Online businesses are no different than offline businesses when it is time to find buyers. The business needs to show it is setup for success no matter who is in charge. The most important strategy for attracting potential buyers is making the business as attractive as possible by taking steps that document and prove success.
Following are some of the steps that successful online business founders have found helped them attract prospective buyers.
• Keep the business plan updated – Business plans need periodic updating to reflect current market conditions and adaptive strategies for sustainability. Business owners that keep their business plans updated are demonstrating a commitment to success. Being able to present a current business plan to buyers gives them the reassurance the business owner has a firm understanding of business conditions and the true condition of the enterprise.
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• Collect data and convert it to meaningful metrics – There are critical metrics for online businesses that tell the story of how well they are doing in cyberspace. They include the number of unique website visitors, breakdown of website traffic from links and people, bounce rate, conversion rate, and many others.
• Get and keep the records and statements in order – Small business owners usually wear many different hats. They manage operations, negotiate contracts, sell products and services, and so on. In the case of online businesses, they frequently are software developers or marketers too. It is not uncommon for the recording keeping to fall behind. When it is time to deal with potential buyers, there is a mad dash to get the financial statements updated. During the process, the business owner discovers that not all of the income is properly recorded or expenses are overstated due to mixing personal and business activities. Wise business owners make sure the business records are always up-to-date and the financial statements readily available upon request.
• Demonstrate enterprise sustainability – Buyers and investors want to know the business is not dependent on the founder or CEO to maintain operations. There should be documented policies and procedures, technical manuals, and descriptions of processes. A buyer wants to know he or she can access all the information needed to run the business.
• Wear the buyer’s shoes – Evaluate the business while assuming the buyer’s perspective. Business owners are usually too close to their business and have difficulty maintaining objectivity. Take a step back, pretend to be a buyer, and consider the factors that would make the business appealing as a potential purchase.
• Make sure the website runs smoothly – Nothing can kill an online business quicker than a website filled with non-working links or one that is difficult to navigate. Test each website element, and use metrics to determine what customers like and do not like about the website. The customer should be able easily make a purchase. A high bounce rate indicates something on the website was immediately unappealing.
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• Maintain a list of contacts – A comprehensive list of contacts who were interested in the business promotions, and products and services, is an asset. They buyer knows it is possible to step into the business with access to a long list of potential and current customers.
• Sell products and services, and not the company – Buyers will be interested in the business if it is successfully selling products and services. Business decisions should not focus on whether the results will appeal to potential buyers. They should focus on creating a positive customer experience.
Online business founders represent the newest wave of entrepreneurs who are turning technology into opportunities. Business owners are passionate about their enterprises, but prospective buyers need to find more than entrepreneurial love for the business. They should find an updated business plan, data and metrics that tell the full story, innovative products and services, and a website that attracts and retains customers.
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OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.