How to Start a $60K/Month Dog Boarding Business (2024)


July 22, 2021

How to Start a $60K/Month Dog Boarding Business (2024)

Do you love dogs? What if you could harness your affection for animals to provide a fun and safe place for pets to hang out while their owners go about their routines, vacations, and unexpected events?

According to the latest statistics, Americans recently adopted new pets at a staggering rate, especially dogs. Rover.com reports that 49% of Americans adopted a new dog during the early COVID pandemic. 

If you ever thought about working with dogs, here’s your cue to secure the rewarding livelihood that a dog boarding business can provide.

We interviewed Larry Fosnick Davis and his wife. They conditioned their Seattle-based dog daycare and boarding business, Metro Dog Seattle, for continued success.

With all the great insight Larry offered, we were able to compile this step-by-step guide to help you start your very own boarding business. Keep reading to find out if opening a dog daycare is the right business for you.

Step 1: Learn more about pet boarding

A lady and a cute dog on a red leash

Let’s start with an overall view of the pet care services industry.

What is dog boarding?

Simply put, dog boarding is the act of caring for dogs while their owners are away. Boarding facilities charge a set fee to pet owners for an agreed-upon length of stay.

The goal is to provide a safe and fun place for animals to lodge when pet owners have obligations to attend to or want their animals to socialize. Simple, right?

Learn the lingo

Learn the “dog words” associated with this business by checking out this glossary published by the American Kennel Club (AKC), a leading authority on dogs in the United States.

Study other terminology sources, such as this grooming glossary provided by Petco.  

Trade organizations

The good news is that there are wonderful organizations that set standards for the doggy care industry. Here are a few notable ones.

Dogs

The AKC is a respected, 130-year-old non-profit organization dedicated to canine pets. Turn to them for expert advice on breeds, behavior, products, and services.

Cats

The Cat Fanciers’ Association (CFA) and Alley Cat Allies provide information for feline pets.

Other international and national organizations

Related trade organizations for animal lodging and care include:

  • The International Boarding & Pet Services Association (IBPSA)
  • National Association of Professional Pet Sitters (NAPPS)
  • National Dog Groomers Association of America (NDGAA)

Last time we checked, organizations like these are an excellent place to dig up some research. So be sure to go out and do it.

Publications

Pick up a copy of Pet Boarding and Daycare magazine and leap into this list of other pet-related publications.

Certification

A man working on his laptop

Research if Professional Pet Boarding Certification (PPBC) might help you achieve credibility in your desired market.

Other certification programs are available through the IBPSA, NAPPS, and NDGAA.

After all, earning a certificate from a respected organization could be a good selling point to set you apart from the local competition. It makes sense, right?

Step 2: Pick up some training and experience

You’ll want to fetch some training and experience. There’s a lot that goes into caring for dogs, so you’ll need to be sure you have what it takes to keep both them and their owners happy. Let’s get into it.

Training

Now let’s go over some skills you’ll need to operate a boarding business confidently. Technical abilities are a must.

Of equal importance is nurturing the soft skills furry four-legged friends need to feel safe and secure. Let me explain.

Technical abilities

Complete a course on pet handling techniques like low-stress and fear-free. According to Larry, these skills—along with pet first-aid—are essential to pet owners.

He says:

The public as a whole started to realize how important it was that their hired caregivers have the same sort of qualifications that you might find in a human daycare provider.

Pursue additional training in the following areas:

Soft skills

OK, I know what you’re thinking: what about those soft skills? Here are some tips on techniques to learn and practice:

  • Clear communication because owners love their pets and want to talk about them!
  • Patience because you will need to learn and adapt to many personalities, both human and pet.
  • Empathy because you’ll be caring for someone’s best buddy, often considered a family member.

In truth, treating each pet as your own will be the key to success in this business.

Reference material

The American Society for the Prevention of Cruelty to Animals (ASPCA) maintains an engaging library on dog care that I recommend you review and save to your favorites list to reference as needed.

Experience

A laptop with and a white notebook on a desk

Gain experience by jumping at the chance to:

  • Work for a boarding business.
  • Walk dogs or pet sit with apps like Rover.com or Wag.
  • Work in a related field, such as for a veterinarian, groomer, or animal shelter.
  • Watch pets for friends and family.
  • Take a pet first-aid class, like the one offered by Metro Dog.

Pets at home are OK, but not enough

Prior experience with pets, not just the ones at home, is highly recommended because you will need to determine if you can:

  • Physically handle different breeds and sizes of dogs.
  • Deal with various personalities and behaviors.
  • Properly feed, medicate, and groom them.
  • Know how to recognize issues that require you to call a veterinarian or the owner.

The best part is that experience is easily accessible and, in many cases, requires no formal education or training.

Step 3: Decide what type of animal boarding business is right for you

When you think of the ubiquitousness of pets and how much people love them, the number of pet business ideas from which you can profit is wide open and very promising.

As such, boarding kennels can trail off into several different directions, so you’ll want to know which is best for you.

Prepare yourself for this important decision by taking IBPSA’s complimentary webinar on business models. The following sections offer some specific points to consider. Keep reading.

At-home kennels

There are two types of home-based kennels: at the customer’s home or in your home. And here’s a fun fact: Experts feel this is a wonderful option for anxious dogs.

If you offer this arrangement, be transparent about other pets and pet guests in the home and the conditions of the house. Consider setting up a meet-and-greet with prospective customers.

Before trotting off in this direction, check local laws and ordinances, especially if you’re a renter.

Pet sitting and dog walking

A lady walking the dog in a park

Larry and his wife started small. Initially, they sat pets and walked dogs for extra income. Two decades later, they invested $700k to open a larger location to serve as a local “community center for pets.”

Please keep it simple by registering with a service like Rover.com, a bookings portal for sitters and dog walkers. Also, read this article on how to start a pet sitting business.

Housesitting

Don’t snooze on offering dog sitting as part of housesitting as these services are often combined and allow you to travel to exciting destinations. 

Like pet sitting and dog walking, housesitting is an excellent way to begin your business with limited start-up funds.

Investigate how to start a dog kennel

Kennel-based animal care facilities might be what most people think of for boarding. There are crated and private room facilities, like The Doggy Dorm. There are even crate-free layouts, like at Dogs Unleashed.

If you’ve got the resources to make it happen, consider opening a brick-and-mortar location. Big or small, physical space will provide the most freedom to allow you to accept more furry guests than doing it at home.

Start a doggy daycare at a veterinarian’s office

If you are a veterinarian, then assess how to offer kenneling as an additional service. Pets with age-related or health issues usually benefit from this amenity.

Include cats and other pets

Tips for boarding other types of pets are available on petinsurance.com.

Diversify

Larry and his wife diversified their services to include daycare, boarding, pet sitting, walking, first-aid training, and more, made possible by their years of experience in the industry.

Some providers endorse and sell products, such as personalized tags and collars, shampoos, and collapsible dog dens.

Larry says retail is new for his business and, while speaking about Metro Dog’s new location, mentions: 

We also have multiple play floors and … private dog rooms for dog breed meetups, dog birthday or adoption parties, etc.

In addition:

We have our own classroom to teach pet first aid … we have a treatment room where we can offer a variety of animal health services.

So, don’t be afraid to add on products and services related to pets.

Step 4: Write a dog boarding business plan

A book on how to write a business plan

You’re super excited about the idea of making tons of fluffy friends, right?

So, let’s document a plan to put this idea in motion. A business plan is crucial, and we have advice and resources to help.

Sniff out the market

Before drafting your business plan, it’s best to analyze the market. Tease out your target audience and local options for pet lodging. Here’s the magic: you’ll land in a better position to make intelligent decisions.

Be specific

No matter the type of business, the sections of a business plan are the same. Make it a practical, living document by delving into specifics within each area.

Specific items to highlight in your kennel business plan are:

  • Additional services you might provide
  • Answering the question, “Are there kennels in my area?”
  • The best location for starting a dog kennel 
  • Financial projections and costs, especially as the business grows
  • Pet boarding kennel insurance to provide adequate coverage
  • Regulations for being a pet boarding business owner
  • The unique competitive advantage of your professional dog kennel

When you’re ready to play ball, use our in-depth guide that comes with a free business plan template.

Be flexible

We’ve all done it: create a beautiful plan on paper only to realize that bringing it to life requires adjustments.

Larry says:

When we did our original business plan, it looked great on paper. But in practice, many of the ideas were not as great as we thought and required a change in paradigm.

The bottom line is that while you need to go through the exercise of writing a business plan, it’s not a static document. Just remember to be flexible and embrace change, and everything will work out.

Step 5: Choose the right name for your pet care business

After figuring out your boarding business model, devise a memorable and playful name. Let me show you how.

Have fun, but leave some wiggle room

Make sure the name is easy to spell, pronounceable, and gives strangers some idea of what your business does. 

For instance, Room & Bark Boarding Services is light and easy to say, and there’s no guessing what the enterprise offers. 

Are you not sold on cute and quirky names? Then try sleek and elegant or something that includes your location, like South Austin Pet Lounge or Metro Dog Seattle.

Try to ensure it won’t need changing in the future because that can be troublesome and expensive.

Hang a tag with a brand

A book about choosing the right brand name for a business

Remember branding when choosing a name because it’s like a shiny label your business wears to distinguish itself from others. 

Ask yourself how your name will look on a logo or graphics and an image you might incorporate that complements your selected moniker. Learn more in the sales and marketing section (Step 13) of this guide.

Gobble up a dot com

Check to see if your business name is available as a dot com. Using one for your website will give you an established look and make your virtual address easier to remember. 

Search for available domain names and dig into UpFlip’s guide on creating a website. Give it a go!

What if I buy an existing business?

In most cases, boarding kennels that are “for sale by owner” already have a name. Research the business’ reputation to decide if you want to keep the name or rebrand with a new one.

Chew on a bit of feedback

Run your name through Google Trends and seek your friends’ and family members’ feedback.

Google Trends will tell you what searches are trending on the Internet, while your friends and family will just tell you their opinions. 

After that, you decide, but it can’t hurt to hear what others think, especially if they’re looking out for your best interests.

Registration

If all looks good and you’re ready to make it official, then register your business name with the government.

Step 6: What is legally required to start a dog daycare business?

Selecting a legal structure is like placing your doggie daycare in the right-sized crate. The truth is, this step is usually beyond the expertise of many entrepreneurs.

So, expect to incur costs engaging the services of an accountant, attorney, and tax professional. The best part is, many of these professionals make excellent business coaches!

Licenses and permits

Figure out what licenses, permits, and tax forms you’ll need. It all depends on your location and the services offered. For example, your city might have a barking ordinance. It’s understandable.

Structure

Evaluate how to set up your business as one of the following:

Type Description
Sole proprietorship The easiest option, but doesn’t protect personal assets.
Limited liability corporation Protects personal assets and provides tax advantages but has time-consuming administrative requirements.
Franchise It’s an agreement to sell services for a franchisor in exchange for an already established business, sort of like a pre-assembled doghouse.
Corporation or partnership A less likely option because most pet boarding businesses employ fewer than 50 people. Learn more on Investopedia.

Regulations

As expected, dealing with live animals and their byproducts merits a figurative collar and leash to control the effects on the facility, community, and environment. Learn about regulations in your locale and comply with them.

For example, the Ohio Environmental Protection Agency (OhioEPA) has precise rules about animal waste. Non-compliance can result in serious penalties. Don’t let this be you.

Step 7: Select a location

Larry and his wife found a dog daycare location in 2001. He says:

We found a suitable location in August 2001 and signed the lease a month later. We opened for business November of that year.

The location you can have or access goes paw-in-paw with the type of boarding business you can own. Let me explain.

How much does it cost to build a dog boarding facility?

A brick-and-mortar location requires you to investigate the feasibility of building a new facility, leasing a space, or buying an existing building.

While investigating, ask yourself the following questions:

  • Can I find a dog boarding business for sale in the area where I want to do business?
  • Is there commercial leasing for a pet boarding business near me?
  • What’s the proximity to similar boarding facilities?
  • What are the area’s demographics, and how do they compare to my targeted customer base?

Dig a little deeper by making these inquiries:

  • Is this location the right size for the services I want to offer?
  • Should I buy a business for sale?
  • What utilities and infrastructure are needed?
  • What are the zoning laws for my type of business?

A quick note about leasing a commercial property

Investigate the condition of the property to ensure business disruptions will be minimal. At least make sure the building passed its code inspections.

Nevertheless, some things are unavoidable, like when Larry’s landlord closed his whole building for two weeks—right in the middle of the busy summer boarding seasonto upgrade the electrical system.

Designing a kennel or at-home location

The right location and design will elevate you to alpha status in this business.

The Barkleigh Store (cute name) sells a book on how to design a kennel. Information for an at-home operation is also available in Upflip’s guide on starting a pet sitting business.

No matter your location, zoning is super-important. Learn as much as you can so that you don’t bark up the wrong tree with local authorities, especially the public health department.

Step 8: Hire the right people

A board and a cup of coffee on a table

Now let’s consider your labor options. Like Larry and his wife, you could start on your own or with a partner, at least until business picks up.

Limiting staff keeps costs down without worrying about whether you can pay employees fairly and keep them around. It’s a perfect option if you plan to start with walking and sitting gigs rather than a full-on boarding facility.

However, hiring someone who has experience could get things off the ground sooner rather than later if you have the money to do it.

Just be sure that whomever you hire has the same level of passion for pet care as you and that they’re comfortable and confident working with dogs of all breeds and sizes.

For inspiration, view this kennel attendant job description and interview questions.

If you bring on some helping hands, use the following checklist to comply with employment laws:

  • Obtain an Employer Identification Number (EIN) from the IRS.
  • Keep employment tax records per this guide provided by the IRS.
  • Pay federal unemployment tax.
  • Hang Workplace Posters in a visible spot.

Step 9: Stock your boarding facility with equipment and supplies

However you decide to outfit your boarding business, just remember that cleanliness and organization are your keys to success. Now let’s go over the equipment and supplies you’ll need.

Basics

If you’re planning to start small like Larry and his wife, only basic supplies and equipment are needed. 

It should include the following:

  • Hands-free leash and waist pack
  • Poop bags
  • Pet first-aid kit
  • Dog wipes
  • Treats and water
  • Headlamp

For an extensive list of pet-sitting supplies, have a look at this guide from Pet Sitters International.

Brick-and-mortar

For those opening a brick-and-mortar boarding business, there’s quite a bit more to consider. 

Most importantly, the days of crated dog care are on their way out, as many dog owners now prefer cage-free environments for their precious companions.

Overnight boarding

Have some crates and large kennels for overnight care. 

To keep up with the progression of daytime dog care, customers prefer open areas where dogs can socialize and play.

Indoor and outdoor spaces

Cutting-edge boarding facilities include indoor and outdoor spaces, so you’ll want to consider materials for outfitting both if that’s the route you take. The Home Depot offers a delightful collection of dog playground equipment.

Cleaning and sanitizing

Once you build a safe and secure space for your four-legged guests, you’ll need plenty of cleaning supplies to keep everything sanitized. 

Pick up basic grooming supplies, like bathing stations, soaps, shampoos, plenty of towels, and nail trimmers.

Decor

There are so many whimsical and clever ways to decorate a pet-focused business. Take advantage of the possibilities and be creative! 

Larry says this about his new facility, “It’s also bright on colors and lighting. Even during the public health inspection, the inspector commented on how nice and bright it is.”

If you’re looking for inspiration, then check out what Amazon.com has to offer.

Step 10: Incorporate safety protocols for boarding kennels

A white keyboard with the word "protocol"

The most important part of dog boarding is keeping your furry guests safe and healthy. After all, that’s why their owners brought them to you. The safety of you and your staff is also a top priority.

First aid

As we mentioned earlier, you and your employees will need training in first aid for dogs. Keep contact information for each pup’s veterinarian on file.

It wouldn’t hurt to have a working relationship with a local vet’s office, just to be safe. Being up to speed on basic human first-aid will also be helpful in the case of a bite or other injuries.

Meet and greet

Require a “trial day” to help prevent incidents. During the evaluation, closely monitor new dogs to get to know them. 

Be sure you and your staff can accommodate and address any anxiety and behavioral issues your pet guest presents.

Require all clients to provide vaccination records for their dogs to limit the spread of illness and disease. All dogs should also be spayed and neutered.

In addition, discuss these areas in your safety plan:

  • Americans with Disabilities Act (ADA) compliance
  • General things that can go wrong and how to handle them
  • Regular inspections for safety issues
  • Sanitation
  • Working conditions per Occupational Safety and Health Administration (OSHA) requirements

Step 11: Get the right insurance

I’ve been there, thinking there’s insurance for everything nowadays. You’re probably asking if you need to take on that extra expense. The short answer is a resounding yes.

Insurance protects your business if something happens to a dog, you, or your property. General liability insurance is a must because it covers bodily injury, property damage, and medical paymentsall-important for a pet business.

On average, kennels spend $300 to $700 for every $1m in coverage, which is about what other types of businesses spend on this type of insurance policy.

Other types of coverage to consider are:

  • Commercial property insurance
  • Commercial umbrella insurance
  • Commercial auto insurance
  • Home-based business insurance

Make it a priority to spend some time reading more about insurance for kennels.

Step 12: Handle your kenneling costs and revenue with a sound financial plan

Monthly revenue of business

It’s time to talk finances. Ambling in this area will prevent your kennel business from covering the ground it needs to succeed. Let me explain.

Bank account

Accounting, taxes, and money flow are easier to manage in one location, such as a business bank account for all your business transactions. Some businesses even set up a separate account for payroll.

Budget

A well-thought-out budget is like a dog gate to secure your finances by keeping them where you want them to be.

If numbers aren’t your thing, explore affordable budgeting courses from Udemy.com and Coursera

Manage your budget with an application like Xero or QuickBooks.

Funding

Ways to acquire funds for your new business include the following:

  • Angel investor or venture capitalist
  • Credit cards
  • Crowdfunding
  • Government programs
  • Home equity loan
  • Partnership
  • Personal funding
  • Loans from friends or family
  • Loans from a lending institution
  • Rollover for business startups (ROBS)

Each option has its pros and cons. Take a look at this SBA guide for an introduction to business funding to learn more.

Pricing

Pricing is a mysterious obstacle faced by many business owners. Take control of it by determining the value of your service. Start by researching your market and competition.

Refer to the market analysis section of your business plan, check the prices in that market, and then use the information to determine your value proposition on the price of kenneling dogs or cats.

How much is dog boarding?

Most boarding businesses charge by the day, with the option for add-on services like grooming.

The American Pet Products Association (APPA) publishes market research every other year, informing what consumers spend and other significant data. Give it a chance.

Keep in mind that you might need to increase prices annually to keep up with minimum wage increases and inflation.

Revenue

You might be wondering how much a dog boarding business makes. 

For Metro Dog Seattle’s first two years, the salary from Larry’s full-time job supported the business. After the start-up period, however, revenues grew enough to employ Larry and his wife full-time.

Although Larry and his wife opened the doors in 2001, weathering economic and global events over the years, within the last five years, his revenue increased from $660k to over $800k annually. Not bad.

Cuddle up to this dog daycare cash flow. See what the average consumer spends annually on pet ownershipincluding boarding costson Investopedia.com.

Step 13: Kick-off a sales and marketing campaign

Marketing attracts customers, and sales bring in revenue. Be the leader of the pack by following the advice in the sections below.

Know your customer

Here’s the magic: Tapping into the pet care services market won’t be difficult as consumers are already spending tons of money on pet hotel costs.

In fact, according to recent Economic Census statistics, consumer spending on pet care services totaled $5.8bn. Think about that for a minute.

Figure out what your ideal customer looks like by creating a customer avatar. Keep reading.

Partnerships and Specials

Build relationships with other entrepreneurs. Veterinarians, pet stores, and groomers might be open to exchanging service promotions.

For instance, “Buds N Suds” grooming can provide their customers a unique promotional code to redeem with your business for 10% off your services—or vice versa.

At Metro Dogs, Larry offers special deals for foster and service dogs. Think about what this could mean for your business.

Establish a logo and brand identity

DIY or hire a graphic designer to develop a simple and effective logo and brand identity. Branding is your visual introduction to the public, so be sure to do the work required. 

While you’re at it, follow Forbes’ expert advice for small businesses. It provides excellent guidance for establishing your:

  • Tone – Are you professional, casual, or funny?
  • Values – What’s important, and how will you communicate it?
  • Blog – Because 81% of readers trust the information.

You can DIY your logo and brand identity, but if it’s too time-consuming, then consider hiring a freelancer to assist.

Digital marketing

A laptop and pencils on a desk

The digital age all but demands a strong strategy for online marketing. You’ll fare much better if you set up a website, social media profiles, and email newsletter subscriptions.

If you’re interested in going further, buy digital ads, try search engine optimization (SEO) techniques, and set up a digital business card with Popl.

A fun fact is that featured snippets can establish you as a dog-boarding authority. It’s worth your time to learn how to optimize for these in your web-based content.

Printed marketing collateral

Include printed materials in your marketing strategies, such as brochures, car magnets, flyers, door hangers, t-shirts, and other printed items. Take advantage of the robust templates and graphics-editing tools on Canva.com.

Direct contact

Direct contact can be effective. Visit dog parks or even try cold calls to fetch initial clients.

Professional appearance as a walking advertisement for your business

Sales and marketing tactics are super important, but what reigns supreme is your level of service and how you represent your business.

Maintain a clean and organized facility. Provide efficient and friendly service to match. Implement neat uniforms, even if it’s simply a branded polo shirt.

Reviews

Proactively seek reviews and respond to negative reviews professionally.

Take it from Larry, who says:

The achievements we’re most proud of are what our clients have to say about us.

Media outlets

Don’t leave traditional media outlets out of your marketing plan because they can still provide great exposure for your business.

Television talk shows interviewed Larry and his wife, and he’s written articles about pet safety. The Seattle Times quoted him about safety hikes with dogs, and the couple demonstrates pet first aid at events. 

Step 14: Establish sound business processes for daily operations

Business process maps might seem like something giant corporations pay consultants tens of thousands of dollars to create. 

However, they’re a simple tool that any entrepreneur can use to:

  • Establish operational processes.
  • Create customer-facing materials.
  • Deploy new products and services.
  • Work through the ideal and alternative paths of daily processes.

LucidChart has several excellent tutorials, videos, and a free cloud-based application to get you started.

Well-thought-out processes will also give you a better idea of which tasks to delegate to staff. Use them as a starting point for a policies and procedures manual.

Key processes to document

Here are a few ideas of process diagrams you can create to document your business operations:

  • Acclimating new pet guests
  • Answering pet parents’ questions and concerns
  • Handling incidents
  • Laying out the facility
  • Keeping people and pets separate and secure
  • Processing payments and reconciling accounts
  • Running the back office and providing administrative support
  • Sanitizing on a schedule and performing the related activities
  • Scheduling exercise, feeding, and grooming

Refer to this article by AKC Pet Insurance to guide you to the kinds of processes you might need.

Policies

A white notebook with a red and black pen

After mapping your processes, set expectations of acceptable and prohibited behavior (by staff and customers) with clearly written policies centered around topics such as:

  • Behavior
  • Emergencies
  • Hours of operation
  • Food
  • Health conditions and medications
  • Payment
  • Pick up and drop off
  • Weather events
  • Vaccinations

Check out the policy and procedure templates available on Smartsheet.com and Template.net.

People will always need pet care, so go out and do it!

The three pillars of Metro Dog Seattle’s success are tenacity, knowledge, and flexibility. As Larry says:

You always keep your options open and never ever give up.

Now that you know what it will take to open your very own dog boarding business, what’s your next step?

At this point, there’s not much standing between you and a room full of loveable furballs!

Ask yourself the following questions:

  • Am I the right person to own a pet boarding business?
  • Do I have what it takes to handle customers and their concerns?
  • How can I ensure my facility is profitable?
  • Do I still want to be a dog daycare business owner?

Learn even more by watching our video on how to start a business. Now go out and do it!


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  • Health and Fitness: Offering health and fitness advice is another way an affiliate marketer can make a great living. Documenting your own experience is the best testimonial in the world because people get to see the change in real time.
  • Fashion and Beauty: Trendsetters and everyday consumers are eager to test the next thing in clothing, makeup, and self-care products. You can make extra income by reviewing the products you love and showing people how to use them.
  • Lifestyle: Everything from self-improvement to van life, pregnancy to education counts as lifestyle content. People want hacks for how to make their lives better, and an affiliate marketer can make a great living sharing their tips.
  • Hobby: Making affiliate income from your hobby can be a great niche for your affiliate website. Whether you love flying model planes, researching serial killers, or going to shows, there are sure to be affiliate campaigns that will appeal to people who enjoy your hobby.
  • Pet Care: Our pets are like family and the affiliate marketing industry is thriving with products pet owners will love. Whether you want an affiliate business or just a little passive income, this niche is adorable!
  • Travel: The majority of Americans plan to travel at least once this year. If you’re all about exploring the world, maybe an affiliate site will make you some extra money.
  • Security and Survival: Content focused on protecting your way of life has a huge target market, and new technology can help your target audience protect themselves better.
  • Non-Profit and Charity: Surprisingly, charitable organizations use affiliate marketing efforts to increase their charitable contributions. Check out some popular affiliate programs for this industry.

Once you’ve chosen a niche, it’s time to find different affiliate programs.

Research affiliate programs

Once you’ve identified your affiliate niche, look for affiliate marketing products you want to market.

Some popular affiliate networks and platforms include:

  • Amazon
  • Commission Junction
  • Impact
  • FlexOffers
  • Audible
  • ShareASale
  • PartnerStack
  • Rakuten Advertising
  • eBay Partner Network
  • Shopify affiliate program
  • WP Engine’s affiliate program
  • Fiverr’s affiliate program
  • ConvertKit’s affiliate program
  • Twitch’s affiliate program

Keep reading to learn more about each of these affiliate product platforms.

How to become an Amazon affiliate marketer

Amazon’s affiliate marketing industry resource webpage showing the "Tools And Features" "Mobile GetLink Help" FAQs

Just go to Amazon Associate Central and apply. Amazon Associates offers 1% to 20% commission on purchases.

Join Commission Junction

Join CJ to get access to top affiliate programs like Google Workspace, GoDaddy, NameCheap, Quickbooks, and Simply Business.

Join Impact

We use impact.com to refer people to companies like Divvy, SEMrush, Canva, and Credit Karma.

Apply for FlexOffers

FlexOffers has over 10,000 affiliate product offers to apply for, including Nike, Hulu, Samsung, and Microsoft.

Become an Audible affiliate

Audible Affiliates earn $15 per user by referring new members to the audiobook site.

Join ShareASale

ShareASale offers its own affiliate link you can use to refer both merchants and other people who want to get into the affiliate marketing industry. They also offer other programs like WP Engine, Gusto accounting software, and other high-ticket affiliate programs.

Join PartnerStack

PartnerStack is an affiliate marketing network with companies like AirDNA and SurferSEO. Apply on the ParnerStack affiliate site.

Try Rakuten’s affiliate website

Rakuten Advertising has partners like Hilton, JanSport (backpacks), and One-Travel. Go to their website to apply to share affiliate links from Rakuten.

How to become an eBay affiliate

Smiling, casually dressed woman with a megaphone in front of eBay’s affiliate partner "Verify Your Bank Account Settings" webpage

You can join eBay’s affiliate program by going to eBay’s Partner Network website. We link to their Getting Started tutorial so you can learn more about it before signing up for the affiliate marketing program that makes between 1% and 6% on most sales.

How to join the Shopify affiliate program

Shopify affiliates gain access to a content gallery created to help affiliates succeed in affiliate marketing. You get $25 to $500 per item sold based on the location and paid package the user signs up for. There’s a catch, though. It’s invite only. Learn more.

WP Engine’s affiliate program

WordPress (WP) Engine offers a generous affiliate program based on the higher of $200 per purchase or the first month’s costs. They also offer a 35% commission on StudioPress, a growing collection of responsive, SEO-optimized WordPress templates. Apply to become a WP Engine affiliate.

Fiverr’s affiliate program

Fiverr freelancer platform’s affiliate marketing career webpage

Use the affiliate program to refer new buyers to freelancer platform Fiverr and receive $15 to $150 depending on what jobs they commission. Plus, the hybrid model offers 10% revenue share. This is a great affiliate program for B2B affiliates because almost every company could use some extra help occasionally.

ConvertKit’s affiliate program

ConvertKit is an email marketing tool that offers a 30% commission for the first 24 months. That means you can make between $2.90 and $18,720 per referral over the course of two years. Become a ConvertKit affiliate.

How to become a Twitch affiliate

Casually dressed bearded man in a beanie in front of Twitch’s affiliate marketing website

To become a Twitch affiliate, you’ll need to:

  • Stream a minimum of 500 minutes in the last 30 days
  • Broadcast a minimum of seven days in the last 30 days
  • Average three or more concurrent viewers during the last 30 days
  • Have a minimum of 50 Followers

As long as you meet these requirements, you’ll be sent an email invite to join the Twitch affiliate program, which provides you with a penny for each reaction during streams, plus a percentage of ad revenue. Learn more about the Twitch affiliate program.

Join affiliate programs

Successful affiliate marketing business concept showing happy man entrepreneur sitting in front of a laptop at home

After you’ve found the best affiliate marketing programs for your affiliate niche, sign up for the affiliate programs you’ve chosen. Most affiliate programs are free to join, but some may have specific requirements or restrictions.

You’ll need to:

  1. Apply for the affiliate networks you want to join. This will normally include providing your personal information and proof of web assets.
  2. Once you are approved on the affiliate network, you’ll want to submit any additional information to apply for each affiliate program. You’ll also need to submit the information to get paid by affiliate partners.
  3. Apply for the marketing campaigns you want to run on your affiliate sites. Many affiliate programs will have thresholds you have to meet to qualify to generate affiliate links. If you don’t qualify, wait until you meet their thresholds to apply.
  4. Wait for an approval.

What is an affiliate marketing program?

An affiliate marketing program is a structured arrangement established by a company or merchant to collaborate with individuals or entities (affiliates) who promote their products for a commission or referral fee. These programs are a popular form of online marketing where businesses leverage the efforts of affiliates to drive traffic, leads, and sales to their websites or offers.

Affiliate marketing programs benefit both merchants and affiliates. Merchants can expand their reach and boost sales without upfront advertising costs, while affiliates can earn commissions by promoting products or services they believe in or have expertise in.

It’s important for both merchants and affiliates to maintain transparency and ethical practices in affiliate marketing to build trust with customers and comply with regulations in their respective industries.

Build a platform

Passive income from-social media concept showing influencer popping out of a laptop with megaphone surrounded by social media platform icons

You’ll need a platform to promote affiliate products when you become an affiliate marketer. Consider running a blog, website, YouTube channel, social media profiles, or an email list. Anything that uses digital marketing will work as long as you have an audience.

There are a lot of people who create online courses then use affiliate marketing to sell other marketing automation tools that work well for eCommerce businesses. Choose the best platform to communicate with your target customers.

Visually interesting subjects will normally use video and image platforms like Instagram, YouTube, or TikTok. Meanwhile, writers might benefit more from blogs and Twitter.

Create high-quality content

Start creating valuable and engaging content related to your niche. This content can include articles, blog posts, product reviews, videos, podcasts, or social media posts. Your content should provide useful information, solve problems, or entertain your audience.

To create amazing content, you’ll need to:

  1. Research keywords to find what people are searching.
  2. Review competitors’ content.
  3. Create an outline (I normally just pull all the headings from competitors, reword them, analyze them, and rearrange them if anything looks out of place).
  4. Create enjoyable content for your audience.

Most affiliate marketing partners will go through three stages in their affiliate marketing journey:

  1. Unattached affiliate marketer
  2. Related affiliate marketer
  3. Involved affiliate marketer

Here’s what these affiliate marketing designations mean:

Unattached affiliate marketing

When you first get started you may not have any useful information to provide people and you’ll copy what others are doing. This is called unattached affiliate marketing, “zero-click,” or “linkless” affiliate marketing. These rely heavily on social media ads to build audiences.

Launch successful businesses and you will eventually develop the experience and authority to give others online marketing tips, at which point you’ll be more focused on the second type of affiliate marketing.

A related affiliate marketer focuses on products in their niche but hasn’t actually used them. It makes it hard to give a sincere review if you’ve never tested a product or service. Many customers see through this type of marketing as insincere and just trying to make a buck.

At least you’ve realized that you have to stay within your niche to participate in the best affiliate marketing programs available to affiliate marketers.

Involved affiliate marketing

The third stage affiliate marketers will enter involves showing they have expertise in the niche and with the product. At this point, you should be eligible for the best affiliate programs. You may even be assigned a dedicated affiliate manager, which may also be called a dedicated account manager.

An affiliate marketer using involved affiliate marketing has experience with their suggestions. That means they are telling their audience that the product has improved their lives in some way. When you endorse something that doesn’t work, it can harm your reputation.

The three levels of affiliate marketing intertwined

UpFlip’s online business ideas blog on a tablet

As your online business grows and you become more of an authority, the need for paid ads may decrease and your testimonial will mean more because your audience knows you have the experience to judge the products.

Business owner at a desktop computer using aff link creation to generate affiliate revenue

Within your content, strategically insert affiliate links to the products or services you’re promoting. These links will include unique tracking codes that identify sales or leads generated through your referrals.

There are a few different ways to insert affiliate links. We’ll discuss:

  • What are affiliate links
  • How do affiliate links work
  • How to get affiliate links
  • How to create affiliate links
  • How to get affiliate links for Amazon
  • How to set up affiliate links

Affiliate links are links with a unique URL that tracks when a user comes to a page through another company’s web assets. An affiliate link records specific data to track sales, including:

  • Affiliate username or ID: This is a unique identifier that lets the company know who referred the user to the website.
  • Clicks: Companies track clicks to see how well affiliate programs work to get people to come to their website.
  • Sales: The ultimate goal of affiliate links is to help a company sell more products or services. That means the affiliate program tracks sales from the affiliate referrals and pays them a commission.
  • Commision Rate: This is how much the affiliate program pays for an action. They might pay a percentage or flat rate on a one-time or recurring basis.
  • Cookie Life: This is the window of time during which an affiliate can get credit for traffic sent to the advertiser’s website.

When a visitor goes to the web page through the affiliate link and buys something, the advertiser pays the affiliate a commission.

Young woman dressed in business casual holding placard with word "Bonus" for affiliate program partners

Affiliate programs function by enabling individuals, known as affiliates, to promote and sell a company’s products or services. In return, these affiliates receive a commission for each successful sale generated through the unique affiliate link associated with their endorsement.

Here’s an overview of how this process operates:

  1. UpFlip displays advertisements or links for a specific website on our website, blog, or social media platforms.
  2. A potential customer clicks on our distinctive affiliate link.
  3. The customer proceeds to make a purchase on our partner’s website.
  4. The affiliate network tracks and records this transaction.
  5. Our partner verifies and confirms the purchase.
  6. UpFlip is compensated with a monetary commission.

The commission rates for affiliate sales can vary widely based on the particular company and offer. Typically, commissions range from around 5% to 50%, particularly when promoting educational courses or events. Some affiliate marketing programs offer a fixed monetary amount per sale instead of a percentage-based commission.

Concept of a few affiliate links selling product showing a link to click hovering over a box labeled "Product" exchanging hands

Go to the affiliate network that your affiliate program is on and go to the related affiliate marketing campaign. You should be able to see all your affiliate marketing campaigns in the affiliate dashboard like the one from CJ below.

Click on the one you want to add to your content. It will take you to a page that looks like this:

Then you’ll want to go to the links and sort them by the earnings per click (EPC). You can either choose a 7-day or 30-day EPC. You may also see EPC (100), which is earnings per 100 clicks. The higher the number the better as long as it is relevant to the content you create.

You’ll want to click Get code on the campaign you want to use. This will give you options like encrypted links, open in new window/tab, and whether to get HTML, JavaScript, or just the URL. Once you choose your settings, update the link and copy the code.

Man in an orange hoodie holding a laptop and wondering about affiliate marketing mistakes, shown with speech bubble reading "What?" overhead

To create an affiliate ID, you will need three main parts:

  1. The landing page
  2. Your affiliate ID
  3. Custom UTMs: Urchin Tracking Modules (UTMs), broken into five main types listed below
UTM Use Example
utm_source Specify the site the link came from

utm_source=Instagram

utm_medium

Categorize between social, email, organic, or paid traffic utm_medium=paid

utm_medium

Tie the link to a specific promotion utm_campaign=Course_beta_testing

utm_medium

Make it easy to track the keyword utm_term=best_business_courses

utm_medium

Used for A/B testing utm_content=link_1 and utm_content=link_2

That means you might have a link that looks like the one below:

Pro Tip: Want to take a deeper dive? You can learn more about building links from Google.

Amazon used to have numerous ways you could get affiliate links for a page including Native Shopping Ads, banners, and mobile popovers, but they recently discontinued support of everything except the “link to any page” setup.

With link to any page, you can link to:

  • Favorite destinations: Choose a product line and subcategory, name the link, and copy the HTML.
  • Search results: Select a product line, enter the keyword, name the link, and copy the HTML.
  • Any page: Paste the link, name the link, and copy the HTML.

You can also use the Idea Hub to get ideas that you could have success with. The mobile app also allows affiliates to share an affiliate link directly from the app with Mobile GetLink.

When we set up affiliate links, we use the following process:

  1. Sign into the affiliate program.
  2. Choose the most relevant link.
  3. Set the link to open in a new window.
  4. Update the link.
  5. Sign into WordPress.
  6. Go to Pretty Links.
  7. Name the link.
  8. Add the link to Pretty Links.
  9. Create a redirect that looks like https://www.upflip.com/go/business-name.
  10. Click the advanced tab.
  11. Mark the Sponsored box.
  12. Save the link.
  13. Add it to your content.

Watch the video below for an example of how to do this in WordPress with Pretty Links.

[su_youtube url="https://youtu.be/3RAe15-1nBA"]

Disclose your affiliate relationship

It’s essential to be transparent with your audience about your affiliate marketing activities. To maintain trust and comply with FTC regulations, you must clearly disclose your affiliate relationship in your content using disclaimers or disclosures.

The way we approach this step is by posting a disclaimer at the top and bottom of each page that says:

"UpFlip earns commissions when you buy products using links on our website. You can learn more about our standards here."

Then in sections with affiliate marketing links, we add:

"This section includes affiliate links."

If you’re using WordPress, you can also make each link a sponsored link by clicking a setting on the link.

Again, these steps are needed to comply with the FTC regulations.

Drive traffic

You have to drive traffic to your content to earn commissions. Utilize various marketing strategies like SEO, social media marketing, email marketing, paid advertising, and content promotion to attract visitors to your platform.

Monitor and track performance

Use analytics tools and affiliate dashboards to monitor your performance and track clicks, conversions, and earnings. This data will help you refine your strategy and focus on what works best.

Optimize for conversions

Continually analyze and optimize your affiliate marketing strategy. Test different promotional techniques, track your results, and make adjustments to improve conversion rates and maximize your earnings.

Scale your efforts

Once you’ve established a successful affiliate marketing strategy in one niche, consider expanding to other niches or products to diversify your income streams.

Stay compliant

Be aware of legal and ethical guidelines related to affiliate marketing in your region. You’ll need to comply with the FTC guidelines in the United States and ensure your marketing practices are ethical and transparent.

Affiliate marketing FAQ

How much do affiliate marketers make?

Nearly 59% of affiliate marketers have not monetized within their first year. You can expect the following breakdown for affiliate marketing earners:

  • Under $80K annually: 80%
  • $80K to $1M annually: 15%
  • $1M to $12M annually: 4%
  • $1M or more monthly: 1%

What is the best affiliate program?

This section includes affiliate links.

The best affiliate program will depend on what kind of content you are creating. Sites like Amazon are easy to work with for first-time affiliate marketers but don’t pay that well.

Meanwhile, insurance companies and online courses tend to have amazing affiliate incentives and are some of the best affiliate programs to earn money with.

Remember, affiliate marketing won’t create a sustainable income overnight. Success typically comes from consistent, high-quality content creation, effective promotion, and a deep understanding of your audience and niche. Be patient and persistent, and over time, you can potentially earn a steady income through affiliate marketing.

My personal favorite recommendations for affiliate programs are:

  • SurferSEO: Everyone needs writing and you can use the AI writer for $29 per blog. Check out SurferSEO.
  • Simply Business: This small business insurance aggregator helps you find the insurance you need faster and pays $25 per quote. Check out Simply Business.
  • Booking Koala: This quoting platform is one of our top-performing affiliate programs. Booking Koala pays 50% commissions.
  • Google: You can earn commissions for sending paid users to Google Workspace or Google Cloud. Both of these are brands that people know well. Apply on CJ to become an affiliate.

Where is the best place to start affiliate marketing?

Young man business owner using a smartphone to generate leads shown by text reading "$25 to $50" over a graph on his phone

[su_quote]I strongly disagree. Everyone is using Amazon affiliate marketing and the margins are crap.[/su_quote]

Matt recommends ShareASale or Impact.

We’ve provided the information for you to monetize your content. What kind of content do you create and how will you start earning affiliate revenue?

Are you struggling to find the right balance for your marketing budget? Maybe you don’t know which marketing strategy to use. We have the information you need to improve your overall marketing performance.

We surveyed business owners to understand how small businesses approach marketing. More than 1,800 people responded, and we’ve used their insights, as well as data gathered for our average marketing budget report to provide a guide for creating marketing budgets.

We’ll explain what a marketing budget is, how much experts suggest spending, and how much marketing teams spend, then we'll discuss how to create a marketing plan. We’ll even show you how to promote a company on a tight budget so you can become a marketing leader without spending thousands on ads.

[su_note note_color="#dbeafc"]Click on any of the links below to jump ahead.

What is a marketing budget?

A marketing budget outlines the costs a company spends on marketing its products or services. Your marketing budget should cover a specific duration, usually a quarter or a year. Your budget may also have periods for particular marketing campaigns.

Your marketing budget should include all expenses related to spreading the word about your business. Your marketing budget allocation will estimate costs for various line items, including:

  1. Marketing team
  2. Paid advertisements
  3. Marketing software
  4. Outsourced marketing services

Expect your company marketing spending to be approximately equal in all four categories.

What is the average marketing budget for a small business?

Responses to UpFlip survey question "How much have you spent on marketing in the last year?"

We asked how much business owners spend on marketing strategies. We found that two-thirds spend less than $1,000 per year marketing their small business, while 15% spend over $10K and another 19% spend between $1K and $10K.

Meanwhile, the Small Business Administration suggests a marketing budget allocation of 8% of company revenue. That means two-thirds of businesses are only marketing enough to make $12,500 in revenue annually.

To make $100K in revenue, you should be spending around $8,000. Meanwhile, if you want $100K in after-tax profit, you’ll want to spend $32K to $400K on marketing each year, based on 2% to 25% profit margins.

How does having a budget help you avoid the traps of digital marketing?

A digital marketing budget makes tracking performance against goals and industry benchmarks easier when comparing marketing channels. The budgets for each channel can also be set in most advertisers’ software, preventing marketing from running rampant.

You can also limit wasted expenses on Google Ads by narrowing your spending to only high-performing keywords.

You can also use the high-performing keywords to guide other marketing team efforts by focusing social media ads, video marketing, and search engine optimization on subjects that actually contribute to your company’s success.

Author’s No-Nonsense Note About Marketing Budgets

Concept showing a men’s fashion website loaded on a laptop next to a miniature shopping cart loaded with and surrounded by brightly colored shopping bags

There are two ways to go about marketing: Spending time or spending money. Every hour you spend marketing is one you can’t spend providing services or creating custom products. Of course, eCommerce stores, content creators, and marketing agencies are marketing during all work hours.

If you have virtually no marketing budget or want to do it all yourself, I suggest assuming you will spend 20 hours per week promoting your business and 20 billable hours per week serving customers. You’ll need to calculate your service rates (or product prices) based on these reduced weekly hours.

How to create a marketing budget

Man standing in front of a chalkboard with an upward trending arrow holding a laptop in one hand and cash in the other with a question mark overhead as he wonders how to create a marketing budget

Creating a marketing budget involves careful planning, analysis, and allocation of resources to ensure that marketing activities align with business goals. Here's a step-by-step guide to help you create a marketing budget:

  1. Understand customer needs.
  2. Examine your business goals.
  3. Review past marketing budget management.
  4. Measure the average cost per lead.
  5. Calculate the average conversion rate.
  6. Establish how many leads you need.
  7. Define your marketing objectives.
  8. Create your marketing budget.
  9. Regularly monitor and adjust your marketing spend.

Understand customer needs

Your marketing strategies should focus on showing you understand your target customers. To succeed, you’ll want to use research and marketing analytics data to gain deeper insights into what existing and potential customers want and need.

Without market research, marketing teams may have a difficult time identifying the marketing channels to reach their target audience best.

Explore demographic and psychographic factors like age, gender, income level, location, and brand loyalty to learn more about what your target audience cares about.

Examine your business goals

You’ll want to consider the overlying business strategy and goals before you create a marketing plan and budget. You might need to talk to executives, investors, and other team members to establish what the business goals are, then create a marketing plan that helps you achieve those goals.

Your business strategy will also impact the marketing team's goals because the marketing budget needs to be high enough to accomplish the business goals.

Throughout this piece, we’ll assume you are trying to make $250K across 1,000 customers. We’ll use these numbers to help illustrate some of the concepts you’ll use to avoid common marketing budget mistakes.

Review past marketing budget management

Before you create a marketing budget plan, review previous years’ marketing budgets and marketing campaigns. Identify what worked well and what didn't. Look for indicators like:

  • Which marketing channels were under budget or over budget?
  • Which marketing campaigns had a higher or lower return on ad spend?
  • Did you overestimate or underestimate the previous year’s marketing budget?
  • Did you add new products or services that impacted marketing costs?
  • How does your cost per lead, cost per click, clickthrough rate, and conversion rate compare to industry averages?

This data will help you make more informed decisions for the upcoming budget.

Wordstream is a good source for these metrics if you do not have information from previous marketing campaigns. It will provide you with a good benchmark to compare your performance.

This is Wordstream’s data regarding cost per click, cost per lead, click-through rate, and conversion rate for Google Ads.

  Avg. Cost Per Click ($) Avg. Cost Per Lead ($) Avg. Click-Through Rate (%) Avg. Conversion Rate (%)
Animals & Pets  $3.13  $23.57  8.12%  13.41%
Apparel / Fashion & Jewelry  $2.72  $72.24  6.46%  1.57%
Arts & Entertainment  $1.55  $76.71  11.78%  3.03%
Attorneys & Legal Services  $9.21  $111.05  4.76%  7.00%
Automotive — For Sale  $2.08  $42.52  8.77%  5.72%
Automotive — Repair, Service & Parts  $3.06  $21.12  5.91%  12.61%
Beauty & Personal Care  $2.89  $36.97  6.87%  8.16%
Business Services  $5.47  $87.36  5.11%  4.94%
Career & Employment  $3.78  $132.95  6.67%  3.11%
Dentists & Dental Services  $6.69  $65.37  5.34%  10.40%
Education & Instruction  $4.10  $62.80  6.41%  7.07%
Finance & Insurance  $4.01  $90.02  6.18%  4.11%
Furniture  $2.77  $108.85  6.19%  2.57%
Health & Fitness  $4.18  $51.42  6.44%  8.40%
Home & Home Improvement  $6.55  $66.02  4.80%  10.22%
Industrial & Commercial  $4.35  $59.74  5.57%  7.91%
Personal Services  $3.90  $40.85  7.54%  8.70%
Physicians & Surgeons  $3.97  $37.71  6.73%  13.12%
Real Estate  $1.55  $66.02  9.09%  2.88%
Restaurants & Food  $1.95  $34.81  8.65%  5.06%
Shopping, Collectibles & Gifts  $2.44  $31.50  6.39%  3.69%
Sports & Recreation  $1.77  $31.82  10.53%  5.69%
Travel  $1.63  $62.18  10.03%  3.87%

Measure the average cost per lead

Cost per lead (CPL) is a marketing metric that compares what you spend on lead generation to the actual number of leads you generate. This helps you understand how much it will cost for a marketing campaign.

The CPL formula is:

CPL = Amount spent on leads / Number of leads

Ideally, marketing investments would use your current numbers, but for those just implementing marketing tactics, use the benchmarks in the table above.

Calculate the average conversion rate

Conversion rate (CVR) measures the percentage of leads you turn into paying customers. Use the formula below to calculate the average conversion rate:

CVR = Number of Sales / Number of Leads

Establish how many leads you need

Now that you're familiar with some of the terms used in a digital marketing strategy, you’ll want to calculate the number of leads you need to hit $250K in gross revenue.

You’ll need to use the formula:

Desired Customers / CVR = Leads to Meet Goal

Let’s assume you’re in the home improvement field, which has a 10.22% CVR. That means you’ll divide:

1,000 Customers / 10.22% = 9,785 leads

Taking it a step further, your marketing plan needs to calculate how much marketing projects cost by multiplying the leads needed by the CPL ($66.02).

9,785 x $66.02 = $646,005.70

As you can see, this is way higher than the $250K revenue you’re hoping to make. That’s because marketing leaders like Google and Facebook tend to charge based on an estimated lifetime customer value. Effectively, you’re paying a percentage of the revenue that you expect to make over the life of the customer relationship.

This is why a marketing budget includes a budget allocated to increasing the earnings from each paying customer through remarketing, loyalty programs, and other strategies that are less costly than paid advertising.

Define your marketing objectives

Next, you’ll want to define your marketing goals and align them with your business goals. Let’s look at some business goals and corresponding goals to include in your marketing budget.

Business Goal Marketing Goal
Increase revenue from $100,000 to $200,000 The topline marketing budget should be less than $24,600
Increase sales per transaction by 10% Raise prices, add suggestive selling to the website, and promote higher-value items
Improve profit by 1% Cut underperforming campaigns, raise prices, implement repurposing content

You could tie marketing goals to other business goals, like:

  • Raise brand awareness by X%
  • Limit discounting current customers' bills to under Y%

These are just a few examples of how your business goals should impact your marketing strategy. Want to know more about tying marketing goals to business goals? Check out this blog.

Create your marketing budget

First, you’ll want to establish the total funds available for marketing. This may be based on a percentage of revenue, a fixed amount set by the company, or other financial considerations.

We suggest using the marketing budget of 12.3% that was mentioned in this CMO study. A startup marketing budget may need to be even higher. MaidThis CEO Neel Parekh told us:

[su_quote]When you first start a business, you may need to spend 20% to get clients faster.[/su_quote]

Check out our interview with him below.

https://www.youtube.com/watch?v=kVyLriqFVdc

Use a marketing budget template

Whether you’re a small business owner or work with them, you can use the information in this report and our marketing budget template to create a balanced small business budget.

The template lets you choose your industry and your revenue goal. Then it suggests a sample marketing budget amount.

Once you know how much your marketing budget should be, you can use the other tabs to set the budgets for specific aspects of your marketing strategy. Then add the actual expenses for an entirely new way of budgeting.

Pro Tip: Seriously, this marketing budget template is probably the tool I am most proud of during my seven years of consulting.

Allocate budget by channel

Decide how much of your budget will be allocated to the marketing channels outlined below.

As you go, you’ll notice that some budget-based initiatives make advertising small business products and services easier than others do. Start limiting your marketing spend on the ineffective channels and transfer it to the ones that are performing better.

Marketing spending as a percentage of revenue ranges from 0% to as high as 38.57%, with an average of 12.3% and a median of 10%. In addition, the average marketing budget dedicates 53.4% of its marketing dollars to its digital marketing budget, while the rest is spent on traditional advertising.

Marketing Budget Distribution
Side by side of two business owners working their marketing plans—one on a laptop taking a call on a cell phone, the other using a tablet and surrounded by social media icons including X, Facebook, and Instagram

Once you’ve decided how much to spend on marketing, you’ll want to break your marketing budget down to the costs for all marketing campaigns. Marketing costs for small businesses will include:

  • Content marketing budget: Expect to spend a minimum of $29 per piece, but some of the best content creators have content marketing budgets that cost up to $1,000 per piece. You may also find content creators that charge $.05 to $1 per word.
  • Paid digital advertising budget: Small businesses should expect to spend $2.59 per click, $3.12 per 1,000 impressions, $.66 to $1.23 on remarketing, $15 to $800 on tools, and a minimum of $350 per month for the monthly ad budget, according to WebFX.
  • Ad monitoring budget: To pay someone to monitor ads for your small business, include a marketing spend of $350 to $5K per month or 12-30% of monthly ad spend—whichever is more.
  • Email marketing budget: Your email marketing budget will vary based on the number of email addresses on your list and the features you need, but you should expect to spend around $18 per month for up to 1,000 people on your email list. As you grow, costs may increase up to $540 per month, plus related labor costs.
  • Social media marketing budget: Social media marketing in 2023 is expected to reach $72.33B in spending, or $2,178.62 per business (calculated by dividing $72.33B by the number of U.S. businesses).
  • Sales funnel automation budget: Automation systems might be included in your email marketing, social media marketing, or other marketing channel budgets.
  • Marketing tools and software: You might include these costs in other categories or put them in a dedicated category. On average, 25.5% of marketing budgets are spent on tech. Depending on the size of your company and the number of customers, necessary tools and software could be free or cost thousands per month.
  • Outsourced marketing expenses: Some companies will outsource all or part of their marketing. As you’ll see in the chart below, approximately 23.5% of marketing costs go to marketing services and agencies.
  • Traditional advertising budget: Traditional marketing budgets are expected to decrease by 2.6%, according to the CMO report. This includes print ads, outdoor advertising, radio spots, and more.

For social media, paid ads, and traditional advertising, you may want to break the promotional budget into specific marketing channels. We recommend utilizing this marketing budget template.

Small Business Allocation: How It’s Different

Professional marketers who responded to the CMO Survey said they spend approximately equal portions of their marketing budgets on marketing labor, paid media, technology, and outsourcing.

Meanwhile, our surveys show that small business owners think about their marketing efforts and spend their marketing budgets differently. The primary form of marketing most small business owners use is social media (60%), followed by Google Ads (17%), SEO (10%), print (7%), and content marketing (6%).

In addition, 44% of small business owners state that print advertising has not worked for their business, while just 24% did not find social media effective. Google Ads and SEO were tied at 13% for perceived ineffectiveness, while content marketing is the channel small business owners find most effective.

Interestingly, small business owners focus least on the strategy that has the most perceived effectiveness. If you’re looking for ways to grow your business, consider creating more content.

Include a contingency

However you think you’ll allocate your marketing dollars, it’s always best to give yourself some wiggle room when creating a marketing budget plan. Most budgets for marketing tend to be approximately 20% higher than companies actually spend.

Make sure you include a contingency in your budget that is up to 10% so you have some extra room if you need it as you manage your small business.

Regularly monitor and adjust your marketing spend

Business person using Google’s Marketing Platform on their laptop

Continuously monitor the performance of your marketing activities against your budget. Make adjustments as needed to optimize performance and maximize return on investment (ROI).

The most commonly used marketing analytics software is Google Analytics. The most common metrics to measure marketing performance are:

  • Sales, revenues: 69.9%
  • Digital, web, and mobile performance: 55.6%
  • Content engagement: 43.4%
  • Lead generation: 40.3%
  • Lead conversion: 36.9%
  • Campaign costs, efficiency (e.g., production, content reuse): 34.8%
  • Campaign effectiveness (e.g., gross rating points, reach, frequency): 34.7%
  • Customer satisfaction: 32.7%
  • Campaign ROI: 30.7%
  • Customer churn, retention rate, loyalty: 28.6%

Why you need an integrated marketing strategy

When a company integrates its marketing strategy, it makes sure every marketing channel pulls from the same playbook.

An integrated marketing strategy is crucial for businesses and organizations for several key reasons:

  • Consistency: An integrated marketing strategy ensures that your brand messaging and visuals are consistent across all channels. This consistency helps you create a cohesive brand identity that earns trust and credibility with your audience.
  • Maximized Reach and Exposure: Different people consume information through different channels. By integrating various marketing channels (such as social media, email, content marketing, traditional advertising, etc.), you can increase your audience and visibility.
  • Improved Customer Experience: An integrated approach allows for a seamless and unified customer experience. When customers encounter a consistent message and experience across different touchpoints, it makes for a smoother and more enjoyable interaction with your brand.
  • Increased Efficiency: Coordinating different marketing efforts can lead to increased efficiency. For example, when your social media efforts align with your content marketing strategy, you can repurpose content for both channels, saving time and resources.
  • Better Data and Analytics: Integrating different channels will help you get a better picture of your audience and their preferences. This allows for better tracking, measurement, and analysis of marketing efforts, leading to better-informed decision-making.
  • Adaptability and Agility: An integrated strategy enables you to pivot when market conditions or consumer preferences change. If one channel isn't performing as expected, you can adjust your approach across multiple channels more easily.
  • Competitive Advantage: Companies that successfully integrate their marketing efforts often gain a competitive edge. This is because they're able to deliver a more cohesive and compelling message than competitors with a disjointed or inconsistent approach.
  • Alignment with Business Goals: An integrated strategy ensures that all marketing efforts are aligned with overall business goals and objectives. This means that every campaign and initiative is contributing to the broader mission of the company.
  • Optimized Budget Allocation: Integrated marketing allows for better allocation of resources. By understanding which channels are most effective for your specific audience, you can allocate your budget and staff to maximize return on investment.
  • Long-term Growth and Sustainability: An integrated approach sets the foundation for sustainable growth. By building a strong and consistent brand presence, you're more likely to retain customers and attract new ones, leading to long-term success.

In today's highly competitive and fast-paced business environment, having a well-thought-out and unified marketing plan is essential for staying relevant, reaching your target audience, and achieving your business objectives.

How to promote your business on a limited marketing budget

Promoting your business on a limited budget requires creativity, strategic planning, and a focus on cost-effective methods. Here are some practical steps to help you get started:

  1. Define your target audience.
  2. Leverage social media.
  3. Optimize your website.
  4. Invest in content marketing.
  5. Be consistent with email marketing.
  6. Collaborate with influencers or partners.
  7. Utilize free marketing tools.
  8. Network in your industry.
  9. Offer referral incentives.
  10. Leverage user-generated content.
  11. Do your own graphic design.
  12. Perform local SEO.
  13. Run giveaways and contests.
  14. Measure and adjust.

Keep reading to learn more about small business marketing methods on a small budget.

Define your target audience

You need to understand your target market to tailor your marketing efforts toward the people who are most likely to be interested in your products or services. Your target market should be as narrowly defined as is reasonable.

Some of the demographics and data points you can use to narrow your target market and reduce your online advertising expenditures include:

  • Age
  • Gender
  • Wealth
  • Location
  • Hobbies
  • Jobs
  • Other demographics

The more narrow your budget, the less cost involved.

Leverage social media

Young woman working on a laptop surrounded by social media icons including YouTube, Instagram, Facebook, and X

Most small businesses that are operating on a small marketing budget will focus on social media posts. You can get a lot of free marketing when you:

  • Choose the Right Platforms: Focus on the social media platforms where your target audience is most active.
  • Join Facebook Groups: There are groups for everything on Facebook. Join your local groups to network and attract customers.
  • Post Regularly: Regular and engaging content can help build a community around your brand.
  • Utilize Hashtags: They can expand the reach of your posts to a wider audience.
  • Engage with Your Audience: Respond to comments, answer questions, and foster a sense of community.

Optimize your website

Try using a free website builder to start. Ensure your site is user-friendly and responsive on mobile. Once you’ve set up your website, use SEO techniques to improve your site’s visibility on search engines.

As you grow, you’ll gain more functionality from a paid website.

Invest in content marketing

As we mentioned earlier, content marketing is one of the least used but most effective types of marketing small businesses can do. Businesses should create valuable, relevant, and informative content that resonates with their target audiences. Blog posts, videos, infographics, and e-books are all great options.

Be consistent with email marketing

Email marketing campaign concept showing a laptop with unopened email icons

Collect email addresses through your website and social media. Then send out regular newsletters with updates, promotions, and valuable content.

Collaborate with influencers or partners

Partnering with influencers in your niche can expose your business to a broader audience. You can also collaborate with complementary businesses for joint promotions or events.

Utilize free marketing tools

Free tools, like Google Analytics, Google Business Profile, and onsite social media analytics, help you monitor performance and make data-driven decisions. There are many other free apps to use as a small business, too.

Network in your industry

Marketing network event being hosted in an open concept space with a speaker standing up in front of the group and an UpFlip slide on the screen

Attend industry seminars, conferences, and other events to make connections and spread the word about your business. These are great places to meet potential customers and people who can refer you to customers.

Offer referral incentives

Encourage your existing customers to refer friends and family by offering discounts or special deals. It doesn’t have to be much—people will appreciate 5% to 10% discounts.

Leverage user-generated content

Encourage customers to share their experiences with your products or services on social media. You can feature their content on your platforms and share them with your followers on social.

Do your own graphic design

Use free or low-cost tools, like Canva, to create eye-catching visuals for your marketing materials. Canva makes it easy to create content and doesn’t require design experience.

Perform local SEO

Young woman working on a laptop to see how business is ranking in local SEO

Optimize your business for local searches so people in your area can easily find you. To do this, you need to:

  1. Make sure your name, phone number, and address are consistent across the internet.
  2. Sign up for Google Business Profile.
  3. Improve your online listings.
  4. Share updates, like new locations or hours, with Google.
  5. Request Google reviews.
  6. Optimize URLs, title tags, headers, meta descriptions, and content on your website.
  7. Add a Google map with your location in your site’s footer.
  8. Create localized content.
  9. Improve your site’s mobile friendliness.
  10. Participate in the community. When people see your company interacting with the local community, it builds trust, and search engines may take notice.

Run contests and giveaways

Engage your audience by offering prizes in exchange for social media engagement or email sign-ups. The point here is to get more followers and more emails to contact. You’ll want to:

  1. Establish your goals.
  2. Choose a contest to run.
  3. Build the contest.
  4. Promote the contest.
  5. Track the results.
  6. Follow up after the contest.
  7. Improve the next contest.

Check out Wishpond’s blog for a more extensive guide on hosting contests.

Measure and adjust

Keep track of what works and what doesn't. Focus on the strategies that give you the best ROI. This will help you avoid falling into the category of small business owners unsatisfied with their marketing results.

These small business marketing statistics can help you create an informed marketing budget, especially when you remember that online marketing is steadily gaining traction over traditional marketing channels, like print and radio.

What is your experience with marketing budgets?

We’ve discussed the importance of creating a marketing budget, provided you with marketing budget allocation best practices, and shared tips on how to use marketing budget templates whether you have an established business or are just starting one.

Whether you have a marketing department or not, take the time to make a marketing budget. It will help increase sales and reduce wasted spending.

Based on years’ worth of UpFlip interviews, I can tell you that marketing automation software and content marketing have some of the best returns.

Have you ever created a marketing budget? What was the biggest pain point in creating it, and what new marketing strategy will you try next?

Wouldn't you like to boost the chances that a business you purchase is a lucrative cash cow instead of a money pit?

You want to make a good decision, and there are essential questions to ask when buying a business.

Budding business owners often buy a business without asking the right questions to become successful. You want to ask questions that reveal all the red flags and minefields that could cause the business to blow up in your face six months later.

We’ll discuss questions to ask yourself before and after approaching businesses and questions you need answered about any business’s history, finances, and the management of the business venture.

[su_note note_color="#dbeafc"]Read from start to finish or click any of the links below to jump right to the topic that interests you most.

There's a lot at stake here. So, sit down and come up with an exhaustive list of questions to ask that'll elicit the exact information you need. Equally important, write down the answers you receive so you have this knowledge when you most need it.

Buying an existing business checklist

Top-down shot of a checklist at a workspace next to a laptop, notebooks, pen, and a potted succulent

There are so many questions to ask before buying a business involved in any industry. You should probably have a checklist with you to verify that you have successfully asked all the due diligence questions to ask when buying a business. Download our buying a business checklist.

Ask yourself before buying an existing business…

1. How will the business further my goals?

You should have a reason for buying the business. Are you trying to acquire technology, customer lists, and employees or achieve other goals?

This question should impact how you evaluate every decision. If an answer doesn’t align with this goal, you may need to ask clarifying questions.

2. Is it better to start a new business instead of acquiring a business?

Do a sanity check before you go and buy a business. You don’t want to buy a business that’s a mess if you can save money by, for example, buying the equipment you want and starting your own business yourself.

3. Can you afford to buy the business?

Business partners sitting down with a laptop and paperwork discussing whether they can afford to buy a new business

You’ll need to establish whether you can afford to buy the business. You’ll have three options as a purchasing business owner:

  1. Buying with cash on hand
  2. Seeking a business loan
  3. Offering the current owner an equity deal

Analyze your current cash flow and figure out how much money you'll be able to spend on the business. Make sure you have enough money for the down payment. It's usually 10 to 20% of the purchase price.

Then, come up with a price tag and stick to it.

Pro Tip: Eager to buy a business but need more help? Bookmark our comprehensive How to Buy a Business With No Money guide.

4. Can your business manage the acquisition?

If you already own a business and are planning a merger, know that a business purchase can be disruptive to business operations. It takes management time away from both small business owners, and key employees from the newly acquired business will take time to acclimate to the new company culture.

5. Will the two cultures blend well?

Business owner and a consultant reviewing information on a tablet

Similarly, if you already own a business and want to grow by buying another, as a new owner, you’ll need to consider how the management team and employees of each organization will work together. Cultural differences can create real problems when you buy businesses.

6. What third-party consultants do I need to hire?

A business owner may need consultants when buying small businesses. You’ll probably need:

  • Contract lawyers
  • Financial analysts
  • Auditor
  • M&A marketing strategists
  • Cultural consultants
  • Human resource experts

7. Is this the best company to purchase currently?

Before buying a company, make sure that it is the best business to achieve your goals.

Keep reading for more questions to ask when buying a business.

Questions to ask a business owner about its history

QuickBooks blog post on tax forms, schedules, and resources on a desktop computer

You'll want to know about the history of the business you'll be buying. An honest business owner will talk about the mistakes the owner made during the business’s history. Hopefully, they'll share valuable pointers on how to avoid making the same mistakes during day-to-day operations.

That's why you should ask these questions about business history.

8. Why are you selling?

You might learn about recent problems the owner is having. The beauty of this question is that it's blunt and might tell you exactly what you need to know.

However, you might get an answer like “I want to retire” or “It's time to see the world.” Although these answers can be truthful, business owners frequently use them to cover up red flags when buying a business.

That's why it's up to you to dig deeper to uncover why the business owner is looking for an exit strategy. Sometimes, you'll just have to trust your intuition.

9. How long have you owned the business?

Woman business owner in an apron with boxes, shelves, and a laptop in the background

When a current owner has operated a business for a long time, you'll probably be buying a company with a loyal customer base and brand recognition.

Past longevity is an excellent indicator of business success. So, if the proprietor has been in business for three decades, you're probably purchasing a valuable asset that'll continue to be a cash cow for you, too.

10. Why did you originally start or buy the business?

This question helps establish the mindset of the current owner. It might also show differences in motivations that could be impacted if a company grows.

Keep reading for financial questions to ask when buying a business.

Questions about the company’s finances

You'll want hard financial data, right? Here are some questions to ask to get the numbers you need:

11. What's the annual gross revenue?

This will tell you how much money you'll be able to pull in with the existing business. But probably even more important is the next question…

12. What are the ongoing costs?

This business question will help you establish how much working capital the company has.

Asking this question and the next one together can be a good way to establish how well the business owner manages its financial statements.

13. How much profit have you made over the years?

Daily calendar next to stacks of hundred dollar bills

Look closely at these figures. High gross revenues and low profit margins indicate high overhead—which is either a red flag or an opportunity.

14. What is your profit margin?

While this may seem the same as the last question, you want to ask questions differently to see if you get consistent answers.

15. Will I be taking on any liabilities?

When you are buying a business, you could also be picking up undisclosed outstanding debt. This could significantly jack up what you'll pay. That's why it's so important to ask about legal obligations!

Any legal obligations and liabilities you will not assume need to be paid off before closing. Don't let the owner say he'll pay them off later because the legal doctrine of “successor liability” means you become liable after business purchasing.

Pro Tip: A better way to handle liabilities is to subtract them from the offer you make when purchasing the business from the previous owner.

16. Can I view the cash flow statements?

Once you start seriously considering buying a business, you'll want to get the financial statements verified by an independent auditor.

This individual will scour the books with a proverbial fine-tooth comb to confirm that what the owner told you is the truth.

And if your auditor does their job right, they’ll leave no stone unturned.

Questions about selling price

Young man with disheveled hair looking up toward a thought bubble with a dollar sign in it

Ask questions that'll help you get to a more precise determination as to how much the small business is worth. This information will help you pay a reasonable price for the company so you're not swindled. If you overpay, this could leave you in dire financial straits, which could ultimately lead to the failure of your business.

Questions to ask about price include:

17. How much are you asking?

Try to get at least a ballpark figure for how much the owner wants. This will let you know if proceeding to the negotiation stage will be worth it. The price should be no more than three times the annual profits.

18. How did you arrive at the purchase price?

Again, this is the kind of question that'll give you a little peek into the mind of the owner. Listen carefully, and then decide whether you think their answers are trustworthy.

19. What assets am I getting?

Man unloading boxes from a work van surrounded by social media icons including Facebook, X, Instagram, and YouTube

This includes both tangible (things like delivery trucks, cooking equipment) and intangible (goodwill generated, social media accounts) assets of the existing business. You want a comprehensive inventory of every single thing you'll be getting in the sale.

20. Have you ever had the business appraised by an independent auditor?

An independent appraisal will give you the best idea of how much you should pay. So, if one hasn't been performed, you should think about having it done before you buy. This way, you'll know the value of the business you're thinking about acquiring.

21. How much access will my auditor have to your books?

You'll want to make sure that you or your financial professional can look at the business's financial statements for the last three to five years. These include tax returns, income statements, balance sheets, cash flow statements, and any current contracts or leases. If you're going to have an independent auditor look at them, make sure you hire a reputable one.

While it would be nice to trust a business's own financial analysis, it's best to be sure the statements have been vetted by accounting professionals. If the owner refuses, he may have something to hide. In that case, it would be best to just walk away from the deal.

22. What do you think the goodwill value of your business is?

There might be a lot of intangible things that go into the owner's personal valuation of their existing business that the hard financial data won’t reveal. These include things like the reputation of the company, customer lists, and employee expertise.

Questions about financing

Man in glasses and a casual sweater sitting at a desk reviewing financial paperwork with coins flying overhead

The following questions will help clarify your financing options:

23. Are you willing to finance the transaction yourself?

This will indicate whether the owner believes in you and the small business. Seller financing usually covers 10% to 25% of the purchase price of a company. It can be used to add to a down payment.

If you can get your seller to put some money on the line by financing the sale, it might serve as an indication of the seller's confidence in the future of the small business. They know more about the business than you do, and if they're not willing to gamble on its success, why should you?

24. What financing options do you recommend?

The current owner might know sources that you don't know about. It doesn't hurt to ask!

25. Are you willing to take a standby position?

Most small business loan lenders loans insist that sellers take a standby position for about two years. This means the seller won't receive any payments during that time. If your seller won't finance the entire transaction, find out if he'd be willing to take a standby position so that the rest of the deal can be funded.

Questions about day-to-day management

Casually dressed woman business owner jotting a note while holding folders and steno pads

Devise a series of carefully written questions to ask that'll help you figure out how the small business generates revenue and how it's run on a daily basis. The better you understand all this, the more confidently you can operate your new business. Businesses with a steady revenue stream are the safest bet.

Ask questions like:

26. How does the business generate revenue?

You'll want to know how you'll get paid—whether that's a one-time payment, through a subscription, or some other means. Some businesses have unique ways of generating revenue that might not be familiar to you.

27. Does the business have a list of profitable clients?

If the small business you're thinking about acquiring has one, ask to take a look at it. This list could be a goldmine for you, making it one more reason to buy the small business.

28. What's your marketing plan?

Screenshot of Fortune article on creating a marketing strategy for small business

Ask the owner what kind of marketing he's done in the past—and what worked and what didn't. This way, you'll get valuable feedback on the marketing that'll get the most bang for your buck.

29. Exactly how many hours do you work each week?

This is an indication of how much of your time your business will eat up. Even the most die-hard entrepreneurs will want to get away once in a while. So, find out how often the current owner was able to get away. You want to know what you're getting yourself into!

30. Are you currently paying yourself?

If the owner isn't getting paid, this is a red flag. You want your venture to generate enough profits that you can draw a salary.

31. How quickly does the business get paid for services and goods?

Stacks of quarters next to a white alarm clock

If there's a time delay between the delivery of merchandise and payment, there might be a supply chain problem. You might want to take a closer look at that before you agree to buy the business.

32. Can you stay on for a short time to ensure a smooth transition?

Buying an existing small business isn't like making other large purchases. No matter how much you know about what you'll be selling, there's probably going to be at least a bit of a learning curve. That's why it would be great if the owner could stay on for six to 12 months to help you learn the ropes.

33. Who are your competitors?

Many businesses fail because they don't meticulously study their competition. You need to know your competitors inside and out so you can effectively compete against them after buying a business.

34. How much of the success of the business is due to the owner's personality?

Smartly dressed business woman standing in front of a cityscape

If the answer is “a lot,” you might think twice about buying this business. That's because this is something that'll be hard to replicate, even with hard work.

35. May I talk to customers, employees, suppliers, and others to independently verify the information I've learned from you?

You need to get your information from secondary sources—not just the owner. This way, you can make sure it's as accurate and truthful as possible.

36. Do you have any tips on how to make the business as successful as possible?

This question will help the owner formulate in his mind precisely what he's done over the years to make his business successful. The answer might result in valuable information you can replicate so that you're successful, too.

Miscellaneous questions

Woman in a casual orange sweater and jeans with a thinking face holding a tablet and surrounded by question marks on a blue background

37. What licenses or permits will I need to get?

You'll want to make sure you comply with the law. Also find out how many of the current owner’s licenses and permits will transfer over to you.

38. Are there any pending lawsuits?

If legal matters are hanging over the business's head, this is definitely a red flag. Issues like that can quickly drain you of your financial resources.

39. Are you a member of any industry organizations?

If they are, ask which memberships have been the most beneficial for them, and don’t hesitate to ask for introductions.

Additional questions to ask yourself

Also, put yourself in the hot seat and ask yourself some probing questions, like:

40. Is this the kind of business that'll bore me to tears a few months in?

Purchasing a business because you're bored isn't a good reason. Get a hobby instead. Running a business can be tedious, and it definitely is hard work.

41. Is my significant other going to be supportive?

For better or for worse, being an entrepreneur is going to affect your relationship with your spouse. They will be going along for the ride, whether they want to or not. Have a frank discussion to make sure they’ll be able to put up with you working long days.

42. How can I improve the business to make it more profitable?

Man in a suit with a question mark hovering overhead staring up at stacks of coins while scratching his head

This is one of the most important questions to ask when buying into a business because it will ultimately tell you whether the asking price is worth paying. The more you can help the company grow, the more valuable it will be when buying small business operations.

43. Do I have the skills for success?

Take a good look at your professional repertoire and make sure you have the skills you need to make the business you're thinking about buying a resounding success.

For example, if you're buying a restaurant, it’s a darn good idea to have some experience actually working in one beforehand.

44. What kind of financial picture do the financial documents paint?

Take a look at all the financial documents with your certified financial professional. These are things like the tax returns for three years, balance sheets, and cash flow statements.

Then, decide whether the business is fiscally healthy enough to make purchasing it a sound idea.

45. How much have similar businesses recently sold for?

Sold sign next to wood block storefronts

To get this information, visit local county offices to see which commercial properties recently had a change in ownership. There are also online resources that can help you find this information.

46. Do I really need financing, or can I find creative ways to do an all-cash deal?

There might be some circumstances under which an all-cash deal makes sense. However, consider the following question, too…

47. Is an all-cash deal even a good idea?

Few buyers can afford an all-cash deal. Even if you could, incurring that level of risk might not be for the best.

48. Have I come up with a business plan I can show to potential lenders?

UpFlip’s How to write a business plan blog post on a laptop

A business plan shows that you're serious about your business. It'll also reveal how feasible it is. These are two things potential lenders are going to want to know.

49. Will I keep all the employees?

Try to figure out which ones will be indispensable assets to the business and try to sweet-talk them into staying. It's also a good idea to meet with the employees once it looks like the sale's going to happen. Make time to answer any of their questions regarding your future plans for the business.

Don’t forget to download our free checklist

Download our free business buying checklist if you haven’t already.

How to buy an existing business

Woman reading UpFlip’s how to buy a business blog post on a tablet

The questions to ask when buying an existing business are part of the due diligence process that will be conducted as the purchase unfolds.

The process of buying a business includes:

  1. Find a business to buy
  2. Determine your budget and financing options
  3. Perform due diligence
  4. Establish business value
  5. Create and enter into a business sale agreement

Check out our blog about buying businesses for more information.

Are you ready to buy a business?

If you've had a lifelong dream of buying a business, asking the right questions can make all the difference when buying a new business venture. The best way to know what questions to ask when buying a business is to come prepared with a list, which we provided for you.

Don't let either the owner or yourself off the hook.

You're buying a business that will be a significant investment of time and money. Asking the right questions will help you to get a business for a fair price, prepare you for the difficulties of ownership, and ensure your long-term success.

So, before you buy, download your free list of questions. You don't have to limit yourself to the questions we’ve prepared. Modify the list as you go!

Which of these questions are most beneficial for getting the information you need to make a decision? Let us know in the comments!


Comments

lucia@ 2022-08-10 14:58:49

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Lenore@ 2022-07-25 05:30:06

Great article. But “bussiness plan?”

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