29 Sep Understanding the Opportunity: How to Position Your Online Business for a Successful Sale
The ability to succinctly express the growth potential of your online or digitally native business will have a material impact on the outcome of any M&A transaction, affecting both the deal terms and the final purchase price. Naturally, buyers want to earn a healthy return on their investment, so the greater potential there is to scale the business and make more money, the more a buyer is willing to spend acquiring the company.
Thus, it is crucial to develop a thorough understanding of the opportunities that exist for your business before going to market. Begin by grouping any activities deliberately selected to drive growth into the following categories.
These are initiatives you are currently working on or have already completed. From establishing a strong social media presence to expanding your product mix and soliciting positive reviews, anything that resulted or is resulting in sustainable growth is fair game. The goal is to highlight all parts of your company’s operational infrastructure that have intrinsic value and that form a stable foundation upon which to grow the business.
The foundation also includes any initiatives you haven’t yet started but can realistically complete prior to listing your business for sale. Small things like consolidating inventory management software, expanding sales channels, or launching new variations of existing products can add up to make a big difference.
Short-Term Growth Initiatives
These are easily executable strategies that will drive growth in the near term, post-acquisition. For instance, Global Wired Advisors frequently works with clients who could easily double their sales volume by allocating more resources to digital marketing efforts. These companies attract a lot of attention from buyers because they have a solid foundation and are poised for rapid short-term growth simply by investing more money in online ad campaigns.
Strategic acquirers look for companies that can generate a reasonable rate of return quickly, so highlighting opportunities to drive growth in the first one to two years is an excellent way to ensure your business stands out from the pack.
Long-Term Growth Initiatives
These include more complex strategies or initiatives that will take considerable time and resources to implement. Perhaps you have a fully fleshed-out product roadmap or a repository of content ready to deploy, really anything that will be rolled out over time or in designated phases. When all the pieces are already in place and all the company’s new owner will have to do is press “Go,” that lets the market know the business is primed for sustained long-term expansion as well as immediate growth in the short term.
The Next Step
An experienced sell side M&A advisor with a background in Institutional Investment Banking can help you create top-tier marketing materials that highlight the tremendous opportunity your company represents. Then, they can actively and selectively market the deal to buyers who will be interested in your business rather than just waiting for a buyer to stumble across your listing online.
In other words – not only does understanding opportunity help you position your business for success, but it also factors into determining the best buyer fit for your deal. Communicating those opportunities to the market and describing them in detail in the Offering Memorandum will help you navigate the business sale process and earn the maximum value for your business at close.
Global Wired Advisors is here to help you sell your Digitally Native D2C or FBA business. We are Mergers and Acquisitions specialists with over 50 years of combined experience in selling online companies. Try our Free Value Estimation Tool and see what your business is worth.
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