Published on August 1st, 2020 | by Alex Shute0
10 Considerations When Selling Your E-Commerce Business During COVID
Selling an e-commerce business already takes a lot of time and resources. It’s even more of a challenge these days because of the pandemic. However, if you’ll look more closely, selling your online business nowadays can also be attractive to a lot of buyers.
We need to practice social distancing and refrain from going out as much as possible. To keep yourself efficient during this time, you’ll need to do most of your transactions in the comfort of your own home. This lack of in-person presence is a welcome convenience to buyers and sellers alike. This is as far as selling your e-commerce business is concerned.
Benefits of Selling Your Business Now
1. Easier to set up meetings for questions and concerns.
All you have to do is to agree with your buyer on a time and date. There are numerous video conference applications that you may use for free. Choose one and you can get the ball rolling after that.
2. Everything is digital.
If you still haven’t got the chance to explore file sharing sites, now is your chance to get started. Aside from giving you more storage space for your important documents and particulars, these sites let you share them with the people concerned. This also makes for a better set-up because you don’t have to sanitize physical documents anymore, thus reducing the risks of contracting the dreaded coronavirus.
3. Faster turnover rate after closing the deal.
Because everything is done online, sending out the documents and other transitional needs is a lot faster. You don’t have to make the buyer wait around for a package that may take days to arrive. Your buyer also doesn’t have to worry about wrinkled papers due to transportation-related handling.
Consolidation of Documents and Other Relevant Records
4. Outsource as much as possible.
Going through all the legalities of paperwork may be a lot of work. This is especially true if you’re not formally trained to take care of them in one go. In this case, hiring professionals such as accountants and lawyers will help reduce your burden by giving you sound advice on what to prepare and what to expect during the entire process of selling your e-commerce business.
5. Consider this as your part in due diligence.
If you have been in the industry for a considerable amount of time already, you most likely have accumulated a lot of records. Aside from your financial statements, this may include vital information about your products or services. Make a run-down of all of these and organize them according to their respective categories. Imagine this as creating a portfolio to show your prospective buyers. Some of the documents that you have to prepare may include the following: financial statements, workflow operations, and product and service information.
They will need all the help they can get to learn more about the e-commerce business that you’re about to sell. Consolidation of records to show them also acts as a gesture of being considerate and thorough when it comes to transacting with them. In the long run, this will give them the impression that you’re a good seller to do business with.
Keeping the Books Clean
6. Prepare your financial statements.
For your financial statement, make sure to keep a record of the past and present transactions you have with your customers. Make a thorough analysis of the trends in terms of sales, expenses, and losses. If you have unadjusted balances on your records take note of them and proceed to the next point.
7. Settle your remaining balances and liabilities.
Speaking of unadjusted balances, settle them all and update your records as you go. Depending on your accumulated dues, this may be easier said than done and you may have to ask for assistance from an accountant to complete this phase. If you’re having concerns paying all of the debts in one go, consider discussing the matter with the people involved and propose a restructuring system until such time that you pay everything in full.
8. Double-check your cash flow.
Most online businesses are in a pinch nowadays because of the pandemic. If yours is doing quite well right now despite the crisis, this is a good way to help you prevent problems before they even manifest.
First off, analyze where your income is coming from. Is it from multiple sources or a single source? Also, check for the expenses that you incur every time you have to complete a transaction. Are there unnecessary expenses that you can cut off to further reduce expenses? If there are, get rid of them and re-allocate the funds.
Closing the Deal and Transferring Ownership
9. Setting Up Your Sales Packages.
Prepare at least two different packages with varying payment terms. Also, consider the payment arrangements depending on your buyer’s needs. Out of pocket and seller financing are just some options you may consider, depending on your buyer’s needs and paying capacity. Discuss these with the buyer and give them some time to weigh out the options.
10. Training and Modules
This is a must during the transitional phase. Because mass gathering is discouraged during this time, conducting online training is the best option right now. Make sure to have everything digitally accessible so the staff who will undergo the training can review the modules and training materials. It’s important so they will stay calibrated, as far as their knowledge of the business and the logistics are concerned.
Wrapping It Up
Even in a crisis, it’s important to keep your business organized and ready for a sale, whether you choose to proceed or not. Keep in mind that having foresight both on the sales and the processes that will take place is more crucial now than ever. This will keep you from having significant losses during a crisis. Aside from that, it can improve your leverage so it will be easier for you to bounce back from the impact that the pandemic caused.
If you’re interested in selling your e-commerce business, feel free to reach out to Upward Exits and we will ensure that the process is smooth from start to finish.