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As an ecommerce business owner, you have been building and growing your store—but for what purpose? Did you know that, at the right time, you are able to sell that store and cash in on the equity that you have built up? If you think you’re ready to take the plunge, here are 6 reasons you should sell your ecommerce store right now.
1. Market is HOT
There are three external forces causing the price for Internet and ecommerce businesses values to rise dramatically in the last 4 years.
Awareness: Now more than ever there is general celebration of entrepreneurship and innovation, specifically in the tech space. Bigcommerce was built off the back of that trend. This has brought more awareness to buy and sell online businesses.
Healthy market: The worst of the financial crisis is over, Europe is in recovery and the US economy is going strong. This has caused M&A activity to increase driving up the price of businesses.
Baby Boomers retiring: The first baby boomers started retiring in January 2011. Most that owned traditional businesses are attracted to the less demanding nature of running an ecommerce store. This has brought capital and demand to the market.
2. Cash out
Your ecommerce business may well be your most valuable asset. This is related to all the hard work you have invested in growing your business–but it also means that all of your wealth is tied up in one asset. There is the risk that something might happen to the business and devalue your wealth, making you asset rich but cash poor. You may want to consider selling your business to realize the value that you have built in your company.
3. Other opportunities
Let’s face it, you’re an entrepreneur, and you have other ideas and passions. The time might come when the passion for your current business will be lower than the passion for your next idea. Selling your business will allow you to pursue those other opportunities. After selling, you’ll benefit from freed brain space and cash that you can use to invest in the new business idea or venture. Just note that there is no going back once you have sold your company, so make sure the timing is right when you sell.
4. You’ve hit your limit
As a business owner, you have a certain skillset, and sometimes you take a business as far as that skillset allows. At this point your business may flat line and you’re no longer able to grow. You have two options, extract as much cash as you can out of the business or sell the business and start another one.
5. You’re ready to exit
Some people build businesses to sell. And maybe as a part of your 3-5 year business plan you have reached the point where you are ready to exit. This is the time to execute on those plans and sell your store.
6. Poor performance
Sometimes a bad apple will always be a bad apple. If a business isn’t performing as well as it should, growing too slowly, or your aren’t capturing market share at a rate that you should, then it might be time to sell. The Boston Consulting Group growth share matrix explains that any business classified as a “Dog” with low market share and low growth should be sold.
Selling your commerce store can be both lucrative and satisfying. Are you ready to make the jump?
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