A little while ago my Father, Barry Dunlop introduced me to a good friend of his : Clinton Lee. Clinton is the person I went to when I needed to know how to buy an existing website.

I call it the…

The Alternative Web Start Up

Finances permitting, buying an existing website is a Fast Track to online success.

Fortunately Clinton Lee is a very successful online business owner and investor, who buys existing websites on a regular basis. Initially I had hoped Clinton would do an interview for us but Clinton is one of those Internet guys who likes to keep a low profile. Indeed many people only know him by his Forum ID’s so doing a public interview and plastering his photo across this website was not an option.

So I suppose you could say Clinton is a real Non-Guru – the kind of guy who implements rather than talks about what he knows.

Clinton’s area of expertise is the buying and selling of businesses and in particular, online businesses. Clinton discusses this subject in great detail at one of his websites: experienced-people.co.uk and I have to say I feel very fortunate in the end that Clinton has very generously provided us with a post on this subject.

I know many of you are really just starting out online, but one day when you have a successful site Clinton is someone you are going to want to know – an expert who can guide you through the process of selling your website. Alternatively another way to start online is to buy an existing online business – this is something more and more people are doing according to Clinton.

Either way, this article is one you will want to bookmark and come back to.

Enjoy – I look forward to your comments.

Michael

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How To Buy an Existing Website – An Introduction

An article by Clinton Lee

80% of new businesses fail.

It’s easy to dismiss the number as driven by a lot of inexperienced, unskilled wanna-be-entrepreneurs. Unfortunately, that’s not quite the case. Many businesses started by seasoned business professionals still don’t make it past the first year.

Why?

Simply put, a business is always a gamble but a new business is even riskier. You may crunch the numbers, have fancy projections, conduct impressive looking financial viability studies and enjoy the advantage of big name backers … and could still fail. That’s just the nature of the beast, you may take steps to mitigate but there’s always more uncertainty and risk in a new business than an established, thriving one.

That’s why there’s a huge market in selling going concerns . Numerous companies such as Businesses For Sale , Daltons , Sunbelt network etc., have, at any given time, tens of thousands of profitable, successful businesses looking for new owners. And they do a roaring trade selling these firms to experienced entrepreneurs and novices alike. There are thousands of less well known business brokers across the world acting on a smaller scale. All together, it’s a market of several billion dollars a year.

The same thing applies to websites.

Anyone wanting to make money on the Internet has two options: starting from scratch or buying an established Internet business with a proven record.

There is often suspicion in the market that if a business or website is really that profitable then it wouldn’t be for sale. The thinking goes along these lines: if I wouldn’t sell my thriving business then others wouldn’t either.

That fails to take account of the fact that there are often very valid reasons for sale.

Sometimes owners die, others need capital in a hurry to meet a big personal tax bill or the costs of a divorce, need to meet non-compete agreements for some new venture they’ve joined… the list of legitimate reasons is long.

Acquisition has one primary drawback over launching: the entry price. An existing business with a fairly guaranteed future earning stream is going to have a higher dollar cost to compensate for the sweat of the founder and the fact that the business model is profit-proven. However, getting to grips with the nuts and bolts of the business, its idiosyncrasies and culture, staff, technology, suppliers and customers takes a while and requires a fair bit of effort.

Is there a middle ground?

Yes, it’s in duplicating an already successful business. Let’s say you’ve found a well-run, highly profitable business. Let’s also say that the owner invited you in, explained the ins and outs of the business, let you browse around and ask questions and taught you his secrets to keeping it profitable. Would that be worth some money to you? Bear in mind it could save you the financial cost, heartbreak and lost time of starting a venture yourself and having it fail. Of course, it would be worth some money. It offers all the advantages of proven model without the baggage of existing operations. It offers all the low-cost benefits of a new venture without anywhere near the same Mount Everest sized risk.

This is where I sell you a program showing you just how to do that. This is where I tell you that for $99 I can open the doors to my business, teach you the ropes and show you how setup a copycat operation to make millions. That’s what many Internet marketers do.

But I’m not going to do that.

I’m going to tell you how you can help yourself. Many of you are aware of one or two website listing locations such as Flippa.com but here is a list of all the main locations to buy a website. Start with a plan. You are going to begin by browsing the listings and ruthlessly ignoring those sites that are too new, aren’t making a profit or are blatantly exaggerating their merits (the tone of the seller’s description often gives this away). Of the others, you’ll eliminate those that aren’t in your areas of interest, perhaps because you are ideologically opposed to promoting gambling … or because you know nothing about the plus size ladies’ fashions they specialise in. It’s important to find a subject that you like and can see yourself commissioning material for or promoting/managing.

You’ll then do a bit of due diligence. You can often eliminate sites just from doing a few checks on the information provided in public. Eliminate them. You now come to a core of websites with widely different business models but all seemingly good, solid businesses. This is your shortlist.

Then comes the interesting bit: learning about them for free. When a seller lists a site, he has to provide information that he wouldn’t normally dream of disclosing. He puts into the public domain intimate details about the finances of his business, he gives people access to his traffic stats, he even downloads Adsense CSVs and provides them for free to interested buyers. He goes further. He’ll discuss the running and management of the site, explain what’s required, address concerns, answer questions and generally be very helpful. He’ll practically teach you what makes the business tick. He gives you all the ammunition you need to set up a competing website!

But it’s a dirty trick to play on the seller if you have no intention of purchasing the business for sale. Pretending to be buying when you’re not is deceiving the seller and it’s bad karma to dupe people. That’s why I suggest you add one more criteria to the shortlist: examine only those sites which fall within your budget. Because no matter how much you learn about the business, you will make more money if you hit the ground running and when you find a good business going at a good rate, it’s generally in your own best interest to grab it before someone else does. It beats starting from scratch. If that good business is going at a bad rate, though, you’re well-armed to go create one yourself.

After all that effort should you end up neither buying nor starting a business I can guarantee that all is not lost. You’ll come out much smarter; you’ll have learnt an awful lot about managing websites, tweaking them, what SEO works, new techniques to monetise sites and much, much more.

Happy Hunting.