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Investing in Online Businesses: Buying a Business and Not a Full-Time Job

buy a business

Ambitions - by Frits Ahlefeldt

This is a blog post by Alex Papa, Online Entrepreneur and Investor.

The past 5 years have seen a significant increase in the amount of investors who have chosen to invest in online business opportunities instead of the conventional brick and mortar type of business. Aspiring entrepreneurs think that owning a dotcom that is widely known equates to automatic success. Although an online based business requires less capital when compared to a traditional business, truth be told; success is not guaranteed. There are many individual parts that are hidden; Without proper research and planning, you will end up buying a job with long hours and low pay.

In reality, the whole process must be governed by a due diligence check list, and this responsibility belongs to the investor alone. These four points will guide you, so as to make sure you are acquiring a business and not a job.

Automation and Systemization

Prior to purchasing a web-based business, you need to be certain that you will be overseeing the business from the outside and not from within. Normally a business may be defined as system that was optimised to produce a certain outcome while following specific procedures. A conventional business may be described as a group of people co-ordinated to work together to produce results as previously defined. An online business may be expressed as an arrangement; where the strengths are embodied in the website and software application. If the business management functions are fully automated or systemized then you have an optimised business. Automation means that web content management, enquiries management, order management and email management are all done by software. Systemization on the other hand means that all tasks that cannot be done by software, such as marketing or service delivery can be done by a team of experts.

Team of Experts

Before purchasing an online business, make certain that you know those that are responsible for the technical aspects of the business and how to locate them. If you are unfamiliar with the technical phase of an internet based business, it is essential that you are knowledgeable of who handles Search Engine Optimisation, who manages Adwords advertising, who has access to the websites hosting server, who the developer is, who the designer is and who the copywriter is. Additionally, you need to make sure the cost of sustaining a team is covered in the business plan. Planning poorly can have long term detrimental effects on running an online business.

Subcontracting Infrastructure

An internet business that delivers services needs to have an infrastructure that mirrors the online version. Besides spending hours marketing the business, you would also have to provide the service once you have received the order. When investing in a service-based web business, you would need a sub-contracting structure to function effectively. If this infrastructure is not part of the business when purchased, you should negotiate the relevant discount, because it will take a lot of planning before the business can run on its own.

Management

A reliable team can run a small to medium-size online business on a part time to full time basis. At the same time, good management is essential if you ever want to take time away from the business. You need to have a manager to supervise the business and reduce the number of people who are directly reporting to you. Unlike a conventional business you do not need to have your staff with you. Your team of experts, as well as the manager of the business, can be in different parts of the world.

If you establish a procedure of due diligence, you will understand the business more than the previous owner, and this is the best position for a new owner. Take note, due diligence in the online world is the same as that of a conventional business world; The whole process should be approached logically, and remember, you will be rewarded for the time you put in with freedom and a great income-producing asset in your portfolio.

About the Author:

Alex Papa is an online entrepreneur and investor with several web assets in his portfolio. He has recently produced a Business Start-up Audio CD Course that teaches people what the rich teach their kids about starting a business that business schools do not. In his blog you may also find Norton 360 discount coupon codes.

About author

Ivan Widjaya
Ivan Widjaya 3034 posts

Ivan Widjaya is the Owner/Editor of Noobpreneur.com, as well as several other blogs. He is a business blogger, web publisher and content marketer for SMEs.

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