Originally written by Jo Thornley on Small Business
Established principles of buying and selling a business still apply with an online company – for instance, the need to dig deep and do thorough research – yet there are some differences.
The lack of bricks and mortar, for example, may make the process a little cheaper, and you may not have any significant staff employment issues to consider. Nevertheless, on the buy side or the sell side it’s mostly a matter of identifying the core issues to consider.
Here’s a rundown of what you need to take into account when buying or selling an online business.
Buying a business
Traffic
The success of an online business is measured in traffic volumes, which roughly equate to high street footfall.
But there’s good and bad traffic. So, you and your team will need to do your own analysis and verify any historic traffic data you receive. In essence, you will want to work out what percentage of the traffic generates business income.
In addition, you will want to establish that business arrives from a healthy mix of sources. Until you have such information, you can’t value the business.
Growth
As with any business, you should be able to track the figures over time.