RMRB 26: Running a Remote Service Business

Jake Davis

January 8, 2019

This week, Jake spoke with Brie about his service business created in April 2016 in the SEO niche. This 100% remote agency sells high-level, white hat SEO focused on content creation, technical SEO, and link building. Most clients are on monthly retainers, though some work is for one-off projects. The team includes part-time staff and contractors, requiring low hours from Brie.

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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 to the Real Money Real Business podcast. This week, I spoke with [Bree 00:00:38] about his SEO agency that is 100% remote. It is making over $13,000 every single month in profit, focusing on White Hat SEO.

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

Bree:                      I’m very good, thanks Jake. How are you?

Jake:                      I’m doing quite well and I really do appreciate you taking the time. I’m very interested in talking with you about your business today. But before we get to those questions that I have for you, I want to go ahead and run through a little quick summary of the business. Again, the business was built in April of 2016, has a monthly revenue of $23,239, expenses of $9,777, to make for a net profit of $13,462, which is generated on a 12-month average. Included in sale of this business are the primary domain and all [inaudible 00:01:24] files, Asana project management tool, SEO templates, PowerPoint presentations for all the SEO talks, training videos, free subscriptions to various services, all historical client data, and all working documents for the agency, SEO proposal template and other client-facing documents, historical client and prospect list to contact again, Gmail accounts, Google Analytics account, Google Tag Manager account, email list, PayPal accounts, Stripe accounts, Xero accounts, LastPass account, SE Rankings account, ActiveCampaign account, and hosting account.

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

Bree:                      Sure. I’ve been doing SEO for over 10 years now. So I started in 2007, and back then, I was doing affiliate SEO, and then about a year after I started doing affiliate SEO, I started doing some client-based SEO. So I started working with clients in around 2008. And had a pretty good run. So I was doing my affiliate sites and then was doing client-based SEO. It was very, very easy back then up until 2011. And in May 2011, I got hit, or a lot of people got hit, by Penguin, and decimated all my client sites and also my affiliate sites. I then spent the next few months basically fixing up the damage for my clients, and decided that I wanted to work for high-level SEO agencies to become the best SEO I possibly could, considering what had happened to me.

                                So in around 2011, 2012, I ended up going over and started working for professional agencies, and I did that for the next six years. And I ended up working for some of the biggest agencies in Australia, and working on a lot of blue chip clients. Large accounts with millions of dollars of revenue. So I pretty much got to the top end of the SEO game, and was very happy with my technical skills and management, client management, and all that kind of stuff. And then, I ended up coming to Bali and quitting my job, and deciding to go out on my own.

                                And then fast forward two and a bit years, I have a successful agency, and yeah, that’s where I’m at right now. So my experience, yeah, it’s very varied. I’ve been around for a long time, and I’ve worked in all kind of areas of SEO, and yeah.

Jake:                      So, you’re extremely well-versed in SEO, as you’ve said, and now you’ve built the service business in the SEO niche. Since it is built on your knowledge, why have you decided to sell it today?

Bree:                      To be honest with you, I’ve been doing client-facing SEO for a long time now, and there’s a couple of reasons. The first reason is, I have quite a bit of cash, and I want to reinvest that into real estate. And also just, I have some other projects on the side I’d like to work on. And yeah, as I’m saying, I’ve been doing client-facing SEO for more than 10 years now, and I’m pretty happy just to take a step back from that and take a step back from the responsibility of running this agency, and go traveling and enjoy my life a little bit more.

Jake:                      How does the business make money?

Bree:                      It’s a service-based business, so basically we change a retainer or a project fee, and basically we get paid, and then we deliver the services, and that’s how it works. It’s generally quite a short sales cycle. And, yeah, it’s all based on services.

Jake:                      Without detailing too much about the specific service you provide, can you talk about the subscription service? Can you talk about why people sign up?

Bree:                      Well, generally they come to us after they’ve been burnt by quite a few other SEO agencies before, ’cause we are a high-level bespoke and transparent SEO agency. And most people come to us because they’ve worked with other agencies in the past, because there’s a lot of poor quality SEO out there. And we happen to be very, very qualified at what we do. And they come to us because they’ve been burnt before, or they’ve got a rankings drop, or something like that. And then they start working with us and realize we actually know what we’re talking about, because we’ve been around for more than 10 years. All the high-level SEOs that work in our company that have been around for about 10 years are very, very experienced. And so they come to us because they’ve had really bad experiences in the past, and we’re very transparent about what we do, and how we do what we do, and that’s why they come to us. And we’ve just got a really, really good reputation in the industry, and people refer us work. It’s that simple.

Jake:                      When you look back at the numbers for the last 12 months, something you notice is a huge spike in November, and then a bit of a decrease until March-ish. And then it jumped right back up and now you are high again going into the summer. So I guess my question, Bree, is why is it not just super steady for the whole year?

Bree:                      Yeah, that’s a very good question, and obviously many buyers would look into that as well. There’s a couple of reasons for that. The first reason is we also run a digital marketing conference, which happens in October this year as well, and that’s obviously a source of lead gen for us. And the spike in November was basically due to, after the conference, getting a lot of work. And also due to, we had a client, there was quite a large client that actually owed us quite a bit of money, and then they ended up paying us in that time as well. So that’s where that spike came from.

                                The decrease in revenue after that point in time was due to … It’s quite a complicated story, but I ended up having a personal relationship end, and I wasn’t working in the business at that point in time, and kind of dropped the ball. And I was kind of instrumental at that point in time to keeping the business running. But obviously since then, we’ve actually employed someone to basically manage the situation so I don’t have to be in that situation anymore.

                                So February’s when I came back on board.

Jake:                      Mm-hmm (affirmative). And then, so you’ve kind of turned it around, and that kind of makes me re-again think my question here that I was thinking earlier. And since the business is built on your knowledge, and as you said, it kind of went down a little bit and then now that you’ve stepped back in, it’s gone back up, so I guess what I’m asking, Bree, is what’s going to happen when you sell the business and then you step out permanently.

Bree:                      Yeah, and that’s a very good question. So basically, in that time, we’ve actually employed an operations manager that’s basically running the accounts day to day. So they’re basically coming in and they’re doing all the operations. And that was kind of severely lacking before. And the other thing that’s happening is we’re kind of working on more passive marketing as well. So we’re doing LinkedIn lead generation, and also doing something to do with SEO and we’re going to be doing email outreach and at that phase of the business, the foundations were kind of like we’d grew really quickly, however, the foundations weren’t really there. But now the foundations are there, so for me to step away from the business is going to be much easier and it’s not going to affect income that much.

                                And having said that, as we know, I’m going to be there for probably six months to a year’s time to basically help the new buyers transition well. So everything that I’m working on at the moment is removing myself from the business from the operations, and also from the sales process too.

Jake:                      As you work to remove yourself, again here, can you just speak about the current time commitment that it takes from your end as the owner to maintain the business at its current level, with all of those systems in place?

Bree:                      Yeah, so if we’re just maintaining, probably about, I’d say about 10 hours a week. Have about three one-hour meetings with the various teams, and obviously any kind of sales calls that come in, I take care of that. However, the new operations manager will be coming in and basically taking care of the sales calls. But at the moment, I’m doing that because obviously I’m the better sales person at this point in time. So that 10 hours a week would be like maintenance level.

                                But as I’m trying to grow and stabilize and make all the operations really solidified, I’m probably spending about 20 to 30 hours a week to basically get everything in place so that when it’s all there, then it’s all going to run without me.

Jake:                      What does the business currently do for marketing?

Bree:                      Well, we do a lot of public talks. We do a lot of talks at conferences and co-working spaces. Just to build the authority of the business and also the authority … Just to basically get leads, and that’s worked really well for us. And we also run a conference. An international digital marketing conference. And that’s obviously a source of leads for us as well. That’s the two main things.

                                If the new owner wanted to take the conference, they’re more than welcome to have the conference as well. That’s a different conversation. That would be included in the sale, but we’d have to have a talk about that. And that’s a really good source of leads, and also for authority as well. And just doing the public talking has worked really well for us. However, I understand that the new owners probably wouldn’t have that same kind of skill set that I have, or would want to do the same things that I’ve done. So that’s why we’re building out doing SEO, email outreach, we’re doing the LinkedIn lead generation as well. And also we’re going to be setting up some sales with cold calling as well.

                                So we’re in the process of setting all those processes up. So once … The new owners can choose to keep doing talks at coworking spaces and run the conference if they want, or they could just get more passive-style leads from LinkedIn or cold calling or from contacting the website.

                                And also the other thing to point out too is a lot of our work comes from referrals, so we have partners that we work with that just give us work. And that’s not reliant on me in any way. They basically just reach out and say, “Hey, we’ve got more clients for you.”

Jake:                      Just clarifying, I’m assuming that the team that you have in place are aware of the sale. Are they willing to continue working with the business after the transition?

Bree:                      100%, yes.

Jake:                      Mm-hmm (affirmative). How experienced is the team in SEO?

Bree:                      The team is very, very experienced. The main SEO head of SEO has more than 10 years’ experience. And other two SEOs that we have on the team have more than five plus years’ experience, and all of them are very, very high-level SEOs. So I think the most important thing here is that they run their own SEO strategies, and we all work together to basically improve and innovate with our SEO strategy based on all of our knowledge. So if I was to leave the team, then the new owner would come in and have access to this pool of high-level SEOs to basically keep the SEO strategies running. So there’s no concern for not having experience in SEO, because we have a really, really good team to basically, to manage this process.

                                So my job is only just to make sure that the work gets delivered, or the operations manager’s job is that. But the reality is is that the SEOs do the work and we have access to a lot of really high-level SEOs.

Jake:                      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, share 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.

                                And so, then going to the future then, if you were, for instance, you were to keep the business, Bree, how would you try to grow the business? We’ve spoken about maintaining, but now let’s look at growing. What are the big opportunities here?

Bree:                      Well, I think the biggest opportunity that my business has, or this business has, realistically is the talent pool that’s available to us. And we have access to, I employ, pretty much I employ SEOs from Australia. And the way that I get them is, because we’re a 100% distributed company, they all work in agencies, and they pretty much hate their job. Everyone hates working at agency. It’s very stressful and very time-consuming. So I’m able to put an ad out and get pretty much the best quality candidates you can get. So we’re talking like guys with like 5, 10 years plus experience that are willing to work for a lot less than they would be working for an agency, because they get a lot more freedom and they’re able to work from home, or to travel and work as well.

                                So I’m able to get really, really high quality candidate for these positions that really love their job. They don’t want to leave their job. Then once they start working, they’re basically, they’re super happy ’cause they only work 20 hours a week, they can do whatever they want. So that’s pretty much the biggest growth opportunity. And it’s not really a growth opportunity, but it’s basically access to a high-level talent pool that not many people have access to.

                                And from that, I think the best way to grow this out would be to basically do the same thing and build out different teams within AdWords, Facebook ads, social media. And instead of having a revenue of like 23,000 a month, you could have that in every single service, from AdWords to social media to PBC. So you could really diversify that way. And the other way to do it basically is just to keep being more aggressive with marketing, because the systems and structures are in place right now, and it’s easy just to keep adding more and more team members to the team because it’s all pretty standardized.

Jake:                      On the flip side of opportunities, you have risks to look out for in the future. Do you feel like there are any potential risks associated with this business that a new owner should be aware of?

Bree:                      Yeah, I think the first thing to be … And I think it’s going to come up with one of your other questions too … I think that the first risk realistically is … It really comes down to the new owner, and it really comes down to how experienced they are at managing teams. It doesn’t have to be an SEO team that they’ve managed before in the past. It obviously helps if they’ve managed SEO, but as long as they’ve managed a team, then I think that the risks will be kind of mitigated. But the main risks, I think … Well, firstly, clients leaving and not getting them replaces. But clients leaving is a fact of life, and we all deal with it. And running an agency, that’s part of the scenario. So clients leaving is one thing.

                                And the second thing I would say is basically the team not performing well. And that’s probably the biggest risk that I see. That some of the team members don’t perform well. They’re poorly managed, therefore they don’t deliver good work, therefore the clients aren’t happy. That’s what I think the main risks are. However, if you have a good manager in there, then they should be able to pinpoint if there’s any problem areas and all that kind of stuff.

                                We have an operations manager now who will manage that process, and that kind of mitigates that risk to a degree. However, I think that the most important thing here is that the business owner is active in the business to basically, to make sure everything’s running the way it’s supposed to run.

Jake:                      You mention the new owner should have experience running a team if they want things to go well. That makes me wonder then, are there any other special skills or requirements for someone to be able to step in and run this business? Do they need a big knowledge in SEO?

Bree:                      Specifically, no. It’s a little bit different from an affiliate site where you have just your commissions coming in from … When it’s your affiliate providers, and you have a team of two or three with content writers and it’s a very different kind of team. We have a team of about 10 people, so you would need some level of management to run this or have someone come in. An operations manager does manage everything for us, however, that being said, it is still a little bit more sophisticated business than just your typical Amazon Associates site, or Amazon FBA site. So that needs to be cleared up.

                                The other thing too to point out too is we’ve had some interest as well from people that wanted to use us as their in-house SEO agency as well. So what that means is, let’s just say you have a portfolio of affiliate sites, or a portfolio of websites that you’re working on, we could actually come in and be your in-house SEO team. And that’s also another area of growth as well. And we have interest in basically people … Kind of having a dual model where we work on their sites as well as work on client sites as well. So that’s definitely an area of growth, because paying SEOs is quite expensive, but if you’re paying at the price that we’re delivering the work for, you’re getting really high quality work at a fraction of the price you’d actually pay someone else for.

Jake:                      Bree, if you could go back and start this service business over again, what would be the piece of advice that you would tell yourself back then? What’s the one thing you wish you knew when you got started?

Bree:                      Only employ Navy Seals. And what I mean by that is we went through a period where we weren’t making as much profit, so we hired whoever we could, and we went through a lot of inexperienced or poor quality team members. And if I could do everything again, I would basically just hire the best from the start, and then not run into all the management issues that you have with having inexperienced team members. I know there’s people out there that run SEO agencies in the Philippines and India. That’s not how we run. We run a very high-level bespoke agency. We’ve never used Indians and Philippines in our agency just to be clear, but what I’m saying is I would still just go for the best quality candidates. You rather have one super high-level quality candidate that you pay more premium for than have three average quality candidates. And we only pick the best people for our team. It’s really, really important for us. If we can’t find that person, we’re not going to hire, because we know that in the long term, if they’re not the right fit for us, then it’s just not going to work out.

Jake:                      Would you commit to a non-compete?

Bree:                      Yes, of course. There’s no problems there.

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

Bree:                      Just to bring it back to commit to non-compete, and that also goes back to the support for the business, yeah, happy just to commit to a non-compete. Also happy to give any leads and referrals that I would get past the point of that contract to the new owners, because for me, it’s the success of the business … A successful sale for me is basically the new owners taking over and actually being successful with the business and growing it and getting the profit out. So that’s the first thing. So no problems there.

                                And then how much support are you willing to offer the buyers? As much as they want. Honestly, I understand this is a high touch industry. I understand this is a high touch situation. If this was another agency taking us over, then they probably wouldn’t need much support because they know how to run an agency. Where if this is someone’s first time at running an agency, I will definitely be on board for at least six months to a year, depending on what we negotiate in the contract, and really help them to make sure the transition runs smoothly.

                                So, yeah. A lot of support, basically.

Jake:                      Are you willing to negotiate on something like an earn-out?

Bree:                      Yeah. And that would be kind of expected with our kind of industry as well, because it’s a little bit different from the normal websites. And I would expect that we would be doing an earn-out kind of situation, because it has to be safe for the buyer to come in and take over this business. And I totally understand that.

Jake:                      Bree, thank you so much for the time tonight. I really appreciate it. Before I ask you my final question, I want to go ahead and run through a little quick summary of the business again. Business was built in April of 2016, has a monthly revenue of $23,239, expenses of $9,777, to make for a net profit of $13,462, which is generated on a 12-month average. Included in sale of this business are the primary domain and all [inaudible 00:19:29] files, Asana project management tool, SEO templates, PowerPoint presentations for all the SEO talks, training videos on how to complete specific tasks, free subscriptions to various services, all historical client data, SEO proposal template … Man, there’s a lot here, Bree. Historical client and prospect list to contact again, Gmail accounts, Google Analytics account, Google Tag Manager account, email list, PayPal accounts, Stripe account, Xero account, LastPass account, SE Rankings account, ActiveCampaign account, and hosting account.

                                Man, I got through them all and only messed up once. I call that a success. Bree, looking at this business, and trying to be purely objective about it, why do you feel like it’s a business worth buying?

Bree:                      Well, there’s a couple of different potential buyers out there, and if you were already an agency that was running, then just buying our SEO team and our systems and procedures is incredibly valuable, because I think the important thing to understand is that we’re very, very high-level SEOs and we offer a very premium product. And there’s not many companies out there that run at the level that we run on for SEO. So you can be confident in knowing that you’re buying a company that’s very, very good, and runs very, very professionally and very, very lean as well. So that’s the first thing.

                                So if you’re an agency, you’re going to get a really good SEO team that you can just plug into your agency, whether it’s a Facebook ads agency or traditional marketing agency. You can just plug us in and you can start making revenue from day one. And you have all the systems and procedures in place. That’s the option number one.

                                The option number two would be someone who’s looking at buying an SEO agency because they don’t have an SEO agency or are not in the place but want to get into it. And for that, I think this is incredibly valuable, because, myself, I have over 10 years’ experience in SEO and I’ve worked in some of the best agencies in the world, and the systems and procedures that we have set up for doing SEO strategy and also for the operations are very, very good and very, very streamlined. So it just basically means that someone’s going to come in and not have to learn the hard way how to run an agency.

                                And having said that, in the current team at the moment, we have over forty years’ experience in SEO with our current SEOs. So you have a wealth of knowledge there that’s just … This is not Southeast Asian SEO knowledge. This is like proper work with blue chip clients. Really, really understand the industry, able to deliver work to some of the biggest companies in the world. So I think that anyone that’s interested in getting into the SEO agency space, then you’re basically getting a premium agency at a fraction of the price. You can grow much larger.

Jake:                      Bree, thank you so much for taking the time today. I really appreciate it.

Bree:                      Cool. No worries, Jake. Happy to be on board again.

Jake:                      Yeah, it is my pleasure to speak with you again, and looking forward to speaking with you again in the future.

Bree:                      All right, thanks Jake.

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.


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