There a few fundamental things to figure out when purchasing an e-commerce concern, away from the standard mechanisms of buying any business such as P&L, Balance Sheet, Liquid Assets, Capital Assets, Outstanding Liabilities, Goodwill, Legal Threats. While not an exhaustive list, these are some of the ones we have come across.
- Financing :: having the money lined up so you can move forward at the appropriate time to make your acquisition- potentially risky ventures such as e-commerce based businesses can require time for adequate financing to be made available from financial institutions. Especially if the business is still quite young in development or small in scale.
- Web Statistics:: These are the ultimate decider of the business, in bricks & mortar retailers you would estimate things like average foot-fall, this is no different. Questions such as
:: How many unique visitors?
:: What is the average visit duration?
:: What percentage of visitors spend xyz time interval on the website?
:: How many successful payments processed versus ones who have just gone to payment page and then cancelled the order?
:: Customer loyalty i.e. the level of recurring business.
- Brand Awareness:: the Internet is a wilderness of so many websites and services that you need to figure out what road people have to get to the business and how many understand where to go. It is great to have a funky name but if the website is not well known, and the name gives no clue from search engines on what it does, then the more expensive it will be to get both the name out there and the trust of people to transact on it. Check for things like ezine subscriptions, rss subscriptions, independent forum correspondence (do people mention the business/recommend the service) etc.
- SEO- check in search engines, such as Google (as it is the dominant search engine on the Internet), the rankings of the business. The optimum placing is on Page 1. You can also use services such as, http://www.googlerankings.com/. Also check out what is listed in Google by using site:// for example site://www.zyxcorp.ie. If the business is using Search Engine advertising and website targeted advertising to get its name out there, then you need to factor in a lot more marketing expense when purchasing.
- Technology: It may seem obvious- but when buying an e-commerce concern- ensure that all the building blocks of the website are either built in-house or licenced from a reputable source. Factor in potential support, cost and stability factors if there are unregulated blocks of code copied from forums, help websites etc. on the initial development of the website. On the same point, the heart of all e-commerce concerns is the datawarehouse- ensure the database is built correctly. Ask yourself these questions:
:: Is it secure?
:: Is it tracking all the vital statistics that you would need to understand your customer base?
:: Can it be easily upgradeable on the growth of the business?
:: Is the database fit for purpose?
Any issues here will again factor upwards the costs of the business.
- Staff:: when purchasing an e-commerce concern, especially a business built in-house- you will have to either retain the services of the key staff involved or request hand-over duration period contracts. Either way, this will be a significant expense, but one that will prove cheaper in the long run. So on purchasing ensure the use of the key employees services is cast iron and the required expense factored into the initial cost.
- Hidden costs:: If unfamiliar with an e-commerce concern, there are costs that may not be obvious, such as- if independently hosted by a 3rd party- what are the monthly costs involved, and what is the average percentage increase of such service? Costs of processing payments- depending on the rate of transactions on the website these can differ significantly. Costs of contracted banner advertising on various websites. If hosted in-house- cost of server maintenance, support costs, broadband required etc. If selling a product that needs delivery- costs of post margins on the pricing structure.
BuyingPart Funding an Online Business Some Tips on What to Look Out For - To learn more about this author, visit John Ryan's Website.
Like this article? Share it with your friends
 |
Related Articles |
|
 Part 7: Funding Request
|
| |
In this section, you will request the amount of funding you will need to start or expand your business. If necessary, you can include different funding scenarios, such as a best and worst case scenarios, but remembe...
|
|
Grants 101
|
| |
This article discusses some of the misconceptions about grants.
|
|
Easy Ways To Earn Extra Money Taking Online Surveys
|
| |
Great tips on how to make a good amount of extra money taking online surveys.
|
|
5 Easy Tips to Running Your Online Business
|
| |
Running an online business is a great way to go into business for yourself. One of the most attractive features when it comes to having an online business is that you can almost completely automate it.
|
|
How To Make Fast Easy Money Online
|
| |
This article describes great ways to go about making fast easy money online.
|
 |
Related Businesses - Evan Elite Authors |
|
Leanne Hoagland Smith
Are your sales where you want them to be? Will you be one of the few who achieves sales success or one of the many who have failed to change? So what are you doing to change those results? Let’s be honest, with companies moving globally and at lightening speeds, the traditional business solutions are outdated and dead. My approach moves your business out of its comfort zone and secures your competitive advantage now. If you are seeking to increase sales, build customer loyalty, create a culture of great attitudes or just achieve some sleep filled nights, then we should talk because my clients have experienced exactly those types of results. Learn more about customer loyalty at http://www.processspecialist.com/customer-loyalty.htm Give me a call at 219.759.5601 for a free strategy session. P.S. If you are seeking a motivational speaker, sales trainer or small business expert that will leave your audience smiling and remembering, please feel free to contact me at 219.759.5601. - Visit Leanne Hoagland Smith's Website |
The Evan Elite Authors program is currently in beta phase. For details please contact us.
|
|
|
John Ryan
(Visit John's Website)
www.thebusi
nessshop.ie is Ireland’s only online
directory committed to supporting business
opportunities. It was created to fill a
void that currently exists for those
seeking to buy or sell a business in
Ireland. Until now, most business owners
used two primary routes for selling their
businesses: expensive, one-off,
mass-market newspaper advertising and/or
enquiries through their accountants. Both
methods are limiting and time-consuming.
On the other hand, those buying businesses
were restricted to placing expensive and
untargeted advertisements, searching
newspapers and trade magazines in the hope
that opportunities will be advertised
there, or to making enquiries through
their own personal network of business
contacts.
thebusinessshop.ie is designed to be the
first port of call for anyone seeking to
buy or sell a business in Ireland. The
website currently incorporates businesses
for sale, franchises and businesses
seeking partners. It is designed for every
size and type of business in Ireland, from
the smallest home-based businesses to
large companies with international
operations.
|
|
 |
|
|
|
|
![[Get Copyright Permissions]](http://license.icopyright.net/images/icopy-w.gif){kind=small}
