Ep 238: Acquiring A Business & Doubling The Traffic In A Few Short Months with Ryan Condie

Jaryd Krause:

This is the intro to the Ryan Condie podcast episode. Imagine doubling your website traffic just a few months after buying your website business. Hi, I'm Jaryd Krause, host of the Buying Online Businesses Podcast. And today I'm speaking with Ryan Condie, who focuses on acquiring, growing, and holding businesses for the long term. Ryan's now bought eight businesses and continues to grow them while working as an M&A advisor at QuietLight Brokerage. He also has a great podcast called Let's Buy Business, which we also talk about in this podcast.

In this podcast, we dive into discussions around how Ryan bought a distressed asset, why he bought a distressed asset. We talk a lot about that business, why it was distressed, how they turned it around, and how they were able to double the traffic in just a few short months by allocating resources to better things.

We also talk about how to partner with someone when buying a business and how to stay partners in business for the long term. Now we talk about partnering because Ryan has an operating partner and investor in this deal that we talk about, and he's worked with many different partners on deals as well.

We also talk about how they found the deal, the deal structure, how they actually bought it, what they took over, and why. And then we move into talking about how to basically become a better business investor by looking at multiple assets prior to even investing and how to just allow yourself to understand the true value of a business so you don't get taken advantage of when you're looking at buying your first business or multiple businesses that you're going to add to your portfolio.

We also talk about how to buy larger assets and how to build a solid online business portfolio, whether it's selling and then buying larger assets or adding on extra assets. We talk about how to add value to businesses and how that can help you build your portfolio. We also talk about focus, which is absolutely key when we're trying to build wealth and a portfolio. And then we move into talking about Ryan's advice for first-time investors.

Now, because Ryan's been in this space so long and we have such great chats, there’s so much value in this podcast episode. You guys are absolutely going to love it. But we didn't just cover a lot about due diligence, and due diligence is super key. We didn't dive into certain things that were massive risks within that business, which we probably should have in hindsight.

But if you're looking at buying a business, make sure you go away and do yourself a favor and get my framework. It's my Due Diligence Framework. A lot of people have been raving about it. A lot of brokers and people that list sites for sale base the data and information that they put out there on the questions we ask within this resource. So to get that, go to buyingonlinebusinesses.com/freeresources and it'll take the guesswork out of buying a business. Now let's dive into the pod.

Do you have a website you might want to sell either now or in the future? We have a hungry list of cashed up and trained up buyers that want to buy your content website. If you have a site making over $300 per month and want to sell it, head to buyingonlinebusinesses.co/sellyourbusiness. Or email us at [email protected] because we'll likely have a buyer. The details are in the description.

Ryan, welcome back to another pod.

Ryan Condie:

Thanks, Jaryd. Thanks for having me.

Jaryd Krause:

Oh, I'm excited for this one. We chatted, and I went away. I went to Indonesia for a couple of months, and we're going to chat before that. So I've been anticipating this call for a while, and we've got some other really cool things that you and I haven't even spoken about yet coming up with other conversations and discussions that we'll be having with other people. So we'll probably drop that towards the end of the show. But for people listening who haven't heard Ryan yet, go to episodes 149, “Why Buy an Online Business”, and episode 150, “How To Get Started Buying an Online Business,” because we had an amazing discussion there. It was actually a really long discussion. So we split into two podcast episodes, and I'm going to be real and honest. They're some of our best value discussions or episodes on the podcast on Buying Online Businesses. So yeah, thanks for that.

Ryan Condie:

Thanks, man. I know we're setting the bar pretty high. So we'll hit that here.

Jaryd Krause:

Oh, man, there'll be some good things that we dig into in this pod. And you just bought a business. So, yeah, I wanted to chat about that with you. Congratulations. I mean, you bought it prior to me going to Bali, and now it's been a couple of months. So you've done a fair few things, I assume, but let's start with why you bought another online business.

Ryan Condie:

Yeah, yeah, absolutely. And a little bit of background about me, Jaryd, is that I've started a lot of businesses. I've bought a lot of businesses. I think I bought eight businesses so far, just over the years. I bought my first e-commerce business in 2011 and built, bought, and sold lots of businesses in the meantime.

But yeah, so I've done a fair amount of deals, and the last few deals I've done have been in the content site space. And I do like content sites. My dog is joining us here. I do like the content site side, and I know that you're a big proponent of that. You typically have really good margins.

You typically don't have the costs associated with SaaS, development, or acquiring customers. And a lot of times, the content that you're creating can live for a long time. So the site that we bought is sidewalkdog.com. So it's a content site all about dogs. And as you can see, my dog just walked in and joined us. And so I like dogs.

Yeah, anyway, so this was an interesting deal. And I'll tell you a little bit about how we found it. One of the things, and I don't know if you've seen this too, Jaryd, is that the longer you're in the industry, the more you end up meeting people, and more people understand what you're trying to do, and you understand what they're trying to do. And there are a lot of handoffs.

And one of my friends is into content sites, and he's like, “Hey, this business is not doing so well. They hit some rough times. They're looking to either sell or shut down or something like that. Would you be interested?”

And so, without that intro and without the many years of having spent time in this space, I probably would have never known this business was for sale. This business had struggled under its current operating structure. And it was a content site, but maybe it was operated more like a traditional business with a physical office and employees that were all US based and it was all tied to that.

And so I was introduced. They needed a quick sale. And as you know, Jaryd, the more and more you look at online businesses or a very particular niche, whether it's a plumbing business or a content site, you get really good at identifying what you can do better, what has worked, and what hasn't worked. And in a few minutes, I looked at this business and thought, Hey, I can do a lot of things to fix this business. And we ended up coming up with a deal.

This is one of those deals where we had to do really fast due diligence, like within two weeks. So that might scare a lot of people away, but there were a lot of moving pieces. But after you've seen a lot of these businesses, you start to understand, and you can digest the due diligence really fast.

Jaryd, I have an operating partner also named Jaryd, and he's very good at all the things that I'm not good at. So, the SEO, the content, automating the content creation with several different writers, and what that looks like—I sent it over to him and said, “Hey, what do you think about this business?” He messaged me back in two minutes. He said,” This is awesome. Here's what I like about it.” And we were able to move forward pretty quickly. And I'll pause there, Jaryd; we can dive into other aspects of the business and other parts of it.

Jaryd Krause:

That's great. Congrats. So when you say you had an operating partner, is this somebody that you were already working with on another business in your portfolio?

Ryan Condie:

Yeah, good question. So I have an operating partner that I do all my content sites with. And he and I used to work together on a previous business, and he came highly recommended from one of my close friends. So this was probably three or four years ago. I had hired him just to do some SEO work and some content work on one of my sites.

He ended up being just world-class and awesome to work with. Brought him on as a partner for that business. And now, if there's anything in the content space, we typically do it together. So I was able to work with him as an agency. I really liked working with him. He likes working with me, or at least he hasn't said he doesn't.

So then we moved forward. We were partners on another site. And then moving forward, this deal came about, and we've done some other stuff together; we've done other content sites. And so when I say he's an operating partner, he brings a lot of the skill sets that I don't have, and I'm putting together the deals and finding the deals with some of the skillsets he doesn't have.

But he and I have probably the utmost trust and, I don't know, the most similar direction of what we want from particular businesses. And we had some very frank conversations early on, before we bought the business, about what we wanted from it and how much time we could put into it. Where do we see growth opportunities?

We made sure that every single project that we're working on is aligned. Because neither he nor I are full-time on this business, but that wasn't the expectation going in. I think that's a critical piece. And luckily, I've been able to work with him on many other projects for several years. So this was just an easy one to step in. And the next content site that we find, we’re going to do it together. We have a partnership now that I think will last for many, many years.

Jaryd Krause:

That's amazing. Congrats. That's really cool. That's what I'm trying to instill in people that are purchasing businesses through our work—hopefully they gain enough trust that they hand over the business to us to help them grow it through what we launched just a couple of weeks ago, our own SEO agency service.

Ryan Condie:

I didn't know that. That's awesome. I'll have to send some stuff over to you.

Jaryd Krause:

We've been doing it in the background for many months, like six months. And I've been working with them even longer, and we've been working with a few businesses that we bought in the community and gotten great results. And I just wanted to prove that they were really good before we launched anything to the public and tested it out.

So, yeah, I think it's so important to have those people in your corner when you're going to buy business because then you've got confidence. So, okay, I can buy this, and I've got somebody that I trust that I can work with to grow as well. And we're going to go in the same direction. They're going to do good work and get great results. And it helps you be more confident in your investment strategy. Would you say that has added some?

Ryan Condie:

Oh, 100%. I probably wouldn't have bought this business had I not had him as a partner. Because with him, and I don't know if you've seen this with your clients too, when you have that partner that brings all the skill sets and knowledge that you don't have, you have so much more confidence moving forward that things are going to work out. The growth opportunities that you're seeing or the weaknesses that you're seeing in the business can be fixed.

And I have a level of understanding of SEO, link building, and all those strategies that sound really smart to my mother. But when you get into the actual implementation of it, there’s a different level. I understand why we do certain things. I understand why it works, but the actual implementation is on another level.

So I would highly recommend that type of partnership for any of your listeners. It's where we're both bringing a lot of stuff to the table and the confidence we're both bringing that we can get this deal done together. And it's one thing to do the deal, but then you've got to run the business afterwards. And that's where it's really critical.

And from a timing perspective, I don't have as much time as he does. So we've structured the deal in a way where it makes sense for him to put in the extra time that I wouldn't have been able to put in on my end. So absolutely, having that strong partner, whether it's operations, an investor, or something else, is critical to a lot of deals.

And everybody tries to go down this path alone. And I see a lot of people make it work that way. And I see a lot of people fail that way. But usually, the people who make it work that way, I think, could row three, four, or five times as fast if they had someone with them.

Jaryd Krause:

Yeah, spot on. So from what I heard, this is an operating partner. Are they also an investor partner in this deal?

Ryan Condie:

Yeah. So from our perspective, we both put in the same amount of capital when it comes to our deals. So in an acquisition that we're looking at, we're moving forward now. And the first deal was a little bit different. I was more on the investor side; he was more on the operating side. But now we're putting in the same amount of capital and, ideally, the same amount of effort. And we're splitting. There are different times in every business where I'm putting more time in than he is, and then it flips vice versa. And there are other times when the business hits a certain point and I'm focusing a little bit more on it.

And one thing that's really important, I felt like with my own partnerships, and I've probably had five or six different partners with lots of different businesses, Jaryd, and one of the things that I value really highly is just how they get it done. I don't care how much time it takes. I don't care about the hoops that they have to jump through. And more importantly, I know that when I'm working with my partner, Jared, it doesn't matter whether it's going to take him 10 hours or one hour. I don't care. But he knows he's going to get it done, and then he can have that confidence in me to get my side of it done.

Jaryd Krause:

Yeah, that's a really good point. Because when you work with people, I don't like to hire people based on hours. I like to hire them and work with people based on output.

Ryan Condie:

Performance, 100%.

Jaryd Krause:

And performance. If somebody is going to take 10 hours to do something or one hour to do something, I’d still like to pay them what they're worth. If it's worth 10 hours of their time but they can do it in one, pay them if they're that good.

Ryan Condie:

Yeah, 100%.

Jaryd Krause:

Rather than trying to pinch pennies and do the hourly rate, you have to micromanage people, and you don't want that. You just say, “Get it done this way.” And if you know they do good quality work, then you don't need to worry about it. It's going to get done. They're the people you want on your side, on your team.

Now, I want to ask about partnering with people. Like you said, you've got multiple partners. What do you like about partnering with people in businesses and investing in businesses with partners?

Ryan Condie:

Yeah, that's a good question. I would say the partnerships that didn't really work out for me in some of them typically revolved around not having upfront conversations about who was going to handle what and going through the P&L or every single thing that needs to happen within a business. And before you buy it, you're literally writing your name next to it.

So who's going to handle this part of the business next? Who's going to handle this one? In Google Sheets, you just go down, down, down. So that way, you don't get to the end and say, “Well, who's going to handle customer support?” And everybody's looking at each other and pointing the finger or whatever you might need.

And so I think what I have found with Jared is that we know what we're bringing to the table, and we're very open. Every single deal and project we do, we outline every step, who's handling what, who's handling our virtual assistants, and who's handling our international employees that we're bringing on for each one of those. Where my partnerships haven't really worked is because we didn't have those conversations beforehand. And it was just like, “Oh, this is an awesome opportunity. Let's dive in.”

Or I also think a big thing is the different stages of people's careers. You run a couple of really good businesses, Jaryd, but you also want to be able to do those while snowboarding in New Zealand or surfing in Bali. And that doesn't work very well if you've got someone who understands that, oh, it needs to look like X, and you need to go in at nine to five, and you need to be in here, and you need to be in this office.

So I think the things that I have felt didn't work out for me were not having those initial conversations and then not understanding what they wanted out of the business or being at different levels of our careers. And you can be different ages, but you're wanting the same thing out of that business. And a lot of times, I find that usually around, are they married? Do they have kids? Are they all the same size and on the same trajectory in terms of timing? And some of it is age, but it doesn't always have to be. Sometimes it just makes it a little bit easier.

I have worked with lots of different partners, some are great, and some didn't work out that well. But when I started working with Jared, I instantly knew we were going to be on the same page with almost everything. But if we're not, we can hash that out really quickly.

So that's why I like working with partners. We can grow so much faster, but I've also gone through partnerships that didn't work. And I think a lot of times you're only hearing about the negative partnerships rather than the ones that were just world-class, and they continue to scale because the world loves bad news. So they all want to hear about the bad partnerships, not the good ones.

Jaryd Krause:

Yeah, yeah. A lot of people love the dangerous, scary stuff because it's entertaining, but they don't want it in their own lives. They don't want the drama, typically.

Ryan Condie:

They want that for Hollywood in the movies.

Jaryd Krause:

Yeah. And it's a really good point. Like when you say, because you both like a partnership, whether it's an intimate relationship or a relationship with the business partner, one thing that can't happen is change and growth. And you're either going to grow one way or another, like sort of grow separately a little bit, maybe, or grow together. And if you do decide to grow separately, that’s totally fine because one person's goals and visions might change, and their intentions might change, maybe for the business or maybe for their own personal life, which is totally cool.

So what I'd like to add to what you've said is, make sure you have a really good worst case scenario agreement that says, If we both want out, what does that look like? What do you do? What do I take on in terms of assets, work, liabilities, and all that sort of stuff? First right of refusal for purchasing it. Do we both have to exit at the same time? All those sorts of things.

Because that's the worst thing. And I've done this with intimate partners as well as business partners—to have the conversation straight up. What if shit hits the fan? What do we do? And how do we handle it? So we've talked about it, and we've come to an agreement early while we're both levelheaded and we're not fuming and having steam come out of our ears if it gets to that stage.

Because, typically, it gets to that stage if there are uncommunicated issues or uncommunicated discussions, which is super important. And that's one thing that I would add as well is communication throughout a partnership. So vital. But yeah, that worst case scenario, an exit agreement, is pretty key.

Ryan Condie:

Yeah. So we had an operating agreement, and even though Jared and I have been partners on other deals, we had a new operating agreement specific for this project in this business. Because things change. There are different assets to divide up. There are different pieces to that puzzle. And absolutely, we went through a lot of scenarios. As a whole, you can't possibly think of every scenario or what the future holds. But as long as you're having those open conversations, then it's easier to have a starting point, and you're not starting from, like, “Well, I thought you were doing this, and I wanted this.” And then you don't point fingers.

Just last week, we had some adjustments that we needed to make to the operating agreement because we were like, “Hey, moving forward, it should look like this.” And he was like, “Yeah, I agree.” And so we ended up adjusting the operating agreement as we were moving forward to adjust to the different business growth and what we felt was going to happen.

Jaryd Krause:

I love that. I love it. That's a level of communication where you can both come to a table and say, “Well, this needs to change a little bit.” This needs to change without having the fear of, like, What are they going to say? Are they going to like it? Are they not going to like it? If you don't express how it feels for you and how you think it should go, then that can create resentment towards the other person. And the more that builds up, the worse it is when things part.

Ryan Condie:

It's a downhill spiral. Like you said, with any partner, intimate or business, it's a downhill spiral.

Jaryd Krause:

Yeah. Yeah. I love it. I love it. So that's partnering, guys. There were so many good things we talked about there. So you found this deal, obviously, just by being in the space, looked at it with your partner, jumped in, and bought it. It's a content site. It's in the pet space. What sort of deal structure did you use?

Ryan Condie:

Yeah, good question. So I want to talk about the deal structure. And then maybe before I talk about the deal structure, that's kind of in line with what we were talking about when we were evaluating the business and doing due diligence.

One of the things we needed to do was move really fast. And looking at the P&L, they had a very expensive tech stack. And I think that's where experience comes into play. And then leaning upon my partner, who's done some automation around content sites—not AI stuff, but more of just, like, how do you streamline the tech stack of just a WordPress site?

It probably costs anywhere from $7,000 to $10,000 a month in tech stack costs, which is quite high. You're crossing your eyebrows. It was very high. And we felt like, in a conservative setting, we could get it down to $1,000 a month. But if we really push, we could get it to $300 to $500 a month.

And so there were certain things that allowed us to look at the business, and very quickly we could start crossing them off. I took their P&L, and I basically got rid of all the costs that I didn't think we needed and put in the new costs that I felt we needed. And we didn't need the business to grow. We just needed the business to be more efficient. And so that was probably one of the deciding factors.

And then we started laying out what we thought our potential growth could be. And it was like, Okay, this is a no brainer. We better buy this right deal structure. So we went 50-50 with my partner. Like I said, we basically structured the deal so that you put in the same amount of capital as I did. And our whole goal was: Can we turn this business around in 30 days and pull all of our capital money in?

So we put the money in to keep it floating. The business had some debt on it, and we ended up just absorbing that debt. We took over that debt. We felt comfortable with that. We liked the percentage rate. It was a fixed rate. It was over a really long period of time. And it was with the US government. So because of that, it had a lot of great things that we liked, and it was rare.

During COVID, the US government issued certain types of debt that they only did then. It was sort of a disaster loan. And it wasn't actually through any bank. It was actually through the US government. And because of that, the interest rate was super low. So we ended up just taking over that. So the business didn't have to go through bankruptcy. And we put some money in to keep it afloat for what we thought might be 60 to 90 days.

And eventually we pulled that money out and started building the business, cutting those costs, and focusing on one, the creating good revenue. Because not all revenue is good. Some revenue can take up a lot of time. And then we were able to cut costs on both sides. So we were sort of cutting from both sides there.

Jaryd Krause:

That's cool. So are you saying you took on that debt or that you sort of paid it out? And also, what percentage of debt did the business have?

Ryan Condie:

Yeah. So it had a pretty significant amount of debt compared to its current financials. It was probably never going to be able to pay it off with its current financials. But when we looked at the financials, we were really confident that we could make it profitable without any growth. And with growth, we're like, “Oh, this will be great. This will be a home run.”

And yeah, so we ended up just absorbing that debt. We didn't particularly want to pay off that debt because we felt like the interest rate was really low, which is one of the reasons why this business was eventually going to go bankrupt. It was a great business. There were a lot of great things about it—a lot of great previous employees that have been laid off—that we felt like we could bring on a contractual basis as contractors.

I don't know how it works in Australia or other countries, but the bankruptcy process is a good thing to have, but it's also not very fun. It can set you back many, many years. You'll never get a loan again. You'll never get a tax refund from the government. You're seven to 10 years out from getting a mortgage if you want to buy a house. There's a lot of downside to it.

So part of our pitch to her was, “Let's take over your debt.” You won't have to declare bankruptcy. And so essentially, we paid for the business by taking over that debt. And at the time, it really wasn't able to make the payments. But like I said, just with a few tweaks, we felt like we could significantly reduce the tech stack. And then we had some really good growth opportunities that we felt like they weren't taking advantage of.

Jaryd Krause:

Yeah. That's minimizing that seven grand a month in that tech stack, which sounds like a huge win.

Ryan Condie:

Yeah. And it was one of those things that gave us pause for a second because we were like, Hey, what if this doesn't work? And we do need $10,000 a month in tech stack. And we thought there was no way. Worst case scenario, it's $2,000 a month with the tech stack. And we ended up making a bunch of changes right when we took over. We broke a bunch of stuff, but we did get the tech stack down to about $500 a month.

And so, yes, you're going to break stuff as you do that. It's never going to be a smooth rollout. But we knew that going in, and we knew that with those changes, this was going to be a great acquisition for us.

Jaryd Krause:

So would you say it was kind of like a distressed asset where she was kind of just making repayments or almost not able to make repayments and you sort of came in, took it over, and with your experience and knowing what you could do by decreasing that tech stack and knowing that you could grow it for a fraction of the price that they were just maintaining and running it for, would you say it's kind of sort of close to a distressed asset?

Ryan Condie:

Definitely distressed and definitely a turnaround project. And one of the things I want to highlight when it comes to not just content sites but all businesses is that I feel like there's good revenue and bad revenue. And there were a bunch of employees helping with paid advertising—not paid advertising, I hope that's the right word. But there's a network of, like, you've got AdSense and you've got Mediavine and AdThrive. And that's just really simple programmatic advertising. And then there are the direct sales ads where you're going to other businesses and saying, “Hey, we're going to do this and this type of sponsorship.”

Jaryd Krause:

Direct retail and asking for deals on ads directly on the site.

Ryan Condie:

Yeah, absolutely. And so this was being run like a traditional media company. Well, the problem is that the revenue that was coming in wasn't good enough to offset all the employees that were needed to generate that revenue. So by revenue standards, the business went way down, but we actually stopped losing money. The employees were laid off before we came on board, but it wasn’t profitable if you set it up that way.

And so we took almost like a 15- 20-year-old media business and brought it into, Hey, this is how we run a very efficient content site. And what was kind of interesting is that the domain rating was so high and the traffic was pretty good that there were so many keywords and keyword phrases that we could rank for right off the bat that they weren't targeting.

So you layer that on with what we felt like we could grow from really structured SEO content that's going to work well with the search engines because nobody was hitting this content. Nobody was providing it, and we felt like, Okay, the growth is going to be pretty interesting.

And since we took over last month, we actually doubled the number of page views from when we took over. So it took us a little bit because we broke a bunch of stuff, updating the tech stack. And it wasn't as smooth as we thought. But about five months in, we've doubled the number of page views. And I think we'll be able to double again by the end of the year. So in about another five months, we think we should double again.

Jaryd Krause:

Man, congrats, Ryan. That's so cool. That's an awesome, awesome story here. Buying a distressed media business and then basically turning it into a more streamlined online content site with a high DR and then not ranking for content that you could easily rank for? How about it? That's so cool.

Ryan Condie:

And everybody, and I think, too, when you're evaluating a business, you're going to look at the revenue and say, We want the revenue to be the highest. Well, revenue doesn't necessarily mean profit. And when we found out what was associated with the cost of the revenue, it turned out to be that it wasn't profitable.

And so it was so much work to get some of the revenue that by just cutting out that revenue and cutting out those costs, we got way further ahead. And then we're able to focus our resources on other areas of the business, like these low-hanging fruit keywords and keyword phrases that we're now starting to rank for. And we started launching some of this new content. And Jaryd, within two weeks, we'll be on the front page of Google with a lot of these new articles.

So part of it is just taking the resources and energy being directed in the wrong direction with bad revenue and actually putting them towards good revenue and good content that's going to continue to drive more revenue.

Jaryd Krause:

That's a life hack and a business hack, really. I think once you get to a certain level, I don't know what sort of career you had prior to investing in businesses. I used to be a plumber. And being in that, I call it being in the survival phase. Until you get out of the survival phase of working for a paycheck, focusing on resources too much isn't super important or a big thing until you get out of that. And then you've got to realize, Where's my time best spent? Where's my money best placed and located?

And so your two main resources, the same in business, are, like, where do I allocate these things that are going to net me the best ROI? Your time as an operator and also the money being spent in the business as well, like decreasing that tech stack, like you said, and then rolling that seven grand a month into good content that you know you can rank for, It's like, Let's go; let's take this as far as we can. So excited.

Ryan Condie:

You would take that deal all day, so yeah.

Jaryd Krause:

Yeah. It just sounds fun to go and be able to see, and for somebody listening, you've looked at so many deals, Ryan. Like you and I look at—I don't know, I know that I've looked at tens of thousands of deals, and I know that you've looked at a lot as well. And when you see these things initially, you can be like, Oh, that's a lot of work. But there's a lot in there that could be revived and made exciting. And you need to have that knowledge to be able to execute on it. So it's not really a first-time buyer's sort of deal.

But I do want to ask you, what would you advise for first-time acquirers? What are some things you would advise them to understand, know a lot more about, and do when they're going to go and buy their first acquisition?

Ryan Condie:

Yeah. I would say one thing that was paramount here is that, like you said, I've looked at thousands of deals like yours, and I'm now at a point where if I looked at a plumbing business, maybe the one you used to work for before you went down this awesome path, I wouldn't know what I was looking at. I'd be like, I don't know. Do those wages seem high? Do they seem low? Does the fuel for the truck seem high or low? I wouldn't know.

But if I looked at 20 of those businesses, I would start to figure out really quickly what they're doing right, what they're doing wrong, and if the percentages are off. And so this is, I feel, just a classic case of I've looked at hundreds of content sites. And so when I saw certain areas of the content site, I thought, Hey, I know I can cut these costs. My partner comes in, Jared, and he's like, “Hey, I can grow this, this, and this. And these are the keywords that we need to rank for. And I think we can double the traffic in X amount of months.”

And we start layering those over, and all of a sudden it's like, Okay, this is a world-class acquisition. And I think what I would recommend is that at the beginning of your search, you might look at a lot of different types of business models, lead generation content, e-commerce, SaaS, whatever. But pretty quickly, there's a lot more benefit to going deeper into one. So going deeper into content, when you see a content site, you're going to know what it's lacking and what it's not. And you'll know if the percentages are off.

And I feel like that was one of the most important things. Because when we did find that acquisition, we had to move so fast that if we didn't have that background, we wouldn't have felt comfortable moving forward with that acquisition.

Jaryd Krause:

I love that piece of advice. It's what I share—and not exactly framed the way that you framed it, but people in the beginning don't know exactly what sort of business they want. And I just say, “Look at them all and sort of see which ones suit you and you feel you would be better at running.” And then when you find a particular type of asset, say you're going to go down just content sites, look at all those content sites in that price bracket.

And by looking at so many of them, you start to get to know the market. And when you get to know the market, as well as working with somebody who can help put some guardrails on and share with you, what multiples are at the current market rate and what's valuable and what's non-valuable, then you start to become more confident and empowered that this asset that I'm looking at is worth this much based on all the other businesses I've looked at and all the other data and based on where the current markets are at.

And that's the best rule and the best way to go about buying a business and knowing what it’s worth, not overpaying, and not getting stumped. And all that stuff, Ryan, that you and I have had of looking at all of these businesses, thousands and thousands of businesses, that for a lot of people, they see as work, From what? From when they first start, it's like, Oh, there's a fair bit of work. It takes a fair bit of effort to look at all these businesses.

What they don't realize is that, unconsciously, they're getting the best level of business education that you can't buy because people go away and try and get that in an MBA or at a university or college. But when you look at so many businesses, you're gathering so much data, so much information, so much value, and learning so much that that isn't wasted time. It's an actual education, and you're paying for that education with your time, not your finances.

And one of the most beautiful parts about buying a business is that all the work that you put in at the start is the best level of education that you set yourself up through the years to be able to put yourself in this position where you can identify a distressed asset and go, “There's value in this. So much value.”

Ryan Condie:

Yeah, absolutely. I love that too. And one thing I would add is that for anybody out there building a business or looking to buy a business, one of the motivating factors for me has always been that for every dollar of profit that you have, someone is typically willing to pay 3x for that. So you get the dollar now, plus you get the 3Z of a value there.

So whether you're building a business or buying a business and turning it around or adding a little bit of that growth to it, it gets really fun. Whether it's a 2x, a 4x, or a 5x, whatever the multiple is, just say 3x for average, and it starts to get really fun. And you start to do the math in your head, and you realize, Wow, the time and effort I’m putting into this business is so valuable. It can take up a pretty big chunk of your net worth really quickly.

And I think that's what people sometimes forget, especially when they're in that grind. You said something like, “This is an education, and this is the school of hard knocks and MBA.” I would also say, You think this is fun. You look at P&Ls and you're like, “I love this. I love due diligence on businesses.” To me, that's play. Would I rather watch Netflix or just dive into another business? I would, except my wife would think I'm crazy, and she would not hang out with me. So we do watch the Netflix stuff.

But that's what I mean; you have these motivating factors. And one of the most motivating things is the lifestyle that comes back from ownership or even exiting a business. And if you think about every dollar of profit you have, you're getting paid that dollar plus the $3 or $4 or whatever that value is that you're creating if you were to turn around and sell that business. And all of a sudden, that three and a half or that 4X, it's the dollar now plus that $3 to $4 that you get down the road. It's pretty awesome.

Jaryd Krause:

Yeah. That compounding effect is phenomenal, isn't it?

Ryan Condie:

100%.

Jaryd Krause:

Yeah. So that's a really good piece of advice. People think about the long term when they're buying a business. And let's frame that, say, somebody's bought their first business, and they've just gone and got to the point that they've grown it over a year, maybe two years, and they want to increase their portfolio.

With the people that you work with and talk to that are selling businesses that have these larger portfolios, which might be seven- to eight-figure portfolios, what would you say is the next step for somebody wanting to grow their portfolio? Is it their option of selling that business and buying a better one, or taking some profits and buying another one that is around the same price? What would you suggest is the best way to scale in terms of using the resources best to grow a solid portfolio?

Ryan Condie:

Yeah, that's a good question. I usually find that people who sell are the next buyers in line. They go sell their business. And all of a sudden, they go on vacation, realize they need to be working on something, and go out and buy another business. They buy a bigger one or one in a different industry. It really just depends on what their exit goals are.

I've talked to a lot of people who say that when they sell, they will put it into a home. They want to buy their primary residence, put it into a second home, or pay off their house because that's what makes them sleep better at night. I think you and I would probably agree that we use cash flow to buy more cash flow. That's the way I view it. I always try to push people, like, Well, how does this money work for you? Can you get it to buy more?

When I think about building portfolios, I typically see two types of portfolios that work best, and one is e-commerce, and one is content. I've seen a lot of people do it in SaaS. It's just trickier because they're not all on the same tech stack. They're not all the same lifetime value of customers. You might have a sales team. It just gets a little bit more complicated.

So when I typically see e-commerce roll-ups or building a portfolio of e-commerce brands, you get really good at Shopify or you get really good at Amazon, and then you start adding pieces to them. Or, say, you're good at Amazon and you go buy a business that's good on Shopify but doesn't have an Amazon presence; well, that's your value add. And then, all of a sudden, you're adding that in.

I've also seen that when you get to a certain size with e-commerce, you're already paying for someone to run your ads. So adding in another portfolio company, you just have that same person running your ads on Facebook, Google, TikTok, wherever you have or YouTube. Or you have a warehouse, and have an extra 10,000 square feet of space, you can add another e-commerce brand and plug it right in and your costs actually don't change that much.

Now let's flip it on the content side. Usually, what you're good at is your SEO, you're really good at generating good content that is going to bring customers in — not customers but visitors or whatever. And when it comes to that aspect of it, I find it's better to stick with what you know. Like if you're good at lead gen, another lead gen business could be pretty awesome or buying a content site that should be doing lead gen but isn't and then you're plugging your expertise in there.

On the flip side, it's like if you start having a lead generation site slash content side and then a content set over here and then a different business model and content over here, I feel like it's a little difficult, and they don't necessarily talk, and your team doesn't have the ability to work across.

And one of the reasons for this Sidewalk Dog that we bought is that Jared has managed dozens and dozens, if not 100 por more, ofwriters over his career. So we knew very quickly that he could have an automated process to manage our writers all over the world. With an automated process, they could take the articles that they wanted to write and the topics, and they would immediately get uploaded after they wrote them and get sent to the editor, who could immediately push them to WordPress. And that process and that flow, he's already built a dozen times. So when we look at content sites, we want to do something where we can streamline them and cut costs.

So when you're adding a portfolio, in our sense, we're not looking for a lead generation site or an ecommerce business to plug into it. We just want to plug in something else that can work with our system. And so even if it's not dog related, we can now apply all the learnings we've had with scaling our content and our writers to that niche. And it could be plumbing or home improvement, but we now have this backend operational system that we're just going to plug into the next one.

Jaryd Krause:

Spot on. And that's what my goal is with BOB—our business here is where people can buy a business and hand it over to our team to grow with the SEO service. And then, at the same time, I’m helping a lot of people build out different parts of their businesses, particularly for content sites. I'm helping them build out an email marketing arm where they can start to earn just as much revenue from their email list through some pretty cool ways that I won't share here in this pod, just through email marketing.

Ryan Condie:

We've got to sign up.

Jaryd Krause:

Yeah. We can talk about it after this call, if you like. And then they have the option to grow that with our team, leave it with us, do a little bit of work themselves with the email marketing, and then they can either sell it and buy another one or just buy another one and do this exact same process.

And the two skills that I want them to get really good at are identifying great businesses to buy, number one, and then, number two, one extra add on, which is typically email marketing. Because it can be done with content sites, SaaS, and with e-com. And then they can just buy amazing assets, plug in the SEO team, plug in that one extra asset, that value that they had, and they can keep buying more businesses or selling them and then chunking up and buying larger businesses.

And that's, I think, a really good way to go. Personally, I like the idea of having one asset to focus on at a time, rather than several. Because yeah, you can have a team and build that stuff, but you still have energy. Even if it's not directed focus, you still have energy and parts of you in different areas that still need attention. And I'm about to take an asset and grow it, buy a larger asset, and chunk it up because it's a lot less effort and a lot less to manage.

Ryan Condie:

That's a great way to think about it. And I think, as entrepreneurs, we get the shiny object syndrome, or you're chasing the next squirrel, or whatever. And I think that's what a lot of entrepreneurs think, and that's how I think too. And it's probably not the best way. And I've tried to actually scale down and scale back my projects so that I'm only focused on one, two, or something like that.

Because if you are able to focus on one, you can put all your energy and effort into it, and then you can sell it, chunk it up, diversify, or do whatever you want from then on. But I have found over and over again that if you try doing too many things at once, everything is mediocre. And then your exit is mediocre.

Jaryd Krause:

Yeah, it is. It is. The business is mediocre, and the exit is mediocre. And one thing before you even get to those mediocre exits and businesses is that if you've got three businesses and you've got income from them all and you're just putting all that income into one basket, it's really hard to determine if I'm going to spend this much money on this business in this growth area. And then maybe that'll take me away from this other one.

So it's just so much better to be like, Yeah, cool, I'm prepared to spend this amount of money on this one business and that growth area, rather than having to divvy it up. And yeah, I think you can grow faster with laser focus.

Ryan Condie:

Absolutely. Yeah, I like that. You're convincing me I need to just be a lot more focused, Jaryd.

Jaryd Krause:

I'm the same. I could do with more focus. Basically, since I started, I bought three businesses in three years, and then I was traveling at the same time. So I was surfing and trying to build another business, a fourth business, on the side. I had all these things going on, and it was just stupid and crazy.

And the business that I ended up building—BOB—is my primary business, which is my main focus. And I've got a few other small things, but they lack fulfillment because I'm focused on one asset, one goal, and one mission and vision, which gives me more fulfillment than the other ones.

Because a blog is cool, but I get so much more fulfillment out of what I do here. But it's taken me so many years to realize I stink at managing a lot of assets—more than three. And it's stupid for me to do so. So why not set myself up for success?

Ryan Condie:

Yeah, I'm the same way. When you have too many assets or too many things to focus on, you might think, Oh, I'm only putting in 10 hours a week on this business and 10 hours a week on these assets or sites. But in reality, you're thinking about them for another 20 on top of that. So it never ends. You're constantly thinking about it rather than just going all in on it. Jaryd Krause:

Yeah, I love it. I love it. Ryan, where can people go to find out more about you and what you're doing? Because you've got some really cool content out there too.

Ryan Condie:

Thanks. Yeah. So I have a podcast, Let's Buy a Business. You can find me on Apple, Spotify, or wherever you find your podcast, letsbuyabusiness.com. On YouTube, Let's Buy a Business. And yeah, we just dropped your episode. It should go live. I think it went live two weeks ago. So we had you on the podcast, and it was awesome.

Jaryd Krause:

Awesome, yeah, thanks for having me on. Guys, go and check that pod out. Also, Ryan, I don't know when it's going to come out or not, but we've got a panel discussion between four of us just on buying businesses. How fun is that going to be? It's going to be you, me, and David, and who's our fourth person? I haven't met him yet.

Ryan Condie:

Acquiring Minds, Will Smith. He’ll be awesome.

Jaryd Krause:

Will Smith.

Ryan Condie:

It'll be great. I think the four of us are all over the world. I think David is in Canada. You've got two in the US, and you're in Australia. It's going to be great. And I think we're going to have four episodes, one for each of our podcasts. So I think they're pretty awesome discussions.

Jaryd Krause:

It's going to be great because we're going to do one a month over four months, and we're going to release it on each of our episodes. So one on yours, Ryan; one on mine; one on David's; one on Will's. And then, I guess we'll just see how we go. I'm sure it's going to be fun and have a lot of value, and we want feedback from you guys as well.

So once you hear the one that comes out in the BOB podcast and Ryan's and the others, let us know your feedback and questions so we can bring those questions to the discussion and answer them for you. And we've all got very different things—you and I are probably the most similar, but David and Will, you know?

Ryan Condie:

Very traditional mainstream businesses, almost not online. Yeah, it'll be a fun discussion.

Jaryd Krause:

I reckon we're probably going to end up doing deals together.

Ryan Condie:

Yeah, yeah. We'll have a little investment fund here that we'll be able to throw together.

Jaryd Krause:

Yeah, it'll be fun. You don't want me operating it; I'll just tell you that.

Ryan Condie:

Sorry?

Jaryd Krause:

You don't want me operating it.

Ryan Condie:

No, me neither. Let's get the pros in.

Jaryd Krause:

Yeah, let's get the pros in.

Ryan Condie:

We'll bring the other Jared.

Jaryd Krause:

Yeah, exactly, exactly. Everybody who is listening, thanks for listening. I typically don't ask you guys to do anything. So I'm going to hit you up and say subscribe. Hit the subscribe button. Share this pod with somebody who is thinking about buying a business. Give the gift of giving. And I'll speak to you on the next one. Thanks, Ryan.

Ryan Condie:

Appreciate it.