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Not many people know this (I hinted at it in my previous post) but I’ve sold 1 of my eCommerce businesses about 4 months ago. I can’t go into specifics on what business and what the deal was but it was a healthy 6 figure number. I can tell you that it was an Amazon & Shopify business.
Something I have visualised since I was a teenager has materialised and it was nothing like I expected. I always thought I’d build something while I was young and then never have to work again. Well it turns out this “dream” is actually a nightmare.
Today I wanted to give you an idea of how you can build and sell a business and what specifics a deal like that entails. Before I go into details I wanted to give you a brief update of what I’ve been up to in the last few months. I took a bit of a time out and travelled a lot.
I am currently in Bali with a good friend (Bastian from Officeflucht – check him out if you speak German).
And then I had enough and work was calling
So now I am in Bali working again full time on my businesses. Thats what I love about eCommerce and this business model. You can take some time out, travel, bring your laptop and work from anywhere in the world. Obviously I had to put in a lot of work in the beginning, its not all as peachy as I make it sound like But after 1-2 years anyone can do this.
So now onto my actual posts.
How I sold 1 of my businesses last year
When I sold the business in November I really didn’t know what to do for a few weeks. I was really depressed for a few weeks. You might think why would you be depressed if you just netted a six figure amount? Well I worked on this business for more than 3 years and it was kind of one of my babies that I took care of every day.
All of a sudden it was gone and while I still had my other businesses going on I felt empty with one big part of my daily life gone. Haters gonna say, take the money and be happy. But thats not what I m about.
Ever since starting on this eCommerce journey I realised I like building different businesses. Now, 4 months later I have come to terms with the fact that I just need to move on and build something else in its stead.
Through all these years I’ve met so many amazing people, students and eCommerce entrepreneurs that made me grow my skills, experience and much more. So eventually I just moved on and found motivation again.
Another thing why I was so depressed and couldn’t find any motivation was the fact that I felt secure. I never had this amount of money in my bank account and I realised why I didn’t hustle anymore. I felt safe and lost my “hunger”.
I am talking about the “hunger” that I had for 3 years working somewhere between 8-12 hours a day for months on end.
I know many entrepreneurs who have flipped many businesses for lots of money and they don’t retire. They just move on and build other businesses.
For me this was a first timer. I thought I can take a couple of weeks of, take it easy and chill. These weeks turned into 2,3 & 4 months doing barely anything. I really felt miserable.
My other businesses still generate 5 figures every month but they could be doing 6 figures a month. Slowly that is decreasing as well and I am starting to eat into my savings (I spent way too much money in the last 4 months).
I really neglected things. But meeting a few entrepreneurs over the last weeks here in Bali really gave me motivation again and I’ve started to pick up things again. That’s another great thing with this industry. You meet a lot of like minded people that can help you along the way. Be in brainstorming or doing projects together.
So after selling that business I basically travelled around Asia, went to Germany for a conference, and took life really easy. I always thought once you make a big chunk of money you can relax and everything is awesome.
But let me tell you its not. I guess thats how many people feel when they retire with 65. All of a sudden you have nothing more to do. While I still had things to do I felt that way. The good thing about my business set up was that I diversified and had more than 1 income stream.
If you recall in my older blog posts I always stress out the importance of that. If I wouldn’t have those other income streams I’d be eating up my savings for the last 4 months.
Not that I could retire anyway but I felt like semi retirement for a few months. Trust me, it is REALLY boring doing nothing for a few months (apart from travelling).
You may understand me if you get to that point and I hope that many of you will
But onto this blog posts topic. How I actually sold that business and what that entails.
I wasn’t even thinking of selling the business. But after hearing how much my friend made on the sale it sounded good.
I went onto Empireflippers Calculation tool to evaluate the business’ worth. I got an email with an estimation and I was surprised.
Within the same day someone from Empireflippers contacted me and asked me for a phone call to see if my business is suitable for their marketplace. I think that was around late May.
In that call we discussed how the business is set up, if I have social media following, email lists, age of the business and other details that may influence a sales price. He gave me another estimation at the end of the call which was even higher.
In a follow up email after the call I now had to prepare a lot of documents and answer over 30 questions regarding my business. For the next two weeks I was collecting income proof, screenshots and answer the questions related to my business. I had to fill in a very detailed profit and loss sheet that they provided and that took me at least 10 days to complete. I sent in all the necessary documents and then I waited.
After about 2 more weeks I got an email that my listing is approved and a final sales price has been calculated. Forget the typical 24X you can get in a normal business. eCommerce businesses can be sold much higher.
The older the business and the more consistent in growth the better. A lot of things go into the final sales price. Like how old the business is, how many email subscribers, how many Facebook fans, Instagram followers and so on.
So I agreed to the sales price and the listing went live. Within the first week I got 12 depositors on my business. The way this works with Empireflippers is that the business itself is not revealed. However a description and actual figures are revealed.
So interested buyers can deposit a minimum fee and then see the actual business. This is actually good because otherwise everyone would see your business. This could be bad, people could copy your business or even hurt your business if they knew who you were.
Within the second week we had an interview with a potential buyer. Empireflippers is on the call with you and prepares you before hand.
They manage the entire call while the buyer is asking questions. You just honestly answer the questions and at the end of the call Empireflippers will gently ask the potential buyer is he is interested. He said he’ll evaluate and think about it. Two days later I got an email that the buyer wants to close the deal.
However at a lower amount than I was asking for. The buyer had concerns about seasonality and the industry which was normal so I agreed to the price. He couldn’t wait to make the transfer. The deal was done. At this stage Empireflippers will collect the money and hold it in escrow until I hand over the business completely to the buyer.
This is called migration. Once the buyer confirms that he is now in control of the business the money is released to me.
This “migration” part took about 3 weeks. Empireflippers will be there with their team to help transfer domains, email and other things. I had about 4 or 5 calls with the buyer to explain everything about the business. Another 4 calls and 2 months support via email was agreed upon. Then finally the buyer confirmed that he is in control of the business.
3 days later I had the money in my account. I looked every day and just on the 3rd day there it was. I couldn’t believe it. The business I built for more than 3 years has just netted me a nice chunk of money. And just 2 days later I fell into the “hole”…see above.
To wrap up, all in all it took about 3 months from contacting Empireflippers to closing the deal and getting the money. If you are considering selling your eCommerce business I can highly recommend them.
So thats that. What I also probably learned of this is to not get too attached to your business. Of course if it’s your life’s dream to build a business and run it until the end and you throughly enjoy doing it then don’t sell it.
But if you want to build different things then go for it. Also the money you get for your business can be used to invest into other businesses.
I choose to put it into my other Amazon business to grow it and real estate as it is the most secure way to put your money in. Even it a property would decrease in value – you still have a roof over your head.
The moral of the story today I guess is, build a business, sell it if you can and keep building other businesses. Take some time off but don’t loose track of why you went into entrepreneurship in the first place.
To live freely, travel the world and build something meaningful. I don’t regret selling this business and to anyone who is hesitating if Amazon FBA is right for you – don’t hesitate. It has enabled me a lifestyle I never thought possible.
I do hope this gave you a bit of an idea what its like to sell a business and how I felt doing it. Don’t make the same mistake I made. Taking off too much time and loosing yourself. Get some well deserved rest and then tackle the next thing
All the best,