This article focuses again on our relationship with Soccer Pro and how we were able to help them grow from a mom and pop soccer retailer in Columbia, MO to a nationwide online leader in soccer equipment and apparel.

Let us know what you think or if you have any questions since there’s no good commenting setup on Entrepreneur‘s website.

photo by taberandrew

Jim’s pretty much the de facto face of the personal finance blogging space and has made numerous press and television appearances (big dog places like the New York Times and ABC).

We talked to Jim about how he built Bargaineering and he gave some great insights on how aspiring blog moguls should think about growth and monetization.

Have a listen and let us here your thoughts!

Don’t have flash? Want to download? Click here.

Program Outline

The Beginnings

• Money is scary!

• Why not journal what I’m learning?

Hard Work

• It’s never easy, but being early is an advantage

• Bring something unique (distilling complicated financial info)

Going Full Time

• Began as a hobby

• Traffic and popularity was more fun than $$$

• Found affiliate marketing

• Difficult to monetize a blog, all about traffic

• PF blog network

Guest Posts

• Network in your niche

• Good for SEO, better for influence

• Being big really helps

Site Design

• Simple and functional

• Do things to build credibility

• “As seen in” needs to link

Monetization

• Show that you can provide value to get better affiliate payouts
• Get traffic, convert it, profit (Sounds easy! )
• Are my leads high quality? Raise payout if so!
• Leads are great because you’re not charging consumers to get a commission

Brian’s current project is MO.com.  His goal with MO is to create a comprehensive online entrepreneurial destination.  Johns Wu, of Bankaholic fame, recently came aboard and Brian surely has lots of other great partners in the wings.  Be sure to check it out.

Have a listen and let us know what you think!

Don’t have flash?  Want to download?  Click here.

Program Outline

Brian’s Background

• Been domaining since Brandon was in diapers
• Owned OfficeSupply.com and GolfCourses.com
• Now working on MO.com

Starting on the Web

• Domains that “obligate” you to start a business
• True definition of a domainer
• Vacation rentals biz
• Web design co.

OfficeSupply.com

• Started on OrderSuppliesOnline.com
• Exponential growth right off the bat!
• Acquiring the OfficeSupply.com
• Growth in the business
• Acquisition of the domain by IREIT

GolfCourses.com

• First bought GolfLessons.com from same seller as OfficeSupply.com
• Bought GolfCourses.com for $55k
• Negotiation tips

State of the Industry

• Market is good right now
• Last year was the valley
• Good online resources
• Domain conference value
• Domain partnerships

MO.com

• Branding
• Most exciting project

Our conversation is pretty much informal chatter on my part–I’m an interviewer newb!–but Shane is excellent and dispenses lots of great advice and “insider” tips for small to mid-sized internet entrepreneurs.  Let us know what you think by leaving a comment!

Important disclaimer:  We’ve never worked with Shane professionally and this profile is in no way meant to pass his success off as something we were a part of.  He’s an inspiration to our team and exemplifies the type of entrepreneurs we associate with and aim to help create.

Listen Here:

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Program Outline

Shane’s Background

• Career Trajectory
• Worked for HeadHunter.net and Career Builder buying distressed sites

Competition

• Competition between little guys and site hungry beasts

• Valuation problems
• Careers niche is exhausted…look for new niches

Nursing Jobs

• Start with the keywords, search for sites to buy
• NursingJobs.org start
• Redesign, long tail, generating revenue
• Test everything!  “See what sticks”
• Growth of NursingJobs.org

Road to the Sale

• Big domain package, raising capital (Founders Investment Banking)
• Is Nursing Jobs for sale?
• Big companies don’t get domains generally…want to buy up and running sites

Closing Advice

• Exact match domain benefits
• Going for the Grand Slam
• Tips for selling an internet business

The show is going to be an informal round table discussion between Nathaniel, myself (Brandon), and oftentimes a guest or two.  Our first episode gives a little background on us and why we started Growth Partner and we chat a bit about valuing pay per click campaigns when selling a business.  Listen to the podcast below and follow along with the short summary under the player if you’d like.  Enjoy!

Listen Here:

Don’t have flash? Want to download? Click here.

What is Growth Partner?

• Past companies
• Why is this show called Entry/Exit?
• What is an ideal partnership?
• Why we’re NOT consultants
• Angel investing + online marketing
• Our investment range
• We’re active partners not passive investors
• Anatomy of our first deal with Soccer Pro
• Exits aren’t necessary the goal
• We’re not building a “portfolio”
• Refer someone for some $
• We want to meet you!

Valuing a PPC Campaign in an Exit

• Organic traffic always has more inherent value
• Organic = marketing annuity
• Step ahead of the competition
• Social media campaign value
• Defensibility of social media
• Can’t just “turn off the faucet” on social media

What is the low end?
Anything under $100,000 is a pretty small deal in the grand scheme of things. At this level, you’re not likely to need tons of lawyers pounding out purchase agreements (try something like this instead), nor will you need to spend months bickering on every detail. Often times, buyers and sellers can agree to a deal and do a simple transfer via Escrow.com. This size of deal is sometimes just a domain or a site with no revenue.

Pricing theory
There’s a lot of volatility in lower end website purchases. Revenue is obviously low and tends to be concentrated–coming from a single, potentially unreliable, program like Google’s AdSense. Another issue at this level is accounting related. Most webmasters report profit as simply Revenue – Expenses but don’t include their own labor as an expense. This is a pretty common problem and definitely an issue. Adjusted net profit numbers for small websites can change significantly when accounting for labor–even at a low hourly rate.

Multiples
Predictably, websites in the low end usually sell for a pretty low multiple. Generally, one year revenue or up two 2x net profit would be a pretty reasonable price. This sounds low to many but the problem is the fact that there’s so much uncertainty at this level. Generally, sites for sale under $100,000 aren’t even a real business–they are simply part of something bigger or a sideline for someone. Unsustainable revenues with a relatively short history also come into play here.

Where to sell
The biggest marketplace to buy or sell sites under 100 Grand is Flippa. Be forewarned, the quality of websites for sale on Flippa is all over the place. Some websites are a complete scam and others posted are legit–do strict diligence before transferring any $$$ for a site for sale on Flippa. Beyond that, try business for sale marketplaces like BizQuest and BizBuySell. These sites target pricier listings but due to the mobility of an internet business, websites are likely to generate a lot of interest from people across the country (or world) even with smaller selling prices.

Who might buy your site?
There aren’t many “strategic buyers” looking at this level. A strategic buyer is someone in a related business that acquires you website because of what it can bring to their core business. If you’ve built a solid niche site such as a tool that’s relevant to an ecommerce site or something similar, you might be able to approach some people directly.  You would most likely sell your site to another individual (as opposed to a larger company) who probably operates a network of sites for a living/sideline.

Creative Commons photo courtesy of amagill.

One of the most exciting parts of being an entrepreneur is an EXIT a.k.a. a liquidity event.

Liquidity event = selling all or a piece of your business.

Selling a business is a common path to individual wealth. (There are other terms for “selling”, i.e. refinancing, selling partial ownership, and so on. These all fall under the category of a liquidity event.)

Many people say real estate is where the wealthy keep their net worth… well, selling a business is where they earned that net worth.

Selling Your Website or Web Business
Selling your website may not necessarily make you a millionaire, but a liquid six-figures or more sure sounds like a nice shot in the arm, eh?

Especially if your website is a sideline to a day job, that amount of money could allow you to become self sufficient and work on growing businesses that you own, day in and day out.

The sale itself isn’t making you rich in many cases, but it’s sure affording you the opportunity to have a better shot than most!

Our Experience
From our experience, there are a few categories of internet business sales. We’re not VC-backed, Silicon Valley hippies, we’re just a group of hard working entrepreneurial marketers that build real businesses on the web. We’ve had 2 successful exits and created many more sustainable businesses online.

That’s where we’re coming from.

On that note, our numbers may reflect “regular Joe” dollars. The fact is – the vast majority of internet businesses are sold in the sub-$5,000,000 range and this area is really our sweet spot.

Here’s the deal sizes we’ve had experience with and I’ll delve into more deeply in this series over the coming weeks:

Low End – Sub $100,000
Middle Market – $100,000-$2,000,000
“Big Deal” – Over $2,000,000

This represents our experiences and what we’ve learned over the years. It is NOT necessarily representative of anyone else’s experiences.

It’s our opinion that businesses are much better off working with a team that is paid on performance only. Particularly through an equity stake or sharing of revenues.

Here’s Why

In many flat-fee consulting arrangements, it goes down like this:

You hire RealCoolSEO for $2,200/month. They come in and clean up some title tags, suggest re-doing your internal link structure, and queue up 25 blog links they use for every client.

This takes about 1 day of work. RealCoolSEO is on cruise control from here on out. A few reports per month, a few more blog links to keep your mind at ease. Just enough to keep that monthly check coming in.

The flat-fee consultant’s incentive is slim. The only way for them to make more money is to get more clients like you, which means their best people are off trying to get more clients. You’re working with the maintenance man. The day-to-day.

Any growth in revenues you see from this arrangement is going to flatline sooner or later.

Your Monthly “Fee” Should be $0

The best partners for your business don’t want money up front. The best partners have a vested interest in your growth. Only when you get paid, should they get paid.

Only then will they take an active interest in your business.

A successful online marketing campaign requires constant attention to connect a service to a customer.

You want links? Constant. Branding? Constant. Conversion optimization? Constant testing. Email marketing?

This is not a “set it and forget it” world, no matter how much the ease of the internet makes it appear so.

The best ‘consultants’ understand this. They will dig into your Facebook account and see how your customers talk. They will sit in on Board meetings and learn every aspect of how your business functions.
Takeaway

Forget about paying a monthly fee. Start thinking about what % of 10x in revenues you’d be willing to share with the right partner to make it happen.