Entrepreneurship Reimagined: Buy, Don't Build

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Oh, could I go to the MC.

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Do you think you have to start a business to be an entrepreneur? Well, think again. Today we'll discuss how you can buy an existing business instead of starting from scratch. This is the launch your business podcast because we know starting a business is challenging, but it doesn't have to be confusing. Each week we'll give you the tactical Advice and the necessary tools to scale your business without feeling burnt out. I'm Terry Rice, business development consultant and staff writer here at Entrepreneur Magazine. Let's dive in. When we think about entrepreneurship, we usually imagine someone starting a business from scratch. And often that business solves a problem they experienced. They then determine other people may have the same problem and then monetize the solution they developed. But what if you haven't developed some magical solution that everybody's waiting to buy? What if you just want the freedom and opportunity that comes with entrepreneurship without the hassle and risk of coming up with a unique idea? Well, one option is to buy a franchise. The business model is all set up for you. You just have to pay a certain amount of money and follow the script. But here's the thing about franchises, and I'm not dissing them, but it just seems like a lot of work. You often need a physical location. You'll need to hire a staff, deal with customer service issues, and the list goes on. So it's just not my thing. Fortunately, there's another way for you to be an entrepreneur without coming up with your own idea. Buying an existing business. And if you want to avoid the additional challenges that come with a brick and mortar business, you can make your life easier by buying an online business. One of my buddies did this a few years ago when he bought a site focused on, get this, Inflatable mattress reviews. Yes, you heard that right. Inflatable mattress reviews. So how does he make money? Well, if someone goes to his website and then buys one of the mattresses that he gave a review on, he makes a percentage of that sale. That's called affiliate marketing. Right. And by the way, I don't think the guy even owns an inflatable mattress. But as you'll learn later, that doesn't matter. You can still make money doing this. And I know inflatable mattresses are very specific. Right? That's the point. These niche sites are designed for a very specific audience looking for a very specific outcome, which makes it much easier to promote them online. And today we're going to talk about those niche sites, how you can buy them. But look, you're still going to gain valuable information from the conversation, even if you have no interest in ever buying a site. Reason being, you'll learn how you can monetize traffic that comes to your website by sharing content directly related to your zone of genius. And we'll be joined by Spencer Hawes. Spencer is the founder of Niche Pursuits, a company that helps you get niche site strategies, SEO Tips and grow your online business. Today we'll discuss how Spencer and another dad bought a mom blog, increased its revenue and eventually sold it for a profit. We'll also talk about how Spencer and his partner navigated the surprising roadblocks that appeared shortly after buying their website. And lastly, key books Spencer recommends when you're thinking about buying a website, online business or just monetizing traffic that comes to your site. Let's hop into it right now. Spencer, glad to have you here. How's it going today, Terry?

Good to be here. Things are going well. I'm excited to chat.

Yeah, yeah, same here. And we met at the Crafting Commerce Conference, which is hard to say. Crafting Commerce Conference.

That's right.

We'll call it event to make it easier and made a connection there. You took this amazing photo of me on stage, so thanks again for that. But that's pretty much how we got in contact was through that. So serendipitous, right?

Yeah, absolutely.

Yeah.

You gave a great presentation and I took your picture right as you were walking off and waving. It turned out amazing. So I'm glad I could get that to you.

Yeah, yeah, I appreciate it. Looked like it looked iconic, but now let's talk about you. So I obviously know who you are, but do you mind just introducing yourself for everyone else, please?

Yeah, absolutely. Business wise, I have a blog over@nichepursuits.com and I've been building niche websites and running an online business full time since 2011. I've built a few software products along the way. Currently I own a product called Link Whisper, which is a WordPress plugin for internal linking. I just launched a new one called Rank Logic, which is also an SEO, SEO performance WordPress plugin. And so I've dabbled a lot with niche websites, SEO, digital marketing, the, the whole gamut if you will. But I'm also a family man. I got four kids, been married for 20 years and I've run a few marathons, you know, on the, that's what I do when I'm not doing business. And so yeah, that's, that's me in like a 30 second nutshell.

I feel so much more boring after hearing your, your, your intro and your, your life story there. But yeah, I got four kids. I've never ran a marathon though, so.

You definitely got me there. Bucket list item you can add, right?

Yeah, yeah. But one thing that stood out to me was part of your story that I want to dig into, which was buying and selling a website because often as entrepreneurs or Aspiring entrepreneurs. We think we have to start our own business. Right? What's my big idea for a business? And that's where people get stuck because they. They can't think of one. Right. Or the other option is to buy a franchise. But not everyone wants to buy like a Burger King or something like that because it doesn't excite them as much as it could. But you took a different route, which was buying an existing website. And I don't want to spoil the story for everybody buying existing website and then building that up. But what I think is hilarious is that you bought a mom blog. You in another. Another guy. So let's just kind of unpack that. Like, what. What made you think, you know what? We need this. Not. Not fatherly. We need a mom blog.

Yeah, you know, it is. It's an interesting Take the two dads, but bought a mom blog. And I mean, that's the reality of what happened is that we weren't looking for a quote unquote, mom blog. It's just that's the opportunity that sort of came across our table. A friend and I were looking for a website to buy because it is a great route to go. You can buy an existing business that's already making money. And potentially, if you come in and you have the skills, hopefully you can grow that business and, you know, increase the income and then exit it sometime in the future. And so it's actually a local friend. He's in my local town. I had never done this before. We decided to buy a business together because he had heard everything I was doing and building. He's like, you know, I want to get involved. It's like, well, let's. Let's invest in something together. And it just so happened that this was the business that came across us. And so it's. It's not just about, like, raising kids and being a mom. It's, you know, like recipes and food and crafts and. But it was definitely, quote, unquote, a mom blog. The word mom was in the domain name and everything. But we went ahead and did it, we bought it and. And we put my friend's wife. Her picture ended up being like the face of the brand. She agreed to this. You know, it's like we couldn't put our own face on it. So she kind of ended up being like the face of the brand. But we really ran the business behind the scenes.

So two questions. One is, where did you buy it from? Was it from like Empire Flippers or something like that? And the other is, did you Bring your wives in as consultants or advisors because, again, you want to have that, that genuine perspective when you're, when you're offering something for this target audience.

Yeah, we found the business privately, so we reached out to some Facebook groups. I think it might have been like, in the mediavine group, we made a post saying, hey, we're looking to buy, you know, businesses, and somebody reached out and they were looking to sell their website. So that's how we found that. And then, yeah, we did, I guess, bring on our wives as consultants. Like I said, you know, my friend's wife was the sort of face of the brand and she was a little bit more involved. Not heavily, but definitely in a lot of different areas about, like, what looks good and what feels right for the brand. And so, yeah, we kind of leaned on them for, for their expertise there.

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Yeah. So there's a lot of tools that you can look at to figure out what type of keywords the website is ranking for. You know, SEO is certainly part of this business. You look at age, Ahrefs or Semrush to kind of figure out, okay, where are they ranking in Google? What keyword opportunities are there? So there's a lot of third party tools. There's also Google Analytics, which anybody that's going to sell their business should give you access to their Google Analytics. So we were able to get that and dive into, okay, they're really getting this many visitors and they're coming from this country and kind of analyze some of the risks there. Right? Like if everybody was coming from, you know, overseas and maybe low value, you know, traffic, that that would be a red flag. Right. And so we kind of analyzed a lot of the data to look for those red flags. We got access to like their earnings like Amazon Associates was part of it and, and mediavine. So we verified that everything was real. The numbers were, were all, all real. And that's kind of the, the biggest thing is just going through, okay, what are the things that can make this business fail? And is, is the owner really saying what the owner is saying? Is it true? Now, we did a good job of all those things that I mentioned. One thing that we didn't do a great job on was understanding how difficult like sponsored revenue was. This is an area of a business that we had never been involved with. The previous owner did a lot of sponsored deals. They would connect with a brand and say, okay, I'm going to feature your food item or whatever in a new recipe and the brand will pay $1,500 for that. And we didn't understand the full complexity of it and how chunky that revenue could be. Right. Like, she may have gotten, you know, all these deals in the previous 12 months, but that doesn't mean those deals are going to happen the next 12 months. It's like every month you got to be hustling and getting new deals. And so even though she had X number of dollars in sponsored revenue, it didn't end up being exactly that amount of sponsored revenue the next year. Right. Because right as two guys, you know, figuring out what to do with that.

I'm going to assume that's not the only hiccup you encountered along the way. So I do want to unpack this because oftentimes people will go to a site like, like Empire Flippers and I'm not calling them out as being, you know, shady or anything, but they're like, well, I just can, I can buy this website that's already making money and I'm going to make More money, and I'll get all my money back in three years, and it's going to be great. Passive income and then happens. Right, so what else occurred that you can kind of give us a warning about? Not just for buying a website, I'm sure, but like for any kind of existing business that someone's buying.

Right. There's a great book that maybe is on my shelf here, you know, about Black Swans. If anybody's read Black Swans, you know, it's these events that you can't predict. Even though you go through your checklist and like, I checked every box, there's something that you just can't predict. And one of those that happened to us was Pinterest. A lot of the traffic was coming from Pinterest. And in late 2018 or early 2019, Pinterest changed their algorithm and started sending a lot less traffic just to websites in general. And so we used to be getting. I don't remember the exact numbers, but it was thousands of visitors every day. You know, call it 7,8000 visitors a day from Pinterest. And that was cut in more than half, right? Like, it went from, you know, to like a couple thousand visitors a day from Pinterest. And so that's one of those things that you can't really predict. It's just call it algorithm risk. You know, whether that's Pinterest or Google, all these. These things can change. And so that was a big hit that we had to figure out, okay, we're in a hole now with traffic. How do we dig ourselves out?

So how'd you dig yourself out?

We did our best with Pinterest. We hired some Pinterest specialists to start pinning more images and doing some things. And that helped a little. But the, the Pinterest traffic never recovered a hundred percent. But we leaned on my expertise. I'm like. Which was a big reason that we bought this business in the first place is because the previous owner did really well on social, Pinterest, et cetera, but was not like an SEO person. And so I saw a lot of opportunity to come in and optimize the articles. And so that's what we did. We doubled down and said, okay, let's focus on Google traffic. We updated a ton of content. There was a lot of really short articles that we fleshed out and made longer so that they, you know, were targeting a specific keyword better and started to rank better. And then we just produced a lot more content that was SEO focused instead of these short little kind of call it social posts. Almost. We said, okay, we're going to write 1500 words, 2000 words or longer on a specific topic that we know we can make money from. And that played out really well. It took a long time, like a year. SEO is a long play. But after a year of updating content, publishing new articles, the traffic way more than doubled from Google, right? It was, you know, like 4 or 5x. Within a year, the SEO traffic went up and eventually more than made up for the lost traffic from Pinterest.

You know, obviously you found some hiccups in the plan that this company had when you fixed them, but I want to go back and just ask, like, was there any moment where you're like, man, this is a bad idea. That ever occur to you and your.

Partner or maybe yes, you know, it's sort of, I've alluded to, but I'll paint the picture even more, is that, yeah, we bought it in mid-2018 and then it was, you know, six or eight months later, the Pinterest traffic just tanked. And so earnings from ad revenue dropped by like a, you know, more than half. On top of that, the sponsored revenue we're expecting, you know, hey, we should be making 5,6000amonth just regularly from sponsored revenue. And we realized, oh my goodness, like, you really gotta hustle, like to land these deals. And so we're putting in way more hours than we wanted to, making less than half of what we thought it was gonna be. And we're like, this was a bad idea, right? This is just, we're working twice as hard, making half as much money. And so, yeah, there was some like, reality checks of like, okay, do we really double down and go for it? And we decided, you know, that's what we should do. Of course. And things played out well over the next few years, but it took some grinding to get it back to where it was profitable, even up to the level of where we thought it should have been when we bought it.

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Yeah, so we had owned it for about three years. So in 2021 is when we kind of decided, okay, I think we're ready to part with this thing. And it was a mutual decision with my partner and I. We just determined that it is so much work and we landed some deals and we had a few deals going. We decided that like, that is just not our forte. I sort of felt like we had gone through everything that we were good at. We had, you know, over the three years that we owned it, like we've applied everything that we're good at. We pulled the levers that we know how to pull and at this point we can, yeah, just kind of hold it and kind of keep doing what we're doing. But we decided, you know what, we got it back. It's earning more than what we paid for it. It's in a good spot. You know, we learned a lot, but we're ready to, we're ready to sell and exit and, you know, do our own thing at this point.

So you don't have to share the numbers if you don't want to. But what did it look like just in regards to how much you invested and what you got back?

Yeah, yeah, happy to share. And there's a lot that kind of goes into this and I don't know how much we want to dive into the complexity of this deal, but for this website, we paid $360,000 and we ended up selling it. We ended up selling it with another website at the same time, but by itself, you know, a little over 500,000. If you were to break it out, maybe $550,000. Right. So we sold it for more than we paid, which is good. And also over the, you know, the previous 12 months, it was earning, you know, us more revenue than where we had bought it at. And so it was a good exit, it was profitable. But yeah, yeah, that's some of the high level numbers.

No, I think that's great. And it shows the value of leveraging strategic patience. Right. Instead of saying, oh my God, we have to make this much money by tomorrow, we're done. Or sticking with it during those downtimes, as in the post, as opposed to quitting and just, you know, you know, throwing the towel in. So I think that's great. And it sounds like a repeatable business model that you're using or you're teaching people. Like, what is. What is that process like?

Yeah, you can definitely buy websites, grow them, and either hold onto them for the revenue or sell them. So on niche pursuits.com I talk about sort of all aspects of building niche websites. And so whether that is building from scratch, I don't, like, have a specific course or anything. All my information is free. So people can, you know, check out my blog or YouTube channel or podcast where I talk about, yeah, you know, how to. How to do keyword research, how to find your niche if you want to start from scratch. And then I also do have a lot of case studies and success stories from other people that have bought websites, grown them, and eventually sold them. So there's also a great book that I think is behind me somewhere. It's called Buy Then Build. That is by one of the brokers over at Quiet Light Brokerage, that if people want to look into that business model that I just explained about buying a business, what to look for, and then, you know, how that can actually oftentimes be a lot better than building from scratch.

Yeah. Let's go a bit deeper into your family to an extent. Do you, by design, look for businesses that I don't want to say are passive because it's obviously active work you're doing, but you're not doing client work where someone's asking you questions while you're taking your kids to the camp or something like that. Is that part of your lifestyle that.

You'Re building around 100%? Yeah, absolutely. I want to be involved in businesses where it doesn't really matter if I decide not to work that day. Right. It's not that big a deal. I mean, it's. And it goes beyond a little bit of just trading time for money. Like, I certainly don't want to get involved in that business where I'm doing, you know, any type of, like you said, client work that relies on me specifically. I really just want to be involved in businesses where I can apply my expertise when I have time, and so that hopefully those things grow over time. And so flexibility is a big thing for me, being able to make my own schedule and not be reliant on other people to make those decisions. So I have several businesses that I'm involved with, some that I work on a lot and others that I only work on when I have time. And if I ever feel overwhelmed and have a profitable business, I figure out, okay, who can I hire to start replacing some of the time that I'm spending. And yes, that'll cut into my profit margins a little bit, but I maximize for time. And so that is definitely a huge part of what I do day to day.

Well, Spencer, I don't want to take up too much your time here, but where can we learn more about you? And I'm going to ask you one more question. You mentioned all the books, so where can we learn more about you? And what is one book that you enjoy recommending.

So people can find more about me@nichepursuits.com I do have a podcast and so they can go to, you know, anywhere where podcasts are and join the Niche Pursuits podcast. They can follow along. I interview a lot of guests that also share their success stories. And then if they're interested in link whisperer, that's linkwhisperer.com it's a internal linking tool, WordPress plugin that, that people can check out. Now, a book. You know, there are lots of really, really good books. I do enjoy Atomic Habits. That is a great book for just sort of developing. Yeah, those microhabits throughout your life that can help you achieve greater things by James Clear. Another one that is that I enjoyed is called Quiet. I forgot the subtitle. Exactly. But it's essentially about the power of introverts in a world that can't stop talking. I'm very much an introvert, you know, except when I'm on a podcast. I'm happy to share, but there's something to focusing in your own space and finding a little quiet spot and doing things that matter most to you. Right. Instead of trying to figure out what is the world trying to tell you to do. You know, there's so many successful entrepreneurs that have found a way to kind of go their own path and do that, even though they might be an introvert. Right. And can come up with a great idea on their own Anyways. And so that's a great book. It's called Quiet by. I think Susan Cain is the author of that one.

Awesome. So I'm going to add those to my list. But Spencer, this has been amazing. I'm so glad that ConvertKit brought us together. I'm going to definitely check out your podcast and your book recommendations. So I appreciate your time and thanks for being on here.

Thank you Terry. And thank you everybody for listening. It's been a pleasure.

Thank you. And that's our show for today. You can learn more about Spencer and his work by visiting nichepursuits.com thanks again for listening and I'll catch up with you next time. Apply what you've learned on today's show. You'll find the show notes and more resources at Terryrice Co podcast. Again, that's TerryRice Co podcast, and the best way to support this podcast is by subscribing, telling a friend, and leaving a review. Also, you can get more tips by following me on Instagram terryrice or follow me on LinkedIn. This episode was produced by Josh Wilcox of Brooklyn Podcasting Studio and edited by Dan Lardy. Special thanks to my wife, Dominique, for keeping our kids relatively quiet as I recorded. Thanks again for listening. I'll see you next time.

Sam.