Starting an internet business is a big decision that requires some serious thought before going ahead.
Aside from your own skills and interests, the other important decision you’ll make is whether to start your business from scratch, or buy one that’s already established.
When you buy an online store, you can start trading much more quickly, and benefit from having an existing audience. While the initial expense and learning curve may be steeper, the flipside is a potentially far quicker return on your investment.
So where to look first? First, you need to know what you’re letting yourself in for.
There are some very particular risks to be aware of when buying your first online store. As such, performing your due diligence is a must. You need to identify any and all factors that could undermine the success of your new business in future. These include:
One of the benefits of buying an online store, as opposed to a brick and mortar business, is that you save yourself a lot of time-consuming and expensive jobs — but you still need to pay out for the site.
High-performing sites can be expensive, sometimes selling for hundreds of thousands of dollars. However, you can also find more modestly priced options around the £300-£1200 mark.
If you’re not sure how much a business is worth, try this technique: take the business’s annual profit and multiply by 2 or 3. On top of this, you should also take into consideration it’s branding, the strength of the domain, traffic, social media presence, and existing customer base.
If you’re looking for a sound investment, here’s a good checklist:
For a first-time entrepreneur, finding an online store to buy can feel like a bit of a minefield. There are several ways to find them – the most common are listed below:
You can also find sites, businesses, and domains for sale on social media — just monitor relevant hashtags, and reach out to people in groups, discussions, and forums.
If you’ve found an online store that you’re interested in, the first step is to ask to take a look at its analytics. The seller should be happy to provide all the necessary information for you – if they’re not, you have to ask yourself why.
Using Google Analytics, you will be able to check the website’s traffic levels and sources, in particular, how much of it is organic, paid, or via referral. You should also take a look at the keywords and phrases that are performing well – you can use SEMRush to easily find this data.
Look at the ecommerce sales data over the past year and see if you can spot any worrying trends or issues. Beware of paid traffic inflating sales figures.
Backlinks and site authority are further important factors to look into — you want a clean and natural backlink profile — avoid any spam.
Here’s a guide on how to check website traffic using Google Analytics.
Once you’ve found an online store to buy and agreed on a price with the seller, the next step – and one of the most perilous – is the transfer of ownership to you. This part of the process should be carefully planned, as it’s the crucial moment where deals can sometimes fall apart at the last minute. Everyone needs to be on the same page and have the same expectations for the outcome.
The easiest way to ensure this is to write up the expectations of the sale in advance, including a comprehensive list of all the assets that should be transferred to you before the sale is considered complete. If you’re worried that you’re going into too much detail, don’t be. More detail is always better than not enough.
Here’s a short list of details to start you off – remember to add anything specific to your own deal:
Buying an online business is potentially risky, but it brings its rewards as well. Don’t rush into any decision, and always take the time to carefully weigh up your options before making a commitment. And remember, the hard work is only just beginning once the deal is done. Read these 7 Top Digital Marketing Tips to get your new online store off to a flying start.
– Written by Gareth Simpson
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