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EXECUTION [Progress] Newbie. Jumped in, bought 1st online biz. Goal to flip for $100k profit in 12 months.

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mojorisin

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Oct 6, 2019
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While I've had a nice corp sales career, I'm always thinking about ways to make extra income streams. Stocks, Bonds, and Real Estate have treated me well. But I'm always thinking about ways for additional income.

I was first inspired by biophase thread of buying an online biz to pay for a sports car (I had an R8 at the time so I can relate). Started researching online biz. Then stumbled across Richard's $240k thread. Which inspired me to buy an online biz for sale vs. starting from scratch.

After 5 months of intense learning of various models, and hours on hours of browsing online biz finally pulled the trigger.

Bought an online lead generation site for web / mobile / e-commerce development companies. Site cost $60k, $3300 per month recurring revenue from 9 customers, been around since 2003, database of 15k registered customers on the website. The business model: I have a directory by city where you can register your business for free. If you want to be in the "top 10" ranking it costs $1k per month for #1, $800 per month for #2, etc etc.

Business Strength: 15k registered customers for me to target for subscription, $3300 current recurring profit, established. 25k page views per month. Google page 1 for local city clients.
Business Weakness: Pageviews decreasing month over month, customer can cancel anytime, backlinks linked to my other website (Google penalty risk), strong competition. Blog content weak.

ASK OF YOU: I need any and all ideas on how to increase my pageviews. Ultimately I my clients want clicks to their website for lead generation.

Why did I buy this site? Recurring revenue, unlimited upside potential, existing clients I can target to turn into monthly revenue, new business models to apply. I can take it in many different directions.

What is my intent for the site: My 1 year goal is to 3x the profit from $3k per month to $9k per month. It also increases the business value to over $250,000 if I decide to sell ($9k monthly profit x 30 = $270,000 valuation using current market rates). Gives me the option to flip for profit of pocket monthly income.

What is my focus? Focus my resources on increasing monthly pageviews from 25k per month to 100k. Increase traffic to paying clients sites. My BIGGEST risk is views are dropping, clients do not get leads, they cancel. It will be difficult to win them back.

What is my execution plan? Unsure. I think I need to put together a digital marketing plan, create a bigger sales funnel. Need valuable content. Build keywords into my existing top pages.

My approach is to go on the "offensive". Improve the site, add value, increase CSAT. Invest $$$ wisely. If I just sit back and collect checks, the site will fail.

30 to 60 days:
1. I'm hiring a digital marketing consultant to build an action plan. Cost is around $1k.
2. Hired consultant to provide keyword recommendations based on search %.
3. Signed up for Ahrefs to start my own learning process, so I can ultimately not rely on others for SEO research.
4. Hire content writer to provide valuable content
5. Solicit registered clients to go from free model to monthly subscription
6. Consider google ads to keep views up for top 3 paying clients (75% of my revenue from 3 clients)

60 to 90 days:
1. Measure results for marketing plan, have views increased.
2. Publish 1 new article weekly. Measure results.
3. Implement improved keywords to top sites
4. Invest into top viewed sites, how to improve

3 to 6 months
I'm not really there yet... I MUST get page views and leads to my customers. I can then add more clients, increase subscription costs. I have to ADD VALUE.

That's it for now. I've officially owned the site for 2 days. I gotta make this happen!
 

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roguehillbilly

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This is really interesting to hear. I picked up one of those “work for yourself from home” magazines the other week at Barnes and Noble to see what was in it. One of these business directory websites was there. The idea was that you’d pay for the software and for it to be setup and then go out and make sales. They were selling shovels though as they had created the template and backend to onboard new customers. Pretty much the same that you’re up to, I think.
Hopefully it works out for you. I’m doing something similar with FB groups, I’ve done outreach to companies that would be a good fit for sponsorship and pitch them on advertising in my group. One thing I’ve found is that they don’t always know how to write compelling copy. I’ve begun to write copy for them and show them engagement and conversions etc. maybe you could try to take a more active role with your clients?
 
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biophase

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What is my intent for the site: My 1 year goal is to 3x the profit from $3k per month to $9k per month.

What is my execution plan? Unsure. I think I need to put together a digital marketing plan, create a bigger sales funnel. Need valuable content. Build keywords into my existing top pages.

1. I'm hiring a digital marketing consultant to build an action plan. Cost is around $1k.

2. Hired consultant to provide keyword recommendations based on search %.
Great job for taking action.

But I think next time you should figure out the above before buying a business you intend to grow.
 

Andy Black

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Consider google ads to keep views up for top 3 paying clients (75% of my revenue from 3 clients)
Why not run Google Ads for every page you’ve got and use the data to inform your SEO plan?

Maybe even use dynamic search ads with a low budget and monitor the search terms?
 
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mojorisin

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Oct 6, 2019
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This is really interesting to hear. I picked up one of those “work for yourself from home” magazines the other week at Barnes and Noble to see what was in it. One of these business directory websites was there. The idea was that you’d pay for the software and for it to be setup and then go out and make sales. They were selling shovels though as they had created the template and backend to onboard new customers. Pretty much the same that you’re up to, I think.
Hopefully it works out for you. I’m doing something similar with FB groups, I’ve done outreach to companies that would be a good fit for sponsorship and pitch then on advertising in my group. One thing I’ve found is that they don’t always know how to write compelling copy. I’ve begun to write copy for them and show them engagement and conversions etc. maybe you could try to take a more active role with your clients?
The site I bought started as a directory site that has been around for 15 years.

I did evaluate a number of business templates "pre built", but I figured better to pay the premium for something already working with revenue that I can run vs. investing 1 to 2 years for the risk of no results.
 
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mojorisin

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Oct 6, 2019
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Great job for taking action.

But I think next you should figure out the above before buying a business you intend to grow.
Bio, heck ya I agree... but I had only a few hours to decide on this one so I jumped in. I originally did this purchase to pay for my R8 (60k purchase for 30k annual profit covers payments). However the more I dig into it, there's a ton of upside here! I made the decision to set bigger goals vs. just using it to pay for the car (or pay off the car faster).
 
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mojorisin

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Oct 6, 2019
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Why not run Google Ads for every page you’ve got and use the data to inform your SEO plan?

Maybe even use dynamic search ads with a low budget and monitor the search terms?
Andy, great suggestions. I'm going to spend the weekend digging into this.

Please keep any ideas or suggestions coming :)

"a smart man learns from his mistakes. a wise man learns from others mistakes".
 

Kid

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Besides Google Ads you could experiment with FB ads (It was not clear from post if person you are hiring does social media).
Do cheap tests like $5 or $10 per day and see if someone bites (measure CPC,reach etc)

Besides that, your plan seems solid.
 
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roguehillbilly

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Bio, heck ya I agree... but I had only a few hours to decide on this one so I jumped in. I originally did this purchase to pay for my R8 (60k purchase for 30k annual profit covers payments). However the more I dig into it, there's a ton of upside here! I made the decision to set bigger goals vs. just using it to pay for the car (or pay off the car faster).
I'm intrigued and I like cool cars. :)

Can you mention some of the resources you found most helpful for acquiring a business?
Sounds like Biophase's thread and other things.

I'm in the same process of looking at a SaaS company to potentially purchase and so I devour any and all info I can

One of the best resources I've found is a course called Micro-Acquisitions:

Affiliate:
non-affiliate:
 

Dmorr

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Is your site like a “homeadvisor” or something similar or is it like a bulletin board where visitors browse for the type business they are looking for. Depending on the specifics I have a couple ideas.
 

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mojorisin

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Oct 6, 2019
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Is your site like a “homeadvisor” or something similar or is it like a bulletin board where visitors browse for the type business they are looking for. Depending on the specifics I have a couple ideas.
1. There is a directory by city, where web firm post their info for free.
2. There is a "top 10 firms" by category (web design / mobile / etc) where the firms pay to be in the top 10. The more they pay, the higher their rank.

I drive traffic through google search, page 1 for most web firm searches when the city name is included.

I do not have user reviews at this time.
 
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mojorisin

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Oct 6, 2019
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I'm intrigued and I like cool cars. :)

Can you mention some of the resources you found most helpful for acquiring a business?
Sounds like Biophase's thread and other things.

I'm in the same process of looking at a SaaS company to potentially purchase and so I devour any and all info I can

One of the best resources I've found is a course called Micro-Acquisitions:

Affiliate:
non-affiliate:
Check out flippa, empire flippers, lots of them out there now
 

jdm667

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Can you send out a weekly email to the 15K registered subscribers on the site, with some information that group would find useful?

Could you then charge a company a fee to be "featured" in that week's email? For example, a VA agency might pay to get in front of so many web dev companies that might want to hire them for extra help.
 
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mojorisin

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Oct 6, 2019
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Can you send out a weekly email to the 15K registered subscribers on the site, with some information that group would find useful?

Could you then charge a company a fee to be "featured" in that week's email? For example, a VA agency might pay to get in front of so many web dev companies that might want to hire them for extra help.
jdm.. I like the thinking. I'll need to put more thought into this. Ideally I need to get feedback from my clients on what problem I can help them solve. Not sure the best way to do that yet.
 

jdm667

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Good point mojorisin - finding out what is valuable to the customers is key, and probably the hardest part.

Once you get some new articles up on the site, could you put a link in the articles to a short survey - maybe have an open response question for them to brain dump their biggest pain points?

If you get 5% of your 15K email subscribers to read your articles, and 4% of those article readers to take the survey, you will get about 30 responses. That should be enough to start to get some ideas.

No matter what you do, please keep us posted - this is exciting!
 

bnkrpt

New Contributor
Jul 26, 2016
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This is going to be a tough battle, not impossible, but will require a lot of work and probably even a change in business model.

It makes sense that this website has been around since 2003, as it was much easier to rank for search terms back in the day. The challenge you will have is what value are you delivering to your visitors, which can then deliver value to your paying customers.

It will get very very expensive driving Google Ads traffic to your site. The fact that your page views are going backwards would have been a sign for me to not purchase. I would say the majority of your traffic has been from organic search, and if your not producing great quality content, then that's going to continue.

I agree with biophase, if you didn't know what you were going to do to improve the site before buying, you should have held off. Being a directory site, they are a dime a dozen. A lot of these sites that operate are usually run on a per lead basis. You drive traffic to your site, you generate a lead for X industry in X location, and you sell those leads to businesses. You want businesses to take all the risk without any guarantees, will be a quick way to burn through customers very quickly.

I also don't think you will get 30x profit for a sale unless you completely change the way the business operates. There would be too much risk in having all of your reliance on organic search traffic and any savvy buyer is going to see that.

An example of a site I bought just 2 months ago, it had 4 years of history which was very consistent of both revenue/profit each month and traffic. I paid 12 months profit for the site, great value as I know without doing much to it, I'll make my money back in 12 months, but I also saw a lot of opportunities to improve the traffic and sales. There was 4000 customers in a database that I could then use to create Facebook custom audiences and send emails to. The site could use a lot of improvement in terms of conversion rate optimisation. It was a group of digital products that meant no physical fulfilment. Yes there is a big reliance on SEO, but using SEMRush I looked at the history and the SEO traffic was on the increase, so was worth the risk. Again I knew as a worst case scenario I would make my money back in 2-3 years (but most likely less than 12 months).

It's hard for me to give advice on what to do for this site as it's not something I would have touched with a 30 foot pole.

Best of luck and I hope you learn a lot to prepare you for your next purchase.
 

logdog

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What's the website? If you post the site I'd be happy to take a look and offer any advice I have.
 

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