What Are the Best Online Businesses That Generate Cash Flow?
Running a business online certainly sounds appealing. After all, you can work in your pajamas and anywhere in the world.
Setting up an online business takes a good bit of work, but once your business is established, it can be a great way to generate income. And if you’re thinking about selling your business after a few years, it can be a great way to turn a profit. Here are a few online businesses that are ideal for generating cash flow.
E-Commerce Businesses
E-commerce businesses involve buying and selling online. Amazon is a great example: it obtains or manufactures some of its own items and sells them. It also allows other sellers to use the platform and can have the advantage of a solid customer base ready to buy. If you have a product that people want to buy and you have a solid ad budget, you can get your business in front of customers.
Depending on the volume of goods you sell, e-commerce businesses can involve more expenses than other online businesses. For instance, you may need warehouse space to store inventory, and you also may need to hire employees to package and ship items. A solid fulfillment system is required to be successful to realize growth.
Software as a Service (SaaS)
SaaS companies are seemingly everywhere. There’s a type of software for everything from streaming movies to doing your taxes! And if you’ve created useful software, you can charge users a monthly subscription fee and bring in revenue.
If you’re starting a company with the eventual goal of selling your business, SaaS is a good way to go. These businesses are easy to scale, and they generally have very low overhead costs after the initial investment, so they’re attractive to buyers.
A software-as-a-service business has great potential for a high cash flow: high cash flow businesses generally have few employees and high gross margins.
Dropshipping
Dropshipping caused quite a buzz several years ago. While the hype has died down, dropshipping remains a very profitable business model. With dropshipping, you don’t store your own inventory. Instead, when a customer buys a product from your store, you order the product from your third-party supplier.
The supplier packages and ships the item directly to the customer. This means that you don’t need to get involved in the logistics of packing and shipping.
If you’re hoping to go into dropshipping, Shopify is a site that lets you easily set up a dropshipping business. And if selling your business eventually is a goal, buyers will like that they can take over operations without needing to handle inventory themselves.
Niche Markets
The world of online business is quite a crowded one. One way to stand out is to offer a product no one else does (or that very few people do). For instance, if you want to sell fragrances, try to sell niche or hard-to-find fragrances.
If you manufacture your own products, selling something unique or with an edge over the competition can set you apart and drive profits higher.
Service Businesses
You might think of service businesses as existing primarily in the outside world. But depending on the service you offer, you can have a service business that’s completely online! For example, if you offer graphic design services, you can find clients and complete work entirely online.
Thinking About Selling Your Business?
Profitable online businesses are appealing to would-be buyers: there are no costs to maintain a physical building and the business can be run from the buyer’s home.
If you have an online business you’re thinking about selling, use our free valuation calculator to help you see how much it’s worth. Sunbelt Business Brokers can help you find the best deal structure for you, and we work exclusively with small and medium businesses! Contact us today for a free valuation and consultation.