Exiting a business is no small chore, especially if you’ve put your heart and soul into an operation. A well-planned exit strategy is your best bet of ensuring a painless process for both you and your buyer.
An experienced broker can advise on the best way to exit your online business, but it always helps to have some basic resources at hand to make sure you don’t overlook any details.
This list may change depending on your business model, but there are some general things you’ll need to think about and prepare for in the year leading up to selling your business. You don’t necessarily need to have everything from the list, but the more you do now the easier the sale will be.
Here’s what you should keep in mind:
Traffic
Your web traffic is a good indicator of the quality of your site, the amount of customers you draw in and the effectiveness of your marketing efforts. As such, a prospective buyer will want to know details related to your traffic. In the year leading up to a sale, you should:
- Install Google Analytics and ensure it is tracking correctly
- Install Google Search Console and ensure you site does not have any warnings/penalties to deal with
- Track keyword rankings and competitors
- Monitor your inbound links using a tool like Ahrefs for authority links to help with the sale or to notice any poor quality links that can be disavowed
- Properly setup goals in Google Analytics to ensure you are tracking conversions/goals across the site and have relevant data
Financial
Financial records are the most significant marker of your business’ health. There’s no end to what financial information a buyer might ask for, and while you won’t necessarily need to jump through all of their hoops, you should:
- Keep all bank account statements and earnings reports from networks and merchants; organize into a monthly income spreadsheet
- Have explanation for any deviations in monthly earnings
- Document all pre-paid accounts with vendors, advertisers and agencies
- Document all pre-paid revenue from customers on annual plans
- Detail a list of all accounts receivable (i.e. any earnings that have not yet been paid)
- Track correlation between goal conversion data and transactions
- Ensure other business assets are not co-mingled financially and if they are, ensure you can clearly separate the two
- Track all business expenses; include any one-time, fixed overhead expenses
Owner
As a business owner, you’re more than just a symbolic head of state. In some cases, you might even be a part of your company’s brand. This happens naturally, but leading up to a sale, you should aim to remove yourself as much as possible. Here are some tips:
- Detail the role you play in your organization (i.e. what will it take to replace you?)
- Document any relationships or agreements you have in place that are key to the business; and how/whether they will continue post sale
- Be prepared for personal checks from buyers. Update your social media profiles so buyer can get an accurate story of your career path
- Prepare an explanation of why you’re leaving the business; it will come up, and you’ll want to present a consistent, positive message
Operational
How transferable are your operations? A prospective buyer will typically look for an opportunity that will be easy to take over, so having streamlined operations – outsourced whenever possible – is key. In general, you should:
- Conduct a task audit which includes a schedule of daily and weekly tasks, how much time and expertise they require, and who typically performs them
- Detail all work done by vendors and contractors, as well as their invoicing, contracts and contact information
- Indicate whether there are tasks that are not currently outsourced that could easily be
Technical
Technical issues in an online business tend to be a deal-breaking red flag for buyers. Get all of the technical aspects of your business in order to make it a more attractive acquisition. You may want to:
- Update your website and ensure there are no broken links, images and all pages work properly
- Make sure your site is mobile friendly and has an optimal page load speed
- Analyze your own hosting data to ensure you are on an optimal hosting plan. If you are overpaying, move servers as soon as you can.
- If you have multiple sites on the same server, consider splitting them out now
- If you’ve had technical downtime on your site, note why and how it was fixed
- Conduct an SEO audit to check for there are no potential issues. If there are, fix them now.
- Ensure your email subscriber list is active (purge those who are not to reduce costs) and track your email campaign metrics (Note: This will be more important for businesses that rely heavily on email for customer acquisition)
Legal
Now the part that nobody likes, but is nevertheless integral to a successful handover: legal. A buyer who does his or her homework will definitely need to know about copyrights, trademarks, agreements and any past legal disputes before investing. Make sure you:
- Ensure that your corporate entity is in the state registrar and in good standing
- Take care of any liens on your business or personal property that could affect a sale
- Make sure your trademark is properly registered and, even where there is no trademark, check to ensure you do not infringe on any third-party trademarks
- Do a content audit to ensure you own all rights to copy, images, etc., particularly if you’ve used a third-party content producer
- Update your privacy policy and terms of use; pay special attention to policy, compliance and any guarantees or warranties they establish
- Detail any past legal problems, including current litigation, disputes and judgments
- Document any strategic alliance agreements or obligations
- Make a list of any supplier or third-party agreements
Need Help Planning Your Exit Strategy?
Nothing can replace advice from an expert, so if you’re considering selling your online business, sign up for our free exit planning email course. We provide tips and advice to help you make a strategic exit from your business, and put it in the right hands.