Like any entrepreneur that building and operating an eCommerce business is similar to the process of parenting the child. There is plenty of planning and care involved. Also, there is a constant worry about growth and the future. Then, comes a moment to relax. Many people put their eCommerce businesses on the market for various reasons. It could be for personal reasons such as premature retirement, major life-altering events, additional tasks to be focused on or work-related reasons such as the creation of a new Whatever your motive, the most important thing is to understand the reason. The clarity you gain will prove helpful during the sale process and negotiation of the sale.
Once you’ve established the reasons for putting your eCommerce company up for sale, you must determine whether it’s the best timing and/or situation to place your eCommerce company to auction. Are you sure it will bring the greatest worth? Can it help you reach your goals? These are just a few of the issues to think over. Let us assist you by providing some crucial elements to think about prior to making the final decision on whether to put your eCommerce company up for sale.
Table of Contents
- When Not To Sell
- When To Sell
- Other Factors To Be Considered
- Stage Of The Business –
When Not To Sell
There may be compelling personal reasons to sell in which the appropriate process might not be achievable to adhere to. For the sake of a greater discussion, let’s ignore these exceptional situations and instead talk about everyday situations. Here are some reasons what you should and shouldn’t do when you offer your eCommerce business to sale.
- Selling due to A Drop If the decision to sell your home is solely because of your current performance, then you need to hold your ground. Remember that your present figures will be the first thing on your prospective buyer’s mind. This is likely to cause the perception of uncertainty and risk among buyers. That, in turn can significantly decrease the value of your company.
- Scattered Finances by this, we’re not referring to the eCommerce performance business available for sale, but the report it provides. This comes in the form reports on income as well as P&L statements, the most up-to-date inventory lists, a detailed listing of all receivables and payables and a complete record of your supply chain system , including company information, vendor details reviews, business ratings, BSR for Amazon FBA companies Seller Discretionary Earnings (SDE) report, and the list goes on. If you don’t have this information organised, it may be best to wait until you have your house in order in a sense.
- The absence of an Exit strategy Your exit strategy should be designed at both an macro and micro-level. The macro-level could include things such as what you’re planning to use the proceeds from the sale, and any legal agreements or disinvestments that need to be considered and the micro-level aspects could include the current suppliers and vendors (especially when you plan to work with them in the near future) and the cost of operations and walkaway prices for negotiations , and other such. It could be beneficial for you to pause and plan an exit strategy prior to placing your eCommerce business up for sale.
When To Sell
It is crucial to be aware of when to sell, it’s equally important to be aware of the reasons that indicate that it is the best moment to make money from your efforts. You should think about putting your eCommerce business up for sale at the time:
- Performance is On The Rise It’s a matter obviously. If your company has performed well, the profits are rising and your financial commitments have been fulfilled and your financials are sound and prospective buyers are likely to line up to purchase the well-oiled machine. This could be the perfect moment to put up your eCommerce company to sell to maximize the value and reap the rewards.
- Business is in Stagnation ModeYou might recall that we warned against selling your business solely because of the current performance being affected by a decline. The issue is a reference to small or no growth over a time. It could not be related to your own performance, but could be due to an epidemic in the world, a socio-economic recession, or more affordable and more efficient competitors. It could be the right time to look into selling your company and seek the advice of experts to help you think through your options. At this point, many entrepreneurs confess to having a doubts about selling their business before they hit a slump or simply hang for the ride. Expert consultants and buyers might be able to assist you make a decision in this instance.
Other Factors To Be Considered
Making the decision of selling not an simple one. The final result has to be as favorable to you as is possible. To accomplish the desired result, consider additional tangible and intangible factors that you should consider before choosing the best option for the sale.
- Age of the Business The majority of the time, it is noted that companies that have less than one year of operation tend to sell for less. On the other hand businesses that have been in operation for 3 or more years are regarded as risk-free and offer high probability opportunities for buyers and buyers.
- Nature Of The Business If your business is seasonal or is heavily dependent on one product it is unlikely to create much excitement for buyers. When you decide to sell your business, it is possible to invest in specific areas that could help to significantly boost your value on the market. These include:
- Diversify your inventory
- Social media is a popular way to build market awareness
- New sources are available for more traffic
- Concentrate on online reviews and other performance indicators
Stage Of The Business –
Business is a lot like an organism and have several distinct stages of their existence. Be aware of these phases from the beginning to the end — and giving the proper patience and attention is the right way to go. This will ensure that you don’t fall victim to the regrettable decision of selling too early or suffering the regretful loss of trading your online business too late.