So, you’re looking to buy an online business. This can be a great way for budding entrepreneurs to get ahead, as starting an online business from scratch takes time and you can’t expect profits straight away.
In this handy guide, we’ll share everything you need to get going, including where to find businesses listed, and the steps to making your purchase.
First off, let’s look at where to begin when buying an online business.
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Are you keen to buy a small ecommerce enterprise or does the security of buying into an online franchise appeal more to you? Either way, we’ve got you covered:
There are lots of thriving online businesses listed on uk.businessesforsale.com. You’ll be able to assess website performance and profits/turnover.
Another great marketplace is Rightbiz. Conveniently, you can filter by category and location. So, if you’re looking for an online business for sale in London, you can focus your search on that specific area.
But remember, a big advantage of buying an online business is that the city or region doesn’t matter so much. So, say you’ve been looking for a business for sale in Glasgow, you could broaden your search to the rest of the UK, or even overseas too.
Popular ecommerce brand Shopify also has a dedicated marketplace for buying and selling online businesses. It’s really user friendly, with easy-to-read sales performance data, and lots of handy guides to walk you through the purchase.
If on the other hand, you’re searching for an online franchise to buy into as an investment, then a good place to start is Daltons. Here, you can search by franchise sector and investment level. They also have helpful guidance on their website tailored to prospective buyers of franchises.
Buying an online franchise could be a great option for you, if you’re happy to operate under an existing system. You’re likely to make money faster, with less risk.
Buying an online business is similar to buying any business, with only a few key differences. Let’s take a look at the process:
Think about what business suits your personality, skills and interests. Consider your own expertise and experience. What do you have to offer that could help steer a business towards success?
Also, consider your goals. Do you want to make a lot of money, or is a moderate income with high job satisfaction more important to you? How hands on do you want to be in shaping the business?
Have a plan for how you will finance your new business venture. How much can you realistically invest from savings and will you use a bank loan, for example? Know what your budget is and be sure to factor in additional costs, such as appointing solicitors and accountants.
When you’ve found a business you like the look of and you’ve done your research and planning, then it’s time to contact the seller to find out more. Many online marketplaces let you message them directly.
Don’t just focus on the ecommerce site, take a holistic approach and ask for information on other details, such as customer base or existing marketing campaigns, just as you would with a bricks and mortar business.
Satisfied with the response? Make your first offer. You should confirm in writing and include ‘subject to contract’ in all correspondence.
If your first offer isn’t accepted, get ready to enter into negotiations. Have your budget in mind at all times and prepare to walk away if the outcome isn’t favourable.
You’ve had your offer accepted, great! But now the real work begins. A period of time (usually between 1-10 business days¹) is given to due diligence, so you can check what you’re getting matches what was advertised. This is essentially the same as when buying a physical business, but there are a few key differences.
Check the following:
- Identity of seller is verifiable (especially as you may not have face-to-face meetings with an online seller).
- Track record of financials - the seller should provide invoices, tax returns, PayPal statements, credit card statements, affiliate/advertising reports for the last 12 months or more².
- Website (and any other channel) traffic - you should be given access to Google Analytics or another service so that you can check traffic sources and backlinks, as well as metrics for visits¹.
- Website maintenance and task audit - find out from the seller what is required in terms of time and cost¹.
- Technology - check the CMS, plugins, site host and email platforms are sound².
If all looks good and the business stands up to rigorous checks, then you’re very nearly there. Now it’s time to close the sale by signing the contract and arrange the transfer of assets with the seller, as per the Asset Purchase Agreement (APA)².
If you’re looking to buy or sell a business overseas, you’ll need a payment solution to reduce your overall international transfer costs as these kinds of transactions can be quite expensive using traditional banks.
|To reduce the costs, open a multi-currency account with Wise and you can send money overseas for tiny fees and currency conversion at the real market rate with no mark-up. And if you end up selling your business to an overseas buyer, you can receive the funds without the high recipient fees charged by many banks.|
You could also benefit from sharing local account details from Wise. With these, you’ll be able to receive money in the local currency and convert it later yourself using Wise’s far better exchange rate.
So, now you know what to expect and where to search, you can start making your online business aspirations a reality. Just remember to have a clear financial plan in mind when you begin. Happy hunting!
Sources used for this article:
Sources checked on 29-April-2021.
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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