When you are building a successful online business, one of your end goals could be to sell the business to an investor for the highest price possible.
Online businesses are relatively easy to grow and scale as you figure out more and more about your target audience, which makes them highly attractive to investors.
However, if you’re not addressing the areas that investors are going to be looking at, you could have a hard time getting offers anywhere close to what the business could potentially be worth if you positioned the business properly. If you’re preparing the business for sale, or believe that making an exit (and a big payday) may be in your near future, there are certain things you’re going to want to do to make the business more attractive to your investors.
Below are 7 key ways you can boost the value of your business, and get higher offers from investors that are ready to buy the business from you.
#1 – Start Creating Content More Frequently
Frequently creating new content helps you build a relationship with your visitors, and bring more new visitors into your business on a regular basis. When those visitors see that you consistently create new content, they’re going to know that there is always something new for them when they come back.
Visitors can be fickle, at the best of times.
If they make their way back onto your website and don’t find something new, they’re liable to completely write you off and find another website to visit instead of yours. On top of establishing the relationship with your readers, consistently creating new content is also going to help you in other ways — namely, ranking higher in the organic search results on major search engines like Google and Bing.
#2 – Work On Your Conversion Rates
It’s unfortunate that most online businesses simply don’t understand conversion rate optimization, or realize how critical it is to their business. They don’t try to improve their conversion rates, even though they have a ton of tools and software available to help them with it.
Some struggling businesses could experience dramatic changes if the business owner would spend time digging into their Google Analytics reports and taking the time to understand the data that they’re looking at. Figuring out where your traffic is coming from, what that traffic is doing on your website, how they’re interacting with your content, and which pages drive the highest revenue can lead you down a very profitable rabbit hole.
Focus your energy into the right areas, like those I just listed, while spending less time on areas that aren’t performing nearly as well. Your Google Analytics reports could be the road map to you turning huge profits, and making the business even more attractive to investors whenever you decide to sell it.
Educating yourself on how to properly utilize Google Analytics may take you some time, but the time that you spend learning and understand what you’re looking at could be some of the highest profit-per-hour that your business has ever seen.
#3 – Engage Your Email Subscribers
The money is in the list.
If your business doesn’t have an email list, you’re making a grave mistake, and one that could potentially cost you tens of thousands or even hundreds of thousands of dollars, depending on the size of your business.
You can’t just focus on growing a massive list, though. You have to make sure those email subscribers are engaged and regularly open the emails that you send to view the content you’re creating. Every person that subscribes to your email list has joined because they are interested in what you have to offer. Each of those people is also a potential new customer, and could be one of your life-long brand ambassadors if you do it right.
That means you’re not just going to want to bombard your subscribers with promotions every time you send them an email. You’ll want to mix in content with your education, and then sprinkle in promotions when you see fit. How you interact with your list is going to determine how long they remain faithful to you, and how well they receive your content and open the emails that you do send.
Retaining customers isn’t difficult whenever you’re sending them useful emails.
If you aren’t already, start learning how to setup your email list, begin collecting subscribers, and sending them regular emails so you can keep them engaged with your content.
#4 – Cut Your Expenses
If there’s one way to make sure your business is attractive to investors, it’s to start looking at your accounting and figure out where you can reduce costs and eliminate unnecessary expenses.
Lowering your expenses will immediately increase your profit margins, and profit margins are what investors will use to determine how much your business is worth to them.
To start, you’ll want to create a monthly operating budget for the business and then do everything within your power to adhere to that budget. Always be on the lookout for new, creative ways to reduce your expenses. Sometimes, spending money can be a great way to reduce your expenses, too, even if it sounds counterintuitive.
For instance, you may be able to outsource some of your more menial tasks that you perform so that you are freeing yourself up to work on those tasks that generate more revenue in the business. Other times, you may need to look at the services you’re using, decide which ones are necessary and which ones can be eliminated, and then start cutting them back.
You never want to accept your expenses as they are right now. Always be on the lookout and strive to make sure they’re getting lower from month to month. Your investors will appreciate your effort.
#5 – Negotiate Better Terms With Your Third Parties
If you’re selling physical products in your business, are there ways that you can reduce your Cost Of Goods Sold (COGS) or negotiate better shipping terms so that your costs are reduced?
If you’re an affiliate marketer, can you promote a similar product that pays better commissions or work with your affiliate network to get higher commissions based on the volume of sales you’re producing? If you are selling advertising space on your website, can you negotiate better deals with your advertisers so that you’re getting paid more and they’re getting more traffic?
It’s in your best interest to reach out to third party providers, suppliers, and vendors to negotiate better terms for yourself, especially if you have been sending consistent traffic and helping those third parties generate more revenue.
Doing this is going to immediately increase your business’ value in the eyes of your investors, without having to directly increase the amount of sales you’re making. Unfortunately, most entrepreneurs are afraid to reach out and attempt to negotiate better deals for themselves, so if you’ve found yourself in this camp, it’s time to buckle down and start brushing up on your communication and negotiation skills.
#6 – Create Processes And Systems
Stop for a second and think about franchised businesses, like a McDonalds store. The reason they are so successful is because there are documented processes and systems in place that every store owner has to follow. Those processes and systems have been created in a way that maximizes profit per visitor and makes it easy to maintain consistency from store to store, so that the customer experience is the same no matter where in the world you’re at.
If you aren’t already using systems in your business, you are operating inefficiently, and could be pushing potential investors away from wanting to submit an offer to buy the business from you.
Treat your business like you would if you owned a franchise and start documenting tasks that you do on a regular basis, and create systems to help reduce the time it takes you to complete certain time-intensive tasks. If you decide to start outsourcing parts of your business, you can use these systems and processes to help bring your freelancers and employees up to speed quickly, which is a trait that investors will love.
Investors love to buy businesses that are clearly defined and that they don’t have to devote significant amounts of their own energy into running. Systems and processes make it easy for them to do that.
#7 – Test New Revenue Sources
One of the best ways to increase the value in your business is to increase the revenue. You can do that by testing new revenue sources and optimizing your business to earn more for each visitor that you bring in.
Introducing a new product in and selling it directly to your email subscribers or on your website could bring in new revenue for you, and help increase the value of your business multiple times over.
To give you an example, if you are selling coffee in your business, you could also start selling your visitors mugs to go along with the coffee. Thinking about and identifying intelligent ways to increase the revenue from your same level of traffic without interfering with their user experience is the key here.
When this is done right, your visitors are going to appreciate you, and the new products and services that you’re advertising that they want to purchase.
Bonus Tip – Get Professional Assistance
At the end of the day, the best way to get a high asking price for your business is to learn how to negotiate your way through the deal and find investors who are capable of and willing to submit offers to buy the business from you.
However, this can present major problems for many entrepreneurs, simply because they’ve never gone through the process of selling a business before. If this is you, you’ll want to reach out to a professional brokerage that has a network of investors they can tap into on your behalf, and the proven negotiation skills needed to get you the highest asking price possible.
Getting professional assistance in any of the areas that I’ve mentioned here will make your life substantially easier, and let you focus on the areas in your business that you’re good at, which can be another way to increase your revenue (and asking price) without completely stressing yourself out.