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June 1, 2020

How to Value and Sell an Online Business with Andrew Voda of Empire Flippers

How to Value and Sell an Online Business with Andrew Voda of Empire Flippers

Have you ever thought about online businesses - that they’re as much of a business as any other business, the kind that has bricks and mortar? Well, the interesting thing is that this is big business. Ed is not kidding you when he tells you that...

Have you ever thought about online businesses - that they’re as much of a business as any other business, the kind that has bricks and mortar? Well, the interesting thing is that this is big business. Ed is not kidding you when he tells you that some of the multiples that are being paid for some of these online businesses are remarkable. Ed had the opportunity to talk to Andrew Voda of Empire Flippers which is a domain brokerage, so to speak. This was a great one because Ed was interested in learning about how regular valuation techniques apply to this asset that resides on the internet. 

Enjoy this conversation with Andrew Voda!



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Ed Mysogland  0:05  
So I'm your host, Ed Mysogland. I teach business owners how to build value and identify and remove risks in their business so that one day they can sell their business and maximum value when they want how they want, and to whom they want. On today's show, I am way stoked about this. Ever since I started the podcast, I've been looking at these guys. It's Andrew vota from Empire Flippers. And one of the things that drew me to this company was their selling businesses, online businesses. And you would think that it would be intuitive that there was a big market for it. But not until I started doing t \he research for this interview did. Did I really learn just how big a business it is. So Andrew, welcome to the show. 

Andrew Voda  1:54  
Thanks, Ed. Glad to be here. And yeah, appreciate you inviting me to the podcast excited about it. 

Ed Mysogland  1:59  
Before you got on. I gave the audience a little bit of a an overview of Empire Flippers. But if you don't mind, can you talk a little bit about Empire Flippers and what you do and how you're serving business owners? 

Andrew Voda  2:11  
Yeah, sure. So to start with Empire, flippers, high level overview. Basically, we're an online business marketplace, where we sell only online based businesses from around the world. So nothing with much of a physical presence anywhere. And these businesses may be set up by people in Australia, Switzerland, India, United States, wherever we have buyers from all over the world, as well. And we vet the businesses, sell them and then transfer them over to the new owners. We'll probably get more into the businesses and everything later. But basically things like E commerce businesses, people that are selling products on Amazon are some like content and informational based businesses as well, that kind of look like blogs and product review sites. That's what Empire Flippers is, as far as who I am a little bit about what I do at Empire Flippers. I'm the Lead seller advisor. So really, what that means is, I'm helping out business owners before they come to our marketplace, and sell their business with us to make sure that they understand you know what the process looks like. And then probably most important to them, how much they can end up taking away from a sale, but in doing all that want to make sure that their business is good to go ready to sell and, and that it's a good fit for our marketplace as well. So pretty much me and Empire Flippers in a nutshell. Wow. 

Ed Mysogland  3:36  
So how did Empire Flippers start? How did it even come into being? I mean, I Intuit like I said, intuitively, you'd say, well, of course, you know, you have an online business, you know, it's an asset like anything else, of course, someone will would want to buy it. So how did Joe get started it? 

Andrew Voda  3:50  
Yeah, so Joe and Justin are the founders of Empire Flippers. And they pretty much started about 10 years ago, the way that they got their started is they initially were building some small websites themselves, and then selling those websites after they started to earn some money, talking, earning like 10 to $100 a month start off real small, and then they would sell those on a multiple of the monthly net profits. So really just started off selling businesses that were a few $1,000. And they were just ones that they were building themselves. Over time though, they started to develop a really reputable name for the websites that they were building and the online business space close to a decade ago. It's a little bit more like the Wild West, where people didn't really know what they're looking at or what they're buying. So when other people wanted to sell their businesses and websites, they came to Joe and Justin and Joe and Justin started selling those websites as well and taking a fee. As you can probably imagine, from there pretty much just snowballed into bigger and bigger websites, and then opened the doors foror more monetization methods and business models as well, where it wasn't just little websites really became like SAS businesses, software, businesses, international ecommerce businesses as well. And, and here in 2020, we've sold close to $125 million worth of online businesses, and over 1000 of them as well, 

Ed Mysogland  5:20  
that is truly remarkable. I mean, Empire Flippers really had first mover's advantage. Because I've been in the industry for a long time. I've heard of them. I never I Not in a million years, I thought it was a funky name. But that, but that was about it. But now once I started researching, it's like, oh, my gosh, this is a big business. So do you have a lot of competition? 

Andrew Voda  5:42  
Yeah, yeah, there's some other competitors out there. But haven't heard much of good for you.

I actually saw something about Empire Flippers. Since we're on a podcast here too, like Empire Flippers started blogging about this and doing a podcast while Joe and Justin were building up the business in the early stages. And I think they did a really excellent job at at marketing and getting their name out there and talking about this industry that not a lot of people knew about. So that really caught on and gained a lot of popularity has really helped us to just grow in our online presence. And in doing so that's helped us to really attract a lot more buyers and sellers and build up our name in the space over the last decade. Traditionally, when we look at the value of an asset, the tangible and intangible assets that we typically value. I mean, it's based on three things, earnings risk and expectations. As a digital asset, I'm assuming the same holds true, right? Yeah, so put simply, there's, you know, earnings is obviously a huge part of it, we're typically looking at the trailing 12 months, net profit times a monthly multiple to get to the valuation price. So again, average monthly net profit over the trailing 12 months, times a monthly multiple. So important factors that go into it, obviously, earnings, it's a big part of it, and then risk and expectations, they're going to be reflected, as I imagine, really any other type of business models, well, is there going to be reflected in that in that multiple at the end of the day? Yeah, but the inverse of of a multiple is like a discount rate or cap rate. And that quantifies risk. But when you start talking about some of the multiples that you have, I mean, in my world, four to six is a big multiple in, in your world, that's probably a bottom feeder, right? That's actually so you may see on our website, that we have these multiples of goes up to think we have one for 64x. Right now, which but that is a monthly multiple. So on a yearly basis, I'm gonna need a calculator probably to you know, know how to buy 12. But so your multiples are based on monthly multiples, as opposed to and I get, but the risk is still the same. When you start talking about forecast with digital assets, you know, let's just talk content. I mean, consumer tastes change, how does the buyer get their investment back, because it seems as though there's the risk associated with these types of businesses certainly more amplified, and more variables than businesses that a normal brokerage would sell. Right. With that risk, though, comes opportunities. Well, a lot of the businesses that we see, you know, it may be someone that doesn't have a ton of experience selling it, and you have someone that has a lot more of a digital marketing background that comes in, and within the first six months, they're able to double or triple the business. And even that is an underestimate compared to what some people in groups are able to do once they take a business over, that can be more risky as well, if people don't know what they're doing. But once we're selling the business, we've already vetted it to make sure that the financials are legitimate. And then there's a handover period as well, where people are learning from the seller to make sure that, you know, they can run the business themselves and, you know, haven't haven't gotten into something that they don't understand most of the acquisitions or strategic acquisitions. So, you know, a lot of buyers in in a normal brokerage would be, look, I'm buying myself a job, I'm going to take the place of the owner, whereas in a lot of the deals that you're dealing with, it's the one plus one equals three strategic value, right? Yeah, and well, with strategic buyers, we see that sometimes, but a lot of the buyers, they may not already be familiar with the vertical like if it's pet products, they may not be familiar with that space, but they know they know what's making the engine run and how to make that that website or that ecommerce business, continue to sell more products or just grow and increase in value. Okay, so So they're doing their due diligence like SEMrush and Ahrefs and things like that and scope

Ed Mysogland  10:00  
Been out the areas that the website is underperforming. And because it's all our good, right and how reliable that kind of information is, I know enough of the vernacular to make me dangerous.

Andrew Voda  10:13  
So then they go hunting for deals like that. And they know that they can add some secret sauce to it and amplify the value, right? Yeah, yeah. So that's definitely one type of buyer. One of the things that you talked about was content versus ecommerce companies content. I mean, I thought content is just that it's it's blogs. It's it's Ed's blog. If Ed's not blogging, How is there still value? How is there? How does that stay? Yeah, so that's a good example of a blog that, you know, will define as a very personally branded blog, where that's ad talking about ads experiences, adds work history, it's probably got pictures of beds face all over the blog. And those are more tricky to sell, if the author or the writer is really intertwined with the website and the content, and therefore that audience as well, those businesses are trickier to sell and require some, some longer Exit Planning to start to kind of extract that presence from the website. But a lot of the websites that we see, they're ones where the author isn't really like the star of the site, it might just be a site that's, you know, best fishing or something like that, where it's site all about fishing, and there really isn't like a main author or person that's steering the ship there, so to speak. So more, so just the content that people are coming for. So you have the same personal goodwill challenges that in a normal business, whatever, especially if the owner is the blogger or the content creator, I can imagine. Yeah, but you go through that a lot of sounds all the time. I mean, yeah, I shouldn't say all the time, but a good chunk of it is I if the risk is the owner, the owner is not there, how do you transfer the value? And it's, it sounds like you face the same thing? What's the composition of your buyers? What are the buyer pools look like for you, right now, on our marketplace, the sizes of the business range pretty significantly. So there's going to be different buyers based on the price of the business based on the business type. To just give a little bit of background, we have businesses right now that are around $20,000. And they might be like a small blog ones up to about $5 million, which are more like a like an international ecommerce business on the lower end, where you might have like a $20,000 business. And that's typically earning about somewhere like 500 to $1,000 a month, that type of buyer, it could be a few different types could be people that are brand new, and you know want to get into the space without building something themselves, they want to have a little bit of cash flow and you know, something to chew on while they're tinkering around and learning the ropes. Or it could be people that run a portfolio of websites and they see one that they know exactly where to take that website, how to grow it and make that earn a lot more money. And maybe they end up flipping that down the road as well on the higher into a lot more private equity groups experienced investors on the upper end, and then everything in between same kind of thing with the exception of individual buyers. So essentially, the three buckets that a normal brokerage operates from is individual buyers, strategics, or direct or indirect kind of competitors. And then private equity groups and sounds sounds somewhat similar, just different assets. Yeah.

Does the value differ? Depending on who the type of buyer is? That's an interesting question. Does it differ based on who the type of buyer is, for example, when we have a strategic buyer, that's, that's looking at buying back the company and they can add gas to it and make the one plus one equals three, they're immediately recognized that they can pay a higher multiple because the mechanics of the deal and the the value associated with it makes financial sense. Yeah. And they can they they inherently have an advantage over individual buyers. Same with you guys are Have you seen that? Yeah, so definitely with experienced buyers that are either already in the space or know how to run that business, they're going to be moving quicker for the most part and you know, someone that doesn't know it, but with our listings on our marketplace, we're a fixed price marketplace. So the listings don't ever sell above the asking multiple, but there are plenty of times where we don't seem to me like strategic buyers that are already in one vertical just buying upsides in that vertical, but certainly more experienced buyers are gonna be paying quicker or they'll pay that full

Ed Mysogland  15:00  
We'll ask him price. So you don't you don't ever get into a situation where it's almost like a controlled auction where you you have multiple buyers bidding on it. And we'd say it maxes out at at the ask price, then what do you do, just pick the one you liked the most?

Andrew Voda  15:16  
Yeah, so that's at that point, if you have a couple of buyers, that's a good problem to have. Yeah, it's a good problem to have one of those better ones. So once that does happen, we call it is the wire race. So what we think is the most fair there is two buyers are competing on the same business, they both agreed to the same or both agreed to pay the same full list price, it really just comes down to whose money is going to land in the bank account first. So it's purely economic. And not, there's no emotional connection to the buyer. It's just whoever whoever can get their money in the account first. And the escrow account usually happens, though, on businesses that are like sub $50,000. And there might be times where we put up a new listing. And within the first two hours, one hour, even sometimes you have three buyers that are sending over, you know, $30,000, they barely reviewed the site, they just know, this is what they want. And they move very quickly. Well, one of the things that we've done and like said, we've been doing it for a long time is when we have multiple buyers will accept both offers, subject to the non performance of the other. So this guy for whatever reason he doesn't want to go through he knows that someone's biting, biting at the bit right behind them. And yeah, that provides a little bit of buyer leverage. I saw that. And this was another thing that totally floored me was SBA financing. You guys can finance these things through the SBA not tell me about that. Yeah, so that's happening more, but it is still, by and large, fairly uncommon. In this space, actually, out of all the deals we've sold, which is right over 1000 deals, they've all been cashed deals. So we've had some that have qualify for an SBA loan, but we've had people come in and buy them first with cash, I gotta be for going that route. So when there is financing, I mean, do you guys get involved in that? Are you just like, You know what, show up with your check that that that tells us the story? Yeah, well, we have some preferred lenders that we work with and have done, you know, ecommerce deals before with an SBA loan. The process, though, is usually just far more drawn out, than if we're using cash obviously, usually takes about 60 days on average to sell a business from from the list until the money's in, man, wouldn't that be great. So they're trying to move deals fast, typical businesses, six to nine months, and it's a long time. So what's even funnier about the SBA financing, as you guys are probably the authority on market comps, I do the valuation, you know, because change of ownership requires a business valuation? Or where do you get your market data? Well, you got to go to somewhere like Empire Flippers to get your data, that seems like a pretty funny way to go, that your your own deals are getting financed with you, you're gonna help the SBA vet that deal based on your own market comps. Yeah. And that's something that with SBA deals, that's why it's still very much not the norm, because it is, I wouldn't say the Wild West, we've got to move on from that. But a lot of these deals still don't qualify for for SBA loans for a really a number of reasons age or seller location, you know, website and not like any sort of intangible, or I should say, you know, any any sort of physical assets involved, and banks just typically don't really know what they're looking at there. That's for certain.

It's funny, I run into a lot of business owners that insist that their website has value over and above there, the aggregate business value, you know, me being the Grim Reaper business valuation, I'm like, that's just not how this works, you know, these assets all work together to contribute to the overall value. And so we get into squabbles about that. So can you talk about just the value and how that value of a website or that digital asset is part of the whole or if you are going to carve it out? How do you value it and the things that go into a normal valuation? Yeah, it's great to meet another Grim Reaper out there. It's been a lonely road. I feel like people don't understand me all the time. But yeah, so really going back to the question there, the website presence or other sort of, you know, followings or social media or intangibles that a business might have on the internet. What does that do to the business value does it does it really increase it a lot? Typically, it's a no really where that should show up and this is what you were alluding to already, is a lot that should be referred

liked it on the bottom line, they have a really outstanding web presence, if there's a lot of traffic that they're generating online already, if they've got huge social media channels, that should be shown in sales, it should be shown in the profit, just having an Instagram account with 10,000 followers, those followers aren't going anywhere doing anything or they're not like real, which is a hard one to vet to. It's not going to shoot up the price of the business just because, you know, you have a few Facebook fans, Twitter followers and whatnot really needs to be a part of the business and, and really be tracked and shown to attribute revenue from that source. That brings up another question. So if I by, ABC for lack of a better acronym, yeah. So if I have a LinkedIn page, does that normally go? Does the Instagram page does the Face Book, the Snapchat, the Tiktok, and things like that? All of that goes in one tranche that if I'm buying them all, yeah, so it's gonna be all the assets that are part of the business, which I've actually never seen. I've seen one business that had a Snapchat to it. No, tiktoks yet, but you're right around the corner.

Starting to see, you know, get them out to have like YouTube share half for the most part, though, it seems like the most important ones are, are still the big names like Facebook, Instagram, to the largest degree, and then a little bit like Pinterest, Tumblr, and whatnot. I got yeah, forgot to follow it. It's part of the business that doesn't need to come with it. So do you get any pushback from the seller saying you have I bought all this, all this influencer marketing, I've aid for these Instagrams, all this traffic and all the costs associated with that, you know, sunk costs in the building this? How am I supposed to recoup my investment? I mean, do you ever get into that, get that pushback? Yeah. And I wish that I talked to those people a few months, you know, before they ended up investing, getting sold by the the Instagram service to get them a bunch of followers and whatnot, because it's pretty crazy how often I hear of people hiring social media agencies to increase their marketing, and it results in nothing, or the owner was doing it before and then things got worse after they hire that marketing agency. Are you getting pushback on these sellers that are sitting there and saying, Look, you know, it's kind of like, look, I bought a million dollars worth of equipment, you know, I need at least a million dollars back. Well, that may not happen. Sorry, no, if it's one of those things that we can prove that, let's say they spent $5,000, on an Instagram page, and that really had no effect on the business whatsoever. We can add it back, if it really was not part and let the buyers decide whether or not they feel they need to pay for it or not. Yeah, but for the most part, it seems like one of those roads where people want to go down if they can, but it's not always going to be one that's going to return their investment. I got it on a personal note, I've had a domain that I've been sitting on forever and go dead. Yeah. And GoDaddy, you know, on the right on the right hand side, where it's manage your your domains. It's giving me a value. So I have the the domain that I've sat on for years called business And I know there's lots of other people that went to GoDaddy, when probably when you were just a little thing. And so one of these days, maybe I'll mess with it put up a storefront or a capital source. I don't know if you're advising me what what do I do? Is it better to to leave that domain alone, let it appreciate? Or is it better to put something on top of it and buy my 50,000 Instagram followers and then call you up and tell you what a great place?

Yeah, so it's a good question with domains and talking about sellers that I've spoken to before. I've, I've had some that have come to me and they have this domain, and they think it's worth a billion dollars. They want me to sell that for them that I certainly can't do with domains. It's tricky. To give you a positive example of what can happen. But this is certainly an exception to the rule is I had a friend that sold a website, it was actually like a similar finance term. And someone emailed him, he was the owner of the domain. So he got an email and somebody wanted to buy it and ended up selling it for like $15,000 because it was related to a project that that person had going on. So they wanted to buy it because it matched the name of their project. Yeah. Most of the time though. The value of the website isn't in the domain name. It's it's really the website itself. Yeah. Some exceptions though, would be clear keywords like diamond I was looking some up to before the show because this isn't I don't do too much domain investing or valuing. But there was one three that sold for apparently

Google sent me this it sold for $14 million. And that actually sold to Chinese company because if you're like a foreign speaker, you don't know, if you'd like speak Chinese, you can't say business to your Chinese friend that doesn't speak English. So you just say the numbers. So there's some domains out there, they're pretty valuable that are just numbers. So that's, you know, since that's easy to communicate with other people, I've had a couple of offers, and it's one of those things of 15 bucks a year or whatever it costs to hold them. So why not? Why Why not just hold it? As we're talking about the brokerage of online businesses? What is their markets for the rental of intangible assets like this? There are definitely sites and marketplaces out there that broker domain names, you know, GoDaddy, they have their auction system name cheap as well. There's a lot of other ones too, that are a little bit more set up with a brand that's like ready to be plugged and played into it. Is it worth anything? I mean, not worth value wise? Is it worth anything from the standpoint of, you know, they say, you know, your your domains worth $8,000? Is that a good number? Because I'm certain out of all the millions of domains that they're thinking with certain there's some sort of algorithm or something's going on, that's giving them that number. You and I both know, having been in the business for a while that garbage in garbage out, I would much rather talk to somebody that that has sold something, or that has valued something, then just rely on an online calculator, you know what I mean? Yeah, and there can be so where you start to see domain names that get acquired for, you know, 1000s of dollars, maybe even up to like, $100,000. Really, what's happened with those domains is they used to be a website, and the previous owner, for some reason that is were over the website, they stopped running it, but maybe it had a lot of history to it and had content on it before then an expired. But there's still a lot of websites on the internet out there that are linking and referencing that website and the backlinks. So the backpacks, yeah, so the backlinks have value, I get it. Yeah, that's like SEO buzzword number one, right, there is backlinks, that is a hot commodity right there, I see a list of some groups that have been I'll see a list of domains that are expired and up for sale. And they will range anywhere from a couple $1,000 up to like $100,000. I don't know if they ever sell for that much. But it could be one where maybe some old lady was blogging about cats for the last 25 years. And you know, she passed away or something and somebody can buy that site. It's got all this SEO Mojo from blogging about cats for so long. So they might start a cat product review site, and they have a huge head start compared to if they just bought a brand new cat domain. I gotcha. So it's about the head start. I get it. But how do you prospect? I mean, where do you Where are you getting your business? I mean, aside from you've been doing it long enough that I'm certain you have a referral base. For me. I mean, accountants and attorneys and financial planners seem to be the people that I talk to who in your world do you talk to that serves as as your feeder for the brokerage? Yeah, we've had the benefit of having a lot of inbound leads over the years, where people are finding us through our podcasts, or our marketing or content, we have a really great marketing team that's always creating new articles, you know, ranking for different SEO terms as well. So that's one big source of where our buyers and sellers come from. Beyond that, though, going out throughout the world, going to different conferences, we have people that live in pretty much every every continent at Empire Flippers. So we're meeting people all around the world. Besides that, we do some outreach as well, to talk to people that have like larger Amazon or E commerce businesses or certain types of websites that we will outreach to to see if they have considered the idea of selling. And then you know, referrals from previous clients probably kind of standard fare there as well. But yeah, we've had the good fortune of having a lot of inbound leads to speaking of Amazon, so the planet has come to a screeching halt. And rumor has it that the affiliate Commission's have been shellacked. So does value just evaporate for the online business just overnight like that. It did. So a lot we've repriced a lot of our websites that we're using this program, Amazon Associates and it was a very aggressive price decrease. So some of these businesses overnight, you know, went from, you know, pretty much got cut in half

Yeah, so how do you have that conversation? We're having conversations now that business isn't necessarily what he what it was 90 days ago and looking forward to the next 12 months, you may or you may not get it back. So what's the conversation that or how are you having the conversation? I'm assuming the same way we are? Yeah, well, you know, sellers that were either wanting to sell or were currently listed and have their businesses up for sale. The business has had to be repriced, and, and you know, maybe not all the sellers wanted to continue to sell their site after that. So they temporarily pause it or delisted it, because they're still getting traffic. So they may be able to replace Amazon associates with another program, make up some of the earnings there and increase the sales over time. But yeah, for others, it's been it hasn't necessarily affected buyers as much as it had, as much as it has sellers. We're not seeing like multiples go down or, you know, offers go down from buyers. But certainly it hasn't pleased all sellers. But I guess if there's a silver lining out of all this, it's what's that expression, rising tide lifts all boats, where I'm going with that, I'm gonna see if I'm going to the place I think I'm going with that expression. But basically, it's a great like lesson to diversify your affiliate revenue, don't rely on Amazon, you know, start to really treat your website as if it's, you know, a real business and don't rely on one client, diversify those earnings some, that's what's going to make businesses stay around longer. At the end of the day, that's what most that's the multiples you're gonna increase to and people are gonna get more from the sale their business anyways, that's interesting. So So you have the same customer concentration issue, in your case is just a affiliate concentration, I have to imagine that Amazon slashing all of that was actually was really good for Amazon. Because Amazon still rockin So the motivation to slash the Commission's I still don't understand why they would do it. Because I mean, the people that were serving them, were still able to serve them. You know what I mean? Yeah, I definitely know what you mean, there. Amazon's just everybody in the world pretty much knows Amazon at this point. So at the end of the day, if they slashed the Commission's that they're paying out to affiliates are people going to stop going and buying through them, there could certainly be website visitors that go to a website, now they click on an affiliate link that takes them to a different website, let's say chewy, a pet site that a lot of people use to buy products on, they may see that product on chewy or another website, then just go back over to Amazon anyways, and you know, price compare and then just buy through Amazon that way, as Amazon stock goes up, the Commission cuts keep going, it seems like you sell like online courses, I was reading an article that the online education market is just going crazy that, especially now where you're you dummies and Kajabi sites and teachable that people are cranking out courses on how to pick whatever it is you want. You want to learn. Is there any value to those types of businesses? Are those exclusive to the teacher? Really? Yeah, a lot of the times they're exclusive to the teacher because of how they're set up. You know, it's it's, it goes back to those types of businesses or sites that are very personally branded. And it's just, it's gonna be a real chore to, you know, redo all these videos, delete that presence from the site, and then still maintain the same earnings. But on the other hand, there are businesses that have been set up where maybe the teachers were were outsourced or they are experts, but they have some sort of deal with the site where they continue to work with the site, but the actual business owner isn't a part of it. So we don't see a ton of those, but they are out there. And when they when they do qualify for a marketplace really just meaning that they're not like personally branded or over rely solely on the owner, they usually generate a good amount of interest there. It's something unique, you know, it's not usually a cookie cutter business. So those do get a lot of interest when they are built correctly. So is confidentiality important in your practice? Yeah, yeah. So how about post sale? I mean, because my next question since we're, we're approaching the conclusion of our conversation. I wanted to see you know, what was the most famous site you brokered? And what was the most famous buyer you worked with? There's definitely been some, some buyers. I think there was there was a buyer last December, that kind of came out of nowhere, and maybe four was it they

To insert our, our CRM or CRM one week, and then week or two later, they wired over close to a million dollars bought a business. And they're a younger person. And I was thinking, Who is this person and you know, talk to her as well. And it just seemed very, very interesting. You don't have that happen every day where somebody comes out of nowhere and wires over that much money without hardly asking any questions. And it was someone that has done a lot of E commerce work, trying to kind of beat around a big buzzwords here, but just a very young, successful female entrepreneur that I didn't know her before this happened, but

Google her name a little bit and was just very impressed that, you know, she heard about us came to us bought a business. And, you know, we were able to have her as a client and get her business to grow. So there's been a few like that, but that was one of the cooler ones. Yeah, I just in case my marketing director happens to be listening to this. So I listened to I listened to Marketing School with Neil Patel, because just so I can keep up with what's going on in marketing and erase that. So Neil Patel I mean, he's a he's a huge name in the in the marketing world. He was talking about your about Empire Flippers, and yeah, and different investments that he's been chasing, you know, that he does agency? Yeah. So that's actually a good one. I don't know if Neil himself has been involved in any deals. But I've like heard the name a few times where he's been maybe part of a group that was in all one, you know, so maybe the broker on that deals like you'd be talking to Neil Patel. It's pretty cool. Couple final questions. So if I'm a business owner, how do I know I need Empire Flippers? I think we've established that if you have a business, if you have storefront, you know, it's probably likely that you need a regular brick and mortar brokerage, versus someone like you. So I guess that would be my, my, the last two questions is How do I know when I need you? A lot of people they don't quite know when they want to sell, and they don't know a lot about the process. So how do they know when they need us, they're really not going to find that out unless they call us and start to at least go down that road of exploring what an exit might look like for themselves, they would need us when we talk about the business, we know that we can sell the business for price that they want. And it's a good fit for both us and for them. But a lot of the times, business owners don't always know what their business is going to sell for what the process is, or they think it's gonna take 12 months to sell their website and, and not you know, two weeks. So that's when it's always good to just talk to each other, make sure we're both a good fit to work with one another, and then hash it out from there. Well, it seems as though people people are more apt to to visit with you, versus I guess where I'm heading with it. I'm trying to determine whether or not like a business that we would work with, there's more of an intimate relationship than a digital asset. Yeah, yeah, it feels like it is. But I don't know. I mean, what do you think? Yeah, I was I was wondering about that, and how you thought about that, as well. I think a lot of people that have built these businesses in the first place, since it is very much like a tech business or like a digital marketing business. It is a business where a lot of the times the owners or the founders of them are a bit younger, 20s 30s 40s A lot, a lot of times 20s and 30s, this is their first time selling business, they really don't have the experience of what a traditional business broker and then relationship looks like. So they really just turned to the first place that they can to do some research online, they find us. And we know exactly how their businesses work. We're very transparent with with our track record as well. And it seems like a pretty natural fit from that point. And we have countless examples of businesses just like theirs that we've sold. A lot of times, it's an online business, these people are comfortable with that online relationship. Maybe we're not in the same country at all. Whereas perhaps more of your experiences, there's a lot more like in person connections and meeting what is it like? So I've been in this for nearly 30 years, and I look at you and when I first got in it business hours, like not in a million years, am I going to interest? I wouldn't trust my car with you much less my business. Well, you know, you're, you're 22 years old.

Ed Mysogland  39:41  
But I think in your case, I mean, this is a I don't wanna say a young man's game, but I don't think age matters nearly as much as the street cred that look I've done deals. You know, it doesn't matter if I'm, you know, 20 3040 years old. I've done more deals.

Andrew Voda  40:00  
was the new, and I can drag you through this path to success. So you may want to think about getting on board. I mean, the avatar of of deal guys in your world, I have to imagine looks kinda like you right? At our company definitely add a lot of others as well, there's there's certainly more that do look like like my avatar here, then somebody who's you know, 60 years old, 50 years old, I don't think that's to say that there's a reason that would make sellers or buyers not want to work with older Internet Business Brokers, it's just typically that the people that are already 56 years old business brokers, for the most part, they're not in that internet space, I think they can definitely provide a lot of value with just the traditional experience that they've been through the business background that they have. But there is that, you know, meeting point where understanding both the business side of things, as well as these online assets, what's involved with them, what the owners are going through, really being able to talk the talk there as well. Yeah, so but I mean, you don't meet anyone in person, you're what zoom calling and, and wiring? And I mean, do you have deal rooms? What is the mechanics of a deal look like with you guys? Yeah, so it's pretty much all online over the internet, you know, through zoom or or, you know, HubSpot or just Skype. Yeah, that's pretty much all how it's done. There's times where we do meet clients buyer's or seller's, but that's more so because we're in the same place at the same time, more so than it's necessary for a deal to be done. Yeah, I guess my last question is, if you had one piece of advice to give to our listeners, that would have the most impact on their business, and then this case, their online business, what would it be? So I'd love to hear yours on this too. But, and this might sound like some somewhat of a biased answer, because I'm a business broker, but setting up a call with a business broker, whether it be me or another business broker, if you're, even if you're not thinking of selling your business, I can't even count all the times that I've worked with sellers that never wanted to sell, they love their business, and then something changed, maybe they just got burned out on it, personal circumstances came up and wanted to move on to another project, get a divorce, I've heard that more than once, a lot of things come up. So if that does happen, just being prepared, and having your business prepared to be able to sell, it's such a better experience for both me. And more importantly, the person wanting to sell the business than it is somebody that's, you know, needs to sell by next month. And this is the first time they've started to think about it, their books aren't in order, they haven't done anything to prepare their business to turn over to a new buyer, that is a very difficult situation, there's so many things that we can talk about to get your business ready or to, you can do over a pretty short timeline to get more from the valuation that you just can't do if you're working on a 30 day notice. Yeah, the same. My rub is, you know, everybody's an exit planner these days. You know, it's it's a buzzword that been diluted, that really rubs me wrong, because I am a big advocate of sale prep. And calling a broker or somebody that has, you know, boots on the ground that is in the trenches that knows full well what you're getting ready to go through is a heck of a lot better than someone that's going to put pen to paper and let me run a spreadsheet for you. That's a different kind of consulting. I'm not taking anything away from it. But when you're thinking about selling, whether, regardless of the type of asset you're you're dealing with, I implore business owners to just have that conversation. It's a confidential conversation. It's not Yeah, it's not like I'm gonna go publicize that you just showed up on my doorstep. The worst case scenario is to have to sell a company under duress. And you know, you know, the same thing. As soon as someone learns that it's in a distressed situation, like we're all getting ready to have an influx of those, the negotiated value, I lose my negotiated leverage. But if we come into the sale process, in a position of strength, where we all understand this is how it's the deal is probably going to go down. Now you can prepare for you make these still may not like the answer, but at least you can prepare for it. So yeah, we're in the we're in the same camp man. Yeah, I was curious where yours would be glad to hear it's, it's the same and, you know, at the end of the day, too, I think incentives are in the right place when when that's the case, because we only get paid when the business sells so it's a conversation that you can have where we're not charging, you know, any money. Buy me a beer if you want to, I suppose. But you know, I'm just there to

Ed Mysogland  45:00  
Help out and to see if it's a good fit. And if it is, you know, here's what we can do, here's how much we can sell it for. And that's what we can run. Yeah. And I think that's the beauty of this podcast and I'm certain with the same with you is that you know what you get a chance to hear the people that you're going to be talking to. And it kind of changes the dynamics that I'm not just looking to feed off your business, I truly want to maximize your value, I truly want you to get the best deal, I truly don't want you to get punched in the face when we hit the market. Yeah, I think the same thing for you guys. I mean, we serve the underserved, we're downstream from the investment bankers and people that are selling their companies for sub 10 million. They need that that investment banking level of expertise to help them through the process. And that's where we kind of come in you and I both, exactly. So what's the best way we can connect with you? The best way to reach me is my email Andrew V. A V as in Victor, at Empire From there, I can send over a link to schedule time to chat. And we can Yeah, easy place to connect? Right. Um, well, one of the things that I know, we've started to talk about earlier, is your state of the industry report. And I know that I'm going to have this this link in the show notes. But can you talk a little bit about this 91 Page behemoth of a state of the state. I wrote it all myself, that I personally snide. And

Andrew Voda  46:35  
so this, this industry for this is the second one that we've published two years in a row right now. And what we're trying to do is just bring more transparency to the online business world, you have some brokers out there that are just trying to lock in sellers, like I'm sure that you see all the time, we just got had multiples. So we're, you know, we're not revealing like names of businesses that we've sold. But last year alone, we sold about 250 270 deals. So we're showing all the real numbers on here's their listing multiple, here's what they sold for, here's how many days there on market, and doing that for for every business type. So there's 91 pages to that goes into a lot more detail. But if you're just getting into the space, you can certainly start with some of the easy numbers and then read through it as well and learn a lot about it. Well, I'll tell you, I mean, it is it as a guy that read it in preparing for this. Oh my gosh, that is a truly great publication. I'm not saying that to stroke it. I mean, I gotta imagine that my brother in in the business valuation community will be hearing this and be downloading that.

Ed Mysogland  47:42  
It is that good? Well, look, man, I'm so grateful for how generous you were with your time and all this experience and how you help business owners maximize their value. I mean, that's what we do here. And so and to all of you that want to learn a little bit more about Andrew and Empire Flippers go to Empire. and Andrew, man, I can't thank you again. I thank you enough. I hope we have an opportunity to do this in person one day. Yeah, I'd love to do that. Stay in touch some more. I really appreciate the opportunity and it was really great to connect with you as well. Right on well, stay well man. I appreciate it. All right you to it. Take care man.


Andrew VodaProfile Photo

Andrew Voda

Have you ever thought about online businesses - that they’re as much of a business as any other business, the kind that has bricks and mortar? Well, the interesting thing is that this is big business. Ed is not kidding you when he tells you that some of the multiples that are being paid for some of these online businesses are remarkable. Ed had the opportunity to talk to Andrew Voda of Empire Flippers which is a domain brokerage, so to speak. This was a great one because Ed was interested in learning about how regular valuation techniques apply to this asset that resides on the internet.