Our Monthly Report – April 2014
Welcome to our Monthly Business Report for April 2014!
We continued to make some changes to our business in April as we changed our focus away from building sites and into helping others buy and sell websites.
We sold another $82K in websites in April, but our overall revenue dropped to just under $43K. With a lack of focus on our outsourcing company, dropping our building niche sites, and discontinuing our Products & Services, we expect this trend to continue over the next few months. Without any growth, we’d expect to be down to around $20-25K/month or so by Q3/Q4, but we’re hoping we can expand the marketplace to keep us at $35-40K+ (with better margins).
We’ve been much more aggressive with the moves we’re making in 2014, but those changes come with risks. Doubling down on the brokerage side of our business requires backing away from the more stable and predictable revenue streams we’ve relied on over the past months/years.
Tweaking our business may get us 20% – 30% annual gains per year, but we’ll never get the kind of hockey stick growth we’re looking for through incremental changes.
We have to be bold if we really want our business to crush it.
That means we have to significantly alter our focus – even put our business at risk – if we want to hit our goals. It’s not just focus, though – we’re also making changes in our personnel and to the culture of our company that will better support our clients and our goals as we grow.
We continue to publish these reports to both inspire you and to publicly document our successes and failures. These reports provide introspection that forces us to take a long, hard look at what we’re doing and gives us a journal we can refer to that tells the story of our journey along with successes and failures we’ve made.
Having to take an open and honest look at our strengths, weaknesses, and growth opportunities (along with the feedback you deliver) provides us insights into our business we wouldn’t have otherwise. These give us an opportunity to look at our business from the outside in, and (hopefully) help lead us to make better decisions about the directions our company takes. To be clear:
Most of the revenue comes from you.
Whether you’ve bought or sold a website or business with us, we wanted to thank you for your continued support as we continue to expand our online empire.
What We’re Working On
Here are some of the highlights on what we’ve been up to recently:
1. Expanding Our Reach (Through Paid Advertising)
Buying or selling websites and businesses isn’t done on impulse – it’s a decision that requires education and trust.
Most of our buyers and sellers don’t purchase anything the first time they come across our marketplace. Buying or selling websites and businesses isn’t done on impulse – it’s a decision that requires education and trust. We have to answer questions, like:
“Why do you charge a deposit?”
“When is the best time to sell?”
“How can I increase the value of the website?” (Both before selling and after purchasing)
While we cover these questions through our blog and podcast, some of our best information we have goes out via email. This allows us to inform and build trust with those who have already made a commitment and expressed interest in what we have to say.
We’ve also leveled-up the information we share. While some of the content is still useful and applicable to newbies, we’ve made the decision to focus on those who appreciate more in-depth analysis, case studies, and strategy.
That being the case, encouraging buyers and sellers to join our email list has been a priority. We’ve done this in several different ways:
We hired Dave @ Growth Scout to run our campaign and he’s been using Perfect Audience to target all previous site visitors with ads across many different platforms. The campaign started off strong the first couple of months, but we’ve noticed our costs increasing and the effectiveness slipping as we continue with the campaign.
We were looking to keep our costs well under $15 per subscriber, but in recent weeks we’ve seen our costs approaching and even surpassing that amount. Diminishing returns is common with retargeting campaigns, so we’re looking for ways we can roll Dave’s expertise into other growth strategies that will continue to drive more subscribers and he’s been working with us on a few ideas.
AfterOffers is a service that allows us to add subscribers from other blogs and websites in our niche. After signing up for another blog’s email list, the new subscribers are then asked if they’d like to also join ours on the host’s Thank You page. This has been a excellent, hands-off approach to gaining new subscribers and (at $1 per subscriber) is priced competitively.
To hear more about the founder and their (After)offer, listen to my interview with Tim Bourquin here.
Vincent has been testing through this for us and we’ve seen quite a bit of early success. The first week of testing netted us 100+ subscribers with only around $120 in ad spend and 10-15 hours worth of work.
Instead of narrowing down our target audience by general interests, we’ve decided to go after those who have liked or engaged with our competitors or others in the buying/selling space. There’s something magical about going directly after your competitors and stealing their market share! :-)
For more on the overall strategy, check out Matthew Woodward’s post here. We’ll be expanding this soon to related niches and brands soon.
We haven’t been as aggressive with our paid advertising campaigns as we should, I think. Our total spend on this is still pretty low, but with the looming cash-crunch expected over the next few months as we restructure our company, we’re just not comfortable expanding this horizontally.
We do have some additional tests planned that include banner ads on related forums, AdWords, and a few other tactics.
Driving all of this additional traffic also means that we need to do a better job of converting them as they arrive, which is why Vincent’s also been focused on Conversion Rate Optimization (CRO) as it relates to email signups. We’re happy with our overall success so far – we’re converting a good amount of unique visitors to email subscribers this year.
2. Adjusting Our Team And Company Culture
In dropping so many of our other projects, we’re also significantly changing the amount and type of customers we work with. We’ve never been a high-volume company, but the fact is we’re moving from $97 – $997 products into the $10K, $40K, and $80K+ website sales and we have to change the way we communicate inside and outside our company. Here are a few of the ways we’re looking to accomplish that:
Making Our Team Smaller/Tighter:
We hired several additional team members in recent months to support revenue streams that we’re now dropping. That left us with additional staff that no longer provide value to our business and we unfortunately had to let them go.
Most were probationary employees and so we just cut their contracts, but a couple were full-time members of the team. We explained it was a focus issue and gave them severance (more than was actually required by law.)
We needed to consolidate our focus TODAY, not six months from now.
Joe initially thought that we might be able to avoid laying them off and instead rely on attrition over the next six months, but after discussing it at length, we realized that would just take too long. We needed to consolidate our focus TODAY, not six months from now.
Flattening Our Company Structure:
Even though we’re a small company, we’ve put too many layers in place that shelter us from some of the important people on our team. Instead of having a more hierarchal structure, we’ll be shifting the EF team to a flatter, more agile structure as we move forward.
The 8 members of our team will all be at the same level and (for now) report to both Joe and I. We’ll be moving the Marketplace Manager into that role once we can get the person out here, get them trained and ready to roll, etc.
Improving Internal Communication:
We’ve typically used Skype for quick chats, email for more important messages, and Google Docs for spreadsheets, Standard Operating Procedures, etc. Lately we’ve felt our communication slipping and felt our current processes were broken.
Both have persistent chat, easy drag/drop features, and a ton of integrations built in, but we thought Slack had the sexier interface and seemed like something we’d stick to using. Since then we’ve moved our entire team over, created a bunch of custom channels, and have seen real improvement in communication.
We also found and have begun using SweetProcess.com to create and document our SOPs. Much better than Google Drive, these are extremely easy to creative, intuitive, and team-focused. I dislike paying a monthly fee for something like this, but the value significantly outweighs the minimal cost of $X. They have a nice import feature that can easily convert any current SOP’s you have. Plus, we can always export these and store them elsewhere if we don’t stick with the company for whatever reason.
Everyone’s A Customer Hero:
In the past, we’ve separated our teams into customer-facing and non-customer-facing groups. The idea was that some people are just generally better at communication and customer support than others.
What we’re realizing though is that everyone on our team has to get better at working with the customers directly. With a newly-improved and smaller EF team, this should definitely be possible. Here’s what we’ve added recently:
Empire Flippers Help Desk – This allows customers to check Buyer/Seller FAQ’s, submit tickets, and even add to our forum or knowledge base so that others can help out.
Live Chat – Select pages will have an “Ask Us” tab on the right side of the screen. They can use this to chat live with us and our team from 10:00am to 9:00pm Eastern.
24 Hour Support – Our team will be working 24 hours, 5 days per week. We’ll also have a couple of agents working shifts on Saturday/Sunday to handle urgent and emergency requests and issues.
3. Changing The Way We Live/Work
I’ve been working 10-14 hour days for quite a while now and I’ve noticed less and less productivity. Over time, my 12 hour day turns into only 4-6 hours of really focused work and the rest is crap. I think a high level of work can be fantastic in short bursts, but I’ve come around to Joe’s approach to this recently.
I was having a chat with our buddy Dan from TropicalMBA.com a couple of weeks ago and we agreed to a challenge.
We would wake up in the morning, handle our usual routine and sit down for a FIXED period of time where we did nothing but creative output. That means no Facebook, no email, no side-tasks – only creative work for 2+ hours (more if I was on a roll.) After that we’d shut our laptop and go “play” for 3-4 hours and get away. We’d finish the day up with 3-5 hours of answering emails, long-term projects, etc.
It’s been going really well for me – I’m feeling much more productive and I’ve been creating way more content for our business. Joe has been following this model for quite a while and it really works out for him. I’ve finally decided to join in and I’m really digging it.
Lastly – it’s time for a move. I’ve been living in Davao City for over 4 years now. While I’ve had the opportunity to travel around SEAsia, I’ve always been “home-based here”. I really dig the Philippines, but I’m going to be taking off in September and trying my hand at being a digital nomad.
I’d always thought the people that did this were really just backpackers, but with sites like AirBnB and amazing expat communities online, I’m seeing how easy it is to land and plug in to a new city or country.
My first stop will be Chiang Mai in September and then Bangkok in October. I’ll likely hang out in Thailand or Vietnam until Dec/Jan when I’d like to hit up Bali for a while. Fun stuff!
There are some questions as to how the dynamic of our business will change with my being gone, but we’ve added a ton of new communication tools and processes that should help. Additionally, Joe and I are still planning to meetup in hub cities throughout SEAsia for our quarterly strategy sessions and mastermind meetings, so I think that will be useful at keeping us connected.
Alright, let’s start digging into April’s numbers:
Traffic And Audience
We saw a dip in traffic, pulling in 20,523 visits in April…around 2K less than the previous month:
Here’s a look at our top content pages for the month:
The marketplace again took on more traffic than our homepage, which goes to show we’re definitely attracting the right audience for what we’re offering.
Here are our top referral sources and the email subscriber conversions for April:
Twitter and Facebook conversions are low, while the WarriorForum, Cloud Living, and Niche Pursuits visitors have converted quite well.
Podcast & Email Audience
We stayed about even when it comes to the podcast with 13,512 for the month:
We’ve been getting great feedback about our podcast recently. We’ve been splitting up the show – half are interviews and half are back to Joe and I waxing on about business strategy, tactics, successes, and failures.
Our total contact records are up to 15,425 at the end of April:
As I mentioned earlier in the post, we’ve been focused on email conversions and have seen some growth here in recent months. We should have a case study out that compares the different email strategies we’ve been using with actual numbers from the campaigns that should be pretty interesting.
We haven’t been building any new sites, but we do have some legacy earnings from the sites we still own.
Joe’s been talking about selling off the rest of our inventory and it might be something we take a stab at in the next couple of weeks. We’re not actively looking to expanding our current portfolio, but we’re always open to it if something great comes along.
Products & Services
We brought in a total of $3,666 worth of Product/Service sales in April. That being said, we’ve decided to cut all of our Products & Services outside of the seller’s listing fee.
Although this has been a profitable arm over the last year or so, we’re realizing that it’s a distraction from our core goals. It’s attracts more website builders than buyers/sellers. This was great for us when we were getting started, but now that we have different goals we need to change what we’re offering.
Any products we offer in the future will be better focused on supporting our core audience.
We had another strong month in April selling $82,962.66 worth of sites overall, which led to $12,444.40 worth of revenue to our business. We’ve sold plenty of our own sites along the way, but this recent month puts us over the $600K mark for brokered sites alone:
Here’s a look at our month-by-month growth to get there:
We’d like to get this to over $2MM by the end of the year. That seems aggressive considering where we’re at today, but by dropping our other priorities we’ll be singularly focused on making that happen and I think we’ve got a fair shot at it.
Our biggest hurdle is attracting more sellers. We have a fair amount of buyers and a great sell-through rate at over 95%, but we’ll need the inventory if we’re going to hit our goals for the year.
IntelliTheme brought in $97, our guide on Amazon came in at $112.25, and our overall affiliate income came in at $633.71.
We’re about 50% done with the development behind our new valuation tool and things are moving along nicely. After we’ve had a chance to test and tweak it a bit, our thought is that we’ll start to use this for determining sales price and use it as a great lead magnet for attracting more sellers to our marketplace.
Our outsourcing revenue bounced up a bit to $24,903.24 for the month, but we’re expecting this to be short-lived. I’d expect this to go down slightly over the next few months and significantly altered by the end of the year.
Our revenue has slipped a bit this month overall, although we’re happy with the direction our company has been heading. I’d expect some turbulent revenue changes over the next few months as we continue to switch over – hopefully our push for the marketplace will help to balance things out by the end of the year.
Here’s a look over time at all of our revenue streams:
And here are the same revenue streams without the outsourcing revenue:
April 2014 Business Data:
- Employees: 28
- Interns: 1
- Contractors: 2
- Contact Records: 15,425 (As of 4/28)
- Email Subscribers: 8,848 (As of 4/30)
- Site Visits: 20,523
- AdSense: $914.99
- Site Sales: $25.00
- Products/Services: $3,666.00
- Brokered Sites: $12,444.40 ($82,962.66 in vetted sites sold)
- IntelliTheme: $97.00
- WPRankTracker: $0.00
- Affiliate: $633.71
- Building A Niche Site Empire Guide (via Amazon sales): $112.25
- Outsourcing: $24,903.24
- Consulting: $0.00 – $0.00
“Case Study: Monthly Business Report for April 2014 from the @empireflippers!” – Tweet This!
How did your April turn out? Was there anything in the report that was inspiring? Concerning? We’d love for you to share your thoughts in the comments.