How to Buy a Successful Online Business & Secure Your Future

Thinking of buying an online business? I’m with you — It offers a potential shortcut to success. 

When you buy a successful online business instead of building from scratch, you save time and effort on brand recognition, customer acquisition, and cash flow. And, if you can get your hands on the right business, you’re also provided instant market access, a ready-made infrastructure, and proven revenue streams – It’s kind of a no-brainer…

Plus, internet entrepreneurs in the U.S. earn a median salary of $101.7K, according to Comparably — there’s real money in digital ventures. 

But, proceed with caution…To avoid wasting money, you need to conduct thorough due diligence, know all of your options, and seek professional advice. With careful navigation, you can make a profitable investment in an online business that secures your future.

Now, let’s get the ball rolling!

The Benefits of Buying an Existing Business

The success rate of online business is only 10-20%, according to Zippia. With that said, ZipRecruiter determined that the average eCommerce business makes $114.5K per year. And, Grit Global says that a newly established eCommerce store can generate approximately $63K in monthly revenue within three months, while Freshbooks says it takes the average business 2-3 years to become profitable.

It’s not easy, but it’s lucrative to run your operations digitally. 

When you buy an established online business, while you may not get the satisfaction of building an empire from the ground up, you unlock numerous benefits: 

• Proven history
• Loyal customer base
• Brand recognition
• Established infrastructure
• Less risk

First of all, pre-existing online businesses come with a track record of generating consistent revenue and profitability. This history of success gives you confidence in the business’s potential for continued growth.

And, by acquiring a business that’s been around for a while, you gain immediate access to a loyal customer base, which saves you the time and effort of trying to get the word out. Then, you can focus on serving and expanding your existing customer base.

Furthermore, established businesses have pre-built brand recognition and a positive reputation in the market. This gives you a valuable head start and enhances your competitiveness, as customers are more likely to trust and choose a recognized brand.

Moreover, mature online businesses have well-established operational processes and infrastructure in place. This ensures a smooth transition for you as the new owner, minimizing disruptions and enabling you to run the business efficiently from day one.

Plus, buying an established online business opens up exciting growth possibilities. You can leverage the existing foundation to introduce new products or services, implement targeted marketing strategies, and explore untapped market segments (when shopping around for a business to buy, you should think about ways to improve upon the existing business operations to drive higher profits). 

Finally, by acquiring a proven online business, you mitigate the risks associated with starting from scratch. You can position yourself for accelerated growth and success in the online business landscape — sometimes for as little as a few thousand dollars.

Are you convinced? Good…now, let’s look at the types of online businesses you can buy. 

What Types of Online Businesses Can You Buy? 

When buying an online business, you have a wide range of options to consider. eCommerce stores, dropshipping businesses, blogs, SaaS, membership sites, and service businesses are some of the most popular options. , 

Let’s take a closer look at these business types and see some of their pros and cons. 

eCommerce Stores

eCommerce businesses sell products online, leveraging popular platforms like Shopify or WooCommerce. They have the flexibility to focus on specific niches, cater to the unique demands of niche markets, or offer a wide variety of products to appeal to a broader customer base. The online nature of these businesses allows for convenient browsing, secure transactions, and seamless order fulfillment. 

By utilizing effective eCommerce strategies, such as search engine optimization (SEO) and targeted marketing, these businesses can reach a global audience and capitalize on the growing trend of online shopping. With the ability to adapt to changing consumer preferences and leverage the power of online marketplaces, e-commerce businesses have significant potential for growth and profitability.

Pros:

• Established audience and customer base
• Existing infrastructure and technology 
• Potential for immediate revenue and profit 
• Opportunity for growth and scalability

Cons:

• Significant upfront cost 
• Risk of inheriting pre-existing issues 
• Dependency on existing suppliers and systems 
• Increasing competition in the eCommerce market

→ See successful eCommerce websites for sale on Empire Flippers. 

Recommended: Buying an eCommerce Business: Better Than Building From Scratch?

Dropshipping Businesses

Dropshipping has emerged as a highly sought-after eCommerce model, enabling online businesses to sell products without the burden of inventory management. With drop shipping, business owners establish partnerships with suppliers who handle product storage and direct shipping to customers. 

This arrangement liberates the business owner from the complexities of inventory management, allowing them to concentrate on crucial aspects like marketing, customer service, and expanding their market presence. By leveraging the dropshipping model, entrepreneurs can streamline their operations, reduce upfront costs, and scale their business more efficiently in the dynamic eCommerce landscape.

Pros:

• Low startup costs and inventory investment 
• Flexibility to sell a wide range of products 
• Easy to set up and run 
• Opportunity to quickly test and scale different products

Cons:

• Lack of control over the quality of products and shipping 
• Lower-end profit margins due to high competition 
• Limited brand control and differentiation 
• Dependence on suppliers, who may have inventory or shipping issues

→ See profitable dropshipping businesses for sale on Flippa.

Content Websites and Blogs

Content-based online businesses generate revenue by creating valuable content such as articles, recipes, blog posts, videos, or podcasts. These businesses monetize their content through various channels, including advertising, sponsored content, and affiliate marketing. 

By producing engaging and informative content, they attract an audience and leverage partnerships with advertisers and affiliate programs to generate income. This model offers flexibility and scalability, as the revenue potential grows with the size and engagement of the audience.

Pros:

• Established audience and traffic 
• Opportunity for immediate revenue through advertising or affiliate marketing 
• Potential for growth with SEO optimization and content strategy 
• Low overhead costs

Cons:

• Difficulty in finding the right niche and content creators 
• Risk of relying heavily on search engine rankings 
• Need for consistent quality content 
• Can take time and effort to monetize and see significant profits

→ See lucrative content websites and blogs for sale on Empire Flippers.

Software as a Service (SaaS)

SaaS (Software as a Service) businesses offer online software applications or services that customers can access through the Internet. These businesses operate on a subscription-based model, where customers pay a recurring fee to use the software. SaaS companies often target specific industries or address particular pain points, providing tailored solutions to their customers. 

This model offers convenience, as users can access the software from anywhere with an internet connection. The recurring subscription revenue stream provides stability and the opportunity for continuous growth.

Pros:

• Recurring revenue streams with subscription business model 
• High-profit margins 
• Scalability potential with relatively low overhead costs 
• Ability to sell globally 

Cons:

• Need for technical expertise or reliance on developers (Fun fact: Aurajinn is actually a SaaS acquisition fail)
• Risk of high customer churn rates 
• The continuous need for updating and enhancing the product 
• High competition in the SaaS market

→ See income-generating SaaS for sale on Flippa.

Membership Websites

Membership-based businesses provide exclusive content, resources, or services to individuals who become paying members. These businesses typically offer access to online courses, coaching programs, or specialized communities. By paying a subscription fee, members gain privileged access to valuable content and benefits that are not available to non-members. 

This model creates a sense of exclusivity and fosters a community of like-minded individuals who share common interests or goals. Membership-based businesses have the advantage of recurring revenue from subscription fees, which can provide a stable income stream and foster long-term relationships with loyal members.

Pros:

• Recurring revenue streams through membership subscriptions 
• Established audience and community 
• Potential for additional revenue streams through upselling premium content or products 
• Flexibility to offer a wide range of content or services 

Cons:

• Need for consistent, high-quality content or services to retain members 
• Difficulty in finding the right niche and building a following 
• Membership fatigue, where members cancel their subscriptions after a few months 
• Dependence on a single platform for hosting and payment processing

→ See promising membership websites for sale on Empire Flippers.

Service Businesses and Agencies

An online service business or agency offers specialized services to clients through digital platforms. They utilize technology and the internet to provide expertise, solutions, or skills in areas such as marketing, design, consulting, writing, programming, or virtual assistance. With a global reach, they communicate and deliver services remotely. 

By specializing in specific niches and upholding high-quality standards, these businesses assist clients in achieving their goals and overcoming digital challenges.

Pros:

• Existing client base and revenue stream 
• Established systems and processes 
• Experienced staff and team in place 
• Potential for expansion to new markets or services 

Cons:

• Dependence on key clients for a large portion of revenue 
• Need for a deep understanding of the industry and market 
• Risk of key staff leaving after the acquisition 
• Difficulty in accurately valuing the business due to the intangible nature of services

→ See worthwhile service businesses for sale on Flippa.

How to Make Sure You Buy the Right Online Business

Investing in an online business requires a thorough evaluation of its potential. Assessing various areas can help you determine the viability and profitability of the business. A comprehensive evaluation should include the following:

Research the Market, Industry, and Business Model

Conduct an in-depth market analysis to determine the business’s suitability for investment. Determine the market size, growth rate, and competition. 

Identify any trends that may impact the market, such as: 

• Technological advances
• Changes in consumer behavior
• Regulatory shifts 

Try to gain a clear understanding of the business’s niche, potential growth, competition, and customer demographics. 

You need to verify that the online business operates in a viable market with room for growth and aligns with your objectives.

As a first-time online business buyer, it’s worth it to seek professional guidance and leverage reliable data sources to verify any claims made by the seller. Additionally, verify the seller’s claims regarding the business’s performance, revenue, and other key metrics through a thorough due diligence process.

In addition, analyze the online business’s model and its scalability. Determine the competitive advantage of the business and identify any potential challenges. Consider the strength of the product or service offering, pricing strategy, and marketing effectiveness. Determine whether the business has a diversified customer base and identifies the sources of revenue. 

If possible, get direct feedback from existing customers and analyze the business’s social media engagement to understand its reputation and overall customer satisfaction.

Finally, analyze the operations of the business, including its supply chain, production processes, and distribution channels. Does the business has any particular strengths or weaknesses within its operations that may impact profitability? Be sure to look at the quality of the supplier relationships, production efficiency, and fulfillment effectiveness. 

Assess Revenue and Profit Trends

To conduct a comprehensive financial analysis of an online business, start by analyzing the revenue and profit trends of the business over time, along with the potential opportunities for revenue growth. Evaluate how the business generates its profits and its revenue streams to identify any potential risks.

To ensure accurate and reliable financial data, it’s smart to get help from a professional accountant or financial analyst. 

Take a look at the historical financials to identify any trends, seasonal fluctuations, and any unusual or one-time costs that may impact profitability. Evaluate the current financial data of the business, including revenue trends, profit margins, and expenses, to determine if the business is profitable and what the risks are.

Review the cash flow and financing structure of the business to identify any potential financing needs — review the balance sheet to identify the business’s assets and liabilities, including any debt obligations and accounts payable. 

Analyze the business’s pricing strategy to determine if it is competitive within the industry. And, check cost structure, including fixed and variable costs, to identify areas where costs can be reduced and efficiencies improved without negatively impacting the overall quality of the product or service.

Assess the growth prospects of the business and determine the potential impact of investments on the business’s financial performance. Determine if the business has any room for expansion, new product development, or entering new markets.

Analyze Traffic and Audience Metrics

To conduct a digital marketing analysis, start by analyzing the business’s website to identify any design issues or functionality problems that could impact the user experience. Evaluate the website’s content to determine if it aligns with the business’s messaging and goals. 

Analyze the key website metrics: 

• Traffic sources and volume
• Engagement metrics
• Conversion rates
• Traffic growth rate
• Search engine rankings

Next, evaluate the social media presence and performance, including the number of followers, engagement rate, and overall content strategy. 

Understand the audience demographics of the business, including age, gender, location, and interests, to determine if the business has a well-defined target audience and if it’s effectively reaching them through its marketing efforts.

Analyze the effectiveness of the advertising and promotional strategies and whether they align with the target audience and business goals.

Keep in mind that, in this case, a poor digital marketing strategy might be a good thing — improved marketing can be one of the easiest ways to increase the profitability of an established business. 

To ensure reliable data, use tools such as Google Analytics and social media analytics to gather accurate data for analysis. From there, evaluate the website’s content and user experience to identify areas for improvement and optimize for better performance.

Review the Business’ Compliance and Assets

Conduct a comprehensive review of the business’s legal and asset structure to determine its overall health and financial stability. 

Evaluate the intellectual property owned by the business and assess its key intellectual property assets to ensure they are adequately protected and enforced. 

Review the following: 

• Inventory management
• Supply chain processes
• Contracts
• Assets
• Liabilities 

Make sure all assets and liabilities are accurately accounted for and in good standing.

Evaluate the business’s compliance with regulations and laws related to online operations, such as: 

• Data privacy
• Anti-spam laws
• Advertising regulations
• eCommerce regulations
• Online payment processing. 

Identify any potential infringement risks or legal disputes, and evaluate the potential risks and liabilities associated with the business’s products or services.

Determine the availability and adequacy of insurance coverage for the business, including general, product, and professional liability insurance. Check that all necessary licenses and permits are in place and up to date and consider relevant legal protections. 

To ensure reliable legal and regulatory data, talk to a professional legal advisor with experience in online business law.

Make an Offer and Finalize the Sale

Once your research is done and you find a business you are interested in acquiring, don’t just dive into negotiations all willy-nilly. You need to be thoughtful to ensure a successful transition. 

Here are the key points to consider:

1. Do your due diligence — Before you start negotiations, evaluate the business by reviewing financial data, legal documentation, and understanding its operations.
2. Set a realistic budget and offer — Set a realistic budget based on the business’s value, financial history, and legal risks. Then, make a reasonable offer that aligns with these factors and the seller’s expectations.
3. Seek professional assistance — Seek advice from legal, financial, and tax advisors to receive expert guidance on legal and tax implications, analyze financial data, and structure the best deal.
4. Fulfill legal and regulatory requirements — Make sure that all legal and regulatory requirements are met when transferring ownership and assets. This includes creating a bill of sale, transferring licenses and permits, and updating employee contracts.
5. Focus on smooth transition — To ensure a smooth transition, communicate clearly with customers and employees. Implement a well-executed plan, address any concerns, provide sufficient training, and handle employee retention or termination matters appropriately.

With this in mind, you can increase the chances of a successful business acquisition and establish a strong foundation for the future.

Where to Find Online Businesses for Sale

When looking to buy an online business, there are several ways to find businesses that are available for sale. Here are some different avenues you can explore.

Browse Online Business Marketplaces 

If you’re looking for convenience and a large selection of businesses for sale, online marketplaces like Empire Flippers and Flippa are good places to start. These platforms offer access to a vast range of businesses, from small niche websites to established SaaS businesses, and are equipped with user-friendly interfaces to help you navigate and filter through listings. 

In addition, these marketplaces offer a comprehensive due diligence process (Empire Flippers happens to be known for their diligence) to verify financial and traffic information, designed by experienced brokers. These resources can help you make an informed decision and avoid potential scams. 

Some marketplaces also offer financing options and payment protection, ensuring a secure transaction process. Overall, using an online marketplace or brokerage can make it easy to find businesses that match your requirements and budget.

Network With the Online Business Community

Networking with other online business owners can be a valuable way to find businesses for sale beyond traditional marketplaces. Join forums and social media groups and pages in your relevant niche — This can help you connect with potential sellers and learn more about the market. Attend conferences and networking events to open opportunities to meet business owners and “flippers” looking to sell. 

Networking requires more effort and patience than a marketplace, but it can offer unique and exclusive opportunities that are hard to find elsewhere. Additionally, building relationships in your community can help you stay current with industry trends and may lead to future business partnerships or investments.

Work With a Business Broker

Hire a business broker to help ensure a smooth transaction process and maximize the chances of finding the right business at a fair price. A professional broker can offer guidance throughout the process, provide due diligence services, and negotiate on your behalf. 

With extensive knowledge of the market and negotiation skills, brokers can help you find and evaluate businesses that match your specific needs and budget. Brokers also have established relationships with sellers and access to exclusive listings that may not be publicly available.

Now, it’s important to note that broker fees can vary based on the size and complexity of the transaction. Fees typically range from 5-15% of the final sale price, so you need to be clear on the fee structure before engaging a service provider. While hiring a broker adds expense, it can save you time and money in the long run by minimizing transaction risk and securing a favorable deal.

Check out Online Classifieds

If you’re willing to explore non-traditional options, online classified ad sites like Craigslist can be a possible source of businesses for sale. While classified websites aren’t specifically designed for business sales, you may find people listing online businesses or websites for sale. 

It’s important to note that these platforms lack the safeguards that online marketplaces and brokers offer, so it’s crucial to proceed with caution.

When using online classifieds platforms, conduct thorough research on the business and seller, verify financials and traffic data, and complete an extensive due diligence process. Consider working with an attorney or a business advisor to ensure that all aspects of the transaction are legally and financially sound. 

While it requires effort and may have more potential risks, exploring online classifieds can provide unique opportunities and save you money compared to dealing with a broker.

Reach Out to Business Owners

If you have a specific business niche in mind and want to maximize the chance of finding the perfect business for sale, reaching out to the owner with an offer can be an effective approach. This strategy can yield exclusive opportunities that aren’t listed publicly and offer more room for negotiation than buying through a broker or marketplace.

However, direct outreach requires significant research and preparation. You will need to identify potential sellers, research their businesses thoroughly, and formulate a persuasive offer. You need to be clear and concise in your message, demonstrate that you’ve done your due diligence, and offer a fair price. 

While this approach is more time-consuming than using an intermediary, it can ensure that you get exactly the business you’re looking for.

It’s best to balance the convenience of using a marketplace or broker with the potential for exclusive opportunities when networking. Conducting due diligence and understanding the process of purchasing an online business can be key to your success as a buyer.

Niche Authority Roundups

Depending on what type of business you are in the market for, consider looking to industry blogs, podcasts, and social media accounts for listing “roundups.”

If you’re interested in opportunities in other niches, check out content from industry experts and authorities in those niches to find them.

Frequently Asked Questions

Final Takeaway

Buying a successful online business can be a great start (or addition) to any investment portfolio. You might consider acquiring an eCommerce store, dropshipping business, content website or blog, SaaS company, membership website, or service business. 

To choose the right online business, research the market, industry, and business model. Look at the revenue and profit trends, check the website traffic and audience, and review the business’s compliance and assets. Once you find a good fit, make an offer and finalize the sale. 

You can find online businesses for sale on websites and through networking with other online business owners, brokers, classified ads, or by reaching out directly. Remember to get professional advice and follow a careful process. 

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