The buying and selling of businesses is nothing new, but many do not understand just how complicated it can get if you aren’t prepared for it–or at least run your business to put you in the best position to sell. Maybe you might want to sell your business later but haven’t made it in a way that potential buyers would be interested; there are plenty of considerations there.
However you want to sell your business online, one thing is clear–you need to know the kind that is most commonly sold in the market.
Online Acquisitions – Why Not Get a Traditional Business Instead?
Before we get into it, we need to understand why businesses are bought in the first place. Not all businesses are created equal, nor are they bought for the same reasons either. Of course, whoever is buying the business wants an asset that brings them a profit later on because they need to recoup the money they spent buying the business and then some.
Sometimes, the money made isn’t as direct, as buyers might be looking at other areas of the business, such as their customers, the equipment and other assets they have, the value of stripping the business for parts, so to speak, etc. Traditional businesses can sometimes be a more direct means of making money, but online businesses have their own uses. For example, a tech company creating software might be interested in a company with plenty of server space and data center equipment that they might get at a discount if they buy the business.
Ultimately, the goal is to make money, but the way that is achieved can be fundamentally different, depending on both the buyer and the business.
Putting it Up for Sale
A business won’t be bought until it is put up for sale, but why would you? The reasons are numerous, and it is often that ten businesses with very identical operations and assets will have ten very different reasons their owners put them up for sale. Still, here are a few:
One of the most common reasons for you, a business owner, to sell your business online is that you have put it through a period of growth and are looking to cash out. Owning a business and making money through it has plenty of advantages, but for some, it is better to get a cash infusion and do something else, as too much of the same thing can get stale.
That opens you up to potentially invest that cash in a new business or even buy one yourself, so you don’t have to spend the time building it all up again. Some people enjoy the building process, and the extra cash gives them plenty of risk aversion should the business fail. Others–especially those who get huge paydays–opt to become investors instead of business owners, helping others raise capital to launch their own businesses and brands.
At times, though, selling a business is a necessity, as anyone can fall on hard times, even if they are millionaires. Potential debt obligations, markets drying up, legal battles and fees, and many more considerations take place.
Some businesses are sold simply because they run out of steam, and the buyer is looking to strip it for parts. It’s a crude and pragmatic affair, but it gives the business owner something instead of nothing, making it a preferable outcome.
Asset Stripping
Not every business is worth buying at its value, and some don’t buy for the actual business at all but for some part of it. Even online businesses can be ‘stripped for parts’ because of some particularly attractive metrics for the buyer, though the considerations can vary significantly.
Take, for example, a website that displays ads using Google AdSense. You cannot make a website for the express purpose of displaying ads. You have to provide something before an ad can be displayed. Even if you do display ads and provide valuable content, info, e-commerce, or anything else, you still have to follow certain guidelines for displaying ads–though the efficacy of enforcing those guidelines is debatable.
Common Businesses Sold
As long as you–as the buyer–have something of worth and value to provide, you can take an AdSense business and promote your content, products, services, and more. Of course, doing so will require you to redo your SEO efforts, affecting your ranking, but that’s the cost of doing business.
Another common online business type is one with plenty of customers or followers. Businesses having social media accounts and marketplaces connected to those accounts will often find themselves being coveted by buyers looking to integrate that user base into their own business. Affiliate websites and blogging websites with plenty of visitors have a similar effect, especially if they take in ad sponsorships in addition to Google AdSense and other advertising avenues.
These kinds of deals often happen due to considerable market research. For example, suppose you need help analyzing the market. In that case, you may hire top management consulting firms to bring advice and potential businesses you can buy to expand your own further, and you will likely be looking at these websites and businesses that have a following you can take advantage of.
Here are the ones often touted as having value for buyers:
- E-commerce stores built on platforms such as Shopify or through Amazon fulfillment (FBA). Being built on a standardized system helps the buyer integrate them into their own business. Platforms that connect buyers and sellers, like classified ads, auction sites, or niche-specific marketplaces, also fall into this category of e-commerce businesses.
- Online retail businesses with a solid customer base, such as a dropshipping business, that have no inventory to hold (for easier acquisition).
- Affiliate marketing websites that work through product promotions and sales commissions through affiliate links.
- Content websites with valuable information, guides, and other offerings through news, blogs, or other niches. Some offer premium content behind paywalls, such as news websites, magazines, or online communities.
- Digital-only products and services, for example, eBooks, courses, and more.
- Social media and influencer brands that have plenty of followers. More often than not, businesses will partner rather than buy their accounts outright, but the latter does happen quite often.
- Online forum-based websites, similar to Quora and Reddit, but with a specific niche and following. Most offer premium services and subscriptions as well.
- Domain names that have brand value, name value, or traffic that the buyer can utilize.
- Software as a service companies that offer subscriptions for recurring monthly or yearly payments.
- Businesses that offer subscription boxes, such as meal deliveries with recurring, regular payments.
- Mobile applications and even games that generate revenue through ads, in-app purchases, or integration with other products.
Buying Businesses is a Pragmatic Affair
More often than not, when a business is purchased, it is not done so because of a passion for the craft or because the buyer is particularly interested in the type of niche a business is operating in. Large businesses or high net-worth individuals, for example, prefer to break into new markets by acquiring already established businesses rather than build their own businesses from scratch.
Other times, businesses are bought because of their asset-stripping value, and because their competitors outsell, outprice, or outcompete them in terms of sales, products, value adds, or anything else. The reasons are numerous, but the most common reason is the first–of Multinational Corporations (MNCs) buying out Small to Medium Enterprises (SMEs).