Useful tips for those who don’t want to build an online business from scratch
Founding an original startup requires creative ideas and innovative solutions. What if you have an entrepreneurial spirit and money, but no new business ideas? Or else, you hate the prospect of the initial startup stages with their hit-and-miss methods, low income and stressful long working hours. Well, business is also a type of commodity. You can always buy an already-existing online enterprise. And if it doesn’t work, you can sell it as well. This article will show you how.
Where to find or list a business for sale
To begin with, check the common mass marketplaces specifically designated for that purpose. By far, the most popular option is the Shopify exchange marketplace.
Here sellers list businesses that are further categorized into niche drop-shipping stores, businesses suitable for the experienced entrepreneurs or those for successful professionals. The marketplace analyses various data types to suggest a valuation price. The sellers are not obliged to stick to it, but may take it into consideration.
A secure messaging system provides buyers and sellers with safe opportunities to negotiate and share any business details they consider necessary.
A buyer then makes a pricing offer to the current business owner. Upon due negotiation and mutual acceptance, buyer and seller can carry out the payment transaction through Escrow. Exchange Support securely transfers the store to the buyer and the seller receives the funds.
The second popular resource for selling and buying small businesses is BizBuySell. It is often used by brokers who make bulk-listings of businesses.
Consider also Empire Flippers with their personalized approach. They facilitate communication by scheduling calls with the seller and vet the store’s data for accuracy.
SideProjectors is a great marketplace with more accessible price offers. The prices may get lower, as the service doesn’t mediate any deals. It only connects buyers and sellers. Naturally, buying here is also risky, so you should conduct your own preliminary research on the prospective partners. This resource also allows selling start-up projects that failed to grow into fully-fledged businesses. They are much cheaper yet require a lot of work-to-do.
Another option is an auction site such as Flippa. It allows a bidding process among prospective buyers. The buyers can manually set preferences to check only the most suitable listings or consult with a buyer manager. The business offers include e-commerce, advertising enterprises, SaaS, marketplaces, domains, starter sites and apps.
Flippa uses ID verification to provide all their users secure deals. Payments are also handled with Escrow. A discussion board option allows sellers and buyers to get in touch and negotiate.
Sellers have to be prepared to deal with both the listing fee and commission fee while dealing with Flippa.
If you aren’t comfortable with buying a business online, you can always contact business owners directly or use the services of a broker. Some examples of online business brokers are Digital Exits and FE International.
How to decide on the offer
Buying or selling a business is a serious decision. Carefully weigh the pros and cons and think about what matters most for you before you begin any negotiations.
Factors to consider before selling a business:
- Is the proposed financial offer good enough? You can use free valuation tools to check the fair market price as well as take your cue from your initial investments of time, money, and efforts into the given project. You surely deserve a return profit.
- Is that the right buyer? You created a business with a certain vision and mission. If you put your soul into it, you’ll surely want the business to prosper and develop in the future. Make sure the new owners will take good care of your loyal clients and employees. Discuss their understanding of enterprise purpose and technical details.
- Have you made your business attractive to buyers? With little preparation, you can get a better price on your existing enterprise. Buyers will look for less friction while adopting your business, so make it more welcoming. Start with updating your website (delete all clutter and simplify navigation), organize your inventories neatly, arrange your documentation in order, etc.
- What type of buyers do you want to negotiate with? Do you want your business to transit to experienced competitors in your own field who’d continue your strategic course? Perhaps, you feel that your business is stuck in progress and needs innovations. A proactive customer or the one with the expertise in different spheres might have a fresh approach. Manufacturers of the goods you sell can also become your prospective buyers and they may offer a higher sale price to connect to your individual client database.
- Prepare for an easy and smooth transition. Document standard operating procedures, highlight all site analytics data and financial patterns, and delegate or automate most work you’ve been handling so that the new owner doesn’t get overwhelmed with responsibilities.
Things to consider before buying an online business:
- What kind of business are you willing to buy? Choose the business sphere, and decide on the criteria important for you (niche, brand development, production type, size of the business and its customer base, profitability, business model, available technologies and platforms).
- Do thorough research on the sold business owners, its history and reputation. Study customer feedback.
- Clarify what goes along with the given business. Make inquiries about the existing website, remaining employees, available social media channels, supplier lists, email newsletters, the domain rights, intellectual property rights for trademarks, patents, logos, etc.
- Study the profile carefully to get an understanding of the approximate time and costs needed to maintain this online business.
- Find out whether any technical knowledge is required to run the business.
- If you plan on buying a business in an unfamiliar niche, study its recent trends, existing competition and opportunities.
- Do a thorough check of possible liabilities, legal aspects of the business, required licenses, unique chances and problems, data security, marketing strategies, shipment partners, etc.
How to increase the value of your e-business before selling
Think of upgrading your business a bit before actual listing. Make it more attractive and expect greater profits.
- Clarify your brand. Represent the brand values clearly with the website, logo, advertising campaigns, blogs, customer targeting. Buyers would appreciate a strong brand more.
- Retain suppliers. Encourage suppliers to keep the agreements for a specified time period after the transition. Selling an enterprise that has stable contracts with vendors and manufacturers is an obvious benefit.
- Simplify your packaging and shipment options. Making them more cost-effective will be a plus. Buyers will check their future expenses before making a purchase.
- Encourage positive reviews. Think of the ways to increase the number of feedbacks left by customers. These may be email notifications, online surveys, a special link in a thank you note and so on.
- Have a mailing list. Compile your clients’ contacts into a single database used for marketing purposes. Sending newsletters, promotions, and follow-ups encourages customer loyalty. Prospective buyers may be willing to pay more for that.