5 Challenges Online Business Owners Face When They Want to Sell Their Company

With the continued advancement of technology and mobile communications, more and more business is being conducted online today than it ever has before. This has given people the ability to start businesses online with relatively low start-up costs.

There are third-party sites such as Etsy, eBay and even Amazon that have helped turn people’s small online stores into massive operations. There are hundreds of thousands of more online businesses that are not of such a large scale, but provide a means of support for countless people around the world.

Like any business, there may come a time when you feel it’s right to sell your online business. Without a storefront presence or a physical location, this could cause some challenges when it comes to finding a buyer who would be interested in taking over.

Indeed, there are specific challenges owners of online businesses may face when they try to sell their company that other business owners may not have to think about. Here are five of these specific challenges, and what you can do to overcome them.

You Work Out of Your Home

A lot of online businesses were started and run by one individual or a small group of individuals. Very often, the owners of online businesses started working out of their home to keep costs low, and the entire business may have remained that way its entire life.

When you go to sell your online business, you must recognize that the person who is buying it won’t be acquiring a physical office space. The buyer, therefore, needs to be prepared to either take on the added cost of renting or purchasing office space, or must be willing to work out of their home as well.

This might not necessarily be a bad thing, as office space is an expense for the new owner, but just realize it may limit the potential number of buyers.

You Have Few, or No, Employees

Another common feature of online businesses is they are often run by just the owner or with the help of a small staff. Again, this is a way online businesses are often able to keep costs so low.

While that can be seen as a positive to a potential buyer, they also may not be interested in handling everything themselves. As a result, the buyer may offer a lower price for your business because they need to factor in the cost of hiring, training and outfitting employees to handle the everyday tasks.

You May Not Have Systems in Place

If you are running your business by yourself or with a small team, you may not have official systems in place. Instead, you may just be operating the business by the seat of your pants.

While you may be very effective running the business this way, almost all buyers desire defined systems in place. When you have systems for how you create, market, sell, collect money and handle accounting, for example, it’s easy for a new owner to take over and continue doing business as is.

If you don’t have systems in place, then it’s up to the buyer to figure it all out once they take over. This could cause a large drop in revenue, for example, as the kinks are worked out.

If you don’t have systems in place, it’s a good idea to do it before you market your online business for sale.

You Rely on Third-Party Sites for Sales

Another common denominator for many online businesses is they derive a large chunk of their sales through third-party sites. This may be the aforementioned eBay, Etsy or Amazon, or it may be some other sites.

Again, this may have kept costs low for you and provided you with a great avenue for marketing, with only the site fees to pay in exchange. A new owner may see this as a potential negative, though.

As unlikely as it may be, what would happen if Amazon shuts down, or starts charging exorbitant fees to online sellers? If this happens and you have no online store of your own, your sales could plummet overnight.

That’s why it may be a good idea to set up an online store on your own website and get it up and running before you list your online business for sale.

You Don’t Keep Data-Driven Books

If you have a relatively small operation behind the scenes, you may not have found it necessary to keep data-intensive books. You may have opted for creating spreadsheets on your own to track revenue, expenses and profit instead of buying accounting software or hiring an accountant.

A potential buyer of your business will expect to see clean books, though. So, if you desire to sell your online business, it’s a good idea to get all your books in order first.

If you don’t have the knowledge or confidence in your own ability to do so, it might be a good idea to hire an accountant on a contractual basis to get your books in order and set up a system for you. The money you spend on the contractor will go a long way in getting you organized and preparing your online business to sell.

These are just five of the challenges you may face when you go to sell your online business that other business owners may not have to deal with. By heeding the warnings of these tips now, you’ll be in a better position to sell your online business in the future.

Talk to a Sunbelt South Florida broker today! Sunbelt Business Brokers of West Palm Beach provides dedicated business brokerage services for all of your selling needs.

Whether you are an established business owner nearing retirement and looking to sell, or an ambitious entrepreneur seeking your next investment opportunity, there is no reason to look beyond Sunbelt Business Brokers. Visit us at 800 Village Square Crossing, Suite 216 Palm Beach Gardens, FL 33410 or contact us at (561) 832-9222.