Investing in smaller websites does seem like the most logical step when wanting to start investing in online businesses. However, it’s not always the best way to start, even if you are a beginner.
Which is why I am going to go into detail on both the Pros and the Cons for investing in small websites and then again for investing in larger websites. This way when you are starting out and looking at many different websites to purchase, you can understand how to make the right move according to your goals.
Pros Of Investing In Smaller Websites
Obviously the best thing about investing in smaller websites is that you don’t need a whole lot of start up cash as apposed to what you would need to go out and invest in a larger site right away.
By purchasing smaller websites, because the business is only small for example just out of it’s startup phase. This leaves so much more room for growth for the future of the business.
By using this technique of buying a smaller website you too can then re-invest in another smaller website and really diversify your portfolio. Which is one way to not put all your eggs in one basket and protect yourself from being at risk to just one industry/niche. This too will give you more than just one revenue stream by owning a few smaller sites.
Another great pro for managing more than one online business. Is it allows you to take what techniques are working in one of your businesses and use it for the next one you are looking to invest in or one that your already own.
Cons Of Investing In Smaller Websites
It can be a lot of work investing in smaller websites, especially for the return you may be getting. Often smaller websites need much more work to be done during the beginning stages of investing, Where all that work won’t provide you a massive return because the business is still in it’s growing stage. Which means there is more work to be done than money to be earned.
Owning to many smaller online businesses can too wear you thin, specifically if they are all in different markets and different types of businesses. Meaning that you may be creating too much work than you can handle at any one time. Where just trying to stay on top of running the business and then marketing it can be tough.
This can affect the businesses that you own, where one business could have the potential to be very successful although you aren’t able to solely focus on it because you still need to work on the other investments you have too.
Obviously a portfolio of smaller sites runs into the problem of not earning as much as one larger website due to it’s size and the workload that needs to be put into it for it to grow bigger.
Pros Of Investing In Larger Websites
There are so many great reasons to invest in one larger online business rather than many smaller websites. To begin with the biggest advantage is that all your time and energy can be focused on solely building the one website you have to maximize the sites potential.
Another great thing about investing in just one larger website is that the bigger the website is, the more of an authority that website has in it’s niche. Meaning more of your efforts can go into other forms of marketing rather than building the brands name. As it has already established it’s name in that niche.
To top it off, owning or investing in one larger website allows what may appear like a bumpy road in business, to be far more smooth. Because we all know that in business sometimes there will be not so great months and months better than the others.
There are always hiccups and problems whilst owning a business, but when owning a larger established business and earning far more than a smaller website. The owner has more assurance that the business will keep stable even through the bad weather as it can easily fend off any small issues that may come it’s way.
Cons Of Investing In Larger Websites
Sure it is great to invest or own one large online business, however with any business there are always challenges. One of which for a largely established website is expansion.
There may look like there are many avenues for expansion however the business should always only focus on it’s one target market and not start spreading into other niches to make more money. This could lead to the beginning of a new end for a business.
Which is why larger websites need to focus harder on driving the right traffic and monetizing to their specific target audience and not the masses. Otherwise this could mean a lot of marketing money and time out the window.
Another thing to consider when investing in a larger online business is check that all of it’s traffic sources are diversified. Because with one Google update, or a social media platform like FB or Twitter going down the tube or being hit by a big. The whole ship (your big business) could sink should it not have it’s traffic and monetization strategies diversified across many platforms.
So what’s the overall conclusion?
Unfortunately there is not right or wrong answer, no crystal ball and there is no one certain thing you should do as it all comes down to personal preference. Which is why you should try and answer these following questions to really see what is best plan of attack for you.
- Will investing in websites be your sole income?
- Do you have the qualifications to run many smaller websites or just one larger one?
- Would you prefer to focus solely on just one business, or would managing a few websites work better for you?
- What risks would you rather take, diversifying in a few smaller websites and earning a little less. Or investing in one larger websites which could earn you more money for less work but has the risk of a non diversified portfolio.
These are some serious questions, that can lead to some serious answers. So take your time and have a good think about how your website investing portfolio should look according to your goals.
For those of you already investing, what do you prefer. Investing in a few smaller websites or one larger one? Feel free to comment your answer below and explain why this does or does not work for you.