By Jock Purtle
For those of you that have found yourselves in the position of wanting to start your own business, but also have other responsibilities you need to take care of, buying an established online business can be one of the best moves you can make.
You just want to be sure that you’re not throwing good money after bad. To do that, you’ll want to know how to evaluate the businesses you’re considering so you know they’re a good buy.
If you’re ready to get started, here is the best advice for buying an established company is right for you.
Finding Businesses for Sale
There are three ways to find businesses for sale: your own research, online marketplaces, and web brokers. Let’s look at each of these.
Your own research entails searching for possibilities in the niche you’re interested in by using search engine results. Concentrate on the 4th page of the results and beyond. These pages are more likely to contain blogs that get traffic, but haven’t been properly monetized.
Hobby blogs and webmasters that are passionate about the topics on their websites, but aren’t necessarily familiar with marketing and monetization, are prime targets for buying and converting into a full-fledged business.
If you decide to make an offer and want to proceed with the deal, be sure you’ve done your due diligence before you sign and make the payment.
Website marketplaces like Flippa have many sites and businesses for sale. However, you’re still on your own to verify everything so you don’t get scammed. Not every business for sale on those sites will be legit, nor will they always be worth the price. Buyer beware.
Web Brokers have lists of established businesses for sale, but they offer much more than that. A reputable broker will have already verified that the business for sale is legit and that the financials are in order.
The broker can assist you in making the right offer and walk you through all of the transfer steps. Most brokers also use an escrow service to financially protect both parties during the transaction.
True, a broker will cost you a little more than buying on your own, but the peace of mind you gain may be well worth it.
Things to Consider
There are many things to take care of before the final payment is made to the previous owner. Verifying financial records is just one.
You’ll need to verify the site’s traffic through Google Analytics or whatever tracking system the owner is using. You’ll also want a list of all the accounts or services the site uses to operate.
That list of accounts and services should be included in the purchase agreement, along with any help you might need from the previous owner.
Does the purchase of the business include any current inventory of products? Does the business have any outstanding debts or lawsuits pending? Ask, ask, about everything.
It’s fairly common for buyers to ask the previous owner to consult for a set time period, or until a certain specified goal is reached by the business. Spell out as much as possible in the contract.
Also, seriously consider using an escrow service to handle the transfer of the assets and the payment(s) to ensure you’re protected.
Learn Monetization Methods
If you want to buy and keep a profitable business, you’re going to need to learn different monetization methods so you can keep the business growing, or even get it earning in case you’ve bought a blog that hasn’t already been monetized.
The way you monetize the website could range from affiliate marketing, selling physical products, offering consulting, creating a software product, and many more.
If the website or business you’ve purchased is already monetized, you’re going to want to dive deep into the in’s and out’s of the monetization method so you can not only sustain the business’ revenue, but also grow it going forward.
Learn Marketing Strategies
Once your monetization strategy has been implemented, you’ll need to focus on your marketing strategy.
Traffic and the marketing strategies you use to drive that to your business are the backbone of a successful business. Speak with the previous owner and get familiar with the marketing strategies used thus far in the business.
In the case of passion bloggers and webmasters, they might not be able to pinpoint exactly what it was that caused their website or blog to grow to where it is.
For times like those, you’ll need to reverse engineer as much as you can, and try to implement the same strategies to ensure the business is going to continue to grow. That, or bring new creativity to the table and start marketing the business in ways the previous owner didn’t.
Making the Business Your Own
You’ve got multiple options when it comes to making the business your own.
You can either let the subscriber and visitor base know that you have recently taken over the business and things are going to change (albeit, slightly), or you can slowly phase out the previous owner while still keeping the same theme and style about the business.
Depending on how the business was built in the first place, the decision could be entirely up to you. If you want to phase out the previous owner, the subscribers and visitors may not even have to know someone knew is in the wheelhouse.
However, if you’re going to alert your new audience that the previous owner has been replaced, you’ll want to make sure you have new ideas and ways to keep the base happy and active while you’re transitioning into ownership of the business.
Learn Time Management
When you have so many responsibilities demanding your attention on a daily basis, proper time management can be one of the best skills you can develop as a new business owner.
Your business will require additional time to maintain it, and even more time to grow it to new levels. If you’re not prepared for proper time management, you could find your business losing ground instead of gaining it.
Before you buy, go through and dissect your time management strategies.
Then, ensure you’ve addressed areas of concern before you actually purchase the business, so you’re adequately prepared when you’re required to devote time and energy into your new venture.
As long as you prepare yourself for the process of owning a business, and understand that you may encounter difficulties, being an entrepreneur is one of the most rewarding things you can do (both personally, and financially).
Jock Purtle is the founder of Digital Exits, an online brokerage service. Jock has been featured in Forbes and contributed to numerous websites and podcasts. He specializes in appraising and buying/selling online businesses and enjoys helping other entrepreneurs do business online.