A business that is seeking to expand its operations can purchase an existing profitable business to drive the expansion. In addition, brick and mortar businesses can purchase successful online businesses in order to debut into the e-commerce world. To do this, one must understand how sellers value their businesses and how to go about identifying the most suitable business. We take a look at How to Value and Sell an E-commerce Business How to Find an Online Business for Sale – Guide.
Valuing an e-commerce business for sale
The value of online businesses could range from a few dollars to millions of dollars. This valuation is usually based on the niche market the business operates in, the level of traffic generated by the business per unit of time, the level of conversion of the traffic into paying clients for the business, the presentation of the business and the quality of the back-end of its websites and online resources. The value can also be increased by the demand of such business vis a vis their supply at a particular period of time.
When set out to value an online business with the intent to sell, it is paramount you get your facts right such that you make the best out of the sale. You can begin by identifying the critical factors that make your business valuable or successful- the critical success factors. You should also question the factors that could be deemed the weak areas of your online business. The next step is to identify how much value the success factors add on to your business and how much the weaknesses take away. In cases, where the weaknesses are weighing down the value of the business, you ought to work on improving them before you can sell the business.
What factors in the external market have an effect on the current value of your business? These can be divided into two categories; those that increase value and those that minimize the value. Will these factors still matter in a few months or years? You need to factor their overall effects in the business valuation such that the value does not mislead the buyers.
The valuation of a business is technical and could therefore require the services of an online business valuation consultant. You can work closely with one in order to arrive at the correct value of your business. However, you ought to work closely with them since they need to understand your business well in order to come up with the correct valuation parameters.
Selling an online business
The joy of any seller is to identify a suitable buyer who sees the value of the business and is willing to pay the price. As a seller, you must advertise your business to potential buyers. You must also be willing to indulge the buyers in the quest to understand your business and its value. Besides this, you must ensure that you have a team of legal experts who can guide you through the process to ensure that you not only sell to the best buyer but that also the transactions are done in accordance with the law, and therefore averting any legal implications in future.
How to find an online business for sale
There are websites that list different online business that are up for sale. This should be your first stop when you want to purchase a business. You can also search on all major search engines using the keywords of the business you intend to purchase. In addition to this, there is an easier option; find a broker who will assist you in identifying the businesses you can purchase and in overseeing the purchase.