Prepare to Sell a Shopify Store or Raise Capital

Know who does which job. A broker or ecommerce M&A adviser finds buyers, runs the process and negotiates. An accountant or fractional CFO prepares the numbers and answers diligence questions. A lawyer drafts and negotiates the contract. The firms on this page sit in the second group, and most sales need all three.

Ask for a readiness review before a valuation. A valuation of messy books values the mess. A good first engagement lists what a buyer or investor would question, such as missing months, cash-basis accounts or unexplained margin swings, and fixes them in order.

Check they can reconcile Shopify data. Orders, payouts, refunds, chargebacks, fees and gift cards all need to tie back to the bank and the accounts. Ask how they would match a year of Shopify payouts to your bank statements, and what they do with the months that don't agree.

Ask how each adviser gets paid. Brokers usually take a success fee on the sale price. Preparation work is typically quoted as a fixed project or monthly fee. In the US, anyone taking a percentage of an equity raise generally needs broker-dealer registration, so ask before you sign.

Ask who else they bring in. A preparation firm that works alongside brokers, lawyers and tax advisers regularly will hand over a cleaner file than one meeting them for the first time on your deal.

Watch for these red flags:

- A confident valuation figure before anyone has seen your accounts.

- Pressure to go to market before the books are clean.

- No questions about owner dependence, suppliers or how the store would run without you.

Buyers and ecommerce investors ask the same questions in a different order. Have the answers documented before the first call.

Books that survive diligence. Monthly accrual accounts, cost of goods recorded against each sale and inventory valued at cost, reconciled to Shopify payouts and the bank. Cash-basis accounts make margins swing with every stock purchase, and buyers discount what they can't read.

Revenue quality. How much comes from repeat customers, how concentrated sales are in one channel or one product, and what happens if one ad channel or one supplier disappears. Shopify's reports hold the customer and product data; the firm turns it into evidence a buyer can test.

Margins after the real costs. Gross margin means little until ads, shipping, returns, payment fees and app subscriptions come off.

Add-backs with evidence. Owner costs and genuine one-offs can be added back to earnings, but only with invoices and a clear explanation. Buyers strike out add-backs they can't verify.

A business that runs without you. Documented processes, supplier relationships held by the company rather than by you personally, and the store itself: who owns the Shopify account, the domain, the theme, the customer data and the app subscriptions, and whether supplier contracts can transfer.

Each of these is a risk a buyer prices into the valuation multiple.

Three different people can bill you in a sale, and each prices the work differently. Typical ranges:

The work usually runs in this order, well before a buyer or investor sees anything: