Look before You Leap: Five Points to Consider When Purchasing an eCommerce Business!

Buy ecommerce business with success!

Hi and welcome to 2014! Hope you  had a wonderful and refreshing holiday!

Like I mentioned earlier, I had to take some days off to spend more time with the family and also to re-strategize for this new year. And so, in the coming few days you will be seeing some changes and improvements on this site.

For now let’s start off this year by talking about one of the ways you can kickstart your entrepreneurial journey the easy way, that is, buying an already existing e-Commerce business!

As we do know building any type of business from scratch is no mean task. It doesn’t matter whether it is online or offline. Records indicate that many who tried that route as entrepreneurs quickly discovered how overwhelming and daunting it can really be.

As a result of the issues associated with starting from scratch, many people have been known to go for an already established business. They consider it more rewarding and less tasking to purchase such a business than starting from zero.

Of course, this has its advantages especially since majority of the work involved in getting the business up and running has already been completed. However, there are still several red flags you need to consider before buying an eCommerce business. And so, if you’re considering starting your own online business this year through acquiring an already existing one, I ask that you read this post all through. In it I share with you a few tips that will help you succeed with your acquisition.

What to look out for When Buying An eCommerce Business

1.    Review a Detailed Copy of Past Web Logs

According to Server Watch, one of the first things you need to ask the current owner for is their collection of past web logs which allows you to verify the traffic and conversion levels generated in the past. Do not trust solely in what the current owner tells you about the success (or failure) of their business. Taking the time to review important documentation, such as these web logs, will allow you to see the unbiased truth for yourself. Of course, documented evident does beat any verbal reports any day.

2.    Research All Incoming Links

In most cases, the current owner whenever they plan to sell a website that they own; will try to push the high number of incoming links they were able to generate within the website as a major selling point. It is fairly easy to become intrigued by a high number, especially if you are familiar with the long-term value backlinks can generate for your new business. However, before you get too excited and ignorantly finalize this deal, take the time to identify the origin of the incoming links. Remember, just because there are a lot within the owner’s website doesn’t mean the links made it there legitimately. Researching their origin will give you the chance to verify this as well. Fortunately, checking the history of incoming links is not as difficult to do as it may seem at first, according to Page 1 Solutions.

3.    Focus on the Reputation

The last thing you want to do is invest your hard-earned money and resources into a business you think is successful, but, in reality, has already been driven into the ground. Use Google or any other popular search engine to view the website’s grade and feedback and comments posted and published by customers and clients about this particular business. In some cases, you might be able to turn a negative reputation around over time. However, you need to be able to realistically assess whether or not that would be a reasonable decision to make. Not all businesses can be saved.

4.    Examine the Past Financial History

In addition to the website ranking and overall reputation, the financial side of the business has to be examined even more closely before you make any final purchasing decisions. It is highly recommended that you obtain copies of the business’s financial records and banking statements for at least the past two years, according to eCommerce Business Journal. Hiring a professional accountant to review these documents is another great idea, because he or she might be able to find a major issue that you may have overlooked during the initial review.

5.    Consider Your Own Business Plan

Think about the amount of money, time and resources you will be investing in this eCommerce business on a short- and long-term basis. Even before you sign your name on the dotted line and finalize the sale or acquisition of the eCommerce business you want, do yourself a favor and create a business plan that reflects the next step. Once all the paperwork has been signed and the sale has been completed, you will need to hit the ground running. Having a definitive plan of action will help you achieve this goal.

Indeed, there are pros and cons when it comes to buying an ecommerce site. however, if you will work with the above tips you will definitely make a good success of your purchase.

Do You Really Need A Business Plan To Succeed In Business?

It’s yet another Monday and as usual it is time for our Community Timeout here on the Web Income Journal!

(Every Mondays we discuss issues that touch our lives as bloggers and web entrepreneurs. If you have any question or issue you want us to discuss, feel free to send your suggestions using this form.)

Today I want us to discuss a very important issue that many of us have come to accept as essential when it comes to succeeding in business – a business plan.

A few years ago, a successful business mogul from my area came up with a Reality TV show, “The Apprentice” aimed at selecting a few budding entrepreneurs to be mentored by this entrepreneur who had succeeded in different business ventures.

The first qualification for anyone to be selected for the program was a well written business plan and of course, the ability to defend this plan and being able to convince the Judges that your business was worth it!

Watching that reality show and observing the young men and women defending their business plans immediately convinced me beyond any doubt that it is NOT really the best business plan that makes any one succeed as an entrepreneur.

Now, my conviction then was not because I had any problems with writing business plans but because I saw many of these people speak with passion about their intended businesses but it was clear that many of them do not have the knowledge of writing great business plans!

Of course, as expected many of these ones lost out while those with good business plans, strategically laid out and detailing every aspect of their intended businesses, were selected and given the opportunity to participate in the program.

Now, this brings us to the topic of the day…

business plan and succeeding in business
As a Recipe to a delicious meal so a Business Plan to business success, right?

 

Business Plans – How Much Do They Really Contribute To Succeeding In A Business?

Do you really need a business plan before you can succeed in your business?

I decided to bring up this topic after reading a blog post on the Harvard Business Review Blog Network titled, “Great Businesses Don’t Start with a Plan!”

In the post, Anthony K. Tjan, the author of the post, categorically stated that from a survey carried out on hundreds of successful entrepreneurs around the globe, aimed at better understanding what it takes to be an entrepreneur and build a really great business, it was discovered that about 70% of those who succeeded in their business and had a successful exit (that is, an IPO or sale to another firm), none of them started with a business plan!

I’m sure you will want to disagree with that since every business book and advice always go something like this,

“To succeed in any type of business, you must have a business plan. Without a business plan you are heading towards failure because if you fail to plan; you are planning to fail!”

On the contrary however, Anthony wrote:

“[These entrepreneur’s] journeys originated in a different place, a place we call the Heart. They were conceived not with a document but with a feeling and doing for an authentic vision. Clarity of purpose and passion ruled the day with less time spent writing about an idea and more time spent just doing it.”

So don’t worry too much about a business plan. But to guide your thinking, improve a pitch to prospective investors, or better align your teams, consider these design points:

1. Identify and clearly articulate your Heart and purpose. Whether you want to call it vision, Heart, purpose or calling, be very clear on the why of a business — the bigger goal at hand.

2. The team is more important than any idea or plan. The top three priorities should be people, followed by people, and then people.

3. Think big, start small, then scale or fail fast. Per Lederhausen’s advice, set the right first “start small” milestone; it will usually involve seeing people’s willingness to buy or at least try your product.

4. Focus on a well-defined market sub-segment or niche. At least to start, think of where you can potentially be the best. This strategy is almost always more successful than being just another player in a massive market.

5. Understand your business model. How you will make money is more important than pages of Excel showing financials that are simply too hard to predict at this early stage anyway. Understand instead the basic way you will make money – is it through transactions, advertising, subscriptions, etc?

Hmm, you may want to call that breaking the rules to succeed in business!

Your turn: The question is, do you think Anthony K. Tjan and his team got it wrong somewhere? Can you say that from your experience a detailed business plan is necessary before you can start a successful business? Or, do you agree with their findings?

Please let’s have your contribution in your comments below. As usual, make your comments useful and valuable.  That way you will be of help to other readers. So the discussion begin!

Image credit: Flickr user – ocean.flynn