There has never been a better time to buy an online business.
With more than 4.79 billion internet users worldwide, a profitable online business can provide access to nearly half of the earth’s population.
However, there are still many misconceptions about owning an online business.
You might have heard that internet businesses aren’t a ‘real’ job; you can’t make money unless you are lucky; or think you need a ton of capital to get started.
You don’t need thousands of dollars in order to make money online.
Buying or building an online business can provide a legitimate stream of income that allows you to lead a fulfilling life with time to devote to the people and projects you love.
If you do it right.
Which begs the question — is buying or building an online business better? 🤔
Is Buying an Online Business a Good Idea?
As more people look for a way to break free from the standard 9 to 5 lifestyle, many are considering purchasing an online business.
But is it a good idea? Or, are you better off building a business from the ground up?
Building an online business is possible, but may require investing a ton of time before you begin to make a profit.
Buying an online business can be extremely beneficial — if you have the right personality, tools, and if you purchase a business that makes sense for your skills and lifestyle.
Keep in mind that buying a successful online business still requires taking on some level of risk.
The benefits, however, are numerous. A successful online business may allow you to save money, pay off debt, be your own boss, and work from home.
But is it better to buy a profitable business or build one from the ground up?
Why Buy an Online Business When You Could Build It?
Many people suffer from option paralysis that makes starting a business overwhelming — there are just so many options out there.
Should you start a content site and rely on ads? Build an affiliate site? Offer a service?
Purchasing an already established business allows you to bypass those beginning months where you might lose confidence and can reduce the risk level, as the company is likely already seeing some success.
Just keep in mind that buying a business still requires work if you want to succeed.
If you aren’t willing to invest time and money in building your business after purchase, it might not be the right path for you.
How Much Does It Cost to Start an Online Business?
Starting an online business can cost anywhere from $0 to millions — depending on what type of business you want to start.
An online service company, such as a graphic design company or a cleaning company, can be started with a free website and a few hours of your time.
However, service businesses require you to trade your time for money — which limits your growth potential. After all, there are only so many hours in the day.
What about an eCommerce company? If you use a drop shipping service like Oberlo, you’ll pay just a few hundred dollars in software, since you won’t have to store stock.
Not to mention, Oberlo integrates with Shopify websites, so you’ll be paying a pretty penny for that service too.
An online store that holds stock, however, could cost you a few thousand dollars to get off the ground.
But there’s another factor that many business owners don’t consider. Online businesses that are cheap to start often rely on undervaluing your own time.
You might not have to pay much to start a content blog — but to actually make any money will require months of content creation, learning about online marketing strategies, such as email tracking and SEO, and then implementing what you learn.
Even if the business doesn’t cost physical cash, your time has value, which is why it often makes more sense to purchase an online business.
Buying a profitable online business makes it easier to get into the heart of growing a business right away, rather than spending thousands of hours getting it up and running.
So, how do you buy an online business? Here’s a step by step guide to purchasing a profitable online business.
Here’s How to Buy a Business Online
Nearly any type of business can be successful with a bit of luck.
Entering the market at the right time, having a piece of content go viral, or producing a product or service with a high need can all lead to a successful online business.
However, those factors are difficult to predict.
Instead of relying on sheer luck, let’s look at reliable steps you can take to purchase a profitable online business you will actually enjoy working on.
Step 1: Determine what type of business you want to buy.
Before laying down cold hard cash for your new online business, take stock of your life. What skills do you have? When you imagine the future, what does it look like? Do you want a business that can run on its own after a few months? Or one that will require daily hands-on work?
Answering these questions, and the ones below, will give you a better idea of what type of business will fit your lifestyle.
- What skills do I bring to the table? Understanding what skills you have — or are willing to learn — will help you decide if a specific company is a good fit for you. For example, if you are an expert in health care, choosing a business related to that field might make sense. (Not to say you can’t go outside of your area of expertise, but make sure you have the time to devote to learning.)
- What profit model will work with my life? For example, if a business requires community moderation, can you dedicate the time or afford to hire someone to handle it for you? If you decide to buy a taxidermy business like the one below, do you have the skills actually to provide the products customers are ordering?
- What is my budget? Consider how much you have to invest upfront and per month. Ideally, your new business will bring in income, but you may not know exactly how much. A loose budget will help steer you away from businesses that might not be the best fit for you.
As you answer the questions, don’t worry about pigeonholing yourself into one industry. You may want to get outside of your current area of expertise; that is totally fine. Rather, use these questions to get an idea of what you are looking for. You can always change your mind later!
Step 2: Find a place to buy your online business.
Now that you understand what type of business you want, it is time to start searching for your new investment. There are three main options for buying an online business, each with its own pros and cons.
- Work with a broker: You work with a specific broker to find, research, and purchase a business. They provide expertise and advice as they walk you through the process, but the cost is prohibitive for many.
- Use an online marketplace: A site like Flippa lists hundreds, or even thousands, of profitable businesses for sale. Listings can include small businesses you can purchase for a few hundred dollars to multi-million-dollar businesses. You can often search marketplaces based on key terms, industry, price, or the age of the business.
Online business marketplaces offer a lot of information upfront, including average profit, monetization, traffic, and so forth. This transparency can make the process easier and more secure.
- Tap your network: Let friends, colleagues, former clients, and networking connections know you are looking to purchase a business. You may find a business you didn’t even know was for sale — however, you will have to work out valuation and other legal aspects on your own.
Step 3: Determine if the business is a good investment.
The key to buying an online business is finding the right one — which can be much more difficult than it sounds. Plus, successful businesses are also expensive businesses.
Take Zoma Sleep, for example. It has a well-designed website and a blog filled with information customers need to decide which mattress to buy.
According to SEMrush domain analysis, the site has a domain authority of 39 and ranks for more than 13,000 key terms.
The cost of this type of website is likely to be high — which may be fine if you are looking to invest money, rather than time.
Business owners working on a smaller budget should consider looking for a business that is not reaching its full potential and in an area you are interested in or, ideally, an expert.
Step 4: Cover the legal details.
Once you have selected a business to purchase, it’s time to take care of the legal stuff. This will include issues such as the actual purchase price, what you get (for example, do you get access to the email list, templates, domain name, etc.), as well as details such as a non-compete clause.
If you work with a broker or online marketplace, they may have processes or templates to aid in this process. However, consider working with an internet business lawyer to ensure your rights and investment are protected.
Step 5: Work to grow your business.
Once the purchase of your online business is final, it is time to make the most of your investment. The next steps will depend heavily on the type of business you purchased as well as the current state of the business.
For example, if you purchase a content site like Host Advice, you will need to make a plan to either revamp the current content or add new reviews on a regular basis.
If you purchase an eCommerce site, you’ll need to look for ways to increase sales, which might include adding new products, creating product bundles, or writing additional content.
Here are a few ways to improve your online business website after purchase:
- Perform an SEO audit: Where does your site rank for popular industry key terms? How do you compare to your competitors? Are meta titles included on all pages? Using an SEO roadmap will give you a clear indication of your site’s overall health and what steps you’ll need to take to increase traffic.
- Create a long-term SEO plan: Look for growth opportunities using a tool like Ahrefs or SEMrush. These tools can help see how you compare to competitors, optimize for speed, and earn high-quality backlinks — all steps that will improve your ranking in Google and increase traffic.
- Look for ways to improve UX (user experience): Play around with the site yourself and look for areas that are difficult to navigate or information that is hard to find. Dig into customer reviews (if you have them) to see what challenges customers are complaining about and make a list of areas you can improve.
- Look for ways to diversify revenue: To be successful in the long term, businesses need multiple sources of revenue. If your content site relies entirely on Amazon affiliate sales, what happens if they lower their commission rates, as they did recently? Would you have a way to replace that income?
Don’t make all the changes all at once — start slow and see how each change impacts revenue and traffic. If you change 50 things all at once, you’ll have no idea what helped — or hurt — your business.
Now, Start Making Money With Your Online Business
Building an online business is a test in persistence and dedication, and requires a willingness to make mistakes. It might not be easy, but it is worth it.
If you take the time to reflect on the skills you already have and are willing to learn new skills, you can grow your new business into a long-term success. Once you’ve taken the steps above, it’s time to dive in and start making money from your new online business.