Building a portfolio of microbusinesses?

[TrevorJ]

Alright, this is something I have been thinking of. I have built my first business for about 6 months, it's currently projecting 50-60k a year profit. It's SEO for local businesses. At this rate I can make a solid profit, I might invest a day or two a week on the business plus most of it is outsourced. My idea was to get this company maybe around 60k a year consistently with my ideal clients (shouldn't be bard if I limit my biz at this level). I have also noticed 50-60k range is the perfect level for optimal profit per time invested, once the business starts making 100k a year everything changes investment wise.

I wanted to also make a few more small businesses, ideally having a portfolio of about 4 businesses. The second one is a website I am launching in the beauty industry, the third one is a retail ecommerce with a very trendy spin as for the fourth haven't conceptulaized it yet.

With my income goals I'd like 4 microbusinesses in my portfolio at all times that bring in 4-6k a month profit. This would allow me to make 200-300k a year. With intelligent work I could reduce my time concentrations on the businesses and work on their longevity and creating more assets for my portfolio that work in similar ways.

I kind of want to do this because that is the amount of cash I would like to make to live the lifestyle I want as a single guy, and also because I love the fun of creating new projects that are not location based. I get bored of doing the same thing over and over honestly. For me it's not about absolute income, I want good relative income and 200-300k is where I want to be. I also want the freedom to work on new projects, that is where fun comes from for me. Not grinding a way at one business because after time that always becomes lackluster to me.

What are you thoughts on this model, has anyone done something similar??

 

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[mayana]

What are you thoughts on this model, has anyone done something similar??

Oh man, don't get me started on this! I wasted a few years of my life trying to make something like this work. I read this book when I was in my early twenties about having multiple streams of income. In the book, the idea was that you would have several income streams and that they would balance each other (like slow times for one, good times for another), and you could easily switch between income streams since your income wasn't 100% dependent on one income.

Note: There is a BIG difference between having multiple streams of income in your business (like making money from several different products, sales channels, or whatever) and what I am talking about here. Several completely different businesses is a whole different animal, in my book.

Okay, so that's the idea, and it sounds great - in theory. But as difficult as it is to start ONE business, it's so much more difficult (if not impossible) to start a few (or several) at the same time. How do you sell 4 products at once? Executing 4 marketing plans? Designing 4 websites? Answering customer service e-mails for 4 different products? And doing it all at once!? It's enough to make my head spin...lol.

Why? I think you will be shooting yourself in the foot! Don't cripple yourself by spreading all of your energy over different ideas - pick one (and if you HAVE to, two is okay...lol) and go full throttle. Don't limit yourself by saying that you only want to make 300k per year... would you be mad if you made lots more than that? Once you get something excellent, then you will have the time and freedom to experiment with new ideas.

You've shown that you can do it - you said you should see 50-60k in profit from your current work. This is a very good start, since a lot of people never even see that kind of money from their own business. How can you satisfy your urge for new projects WITHIN your current business? That's where I'd focus my energy, if I were you

One other thing that I would be really careful about is to make sure that you are being 100% honest with yourself. Is it that you are truly getting bored with working on one business for a long time, or that you can't really get yourself to focus, so you tend to move on to the next idea. This is a huge trap, and something that HAS to be dealt with ASAP!

I've had so much more success since I learned to tame my mind and focus on just one thing at a time.

 

[TrevorJ]

Hey man great input thank you. I truly do get bored of doing the same thing consistently, maybe at least with my current biz. But all of my portfolio items are semi related. I mean yes, they are seperate businesses but they are all based on similar things I would be doing somewhat. SO biz 1, i am doing internet markeitng for clients. Biz 2 is an authority website I would run making money on advertising and affiliate products (so no real customer service there), the second biz would be another website which is online retail, so and so on.

Oh man, don't get me started on this! I wasted a few years of my life trying to make something like this work. I read this book when I was in my early twenties about having multiple streams of income. In the book, the idea was that you would have several income streams and that they would balance each other (like slow times for one, good times for another), and you could easily switch between income streams since your income wasn't 100% dependent on one income.

Note: There is a BIG difference between having multiple streams of income in your business (like making money from several different products, sales channels, or whatever) and what I am talking about here. Several completely different businesses is a whole different animal, in my book.

Okay, so that's the idea, and it sounds great - in theory. But as difficult as it is to start ONE business, it's so much more difficult (if not impossible) to start a few (or several) at the same time. How do you sell 4 products at once? Executing 4 marketing plans? Designing 4 websites? Answering customer service e-mails for 4 different products? And doing it all at once!? It's enough to make my head spin...lol.

Why? I think you will be shooting yourself in the foot! Don't cripple yourself by spreading all of your energy over different ideas - pick one (and if you HAVE to, two is okay...lol) and go full throttle. Don't limit yourself by saying that you only want to make 300k per year... would you be mad if you made lots more than that? Once you get something excellent, then you will have the time and freedom to experiment with new ideas.

You've shown that you can do it - you said you should see 50-60k in profit from your current work. This is a very good start, since a lot of people never even see that kind of money from their own business. How can you satisfy your urge for new projects WITHIN your current business? That's where I'd focus my energy, if I were you

One other thing that I would be really careful about is to make sure that you are being 100% honest with yourself. Is it that you are truly getting bored with working on one business for a long time, or that you can't really get yourself to focus, so you tend to move on to the next idea. This is a huge trap, and something that HAS to be dealt with ASAP!

I've had so much more success since I learned to tame my mind and focus on just one thing at a time.

 

[DeletedUser2]

With my income goals I'd like 4 microbusinesses in my portfolio at all times that bring in 4-6k a month profit.

I wanted to also make a few more small businesses, ideally having a portfolio of about 4 businesses.

Worst

Idea



EVER



Z

 

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[TrevorJ]

Worst

Idea



EVER



Z

Lol thanks for the helpful input.

 

[DeletedUser2]

go read more of my posts.

and you will understand why
Z

 

[TrevorJ]

Will do Zendo, I am really trying to define my direction right now. I am looking more towards building incoming wealth, living a classy lifestyle 250k+ a year, and less towards the big payoff retirement thing. I am 27 right now, and disappointed where I am only making 50k a year.

go read more of my posts.

and you will understand why
Z

 

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[TrevorJ]

Zendo, I read some of your posts, really great information. I would love the chance to chat with you sometime of Over skype or something. I think 5 minutes with you could really help me.

 

[BBarakti]

That wasn't much input, but I think it's still valid and even helpful because of the source. The reason I say that is because mayana has already went into why it's a bad idea and explained mindset and everything....AND I'm pretty sure the book that brought us all here actually talks about this sort of thing being a bad idea. If I'm not mistaken MJ talks about this subject in the book and numerous places it's been discussed on the forum.

Now as a point of disclosure, I'm super proud and jealous at the same time.. good for you getting something going making 50k... that's awesome.

Also, take this post with a grain of salt as I'm nowhere.. Pretty much just stuck. I'm pretty sure it's something in the transmission, since the engine's screaming and knows how to make power, I just can't seem to translate that into the real world.

No seriously, good job. Keep going.

 

[TrevorJ]

very good advice guys. Well even though my SEO biz is making me 50-60k a year, I know it's slow lane honestly. Unless I some how raise some money, but it would require that I make some intricate systems which in reality, with the state of search and since it's a service I don't think it would be a good investmetn for most investors. That's why I've been looking at other prospects, really don't feel my current biz is fast lane though, more like self employed lane.

 

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[exige]

An SEO firm can be fastlaned. Decouple yourself from doing the hands on work so YOU achieve time freedom, systematize everything and scale your staff. There is a local firm around here where a guy did just that, and now they are huge. I don't think he ever did hands on SEO, he was a strong sales guy who saw an opportunity in the market. They do all forms of traditional advertising to reach old school businesses, radio, billboards, etc. and they cut rev-share deals with pretty much every large retail chain in the area to do SEO and CRO for their e-commerce stores (big sporting goods places, etc.). You're facing the challenge of all professional services firms, "how do I scale". Solve that. How can you get to $5m revs in 2 years?

 

[Thriftypreneur]

Since your ideas seem to be web-based, instead of running multiple business, why not just get them to a certain level (branding the hell out of them the whole way), and then just flip for 3-5x yearly?

Flip your SEO business for around 200k, then just start your next project and do the same. Gives you the diversity you're looking for while being able to focus and make great one project at a time. Do this until you find something you wanna stick with.

 

[M&N]

Trevor, I know what you feel. Actually I had similar thoughts not so long time ago.

Thrifty's advice is spot on. I'd only add that you might want to start working on your new startup before you flip the existing one. In other words, make sure your new project works and brings money before you sell your current business. You never know, maybe your 3rd or 4th project will be so successful (and will give you so much freedom) that you won't even think about moving to something else.

This is my plan "too".

 

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[TrevorJ]

Hmm this seems correct man. I guess doing the math, say you had 400 small local SEO business clients on the books at a time, paying $500 a month (not unheard of, lets say also with a -100 dollar link building budget). So 400 clients x 400 dollars per month revenue = 160,000 per month. With a team of like 10 employees Let's say -50k a month in salaries still lives you with a positive 100,000 a month. But I think to grow that you would need a pretty aggressive sales team. That team also kinda got in when the getting was good. But even if I didn't want to scale it to that level, I could still scale it to make me like 20k a month and then automate the biz to some level.

An SEO firm can be fastlaned. Decouple yourself from doing the hands on work so YOU achieve time freedom, systematize everything and scale your staff. There is a local firm around here where a guy did just that, and now they are huge. I don't think he ever did hands on SEO, he was a strong sales guy who saw an opportunity in the market. They do all forms of traditional advertising to reach old school businesses, radio, billboards, etc. and they cut rev-share deals with pretty much every large retail chain in the area to do SEO and CRO for their e-commerce stores (big sporting goods places, etc.). You're facing the challenge of all professional services firms, "how do I scale". Solve that. How can you get to $5m revs in 2 years?

 

[TrevorJ]

Do you think I could flip my company for like 4x yearly? So if it's making 50k worth of clients + brand + website rankings for 200k?

 

[Thriftypreneur]

Do you think I could flip my company for like 4x yearly? So if it's making 50k worth of clients + brand + website rankings for 200k?

Too many variable in play with selling a business to give you a solid answer to that. On public auctions, like Flippa, I don't see many big sales going for more than 3x yearly, most only getting 1-2x. But if you go to a private broker, that could be completely different. I mean, if you're able to get in contact with someone who knows how your business/seo sector and wants to take over and scale it up or add it to their existing business, I'd imagine you could get a nice sale.

This is all just conjecture, however. Should do your own thorough research if you're interested in it.

 

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[biophase]

IMO if you own an SEO company you should be starting real companies and leveraging your SEO company at wholesale or free rates to rank your new company.

It makes no sense to me if you are good at SEO to keep ranking everyone else's company and in essence, make them make more money.

If it were me I'd keep the SEO company going and expand it to do social media management (facebook, blogs, twitter). Then I'd start a company and hire the SEO company (treat it as a new client) at minimal prices and blow it up.

Your company spends $500 on SEO, gets $500 worth of SEO because there is no markup
Competitor 1 spends $500 on SEO, gets $250 worth of SEO due to markups

You catch your competitor eventually.

 

[TrevorJ]

Exactly how I feel biophase. I am doing SEO for businesses I don't own or care about. Where I could be creating companies and using my SEO and internet marketing skills to rank them. Could you a explain a little more abotu what you mean of leveraging my seo company to new companies I start?

 

[travisl]

Terrible idea! If you are one that has to be hands on in all of your businesses. You'll spread yourself too thin, get burned out and not perform as well in any of the businesses as you need to.

-OR-

You can come up with the business idea, create a system and get other people to do it for you. The focus should be on your team. Get good people around you, and you can in fact own and control as many businesses as you want. To see this operating on a huge scale take a look at the virgin group. A ton of companies, all over the world, that don't seem to have much to do with each other, but they are all controlled by the same guy (Richard Branson) and somehow it works.

So you need an intricate system do you?

Not necessarily, not at all. Want to hire someone to run your SEO business? That should take a 300 page report on your business systems right? Not really, here is a working employee manual for you, for someone to run that business for you

**************
Accept payments for X amount for each package

Do keyword research and create SEO plan

Outsource work to (Your outsourcers) for X amount

Email and call 5 new prospects every week

Respond to support and maintain current clients

Pay: $30,000 a year part time.
**************

There you go, that is a working and healthy business system. Want to get fancy (and get people to work for cheap, or on deferred payment/no upfront costs) and really hit the road to get rich doing this?

Incorporate a parent company, or group, that starts and owns companies beneath. Give anyone working with you stock in what they work on, and staple guys stock in the parent company. It's not easy, but it is pretty simple.


My company is moving into doing this now, and will hit hard this coming year. We can now create any campaign or business that we want in the startup world, and own and operate them under a parent company, while still maintaining our ability to offer marketing services for high profile clients.

I'll let you know some of the staple people that I have (I have a marketing company btw):

*Bookkeeper, Lawyer, Accountant, Successful Business Mentor: Wait a sec, you can handle all of this stuff yourself right? Quickbooks, some legal docs off of google, reading a few threads off of fastlane and a magazine and you're covered right?

In reality, these stabilities, resources, and infrastructures are going to be the thing that prevents any talent that you have working for you to leave and do their own thing. Think about it, assembling a team of those guys sounds scary, and expensive. But in reality, it's that annoying, but part that is necessary if you want to go big. And it's not as expensive as you might think, you can offer them stock, or pay them as needed, but just have them on stand by if you ever need to stabilize your ventures. People want a safe and consistent system, but at the same time they have that part of them that wants to make it big. This is why they will work with you. Working for large corporations is a nice safe system for most, but also doesn't leave much room to make it big. Show your people that you can offer them a feeling of safety, and the opportunity to make it big and you should always be able to find people. Don't do this and give them the feeling that your ventures are going to crash any day (trust me I've worked in startups like this before)

*2 Solid programmers and 1 Designer: The fun part, any website, app, software, technology that you can dream you tell these guys about it and they'll build it.

*1 Good marketer, leader, administrative guy: (I'm still looking for one) Train this guy up as your Vice president. He's going to take your spot in the future when you want to take a vacation for a year and have your companies run and be more profitable when you come back.

*1 good offshore virtual assistant: Great for doing tedious work that no one else wants to do. Shoot, you need to send 50 emails this week to prospective clients. Create a template and have them do it, among other things like simple website traffic generation techniques. Plus it will make your team feel like they are superstars because they can leave tedious work for your companies assistant and he'll handle it. For close to $300 a month they'll definitely come in handy, and can contribute greatly to success.



Now you just need to write your documents and systems for any business that you want to start. I try to write them so that a fresh high school graduate would be able to understand it. Sure it can be crude at the beginning, no one really cares. As you get off the ground though, work with your team to draft more official documents if need be.

Sorry for the long post, but you will most likely have the point by now. Make sure your businesses have strong monetization plans, so you can get you and your guys paid well as soon as possible. The bigger you get, the more you will need to expand your team and system.

Also need help finding people? Look at my other post about connecting with anyone on Linked In. It works

 

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[TrevorJ]

Nice post man, I am definitely not a level yet to be able to hire anyone unfortuanetly montary wise, end of year business should be grossing 60k/yr profit at it's current growth rate. Also, ny onyl source of income currrently.

Terrible idea! If you are one that has to be hands on in all of your businesses. You'll spread yourself too thin, get burned out and not perform as well in any of the businesses as you need to.

-OR-

You can come up with the business idea, create a system and get other people to do it for you. The focus should be on your team. Get good people around you, and you can in fact own and control as many businesses as you want. To see this operating on a huge scale take a look at the virgin group. A ton of companies, all over the world, that don't seem to have much to do with each other, but they are all controlled by the same guy (Richard Branson) and somehow it works.

So you need an intricate system do you?

Not necessarily, not at all. Want to hire someone to run your SEO business? That should take a 300 page report on your business systems right? Not really, here is a working employee manual for you, for someone to run that business for you

**************
Accept payments for X amount for each package

Do keyword research and create SEO plan

Outsource work to (Your outsourcers) for X amount

Email and call 5 new prospects every week

Respond to support and maintain current clients

Pay: $30,000 a year part time.
**************

There you go, that is a working and healthy business system. Want to get fancy (and get people to work for cheap, or on deferred payment/no upfront costs) and really hit the road to get rich doing this?

Incorporate a parent company, or group, that starts and owns companies beneath. Give anyone working with you stock in what they work on, and staple guys stock in the parent company. It's not easy, but it is pretty simple.


My company is moving into doing this now, and will hit hard this coming year. We can now create any campaign or business that we want in the startup world, and own and operate them under a parent company, while still maintaining our ability to offer marketing services for high profile clients.

I'll let you know some of the staple people that I have (I have a marketing company btw):

*Bookkeeper, Lawyer, Accountant, Successful Business Mentor: Wait a sec, you can handle all of this stuff yourself right? Quickbooks, some legal docs off of google, reading a few threads off of fastlane and a magazine and you're covered right?

In reality, these stabilities, resources, and infrastructures are going to be the thing that prevents any talent that you have working for you to leave and do their own thing. Think about it, assembling a team of those guys sounds scary, and expensive. But in reality, it's that annoying, but part that is necessary if you want to go big. And it's not as expensive as you might think, you can offer them stock, or pay them as needed, but just have them on stand by if you ever need to stabilize your ventures. People want a safe and consistent system, but at the same time they have that part of them that wants to make it big. This is why they will work with you. Working for large corporations is a nice safe system for most, but also doesn't leave much room to make it big. Show your people that you can offer them a feeling of safety, and the opportunity to make it big and you should always be able to find people. Don't do this and give them the feeling that your ventures are going to crash any day (trust me I've worked in startups like this before)

*2 Solid programmers and 1 Designer: The fun part, any website, app, software, technology that you can dream you tell these guys about it and they'll build it.

*1 Good marketer, leader, administrative guy: (I'm still looking for one) Train this guy up as your Vice president. He's going to take your spot in the future when you want to take a vacation for a year and have your companies run and be more profitable when you come back.

*1 good offshore virtual assistant: Great for doing tedious work that no one else wants to do. Shoot, you need to send 50 emails this week to prospective clients. Create a template and have them do it, among other things like simple website traffic generation techniques. Plus it will make your team feel like they are superstars because they can leave tedious work for your companies assistant and he'll handle it. For close to $300 a month they'll definitely come in handy, and can contribute greatly to success.



Now you just need to write your documents and systems for any business that you want to start. I try to write them so that a fresh high school graduate would be able to understand it. Sure it can be crude at the beginning, no one really cares. As you get off the ground though, work with your team to draft more official documents if need be.

Sorry for the long post, but you will most likely have the point by now. Make sure your businesses have strong monetization plans, so you can get you and your guys paid well as soon as possible. The bigger you get, the more you will need to expand your team and system.

Also need help finding people? Look at my other post about connecting with anyone on Linked In. It works

 

[travisl]

Ever consider forming a corporation and seeking funding?

Not to mention if you really want to build up separate businesses you could still hire someone to run yours, and focus on building them.

Also there is this strategy,

Get in touch with the people you need, offer them contract work but as you grow offer them to be able to be part of the business and learn how to work with you, the way you do things, etc. You can even offer them stock, or cut of profits on top of what you pay them. This way you will begin to have "employees" as needed so to say, without having to pay anything close to a salary. This way also say that you start growing very fast, you will always be able to increase their workload as needed.

What I am trying to get at here, is that you can only get so far being the only person on your team. Few have ever achieved financial freedom all alone. I am just shooting some things your way to help you manage it, even with the few resources you may have, it is still very doable.

If you can build a business to 60K a year, the only thing that is standing between you and 10 or even 100 times that is just expanding with more people.

Or that's my view anyway!

 

[TrevorJ]

Great information Travis. The main mental road block I am having right now is coming from a few places. SEO I feel is a very volatile service, so whether it will last 10 years, I have no idea. The engines change frequently, so that means products(service) has to change frequently.

Really my long term goals are to make 300-400k per year with a stable income stream (business/businesses). Some fastlaners might say this is a weak goal, but this is a goal that fits my life really. I don't think in my belief making more than that will substantially change my life (I never plan on having kids, etc).

So I am really trying to find a long term business that has the ability to quickly grow to a level around my ideal income. (doesn't have to be overnight or anything). So I am very lost on my ideas etc.

 

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[travisl]

Trust me you don't have to tell me about SEO! Haha

So why don't you focus on your more sustainable businesses? You said you had a few ideas about things that you want to implement. Why don't you focus more on building your audience, brand and email list (from an internet marketing standpoint) as these things are sustainable. If your SEO services work (for now) use that to your advantage. The fun, and promising thing about this, is that once you start building an email list and social following, you will have your goals sustainable and attainable.

For instance say you promote an affiliate offer to your email lists twice a month and your list size is 1,000 and you convert to your offer at 1% (modest) and average $20 per sale. That means that 20 people end up buying from you monthly and you make $400/mo. This means that if you build your list to 10,000 you should make $4000/ mo. An audience of 100,000 should yield $40,000/mo. If you implement ad swaps (trading a promotion with another list owner) on your way building up, and guest posting on popular blogs that is definitely do able. If you don't want to write the content on your own there are plenty of guys that write great stuff for cheap.

Internet marketers covet this as the most sacred of techniques to make a living online, that only few know about, but in reality this technique is what any business since the beginning of time has relied on.

Build an audience, and continue solving a problem for them and they will pay you.

So even for your SEO business if you think it will be hard to sustain, just take your current clients and continue to adapt and give them what works. If you can't do it yourself, then just have someone else do it (another firm, freelancer, white label work) who can, and keep the profit on top, and un-limit your self to focus on the things that will take care of you long term.

 

[TrevorJ]

Trust me you don't have to tell me about SEO! Haha

So why don't you focus on your more sustainable businesses? You said you had a few ideas about things that you want to implement. Why don't you focus more on building your audience, brand and email list (from an internet marketing standpoint) as these things are sustainable. If your SEO services work (for now) use that to your advantage. The fun, and promising thing about this, is that once you start building an email list and social following, you will have your goals sustainable and attainable.

For instance say you promote an affiliate offer to your email lists twice a month and your list size is 1,000 and you convert to your offer at 1% (modest) and average $20 per sale. That means that 20 people end up buying from you monthly and you make $400/mo. This means that if you build your list to 10,000 you should make $4000/ mo. An audience of 100,000 should yield $40,000/mo. If you implement ad swaps (trading a promotion with another list owner) on your way building up, and guest posting on popular blogs that is definitely do able. If you don't want to write the content on your own there are plenty of guys that write great stuff for cheap.

Internet marketers covet this as the most sacred of techniques to make a living online, that only few know about, but in reality this technique is what any business since the beginning of time has relied on.

Build an audience, and continue solving a problem for them and they will pay you.

So even for your SEO business if you think it will be hard to sustain, just take your current clients and continue to adapt and give them what works. If you can't do it yourself, then just have someone else do it (another firm, freelancer, white label work) who can, and keep the profit on top, and un-limit your self to focus on the things that will take care of you long term.

Yeah I am probably going to over time transfer all my clients into PPC management clients, that is a much more sustainable product to sell.

 

[biophase]

Exactly how I feel biophase. I am doing SEO for businesses I don't own or care about. Where I could be creating companies and using my SEO and internet marketing skills to rank them. Could you a explain a little more abotu what you mean of leveraging my seo company to new companies I start?

Well you know SEO and have people to do it. So your new company basically will get free SEO and at much faster speed than anyone else.

Basically your new company will get SEO at wholesale prices. This is leverage that your competitors won't have (unless they have an SEO company or do it inhouse).

 

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[MJ DeMarco]

"Microbusinesses" make "micromoney" -- to echo Zen.... Worst. Idea. Ever.