The Types of Buyers in Ecommerce Business Acquisitions
If you are planning to sell your business anytime soon, there are many concerns already on your mind. When selling, you have to consider the value of your business’s assets, advertising that your business is for sale, and the stress of the transition process, all while keeping up with the day-to-day pressures of keeping your business running smoothly. You may wonder why you should add another concern to your already long list.
While selling your business can be stressful, it does not have to be overwhelming.
There are many best practices you can follow to help the entire process go smoother. Perhaps most importantly, you need to keep in mind the diverse types of buyers who are attracted to e-commerce acquisitions. Knowing the types of people you are bound to meet, what motivates them, and how best to pitch the sale can make all the difference in how long your business stays on the market and what your profits will be on the sale.
In this article, you will be introduced to the types of buyers in e-commerce business acquisitions you are most likely to encounter. You will also get some tips on how best to interact with these buyers to put your business in the best possible light.
Every business owner has owned a first business. They either created it, bought it, or inherited it. However, not every entrepreneur has. Your business may very well be the path to business ownership for your buyer. The newcomer may be working a day job and be tired of it. For them, owning an online business will be the first step in mapping out their lives. Your business may be what lets them start building the future of their dreams. All of this is likely to be on their mind when they inquire about your business. They are hopeful, even excited, about doing business online.
Generally, newcomers are looking to pay about $80,000. Too far above this is likely beyond their reach, and too far below may not feel like a real enough investment.
Let yourself be engaged by their excitement. Find out what interests them about owning an e-commerce business. Keep in mind that the newcomer is looking for something they can understand and successfully manage. The more complex your business and sales presentation is, the less likely the buyer will find it to be the right fit.
Many newcomers get cold feet if they feel they will be overwhelmed.
Make sure to show them the processes already in place to help them run things.
If you are willing to give them advice or other support after the purchase, make sure they know this. It can give them the extra bit of confidence they need to make a deal.
If you want no involvement after the sale, or your business is too far outside the price range, selling to the newcomer may not be the right option.
Self-starters already have some experience owning and operating an e-commerce business. Often, they like to find new businesses they believe they can improve or grow exponentially. They are also probably self-taught in various business practices, from search engine optimization to social media ad campaigns.
Because of their prior business experience, self-starters can and are more willing to make a larger investment. Generally, they are looking to purchase a business valued somewhere around $100,000.
Every self-starter is different and wants different qualities in an online business. They may want to purchase a business that could be doing better because they see a way to make it profitable. Or they may be looking for something that gives them a new challenge.
With self-starters, the best method is to show them the potential your business has. This is sure to gain their interest.
Some entrepreneurs like to run a single business and make it their career. For others, the satisfaction of building up and selling their business is what motivates them. Just like in the housing market, there are many buyers who look into e-commerce businesses because they want to flip them for a profit. Usually, these buyers have a team to assist them in managing the affairs of the business.
Often, business flippers are highly experienced in particular types of businesses. These tend to be the businesses they seek out. Flippers find a business they deeply understand that is underperforming or has the potential for growth. Using their wide knowledge of the business’s niche, flippers can make the business more profitable. After a few years of improving the business, flippers put it on the market.
Because business flippers make their profit by reselling, they tend to be tougher negotiators when it comes to price. This is almost definitely not their first price negotiation, and it will show.
Presenting your business as a smart investment at the right price is the most effective way to reach them.
Investors often own part or all of multiple businesses at a time. Investors often pool their resources with other investors. This lets them buy seven or eight-figure online businesses. Because they have such wide resources, they usually do not run businesses themselves. Investors are usually deeply familiar with what makes e-commerce businesses tick and understand what to look for when making a purchase.
Investors are looking to diversify their income, so showing them how your business could fit into their overall portfolio is wise.
Portfolios can be large or small with unique businesses. Keeping in mind the size and goals of your buyer will help you see your business through their eyes.
Buyers know what they want in a business. Knowing their motivations will help you communicate clearly about your business. It will also help make the selling process a little faster.