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I was searching for a partner recently to help me rank a bunch of vids. I happened to hire a guy who's ranked very highly for a competitive term. I hired him because he out SEO'd all of his competition who were trying to get me to click on their PPC ad, and then buy their SEO. He beat all the guys who say they are good, but their own stuff doesn't rank.

I'm going to tell you how this guy turned $600 in over $100k in about 70 days.
He created a video for $100. Then he invested $500 + his own labor in ranking it. He attracted my attention when I was searching and I hired him.

He took every dollar I spent with him (small 5 figure sum so far) and invested it in a combination of more ranking + PPC. He didn't set aside a nickel for taxes, savings, the mortgage, nothing. Every dime - all in.

He brilliantly connected the PPC to his high Google ranking by basically saying; "I am the real deal, if you don't believe me, click here to go back to Google and see for yourself."

This activity put him in a position to raise his prices... significantly. One of the best positioning plays I've ever seen - personally.

That's the story in a nutshell. Nothing fancy - pretty anti-climactic... but there's a lot to be learned here...

In talking to this guy - he has big goals. He doesn't see SEO as a gateway to a $50k - $150k per year income. He sees SEO as a way to make himself a millionaire. $100k in 70 days is a helluva start...

Let me re-iterate, because in his mind he wanted to make himself a millionaire from SEO, he devised a strategy, implemented it, and had the guts to invest in it aggressively... Why can't you?

Notice how his initial investment was $600? I know a lot of Warriors would crap their pants at the thought of spending $600 on marketing. He started with a really big goal... But his start was small.

If you went out and closed that proverbial "$5k deal" - what will you spend it on??? After the months of struggling to finally snag one of those bad boys, would you splurge, pay bills, or invest every dime of it in getting more $5k deals?

Do you have the guts to be late on the rent because you'd rather spend the rent money on 1,000 handwritten and personally addressed letters to business owners? Or maybe it's not letters, maybe it's $5k on whatever you did to get the $5k deal in the first place.

I'm starting to see patterns the more and more I deal with folks, from vendors, partners, clients, fellow Warriors, etc. Those who are spending the most, are making the most. My client is crushing it because he spends more than his competition. My vendors are crushing it.

Do you have big goals? Are you actively making smart and aggressive investments to achieve them? Are you actively surrounding yourself with people who have bigger goals than you?


HERE'S A TEST

Assuming YOU had one of the following choice, which of these would you choose? Let's assume there's a guy who has a firm that does whatever it is that you do - mobile, design, SEO, whatever. This guy has a great business, team, staff, reviews, customer roll, the works. He's been the full time manager of this business and now he just wants to settle down, but he doesn't want to send his people away without a job. You and he have a great relationship and he lets you know he wants out, and he offers you two ways in.

  1. He offers you a job as the full time manager - he'll be an "absent owner" but you'll run the entire ship for a salary of $100k per year + bonus.
  2. He offers you to buy his business - with owner financing. He'll take whatever you can pony up at the moment, even if it's $100, and he'll collect $6k per month, for 36 months. After that, the business is entirely yours. Payments are set to start 30 days after transition, one missed payment means you're out the door - fast.

The owners' take home pay is $150,000 EBITDA - before handing it to you - if you take it.

Which would you choose?

Why?

EDIT: Title suggested it was 60 days, I looked at the upload date on the guys' video and realized its closer to 70 days when I was writing this post. Apologies.
#$100k #days
  • Profile picture of the author DaniMc
    Originally Posted by TheBigBee View Post

    Those who are spending the most, are making the most.
    1. He offers you a job as the full time manager - he'll be an "absent owner" but you'll run the entire ship for a salary of $100k per year + bonus.
    2. He offers you to buy his business - with owner financing. He'll take whatever you can pony up at the moment, even if it's $100, and he'll collect $6k per month, for 36 months. After that, the business is entirely yours. Payments are set to start 30 days after transition, one missed payment means you're out the door - fast.

    The owners' take home pay is $150,000 EBITDA - before handing it to you - if you take it.

    Which would you choose?
    It's called cashflow. If a lot of money isn't flowing OUT of your business, you wont have much flowing in either. The goal is not to always have more coming in than going out. At first...you have what's called a burn rate. This is the rate at which you negative in cash. It's OK as long as every dollar you spend is an investment in future revenue. Eventually, those investments pay off.

    Your scenario is a little tight for some people.

    Option #1 is off the table - I occasionally have people try to pull me in and I just wont do it. I'm not an employee.

    First, you would be buying the business for $216,000. Hard to believe the owner is paying himself $150,000 annually and only selling for $216,000. I LOVE buying money on the cheap but that is a little extreme. I would get very deep into the diligence for an offer like that. Smells fishy.

    Let's assume all is on the up and up.

    If it's $150,000 EBITDA, and he is taking $6k a month - you are going to be living tight for those three years. Not a lot left over for the amount of work that will be done.

    The business is seriously undervalued, I would consider buying it, and then resell it at a premium with similar terms. So for those three years, it would be an arbitrage play.

    If I was broke, I would probably still take the deal. If I was already succeeding, I would probably take the deal and just do a slow merger into my business. Then again, I would probably just give the $216k upfront. EDIT - Scratch that. That would be dumb. I'd take him up on the offer and keep the cash in my accounts to use for business development.

    Over 10 years, It's $1.5mm - that is a huge ROI, provided it didn't take me away from my other projects.
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    • Profile picture of the author TheBigBee
      Originally Posted by Dan McCoy View Post

      I
      The business is seriously undervalued, I would consider buying it, and then resell it at a premium with similar terms. So for those three years, it would be an arbitrage play.

      If I was broke, I would probably still take the deal.
      Yes!! I would do two things then flip:
      1. Figure out if there are holes to fill in. For example, if upon investigation I uncover that they are not responding to leads within 5 minutes, then I instantly know by doing that, sales will bump. There's data to support that. If they are running PPC (especially outsourcing it), I'd bring in Trada and Pluralis to a) get rid of the costs of outsourcing PPC and b) enhance PPC conversions.
      2. Raise prices on everything - give a token with high "perceived" value before doing so.

      Then I'd flip so fast heads would roll!
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  • Profile picture of the author Claude Whitacre
    Originally Posted by TheBigBee View Post

    He took every dollar I spent with him (small 5 figure sum so far) and invested it in a combination of more ranking + PPC. He didn't set aside a nickel for taxes, savings, the mortgage, nothing. Every dime - all in.
    Many people don't have the cash flow (that's a guess) to treat profit as an investment. They treat it as income.

    It wasn't until I finally started learning marketing (as opposed to selling) and applying what I learned, that I was able to see my income really take off.

    If you catch a fish, you can eat it, or cut it up and use it as bait to catch more fish.

    Most never get out of the stage of catching one fish, and eating it. I hope that made sense.
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    • Profile picture of the author AndrewCavanagh
      Originally Posted by Claude Whitacre View Post

      Many people don't have the cash flow (that's a guess) to treat profit as an investment. They treat it as income.

      It wasn't until I finally started learning marketing (as opposed to selling) and applying what I learned, that I was able to see my income really take off.

      If you catch a fish, you can eat it, or cut it up and use it as bait to catch more fish.

      Most never get out of the stage of catching one fish, and eating it. I hope that made sense.
      Very well put and you've really hit the nail on the head.

      The other side of this is that most people have such a
      high personal cost of living (they spend too much, have
      too many repayments on things they don't need) that
      the money going out is huge.

      That makes it harder to invest.

      Understanding your own personal expenses as a business
      too can be a huge leap in understanding for many people.

      If you have a pile of basic living costs...repayments on
      a house, two cars, credit card debits, furniture repayments...
      the list goes on.

      Then your real disposable income is tiny.

      Many people who make six figure incomes have tiny
      disposable incomes because they're in personal debt up
      to their eyeballs.


      And then there are some very smart people who keep
      their personal living costs to a minimum and focus on
      having good cash reserves and reinvesting in their
      own business.

      Many years ago I read a book that studied some business
      people who got wealthy and financially independent
      quickly and stayed that way and their personal expenses
      (including car, housing, food, clothing, entertainment etc)
      were around 25% of their total incomes.

      When your personal costs are that low it's hard to put
      you under financial pressure so you tend to make better
      financial decisions and you're always cashed up when
      opportunities come.

      Kindest regards,
      Andrew Cavanagh
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