Few countries have taken to online sales like Britain. It might surprise you to learn that 9.3% of UK GDP now comes from eCommerce sales alone, showing that we’re one of the world leaders in the eCommerce sector.
If you’re looking to jump into a thriving industry and make your entrepreneurial dreams come true, buying an online business simply makes sense. Like anything, there are no guarantees, but buying an online business is the easiest way to get started quickly with minimal overhead.
At Cogogo, we help you find the latest online businesses for sale to help you cut out those complex startup phases and get on with selling to the British public. Check out our latest listings now.
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Why should you buy an online business?
Launching an online business has its challenges, but also its unique advantages. With 47% of the UK public saying they want to start a business, here’s why this is the place to start:
- The UK boasts one of the largest online markets in the world, settling just behind the likes of the U.S. and China.
- Manage everything online, allowing you to run your business from anywhere.
- Minimal overheads because you’re not relying on a brick-and-mortar store such as a café,
- Less startup capital is needed than for starting a physical business.
- Get an established customer base and brand by purchasing an existing online company.
Buying an online business minimises your personal risk and gives you a head start on the competition. With an established brand, product line, and customer database on your side, you’ve got all the tools needed to turn your venture into a success.
How to find an online-based business for sale
Where do you look if you’re in the market to buy an online company? There’s no centralised market, so you’re going to have to explore multiple channels, including:
- Online marketplaces, including Cogogo.
- Business sales directories.
- Broker networks.
- Social media.
- Online marketing.
- In-person deals through trade shows and other events.
One important point to remember is that a considerable number of business sales never actually hit the open market. You only find out about them after the deal has already gone through. That’s why leveraging your own business network is such a powerful way of uncovering lucrative deals on online firms for sale.
How to value an online business for sale
Online businesses differ from traditional brick-and-mortar businesses in structure, which is why the valuation methods tend to differ. It’s also why it’s worth consulting with a professional valuation agent to get an objective overview of what an online company for sale could be worth on the open market.
Examples of valuation methods that come into play include:
- Seller’s Discretionary Earnings (SDE) multiples are commonly applied to smaller online companies.
- Comparable company analysis is a method that aggregates the values from recent sales of similar businesses.
- Customer-focused metrics might also be used, including Customer Lifetime Value (CLV) and Customer Acquisition Cost (CAC), to get an idea of what future profitability might look like.
- Revenue-based multiples may be used instead of SDE, particularly if an online business is growing quickly or where earnings are in the red.
The thing is, the correct valuation method depends on the nature of the online business you’re looking at and where it is in its growth cycle. The best way to determine the optimal valuation method is to consult a professional valuation agent. Before that, you need a shortlist of online firms available now. Alternatively, try our free instant business valuation calculator today.
If you’re ready to explore the market, contact Cogogo and speak to one of our experts now.
