In episode #665, Eric and Neil tell you what you should do instead of starting a business. Tune in to hear why you don’t have to start your own business.
TIME-STAMPED SHOW NOTES:
- [00:27] Today’s Topic: Forget Starting a Business, Do This Instead
- [00:46] Neil thinks starting a business is one of the hardest things to do. It is far easier to buy a business.
- [01:25] Buy a company and grow it.
- [01:48] Income Store has over 800 websites. They buy other websites and promise a return to their investors.
- [02:09] They brought in $28 Million last year.
- [02:29] If you think you can’t afford to buy a business, you can always do cellar-based financing where you pay a monthly fee.
- [02:53] You can do a lot of creative things to cut costs and improve profits.
- [03:05] You can also only buy a portion of the company and include a clause where you can buy them out in the future.
- [03:34] FE International has great content about buying businesses.
- [03:45] Buy Biz Sell, Flippa, and Empire Flipper are also great resources.
- [04:02] If you are looking for low-cost deals, Flippa and Empire Flipper are good for that.
- [04:34] Neil’s favorite business purchases are blogs that aren’t properly monetized.
- [04:45] Buy a business once you have proven that you can grow someone else’s business.
- [05:00] Use those skills to grow your own site.
- [05:30] Grow things on your own and once you’re confident, buy a business.
- [05:34] That’s all for today!
- [05:37] Go to Singlegrain.com/Giveway for a special marketing tool giveaway!
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The post Forget Starting a Business, Do This Instead | Ep. #665 appeared first on Marketing School Podcast.
Full Transcript of The Episode
Eric Siu: Welcome to another episode of Marketing School. I'm Eric Siu.
Neil Patel: And I'm Neil Patel.
Eric Siu: And today, we're going to tell you about, well, why you should forget starting a business and doing this instead. So recently, Neil was speaking at a little Mastermind in Beverley Hills called War Room, and this was actually in his talk and this is something we talk about from time to time. So, Neil what is the secret?
Neil Patel: Yeah, I'm a big believer that starting businesses is one of the hardest things to do. That's why a lot of entrepreneurs fail and things are hit or miss. But, if you just buy businesses that are doing somewhat well, it's much easier to grow them and make more money. And there's a lot of business owners out there who are just tired of their business because it's flat. Or, they just want to do something else because they're not passionate about it. So why not just try to buy a business instead. It's like so much easier than starting. Like, don't waste your time being a cool entrepreneur and try to create new ideas unless you're trying to do world changing stuff, like make people live on Mars. Instead, if you're trying to create a need to company, go buy one and just grow it.
Eric Siu: Yeah. I think for those of you that are starting out, absolutely start a business first, set your foundation, and then from there figure out a framework. I mean, if you're good with that and you don't need anything else in life, that's fine. Right? But, if you're going for moon shots, if you have larger aspirations, then from there put together a framework and start to figure out how you can start to acquire businesses.
So here's an example for you. There's a site or a business called Income Store. You can go to IncomeStore.com and they have over 800 websites. And then, their model is basically buying other websites and promising a return to their investors. So, those of you that are interested in that stuff, maybe you don't want to buy a business, maybe you just want to invest in this guy, you can go ahead and do that. And their revenue, if you look at the Inc 5000, has continued to climb over time. I think they did twenty-eight million last year or something like that. Once they switched to this model, where they were just continuing to take a playbook that they had and then deploy it on new websites, it has worked out well for them.
Neil Patel: Yeah. And when it comes to buying, many of you guys could be like, "Oh, I don't have the capital so I can't end up buying." That's okay. A lot of people do seller-based financing in which you can pay monthly fees and you can take pretty much the profits and give them it there. Or you can do really creative things like, oh, you're spending X, Y, and Z dollars on credit cards, this is ten percent of your expenses. Let me use a credit card that gives me a two percent cash back. Like you can do a lot of creative things to cut the cost and improve the profit, and that makes it easier to do seller-based financing and just pay them monthly fees until you're done for a few years. Heck, you can even do things where you buy out a portion of the company, like ten, fifteen percent. And, as it grows, you have the right to buy out the rest. So you can just put a clause saying, hey, I only want to buy ten percent. But, within the next twelve months I want the option to buy the rest at this price.
Eric Siu: Yeah, and some of you are probably wondering, well, it's easy for you guys to say, you guys already know a lot of people or whatever. So, how do you get the deals? How do you go about sourcing the deal flow? So here are some spots you can go to at least get started with this stuff. You can go to FE International. That's F as in Frank, E as in Eric. FEInternational.com and they have a lot of good content about buying businesses, how to value them and things like that. So, if you're looking to get your feet wet, check that out.
There's also a site called Buy Biz Sell, I think. That's B-U-Y-B-I-ZSell.com and then there's also Flippa and you have Empire Flippers. So there's just a couple of spots you can go to online to get started. But that's not the only place you can source deals and you've got to still continue to build relationships.
Neil Patel: If you're looking for low cost deals, so ones that don't do as much revenue and are cheaper to buy, you can find more of those on Flippa, Empire Flippers has a bit more ones that are expensive. And then, when you go like to the brokerage firms like FE International, that's when you're looking at really expensive sites. They get into the six figures or seven figures, rarely, but sometimes in the eight figures. So, depending on what your budget is, you probably want to start off with Flippa or Empire Flippers first.
Eric Siu: Yeah, is there anything else to add around this?
Neil Patel: Nope. Just look at really buying businesses. My favorite businesses to buy is blogs that have traffic but aren't monetized. You buy them and you just monetize them.
Eric Siu: Yeah, and when do you think people should start buying a business?
Neil Patel: Once you've tested out that you can grow something, so it doesn't have to be your website. It could be you're a consultant for someone else and you know you can grow their traffic. Figure out what you're passionate about and, once you've done those two things, go buy a site that you're passionate about and then, two, use the skills you've had to grow other websites and just grow your own website.
Eric Siu: Honestly, those of you that are listening to this podcast, I mean this is one of the greatest skills you can have. You can literally, like magician or a wizard, take a website that is failing, that's stressed. And you can take a private equity model where you can just cut costs or you can take the skills that you got from this podcast or just learning marketing in general, and you can grow it. You combine these two in a one-two punch, you're going to be much better, in a much better spot than most people. So check it out. I mean, continue to grow things on your own and then, once you're really confident in your skills, try to deploy this model and let us know how it works for you.
But, before we go, go to singlegrain.com/giveaway to check out our marketing tools to grow your business and we'll see you tomorrow.
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