What business size and stage are you ready for?
Running a business can change your lifestyle. If you're buying a start-up, it's likely you'll work long hours for little pay. You may have to sacrifice time with family and friends as your business finds stability.
Small eCommerce businesses with concrete customer bases are typically pricier, but you won't have to work from the ground up.
If you just want to diversify your investment portfolio, consider incorporated businesses. There's less work required but you'll have to wait for months until the acquisition amount is recovered.
What are your interests?
Identify your expertise and the areas you need to improve. For example, if the eCommerce store you want to buy still lacks branding and you have no prior experience, hire an experienced brand strategist to handle it.
While you can outsource almost any task these days, it's easier if the business matches your interests. You will know what products/services are needed by the target market because you're one of them.
Where should you start the search?
Once you know what type of eCommerce business to buy, it's time to shop around. The type of business you're looking for determines the place where you should shop.
For example, if you want to buy an incorporated business, it's probably best to work with a broker. You can also buy and sell online businesses in any of these 14 marketplaces.
Prices vary widely. Logically, six-figure enterprises tend to come with a hefty price tag.
Why is the eCommerce business for sale?
Business owners sell their online ventures for different reasons. Some are selling for retirement and others have more disconcerting reasons.
Learning how to buy an eCommerce business requires developing an instinct that will tell you if a business is not in good condition.
Have a thorough discussion with the seller and don't forget to ask for the following:
Is this the cheapest offer possible?
Usually, eCommerce businesses for sale have listed prices. You can negotiate the price and adjust the terms of payment based on the valuation report.
You might have to meet with the owner several times to figure out the best deal for both parties. Remember to maintain respect throughout the process and avoid severely undervaluing their hard work.
How do I submit the offer?
Prepare a letter of intent to formally express your plan to do business with the seller. The letter must indicate who's making the purchase (an individual or a company), the general terms, and the timeline of the deal. For the security of both parties, consider drafting a confidentiality agreement as well.
An LOI can help save time and energy because it ensures that both parties are on the same page before meeting each other.
What are the documents I should go over?
Once both parties agree to negotiate, request a copy of all important documents. These include: