buying an established internet business....help please
memphis10
subscriber Posts: 3
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.
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.
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Comments
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.
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,
Brandon
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.
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