Murray Priestley is a partner at Global Private Partners, a private equity firm based in Hong Kong. And author of “The $1million Pay Day” – which is designed to help us understand what a Private Equity business would be looking for in our business should we want to sell. So this show is going to be about buying, scaling and selling online businesses. Plus, we’ll probably aim to get a few nuggets from Murray’s wide experience with ecommerce businesses.
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Global Private Partners is a private equity company that represents a group of investors. They buy into companies in percentage or in full, grow it, scale it, and sell it.
About two years ago, Murray and several of his friends started their company by purchasing an Amazon business. Since then, they have purchased three more businesses and stitched them together into one business, which they’ve managed to spin off into a services company.
As soon as they bought the first one, they increased it onto other platforms to build more equity into it in preparation of selling it. Being in only one platform has some risk, in spreading the risk across multiple platforms, they were also able to learn which platforms worked and which ones didn’t work.
All Numbers Based
Murray advises looking at everything on a numbers basis. He practices split testing to gather number data. Global Private Partners may have six different campaigns running for a single product on a particular channel, and they’re all being split tested all of the time. If any one campaign isn’t performing, they kill it. If one is performing well, they scale it.
Dropshipping is a fantastic way to get started in an eCommerce business because there is no risk of inventory. If you can make something work in drop shipping, buy more of it and put a private label on it. The key is to buy cheap.
Business owners must also be prepared to change direction. If a particular path isn’t working well, pivot.
Listen to learn the dangers of falling in love with your product.
One Million Dollar Payday
Murray’s book teaches business owners what private equity firms are looking for in a business, and how to avoid selling to a private equity firm if that’s not your goal.
Private equity firms are seeking companies that are struggling and that have hidden value that the owner doesn’t know they have. Perhaps they have a large email list, but never send out any emails. They want a company with a team and systems already in place. They will also look at your processes, and if they like one, they’ll scale it into all their other companies.
Listen to learn about a hidden value you might not know you have.
Most business owners haven’t thought about selling, but you should always start a business with the assumption that you will sell it, and therefore structure it in a way that makes it easier to sell.
Listen to learn how to calculate the worth of your business to a buyer.
Readying a Business for Sale
In eCommerce especially, you must buy cheap to make enough money to be sellable. Have a data mentality that it’s all about numbers, and split test literally everything.
Listen to learn how to split test your prices.
Split test price, titles, descriptions, and images, and keep records of everything you’ve tried already.
Listen to find out more about taking better images.
Approaching a Private Equity Firm to Sell
A private equity firm will probably find you before you find them. If you do go looking for one, some online resources are Empire Flippers and Iffy International, which are purpose-built to sell eCommerce businesses.
To make your business attractive to a buyer, make sure you have your data ready, you’ve kept good accounting records, your team is in place, and the business has been running on the upside.
eCommerce Book Top Tip
- The Checklist Manifesto by Atul Gawande
Listen to find out why this is the best book on systemization that Murray has ever read.
eCommerce Traffic Top Tip
Listen to learn how to teach Facebook what kind of audience you want.
Tool Top Tip
Start Up Top Tip
- Learn how to dropship