/ 10 min read
Sep 16, 2022
Selling your business can be a lengthy process with a lot of moving parts. Thousands of small businesses are sold in the U.S. every year. If you want to sell your business fast, what’s the best way to do it?
Every business sale is different. There’s no hard or fast rule for how long it takes.
Some sales require external professionals, like lawyers, accountants, or tax advisors. Deal structure, finances, and the market will affect the process, timing, and outcome.
If you’re a small business founder who has decided it’s time to move on, you may find your business is too small for private equity or venture capital. But finding a direct buyer can be a time-consuming and costly process.
It typically takes six to 12 months to sell a business. Here’s how you can speed the process up, or at least streamline it. (If you’re selling a Shopify business, a sale can happen in as little as a few weeks.)
Is now a good time to sell your business? You've invested so much time and effort into starting it. Are you sure you want to sell it?
It's essential to be clear about why you're selling:
Maybe you need to sell your business fast because of personal reasons, such as taking care of your health, paying off debts or loans, handling a divorce, or simply being overworked and finding your business too demanding.
Or, perhaps you want to sell your business fast for financial reasons, such as estate planning, paying taxes, making investments, or needing capital for a new business idea.
If you’re considering selling your business on a tight turnaround, potential buyers will be curious as to why. However, if your company generates a stable profit, has a significant number of customers, or long-term contracts that guarantee its consistency in the future, buyers will consider it attractive regardless of your reasons.
Figure out if this is 100% what you want to do and why. If you’re in doubt, then maybe it’s not the time to sell. If you have a Shopify store, there are other options.
How would you begin to sell a business quickly? We have prepared a comprehensive guide, but in short, here’s what you need to do first:
The performance of your business is one of the most important aspects potential buyers look at when considering a purchase. You'll need to show your balance sheet, cash flow, profit, and loss. These provide a clear picture of your business’s financial health, profitability, expenses, taxes, and cost of goods sold. Ideally, prepare the last two to three years worth of these documents.
If your business is profitable, make sure that’s clear. Or, if you’ve automated your operations, be sure to highlight that. Some buyers may not want to be actively involved, but want a business that essentially runs itself.
This step is also key for identifying areas that could be improved in order to sell your business quickly at
the highest price:
Audit key books and clean up financial clutter. Separate irrelevant expenses, pay off outstanding debts, and organize your records in an easily accessible place.
Make improvements in your business operations. For example, optimize how you manage the inventory, the supply chain, or customer acquisition.
Document your business processes to shorten the buyer’s learning curve.
Review all your contracts with employees, customers, and contractors and make sure the new buyer won’t have trouble transferring them over.
Ensure everything is prepared for the transition to keep your customers happy.
Once everything is in check, you’re in a stronger position to sell and garner a more attractive offer.
Remember, you don’t have to wait for the ‘right time’ to sell. Instead of waiting for a seasonal sales boost, use the time to prepare your business for sale so that you’re ready to act when needed. A savvy buyer will consider your overall performance, growth trends, and profit margins, including seasonality and a current market downturn.
The value of your business reflects its potential, not the money and time you've put into it. It largely depends on how well it has performed in the past, how well it’s currently performing, and what the outlook for future performance looks like. That’s easier said than done. Try to avoid including your emotional investment in your business when considering your asking price since buyers won’t include this in their decision.
You can calculate your business' value based on various methods: here’s a discussion of three specifically for e-commerce businesses.
A fast method is to calculate your net present value (NPV), or the difference between the current income and current expenditures over a period. This figure can show potential buyers the profitability of your business.
The NPV is the outcome of computations performed to determine the current worth of a prospective series of cash flows. You can calculate NPV with the following equation:
NPV = [Current value of future cash flow] — [Current value of cash expenses]
It’s common for prospective buyers to ask for the NPV to calculate the profitability of a particular investment based on the assumption that a dollar now is potentially worth more than a dollar in the future.
As a baseline, try to take into account profit margins, competitive advantage, customer acquisition cost, revenue stream diversity, brand value, and market conditions.
How to sell your business quickly, at the highest price: provide as much information as you can, because factors that will impact the value of your business include:
Growth and marketing plan
Variety of products
Revenue stream diversity
Financial condition of your business
Financial growth in recent years
Brand popularity, sentiment, and online reviews
Customer base size
Potential to attract new customers
Number and type of assets your business is selling
Conditions in your industry
To back up your valuation, consider sharing the following (but make sure you have appropriate non-disclosure agreements in place):
Traffic and sales reports
Full inventory list
Intellectual property (IP) details
List of purchase orders and supplies
It’s essential to take all factors into consideration when deciding on the value of your small business, but aim to remain objective. Once you’ve got a number, consider double-checking it with financial advisors, brokers, or other entrepreneurs and experts in your field.
Brokers mediate most traditional business sales. Brokers work with a network of buyers. They communicate new deals with their buyer contacts, and present you with options if they believe your company is a good fit for what their buyers are looking for.
Finding a good broker in your industry can be a long and exhausting process. You'll need an expert broker who will consider every factor and come up with a fair price for your company — not too high, and not too low. Your business network can be a good source to find a good, certified broker. However, before choosing a broker, check their track record.
Brokers will also ask to see the detailed documents and plans that you gathered in preparation for the sale. This helps them match you with a buyer that’s interested in your business.
Consider choosing a broker that understands your personal reasons for selling the company. They need to be compassionate throughout the process. You’ve put in a lot of time and effort into the business that you’re selling.
Finally, if you decide to hire a broker, keep in mind that there are some drawbacks. We spoke to OpenStore’s Frank Kosarek who has worked with thousands of e-commerce merchants who were looking to sell their businesses:
“Some founders spend six months or more fielding ‘interested’ buyer calls, only to realize that most people have just been tire kicking and have no intention to buy.”
While brokers take on the hassle of advertising your business, finding a buyer, and handling the legal work, they don’t do it for free. Frank continues:
“Another major problem with selling through a broker is that fees can be 10-15% of your entire purchase price. No offer is guaranteed and, if you’re able to sell, the process traditionally takes months before receiving liquidity.”
In addition, some brokers charge fees even if you sell without their help later. So, carefully consider the brokers you engage with and the agreements you sign.
Not all brokers are experts in your specific industry or understand the unique aspects of your business. If your business operates within a specific niche, you might not be a priority for the broker, making the selling process longer and more difficult.
Brokers also often use simplistic business valuation methods that could potentially over or undervalue your business. And ultimately, brokers will typically prioritize their own interests with their long-standing buyer networks over yours.
How to sell to personal connections from business, friends or family. There are no fees, more trust, and you have complete control over the process, but this could require a significant time investment and expert support for finances and legal.
Look for buyers online for free, or through your connections, to cast a wider net.
List on business marketplaces like Flippa, Empire Flippers, and Investors Club. This requires a significant time investment to manage the listing and sort through non-serious buyers, but this also means you have access to a large number of buyers. Some marketplaces charge listing fees, not a percentage of the final sale.
Sell a Shopify store confidentially to OpenStore: fast and easy process, expert help with paperwork and legal. OpenStore currently only supports the sale of Shopify businesses.
In all cases, we recommend hiring your own legal and accounting professionals to help you with things like financial statements, non-disclosure agreements (especially if selling to competitors), audits, business valuations, and the handover process.
Your accounting records disclose your company's prospective worth to a buyer by documenting its history of success. We touched upon this earlier, but here is where you really need to focus on the financials.
Your records should be reliable and precise. A potential buyer will be able to analyze your financials more quickly if you provide correct and current information. It's also critical that your records follow the relevant accounting guidelines so that your financial statements can be compared to those of other businesses.
If you’re wondering how to legally sell your business fast, we spoke to lawyers and pricing specialists to bring you the following guides:
Here we are, the moment that all of this preparation has been leading to. Work through your options and assess the best offers from your shortlist.
Personal connections: a good candidate could be someone you trust who is eager to start a new business.
Online communities can connect you with a business enthusiast already doing something similar — leaving your business running in good hands.
Online marketplace listings can attract serial entrepreneurs who will successfully grow your business and have money to invest. They could also make decisions fast.
Brokers: consider their contacts that are the most interested and could be the best fit for your business.
OpenStore: get a free, no-obligation offer for your Shopify store in just one day. If eligible, you’ll be paid fast: in a matter of weeks, not months.
Allow some room for negotiation to get a deal you’re happy with. Make sure all agreements are formalized in writing.
Then, finalize handover terms, transfer ownership, and provide post-sale support if needed. The smoother the transition, the more confident the new owner will be in running your business.
When the process of selling your business is over, you'll need to figure out how to manage the earnings. Make a financial plan and understand tax implications that may arise as a result of your income (tax considerations when selling an e-commerce business).
Consider consulting a financial adviser about investing your money and developing a retirement plan. You want to enjoy whatever comes next.
If you're on Shopify, there’s a significantly easier and faster way to sell your store. These seven steps are usually part of the typical process when you want to sell your business and could take six months or more.
But OpenStore has a way to reduce the entire process:
Get an offer in 1 day
Get cash in 2 weeks
Move on in 3 months
It only takes a few minutes to request an offer and it doesn’t require all the preparations and housekeeping work of the traditional process we discussed. Frank explains how:
“Unlike traditional sales processes, OpenStore takes a scientific approach to pricing businesses to ensure our offers are objective, fair, and can be guaranteed throughout closing. The custom-built pricing engine produces objective business valuations based on traditional and non-traditional metrics, such as Shopify sales data and the relationship that brands have built with customers.
What’s more, OpenStore seeks to grow each brand and retain the brand name. Founders can see the brands they bootstrapped and built grow further, and rest easy knowing that OpenStore won’t sell their company for a quick profit.”
OpenStore’s reliable tech and experienced team can provide you with a fast process that will empower you for the next chapter of your life.
Find out what your Shopify store is worth
You don’t have to be looking to sell your Shopify store to use this form — just follow our simple steps for a free valuation:
Financial preparedness—from audits to accurate valuations—will make your business more appealing for sale. Waiting for the 'perfect...
If you have an e-commerce business on Shopify, selling it to OpenStore is the easiest way to do so quickly and confidentially.