RMRB 5: Using Facebook Ads to Grow

Focusing on the apparel & accessories niche, Preston has grown his dropshipping business to $10k/month in just a year. He has focused on social media marketing to grow, with an emphasis on Facebook ads. He explains why he chose to rebrand recently and how that affected his profits with his business. 

Find more businesses like this one on our marketplace: http://bit.ly/2PZ95Z4

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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 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. Today I’m going to be looking at a business that only takes the owner about 10 hours a week due to the staff that he has helping him run the business, but he’s making about $10,000 every single month on the monthly average, so really excited to learn how he’s done it and built this business up. Preston, thank you for taking the time to be with me today. How are you doing?

Preston:               I’m doing great. I’m doing great. How about yourself?

Jake:                      I’m doing well. It’s been a busy couple of weeks, and looking forward to our chat today. Thank you for taking the time.

Preston:               Yeah, definitely. Thanks for inviting me.

Jake:                      Before we get to the questions that I have for you, I want to go ahead and run through a quick summary of the business. Again, the business was built in January of 2017, has a monthly revenue of $86,121, expenses of $75,970, to make for a net profit of $10,152, which is generated on a 12-month average. Included in the sale of this business are the domain, site content and files, Facebook page, Instagram account, email list, and Facebook Ads account. Preston, can you tell us a little bit about your background in building and running online businesses?

Preston:               Yeah, so I’ve been working in the e-commerce drop shipping world for about three years, and I originally just started out running a lot of different Facebook ads and just trying out a lot of different products, not having a lot of the early success, but where I’m at right now was a great opportunity. About a year ago, a little bit over a year ago, I guess now, I started working with a really great print-on-demand company, and it’s allowed me to really be able to take this business to a whole other level.

Jake:                      How did you come up with the idea to start the business?

Preston:               I originally started out doing some different things, kind of drop shipping using AliExpress, but my older cousin, he suggested that maybe I get into the print-on-demand because there’s a big market there, so I kind of ended up going that direction because it’s something my cousin mentioned to me.

Jake:                      And why are you selling it today?

Preston:               I’m selling it at this point in time because I just want to do something that I’m a little bit more passionate about. I’m going to go on to some consulting work and things of that nature, so I think for where the business is at and the opportunity that is there right now, this business could in all likelihood double, triple in what we did sales last year through the course of this year just because I’ve started implementing some new strategies and tactics that have really shown some really great results.

Jake:                      Seeing as the business was created at the start of last year, when you look at the numbers, it really didn’t take long for the business to be able to get to a point, you know, back in May, the fifth month after launching, you made $18,000 in profit. What would you attribute to your growth?

Preston:               Obviously there’s a little bit of luck in the beginning when you make such a big jump, but a lot of it just came down to timing, understanding the market, understanding what the market wanted at that particular time. The great thing about it for whoever ends up taking this over is there’s just so much data that’s been acquired over the last year, year and a half almost, I guess now, where I just have so much great data and it’s a lot easier to acquire customers than ever before for me.

Jake:                      Again, when looking back at the last year, you see pretty steady sales around the $15,000 mark, but then there’s a dip in about October.

Preston:               Yeah.

Jake:                      What was happening in late fall of last year?

Preston:               So I ended up deciding to change kind of the direction of the company because I felt like the way that I was going about it, it wasn’t going to be as sustainable and the growth might have not stayed as consistent as where it’s at now. So what I did is I kind of restructured the business model, and what I ended up doing was changing a lot of the pricing and kind of rebranding the business and our customer, and so we just kind of re-changed who we were really going to go after as our core customer and really decided to focus on building a long-term company versus maybe a little bit something that could have a little bit more fluctuation in it, so it was just a change in philosophy.

Jake:                      And then it didn’t take long from then to get back to where you were before and higher. Your revenue is much higher than it was before and your profits are back above the $15,000 mark.

Preston:               Yeah, and they’re going to only be better. At this point in the month, and we still have another I think seven or eight days in the month, at this point we’re already over 17 I believe for the month, $17,000 net, so we’re rocking and rolling, and it’s going to be a good month. It might be the best month that we have had up to this point so far when the month ends, maybe around 25 or so.

Jake:                      And what are you doing for the business on a week-to-week basis, because obviously you’re growing, so something has to be being done on the business. What are you doing?

Preston:               Well, I’ve been adding a couple of new things. I’ve been spending a little bit more time than I normally have been in the past, but I’ve really been trying to get the business set up the best way possible for a new seller to have success immediately, because I want to give somebody something that they can pretty much take and there’s going to be some good safety nets in it for them. I think that’s just something I would like to do out of courtesy, so I’ve really been focusing on really building out new email strategies, new email campaigns, different funnels for people to go into.

                                I have an email list of about, just short of 26,000 people on, and I’ve been focusing on really kind of building some of these new things just over the course of the last two or three weeks. I definitely know for a fact in the last 30 days just from my email revenue, I’ve ended up bringing in an extra $35,000 in sales just from people that I’m not having to spend any money to reacquire or anything of that nature, so it’s a very profitable strategy, and the profitability, it’s showing this month already.

Jake:                      Email marketing can definitely be a powerful tool, so in addition to the email marketing, what else are you doing for marketing? I know that there are the social media pages.

Preston:               Yeah, so the other source that I really focus on is Facebook, and I’ve been involved and working on slowly training one of my VAs to start running some Facebook advertising for me, so that’s made it so I don’t really spend as much time as I used to. That’s where I would spend the majority of my time. Probably about 10, 15 hours a week I would spend just doing the Facebook side of things. The rest of the business is pretty much automated as far as the email and support and customer side of things. Maybe every once in a while you might have a couple of emails a week that you might have to address that are like case-by-case issues, but as far as the day-to-day, the majority of it is spent just on the Facebook and doing the advertising. There’s actually some really great companies out there that I’ve worked with in the past that can take over the whole marketing end if that was something that somebody didn’t want to even have to deal with.

Jake:                      You mentioned the VAs plural that you have. How many different employees do you have?

Preston:               I have three, and I may end up adding a fourth before everything’s said and done just to make things even easier for the new person taking over. Actually right now I’ve kind of been running higher on the expenses, and there’s a lot of things that I’m going to be doing over the course of the next couple of weeks that are really going to cut down on the business’ operating expenses that will make the net profit go up by default.

Jake:                      And are all of the employees that you currently have looking to continue to working with the business when the new buyer takes over?

Preston:               Yeah, definitely are. They definitely are, and I’m keeping all those things in mind as I’m bringing on new people and training people so that it can make the new buyer’s life as easy as possible, and yeah, I’m building the business so that regardless, if I still have it, it’s as easy as possible, and if somebody else takes it over, it’s going to be as easy as possible for them. That’s the goal.

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.

                                What do you feel are some of the big opportunities for growth that if you were to keep it, you would try to take advantage of?

Preston:               Well, there’s just so many great new print-on-demand products that continuously come out that have never been experienced and really saw before. Actually the two companies that I use for the print-on-demand, they’re always coming out with great high quality product that people love, so there’s just a lot of opportunity in expanding the product line. I’ve slowly been doing that and adding new products, and it’s just brought an increase in order average value, so just that alone has made more money and made things more profitable for me.

Jake:                      And then you’re also looking to grow the Instagram page. Have you looked at other social media platforms as well?

Preston:               Well, I haven’t really put a whole lot of energy into Instagram because most of our customer base is older, so since there’s more Millennials on Instagram, it really didn’t make sense when I looked at it to really spend a whole lot of energy there at this time.

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

Preston:               Yeah. I mean, I think with any business, there’s definitely risks that are associated. I would say in a business like this, the risks are relatively small, so that’s a great thing. I would say probably the major risk would just be at least taking out some time to learn a little bit more about the day-to-day operations of the business, and not everything will not already be kind of automated for you, but just so that you know for your own comfort or your own state of mind, so then that way if you have to make a new decision or hire a new person or something of that nature, you’re just kind of a little bit more familiar. I think it will make your life a little bit easier knowing the business and feeling comfortable in the different aspects of it.

Jake:                      Do you feel like the business has a large learning curve?

Preston:               Not at this point, not at this point because even on the Facebook advertising end, all the data is already there, all the information is already there. I already have a design team that already knows what sort of designs and direction that have the best success, and at this point, no, there’s not going to be a whole lot of downside. There’s a lot more upside because we just have so much data and we know who our customers are and what they want at this point.

Jake:                      Have you looked at focusing on Google Ads and working on improving SEO to try to drive in some organic traffic?

Preston:               Yeah, it’s actually one of the things I’ve been learning more about. It’s not something I’ve had a strong skill set at up to this point. It just hasn’t been my primary focus, but if someone that did have a skill set in SEO and Google, it would probably really increase the percentage of sales and business overall because it’s just an area that we haven’t really expanded to at this point.

Jake:                      Would you commit to a noncompete?

Preston:               Oh yeah, definitely.

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

Preston:               I mean, hey, for a month, I’m pretty open. If you need five, 10, 20 hours a week, I can provide that support. I want the business to succeed. I want the person that takes it over to succeed and do well, so I definitely don’t mind being there and helping out as needed, and that could extend beyond even the 30 days. Like I said, there’s a lot of great resources that I have on my end already that I can hand over as well too.

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

Preston:               Yeah, I definitely would.

Jake:                      Awesome. Thank you, Preston, so much for the time. I do have one final question for you. Before we get to that though, I want to go ahead and run through a quick summary of the business again. Again, the business was built in January of 2017, has a monthly revenue of $86,121, expenses of $75,970, to make for a net profit of $10,152, which is generated on a 12-month average. Included in the sale of this business are the domain, site content and files, Facebook page, Instagram account, email list, and Facebook Ads account. Preston, can you kind of recap everything that we’ve spoken about today and in your own words give me your best 30 second pitch on why this is a business worth buying?

Preston:               Yeah. I believe this is a business that is worth buying because I really have put a lot of hard work and time into this business. It’s not something that I haven’t put a whole lot of time into. All you’re going to have to do is be able pretty duplicate what I’ve already done, and it will be fairly easy to repeat what I’ve done at this point.

Jake:                      I mean, I think that’s just exactly it. You take a look at this business, and you look at something that shows clear potential to grow more. As you said, this month, March, has been a killer for you, or April, sorry, has been a killer for you, but on the other hand, if you want to put in the time to try to grow it more, you can, but also if you wanted to just sit back and have this be a very passive business, you’ve already been putting those processes in place to try to automate it to make it an extremely passive business.

Preston:               Yeah, that’s exactly what I’ve done. I like doing a lot of other things. I have a lot of personal hobbies in my life, so from day-to-day, I try to have as much free time to enjoy my life as possible, and that’s one of the reasons why I’ve made it as automated as possible.

Jake:                      Preston, thank you so much for the time today.

Preston:               Hey, thank you so much for having me.

Jake:                      You just learned how this business works, and I want to give you the opportunity to learn more about what 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.