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richardd

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@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.
I remember this business. Yes, I signed up for it as well just to test it out. I was getting sporadic results too. I could fix that problem by using a different domain for the mx forwarding servers, but it would be a pain with all the current customers. In the end, the ROI got to be too low for me, and having to fix those delivery problems.

I did research online for reviews. Trust Pilot is good place:


Again, those issues could have been fixed, but the trouble wasn't worth it.
 

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jon11

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so im looking at another potential. Its a SaaS, the google analytics account looks good lots of organic traffic. It fits alot of criteria but 60k is quite alot of capital to outlay on my first online business. There are a few things that I think I could do to improve it wrg to speed etc. but im undecided the paralysis is hitting me hard.
 
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richardd

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so im looking at another potential. Its a SaaS, the google analytics account looks good lots of organic traffic. It fits alot of criteria but 60k is quite alot of capital to outlay on my first online business. There are a few things that I think I could do to improve it wrg to speed etc. but im undecided the paralysis is hitting me hard.
@jon11 feel free to PM me if you can give me more details on your opportunity. No need to tell me explicitly what it is of course.
 
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richardd

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Thanksgiving Day UPDATE: Online community eclipsed $7000 for the month of November! I officially blew away my projected net of $5000. With three days to go, we have an outside shot at $8000. I know it's an arbitrary number at this point, but those types of round numbers truly motivate me.
 

jon11

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Ah it sold this morning but for 75k which I wouldn't have stretched to anyway.
 

jon11

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yeh that was the one. It looked like decent organic traffic, could have made some tweaks. Anyway onto the next one.
 
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richardd

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yeh that was the one. It looked like decent organic traffic, could have made some tweaks. Anyway onto the next one.
I was looking at it too. I offered the broker $65K. Interestingly, when I got the notification for the BIN price, I almost jumped on it. I had a strong feeling that the seller got an acceptable offer, and that's why they post a BIN price a little early since there were like 15 days left in the auction. I won an auction once by doing this... Kinda just sneak in there at the last minute. FYI, I would have bought the asset at $75K.
 

M&A

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Haven't logged in a long time but I enjoyed reading about your successes in this thread and wanted to congratulate you.

Have you ever considered doing the same with a physical business?

I know a guy who bought an underperforming restaurant for about 4 million (I'm sure he financed the deal in several ways). He spent minimal time on it but he improved the business, changed the menus, broke down walls, added more tables and upgraded the bar.

I am positive he drew a descent salary during his time of ownership just like you are doing with the cashflow.

He just sold the place for 8 million bucks at 35 years old.
 

mojorisin

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Oct 6, 2019
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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.
Richard, sent you a PM on a content site I'm considering. Would like to get your take on it. TIA.
 

pumpking

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I was looking at it too. I offered the broker $65K. Interestingly, when I got the notification for the BIN price, I almost jumped on it. I had a strong feeling that the seller got an acceptable offer, and that's why they post a BIN price a little early since there were like 15 days left in the auction. I won an auction once by doing this... Kinda just sneak in there at the last minute. FYI, I would have bought the asset at $75K.
I was also browsing that one. I got a little turned off by one of the comment / questions indicating that some of the songs they have are under copyright and licenses would need to be obtained. Maybe not a big deal ultimately but it gave me pause.

Since we're talking about this one—how do you feel about the dip in traffic across July and August 2019? (screenshot included). I thought perhaps this drop, and the subsequent rise of traffic may have been a yellow-light warning and possibly inspired the seller to offload the asset? If I had been running DD on this I would have asked about that dip to see if there was any explanation.

I may also be over analyzing. I admit I'm a little paranoid of being scammed, I guess at some point you have to push past that anxiety or a purchase will be impossible!
 

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richardd

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I was also browsing that one. I got a little turned off by one of the comment / questions indicating that some of the songs they have are under copyright and licenses would need to be obtained. Maybe not a big deal ultimately but it gave me pause.

Since we're talking about this one—how do you feel about the dip in traffic across July and August 2019? (screenshot included). I thought perhaps this drop, and the subsequent rise of traffic may have been a yellow-light warning and possibly inspired the seller to offload the asset? If I had been running DD on this I would have asked about that dip to see if there was any explanation.

I may also be over analyzing. I admit I'm a little paranoid of being scammed, I guess at some point you have to push past that anxiety or a purchase will be impossible!
I would have obtained the licensing for the music after purchase which would have been an extra cost. As for the drop in traffic, I thought it was possibly due to seasonal use. A lot of the traffic is from the US. Possibly a lot of school-aged kids use this service, but in the summer, they have other things that they'd want to do during their ultra-free time. I would have queried the seller on this, and I would have analyzed Google Analytics year over year.
 

jon11

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The licencing wasnt an issue, but the seller had burned alot of people mismanaging the kickstarter as you can see by the hundreds of comments asking for refund. Pianu: A New Way to Play Piano

Not saying this was a scam but wouldnt have helped overall longterm reputation. I had a look at his google analytics though looked legit.
 
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richardd

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DECEMBER 1 UPDATE: Probably the last update for while on my online community. I officially set my monthly earnings record with $8134 for the month of November. I looked back at our GA traffic patterns since 2017, and normally we have a downturn in traffic in November and December while leading to big upswings in traffic come January. I reversed that trend considerably this year. I drove 591K page views for this past month. Last November the site did 351K. I did this by implementing automation using Hootsuite, vastly improving our social media posting. Moving forward, I'll be able to cycle through our evergreen content with simple clicks of a button.

This is monumental for me. I took a business that I bought for $80,000 about 6 months ago, a business that was averaging about $3500 a month in ad sales, and increased it to over $8000 in a month. I may not be able to reproduce this month over month, but I think we can do $7000 a month now consistently. ROI should be about 100%, meaning it will pay for itself in a little over a year after my initial purchase. None of this includes improving the site, and adding monetization beyond ad sales. I have a feeling 2020 will be a great year.
 

John_Wick

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John_Wick

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Update:

Completed the S&P of my 2nd deal. I think I have this deal in the pocket. It's 4X the size of my last deal. ROI >85%. About 50% of my salary income with a upside potential because the site looks like crap. My first deal only represents 7% of my salary income. This deal is so good that I am using tax loan (2.5% annual rate) to finance a good part of it. That will bring a cool 25% addition to my monthly income. I think it's worth the risk.

The thing that I really wanted to share is: greed and fear. For the past few days, I had a constant swing between these the two emotions. It's funny how I can feel "this deal is too good to be true I want more time to look at it" and "this deal is so good that I want to close it now" at the same time.

I literally read and re-read Richardd's post and previous PM response to gain more comfort. For example, where on Google Analytics should I dig into to see whether there is anything unnatural about the traffics, what pages are mostly viewed. I think my DD is diligent enough to reduce the risk of me buying into a complete scam.

I have a great ton of fear. I attribute my fear to ignorance and inexperience. I don't feel like I have a good understanding of how traffic, backlinks, SEO works. I know I'm paying for traffic and the cashflow that it brings. But, it bothers me not knowing how traffic works. I know good content and value is eventually what brings people together, but there seems to be a good amount of tech available to hack it.

Anyways, I am doing courses on Google Academy to get smart on this. Hopefully, I will grow more comfortable with online businesses. Maybe by the end of next year I could replace my another 50% of my job income by growing the businesses I acquire or making additional acquisitions...

For the first time... making money and doing deals feel so great that it's almost addictive...
 
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Rydez

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Dec 7, 2019
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@richardd, I've been lurking this thread. Thank you for this. Here's my brief intro (at the time of posting this, it is awaiting approval).

Let's say there's a website that facilitates a solid forum community. Let's say you even consider yourself to be a part of the community, and that it has existed steadily for over a decade. However, it has only started using ads for profit for a few months. There aren't years of proven profit, however, there are years of proven community, and arguably this is the underpinning of profit in this case.

When you say "Years of proven profitability", do you mean years of proven ability to profit or years of proven profit?
 
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richardd

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@richardd, I've been lurking this thread. Thank you for this. Here's my brief intro (at the time of posting this, it is awaiting approval).

Let's say there's a website that facilitates a solid forum community. Let's say you even consider yourself to be a part of the community, and that it has existed steadily for over a decade. However, it has only started using ads for profit for a few months. There aren't years of proven profit, however, there are years of proven community, and arguably this is the underpinning of profit in this case.

When you say "Years of proven profitability", do you mean years of proven ability to profit or years of proven profit?
Normally I look at years of proven profitability. BUT, in your case, the traffic is more important. If the site has proven traffic for years, I'd consider it a seasoned asset. Forums are great because of the user engagement. You can't fake this. And if the current owner just started monetizing it, I'd consider that strongly. Ad sales of course are driven by traffic. And since the traffic is seasoned and genuine, I think you'd have a good candidate for a business asset to consider.
 
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richardd

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PROGRESS UPDATE: My web hosting company has been a pain since I took it over in October. BUT, I recently hired a new UNIX administrator with a lot of experience handling help desk tickets. I had been handling these tickets for the past two months, and it was taking up so much of my time. Now I have a guy who knows way more than I do, and has way more experience. I was technically capable since I know UNIX and web hosting. I just don't have the time to focus on tickets.

That hosting business has been super profitable though! Cost me $16,500 to acquire. We profit about $2000 a month since I took over. The new guy will only cost me $326 a month handling the tickets. I'm good with that!

$300 a month for support person
$20 a month for extra Help Scout user (ticket handling software)
$6 a month for extra Google Suite user (email)
25 hours a week freed up... PRICELESS
 
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Rydez

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Dec 7, 2019
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Normally I look at years of proven profitability. BUT, in your case, the traffic is more important. If the site has proven traffic for years, I'd consider it a seasoned asset. Forums are great because of the user engagement. You can't fake this. And if the current owner just started monetizing it, I'd consider that strongly. Ad sales of course are driven by traffic. And since the traffic is seasoned and genuine, I think you'd have a good candidate for a business asset to consider.
Thanks for your reply. I completely agree. Rules, though helpful, are not a replacement for critical thinking.
 

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richardd

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Thanks for your reply. I completely agree. Rules, though helpful, are not a replacement for critical thinking.
Yes critical thinking is a must. My 11 criteria for finding viable businesses is a foundation but not hard rules. Just recently discussing my web hosting business, it failed on one very important criteria: low hours of owner operation. I've been logging 25 hours a week handling support tickets. This was probably why the previous owner sold it for $16,500 to me even though he was profiting $2000 a month. He had his business as a job. I knew I could find the labor to take on these daily operations at minimal cost. Of course, he had other reasons for selling, namely to cash out and use those funds on another project.
 

TFF123

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Dec 8, 2019
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Great thread. Just a little worrying that some many of you are also looking at websites to buy. Having said that, I'm not quite at the $75k mark yet!
 

John_Wick

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Quick note to future buyers:

If you use brokers or Escrow.com, please DO read the terms of the escrow arrangement. It sounds obvious. But, the thing is brokers and escrow broker/agent don't give a damn about your terms in the S&P. I'm talking about my reaction when I see the escrow arrangement in my live deal.

Theirs:
  • Buyer fund 100% to the escrow, then the seller transfer the domain. Buyer has 1 inspection day until escrow closes.
Mine (simplified):
  • Buyer fund 100% to the escrow, then seller transfer all assets except the domain. Escrow closes within 10 days after that. Then the transfer of domain.
Don't mean to complain, but want to share this as a reminder to future buyers: if you have an agreement in writing, then do look into the writing. And make sure relevant parties follow it...

p.s.,
My experience with Flippa is better. For deals above $20k (I think), they assign a person to work with both parties. Then you manually instruct them to release the escrow and what not.

p.p.s,
What I previously thought "I negotiated a trial period" in my first was just my ignorance. It seems to be a normal process that goes: Buyer fund the Escrow, Seller transfer part of the assets, buyer fund the rest of Escrow, Seller transfer the rest (usually domain being the last). But, I did feel good about it at the time. And, it was a good seller and good experience for my first deal.
 

John_Wick

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Just want to share...

Warren Buffet's view on what makes a great business:

1. It constantly generates a good return on capital (20% ROI)
2. It keeps using that capital to generate more capital (thus compounding it 100, 120, 144, etc.)

Chapter 57, from the Snowball (on Warren Buffet) is great listen / read for people thinking about this. There are plenty more lessons worth revisiting again and again, like the cigar-butt investment approach, the genie view (treat oneself as a vehicle that needs to be re-oiled, which was also elaborated in TMF), stories on Geico and Washington Post.

It also helps the post 80's like me to get a better perspective and context of how our economy has evolved and is evolving.
 

Tom A

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Jul 11, 2018
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Richard, you are awesome. We know that.

But how the hell you are handling your accounting, taxes, bookkeeping and other legals for ALL these businesses? :rofl:

I have only one e-commerce business, inventory involved, and even that takes a lot of time to figure out.

Cheers,
 
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richardd

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Richard, you are awesome. We know that.

But how the hell you are handling your accounting, taxes, bookkeeping and other legals for ALL these businesses? :rofl:

I have only one e-commerce business, inventory involved, and even that takes a lot of time to figure out.

Cheers,
Thanks! I centralized everything using QuickBooks Online for accounting and book keeping, Help Scout for managing customer support, and Trello for keeping track of my tasks. I also use Skype to converse with my contractors.

It was quite a large undertaking to get organized. My current challenge was to free up time to keep up with all this maintenance. Luckily I just hired a guy to take on some of the day to day load. And I set my new quit date for my one large consulting contract for 3/31/2020. Then I'll be back to about 10 hours a week working.
 

Tom A

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I centralized everything using QuickBooks Online for accounting and book keeping
I am aware this is not the subject for this thread, but quickly, I assume each business has its own books, taxes, etc., and not commingled...? I would assume each business has its own LLC (or other formation) and files taxes separately. Tax season is coming, i cannot stop myself thinking, planning about it....
 
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richardd

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I am aware this is not the subject for this thread, but quickly, I assume each business has its own books, taxes, etc., and not commingled...? I would assume each business has its own LLC (or other formation) and files taxes separately. Tax season is coming, i cannot stop myself thinking, planning about it....
Ah I see. My operation would become cost and time prohibitive if I structured it under multiple entities. Since my business models are pretty simply, I can subcategorize each sale under a different business unit. Similarly with expenses, although some expenses cross business units.

There may come a time where I may spawn off a business unit into its own corporate entity, but it would have to get pretty large. Honestly, I can't imagine at what point that could happen practically speaking.
 
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