Have you built a strong online business, putting your heart and soul into it and made the executive decision to sell it? If so, then congratulations. Building your business from scratch was difficult, selling it will be no easy feat either. In fact, it can be downright tricky! After all, you don’t want to undersell your company and lose money, but asking too much for it can also have a negative impact.
If you plan to sell your successful online business, you need to know what your business is worth – what a potential buyer is willing to purchase it for. Several metrics can help you figure out what the price of your business should be, but there are three important ones to consider.
3 Key Metrics To Help You Determine If Your Business Can Be Successfully Sold
The most understood metric by business owners is the money metric. Now, you can’t count on the normal traditional aspect to assist you here. When it comes to the money metric, you’ve got to concern yourself with the profits, sales, expenses, productivity and cash flow. A closer look at the money metric breakdown will give you a better understanding of what potential buyers are looking for in your company.
- Profit – Profit is the first thing a buyer looks for. The more profit you have, the more your business is worth. Showing a trend on profitability is very attractive to a potential buyer and will help your online business sell quickly.
- Sales – This alone isn’t enough to sway buyers, but it will let them know how your company is doing. Are sales up or down? Sales projections will give you an indicator of the company’s growth.
- Expense – When it comes to expense, you need to look at not just the profit but the waste. Where is money going that doesn’t need to be?
Marketers and small business owners have a lot going on, and when it comes to the marketing, they should know how their marketing is doing. After all, if their marketing is going well, it’s only going to help with the financial aspects of the business. In the end, this will help improve the sale. What are some of the metrics to keep an eye on?
- Email Performance – It’s imperative to keep a closer eye on your list growth, click-through rates and open rates to see how your email list performance is doing. You can receive this information from your email service provides.
- Keyword Report – Keyword phrases provide you with organic traffic, as it helps with website ranking. If you want to improve your website’s ranking, you need to keep track of it. Bear in mind that Google doesn’t provide all this information, so you’ll need to find another tool to learn this data.
- Overall Traffic – It’s good to know what your overall traffic number is so that your prospective buyers can get an idea of how much traffic your website is getting.
- Social Media Traffic – Have you built up a strong social media presence? Consider recording these efforts, including your follower growth. Again, Google Analytics is a useful tool in this situation.
- Traffic Sources – What is your main source of traffic? Where are your visitors coming from? Use Google Analytics is a great tool to help you learn where your traffic is coming.
The conversion metric is considered important, but it entails more than the sale itself. Once you understand that, you can come up with an idea to entice visitors to take the journey you want them to such as email sign-up, registration, form completion, information request, etc. Google Analytics again will help you get a good picture of your conversion rate.
- Objectives – What will the conversion be? If the objective is to have visitors give you their email address, you can get a conversion of how many provided you with their email address to how many visitors you had.
- Conversion Funnels – Every objective you have should have a tie in together – to funnel together. This will help you to learn the number of people who are moving from one stage to the next and where you’re losing them. With this information, you can learn what is and is not working.
- Research and Test – Believe it or not, research is still considered an important sub-metric of the conversion method. Again, it boils down to learning what is and isn’t working. Don’t automatically assume that what you’re using isn’t working because you don’t see a high conversion rate. You may need to keep what you have but try something else to go along with it. Where are things going wrong with prospective buyers?
As you see, for every primary metric, you have sub-metrics that your prospective company buyer is going to want to know. You should have all this information in hand to show them. They want to know why they should buy your company. This information acts as the incentive as to why your company is worth the money you are asking. You know from the numbers it’s time to sell the company. Now, it’s up to you to show them that the numbers are as good as you know them to be.
Remember, you’ve built a company you can be proud of, why not sell it for a price that your hard work, determination, and blood, sweat and tears have put into it? An online business broker can help you set the best price for your business, ensure that your financial statements, marketing metrics are complete and in order and even help you decide if it’s the right time to sell at the present moment. Plus, an online business broker will do the leg work, finding prospective buyers, vetting them and facilitating the sale from the negotiation process onward. To learn more about the services of an online business broker, contact us today