Anyone that wants to own a business and has a fairly substantial amount of money to invest can consider buying an established business instead of trying to create one from scratch. Instead of spending years and a ton of cash to start a new business in the hopes of making a profit eventually, you can instantly start bringing in revenue every month when a buy a business that is already successful.
Traditionally, businesses required a lot of hands-on work and time to run them. This is still true for many types of companies these days, but online businesses can potentially generate a passive income without the need for any ongoing work.
This article is going to teach you about two websites that you can use to find existing companies that want to sell so you can arrange deals to purchase them. It’s possible to buy one for a few thousand dollars, although it likely won’t be very profitable, but you could also spend millions on a company that has hundreds of thousands in monthly revenue.
You really just have to decide how much money you’re willing to risk by investing it, and how much monthly profit you want from it. Then begin the search for a company that meets your criteria. Don’t be in a hurry to make a decision either. You may only get one shot to get this right, so you want to thoroughly investigate a business before you agree to buy it.
Business Buying Strategies
The main reason why you might want to buy a profitable online business is to collect the monthly profits. It’s a fairly direct exchange of investment funds for recurring revenue. The more you’re able to spend, the better and more profitable business you’re likely to be able to purchase.
You can take the opposite approach too. Instead of being the buyer, you can make money as the seller. If you’re great at starting new companies or profitable websites, you could potentially make a lot of money building and selling sites as a side hustle. The longer you’re willing to work to show long-term profits, the more you’ll likely be able to fetch for your asset. In general, having at least a year’s worth of revenue and other data to show to potential buyers will result in the best prices.
A third option still has you as the seller, but instead of creating businesses from scratch, you buy and then resell existing companies. If you can get a good enough deal, you could immediately flip it for a quick profit. Another strategy is to buy a company, work on it to make improvements and increase revenue, and then resell it for a lot more than you paid.
BizBuySell
A website called BizBuySell connects buyers and sellers of businesses. You can find almost any type of business being sold here. Some of them can potentially be bought for under $50,000, but there are also businesses here selling for millions.
No matter how great a business appears on the surface, make sure you take the time to do your own homework and research to do your due diligence before you commit to buy. Declining traffic, declining sales, bad reviews, supply issues, high employee turnover and many other factors can all affect the profitability and future viability of a business.
Sometimes people want to retire or move on from a great business, so they’ll sell it. That’s the kind of business you want to buy. In other cases, experienced business owners create a successful company that makes a lot of money, but they realize at a certain point that the revenue is going to decline drastically or that the business isn’t really sustainable for a variety off reasons. They’ll try to unload the business while it still appears to be valuable. In general, you want to do your best to identify and avoid these businesses.
Flippa
Another site that lets you buy and sell businesses online is Flippa. This site also has almost any kind of business for sale with clearly stated profit and revenue data. There are a lot of really low quality businesses for sale here, so you do need to be careful to avoid them. In particular, many of the really cheap businesses are merely brand new websites set up to quickly resell.
It’s also common to find some low-quality or even scam sites selling for a few thousand dollars. Past revenue performance doesn’t guarantee future results. It’s quite easy to fake revenue on a site in a variety of ways – getting friends to complete purchases or even paying for traffic without disclosing those costs. I’ve seen sites sold on Flippa for thousands and they turned out to be completely worthless once turned over to the new owner because some important piece of information wasn’t disclosed.
Look out for big spikes in traffic and/or sales data. You really want to see steady traffic and sales for a reliable business to generate a steady income. It’s also possible to create websites, build them up to generate some profit, and then resell them here as a business.