SE3 EP12: How to Build and Sell an eCommerce Business with Maximum Asset Value

2X eCommerce Podcast · with Thomas Smale · January 22, 2018 · 41 min

Summary

To maximize your eCommerce business valuation for a future sale, focus on building a robust and scalable operation from day one. This episode provides essential strategies for creating an attractive asset for buyers, leveraging expert advice on growth, exit planning, and M&A in the digital space.

Key takeaways

• Implement clear standard operating procedures and strong documentation to demonstrate a transferable business model, increasing buyer confidence and valuation.
• Focus on diversified traffic sources and revenue streams to reduce risk and signal stability to potential acquirers.
• Establish a strong, defensible brand and customer base, as these intangible assets significantly contribute to an attractive exit multiple.
• Proactively seek advice from M&A specialists early in your business journey to understand what drives value and prepare for a successful exit.
• Optimize for recurring revenue models or strong customer lifetime value (LTV) metrics, as these are highly prized by buyers for predictable future earnings.

Themes

Topics covered

Episode description

On this episode we talk about how to build your ecommerce business in 2018, in preparation for a sale or exit sometime in the future.   I am joined by Thomas Smale; the Founder of FE International, a leading website brokerage firm.  Thomas specializes in advising in the M&A of SaaS, e-commerce, affiliate and content businesses.  He has consulted hundreds of internet entrepreneurs on exit strategy, growth and business development.     FE International offers comprehensive exit planning services  as well as direct access to an established network of pre-qualified international investors  to drive demand to your business and maximize value for your company.   FE International provides advisory services for mid-market SaaS, e-commerce and content businesses.  The company has become the pre-eminent adviser and valuation thought-leader in the industry,  completing over $75M in sales across 425 acquisitions since 2010.  FE International is headquartered in Boston, US, with offices also in Europe and S.E. Asia.     --- SPONSORS: This episode is brought to you by: .STORE .STORE domains are getting mainstream adoption by brands such as Emirates (www.emirates.store), Jimi Hendrix (www.jimihendrix.store), and F1 (www.f1.store). If you want a short and snappy domain name for your retail brand or your online store, you can now get a .STORE domain name for just £4.99 or about $6.99 using the coupon code 2XSTORE at www.get.store.  and Klaviyo  Klaviyo is a game-changing email automation tool specifically built for scaling eCommerce businesses. I am not just saying it…I use Klaviyo in my ecommerce store as well in a number of stores I advise for. With Klaviyo, in just a few clicks you are able to activate pre-built email automation flows such as cart abandonment, up-sells and win-backs.  Klaviyo also seamlessly integrates with Facebook Audiences. If you’re an eCommerce manager, I cannot recommend Klaviyo enough. Give Klaviyo a try today on  www.klaviyo.com.

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Frequently asked about this episode

What does this episode say about business valuation?

Implement clear standard operating procedures and strong documentation to demonstrate a transferable business model, increasing buyer confidence and valuation.

What does this episode say about exit strategy?

Focus on diversified traffic sources and revenue streams to reduce risk and signal stability to potential acquirers.

What does this episode say about growth strategy?

Establish a strong, defensible brand and customer base, as these intangible assets significantly contribute to an attractive exit multiple.

What does this episode say about mergers & acquisitions?

Proactively seek advice from M&A specialists early in your business journey to understand what drives value and prepare for a successful exit.

What does this episode say about business valuation?

Optimize for recurring revenue models or strong customer lifetime value (LTV) metrics, as these are highly prized by buyers for predictable future earnings.

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