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How To Find An Online Business To Buy

How To Find An Online Business To Buy

Whenever you get the chance to interview any type of successful entrepreneur, there’s one message that comes through loud and clear:

“You would be crazy not to own an internet business in today’s day and age.”

And it’s true. If you don’t already own an internet business, you’re missing out on a huge gold mine.

With the amount of information that’s available today, anyone with an internet connection and the urge to learn can become a successful internet entrepreneur.

Online Marketplaces

Right now there are quite a few different online marketplaces that make it easy for you to find websites and domains you can purchase to renovate and flip for a nice profit down the road.

One of the most popular marketplaces is http://www.sedo.com. Another great marketplace is http://bizbuysell.com

You can browse for different businesses that you’re interested in, and then start digging in to find out if the business is worth buying.

Once you’ve selected a business to buy, you’ll be on your own to contact the owner, perform due diligence, negotiate a price, and close the deal.

When closing the sale, it’s best to use an escrow service to help make the deal move forward smoothly and to protect both parties.

Online Auctions

Online auctions require a different approach, and could have higher risks. With an auction listing you are going to be bidding against different investors, with a small chance of being able to “Buy It Now”.

Auctions also tend to be fast paced, which can make it harder to do proper due diligence. You won’t have weeks to research the company or site, however, businesses listed on auctions tend to be cheaper.

One of the most popular websites for auctioning online businesses is http://flippa.com

While there are quite a few scams and hyped businesses for sale on Flippa, if you know what you’re looking for, it is possible to find a few “diamonds in the rough” every now and then.

Your Own Research

When you’re looking for deals, especially with the intention of renovating the site and flipping it again for a large profit, performing your own research is one of the best strategies you can use.

If an owner has listed their site for sale on a marketplace or auction house, they’re intent is to make a profit on the sale. However, by doing your own research, you may find an owner that doesn’t necessarily realize the value of their business and you may be able to purchase it for a lower rate.

In those cases, you can typically buy the blogs for anywhere from a few hundred to a few thousand dollars, implement proper marketing strategies and monetization, and then find a new investor to sell the business to for 20-30 times what you’ve invested in it.

The best way to find these sites is by looking through the search results pages on major search engines. Skip the first pages, as those will fetch a higher price. Start by going to sites on the 5th or 6th page, as those sites are more likely to be owned by someone who doesn’t understand how to take them to the next level.

Brokers

If you’re not wanting to take the risks associated with marketplaces or auction houses, or don’t want to devote the hours of research required to find undervalued sites in the search results, working with a broker could be a great strategy for you.

A web broker will have listings of businesses and websites for sale along with a list of investors that are ready and willing to purchase these sites whenever they come up for sale.

Working with a broker can save you a significant amount of time and money. A quality broker will work with you during the due diligence and negotiation process to minimize your risk when closing the sale. Brokers typically only work with reputable sellers and investors and utilize an escrow service to handle the transfer of ownership.

While working with a broker tends to cost more than finding the businesses yourself, the lowered risk tends to more than make up for the difference in price range, and is one of the best ways to save time and money whether you’re buying or selling.

Jock Purtle

Written by Jock Purtle

Jock Purtle is the founder of DigitalExits.com and is an industry leader and expert on valuations of high growth internet companies, website valuations, and website brokerage. He has been featured and quoted in publications such as Forbes, CNBC, Entrepreneur and Business Insider. He was the runner up in the Australian Global Student Entrepreneur awards and is currently living in American. He acquired his first company at the age of 19, and since then has acquired 3 different businesses over his career.

Comments

  1. Great article Jock.

    I agree if you want to try and alleviate risk you are better off working with a well known broker in the space. While that doesn’t mean your off the hook for performing due diligence but most top brokers won’t entertain bad deals/scams because they value their reputation.

    Also wanted to point out another great way to get into the space is working with a buyer group. This helps new buyers work with people in the space that are knowledgable, alleviate risk by either bringing in less capital to one deal or diversifying over many deals, and learn from people that are already successful in the space.

    Thanks again for the great read!

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