Do you own an online business? Have you decided to sell? Regardless of if you want to move on to bigger or better things, or just don’t have time to run the business any longer, chances are you want to get as much as you can when you sell.
Unfortunately, when you are trying to buy or sell online companies, the process can be difficult and tedious. The good news is, there are some tips that can help. Keep reading to find out how you can make this process easier and get maximum value for your business.
Determine What Your Business is Worth
In many cases, there’s a gap between what you think your business is worth and what the market is willing to pay. Some of the factors you need to consider when determining the value of your online business include:
- Yearly profits
- Scalability of your business
- Business growth trends
- Breakdown of customer acquisition channels
- Ability to attract new customers
- How much time you spend running your business
Any investor is going to look into these areas when deciding if they want to move forward with a purchase, and how much they are willing to pay for it. They are also going to look at what comparable businesses sold for in the past.
Why Would Buyers be Willing to Pay a Premium?
If you want to increase what investors offer for your online business, there are two main areas you need to focus on: the return on investment and the relative risk.
If you have a business with a lower amount of risk, then it is going to help you get a higher premium on the open market. If your business is considered “risky” with lower profit margins that fall lower on the earnings-multiple scale, then it’s going to be more difficult to sell.
If you want to improve the likelihood you can sell for a significant profit, you need to focus on some key things:
- Establishing documented processes and systems
- Predictably driving new sales to your business
- Positioning your branding in the market
- Providing a long and detailed history of traffic stats
- Show the business has a clean legal history
The market is growing and when you are ready to sell your online business, you have to focus on areas that investors are going to look at to make sure your offer will stand out in a crowded marketplace.
Where to Sell Your Website
Where you can sell your online business is usually dependent on how much it’s worth. Some of the popular options include:
- Auction: Buyers place bids for the business.
- Marketplace: You can post your business, similar to a classified ad listing, and wait for buyers.
- Broker: If you want a professional to handle the process, then hiring a broker is best, but since it costs more, it’s only for businesses selling for over $250,000, in most cases.
- Investment bank: If you have a business that does over $5 million in profits annually, then using an investment bank for the sale may be best.
Who’s Going to Buy Your Business?
The buyer you attract is dependent on the type of online business you have and how much it is worth. You may find a first-time buyer interested, or even a private equity company. There are even brick-and-mortar entrepreneurs who may want to expand their own services by purchasing yours. As a result, there are quite a few opportunities to find motivated buyers.
If you want to sell your online business for maximum value, you have to know what the market will bear. Once you know, position your site to help you fetch a premium price.