RMRB 21: Creating an Info Product Business

Jake spoke with Dave about his info product & subscription business. It was created in April 2008 and is now making over $10k/month in profit. This unique business creates video training courses to help others with their online marketing and earns from both product sales and subscriptions.

Find more businesses like this one on our marketplace: http://bit.ly/2BKrzHM

Check Out This Week’s Episode:

 

 

Jake:                      What if you could cut through the noise in the online business world and learn from someone who has built a real business? We verified the numbers and combed through the PNL. This is not only a real business, but a real asset that people want to buy. We’re going to pull the curtain back and give you the insights this entrepreneur has discovered that you can use to level up your knowledge, whether you’re looking to buy a business, or looking for inspiration to take your current business to the next level.

                                Hey, listeners. Welcome back the Real Money, Real Business Podcast. Today, I got to speak with Dave about his info product and subscription business. With over 10 years of history, the business is now making over $10,000 every single month by creating video training courses to help people with their digital marketing.

                                Dave, thank you for coming on here today to discuss this business with me. How are you doing?

Dave:                    Hey, Jake. I’m doing well. Thanks for having me.

Jake:                      It is my pleasure, my pleasure. I’m very excited to chat with you about this business you’ve built up. Can you tell us a little bit about your background in building and running online businesses?

Dave:                    Sure. I’m primarily an info product guy. I started back in the ’90s by writing and selling physical books. I’d come up with an idea for a topic, I would write the book, and I would sell that physical book through the mail. Then early 2000 came along and eBooks became a thing that you could do. That’s 100% profit, so I switched from doing physical books to writing eBooks and selling those. That worked great for a while, until so much information became available on the internet that eBooks became devalued. Okay, when I was doing them you could easily sell eBooks for $60 a copy, but then so much information got out there that they were devalued, maybe $10 a copy.

                                Around that same time, was around 2004, 2005, YouTube became a thing, video became a thing. So then I decided to switch my info product model from eBooks to video training courses. I decided to primarily focus on marketing and techy stuff. That’s when I launched the website, and 10 years later we’re still going strong.

Jake:                      As you said, it’s been 10 years now and is one heck of a ride. In the last 10 years, was there anything that happened that you would really call a bump in the road? Or was it all smooth sailing over the course of a decade?

Dave:                    It’s actually been, I’m going to say, pretty much smooth sailing over the course of a decade. I think the primary reason for that was my experience in the info product world before I started it. I learned some important lessons there. The biggest one being that if you’re in the info product business you can’t just have one or two info products, because if you do that, eventually you’re going to die. Either a competition or just market changes are going to get you. For example, let’s say someone 10 years ago did an info product on how to market with MySpace. Okay, today they would be completely out of business.

                                So I learned early on that you’ve got to have a lot of different courses or products that you can continually sell to your client base. So I brought that knowledge and skillset into this site, and that’s pretty much why it’s been smooth sailing because I’ve been able to beat back any potential competitors and keep things going consistently, year after year.

Jake:                      So now that we are here, a decade down the road, things have been pretty smooth sailing. Why have you decided to sell it after all this time?

Dave:                    There’s actually two primary reasons for that. The first reason is that I’m a one-man show. I’ve been doing everything by myself. Everything in terms of the tech of the website, everything in terms of the marketing of the website, the actual info product creation, all of that is done by me. So I have a very broad skillset and I thought maybe it’s time for me just to focus in on one of those skillsets instead of trying to do everything myself.

                                The second reason is I have a reengage son who decided he doesn’t want to go to college. He wants to follow in my footsteps and build his own business, and he’s not sure what that is. So I would like to maybe start a different business, not related to the one I’m doing, get that guy built up and then hand the keys off to my son at some point in the future.

Jake:                      When you take a look back over the last year, in terms of the numbers, something I noticed is you’ll have some months that are up and some months that are down. Is that something that is due to the nature of the products, are the products themselves seasonal? Or is it because it is subscription-based, so some months you make more money because people’s subscriptions renew and then other months you don’t?

Dave:                    That’s a great question. Here’s the answer to that. Okay, so my business model is kind of unique. Most people, I guess, they think of a completely different business model. Most people are thinking of I need to get new customers in all the time, I have one or two products and my primary focus is getting new customers. My model’s a little bit different. I spent the first couple of years of the business getting the new customers, and from that point on what I do is I create new courses and market those courses to my existing customer base.

                                So what you see with the monthly fluctuation is simply did I release a new product to my customer base during that month or didn’t I, and the numbers clearly show when I did and when I didn’t. Typically, when I didn’t do that it was because I was involved with another project. I do some freelancing on the side. Maybe I got buried in another project and I didn’t release a new product to my existing customers during that month.

Jake:                      Take me through the gradual change in how you deal with this business. When you started out, how much work did it take for you to get it up and running? And then now, here we are a decade later, how much time do you have to commit nowadays?

Dave:                    Sure. When I started out, I was chasing my tail because one of the things that I do when I create any new product is I don’t spend a bunch of time creating the product just thinking it’s going to sell and then go out there and market it and see what will happen. I’ve learned from experience that’s a horrible way to do things. So instead what I do is I kind of pre-sell things. I will have the shell of a product, or I don’t have the product at all, and then I do the marketing, offering it as a pre-enroll, as an example, to see if there’s enough interest.

                                When I started the business, that’s what I did. I started the business, I offered training that was going to be delivered weekly. I only had the first week of training done and the thing was an immediate hit, so I was scrambling, week after week, getting the content out there. I learned my lesson with that to be a little better with the management of my time.

                                If we fast forward from the beginning, where I was kind of chasing my tail, to what I do now, the primary area where I spend my time now is just new content creation. By content, I mean new courses that I can sell to my audience. From day to day all there really is, is maybe answering a couple customer support emails. The bulk of my time is spent researching and developing new content.

Jake:                      In terms of marketing for the business, there’s a YouTube channel that you use and then there’s a Facebook page that you do not use. Correct?

Dave:                    Correct.

Jake:                      Mm-hmm (affirmative). Can you explain that process? Why haven’t you been suing the Facebook and the social media?

Dave:                    Sure, yes. That’s another great question. Let me explain how this works. The Facebook, that’s simply out there to claim the name of the business and I don’t do anything with that. The YouTube is actually used as a training tool with some courses within the business. In a nutshell, the broad overview is what I do in terms of marketing the business at this point is I am marketing courses to my existing customer base. The reason for that is it’s way easier to sell existing customers than new customers.

                                That gets back to the monthly fluctuation in the numbers as well because when I’m marketing to existing customers I’m using my email list, that’s it. I don’t do any form of paid advertising, I don’t do any social media, and I don’t do any SEO or all the things that you’re supposed to do. Why is that? Well, it’s because I haven’t had to do it. I’m just a one-man show and I use the model where I market products to my existing customers. That’s worked well for me, but I realize that’s an area that needs more attention if I want the business to grow.

Jake:                      You’re a one-man show. Have you ever had anyone help you with the business?

Dave:                    No. I’ve never done any outsourcing, I never use any freelancers, virtual assistants. None of that. Everything is done 100% by me.

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                                Now, back to the interview.

                                Then looking forward then, if you were to keep the business, what are some of the opportunities for growth that you would focus on if you had more time to put in?

Dave:                    Sure. If I’m going to grow the business, I’m going to focus in on the things that I just mentioned, because I already know that I can keep the business at a sustainable level by simply marketing to my existing customer base. For growth, what I’m going to do is I’m going to do Facebook ads, I’m likely going to do YouTube ads, I’m going to do Pinterest. Maybe a little more social media, be more aggressive in bringing new eyeballs into the site so I can grow the list even larger and I can continue marketing to that list.

Jake:                      Do you feel like there are any potential risks associated with this business that a new owner should be aware of?

Dave:                    I would say the biggest risk is common in the info product business, that is you have to put out new content for people to buy at least at a semi-regular basis. If you’re thinking that you can just take an existing business or start a business where you have one info product and you want to have longevity, that’s not going to work. You’ve got to add to that library.

Jake:                      Speaking of adding to the content and everything, you have a significant following on the YouTube channel, with over one million video views, correct?

Dave:                    Correct.

Jake:                      How did you go about growing that channel, and do you have any tips for anyone who wants to either take this business and keep growing the channel, or grow their existing business YouTube channel?

Dave:                    Yeah. YouTube is an interesting topic because I actually have another channel, unrelated to this business, that has over six million views and it only has like five videos out there. There’s a specific technique that I use when publishing videos to YouTube that maybe we really shouldn’t get into here, but it’s kind of a formula that I use to research the video topics that I want to cover. Then within the video I use some specific techniques to foster viewer engagement, which YouTube loves, which helps get a lot more eyeballs on your videos as well.

Jake:                      Going back to that question and asking it in a different way then, aside from YouTube, is there one piece of advice that you would want to give to someone starting out their own info product business?

Dave:                    Yeah. You need to develop a relationship with your audience, where they absolutely trust you. In this particular business, it’s known for telling it like it is, getting straight to the point. There’s not a lot of hype there. You have to do that if you want to have longevity with this business, or really any info product business, because there’s so many people out there doing it these days that you’ve got to find your own voice. I find that the voice that works best is authenticity. If you’re inauthentic and you’re just going out there for a money grab, maybe you’ll make a little bit of money for a while, but things are going to go downhill eventually.

Jake:                      Would you commit to a non-compete?

Dave:                    Yes.

Jake:                      How much support are you willing to offer a new owner during the transition period?

Dave:                    I would be available to provide any support they would need for a reasonable amount of time.

Jake:                      Are you open to discussing something like an earn out?

Dave:                    Yes, I am.

Jake:                      Awesome. Dave, thank you so much. I do have another question for you, but before we get to that I want to go ahead and run through that quick summary of the business again. The business was built in April of 2008, has monthly revenue of $11,422, expenses of $893, to make for a profit of $10,529, which is generated on a 12-month average. Included in the sale of this business are the primary domain, site content and files, YouTube channel, Facebook page, and related domains.

                                It’s interesting when you look at this business, because with that history of a decade it really feels like a business that isn’t going anywhere. But, Dave, in your own words, looking at this objectively, why do you feel like this is a business worth buying?

Dave:                    The opportunity for growth is obvious. I spend little to no time trying to acquire new customers. The model for years and years has been simply marketing to existing customers. The list I have is not huge, but it’s able to generate six figures annually using that. So I would just say the clear and obvious opportunities for growth make the business definitely worth a second look.

Jake:                      Dave, thank you so much for taking the time today. Is there any final points that you want to add about the business?

Dave:                    No.

Jake:                      Awesome. Well, I really, really do appreciate you taking the time today and sharing your insight on what makes this six-figure business, $357,000 evaluated at, tick. Thank you so much.

Dave:                    You’re welcome.

Jake:                      You just learned how this business works and I want to give you the opportunity to learn more about what you can do to buy real online businesses just like this one. If you want to find out more about businesses making real money, head over to empireflippers.com and sign up for our mailing list. There is an entire world of people quietly investing their money into online businesses and seeing great returns. Now, we want to help you do the same thing.