Buying and selling businesses are now as common as buying and selling real estate. However, it presents many technicalities since websites essentially represent internet real estate.
Much work goes into ensuring that a business is valuable enough to sell. Often, owners have invested a lot of time and resources into building a site from the ground up. So, various factors come up to justify selling.
Knowing why the owner wants to sell it could be the key information to get a fair deal from buying a website.
Let’s take a look at some of the most common reasons sellers give while selling their business and what they might mean for you, the potential buyer.
#1. Need Funds for a New Project
For many entrepreneurs, projects come and go. Once they feel one is completed, it’s just time to move on. For others, smaller projects are simply tools to help them reach larger goals.
If you can make a decent cash offer to these people, chances are you can strike a quick deal. They are probably more interested in getting the cash they need now to use on other projects rather than going through lengthy negotiations.
#2. I’m Selling Due to Health Issues/Family Issues
Some sellers do claim to sell their websites because they need the cash for health or family matters. It is only human to feel bad for them, even though you cannot tell if they are genuine.
Just don’t let sympathy sway you into overpaying or taking on a site that’s not quite right for you. Being a good person is great, but business is business, after all. Do your homework thoroughly all the same.
#3. I Just Don’t Have Time Anymore
A lack of time is one of the biggest reasons people throw the towel in on a business. In theory, running a business sounds easy, and something one can do in their spare time. However, the reality can often be something very different.
So, if you have already been warned that the website you want is very time-consuming, ensure that you consider that before you take it on. Ask questions, run projections. And ask yourself, do I really have the time to make this site work?
Many buyers overlook this factor because it doesn’t reflect on any income statement. Yet, it is a big part of the cost equation.
Speaking from experience, usually, if the owner tells you she spends ten hours a week on the site, then you should probably double that number.
Factor in how much it will cost to hire someone to do that work if you find you can’t do it yourself. Then, ensure that you include those numbers in your profit projections.
#4. This is What I Do. I Flip Websites
If this is the reason offered up for a website sale, you will need to be more cautious. These sellers usually identify themselves as experts, which may or may not be true.
They are in this for the money, and that’s about it. Unfortunately, it often means that to create the numbers buyers want to see, they may have taken some grey hat shortcuts along the way. Such shady shortcuts may come back and haunt you as the new owner later on.
As the buyer, you must carefully investigate and analyze the business before you go for it. Some of the essential questions to ask yourself are:
- Is the traffic genuine?
- What SEO/ Ads tactics have they used to boost the business?
Bad SEO attracts Google penalties that can be difficult to recover from and very expensive to fix.
#5. I’ve Lost Interest in This Business
This is an honest enough reason for a website sale. But you need more information.
- Why have they lost interest?
- Was the site too hard to run?
- Does it lack the potential that the owner initially assumed it had?
- Or did they simply choose a niche that they genuinely found was not quite as fascinating as they had assumed?
Get the answers to these questions before making a bid to avoid being stuck with a business you will find utterly boring as well. If it is something, you can work with, then go for it.
#6. I Got a Job/I’m Retiring/I’m Joining the Family Business
The concept of making money online has become more and more popular. So more and more people have convinced themselves that they can free themselves from to 9 to 5 grind and carve out a living as a successful webmaster instead.
However, for every successful business owner, there are at least four or five fellows, those who’ve realized that owning a business and making money off it is not as easy.
They then decide to find an easier way to make money by taking on a full-time job that doesn’t involve managing and maintaining a website. Some choose to take on the responsibility of running family businesses or even retire.
#7. I Want to Capitalize on Business
The business seller may decide to undertake a new business venture they need capital for. So, they decide to sell off their business.
Such sellers go both ways. They could be desperate and willing to let go of the site even at a lower than usual price. If you find such, you could land yourself the best deal.
Alternatively, they could be trying to get as much money out of the site and thus employ black hat tactics to make it more attractive.
Either way, investigate and ensure you are getting the best deal for you.
#8. I Want a Change in Lifestyle
People’s priorities tend to shift to what they value most. Many webmasters find themselves in such a situation. First, they start strong and build their websites. Then, life happens.
For instance, they want to travel more, spend time with family, focus on more physical ventures, etc.
Whatever the case, these usually have a genuine reason for selling. So, they are less likely to try and rip you off. Just make sure you are equipped to handle what they leave behind.
#9. My Skillset Can No Longer Sustain The Business
For enthusiasts, continuity is often a good enough reason to sell a business. These types have built their sites but realized they do not have the skills or resources to sustain or carry it further.
Such sellers often look for buyers with relevant knowledge and expertise to take on what they have built. So, they’ll likely not be keen on the price but more on your skillset.
For example, a cosmetics site owner will most likely want to sell to another beauty lover who will build on the brand and not turn it into a general store.
#10. The business is Collapsing
For multiple reasons, websites, just like any other business, sometimes take a turn for the worst and start making losses. So, the owners choose to sell to cut their losses. Unfortunately, this approach is common with eCommerce websites.
Often, the owners may not divulge such information to you and may even try to cover up. So, your due diligence is essential. However, if they tell you that the site is making losses, ensure you have a solid plan to get it running again before you buy.
Over to You
These are just some of the many reasons sellers will offer for selling a business. So, before buying a business from a seller offering these reasons for a sale, ensure that there’s potential for the website to be successful in avoiding taking on a project that will lead to more business losses than profits.
Just as you would never buy a car without taking a test drive and you’d certainly never buy a house without all the correct reports, don’t let anything distract you from thoroughly investigating and analyzing a website purchase before you make it.
Whatever the reason for a sale, you still keep your head and do full due diligence before parting with your penny.