Planning to Buy an Online Business? Top Factors to Consider Before Signing That Check

Estimated reading time: 4 minutes

As of March 2021, there were 7.8 billion internet users in the world, according to Internet World Stats. This is a whopping 63.2 percent of the world population. The number escalated following the pandemic, and the trend is here to stay.

Clearly, the online business market has a huge potential as we advance. Whether you plan to sell your business or purchase an established business, now is the right time. For those planning to start in this field, it makes sense to buy an established online business rather than start from scratch at this point.

However, not all online businesses are hunky-dory; while some may be well-oiled machines, others might have a questionable infrastructure. It’s always wise to do your due diligence and determine if the business is worth investing in. Here are some factors to consider before buying a business online.

Familiarize Yourself With the Business Model

Do we even need to say it? You wouldn’t want to buy the first online business that comes your way and roll with it. There’s no place for gambling in business; you need to be sure of what you’re getting yourself into. Therefore, it’s wise to familiarize yourself with the business model and products/services offered by the business.

Also, research the modus operandi of the business, like whether they have more than one channel of revenue, have necessary protocols in place for online sales, and whether you have the knowledge or expertise to grow that particular business further.

Gauge the Performance and Longevity of the Business

No one wants to buy a business that’s not performing well and has no scope of surviving in the future. Therefore, ensure that the company you’re interested in has been established and has already broken even or is on its way to break even. Ask the business owner about the client/consumer base and verifiable financial documents.

Upon receiving the documents, analyze them and ensure that the annual revenue has been on the higher side. If you find that’s not the case, ask for clarification and figure out if it’s something you can rectify. Once you’re sure of how the business is performing or if you can grow it, go ahead with the purchase decision.

Research the Traffic and Lead Generation of the Business

Any online business depends upon traffic and lead conversion. As such, before considering buying any business, consider researching the traffic of the website. Tools like Google Analytics give a detailed overview of any website’s traffic, including daily traffic, lead conversion, bounce rate, traffic sources, and more. Make sure that the business you’re considering has good organic traffic with high lead conversion.

Check the SERP Ranking Of the Business

Here’s a simple test for you. Google the business’s brand name, and if the website doesn’t pop up on the first page, there’s something wrong with it. If the company is not ranking higher than the competition, chances are you will lose out on potential customers to the competition.

If the business is not performing well on SERP, look at its coding, SEO, search engine optimizations, and c0ntent. If it’s salvageable and you feel that the website has the potential to score higher after an overhaul, then only go ahead with the purchase.

Ensure That Proper SEO Methods Have Been Followed

An extension of the above point, ensure that the SEO methods used by the business are ethical. Small businesses often rely on grey/blackhat SEO practices and shady backlink building to attract traffic.

Common practices include paying third-party advertisers to generate backlinks on spammy websites, plagiarised content, keyword stuffing, and more. Use tools like AHRef etc., to check the credibility of backlinks and Google PageSpeed for SEO analysis.

SEE ALSO: What Is Yoast SEO Plugin & How To Use It

Enquire What Will Be Included With the Purchase

Once you have done all background and performance checks, the next step is to verify what will be included in the purchase deed. Purchase of online business should ideally include full ownership with all digital assets and the domain name.

Ensure that the domain name is registered in the owner’s name long-term to transfer the ownership in time and make sure that the website is hosted on its server instead of shared servers. This will allow you to move to a more robust server if required.

Buying an established online business is a great opportunity, especially now that the online business trend is rising. However, a minor oversight might cause a considerable loss to you.

Verify as many of the above details as you can to avoid that from happening. Additionally, you can work with an experienced business broker with a history of buying and selling online businesses will make the whole process easier for you.