Have you ever thought about "how to sell my online business"? It's like saying goodbye to something you've built and cared for, which can be challenging. But sometimes life changes, and you might need to sell your business for various reasons. Getting ready can make this process easier.
Even if you're not planning to sell right away, learning how to do it can help you run your business better. Think of it as having a useful skill in your back pocket.
In this guide, we'll show you how to sell your online business step by step. Whether you want to do it yourself or get help from experts, we've got you covered.
If you're not sure or thinking about how much your business could sell for, take a look at the types of businesses that usually get sold:
eCommerce Stores
Affiliate Sites
Dropshipping sites
Display Advertising Sites
Affiliate sites
SaaS Businesses
Mobile Apps
Productized services
Lead Generation Sites
If you want to know how your online business is valued, read our article about business valuation.
Why I Need to Sell My Online Business
There are many reasons why people decide to sell their online businesses. Sometimes, things are going well, and they want to make money from it. But there are other times when personal things change, like starting a family, and you need to rethink your business. Others just want a break to travel or are excited about starting a new business adventure. And some see a chance to use the money from selling to invest in something else.
When to sell your online business is a decision only you can make, but it's good to know your options if you're thinking about it.
How To Sell My Online Business
Before you even think about selling your online business, there are some essential steps you should take to ensure a smooth and profitable sale. These steps involve getting your business affairs in order, and they offer benefits not just to potential buyers but to you as the business owner as well.
Collect Accurate Data
Accurate data shows how well your business is performing beyond finances. It reveals your website's traffic, customer demographics, and marketing effectiveness, giving buyers insights into your business's health.
When collecting accurate data, consider:
Tracking Website Traffic: Understand which pages are the most popular and where your site's visitors are coming from.
Customer Insights: Gather information about your customers, including their geographic locations, interests, and purchasing history.
Conversion Rates: Track your conversion rates to measure how efficiently you transform visitors into paying customers.
Email Lists and Contacts: Obtain data on your email lists and contacts, including the number of subscribers and their engagement level as leads or customers.
Why it's important for buyers?
Buyers want to be sure that the reported traffic is genuine. Having reliable data helps establish the legitimacy of your traffic sources and shows buyers that they're investing in a real asset. It also enables them to assess your conversion rates and growth potential.
Why it's beneficial for you?
As a business owner, accurate analytics provides a history to measure your business's performance. It helps you understand how customers use your site, identify seasonal dips or more serious issues, and fine-tune your strategies.
Update Your Finances
Maintaining accurate financial records is crucial for determining your business's value. Start early to avoid last-minute stress. It helps you manage expenses and assess your business's performance. Consider hiring a professional for credibility when selling.
Buyers need clear and organized financial data to evaluate your business's value. They want to see separate business and personal accounts. If your business and personal expenses share the same account, it's time to separate them.
Why it's important for buyers?
Clear financial records help buyers gauge the profitability of your business. They want to know your net monthly revenue, gross margin, and expenses, including customer acquisition costs and overhead. They must ensure your business is genuinely profitable and has no outstanding debts.
Why it's beneficial for you?
Well-organized finances let you easily track your income, expenses, and profit margins. It ensures that your taxes are in order and helps you accurately assess your business's value.
Establish Standard Operating Procedures (SOPs)
Creating a Standard Operating Procedure (SOP) defines your systems and processes for potential buyers. It's a document detailing how tasks like product selection, keyword research, listings, SEO, and content creation are handled. Document these processes as you go, avoiding last-minute chaos. Keep them accurate and updated so the new owner can rely on something other than outdated methods.
Why it's important for buyers?
Buyers seek well-organized businesses that rely on something other than the owner's involvement. Having SOPs in place means they're investing in a smoothly running machine, making your business more appealing.
Why it's beneficial for you?
SOPs free up your time and make training employees easier. They help identify Key Performance Indicators (KPIs) to measure employee performance and provide a structured way to improve and grow your business.
How Can I Maximize the Value When Selling My Online Business
Business owners want to get a reasonable price for their business. You've put a lot of time, money, and effort into it to get it ready for sale. Here are some things you can do to make it worth more.
Optimize Your Website: Boost your SEO to attract more traffic and potential customers. High-ranking search results and consistent traffic numbers add value to your business.
Secure Supplier Deals: Ensure important deals with suppliers, manufacturers, and partners continue with the new owner. Highlight any key partnerships that contribute to your business's success.
Increase Profitability: If selling your business is in your plans, focus on a solid final year. Maintain high activity and strong revenue to enhance your business's value. A profitable last year will impress potential buyers and lead to a better selling price.
What Is the Potential Selling Price for My Online Business
You can evaluate the potential selling price using a valuation formula. This formula breaks down the required net profit to achieve your exit target for the business sale. To calculate it, you consider two factors:
Average Monthly Profit: Your profit after expenses averaged over at least 12 months.
Sales Multiple: You multiply your average profit by a number between 20 to 60+ to get your listing price. [average net profit] x (20 to 60+) = listing price
For instance, if your monthly profit is $15,000, a conservative 20 times multiple would make your listing price $300,000. If your business has significant growth potential, a higher multiple (e.g., 60 times) could bring it to a comfortable $900,000.
This formula works both ways. You can decide on a sale price (e.g., $500,000) and calculate the monthly profit needed (e.g., $25,000) to achieve it.
Where to Safely Sell My Online Business
Ready to sell but need help finding a buyer? Here are three safe ways to sell your online business.
Private Sale: You take charge of finding buyers, handling data transfer, and negotiations. It saves brokerage fees but demands time and negotiation skills.
Broker Sale: Involve a third-party broker experienced in online business transactions. Provide necessary data, including website traffic, revenue proof, and ownership documents.
Marketplace Platforms: Explore platforms like Flippa, Shopify Exchange, Empire Flippers, and Side Projectors for buying, selling, and flipping online businesses. They offer built-in audiences and typically charge lower fees than business brokers.
What's Next?
Deciding to sell your online business is a big deal, especially if you've put a lot of time and effort into it over the years.
Think about how life-changing it could be if you sold your business for a substantial amount of money. By following the steps in this guide, you'll be well-prepared for that big sale if you decide to go for it.
Even if you decide not to sell, the information in this guide can help you make your business better, more organized, and automated. It can become a machine that makes money efficiently and gives you the freedom to live the way you want.
If you're thinking about selling your online business, we're here to help: sell my online business. You can reach us, and we can advise you on your options. A broker isn't always the best choice, so it's good to get a second opinion before you make a decision.