Meta Description: If you are confused regarding how to sell your online business, here is the relevant information to get you started on your way.
While, globally, retail businesses have been floundering, online businesses and e-commerce have been thriving. The combination of social distancing, travel restrictions and the general convenience offered by e-commerce has made it the preferred mode for a large majority of people. Not only is this the time for rampant growth, but it is also an equally opportune period for cashing in on your hard work and toil. As an entrepreneur, undoubtedly you have taken great pains to establish and nurture your online business. If you are now contemplating exiting it and are wondering how to sell your online business, then here’s all the guidance that you need.
How To Sell Your Online Business: Factors To Be Considered
It is not an unreasonable ambition to seek the maximum returns for your business. Business owners often make the mistake of equating returns with current sales and cost of operations and adding an exit percentage over it. While all this is needed, of course, the intangible aspect of ‘value’ often gets ignored. There are several factors that can enhance the value of your online business and result in higher returns when you sell it. Here are a few of them.
- Age of Business: Businesses that have been around for over 2 years are considered more valuable. The longer the tenure, the higher value. This is primarily because it is evidence of your business model being robust enough to have withstood the different market swings, and shows more promise of being sustainable in the future as well.
- Catalogue and Inventory: Businesses that offer multiple products or services are usually associated with higher value. Over-reliance on a single product is deemed risky as a significant change in buying trends or consumer choices may affect such businesses negatively.
- Brand Recall: The internet is the cradle for any online business. Naturally, your presence on social media, online reviews as well as good word of mouth, all have a bearing on how your business is perceived. This, in turn, has a direct impact on the value of your business.
- Online Traffic: Online buzz and brand recognition are all good, but what about sales? Another important consideration to sell your online business is the different modes and avenues of traffic to your store or site. Businesses with web and app-based access, multiple online partnerships and high online traffic are deemed more valuable.
Keeping the above factors in mind is vital to understanding the key contributors that go into determining your selling price. Any areas that may be of concern should be plugged in first in order to get the maximum returns. Having done that, it is time to get your business valuation done through a professional medium.
How To Sell Your Online Business: Modes of Selling
Having established the value of your business and the corresponding selling price, it is time to consider the mode of selling it. There are several channels to achieve this with each having its own merits. You must carefully evaluate and consider the one that works the best for you.
- Selling On Your Own: When you sell your online business on your own, you have the most freedom and control over the proceedings. You save on overhead fees as well. On the other hand, you need to have the experience, knowledge and wherewithal for running the entire process on your own. It can be taxing on your time and may not be the best idea for first-time sellers.
- Online Marketplaces: Just like you would use a yellow pages guide, digital marketplaces exist to help you post your online business for sale. It can help you connect with potential buyers in the network while retaining a high degree of control over the process. The challenge can be identifying the right buyers and successfully concluding negotiations, especially if you do not have prior experience in doing so.`
- Brokers and Mediators: Business owners who are new to the process are advised to seek professional assistance. This can be in the form of individual consultants or professional brokerage firms. Not only can this save you a lot of time and effort, it often results in higher returns as well. It is worth noting that there will be a fee or commission for this professional service that needs to factor in while making the sale.
- Professional Acquirers: There are some niche companies that acquire online businesses to integrate them into their own platform. They offer an entirely seamless experience with minimal disruption to your business and the highest valuation in the process.
In Summation
With the information provided here, you should now know how to sell your online business, the steps involved and the avenues to choose from. Selling your business is a significant decision and every care must be taken to make it a rewarding experience.
