Opportunity vs. Potential Whilst valuing your ecommerce Firm


It's interesting to see the broad assortment of value various buyers will attribute to a exact same online business. 1 buyer could get a business as useless while other is ready to pay hundreds of thousands. Valuation of your ecommerce business is in direct ratio to the quantity of chance perceived by the purchaser. To understand this fully, we have to differentiate between potential and opportunity.

Opportunity Vs Possible

Internet business owners I've served over the years have constantly stressed the potential their company represent. They were oblivious of the harm due to their company's value by over emphasizing its potential. This is one of the most innocent mistakes that virtually every company owner makes and the term"potential" is possibly the most frequently used phrases by business owners that nurtures unrealistic value for their enterprise. This is also among those"core" principles of creating a successful exit strategy. "My eCommerce firm has so much potential to grow due to the size of this industry it operates in, specific market it addresses.... Etc". Yes, if only small business owner had applied himself he'd have done much better. If buyers apply themselvesor better than you, then surely they will achieve more success than you've experienced.

Our products:

Magento 2 pos

Bigcommerce pos software

Woocommerce pos app

Shopify pos app

Commercetools Pos

MSI

The thing is that the buyer's answer to this always seems to be,"If I am going to do it why should I pay you for what I'll do?"

Buyers will buy because of the possibility.

Buyers will cover for the chance. Opportunity that you've created. It is already there and it is only fair you get compensated for it.

Buyers will not cover for the potential.

Few years back I was helping a customer who possessed an online clothing designing firm. He had created a special notion of using designs created by elementary school children in his line(s). This was such a special concept it instantly caught the attention of media and was all on the media in a short while. One of those interested were some big box retailers that showed their interest in this business's line. In this time period, the owner was introduced with some special family situation that required him to sell his company. After the seller approached me to appreciate and promote his company, I fought to justify the expectations of the vendor for his company. His company had a great potential but it was rather young and execution was untested. The company didn't have years of history behind it and there was nothing to show besides the media coverage and attention from the retailers. I attempted to explain this to vendor but he had been convinced that corporation can be sold for greater value. Fast forward few months and we learned that it didn't make sense to sell the business for the money people were offering to pay for it since seller was trying to market depending on the possible rather than a true prospect. If on the other hand, seller had signed a long term contracts with retailers who ensured future earnings and profitability, the company could have produced a real chance and it would have been easy to sell at a price that would have made the seller happy.

With above discussion, we know that any company that's priced based on fair evaluation of this opportunity that it represents can be marketed supplied it has a capacity to grow, possible to make more profits, possible to draw more customers and so forth. This not only clarifies the gap between potential and opportunity, but also highlights the fact you will attract more buyers if your ecommerce business available provides both. Why both? This is because net business for sale marketplace places are bombarded with all sorts of exciting opportunities for buyers. The first ones to be sold are those that provide both elements.

The Worth of a Company Is Directly Proportionate to the Opportunity that a Buyer Perceives

It's evident that buyer who sees the maximum opportunity for your site company will pay the highest price. Next question is the identical chance could mean different to different people and how to find Mr. Right to whom your company will provide the most opportunity? This will be the subject of my next blog post...


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