Buying an online business

[murphster]

Hi all, I have been looking over online businesses for sale and would like to purchase a website as a side-line/something different from the day job. I have been investigating a few different types and realise I am lacking knowledge/experience in some areas.

How do I quantify the quality of a BPN? I can see you can get one setup cheaply on fiverr.com etc. but what was to stop me purchasing the site and then google determining it is spammy and demoting the site the following month after I have purchased?

If it was demoted, then would I just be able to pay someone on Fiverr to set me up a few more? I just want to understand how sensitive a site might be to them.

Apologies if this is obvious but how do I protect myself from any potential financial miss-management of a previous owner? Some websites are only a few months old and probably not yet set-up as a company with proper accounts. (i.e. unpaid debts / VAT / sales taxes etc.)

(Any links/tips greatly received!)

Thanks.

[jammy-git]

Buy a business that isn't just a few months old. Buy one with several years worth of accounts and can prove its income. Get access to their analytics account and see where the traffic is coming from.

In all honesty, if you're lacking experience and knowledge in this area I would advise you to set up your own site and make your own mistakes before spending a lot of cash on something that's already going.

[akirk]

So, let's be clear

you don't know anything about running an online business
you might be looking to buy something which is only a few months old
you think it might rely on spammy weird SEO tricks to fake ranking, and if not you want to do so...

what could possibly go wrong

as above - get some experience first... set up a site, sell something, see what it takes - and the answer is lots of hard work...
to buy a site that already exists to save you that initial setup hurdle will cost money, and it won't be a site a few months old

a lot of people believe that eCommerce is an easy way to make money without effort - it isn'[t, it takes as much effort as setting up a shop in real life - it is just easier to scale...

[StevieBee]

Aside from the issue of inexperience in running an online enterprise, I'd also suggest some basic business insight is lacking:

murphster said:

Apologies if this is obvious but how do I protect myself from any potential financial miss-management of a previous owner?

You need to appoint an accountant to undertake due diligence and a lawyer to arrange contracts and ownership transfer and the like. You need to assess the market, growth potential, risk and many other things as you would any business; online or otherwise.

You mention this being a 'sideline' business so it may well be a case of a punt amounting to a few grand that you wont miss in which case, only you can determine the level of risk you are prepared to take but even then, you need to take care that you are not buying huge liabilities.

[murphster]

Okay, thanks for the feedback. Points are taken...

StevieBee said:

You mention this being a 'sideline' business so it may well be a case of a punt amounting to a few grand that you wont miss in which case, only you can determine the level of risk you are prepared to take but even then, you need to take care that you are not buying huge liabilities.

You are correct here. I was thinking to have something to learn/work from would be good but, as you say, there is some risk... I'll do some more reading and determine whether a few £k punt is worthwhile.

Thanks again.

[NovaPower]

Most of the websites you see for sale on businessesforsale aren't actually businesses. Somebody has created a website, added ecommerce functionality, self built a few links, compiled a list of wholesalers and boom it's ready to sell for £5k.

I'm sure there are some exceptions, with a trading history etc.

Save your money and set up your own site. You will need said money for your marketing campaigns if you want your site to gain any traction,

[pharmvrs]

You’ve not mentioned a budget but did mention a side business, I’d try with eBay and/or Amazon to test your theory-and they will test you!!

Start up as a new store so you won’t need to worry about any previous misdemeanour behaviour-purchase your sundry set up items off eBay to give you your instant 10 feedbacks or whatever to start listing more.

You will have instant access to customers without any major upfront outlay and will only pay when you actually make a sale.

If the budget is larger or if you have larger ambitions in the short term then a mix of eBay/amazon and dedicated website is an option.

Decide what you would enjoy selling more than your current day job-fairly soon it all becomes “the day job” anyway but you have the bonus of being your own boss!

[StevieBee]

murphster said:

Okay, thanks for the feedback. Points are taken...

StevieBee said:

You mention this being a 'sideline' business so it may well be a case of a punt amounting to a few grand that you wont miss in which case, only you can determine the level of risk you are prepared to take but even then, you need to take care that you are not buying huge liabilities.

You are correct here. I was thinking to have something to learn/work from would be good but, as you say, there is some risk... I'll do some more reading and determine whether a few £k punt is worthwhile.

Thanks again.

No probs...and re-reading the first line of my post, I realise I came across as a pompous knob! Not the intention!

Key thing then is to really just to check that you are not purchasing liabilities and that nothing is likely to pop up over the coming months that may cause you financial, reputational or time-related issues.

Good luck!

[MrSparks]

I often look at flippa etc for online business opportunities to add to our existing business.

However I am already many years into an ecommerce based business from start up to where we are now so am experienced. I look purely for competitors and complimentary websites that are VERY close to our niche. Trick is to specialise.

But my advise is only look at businesses valued at £15,000 upwards, if not more.. the only one I've come across so far that was worth buying was way out of my budget at £1,000,000 !! It was a worthwhile business to buy though if you had the readies.

Almost everything at £10k or under is either a) just a website and wholesaler list someone has created or b) never going to make any decent money hence why it's for sale for not a lot.

Ultimately a worthwhile business is going to be a lot more than £15k.

Otherwise you might as well just start from scratch and put the money to marketing...

[DSLiverpool]

Start with the right product, right price, good availability THEN look at the sales conduit - if you think you have found the product I am happy have a chat about where you go from here (is it down to the lake I fear / Haircut 100 tribute quote).