5 Tips for Increasing the Valuation of Your Ecommerce Business
Updated: Apr 22, 2022
There are many reasons why you might be looking for an exit. Perhaps you’re an entrepreneur who’s ready to start something new. Perhaps you’re ready to retire and cash in on all your hard work. Regardless, valuing your ecommerce business at the right time is crucial for you to make the most of exiting your brand. Here are our top 5 tips to ensure you are receiving the best and most accurate valuation of your ecommerce business.
1. Prepare Your Site
The website for your business is equivalent to the storefront of a brick-and-mortar shop. In order to get the best valuation for your ecommerce business from potential buyers, make sure your website is clean, easy to navigate, and all information is readily available. A good tip to follow is to ensure your products are only two clicks away from the homepage. A more streamlined website not only has the potential to improve sales, but also makes your brand a more accessible and attractive option to potential buyers.
2. Paperwork At The Ready!
Potential buyers are generally interested in the same financial information across the board, although some buyers may ask for more specific information. Generally, the most important details of your brand's financial health are:
Annual revenue for the last 3 years
Profit over the last 3 years
Company balance sheet, and
SDE (seller discretionary earning).
By ensuring you have all this information readily available, it not only helps you manage your company finances better, but also offers sellers a more robust and better impression of the financial health of your company. This improves the valuing of your ecommerce business.
3. Organise Your Customer Data
What is the distribution of your customer base? Where are your customers based? All of these questions are important considerations for a potential buyer when deciding whether your company is the right fit for them. Some buyers have no preference, whereas others would prefer a brand with a customer base they are familiar with. Either way, having this information on hand is an easy way to let potential buyers decide quickly whether or not to move forward with you, and gives YOU more time to search for a more suitable buyer too!
4. Improve Your Product and Services
While this might seem obvious, constantly seeking to improve your goods and better your customer service improves your reviews, makes your brand more profitable, and also greatly improves the valuation of your brand. Not only does this showcase in-depth knowledge of your product, what your customers want, as well as your industry, it also indicates potential for further growth and expansion to buyers. One way you can improve your customer service is by automating your customer service cycle, so customers get their queries answered and their problems solved as quickly as possible.
5. Utilise Una Brands’ Free Valuation Service
If you’re interested in selling your brand, Una can help! We offer a no-strings-attached free valuation service, and will offer you a fair, fast and reliable valuation if you meet our acquisition criteria. What are you waiting for? Get evaluated by Una Brands today!
While valuing your ecommerce brand is a stressful endeavour, getting the right valuation for your company is one of the most important steps. Let us know if you have other tips for potential sellers on getting the best valuation for your ecommerce business!