Incredible! And inspiring!
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Free registration at the forum removes this block.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.
UPDATE: I spent all weekend improving my organization. I'm back to Inbox Zero! I setup up filters in all of my Gmail accounts. I set up all starred emails to create a card automatically in Trello. I adopted the Station app browser to replace Google Chrome tabs, and so all of my business apps are more easily accessed. Love Station! Got 1Password working for password management. Set up Grammarly to fix my spelling issues everywhere. Adopted Polymail for unified inbox. And hired a second guy to handle tickets for my web hosting business. TOTAL action faking stuff, because I didn't feel like doing actual work. BUT I will be saving a ton of time. Cleaned up my desk too. Oh, and also switched from Dropbox to Google Drive.
UPDATE: Getting organized...
My last long post here referenced my performing action faking. But context is everything. I'm on the verge of getting my business to the promised land, well at least for me. Way more money than my family needs while working half days on it and nothing else but enjoying the rest of the day doing whatever I want, whenever I want, wherever I want.
So at long last it was time to get organized. When you're a serial entrepreneur acquiring business after business after business, you reach a point where chaos reigns. My chaos is lack of organization. I have 6 separate email accounts. Each had thousands of emails, some going back 10 years. I decided to go inbox zero, because hoarding emails and using your inbox as a to-do list just wasn't cutting it.
I currently use Trello to keep track of everything, and I tried integrating email with it, but the process became unwieldy with Google action scripts tied to Gmail labels and email forwarding to the Trello boards. So i decided to go simple. I just wanted one simple click to mark emails for to-do items. That's when I rediscovered the star (or pin) in Gmail. On my phone, tablet, and PC, I use Spike. All work nicely with the simple act of pinning emails. So, even with a massive amount of emails, I have my email to-dos all neatly packaged with a star.
Next, I figured I would get through the 20K emails. I decided to purge stuff that was pre-2018. No looking back. That still left me with 5K emails. So with the magic of Gmail filtering, and a lot of hours at the computer, I finally paired all of it down to about 1000 emails.
I labelled all 1000 of those emails as "Keep". So now my inboxes are totally clean. But then what about daily upkeep? I don't want to sort through the gobs of junk that comes in on a daily basis. So I rediscovered Gmail filtering! I know about a lot of automated emails that come in. I created filters for a majority of them. Those emails either get forwarded to Help Scout (the help desk ticketing system for my businesses), or labelled as "Delete Later" cuz as a hoarder, I can't get myself to just let that shit go. What's left over in my daily inboxes are emails that fall through the Gmail filters, and there aren't many. Specifically, they are actual work emails, newsletters, and junk that pass the Spam filters.
One of the best features of Spike is that it has is the functionality to click a button that allows you to unsubscribe from a newsletter and then auto delete the email. Just that alone will keep my inboxes from continuing to be inundated with junk that I never read. From here, I only see the good stuff. And I give myself 4 choices:
1) Respond
2) Pin (or star) for later response or action
3) Archive
4) Delete
With these 4 choices, it's very easy for me to get through my inbox. Oh, by the way, all of my businesses are consolidated into one inbox. This setup effectively turns my chaos into the soothing sounds of, well, whatever. Currently my wife vacuuming which is drowning out my son's crying. But I am now at peace.
As a side note, my next challenge is to only do emails at specific times in the day. Probably first thing in the morning, maybe noon time, and then at the end of the day. I should allocate 20 minutes for each period. I really think that's all I need with my new system. AND maybe someday, I'll hire a VA to do this for me.
I have a product that needs your assistance. Please contact me for the details. Thanks ZachI studied at one of those prestigious engineering colleges in the US getting a bachelor's degree in mechanical engineering.
Mind you, I kind of wish I would have gone to a state school, and saved my parents a hundred grand. And I probably would have had way more fun.
Excellent point. And thank you for sharing. Sounds simple, but hard to make the ask (for me)... curious, what would you do in my situation.Quick thing. Verify the customers. If you can speak with them or email them, do it. Do not just trust the seller on the accuracy of their data.
If I buy a business like a retail store or a cafe, but I want to be as hands off as possible
Can I just hire a manager ?
I have read all of your posts for several times. Very inspiring. I'm also in the mid 40's. I have a full-time job (running digital marketing at a startup), but have also started a side hustle consulting/coaching business. The side hustle is slow lane but it provides another source of income. I have been thinking about acquiring businesses as I have done turn-around at several employers. So, your story is both inspiring and relevant to my plan. Thank you for the generous sharing.
I wonder if I can ask you a few questions:
1) How are your acquired businesses performing during current Covic-19 crisis?
2) My plan is to use my consulting/coaching revenue to fund acquisition. But, with the Federal government stimulus package, there is some benefits for SBA loans. I'm curious to get your thought on using SBA loans to acquire businesses.
3) I have been monitoring BizBuySell and Flippa, but have a hard time to find businesses at the $20K-$40K range that fit the criteria you outline. It seems that drop-ship e-commerce businesses take up a large portion of them. But, I have been only looking at this for about a month. My question: How long did it take you to search before finding a good candidate for acquisition? (1 week? a weeks? A few months?)
Thanks in advance.
Lol, there is no secret sauce. It's all laid out in this thread. The playbook is written. Honestly, everything I've done up to this point like raising capital, setting up a strategy, targeting businesses based on that strategy, and then executing the simple strategy is all in here.
For the people that have read this thread, let me know if this all makes sense. And if there are any grey areas, or you're not sure about certain details, pm me. Lots of people have already done so with their thoughts, what businesses they have targeted, and asked for my opinions on those opportunities. Just get out there and start looking even if you are window shopping. You can save money in the meantime.
Ma prima di iniziare il targeting, assicurati ancora di venire con i tuoi criteri di ciò che la tua attività futura dovrebbe soddisfare. Quindi trova quelle opportunità e torna da me. Non lasciare che la mancanza di capitale, la mancanza di esperienza o la mancanza di fiducia ti impediscano di iniziare a cercare opportunità di acquisto.
Sembro una pubblicità! Ma te lo prometto, non ti sto vendendo niente. Diavolo, sto trascorrendo molto tempo a lavorare con così tanti di voi. Ma non sto chiedendo in cambio denaro o guadagno finanziario, né lo farò mai.
L'unica cosa che ti sto vendendo è francamente un modo per entrare nella corsia di sorpasso. E il mio unico compenso è vederti avere successo.
[/CITAZIONE]
Wow You are a very humble person, a man with a big heart .. Thanks for sharing your experiences with us
Lol, there is no secret sauce. It's all laid out in this thread. The playbook is written. Honestly, everything I've done up to this point like raising capital, setting up a strategy, targeting businesses based on that strategy, and then executing the simple strategy is all in here.
For the people that have read this thread, let me know if this all makes sense. And if there are any grey areas, or you're not sure about certain details, pm me. Lots of people have already done so with their thoughts, what businesses they have targeted, and asked for my opinions on those opportunities. Just get out there and start looking even if you are window shopping. You can save money in the meantime.
Ma prima di iniziare il targeting, assicurati ancora di venire con i tuoi criteri di ciò che la tua attività futura dovrebbe soddisfare. Quindi trova quelle opportunità e torna da me. Non lasciare che la mancanza di capitale, la mancanza di esperienza o la mancanza di fiducia ti impediscano di iniziare a cercare opportunità di acquisto.
Sembro una pubblicità! Ma te lo prometto, non ti sto vendendo niente. Diavolo, sto trascorrendo molto tempo a lavorare con così tanti di voi. Ma non sto chiedendo in cambio denaro o guadagno finanziario, né lo farò mai.
L'unica cosa che ti sto vendendo è francamente un modo per entrare nella corsia di sorpasso. E il mio unico compenso è vederti avere successo.
[/CITAZIONE]
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.
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.
This is absolutely fantastic and an interesting read. I'm currently unemployed due to covid, have a wife and a 14 month old son, and of course a mortgage payment. Thankfully, we have my wife's income and a rental income that pays about half our mortgage. With that said, I decided I wanted a change. I decided to read books (never was a reader until now) (read 13 so far since Covid begun including TMF and just started Unscripted ). I decided to start meditating, visualizing, setting daily goals that I mark off on my phone and track how I do with them. Also, created a side web design and social media service business. I have only had a few clients so far, but I realize its slowlane and not really scalable.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.
Wow!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.
I have done this and open to other investors or mentoring/coaching.Hey guys,
As @doitman has not been seen in a while, I was wondering if anyone has made some progress in the same excellent direction as he went?
I have started to finally find some decent deals, but still really need a mentor to act as a sounding board for the tough questions that could be real critical.
Please let me know if anyone else in the "Acquisition" lane has had any luck with the following:
A. Finding a mentor who deals in the lower market where most of us are looking
B. Have any stories to share of similar "Buy a Business" experience
C. Knowing anybody who has bought/sold a small business (online or brick & mortar) that might be someone I could reach out to, even as a paid coach
Take care!
This is absolutely fantastic and an interesting read. I'm currently unemployed due to covid, have a wife and a 14 month old son, and of course a mortgage payment. Thankfully, we have my wife's income and a rental income that pays about half our mortgage. With that said, I decided I wanted a change. I decided to read books (never was a reader until now) (read 13 so far since Covid begun including TMF and just started Unscripted ). I decided to start meditating, visualizing, setting daily goals that I mark off on my phone and track how I do with them. Also, created a side web design and social media service business. I have only had a few clients so far, but I realize its slowlane and not really scalable.
With Covid, I'm the one taking care of my son (we don't trust daycare with this virus still around), so a lot of my time is dedicated to him until night. I do want a job to bring in income (cause there's a multi-family house for that will be going on the market soon that Id love to buy for a bigger house for myself, and more rental income), but at the same time I don't because I really don't want slowlane life.
My mind is always thinking about something entrepreneurial to do, but my problem is starting. I'm just not sure how. And I probably need to educate myself in certain area's to master my craft and maybe be able to start what I want to do. I definitely don't want to pay absurd prices to go back to college. Side note, I am thinking of taking real estate course to get my real estate license and become an agent. They do make some decent money in Long Island, NY because the housing market stays crazy here. Just to get some income coming in until I can make my thoughts a reality.
Great stuff man. Well done. Thanks for sharing!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.
Where do you find those businesses? I'm interested in buying a fewFrom 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.
Amazing inspiring story. Hearing this encourages me. It's definitely not easy to achieve what you have in such a time frame, but you have made it possible.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.
Hi @doitman,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.
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.
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