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GOLD! From 0 To $240,000 Per Year PROFIT In 18 Months

John_Wick

Contributor
Read Millionaire Fastlane
Oct 1, 2019
15
22
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This is the same stage that i am at, I'm actually considering going abit higher than the 10-20k mark if the right thing comes along. Also 40% ROI would be ok for me.

I was initially drawing up a shortlist, but I think you probably don't have enough time if the deal is one you want to take so I'm doing practice run DDs across EF/Flippa etc. Want to squeeze rather than jerk the trigger.
I will echo what Richardd said about him being a machine and almost always pulled the triggered if the ROI is good and profitability is sustainable.

I personally find that doing lots of DD can be a feel-good thing that makes me mix movement with progress. Like I even created a pipeline for the targets. Not really useful.

But, finding a good deal and checking that it performs does take time. So, good luck!
 

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John_Wick

Contributor
Read Millionaire Fastlane
Oct 1, 2019
15
22
17
Of course it works. You are arbitraging assets. That's not a new concept ;)

Congrats on taking the step and putting in the work!
Yea, I think I am finally through that self-doubt stage that says "why would anyone sell their asset if it's working and requires little time". Still got much to learn. And, great to see so many accomplished fastlaners still hang around here and help people grow.
 
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richardd

Silver Contributor
FASTLANE INSIDER
Speedway Pass
Jun 11, 2017
172
846
302
United States
SUPER UPDATE: I know this is probably getting boring to everyone, but yesterday was the 5th day in a row that we eclipsed our previous daily record for ads earnings. Over 28K page views and $326 earned.

I also got started on my new start-up. We are building an online academy/school that will host teachers and students with both one-on-one and master class sessions. I have a Facebook group of educators/teachers that has been building for years, and after reaching out to them on our new venture, we've gotten a lot of interest. Our main online community that I referenced above will provide the leads for students.
 
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richardd

Silver Contributor
FASTLANE INSIDER
Speedway Pass
Jun 11, 2017
172
846
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United States
I just want to say, thank you!

I'm 24 years old and I read The Millionaire Fastlane at 22. I have tried blogging, day trading, drop shipping, retail arbitrage, and have tasted a little success but ultimately failure in all of my ventures. Nothing seems to stick and my motivation dies out when I'm losing all my money I saved to start the venture with. Mind you, I was trying to create startups solo, so that may be part of my problem.

I was really low on morale and reading this has really helped. It helped in the sense of, I know it's still possible, I still have hope. I know I can create more cash flow and freedom while benefiting others. I just have to keep trying.

Your list of criteria is extremely helpful. I've been trying to pinpoint what best suited me and this really helps.

Thanks a lot.
Glad this helps. If you need more guidance, feel free to PM me. Good luck.
 
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richardd

Silver Contributor
FASTLANE INSIDER
Speedway Pass
Jun 11, 2017
172
846
302
United States
I hope this may somehow help others by sharing my experience from listening to the book, to finding this post, trying Richardd's strategy and getting advice from the OP himself.

It's funny I actually read Fastlane about 5 years ago. But, I never bothered to check the forum. Maybe I just wanted to act on it instead of discussing it. And, my trust for online forums were (still) low. That was a mistake of course.

Anyways, so I thought of picking up this book again for a refresher in October. But, I have already read it. So, this time I tried listening to it, which makes my NET time more productive.

Then, I realized that I have been trying to hack the slowlane equation by changing jobs. I decided to never repeat that mistake again. So, I created a poster and put it on my wall (attached). The pivotal moment came when I opened the book for reference and realized there was actually a forum with like-minded people. Great, maybe I can benefit from others' experience, too. So, here I came.

I found this OP in about mid-Oct. I got really inspired because I have been trying to create side businesses while working full time. It really hit me because it shows there is actually another alternative for people who feel they are stuck in the middle.

Then I started trying Richardd's strategy. I started reading the thread from the beginning. I created an index with captured images that serve like a playbook - where to look, what to ask, how to DD, criteria to use, how to operate, etc.

Then I started looking for deals and doing DDs. I experienced the same analysis paralysis someone mentioned here in the thread, too. And, just when I thought I was really close to finding a deal (a VPN business), the seller decided to keep it for himself. Then the next one (social media analytics) was bought outright while I was bidding. Disappointed but somewhat validated. I thought maybe I should look into other places, too.

Then, Richardd finally showed up replying on this thread and offered help to everyone - "please PM me if you have any question." I wasn't sure. But, I reached out anyways. I explained what I have tried and asked for advice. So, that led to me increasing my budget to $10k~$20k range for a first purchase. Then, I found a directory business. The ROI was okay (45%), but the site is really simple and has strong organic traffic. At least it seemed like a real performing asset.

So, I sent that listing to Richardd, and asked his view. I felt uncomfortable because it felt like asking someone to do my homework. He wrote: "Now we are talking." His simple rely made me day because it validated my pick when I was about to give up on this business acquisition strategy.

The process wasn't all smooth but that's as it should be. For example, I was almost outbid last minute. That got my ROI dropped from 45% to 40%. But, I can live with that. It's a simple business with lots of upside potential that can actually help me learned how to build things that add value while getting paid.

Before the S&P was signed, I negotiated a trial period of 20 days to test the asset. I wanted that because I was scared of buying a scam. Richardd helped me check the traffic. And, I'm seeing AdSense revenue everyday. So, it seemed real.

Today I signed the S&P agreement. I think the chance of seller walking back on this deal is close to zero now. So, I consider this a great milestone for myself.

This isn't a success story at all. But, it's a process story that shows this strategy works and Richardd really does offer help for free (but please do your homework too). Keep in mind that this is on top of his consulting jobs and many businesses.

So, that's amazing.
John is not the only one who goes through "Analysis Paralysis". I've discussed this with many entrepreneurs on this forum. We all go through it. I do too. In fact, I publicized it in this thread. I was struggling with decision-making on acquiring a particular business. I'd go round and round in my head what I should do. In the end, it's about having the process in place which then allows you to be decisive.
 

John_Wick

Contributor
Read Millionaire Fastlane
Oct 1, 2019
15
22
17
SUPER UPDATE: I know this is probably getting boring to everyone, but yesterday was the 5th day in a row that we eclipsed our previous daily record for ads earnings. Over 28K page views and $326 earned.

I also got started on my new start-up. We are building an online academy/school that will host teachers and students with both one-on-one and master class sessions. I have a Facebook group of educators/teachers that has been building for years, and after reaching out to them on our new venture, we've gotten a lot of interest. Our main online community that I referenced above will provide the leads for students.
This is pure awesomeness.
 

Nice_home

Contributor
Read Millionaire Fastlane
Feb 19, 2019
47
51
107
From 0 to $240,000 per year profit in 18 months

I've been a follower of this forum for about a year now, had read the Millionaire Fastlane book, and finally have decided to tell my story. About a year and a half ago, I found myself unemployed and with near zero savings, two house payments, and a second baby on the way. Things were so dire that I was contemplating bankruptcy. I had just lost my slow-lane job with one of the original big three TV network companies. Worked there for about 3 years making the mistake of transitioning away from my career in computer consulting thinking that having a job would bring a certain level of security. It didn't. Man, those were dark days.

I decided to go back to consulting. But this time instead of taking on just one client full-time, I took on a second, and then a third, and then a fourth. A couple of them, I was billing 40 hours a week, working at the client site for 1, while telecommuting for the other. Clients 3 and 4 were part-time, billing 10-20 hours a week for each but at higher rates, also remote. FYI if you haven't heard, businesses more and more are allowing the telecommuting way. So, if you hate going into your job, look for opportunities to work from home. They're out there.

Well I did this for the past year+, and life has been shit busy, but I saved up a ton, about $200,000 in a year. That felt good. I felt secure with a lot of savings, I had multiple income streams, and the second baby now walks and can feed herself. My wife suggested we invest the $200K in money market funds or CDs. Sounds good, right? Earn 2.3% APY resulting in a whopping $383/mo.! I love my wife, but not for us.

Investing in low-yield financial instruments, and working for someone whether consulting or full time. These are strong characteristics of the slow lane. I've always had an entrepreneur’s mindset. I wanted financial freedom from the daily 9-5 grind, or for me this past year, the 5am-1am grind, including weekends. Even though I had the high-paying clients, if you think about it, it's never good to have all your nuts in very few baskets. And you definitely don't want your schedule dictated to you as consulting can often times do. Besides, money was still tied to my time, and this current work schedule was unsustainable. So having a business seemed like the way to go.

How did I start a business that gives me the financial freedom and time freedom that I so desired? Funny thing. I didn't. I didn't start a new business. Oh, I created a new corporate entity initially for my consulting. But I'm just not creative enough, nor risk averse with family and kids to take a chance there. And besides, burning a year of my life working my a$$ off to roll the dice on a new venture. Nah. So did this mean that I just wasn't going to pursue financial freedom, and maybe instead continue the 100 hours a week work load? No.

About 6 months ago, I started looking at buying software/internet businesses. Why reinvent the wheel? The number of businesses sold on the internet is growing rapidly. Sure there's a ton of scams, get-rich-quick opportunities offered by fake sellers. There are a lot of businesses that the seller just wants out because of failing operations. There are businesses that are a dying breed tied to the old world, pre-internet. For example, consider commercial printing companies which as a side note I was an owner of one about 10 years ago. I'll get back to this in a moment. There are businesses that run in a saturated space like many ecommerce, dropship/Amazon businesses that may have once been profitable, but have lost their edge due to the marketplace. Oh, and blogs, need I say more. Lots of bad opportunities!

So let me quickly detour farther into the past. 10 years ago, I was the owner of a print shop. We had lots of B2B customers looking for printed material on paper. They were all local customers, who often times paid late since we invoiced at NET 30. We had employees running the machines to print and cut and collate and staple. We had leased printers and other equipment. We had leased store-front space. We had a lot of COGS (Cost of Goods Sold), namely the paper itself. Ultimately we failed, and went out of business. Simply put, sales decreased over time, the business didn't scale, the cash flow was shit due to late payers, the overhead was horrendous, and having full-time employees was expensive and such a burden.

Years later, I tried blogging. Tech centric since I'm a programmer. That was a waste of time. AdSense brought in a few hundred bucks a month. But since I don't like writing (even this posting is painful to me), it turned out not to be worth it. I tried ecommerce, AliExpress/Shopify drop shipping of apparel. Did OK for a few months, but then the sales dried up, and I had difficulty coming up with new products to sell. Hated that as well. Definitely not sustainable. So ultimately I failed.

Which bring us back to now. I say I failed, which I'm sure many of you reading this have done so as well. But I say that to make a point. Failure is not truly failure when considering what it really is. As humans, we all fail, probably every day in one form or another. Most of our failures are inconsequential. We break something. We say the wrong thing at the wrong time. We buy some product that doesn't live up to our expectations. But guess what? We adjust our behaviors to mitigate risk so that next time, we do better. Business should be treated the same. Choices that you make in business can be driven by experiences, good and bad. I have a ton of that, especially the bad.

So based on my past failures, I came up with criteria for what my next business acquisition would require. Here they are:

1) No full-time employees. Didn't want the headache.
2) Profitable. Of course.
3) Years of proven profitability.
4) Digital/software products or services. No inventory. No drop shipping.
5) Scalable.
6) No physical location. Allowing work from home without need for leasing office/store.
7) Flexible business. Caters to expanding product and service line beyond current offerings to customers.
8) Low weekly hours necessary for owner operation.
9) Instant credit card sales, vs NET30 or other delayed payment processing.
10) Minimal marketing.
11) Full control. No partnerships. Limit dependencies with external entities.

So, I'm sitting on my $200,000 nest egg from all that hard work. I'm researching businesses for sale. And I find one that is a software company that sells proprietary accounting software. Promising! I'm a programmer with tons of experience in accounting. The business has been operational for 30 years, with recurring clients going back 10+ years, and has been run by this one couple who are well into their retirement years but hadn't pulled the trigger. And guess what? This software business satisfies all 11 of my requirements above. Well, I send their broker an offer of about $200K with half of it owner-financed for 5 years. They accept. Done deal. The profit annualized is $70,000 with an initial investment of $100,000. ROI = 70%. Nice! Since taking over, I'm happy with the performance, and I only spend maybe a couple hours a week on it. I outsource the programming.

Why stop there? I know MJ preaches monogamy. But I feel you can scale your company multiple ways. 1) expanding your sales in your current product/service line, and 2) buying existing businesses to generate more revenue. The only limiting factor of the second is that you will hit a limiting threshold in time when managing and marketing your multiple business holdings. Hopefully by then, you have gotten to a point where you can hire managers to offload that work. In any case, I next took over... a blog. I laugh when I write that because as mentioned before, I hated blogging. But I'll give you a little secret. You can hire writers, which I have a whole staff of them.

The blog is more than just a blog with hundreds of thousands of viewers per month. It has an online Facebook page with a quarter million followers, and a Facebook group with tens of thousands of passionate people whose lives revolve around my niche. And I am one of them, also passionate towards the content that we generate. So, I placed an offer, and got it, trademark included. $80K. We make money working with an advertising agency that deals with handling ad fill. Profit after paying our writing staff has been about $3500/mo. So annualized is $42,000 profit/year. ROI = 52.5%.

Next acquisition. I bought a web site backup service. We have hundreds of customers that we perform nightly backups of their sites as well as make sure their sites are operational 24x7. I outsource that work to offshore for cheap, but excellent labor. I love the guys who keep this business going strong day to day. I barely do anything but accounting for this. Maybe spend half an hour a day. I got it for $35,000. And annualized we make $30K in profit. ROI = 85%.

And most recently I've assumed a web marketing business. This too has a team of contractors that do the heavy lifting. Premium one-word, business-specific, domain name that garners 30K organic traffic a month. Very little ad spend. We generate about $8000/mo. in profit, again annualized to $96K profit for an ROI = 240%. I haven't figured out why the previous owner sold this other than he didn't want to do it anymore, and wanted to concentrate on his other business. He's got rep. I did my research.

So here's the grand total annualized profit:

Accounting Software Business: $70,000
Blog and Online Community: $42,000
Web Site Backup Business: $30,000
Web Marketing Business: $96,000

Total Annualized Profit: $238,000

Mind you, since these ventures take up maybe a total of a couple hours a day for me to run, I am free to focus on marketing for growth, while keeping a couple of my consulting clients. I quit the one client where I had to go into the office, and the other remote client, I just quit because I didn't have time for them. So I work from home now. The consulting dollars gets me to $400K a year, but I will most likely stop consulting next year to completely focus on my businesses. And my family and I are planning on moving to Central America this winter, because we love it there, and hell, I can work from anywhere that has internet.

One last note on being a serial entrepreneur. I look for synergies between my businesses and any future acquisitions. Each of the four ventures that I now have complement one or more of the other businesses, so I can leverage/cross-sell amongst the lot of them. This specific business model is starting to gain traction. But one challenge for me is branding when cross-selling. I haven't figured out how to consolidate the brands most efficiently. Each has their own distinct brand that current customers trust. And future customers may gravitate to the current branding. So not sure yet, but it's a good problem to have.
Thanks for sharing your thoughts on this thread, which is both amazing and challenging to me! I have a few questions, would you please be able to share your response if you have a chance?

Main question:

I have a very "habit"-oriented approach to work. Are there particular fundamental/core habits that allow you to acquire and integrate and manage these multiple businesses? (Is there a core/singular function you focus on, or do you find yourself constantly multitasking? Based on this thread, it seems like you are pretty good at handling multiple workflows at the same time?) Do you focus on the programming component of all the businesses, and outsource everything else?

Other random questions:

How do you get to the $10 CPM for your blog? Are you advertising your own services (cross-selling)? Or you are doing $10 through Google Ads? Anything special you are doing to get to that $10 rate? Do you think it's related to your niche?

Do you use any outside resources, for example a lawyer, CPA etc, for due diligence when acquiring new businesses?

Thanks!
 
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richardd

Silver Contributor
FASTLANE INSIDER
Speedway Pass
Jun 11, 2017
172
846
302
United States
Thanks for sharing your thoughts on this thread, which is both amazing and challenging to me! I have a few questions, would you please be able to share your response if you have a chance?

Main question:

I have a very "habit"-oriented approach to work. Are there particular fundamental/core habits that allow you to acquire and integrate and manage these multiple businesses? (Is there a core/singular function you focus on, or do you find yourself constantly multitasking? Based on this thread, it seems like you are pretty good at handling multiple workflows at the same time?) Do you focus on the programming component of all the businesses, and outsource everything else?

Other random questions:

How do you get to the $10 CPM for your blog? Are you advertising your own services (cross-selling)? Or you are doing $10 through Google Ads? Anything special you are doing to get to that $10 rate? Do you think it's related to your niche?

Do you use any outside resources, for example a lawyer, CPA etc, for due diligence when acquiring new businesses?

Thanks!
Thanks. I am good at multitasking. I describe it as a controlled chaos. But where I focus is interestingly what works best at the moment. Like right now, there are two things that are working extremely well: sales for my accounting software business and for my online community. It's easier for me to throw all my mental resources at a successful process to make it even better. People do this with A+B testing for advertising. This is applicable beyond standard advertising methodology.

So, some specifics here. In my software business, I'm discovering that our customers really need W2 and 1099 forms. So, I'm focusing a lot of energy generating sales related to that need. And now we're making a killing here.

For the online community, I've discussed it more so recently. In order to drive more traffic to our site, I implemented automation with Hootsuite to make our daily social media posts across all of our accounts, and it has been quite successful. The really nice thing about this besides not having to login to Facebook, Pinterest, Instagram, and Twitter accounts, I can schedule all my posts from one platform. And then since our content is evergreen, I can re-post them easily months later to get the same traffic numbers.

I also know now that the online community is a huge winner of an acquisition. So I will be leveraging the awesome traffic to startup my online academy. Speaking of the traffic, the $10 CPM is actually based on multiple ads performing on the same page view. I use AdThrive, and I have been more than happy with them. Way better than AdSense which I also use on another site. I think the high CPM is a result of my niche, but I'm not sure. And, I haven't started cross selling yet.

To multitask, I use Trello.
 

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pumpking

New Contributor
Sep 14, 2019
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Yea, I think I am finally through that self-doubt stage that says "why would anyone sell their asset if it's working and requires little time". Still got much to learn. And, great to see so many accomplished fastlaners still hang around here and help people grow.
Was just thinking about this today myself. I actually have a hard time understanding why someone would want to sell an asset that's doing well. I have a short list of possible reasons:
  • (Unsubstantiated) fear that their business won't always be profitable, or is about to go down soon (probably uncommon)
  • Something else that is more profitable competing for the owner's time (this appears to be the #1 most common reason listed on broker sites, but also seems like an easy cover)
  • Divorce or some other life circumstance requiring the sale
  • Retirement
To those of you who have gone through purchases, did I catch them all? What's been your experience?
 

pumpking

New Contributor
Sep 14, 2019
34
19
39
Also an unrelate thought / question. Where do we think the market place for online businesses is itself going? I would imagine as time goes on there will be more businesses for sale than there are today, owing to the natural growth of the internet and IT (in the case of SaaS), and perhaps as the visibility of brokerage sites increases. If so, we should be even less concerned about passing up business opportunities as there really isn't a scarcity in the long run.

Then again I haven't gone through a purchase myself nor faced competition from other buyers.
 
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richardd

Silver Contributor
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Jun 11, 2017
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Was just thinking about this today myself. I actually have a hard time understanding why someone would want to sell an asset that's doing well. I have a short list of possible reasons:
  • (Unsubstantiated) fear that their business won't always be profitable, or is about to go down soon (probably uncommon)
  • Something else that is more profitable competing for the owner's time (this appears to be the #1 most common reason listed on broker sites, but also seems like an easy cover)
  • Divorce or some other life circumstance requiring the sale
  • Retirement
To those of you who have gone through purchases, did I catch them all? What's been your experience?
From my experience, the previous owners of my software business (actually an older couple) wanted to retire, the past owner of the online community/blog had spun off a successful ecommerce business and wanted to concentrate on that, and the former owners of both the web hosting and web site backup businesses wanted to concentrate on other new business ventures as well.
 

Andy Black

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From 0 to $240,000 per year profit in 18 months

I've been a follower of this forum for about a year now, had read the Millionaire Fastlane book, and finally have decided to tell my story. About a year and a half ago, I found myself unemployed and with near zero savings, two house payments, and a second baby on the way. Things were so dire that I was contemplating bankruptcy. I had just lost my slow-lane job with one of the original big three TV network companies. Worked there for about 3 years making the mistake of transitioning away from my career in computer consulting thinking that having a job would bring a certain level of security. It didn't. Man, those were dark days.

I decided to go back to consulting. But this time instead of taking on just one client full-time, I took on a second, and then a third, and then a fourth. A couple of them, I was billing 40 hours a week, working at the client site for 1, while telecommuting for the other. Clients 3 and 4 were part-time, billing 10-20 hours a week for each but at higher rates, also remote. FYI if you haven't heard, businesses more and more are allowing the telecommuting way. So, if you hate going into your job, look for opportunities to work from home. They're out there.

Well I did this for the past year+, and life has been shit busy, but I saved up a ton, about $200,000 in a year. That felt good. I felt secure with a lot of savings, I had multiple income streams, and the second baby now walks and can feed herself. My wife suggested we invest the $200K in money market funds or CDs. Sounds good, right? Earn 2.3% APY resulting in a whopping $383/mo.! I love my wife, but not for us.

Investing in low-yield financial instruments, and working for someone whether consulting or full time. These are strong characteristics of the slow lane. I've always had an entrepreneur’s mindset. I wanted financial freedom from the daily 9-5 grind, or for me this past year, the 5am-1am grind, including weekends. Even though I had the high-paying clients, if you think about it, it's never good to have all your nuts in very few baskets. And you definitely don't want your schedule dictated to you as consulting can often times do. Besides, money was still tied to my time, and this current work schedule was unsustainable. So having a business seemed like the way to go.

How did I start a business that gives me the financial freedom and time freedom that I so desired? Funny thing. I didn't. I didn't start a new business. Oh, I created a new corporate entity initially for my consulting. But I'm just not creative enough, nor risk averse with family and kids to take a chance there. And besides, burning a year of my life working my a$$ off to roll the dice on a new venture. Nah. So did this mean that I just wasn't going to pursue financial freedom, and maybe instead continue the 100 hours a week work load? No.

About 6 months ago, I started looking at buying software/internet businesses. Why reinvent the wheel? The number of businesses sold on the internet is growing rapidly. Sure there's a ton of scams, get-rich-quick opportunities offered by fake sellers. There are a lot of businesses that the seller just wants out because of failing operations. There are businesses that are a dying breed tied to the old world, pre-internet. For example, consider commercial printing companies which as a side note I was an owner of one about 10 years ago. I'll get back to this in a moment. There are businesses that run in a saturated space like many ecommerce, dropship/Amazon businesses that may have once been profitable, but have lost their edge due to the marketplace. Oh, and blogs, need I say more. Lots of bad opportunities!

So let me quickly detour farther into the past. 10 years ago, I was the owner of a print shop. We had lots of B2B customers looking for printed material on paper. They were all local customers, who often times paid late since we invoiced at NET 30. We had employees running the machines to print and cut and collate and staple. We had leased printers and other equipment. We had leased store-front space. We had a lot of COGS (Cost of Goods Sold), namely the paper itself. Ultimately we failed, and went out of business. Simply put, sales decreased over time, the business didn't scale, the cash flow was shit due to late payers, the overhead was horrendous, and having full-time employees was expensive and such a burden.

Years later, I tried blogging. Tech centric since I'm a programmer. That was a waste of time. AdSense brought in a few hundred bucks a month. But since I don't like writing (even this posting is painful to me), it turned out not to be worth it. I tried ecommerce, AliExpress/Shopify drop shipping of apparel. Did OK for a few months, but then the sales dried up, and I had difficulty coming up with new products to sell. Hated that as well. Definitely not sustainable. So ultimately I failed.

Which bring us back to now. I say I failed, which I'm sure many of you reading this have done so as well. But I say that to make a point. Failure is not truly failure when considering what it really is. As humans, we all fail, probably every day in one form or another. Most of our failures are inconsequential. We break something. We say the wrong thing at the wrong time. We buy some product that doesn't live up to our expectations. But guess what? We adjust our behaviors to mitigate risk so that next time, we do better. Business should be treated the same. Choices that you make in business can be driven by experiences, good and bad. I have a ton of that, especially the bad.

So based on my past failures, I came up with criteria for what my next business acquisition would require. Here they are:

1) No full-time employees. Didn't want the headache.
2) Profitable. Of course.
3) Years of proven profitability.
4) Digital/software products or services. No inventory. No drop shipping.
5) Scalable.
6) No physical location. Allowing work from home without need for leasing office/store.
7) Flexible business. Caters to expanding product and service line beyond current offerings to customers.
8) Low weekly hours necessary for owner operation.
9) Instant credit card sales, vs NET30 or other delayed payment processing.
10) Minimal marketing.
11) Full control. No partnerships. Limit dependencies with external entities.

So, I'm sitting on my $200,000 nest egg from all that hard work. I'm researching businesses for sale. And I find one that is a software company that sells proprietary accounting software. Promising! I'm a programmer with tons of experience in accounting. The business has been operational for 30 years, with recurring clients going back 10+ years, and has been run by this one couple who are well into their retirement years but hadn't pulled the trigger. And guess what? This software business satisfies all 11 of my requirements above. Well, I send their broker an offer of about $200K with half of it owner-financed for 5 years. They accept. Done deal. The profit annualized is $70,000 with an initial investment of $100,000. ROI = 70%. Nice! Since taking over, I'm happy with the performance, and I only spend maybe a couple hours a week on it. I outsource the programming.

Why stop there? I know MJ preaches monogamy. But I feel you can scale your company multiple ways. 1) expanding your sales in your current product/service line, and 2) buying existing businesses to generate more revenue. The only limiting factor of the second is that you will hit a limiting threshold in time when managing and marketing your multiple business holdings. Hopefully by then, you have gotten to a point where you can hire managers to offload that work. In any case, I next took over... a blog. I laugh when I write that because as mentioned before, I hated blogging. But I'll give you a little secret. You can hire writers, which I have a whole staff of them.

The blog is more than just a blog with hundreds of thousands of viewers per month. It has an online Facebook page with a quarter million followers, and a Facebook group with tens of thousands of passionate people whose lives revolve around my niche. And I am one of them, also passionate towards the content that we generate. So, I placed an offer, and got it, trademark included. $80K. We make money working with an advertising agency that deals with handling ad fill. Profit after paying our writing staff has been about $3500/mo. So annualized is $42,000 profit/year. ROI = 52.5%.

Next acquisition. I bought a web site backup service. We have hundreds of customers that we perform nightly backups of their sites as well as make sure their sites are operational 24x7. I outsource that work to offshore for cheap, but excellent labor. I love the guys who keep this business going strong day to day. I barely do anything but accounting for this. Maybe spend half an hour a day. I got it for $35,000. And annualized we make $30K in profit. ROI = 85%.

And most recently I've assumed a web marketing business. This too has a team of contractors that do the heavy lifting. Premium one-word, business-specific, domain name that garners 30K organic traffic a month. Very little ad spend. We generate about $8000/mo. in profit, again annualized to $96K profit for an ROI = 240%. I haven't figured out why the previous owner sold this other than he didn't want to do it anymore, and wanted to concentrate on his other business. He's got rep. I did my research.

So here's the grand total annualized profit:

Accounting Software Business: $70,000
Blog and Online Community: $42,000
Web Site Backup Business: $30,000
Web Marketing Business: $96,000

Total Annualized Profit: $238,000

Mind you, since these ventures take up maybe a total of a couple hours a day for me to run, I am free to focus on marketing for growth, while keeping a couple of my consulting clients. I quit the one client where I had to go into the office, and the other remote client, I just quit because I didn't have time for them. So I work from home now. The consulting dollars gets me to $400K a year, but I will most likely stop consulting next year to completely focus on my businesses. And my family and I are planning on moving to Central America this winter, because we love it there, and hell, I can work from anywhere that has internet.

One last note on being a serial entrepreneur. I look for synergies between my businesses and any future acquisitions. Each of the four ventures that I now have complement one or more of the other businesses, so I can leverage/cross-sell amongst the lot of them. This specific business model is starting to gain traction. But one challenge for me is branding when cross-selling. I haven't figured out how to consolidate the brands most efficiently. Each has their own distinct brand that current customers trust. And future customers may gravitate to the current branding. So not sure yet, but it's a good problem to have.
Only just saw this thread. I love your criteria. I’ve been consulting for multiple clients too, then weaning myself off having a few bigger clients and having a lot of smaller ones instead. Nothing wrong with consulting as a way of bootstrapping and getting market experience.

Love your latest daily results posts too. Well done.
 

jon11

New Contributor
Read Millionaire Fastlane
Nov 3, 2019
13
6
15
Doing DD on an EF site atm. Running through Richards criteria.

1) No full-time employees. Didn't want the headache.
2 sales employees, commission based only though X

2) Profitable. Of course. O
Yeh around 2k pm

3) Years of proven profitability. O
Pretty steady since 2017

4) Digital/software products or services. No inventory. No drop shipping. X
Ah nope, very much a physical product with suppliers, inventory and lead times.

5) Scalable. -
Perhaps but I imagine you'd have to get into alot of brand building to add products to the range. Possible though.

6) No physical location. Allowing work from home without need for leasing office/store. O
At least checks this box its FBA/Shopify

7) Flexible business. Caters to expanding product and service line beyond current offerings to customers. -
Well possibly, but same criteria as point 5 applies.

8) Low weekly hours necessary for owner operation.
Allegedly 1 hr per week. O

9) Instant credit card sales, vs NET30 or other delayed payment processing. O
check

10) Minimal marketing.X
Well i would say this product probably lives and dies by its marketing

11) Full control. No partnerships. Limit dependencies with external entities.O
I guess suppliers would be the main bugbear.

So only really fulfills around half the criteria. I've drawn up a list of questions for the seller. They say they are selling due to medical family emergency which is plausible.
 
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richardd

Silver Contributor
FASTLANE INSIDER
Speedway Pass
Jun 11, 2017
172
846
302
United States
I just read a thread from @V8Bill. It resonated with me. He basically discussed feeling rich when you make 2x your monthly expenses. I totally concur with this. His concept is actually the reason why I've been driven to get to $240K a year in profit. The amount is not arbitrary. My break-even is $120K a year in order to pay our personal expenses and taxes. Doubling that in profit, I definitely feel the weight of financial stress go away. New stresses have replaced the old ones, but those have more to do with business growth than anything.

Here are my benchmarks when it comes to business goals:

1) Classic financial freedom comes when you generate enough business profit to cover your normal personal monthly expenses
2) Financial escape velocity comes when your profit exceeds your personal expenses
3) Feeling rich comes when your profit reaches a certain multiplier of your personal expenses (for me it is 2x)
4) True financial freedom comes when your profit exceeds #3 above, and you can use this excess income to generate more income

These 4 benchmarks are what drive me personally. I've accomplished #1, #2, and #3. Now I am in hot pursuit of #4.
 
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richardd

Silver Contributor
FASTLANE INSIDER
Speedway Pass
Jun 11, 2017
172
846
302
United States
Doing DD on an EF site atm. Running through Richards criteria.

1) No full-time employees. Didn't want the headache.
2 sales employees, commission based only though X

2) Profitable. Of course. O
Yeh around 2k pm

3) Years of proven profitability. O
Pretty steady since 2017

4) Digital/software products or services. No inventory. No drop shipping. X
Ah nope, very much a physical product with suppliers, inventory and lead times.

5) Scalable. -
Perhaps but I imagine you'd have to get into alot of brand building to add products to the range. Possible though.

6) No physical location. Allowing work from home without need for leasing office/store. O
At least checks this box its FBA/Shopify

7) Flexible business. Caters to expanding product and service line beyond current offerings to customers. -
Well possibly, but same criteria as point 5 applies.

8) Low weekly hours necessary for owner operation.
Allegedly 1 hr per week. O

9) Instant credit card sales, vs NET30 or other delayed payment processing. O
check

10) Minimal marketing.X
Well i would say this product probably lives and dies by its marketing

11) Full control. No partnerships. Limit dependencies with external entities.O
I guess suppliers would be the main bugbear.

So only really fulfills around half the criteria. I've drawn up a list of questions for the seller. They say they are selling due to medical family emergency which is plausible.
@jon11 Since these are my own criteria, you can obviously have your own. If you are comfortable in the ecommerce space which typically includes marketing, then my requirements don't need to be yours.

As for full control, you can take control of your suppliers. You would want to find multiple supplies to start, and depending on the product you can look to control manufacturing it.

One last comment on employees. Sales employees just working on commissions would be fine with me. I just don't want the HR headache, nor the monthly expense with possible losses incurred.
 

mojorisin

New Contributor
Oct 6, 2019
3
1
11
richardd, amazing thread. congrat's on your success, and thank you for taking the time to share.

Perfect timing for me personally as I'm in the hunt to buy a digital business, my criteria is similar to yours. However it's very intimidating to me. Your "playbook" has brought me to the 5 yard line. Now its time to punch it into the endzone.

I see why you like flippa, as most other sites are $100k plus business. For my first one I'd like to stick under that threshold but anything under $20k probably not worth the time.

Can you share your "vetting" process and / or checklist? Or did you use a particular site or company? There are 2 or 3 that are interesting to me, but now I need to start the vetting process.

Thanks again. Great work!
 
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richardd

Silver Contributor
FASTLANE INSIDER
Speedway Pass
Jun 11, 2017
172
846
302
United States
UPDATE: I had a few days reprieve in reporting daily records for my online community. It did continue to make ad sales of $300+ per day. But yesterday, I blew away my daily page traffic with 31K page views resulting in a new daily record for ads earnings: $475 with the previous record being $345.

We should eclipse my goal of $5000 this month. Actually we should surpass $6000, with a slight chance to make it to $7000.
 
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richardd

Silver Contributor
FASTLANE INSIDER
Speedway Pass
Jun 11, 2017
172
846
302
United States
A side effect of my new automation with posting on my social media accounts. I have zeroed in on the content that really resonates with our audience. There is no coincidence in this significant increase in performance for the online community.

So, this weekend, I came up with article ideas that have laser focus related to or similar in nature to the winning posts. I started assigning them to my writing staff.
 

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richardd

Silver Contributor
FASTLANE INSIDER
Speedway Pass
Jun 11, 2017
172
846
302
United States
richardd, amazing thread. congrat's on your success, and thank you for taking the time to share.

Perfect timing for me personally as I'm in the hunt to buy a digital business, my criteria is similar to yours. However it's very intimidating to me. Your "playbook" has brought me to the 5 yard line. Now its time to punch it into the endzone.

I see why you like flippa, as most other sites are $100k plus business. For my first one I'd like to stick under that threshold but anything under $20k probably not worth the time.

Can you share your "vetting" process and / or checklist? Or did you use a particular site or company? There are 2 or 3 that are interesting to me, but now I need to start the vetting process.

Thanks again. Great work!
Yes, try over $20,000 on Flippa. For $100K businesses, consider more broker centric sites like BizBuySell.

For vetting sellers, Flippa does do some verification. I hate to say it, but really try to consider US/UK/AU/CA businesses. Second, ask for government issued ID. And try to find seller's social network accounts, and then message them independently without their knowledge to those accounts. Hopefully they respond back stating that they are selling their business.

I've mentioned this before, but concentrate on businesses that are priced approximately 20x monthly profit on Flippa. Super ROI should be considered with a wary eye. And look for businesses that have profit numbers for at least two years. Also try to get Google Analytics access. This should be mandatory. Start there, and then PM what you find.
 

1milclub

Bronze Contributor
Read Millionaire Fastlane
Jan 27, 2014
143
114
86
US
Freelance writers. Most of them solicit me through our site.
1. How long are your articles? 100-1500 words seem to work well with SEO, but it may vary with the niche you are in.

2. if you don't mind, what is the rate per word, or for the article you pay? looking for some writers for some sites i am considering

3. On Flippa, I see there are many info sites that are automated (gets content automatically scraping the web). What are your thoughts about them? I think Google won't like that. maybe mix it up with some of our own content?
 
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richardd

Silver Contributor
FASTLANE INSIDER
Speedway Pass
Jun 11, 2017
172
846
302
United States
1. How long are your articles? 100-1500 words seem to work well with SEO, but it may vary with the niche you are in.

2. if you don't mind, what is the rate per word, or for the article you pay? looking for some writers for some sites i am considering

3. On Flippa, I see there are many info sites that are automated (gets content automatically scraping the web). What are your thoughts about them? I think Google won't like that. maybe mix it up with some of our own content?
1) Maybe 500 words on average
2) About $25 per article
3) I do not subscribe to this method. It is utilizing copyright material.
 
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richardd

Silver Contributor
FASTLANE INSIDER
Speedway Pass
Jun 11, 2017
172
846
302
United States
UPDATE: Online community hit over $5000 in ad sales for the month. That was my goal, but with 10 days left, we should make it over $7000.

Also, I'm in the final stages of negotiating to purchase that other online business. It's been an extended negotiation, but I believe we have come to terms that we both can accept. The agreed price is $105,000. $65,000 down, 3 monthly payments for the rest of the $40,000 with no interest. Annual profit is approximately $80,000.

As a result, I may have to extend my consulting into the new year for cash flow purposes, but probably not past March.
 
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richardd

Silver Contributor
FASTLANE INSIDER
Speedway Pass
Jun 11, 2017
172
846
302
United States
UPDATE: Online community just surpassed $6000 in ads earnings for the month. With 7 days to go, it's all but guaranteed to pass $7000 for November with a shot at $8000. My initial goal was $5000. I'll be moving forward with starting up an online school affiliated with the community. I have a group of teachers very interested, and hundreds of thousands of prospective students from the community to start with.
 

Redwolf

New Contributor
May 6, 2018
7
12
15
@richardd FYI, you may have dodged a bullet with ForwardMX. I signed up for the service after reading this post for an old domain of mine, updated MX records and everything properly with Zonomi (awesome nameserver service BTW). Only one email has come through at all, even to SPAM folder. After emailing ForwardMX, the reason is they seem to be being filtered by Google quite a bit, here is an excerpt from the logs sent to me by them:

"Our system has detected that this message is 550-5.7.1 likely suspicious due to the very low reputation of the sending 550-5.7.1 domain. To best protect our users from spam, the message has been 550-5.7.1 blocked."

I guess a lesson here might be to sign up for the service of a business we are considering purchasing and give it a test drive first. Maybe it works great for everyone else and I'm just having issues.

Any other recommendations for domain → gmail forwarding services? I still want that service.
 
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