Strong Declining Businesses

Ramon Van Meer shares his approach to evaluating and purchasing online businesses, emphasizing thorough due diligence and understanding value beyond current performance. He believes buying existing businesses is preferable to building from scratch, especially for those skilled at scaling rather than starting from zero.

Key Assessment Points:

• Product Research:

  • Validate if product solves real problems or meets market needs
  • Research market size and search volume using Google Trends
  • Analyze social media presence and community engagement
  • Study Amazon performance using tools like Helium 10

• Business Performance:

  • Willing to consider flat or declining businesses if fundamentally sound
  • Evaluate traffic channel diversity to reduce risk
  • Analyze revenue and profit margins
  • Calculate potential ROI on marketing spend

• Asset Evaluation:

  • Look for valuable intellectual property (trademarks, patents)
  • Consider email and SMS subscriber lists
  • Value social media following
  • Assess brand strength

• Financial Structure:

  • Use SBA loans (up to 90% financing)
  • Negotiate seller financing (typically 60-80% cash at closing)
  • Structure remaining payment as seller's note or earn-out
  • Interest rates typically 5-7% for SBA loans

• Risk Mitigation:

  • Use established brokers like Quiet Light instead of open marketplaces
  • Employ due diligence companies like Centurica
  • Verify traffic sources and revenue claims
  • Get professional valuation assessment

The approach emphasizes finding businesses with untapped potential, similar to real estate investing - looking for "crappy houses in good neighborhoods" that can be improved through better execution and marketing.