Questions to Ask Yourself Before Selling Your Business | Chris Shipferling | Global Wired Advisors
Honest Ecommerce · with Chris Shipferling · January 18, 2021 · 43 min
Summary
Considering selling your ecommerce business? This episode provides crucial insights for founders, detailing the essential pre-sale preparations. Learn what acquirers look for, from financial health to operational robustness, and understand the importance of seeking expert M&A advisory early in the process to maximize your company's value and ensure a smooth transaction.
Key takeaways
Before even considering a sale, ensure your financial records are impeccable, including monthly P&L statements for at least two years, prepared on an accrual basis using GAAP methods, and maintained by a competent CPA.
Understand that acquirers value not only financial metrics but also digital health. Be prepared to present data on customer acquisition, retention, website performance, and platform reliance beyond just sales figures.
Engage with a reputable M&A advisor early in the process. They will guide you through due diligence, help assess your business's true market value, and connect you with potential buyers.
Diversify your sales channels and marketing efforts; over-reliance on a single platform like Amazon or Facebook can be perceived as a significant risk by potential buyers, potentially decreasing valuation.
Systemize your operations and build a strong, independent team. Businesses that are overly reliant on the founder are less attractive to buyers who seek scalable and self-sufficient entities.
Chris Shipferling is a Managing Partner at Global Wired Advisors, a Lower Middle Market Investment Bank focused on Digital Assets. On this podcast, we talk about consumer packaged goods, why you should always collect data, and why placing your future on Facebook isn’t a good plan. To learn more, visit: honestecommerce.co Resources: Chris’s LinkedIn: linkedin.com/in/chrisshipferling Global Wired Advisors’ website: globalwiredadvisors.com Visit gorgias.grsm.io/honest to get your 2nd month with Gorgias free! Visit klaviyo.com/honest to get a free trial! Visit avalara.com/honest to find out how your business can be sales tax ready! Visit rewind.io, respond to any of Rewind’s welcome emails and mention Honest Ecommerce (this podcast) to get your first month absolutely free!
What does this episode say about finance & fundraising?
Before even considering a sale, ensure your financial records are impeccable, including monthly P&L statements for at least two years, prepared on an accrual basis using GAAP methods, and maintained by a competent CPA.
What does this episode say about founder & leadership?
Understand that acquirers value not only financial metrics but also digital health. Be prepared to present data on customer acquisition, retention, website performance, and platform reliance beyond just sales figures.
What does this episode say about analytics & attribution?
Engage with a reputable M&A advisor early in the process. They will guide you through due diligence, help assess your business's true market value, and connect you with potential buyers.
What does this episode say about dtc strategy?
Diversify your sales channels and marketing efforts; over-reliance on a single platform like Amazon or Facebook can be perceived as a significant risk by potential buyers, potentially decreasing valuation.
What does this episode say about finance & fundraising?
Systemize your operations and build a strong, independent team. Businesses that are overly reliant on the founder are less attractive to buyers who seek scalable and self-sufficient entities.
