5 Metrics You Must Evaluate Before Buying an Online Business
An individual working on a laptop In the fast-growing world of digital entrepreneurship, acquiring an online business can be a smart move—if you know what to look for. Many aspiring entrepreneurs rush into purchases based on surface-level appeal, without diving into the financial and operational metrics that truly matter. Before signing any deals, make sure you're evaluating the right data to ensure long-term profitability and stability. This post breaks down five essential metrics every investor should examine before acquiring an online venture. 1. Customer Acquisition Cost (CAC) Your Customer Acquisition Cost (CAC) is a foundational metric that reveals how much you're spending to gain a new customer. It’s calculated by dividing total marketing and sales expenses by the number of new customers acquired over a specific period. A high CAC relative to the average order value or customer lifetime value could indicate an unsustainable model. Experts like Fund Manager Jayden Scott...