The thing about Online Businesses | Websites these days is that the market has been around long enough whereby there are businesses of quality, with verifiable statistics and easier to follow financials. So the information collected is more capably captured and consistent.
Back not so long ago, there were the boom-and-bust years of the WWW when companies paid big bucks for what appeared to be unprofitable online businesses/websites. A sort of gold fever gripped investors: some became almost instant millionaires and others, well many others went the other way, in a big way!
Since the bubble burst, however, the online market has established at a more measured and sustainable pace. Trends show that there are sites that continue to increase in value across the board and the trend remains upward.
This environment presents ample opportunity for successful speculation. Just like the physical property market, the online property market is rightly being regarded by many as a great place to make not just a quick profit, but—potentially—a living.
As with a property, you can buy a web site and have it increase in value over time without having to do anything but maintain it (although the value of physical property depends on the scarcity of real estate, which is unlikely ever to be a problem online!). [“Flipping Websites for Profit“]
As with any business purchase, there are steps to this process:
1. Locating an online business you want to buy
2. Negotiating and completing the sale
3. Adding value to the business
4. Making the decision what to do next – do I keep it? or do i sell it?
5. If part of an existing business’ online strategy, is it doing its job? has it lived up to expectations? is it time to buy another one perhaps?
Lets look at Step 1.
How do you find an online business to buy?
Do you know of one being sold, that you’re interested in?
How do you know what you’re looking at, really? How do you analyse it?
I’ll into more detail about these points next week…
This week I’ve been “shopping” for websites.
Plenty around but not many I’m all that interested in. Mainly because even though they may look pretty, there’s been no real revenue-generating thought put into them. Yes, in some cases that can offer opportunity for me, agreed. But not at the asking prices!
Buying and selling a a website is no different to buying and selling a business.
Just because the owner of the site has spent, in some cases, a lot of money to get the site functioning the way it does, it does not automatically mean the site is worth that much.
If it is nothing more than a really expensive “brochure”, the value as such will usually be negligible to a potential buyer. What a seller wants to be able to demonstrate, to illustrate value, is only two things… traffic (incl. database) and revenue.
If neither of these is able to be validated, then realistic interest in the site will be no more than it is for the construction of an average site, regardless of the bells and whistles. That said, there’s always the exception whereby the site holds some strategic value and will save the potential buyer a lot of effort. They, however, are few and far between…
If you have a website you’d like me to have a look at, please email details to firstname.lastname@example.org
Whilst each of you are determining your own Online Business Strategy, I’ve been working on mine. That is, I am now in hot pursuit of Online Businesses and websites as a potential purchase for myself and/or my network of potential buyers… Do you have one?