When selling your freelance business, it makes sense that you would want to maximize the value and earn as much money on the sale as humanly possible. You have put time and effort into building and growing your business, you deserve a return!
Knowing you want to make as much as possible on a sale is one thing. Knowing how to actually maximize the acquisition value is another. Luckily, there are a few things you can do that will help you get every last possible cent.
From organizing your paperwork to cleaning up your website to finding a strategic buyer, it is up to you to present your freelance business in the best light possible. The more reasons you can give a buyer to purchase your business, the more likely you are to fetch a high price.
Here are some things you can do in order to maximize your acquisition value:
1) Plan to Sell Your Freelance Business
Start planning for a sale before you even know you want to sell. The sooner you can get your affairs in order, the better. Of course, it is not always possible. Sometimes things happen that force you to list your business in a hurry. But most of the time, you will be able to do some prep work in advance.
Take a little time to really examine your business. If there are inefficiencies that can be corrected, make that effort now. Not only will doing these things help make your business sellable down the road, it may even help your business find greater success in the moment. Look at it this way, a well-run business is always an asset.
2) Improve the Customer Experience
Improving your website design can increase your value. A user-friendly website can help convert a visitor into a client or customer. Visitors do not like obstacles to their objectives. If they are looking for a product or service that you offer, make it as easy as possible for them to find it. Optimize the site for speed. This ease of use will easily translate into increased customer satisfaction. In turn, this satisfaction leads to higher revenues and a higher acquisition value.
A high conversion rate signals to a buyer that your service or product is connecting with visitors. In their minds, this means that you are offering something that people want. Something they can use to turn a profit.
3) Tidy Things Up
Do not even try to sell your freelance business before it is ready. Being ready requires more than just your desire to sell. Being ready means the business is neat, tidy, and easily transferable.
This means taking the time to update your books and make sure that your accounting is correct. You may want to consider hiring an accountant or bookkeeper for this task. The spend you put into hiring a professional will come back to you in your valuation later on.
If you have not done so already, invest in your analytics. By using specific software, you can easily track important metrics like traffic, click-throughs and conversions. This information will tell potential buyers important details about the successes and failures of your business. Buyers are not usually interested in taking major risks. Clearly displaying and making sense of your analytics will help ease their minds.
Document everything. Buyers like a business that they can easily run from day one. Document all of your contacts and vendors. It is also a good idea to pull together an official policy and procedure manual. Standardizing these things, and writing them down, helps a buyer understand each step required to successfully run your business.
Stay focused. If you can focus your efforts on your most profitable elements, you may be able to increase your revenues before you even begin the sales process.
Determine exactly what it is that you are selling. What you sell will decide which documents and procedures are most important for you to cover. If you are selling your client list, you will require a certain set of data. Selling your revenue stream, will require another. Narrowing down what is on offer will make it easier for you to present your business in the most attractive way.
4) Grow, Grow, Grow
Before you sell your freelance business, try to grow it as much as possible. Listing a growing, profitable, business allows potential buyers to easily imagine the return on their investment. If your numbers are shrinking, most buyers will see too much risk to take a chance on you.
Try to improve your SEO and build your content to boost traffic numbers. If you are relying on a single traffic source, it is a great idea to diversify. The more stable and secure the traffic sources, the more stable and secure your profits will be.
Nurture or build your social media following. Post often and respond to customer queries and comments. Consumers love connection and the more you engage with them, the more likely you are to gain new followers and increase your reach.
5) Look for A Strategic Buyer
One of the keys to gaining the maximum acquisition value possible is to find the right buyer. Someone who truly sees the value in what you do will be far more likely to offer you that value in return.
A potential buyer will be performing due diligence on you to make sure your freelance business fits their needs Do not be afraid to do a little investigating of your own. If the buyer does not seem like a good fit, it is okay to walk away and look for something that works better.
In order to help you decide on the right buyer, you need to know what it is you do best and trim your buyer list accordingly. It is okay to approach other companies doing similar or adjacent work and see if they are interested in making an acquisition. If you have contacts in your market, reach out to see if they know of anyone who might be a good match.
Perhaps one of the best options for finding the right buyer is to use a web broker. Brokers often have a buyer list and they likely already know a handful of people who are looking for an opportunity like the one you are presenting. A broker will also help you navigate all of the steps mentioned here, allowing the process to move more quickly and smoothly.
When is the right time to sell your freelance business?
Knowing the exact moment to make your exit can be a little tricky. There will always be feelings of uncertainty when walking away from something you have built. Whether you never expected to sell, or have been working towards a sale from the get go, there are a few things that can signal that the time is right:
You’ve Lost Interest
It happens sometimes. You work for so many years on a project and then, one day, you realize that you do not care anymore. Maybe it has become too stressful, maybe you just need a change. Whatever the reason, these feelings indicate that it may be a good time to walk away. It is hard to grow a profitable business if you are not interested in it. Take whatever you earn from the sale and do something that makes you happy, personally and professionally.
You’ve Done All You Can Do
We all have skills that we bring to the table. It was likely your skills that contributed to the success of your freelance business in the first place. But, sometimes, as a business gets bigger, you may find that your skills no longer apply. If your business outgrows your capabilities, it is best to sell it to someone else. There are lots of people out there who will be able to get on board with your vision and carry on what you have started. This is where finding the right buyer comes in. There is no shame in passing things on to someone else so you can find a way to return to what you do best.
You’re About to Be Marginalized
Markets are shifting all the time. These shifts can bring a change in needs and demands. Whether it is the release of new software and technology or new competition arriving on the scene, you can see the writing on the wall. When you know you are about to become irrelevant or marginalized, it is a good time to sell. Sometimes buyers are looking for just this sort of opportunity. They may be able to strategically roll your business into theirs or they may have ways to adapt your offering to fit the changes in the market. Just because it is the end of the road for your business as it stands today, it does not mean it is not valuable to someone else.
You Get a Better Offer
A time may come where a new, and better, offer comes your way. Maybe there is a new freelance business idea you have been considering. In this instance, you may need the revenue generated from the sale of your current business to purchase or launch a new venture. Sometimes making more money means moving on to something else. There is also the possibility that someone may approach you with an offer for your business. Depending on the buyer, the market, and the current growth of your business, it could be worth seriously considering this offer. If a major player in your field wants to acquire your business, do not ignore it. It might be the most lucrative thing you can do.
Selling your freelance business is a difficult thing. You have put everything into creating something profitable and walking away is not easy. But once you make the decision to sell, it is up to you to maximize the acquisition value by running through the steps above. The effort you put in to the front end of this process will be more than worth it. You created the business, now it’s time to cash in on all your hard work!
Brandon Ribak, COO and Managing Partner of WeSellYourSite.com, has been building, buying and selling websites for the last 8 years and brings valuable experience and insight to the table. He’s very passionate about helping others successfully buy and sell web based businesses.