Online businesses have grown significantly over the past decade. Popular brick and mortar businesses are also following this trend to maximize profits as online shopping witnesses a boom. From an estimated global sales figure of $25 trillion, the value of online shopping is set to grow to almost $30 trillion by the end of 2023.
Smartphones have also become the predominant choice on which to browse the internet and do shopping. Online shopping and smartphone use seem to have correlated well to build this industry. Get in on the action by purchasing an existing store with these easy steps.
Reasons To Buy An Existing Online Business
Existing online businesses have already made a name for themselves online. Their brands are established, and they have all the technology in place to drive traffic and convert leads to sales.
All operations are in place to continue making profits or to make the business profitable once again. Do your research to determine how much traffic the business attracts and what their domain authority looks like to understand its target market.
An existing market means that the business also holds the potential to expand on its existing market base. Purchasing an existing business removes much of the stress and costs associated with a startup. Why go through all the trial and error of investing in a startup that you don’t know will be successful, when you can purchase an existing profitable business?
Where To Find Existing Businesses For Sale Online
Exchange is probably one of the most well-known online sites to visit when looking for businesses on the market. All data linked to these businesses is available to help make a good purchase decision.
Key metrics are provided that show website performance. The visibility and security of the website can also be established from sites like this. Also evaluate website value on how it is presented; the design is important as this element holds significant appeal for potential traffic. Use tools like 1and1 to help determine the value.
If this sounds like too much effort, purchase a readymade online store that takes all the angst out of buying a new business. Readymade stores have all the necessary technical backup to support the start of a successful online business without having to worry about these aspects. They are so comprehensive that they already have everything in place to start selling right away.
Do Your Own Research
Never rely on only the facts and figures provided by an internet search to establish the current value and profitability of an online business. Dig deeper by speaking to the owner personally. Find out what sales projections are like for the next few years.
Obtain a history of performance over the past three years or more, if possible. Conduct an analysis of the industry; look into associated competitors, trends and developments.
Establish the financial status of the business by looking at financial statements and monthly operating costs and the business’s position in the industry. Ask the owner why they want to sell the business, and whether they have run successful or failed business in the past. Don’t simply accept someone at their word regarding the company value.
Check The Marketing Campaign
Find out what marketing strategies are in place and how these have performed in recent months. Ascertain what steps have been taken to attract traffic, and how leads have been converted in paying customers. Ask how much has been invested in recent marketing campaigns and what the ROIs have been.
Until you know whether the advertising tactics used have been successful, you won’t know what has worked and what hasn’t. You want to purchase an existing profitable business to take the pain out of the startup. To accomplish this goal, you need to still do lots of homework to find out whether this purchase will be profitable.
Evaluate Social Media Accounts
Look at all the social media accounts linked to the business. Note how many positive and negative responses have been made, and how the company has dealt with customers.
Online reputation is the key and this can be an enlightening investigation that will help you make an informed decision about its value. Do customer comments indicate frustration with a lack of service or dissatisfaction with the products provided? If so, these problems are an indication of inadequate customer support.
They don’t necessarily mean that you shouldn’t buy the company, but they do indicate a weakness that needs to be addressed. If you do decide to buy the company, you can immediately indicate to customers that it is under new management.
Also determine whether discounts or guarantees have been provided, which have not yet been met. Small details like this will be helpful in clarifying the hidden value or otherwise of the business.
Protect Your Interests
If you’ve done your homework and are set on purchasing a certain business, you need to make an offer. Ensure that certain clauses are included in the contract once the sale has been accepted.
You should look at including non-compete clauses in the contract, for example. It is pointless to buy a profitable business if the original owner has plans to open the same business and entice customers away from you.
The original owner has all the knowledge, experience and resources to compete against you if you don’t include this type of protection in the sale agreement.
Ensure that they are prevented from opening a business in the same or similar industry for at least five years. This is the best way to prevent them from becoming a direct competitor and stealing existing business from you.
Obtain The Website’s Source Code
Without the proof and ownership of the source code, you won’t know how to maintain your website. Use an expert programmer to assist you when speaking to the web developer and master about this critical component. Find out how payments and credit card issues have been established, and whether there are additional costs involved to ensure ongoing processing.
Obtain all the necessary passwords for administrator rights to the website and credit card processing functions as soon as possible. You want to avoid being called on to make massive deposits to process outstanding costs on credit cards with the associated bank.