Monthly Archives: May 2011

Start a new business or buy an existing one?

Ok so you’ve decided to work for yourself but does that mean you have to set up your new business from scratch? Actually, no…

At any one time there are countless existing businesses for sale in all manner of industries and if you have the money, there is no reason why you shouldn’t consider this option if running your own business appeals.

There are many reasons why a business might be for sale – the owners may wish to retire, they may be looking at starting a new venture, they may want to release cash or they may just be fed up of the business having run it for many years. Equally, the business could be in difficulties and the owners are just trying to offload it onto someone else (although businesses in this situation can sometimes offer better potential returns if you have the ability to turn things around).

The cost of a business will be based on a number of factors including the history of the business, its current performance in terms of turnover and profit, future performance and potential for growth, the reason for the sale and so on. A very basic way of valuing a business would be to work on a multiplier of the previous years profits (for example, Internet businesses are often valued at 2.5 to 3 times annual profit. Thus an online business generating profits of £50k a year may be worth £150k if sold. This is a basic and crude way of valuing but it gives you an idea.

Many people think that buying a business is expensive and to be fair, if you are looking for one with huge profits, it will be. However, there are many smaller businesses for sale (particularly in the Internet industry) which can be snapped up for thousands or even hundreds of pounds. I have personally sold website businesses for just a few hundred pounds in the past.

Buying an established business is a great way to leap-frog many of the hurdles you may have with a complete start up. You will have an existing customer base, an existing product or service and possibly a database of previous customers to market to. You may also have an existing brand and in the case of an online business, existing search engine traffic etc. Injecting new ideas into a business via a change of ownership can also be good for the customers. I have had businesses in the past which I have run for many years and have simply got bored of them. This isn’t good for me and it wasn’t good for my customers. Moving them onto someone else with new enthusiasm was good all round and if you can look at a business and see an opportunity to increase income by adding to or altering their services etc this is an excellent way of taking the business to a new level.

Going forward my own personal preference would be to purchase a good quality, established business rather than to set one up from scratch. If you are thinking along the same lines, have a look at the sites below as they may help in your search and when looking at businesses for sale:

Online businesses for sale: Flippa.com
All manner of businesses for sale worldwide: Businessesforsale.com

Google Adsense Revisited…

I can’t believe it is nearly a year since I last updated this blog! Where does the time go? I was only reminded because an old subscriber of mine dropped me an email to see if I was still working online! The answer to this question is yes, most definitely however these days the majority of my online businesses have absolutely nothing to do with Internet marketing or showing other people how to earn a living online hence the fact that this site has become a little neglected.

However I was prompted to add this quick post following the above email and also because of a promotional card I received through the post from those lovely people over at Google. The card was promoting Google Adsense (which I have been using since it was first launched) and was customized around one of my sites to inform me that I wasn’t using the maximum number of Adsense advertising blocks on some pages. This was true, I wasn’t! To be honest, the site in question is one which I haven’t done a thing with for years and just sits there kicking in a bit of Adsense revenue every month but it prompted me to take another look at it.

I like to think I know a bit about Adsense and over the years, it has earned me some serious dosh so I wasn’t overly convinced that adding another Adsense block would make a lot of difference. However, the card from Google also suggested that I set the site up to accept both text and image advertising blocks (something which I do as a matter of course these days). Because the site had had Adsense added so long ago, the option to display images and text wasn’t one which I had opted for thus only text ads were being displayed. There are a number of advantages of displaying both, not least the fact that it gives a bit more variety. Also people do tend to filter out Google text advertising these days as they become more used to it. I have also found that image ads can often pay a higher clickthrough rate but that may just be on the keywords I am targeting so you may have different results.

Anyway, long story short, I spent half an hour adding and updating the Adsense code on three of my ‘old’ websites two days ago and so far the results are staggering. The sites were previously achieving good clickthrough rates of just over 4% but after my amendments this rate has increased to over 17% for the past two days! Now two days is clearly not a very long period of time and it will be interesting to see how this rate adjusts over the next month or so but as an initial result, this is excellent.

I have Google to thank for dropping me the promotional card (of course they will be earning more as a result of my changes too) and if you have Adsense blocks on a website which you haven’t looked at for ages, I urge you to take five minutes to review them today and make sure you are using Adsense to its full potential otherwise you may well be leaving money on the table just as I was.