5 Tips for Preparing for the Sale of your E-commerce Business

So far this year we have had two online business sell for over a million dollars and have supported the financials and due diligence of the transactions.  We have found the below tips to be essential to ensure the top sales price.

1.  Plan in advance for the sale, don't wait until you are burnt out from the business.  Both of the businesses mentioned above had planned a year in advance for the sale and were able to get a premium price.

2.  Make sure your financial statements are in tip-top shape.  The cleaner they look, the more confidence the buyer will have on your business.  Yes, they should be on Accrual Basis.  That means inventory is "expensed" when sold not when bought.

3.  Maximize your SDE (seller's discretionary income) add-backs.  Some examples include- auto expenses, travel, shareholder wages, home office, garage rent, 401k contributions, etc.

4.  The year before the sale- negotiate with your vendors.  A 3-5% discount can equal a chunk of change on the sales price.

5.  If it's your first sale use a broker to sell your business.  A good broker knows the inside out of the sale and can guide you to get the most out of the transaction.  We have a couple that we can recommend.  

Feel free to leave comments or questions below.