When To Sell Your Business: 10 Telltale Signs Your Company Is Ready for Buyers
Is it time to sell your business?
This is a question that most business owners find themselves asking sooner or later.
Perhaps you feel your organization is booming, and it’s time to let someone else take the reins. Or maybe running a business isn’t for you, and you want to switch to a more traditional career.
Of course, selling a business isn’t an easy choice. You’ve invested time, money, and effort in your enterprise.
Luckily, we’re here to make this decision easier. We’ll discuss 10 signs that suggest your company is ready for buyers.
10 Signs Your eCommerce Business Is Ready To Be Sold
1. Demonstrated Consistent Sales Growth Over Recent Years
Free to use image sourced from Unsplash
This might sound contradictory. After all, you’ve consistently increased your sales over a number of years – why abandon a profitable business?
But put yourself in the perspective of the buyer for a moment. Are you likely to invest in (A) a business that is stagnant, or (B) one that is experiencing constant growth?
The majority of investors will pick scenario A. Of course, just because a business is doing well doesn’t mean it’s ready to be sold. You might feel that with you at the helm, your business could be headed for even more growth.
Don’t think, though, that you should hang on until growth comes to a halt. You’ll find the job of selling your business much easier during times of growth.
2. Garnered Positive Reviews From Satisfied Customers
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Do customers like your brand? What’s more, are they going out of their way to tell other people?
Even a small loyal following will make your business more attractive to buyers. Social proof means that buyers can jump in without worrying about building up the brand name.
If, on the other hand, your business has yet to cultivate many reviews, you might want to hold off on a sale. Consider ways you can encourage customers to leave more positive comments. For example, you might incentivize reviews by offering discounts.
Additionally, try to improve experiences more broadly. For instance, you could boost customer support by reducing the call drop rate.
If you’re getting negative reviews, try to plug into what customers are saying. Consider how you can prove to customers that you’re listening to their feedback.
By building up a portfolio of positive reviews, you’ll likely get more lucrative offers from buyers.
3. Established a Strong and Reputable Brand
There’s an easy way to know when a brand has hit the jackpot. Customers start using the brand name as a verb. For example, people often say they are ‘getting an Uber’, rather than getting a cab. Of course, you don’t need to have reached this level of recognition to sell your business. However, a strong brand with a positive reputation is important to sellers.
You have built a strong brand if some of the following points are true:
- Your brand embodies the overall culture of your organization.
- There are high levels of brand awareness within your target audience.
- Your employees are strong cheerleaders of your brand.
- You have a brand that stands out and is easy to remember.
4. Cultivated a Loyal and Dedicated Customer Base
A loyal customer base can do wonders for a business. We’ve already mentioned the importance of customer reviews. But that isn’t the only positive of a strong customer base.
The more cheerleaders you have and the more people share your posts on social media, the more new referrals you can get, growing your customer base even further.
Most crucially, of course, the bigger your base, the more people buying your products or services.
These factors don’t go unnoticed by potential buyers. When making the decision to sell your business, you should first ask yourself some of the following questions. Are your customers:
- Becoming repeat purchasers?
- Engaging with your posts on social media?
- Sharing favorable reviews online?
- Sharing data with you, such as signing up to your mailing list?
- Signing up for customer loyalty programs?
These are just some factors that indicate you have a group of dedicated customers.
5. Attracted a Diverse Audience With Broad Appeal
Having a group of fanatical customers is a great sign to investors. But the makeup of your audience is also important.
If customers are largely part of the same age group or gender, it does indicate a somewhat narrow form of appeal.
A key concern for buyers is scalability. That’s why they’re often more interested in brands that have the ability to appeal to different groups. The greater the diversity of an audience, the more perspectives it can gain. You can build better products with even wider appeal, helping you to pull in customers.
Of course, having a more targeted audience isn’t always a bad sign. Buyers will still be interested in brands that have managed to carve out a niche corner of the market.
6. Implemented Streamlined and Efficient Operations
Messy, internal processes are a nightmare for all organizations. Teamwork becomes more difficult, and projects are hampered by delays. You’ll take longer to meet your goals, and overall business growth will be stunted.
Issues with internal operations might well be the reason you want to sell your business. But don’t think this makes your organization an attractive prospect to buyers.
Businesses with streamlined operations, on the other hand, are much more investable. They’ll tend to have better collaboration, quicker processes, and meet their overall goals more quickly.
To improve your internal operations, you may want to consider some of the following points:
- Invest in automation software to improve workflows.
- Set clear goals for team members.
- Use data to identify areas for improvement.
7. Developed a Clear and Concise Business Plan
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A clear business plan is a must-have for those looking to sell their business. Not only does a business plan outline a clear vision, it also provides a roadmap for going forward.
Below are just some of the factors that every marketing plan should include:
- A SWOT analysis — This assesses the broader picture of your business. What opportunities are likely to present themselves? What challenges do you face? What are the strengths and weaknesses of your business, and how will these impact the future?
- A description of products and services — It goes without saying that any buyer will want a comprehensive understanding of what your company offers to customers. In this section, it’s also important to explain how products are manufactured and sold.
- A summary of marketing activities — Who are your target audiences, and how can you ensure that you reach them?
8. Achieved a Secure Financial Track Record With Healthy Profit Margins
Is your business profitable? It might sound like a simple point, but it’s essential for securing a buyer.
Whilst some investors like the challenge of transforming a failing company, most prefer security.
Image sourced from fastcapital360.com
Securing a solid financial track record not only ensures your business’s stability but also positions it favorably in the eyes of potential buyers.
When your financials demonstrate consistent growth and healthy profit margins, it reflects positively on your business’s overall health and potential for future success.
This is particularly important if you’re considering obtaining business loans to fuel further growth or expansion.
According to the Corporate Finance Institute, a healthy profit margin is around 20%, although this varies depending on your industry. If your profit margins aren’t looking so good, consider ways you can boost them.
For example, you could reduce your operating costs by downsizing your office or using less equipment. Or, you might find ways to increase the average order value by improving upselling efforts.
9. Gained a Competitive Advantage Over Rivals
Have you established a strong foothold over your corner of the market? If so, you’ll likely find many parties interested in buying your business. Leading businesses can control the narrative, setting expectations for competitors.
Of course, setting a competitive advantage isn’t always easy. It’s not hard to find yourself trailing behind your competitors.
If you feel your business should be more competitive before seeking buyers, try following some of these steps:
- Offer more innovative products to allow buyers to differentiate your brand.
- Try to target a niche, such as a specific product within your industry.
- Establish a more competitive pricing structure compared to your rivals.
- Invest in the latest technologies, such as an outbound call center solution.
- Put more effort into delivering the best experiences for your customers.
10. Assembled a Team of Experienced and Committed Employees
Free to use image sourced from Unsplash
Your employees are the lifeblood of your organization. It doesn’t matter if you have the best branding, website, or store; a business only succeeds with the right employees. Buyers will be more interested in businesses that are built around strong teams of people.
Of course, having the best team of people means more than experience. Teams need to work together to form a cohesive unit. Cross-departmental communication needs to be strong to support progress towards your goals. Above all, the values of your organization should match those of its staff.
Does your organization have the best possible team of employees? If not, you might want to hold off on the sale so you can build a more dedicated team.
Is now the right time to sell your business? Ultimately, only you can answer this question.
Today, we’ve provided 10 clear signs that now might be the time to sell. How many of these points apply to your business? If the answer is several, then good news! Buyers will likely come flocking to you with strong offers.
But if this isn’t the case, don’t despair. Even if your business isn’t massively profitable, streamlined, or authoritative, it still may appeal to some. Certain buyers will look for ways that they can grow the business post-acquisition, so perceived flaws can become strengths.
Selling your business is never an easy decision. Luckily, we’ve got your back. Our dedicated team of experts will guide you through every step of the sales process.
Register an account today to get one step closer to making a life-chaning exit from your online business.