September 18, 2021

How to Buy Online Businesses, Like this One for $10k

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How to Buy Online Businesses, Like this One for $10k

Unconventional Acquisitions

September 18, 2021

What if you could buy a profitable online business for a few thousand dollars?

I bought into this business (40%) Strike Fire Productions for $10k and sweat equity. It is a podcast production business that did $117-144k in annualized profit. 

They are the #1 Podcast Production company in cannabis and rep some of the top podcasts, companies and guests in the space. I helped them optimize their business and helped them grew. Which meant I get 40% of the profits. But the real benefit to me was this is an ecosystem add-on for my cannabis VC fund. You see I get all my portfolio companies a massive discount, I get them on these podcasts and I use this business to help them grow. 

That’s a mix of money down and sweat equity on an accretive add-on deal. Not shabby for let’s call it $57k in annual revenue to me (if I don’t spend that on the business and growing it). Now that was an insider deal, which you should work to accumulate. But, how about for non-insider deals? 

How to Find Online Businesses to Buy

Have you all heard of Flippa? It’s the largest online site for buying and selling online businesses. Let’s break down how to go after them. *Disclaimer* we get all sorts of hate for saying you can get the kind of deals I am talking about so let’s disclaim up front. I didn’t due diligence this individual business, you need to do the work on all the businesses. And MANY sellers are going to turn down your offers but with the market today and millions of them for sale, believe me when I say someone will say yes. 

Flippa works like this: you go in and search thousands of businesses, engage with the sellers and transact all on their site. 

You screen the deals based on what your parameters are such as businesses below $10k, $1k, above $1MM or varying industries. Or you use one of the search tools.

Like this list of ways to search they highlight for you:  

Then you narrow down. Maybe you are super into sewing, and want to start with a small business.

For Instance Meet Jen: Jen apparently is super into sewing too. Now my first steps would be: request more information. I’d have questions like:

  • Is this a real site? Meaning is it a template or actually producing? 
  • Are the profits there and verifiable?
  • How much work is it?
  • Are you buying at an upswing (no bueno)?
  • Can you increase the return on this?
  • … 

If your questions are answered to your liking, next steps…

You can buy a company like this sewing machine site by Jen.

She profits $642 a month and is selling it for $10k. Which means you break even in 15 months and start cash flowing. Or you do what I would do and negotiate the price down sizably, tell Jen you’ll pay her in monthly installments using the profit over the course of 7 months and so by month 7 you are profiting $642 a month. If she says no, pass. Or negotiate an upside payout if you grow the business you’ll pay her some % on it. Get creative.

Now I don’t like sewing, so this probably wouldn’t be my jam but if it was, I would ramp up the profitability by adding:

  • Other channels to grow like Youtube, Instagram, Pinterest
  • Buy accounts related to sewing to drive growth —> Using a service like Social Tradia you can buy IG account for hundreds of dollars
  • Cross-post writing on other more popular sewing and craft blogs
  • Ping a bunch of manufacturers and see if they want to put my blog reviews on their sites so I get affiliate links
  • And the list goes on…

Flippa has THOUSANDS of businesses for sale. Start small with one like this English education site that is going for $2,000 and had revenue of $418 a month. Again – trust, but verify. 

The funny part is the big boys, they are doing this a different way, at scale.

If you didn’t catch Pier 1’s acquisition by none other than Tai Lopez, you are in for a treat. Do you know Tai Lopez? He’s this guy, we’ve talked about him before:

Known for talking about his Ferrari’s, Lambourgini’s and his book reading to get rich quick schemers.

However, he may not be a complete looney bin. Pier 1 went into Chapter 11 Bankruptcy and Tai here, under Retail Ecommerce Ventures LLC, bought the companies online assets and IP at auction. $31MM for a company that did $300MM online. Not as dumb as you project on the interwebs Tai. He did the same thing quietly with Dress Barn earlier this year. And if you haven’t noticed they’re killing it online.

So lest the man with a penchant for taking photos with cars and chickas best you, it’s time to think about the e-world alongside the retail storefront world. 

Be the only beneficiary of what is to come, it’s time to start thinking about how to get in the game. Go to Flippa. Think on your niche. Do your due diligence BUT don’t believe that you can’t own a business.

Yours Unconventionally,

Codie Sanchez & Ryan Snow

Co-founders, Unconventional Acquisitions

You can also register for the course here OR if you are serious about buying a small business, join our Mastermind.

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