Yesterday I’ve talked to you about some due diligence that you need to do before purchasing a website business. Part 1 of this post can be found here. Today I want to talk to you in detail about other hidden costs associated with buying a website. You really need to understand the ins and outs of the business model of the website before making the purchase.
Last thing you want is to buy the website and then realize that you have no visitors coming to your site and that you are not making any sales. Well there could be hundreds of reason for this – obvious one is that the seller cancelled his paid advertisement account to drive traffic to your site; therefore no one is coming to your site.
What you need to understand is that success does not come for free and success is not easy to achieve. I am sorry to give you this bad news but you really need to understand this. If it is easy, then everyone will be successful and there wouldn’t be any failures. What I am getting at is that running a website will cost money and time. Time of all is the only scarcest commodity on the planet. All we got is 24 hours in a day and that’s all we got. So if you buy a website, you should expect to spend a lot of time building it further. No one will sell you a self sustaining website for couple of thousands dollars. If it is self sustainable, then it will be in the millions.
Here are few things you need to know before buying a website:
Hidden cost #1 – Your Time
How much time does it take to run the website on a daily basis to continue with the income projections projected by the seller? Some will claim that you can make millions within a short period of time; yes you can but it takes resources to get there. Like I said earlier, you only have 24 hours a day and you need to first figure out how much time you can commit to this website business. If the seller is honest, they will provide you with their honest assessment of how much time it will take to run the site.
Many people fail because they underestimate this particular point. Once they buy a website, they expect to become an instant millionaire but they are disappointed after a week or so because nothing substantial took place. Just like anything, you need to take a step at a time. If you have not ready my previous post on “how to start a startup”, you should consider reading that before you proceed further down this post.
Hidden Cost #2 – Website Promotion and Advertising
Well you need to let people know that your site exists so they can visit your site and purchase any product you are selling. In order to do that, you only have limited approaches. You can either build traffic by spending all of your time talking about your website on other websites, you can allow your site to naturally receive traffic from search engines or you can purchase advertisement on other websites. All of this cost time and money. The cheapest is the natural traffic that you receive from search engines; however, it takes upfront work on your part to get the content right along with the search engine optimization.
Your seller may have had a paid advertisement account from a third party to drive traffic to the site before he/she sold it to you. The seller may not share this information with you. You need to ask the seller if they have any paid advertisement campaign to drive traffic or if the traffic is natural.
Ask the seller to provide you with details of how he/she managed to drive traffic to the site. This sort of information will help you achieve the same results.
Hidden Cost #3 – Content
When you buy the site, it will come with full of great content. Some sites may contain duplicate copies of other sites content. You need to make sure of this with the seller. Copies are no good for search engines.
How are you planning to continue to provide good quality content for your visitors so you can retain your visitors? If the website for sale requires you to regularly update it with fresh contents (i.e. a blog), you should figure out how much it is going to cost you to come up with necessary contents. You may have to hire someone to write content if you don’t have the time to write them yourself. Sometime hiring a freelance writer may not cut it – so you will actually have to find a good writer to populate your site.
Updating your website on a regular basis is very important. Visitors to your site will always come back if they know that they can find good useful information from your site.
Hidden Cost #4 – Maintenance and Hosting
Ask the seller if the site requires any modification to the source code to keep it going. Some websites will require you to modify source code manually to add content or to add advertisement on your site. If you are not a programmer, then you will be paying a lot of money to a programmer to update your site on a regular basis. I still see a lot of website that are manually updated. A good website will all be automated through a central administrative control panel. If there isn’t a control panel, then most likely you will have to learn to program very soon.
Hosting can also be a problem. First you need to understand if the seller is recommending that you stay with the current hosting provider or if you are free to move it to another provider. Many websites for sale on eBay for example will sell you a website for dirt cheap but they want you to stay with the current hosting provider. Their business is really to sell hosting services.
If you choose to move the website to another host, you may be surprised with additional modules that may be required to run the website. So getting a cheap hosting service will be out of the question. You will have to pay extra money to have these modules installed or pay extra money monthly to get the support for those modules. Ask the seller to explain all necessary extra modules / special hosting needs for the website. It is very important that you understand the technical requirements to run the website.
Hidden Cost #5 – All Other…
There are many aspects to running a website that you need to be aware of before buying a website. However, I think through part one and part two of this post, I have covered most of the important elements to be aware of before buying a website.
Few other elements to keep in mind are costs that are associated with running the site itself – i.e. what is required to continue the services that your site is offering. Seller may have a paid subscription service on the site or any other services that require you to sign up with a third party website. This third party website may offer the services for free but in many cases, they will charge a monthly fee to offer the service to your visitors.
Then finally you need to be aware of the backend system that is powering the site. Ask the seller to explain to you how the site was designed. Is it using an open source platform, a freely available platform or was it manually coded. The hardest to manage would be the latter one – coded by the seller. In this case, you are in for a shock if the system fails after you buy the website because understanding the coding behind the website will take forever even for an experienced programmer. It will cost you a lot of money. Feel free to ask the seller to provide you with technical support for the next 12 to 18 months as gratitude. This way you can take the time to understand the system over a year or so.
I truly hope that you found my post useful. I hope you will take your time to do the necessary due diligence before purchasing a website. Please share with me some of your experiences so I can follow up with another post in the future.
Like I said in my previous post, all of this information is provided to you so you can make an informed decision. It is not meant to discourage you from buying a website. I believe if you can find the right deal and get a head start, then go for it.