Business Innovators Radio - Sophie Howard – Online Business Investor – On How to Buy and Build Profitable Online Businesses without a Big Budget Or Being Tech Savvy

Episode Date: October 18, 2023

In this episode, Nina Hershberger talks with Sophie Howard, an online specialist from New Zealand, about the lucrative world of buying established online businesses. Sophie shares her expertise on how to build a business without a big budget or technical skills, making it accessible for aspiring entrepreneurs.Sophie Howard is a successful entrepreneur who sold her first online business for over a million US dollars. She now teaches thousands of students how to sell online and build their own profitable businesses. Her experience and knowledge make her a valuable resource for anyone interested in venturing into the online business world.During the interview, Sophie discusses the different types of online businesses that can be purchased, such as content sites, newsletters, and software as a service (SaaS) businesses. She also emphasizes the importance of choosing businesses that have been established for at least a year, as they have proven to be more successful and have a higher chance of ranking well on Google.Are you an entrepreneur who dreams of owning a profitable business? With Freedom Navigator, you can achieve this goal faster than you might think! Hosted by successful entrepreneur Sophie, Freedom Navigator teaches you how to gain financial freedom through the acquisition of multiple small to medium-sized businesses. And the best part? You don’t need a huge budget or be tech-savvy to get started.Click now to gain access to a free training session and a copy of Sophie’s book she talks about in this episode. Plus, you’ll see real-life case studies of Sophie’s recent online business purchases and learn how she has turned them into profitable ventures.MegaBucks Radio with Nina Hershbergerhttps://businessinnovatorsradio.com/megabucks-radio-with-nina-hershbergerSource: https://businessinnovatorsradio.com/sophie-howard-online-business-investor-on-how-to-buy-and-build-profitable-online-businesses-without-a-big-budget-or-being-tech-savvy

Welcome to Megabox Radio. Conversations with successful entrepreneurs, sharing their tips and strategies for success, real-world ideas that can put Megabox in your bank account. Here's your host, Nina Hirshberger. Welcome to today's show. This is your host, Nina Hirshberger. And with me today, I have Sophie Howard. Sophie is hailing from all the way across the world in New Zealand. And so I'm excited to have her.

She's an online specialist. We're going to be chatting about how to buy an established online business. This is for those who'd like to have a business without the need to have a big budget or be tech savvy, which is fantastic. Let me give you a little background, though, on Sophie. She founded aspiring entrepreneurs. In 2013, she started her first online business. business, which she sold in 2015 for over a million US dollars. So she is a woman who knows how to do what she's going to talk about today.

So now she's teaching thousands of students how to sell online and how to have that business. So welcome to today's show, Sophie. Thank you so much, Lynette. It's great to be here. I love talking about online business with entrepreneurial people who, who were interested in different ways. So let's go back in time.

What did you do prior to online and how did you get interested in online? Well, I was working for the New Zealand government. So I had a very nice job. Couldn't complain about it. I was in the foreign office. So I had a really interesting job, lots of travel, nice boss, part-time hours.

It was all very nice and really interesting work. But when I had two children, not one, the numbers just were awful for the cost of childcare, to what I earned, to how many hours I worked in a week, to how many hours of sleep I got in a week. It was just not really going to track in the right direction for how I wanted to live. So I was on my second time on maternity leave. I started an Amazon business. and I quite like the concept of Amazon because New Zealand, obviously, there's hardly edged population to sell too locally, so it had to be online. It was only a matter of which business model and which platform. So I like the idea of selling a physical product, and I think there's a good one to start with maybe some beginners luck.

I don't think I can take all the credit for the World Beating Strategy, but I did a really quality premium brand that wasn't from China when everybody else was sourced. from Alibaba. I did this really beautiful handmade products, not by me, handmade in Nepal, and it sold like crazy. So I had great cash flow for a year or two, and then a big exit. So that was a great start. A couple of years down the track, Amazon did get a lot more competitive than those easy e-todes back in 2013.

So during COVID, I switched over to selling e-books on Amazon, so that Kindle publishing game, which has been great and still doing that. And then more recent from that, I've been buying online businesses, so content sites like a WordPress site. And I've brought some newsletter businesses, and they've been great too. So I've been buying online businesses, and that's been a whole different game and much faster and much more certain than this. It's from scratch yourself stuff. But I've been really enjoying doing that. Well, that would make sense if you know what to buy.

you're buying from a reputable person and you're not overpaying. So there's probably a lot that goes into that. Let's start out with how do you figure out, let's say you're a business person right now or you want to be a business person and you think, okay, but how do I find anything? What do you do? What do you tell them? So there's some really good platforms that are the marketplaces where these online businesses get bought and solve.

And the bigger the deal, the more involved those brokers will be in vetting and validating all the numbers and all the tech. So they're very small sites. There's a few platforms where you can start small. So Flipper, which is F-L-I-D-A, is a great site where there's, you know, sites with a dollar reserve right up to the million-dollar plus mark. So that's sort of my go-to first place to look for these deals. You do need to, firstly, decide what kind of business model you like, because you can look at all these businesses for sale, and they all look amazing, and they all make profit, and they've been up and running for a year or two.

But I have my own criteria of which kind of business model, how old I like to be. I don't want anything too new, like an older one, at least a year or two, ideally. And then sometimes it's kind of a bidding process, like an auction, in front of. Sometimes it's just an asking price you can negotiate direct with the seller. So I think at the moment there's some really good buying. I've found a lot of the sellers are very motivated. There's a lot of people's projects they've started and some great work, writing a blog regularly that they haven't fully monetized it.

Or they started and had plans to scale but got busy with a day job or family or just got bored. I think a lot of people just sort of go too fast and burn out. So there's some really good science. for sale and it could be things like a blog site that's got adverts on it and some affiliate links and between the ad income and the affiliate links it can earn a really nice income stream and so I always start small and I teach other people to start small

the first time you buy a website you've got to migrate the domain which is easy when you know how but the first time you do it is nice to start small and then over time what I'm doing myself and looking to help people do is build a portfolio. And once you've got a bunch of these, it's a different sort of aspect class, but it's a pretty smart way to get some income streams that you don't have to work hard to build yourself, but just buy other people.

And the price you pay up front, and what they can earn, I think, insane returns on that investment. Okay, so if I understood you're right, one of your criteria is to look for those that are a little older than in the business a little longer, not a newbie startup kind of business. Yeah. So that's a three things. Yeah, that's Disney one, yeah. So that's criteria one.

So go ahead. Yeah, so at least one year old, never below that, but mostly they've been sort of five or ten years old. The older, the better actually, because Google ranks things based on a bunch of factors, but how long they've known interested the site and how long those keywords. It's relevant to that site. That really helps you get to the top of page one for the keywords you need. And then the next criteria would be the business model. So things I don't like, see things I like, but quite a big no-go area.

So I don't like E-Bog as a product just because there's a lot of complexity to manage those supply chains and inventory. and I'm a physical product skill with the best of them. You know, I've done really well selling physical products, but I don't ever want to buy somebody else's physical product business. I think anything reliant on Facebook ads or where you're just on one big platform like Amazon or Shopify, I'd rather start one of those than buy one, and I'm a little bit nervous about buying those because you've just got a lot to manage, if not as passive or straightforward, and a lot that can go wrong,

and a lot that can cost you a lot of money if it goes wrong. So that drop shipping or Shopify or Facebook ads to a listing or even Amazon for FBA products, there's a lot you don't know and don't get to see when you buy those businesses. So I keep clear of those, but the ones I really like most of all, the three business models I really love. One is a content site, just a straight, boring blog, WordPress, blog posts, about some niche that people are interested in and always will be, a nice evergreen subject. And then on that page, we can add reviews of products or recommendations for products,

and that earns some commission and a banner of some nice advertising on the site. Not too much to be annoying, but it's enough to earn some extra income. So the content sites are really straightforward, and that's definitely the place to start if you're doing this. You don't need to write them yourself. There's a whole world out there of keen freelance writers who will write books. articles to keep it going. And maybe you don't need to add that many. I've just bought a site that's only got

30 articles on it in three years and it makes 10K plus a month income, pure profit. So that's big cool. So the other things I like in terms of the business model, I love newsletters because you're straight

into the inbox of your reader. And that email list is a great asset to be able to buy, which would be really hard to build from scratch. And then I really like software as a service or SaaS businesses, but they're a bit trickier to run. So that wouldn't be your first site you buy. But anything where there's a subscription,

kind of like a monthly design pack or something like that, is one I send out to one of the businesses I bought. And it makes a really nice, steady income. That $1,500 every single week, comes in a straight profit on a site that I bought online. and it's a monthly subscription business, but it's actually a digital product that's sent out it's not a physical good.

So those are the three best business models. And I like to get businesses growing, and quality is really high. I don't want something that's been kind of regular. Something that's been that's been able to

the sound that's tested type of Google updates or, you know, changes in the economy, you know, being recession proofs really important. Kind of bumpy a few years. And so there's actually some great, great deal that I have far more great quality businesses to buy than I can possibly buy myself. So I've been really enjoying buying and finding my own and also helping other people as well. So a few minutes ago you said you recommend people start small. define smarts and start small

so let's say you're looking at one of the you're looking at different businesses you're going after a blog what is the definition of starting small oh I like under $5,000 maybe just the size where there's a little bit of income the thing's proven there's some content there's some affiliate

links there's some ad set up but you can see a way to own it and grow it and improve it and I really do have a bias towards subjects I'm interested in myself. So if I bought a website that was a blog all about how to repair classic cars or something, I just wouldn't have a clue about what to write about next, whereas if it was something I'm a mum or something to do with tennis which I play, or, you know, something that I've got some connection to,

I find it much easier to, A, get excited about how to grow that business, but I can sort of work with the writing team a lot better to kind of plan future content. So there's a bit of research needed on what keywords are people searching for because you want your content to be relevant. And then you want your writer to do some nice original research and writing. We barely use AI. We have the writers use a little bit of AI to help sort of structure the articles and find some snappy headlines.

But we generally have humans write the articles. So if you start with a 5K purchase, it'll be a pretty much a starter site. And then I basically put together a 12-month plan that's kind of a quality, steady stream of new articles that are relevant for what markets interested in that are going to rank well on Google. And just it's so passive at that point because the writers do all the work. And they can upload new articles and images. and then as the volume of content grows, the number of readers turning up to the page grows

to read and spend time on that site. Google's tracking all that, and over time that site should rise higher and higher. And the Google rankings get more volume of traffic, which is a direct link to more income from your ad and your good articles reviewing the products or services. The affiliate commission from those can add up really quickly. But you need to get the volume through your page.

which is really comes back to a good content plan, which you don't need to be an expert on SEO, and you don't need to be a writer. But I'd rather put, if I had a 10K budget, I'd rather put 5K into buying the site than 5K into some really good quality content and having some great new articles written. And then, a year from there,

you could have a site that's really cranking and getting a really healthy return. And you can feel that you get that excitement and pride that you have on the entrepreneurial side, but you're behaving more like an investor looking for return and investment and buying an income stream. So it's kind of that mix of entrepreneurship and investors being an investor as well. So it's a really nice middle ground where you still get to be creative and grow something,

but you're buying something that already works. Best of both worlds, I reckon. Yeah, so in other words, what you're looking for is a blog, let's put it as a blog, that's been in business or been doing that for at least a year. The older, the better, because, you know, it's been seasoned. And they probably don't have a lot of ads or a lot of affiliate links because that's where the money's going to be. So that's where you can see if you keep the content going,

you can add things. Am I right on that? Exactly, yeah. So you can shape the future content plan. It's not that complicated. There's lots of varieties out there. It's well as a nice, safe subject. I'm not going to do some spammy thing.

I can't think of a good example, but, you know, like I keep it pretty clean and wholesome. The subjects I choose and something that I'm personally interested in. And if it suits product reviews or services that relate to that subject, that can be a really good way to grow it quickly. So how do you know you're not going to buy a dud?

Oh, well, this is the set. that keeps me awake at night. So the nice thing about Google is there's really only one big search platform, sorry, Bing, but don't know too much of the thing. So I look at WordPress. I only buy WordPress sites, and we have really good tracking available from a platform called Google Analytics, which is sort of the back end of the website and how Google sees that blog. So they'll tell you how long people stay on the site for which country did they come from.

how did they find the site? Was it clicking through an ad, or did they search organically and find it naturally? Those sorts of metrics help me decide if it's quality, is it spammy, is it box traffic? You know, there's a lot that can be, you know, the person's selling can say, or we get 100,000 clicks a month or view the month or whatever. But you can actually validate all of that. You can see the advertising revenue. you can see the numbers of visitors to the different pages.

You can see which article's performing the best. So there's no sort of debate or sales pitch from the cellar. You actually see first-hand data of who's site version. How did they find it? How long did they stay on each page and click around on the site? Was it obviously a bad experience if they all bounce straight off 10 seconds later? So I quite like that. It's very sort of just straight analysis.

And I've got some questions I ask the seller as well. But basically it's all laid there when you have their Google Analytics accounts. So it's part of the purchasing process. I always get added to Google Analytics and have a good dig through all the history of that site. And not really any of that can be faked. So quite like that. I feel quite confident buying once I've seen that. And obviously the bigger the deal, does it come with a T's like,

Does it come with a team or how big the social media side of things? I don't really like doing social media, so it's good for doing it. But if there's an email list or an assistant who sends out a newsletter each week or at that, then there's a few people they've worked through with a great blog site. You can do it online. A couple of Zoom calls are something quite good often to walk through the back end of the advertising. account. So you can actually ask for them to do a log in and walk through a lot of data on their side as well. So it's very transparent and some of the brokers

like Flipper will validate and go through the data and check it all out. It's a bigger site. So over 50k they put some of their analysts on the deal to make sure what gets listed is really good quality. But a few years. traps for new players, but generally, if we follow some good training, I think there's some really good, really good purchases out there, some great deals. Okay, so this all makes sense. Now, let's turn the corner. So your business model right now is not only are you looking for those kind of deals for yourself personally to have multiple streams of income, multiple businesses, but you're beginning to teach others how to look for and get businesses like that as well.

Is that right? That's right, yeah. So I've put together a program where I share with my students all the deals I'm doing so they can watch over my shoulder and see what I'm looking at and what I like or don't like about different deals. Because there's a bit of a science, valuation could be based on income, but there's also a bit of a set of skills around the negotiating. and maybe if you're building a portfolio, how businesses will link into each other.

You can get a bit, make things quite fun that way. So I teach people how to start small, which is, I think, definitely the way to start. I teach them how to look for the deals on the best platforms and how to ask really good questions of the sellers and keep safe while you're buying the sites and also know what to do once you own it to continue getting good content produced and growing it. and maybe growing a portfolio. So the people that have joined the program so far are kind of a mix of entrepreneurs, corporate people who've been working really hard

and have a good income stream and want to do something for themselves and see this is like a retirement plan to buy something now, build a debt for a year or two and that's the future income stream. I think it really appeals to people that are not so dependent on their employers or worrying that when they retire,

they're just going to grind your hold and have no income or any projects. So I think it's quite a meaningful thing for people to do to start a strategy like this and start buying a couple smaller sites, getting a bit more confident buying some bigger sites, and then there's a whole portfolio of really valuable websites there that you can live off. So I could live off my portfolio of websites I've bought now. I don't need to do anything else, which is very nice. I do really enjoy teaching.

I've always taught entrepreneurship and universities, and I've taught Amazon courses, and so it's sort of an obvious thing for me to help people that want to do this. There's some other people out there that teach this kind of thing sort of in a start from scratch, start your own blog, and that sort of high-tessel thing. And then there's people who are kind of X Wall Street, big, M&A backgrounds, doing great big deals with other people's money.

and they teach some of this acquisition stuff on doing big deals. But I think the band I'm in is that sort of mid-space. It's sort of the acquisition entrepreneur. Maybe the first business you buy is a learning exercise, and the second one gets you out your day job, and then when you've got three or four, then that's a nice portfolio, and it all adds up to be a really healthy bunch of income stream.

So it's not throwing money around like I don't care, and it's somebody else's, there's no tricky finance. So the people that do my course are generally starting small, but usually their own funds and their own resources to acquire these sites, which is a bit different from dealing with banks and investors and business partners, you know, keep it really simple and something you own and learn a little bit about. You don't need to be very techy to do this, but you do need to be able to work with writers and, you know, outsource work to a designer,

if you need your WordPress site, you know, make it look different. So I think you need to be sort of open to learning, but you don't need to have a technical background as well. I'm not tech at all. I couldn't write a word of WordPress code. Just, yeah, keep things pretty simple at my end and outsource anything techie or content-based

and lots of great agencies that will do the migration for you and sort out your hosting and all that stuff. I don't have a clue about that. and know what needs to be done, but I don't know how to do it myself. Yeah, that makes sense. So how could somebody find out about your program? Well, it is a program called Freedom Navigator, and what we could do is pop in your show notes,

maybe a link to go and have a look at a free training. So I've got a – it's about an hour-long master class, and I do a deep dive into three of the recent deals I've done and how I found them, how the numbers look, what I learned doing those deals. There's always a, you know, a bit of interesting stuff on this. fringes of every deal that made it, you know, interesting story as well, and how those deals are tracking now, you know, years later in some cases.

So that's in a free training. So if you go to Aspiring Entrepreneurs.com, the website is Aspiring Entrepreneurs.com. And on there, free training and also a free book. So I've got a book called Freedom Now. People are like reading rather than watching webinars, you can read that and see how these deals look and how exciting it can all be and a few lessons and more stories

and a bit of inspiration if it's something you might be interested in. And then you could come and have a chatting program. But we've been a really nice community. I really like teaching this stuff. And we've attracted a really smart, pretty savvy people who really want to learn this and take it as a series of. opportunity. It can be up to buy just so

high and the return on investment when you find these good deals and negotiate a good price. I mean, it can really take off pretty quickly, so it's a bit of a thrill, and the students I've got now are loving what we're doing and are really enjoying it. And it doesn't

take long. When you say it could really take off pretty quickly, it's not a years-long kind of thing. It's quicker than that. Yeah, well, that That's the beauty of it. If you wanted to start business, you've got years or month least of that grind, the evenings, the weekends, taking the cash out your other J-Dob and your time and risk to build it.

Whereas there's one of these, it's already proven, it's already making income, it's already up and running. Basically, pay them some money, get the password and start collecting the cash. It's brilliant. So you do pay up front. There are ways to structure the finance with the seller when the deals get bigger. so you don't pay all that print, and that's good both for your cash flow and to manage the risk

and keep everyone honest. So you don't need all the cash up front for every deal. But, yeah, it's been a real adventure and something that's, you know, found very profitable and lucrative, but also much less hard work than building a business, far less work, much faster to that end point

of having a profitable business, which is the holy grail to so many entrepreneurs. Yeah, no, Sophie, this is brilliant. It really is brilliant because, yes, the people that listen to my podcast are entrepreneurs are looking for things like this. So it makes perfect sense what you're talking about. So the best thing to do is to go to aspiring entrepreneurs.com. I will put it in the show links below so that they can go and they can get, listen to that

master class and look over your shoulder and stuff. Is there anything else you want to share before? I'm looking at the clock and we're getting out of time. So anything else that I didn't ask that would be important for somebody to hear? No, just grab a copy of that free book and you'll pretty quickly get a feel if this seems like a right kind of strategy for you. So free book and free training and you'll get a pretty good taste of how it can be and what it looks like and if you are keen I'd love to help you start building your online portfolio well that's

fabulous so thankful for you being on today's show it was fascinating it was interesting I'm going to go check out that master class and the book as well so thank you Sophie for being on today's call thank you very much for the opportunity and I hope your listeners finding this sort of different way of approaching building and country A bit different, but I think it's a really worthy one and with having a good look at. Yeah, I agree. So until next time, this is Nina Hirshberger saying go out and make it a great day. Thank you for listening to Megabucks Radio with Nina Hirshberger.

To learn more about the resources mentioned on today's show or to listen to past episodes, visit megabucksradio.com.