[00:00] - Sponsor: Rewind
- [00:40] - Introduction
- [01:33] - How to get started
- [02:30] - Buying an online business
- [03:07] - Advantage of buying an online business
- [04:20] - Buying a business vs. starting one
- [08:12] - Things to consider when buying a business
- [09:08] - Where to find Jaryd
- Jaryd Krause's LinkedIn: https://au.linkedin.com/in/jarydkrause
- Jaryd Krause's Website: https://buyingonlinebusinesses.com/
- 90% of all start-ups fail.
- When you find a product that you are passionate about, the next step is to find the product-market fit.
- Finding the product-market fit can cost you time and money (for ad campaigns, setting-up your shop, etc.).
- Several advantages of buying an online business are: 1) It already passed the 90% failure rate and 2) It already has a product-market fit.
- You can see the proof, the digital marketing system, and its working campaigns. All you just need to do is put your flare into it.
- You get what you pay for when buying an online business.
- Launching a start-up can cost you more money compared to just buying one.
- Lean into what’s working really well in your business. Prioritize best-selling products to get a good profit margin.
- Be cautious of business claims. Opt for stores that are listed as they are.
- When buying a business, make sure it has a system that is working well. Consider its product-market fit and marketing system.
Unprepared isn't scripted or edited. There are no redos, and when we screw up, it's going live. This works for our show, but it is no way to run your Ecommerce business.
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Hey, everybody, welcome back to another episode of Unprepared. Joining me from across the planet, on the other side of the world and somewhere that's a lot warmer than where I am.
Welcome to the show Jaryd from Buying Online Businesses. How are you doing?
Good, man, thanks so much for having me on, Chase.
I love these little chats we get to have all the time. It's great.
It's so much fun. This is the best part of my job. This is the best random idea I had was making bite-sized episodes of the podcast. It just means I get to talk to all the partners that we have out in the community, and I learned way faster, a lot more rapidly.
But this isn't about me. This is about you and today the topic is how to go from zero to one in Ecommerce, but kind of a cheating way. I don't know, I'll pass it over to you and let you run the reins here.
This is the funny thing. We're at school. We're told not to cheat. We're told not to take shortcuts. We're told not to, you know, do lots of things and it can really stop us up as an adult and wanting to achieve goals and things like that.
I mean, I went down the route of trying to start my own website businesses and failed. And it's quite hard. You know, I started a content blog.
I had a bit of money, started an Ecommerce business, doing drop shipping as well; made a little bit of money and didn't know anything about digital marketing at the time. So that was a real awakening. But then I came across the stat that 90% of all start-ups fail.
I was like, hang on, I'm still plumbing, still doing my regular job and I was running these two other businesses.
I'm like, well if 90% of these businesses fail, that means I need to start another 8 to at least have one that's gonna work. And I thought this is ridiculous. Why can't I possibly buy one?
So went back onto Google and I typed into Google how to buy a website business or an online business and there wasn't much at the time. So I started creating content around it and teaching myself and I bought my first business. Then I bought another one and another one, and I bought three within 18 months.
The thing about buying a business, instead of starting from scratch is not only the 90% failure rate, but what's within that 90% failure rate. A lot of people want to just start an online business to make money and they don't have any experience or digital marketing skills or business skills at all. So that makes it really hard.
To stack on top of that is that once you do find a product that you are passionate or excited about, you still need to find this thing called product-market fit.
And that's really hard, like that can take some serious time and some serious money into ad campaigns, into setting up your shop, into trying to find what products are going to actually sell with the audience that you're marketing to.
This is why so many people struggle because they just don't really get to the product-market fit.
But when you buy an online business, you already find one that's past that 90% failure rate, it's already got a product-market fit, you can see the proof if you log into their Shopify account; which you can do when you're about to buy the site, you just get its access, and you can see all the sales, you can see how many returns are happening, if any. And it's already past that product-market fit.
It's already got a digital marketing system, right? It's got the campaigns that are working, they've already put all that tests; that all those mad scientists test together. And you can come in and become an operator and then you know, put your own flair into it.
Oh, yeah. Absolutely. This reminds me of a conversation I had a few months ago and I'll try to link to it in the show notes, with a guy, he bought a supplement company.
And it was doing about 12 grand a month and then he doubled it to do about a quarter-million the next year. So you know, that just goes to show that like, you know, you can buy other people's businesses and grow them.
What, what kind of investment am I looking at to go down this route to buy an Ecommerce store as opposed to starting one?
An Ecommerce store...look the general rule of thumb here is that I like to say is that you get what you pay for.
There are, you know, people that start Ecommerce stores and they've just got like a storefront, they're not really selling many products, and they've tried to scrap some things together and they're selling it for like $10,000 or $20,000.
I'd say you probably wouldn't want to spend any less than the 40 to $50,000 range to buy something that's at least, got some legs, or starting to grow some legs, and then come in, and make some radical changes to it; once you know what's working and what's not working.
The thing with businesses is a lot of people will buy one, they'll get really excited, and they'll go; oh cool, I'm gonna change all these things and stuff like that. And then, you know, you know, throw the baby out off the bathwater, instead of, just stopping and waiting for a number of months.
You know, this is what I do with all my coaching clients and mastermind clients is we just look into what's working, and just go, alright, what's working really, really well. And let's lean on to that.
For example, if they've got like 100 products to sell, what are the top three best products? Let's stop marketing everything else, except those top three best products.
Let's put those top three best products on the top of the site, on the homepage, and really put a lot of attention around those and get a bunch of money for the best selling products, make a really good profit margin, and then start experimenting on the side and trying to see you know, run things, run campaigns alongside those best products and all that sort of stuff.
So I would say to answer your questions, I wouldn't spend any less than the 40 to $50,000 range. Now when you're starting an Ecommerce business, depending on if you're doing so product distribution, you know, having a warehouse and or you're doing dropshipping and stuff like that there are some serious start-up costs, and people spend 50k or more.
I know. Yesterday on Twitter, there was a release from Shopify, it's an official thing on the blog somewhere, and I hope I can find it off, the track down- long story short, the expected cost that an entrepreneur like guessed, they were going to spend on starting an Ecommerce business was around $20,000.
And then in the actuality cost, was I want to say it was 48,000. But I do know, it was like between 40 and 50,000 was what it actually ended up being- start-up costs to, you know, launch a new business that doesn't have a product-market fit or doesn't have stuff figured out already. So, that's something to keep in mind.
That's like 90% of people that's spinning around 40 to $50,000 and not getting it back, not getting a return on it.
That's the actual real stats, right?
They're going bankrupt, yeah.
Yeah. It's a harsh reality.
Yeah. Or you can find one that's already selling. So, that's the key I want to point out here is you mentioned earlier that some people are going to throw in some stuff together and adding products and saying, oh, I've got a turnkey Ecommerce site. But if it doesn't have sales, it doesn't have customers.
That's not a turnkey site, you're inheriting a nightmare. Like, don't spend any money on that kind of stuff. There are sleazy people out there that will sell you a snake oil Shopify store.
Yeah, there's plenty of people out there. On Shopify exchange is where they actually let people list their Shopify stores as they are. People would set up a stop of Shopify store, link it up with Alibaba and say, I've got a dropshipping business.
And they'll tell you, you know, they'll try and put some fake sales through and stuff like that. And, yeah, you're not really buying, like when you buy a business, what you want to buy is you want to buy a system that's working quite well, they haven't got those two main things.
You want the customers, man- like you want to have that proven track record and like you want a system. You essentially want a basic funnel that's working.
The two most valuable things are like having the product-market fit; knowing that the product will sell and to who, and the second is a marketing system, like those two things, like that's the business.
They're like, if you've got that, then you've got a business, if you don't have that, then you don't really have a business.
And so I think that's, you know, you need to really do your due diligence on the marketing system and the product and stuff like that. But we can get into that if you'd like as well.
Well I you know, I think I want to kind of end it there because I know we're gonna, I'm gonna have you back, because we're gonna talk with the other side of this conversation about--I've grown my business to a certain point, I think I want to sell it. Well, I'm gonna have Jaryd back. We're gonna talk about that next time.
But if this is resonating with someone now and they're like, you know what, that sounds like a better investment of my time, energy and money. How do they get a hold of you?
Go to my site, buyingonlinebusinesses.com I've got a podcast and you can check that out.
If you want to listen to that, if you like if you want to sell your business Chase, I've got a bunch of buyers if anybody else listening has want to sell their business as well.
I've got a bunch of buyers in my community that are willing to buy; people that aren't even in my community, just people that listen to my podcast.
So check out my site if you're interested. And if you got any questions, leave me a message.
Thank you so much.