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Running an online business can be an excellent second income source. In fact, if you invest enough time and effort into it, it can even turn into your main revenue stream.
You don’t have to start your online business from scratch, though. Instead, you can buy one that is already profitable and then continue growing it.
Read on to learn how you can buy a profitable online business and what to look out for.
Chose the Type of Business You Want to Buy
First, you will need to ensure that the business you are investing in is one that you will be able to run and grow over a considerable time. It won’t be enough to just throw some money around and expect your new online business to run itself.
Skills and Interests
If you are buying a blog, you will need to keep it populated with fresh content. This might be the best course of action if writing is your forte. On the other hand, if you’re buying an online store, you will need to consider fulfillment, shipping, and quality control, to name just a few aspects of ecommerce. Will you be up for the task?
Take careful stock of your skills, interests, and the time you have to devote to this business. How do you imagine things should run? Do you want to be doing the work yourself, or will you need to hire someone to lend a hand?
If you choose a business in an industry that genuinely interests you, you will be much better equipped to grow it. For example, if you like to go camping, then a website that reviews camping equipment or a blog that offers camping tips might be a good investment.
You can, of course, choose a business you have no prior knowledge about if you’re ready for the learning curve. Note that this will likely require more effort and more of an initial commitment. If you’re already spread way too thin, you might want to reconsider.
You also need to consider what it is you will actually know how to do. For instance, if the business has an active social media presence but you’ve never used a social network actively, you will need to build the skill or hire someone to do it for you. Does the business provide enough revenue for you to do this? Or can you afford to pay someone’s retainer out of your current income?
The Money Factor
Finally, there are the finances to examine. Carefully consider how much you’re able to invest and how much you expect the business to earn and when.
There are businesses you can buy that will already be generating an income, and there are those that are on the cusp but not quite there yet. The former will require a larger investment upfront, but they will also start paying you back immediately.
Determine Where You Want to Shop
Once you have an idea of the kind of business you want to buy, you need to start looking for it. Having a defined budget will help you avoid any dead ends, so make sure you have at least a rough figure in mind.
There are several ways to find an online business to buy:
- Through a broker – Online brokers specialize in finding, researching, and selling businesses. They can help walk you through the entire process and save you a lot of time and effort. Naturally, their services come with a higher price tag. Make sure you do some research into the best ones first.
- Through an online marketplace – There are also websites like Flippa that list hundreds of businesses for sale. Here you’ll be able to find anything from small websites to huge businesses that are worth a lot of money. You’ll need to spend some time doing your own research and conducting the negotiations yourself, but it will not require an additional monetary investment.
- Put the word out – You can also let your friends and family know that you are looking to buy a website. The wider you spread the word, the more likely someone will let you know of an interesting opportunity. Of course, if your network is small, this might not be the most viable route for you.
You can also approach any online business with an offer. This is the least effective course of action, as you probably won’t quickly find someone who is ready to sell. Try checking out an online marketplace first. This is where you’ll get not only the most information but also some assistance with the legal process.
Determine Whether It’s a Good Investment
You will then also need to determine whether the business you are considering is actually worth the investment. Valuing an online business can be a bit tricky, especially if you are new to the given industry. Fortunately, there are several factors to consider that can help you make the right choice:
The Website Is Growing
If a website is showing clear signs of growth, it’s likely going to be a good investment. These signs typically include a steady increase in traffic, social media followers, and revenue. On the other hand, if a website isn’t showing signs of growth, it’s not necessarily an unsound investment. It just means you will need to look into it some more.
It Has More Than One Source of Traffic
Ideally, you want any website you purchase to be getting traffic from a variety of sources. One of them will naturally be the most lucrative and the best performing, and you should also consider whether you’ll be able to continue growing it.
Keep in mind that a business that relies too heavily on a single source of traffic won’t be the best choice. You may end up losing all of your traffic if the rules of the traffic source change.
It Has More Than One Revenue Stream
Likewise, it’s not good to buy a business that depends on a single product or a single form of income. You want several of them in place. For example, a blog should be earning from ads and affiliates, and not just one or the other. At the least, you should be able to implement another income source as soon as you take ownership.
There Is a Marketing Strategy in Place
A business that is already investing in marketing or advertising will always be the best choice. You will then be able to build on these foundations instead of starting from scratch.
Use your common sense when checking a business out. Can you see any room for growth, and more importantly, can you see yourself growing this business? Are you able to work with what’s already there, or will you need to significantly improve your skills?
If it seems like too much of an effort, perhaps look for a business you feel more confident about.
Think About Growing Your Business
Finally, consider what you will be doing to grow your business. Unless you see a sustainable way forward – one that you either have the knowledge or the resources to develop – you may be better off choosing a different business to buy.
Consider elements such as the time that it will take you to:
- add new content
- stay active on social media
- order new stock
- anything else that needs taking care of on a daily basis
Write it all down and calculate the hours that need to be put in. You may discover that a business requires 5+ hours a day of active work, while you only have an hour or two to invest at the moment.
This can be your biggest stumbling block, especially if you find a business that fits into your budget and that you have a genuine interest in. Remember: just because a business has been doing well so far doesn’t mean you can just let it sit and expect it to keep generating an income. You’ll need to put in the effort – all you have to discover is how much.
If you can’t see a way forward and you’re only tempted by the figures somebody else has managed to draw from a certain business, choose something else to invest in. The worst thing you can do is invest in something you will then quickly tank.
Buying a profitable online business can take a significant amount of time if you want to get it right. In any case, don’t just jump for the first option that seems viable. Instead, spend more time investigating until you find a business you will be happy to run and continue to invest in for a long time to come.
Finally, make sure you do your homework and check all the data thoroughly. You only want to part with your money if the website is truly legitimate.