If you already have a Shopify store, there might come a time when you may want to sell the store. You may have even started with your Shopify store as a side hustle or as a full-time commitment. However, when it comes to selling your store it is always best to expect a certain amount of profit. Most certainly, you may expect to sell the store at certain pricing that would be profitable. If you aim to put up your Shopify stores for sale with a six-figure stamp on them, certain things have to be done a certain way. This article can help you understand the different steps that can help you sell your Shopify store for six figures.
Steps to Put Up Shopify Stores For Sale for Six-Figures
Some many different pieces or factors determine the valuation of Shopify stores for sale. Each of these factors has a varying degree of influence on the overall pricing and valuation of the business. You might have the impression that your business might be worth a lot.
However, it is important to consider all the different aspects that determine the valuation of a Shopify business to make sure that you arrive at an accurate estimate. This way, you will be able to price your business right and reap the best benefits. By considering all these factors, here are the 5 steps that can help you sell your business for six figures.
Calculate the EBITDA Multiple
One of the most common ways to understand how a Shopify store for sale gets its valuation is to use the common formula of EBITDA x Multiple. Instead of using a typical yearly average, it can be beneficial to look into the monthly average of your business.
All you have to do is multiply your 12-month average net profits with the multiple. To identify this multiple, you will have to practice. Usually, multiples range between 30x and 50x. The current state of the Shopify store is instrumental in determining this multiple. So, make sure that you factor in the current state to identify the right multiple values for calculating the valuation.
Identify Your Traffic and Revenue Diversity
Traffic is an important factor to be considered for a business. However, the source of this traffic is also important. In case Shopify stores for sale get all of its traffic from a single source, then the diversity is less.
This would mean that the target user and persona is focused on a small part of the potential market. Similarly, it is also beneficial to consider the revenue diversity as this can provide information regarding the different types of customers who purchase products or services from Shopify stores for sale.
Have a Strong Branding
Branding can be quite a tricky factor to identify and quantify. Essentially, a strong brand is associated with providing a positive experience to its customers or users. The positive experience that customers have can be quantified in certain avenues such as positive reviews, recurrent purchases, brand loyalty, recommending the product or service to their friends and family, and many others.
You can validate a strong brand presence by observing plenty of organic engagement on social media or testimonials provided on social platforms or email. Ultimately, with a strong brand, you can experience an increase in gross revenue.
Showcase Your Strong Financials
One of the other key steps to follow when you plan to put up Shopify stores for sale for a six-figure value is important to show that you have a strong revenue cycle. There are certain ways in which you can do this. The first and most important step is to have clear financial documentation. Make sure that you have documented all of your finances along the way as the business has grown.
Moreover, make sure that the finances are accurate and audited so that you can ensure that you are in the clear. Having a clean profit and loss statement can provide potential buyers with insights into the financial aspect of your company. By being transparent with your finances and showing a clear picture of your revenue, it is more likely that the buyers or acquirers of your business appreciate it.
Have Strong Analytics
While you may have differences in traffic and revenue across different user personas and niches, it can be challenging to explain the trend during the different times of the year. Make sure that you have strong business analysis demonstrated with the help of analytics so that your trends, insights, dips, and peaks can be explained clearly.
In a Nutshell
If you plan to put up Shopify stores for sale for six figures, make sure that you have positioned your company well. In addition to the positioning, have strong financials, revenue, and other relevant documentation so that you can go ahead with the selling process without facing any major challenges. If you are planning to sell, you also have the option to sell Shopify store to Unybrands.