Once you’ve found your business, you need to make sure the financial metrics in the listing are legit, and the opportunity is not a scam (scams are plentiful on Flippa if looking for cheap businesses under $5,000, so be careful). The following is a brief guide on how to evaluate a business on Flippa. If possible, seek advice from professionals such as accountants, lawyers, and regulatory professionals. You can contact me for any questions during this process.

• Review Financial Metrics: Look at the revenue and profit figures provided by the seller. Pay attention to factors such as monthly revenue, profit margins, and growth trends over time. Ensure that the financial data provided is accurate and can be verified by asking to see the sellers bank statements. For stores with lots of traffic, confirm Ad Spend data is accurate by asking for access to accounts. It’s just as important to confirm that expenses are accurately recorded as revenue.
• Assess Traffic Sources and Quality: Examine the sources of traffic to the website or online business by getting access to Google Analytics or the Shopify Dashboard from the seller. Determine whether the traffic is organic, paid, or from other sources like social media or referrals. Evaluate the quality of the traffic by looking at metrics such as bounce rate, time on site, and conversion rates. Here is the best place to find opportunities to improve the business and increase the revenue post acquisition.
• Evaluate the Business Model: Determine the sustainability and scalability of the business model. Consider factors such as product or service uniqueness, competitive advantage, barriers to entry, and potential for expansion into new markets or product lines. You want to purchase a business that has a wide enough niche to continue growth but is not over saturated with competition.
• Assess Operational Requirements: Evaluate the time, effort, and capital required to operate the business. Consider factors such as inventory management, fulfillment processes, customer support, and marketing strategies. Determine whether the business can be easily managed by a single individual or if it requires a team.
• Check for Legal and Compliance Issues: Ensure that the business is compliant with relevant laws and regulations, especially regarding intellectual property rights, data protection, and consumer rights. Verify that all necessary licenses and permits are in place. Ensure the taxes are paid and all orders that have been paid for have been shipped. Work with the seller to determine who will handle returns during the transfer of ownership.
• Review Seller Reputation and Feedback: Take into account the reputation and track record of the seller on Flippa. Review feedback from previous buyers and sellers to assess their credibility and reliability. I always recommend scheduling a call with a seller before placing an offer.