Acquiring an established and profitable online business is one way to gain online revenue. However, there are still important things you need to consider before you buy any website.
While it can be easy nowadays to create your website and start an online business, this is not what we’ll discuss here. We will also not discuss starting a digital business from scratch or building a website for your offline business.
In this post, we will talk about buying an existing online business (with domain names, websites, online assets, and email lists to name a few) so you can take over and start earning profits right away.
Without further ado, here are the top things you should take a closer look if you are interested in purchasing an established online business.
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Financials
The first thing you need to check before you buy any website is the financial aspect of the online business. You will waste a lot of money if you buy a business that is not making money and there is no strategic plan that will allow you to earn profits in the near future.
Set aside enough time to review the financial records of the online business you want to buy.
Check if the business has regular cash flow, evidence of smart decision making, and well-planned financial strategy. You might be looking for websites that are breaking even because the price tag is not that high.
If you see that the website is losing money, be sure to check if the business has issues with the general concept or its processes needs to be improved. There are instances that the business is not taking its full flight because the owner has his shortcomings.
Target Market
The next factor you need to check is the target market of the website. Review if the business has a clearly defined target audience that it is effectively reaching.
It is ideal that the site’s target market will complement with your prospect or existing audience.
As you would for any other commercial purchase you intend to make, you should also set aside enough time on competitive research that includes similar sites to the one that you want to buy.
In most cases, even websites that have been managed well or has outstanding business processes can be outranked by someone that is more established or bigger.
Unless the present owner has already achieved some milestones and you can see a very clear path in taking the same path once you take over the site, it is probably ideal to look for an online business with high potential for success.
Nowadays, the most popular platforms for commercial websites include Drupal, Joomla, and WordPress. These platforms were originally Content Management Systems (CMS) that have gradually evolved into platforms for building websites.
Checking the platform and technology behind a website is crucial because it will form the basis of several factors, which include:
Upfront and ongoing fees
Access to experts
The need for external help
Flexibility in marketing, design, and other vital areas
Each platform has its own advantages and disadvantages, and technology doesn’t necessarily need to be the deal breaker.
Stats / Traction
The online traction of a website or a domain has a significant effect on your profit.
Be sure to check the comprehensive analytics reports and historical traction about any online asset that you want to buy. Just walk away if the owner of a website doesn’t want to disclose this vital information.
In reviewing the traction of the website, you need to ensure that you are comfortable in assuming ownership taking into consideration how the website has been managed.
Make sure that the keywords and key phrases that they are already ranking for can match well with the target market that you are sharing in common.
Consider how likely it is for the present SEO standing of the website to be sustainable in the long-term.
This is not to say that you should demand that the website will stay relevant in search results without effort after you assume ownership.
Instead, you should ensure that the keywords will still be used by people when they perform searches for at least the next five years.
Workload
Before buying a website, you should also check how much work is required in running the business as it presently stands.
There are numerous ways that website owners can use technology to automate the manual process.
However, it is quite unlikely that you will ever be able to really allow the business to run on its own.
Yes, you can earn money online but the competition today is really fierce. You still need to make the business stand out and make it profitable.
Ask the current owner how much time they are putting into running the business and what specific roles they are playing.
Also, determine the specific tasks that the current management is entrusting to full-time personnel or freelancers and their corresponding costs.
If the present owner has vital skills that you are lacking such as copywriting, coding, or HTML, you should perform the necessary research to figure out how much you need to spend to do these jobs.
Your preferred workload should be part of your decision-making process. Some website owners are working as much as 120 hours per week.
While they may say that they really love their work, this required time may not be applicable to you. Be sure to check if this will cost you more than it will cost the present owner.
Conclusion
Acquiring an existing website is a good way to jump into a digital-ready business as long as it meets the minimum standards discussed in this post as well as your own expectations.
Once you have already chosen the right online asset to start with, you will be in a great position to be successful in the digital world especially if you view and manage this like any other business you want to run.
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