Jaryd Krause has successfully bought, grown and sold online businesses. Here he takes us through how to buy and integrate an online business with a traditional offline business to amplify growth.
@jaryd krause is an Online Business M&A Advisor with deep experience growing 7 & 8 Figure Online Businesses. In this discussion we talk about the huge potential for offline business owners to leverage online assets for grow, and also how to take advantage of the opportunities.
Jaryd shares his personal back story. From starting as a plumbing apprentice to becoming a leading M&A advisor in Online Businesses.
The conversation covers how traditional businesses can;
We also talk about;
Chapters
00:00Introduction to Online Business Acquisition
02:59Jared's Journey from Plumbing to Online Business
06:09The Synergy of Online and Offline Businesses
08:56Acquisition Strategies for Business Growth
11:46Leveraging Online Assets for Offline Success
15:06Exploring Marketplaces for Online Business Acquisition
18:01Understanding Business Valuation and Multiples
21:10Navigating the Online Business Landscape
23:51The Future of Business: Online and Offline Integration
26:42Diversifying Business Models
32:06Assessing Online Business Opportunities
36:03Learning from Mistakes in Acquisitions
40:12Strategies for Small Business Growth
44:05Empowering Small Businesses for Success
Michael (00:01.262)
Welcome in to the Owner to Owner podcast. It's edition 152. Jared Krauss joins me today. Hey Jared.
Jaryd Krause (00:10.559)
Hey, thank you so much for having me on Michael. Congrats on 152 episodes. It's great.
Michael (00:14.808)
Thank you. Yeah. It's a, whatever that is four and a half years, but there's some, there's lots in the tank. look, really, thank you so much for coming on. I was on your podcast maybe a month ago when we'll talk about that. The end, it's a really great resource and it's entirely relevant to the conversation we're about to have, which is really, how to, how to successfully acquire an online business. Jared's a special.
Jared is an &A advisor for specifically around online businesses and for online business owners. He's also a growth consultant. So if you've got an online business and you want to ramp it up, Jared is someone you can talk to about that. And mainly it's with seven and eight figure businesses. I don't use that terminology a lot on the podcast, but it's, you know,
Is that still?
Where you play? Yeah. Yeah. Yeah.
Jaryd Krause (01:19.581)
Yeah, absolutely. Yeah, still play in that range. You know, I started I started buying online businesses, the company to help people, you know, just replace their income and buy, you know, five to six bigger businesses. And we still have that, you know, it's still a great resource and course and coaching where people can
Michael (01:39.372)
Yep. Yeah.
Jaryd Krause (01:40.093)
get that, but yeah, if somebody wants to work with me as a, as a buyer side advisor, it's seven, eight figures and, yeah, thanks for mentioning that. Also, think it's worth people noting that on the podcast that you came on is episode three, one, one, which is, it's a great, you know, it's a great podcast episode to listen to you guys. I am biased, but like, just, biased towards talking to you, Michael. It's always a good time, you know, we have.
Michael (01:44.984)
Yeah, which is.
Michael (02:00.27)
That's good. We've done it a few times. So anyway, like it, so just a couple of things, know, seven and eight figure. So anywhere from a million dollars of value up, the eight figure kicks in at 10. You know, as I say, it's, I just want to put that in dollar terms. But the themes and while we're chatting today, we're going to tap into Jared's deep.
Jaryd Krause (02:20.179)
Yeah.
Michael (02:29.577)
online experience, but he also started, didn't, you weren't born into online. We'll get to that. You started, in a completely different field, but we really want to drive home for small business owners, the opportunities with online. don't think small businesses across the board are fully taken advantage of online. And there's still a, I was looking earlier, there's a lot of businesses, small businesses that still
Jaryd Krause (02:34.388)
Mm.
Michael (02:59.213)
don't have a website. that's it. And look, I guess some of them will never need one never, but so today we're going to talk about the reasons you might consider maybe leapfrogging that and buying some online businesses that can pair into your existing offline businesses. And we're going to talk to you about how you do that and where you do that. So they're the things it's really to drive home this idea that
Jaryd Krause (03:00.819)
Yeah, yes, wow.
Michael (03:29.197)
I think you need to explore, it's been like this for a long time, but really, this is the episode to really think a bit deeper and harder about why you need to be online, if not 100 % significantly as an adjunct to your offline business. So, hey Jared, tell us about yourself. Where did you get started? Where are you based and what are your main business?
operations and then we'll...
Jaryd Krause (04:02.045)
Yeah, cool. Thanks. Yeah, can't wait to dive into this chat about just the juicy stuff of online businesses and acquiring them for your for your primary say, brick and mortar business. Now. Yeah, I mean, I'm a plumber, right? Like I'm a I'm a apprentice. I was an apprentice plumber. Did that straight out of school what I did at school based actually grew up on the Gold Coast.
And yeah, just, just didn't like it. Like I ended up being pretty stressful in the sense that I was sort of groomed to become a site supervisor and reformer and then got put into that role whilst I was still an apprentice and pretty young, like 19 and had, you know,
these 40 year old guys that had been on the, on the tools a lot longer than me, you know, two decades over my three years. And yeah, it was just, I just turned to the online space to like literally how I typed into Google in 2013, how to travel the world and make money online. So was doing trips between, you know, work and stuff like that. Cause I was just trying to get out of it.
Yeah. Made a couple of failures, failure attempts at startups and then realize, I'm hanging on 90 % of these things fail. Why don't I go buy one that's past that 90 % failure rate that's already making an income. yeah, went and did that and bought a few small ones and that, that led to people wanting to know how to do it. And then to me coaching, teaching and now advising. Yeah.
Michael (05:21.367)
the
Michael (05:31.413)
Yeah, that's that's that pathway I love and you know 2013's, know, relatively early days for that digital nomad. If we could call it that you know, but
Jaryd Krause (05:44.135)
Really? Yeah, it's pre-digital nomad phase. Yeah.
Michael (05:48.214)
Yeah, yeah. And also for you, you took whatever the pathway was in school to plumbing and that wasn't for you and you were looking for something else. And then to think about combining with travel, I'm guessing a little bit of surfing might have been in the mix.
Jaryd Krause (06:08.735)
You know me too well, Michael. Yeah, that's the goal. That's my life goal is how do I surf the best waves I can around the world? That was the biggest motivation for travelers. Why I was traveling is just surfing around and how do I continue surfing and traveling and enjoy that lifestyle and make an income without going home broke again?
to a plumbing job and then saving up and then going away. And it's sort of just, you know, like you said, where am I located now? I live in Indonesia and just try to do like one strike mission a month. my brains out here and then go on a few trips a year.
Michael (06:46.465)
Yeah, excellent. All right, so let's hook into, set it up with the work you do right now, the main work you do, and then we'll get into the how and why of finding and buying online businesses, either as something, just as a standalone thing, but probably for today more interestingly, how you couple that up with a,
with a bricks and mortar or another offline business.
Jaryd Krause (07:20.595)
Yeah, for sure. mean, look with my experience in on the online space, you know, and I've been looking at it now is like, do I go and buy instead of buying an online business, which I just know so well, why don't I just go buy a brick and mortar business and offline business that like a mechanic or, you know, something that, you know, manufacturer that
you know, I can just use my skills online to scale infinitely. And I even recommend that to my clients now where, yeah, I'm going out and you know, they come to me with their cash or what they want to buy a business, help them get a bit of finance. And then we create that acquisition strategy. And then their first acquisition might be an online business, but that once we have that online business, it's like, how do we build the portfolio?
and grow by acquisition and not just the online space is like, you go and like, say you have an e-commerce business that is a distribution channel for say surfboards and you're just selling a bunch of surfboards that are not particularly your own, or maybe it is, you you're getting them designed from manufacturer, like go and buy the manufacturer, you know, if you can't raise some funds, go and buy the manufacturer. And then you're cutting out your biggest expense, you know, and the vice versa. If you have a.
offline business. Say for example you're manufacturing surfboards or you're manufacturing something. Who's selling surfboards online? Can you go away and buy that sales distribution channel?
For example, if you're a motor mechanic, you own a motor mechanic shop, you know, who has a media business online in Australia that, you know, can help get leads for a motor mechanic workshop, you know, and, acquire that, know, you just acquire your marketing channel versus, you know, the other way around is like, how do I try and tap into building out a marketing channel online? And that's, that can be costly.
Michael (09:14.282)
It's.
Michael (09:21.932)
Yeah.
Jaryd Krause (09:23.967)
in terms of not just money, but what's more valuable this time, you know, it might take you a year and like a couple hundred grand to start to work out a system that acquires those leads versus just buying something that's already got them embedded, you know.
Michael (09:37.292)
Yeah. It's really interesting. You've kind of gone full circle, you know, from being very much a pure online specialist and now in your own capacity and with your clients to think about how you, you maybe by parts of the supply chain or the, yeah, it's really, and this is the opportunity and in a very practical way, you know, I deal with a lot of
traditional offline businesses and their biggest challenge and often the biggest source of frustration is how do I get new clients and you can keep paying for them advertising online offline doesn't really matter but then this idea that you can expand your horizons a bit and look at
Jaryd Krause (10:18.303)
Mm.
Michael (10:34.279)
online businesses that are in your sector, your industry, are where the customers you want to sell to hang out and maybe buy that or that's the sort of stuff that's really, really exciting and possible.
Jaryd Krause (10:48.457)
Yeah, I somebody on my podcast a couple of months ago, he does acquisitions at like quite a large scale, like nine figures, but started off, know, six figures, seven figures. And he said, every, your biggest, biggest business challenges can be resolved with an acquisition. For example, if it's not just a sales distribution channel and say you have a motor mechanic workshop and you just, your staff are just,
lousy, for example, and you're just really struggling with them and you kind of want to not be operating that business anymore. If you hired another motor mechanic workshop in that same in a similar location that was crushing it, right, if you acquired one, you could use their team to come and infiltrate your your your previous businesses team and build a better culture. So you could have that you could hire that operator of that motor mechanic, they might have
five mechanics under them, right? And then you can have that operator come and, you know, hire and, or, and, or use some of the team to run the motor mechanic shop that you have. And then you can have that, you know, that operator run to sort of two motor mechanics and hire the right people and build the right culture. So you can actually acquire a team as well as not just like a, a working profitable business. and then, you know,
you say you wanted to scout that operator knows how to run two, you could buy another one that that operator could just, you know, spend a day or week at each of those mechanic workshops. And you can be a bit more hands off in terms of scalability. If you just want to require like brick and mortar businesses, but yeah, if, if, if your biggest challenge, like you said, is, is sales and leads, then it's, it's SEO, like local SEO in these areas for like,
brick and mortar businesses is untapped. Like having the skills to do SEO in a certain location is just so easy. Like it's, it's a great resource to, to go away and buy a sales distribution channel in your area, you know.
Michael (13:01.549)
Yeah. mean, I think for you, yes, it's, and for a lot of, yeah, yeah. And a lot of owners, it's getting a website, getting an agency and it's all, and it's being disrupted at such a pace. this idea that, and I think in practical terms, it could be buying a traditional offline business, I call it a content site, a site that,
Jaryd Krause (13:04.785)
It is for me. Yeah. Correct.
Jaryd Krause (13:11.773)
It's just scary. Yeah.
Jaryd Krause (13:29.929)
Hmm.
Michael (13:30.904)
pulls together your kind of customers in a place because you're actually not selling them anything. You're actually sharing information about that industry, that product, whatever it might be. then if you have those two together, then you call it, simple terms, cross marketing, but you're not even
necessarily buying in that case as a content business, you're just buying access to the potential customers and you've to be like everything you've got to make sure you're promoting what you're selling to them in the right way. But this is all very feasible and very possible.
Jaryd Krause (14:21.779)
Yeah. Once you kind of work out what, who, like who you're selling your product to your product and service to, how do you sell that online? And then you just ask the question, well, how do I not try and just do that, work that out myself, but how do I find somebody that's already selling that product and service online and just buy them, you know, and you just, you just approach them with like, Hey, look,
Michael (14:44.833)
Yeah, yeah, yeah.
Jaryd Krause (14:51.967)
You're great. You're doing a great thing. Like I want to see if you'd be interested in exiting and you add your products and service to their, to, that business. You need to sell it to their email list. You literally buying a database of people that are just interested in, know, say for example, you're a, you're, you're a lawyer and there's a website that, you know, teaches people how to, uh,
Michael (15:06.081)
Yeah,
Jaryd Krause (15:16.987)
find lawyers, you know, for your specific cases, you could buy that website. You know, it's a whole email list of people hungry looking for the right lawyer. Yeah.
Michael (15:26.221)
Yeah, yeah. So that would be maybe like a directory site or like as a type of website that people are searching for that service. So where do you start? You talked about acquisitions. So acquisitions, you've got to know what you're after. Are there other marketplaces where someone who's
Jaryd Krause (15:37.502)
Yeah.
Jaryd Krause (15:48.222)
Mm-hmm.
Michael (15:53.952)
interested in what we're talking about and says I want to diversify my business and where might you go? Is Flippa for example a marketplace? Are there others like that and how do they work?
Jaryd Krause (16:08.839)
Yeah, that's a good question. Flipper.com, absolutely. It's a great marketplace. know the CEO quite well. He's been on my podcast a couple of times. I've been on their podcast as well. The cool thing about Flipper is that you've got a huge array of different types of online businesses. They are the largest marketplace for buying and selling online businesses. The hard thing about it is that a lot of people do self-list their business.
typically the better businesses to acquire the ones that have a broker that lists them on Flippa and just the broker of the business. Then yeah, you've got empireflippers.com. You've got Empire Flippers is a similar thing. It's a marketplace. Then you've got quietlight.com. If you want a software business, got Feinternational.com. You've got websiteclosers.com. You got websiteproperties.com. What I do suggest people do is there's,
basically six good solid ones that you can look at. Typically, when you know what sort of business you're looking to acquire, say you're looking to buy a blog, right? Or a media business or a YouTube channel, right? You can, these guys, you know, if you own a mechanic workshop, you could buy a Facebook group of, people that are interested in a certain type of car, you know, or, know, just a mechanic type.
Facebook group, it's a media business. It's a list of people you could purchase that and then, you know, add more value to it and start selling your products and services to that. You can literally type into Google, where do I buy Facebook groups? You know, where do I buy YouTube channels? Where do I buy Instagram accounts? So that's the cool, where do I buy a TikTok account? just there's always new places popping up that you can, that do our marketplaces for these types of businesses. It's pretty cool.
Michael (17:36.534)
Yeah.
Michael (17:55.7)
Michael (18:01.247)
So whereas you know, there's places you go if you want to buy a cafe or take like an auto mechanic shop, you go to seek or you go to Eden exchange and there's thousands of them. So this is this is quite profound, right? If you're you got to get your business strategy right. That is I want to I want to grow. I think a smarter way to do is to buy something. But the takeaway is you can buy a Facebook group.
Jaryd Krause (18:05.352)
Mm-hmm.
Jaryd Krause (18:15.123)
right
Jaryd Krause (18:25.951)
Mm-hmm.
Michael (18:29.899)
You can buy a YouTube channel. and you got to, you know, pay the right price and integrate it properly. But that's, that's what we're trying to say is possible. It's you can leapfrog.
Jaryd Krause (18:32.671)
Yeah.
Jaryd Krause (18:42.107)
Absolutely. And when you're, you know, just to put it into perspective for somebody that say, say they're a hairdresser, right?
and you or they own a salon or something like that. And they're like, I want to buy an Instagram account for people that are interested in hairstyles. If you're going to buy an online business, what you're going to do is you're going to buy businesses already earning an income stream and already has its own product and services for sale. And you can buy that for a two to three multiple. Yeah. So if you buy a, let's say a hundred thousand dollar YouTube channel or a hundred thousand dollar Instagram or Tik Tok account,
that is going to be making anywhere from like, you know, 20 to 30 K a year in itself. And then maybe you could add 15 to 30 K of sales to your hair salon as well. Right. So you buying it for a far cheaper multiple than most other people technically. And so don't just think about buying an Instagram account or a tick tock account or a Facebook group, just, you know,
for 100K without knowing that you can sell your product and services. That business can still run alongside your primary business and earn its income from what its products and services are already being offered, but you can just add yours to it. So it's in the right, correct, correct. The right time you would.
Michael (20:07.469)
In the right way at the right time.
Jaryd Krause (20:13.673)
do what we call a nurture sequence, add a lot of value, do a bit more of a deep dive into like maybe you do a survey, a two to three question survey, nothing crazy. And you work out what that audience is really hungry for. And then you sort of develop or sell your product in a way that it's gonna be the right value for what they're actually hungry for.
You know, they've been on this list, they've been in this ecosystem for years and the hunger of this certain thing and you have it. What a win.
Michael (20:47.307)
Yeah, yeah, and it's, I was gonna ask you about the typical multiples and you already talked about them. And so what we're talking about here is they're very different businesses, but the fundamentals are quite similar. You could buy that example of a business at two or three times its annual earnings profit, which is sort of a benchmark for the...
Jaryd Krause (21:10.695)
Net profit. Yeah.
Michael (21:16.393)
any old small business. that's a bit of comfort there. You've got to buy it so that it kind of earns enough to pay for itself. And in some respect, if you can then over time integrate that into your other business, the value is so much higher because you get, presuming it stays.
Jaryd Krause (21:17.778)
Exactly.
Michael (21:41.824)
as it was a self-sustaining business, but then you can in the right way, draw our customers or cross-sell or whatever you want to do with your other business. This is the exciting opportunity to... Because I think there's the businesses that there's a lot of disruption going on in the online world as well. I track it, you're working it day to day, but...
Jaryd Krause (21:50.719)
Mm.
Michael (22:10.815)
It can seem like a pretty scary place, if you want to educate yourself, you can do that by, you don't have to buy anything, just explore Flipper. It's an incredible resource to learn about the kinds of businesses you can buy, the prices you might pay. It's actually really transparent. There's so much data around about these businesses.
You can get in there and dig around and learn some before you take the big leap or talk to you. You made plenty of early investments that maybe didn't pay off, here you are 12, 13 years on with the confidence to advise others on how to do it or not to do it.
Jaryd Krause (23:02.813)
Yeah, you could literally get so much. That's, that's, that's the thing about online is like, it's, it can be daunting because there's so much that's over information and you're like, well, what do I do? Where do I start? All that sort of stuff. That's where people like me create these businesses where like, just check out my YouTube channel and I'll literally break down these online businesses, what their risks are, what you need to be checking throughout due diligence, you know, and then you can start to educate yourself and decide.
Do I want to go down this route or not? You know, it's not for everybody. is for somebody that is like, they can see that it's a great opportunity for them and they're willing to do it. but, you know, a lot of people might just want to just sit on the hands, Michael, you know, and complain about the problem versus being proactive.
Michael (23:51.426)
Yeah, and this is the disruption from AI. It's disrupting everyday businesses at a different rate or different pace, but they're being disrupted in one way. And it's a bit like you coming full circle from online to now pairing it up with an offline business. That's if you've got an offline traditional business, there'll be some that don't need a web presence.
Maybe, but I'd argue that most businesses could draw in more customers from other places with a better online presence.
Jaryd Krause (24:30.547)
mean, even if you're manufacturing steel, and you're selling it to the Australian government for roads and whatnot, like, you've got probably billions of dollars, maybe hundreds of millions of dollars, maybe they don't want to produce more steel or can't. So you don't buy a business unless you you're scalable, right? But for that business that and they can produce more steel and they are scalable, say, for example, like a small salon or, you know,
an ice cream business, you know, it's super scalable. You can purchase a sales distribution channel versus just selling to like, if you might, you might have like one or two key person or key clients, which is, which is quite risky, right? Like, so some of these big, bigger businesses doesn't even need to be a big business. Maybe you've got three or four clients. That's risky, you know, so you've got four clients, 25 % of revenue is coming from one client.
Michael (25:08.257)
Yeah.
Jaryd Krause (25:25.213)
Why not spread that low between a bunch and create a bit more of a remote for your business?
Michael (25:30.178)
Yeah, yeah. I've got a business at the moment and it's a traditional brick and mortar business, highly specialized in what it does. They started with an online presence. It's an e-commerce online presence. sell the kinds of goods they sell in store. And they're essentially Victorian based as a face-to-face business.
Jaryd Krause (25:53.694)
Hmm.
Michael (25:59.71)
And the thinking early days was to kind of give their existing customers some more options so they didn't have to come to the store all the time. Because some people might travel hours and hours. Well, what it's really done is it's actually opened up new customers in whole other states. And then...
Jaryd Krause (26:21.684)
Yeah.
Michael (26:26.701)
And then you're forced to think about, what other products could we sell that don't have to be bought in store? so now it's a business that's gone from a 100 % personalized sort of business, in-store fitted kind of products to 50-50. Revenue comes in and now in terms of getting ready to sell that business,
Jaryd Krause (26:42.911)
Hmm.
Michael (26:56.691)
it could have been a one trick pony and now it's a two trick pony and it's more diversified. It's actually got growth potential as opposed to saying it's a traditional business that's just going to fade out. you know,
Jaryd Krause (27:12.657)
It's, it's such a good, great point, right? You know, here in here in Bali and it's the same in Australia, you've got a butcher, right? What they're, they're the most amount of people, if it's just a butcher shop alone, the most amount of people they can target to is just in their location and people that walk by, you know, like walk through traffic and know that that butcher shop exists. Then you go and buy a somebody that's a, you know, talks about
meat online, you know, or like, you know, how to or maybe they're a blogger, right, or a vlogger, or they've got like, this Instagram account that helps people to create amazing dishes, like teachers how to cook their meat, you know, chicken, all that sort of stuff, fish. And then you go, All right, cool, what you could purchase that
Instagram account that tick tock channel that YouTube Facebook group, whatever it is, and you go from selling your meat to people that walk through to freezing your meat and distributing it around Australia. You know, distributing it to Indonesia, like most of the meatiness in Indonesia is Australian meat. Yeah. I'm talking beef. Anyway, but so then you go from
Michael (28:30.315)
Yeah, yeah.
Jaryd Krause (28:34.205)
this audience of just your location in maybe a small country town in Victoria to, all right, I'm selling, I'm freezing this meat and distributing it further. And you realize like, okay, we don't need to have, you know, that much staff, you know, we don't need to have to scale. don't need a butcher shop now in Queensland and New South Wales is like, we just, we don't need to serve that.
serve that audience by opening up a physical store location and having rents every time we open one, you just send the meat to their door.
Michael (29:09.729)
Yeah, well, you get people make it into something like a destination business. So people do travel to if something's quirky or artisan or...
Jaryd Krause (29:15.507)
Mm-hmm.
Michael (29:23.551)
organic, whatever it might be, wine, food, know, gazillion things. you drive around the regions of Australia and there are all these, I think that's gathering pace. They're making their business, they have to make their business a destination business. Otherwise, it won't survive in that smaller local community because just...
Jaryd Krause (29:25.886)
Yeah.
Michael (29:48.846)
or it'll survive at the most basic level. But there are these, where I'm in central Victoria, there's incredible businesses and it's a tourist town, it's a weekend town and more of the businesses are now, I think, cottoning on to build a bit of a brand through an online presence. Talk about, could be a really simple, something that differentiates
whatever you're selling from everything else you could buy. And you turn yourself into a destination business or not like something that's got a bit of character that people, they get emotionally hooked into coming in, checking you out.
Jaryd Krause (30:34.875)
Absolutely. Yeah, it's, it can work the opposite way. You know, like, you know, you really love buying, you know, you're buying your meat and then you buy it online. But if you know, it's from this cool like location in Victoria and you're like, let's go for barbecue ribs there. Like, I love this meat. Like let's yeah.
Michael (30:56.779)
Who hasn't traveled a couple of hours for some prime ribs or a pasty or a vanilla slice or a coffee even?
Jaryd Krause (30:59.135)
Food. Yeah.
Yeah. mean, women, women don't, women don't shop. how women choose restaurants now is Instagram. Come on guys. Like if you own a restaurant, what are you doing? Like you need to be online. Yeah.
Michael (31:15.115)
Yeah, yeah, yeah, yeah. Okay. So we talked about progressing someone who's going, I think there's something in this. So we've talked about the kinds of sites you should, like Flippa, Melbourne-born, like Leads the World, it's great, it's FLI-PA.com. You can learn a lot there, you can go online and...
and educate yourself if you're interested, you know, that's your thing. If you were just giving like a really high level checklist of what you should and shouldn't do when you're assessing an online opportunity, would the three or four things be, Jared?
Jaryd Krause (32:06.399)
First thing is verify the financials, check the financials, reconcile them between their P and L to bank statements. You can also get their tax returns as well, things like that. You can get viewers access to their merchant accounts where they receive the income.
Michael (32:21.589)
Yep. Yep.
Jaryd Krause (32:29.779)
Then that's the, that's, that's key. Then secondly, would say verify traffic sources and make sure they're the legitimate traffic sources. and what are the risks of the traffic as well? Like is, is the traffic, is it just stable or is it declining or is it inclining? Where is the traffic coming from? Is it coming from say just social media? say if you're buying a social media account, of course it's coming from social media, but if you're blind, buying a blog,
Michael (32:56.737)
Yeah. Yep.
Jaryd Krause (32:58.655)
Where is that traffic coming from? are you buying? Correct
Michael (33:01.003)
It's like customer concentration. you have a spread of sources of traffic? Excuse me.
Jaryd Krause (33:09.087)
Yeah. Yeah. Do you have single source dependency on one, one source, right? If you've got a blog that most of its traffic comes from just Pinterest, that could be a risk versus buying one that's got a little bit of Pinterest, a little bit of Facebook, a little bit of organic search from Google. So they're the top two is, is, is definitely financials traffic. Uh, what else would I put below that?
Michael (33:33.514)
I guess I'd say, you know, in terms of if it's a content site that you can continue to some in some way what you pay for the price for the business includes a way to keep, you know, the content that got people interested in the site in the first place, you know, you got a kind of business as usual approach to that. Is that fair?
Jaryd Krause (33:58.405)
Yeah. Like, do you mean you'd, they would need to like, you'd be buying their system, their procedure on how they create content. Yeah, absolutely. So you, you're definitely buying systems, processes, team, if they're using team, or contractors, access to contractors, stuff like that.
Michael (34:04.685)
Yeah, yeah, yeah.
Michael (34:20.161)
So it sounds, it does sound, you know, it's exactly the same as when you buy a cafe, you look at the pause thing or if you buy a manufacturing business, you want to look at your client spread. There's all these, you know, this is another thing to keep in mind. It might be a different type of business, but fundamentals are fundamentals. And there's a lot of, and Flipper,
Jaryd Krause (34:21.983)
It's so similar to, it's exactly the same.
Jaryd Krause (34:45.107)
The business, you need to check. Yeah. All businesses need to check their financials. All businesses need to check the traffic, the clients revenue, all that stuff. Yeah.
Michael (34:52.909)
Yep. And a lot of it is, I think it's available in, I've spent a reasonable amount of time on Flippa and the, got to check the veracity of the information, but there is, it's like a uniform process that to get your business listed, you have to have all this stuff. so it's, there's some, you know, there's business sales and you're relying on, you know, like guesswork or someone's,
opinion of what sales were last year because there's a lot of cash in the business or something. This is actually highly transparent process, which was quite interesting.
Jaryd Krause (35:24.809)
Yeah. Correct.
Jaryd Krause (35:33.767)
Yeah, it's, it's, it's very good buying online where you can get very like the verification of financials is tracked maybe more than say cash. and there's less human error because it's, it's pretty transactional online. you know, obviously here, you know, give and take that. Yeah, it's, it's, it's, it's, it can be easy to check things, but you just need to know what to check and what to look for. Like you kind of want.
Michael (35:51.841)
Yeah.
Michael (36:03.329)
Yeah. So it's, yeah, for you, that's where, is that your pathway from, you know, like educating people and actually doing it yourself to being an advisor, you've seen some big misses or some bad investments.
Jaryd Krause (36:03.837)
Yeah.
Jaryd Krause (36:21.427)
Yeah, absolutely. Well, not, not really with my, not really with my pool of, pool of clients, but I have been contacted by people that have like listened to my podcasts and be like, Hey, this happened. didn't use, I didn't hire you or use your course.
Michael (36:40.701)
Right.
Jaryd Krause (36:41.215)
I want to share my experience so people don't do it again. Obviously, I train out those sorts of errors. Of course, there's still errors to be made. I've made errors, then I will continue to make errors in acquisitions. It doesn't matter if I've looked at tens of thousands of deals or bought ridiculous amounts of money worth of deals.
you're human, you're going to make mistakes in your career and everybody does, right? I mean, just like the
Michael (37:13.643)
Yeah, it's about getting, just getting to a point where you, I mean, you have, you do have a long period of time doing this and so it's not like making any foolish promises that it's all, we don't want to hear that, right? We actually want to hear that there is, there is a, there's a better way and you've to do your homework and, and, and it, but it is, it is feasible.
Jaryd Krause (37:38.419)
it's definitely feasible. mean, it's, you know, my whole career is built on it. And it's made a lot of people a lot of money. And it's just a great way to build a brick and mortar business. A primary business is just like
literally, if people just go and open their eyes, you know, I know that one, I know it's like running a business, it's tough. And sometimes it's annoying and frustrating. And like, literally, if you just go on to flip up, or you go to empire flippers.com, and a couple of these places I mentioned, you can go and see how much these businesses are for sale, you can see how much money they're making, they can can see the hours required to run them. And you'd like, without even this.
being an advantage to grow my primary business. If I bought this alone, it would be a good investment. And that's what most people do is they buy these alone that, you know, where you don't even have the value out of a different business to add to it. it's, it's, this is how, this is how the wealthy build their wealth. You know, Facebook, who do they acquire? Instagram. What's that? You know, this is how they just buy out their competitors. They buy out the market share.
Michael (38:26.892)
Yeah.
Jaryd Krause (38:50.471)
This is how the wealthy build their wealth and make their businesses even better is just by acquiring, you know, growth by acquisition. It's, it's, it's what the elite do. And now we're in a position in, in life today where us folk can do it in the five, six, seven, eight figure range can do it without having it as a B hundreds of millions, billions and trillions of dollars. We can do it at smaller range. It's beautiful. Beautiful time. Yeah.
Michael (38:56.161)
Yeah, yeah.
Michael (39:14.817)
Yeah, that's, you can have a really small monopoly in your niche. And that's by adding complimentary assets and diversified marketing and have two sites rather than one and have better market. it's pretty, it's just the opportunities exist. I think the, we'll finish.
Jaryd Krause (39:20.062)
Yeah.
Michael (39:42.19)
finish this part of the discussion. I know you've got some time constraints today, but it is, I think, loud and clear that if you've got a single, if your business is singularly reliant on one customer or it's one location or you've got one key staff member, you've just got to think of the ways
We're encouraging you to think of ways to diversify your risk. there's a step up that's possible with online that is, think it might seem a long way away if you haven't even got a website or you've never written a newsletter, it is, I see it every day, these smaller businesses can add a simple website, e-commerce, start doing some marketing and it...
It's a course that's an investment, it pays dividends and you can fast track it by acquisitions of the right kinds of businesses. Jared, there's a couple of questions I'd like to finish on. We might do round two in another couple of months and dig really deep on some mechanics for buying an online business.
Jaryd Krause (41:07.007)
You too.
Michael (41:10.071)
Books and blogs and sources of inspiration for you to, you've worked really hard to get to where you are and involve surfing and business. So well done on that. who's helped you get there?
Jaryd Krause (41:24.319)
Thank you. Thanks.
everybody, all of life. Yeah, absolutely. Like definitely good support. they have no idea what I do. I mean, to a certain extent they do. but definitely there have been a great support. I would say at the start, was just Google. I just Googled so much and just learned so much from a bunch of different bloggers on how to be a blogger. I used podcasts and YouTube channels.
Michael (41:31.949)
Mom and dad. Yeah, get on.
Jaryd Krause (41:58.097)
and books and mentors, one specific mentor in 2017 when I first first launched my educational company. He was great. I would say hi mentors, like if you if you have something you want to achieve.
Go and find somebody that is, has done that multiple times, right? And hire them and pay them good money to do it. You know, the more money you pay somebody, the more accountable they're going to be to get you a great result. not saying that you just need to overflate and throw too much money at them, but like you pay, pay for good help, pay for good mentors. so if you want to do a certain thing, then do that. books, mean,
The one that I recommend most is The Obstacles of the Way by Ryan Holiday. It's an amazing book. I don't have it on my bookshelf right now. It just gets handed out between friends. A lot of my community read that book. I've got another good book by Roger Hamilton called Your Life, Your Legacy. It's on wealth creation profiles and understanding like what your wealth creation profile you have.
Michael (43:10.177)
Yeah.
Jaryd Krause (43:10.527)
I would say it's hard at the start to learn to listen to what you love in life and business, but as you start to evolve, then you can start to become a bit more picky. like listening to yourself is pretty, pretty critical at the start until you get a pretty clear, clear head space. so yeah, learning from yourself, learning from others, learning from your failures. I don't think there's any specific influences that I like. I like to get pieces from.
Michael (43:35.053)
Yeah.
Jaryd Krause (43:40.519)
some influences. Sometimes I listen to billionaires and be like, that is not correct for me. You know? yeah, I do like to prove things wrong and prove people wrong and prove myself wrong. Yeah.
Michael (43:46.657)
Hmm. Yeah. Yeah.
Michael (43:53.678)
Yeah. this is the question that I'm going to have uniformly asked in each of the podcast interviews this year. If the federal small, we had a federal, I know you're living offshore at the minute. but if we had it, you, it's an Australian business. If we had a federal small business department and you were the head of it, what would be your top three priorities to
Jaryd Krause (44:05.063)
Awesome.
Michael (44:23.51)
to increase in the success of our small business economy.
Jaryd Krause (44:33.587)
That's a great question.
Jaryd Krause (44:39.036)
I would,
Michael (44:39.103)
us.
Jaryd Krause (44:42.183)
I would look at my, one of my philosophies on growth is called inside out. Inside out growth is, is not learned from what everybody else tells you you should do, but learn from what's already working and what's not working within the organization and do less of what's not working more of what is working. And I would go away and look at where the resources being spent for small businesses in that structure and which of the businesses that are.
performing better and providing better products and services for our people in Australia and work out why they're successful. And then once I know why they're successful, I'd be putting out grants to those businesses that are similar in that and putting the resources of whatever, you know, you see these grants go out to businesses and stuff you like, anybody can apply for that. it's like, it's,
I do know that there's people that get that money that don't spend it on the things that they're supposed to spend it on in their businesses. And I would really tighten up that constraint. and I would, and that would be my high level philosophy of like, how do I understand where the resources are going out to businesses that are taking the piss and, and give it to those businesses that are doing great and then find more of those businesses. And that's going to.
Michael (45:53.612)
Yeah.
Michael (46:04.971)
Yeah, so profiling them and saying, this is, you know, I think we have some industries in that we should do far better at and shared learnings. Yeah, more funding.
Jaryd Krause (46:18.106)
Right. Right. And sort of incentivize those businesses to share. Like I would say, how do we make those smaller businesses more successful and then sort of share that with the economy? I would have somebody interview them and then create some sort of media outlet for the government to
that small businesses could learn from. And then once they've, once they've got these certain things, they could apply for these certain grants to achieve this, you know, the same results as these smaller businesses and just champion them. So then you're starting to not just tell people to start a small business or grow their small businesses. You're sort of teaching people what a good business looks like and to only go down that route. If you're going to do the right things versus just try and start it and see what happens. Yeah.
Michael (46:57.047)
Yeah. Yeah.
Michael (47:13.569)
Yeah, yeah, throw a lot of stuff at the wall. these are the it's partly what's firstly it's possible because these people did it. Why not you?
Jaryd Krause (47:16.731)
Yeah.
Jaryd Krause (47:22.365)
Yeah. Yeah, exactly. I'd also look at doing like the thing of like what's happening within the organization where are people just not, you know, achieving their KPIs and how do I get better people in, in the organization that are driving growth and champion those ones that are driving growth and have them hire more people that, you know, yeah. So I'd, I'd, I'd change the incentive for everything and everybody.
Michael (47:39.115)
Yeah.
Michael (47:51.425)
Yeah, yeah, so swiping, swiping reforms. That's great.
Jaryd Krause (47:54.503)
Yes, yes. Yeah. Yeah. And then that way everybody's incentivized to do better. It's just the way of evolution, but it's just a bit more of a measured approach to prove provide better evolution. Yeah.
Michael (48:00.812)
Yeah.
Michael (48:08.087)
Yeah.
Jared, thank you so much. We will do round two and we will go into some real mechanics because you've got a lot of experience. I've done it myself and there's a way forward here. I guess the idea today was really to there are these, to diversify your risk and to actually grow your business, think of online businesses.
Jaryd Krause (48:13.609)
Thank you.
Michael (48:39.053)
And just remember you can actually buy something like a Facebook group. Wacky as it might sound to some people, that's possible. Where do people reach you Jared?
Jaryd Krause (48:42.962)
Mm-hmm.
Jaryd Krause (48:50.301)
Yeah. If you go to LinkedIn, just find me on LinkedIn. or type my name into, you know, YouTube, Google. I'll be around. Yeah. Happy to chat. Yeah. Reach out on LinkedIn guys. If you've got questions, let me know. if I can't help you, I can up and you want to do something in this space, it's likely that I can refer you to somebody that can. And that's the goal is to make sure people have the right people to help them do what they want.
Michael (48:59.341)
Cool. Yep. And happy to chat. So, all right.
Michael (49:20.427)
Yeah, excellent. I know that's from a very genuine place. You've been doing what you've been doing a long time, so I know you want to help. All right, well, you take care and we'll catch up soonish.
Jaryd Krause (49:27.995)
Absolutely. Thank you.
Blockwise.
I'm looking forward to another one. Yeah, let's go. This will be fun. Thanks so much for your time, Michael. Appreciate you having me on.
Michael (49:39.743)
Andy Jarrod. Cheers, mate.