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buying an established internet business....help please

memphis10memphis10 subscriber Posts: 3
edited February 2009 in Selecting a Business
Hi, i am 24 years old and interested in buying an established online business. This is something ive never done before and i am pretty scared of it actually. I notice there are quite a few marketplaces selling established websites but i am terrified of being scamed because i as well as anyone else couldnt afford to lose that kind of money.
There are a couple i have found that im interested in. Do people who do this kind of thing usually have some sort of business acquisition lawyer help them with the process to keep from getting scamed or am i just being to paranoid?? Any advice as to what i should do would be greatly appreciated.
This is my dream to work from home with an online business i love, so hopefully there are legitimate ways of doing this.


  • MattThomasMattThomas subscriber Posts: 2
    Yes you should always consult a lawyer before purchasing another business. Consulting with your accountant is recommended as well. Scammers would be much more hesitant to pursue a deal if they know a lawyer is handling the purchase.
    Three key things you should consider when looking for a worthwhile web site to purchase: Revenues, Profits and Cash Flows.
    You`ll want to know what the revenues are in order to understand what kind of sales the site is bringing in. Are there opportunities for revenue growth? Is the revenue stable or seasonal?
    Profits are important because you will get a feel for the types of expenses associated with the website, the markup or margin that the site is enjoying as well as opportunities for increasing your margin.
    Finally cash is important because there are certain non cash expenses that erode profits in the interest of reducing tax liability (ie: depreciation expense). Cash flows will tell you exactly what CASH you will be seeing flow in and out of your business. Profits can only tell you so much, cash will tell you what you really have to work with.
    Your accountant will likely look at all of these things, but these are things you should get used to looking at, since you wouldn`t want to contact your accountant every time you think there might be an opportunity. Doing your own due diligence will allow you to be more educated in your decision making and save you money.
  • WebJunkyWebJunky subscriber Posts: 8 Member
    the main thing is proof of income and your own inclination of continuing profitability.  how do you feel about the business contunuing to make profits and grow. take your time with due diligence (reviewing financials, tax returns, domain ownership, customer database, sales patterns/concentrations, any contracts with suppliers/vendors, etc)
  • memphis10memphis10 subscriber Posts: 3
    Wow thanks alot for the informative replys. I appreciate it. A dropshipping business is definately something that attracts my attention. The reason i am wanting an already established business is because im not a web designer nor do i want to have the headache of getting it out there. Finding something thats been in business at least a couple years with loyal customer base good search engine ranking is more my cup of tea. I just couldnt even imagine getting ripped off for that kind of money!
    Has anyone ever taken a look at websitebroker.com or the marketplace on sitepoint.com? Any of these look like legitimate businesses for sale or should i be looking somewhere else?
    Again thanks alot,
  • jodi728jodi728 subscriber Posts: 1
    Another way to do a quick check on a company is to check it out on the nasdaq or NYSE. I`ve been researching alot of internet businesses myself, and I was interested in Herbalife. I checked out the stock rating and disclosure page, along with critics comments, and found fairly good info that way. In particular, Cramer (the booyah guy) said it was actually a decent company with an excellent product and that the stock really should be trading higher than it is. Former Disney CEO now in charge of the company. Hope that helps a little, I`m new here too.
  • speedyeohspeedyeoh subscriber Posts: 1
    You can find some established website for sell at sitepoint.com
  • MKyleCraigMKyleCraig subscriber Posts: 0
    Definitely get the help from a professional lawyer.
    You can ask for preliminary details ahead of time - ask about traffic, number of unique visitors, size of mailing list, average revenue, etc. The owner should be able to provide you with some basic information.
  • rcavezzarcavezza subscriber Posts: 10
    Check out this forum topic at sitepoint.com.  "Advice For Website Buyers".  They also have an entire free pdf document on the subject.  http://www.sitepoint.com/forums/showthread.php?t=544976
    I would recommend not getting a tax attorney and accountant before making a purchase - it may not be worth such a small investment.  I would suggest buying a simple website for less than $200 and feeling it out.  Depending on how the experience is, you may want to invest in another website. 
    Robert M. Cavezza
    Cavezza Holdings LLC
  • memphis10memphis10 subscriber Posts: 3
    Great advice everyone...thanks alot!
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