You may no longer have the desire to run your eCommerce business. Perhaps you would like to embark on a new venture without completely shutting your company down. Maybe you are ready to retire and want to pass the torch to someone else. Regardless of the specific reason, there is nothing wrong with wanting to sell your eCommerce business. As is the case in the offline world, there are several steps that need to be taken before proceeding further with this type of sale.
Separate Personal from Professional Finances
Over 50 percent of U.S. businesses and brands are based out of the homes of their respective owners, according to the Small Business Administration (SBA). A common practice, therefore, is for the owners to combine their personal and professional finances together within the same accounts. This approach is acceptable for tax purposes as long as you are able to distinguish between them on paper. When selling your eCommerce business, though, this is no longer an acceptable practice.
You need to have separate accounts and keep your professional finances completely separated from your personal savings. This is primarily because you will be able to provide the new owner with merchant account and business banking statements by doing so without having to worry about releasing information about your personal finances, according to Practical eCommerce.
Prepare a Detailed History of Your Finances
Establishing a separate bank account for your company is a great start, but it’s not enough. You’ll also need to prepare a detailed history of your financial reports in order to show your potential buyers the type of cash flow your business has generated for at least the past two to three years. Even though this is not necessarily a requirement for selling your business, it is a great way to increase your credibility, and is also a major selling point most investors and buyers will want to see. You can handle the majority of this grunt work on your own without any professional assistance, but hiring at least one accountant to help you get everything organized is highly recommended.
Another important point to consider is exactly how you are going to sell your eCommerce business in the first place. For instance, you can choose to go with a listing site that has built a reputation for successfully facilitating these types of sales in the past. Listing sites basically place classified ads on the Internet for interested site owners and brokers to explore.
These sites make their money by charging the seller a flat rate fee, just to list their business, whether they close a sale or not. On the other hand, you can choose to go with a broker. Even though most brokers do not charge an upfront flat rate fee, they can ask for up to 10 percent commission of the final sale price, according to All Business.
Think About Your Reasons
The last thing you need to do is take the time to seriously consider your reasons behind this big decision. Once you get the ball rolling and cross the point of no return, it will be too late to change your mind. Therefore, it would be wise to consider all your options first before proceeding any further. If you want to sell your business just because you have had a few bad months this year, you might want to consider revamping your image, developing a new business plan, and putting forth a considerable effort to turn things around before you willingly give up the business you helped build to someone else.