Buying a business can often be easier than starting a business. Someone has already endured the difficult part of entrepreneurship where one has to enter into a market, many times filled with established competitors.
This is the case with online businesses too. By online business I’m referring to any online-based business where there is a distinguished brand and a value-based transaction happening.
This can include a blog which offers readers value through the content published, a services business which gains clientele through their digital presence, or even an ecommerce site which sells products, both physical and/or digital.
The value in buying these businesses is in acquiring existing audiences, loyal customers, and most important of all cashflow. With cashflow you are adding to your current income and inadvertely also increasing the amount of debt you can access.
You’re looking for a profit generating business that you can purchase at a generous multiple, and which you could inject your own value into in an effort to maximize the return on investment.
You can also sell your existing online business or the business you acquired at an even higher multiple, and what’s great about buying or selling an online business is that it is fairly easy to do, and can be done solely on a single platform regardless where the buyer or seller is from.
I spend about 30 minutes every evening browsing the following platforms for my next deal or listing any digital properties I’m in a position to sell.
Flippa
Flippa is the go to place to buy and sell any online businesses and includes listings from around the world. Here one can buy websites, software platforms, domains, ecommerce stores, or even apps from starter templates and turn-key businesses to online businesses valued at million’s of Rands.
Flippa Listings are generally auctions where the highest bidder will win provided that the reserve price has been met. As a bidder you can see the bid history and enter the maximum amount you are willing to pay for listing. Flippa will then automatically and incrementally submit your bids to the seller for approval until you either win the auction or reach you max bid and are out bid.
As a seller you you can list your business for a small listing fee and when your business sells Flippa will receive an additional 4% success fee.
Below you can see my profile. On Flippa I’ve completed two deals totaling around R6k. One deal was purchasing a rare 5 letter .com domain name, and the other was selling one of my first blogs.
For both deals the process was very smooth and the buyer and seller were very easy to communicate with and transfer the bought or sold items.
Empire Flippers
If you have a bigger budget when it comes to buying businesses, check out Empire Flippers which have some very high priced online businesses for sale, but ones which are very profitable. At minimum, you’ll fork out R100k.
The next difference between Flippa and Empire Flippers is that Empire Flippers’ listings are generally business profiting from the display and/or affiliate marketing business models. There are other monetization methods too – but these seem to be the primary ones.
I am yet to purchase an online business on Flippa myself, but know of other who have found success in selling their businesses on the platform and who are very happy with the service and support they received.
Finding online SA-based businesses
If you’re looking for a local online business to buy online, there is not not really an online platform dedicated to these kinds of businesses, but you can try browsing BusinessForSale.com. Here and there the odd online business pops up.
Next you can try searching for ‘South Africa’ in the search bar of Flippa and it will should businesses listed in South Africa (seller is in South Africa) or listings which reference South Africa. Sometimes there are local sites and domains such as the blog I sold which was on a .co.za domain.
If that doesn’t work – your best bet is to put in the time and look for potential business you could acquire that are within your budget. To do this list down what you are looking for and then start browsing for sites that meet those criterias.
Once you find something you can approach the owner directly and perhaps even score a better deal as there will be no middleman taking their fees. In many cases online businesses where the owners don’t seem to be investing a lot of time or are unable to will be easier to convince to sell to you.
Avoiding scams
As with anything online where money is involved, there are scammers. Always uses trusted platforms, an even then, ensure that you do your due diligence.
What’s great with a platform like Flippa is sellers and buyers can get verified. Additionally on their profiles you can see the mount of business they’ve conducted over the platform and their other listings for sale or those which have sold.
Specifically stay away from any groups on social media, specifically Facebook. I’d also be cautious of he BobShop and Gumtree. Here I have seen listings of smaller starter sites and domains.
Finally, when you have some money saved up that you can use to invest, explore buying an online business, it could be something that you’re passionate about like cars or sport, and know you don’t need tens of thousands of Rands, you can get started with a much smaller budget.