Many people dream of building a business empire from a laptop sitting at their kitchen table. However, with the growing number of online businesses, it can be hard — and daunting — to figure out how to make this work.
For the past nine years, I’ve helped over 600 entrepreneurs sell their Internet-based businesses. In that time, I’ve seen incredibly creative and inspiring ideas.
Finding a unique niche can feel almost impossible, but some people still manage to get very creative. A single incident can spark an “a-ha!” moment in their head, and suddenly the idea takes shape. For example, an online business that catered to people who want to glitter bomb their enemies eventually sold for $85,000.
There are some more “traditional” businesses that are very easy to set up and maintain before it’s time to sell the company. Consider four online business types if you’re searching for your “a-ha!” moment.
1. SaaS businesses
SaaS (Software as a Service) businesses are currently one of the hottest business niches. So what is SaaS exactly? It’s a website that sits in the cloud and offers a service to an individual or company. Users pay monthly or annual subscription rates for the features they need.
If you think really big, then cloud providers such as Dropbox or Google Apps could be considered SaaS, but at a much more basic level, a good example of a SaaS is full access to a collection of tutorial videos, eBooks, games etc. for a set fee.
Buyers love these kinds of businesses because they are metric-heavy, and provide a lot of opportunity for optimization. If you throw in the fact that most SaaS businesses operate on recurring revenue models, then this makes SaaS businesses very desirable.
2. Product of the month clubs
The past several years have seen a proliferation of “product of the month” clubs. Sites such as TrunkClub or Bombfell give users the benefits of convenience and access to products they might not otherwise try.
These types of sites identify a need for something that is normally quite inconvenient or stressful for the customer. They remove that inconvenience or stress through their services. TrunkClub or Bombfell, for example, send clothes by mail to subscribers, who try everything on in the comfort of their own homes, keep what they want and return the rest.
Now, compare this to walking into a busy mall, after work or on weekends and fighting the crowds. It’s easy to see why these sorts of convenience-oriented sites have so much appeal.
And it’s not just clothing. People can pay a little bit more for anything they need on a daily basis, in exchange for the convenience of having it shipped directly to their door. Some sites even offer free delivery and returns, so you don’t even have to step outside to go to the post office.
From a business acquisition viewpoint, “product of the month” clubs offer strong recurring revenues in the e-commerce world. Those are three words that all potential buyers want to hear.
3. Amazon brands
Amazon’s power as a marketplace is indisputable. It is king when it comes to online selling, and many a rival has folded under Amazon’s thunder.
Amazon stores that own their own brands can pay Amazon.com to have their products listed on the site and take advantage of Amazon’s delivery infrastructure. The goods are stored in Amazon’s warehouses, eligible for Prime delivery, and Amazon takes care of packing, delivery, returns and customer service. All for a fee, of course.
“Fulfilled by Amazon” leverages the incredible power of the Amazon marketplace, while at the same time ensuring that the online business in question has nothing more to do than collect orders and pass them on to Amazon.
4. Online education
We’ve seen a surge in continuing education recently, so it’s easy to see why online education sites are so popular. This is another example of recurring revenue, which is every entrepreneur’s dream.
The cost of “traditional” offline education can be prohibitively high, reaching into the multiple tens of thousands of dollars. An online course, on the other hand, can be extremely cheap if you offer full access to a course for a flat fee or a recurring monthly fee. What’s more, online courses are extremely flexible in the sense that a subscriber can learn in his or her spare time.
In addition, online course material tends to be evergreen, only requiring an occasional update. This puts the emphasis on marketing, tweaking and optimizing the experience for users, which is highly appealing to growth-oriented buyers.
Sell your online business, start with a great idea
Of course, you can make any business appealing to buyers with the right marketing. Take the glitter bomb idea, for example: something so simple, yet it appeals to people’s sense of humor. This idea coupled with clever marketing led to mass media coverage, which in turn led to an $85,000 payday for the founder. And all for what? Putting glitter in a box and shipping it off. Talk about simple.
Although the four business models listed are popular, they are not the only ones. If you can easily take yourself out of the business, show a potential buyer there is lots of growth still to be had and the finances look good, then you can make many other entrepreneurial ideas scalable — and sellable as well.
This article has been edited.
Mark Daoust is the founder and CEO of Quiet Light Brokerage, an internet business brokerage firm advising entreprenuers on the exit of their e-commerce, SaaS, Amazon, and other web based businesses. Mark is also the author of the recently published Ultimate Guide to Website Value.