If you’ve been thinking about getting into the world of online business, there is a lot to be said for buying an online business for sale. However, there are big “gotchas” as well. Depending on your skill set and level of business experience, you’ll want to think carefully before you either buy OR build a successful, revenue generating content-based online business.
Now what I mean by a content-based online business is a business that generates its revenue primarily through the website itself, either through ads, affiliate sales and sponsorships, or a mix of them.
Some of the starter sites can be purchase for around $2,000 USD or less. And by starter site, I mean sites that are under a year old and/or they haven't started generating income/revenue yet.
Back in episode 150 of my Online Business Launchpad podcast, I interviewed Sophie Howard, who's the founder of Aspiring Entrepreneurs. Sophie has had a lot of experience in buying and building up online businesses, including several different types of content-based websites. I was delighted when Sophie offered me access to her Freedom Navigators course, where she teaches others how to buy and improve online businesses.
I quickly dug into the course and learned how to review established online businesses for sale. It has been a bit of a journey because there's a lot of information gathering involved, not to mention trying to figure out whether the business model is a good fit for my interest and capabilities.
It’s also been interesting applying the Freedom Navigator course concepts to my own little side projects where I've been building up my own version of a content-based online business.
So based on what I’ve learned so far, I thought I would share with you some of the pros and cons that I see for buying versus building an established online business.
The Pros And Cons Of Building An Online Business
So let's start with the pros of building a content-based online business from scratch.
The Good Bits (The Pros)
The first “pro” of starting from scratch is that you get to shape what it all looks like. And by that I mean in terms of what the website is about, how it's branded and how you monetize it.
And the second “pro” is that you get a lot of choice in terms of the technology that you use. You can choose what platform your website is built on, where it's hosted, what editor to use to update the site, et cetera. And then you also get to choose who you partner with in terms of affiliates, ad platforms, and any sponsors that you end up getting.
The Bad Bits (The Cons)
But there are some downsides as well. Now, it can take, and I can tell you this from experience, up to six months or more to build up a solid body of content that is useful and valuable enough to people so that they want to come to the website and look at it.
And it can take even longer for Google to notice you. There are things you can do to speed things up a bit, but there's no getting past the fact that it just takes time to get the whole thing to the point where it's generating the amount of money that you need. Whether that’s to support yourself and your family or even just helping pay some of the bills.
So you need to have enough cash and time to develop the site without immediately getting money back in return. And if, like me, you do not have wonderful design skills, you have to figure out a way to get the website designed.
You might muddle through the website building process yourself. Or you could hire someone to help. Or if you're really lucky, you might partner with someone who builds the website for you in return for a percentage of the profits (once they do start coming in).
And the same holds true for being able to write SEO optimized website copy. Either you can do it well or you can’t. And if you can’t, you’ll have to find someone who can. And good copywriters don’t come cheap.
Of course, you can always choose to use it as a learning process. Which means you’ll do your best, cross your fingers and hope that somehow your efforts will somehow magically hit the mark. And by “hit the mark” I mean please the SEO powers that be so that your web pages rank on Google (or any of the other search engines). The chances of this happening are low to very unlikely.
Examples of Building An Online Business From Scratch
I think that buying an established content-based online business is an interesting model, and one that I’ve been experimenting with. If you’re curious, you can go here to see the project progress.
But if you’re a regular Online Business Launchpad podcast listener, you’ll know that I’m also experimenting with building content-based online businesses from scratch. One example is the themenopauseeffect.com website.
It was started as an experiment and then languished for a couple of years. Now I'm slowly posting deeper and richer SEO optimized contents on the site, thanks to the help of a really great health writer who is giving me a hand.
Buying An Established Online Business For Sale
As I said earlier, it’s a long slow process to build something from the ground up. And I’ll be curious to see whether, in the long run, buying an existing content based online business is quicker/faster/better than building one from scratch.
In the short term, here are some of the things I’ve learned about buying instead of building.
The Upside (The Pros)
The benefits of buying an established online business are pretty clear cut. Here they are.
1. Immediate Cashflow
No more waiting around for the money to start coming in. You’re getting a business that's already generating revenue. And what's not to like about that!
2. Ability To Rapidly Make Improvements
If you have business experience, you'll be able to look at their business model and find things that you could do cheaper or more efficiently. And depending on your skillset, you may be able to fairly rapidly add value to the website.
There's so many different ways of increasing that value. You could add in new products or services or digital assets or even new ways of monetizing what's already there.
For example, I put in a bid on a website that I knew I could immediately add value to just by changing the way the information was laid out on the page so that people could find what they were looking for more easily.
Which meant they'd stay on the site longer, which would mean they would see more ads, which would mean that I would be able to generate more revenue.
Sadly I got outbid for that site, but there have been other sites I've seen where it would be a natural fit to have ads or affiliate links, but the creator, for whatever reason, hasn't got either of those on the side.
3. Ready Made Team
Often these established online businesses for sale already have teams running them. And those teams may be quite happy to stay on when the website/business ownership changes hands.
Which means you have a choice to make.
Do you take over the business tasks and let the team go, thus creating a job for yourself? Maybe you’re already an expert in something and it makes more sense for you to take over some or all of the tasks the team was doing.
Or do you choose to be the boss and leave the day-to-day work with the team to do? And that's a really nice choice to have.
4. Total Decision Making Control
If you’ve ever worked for someone else and been frustrated by not being able to make decisions on behalf of that business, you’re going to love buying an established online business.
If the look and the feel of the site isn't quite to your taste or the focus is a touch different to what you would like, then you can always tweak things. Obviously you would do this in a careful way so that you don't break the things that are working.
But you will have a lot of leeway to put your own stamp on things, and I think that's really important.
The Downside of Buying An Online Business For Sale
Now, obviously there's some definite downsides to this, which might mean that buying a ready-made established online business might not be for you.
1. Learn Fast Or Fail
For starters, if you don't have business experience, and by that I mean understanding how to actually run a profitable business, then you'll have to learn super fast because if you don't, things are going to turn into a disaster.
Or if you do want to take more control of the website and do a lot of the things yourself, but you don't have copywriting or SEO skills or website management skills yet, then you're going to need to have a team to do it for you while you're learning.
And if you don't have team management skills or experience, it'll be a bit of a trial by fire to get that experience, which isn't always a bad thing, but it does make things a lot more stressful.
2. You Need Money To Start With
Of course, the elephant in the room is that you have to have money to buy an established online business. So if you're bootstrapping and you haven't built up enough cash reserves yet so that you can afford to buy an existing business, then this probably isn't the model for you.
However, if you do have some money, then it's possible to find ways of coming up with the rest of the money that you do need. Some sellers are willing to arrange vendor financing, which is really helpful.
Personally, I've just gone with cash offers because I'm still at the newbie end when it comes to buying, and I only want to offer what I can afford to lose.
But if you're comfortable with vendor financing, then, done right, you'll be able to use the existing income that comes in from the website to help make payments to the vendor on a regular basis until it's paid off.
A Caveat To Buying An Established Online Business
There is a caveat to buying your own content-based online business. And that is that artificial intelligence (AI) is disrupting a lot of business models at the moment. I've started hearing stories about content creation companies having to close their doors because demand for their services just dropped off a cliff.
So you need to be really careful about buying something that is at risk of having its lunch eaten by AI. However, the disruption that AI is causing also offers opportunities to take things in a different direction.
And once again, success is going to come down to your ability to spot opportunities and then act on those opportunities. If AI is something that worries you or you know you need to build skills in that area, I highly recommend Steven Lewis’s course on how to use AI to give you and your business an edge.
Wrapping It All Up
So there you have it. There are definitely upsides and downsides to both ways of getting a content-based online business going.
If you're starting from scratch and you need to build skills or you don't have a lot of money or experience, then I'd advise you to build what you want and then use that experience to learn what works and what doesn't. And then later you can look at buying an existing business.
But if you already have some experience and skills, and you're keen to have something that's already generating revenue, then you’ll want to have a look at buying an existing site.
And if you’re interested in learning more about how to buy an established online business for sale, have a listen to Sophie Howard’s short training and introduction to her Freedom Navigators program where she teaches you the secrets to successfully buying and growing an existing online business.
Disclaimer: I'm an affiliate for the Freedom Navigators course. I’ve done it and found it to be very, very helpful. Sophie knows what she's doing and she's done a good job of putting the course together. Plus she has weekly Q&A sessions where she does extra training and answers questions.
So if you sign up using my affiliate link, I’ll get a commission for which I thank you. It helps my team and I to keep helping people like yourself start, build and grow online businesses that will make a difference for you and your family.
And I might even see you at the Q&A sessions.