7 Reasons To Buy Micro-Businesses And Digital Real Estate Assets Every Month As a Small Business Owner

There is no end of opportunity for growth if you begin to look at the micro acquisitions

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There's now a way for small business owners (like me) to actually buy micro-businesses as well as digital real estate and it's easier than ever before.

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For many, including myself at my SEO Agency Pearl Lemon, this concept didn't even exist two years ago.

And now I'm making purchases several times per month!

Let me elaborate in more detail by beginning with some definitions, because we're not talking about any kind of business. Or any kind of real estate for that matter.

More specifically I want to inform you about micro-businesses and digital real estate and the value they can hold for entrepreneurs.

So, let's begin with some broad definitions for both:

  1. Micro-businesses are companies that generate less than $1 million in turnover annually. (This can go all the way down to $0 in annual turnover in some cases)
  2. Meanwhile, domain names, websites, and blogs are the most popular forms of digital real estate today.

A piece of digital real estate is any digital asset that may be bought or sold.

So now let's get into this industry as a whole and why you should be running towards it!

Reason #1: The Supply Of Digital Assets For Sale Currently Exceed Demand

So much like in the world of physical real estate - when the supply exceeds the demand - there is an overall lowering of prices to make any individual item of sale more competitive.

Generally, across the market you'll see a drop in prices because the supply exceeds the demand, i.e. if there are 10 houses selling for £100,000 each but only 2 buyers are interested, the home-owners will compete with themselves to "win' the buyers - thus leading to a net decrease of all the property prices.

This effectively makes the purchasing of any form of digital property - a buyer's market.

Broadly, the way to look at it is that the exchange of web-based goods has only been around for a few decades at best.

Anything physical has been selling for hundreds of years or more.

Furthermore - it is only a specific subset of those who are online that can leverage the purchase of an online business.

You need to be digitally savvy to be able to get an uptick or boost from such an online purchase, i.e., you need to have the technical and marketing skills to increase the value of the business you've bought.

Reason #2: A Great Way to Diversify your Income Streams and Investment Portfolio

If you're hedged into a market like the cryptocurrency market or the events business, and then something like a pandemic comes along, this could both positively and negatively impact your niche.

To ensure you're protected against this, diversification in a number of ways through digital acquisitions will also be advantageous to you.

This can apply at an industry level, technology level or geographical level

So, if you rely upon the WordPress platform and then WordPress closed its open source framework and you're a plugin developer - you'd be out of business.

Therefore, working across multiple platforms would be a sensible approach.

Equally, if you sell live event tickets, events websites, and an events CMS, then moving into a different niche as a backup would be sensible.

Through the purchase of digital businesses all of this is very quickly possible, if you're aware of it.

Reason #3: Access the Hidden Value that Comes with Digital Real Estate

One of the biggest advantages of buying an existing business is that they've already gone through a plethora of things that you no longer need to worry about.

The branding and design of the site (even if terrible in your opinion) have been taken care of. The product market fit has been taken care of. And alongside this, you also don't have to worry about all the iterative, MVP, lean startup type work that occurs when you build something.

ALL this value is baked into the product upon the point of purchase - but none of it is realized in the sales price.

This is (at the moment) an intangible and solvent part of the sale price, so is basically something you "get for free'

Reason #4: Avoiding all the Startup Costs

Development costs, even for something seemingly simple such as a Squarespace or WordPress website install, can run into the tens of thousands of £££ (sometimes more).

So, buying a web application allows you to avoid unexpected costs such as overspending on human capital - most often caused by hiring for skills outside of your core area of expertise - something most business owners tend to do.

There can be challenges in the industry, determining the market fit, as well as the process of finding the right team. All these things cost time and money, but if you were to buy your business you could avoid the initial costs and risks that come along with it.

Reason #5: It's Easier to Grow an Existing Business Rather than Create a New One

Overall building a business takes a lot more effort to make it successful than buying an already successful (or soon to be successful) business.

This limits risks such as boredom, founder burnout, and the innumerable variables that come with building a business.

Furthermore, you can continue to build the business more quickly and get a faster return on your investment than relying upon starting from scratch.

Reason #6: Adding New Revenue Lines to Your Newly Acquired Business

If you purchase a business outright - of whatever size - and the business has an existing audience, there's huge potential in identifying new revenue streams for the company.

This can range from selling advertising space on the website to offering paid digital downloads, gated pay for content, and much more.

The beauty of having an audience of potential buyers is that you can identify products that are an excellent match for those buyers.

You can even go so far as to ask your buyers themselves: "what else would you like to buy from me?'

Reason #7: Grow your Main Business through a Digital Acquisition

One of the ways in which my company Pearl Lemon is growing is by tactically purchasing domains with links pointing back to the business website.

Many websites go defunct/owners get bored/run out of resources to continue growing…and well things just change (it's also an entire area of business within its own right - think domain flipping!).

This - if you have a related website - presents an ideal opportunity for you to buy a domain, point the link to your existing website and see the traffic increase as a result. Ideally, this equals more buyers for you!

Final Thoughts

There is no end of opportunity for growth if you begin to look at the micro acquisitions market and with businesses and domains and websites all selling from as little as $250 going up into 6-figures there is something for every budget. And if you allocate some funds and a process to this, it's an incredible way to grow your overall investment portfolio.

This is why we at Pearl Lemon buy micro-businesses and digital assets 3x per month and advise any business owner to look into this growing market. Don't miss valuable investment opportunities and if this is new territory for you, me and my team at Pearl Lemon are more than happy to offer our expert support.