OpenClaims

How to sell yourShopify store

Building a Shopify store is a challenging journey. Watching something you started from scratch grow into a successful
business is incredibly rewarding. However, there comes a time when you may want a change. This could be to pursue a different business idea, spend some time with family, or chase that hobby you always wanted to make a reality.

You may make the tough decision to sell your Shopify store in order to unlock money that you can reinvest in your next projects or personal interests.

If you’re thinking of selling your online business, this article is for you. Read on to find out how to decide whether you should sell, how to calculate the price of your online store and prepare it for sale, and finally, how to sell your Shopify store as seamlessly as possible.

Should I sell my onlinebusiness?

This is step one—scratch that, step zero. You need to be sure this is the right decision for you; creating and growing a business is a sentimental affair. Evaluate the reasons you’re considering it in the first place and make sure you’re all-in on the decision to sell.

Finding someone dedicated to take over the day-to-day of your business is a good option. Consider what you want from a prospective party's motives, ambitions, and plans for expanding your company.

Past the emotional side of deciding to sell, you also need to consider whether it’s the right time. If your company is seasonal, or if revenues have been declining for a few months, think about waiting until the business is performing at its peak. It's critical to assess how your company is currently performing, its current valuation, and what you need to do to ensure you achieve your desired price.

Let’s see how to value your online business to prepare it for sale.

What’s the value of myShopify store?

Everyone wants to believe that their idea is the next big thing. That’s why many business owners tend to overestimate the value of their businesses.

The fact is: your company's value isn't determined by the amount of time and money you've invested in it. It mostly depends on how quickly it’s growing, how it’s functioning today, and its profitability.

While future growth is uncertain and often discounted by buyers, a fast-growing business with a proven history of growth with healthy margins will be valued higher than a declining business or a business with a short track record.

To determine the value of your Shopify store, you first need to calculate your seller’s discretionary earnings. The SDE usually represents the earnings generated by your business to a buyer over a 12-month period.

To offer potential acquirers a complete picture of your company’s history, you should provide twelve months of reliable data that shows your business' genuine status.

Once you know your SDE, you can begin calculating a business valuation by multiplying your annual net profit by the number of years your firm has generated net profit. Here’s what this calculation looks like:

Annual SDE x Market Multiple = Shopify Store Value

While this is how most buyers and marketplaces value Shopify businesses, there are shortcomings. The SDE and market multiple method is a simplistic formula that doesn’t take into account many key variables like the strength of your customers, their purchase behavior, and the efficiency of your marketing engine–among others.

Share the article