There must be hundreds of Website Valuation Tools of all kinds out there. Seemingly everyone, from industry enthusiasts to brokers and marketplaces, has at some point released one. But do these tools actually work in…
In this series of articles, I’ll be covering the whole process of website due diligence, from start to finish. The guide is intended to prove a useful resource for those about to purchase a website or an online business, to make sure you won’t get scammed out of your money or buying a business that carries a significant risk of failure or loss of revenue.
In Part 1 of this guide, we’ll look at website due diligence in general, what it consists of, how the process works, and how it differs from business model to business model.
Many of us have websites that generate some kind of revenue month to month. These sites are often worth a significant amount and selling may be the perfect option to fuel your new business or help you invest elsewhere.
But it’s not all fun and games – there are some important things that one needs to consider before rushing into selling off a potentially very valuable asset. Some of these things can significantly affect how your site will be valued at, and in some cases whether it will even be bought at all!
So what is live revenue verification and what’s all the fuss about?
I’ve said it before and I’ll say it again – NEVER trust a screenshot or a video walkthrough, unless the purchase price doesn’t exceed what you’d spend on a dinner. There should be absolutely no exceptions to this rule, ever.
This guide walks you through the whole process of Live Revenue Verification and shows you the red flags to look for in your next online business acquisition.
The two most common questions people ask from me are “how should I go about buying a website for <$100,000?” and “Can I find a decent online business for less than 2x its yearly profit?”. These questions are often asked by the same people. The answers to them are more complicated than one might think, and if you were to ask 10 people somewhat familiar with the online acquisitions industry then odds are that you’d hear answers ranging from “It’s impossible” to “Easy. Just browse Flippa” – both of which are colossally wrong.
Due diligence is a tricky subject and one that can’t be very easily taught or learned, making many buyers choose to leave it to professionals instead. But there are a number of simple but crucial things that everyone who’s thinking of buying a website or an online business is better off knowing themselves. In this article, I’ll cover the 5 arguably most common mistakes that are often made by buyers new to the industry and some experienced buyers alike.
More people than ever before jump on the bandwagon to buy an online business. Some do it for the cash flow, others for the ‘lifestyle benefits’, and a few because that’s what they’re good at.
Even though the process of buying an online business has gotten very simple, and brokers would like you to believe that so is owning an operating one, there are some things that a lot of people who are new to the industry don’t account with or discover until it’s too late.
So you’ve put aside a certain amount of spare cash and you’re trying to figure out whether you should put it all into one online business purchase or diversify by completing several acquisitions?
You’re certainly not alone. In fact, most people who enter the industry nowadays ask this exact question.
Here’s my opinion.
Most established web businesses tend to sell for anywhere between 2x and 4x of their yearly cash flow, but for many buyers having to wait 4 years to recoup their investment seems long, especially if there are significant risks involved.
Here are 6 “rules” from my own acquisition strategy, along with some case studies, showing you how I look beyond the “profit multiple” when completing acquisitions and usually achieve a far better ROI.
Today is an important day. It marks the victory of an important battle in my personal War Against Procrastination.
For no less than 3 years I’ve been thinking of organising an “Ask Me Anything” – and the time has finally come.
See you on Reddit!