How To Sell Online / Success Stories

How I Grew, Valued, and Sold My Ecommerce Business — The Why, Who & What’s Next

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You dream of becoming a successful entrepreneur, building a business from a single idea, and growing it into a thriving company.

But have you prepared yourself for the possibility of selling the business you have poured your heart and soul into?

  • Maybe you need to sell out of necessity for your family?
  • Perhaps it grew too fast too soon?
  • Or the seller’s market is financially strong and it is simply the perfect time?

In my case, So Suzy Stamps hit the trifecta jackpot all at once.

  • We were facing major family changes
  • Our business grew too fast too soon
  • The creative industry was booming

Our reputation was in strong standing and the timeframe we were looking at selling played well into our growth trends.

In 2 years, we saw a 374% growth, opened a brick and mortar store and our inventory grew to more than I could handle on my own.

We had hit that pivotal moment in our company where we grew too fast.  If I wanted to maintain a high customer satisfaction rate, I needed to make a decision.

Business may have been thriving, but our suppliers and manufacturers could not keep up with the demand and our customers were becoming frustrated.

We had hit that pivotal moment in our company where we grew too fast.  If I wanted to maintain a high customer satisfaction rate, I needed to make a decision.

The choices I had before me were simple:

  • Invest and expand
  • Walk away
  • Sell

My husband and I discussed the possibility of expanding and potentially manufacturing our own stamps, however, the time, money and man-power needed were too great.

If we went into manufacturing, we would need equipment, a new building, staff, and supplies, not to mention there would be a learning curve as neither of us had manufacturing experience.

He wanted to retire, not start a second career.

Walking away was out of the question. I had invested too much time, energy and money into my company to just let it go. Besides, we were thriving.

I did not become an entrepreneur just to walk away.  This was not a hobby, this was my life.

The only real option was to sell.

  • But where would I go?
  • What did I need to do?
  • How much was it worth?
  • Who could help me with this process?

There were so many questions I needed answers for and not a lot of valuable information available.

6 Questions Every Owner Must Answer Before You Sell

Let’s face it, the people writing the traditional selling a business “how to” books and online articles don’t know me, my customers or my industry.

What works for a real estate developer does not work for a stamp company. I am not making millions of dollars a year, I am a small business owner in the creative industry.

The most important piece of advice I can give when looking at selling your company is to listen. Listen to you, your customers and your industry.

  1. Why do you want to sell? Is it out of necessity, continuing growth or are you looking to make a profit?
  2. What do you need to make your company attractive to prospective buyers? Does your website need to be updated, inventory cleaned up, marketing campaigns planned? Are your bookkeeping and financial documents in order?
  3. How would your customers benefit from a sale? Would there be more inventory available, faster shipping times, more product options?
  4. Who would have the ability to grow your business the way your customers needed it? A competitor, a manufacturer, a consumer?
  5. How is the financial climate in your industry? Is it stagnant, growing or receding?
  6. Where will you find a buyer? Is it in your best interest to find a broker or find one yourself through networking, conferences, industry organization or word of mouth?

Once the decision to sell was made, I knew I needed to get my house in order.

Follow Suzy’s New Venture

Want to keep up with Suzy? Listen to her podcast, take classes and soak up all the ecommerce tips and tidbits she’s offering online.

Prepping to Sell My Ecommerce Business

1. Updating the Theme

I started with cleaning the backend of my website. Think of it in the same way of staging your house to put on the market.

You want the charm without the personal touches:

  • Clean
  • Uncluttered
  • A palette for new vision without feeling sterile and uninviting

At this point, I was still using one of the old templates from BigCommerce and decided the website looked dated.

I could have left it for the new owners to manage, but:

  • I did not know how long it would take for me to find a buyer
  • December was a slow month in sales and the perfect time to shut down the site for maintenance
  • I could make an event out of the new site to promote sales come January 1st, which would look great to a prospective buyer
  • It would also help to prepare my customers to a potential change

When selecting a new template, I wanted something simple, where if the new owners wanted to update the logo, it wouldn’t clash with the new theme. The new theme also needed to still allow for the personality of the brand to shine through.

I decided to go with the Runway Bright Stencil by Pixel Union. It was cheery, fully responsive and could be easily updated if necessary.

2. Organizing Inventory

Next, I removed all products that were not in stock. I was not going to invest in add-on items during our transition period and I did not want our site to appear empty to potential buyers or customers.

I also condensed our product categories.

Having so many categories made our website look cluttered and uninviting. Instead I re-organized and streamlined the flow.

I also updated all our product images and included photos of how our stamps were used on cards.

I wanted the inspiration for our designs to be available for not only the customer, but for the buyer as well. They weren’t just purchasing our company, they were inheriting our brand, our designs and the personality behind it.

They needed to be inspired –– inspired by our website, our products, reviews, social media, customers and design team.

Above is what the backend of the site looks like for each product –– where I added in additional imagery to help my customers and the new buyers visualize how to use the product.

Above is what the site looked like to customers and the prospective buyer.

3. Getting Financials in Order

Once I had our website updated, I started on our financials – the key first step to a favorable valuation. Not only did I update our bookkeeping records, I wanted to create a one-page quick glance reference sheet that included:

  • Last 3 years of sales revenue
  • % of growth per year
  • Top 10 stamps with their sales amount
  • Active wholesale accounts
  • Number of customers, orders and conversion percentage
  • Value of inventory on hand
  • Number of unique designs we owned
  • Monthly operating costs

Our annual industry conference was coming up in January and I wanted to:

  • Take advantage of the opportunity and meet with potential buyers.
  • Be prepared with quick reference material and not an overwhelming amount of information.
  • Have specific information on hand my buyer would need to know for our industry.  They did not have a lot of time to dissect a report, if they were interested in more information, we would provide it later in the discussion.

For now, a one-page report would be ideal for our situation.

Where to Find the Right Buyers

Business calculators and formulas should be taken with a grain of salt. You need to know your industry and sell that industry vision to a buyer.

Since the conference was geared toward manufacturers and buyers and not open to the public, I could focus on gauging the interest from companies within our industry, which would become invaluable when it came to determine the actual sale price.

It was during the conference that I received a valuable piece of advice from another stamp company owner:

A competitor does not hold the value of your business as high as a consumer or manufacturer.

Primarily, since many of my customers are their customers, my customer database brings in zero value. The designs and sentiment stamps we carry also bring in little value as there is a good chance we have overlapping or similar designs.

In other words, my initial asking price just took a big kick to the pants, but it also reinforced that business calculators and formulas should be taken with a grain of salt –– which is why it is so important for you to know your industry and the type of seller you want to attract.

How Various Buyers Value an Online Business

For me, my top three candidates for business valuation were Manufacturer, Competitor and Consumer and each had their pros and cons, it just depended on what my needs were.

1. Manufacturer

  • Sells their services to other stamp companies so their client database is made up of store owners, not consumers
  • By manufacturing and selling to the consumer, they will have a higher ROI
  • They could recoup the cost of the purchase quicker

Biggest benefit: These factors equal a more perceived value in your business and a higher sale price.

2. Competitor

  • Same customer base
  • Duplicate design
  • Established website
  • Your company would integrate with theirs and your designs as a brand they offer
  • Your existing inventory is worth approximately 35% of cost

Biggest drawback: Essentially, your company holds little value and would have a low sale price.

3. Consumer

This is someone who is active and educated in your industry who wants to just “take over” what you have built.

  • Complete turnkey business is an asset
  • Website has high value
  • Customer database and social media presence has high value

Biggest value: Greater value in your business as the hard part is done and equals higher sale price.

Timing is Everything

You want your reputation to remain intact – which is why timing is so important.

In most cases, you will be focused on a consumer or manufacturer, but you also need to factor in your “why.”

  • Why are you selling?
  • Do you need out sooner rather than later?
  • Can you wait for the perfect buyer who can meet your asking price?

If you are in dire need to sell, a competitor may be your best option.

  • They have the funds to purchased
  • You won’t be required to stay on longer during transition
  • Relatively painless

If you have time and your main motivation for selling is to ensure your customers are taken care of, a manufacturer may be your best option.

  • They have the funds to purchase
  • You may be asked to help during the transition
  • Your customers will be happy as their needs will be met

Imagine if you could have walked into your dream business and instantly started to see the sales pour in: the customers, brand awareness, the hours of sleep you would enjoy, lack of stress, wouldn’t that be heaven?

That is what a consumer buyer will be getting.

They get it all. Everything you did, everything you have and everything in the pipeline has value. But…

  • Do they have the funds up front?
  • Would you consider payments?
  • Would you be willing to stay and help through a transition period?

If you have time to wait for a buyer to come up with funds, going for a consumer buyer could be the most lucrative. However, you want to look at your business trends.

  • If business is typically slow in Q4, do you want to sell to someone who may be disappointed in the lack of profit?
  • Do you want their perception of you be tainted due to the ebb and flow of seasonality?

Regardless of whether you warned them about the slow months, you want your reputation to remain intact, not slandered.

When it comes to selling to a consumer, keep your timing in mind. In the end, you will all benefit from it.

How to Transition Profitably

We turned the change of ownership into a fun and wonderful time, with clear direction of who was now in charge.

First things first, I sold my business to a manufacturer. And not just any manufacturer. I sold it to the manufacturer that helped me to grow the business in the first place by providing all of the quality stamps I needed in the timeframes that I needed them.

It was clear they knew how to handle demand and that they made quality products. Both of those were especially important to me in selling the business. I had built trust with my audience, and I didn’t want to hand them off to a seller I wasn’t sure knew how to keep up with demand and quality in sync.

I sold the business to them in the first quarter of 2017. One of the key reasons I wanted to sell in the first quarter is because traditionally Q1 and Q2 are our most profitable months. The new owner could easily see a profit from their investment in the first 6 months if purchased at the right time.

I also scheduled specific promotions and marketing campaigns throughout the first half of the year.

We had new releases, anniversary celebration, month long collaborations with other companies, we sponsored events that drew in new customers and we celebrated the new owners.

We turned the change of ownership into a fun and wonderful time, with clear direction of who was now in charge.

When I asked how they felt at the end of their first month, John replied:

“I haven’t smiled this much in a long time.” While Vicky quickly added, “he also hasn’t seen the sun in a month.”

When selling your company, it’s about making everyone feel confident and successful.

  • Put together a marketing plan that they can implement
  • Offer to help them during the transition
  • Answer the questions they have
  • Give them feedback if they ask, but keep in mind this is their baby now.  They need to make the decisions that are best for them and the vision they have for their new business.

How to Transition Peacefully

Don’t sabotage the new owners by being aloof and non-existent.

Now that you have sold your business, what happens now?

  • Where do you go?
  • What do you do?

If the new owners are receptive, plan an event to celebrate. First, put your customers at ease by being active on social media. Put on a happy and positive front, address them directly, introduce the new owners, tell them why you sold, if appropriate.

Remember, you know your customers and what needs to be done to put them at ease.

Don’t sabotage the new owners by being aloof and non-existent. The more successful their first month is, the more valuable you become.

Learning to Let Go: Starting a New Chapter

Once an entrepreneur, always an entrepreneur and there is always another dream to grow.

There is one aspect you can’t plan for and the one that sneaks up on you with no warning:

The emotional roller coaster of letting go.

The joy, relief, sadness, fear and pride. It’s very similar to watching your child graduate from high school and then move out, get married, and have a family of their own.

They will always be your child, but now it’s time for them to make a life for themselves. A lot of times without your opinion or consent, as much as that may frustrate you, it’s part of the process.

The “baby” I gave birth to, raised, nurtured and cultivated into a successful young business will always be a part of me, but for her to continue to grow, I needed to let go and move on.

I needed to let the new owners take her in the direction they envisioned.

It’s my turn to sit back, relish in my achievements and start building a new chapter in my life. Because let’s face it, once an entrepreneur, always an entrepreneur and there is always another dream to grow.

Follow Suzy’s New Venture

Want to keep up with Suzy? Listen to her podcast, take classes and soak up all the ecommerce tips and tidbits she’s offering online.

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