What to Look for When Buying an Existing Online Business
These days, it's quite easy to start an online business. However, given that online businesses operate in such a quick and dynamic landscape, it can be easy for people to lose their money even with a strong line of products or services. Hence, if this is your first time managing an online business, you should consider buying an existing business instead of creating one from scratch.
Here is what you need to look for when choosing a potential online business to purchase, and why online general liability insurance for small business is a critical component that any e-commerce store should have.
Perform a Complete Audit
The first thing that you need to do for any potential purchase is to conduct a complete and thorough audit of the business. In order to do it correctly, you should hire an online business broker because they know exactly which aspects of the business to look at so that you will get a clear picture.
You should clarify what is included when you purchase the online business. At the very least, you should receive the exclusive domain, the website, and all the social media accounts that are associated with the business. If the business sold products, you should also get existing inventory information. Finally, you should get information about the existing staff hired by the business.
A complete audit will also cover all the relevant financial and legal information. You should receive information about the cash flow, accounts payable, and all other financial statements connected to the business. You should also get information about the legal standing of the business, such as whether they have any existing liabilities or legal issues that they need to settle. One huge selling point would be if the business has online general liability insurance. This kind of insurance will cover the costs of legal fees for any liabilities incurred by the business.
Check the Website
After performing your audit and deciding that you want to continue, your next move should be to check the existing website and associated social media accounts of the business. The appearance, content, and performance of the website (in terms of the user interface) will give you a good idea of how much time, money, and effort was invested into creating the website and social media accounts. It will also give you an idea of how people react to the website. Remember, poor website design will discourage people from doing business with the owner.
Check the Performance
Aside from checking the content of the website, you should also check the performance of the website itself outside of the user interface. What is the bounce rate of the website? What is the traffic conversion rate?
During this time, you should also take the opportunity to check the performance of the business itself. Check for online reviews; they will give you a good idea of how the market views the business. Are there any complaints about the business, particularly complaints that are so serious that they were lodged with an organization such as the Better Business Bureau? You can also check whether the business has won any awards, certifications, or merits to signify that they are an exemplary organization.
Even a simple Google search would generally be enough to uncover information, whether good or bad!
Know the Existing Marketing Strategy
Any business owner who is serious about selling their online business and isn't trying to pull a fast one over you will be willing to share their marketing strategy with you. After all, they want you to know why their marketing strategy is working so that you can see how it will work for you! It will put them into a better position to bargain if the negotiations continue.
Ask about their online marketing strategy, particularly if they are using methods such as Search Engine Optimization (SEO), Pay-Per-Click (PPC), or social media marketing campaigns. If they already have a strong and solid marketing strategy in place, it will be easier to adopt the strategy as your own and build off from there, should you decide to continue with the purchase.
Buy It Through the Right Channels
Once you have decided on purchasing an online business, you will need to hire a reputable and experienced online broker to handle the sale. The online broker will act like the traditional broker: they will become an intermediary between the concerned parties and work towards a resolution that's profitable and acceptable for all parties involved.