How to Sell Your Online Retailing Business
When you have built and operated your online retailing business it can be very sensible to sell up and move on if you feel you have achieved everything that you wanted to do when you started out. Additionally, growing a business requires a different set of skills to starting one so if you feel you'd like to start another business rather than grow the one you have, then it could be time to sell.
The first important step in selling a business is to be realistic about what you can get for it. If you were buying a business like yours, rather than starting from scratch, what would you be prepared to pay for it? Being aware of the motivations of a potential buyer will help you negotiate better as you not only get a feel for what they want but this can also help you explain in detail the key areas that they will want to know about. In my experience, being honest and open about everything, good or bad, makes for a much more efficient sales process and helps engage the buyer into a trustworthy deal. As a rough guide, many agents, accountants, lawyers and brokers suggest for businesses looking to sell for less than £1m, then a good start is to multiply your operating earnings (so called EBITDA) from between 4-8 times. So if your business makes £15,000 before interest, tax and depreciation, then a rough guide price would be between £60,000 and £120,000. If you want more then you will need to have some business assets that a buyer is prepared to pay for over and above the earnings (e.g. unique software, exclusive supply agreements etc)
Prepare your books
Having a good set of accounts to show to any prospective buyer is important. A solid set of records that shows all of the income and outgoings of the business will give the potential buyer confidence in the business they are buying and make them more likely to invest at a greater level. A good set of books also shows professionalism and presents the customer with a clear perspective of a well-managed business. Conversely, poor books will translate to poor management in the eyes of the buyer, however. Having a solid business plan for development can also show the potential buyer how they can realise the potential of the business and take it on to the next level. Clear out any weird stuff that may be lurking in the books from the early start up days (I once looked to buy a telemarketing business and discovered the owner's conservatory was sitting on the balance sheet!)
Investigate whether a marketplace would suit your sale
Ebay, Businessforsale.com, daltonsweekly and many many other marketplaces (just google "sell my business") are maybe the best place to advertise your business for sale. However, do some research on each marketplace as some are better than others. Typically, the more specialised the site the better the quality of buyer and this will translate in less faffing about for you
Should you use a broker?
Brokers make their money on a percentage of the sale price (plus non refundable set up fees) so you may find it tricky to find a broker that would be interested in a sale for less than £1m. That said, if you do find a broker keen on working with you then they can help in making sure that everything is done correctly and this will save you days and sometimes weeks in time! Be aware, selling a business is very time consuming and having someone outside of your business to manage conversations and answers emails allows you to continue focussing on running your company. Brokers sell businesses all the time so grill them with your questions to ensure they fully understand your business and will not waste time finding the wrong type of buyer. A good broker can accelerate the sale and ensure the process is smooth and accurate.
Why not try and sell it yourself?
One idea is to create a 'cover style' web page on your domain and link it to a google ad or facebook ad. The page will only be seen by people who are looking to buy an online retailing business so you regular customers will not know. Obviously use very specific keywords for your ads. Create a different email address to your normal activities (if you want) so the email only comes to you.