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RMRB 23: Building a Passive and Growing Business

JakeDavis December 22, 2018

Jake spoke with Ryan about his SaaS business in the live streaming niche. Created in August 2016, the business is making $10k/month in net profit. The custom coded site offers a service connecting streamers and followers on a popular platform. Streamers gain followers and followers earn money for following. The business has enjoyed substantial year-on-year growth and requires minimal work from Ryan to run. 

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Speaker 1:           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 P&L. 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 to the Real Money Real Business podcast. This week I had the opportunity to speak with Ryan about his unique SaaS business. His business allows streamers that use a popular platform to connect with potential followers to grow their channels even more, and he’s doing really awesome with this business. He’s being very successful. He’s making just under $10,000 every single month in net profit.

                                Ryan, thank you for taking the time to be on here with me today. How are you doing?

Ryan:                     I’m doing pretty good. Thank you. How about you?

Speaker 1:           I’m doing okay. Just fine. And I really do appreciate you taking the time. Before we dive into the questions we have because this is a very interesting business, before we get to that though, I want to go ahead and run through a little quick summary of the business. Again, the business was built in August of 2016, has a monthly revenue of $11,750, expenses of $1,894 to make for a net profit of $9,856 which is generated on a seven month average. Included in the sale of this business are the primary domain and all site content and files and source code and database information and emails of approximately 2000 and all social media accounts.

                                Ryan, can you tell us a little bit about your background in building and running online businesses?

Ryan:                     I’ve been developing websites for about 20 years now. I self-taught myself when I was a teenager, and I’ve always liked the idea of websites or making some kind of an online game or something, and I really enjoyed coding with PHP and just continued to work with it over the years and continue learning and just kind of making my way doing that.

Speaker 1:           This is, as you and I were speaking about before, this is an interesting business to me because I actually have some experience with the platform. Do you have experience with the platform? Is that why you settled upon building this business?

Ryan:                     Yeah, I actually do. I had quite a lot of experience with the platform, quite a few years ago. I was not huge, but I was one of the bigger members of the platform I guess you could say. I kind of quit doing that and started focusing more on actually creating websites because I was making more money through coding sites and running them. But I had many years of that and had many years of coding other websites that were related to this platform as well. Yeah, probably the last five or six years of my experience has mainly focused on this platform.

Speaker 1:           When speaking about growing this business, were there any bumps in the road, or was it all pretty smooth sailing in the last two years?

Ryan:                     I would say it was probably about 98% smooth sailing. There was a few little hiccups, but those were mostly kind of just on my end. It wasn’t necessarily the business itself. Just kind of like figuring out taxes and stuff like that was a little hurdle for me, but again that wasn’t anything to directly do with the site itself. The site’s been pretty easy going though. It’s fairly simple.

Speaker 1:           With it being fairly simple and easygoing to run, why have you decided to sell it today?

Ryan:                     I’m just really looking, I live in the city at the moment, and me and my fiancé and kids, we’re just, we really want to get out of the city and get a nice house out in the country and have some money to live on for a little bit, while I work on future endeavors.

Speaker 1:           So looking back, I noticed that the business has seen a lot of growth in the last seven months even, and that’s why it’s [inaudible 00:04:14] a seven month average because where the business is now is not actually reflected in a 12-month average as you’ve seen this massive growth. What has been the cause of this massive growth?

Ryan:                     I believe a lot of it is just the maturity of the site, like the age of it and the trustworthiness of the site is really getting out there. I believe earlier this year it exploded when a couple of big forums out there on the internet, some people posted links on there, it has good chat going on the forums about it and it drove a lot of traffic. So I think over the last year or so people that’s really certain get its foothold out into the internet and be known as a trustworthy site that people can use and enjoy it.

Speaker 1:           One of the first things that I thought when I saw this business is I thought to myself, is this breaking the terms of service of this platform that you are kind of working with, or not with, but in reference to. My question is, I know you claim it’s not. Have you hit any issues with the terms of service? Have there been any complaints or anything like that?

Ryan:                     No there hasn’t. I haven’t been contacted by the platform company at all whatsoever since the launch of the site back in 2016. I did know that a couple of the platform employees have actually been to my website and visited it. So I haven’t heard anything like I said from the platform itself, so I assume that with them seeing it, it’s been on their radar at some point, they’ve checked it out, they’ve deemed it as not a threat, or anything bad that they should take action against and that in fact we actually use that platform’s official API. So even if they wanted to, they could easily shut down the API which would shut down the site. But we haven’t had any issues like that whatsoever.

Speaker 1:           And of the services you provide, how does the business make money?

Ryan:                     The business makes money primarily by people who use the platform will come to the website to buy the services from us. So they pay us a portion of money and then they get the service in return. But then there’s other people who use the platform as well. Those people are the ones that complete the service for the first group of people. The people who are completing the service end up actually making some money in return for doing the service, and we’re just kind of like the middle man that takes a little bit.

Speaker 1:           As I said before, I do have a little experience with this platform. For anyone listening, I absolutely see the market here. I know why people would want to use this service on both ends, and I mean, it seems legit to me. Now the question I have Ryan, and this kind of goes back to asking about the terms of service, it’s totally fine and fair because you make a point to not use any botted accounts, any fake accounts, correct?

Ryan:                     Correct. Everything done through our website is done by real people. Yeah, typically the platform, they crack down websites with fake accounts and stuff like that, but everything on my site is legit from actual people.

Speaker 1:           Potential risk, which we’ll touch on risks later, but since we’re here, a potential risk could be someone coming in, pretending to be a fake person, and then they have a bunch of fake accounts. What would be the course of action. How do you prevent that?

Ryan:                     Pretty much I have a script that’ll kind of check against like users IP addresses for example and see if someone is, has like 20 different accounts that they’re trying to abuse the system with. Then typically for that I just ban them from the website.

Speaker 1:           With the business as it currently stands, what do you do in terms of marketing for the business? As I mentioned before, you have the social media accounts with it. Is that all you do?

Ryan:                     Yeah, I don’t really do too much marketing at the moment, maybe like an Instagram post a week, but that’s about it. I currently, I have Twitter integrated with the website and so every time a new service is being requested, I’ll like automatically post to our Twitter account. And that’s kind of about the only marketing I really do.

Speaker 1:           Do you have to spend any time on the business outside of marketing?

Ryan:                     Yeah, I probably spend maybe like five minutes a day responding to emails and answering questions there. Then maybe another 5 to 10 minutes doing some payouts that I need to do on PayPal, or maybe inserting a couple things into the database that I need to do real quick. But typically I would say 10 minutes or less a day.

Speaker 1:           Ryan, if someone looking at this business was interested, but they unlike you do not have that developer background, how easy would it be for them to run this business?

Ryan:                     That’s kind of a tough one. The entire website from the ground up was coded by me. I don’t use any sort of framework or any kind of like platform to built off of. So everything is coded from scratch. I would ideally say that a person would need a little bit of experience in PHP to be able to really dive into the code and change things. But I’ve been doing it for a long time, so I like to think that my code is fairly easy to follow. There’s no commenting or anything in it, but I believe a lot of it you can look at it and kind of tell what that chunk of code does.

Speaker 1:           Hey listeners. Do you want to find a business that is just right for you? Head on over to Empire Flippers and have a look at our marketplace, where you can see real businesses making real money, just like the one we’re looking at today. In fact, don’t miss out. Head over now. Show your email address and we’ll send you hot, fresh, new listings of successful businesses every week to your inbox. Now back to the interview.

                                What do you feel are some of the major opportunities for growth that a new owner could focus on?

Ryan:                     One of the main things that I’ve even been considering doing a couple months ago was integrating some extra payment gateways so that the users can pay directly on the website with credit card or have some kind of like a Bitcoin automatic processor on there, because at the moment it’s only … it only accepts PayPal and that’s all automatic. And then I do have a place where people can pay with bitcoin, but I have to manually do those transactions. So I would say that adding more automatic payments would be good. And then there’s a couple other small features that I believe would help out just kind of quality of life type of things.

Speaker 1:           And when you pass of the business, are you willing to walk the new owner through all of those ideas that you have for future features and quality of life things that you’re thinking about?

Ryan:                     Yeah, yeah. That would be no problem.

Speaker 1:           Other than the potential risk with the platform coming at you for violating terms of service, although again you are not, so you’ve kind of mitigated that risk with the practices that you have, but aside from that, do you feel like there are any potential risks associated with this business that a buyer should be aware of?

Ryan:                     I don’t really foresee any other risk other than what I just mentioned. I mean every website has its risk. Anything can happen in the future. But as far as it goes, as long as that doesn’t happen, I think it’s going to pretty good. It’s getting … It seems to be increasing month after month, so I don’t really see any issues arising.

Speaker 1:           What advice would you have to someone who wanted to started their own online business? What’s something you wish you had known when you got started with this one?

Ryan:                     Well, that’s a tough one. I would just say kind of just go for, just coming up with ideas is the hardest part, but like coming up the ideas for what type of a website you want to make, you wanted to do this, you wanted to do that, just coming up with those ideas. But then once you get it, just do it. I can’t even count how many websites I’ve made in over the years, way too many. But if I would’ve gave up, I wouldn’t have the one that I have now that has totally made all those previous ones worth it. So just, try to come up with ideas. Go for it. If it doesn’t work out, it’s not the end of the world. Just move on to the next project and hope that you can succeed with that one.

Speaker 1:           Ryan, would you commit to a noncompete?

Ryan:                     Yes.

Speaker 1:           And how much support are you willing to offer a new owner during the transition period?

Ryan:                     I’m willing to pretty much support with whatever they need within reason.

Speaker 1:           Are you open to discussing something like an earn out?

Ryan:                     Yes, I would be willing to discuss it.

Speaker 1:           Ryan, thank you. 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 August of 2016, has a monthly revenue of $11,750, expenses of $1,894 to make for net profit of $9,856 which is generated on a seven month average. Included in the sale of this business are the primary domain and all site source code and database information, email list of approximately 2000, and all social media accounts.

                                Ryan, I can tell you, when I look at this, and I want to reiterate again for anyone listening, that as someone who knows the niche and the space that you’re in, there is a need for this. There is a market for this I should say. And I see value. But when you look at this business, objectively why do you see this as a business worth buying?

Ryan:                     I pretty much see it as a business worth buying because SaaS businesses are very good. They’re typically low effort, low maintenance, if that is the type of business that someone is looking for. It’s very different than selling products on ecommerce for example. So this is just, this is very laid back, this is for someone who doesn’t want to spend as much time working on something. Again, I haven’t really done a whole lot of advertising with the site or marketing in the past. So anyone that may be good at doing advertisements on Facebook or Google or something, may find that it really helps boost the site out.

Speaker 1:           Ryan, thank you so much for taking the time today. I’ve really enjoyed our conversation.

Ryan:                     Yeah. Thank you. Me too.

Speaker 1:           You’ve 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 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.

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