If you know a little bit about me, I have been running an eCommerce business called Aura Eve for about 5 years now. It is a booty band and activewear online store which I was running with a business partner from 2014 until the very end of last year. Throughout that whole business journey, we’ve grown the business from our spare room to our garage and moved into our warehouse. We had to make a very tough decision to sell last year. I thought I would just share how exactly we did it and just some things that I learned that I think others would benefit from.
The first question that comes to mind is why we’ve actually sold the business: I suppose in life, sometimes things don’t always go to plan and we really have to make some hard choices as to what we’re going do next. Back when we had the business probably 18 months ago, we did have really big plans to expand the business, grow it, hence why we wanted to have our own warehouse. Unfortunately, life took us on different paths, my business partner recently became a new mother and at the same time, my Little Miss Bookkeeping business grew very, very quickly . I’m also unable to really invest the time into Aura Eve hence we had to make the hard decision to essentially sell. The decision to sell the business was really, really hard mentally for me because I felt that we had birthed this baby that was growing and growing and I had to really let go and make the conscious decision that someone else had to adopt our baby and really see it through its full potential.
Now you’re probably wondering how we sold Aura Eve.
When we first made the decision, we engaged a local business broker to help us with marketing and finding potential buyers. In hindsight, we probably rushed into choosing the right broker. Looking back, I think our broker wasn’t the right fit because of her lack of e-commerce experience. I think I sort of knew we weren’t quite aligned that when I talk about e-commerce terms like Google Analytics and Shopify I don’t think my broker at that time really understood that. I’m not sure if it was relayed to correctly with potential buyers. Long story short, we did stick with that broker for a period of time. We had a few inquiries, meetings with potential buyers. We went through the dance of potential sale negotiation and got an offer.
We moved on from that broker and I decided to list Aura Eve on a website that essentially trades in domains and online businesses. We did that early December since we really wanted to flip the business really quickly. We had just run our Black Friday Sales, we literally had no stock and we were essentially selling intellectual property like our website, our client base, subscribers, email subscriber list and content that we have created over the last 5 years.
I listed our business on a domain flipping website. I was inundated with a number of inquiries from clients from the US, Canada, UK, Slovakia obviously other Australians. I spent probably a good week to two weeks just going through a whole lot of questions from potential buyers and going through all those queries trying to weed out who was a tyke and who was really serious. That obviously took a lot of time and when you don’t have your own broker you’ve got to really do a lot of the vetting yourself. Long story short, I wanted to move the business really quickly before the end of 2019. Our business was on a domain flipping website for 10 days for everyone to place their bids. I made phone calls to all the serious buyers. At the end of the day, we chose a buyer that we thought was the right fit.
When did the sale happen?
It all happened on the 31st of December, the very, very last day of 2019. We ended up choosing an Australian buyer who is based on the Gold Coast. He came and visited us here in the Sunshine Coast and we spent a good chunk of the day just running through Aura Eve, how it worked and our processes. He took the remaining stock, bits, and piece and we said goodbye to our baby that very day. It really happened so quickly, from the day I listed the sale myself to the day that we said goodbye. It is a very big relief to be able to move forward because I felt that we were in a few months of unknowing, in the unknown and not knowing the next step for Aura Eve.
There are a few tips that I wanted to share that I’ve learned based on this experience. Remember, I am not a business broker, this is the first time I ever sold a business myself. If you really want the right advice, please speak to someone who knows what they’re talking about. I’m simply here to share what I’ve learned and I’m hoping it will help someone else in the same situation.
Tip #1: Know your figures
As an accountant, it comes naturally to me. I know what my figures look like when they’re at a particular time. I try to stay on top of my bookkeeping and when you help process your own tax returns, bookkeeping and financials you’ll know private data. When it comes to having conversations with a potential buyer, they’re going to want to know:
- What is your profit ?
- What is your turnover?
- What is the inventory on hand?
If you can’t give them that quickly, confidently, you might be missing out on a really good potential buyer so it’s really, really important to know your figures back-to-front upside down.
Tip #2: Be clear on why you are selling your business
Tell potential buyers your story and why you’ve decided to move on from the business. As I’ve mentioned, my business partner embraced motherhood for the first time and that is her priority. I have a growing bookkeeping business and that really, quickly became my priority. So there was no question as to why we’re selling as our time has to be prioritised elsewhere and hence why Aura Eve became available.
Tip #3: Be prepared for pre & post-sale
We spent a lot of time cleaning up our emails and internal filing. It always takes longer than you think. You can’t really plan on how long it’s going to take but you really do have to set aside time to clean up, get everything organised, all these processes and communicate that really clearly. When it comes to post-sale, we are still in that phase, we’re in the middle of closing down our postage accounts, I’m still in the middle of closing our company, transferring business names. When the changeover happened on the 31st of December, I know I’ve still got another month, two or three months before I can officially say I’m not doing anything Aura Eve related. I’ve still got to do my tax return for 2019, I’ve still got to do my tax return for 2020 and I think a lot of people don’t forget that there are other things that happen pre-sale. We still have to do register the company and that just doesn’t happen at a click of your finger. I myself as a business owner have to be responsible for that whether I do it myself or get help from a trusted tax agent.
Tip #4: Take emotion out
It is really hard as a business owner. You will value your business differently to someone who’s looking at hard figures and not really understanding your business story. At the end of the day, people are going to look at data. They’re going to look at your turnover, profit, how many people are looking at your website and really that’s how they’re going to value your business. You might value your business at a million dollars but unless you’ve got hard sales, hard numbers to really back that up then you really can’t sell your business at some ridiculous figures if no one’s going to buy it for that. We really had to take any emotion out and think about all our business sale decision logically. At the end of the day I’m very thankful that we were able to move it within a 10 day period essentially and those 10 days were just CRAZY! I remember doing Skype sessions to a guy over in Europe. I remember myself and my business partner on our way to an event down on Brisbane and we’re on a phone call with a potential buyer in Canada. The time difference does get a little tricky but definitely tip number four is to take emotion out and try and be as levelheaded and as logical as you can.