When economic uncertainty hits, many aspiring entrepreneurs wonder if it’s the right time to invest in online businesses. While traditional wisdom might suggest waiting for better times, the reality from the front lines of high-stakes digital mergers and acquisitions tells a dramatically different story.

Thomas Smail, CEO and co-founder of FE International, has overseen hundreds of millions in online business transactions. His company, recognised as one of America’s fastest-growing firms by the Financial Times for three consecutive years, specialises in seven and eight-figure deals with SaaS, e-commerce, and content businesses. In this exclusive follow-up interview, Thomas reveals surprising insights about how recessions actually impact the online business acquisition market and shares the strategies behind building multi-million-dollar digital assets. Watch the full interview to discover why now might be the perfect time to make your move.

The Recession Reality Check for Online Business Sales

Despite widespread economic concerns and stock market volatility, Thomas reveals a surprising truth: online business valuations haven’t dropped, and deal volumes remain consistently strong. This contradicts the fear-driven narrative dominating mainstream media and reveals a fundamental disconnect between public markets and digital asset values.

“I think a lot of people look at the stock market and they say oh the stock market is down, the industry must be down as well,” Thomas explains. “But I think the reality is the online businesses are still relatively undiscovered, so valuations are still way below the public markets.”

The data supports this optimism. FE International has actually recorded some of their highest-value deals in recent months, with businesses selling well above their typical accurate valuations. This isn’t just luck – it reflects the fundamental strength and resilience of profitable online businesses during uncertain economic times.

Three Types of Buyers Driving the Market

Understanding who’s still actively buying online businesses reveals why the market remains robust. Thomas identifies three distinct buyer categories, each with different motivations and financial structures:

Individual Buyers represent the grassroots level of the market. These include professionals, couples, or family partnerships using personal capital or government-backed loans to acquire businesses typically valued under $5 million. Their motivation often centres around career transitions, supplemental income, or achieving financial independence—a path many professionals take to leave the corporate world behind.

Strategic Buyers are existing profitable companies seeking competitors or synergistic businesses to accelerate growth. These buyers operate across all price ranges and remain active regardless of economic conditions because acquisition often represents their most efficient growth strategy.

Private Equity Firms and Investment Groups comprise the most sophisticated buyer segment. While some debt-dependent funds have slowed due to higher interest rates, equity-funded groups continue buying at pre-recession rates. “Those funds are still buying at exactly the same rate they ever were before, valuations have not really changed at all,” Thomas confirms.

Why Recessions Actually Benefit Online Business Buyers

Counter-intuitively, economic downturns can create ideal conditions for acquiring online businesses. Thomas draws a compelling comparison: if you had invested $1 million in the stock market at the beginning of the year, you’d likely have $800,000 now. But if you’d bought a cash-flowing online business at a 5x multiple, you’d still have your $1 million asset generating $200,000 annually.

This mirrors Warren Buffett’s philosophy of investing in cash-generating assets rather than speculative investments. Online businesses provide tangible, measurable returns through actual revenue and profit, not just paper valuations subject to market sentiment.

For individuals, recessions often remove the psychological and practical barriers to business ownership. “If someone’s lost their job and they have a mortgage and like kids to pay for, they’re going to be working more than they would have been if they had their nice secure safe government job,” Thomas observes. Suddenly, the excuses about lacking time or motivation disappear, replaced by urgent necessity and focused determination, sometimes transforming job loss into a powerful catalyst for entrepreneurship.

Content Sites vs E-commerce: Choosing Your Path

For beginners entering the online business space, the choice between content sites and e-commerce can feel overwhelming. Thomas provides clear guidance based on a decade of high-level deals and practical experience.

Content sites offer the most accessible entry point for most people. “Anyone as long as you can read and write, you can run a content business,” Thomas states. Content sites don’t require inventory management, supply chain logistics, or significant working capital for stock purchases. This low barrier to entry means even a small initial investment can be transformed into a significant asset, creating the ultimate laptop lifestyle.

E-commerce businesses, while equally profitable long-term, demand more sophisticated operational skills and greater cash flow management. “In the short term you can be in a bit of a cash crunch in an e-commerce business because you have to invest in inventory,” Thomas explains. This makes e-commerce more suitable for buyers with substantial operating capital and logistics experience.

The Million-Word Secret: Scaling Content to Eight Figures

Perhaps the most eye-opening revelation from Thomas concerns what separates seven-figure content sites from eight-figure powerhouses. The answer isn’t complex algorithms or secret marketing techniques – it’s systematic content production at massive scale.

Thomas recalls an eight-figure content site sale that shocked even his experienced team: “They were producing something like a million words of content a month, which I couldn’t even personally and I’ve been in this industry a long time, I couldn’t even comprehend that volume was possible.”

This wasn’t automated or low-quality content. The business employed real writers and maintained an editorial team, but they’d created scalable systems for consistent, high-quality content production. Combined with expert SEO and organic link-building success, this volume approach generated massive traffic and revenue.

“Most people think that it has to be more complex, maybe they have better subject matter knowledge,” Thomas notes. “But it’s the ability to produce high quality content at scale. It’s not just scale, it also has to be high quality.”

Strategic Investment Approach: The $100K Blueprint

For investors with $100,000 to deploy in online businesses, Thomas recommends a focused rather than diversified approach. Instead of spreading capital across multiple smaller sites, concentrate on acquiring one quality business in a sector you understand.

“I would buy something that I’m interested in or at least have an understanding of, particularly in the content space because it’s really difficult to know whether or not the content is good,” Thomas advises. This subject matter familiarity enables better due diligence and more effective post-acquisition improvements.

The recommended capital allocation follows an 80/20 rule: invest 80% in the acquisition itself and reserve 20% for immediate improvements. This might involve producing 50 high-quality articles at $200 each, then investing the remainder in content promotion and SEO.

Even in worst-case scenarios where new content produces no immediate results, you still own a $80,000 asset generating approximately $20,000 annually. More likely, the content will gradually gain traction, with some pieces ranking and driving traffic months or even years later.

The Patience Factor: Why Most Content Sites Fail

One critical factor separating successful content site operators from failures isn’t skill or resources – it’s patience. Thomas emphasises that content marketing operates on extended timelines that catch many entrepreneurs off-guard.

“A lot of the time the people who fail isn’t because they produce bad content, it’s because they gave up,” Thomas explains. “They were like well that didn’t work, I’m gonna go get a job because online business doesn’t work. It doesn’t [not] work, they weren’t patient enough.”

Content pieces can take 12+ months to gain significant search rankings, and initial positions on page two of Google generate virtually no traffic. But once content breaks into the top five positions, traffic can increase exponentially. Understanding and accepting these timelines is crucial for long-term success.

Market Opportunity: The Undervalued Asset Class

Despite growing recognition, online businesses remain significantly undervalued compared to traditional assets. This creates opportunities for educated investors willing to enter an emerging market before mainstream adoption.

Thomas believes this valuation gap will persist because online businesses require specific knowledge and skills that many traditional investors lack. While anyone can buy shares or property, successfully operating an online business demands digital marketing expertise, content strategy understanding, and technical competence.

This knowledge barrier creates a protective moat around the industry, maintaining attractive valuations and returns for those willing to develop the necessary expertise. For individuals committed to learning these skills, the opportunity represents potentially life-changing wealth creation potential.

Taking Action in Uncertain Times

Thomas’s insights reveal that economic uncertainty doesn’t eliminate opportunities – it redistributes them. While some asset classes suffer, cash-flowing online businesses continue thriving because they solve real problems for real customers regardless of economic conditions.

For aspiring online business owners, the current environment offers several advantages: reduced competition from fairweather entrepreneurs, motivated sellers, and stable valuations in a proven asset class. The key is approaching acquisitions with proper education, realistic expectations, and long-term commitment.

Whether you’re looking to replace your corporate income, build a passive investment portfolio, or create generational wealth, online businesses provide a viable path forward. The question isn’t whether recessions affect online business acquisitions – it’s whether you’re prepared to capitalise on the opportunities they create.

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