Computer Based Businesses! – (Which to Buy?)

Computer-Based Businesses? – Which to Buy? –

Choosing the right computer business model is

the first step to acquiring an online business.

If you have narrowed your search to that of the

“Software Business Model”, you are not alone.

Many Software and Software as a Service or (SaaS) Businesses

are extremely popular with investors.

These investors are typically involved

with an operation of a recurring revenue model.

 

Computer-Based Businesses in 2018!

According to Mashable, 5 reason recurring revenue works are as followed:

• Traditional Businesses profiting, not just Tech Startup
• IP Entry is Lower
• Built to Scale
• Possibility for Collaboration and Shared Revenue Models

 

Having said that, let’s examine what exactly is a Software business,

and why you should buy one if you are in the position to do so.

 

The Begining of Computer History?

Before we dive into some of the most common reasons software companies

are a great investment to consider, let’s look at the backbone

of how and what makes up a software business.

This will help frame your decision in buying or selling,

a software company and choosing the best model.

Spend a little time on the internet,

and you might have seen new and relevant products.

 

Computer-Based Business Products?

Some of these products are created to enhance and simplify the user experience.

This type of technology allows for a certain niche

markets to expand on their already existing technology.

Or, it can be an opportunity to bring

a new product or software to the marketplace.

 

Online Retailer Computer Business

For example, ClickBank, an established partner network,

is used to sell such a niche software product.

ClickBank, for example, has provided the transfer

of lifestyle products to their customer base.

According to their company website, this practice

has been going on for over 17 years, with a company mission of:

 

·       improving,

·       inspiring

·       and coaching the lives of their customers.

 

Business Mission?

Aside from their mission statement, they are one of the largest online retailers.

Pretty impressive to say the least.

This is done through 6 million unique products according to

ClickBank, that reach over 200 million worldwide customers.

This provides an illustration of how

this business dynamic operates in the real world.

Depending on the type of product and customer base, the

software business can set up either a

one-time fee, or a subscription payment plan.

 

Buying a Software Business?

If you are looking to buy a software business, then you should

focus on the business’s marketing strategy and business model.

This marketing strategy will include several factors that should be determined in the sale.

For example, traffic sources. You want to ensure you are buying a

platform or software program, with legitimate verifiable traffic sources.

These traffic channels should provide growth

from reputable and relevant industry topic sites.

 

Backend Quality of Software Company

Make sure that the traffic supply did not just increase a

month or so prior to you buying the business model.

Always insist on a historical performance sheet

showing user activity and conversion rates.

This is the backend analysis of the computer software.

It will provide the quality and integrity of the

software’s source, along with a technical overview.

In this technical overview, requirements

for future upgrades are noted in this process.

 

Software Model – The Art of Business

In the software business, there exist several

types of computer model’s businesses.

These computer business models, are important to examine

regardless if you are thinking of buying or selling your business.

So, let’s start out with the first

computer software model, the Software as a Service.

 

What is a Software-as-a-Service business?

This is a great question if you’re in search

of buying a specific type of computer software business.

According to QuickBooks, the business of software or SaaS, is

defined as the delivery model for software.

The next step in this procedure has to do

with the hosting of the business applications.

A few of the applications are listed below:

 

·       CRM – Customer Relationship Management Services

·       HR – Human Resource management systems

·       CMS – Content management systems

·       Accounting services – on cloud computing – on most occasions

 

 

You can see the many advantages of this type of software business model.

You have little upfront costs, which is a huge selling point to many

investors, or even new buyers to the market.

 

Computing Features?

The cloud computing feature can help deliver virtual services,

so you never miss a beat. This helps with customer

service reduction in costs since the virtual services can

now have automated systems for user help.

Another advantage in this type of model is,

the reduced cost compared to traditional hosting platforms.

 

Computer Technology – Improvements to the Base

For example, physical servers and machines, yes, you remember

those days, they would take up so much space in the office.

You may even still be operating under these working conditions,

but that all may change in the near feature, if not already.

This is because of the new online trends, and with an increased

number of users going on online, a greater capacity

for data storage will eventually be mandatory.

 

Online Users?

Online users will continue to search online for data, therefore

data will continue to grow, and the data volume

only increases, and as you see, the entire cycle repeats.

So, be ready with a computer software platform that

can handle the insatiable desire to consume large amounts of data online.

 

Subscription Based Software Company

You might already understand or are just learning about the

subscription computer software business model.

This business model in computer software, is where online users pay

a subscription for a service or borrowed product.

For example, Netflix and rented movies. The movies are

in the intangible form, and not the traditional tangible form.

In some cases, this paid subscription is to rent software hosted online.

This is in comparison to buying it as an individual product,

hosting it, and installing it to your local computer.

 

Software Companies as a Service?

Software as a Service is the core of centralized or cloud computing.

It aims users to run their own computer tools as online rented products, very innovative.

The computer processing work and file saving process is conducted while on the internet.

This allows users to access their computer tools

and files while using a web browser, on their own personal computer.

 

Advantages of Computer Software?

So, how do online users benefit from this type of computer business model?

Great question, because, it allows the resourcefulness of the product

to increase residual revenue and value, with intangible products.

The benefit of having no large upfront cost to take ownership

in a software tool is very attractive to many.

Think of all the new computer programmers and developers hitting the

information and technology industry.

 

Progression of New Computer Technology

This can be helpful in their quest for the next:

 

·       advanced technological tool,

·       platform

·       or software discovery.

 

Allowing small upfront costs through SaaS, can afford new students

or new industry people, to take advantage of these services.

From an investors point of view, this means an everlasting stream

of income, if software and technology can continue to match

supply and demand, without any hiccups in the transfer.

 

Cloud Computer and Technology Business

Cloud computing has allowed for this type of

technology to progress even further in the development stages.

Online users can also have quick and easy access to these vital tools.

This is because, since it is hosted on the cloud, this function becomes even more relevant.

The need to not have to worry about computer hardware

is another advantageous point to this business model observation.

This only advances the progression and new development of SaaS.

This is because now technical support can aid in better customer support.

This synergistic channel of helping and solving problems

only increases the long-term value of these

new advances in computer software companies and models, long-term.

 

Computer Acquisition Trends 

Another trend to take notice if interested in buying a software company is,

the increasing popularity of online acquisitions for subscription businesses.

These SaaS businesses can show a strong amount of recurring

income for both monthly and quarterly billing models.

There are other factors that an investor should take notice before purchasing a SaaS business.

One factor to take note on is the foundation.

Make sure to focus on the strength of the base of the business,

this will provide a good foundational map for the future of the business.

 

Also, look for the following:

·       Monthly Recurring revenue or (MVR)

·       The value of the customer for the lifetime or (CLV)

·       Chum

 

 

High Content Marketing for Software Subscription Companies

These type of software companies have a business model

that goes after high content marketing efforts.

This is the reason, why they rely on such a high subscription conversion rate.

Without the creation of highly engageable content, this type of business model would not succeed.

They are interchangeable on each other’s success,

that is high-quality content, mixed in with subscription marketing.

This means, that the high rate of subscription users,

is paralleled to the quality of content subscribing to.

Just think about it, would you provde your personal email address

and information to a subscription service, if it didn’t produce

relevant high-quality information pertaining to your search?

Maybe, but most likely, not.

 

Buying A Subscription Software Company

Having said that, if you are in the business

of buying a subscription software company, this is something to consider.

That is, having a content creation plan in place prior to the purchase.

Now, that may not necessarily mean the actual content itself,

but a marketing strategy or plan, to put in place

for new subscribers once ownership is transferred.

 

Content Marketing?

Having a content marketing plan in place or having prior experience and

knowledge as a prospective buyer, is a plus.

This is an important decision in the choice of software business model

you ultimately invest in, within the software industry.

This is because, content marketing and traffic,

translates into increased and consistent online subscriptions

 

What is a Subscription based Business?

Let’s think of a common subscription business

model to help answer and understand this business model.

 Let’s use Netflix as one

This is a great example of where online users watch movies for a periodic fee.

This fee can be one of the following:

 

·       Daily

·       Monthly

·       Annually

 

 

Free Content and Premium Computer Service?

A lot of these paid subscription businesses, have many

combine free content with their fee services.

This free content was included in the member only or premium

purchases. However, some of these members-only websites,

do not require any money, just your contact information.

The collection of online users’ personal information is just as

valuable in some cases more valuable, than the actual dollar cost.

 

More Online Users, More Traffic!

This can help refer others to the subscription services that are outside of the membership.

This is because the free content is accessed online freely.

This marketing tactic by subscription software companies

allows for a greater return on investment.

In this case, the investment would be categorized as content creation, free that that is.

 

Bigger Mission – Online Community

So, in turn, it can help educate the online public

of the brand as while as capture new audiences.

This is something to consider if you are in the

position to buy a software company with subscription services.

But wait, there are more attractive qualities to buying this type of software platform.

 

Why you should Buy?

For example, most successful subscription paid software companies,

also have a successful marketing strategy and lead channel in place.

They understand how to target their audience and convert them over to buyers.

This is an important step in the subscription software business.

Without quality leads being generated through subscription,

then quality company assets are devalued.

 

Greater Return?

This is because, leads need to have a greater return on cost,

and quality is an important determinant of this factor.

So, if a successful subscription model has already in place,

a well-defined marketing strategy with proven results, this should peak your interest.

This is because this strategy will show the actual conversion funnels and placements.

This is in black and white without any guessing.

 

Online Acquisitions Popular Buy?

The reason many investors looking to buy subscription businesses do

is because they understand the attractiveness for online acquisitions.

They understand that normally, a subscription

business will employ a monthly or quarterly billing model.

This way you can enjoy a large amount

of recurring income, rather than just one payoff.

 

Attractive Business Channel

This approach is attractive for obvious reasons.

The focus for buyers should be on the customer base strength.

 

Also, as mentioned earlier, do not forget:

·       the chum rate,

·       the customer lifetime value,

·       and lastly the associated customer acquisitions costs.