Selling Your E-commerce and Web based Businesses for a High Valuation
Selling E-commerce Web based Businesses: Most Ecommerce and web based business sellers struggle to sell their company. This happens because of some common problems like poor presentation, use of outdated technology and tools, and others. There are various important things that you need to carefully check in order to sell your Ecommerce and web based company for a high value. You should also have a solid grip on the core fundamentals to sell your Ecommerce and web based company for a good price. Let’s have a look at how you can sell your web based company for a high valuation.
What is a Good Price for Selling E-commerce Web based Businesses?
First of all, make sure you know what is the good price for an Ecommerce and web based company. A good price is currently between 3 and 6 times earnings before interest, taxes, depreciation and amortization. In other words, you should calculate the price based on the annual cash flow of your online business.
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Factors Affecting the Valuation of Ecommerce and Web Based Businesses
There are some really important factors that define the true valuation of any kind of Ecommerce and Image editing based business. One of these most important and influential factors include owner-dependency. This simply means that you should keep your main focus on building an Ecommerce company that is not dependent on you for producing profits. If your online company is owner-independent and easily transferable, you will be able to sell it for a high valuation.
Is Your Ecommerce Company a Desirable Acquisition?
Again there are many factors that determine if your Ecommerce company is a desirable acquisition. The most important of these factors include the following.
- Age of your Ecommerce and web based company domain
- Business history of at least 6 years
- Consistent revenue or growing revenue throughout the 6 year history of your online company
- List of loyal customers
- Customers’ feedback about your products
- Ecommerce revenue unaffected by latest Google updates
- Do you own an Ecommerce company in an industry that is growing?
- Do you have a solid and mature plan to run your Ecommerce company that doesn’t depend on you? Make sure you develop processes that run without your involvement. This will have a positive impact on the valuation of your Ecommerce and web based company.
- Does your business have unexpected growth opportunities?
- Is it able to generate guaranteed recurring revenue?
- What tools and services you use? Make sure you use advanced tools and services. Use of out-dated technology can have a negative impact on the valuation of your Ecommerce and web based company.
- Have your financials maintained by CPA Firms. Potential buyers are more interested in this than financial statements that are prepared by the owner or seller.
- What source of traffic you use? Make sure you have multiple sources of traffic, including both paid and unpaid.
- Do you collect subscribers’ data? It is important to have a large permission-based subscriber list.
- Make sure you use a responsive (mobile ready) website.
These were some of those vital factors that can affect the valuation of your Ecommerce and web based business. By working on all these factors, you can sell your Ecommerce company for a high valuation.
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