Many people dream of staying at home and building a business empire using only their kitchen table and a laptop. But with the number of online businesses going through the roof, it can be extremely 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 is taking shape before they know it. An online business that catered to people wanting to glitter bomb their enemies, for example, eventually sold for $85,000.
There are some more “traditional” businesses that are very easy to set up and maintain before it becomes time to sell the company. Consider these four online business types if you’re searching for your “a-ha!” moment:
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. The users normally pay monthly or yearly 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 could be something that you are offering full access to for a set fee, such as a collection of tutorial videos, eBooks, games etc.
Buyers love these kinds of businesses because they are metric-heavy, and provide a lot of opportunity for optimizations. If you throw in the fact that most SaaS businesses operate on recurring revenue models, then this makes SaaS businesses very desirable. After all, it is a dream of every entrepreneur to have run a fully-automated ATM of a business.
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 then try to 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. They then keep what they want and send back the rest.
Now, compare this to walking in a busy mall, after work or on weekends, fighting the crowds in stores. 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 world of e-commerce. Those are the three words that all potential buyers want to hear.
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 (including internationally), as well as take advantage of Amazon’s delivery infrastructure. The goods are stored in Amazon’s warehouses, are 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.
We’ve been seeing a surge in the trend of continuing education recently, so it’s easy to see why online education sites are so popular and in demand by buyers. 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 give full access to a course for a flat fee or a recurring monthly fee. What’s more, an online course is extremely flexible in the sense that a subscriber can learn in his or her spare time.
In addition, the material tends to be evergreen, only needing the occasional update. This puts the emphasis on marketing, tweaking and optimizing the experience for users, which is highly appealing to growth-oriented buyers.
All It Takes Is a Really Good 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 appealed to people’s sense of humor. That and 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 here are popular ones, they are not the only ones. If you can easily take yourself out of the business, show a potential buyer that 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.
BusinessCollective, launched in partnership with Citi, is a virtual mentorship program powered by North America’s most ambitious young thought leaders, entrepreneurs, executives and small business owners.