At a certain point in your e-commerce business, you’re probably wondering if it’s time to exit and sell your company. You might be looking to start a new venture and you need capital, or you might want to spend more time focusing on other things such as your family. You’ve even probably talked to a digital broker or two to know what it takes to sell a website successfully.
While there are many valid reasons for you to want to sell your online business, there are also factors that you need to consider before you go ahead with the final sale, such as evaluation of your business. Here are some of those factors:
Current market factors
Current market factors are generally the most significant reasons why you might be considering to sell your business. The “buy low, sell high” strategy has always been an attractive one, especially for an industry such as e-commerce where stocks are dynamic and can change daily. When you wake up to a market that’s dazzlingly high, you might be tempted to sell your business as quickly as possible to reap the biggest profits.
However, you need to step back and avoid being blinded by the positive trend because it could turn out to be only a short-term victory. You can actually look at your competitors to see what they are doing. Are they also selling their businesses or are they holding back? In this case, being the first might not be a good thing.
Growth opportunities
If your business has already hit a peak and has not experienced any significant revenue or customer base growth in a long time, it could be a sign for you to sell…or it could be a sign that you’re doing something wrong with your marketing campaign. The fear of missing out on potential growth is real, and your current rut could simply be the product of wrong marketing strategies. What if you sell your business too early and the buyer could be the one who implements the correct marketing strategies to facilitate significant revenue and customer base growth?
You should consider re-evaluating your marketing strategy first to see if there are any factors that you are missing. It just might be a case of switching to a new marketing campaign!
Taxes
Taxes are another major factor that many people consider when making business decisions. There are many times when you would find yourself at the mercy of federal and state tax laws which can adversely affect your business in significant ways.
When it comes to taxes, you have two choices. First, you can hold out the hope that future changes to tax laws will benefit your business. Second, you can cut your losses and sell. The best way to decide is to figure out how much longer you can afford or want to stay in business, and get a feel of current government policies. If there is a chance of better tax laws in the future, you can wait out the storm.
Employees and human resource concerns
Your employees might be another reason why you might be considering selling your business. Underperforming employees can cause significant losses in revenue, but before you pull the plug on your business, you should consider the reason why your employees are performing so poorly.
Yes, there are times when you just ended up hiring the wrong people, but more often than not, your employees might have deeper reasons why they’re not performing well. The best way to go about this is to have open and direct communication channels with your workers. Allow them an avenue where their concerns can be heard and addressed. You might be surprised how quickly they turn around and become star employees after!
Legal issues
If your business is currently undergoing upheaval due to a legal concern or issue, it is tempting to cut your losses and walk away. However, this is actually the WORST time to sell your business because any legal problems attached to your company will not only scare away most potential buyers, but they will also massively cause the valuation of your business to go down.
Any legal liabilities should be settled completely before you sell your business. It is not only the smart business decision, but it’s also one that you will choose if you are an ethical business owner.
Purpose and drive
Do you remember how it felt the first time you opened up your business That innate fire and drive that pushed you to start your online business in the first place? Over time, this drive could simmer down, and most business owners tend to want to sell after they experience “business burnout”.
Ask yourself, however, whether that is what you’re really feeling, or whether you’re just feeling stressed out and anxious because of daily business problems. If you’re only feeling the latter, you’ll probably end up feeling seller’s remorse once the crisis has passed and you’re feeling better once more.
