One of the most common questions that I get from eager entrepreneurs is “How do you evaluate a web property and its traffic sources?”

This is a vital part to success when buying web properties on a marketplace like Flippa and it’s really important to follow a few basic guidelines. From my experience, identifying SEO reporting tools you trust like MOZ and SEMrush are fundamental to finding quality web properties. 

Kick Starting Search Engine Optimization (SEO)

When you start doing research on buying websites and online businesses, you most definitely need to learn about the basic concepts around SEO.

Knowing how no-follow links, follow links, and backlinks work to build authority for your website are extremely important. Being able to identify a site that has had proper SEO performed on it is something all expert investors will tell you is a key foundation. Fortunately, Flippa recently partnered with SEMrush, directly integrating their analytics reporting within their platform to provide buyers with detailed SEO reports. 

Being able to identify a site that has had proper SEO performed on it is something all expert investors will tell you is a key foundation. – @stvmcg Click To Tweet

Outside of buying an SEO report, the fastest way to identify if SEO has been performed on a website is to ask the seller. Many times, sellers will share that they’ve done SEO for a business in the seller notes but I always ask exactly what has been done. For content businesses, this is paramount. I’ve personally heard horror stories about investors buying sites with zero backlinks and traffic. 

Once you have acquired a website that has some basic SEO and organic keyword rankings it’s important to share content about the business consistently on social media. The primary kickstart that will help you is to automate content sharing on social with Buffer or other services to begin driving traffic.

I always recommend, no matter what stage the business is in, to have a steady stream of content going out to social media to grow. Not sharing your businesses content with the largest communities in human history on social media platforms isn’t a wise choice. You can definitely “save” businesses through this automated social media sharing strategy if there is already a somewhat developed SEO profile. 

What To Look For FIRST

I always find it helpful knowing that it is possible to revive a business from lackluster SEO strategies in the past. With that said, now that we’ve gone over how to kickstart a business’s SEO, it’s important to reverse engineer what to look for when buying a business to avoid the need to rely heavily on that.

As a rule of thumb, if an online business does not have 60% organic traffic every month, I will skip on the deal. – @stvmcg Click To Tweet

As a rule of thumb, if an online business does not have 60% organic traffic every month, I will skip on the deal. After buying 5+ small online businesses in 2016-17 and trying to develop an SEO profile from scratch I learned quickly that 60% was the magic number for de-risking an investment. If you have 60% organic traffic coming from Google, the business is collecting enough data to sustain itself even if multiple new or old revenue streams fail. 

These are five ways that 60% organic traffic can be leveraged outside of your core business’s revenue streams:

  1. Training your Facebook Pixel for retargeting and providing pixel data to advertisers

  2. Selling ad placements to advertisers on your homepage on monthly plans 

  3. Collect emails with timed signup popups to upsell via email marketing

  4. Collect opt-ins for push notifications from the visitor’s web browser to upsell

  5. Social proof plugins on your homepage convert a higher percentage of organic traffic

Knowing there is a base of consistent traffic will help you as a starting point in your diligence. Normally online businesses that have over 50% organic traffic sell extremely quickly because buyers understand there are dozens of ways to monetize a business growing organically. Worst case scenario, buyers know they can 301 direct a dormant website and maximize the organic traffic on a different relevant website. I don’t recommend doing that personally given the potential backlash from Google, but I’ve met many entrepreneurs that have acquired many smaller content sites to 301 redirected them to their main business increasing their sales through organic traffic. 

Once you’ve identified a web property that has good organic traffic it’s important to look at the user base.

These are some basic questions to answer:

  1. How many registered users does the business have?

  2. How many times have all the users been contacted?

  3. What information has been collected from the users?

  4. What other businesses would be interested in advertising to this user base?

  5. What other businesses of a similar size would be a good distribution partner?

  6. Where did the users come from?

  7. How long have the users been using the product or service?

  8. Why are the users using the product or service?

In my experience, sending Google Form surveys to the user base within the first few weeks of acquiring an online business is best. Getting honest and constructive feedback from active users is key to scaling the business. The faster you open the line of communication with the user base the easier developing a roadmap will be.

Getting honest and constructive feedback from active users is key to scaling the business. The faster you open the line of communication with the user base the easier developing a roadmap will be. – @stvmcg Click To Tweet

Secret Trick: Standard Operating Procedure 

When you’ve looked at an SEO overview or report from SEMrush, you’ve identified the traffic sources for the majority of users or customers, it’s really important to ask sellers for an SOP (standard operating procedure). This document will allow you to gauge the time investment as well as indirectly where the most valuable traffic or revenue is coming from. After a quick glance at an SOP you will be able to find where the business is lacking and how it can be improved. If you can overlap the traffic sources with where the day to day bandwidth is being spent from the sellers’ SOP, you will be able to find some room for improvement.

For example – no time is being spent on upselling current customers on additional product offerings to generate more revenue.

I highly recommend creating an SOP for a business if you plan on selling it in the future. This basic document will give buyers a brief overview of the day to day tasks required to onboard new users, communicate with current users, grow the business, etc.

If the seller of the business you are interested in doesn’t have an SOP, request that they take a few hours to make one. It will not only help you out, but it will help the seller long-term.  

Conclusion

Overall, its important to know you can fix a web property with SEO tricks, but you still need to look for organic traffic first before buying an online business. Learning more about where sellers time is spent through the SOP and from a user base survey will give you a solid picture of where the business can be improved. These are all powerful negotiating points as well.

Steve McGarry

Steve McGarry

Steve McGarry is an entrepreneur, content creator, and investor based in sunny Tampa, Florida. In 2015, while living in San Francisco, Steve sold his first fintech startup LendLayer to Max Levchin’s (founder of PayPal) consumer finance company Affirm. In the last 5 years, Steve has both built an online community that reaches 1.4 million people every month on social media and a portfolio of over a dozen web properties. Currently, he’s the co-founder of a next-generation fintech startup called GrowYourBase while managing his portfolio of online businesses.

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