Cashing out: Selling my first business and why it was a bittersweet moment

Last year, I closed a deal to sell my first business. It was a bittersweet moment, to say the least. Money was in the bank, but I woke up the days after the deal without seeing any product sales from the business I sold. It was almost like a part of me was missing.

Could this be a case of seller’s remorse? But upon further reflection, selling the company made all the sense in the world.

Photo credit: Stories / Freepik

Here’s a bit of a background: This was my first ecommerce company. The business model was around Amazon FBA (fulfilled by Amazon) – if you want to learn more, type “Amazon FBA” on YouTube and you’ll see more results than you probably want.

Choosing this business model turned out to be very important, as the other side of the market – i.e., the buyers – had been growing over the last three to four years. I believe with the Covid-19 situation and Amazon’s continued dominance, this market will continue to grow.

About now, I reckon the casual observer might be thinking, “You can actually sell a small ecommerce/online business?” Buying and selling businesses seems like such a Wall Street thing to do, and online companies are so novel.

Yes, there are buyers for these mid-market online businesses, and brokers such as FE International, Quiet Light Brokerage, and Empire Flippers facilitate these transactions. In my opinion, what buyers get are the Goldilocks of businesses: They grow fast and have low overhead and operating leverage, and they don’t come with risks that startups often incur.

At the same time, the valuations of these firms are still quite attractive – approximately 3x to 4x in private equity multiple. That said, these businesses are not a passive investment by any means, and some time and experience are necessary to run them successfully.

The sales process

1) Finding the brokers

Selling a company is more difficult than it seems.

The first step is to find a broker, one that will fight for your business on your behalf and would vet potential buyers. While I did know friends/connections who have sold their online business and could consult them, I got conflicting signals on which ones are better.

Fortunately, I bumped into a fellow Amazon seller in Manila who recommended me to Quiet Light Brokerage. I spoke directly to the CEO and felt comfortable giving them the deal. After that, we were off to the races!

2) Valuation and other business summaries

The next move was deciding the valuation, and boy, was I glad that I had regular accounting and bookkeeping done!

Why this is bittersweet