Thinking about buying an online business? Here is the up and downside of buying an online business…
Data from the U.S. Bureau of Labor Statistics (BLS) shows that approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more.
According to the BLS, entrepreneurs started 774,725 new businesses in the year ending March 2019. From the historical data, we can expect approximately 155,000 of these businesses to fail within the first two years.
There’s no wonder you would want to buy an existing online business that is successful.
WARNING!
There are a lot of mistakes made when buying an online business. The following advice will help.
Find A Site
Find a site in a niche that is popular. There are places to buy websites that will let you sort through which sites are most lucrative:
FE International
Empire Flippers
Flippa | Buying mini cash-flowing businesses on Flippa
Investors Club – They list smaller websites.
Flipping Websites Facebook Group – This group is run by the same owners as Investors Club.
Niche Website Flippers Facebook Group – Another popular Facebook Group for finding private sellersExpect to pay a broker’s fee. Depending upon the revenue that the site is generating this can be substantial.
How Much Will It Cost?
Typically you will need to pay a multiple of how much the site is earning each month. If a site earns $1000 a month, it would sell for $27,000-37,000.
What About Traffic?
Sellers will often “exaggerate” how much traffic a site is getting (and how much it’s earning).
The tip here is to have the seller add you to their Google Analytics to allow you to verify if the traffic numbers are real.
This also lets you see the history of the traffic fluctuations.
Note: you will want to make sure that the majority of this traffic is organically coming from US-based visitors. Organic traffic is more consistent and easier to scale than paid or social.
Can I Get the Site for Less?
Sometimes there is room for negotiation. Usually, sellers have their own motivation for selling the site. This means that they may want to let it go for less.
Transferring the Site
Here is the process of transferring the website after the sale.
- You will transfer the funds into an escrow account (which protects both parties).
- Seller will transfer the domain and files to your hosting company. Your hosting company will gladly help you with this process.
- Makes sure the site is working properly before releasing the funds.
- Important! Make sure that the seller deletes the files still in their hosting account.
Big Branding Secret!
Here is the secret that many high-earning entrepreneurs won’t reveal. Be careful to avoid pictures of yourself on your site. The more personality “neutral” you can make the site the better your chances of selling it later. The goal is to create sites that the new buyer won’t feel are too tied to a personality. This also allows you to build a portfolio of sites that sell faster for many multiples of their monthly earnings!
Optimize The Site
Once you have the site transferred there are some strategies to increase the income it’s earning.Increase the site speed. This helps with mobile traffic and organic rankings.
Test ad networks! Odds are the site is already using AdSense. But other networks can perform better. Some alternatives include:
Media.net.
PropellerAds.
Monumetric.
Revcontent.
AdThrive.
Mediavine.
InfoLinks.
Bidvertiser.
Strengthen Keyword SEO
A simple search for the keyword string “Single Operated Newsletter” will reveal some of the strategies we use for ranking on Google. You can learn 100 more such strategies in our AffiliateMuse Stacking manual. (Which you get as a member).
Remember that digital products carry the highest money earning potential!
Advertising is Digital!
Something to think about. More money is made online from advertising than anything else.