Running an online business is currently one of the smartest and most popular decisions anyone can make. However, it’s hard to start such an endeavor from scratch and that’s why a lot of people look to go down the road of business acquisition and want to acquire an already established business by looking at websites for sale.
But first, you need to know a few things before you commit to an online business acquisition.
Business Acquisition – Do a Basic Audit
During a business acquisition, before you can be sure that the business you decided to acquire is legitimate, you need to check all of the seller’s claims. The first thing you need to do is a basic audit of the business and check the following:
- What you’ll be acquiring during the sale. Some of the basic things the seller needs to include are the website, domain, customer list, and all of the website’s social accounts. However, check to see if they will also include the staff, inventory, and accounts receivables.
- Legal matters. Make sure that you understand all of the business’ legal matters such as the business structure, number of owners, and domain ownership.
- Profitability. The annual sales figures for the business are not as important as the amount that’s left after all business-related costs are paid off. This includes employee wages, taxes, inventory costs, and shipping.
- Financial documents. All financial documents that show the expenses and revenues of that business need to be reviewed. This includes bank and PayPal statements.
- Sales channels. Inform yourself about all the channels the business uses to sell its products and whether all marketplace accounts and listings will be transferred to you after the sale.
Business Acquisition – Perform a Technical Audit
After you go through all of the important points of a basic audit, you need to focus on the technical aspect of the business and review the software the store runs on. See if you have enough technical skills for the types of software used. If not, see if you’ll be able to learn it.
There are three different things you should focus on during your technical audit.
Business Acquisition – eCommerce Software
The eCommerce software that’s used in any online store is the heart of the business and shows you if it has growth potential. If the software is expensive, doesn’t have key features, or lags a lot, you can’t expect much from it.
Ask the following questions when reviewing the software:
- Are there any free training courses that can help you learn how to use it?
- How much does it cost and does it come with any additional expenses?
- What shipping integrations and payment processors are currently supported by the software?
- Are there any integrations between the software and the tools currently used by the business?
- Is it hosted or self-hosted? If the software is self-hosted, it might need some special hosting requirements.
- Is there a possibility to switch to another software?
Business Acquisition – Marketing Software
This type of software is just as important and needs to be evaluated using the same criteria as above. It’s important to remember there are many different types of marketing software, but some are more important than others.
Find out if the business uses them and if they meet all the required criteria. You need to pay special attention to the following:
- Customer support tools. Customers are a big part of every business and unless the online business you’re purchasing has a great tool that can handle customer support, it’s not worth your time.
- Content management system (CMS). This system is an application that is used to manage the content of a website. The most popular content management system currently used by online businesses is WordPress.
- Social media marketing tools. A strong social media presence is a huge benefit, as social media can help a business reach new heights. This is why these tools need to be included in the marketing software of the company you’re looking to acquire.
- Email marketing software. Email marketing is one of the most popular and most effective marketing techniques. However, it’s very difficult to accomplish a good email marketing strategy without the proper software, so make sure your future company has it.
Business Acquisition – Domain Details
Another part of your technical audit needs to be to check all the domain’s details to see if they match the owner’s claims.
You need to find out the following:
- How old the domain is. Domain age is very important for SEO rankings. Google ranks older domains that have been used for years much higher than new ones.
- Domain’s history. Just because the domain is being used for that website now, it doesn’t mean it wasn’t used differently in the past. Find out the complete history and check to see if it was used for any suspicious or spammy websites.
- If the domain is blacklisted. Some domains can be blacklisted by anti-spam groups because of suspicious activity. Check to see if it is on one. Otherwise, you won’t have access to certain search engines and mail servers.
- Domain name extension. Domain name extensions are more important than some people realize. It’s important that a domain name ends in a reputable and trustworthy extension. The best option is “.com”, as it’s the most known and used by 37.32% of domains.
Conduct a Store Audit
Another important thing you need to do before you purchase an online business is to visit their website and see if it offers a smooth experience.
Things to check include:
- Website performance. The two most important features the website needs to have are fast loading time and mobile responsiveness.
- Store content. Review the copy on the website to see if it’s original, optimized for search engines and if the product descriptions aren’t just copied from the manufacturer’s website. Additionally, find out the source of all the images and if there are any copyright issues associated with them.
- Online reviews. Search for the business online to see if any bloggers have discussed it or if it has won any industry awards in the past. Additionally, check to see if there have been any scam reports associated with that business in the past.
Online business acquisition is the best choice for people who want to have a successful business right away without creating and growing it themselves. Choosing the perfect business won’t be hard at all, as long as you know the types of audits you need to do.