Forums: Discussions for entrepreneurs and small business.

You need an attorney when making any kind to purchase or sales of a business, and accountant would be helpful also.

Yes you should always consult a lawyer before purchasing another business. Consulting with your accountant is recommended as well. Scammers would be much more hesitant to pursue a deal if they know a lawyer is handling the purchase.

Three key things you should consider when looking for a worthwhile web site to purchase: Revenues, Profits and Cash Flows.

You`ll want to know what the revenues are in order to understand what kind of sales the site is bringing in. Are there opportunities for revenue growth? Is the revenue stable or seasonal?

Profits are important because you will get a feel for the types of expenses associated with the website, the markup or margin that the site is enjoying as well as opportunities for increasing your margin.

Finally cash is important because there are certain non cash expenses that erode profits in the interest of reducing tax liability (ie: depreciation expense). Cash flows will tell you exactly what CASH you will be seeing flow in and out of your business. Profits can only tell you so much, cash will tell you what you really have to work with.

Your accountant will likely look at all of these things, but these are things you should get used to looking at, since you wouldn`t want to contact your accountant every time you think there might be an opportunity. Doing your own due diligence will allow you to be more educated in your decision making and save you money.


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the main thing is proof of income and your own inclination of continuing profitability.  how do you feel about the business contunuing to make profits and grow. take your time with due diligence (reviewing financials, tax returns, domain ownership, customer database, sales patterns/concentrations, any contracts with suppliers/vendors, etc)

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Another way to do a quick check on a company is to check it out on the nasdaq or NYSE. I`ve been researching alot of internet businesses myself, and I was interested in Herbalife. I checked out the stock rating and disclosure page, along with critics comments, and found fairly good info that way. In particular, Cramer (the booyah guy) said it was actually a decent company with an excellent product and that the stock really should be trading higher than it is. Former Disney CEO now in charge of the company. Hope that helps a little, I`m new here too.

You can find some established website for sell at sitepoint.com


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Definitely get the help from a professional lawyer.

You can ask for preliminary details ahead of time - ask about traffic, number of unique visitors, size of mailing list, average revenue, etc. The owner should be able to provide you with some basic information.



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You should find out the P/E Ratio for similar websites and multiply the profits by that figure. However, I can`t see how you will make money doing this. On top of the price you will pay, legal and accounting costs need to be factored in.

You should try starting your own site and invest the cash you are prepared to pay for the existing site. For example you can "pay" yourself for working on your new site while using PPC advertising to supplement organic traffic.