8 Ways to Make Your Online Business More Valuable

Preparing your business for sale is a strategic process. By devoting time and effort to the right tasks now, you can increase your business’s attractiveness to potential buyers and ultimately demand a higher price.

In this article, we’ll discuss some practical things that online business owners should focus on leading up to a potential sale. Ideally, you’ll have at least 6-12 months to work on these details before pursuing a sale, but having even more time is better. Don’t wait until you’re ready to sell, or you’ll likely miss out on getting top dollar for your business.

How to Make Your Online Business More Valuable

1. Increase Profit

Profit is the most influential factor in determining an online business’s value. If you want to increase the value, it makes sense to focus on growing your profits.

Here are a few of the basic ways to increase profits:

  • Improve conversion rates
  • Increase the average order value
  • Make more repeat sales
  • Increase prices
  • Expand your products and services
  • Add a new revenue stream
  • Reduce expenses

Of course, identifying the best options for your business will depend on the type of business you run and the ways you make money. However, most of these options are relevant regardless of whether you sell physical products, digital products, affiliate products, or services.

Working to improve conversion rates is an excellent place to start because it can lead to immediate and ongoing improvements in your profit. Plus, it’s relatively easy to track and measure. In other words, it’s possible to get significant results without a major time commitment.

Many online business owners immediately look to grow traffic when they want to improve revenue or profit. While getting more traffic is good, improving results with the existing traffic usually produces superior results.

2. Remove Yourself from the Business

To maximize your online business’s value before selling, remove yourself from the day-to-day operations. This requires you to create a system that allows the business to run smoothly without your constant involvement.

Buyers want to know that the business will continue to generate profits without relying too heavily on the owner. If the business relies heavily on you, potential buyers may wonder what will happen when you’re no longer involved. They’ll also need to replace you with someone else who’s equally as effective as you.

To successfully remove yourself from day-to-day operations, you can consider hiring a team of professionals who can handle various aspects of your business. Delegating tasks will free up your time to focus on other important aspects of the business, such as growth and expansion.

If you don’t have the budget to hire a full-time team, you can consider working with freelancers. Freelancers are a great option because they can work on a project-by-project basis. You only pay for the work you need, without any long-term commitment. This can be a cost-effective way to get the help you need without breaking the bank.

For example, if you run a content-based website, you can hire freelance writers to create all of the content, so you don’t need to produce any of it yourself. You can also hire freelance editors and virtual assistants to handle other day-to-day tasks.

You can also utilize tools and software to automate certain tasks or reduce the amount of manual involvement. With the rise of AI, the potential here is evolving very quickly.

Finally, you need to make sure that you manage your time effectively. As a business owner, it’s easy to get caught up in busy work and not focus on the most important tasks that will actually make your business more valuable. Prioritizing your time and focusing on high-impact activities can drive your business’s value higher.

3. Build Recurring Revenue

One of the best ways to increase the value of your online business before selling is to build recurring revenue. This revenue comes in regularly, typically through subscriptions or ongoing payments. Potential buyers love recurring revenue because it improves predictability, stability, and scalability. It gives them a baseline of what to expect moving forward while providing opportunities for exponential growth.

There are several ways to build recurring revenue for your online business. One of the most common is to offer a subscription service. This can be done for digital products, such as software (SaaS), online courses, members-only content, or physical products, such as a monthly subscription box. By offering a subscription service, you can ensure a steady stream of revenue each month.

Another way to build recurring revenue is to offer services on a retainer. This could be anything from ongoing marketing services to a specific number of hours of development work each month. By having clients on a retainer, you can ensure consistent monthly income as long as you retain those clients.

Not only will recurring revenue make your online business more attractive to buyers, but it’s also likely to increase the valuation. SaaS businesses regularly sell for significantly higher multiples than other online businesses that don’t involve recurring revenue.

4. Add New Income Streams

You can also increase your business’s value by introducing new income streams. The potential benefits include increased overall revenue and stronger diversification.

Of course, the options that are available will depend on your business model and the income streams already in place. Affiliate marketing is an excellent option for many online businesses because it works well as a primary source of revenue or as a complement to your existing income streams.

If you already make money with affiliate marketing, there are probably other affiliate programs that could serve as a new income stream.

Digital/downloadable products also work very well for a wide range of businesses. There are endless ideas and product types you could create. Many of them are relatively easy and inexpensive to create, and they can be sold over and over again without the need for physical inventory.

It’s possible to use your existing content, information, or assets to create digital products. For example, you could compile your best blog posts into an eBook or create a digital course based on your expertise.

 

Related Content

In addition to this overview for optimizing online companies, we have compiled tips for selling e-commerce and SaaS companies

5. Diversify Traffic Sources

Does your website or online business get the majority of its traffic from a single source? If that’s the case, buyers will be at risk of a catastrophe if something happens to that traffic source.

Diversifying your traffic will make your business less risky to potential buyers. In this case, losing traffic from one source won’t be devastating to the business.

Having diversification in traffic has always been important, but with the frequency and severity of Google’s search algorithm updates increasing over the past few years, this is now more important than it’s ever been. Sites that rely exclusively on organic search traffic from Google present a bigger risk to buyers.

To diversify, you can work on building up supplementary traffic sources like social media, direct traffic, an email list (more on this in a minute), and even paid ads.

6. Establish Brand Recognition and Authority

Having strong brand recognition and authority in your niche or industry is an essential factor that can significantly increase the value of your online business. This means having a well-known, respected brand that people trust.

Here are some ways to establish brand recognition for your online business:

Define Your Brand Voice

Defining your brand voice is often overlooked when building brand recognition. Your brand voice is the tone and personality of your brand that reflects your values, mission, and audience. By defining your brand voice, you can create a consistent message across all marketing channels, including social media, email, and website content. This helps your audience recognize and remember your brand.

Have a Strong and Consistent Visual Identity

Your visual identity is the visual representation of your brand, including your logo, color scheme, and typography. A strong and consistent visual identity helps your brand stand out and be easily recognizable. Use your visual identity across all marketing channels, including your website, social media, and marketing materials.

Create High-Quality Content

One way to establish this is through creating high-quality content consistently. By producing valuable, informative content regularly, you can build a loyal following and become known as an expert in your field.

Use Social Media

Social media is a powerful tool to build brand recognition and reach a wider audience. Use social media to share your brand’s story, values, and mission. Engage with your audience by responding to comments and messages. Use social media to showcase your products or services and share customer reviews and testimonials.

Leverage Collaborations and Partnerships

Another way to establish brand recognition and authority is through collaborations and partnerships with other influential brands or influencers in your niche. This not only helps to increase your reach but also adds credibility to your brand.

7. Grow Your Email List

An email list is one of the most valuable assets of an online business. Your email list allows you to reach your target audience at any time without paying for ads or relying on other platforms (like search engines or social media). A large and engaged email list can significantly increase the value of your business when it comes time to sell.

Here are some effective ways to grow your email list:

Offer a Lead Magnet

A lead magnet is something of value that you offer to your audience in exchange for their email address. It can be an eBook, checklist, video series, or any other type of valuable content. Make sure your lead magnet is relevant to your target audience and solves a problem they have.

Optimize Your Website for Conversions

Make it easy for visitors to your website to sign up for your email list by optimizing your website for conversions. This includes having prominent opt-in forms, using compelling copy and visuals, and offering a clear benefit or incentive for signing up.

Use Social Media

Social media can also be an effective tool for growing your email list. You can promote your lead magnet on social media, run ads, or include a link to your opt-in form in your social media profiles.

Collaborate with Other Businesses

Collaborating with other businesses that target a similar audience can also be an effective way to grow your email list. You can co-create content or promotions and cross-promote each other’s lead magnets to reach new audiences.

Use Paid Advertising

Paid advertising can be an effective way to grow your email list. Use platforms like Facebook Ads or Google Ads to target your ideal audience and drive traffic to your website.

8. Establish Upward Trends Before Selling

It’s much easier to sell a website or online business that’s trending up than one that is flat or trending down. This applies to both traffic and revenue. Upward trending websites and businesses are more valuable and attractive to potential buyers. If the upward trends continue, the buyer can recoup their investment faster.

Unfortunately, many online business owners wait until their business is declining before deciding to sell. Maybe they’ve lost interest in the business and it’s started to slip. Or maybe they’re busy with other ventures and don’t have enough time to dedicate to the business.

This can significantly decrease the value and potential selling price of the business. Businesses with downward trends tend to sell for lower multiples because the risk is higher for the buyer.

Most online businesses go through some ups and downs at times. The key is to plan your exit ahead of time and be sure to dedicate enough energy and resources so the business is growing, or at least stable, prior to selling. If there are downward trends, work on reversing them before trying to sell the business.

Final Thoughts

Planning and preparation are critical if you want to maximize the value of your business before an exit. By focusing on the topics covered in this article, you’ll give yourself the best chance of selling your online business for top dollar.

Author Bio: Marc Andre

Marc has been building, growing, and selling online businesses since 2007. He’s built successful businesses in industries like web/graphic design, photography, travel, and personal finance. Marc is the founder of Flip My Site, where he publishes content related to buying and selling websites, including inspirational stories of successful exits by entrepreneurs around the world.