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👔 Buying Traditional vs Online Businesses

👔 Buying Traditional vs Online Businesses

March 25, 2024

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Read time: 5 minutes

On the deal docket this week:

🧠Idealation: Buying Traditional vs Online Businesses
💸 Riches in Niches: Under-Optimized Tattoo Content Site
♣️Deal Me In: Evergreen Affiliate Site in Senior Niche
🔗 Helpful links: Best Resources + Start a Local Business

🧠Idealation

Buying Traditional vs Online Businesses

Buy $250k in cash flow for $50k - that’s the magical little formula for freedom that everyone is pushing online. The plan calls for finding a retiring owner of a traditional business and putting 10% down with an SBA loan to purchase the business. That’s a great plan - assuming you can find a business near you (or are happy to relocate), a willing retiring owner, an SBA loan, and a good amount of luck. One reason this can work is that successful traditional small businesses, although risky, have a history of making money and relatively stable cash flows to finance acquisition debt.

Traditional businesses have some advantages and disadvantages over online businesses so let’s discuss:

Traditional Businesses:

Pros:

Tangible Stuff: Traditional businesses come with physical assets like buildings, equipment, and inventory. It's like having something you can touch and feel, which can make you and a bank feel more secure.
Local Love: Having a physical presence can attract local customers who like to have a personal feel. It's like being part of the neighborhood scene.
Old-School Systems: These businesses often have established ways of doing things and relationships with suppliers and customers. So, you're not starting from scratch.
Money Coming In: Traditional businesses that have been making money consistently are likely to keep doing so.

Cons:

Limited Crowd: Your customer base is pretty much limited to the folks who walk through your door. So, you're not reaching as many people as you could online (although you can advertise online).
Less Wiggle Room: Changing things up or expanding can be a hassle with a traditional setup.
Rough Times Ahead: When the economy takes a hit or trends change, traditional businesses can feel it hard. Think of it like being on shaky ground during tough times.

Online Business:

Pros:

Low Costs, Big Potential: Online businesses often don't need fancy storefronts or tons of inventory, so you're saving a lot on overhead. You are utilizing the best kind of leverage like code, media and zero or low marginal cost of production, this can lead to major growth potential.
Worldwide Reach: Your business can reach people all over the globe. It's like having a shop that's open 24/7 to the whole world.
Call the Shots: Running an online business gives you tons of flexibility. You can work from anywhere, anytime, and scale up whenever you want.
Data at Your Fingertips: You've got access to all sorts of data and tools to see what's working and what's not. It's like having a crystal ball for your business decisions.

Cons:

Crowded Streets: The internet is like a bustling marketplace, and it can be tough to stand out among all the competition.
Security Concerns: Online businesses have to deal with scammers and copycats, which can be a real headache.
Tech Troubles: If your website crashes or there's a glitch in your system, it can really mess things up fast.
Riding the Wave: Online trends can change in the blink of an eye. You've gotta be ready to adapt or risk getting left behind.

💸 Riches in Niches

Under-Optimized Tattoo Content Site

Asking Price: $210,000

This site presents an excellent opportunity for anyone interested in the female tattoo niche. The seller has expressed limited interest in exploring new revenue streams within this niche.

The site enjoys diverse traffic sources from Pinterest and Google, with no additional monetization beyond Ads. This opens up significant potential for additional revenue streams.

Key Stats:

Site Age: 4 years old

Pageviews: 420K per month

Risks:

Competition
Potential impact from AI design

Opportunities:

Sell leads to tattoo parlors
Offer physical products like healing bundles
Transform into a directory site (similar to care.com)
Build an email list with lead magnets
Establish and grow an Instagram account
Sell leads for designers
Introduce a membership offering, similar to this competitor (https://www.tattoomenow.com/)

Questions for the Seller:

How has this site fared through Google updates over the years?
Is there an existing email list?
Would you consider a payment structure of 2/3 upfront with 1/3 spread over the next 12 months? (Just an idea for a deal that allows for flexibility and time for growth before full payment is due)

View this listing 👉️

♣️Deal Me In

Evergreen A ffiliate Site with High Potential

Asking Price: $259,080

The senior care niche is currently experiencing significant growth due to various macro-economic and demographic factors, offering high Average Order Value (AOV). This site generates revenue through affiliate sales and leads, utilizing a pay-per-call model.

Featuring 7 vendors across 3 verticals and direct affiliate relationships.