Dear Aunty B.
I want to sell my online business. And badly.
The business has been up just over a year. During that time, despite the 80-odd hours I’ve worked each week, it’s grown at a snail’s pace. At the moment I’m coming in at about $100 a month in income – if I’m lucky.
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This is despite the fact that (1) it is a better- developed online business than the competitors (2) it uses social media (both Facebook and Twitter) in new and innovative ways, something none of the competitors are doing and (3) it’s offering is way better and a WAY cheaper than the competitors.
I network furiously, spend time on SEO, blog regularly, Tweet relevant tweets at a reasonable pace and interact on Facebook at a discreet pace. But nothing seems to work. In fact, the lead competitor only started a blog and got on Twitter after I did, and the tone of the blog articles often read suspiciously like mine.
I have reviewed my business plan and revised my strategy but nothing is working. My income is dropping…last month I only made $80 and frankly I’m at my wits end. I know that the first five years of business are critical and that most businesses fail in the first twoyears.
I can’t afford to live on $100 a month. At the moment I’ve been financing myself for over 21 months and the funds are running out. More than that, I’ve lost the passion. I find I hate work now and feel like I’m chained to this company. It’s worse than having an employer. At least then you can walk away.
What do I do? I have no idea what the site is worth or where I should go to value it? I have no idea of what are the first steps to take in selling an online business or even if I should sell it.
Any help or insight would be gratefully received.
A fed up online business owner
Dear Fed Up,
First of all, congratulations. You have given your new venture a red-hot go. You have faced reality and realised something is fundamentally wrong. And you have made the very difficult decision that enough is enough. At this point you are not generating revenue or profit so it would be very hard to sell your business. But you could certainly sell parts of your business. I don’t know what your domain name is but if it is a ripper, you could try selling that. You could try selling your website. A Melbourne company called Flippa sells websites. Do a search on SmartCompany and read about the founder Mark Harbottle. You should also approach your main competitor and offer to sell the business to them. They will probably decline, but they may well buy any membership lists you have.
One thing does concern me: You still don’t understand why the business has failed. To get a great business you need to get a number of things right. First, you need a clear value proposition. Is there demand for what I want to sell? Will the marketplace pay what I want to charge? Are there enough people who will pay to generate profit for shareholders? Do I have a clear position in the marketplace? Do I have a strong competitive advantage? And so on.
That work at the start of a business is crucial. If you have not yet decided to walk away then do this: Sit down with a strategist and see if there is some fundamental way of restructuring the business to focus on a different niche that is more lucrative and has a stronger value proposition.
Your Aunty B
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