Buying an existing online business is basi-

cally the same as purchasing any other type of

business: You have to do your homework and

determine whether it’s truly a wise buy. Find

answers to these questions about a business

before you sign on the dotted line:

 ✓ Is the online business a viable business

model?

 ✓ Does the purchase include any existing

inventory or customer contracts?

 ✓ Even though the site is established, does its

concept pass your feasibility test?

 ✓ Is the site generating revenue? How much?

(Ask for financial statements verified by a

certified public accountant.)

 ✓ What expenses does it incur?

 ✓ Can you reduce the amount of overhead by

making different management decisions?

 ✓ Can you increase the percentage of profit

by making different management deci-

sions? If so, how long would it take to

implement these changes?

 ✓ How long has the site been established?

 ✓ What is the annual percentage of revenue

growth? (How much more money does it

make over the previous year?)

 ✓ How many people visit the site each day?

(Ask for verification.)

 ✓ Does the owner maintain any logs or

records verifying the number of visitors

and other stats?

 ✓ What are the site’s popularity rankings in

all the major search engines?

 ✓ What, if anything, has the owner previously

done to increase rankings?

 ✓ Has the site been featured in any maga-

zines or other Web sites?

 ✓ How many other Web sites link to this site,

and vice versa?

 ✓ If a product is being sold, does it have a

dedicated supplier? Does it have other

supplier sources?

 ✓ If it’s an information product or a service

business, do you have the skills and staff

to duplicate it?

 ✓ Does the site have a poor reputation? Or,

has it had lots of unhappy customers?

 ✓ Is the site in good standing with the Better

Business Bureau and other organizations?

 ✓ Does it have a current business license?

 ✓ Are its taxes current?

 ✓ Has its URL expired, or is it about to?

 ✓ Does it have a valid Secure Sockets Layer

(SSL) certificate to allow protected, prop-

erly encrypted transactions over the

Internet?

 ✓ Which hardware and software, if any, are

included with the sale?

 ✓ Do you gain any proprietary software in

purchasing the site?

 ✓ Why is the current owner willing to sell?

 ✓ Can you create your own site and generate

similar results in a short length of time, for

less than the selling price?