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As you start to get involved in remote work, the idea of having your own online business will eventually come into play. Should you consider buying an online business or building one from the ground-up? Both of these can be rather lucrative if you know what you are doing. Buying an established business can pay off a lot more in the long run than starting one from scratch. If you are curious about why buying is better than building an online business, here are some tips and information for you to explore.
Buying vs. building
As we explore the overview of the online business landscape, we find people who are very good at buying online businesses and those who are very efficient at creating businesses. If you build online businesses, you might either be interested in selling it down the road or sticking with it for the long run until it turns around profit.
Having a lot of capital to invest in a business is the top reason why buying is better than building an online business. As stated by Greg Elfrink of Empire Flippers: “Buying a business doesn’t just let you skip the timeline, but it also lets you come into the game already having hard data on what is working and what isn’t.” If you want to go straight to making money, buying a business is the better way to go.
Many people make a living out of creating online businesses, getting it up to a certain level of income, and then selling them. These sorts of people usually have years of background experience with marketing and SEO. If you are new to online business, it would be difficult to match their usual timeframe for monetization.
Where to get started?
Getting started with buying an online business is pretty simple and straightforward. Thankfully, there are already many different platforms, marketplaces, and brokers that make it easier for you to shop around the different options that exist. Out of the many different places to start, here are some of the best options:
Tip 1: Pick a monetization type
When buying an online business, picking a niche of personal interest is usually the way to go, But sometimes it makes a lot more sense to start off with how the business is monetized. There are different skills required for just about every type of business. You need to match your experience with a business that will be the best fit. Ideally, you can align the monetization method and niche to create a perfect fit, but it’s not always easy.
Remember that you will need to work in your online business for a little while. For this reason, it can be helpful to pick a niche that is both profitable and practical for your knowledge and skillset. If you are new to the online business space, make sure to maintain an open mind, since the most boring niches are the least competitive and can often make the most money.
Tip 2: Check for consistent income
You must check for consistent and reliable sources of income before buying a business. “You might overestimate your own skills or underestimate what is required to really manage the business you’re buying,” Elfrink says. “This can lead to not only frustration but actually losing all that capital you’ve invested in the business, along with the actual business profit starting to decline.”
One of the most important aspects before buying any business is to dig diligently into the financial details of the business to make sure you have a full understanding of the profit and loss. Without this information, and proof that it is consistent income, you will be much more likely to buy a business that turns into a dud. Once you have the income, it is also normal to make an offer that is near 30x the monthly profit to acquire the business.
Related: How to Start a Business Online
Tip 3: Know the operating processes and level of traffic
Before you get into an online business, you should know exactly how you are going to run it. Speak with the owner directly about what they do each month to run the business. This way, you will know right away what you will be taking on.
At the same time, you should inquire about how much traffic the business receives, where it gets this traffic, how the business is marketed, and so on. This will help you know how to continue running the business when it becomes yours.
Patience will always be necessary
When we view the overview of the online business landscape, one of the reasons why buying is better than building an online business is because it could save you years of time and money.
However, please keep in mind that patience will be a virtue when you buy an online business. You may not immediately increase your income to the point you want or learn the ropes of the business quickly. Stick with it, be humble, and learn things every day, so that you can achieve the level of success that you want.