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If you want to run an online business, you have two basic options: create a new business from scratch or buy an existing one.
Of course, there are pros and cons to each approach. This article covers the specific advantages of building and buying so you can decide which approach is best for you.
- The biggest factor is time vs. money. Starting from scratch is usually ideal if you have more time than money. Buying an existing website or business is usually ideal if you have more money than time.
- You’re risk tolerance is also an important factor. Buying an existing business involves more risk because of the upfront cost.
- Investors typically prefer to buy an existing business because you can start generating cash flow immediately.
- There’s no guarantee of success with either approach. It’s possible you’ll dedicate time and money without getting the results you’re after.
The Build vs. Buy Dilemma
Running a successful online business is a dream for many people, and there’s more than one way to achieve success. Of course, starting a website or business from scratch usually comes to mind. But buying an existing business can offer several advantages that you don’t get when building from the ground up.
I’ve been running online businesses since 2007, and most of my experience involves websites and businesses that I started from scratch. However, I’ve also bought a few sites in recent years, so I’ve seen the advantages of both firsthand.
Although both are viable options, it’s an important decision. You’ll need to invest a lot of time or money (or both) to succeed, and no one wants to waste their time or money.
With that in mind, let’s look at the advantages of each approach.
The Advantages of Building a New Website or Business
If you decide to start a new website or online business from scratch, you’ll enjoy these benefits and advantages.
1. Freedom to Start the Business of Your Choice
If you decide to build the business yourself, you can pursue any type of website or online business you choose. This is an advantage if you have a specific idea in mind.
While you can buy all sorts of websites and businesses, you can only buy what other business owners are willing to sell. The selection is limited. You may be unable to find a business owner who wants to sell exactly what you want to buy if you have something very specific in mind.
For this reason, creative visionaries often prefer to start from scratch rather than buy an existing business.
2. Ability to Start at Any Time
Creating a website or business from scratch allows you to dive in and get started when the time is right. You don’t have to wait for the right buying opportunity.
Of course, there are always websites and businesses for sale, but finding the right one that you want to buy can take time. It’s possible that you’ll spend months scouring marketplaces like Flippa, Empire Flippers, or Motion Invest, looking for just the right opportunity.
And then, once you’ve found the site you want to buy, you’ll need to negotiate the price and terms, complete due diligence, and go through the transfer process. Some sales are quick, but others take time.
3. Lower Financial Investment
Building a website or business from scratch costs less than buying an existing site. There’s no purchase price, and most sites and online businesses can be started with relatively low startup costs.
Of course, the financial investment needed to buy an existing site varies depending on what you buy. It’s possible to invest only a small amount, but established, profitable sites usually come at a significant cost.
4. Reduced Financial Risk
Starting from scratch is typically less risky than buying an existing business because of the lower upfront investment. Instead, you can start building your business slowly with minimal costs. You can do most or all of the work yourself until the site starts making money, so you can avoid taking financial risks.
Instead of risking your money, starting a site from scratch and doing the work yourself involves a risk of losing your time. If you dedicate a lot of time and effort to the site and it doesn’t make money, you may have wasted your time. However, the financial risk is a bigger deal for many people.
5. Learning and Skill Development
Building a website or business from scratch gives you the opportunity to learn and develop new skills. You’ll become better at internet marketing, content creation, SEO, project management, and more.
Of course, you can build similar skills by buying an existing website, but it’s not quite the same as creating a new site from scratch. Starting from scratch is more challenging, and if you succeed, you’ll have some valuable experience and skills.
The things you learn by building a successful online business from scratch can be used with other projects in the future. This includes starting other sites from scratch, buying and improving existing sites, or working for others (either as a freelancer or employee).
6. No Baggage
When you buy an existing website or business, it comes with its own set of problems and issues. The site may have a poor reputation, outdated content, a less-than-ideal technical setup, or many other potential issues that complicate things.
You may find that you have to spend a lot of time or money dealing with these issues and getting to where you want to be.
By starting from scratch, you don’t inherit any of these problems. You can build the site and business that you want from day one. The process still won’t be easy, but you can avoid all the problems associated with buying an existing site or business.
7. Tech Stack Control
When creating a website or business from scratch, you can choose the tech stack that works best for your needs. This includes selecting the right web hosting provider, content management system (CMS), plugins, email marketing platform, and more. You don’t have to work with what someone else has chosen.
If you buy an existing site or business, you may be stuck working with an existing tech stack that doesn’t perfectly meet your needs. You may be able to make improvements, but some things are more difficult to change than others.
The Advantages of Buying an Established Website or Business
Now, let’s look at some convincing reasons why you might want to buy an existing site or business rather than starting from scratch.
1. Immediate Cash Flow
One of the biggest advantages of buying an established website or business is that you can start making money immediately. If you buy a profitable site, you won’t have to wait months or years for it to start earning income. You get immediate cash flow.
Of course, you’ll need to make your initial investment back before you turn a profit, but skipping the early days of the grind can be a big advantage.
Investors who buy existing sites must find ways to increase revenue rather than find a way to start generating revenue. Improving an existing site is often easier than achieving success from scratch.
Best for Small Sites
Best for Medium-Sized Sites
Best for Well-Established Sites
2. Minimize Your Time Investment
When you buy an existing website or business, you don’t have to spend weeks or months setting up the basic foundations. All of that has been done for you already. This means you can jump right into the things that will help grow your site or business faster.
Building and growing a successful online business from scratch requires a significant time investment. Most successful websites made nothing, or very little, for the first 6-12 months, and maybe more.
By buying an existing site, you can skip this stage entirely.
3. Established Audience and Traffic
A well-established site comes with an existing audience and traffic. You won’t have to spend months or years building an audience from scratch.
Most entrepreneurs and website owners find getting off the ground the hardest part. Generally, growing existing traffic is easier than building traffic from nothing.
4. Established Brand and Reputation
Many existing sites and business have their own established brand and reputation. People already know the business and what it does.
You don’t have to start from scratch when building a positive reputation (assuming the business you buy has a positive reputation and not a negative one).
5. Existing Content
The existing content on a blog or niche website may be extremely valuable in and of itself. If the site already has 500 articles and it would cost you $100 per article to create the content, that’s $50,000 of value just from the existing content.
Of course, not all sites have the same quality of content, so it’s important to thoroughly check the content before deciding how much you’re willing to pay.
Even if the content needs some work, there may be advantages to having existing content. Updating and improving existing content often produces faster results (in terms of search rankings and traffic) than creating new content.
NeuronWriter is my go-to tool for optimizing content for Google. You can use it to write new content or update existing content. NeuronWriter uses natural language processing (NLP) to help you plan, write, and optimize content.
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6. SEO and Backlink Advantages
An existing, established website will typically come with an SEO advantage. It takes a while for Google to trust a new site, which is one of the reasons why new sites often take several months before they begin making money.
The existing site may also have backlinks from other sites, which makes it easier to rank content in search engines like Google. Link building requires significant time or money, so buying a website that already has strong links is a major advantage.
Again, it’s important to thoroughly check the SEO and backlink profile of an existing website before buying. However, if the site has strong SEO and many quality backlinks, that’s a huge plus.
7. Access to Customer Data
When you buy an established website or business, you also get access to customer data or an email list. If you have relevant existing products and services, you can promote them to the customers or subscribers of the site you bought.
Evaluating Your Situation: Factors to Consider
Now that we’ve looked at the advantages of each approach, let’s talk about some factors you need to consider when deciding which approach is right for you.
Your Skills and Experience
The first thing to consider is your own skills and experience. Are your skills better suited for starting and growing a new site from scratch or for managing and improving an existing business?
From my experience and observations of other business owners that I know, people who tend to be more creative and passionate typically do better with starting sites from scratch.
Most of the people who do really well with buying existing businesses have experience managing teams or running another type of business. They may not have the same creative flair, but they have the business acumen to grow and increase the value of an existing site.
Your Budget and Financial Situation
The second factor you need to consider is your budget and financial situation. If you don’t have the money to buy a business outright, starting from scratch may be your only option.
On the other hand, if you have the capital to invest in an established website or business, your options are wide open.
While there are some options for financing the purchase of a website or online business, they’re often limited. Some online businesses are eligible for SBA loans, but others are not (this applies to all businesses, not just online businesses). Most website sales for less than $1 million are done in cash or with seller financing.
Empire Flippers is a full-service brokerage and one of the leading marketplaces for buying and selling websites and online businesses.
- More than $450 million of online businesses sold
- Large marketplace with many active listings
- Huge audience of buyers and investors
Do you want a business that will be profitable ASAP, or are you able and willing to wait for a year or so?
Creating a new website or business from scratch can take time, especially if you’re starting out with no budget. Many successful businesses made nothing or very little for the first year or more.
Buying an existing business gives you immediate access to revenue and potentially faster growth than you would get by creating something from nothing.
Your Level of Risk Tolerance
One of the biggest differences between buying an existing business and starting from scratch is the level of risk involved.
Buying an existing business involves more financial risk because of the upfront cost of acquiring the asset. If the site’s profitability declines, you may lose some or all of your investment.
If you’re not interested in taking a financial risk, starting a site from scratch is probably the better approach. But if you are willing to take a calculated risk, buying an existing site may be ideal for you.
The Websites and Businesses Available for Purchase
Finally, it’s important to consider the actual websites and businesses available for purchase. You can only buy what others are willing to sell. Finding the right website or business usually isn’t easy, so there’s no guarantee that you’ll find what you’re looking for.
If you can’t find a business you want to buy, you can wait until something better comes along, broaden your search, or just start something from scratch instead.
Many buyers use marketplaces, brokers, or Facebook groups to find people looking to sell. But you can also take a proactive approach and reach out to website owners to see if they’re interested in selling. This takes more time and effort but may allow you to get the site you want.
So, should you buy an existing site or create one from scratch? That depends on your situation, risk tolerance, and timeline.
If you want to make money quickly and minimize the time investment, buying an established website or business could be a great option. However, if you’re more interested in developing skills and taking less financial risk, starting a website from scratch may be the better approach.
Really, it comes down to time and money. Do you have more time to devote to building a business from scratch or more money to buy an existing site that’s already profitable?
If you’re interested in looking at websites and businesses for sale, be sure to see my list of website marketplaces, brokers, and Facebook groups.