Shopify has become the dream destination for thousands aspiring to run their own businesses. The platform has allowed more than 50,000 merchants to bring their operations online and run them efficiently by creating appealing storefronts and providing better experiences to shoppers coming to these merchants. Shopify’s unmatched ease of use and the fact that it hosts several stores in order to scale and acquire them. This blog will discuss all you need to know if you wish to sell your Shopify Business.
As a seller with a store on Shopify, creating a business that could potentially turn into opportunities for both the buyer and seller is important. The first thing you need to know is that to sell your Shopify business successfully and at a good price, you must focus on building a shop with strong financials and a good valuation. Here’s all you need to know about selling your Shopify business.
Reasons for putting Shopify stores for sale
As an entrepreneur with a store on Shopify, there may be a number of reasons why you would want to sell your operations. It may be possible that you wish to move on to new things from your business after having groomed it in the best way possible. It can be difficult to take care of two ventures together, making it necessary for you to commit to one.
On the other hand, some entrepreneurs may be looking for an exit from the get-go. So, when presented with a profitable acquisition offer, these entrepreneurs may be ready to take it readily. For people running the business, profitability may be the end-goal, and such an offer may be the best way out.
Most importantly, entrepreneurs may exhaust their scaling capacities on account of their limited resources and professional expertise. Hiring new employees, taking steps to grow the business and expanding operations can be extremely difficult. This indicates that the business is ready to be sold.
But why do buyers seek out Shopify businesses? Because it gives them an opportunity to take an already successful business and make it even bigger and better. It allows the buyer to acquire new sources of revenue to ultimately offset possible losses from other sales avenues. Simply acquiring a business can also help people looking to run a business without having to build it from nothing.
Evaluate your business
Carrying out the valuation of Shopify stores for sale is the first step to ascertain the asking price. Businesses of various sizes can conduct valuation using different methods like the Seller’s Discretionary Earnings (SDE) method and EBITDA. Here are the factors to consider while carrying out evaluation—
Financials: Financial records that are clear and show the accurate state of the company’s financial state are important in the eyes of buyers. The buyer will like to focus on revenue from various avenues. Sellers’ whose product is seasonal are also assessed based on the sales performance based on seasonality and future projections.
Age: Businesses that have been operational for less than a year may not fetch as attractive a price, but those that have been around for three years or enjoyed steady growth over five years or more are preferred by buyers.
Traffic: Growth across all sources of traffic, reasons for increases and decreases in it are examined by buyers.
Customer service: Enhance customer experience by offering quality service through extensive FAQs, live chats, transparent billing, help desk ticketing and payment history.
You can increase your valuation in many ways. Here are some methods to ensure that you have the most favourable valuation for Shopify stores for sale-
- Increasing the number of products offered by the merchant can help grow business valuation. This is because buyers tend to steer clear of stores whose 50% or more revenue comes from a single product.
- Gaining traction through advertisements on digital platforms helps better the cost per click and conversion rates among others.
- Shopify performance indicators such as the number of returning customers, order value and revenue.
- Reviews of the store along with the number and type of followers on social media.
Finding the right buyer
An ideal buyer for Shopify stores for sale must be one that can offer a fair bid. It should also be able to expand the business and scale it more. Here are the types of buyers for Shopify stores for sale –
Private equity firms can invest a large sum of money in your shop, while brokers can help find the right buyers and carry out the deal till the business is handed over. Aggregators are acquirers of shops that buy the business from the sellers directly while also expanding it.
Sell to an aggregator
Aggregators or roll-up businesses have an easy acquisition process and advanced tech platforms that make the entire process smoother. They have the expertise of long-term industry experts and veterans who can evaluate, scale and groom Shopify stores to achieve their full potential. Aggregators provide support to the seller from the get-go in order to make the acquisition process smooth for both the parties.
You can also rest assured that your business will be in good hands because these professionals only buy stores that show promise and potential. This ensures that they are also committed to giving the best possible future course to your business. The ultimate focus of these aggregators is on growth over the long-term, sustainability and taking responsibility for the new acquisition.
Here’s how you can prepare for the listing of your Shopify stores for sale
Once you have selected the type of buyer you wish to sell your business to, going over your business story, long-term goals, strategies to maintain business volume and plans for expansion is highly advised. Creating your profit and loss statement before the sale is crucial as it gives the buyer insight into the performance, profits and losses of your business.
Working on enhancing your store traffic and launching new products can help you present your Shopify business for sale in a positive light. You must also be able to tackle all bottlenecks before the sale so that the buyer is assured that your business is a profit-making enterprise.