Are you thinking of buying an online business?
Jaryd Krause is the Founder, CEO, and Online Business Mentor at Buying Online Businesses.
He uses his knowledge, experiences, and previous success in purchasing online businesses to teach people how they can be successful in doing the same.
His mission is to teach 1,000 people how to replace their current income, quit their job and live a lifestyle they absolutely love.
His company trains its clients on what they need to be successful. Jaryd believes in changing lives one website at a time.
Learn more about how Buying Online Businesses by listening to this episode of The Thoughtful Entrepreneur above and don’t forget to subscribe on Apple Podcasts – Stitcher – Spotify –Google Play –Castbox – TuneIn – RSS.
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0:00
Welcome to the thoughtful entrepreneur Show. I'm Josh Elledge, founder and CEO of up my influence.com. We turn entrepreneurs into media celebrities, grow their authority, and help them build partnerships with top influencers. We believe that every person has a unique message that can positively impact the world. stick around to the end of the show, where I'll reveal how you can be our next guest on one of the fastest growing daily inspiration podcasts on the planet in 15 to 20 minutes. Let's go. All right, Jaryd Krause, you're the founder and CEO of Buying Online Businesses and on the web at buying online businesses dot com. And guess what you've got a podcast as well, and that's called buying online businesses, which is the preeminent podcast for learning how to buy online businesses. Well, thank you so much for joining us. First off.
0:56
Thanks for having me. greatly. Appreciate it.
0:59
So Jaryd, why buy an online business?
1:03
Great question. So long story short is I struggled to I was running away from my job running away from my life.
1:10
And I
1:12
didn't really like what I was doing. And I tried to start my own online businesses. And this is what everybody tells us, you know, you want to make money, a lot of stuff. You're an online business and it's servicing simple, quick and easy. It's actually really not, I, you probably know this as well. And a lot of other people that are probably struggling listening or watching this or listening and thinking the same thing. And I struggled for so long, I started many of my businesses and failed and I thought, well, if 90% of startups file, want to just go and buy a business as poss at 90% failure, right? That's already got a proven track record of making money every single month. So I went and checked out if I could, and I taught myself how to buy some businesses. Some websites,
1:52
and and yeah, I mean, you know, again, I could talk through, you know, from experience, I've had a number of online businesses not do so well. savings Angel ended up doing very well, we did 6 million in revenue. But, you know, if people knew what I had to go through in that first year, you know, I don't I don't think anybody could I, you know, only a very, very, very special person could have stomach what I had to stomach, you know, losing a home to foreclosure, you know, going through bankruptcy, like all that other stuff, like I had to learn through making a lot of mistakes. And then, you know, just I had to put in that, you know, 80 hours a week, non stop for a good year and a half, you know, before we really started making decent profit from that. And, you know, I've been there Same thing with my influence, even though we've already had success, like to build out your systems to figure out what the market wants to do, you know, to start building your authority with that brand. And this stuff takes a lot of work, and I get You know, one way is you can, you know, and I'm sure the attrition rate is is you know, if we looked at all online businesses is pretty abysmal. Like I would imagine most don't go on to do much of anything and these ways and bricks I guess buying an online business kind of gives you a free pass you know, past all that junk and and not knowing this stuff at the early stages and, and jump into something that maybe has some of those elements that you want it's kind of like you know, in some ways it's kind of like adopting a dog that is already been through the early puppy stages you know, where the peeing on the carpet pooping all over mouthing and chewing up everything like they've already been through all the messy stuff. Now you just get it to you know, get to get right into the you know, puppies are cute and all that but still,
3:52
yeah, we'll get to this as well as here as well to.
3:55
Yeah, yeah. Okay, so like, how do you know like, how do you buy business. How does that work?
4:02
Yes, great question. So coming back to skipping that failure rate of like, I just want to take knows people who like have they bought the businesses as well. And they get the lessons that the owner has learnt. And that you can incorporate that in a cell and I teach you have a training period as well. So it's not like you just buy something you don't know what to do. It's you get to get taught, like an onboarding process of how to run the business well, which is really cool. But how do you find these businesses a lot of people started looking at marketplaces where they've got the kind of auction beating type thing where it's kind of like eBay where you can buy websites on an auction basis. Now and then there's also other places like in Australia and around the world that have marketplaces as well where you can apparently buy websites from now the thing with that is, I suggest it's not a place to go because there's a lot of junky websites listed there for sale and people just don't Know what they're doing with their business, they've tried to make a bit of money and it's just a flop and they're just selling pretty much their own startup that's failing anyway. So I avoid those. And I tell all my clients, especially in my community that we just avoid those and we go to we go to website brokers and this many good website brokers, I urge people to just research website brokers like the Empire Flippers in FE International, they're two of the best brand brokers around at the moment now, and I've had those guys on my podcast as well, but they've got their reputation at stake. So they don't want to sell bad businesses because they're going to go out of business then and get bad reviews. So they try to do the best thing for everyone. And yeah, that's where I'll go is website brokers. It's exactly like buying a property like a investing in property. What you're doing is exactly the same but what you're doing is you're buying digital property, and it's a lot quicker to be able to sell it and look easy to buy you out to buy You know, rather than going through the whole property investing phase, yeah.
6:05
How much does it cost to buy a business? Like what's, what's the range?
6:09
Yeah, the range is, I mean, you've got these small list things like I was talking about before that a junkie ones, if you buy anything under 10 K, I say you're buying yourself a start up, and it's just not worth it. But if you bought anything 20 K, up to five to I mean, I was speaking to one of the brokers last week, he's selling a business for 35 million. So you've got a big range there. And it's really good because people can come to the market with whatever their financial position.
6:34
Now, what if I want to sell a business? How do I do that? Yeah, I do. Well, at least I'm open to some sort of an exit slash partnership type type thing with we'll see you know, I'm open savings Angel I like I've got, I've loved the work that I've done for 12 years. You know, we've done over 6 million of revenue, but honestly, like, I wake up and I'm so passionate about helping business owners become media celebrities. And I'm much more passionate about that than I am about coupons today, my friend, I gotta tell you, if I'm being honest.
7:09
And Wallace, you've done so well with that is like you don't want to sell that business to someone who's just going to destroy it as well. Because you put Oh,
7:18
no, no, no, that would be horrible.
7:22
So that's why it's bad to go through a broker because, like, better website investors go through brokers. So yeah, I would put you into some of the brokers are also linked you up with some, some of one of my mates as well that you're going to be able to have a chat to and see what you can do with him there as well. So there's, I would suggest looking at brokers. And that's probably the best place because it's also when you're trying to sell a business. It's electronic, sell a car as well. You've got to have people come and check it out. And you got to show them everything and there's a bit of work in it. Having a broker Yeah, just you don't have to do that yourself and it makes it so much better.
8:01
So, um, so yeah, so it looks like, you know, coming into this, you really want to look at this as making an investment into an existing, you're basically just like you would buy a brick and mortar perhaps need to get funding or self did you've got access at all. Now, are all of these businesses super profitable? Or like how do they how do you determine valuation of an online business?
8:30
Yeah, so normally at the moment, it's roughly around and this they do apply like brick and mortar businesses do it by multiples of years. And online businesses do it by multiples of months, and an average at the moment is in between 24 to 36 month multiple, and that is normally how you would value business and then it changes differently depending on how much work is required for the business. How much traffic coming to it, how much is actually buying Like how well it is established. So businesses that have been around for six months to 12 months are going to be as well established or as valuable as something that is a lot older, that's been going really well. timeframe. So there's so many different things about you know, when we dig into financials, the due diligence of the financials, the traffic, the SEO, the marketing, and so many different little umbrellas that we need to cover in due diligence, which is what I teach people in our community. Yeah, to make sure that we vet this business correctly because we don't want to go and buy a limit, right? Yeah, right. That's the had a value business does start to get a little bit more technical, but if it's in between that 24 to 36 month range, you generally buying it fair business and then you have bought businesses that are up, you know, the the 15 month multiple, which is really getting out there that's kind of sitting records there but around the around the two, three three year mark range is a generally auto valuable business
10:04
nice nice and so like any success but can you think of any success stories you know recent ones that you've you've heard of people that have purchased a business and then been able to take it and and actually do quite well with it
10:19
yeah for sure my clients man like people that have stopped working with me they they're making nothing like plumbers that a lot just like me or construction work is a lot. I work with a lot of construction workers and they come in they know nothing about the internet and they end up buying businesses making 2000 $3,000 a month and start growing and one of my last clients feel he bought a business. He was making nothing online within six months working with me bought a business and making 48 came up. So for me, that's amazing. Yeah, I mean in six months, but he obviously went away and did the work and it's like it's let's just haven't been Tea Party and see if this works is it's getting there roll up your sleeves and take some action and look at businesses and vet them and due diligence and there's some pretty cool success stories just there. And you see people doing it all the time I have people come to my podcast that have bought businesses and Zach zone Hey Camelot podcast and he bought a business and ended up flipping it I think he made like 20 plus grand in four months or something 24 grand was his first business he bought first website and you know, started flipping it and he did really well. There's so many people that are just like starting to get into this space because they realize the leverage of other people's hard work and then Oh man, this person like you know Josh has just done all this work to get his business to six mil I can just come in and payments and money is Donald God work. And I know that sounds like frustrating to you, but it's a massive win for you. And for Oh, for sure, the seller, the buyer as well. So it's a really good, it's a really good market with so many people take great advantage of each other's efforts.
12:13
Yeah. And you know, and they're digital entrepreneurs like myself that we've built something. And then another opportunity came along, you know, because when you're visible like that, yeah, and you're in that world, that's kind of what happened to us. And so, you know, I would get, you know, starting savings Angel over from scratch, like, oh, there's no way that I mean, that, that makes me sick, just thinking about like, I could never do that. But, you know, I create opportunities now. So, you know, if you're, if you're looking at a website that, you know, someone wants to make some sort of an exit and I'd like to get some, you know, talk about that in just a second. But, I mean, the reality is, you know, people have created successful online businesses are probably going to create more More than one successful online business and sometimes they want to stay, you know, keep their hands on the wheels of all those businesses. And other times they're like, you know what, I just don't have the like me, I don't have the brain share to do that. Like, I just I don't I kind of don't want to, uh, you know, to be involved in the day to day up. thing I know that if someone had a piece of that action, I know they could do amazing stuff with it. So I don't mind sharing that opportunity with someone especially with great a great win win. And so I guess my last question is acquisition. It's not always like, Okay, well, here's 50 K, goodbye. It's now you know, give me the keys. It's now mine hundred percent. I mean, there's different models, right?
13:50
Oh, yeah, there's definitely different business models like just like you got like Tesla cars, Ford cars Toyota's and all these different types of models. The same with businesses like you've got affiliate websites, you got drop shipping websites, you've got adsense websites, just get traffic in and then make money by putting ads on it. You've got digital products, sites, you've got community membership subscriptions, SAS business models. This is main business models that you can buy. And this is what I talk about when somebody is coming to the market is I get in my community, we get them to set a specific set of goals and a specific set of guidelines. The goal is because he want to achieve out lifestyle goal and be our financial goal. So they need to be within those two. Those two sort of goal umbrellas, and then we look at what business model is going to suit that and within the guidelines that they create as well. And because you don't want to go away and buy something that's not fulfilling you. I mean, I've heard stories about people that have bought a business and they built it up and a lot man I actually hate This like it's not getting me what I want let's not go down that route let's like work it out from the start every the different business models that we need to link up with our own personalities, our own passions and our own goals.
15:16
Yeah, yeah, nice. Well Jared again so someone who's like I know that there's people listening to this are like getting kind of excited about this idea. And so obviously a great resource you go to buying online businesses.com you can in your podcast player right now. You can search for the buying online businesses podcast. Sounds like you've had some amazing program amazing interviews with with some some people that have been on either side of it or involved in the in the business of it. You have icy 2223 episodes right now. So someone you could realistically go back and binge listen to all 23 episodes. If you wanted to, so
16:02
yeah, we're quite young in the podcast front.
16:05
But yeah, anything any. Yeah. Anything else in terms of resources that people should know about?
16:11
Yeah, I do have three resources on my page. I've got a due diligence framework. And this is really valuable because a lot of people want to buy a website, but they don't know what type of due diligence to do what questions I should be asking the seller to make sure I can get the business correctly. So get that free Jillian's framework. And then I've also got a website evaluated tool that people can help value websites before they spend all their time doing due diligence and wait out the duds and then I've also got a case study training. You viewers like we talked about fuel before who's making 48 k a month from his first business within six months. I did a little case study training for everybody to see how that process flows and what it looks like to to buy a business. So check out those resources there. I mean, everybody's loving them that they can they gone Okay, close.
17:01
Yeah, very good. Very good. Well, Jaryd Krause, thank you so much again, the host of buying online businesses podcast and of course the founder, CEO of buying online businesses.com. Jaryd, thanks for joining us. Thanks so much, Josh. Appreciate it. Thanks for listening to the thoughtful entrepreneur show. If you are a thoughtful business owner or professional who would like to be on this daily program, please visit up my influence.com slash guest that we've got something out of this interview. Would you share this episode on social media? Just do a quick screenshot with your phone and texted to a friend or posted on the socials. A few do that tag us with the hashtag up my influence. Each month we scour Twitter, LinkedIn, Facebook and Instagram. We pick one winner from each platform and you get crowned king or queen of that social media. What do you win? We're going to promote you and your business to over 120,000 social media fans totally free. Now, can you also hook us up now in your podcast player right now, please give us a thumbs up or a rating and review. We promise to read it all and take action. We believe that every person has a message that can positively impact the world. Your feedback helps us fulfill that mission. While you're at it, hit that subscribe button. You know why? Tomorrow? That's right, seven days a week, you are going to be inspired and motivated to succeed 15 minutes a day. My name is Josh Elledge. Let's connect on the socials. You'll find all the stuff we're doing at up my influence.com Thanks for listening and thank you for being a part of the thoughtful entrepreneur movement.
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