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Brokers Need To Stop Selling The Dream Of Easy Money
By Quiet Light
When it comes to buying and selling websites, some website brokers promote the misguided idea that buying and selling websites is simple, that it’s a ticket to easy money and an easy life, and that you can do this while swinging from your hammock in the Caribbean.
Well, you could do it from your hammock in the Caribbean – assuming you can get good wi-fi there. However, what is reckless and irresponsible of some of these brokers is that they sell the dream without discussing the reality. The reality is that buying and selling websites successfully takes skill, hard work, and willingness to take on significant risk.
Big Returns & Big Successes DO Happen
Buying and selling websites can be extremely profitable, there’s no doubt about that, and I’ve had the good fortune to help many buyers and sellers realize that profit.
Consider the client who bought an online directory and grew his value 1,239% in just 14 months (not including the revenue he made in those 14 months!). I had another client who spent $700,000 on a lead generation business and made that money back in the first year. If he had sold it there and then, he could have made a 242% profit on his investment (and again, we are not including the revenue he made during this period).
Buying Smartly Is Hard Work
These stories all sound wonderful, and I love hearing about them. However, some brokers only talk about the good things to promote “the good life”; yet they fail to mention the work that successful website owners have to do behind the scenes to see such a great payday at the end.
The fact is, successful buyers work hard at what they do. They usually have a plan, and they follow that plan closely and religiously. Those buyers who do not follow a strict plan often lose.
Unfortunately, I speak from experience. A few years ago, I acquired an online business selling fire-rated locking cabinets and gun safes. It was a whole network of sites, and it relied on drop shipping (where you do not own the inventory, but you pass your orders onto an actual supplier who ships them out for you). Since I was in the business of helping other people make great buys, I relied more on my gut than good processes. I ended up skipping several steps and took a loss as a result.
The fact is, if we want to talk about the great successes of some buyers, we have a responsibility also to talk about some of the challenges you’ll face as well. There are challenges at just about every step.
Challenges When You Look To Buy
You Will Look At Countless Sites & Find Only One Worth Considering
When looking for a good online business to buy, it will not be a case of looking at ten sites or so and making a quick decision. To find one worth your time considering, you are going to need to look at dozens or even hundreds of sites. Moreover, out of every dozen, you will only find one that either isn’t a scam or a business that is terminally ill, with paperwork and business summaries to match.
Of course, a reputable broker will certainly help you sift through some of the junk. However, brokers like Quiet Light Brokerage face the same challenges that you do. For every 10-15 businesses we look at, we may find 1, maybe two that are ready to transition to a new owner.
You’ll Start Negotiating a Deal, Only For a Wrench To Fall In The Works
Despite the fact that it can be hard to find that right acquisition, eventually most buyers will engage with a seller and begin negotiations for their business. However, most experienced and successful buyers have war stories of broken deals that fell apart for seemingly no reason.
This could be anything from dishonesty on the part of the seller, an inaccuracy on the part of the seller (deliberately or otherwise), or quite simply, the seller changes his mind and backs out.
Being a successful buyer requires patience and discipline to not let frustration create dangerous compromises in your acquisition plan.
Dealing with Self-Doubt
The way some brokerage firms talk about acquiring websites, you’d think it is easy to spot a money maker. However, the reality is different.
Once you find a website that you think makes a good potential acquisition, you’ll be met with loads of self-doubt (with good reason). It is easy to look back and see why an investment worked or didn’t work, but it is harder to see that when you place your savings on the line.
Good deals are not that easy to find, so the idea that flipping websites are easy money is a delusion at best. So uncertainty and nerves come with the territory.
As You Take Over a Business
Training is Like Taking a Sip from a Firehose
There are more challenges to buying a great online business than just finding a good target. As you take over the business, you’ll be greeted with a whole host of new challenges.
First is training. Sellers typically agree to include 30 days of training with the sale of their business. While this is certainly a long enough period for you to get a grasp of how to run the business, it is ambitious to think that you can learn in 30 days what the seller learned over several years of trial and error with the business.
Frankly, it can be like trying to take a sip from a firehose. So while some brokers may give the impression that you’ll make your acquisition while working from the Caribbean, the reality is that when you make an acquisition, you’ll be quite busy with learning the ropes for your new business.
Successful Buyers Deal With Surprises
Even though a business sale negotiation involves the most intensive due diligence, you still may find a surprise that catches you totally off guard.
Once again, the idea that you can simply acquire an online business and be off to the races earning a return on the business simply doesn’t hold up. You’ll need to deal with surprises, some big, some small, and be available to make the necessary pivots as you discover them.
You’ll Want To Hit The Ground Running
After you acquire an online business, there certainly won’t be time to take a vacation. You’ll want to put in place improvements to get as strong of an ROI as quickly as possible. This requires having a strategy and plan in place before you make the acquisition.
Buying an online business is anything but a passive practice.
It’s Time for an Even-Handed Look At Successful Acquisitions
Our industry has an obligation to be honest to buyers to speak fairly about the work it takes to make great acquisitions. Yes, there are potential rewards of seeing 1000% returns or greater. When you find a great acquisition and put in place your plan, you’ll also experience the luxury of having a much more free schedule than if you had a corporate job.
However, this comes with a requirement of skill, hard work, and a bit of luck. Our industry is not a “get rich quick” scheme, and brokers should not present it in this way. Rather, the brokers in this industry should spend more time giving you the tools and observations to help you make those great investments that lead to massive returns and long vacations.
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Impeccable article, I agree wholeheartedly that brokers need to make realistic claims on making money with digital assets – websites! Authenticity usually wins the race and definitely wins the trust of the investor/buyer.
I salute Quiet Light for being the first to my knowledge to bring this up!