How To Decide When Is The Right Time To Sell Your Online Business

The online selling business industry has advanced at an astonishing pace over the past few years. Thanks to its rapid growth, it has created a space where small homegrown businesses have found a home and thrived. Countless talented entrepreneurs who would otherwise not have access to a platform to create and grow their business have been afforded a level-playing field on which to prove their mettle.

It is no secret that it takes incredible devotion, hard work and determination to build a successful business. And the creators of such businesses deserve to be rewarded for their efforts, whether through the flourishing business or by selling it. Selling off their love’s labour may be difficult for many entrepreneurs, but cashing out when the time is right is better than retaining a struggling business.

Common reasons why people sell online businesses

Personal reasons: Entrepreneurs may sell their online business in order to embark on a fresh start by establishing a new enterprise. Selling their existing business to pursue a different one may seem to be a logical course of action. Sometimes, entrepreneurs may just be exhausted from having worked in the same industry for too long and feel stagnated.

Alternatively, they may wish to retire and enjoy other aspects of life rather than working. Some business owners may have to sell off their business due to ill health so that they can take care of themselves.

Raise capital: Owners of smaller web businesses often sell their operations in order to raise capital to start something new. They may not have the money to expand or initiate another project. Entrepreneurs tend to feel that they could have avoided certain mistakes and done some things differently with their first enterprise. They wish to make a fresh start after learning lessons about product offering, marketing and expansion.

Sticking to their initial plan: Some entrepreneurs are in the business of buying and selling online businesses just as one would invest in stocks or real estate. They buy these web businesses, grow, scale and then sell them. The market for these businesses is steadily growing, with more and more investors looking to own and operate their business while diversifying their portfolios.

How to decide whether to sell your business?

The decision to sell your internet business can be taken at any stage in the duration of the business. However, a prudent entrepreneur should be ready to sell their operations right from the get-go, irrespective of whether the business is doing well or not.

Assess the stages

Throughout the lifespan of a business, it goes through various risks. This means that there may be opportunities and reasons to sell it at every stage. Here’s a look at the challenges faced in every stage of the business—

Stage 1

The first stage of a business requires ample research for development and the challenges include decisions around the choice of eCommerce platform, managing expenses and deciding on the product to be sold. Even if the business is not very old, as long as it has been managed well and performs well, it can attract a good price.

Stage 2

In the second stage, the choice of product mix and the benefits of your online platform will start to reveal themselves. At this time, businesses often run out of money and struggle for survival. A crisis of funding, organisation and market penetration occurs at this point.

Stage 3

The third stage is when many owners may choose to sell their business. While the performance may have plateaued, growth could still be stable and revenues high, making the business attractive to buyers. Entrepreneurs believe it is profitable to sell the business at this point when it is still doing well instead of investing in expansion. These businesses attract good prices when compared to those just starting off in the early stages.

Stage 4

The fourth stage is when the business really takes off and expands rapidly. The business receives outside investment at this point and is under the process of reorganisation for expanding operations. Entrepreneurs could struggle with maintaining control of expansion activities at this point so that resources do not flame out.

Stage 5

In the fifth stage, a company matures and reaches a point where it controls a significant market share. The business faces risks because of changes in technology and shifting consumer behaviour. The struggle is to maintain the market share and owners who are unable to do that look to sell business online.

Conclusion

The strengths of the business like its age, nature of products, growth, revenue must be weighed against weaknesses like the decline in the market share, growing competition, and changes in technology and eCommerce rules. Owners must also get a sense of the opportunities and threats facing the business.

Entrepreneurs must take the pulse of their business routinely so that they can ascertain the right time to sell their business. While each stage in a business poses unique challenges and presents new reasons to the owners to seek an exit, a lot of evaluation goes into making the right decision. Check detailed guide on how to sell businesses online for more insight.

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