27 Essential Due Diligence Tools for Buying Online Businesses

When buying an online business, thorough due diligence is critical to ensure you're making a sound investment. In this comprehensive guide, we'll explore 27 essential due diligence tools that can help you evaluate potential acquisitions and uncover both red flags and opportunities. We'll also discuss key principles to keep in mind during the due diligence process.

Full-Service Due Diligence

Centurica

Centurica is a full-service due diligence firm that offers various packages to help buyers thoroughly evaluate online businesses. Their services range from basic reports starting at $59 to comprehensive packages up to $5,000.

Key benefits of using Centurica:

• Expert team with extensive experience in online business acquisitions
• Multiple package options to fit different budgets and needs
• Comprehensive analysis covering various aspects of the business

While $5,000 may seem steep, it's a small price to pay when considering mid to high six-figure or seven-figure deals. The insights provided can potentially save you from making a costly mistake or help you identify opportunities for growth.

Search and Competitive Intelligence Tools

Google.com and Google Trends

Google's search engine and Google Trends are invaluable tools for conducting basic due diligence on both the business and the seller.

Using Google search:

• Research the business name, products, and key terms
• Look for reviews, complaints, and general sentiment
• Investigate the seller's background and reputation
• Check for any legal issues or controversies

Google Trends allows you to:

• Analyze search volume trends for relevant keywords
• Identify seasonal patterns in the business
• Compare the business to competitors
• Evaluate long-term market trends

When using Google Trends, be sure to:

• Adjust the date range to view long-term trends
• Compare multiple related terms
• Look at regional data for geographic insights
• Consider changes in search behavior over time

Built With

Built With is a powerful tool that reveals the technology stack used by a website. This information can be valuable for several reasons:

• Verify the technologies mentioned in the business listing
• Identify potential subscription costs not listed in financials
• Assess the technical complexity of the site
• Plan for any necessary technology transitions post-acquisition

When using Built With, pay attention to:

• Content management systems (e.g., WordPress, Shopify)
• Analytics tools (e.g., Google Analytics, Hotjar)
• Marketing automation platforms (e.g., Drip, MailChimp)
• Advertising networks (e.g., Google AdSense, Media.net)

SpyFu

SpyFu is a comprehensive competitive intelligence tool that provides valuable insights into a website's search marketing efforts. Key features include:

• Historical data on paid and organic search campaigns
• Competitor analysis and keyword overlap
• Ad copy and landing page examples
• Ranking history for specific keywords

When using SpyFu for due diligence:

• Compare the site's performance to top competitors
• Identify potential growth opportunities in paid or organic search
• Verify claims about past marketing efforts
• Assess the stability of the site's search rankings

Moz, SEMrush, Majestic, and Ahrefs

These popular SEO tools offer similar functionality but with some unique features. It's often beneficial to use multiple tools to get a comprehensive picture of a site's search performance. Key areas to focus on include:

• Backlink profiles and link quality
• Organic search traffic estimates
• Keyword rankings and opportunities
• On-page SEO issues and technical problems

When comparing data across tools, keep in mind that each uses different methodologies and data sources, so absolute numbers may vary. Focus on trends and relative performance rather than specific metrics.

Alexa.com

Alexa, now owned by Amazon, has recently launched a new competitive intelligence tool. While it's a newcomer in this space, Alexa's long history of web crawling and data collection could make it a valuable resource. Key features to explore include:

• Traffic estimates and engagement metrics
• Audience demographics and interests
• Keyword opportunities and gaps
• Competitor comparisons

As with other third-party tools, use Alexa's data as one piece of the puzzle rather than definitive proof of a site's performance.

Technical SEO and Content Analysis Tools

Screaming Frog and DeepCrawl

These tools allow you to perform in-depth technical SEO audits of websites. Key benefits include:

• Identifying broken links and 404 errors
• Analyzing redirect chains and opportunities for optimization
• Uncovering duplicate content issues
• Evaluating meta tags, headings, and other on-page elements

When using these tools for due diligence:

• Look for significant technical issues that could impact search performance
• Identify opportunities for quick wins post-acquisition
• Assess the overall health of the site's architecture

Screening Frog offers a free version with a 500 URL limit, while the paid version ($150/year) allows for unlimited crawling. DeepCrawl is a more expensive option but offers additional features for enterprise-level sites.

Copyscape

Copyscape is a tool designed to detect duplicate content across the web. During due diligence, use Copyscape to:

• Verify the originality of the site's content
• Identify potential copyright infringement issues
• Discover unauthorized use of the site's content elsewhere

While duplicate content is less of an SEO issue than it once was, it's still important to ensure the site you're acquiring has original, valuable content.

Domain and Website Analysis Tools

PublicWWW

PublicWWW is a unique tool that allows you to search for specific code snippets across the web. This can be incredibly useful for:

• Identifying other sites using the same AdSense ID or affiliate codes
• Discovering potential undisclosed websites owned by the seller
• Finding opportunities for affiliate partnerships or acquisitions

When using PublicWWW, think creatively about what code snippets or identifiers might reveal valuable information about the business or its owner.

SpyOnWeb

Similar to PublicWWW, SpyOnWeb helps you uncover connections between websites based on shared resources like IP addresses, Google Analytics IDs, and AdSense codes. Use this tool to:

• Verify the seller's claims about other owned properties
• Identify potential competing sites owned by the seller
• Discover opportunities for expansion or consolidation

DomainIQ, DomainTools, and WHOIS

These domain analysis tools provide valuable information about a website's history and ownership. Key data points to investigate include:

• Domain registration date and expiration
• Historical ownership changes
• Other domains registered to the same owner
• IP address and hosting information

When using these tools, look for any discrepancies between the information provided by the seller and what's publicly available. Also, consider how changes in ownership or hosting might impact the business post-acquisition.

Additional Verification Tools

AdSense Ban Checker

This tool allows you to check if a domain has been banned from Google AdSense. While not 100% accurate, it can provide a good indication of potential issues with a site's monetization history. If a site claims to have switched from AdSense to another ad network, this tool can help verify if that change was voluntary or forced.

Social Mention

Social Mention is a social media search and analysis platform that aggregates user-generated content from across the web. Use this tool to:

• Gauge brand sentiment and reputation
• Identify potential PR issues or controversies
• Discover user-generated content related to the business
• Assess the effectiveness of the site's social media strategy

BuzzSumo

While not mentioned in the original list, BuzzSumo is a valuable addition to your due diligence toolkit. This content analysis tool allows you to:

• Identify the most popular content in a specific niche
• Analyze the site's top-performing content
• Discover potential content gaps and opportunities
• Evaluate the site's social media engagement

Direct Social Media Analysis

Don't forget to manually review the business's presence on major social media platforms like Facebook, LinkedIn, Twitter, and Instagram. Look for:

• Consistency in branding and messaging
• Engagement levels and follower growth
• Any red flags in customer interactions or comments
• Opportunities for improvement or expansion

Key Principles for Effective Due Diligence

As you use these tools to evaluate potential acquisitions, keep the following principles in mind:

1. Recognize Your Knowledge Gaps

Understand that there may be aspects of the business or industry that you're not familiar with. Don't hesitate to seek advice from experts or mentors who can provide additional insights.

2. Involve Professionals

While these tools provide valuable information, it's crucial to involve professionals like attorneys and accountants in the due diligence process. However, remember that their perspective is focused on specific areas of concern. As the potential buyer, you need to synthesize their input with your own business judgment.

3. Ask Questions Persistently

Don't be afraid to ask questions, even if you think you might already know the answer. Sometimes, asking the same question in different ways can reveal new information or inconsistencies. However, be mindful not to ask redundant or irrelevant questions that might frustrate the seller.

4. Keep Organized Records

Maintain detailed records of all the information you gather during due diligence. This will help you avoid requesting the same documents multiple times and demonstrate your seriousness to the seller.

5. Prepare Thoughtful Questions

Sellers often gauge a buyer's seriousness and potential for success based on the quality of their questions. Do your homework before calls or meetings, and ask insightful questions that show you've done your research and understand the business.

6. Balance Thoroughness with Efficiency

While it's important to be thorough, respect the seller's time by focusing on the most critical aspects of the business. Prioritize your due diligence efforts based on the potential impact on the deal and future success of the business.

7. Leverage Your Broker's Expertise

If you're working with a broker, don't hesitate to ask for their advice on what questions to ask or how to approach sensitive topics. A good broker can help facilitate communication between buyer and seller and provide valuable insights into the due diligence process.

Conclusion

Conducting thorough due diligence is crucial when buying an online business. By leveraging these 27 tools and following the key principles outlined above, you'll be well-equipped to evaluate potential acquisitions, identify red flags, and uncover opportunities for growth.

Remember that while these tools provide valuable insights, they should be used in conjunction with first-hand data from sources like Google Analytics and financial statements. Always verify claims made by the seller and don't be afraid to dig deeper when something doesn't add up.

By approaching due diligence systematically and thoughtfully, you'll increase your chances of making a successful acquisition and set yourself up for long-term success in your new venture.

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