You have invested time, sweat, and money to successfully establish your Shopify store and now it is time to put your Shopify store for sale. Selling a Shopify store is a one-time task and the stakes involved are undoubtedly high. A single oversight or overconfidence can leave years of your hard work go down the drain and cost you several millions of rupees. Contrarily, taking the right decision works in your favour and ensures a solid footfall plus hassle-free transition.
Mistakes to Avoid While You Sell a Shopify Store
Making the most of your hard work becomes a real accomplishment when you can sell a Shopify store successfully. Here are some common mistakes to avoid while putting your Shopify store for sale:
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Miscalculating the Worth of Your Shopify Business
Undervaluing the worth of your Shopify business is a common concern for many, but even disastrous could be overvaluing it, which most entrepreneurs tend to do. One of the major reasons to do so could be your inability to think logically and arrive at your business valuation based on its financials like performance, sales, revenue, etc., Instead, you get emotional about selling a Shopify store you built and now own, by trying to put an arbitrary price on it.
Having said this, listing your Shopify store for sale with a radically inflated price only dents your credibility with potential investors, which is difficult to gain back even with a substantial price drop later.
Recommendation: It is better to avoid overvaluing your business by viewing your business objectively, seeking professional advice, finding comparable sales, and utilising legitimate online business valuation methods.
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Selling post a Dip in Performance
Selling a Shopify store when its performance takes a hit within a short period is a poor business strategy. Doing so only elevates the risk factor and uncertainty in the minds of potential buyers. In this scenario, buyers or investors won’t be able to assess the valuation rationally leaving most of their queries open-ended. This increased uncertainty and risk may compel the investors to devalue your business.
Recommendation: Give the business some time to stabilise after any major decline in performance and find the root cause of the decline. Avoid any major changes to your business 6 months before you decide to sell it.
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Choosing a Wrong Representative/Broker
Choosing an underqualified representative/broker to sell a Shopify store could be a dreadful experience. The signs of such shady and illegitimate brokers include inflated valuation, sloppy listings, and a limited number of potential buyers. Of late, many such instances of illegitimate brokers trying to trap the sellers and their businesses with signed agreements even when a buyer does not materialise are on the rise.
Recommendation: Read online reviews on the broker and his work, and ask the broker for details of previous clients whose businesses were sold off successfully by him/her. Also, get the brokers to explain the methodology behind the valuation of a business.
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Failure to Abide by the Exit Plan
An exit plan is a must for the sale of any business, irrespective of its scale. An exit plan helps you set the target exit price and explore various exit scenarios like the deal and acquisition structure, retaining an advisory role or equity in the business even after the sale, obtaining transfer of ownership agreements from all stakeholders, etc. Selling a Shopify store without an exit plan is like shooting in the dark. You may eventually end up hitting the wrong target and only run into deeper problems.
Recommendation: Identify key drivers of your business and set achievable goals. Create action items to increase your business valuation over time, and track the progress using performance metrics. Work with an advisor or partner who can show you the mirror while you drift away from the exit plan.
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Underestimating Time and Effort
Putting up your Shopify store for sale is just the beginning of a long arduous journey filled with roadblocks. Some common roadblocks that you might encounter during the sale process include listing preparation, joining conference calls and addressing queries, reviewing legal contracts, and negotiating deal terms. All these are time-intensive activities and can take several weeks to finalise without a qualified advisor or a proper exit plan.
Recommendation: Be prepared to sail against the tide and hold off before you have fully made up your mind to commit yourself to the process. Consider hiring a reputed advisor to facilitate the sale on your behalf.
Summing it Up
In a nutshell, you can now successfully sell your business and enjoy the financial rewards that come with the sale, if you can avoid some of the basic mistakes listed above. For more information about selling a Shopify store, follow a detailed guide on how to sell Shopify stores online.