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Thinking Of Buying An Online Business? Jaryd Krause Discusses All You Need To Know


In the podcast:
00:42 – Episode & Guest Overview
02:18 – Perspective in Buying A Website & Scaling It
04:10 – Best Type of Website To Purchase
11:10 – Low Hanging Fruit In Buying Different Businesses
12:34 – Process in Revealing Suppliers in E-Commerce Sites
13:36 – The Due Diligence Process
17:55 – Backlinks Removed on Bought Sites
22:47 – Importance of Email List
25:58 – Financial Due Diligence
28:41 – Marketing Side of Due Diligence
29:44 – Competition of the Website in Terms of its Industry
31:13 – Jaryd’s Advice to Beginners in the Buying Space
33:42 – How Business Are Valued at Certain Price Points
40:40 – Where To Buy and Sell Websites
41:25 – Learn More About Jaryd Krause



Thinking Of Buying An Online Business? Jaryd Krause Discusses All You Need To Know in PDF


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Episode & Guest Overview

Ilana:
Welcome back to another episode of Teach Traffic. This is episode number 67 and I’m your host, Ilana Wexler. And today we’re talking all about the due diligence that you need to do and what you need to look for before buying an online business.

Now I have talked about This whole concept of buying an online business versus building one back in Episode 44. But we talk about different things. In this episode. I’m interviewing a guest called Jaryd Krause.
And we’re going to talk about all the different monetization options that you could look for. So the different types of businesses monetize different ways, how to do proper due diligence, some low hanging fruit to look for the various price points to consider advice if when Jaryd was just if he was just starting out, and really everything in between.

So if you’ve ever considered buying an online business versus building one from scratch, you definitely want to listen to this episode. And we’re going to make show notes available for you at teachtraffic.com and I really hope that you enjoy this episode.
And as always, if you need help with mastering paid traffic, you can check out our online community at teachtraffic.com/training.

I’ve actually launched a low-end option of an Ask me anything for just $19 a month. So you can check that out. And but yeah, let’s get stuck into today’s episode.

Perspective in Buying A Website

Jaryd Krause:
Everybody’s got a different perspective on why they would buy a website and what they would do to scale it. So yeah, I help people buy and scale and yeah, let’s let’s jump in.

Ilana:
Awesome. All right, so why don’t we touch why would somebody consider buying a site versus building a new one completely from scratch? What sort of the main reasons why?

Jaryd Krause:
Well, it takes time to really start to get traction with the website business in terms of traffic, and getting your marketing down and your sales down your sales process.

Well, it takes time to really start to get traction with the website business in terms of traffic, and getting your marketing down and your sales down your sales process.

So a good structure of SEO and all these different things and components that come with owning an online business, it can really take time to get data on what’s working, what’s not working weeded out, to get a higher functioning website, and all of those aspects I just mentioned.

And it can take a lot of time, effort, energy and money. And then for those people who have done this before, they already know, kind of know what sort of strategies are going to work, although they can just supersede that and achieve their results a lot faster if they go and buy something.

And then for those who don’t know how to start an online business, or haven’t done it before, I mean, this value right of startups is very, very high. It’s over 90% of startups fail.

And that was one of the reasons I sucked at the start. I started two different website businesses. I learned a lot through the process that is realizable if I can skip that value, right. Well Go and go and buy something that is in that 10%. And already has a proven track record of making money every month, and then just adding on my skills to that.

Best Type of Website To Purchase

Ilana:
Yeah, nice. I mean, I personally can see the merit in buying a site versus building it is the opportunity cost of money and time spent in building one way most people realize that you pay with money or with time, but often you do pay with both in building a new one from scratch versus buying an existing one, though.

What would you say? I mean, there’s so many different types of websites that you can possibly buy in terms of the monetization strategy, be it like an ecommerce site versus a content site versus an affiliate site?

What would you say is the best type of website to buy? So let’s say you know, one of our listeners says, yep, I’ve committed to buying a site and they’ve sorted exploring the possible options, which type of website do you think is the best one to buy? Or is there a best one?

Jaryd Krause:
Yeah, that’s such a good question. And it’s, I wouldn’t say there’s a best one for anybody to buy . It’s very per person basis and individual. So, like I mentioned before, I learned some skills in SEO and a bit of digital marketing when I first started my sites, and I learned a lot about drop shipping.

And so I went down the route of finding a site that was within the drop shipping niche, and I was either gonna have a drop shipping ecommerce type business, or one that was either a content type membership based business that was within drop shipping, so I went to the niche rather than the business model.

Now, that’s not necessarily always the most important way to go or the best way to go because sometimes people can become quite fixated on the niche and they struggled to find something that’s within that niche.

And then we have other people that throw around the words like you need to be passionate about the niche and what you’re working in. And whilst that has some merit is also, you know, it’s a double edged sword where people can be so passionate about something, they can have a bit of a blindfold on to some of the things that aren’t working the business and run into the ground as well, which I’ve seen happen.

And so it really depends on the person who’s purchasing the business and finding passion in the type of work that they would do. So for example, I may not love drop shipping, but I may love the niche or vice versa. I may not love the niche.

Say for example, I bought a business before that hasn’t been a niche that I absolutely love, but I love the business model. And I love that I could dig in and do some paid marketing, some paid traffic like you do and all your listeners are into as well.

And then you’ve got other people that have learned a little bit about it. SEO and they go well, I’d probably prefer to do organic traffic, and, you know, create content and just run an affiliate site like that, or a content website lot like that.

So I don’t think there’s one particular business model that’s better for everybody. I feel it’s better for that person who’s going to invest in a website to understand what role they’re going to love about driving the business. And that’s going to help them focus on what type of business model to go down.

Ilana:
For my apologies, that was probably a bit of a difficult question and a gray area.

Jaryd Krause:
It’s such a good question, though. Like, it’s, I wouldn’t say it’s a thing to apologize about, because everybody comes to me and says, “Hey, Jared, what sort of business should I buy?”
And that’s the answer that I give them every single time. It’s really dependent on on who that is. So it’s actually In fact, you know, quite the opposite was a great question.

Ilana:
The thing is, though, like so let’s touch on you know, my expertise and obviously listeners of this podcast are into traffic specifically paid traffic.

Let’s sort of, let’s pretend that our target customer is somebody who has paid traffic skills, what then would you say is a good type of business to buy?

Would it be a business that is currently not doing paid traffic and then that’s a good bolt on of their skills that they could add, or a business that is already doing paid traffic and possibly they could be that person could do it better?

Jaryd Krause:
I would say both. So you’ve got in terms of business model, I would probably suggest sticking away from content, websites like publishing websites. And the reason being is because, you know, the margins aren’t so high on some affiliate products and ads and stuff like that and to run Pay Per Click campaigns, you know, you may not be getting the margins.

You actually want and then so I’ll probably stick against that but with you know that in mind you’ve got an ecommerce different different types of e commerce website businesses and say SaaS membership website businesses that may do some marketing or you know, don’t do it at all.

But you could add to your skill set to that. So when you’re looking for one of these boots up businesses to buy, look at the opportunity that’s involved with your skill set. And then you can plug that in and really, you get a higher return on your investment from those particular types of websites.

Ilana:
I one thing that springs to my head is if let’s say I were to buy a content site that ranks organically and gets a lot of SEO traffic, a good bolt on for me would be well, I can create a pretty good retargeting campaign just to leverage that existing traffic that that sites are really getting and possible.

I create my own info product for it and then hit the ground running that way. So illuminating the whole, as you say the slim margins of affiliate stuff and then the whole concept of buying traffic with enough of that margin, possibly so your own product and then bolt that on when you reckon.

Jaryd Krause:
Yeah that’s such a good strategy is like when you can say sites that are doing cold traffic and they’re just getting some cold traffic in but they’re not really utilizing remarketing and pixel link people and haven’t got a good remarketing campaign happening.

You can come in and you know, with that skill set, you can really work that business to get a better return than the previous owner was, you know, doing with their ads, and vice versa.
Maybe they were doing remarketing and now just exhausted that you know, that remarketing list or that audience and the frequency is quite high on the ads.

You could come in and use your call traffic skills to boost that traffic amount up. So then you can also increase that audience that you’re remarketing to as well. Hmm.

Low Hanging Fruit In Buying Different Businesses

Ilana:
What would you say would be some low hanging fruit? Like if you were looking at buying a handful of different businesses, what some low hanging fruit that you would look for in certain businesses to buy?

Jaryd Krause:
Yes certainly would be what we just mentioned there is that somebody may look at a business with the lens of “Hey, I’ve got good skills with paid marketing”. That’s a low hanging fruit, seeing where that marketing hasn’t been done to the level that you’ll look at that you have the skill set that you have.

And you could come in and use your skill set to change that marketing or add your flair to that marketing.
As the same goes with content websites and not having an email list. So many content websites actually so focused on organic traffic that they’re so susceptible to a Google algorithm change.

And they don’t realize that they can reduce that risk by building out an email list. So if there isn’t an email list that is a huge, low hanging fruit you can add to the business.

And then also for those sites say even if it is in e-commerce, and I do have an email list is asked how often do they email?

Or do they have an abandoned cart sequence set up? How often are they promoted to the list? I like engaging with open rates and all that sort of stuff, and there’s some really good low hanging fruits.

Process in Revealing Suppliers in E-Commerce Sites

Ilana:
Yeah, nice. With people buying an e-commerce site, is it pretty typical that they reveal who their suppliers are, etc? Is that sort of…

Jaryd Krause:
it’s a can so you need to sign an NDA, so a nondisclosure agreement and you kind of want to work out.
If you want to be in contact with the suppliers to work out you know if that contract is still going to apply like, and at the same rates is still going to apply it, they’re still going to do the same service that they’re running for the previous owner.

So I think it’s really important and to sign an NDA and also to have your previous cell assign an NCA as well, so they can’t just go away and, and grab that, you know, use that same wholesaler or supplier, or whatever it is, and start another business using the same person, but in direct competition with you since you’ve just bought their site.

So that’s a huge thing to understand and remember, as well.

The Due Diligence Process

Ilana:
I would imagine, you know, you’re sort of embarking on probably an expensive purchase, obviously, depending on the size of the business, we’ll get to and I’ll sort of talk about price points a little bit later.
But I would imagine a huge part of this process is the due diligence process.

Do you want to sort of unpack what due diligence people need to do in order to really go in armed with the knowledge that sort of the buying a good a good website and that sort of sound and that sort of dodgy practice hasn’t been done to sort of touch on some of those things that people should look for?

Jaryd Krause:
Yeah, certainly, this is my main, this is the main thing that I teach within my community is a whole course on how to buy business.

And it’s just focused solely on due diligence and the right questions to ask the seller depending on the type of business model you are buying, yeah, so the main key areas of due diligence are SEO, due diligence, marketing, due diligence, financial due diligence, and the competition.

So then they’re the key types of things you need to be checking. So through SEO, you really need to be looking at what the traffic’s doing, is it trending up, down, sideways, and most importantly, asking the question of why, like, why is traffic training that certain way.

For example, sometimes you will Look at businesses and they say that the business’s traffic is trending down so heavily through certain periods of the year and they just think, Oh, this business is a bit shaky and fluctuating.
And it could be a business that is an e commerce space selling swimwear.

And then when it hits summer, like they’ve turned away and don’t buy the business hits someone, they go, “Wow, okay, that business went through the roof, and they may just miss it on a really good opportunity because they didn’t understand traffic was dipping down because of seasonality”.

Same thing with Google algorithm updates, you need to check if the site has been rocked by Google change and all the algorithm changes within the SEO. And yeah, looking at the trap.

Ilana:
Alright, on that, like, let’s say a site has been rocked by an SEO algorithm update, would you typically see something like a sort of a cliff dropping in traffic or a gradual decline or increase depending if there’s positive or negative.

Jaryd Krause:
It really depends. On the update, and it really depends on the nation of the site.
So sometimes you can have a huge spike down. Or it can be a gradual one, in terms of like, what would I do to a site that has been affected heavily by an algorithm update is kind of look at the overall SEO profile of the website, like the domain authority, the level of content, it has the rankings of those articles, and pages and kind of see like, Hey, can I bring this around?

To the opposite side of why the site was actually affected? And most often it’s a no, I don’t want to catch a falling knife or I tell my clients, we don’t want to catch a falling knife.

Okay. But if it is, if it is something that’s the person who’s purchased, the site is very confident in their SEO skills and their content marketing skills.

And they’re very certain like in Reverse that then, by all means that’s that’s like an opportunity. Like, some problems are just opportunities in disguise.

So it is quite business dependent. Mm hmm. Yeah. So sorry, we dig a bit off the due diligence. But did you want me to keep going? Or did you have more questions within that?

Backlinks Removed on Bought Sites

Ilana:
I just had a question within the SEO side of things. I mean, as you know, I’m a paid traffic person.
But I tell people I know enough about SEO to be dangerous. Yeah, I know it means an SEO expert. But what about situations?

I know lots of SEO people build links to a site in order to get it to rank. What about a situation where you know, somebody’s selling a site that’s ranking, they sell the site, and then they remove those links, is there a way of detecting that might happen?

Jaryd Krause:
Yeah, so this is such a juicy question, and I’m very similar. Have you heard that just everybody knows a bit of a disclaimer? I know enough to be dangerous as well.

But I’m not an expert in SEO. Yeah, such a good juicy question this one like, if you’re you want to do, you do want to look into the links the backlink profile of the website before you purchase it and see you know, what sort of links are coming in and bringing traffic to the site.

And then asking the seller, if any of those are paid links, because sometimes, you know, you might need to keep paying for the link.

Or it might be attached to a PBN which is a private blog network with this which is basically a syndication of different blogs that will be linking into the site to boost its, you know, boost its traffic out but sometimes those PBN’s are non relevant links with sending non relevant traffic which can decrease your bounce rate and time on page which decreases your overall SEO profile.

But getting to that question of like, what happens like is there a way to prevent the owner being affected or the new owner yourself being affected by a link being removed and decreasing rankings is if it’s a paid link, then you want to know if it’s paid and then keep paying I guess, until you can get enough traffic to warrant removing that link and putting a different link in place instead.

That’s what my suggestion would be in terms of people that have bought sites and they’ve got a couple of good articles that are ranking quite high.

And I’ve had this happen to a client of mine, he bought a site where a few of these articles were ranking quite high, bringing in most of his traffic, and he dipped from a Google PageRank one to two and lost a lot of traffic and then what he had to do wasn’t because of a backlink, it was because of a competitor had built out another article which was superior, so we had to just leapfrog them again.

But in terms of the question with the backlink, I would say, if you’re paying for it, then you can keep paying for it and keep that. But the backlink isn’t the only thing that’s gonna help you get ranked for. That makes sense like it could.

It could drop your rankings but that may not be the only thing that’s causing that and if it did drop your rankings look for a backlink that’s superior to the previous one. So you can get your rankings backup. Yeah.

Ilana:
What tool do you use to really evaluate the backlinks and the general authority of those backlinks?

Jaryd Krause:
So SemRush and ahrefs are the two ones that I recommend people go away and use.

Ilana:
Do you need both of them or would SemRush is enough?

Jaryd Krause:
Yeah, SemRush is what I recommend most people go to SemRush. And it’s basically very, very similar, their competitor so…

Ilana:
Yeah. Interesting. Okay. I guess it also raised an interesting point where if you know, predominantly most of their traffic is coming from, say one or two articles that if they lose those rankings on those articles, a significant portion of their traffic disappears.

Therein lies the risk of you know, you know, all that due diligence that you’d need to do to say, yes, it is most of the traffic coming from one or two pages, therefore, you’re at risk of losing those rankings and therefore all your traffic, you know.

Jaryd Krause:
Yeah, that’s right. Like you could, you could lose, you know, if you got two pages, bringing 50% of the traffic Ah, you know, that’s a huge risk.

And so many people. I think, a lot of people that are into niche content websites or any sort of content websites is that there’s so heavy into that space and getting traffic and organic but and it’s becomes a normality that to have a couple of pages bringing most of the traffic and they forget that there’s, I believe that they forget that there’s a better approach.

And that’s why I’m huge on telling people to build out an email list in case you lose rankings, then you don’t need to lose traffic because you can still send them to your website.

And then also, instead of just focusing on those top two articles, say for example, a site does have those top two articles, you know, focus on refining existing content and bring that up to scratch to a point where you’re on, you’re leaning on those two key pillar posts or articles.

You’ve got some backup ones that are bringing in a good chunk of traffic as well.

Importance of Email List

Ilana:
Yeah. Interestingly, let’s say you encounter a business that does not have an email list. Are they valued lower because of that or does almost not even come into play.

Jaryd Krause:
It does come into play, but they a broker wouldn’t focus on that they wouldn’t say, hey, this business is discounted because it doesn’t have an email list that would just say, Hey, this is a good business because it doesn’t have an email list.

It’s a good opportunity, they said, then flipped it around. I certainly, um, my, my belief is that a business is far more valuable with an email list. And so even if somebody was to buy a business, and they left at the exact assignment but they built out a thriving email list that’s highly engaged and has great open rates about businesses value would be a lot higher.

If nothing else changed except for the list, and you put it back on the market.

Ilana:
I mean, you’re preaching to the converted here. I completely agree it is so it’s not a leading question that was big for them. Yeah, like I agree. Like I see so many classes. 10 affiliate sites that have no email opt ins, I think you guys are crazy, like, such a missed opportunity.

And I mean, like I deal with paid traffic, obviously, you know what I live and breathe. But still regardless, I still have access to so many people’s Google Analytics and regardless of all our paid traffic endeavors by far and away the highest converting traffic source for pretty much all our clients in TeachTraffic.com on my agency is email.

Jaryd Krause:
I’m so glad we’re talking about this because email is everything. Even if I was to not have a content driven business or a content site, and I was to just be in business selling any product or service? If I could not have an email list, I would probably not be in business.

Ilana:
Totally! Hundred percent. Yeah. amazing way to communicate with your audience and to really develop that relationship.

And funny and all my emails that I send to my database, I encourage people to reply to my emails and people do and I love it and I’d start engaging in a chat with them, you know about whatever they’re doing and working on and it’s such an amazing way to, to communicate with people, and I’ll even have some people reply going.

Is this really gonna go to you? Like, yes, it is. I have a person and I will respond. It’s pretty funny.
Okay, so let’s get back to what we’ve been talking about.

You mentioned the four elements that you look for in terms of due diligence. So we’ve obviously touched on SEO. What about marketing? I guess maybe that email database falls under that. The third thing you mentioned was financial. Do you want to maybe touch on that a little bit?

Financial Due Diligence

Jaryd Krause:
Yeah, for sure. And If you’d like to touch on marketing bit data we can as well, because you know, paid, traffic’s huge here, but let’s just quickly run over the financial ones.

When you come in to buy a business, you know, traditionally anything under the 50 k range or 100 k range, people will just send you an Excel sheet with their P&L, and sometimes screenshots of the zero account or QuickBooks or whatever people are using around the world.

And it’s just I really want to stress on this point that it’s not good enough, because people can just put any old figure into that Excel sheet and that’s a screenshot with I could have butchered the numbers.
Find it really important to have viewers access the business’s merchant account and see if you can get viewers access or do a screen share with their business bank account and cross reference all the numbers that’s so, so important.

And if it gets to a point where you know the numbers are too much for you to be confident in then have you know somebody, like an accountant, look over it for you and verify all of that. That’s so important.
Like a lot of people were just like, yep, cool. It’s making money. I see some screenshots and it’s just not. It’s not the best way to verify your financials.

Also, there’s so many questions within the business. So I’ve had somebody that I know somebody who’s gone and bought a business before and they did so many sales like the business, it’s certainly sales leading up to the sale of the business.

So they made a bunch of revenue, but they didn’t include the expenses. And yeah, just ridiculous, right? And the poor guy asked to say like, Hey, I just want to confirm that there’s no additional expenses or there’s nothing, you know, being paid for that’s, you know, contributing to the sales.

Can you just confirm that verify that and and the person lied. So they bought the business from exchangemarketplace.com, which is where people can list their Shopify sites for sale.

And yeah, I bought this site and the business is making money, so little bit of money, which is good. He owns it, but he’s just, it’s, it’s been a bad experience for him because that person just lied.

He didn’t go and verify that and check it and it sucks. So yeah, you need to just be verifying these things, guys.

Marketing Side of Due Diligence

Ilana:
Yeah, for sure. big lesson. Did you want to, excuse me, touch on something with the marketing aspect, which you said?

Jaryd Krause:
Yeah, for sure. Like with marketing, it’s the same question as you asking throughout all of digital and the SEO, SEO as well as like, what’s working, what’s not working, and why.

So digging in, like if you can get like fuse access of the Like I’ve sold a business where I gave us access to my Google Ads account. And you can give that access to Facebook ads accounts and all your different ad accounts and, and only catalytics, analytics, everything.

So and you sign an NDA so you’re not going to use that, you know that data to your advantage.
And you can go away and look at if you’re a digital marketer and you’re highly effective in digital marketing have been for other businesses, you can go in and look at the marketing strategy, their ads, and this is what you do Ilana is you can go and look in and be like, “Alright, cool”.

This is what they’re doing well. This is what they’re not doing well. And they’re in lies some of the low hanging fruits itself.

Competition of the Website in Terms of its Industry

Ilana:
Cool. All righty. What about competition? Do you like an industry which is really competitive or not much at all or it depends.

Jaryd Krause:
Again, guess it depends on the business and the niche. What they’re selling.
If there’s some if there’s a, you know, I’m looking at mainly direct competitors, not indirect competitors, so direct competitors to people that are selling the same types of products and services, and solely selling those ones as you if you’re purchasing that particular business.

And so I would say, I’d like to see other competitions and just see what they’re doing well and see what they’re not doing well. And then it’s kind of like when you go away and look at other people’s marketing campaigns and ads and stuff like that you can kind of like to model what they’re doing.

And that’s a big part of the thing that I look at when buying a site is I look at the competitors and say, All right, cool. What is the business that I’m looking at buying, not doing and how hard would it be to replicate what that other competitor is doing?

And I will try and do it like, do I need to be spending, you know, 10 million a year on paid ads. They get there compared to like, you know, hardly any maybe only 100K or something a year.

So really seeing what the big gap is, and seeing how you could bridge the gap. And if it’s a possibility at all.

Jaryd’s Advice to Beginners in the Buying Space

Ilana:
If you were starting out from scratch, you know, you never bought a site before. What? What would you do? Like what? What type of site would you buy? I know it depends on your skill set. But I guess yeah, like, what advice would you give somebody who’s never bought a site? before? It’s kind of where I’m going with this question.

Jaryd Krause:
Yeah, that’s a good one. It’s, if you’ve never bought a website before with this, and it also does depend on your skill set as well and your financial background, so it is quite individual, but if you’ve never bought a website before, I’d say definitely start off at the lower end of the spectrum, right buy something around the 20 to 50 k range.

And, and learn how to run that business, learn how to do the marketing or the SEO, and learn those skills and even hire a VA. And then slowly work your way up, build that up a bit, and then you can either keep it or sell it, and then buy something bigger, but I’d start off at a smaller you know, financial mark in between that 20 to 50 k range.

And I wouldn’t try and not do something that’s a difficult business to run. Content websites are very simple to run. You just need to produce great content, like it depends on how deep you want to get into that.
Like if you’re going to pay for all the tools like SemRush, ahrefs and Market Muse and all these, you know, a big expensive content marketing strategy, but if you just wanted to, you know, follow what the previous owner was doing it was working.

It’d be a pretty simple and easy business to run. I would I really advise those who are looking at buying an e-commerce website have zero marketing experience to not go down that route unless they’re committed to paying a lot of money and spending a lot of time on becoming a great Digital Marketer because the competition in e commerce is only getting fiercer and fiercer actually in all online businesses.

And if you’re coming up against somebody that’s got some skills with marketing, you’re gonna have a really tough time in that business.

How Business Are Valued at Certain Price Points

Ilana:
Yeah, for sure. So you mentioned the lower end of the market, the 20 to 50K, let’s sort of touch on the various price points. There are sort of a good segue to that.

And I guess the multiples that people use to get to those price points. I mean, For some people 20 k is a lot of money, especially to throw in to something that could be perceived as a bit of a gamble.
Excuse me, if it’s gonna work, though, how do people get to those price points? You know, yet we’re about to touch on that.

Jaryd Krause:
Yeah, yeah. So how the business is valued at those price points you, man. Yeah. Yeah. So you’re right, like 20k is a decent sum of money.

And most of these are in US dollars as well. And then when you get up to 50K and 100K, it can be you know, it can be getting up there.

And if somebody is buying a business for 50k cash, it’s a huge fee. So, you know, pat yourself on the back for that.

So how do people get to that price range now?

Content websites have a different multiple to some e-commerce websites and then the highest multiple out of them all. I like SaaS. And membership type businesses because of the levels of risk.

Now, not a multiple will be via monthly months normally, normally it’s a monthly multiple in the website, or multiple of profit, revenue. Yeah, a multiple of net profit.

So how it’ll work would be for a content website. Save the business. Well, let’s just do round numbers right. So we’ll do a 100K. website, say a business for sale for 100K.

If you divide that by three, it’s normally like 36 months multiple, which is three years. So if you divide that by three and then divide that by 12, normally a 100k website will be making $2700 net profit per month.
So what the website brokers do is they get the business and I work out what their average monthly net profit is.
Normally it’ll be over 12 months and that’s what I’d suggest they value the net profit average out over. Sometimes what they do is they see the best three to six months.

And they might call the best four months have been these four months and we’re gonna average we’re gonna make the average net profit from those three to four months and then now times their multiple by that average net profit.
So that’s a little trick and a tactic that they may use to value the business. So then they might go. I call a content website, maybe all right, roughly around 30 multiples of 30.

Right so they’ll get the average monthly net profit and times that by 30. And that will be the price of the business and sometimes I might say this business has two articles, like we mentioned before , that are ranked and bring most of the traffic.

And that could be a little bit of a risk. So they may bring that down a bit. Right.
And that may if it has a good email list, I may bump it up a little bit like put an extra multiple on a Mega 32.
So it really depends on the business with the multiple that they put on it.

Ilana:
Right…

Jaryd Krause:
Does that make sense? Or is that very confusing?

Ilana:
No, no, it does make sense.

To me it feels quite high, like based on 36 months or three years worth of profit is that given there are so many risks given that you are at the mercy really of Google ranking you at an algo potential algorithm updates etc? I mean, maybe I’m completely off he you know, am I off?

I don’t know if that feels high to you, like it will take you three years to pay off that investment, basically.

Jaryd Krause:
If you did nothing, that’s right. So normally it’s roughly a 20 to 30% return on your investment per year.
Now, that is an amazing ROI. But you’re right, there’s those risks they’re involved with, you know, being heavily reliant on Google.

So if you’re gonna, and we’ve seen content websites sell for up to a multiple of, you know, 36 to 40 and 42. Even.
So, and there’s those content websites are the ones that have a lot of great keywords ranking, a lot of great articles ranking. They don’t have they’re not relying on just one affiliate like Amazon, that they got multiple affiliates, and they’re not through an affiliate commission program.

They’ve gone directly to the retailers and become an affiliate with them. So they’ve decreased their risk a lot with the spread of traffic, also with a spread of income diversification They may have a really good email list that’s thriving as well. And their brand is quite good.

And the audience, you know, the bounce rates high and the time on page is quite high. That is an exceptional business that is worthy, in my opinion of, you know, 30 plus 36 plus multiple because it’s a lot easier to maintain.

And you’ve got this platform that, you know, you can add some content marketing skills to or paid traffic paid traffic skills to as well. And it’s the same with an e commerce website business, right?

If it’s a very niche product, and it’s doing great and the marketing funnels have been working for a long time without any tweaks, I’ve got a good email list, abandoned cart, email sequence, and all that sort of stuff.

All those things stack up and they make the business better and better. Yeah. One thing that I tell people is that, you know, you get what you pay for. And, like, because I used to be a plumber, I use this analogy.

If you’re going to go and buy a tape measure from crazy clocks or a discount store for a couple of dollars is only going to last you so long and it’s going to decay and break down and it’s going to be hard to use and you’re going to get a bad return on your investment.

But if you go and buy like a $50 type measure, you are going to have that for a lot longer and your ROI is going to be so much higher. One of one of the things that Warren Buffett says who’s the most successful business investor in the world is he says it’s better to buy a good business at a fair price than a fair business at a good price.

Where To Buy and Sell Websites

Ilana:
I totally agree with that.

If somebody has listened to this episode of things. Yep. OK. I want to explore this option. Where is somewhere that they could go to to find businesses so that they could buy?

Jaryd Krause:
So there’s so many places. If you type into Google: “Website Brokers”, check that out for the first time, as I suggest, going to Website Brokers.

You got Empire Flippers, FE International, Investors.Club, MOCEANInvest.com, Quiet Light Brokerage. There’s so many. I like those. Those are probably the top picks off the top of my head.

Learn More About Jaryd Krause

Ilana:
Cool. Awesome. Yeah, well, I’m mindful of the time, so. Thank you so much for coming on today’s episode. For the listeners that kind of want to find out more about you and the products/services that you offer, where can people find out more about you?

Jaryd Krause:
Sure. Thank you so much as well for having me, it’s OK. I’ve had a great time today going deep as well as really good. So, yeah, you can just find…

Ilana:
Feel like we could do part two, to be honest. Like, I’m just watching the clock here that I’ve got actually a whole other question that I can ask you anyway.

Jaryd Krause:
Maybe we can. I know that where you’re going to come on my podcast.
So maybe if we don’t do another one we can keep on rolling with this. It’s been fun.

Yeah. So if you want to check out, you know, more about my stuff, just go to BuyingOnlineBusinesses.com.

So “Buying Online Businesses”, plural. I can see the podcast. We’ve been ranked in the top three best passive income podcasts online, so you can check that out.

And that’s just the free content to check out. And if people vibe with it. Awesome. If they don’t, awesome as well. It’s not their thing. And they can say in your podcast. And you can help them with their products.

Ilana:
Sounds good. Jaryd, thank you so much for taking time out of your day and coming on. Really appreciate it. And yeah, I’m looking forward to going on yours.

Jaryd Krause:
Yeah, me too. That’s gonna be great fun. Thank you.

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About Ilana

Hi, I’m Ilana Wechsler, former data analyst, turned Pay Per Click (PPC) marketing expert.

I discovered the world of PPC about 10 years ago when I left the corporate world as a data analyst.

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Privacy Policy

We are committed to protecting your privacy, and this policy explains how we collect and process personal information about you when you use our products and services (our “Services”), or when you otherwise do business or make contact with us by visiting all of the Sites and services owned, hosted, or operated by Altolana Pty Ltd t/a Green Arrow Digital (collectively “we,” “us,” or “our”), including greenarrowdigital.com, greenarrowdigital.com.au, ilanawechsler.com and any other site that we have owned or operated, do own and operate or may own or operate in the future including social media sites (collectively, the “Sites”). Unless we say otherwise, all references to the Sites in this policy include all such Sites.

Should we ask you to provide certain information by which you can be identified when using our websites, then you can be assured that it will only be used in accordance with this privacy statement.

Green Arrow Digital may change this policy from time to time by updating this page. You should check this page from time to time to ensure that you are happy with any changes. This policy is effective from 24/05/2018.

What Type Of Information We Collect

We may collect the following information when you register to use our Services, subscribe to our newsletters, respond to a survey or offer, make an enquiry through our websites, or contact us in any other way:

  • Name, email, address, phone number
  • Job title, organisation information
  • Usernames and passwords
  • Billing details (Payment card details are processed and stored via one of our contracted third party service providers. We encrypt your payment card details in your browser and securely transfer this data to our relevant third party payment provider to process a payment.)
  • Transaction data for of products and services you have purchased from us.
  • Demographic information such as postcode, preferences and interests
  • IP address and your use of our websites
  • If you register for a course the information is used to to track your preferences, and to keep you informed about the course and related events
  • Copies of your communications with us

How We Use The Information We Collect

The personal information we collect from you may be used in one or more of the following ways to help us understand your needs and provide you with a better service :

  • To deal with enquiries, requests and technical support (your information helps us respond to your individual needs)
  • To create and administer records about any online account that you register with us
  • To provide you with information and access to resources that you have requested from us
  • To improve our websites (we continually strive to improve our website offerings based on the information and feedback we receive from you)
  • For website and system administration and security
  • For general business purposes, including to improve customer service (to effectively respond to your customer service requests and support needs), to help us improve the content and functionality of our Services, to better understand our users, to protect against wrongdoing, to enforce our Terms of Service, and to generally manage our business
  • To process transactions and to provide Services to our customers and end-users
  • For recruitment purposes, in the event you apply for a job with us
  • To administer contests, promotions, surveys, or other content across our sites
  • To send periodic transactional emails. The email address you provide to process your order and purchase a product will only be used to send you information and updates pertaining to your order. Where it is in accordance with your marketing preferences, we will send occasional marketing emails about our products and services, which you can unsubscribe from at any time using the link provided in the message.

Your Rights With Respect To The Data We Collect

Under the General Data Protection Regulation (GDPR), you have the right to access, rectify, port and erase your data, as well as the right to restrict and object to certain processing of your data. This includes:

  • where you have agreed to direct marketing, the right to object to our processing of your data for that purpose, which you can exercise by using the “unsubscribe” link in such marketing communications; and
  • the right to object to our processing of your data where we are pursuing our legitimate interests or those of a third party which you can exercise by requesting us to delete your details at any time by sending a written request via email to: support@greenarrowdigital.com

You can contact our Data Privacy Officer (DPO) and dedicated compliance team at any time by emailing us at support@greenarrowdigital.com and we’ll be able to assist with your data inquiries, requests and data protection issues.

Controlling Your Personal Information

You may choose to restrict the collection or use of your personal information in the following ways:

  • Whenever you are asked to fill in a form on our websites, look for the box that you can click to indicate your preference regarding receiving further marketing correspondence from us
  • If you have previously agreed to us using your personal information for direct marketing purposes, you may change your mind at any time by emailing us at support@greenarrowdigital.com
  • We will not sell, distribute or lease your personal information to third parties unless we have your permission or are required by law to do so. We may use your personal information to send you promotional information about third parties which we think you may find interesting if you tell us that you wish this to happen.
  • You may request details of personal information which we hold about you. If you would like a copy of the information held on you please email your request to support@greenarrowdigital.com
  • If you believe that any information we are holding on you is incorrect or incomplete, please email us as soon as possible, at the above address. We will promptly correct any information found to be incorrect.

Email newsletters:

If you subscribe to receive one or more of our email newsletters, you will need to register an account with us. We provide newsletters to you free of charge.

Our newsletters may contain promotions or advertisements relating to goods or services provided by us and associated third parties. If at any time you wish to unsubscribe from an email newsletter you may do so by following the unsubscribe instructions on the newsletter or by emailing us at support@greenarrowdigital.com.

Cookies:

The website automatically gathers certain information such as IP addresses and the number and frequency of visitors to the website and individual web pages. This is collected using cookies and is used by us for security and monitoring purposes, to manage the website, to track usage, to improve the website and to improve the website services.

Cookies are pieces of information that are stored by the browser on the hard drive of your computer. The website also uses cookies to enable us, and any person who advertises on the website, to provide features such as remembering certain information about you and your preferences so that we and they can deliver targeted material which will be of most interest to you.

Cookies can be deleted from your hard drive or you can configure your web browser so that it rejects cookies. Rejection of cookies will not prevent you from using most of the features on the website. If you experience any problems deleting cookies, you should contact the supplier of your web browser.

Information sharing:

We only ever share your personal information with third parties with your permission.

If any third party organises or manages on our behalf a promotion, competition, survey or poll run through the website in which you wish to participate, we may ask to disclose your information to that third party to enable them to do so. They will be prohibited from using your information for any other purpose unless you have given them specific consent.

Note that if you upload or post any information to a public part of the website, we may use it in accordance with our Terms and it may be viewed and used by others.

Forums and Blogs:

Please be aware that when you post information to any forums, chat rooms, blogs, or message boards on or through the website, that information can be accessed by the public and used to send you unsolicited communications.

Data Retention

Your information is collected and stored on servers on behalf www.greenarrowdigital.com. We may keep your information for a reasonable period for the purposes set out in this Policy.

We may retain your personal information as long as you continue to use the Services, have an account with us, or for as long as is necessary to fulfil the purposes outlined in the policy. You can ask to close your account by contacting us at the details at the bottom of this document, and we will delete your personal information on request.

We may, however, retain personal information for an additional period as is permitted or required under applicable laws, for legal, tax, or regulatory reasons, or for legitimate and lawful business purposes.

Security:

We adopt appropriate security procedures to help prevent unauthorised access to your information. www.greenarrowdigital.com shall not be liable for any attempt to hack or crack or otherwise gain access to any part of this website including any of your information.

Use of details:

In order to make use of some services provided through the website such as the forums, email newsletters, competitions and polls, you will need to register an account with us. When you do so, you will provide us with information about yourself and you will be able to choose to receive our newsletter. You can log in to your account and update your preference at any time in the membership details section of your profile. We will only use your information in accordance with your instructions and as set out in this policy.

By providing us with telephone numbers or an email address, you consent to being contacted by these methods for these purposes. If you do not want to receive marketing information from us, you can notify us as part of the registration process, you can stop receiving this information at any time by following the unsubscribe instructions on the correspondence you receive, by amending your account preferences, or by emailing us at admin@greenarrowdigital.com giving your username and password plus details of the information you no longer wish to receive.

If you wish to take part in any poll or survey run through the website, we will also use your information for the purposes specified in the poll or survey. We may also disclose non-personal, aggregated information we collect through the poll or survey to third parties.

If you wish to take part in any promotion or competition run through the website, we will also use your information for the purposes specified in the promotion or competition, to make sure you are eligible to enter the promotion or competition, to contact you if you have won a prize and for publicity purposes.

Governing Law

This policy and the use of this Site are governed by the laws of Australia exclusively. If a dispute arises under this Policy we agree to first try to resolve it with the help of a mutually agreed-upon mediator in the following location: Sydney, Australia. Any costs and fees other than attorney fees associated with the mediation will be shared equally by each of us.

If it proves impossible to arrive at a mutually satisfactory solution through mediation, we agree to submit the dispute to binding arbitration at the following location: Sydney, Australia. Judgment upon the award rendered by the arbitration may be entered in any court with jurisdiction to do so.

Green Arrow Digital is controlled, operated and administered entirely within Sydney, Australia. This statement and the policies outlined herein are not intended to and do not create any contractual or other legal rights in or on behalf of any party.

The application of the United Nations Convention on Contracts for the International Sale of Goods, as amended, is expressly excluded.

Other sites:

The website contains links to third party websites. We may, on occasion, disclose non-personal aggregated information to the owners or providers of those third party websites.

We link to a wide variety of other websites and we display advertisements from third parties on our website. We are not responsible for the content or privacy policies of these websites or for third party advertisers or for the way in which information about their users is treated. In particular, unless expressly stated, we are not agents for those sites or advertisers nor are we authorised to make representations on their behalf.

Once you have used these links to leave our sites, you should note that we do not have any control over that other website. Therefore, we cannot be responsible for the protection and privacy of any information which you provide whilst visiting such sites and such sites are not governed by this privacy statement. You should exercise caution and look at the privacy statement applicable to the website in question.

Information use:

We may use your information as set out in this privacy policy and in any other manner you expressly consent to us doing so, we may also use your information for any purpose if we are required to do so by any law or other regulatory or government authority, to enforce our terms or to protect the safety of others. In particular, we may collect and use personal information for the purposes of investigating and, if necessary, removing any content about which we receive a complaint.

Policy changes:

By using the website you agree to the terms of this Policy and our Terms. We may amend this Policy and the Terms from time to time. If we do so, we will post an updated version on the website. You will be bound by the new terms upon your continued use of the website.

Altolana Pty Limited trades as Green Arrow Digital

ABN: 72 141 554 047

If you have any questions you may contact us at:

Green Arrow Digital

PO Box 562

Rose Bay

Sydney 2029

Australia

support@greenarrowdigital.com

Terms and Condition

Introduction

Green Arrow Digital regards customer privacy as an important part of our relationship with our customers. The following privacy policy applies to all Green Arrow Digital users, and conforms to Internet privacy standards. If you have questions or concerns regarding this statement, you should first contact Ilana Wechsler at (02) 8060 7311.

Collection of Information

In order to use the Green Arrow Digital website, we may require information from you in order to provide the best service possible. All correspondence may also be collected and stored, particularly in regard to sales, support and accounts, including Email. Any information collected by Green Arrow Digital is collected via correspondence from you or your company. This may be via the telephone, Email, mail, fax or directly through our website.

Use of Collection Information

Any details collected from Green Arrow Digital customers is required in order to provide you with our products and/or services, and a high level of customer service. Correspondence is recorded in order to provide service references, and to assist in our staff development.

Storage of Collected Information

The security of your personal information is important to us. When you enter sensitive information (such as credit card numbers) on our website, we encrypt that information using secure socket layer technology (SSL). When Credit Card details are collected, we simply pass them on in order to be processed as required. We never permanently store complete Credit Card details.

We follow generally accepted industry standards to protect the personal information submitted to us, both during transmission and once we receive it.

If you have any questions about security on our Website, you can email us at ilana@greenarrowdigital.com

Access to Collected Information

If your personally identifiable information changes, or if you no longer desire our service, you may correct, update, delete or deactivate it by emailing us at ilana@greenarrowdigital.com.

Orders

If you purchase a product or service from us, we may request certain personally identifiable information from you. You may be required to provide contact information (such as name, Email, and postal address) and financial information (such as credit card number, expiration date). We use this information for billing purposes and to fill your orders. If we have trouble processing an order, we will use this information to contact you.

Communications

Green Arrow Digital uses personally identifiable information for essential communications, such as Emails, accounts information, and critical service details. We may also use this information for other purposes, including some promotional Emails. If at any time a customer wishes not to receive such correspondence, they can request to be removed from any mailing lists by emailing us at ilana@greenarrowdigital.com. You will be notified when your personal information is collected by any third party that is not our agent/service provider, so you can make an informed choice as to whether or not to share your information with that party.

Third Parties

Green Arrow Digital may at its discretion use other third parties to provide essential services on our site or for our business processes. We may share your details as necessary for the third party to provide that service. These third parties are prohibited from using your personally identifiable information for any other purpose. Green Arrow Digital does not share any information with third parties for any unknown or unrelated uses.

Legal

We reserve the right to disclose your personally identifiable information as required by law and when we believe that disclosure is necessary to protect our rights and/or comply with a judicial proceeding, court order, or legal process served on our Website.

Links

Links on the Green Arrow Digital site to external entities are not covered within this policy. The terms and conditions set out in this privacy statement only cover the domain name of www.greenarrowdigital.com

Changes to Privacy Policy

If we decide to change our privacy policy, we will post those changes to this privacy statement, the homepage, and other places we deem appropriate so that you are aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. We reserve the right to modify this privacy statement at any time, so please review it frequently. If we make material changes to this policy, we will notify you here, by Email, or by means of a notice on our homepage.

Green Arrow Digital Security Policy

Green Arrow Digital uses the eWAY Payment Gateway for its online credit card transactions. eWAY processes online credit card transactions for thousands of Australian merchants, providing a safe and secure means of collecting payments via the Internet. All online credit card transactions performed on this site using the eWAY gateway are secured payments.

– Payments are fully automated with an immediate response.

– Your complete credit card number cannot be viewed by Green Arrow Digital or any outside party.

– All transactions are performed under 128 Bit SSL Certificate.

– All transaction data is encrypted for storage within eWAY’s bank-grade data centre, further protecting your credit card data.

– eWAY is an authorised third party processor for all the major Australian banks.

– eWAY at no time touches your funds; all monies are directly transferred from your credit card to the merchant account held by Green Arrow Digital

For more information about eWAY and online credit card payments, please visit www.eWAY.com.au

Delivery Policy

After ordering online, you will receive an email confirmation from eWAY containing your order details (if you have provided your email address). We will normally confirm receipt of your order within a few minutes of ordering. We will attempt to send your software/license/access code via email within 2 working days.

If you wish to query a delivery please contact us at ilana@greenarrowdigital.com.

Refund Policy

If for any reason you are not completely satisfied with your purchase we will give you a 7 day money-back guarantee from the time you receive the goods. Please email us at ilana@greenarrowdigital.com within that time if you are not satisfied with your purchase so that we can resolve any problems.

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