Click here to listen on iTunes

Marcus: Hey, Warriors! Welcome to another epic episode of the Warrior Podcast. We have an exciting episode ahead as we venture into the topics of what it takes to operate a digital business online and how to evaluate what your website is actually were. I think one of the biggest issues for internet marketers today is recognizing what the online business is worth, and secondly how to actually make money online in the buying and reselling space of websites, domains as well. So with that being said, I have a very special guest with me today, all the way from empireflippers.com, Justin Cooke. Justin is one of the biggest and brightest minds in the digital business space, with over 26 million dollars’ worth of sales under his belt at Empire Flippers. I’m excited to say that we get to pick his brain apart and him going between the US, Thailand, Vietnam, and the Philippines. He is basically living the digital lifestyle we’ve all dreamed of at one point. Justin is basically living proof that it’s possible right? So welcome, Justine. How are you going, buddy?

Justin: Good man, Marcus thanks for having me in this show.

Marcus:[laughs] Really happy to have you on board man. So, actually Justin, where are you at the moment?

Justin: I’m in Saigon, Vietnam right now; I actually have an apartment here and I spend most of my time here. I just got back from this trip to Phuket, Thailand with our team. We do this every 3-4 months or so. We bring about a dozen of us together for a month and have an exotic location and we get to work together. Our team is distributed, meaning they work somewhere in Colombia, somewhere in the US, somewhere in South East Asia. And 3 times a year or so we just kind of get a run together because we don’t have an office and it kind of gives us a chance to work together, get to know each other and down some beers.

Marcus: Dude that’s epic. Wait, Hang on, I just want to clarify, you guys don’t have an office?

Justin: No office, I’m in my apartment right now, sometimes we’ll rent space. So for this trip in Phuket, there is this like 10-bedroom, 3 apartment floor we basically took over in this place. So that was our office for the month. We also live there and ate there and work there. We rented offices in Manila for brief periods of time when we had some of our team that are training. My business partner is based on Manila. So we will sometimes run offices, it’s one of those temporary office. We will do like a readjust Office or something. We are non-office based; I’m not a fan myself. I don’t love offices; I do coffee shops and like hotels, bars, and restaurant sometimes. But I’m not an office guy.

Marcus:[laughs] Living like a true Warrior, buddy. [laughs] Listen, man, I think one of the coolest things I like about the EmpireFlipper’s team is you guys are based all over, you have some of the coolest people working in a team too. And I remember going through your about page and seeing James Howitt’s beard giving rent fin skin or giving a good run for his money. I had a conversation with Tim about that whose I head a worry of the moment. We had a good crack over the laugh over that one.

Justin: Yeah, James’ beard is legendary. He’s a great dude. I think he is the only bearded guy on the team actually. No, no, Alex grown out a beard too. We got a couple of them. But they are definitely the underdogs in the crew right now.

Marcus:[laughs] Well alright man, I guess like today I really want to sort of pick your brain and go through I guess, obviously you guys, like you said, you don’t have an office. That’s pretty incredible to me. To operate a fully functional business that’s 26 million dollars’ worth of sales, without an office. That’s kind of a big deal. So I’m really happy to have you on board and getting to pick your brain. So I was actually going to ask you as my very first question where you guys are running from an establishing a home but that kind of voids that question really quick doesn’t it? So what’s the team like for you guys? Because I don’t know the way you pack up as well. You guys are a buying and selling marketplace for websites digital businesses online. When you first started, did you guys bring someone on board because you needed them at that time? Or did you guys actually have a mapped out to-do list, and then worked out to hire the right people to bring on board?

Justin: Yes, so Joe and I, You know, it was just us at start. We’d run outsourcing company previously, we had a little bit of head start there. We have a team in the Philippines helping us, but at some point, we had a couple of friends that were part of a group called the tropical MBA and we were talking about this before we got into the show, They run like something called the Dynamite Circle. And they have started hiring these apprentices. And they were paying them 1000 bucks or 1500 bucks a month. Come halfway around the world and work out the Philippines with them and kind of help them grow their business. They were pretty small this time. Joe and I were like “I don’t know what kind of shmucks would come halfway around the world for 1500 bucks a month, to work at some crazy little place. Who in the right mind would do that?” So we just freaking not question about that. We went up to Puerto Galera in the Philippines and met one of their new hires, and this dude was sharp man, He was like on point, a good marketer, just a good young kind of like excited guy working on their team. And we're like “wow! Maybe this isn’t such a crazy idea, maybe we could actually get some good people” So we decided to follow their model and setup an apprentice program. So instead of a straight hire, we said “Look we are going to bring people into this kind of lifestyle.” And we are in the Philippines have time traveling, South East Asia and part of it and we love what we are doing. It’s amazing. How do we get more people involve? We’ll get them to come over here, work with us, help us grow our business and also introduce them to this thing that we love. So basically reach out to our audience and said “Look, would anyone like to do this?” and the response was overwhelming. So we got a ton of people applying. So this was good for us for a couple of reasons, Number 1, we are able to introduce them to this thing and save money in the process. I mean to start off we are only paying, we paid the room and board and we also give them like a thousand bucks a month. So relatively cheap for us to get someone on board. So initially we have to raise their pay after this 6 month apprenticeship but it’s a wage kind of get them started on the cheap because they don’t know much when they start. So we have to do a lot of training and put a lot of time in. The other side of the apprenticeship is that we have to; you know we are very transparent. Like externally like across the rooms but also internally. So we were like “We will show you the business. There’s nothing, we are not hiding stuff behind the curtain. You’re going to see everything, you’re going to see Joe and I interact and how we work together. And so we started that apprenticeship. We started with 1 and now we’ve got through that apprentice program we’ve got around about a dozen people that we brought on board and that are currently working for us.

Marcus: Wow that’s impressive. Where are they based?

Justin: Well we were just Phuket days ago

Marcus: Oh nice

Justin: But some of them are in Colombia, another one is in Brazil, got a couple of guys here in Saigon with me, one person in Manila, so kind of allover. Originally when we were starting out just a couple of us, we were all in South East Asia and Joe and I are really adamant about bringing them out and having them stay close to us. So we could easily work together. There was a cheap flight if you want to go to Manila, Saigon or whatever. But as we’ve grown and people are married and people have different travel interest. So we’ve kind of like open it up a little bit and we have people living and working all over now.

Marcus: Okay, So, I mean with that being said, have you actually found operating from abroad with managing all over the apprentices oversea. Like you mentioned they’ve come from Colombia, Brazil, and Manila as well; did you sort of pull them into a single pool and manage them, there and then? Like physically for the period or are you just managing from abroad with that.

Justin: Yeah, no, we had to bring them over so that was an absolute requirement. So most of them are American, we’ve got a Kiwi; we’ve got a British guy. So we got a couple but most of them are American but we brought them over to South East Asia to work with us directly first. So to start it was in the Philippines but recently it’s been on Saigon, Vietnam. But we will have them work closely for normally about 6 months at least. And then they can kind of branch out although we ask them to stay within South East Asia. And then after a year, they can go a little further out. But only we would have done it without having them come out. Because our business is not like, it’s not a traditional business and that there are a ton of companies out there doing it and that the job roles are well defined so because of that we need them close because there's a lot to learn about our business. It’s not like there a lot of people out there doing what we do. So we don’t have this huge pool of experience to hire from, we’ve got to train them from scratch. So having them close just
makes it a lot easier to get that done.

Marcus: I actually really admire the business you guys take, its actually really similar to a good friend of mine, Dennis Hue from Bleachmetrics system of learn, do, and teach. So it’s really good to see that it stretches beyond what Dennis does and the social application side of things with Bleachmetrics and Facebook. And it could actually be applied in other business areas online as well. It’s amazing to see that it’s performing well.

Justin: Well one of the things Joe and I have gone back and forth honest-like. We’ve asked ourselves like if we had an office, we just buckle down and went to the US which we don’t want to do for lifestyle reason and a whole bunch of reason. Let’s just get an office in Houston, We’ve got friends over there, that’s basically done this and buckle down for a couple of years, put everyone on a room and get some stuff done. Are we hurting our business by not doing that? And then we took a step backwards and look. That’s the wrong question to ask, it’s what kind of business do we want to build? We actually were saying that. [laughs] I’m not wording it from someone else. I can’t pass the buck on this one. Like the business we build is determined by us. So why not build the kind of business that we want. I mean it’s not just what’s best for the business; it’s what we want out of the business, what we want the business to be. And so we want the business to be a team of remote people that are able to bring themselves together for the good of the business. And that’s what we want so that’s the type of business we are building.

Marcus: Okay and I noticed with the Empire Flippers, I just went through the actual homepage. You guys have a whole bunch of listings surrounding Amazon FBA’s, a couple of private blog networks; a couple of sports-based websites as well. What is sort like the hottest trends that you sort of noticing in the actual marketplace as far as buying and reselling or even just selling websites at the moment?

Justin: Yeah well what’s interesting about us going buy and sell website's online business that we really lag the market. So we are not bleeding edge we kind of are in the tail end. And the reason is if you start a business, it’s going to take a couple of years to kind of build it, make it profitable, scale it, and then eventually sell it. A couple of years ago 2-3-4 years ago, everyone was kind of starting FBA. Everyone was starting FBA and the amazing selling machine. All these courses were coming out like it was getting really popular. We saw that coming, we didn’t actually sell our first FBA business until I think it was December 2016? No, Yeah I don’t know maybe it's December 2015 we had our first listing. We started selling in 2016, that’s right. So December 2015 we got our first listing in the marketplace and 2016 we started selling. So that's way behind when Amazon FBA first started taking off. That’s because it took a few years for us to build our business. So I’ll tell you right now in terms of the business better we’ve seen a lot of Amazon FBA. We’ve list a few Amazon merch businesses. We continue to see some server space businesses. A lot of Amazon associates, websites, we still see the absent sites, which is where we kind of originally came from. And other some affiliate sites. Drop shipping sites, we see a lot of 5 figure and like low 6 figure drop shipping sites. Not a lot of bigger drop shipping sites but definitely on the 5 – 40 thousand to 250 thousand range. We see quite a bit of those as well.

Marcus: Okay, yeah I mean with I guess the Amazon FBA sites basically, I haven’t really ever seen many of them pop up until recently actually that it seems to be a significant boom of them coming about; even with like the classic Amazon affiliates. You know there's been a whole bunch of software out there that all is generating these websites and to some degree, these websites have some form of value but I tend to find that it doesn’t make too much sense if there is no traffic on these sites as well. That’s just from personal observation on some of them. But like I said you guys are running 26 million dollars’ worth of websites ready thru your platform thru your marketplace. And the 1st million, that would have been a milestone in itself. Like I think reaching the 1st million and I guess business sales is quite impressive. You know everybody is trying to get and dig in that sort of market. Now I just want to flip things over a little bit cause I know for a fact that you are a man out of my own heart when you talk about sales funnels, when you talk about automations, when you talk about all these wonderful things about bringing the models of marketing 2017 to life. I think that this year there is a giant push on anything related to automation and artificial intelligence. I remember Facebook just had an instance where they just had to kill 2 of their bots basically because they're creating their own English language that nobody could understand right? And this giant string that’s making things faster. And it’s been fun I think for a lot of these businesses to try and get a bot to react human without being too human. So with Empire Flippers and I guess the way you guys are running your model as well, have you found to some degree like a self-service system is starting to take over I guess is a better experience to dealing with a specialist? Or do you guys still feel like a specialist is still the best method of user satisfaction?

Justin: Yes interesting, so in this industry it kind of went from tech and automation which should be a business like Flipper, so they were kind of rulers than us and they were a marketplace, actually auction house for listing and selling website and online businesses. And the problem with that is people are selling like larger businesses; let’s say 5-6-7 figure businesses aren’t as comfortable as just using the platform itself. They want someone to talk to, they want someone to work with the details with and that’s also something that’s going to change you and like head more towards the higher touch, the white glove service is what we call it. Because our customers were demanding it. So I don’t know, we use a lot of automations in terms of like we have a Hub Spot, for example, we have an enterprise level Hub Spot which is ridiculously expensive. But we use the hell out of that in terms of like making sure we’re tagging the correct prospects and moving them along the funnel and using their deals and it’s really really helpful for us, both on the sales and marketing side. But in terms of like touching customers thru bots or using automations like that, we found that less effective. In fact, even when we use macros from our customer servers we have just under a dozen people in the Philippines that work for us and they help us in the customer service staff. Even the macros can be a little alarming or disturbing to customers to which we hardly use those sparingly and we have a tier 2 traffic kinds of like does the more right level of touch. So I don’t see it heading towards that, I see more kind of human interaction, more white-glove service, more connections with people, especially on the larger businesses. So maybe automations on the much smaller ones so under 20 thousand or so in terms of evaluations. And I think Flipper does a really good job and that space. But when you’re talking about 5-6 larger 5-6-7 figure businesses, I don’t see that “touch factor” going away anytime soon.

Marcus: Yeah, I think it’s funny that you mention Flipper.com because one of my friends actually works there. And it’s always fun to sort of see what the market is as far as buying and selling demands in businesses are. But the one thing that really struck out to me between you guys is Empire Flippers tends to hold a lot of a unanimity before someone makes a deposit on an actual business. So I was actually really curious about the actual mentality is behind that because you go on flipper.com and its variable right? If they’ve got this is mywebsite.com or mywebsite.ca or what not. Actually listed out and there is some that are anonymous so taking on board a completely anonymize marketplace and listings that only give out specific data like demand authority for Moz or what’s the page use or how much revenue is it generating. I just wanted to see what the mentality behind keeping everything anonymous upfront is.

Justin: So when we were just starting out, we kind of build our own sites and we were making a little bit of money, we were selling them on Flipper, we realize there are people creating courses and I don’t have words for it actually [laughs] They were creating courses like “here is how you find profitable businesses, go to empire flippers on flipper look up the website switch line, look at the domain names, copy those and create sites.” There are courses being sold and giving away on that. And so every time we got more popular, every time we are doing a new listing on Flipper [inaudible] cause the buyer [inaudible] doesn’t copycats after the fact which adds pressure and adds competition it could be problematic. So we have buyers that actually ask us “Look, can you sell to us privately or directly without even telling us the URL, without even telling us the niche, will just buy for it.” Multiple buyers sell like this which I think is crazy but from their perspective it makes sense. “Look, we know, we want this cash flowing websites; we don’t even care what the domain name is.” These are 4 figure and low 5 figure sites. And I said, “Oh my God, okay, I guess we’ll try that out.” And so we did that and it worked well. As we started doing bigger businesses that I mean like someone by 140 thousand dollar business completely side on the scene so we changed the process, and we do this very differently than any competitors that we know of where we charge a refundable deposit. So for example 100 thousand dollar website for sale, we charge a prospective buyer 5000 dollar refundable deposit and our reasoning behind this is, we could just have them sign a non-disclosure agreement, NDA, right and a lot of this do this digitally, and you go, you put your little stamp there and your initials and it’s good to go and then they show you the business. So our thought process like, look, anyone could sign NDA and we are dealing with an American national living in Hong Kong some are Australian in Lisbon, like how are you going to enforce the NDA, in what jurisdiction, it’s ridiculous, it’s just not going to happen. So rather than using an NDA why don’t we charge something that’s tangible, like we actually charge them money on their credit card or have them wire us the money directly and couple of things, You’ve got to have 5 thousand dollars available on a credit card or wire, knocks out a bunch of people that have 0 money available, right? So they're out of the picture, they can’t do it. And that’s, that’s helpful from that perspective but that’s also a bigger step than signing a Non Enforceable NDA, and so we ran with the deposit model, and it’s been super effective, now, at any one time, we have multiple deposits. We give it back at any time for any reason. In fact, if you ultimately buy the business or the website, we refund the credit card deposit and require a wire from you, so we’re not keeping deposits, we’re not doing any of that, and buyers understood. Especially, the first time maybe they’re a little hesitant to hear that, they’re like “I don’t know about this.” But once they’ve done it a couple of times they get into the swing of things and they’re cool with it. Sellers love it too, and its funny, this is really funny Marcus, Sellers love the fact that we charge a deposit, cause they’re like “Good, I could protect my net and that be less competition.” And they think we do it for their benefit, but the truth is it’s not for the seller’s benefit, I’m glad that they find value in it but this is for the buyer, most of the businesses we list sell. So having the deposit Prots in place so we don’t get a dozen or 2 dozen or 3 dozen copycats protects the in the buyer, right? So we’re actually looking to protect the buyer to their benefit even thou sellers think it’s theirs.

Marcus: Okay, Yeah, I think it’s pretty interesting when I guess sellers come up to you and be like “Oh this is actually really cool for us” when you didn’t even, you know, design the basis of the model to benefit them initially, so to say, [laughs]

Justin: /I’m glad they’re happy about it / It’s really [inaudible]/ I’m glad, I’m glad they’ve taken value

Marcus: /yeah /I’m glad they’re happy about it/ well, like, you know, that’s the first, yeah

Justin: Yeah exactly.

Marcus: With that being said like, you guys been in operations for a few years now, and obviously you guys would’ve done a whole bunch different changes and tweaks to the model, to the business, to, you know the landing page, to how you’re talking to the customers. In your perspective being an Empire Flippers, what’s been the most effective implementation that you guys have found in securing, and this is a big question, securing the trust online between a buyer and seller, what’s the biggest implementation you’ve done to improve that.

Justin: Transparency. No question, like I’ve explained what that means. You know, from the day we started, right, we, in our previous businesses, and kinda previous business experience order for other companies, Joe and I were both kinda, we bought into the model that if you’ve got something working you don’t tell anyone, if it's working well, you’ve got a business going, you just quietly, keep raining the cash down and keep the business going, scale as much you can and don’t tell anyone about it. Be, you know, be secretive and that’s how we operated and so with the business we have now, Empire Flippers, we flipped the script on that. So look, let’s try something else, I mean it feels better to just say “look, here’s exactly where we’re at, at this speed. Perfectly honest where we’re at and if that discourages some people, great, if that encourages others, great. But we will be giving the customers that kind of like that approach, knows the people we want to talk to. And so, we just said “look this is exactly how we build the sites we are building back when we used to build sites are solves. This is exactly where we’re coming from and how we get businesses, who we want to work with, this is who’s not a good fit for us and is very clear we did, we’ve done quarterly reports for many years now talking about the money we brought in, you know, we are talking about 26 million, that’s in total sales. We generally, we charge 15% success fee on businesses, so we have 15% of that money, and we kinda break down exactly how that money comes in and what with it we keep, that kind of thing. We’ve done this for years and what it's done is that it’s really attracted costumers that appreciate the way we do businesses, that like the way we do businesses, and that are kind of a line with us. Part of that is doing a podcast and you know this is, as hosting a podcast, but when people are listening to you in their earbuds like they get a feel for how you do business, you can’t BS your way thru that, Maybe you can for a bit. I probably do that for one episode, you know we got 150-160 something podcast episodes, I have another show that I do, I’ve done a ton of interviews and you listen to a few of those and you’re going to get a really good sense for who I am and how I do business. And there’s no way around that. So that’s a great way for you to find your tribe, your customers and the people that like the way you do business. So being transparent and then, I think, well, doing a podcast interview has been tremendously successful for our business.

Marcus: Okay, yeah, I had to agree with you on that, podcast is sort of the booming thing even in Australia right now, on radio, we actually, it’s funny mentioning on radio, but [laughs] here we have advertisements for podcast competitions to finding Australia’s best podcaster at the moment

Justin: Oh that’s fun

Marcus: Yeah, which is amazing because it’s actually being run of a free to air public radio station to moving to Digital? So I think having that trust and sincerity, not just online but you’re right, having someone tell you what’s truth and transparency is rather than just reading it on a page makes a wealthy difference there. And speaking—

Justin: Think about this Marcus we have people that might, on my business partner, on the marketing, kind of operational customer service side, my business partner is on the sales side, but he’ll go phone call someone whose listen to, more than a dozen episodes that come on the show, right? And they’ll come to talk to him like “Oh Joe, it’s so great to talk to you, by the way, love you podcast” and then there’s no question of like trying to build trust, they already know they can trust us “So look Joe, I love the way you operate, I want to buy a business from you, not really sure what I should get, here are kinda of my requirements, here’s where I’m good at, what do you think?” And so like, there’s no trying to build social proof with him or explain who we are, he knows who we are,it’s effectively just trying to match him with the business that kinda meets his interest and skill sets, So that’s a hella lot of easier proposition than trying to sell them online. “No look, I promise we’re legit, here’s how to stock” We have to do it over the phone from half a world away, it makes it a bit more challenging than if they already know and selected you.

Marcus: Yeah, that makes, it makes a lot of difference with trust. The big thing that you guys do is evaluate website values and I think a lot of trust goes into that, especially of somethings that’s, I mean software based initially but then you actually go thru and actually accurate and come thru. I think that’s, most businesses that sort of a service methodology that I think everyone wants to get to, to a point, right? Where they have a self-sustainable, self-service management system where people can just automatically buy on their own but, you know, to a deeper degree when they want to invest something bigger, and with a lot more, that they actually have someone there they can immediately have a sense of trust with, and I think building that authority thru podcast, thru content online definitely makes that big difference. Which is what I love about you guys having, I think you guys, did the last one was, was it wait but why? /yeah, yeah that was great.

Justin: /yeah, yeah, that was great; I’m a huge fan of his blog so getting him to the show is just plausible.

Marcus: Yeah, getting him to the show is just amazing. Particularly to the point where he’s just had Elon Musk on the phone [laughs] so, you know that’s really brilliant, I’ll tell you that. But that being said, when you guys are evaluating the value of a website, how do you dictate what the vital signs are in evaluating the prices is roughly going to be considering, this is a big thing too cause obviously this is a digital landmark, it’s not a physical landmark, so to say, but how do you take those vital signs, understand what the vital signs are and not mistake them as a vanity metric?

Justin: So yeah, there are 2 different things, like there are businesses that do deal with like domains, right? Which are having really no earnings or whatever? In our opinion, highly speculative but that’s not the space we’re in. We don’t deal with that, we are dealing with actual online businesses, now, sometimes those are, you know, the front for those is a website, sometimes it’s an FBA business for example, where it makes money online but doesn’t necessarily have a website attached. There’s all over types of online businesses but so is the website, sometimes it’s not. But primarily how those are valued is on some multiples on their earnings, so you know, this isn’t the valley, we are not dealing with the next Twitter, we are not dealing with the next Facebook, I mean God bless them, those are amazing companies, but most of us aren’t building the next Facebook. We are building an 80 thousand dollar website, we are building a 600 thousand dollar service-based businesses, we are building a 1.8 million dollar Amazon FBA Business, right?, so those are the types of businesses we are building, not the 50 billion dollars Facebook, whatever, so we, you know, they get crazy multiples in the valley but the rest of us, which is 98% percent of us, we are going to be selling our businesses based on multiple of profits. So how that generally works is, we’ll look at the last 12 months of earnings, let’s say you have an e-commerce business, you’re making 30 thousand dollars a month, you have a 33% profit margin meaning you’re making 10 thousand dollars a month on average, now Christmas is higher obviously maybe June is lower but 10 thousand bucks a month of profit on average on the last 12 months, we’ll take that and multiply it by a multiple. That’s generally somewhere between 20x and 40x right? So 10 thousand a month, your businesses will generally worth somewhere in between 20, well 10 thousand be 2 hundred thousand dollars and 400 thousand dollars depending, Now Marcus you’ll just say well that’s a ridiculously large range [laughs] I’d like to know how you’ll get 200 or 400 makes a big difference to me. And so a lot of things go into that, right, how long is the business been around, what’s the trajectory like, how stable are your monetization methods, how stable is your traffic, how scalable is your business, how much work is required from you versus people on process that you have in place. So there’s a lot of factor going to determining what that multiple is. I guess if you say you’re kind of looking for a general range, for econ, for AdSense, Amazon type sites you’re probably looking between 24 and 32 on average. For e-commerce and general, you’re probably looking at around the same range. For SAS businesses you’re probably looking more at the, you know, 28-40x and up at range so it depends by monetization but most importantly what the business looks like. One of the sellers get wrong all the time and we have to be the bearer of bad news on this cause they think I invested all this money in the technology, I invested 200 thousand dollars in this business, its worth, whatever its worth is worth that plus 200 thousand cause I’m going to get my 200 thousand back right? Well no, I mean if your business isn’t making anything, you built the start out and failed to launch and you put 200 thousand in, I’m sorry to tell you but that’s a waste of 200 thousand dollars. No one wants; no buyer wants to pay you back for your mistake, right? So that’s kind of the bad news there’s that we’re stuck particularly with kind of the Silicon Valley entrepreneurs and then they’re kinda like “look I put all this money into it” it could crush it and then hands to the right person, that sounds awesome why don’t you partner with that person or do it yourself and get a earning, profit, and then we could base on a multiple of that profit. So, unfortunately, we’re just not able to do businesses that arc, our earning or our profitable, that’s not going to work for us.

Marcus: Yeah I think, its pretty eye-opening when you got thru and tell someone “you’ve basically just miss invested 200 thousand dollars into software that doesn’t work.”

Justin: Sucks

Marcus: Ooh yeah, [laughs]

Justin: People want for social followers too, like they’re like “look I think my business should worth more than a multiple of that profit because I’ve got a 100 thousand twitter followers or whatever. They may or may not; probably they are aware [laughs] but there are up and just go buy a gazillion fake twitter followers. So like add on to your multiple heavily for your social media following that may or may not actually care about what you’re saying on social media is not that impressive. So you’re not going to get a huge value-add on your gazillion Facebook likes that you paid, you know, a penny for like for. That’s /not gone happen

Marcus: / that’s not going to happen. Yeah. So I have a really big question for you, on the basis of saying, you know like, telling someone that their 200 thousand dollar software that they’ve invested in basically sucks, the big question is as a digital business coming to an exit strategy or planning an exit strategy, how do they actually maintain a maximum amount of return as possible based on that?

Justin: So there are 2 big factors right, 1 is the net profit that’s earning and that’s generally that’s for the last 12 months, we will cut that down to 6 months by the way if its like heavily growing, like if where was 12 months ago is barely where it’s now or if its heavily declining if it was earning a lot previously and in the last 6 months it hasn’t been, but normally won't 12 months. So we are looking at 12 months as profit. You should just start thinking about your business, at least 12 months out. So if you’re going to be planning to branch out the exit, you should start thinking about that because there are things you can do over the next 12 months to really maximize your margin and ultimately your net profit. So cutting out the exploratory marketing spent, things that are not delivering in our why, you know this, sometimes just a testing marketing channels and it sucks. But you got the ones that are working. It’s better to cut that spend and reinvest that money into the profitable, things that are getting ROY on. It gives you cut cost that are not necessary, it gives you add people where needed to help grow the business or help automate, to get the amount of hours putting in the business out. It sounds counter-intuitive, cause it may hurt the profit but it will make your business more sellable. If you’re putting 30 hours a week and the business makes 3-4 thousand dollars a month. Having it drop to, like 2 grand a month because you had to put some virtual assistance in or something but cutting you to 5 hours a week can be super valuable and that it makes your business sellable where it wasn’t sellable before. So starting to think about how you can improve that net profit, 12 months status is really important. The next thing to do is to have all of the other things which we really didn’t get to in the show but we talk about Empireflipper.com but having those things works so a trajectory that’s pausing. You’re earning more every month or every quarter or anywhere within the previous month or quarter. I’m having a diversified traffic channels, having solid monetization methods in place, having people on the process in there that keeps you from putting a ton manual work in the business. So all these different things that improve the multiple, so basically maximize your net profit over the 12 months before you list it inside your business and then doing all the additional things that will improve your multiple and get you to the higher end of that range.

Marcus: Do you think it’s viable for someone to actually, perpetually build, let’s say, for instance, I’ve got money to spend right? So do you think it’s viable for me as a person to then basically build like 10-20 Amazon FBA websites or drop shipment websites or e-commerce sites build them up and basically after 12 months start to sell and restart? As a profitable

Justin: Yeah absolutely, we will show you how to do that. You can do it multiple ways. We have one guy that I know and I’ve known for years and he’ll build maybe sort a dozen-2 dozen sites a year, they’re traditionally Amazon associates sites and maybe some AdSense sites but usually Amazon associates. He’ll kinda build them up and sell them between when their, 18-36 months old. And so he has been doing this for years and so he is in the point now where last year a year and a half or so, he’s been selling them off and he’s continue to sell them off maybe a dozen a year or so with us. And so that’s kind of his process that makes a couple of hundred thousand dollars a year by doing that, continue to start them again from scratch and you know, takes him a year and a half to 3-year process but he’s constantly has them in the pipeline, right? Keeps pumping them out and then selling them when they rise to the top. There’s another group, this is a partnership where they do only a couple of businesses a year they do like 3 or 4 but they tend to sell for quite a bit more, so where’s that first guy was doing amidst all his sites were somewhere between 20 or maybe 80 to a 100 thousand dollars, per site maybe 20 to 60. This other guys would sell maybe kinda like 80 on the low end up to like 300 thousand dollars. They have some that failed so like, to work out or just not were selling but the ones that are a win are 200-300 thousand dollars, so they make, you know, half a million a year for the last year and a half, almost 2 years by doing this. They do this 3-4 sites a year put quite a bit time, effort, energy into each one, bud each one of them, you know, into a sellable amount that’s, you know, high 5 figures too low to mid 6 figures.

Marcus: Okay cool, I think that was the last question for our time unfortunately because, you know I know I’ve sorta got a limited time with you and your busy schedule and you know, managing everybody abroad. So, actually before you, before I let you go, the evaluation tour itself, so was that over on the empireflippers.com main website?

Justin: Yeah, so we have evaluation tool, it’s an automated tool that based on your inputs, your earnings, and everything will give you a multiple range. I told you there are 2 things, you know, a business is valued on, about how much it earns and that’s multiply by a multiple. So what it will do is based on your input it will give you a range, so let’s say you have an FBA business that’s making 10 thousand dollars a month in profit and they’ll tell you based on your inputs, let’s say it was like 26x to 30x, so it gives you a value somewhere between 260 – 300 thousand dollars. Well, you’ll say, Justin that’s smart, specific enough, well that’s just kinda rough estimate after you actually submit your business for sale with us and to get it listed, we are going to go to the process of fine tuning that. So we’ll give you an exact multiple, tell you “okay, in that range it’s in the 26x side or it’s in the 29x side based on this factors. So we kinda narrow it down. It’s actually a tool that we use to list, price, and sell businesses on a marketplace and it’s free to use, you can check it out empireflippers.com/valuation-tool

Marcus: Okay great, thank you very much for your time today Justin, I really appreciate you taking a time out of your day to talk thru what Empire Flippers is doing, you know managing abroad, you know living the digital lifestyle is, like I said something we all dreamt of, so it’s good to see someone’s actually doing it and you know, live and able to talk to you in person about it too, and you know, really thank you for your time. Alright, guys, well that’s all we have time for today and hopefully, we’ll see you on the next episode. Thank you!

Justin: Thanks, Marcus.