Buying an online business

As an online entrepreneur, you can start from scratch and build an online business from the ground up. Figure out your niche. Set up a website. Build an email list and market to it. Write blog posts and other content. Create products or promote affiliate products — or use the drop shipping model.

It does take time before your new online business will actually start making money and become profitable.

The alternative is to buy an existing already established online business for sale.

What to Look for When Buying an Online Business

To be clear, you’re not just buying a website. You’re buying a complete business with products and customers, proven marketing methods to generate leads and make sales, a social media presence, ongoing ad campaigns, an email list, even employees and/or virtual assistants.

This is a turnkey opportunity that you take over. After you buy it you can let it run as it was before or attempt to increase profits by making changes — perhaps you recognize something the current owner is not doing that could boost sales. Once you buy, it’s your business.

The online business should have a track record of sales and profits you can see before you buy the business — always check out the financials. Don’t rely solely on what the seller tells you. One thing to keep in mind is that you shouldn’t buy an online business for sale solely because it is a big moneymaker. That’s important, of course. You should have an interest in the niche too.

A great thing is that you don’t have to figure out the business for yourself once you buy — you might have been worried about that. Often, the seller will include training for you to make sure you know how everything runs.

Buying an online business is kind of like buying an offline business; such as a popular pet store in a community, complete with shelves full of products, relationships with vendors, a lease on the space, and more. Setting up your own pet store would mean finding a storefront to lease and negotiating the rent, researching the best location, renovating the interior as needed, putting up signage, advertising in local publications, sourcing products… You get the idea.

By buying a business, whether it’s an online business for sale or a bricks and mortar store, you’ll shortcut around many of the time-consuming and sometimes expensive tasks required to build a thriving venture.

Of course, you will have to pay to buy the site. So you have to measure if paying that price is worth not having to build a complete e-commerce business yourself. Also keep in mind that really successful sites will be quite pricey, with prices in the tens to hundreds of thousands of dollars. But you can find full-fledged online businesses for a few hundred or a few thousand dollars too.

A good rule of thumb is to multiply the annual profits of the business by 2 or 3 times to get a fair for the sales price. Factors like assets, a good domain name, a recognizable brand, a large amount of quality website traffic, a good social media presence, and a large email list of responsive names might also influence the purchase price.

Here are some other things to keep in mind that should influence your decision. You want to make sure the business you want to buy:

  1. Is growing
  2. Has multiple streams of income and doesn’t really on just one product
  3. Gets traffic from a variety of sources
  4. Has revenues that are consistent from month to month
  5. Has systems in place for marketing