RMRB 6: Generating Passive Income

Jake spoke with Preston, the owner of an affiliate, info product, and Adsense business about how he managed to grow the business to nearly $8k/month in profit. The crazy thing is, he does it while only working on the business a couple hours per week! While there is opportunity to grow the business if a new owner invested more time, Preston is able to share his experience of managing a passive business. 

Find more businesses like this one on our marketplace: http://bit.ly/2oE3kUd

Check Out This Week’s Episode:

 

 

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. Today I’m going to be looking at an affiliate business that only takes its owner about two hours every single week, very little time, and he’s making upwards of $9,000 every single month in net profit. I got the opportunity to sit down with him and figure out what he’s doing with this business and so let’s dive right in.

                                Chris, thank you for taking the time. How are you doing today?

Chris:                     Doing good. How about yourself?

Speaker 1:           I’m doing really well. Thank you for taking the time to be on here with me today. I’m looking forward to chatting about your business.

Chris:                     Same here.

Speaker 1:           Before we get to the questions that I have for you though, I want to go ahead and run through a quick summary of the business. Again, the business was built in August of 2014, has a monthly revenue of $8,077, expenses of $227 to make for a net profit of $7,450, which is generated on a 12 month average.

                                Included in sale of this business are the domain, site content and files, podcast, Facebook group, email list, three affiliate accounts, YouTube account, and Gumroad account. Please note that you must currently have an approved AdSense account before purchasing this business, to assure a successful migration of the business.

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

Chris:                     Yeah, so this online business was created, it was kind of, it’s not my first one that I’ve done, but it was one of the first successful ones that was created. So I’ve had a background in creating online Amazon FBA businesses, along with some niche sites in the past, but this was the first big one that I kind of put together.

Speaker 1:           And how did you get the inspiration for this business?

Chris:                     Well, the actual topic matter of the site was something I was actually doing personally. So what, the way it started was, I just decided it was going to be a good way for me to document my process and help others along the way. So I started off by, basically, anytime I had a question or somebody that was close to me, had a question related to this niche, I would actually go in and start blogging about it.

                                So I also did a lot of videos that were related to the topic matter, to help myself, because I found that I was a good learner if I taught somebody to do something. So I started creating the content that way, with actually, no intention of monetization right away. It was more of a, let’s build it and just be a journal of sorts, and as time grew, I started writing more content over the niche and building the site up and seeing the possible opportunities for monetization and growth and kind of grew from there.

Speaker 1:           And now, you look back at the last year and the numbers never got very small, but they aren’t like, the lowest over the last year, net profit level was $5,140 and that was in September, I believe. So, but which is still not a small number by any means, but I guess my question is, is you have some months at 10,000, 11,000 and then other months at 5,000 for sales and profit. What leads to that fluctuation?

Chris:                     Yeah, so a lot of it was content creation. When I had time, free time in my personal life, I was able to put together email campaigns or write new content, create a new item, info product, on there. So it was really around my work schedule and when I had availability. So you see spikes in that sense.

                                And also, what we found happened is, I would be able to, when I would actually focus on it, you could see a lot of income come from the site. When I got busy at work or were taking trips, you saw it dip a little bit. So the average price point that was on there is where it would sit in a normal month and sometimes the payments that I would get would come at the end of a month. So it would make one month look a little bigger than the next month. So you see a little bit of fluctuation in that as well.

Speaker 1:           So you feel like moving forward, to keep the levels higher and steady and even grow more, just being consistent with that content and staying on top of it is the way to do that?

Chris:                     Oh yeah. For instance, this last month, and I know you guys will see it when you update the numbers for March, but we did some JV promotions this month and with a little bit of extra content, along with a few emails, we made an additional like $12,000 off push. So you can definitely tell on those spikes when consistent content and a little bit of work goes into it.

Speaker 1:           I’m sorry, maybe you mentioned it before and I missed it, but did you mention whether or not you are solely working on the content or do you have a team behind you?

Chris:                     So what used to happen, when we grew in, about two years ago, I had two other people that were partners in the business and they still are. And they would, we would basically write content three or four times a week. Our goal was to have three posts up every week and we got to the point where we had the reoccurring income coming in and we, I wouldn’t say it got lazy, but we started slowly not posting as much.

                                So in 2016, into the start of 2017, we were three, four times a week with different content being posted. And at this point, it’s maybe once a month a new blog post gets put up. So there’s been a big shift in the amount of content and work that’s been in it. So as of late, it’s been completely passive income and before it was a lot of work to start building that site.

Speaker 1:           With the podcast associated with the business, it’s one of the pieces of content that you put out and I mean, the notable assets include the podcast, Facebook group and you have a lot of members in the Facebook group. You have a YouTube channel with over 10,000 subscribers, an email list with over 12,000 subscribers. And I want to touch on all of those, because they can all be useful tools to growing the business more, but first with the podcast. Moving forward, I’m assuming, and correct me if I’m wrong, but I’m assuming that the podcast is being hosted and run by you. If a new owner takes over the business, what’s going to happen with that podcast without you being the personality?

Chris:                     My guess is, you look at the podcast, it hasn’t been, we’ve had a lot of residual stuff from the original part of it. I think it can be shifted, pretty easily, into a new audience or a new host or narration with that. And what I found with the audience that we have in this niche is, there was a personal connection at first, when I first started with my initial core group that kind of built the Facebook, YouTube channel and then the podcast. Past that, they were searching for the content and in this niche, I haven’t found a lot of fantastic competitors that are pulling a lot of this content in.

                                So I think anybody who’s able to revamp these areas, because of the time, there hasn’t been a lot of great content pushed to it, will have the opportunity to shift it and morph it into something. And I don’t think you’re going to see a real big difference in how people view it, because they were there for the content, they weren’t there because they were friends with me.

Speaker 1:           How does the business make money? I know there’s a lot of different sides to it, but can you talk about each of those channels and which channel is, brings in the most revenue?

Chris:                     So our main channel that we’re going to get the revenue from, is our affiliate agreements. So we have three main affiliates through the site and they account for the majority of the income. And these are built, been built off some substantial blog posts over that, comparing the softwares that were in that niche and promoting those. So there’s also been courses created that were posted on the blog, in forms of videos, to help people learn these tools.

                                So what we found was, a lot of the affiliate money that we got were because we were teaching somebody how to use these tools and there really wasn’t heavy promotion, outside of that. It’s been mostly organic, being found because they’re looking for how to use these or the benefits before they go and purchase, we’re the last stop on the chain. We’re able to grab them at that point and provide some great content and that call to action.

                                So that’s the majority of the money and that can be seen on there. The Gumroad is our info products. So not a lot of work has gone into the info products over the last year or so, but when we did launch new info products, you see spikes within the income because we do have that email base that we’re able to send it out to. And knowing the niche pretty well, it’s pretty easy to create content for.

                                And I think that anybody who were to purchase the site, can learn it pretty quickly as well. It’s not a real complicated, complex niche that you have to really study for. It’s more of one that you can learn and a lot of the content and info products that we’ve pushed, have just been, not, I wouldn’t say common sense, but just step by step guides for people trying to find out how to do it. So the how-to’s and the more informational videos or content there.

                                So that’s what you see in the info product side of thing. We had one big Google Chrome extension and that was launched in 2016, I believe, and that was a big source of income on our info products. And since then we have a few here and there, but that is kind of the lower end of it. And then we have a little bit of AdSense that goes on the site and for the first year or two, we didn’t even have that on there. Then I was like, “Oh, you can put this on there and grab a little bit of the traffic.” But that’s on the lower end of what we get.

Speaker 1:           Yeah, but as you mentioned, it’s just, people are coming anyway, might as well put some ads up.

Chris:                     Exactly.

Speaker 1:           So now back to the marketing side of things, the content. You, with the Facebook group with over 28,000 members, YouTube Channel with over 10,000 subscribers and an email list with over 12,000 subscribers, do you use those?

Chris:                     Not as much as we should. Definitely will put that out there. The email list is the most under utilized. The Facebook group, when it was started, was extremely active and it was driven by me, primarily. We had a few like core members of the group that would also respond and ever since then, it’s just grown into its own beast. Really haven’t done a lot of pushing and then we’ll post the new content in that area, but I think there’s some great potential that just hasn’t been tapped yet and it’s just because I’m, literally, don’t have the time in the day to do it.

Speaker 1:           So with the little time that you have for the business, how much time would you say that you invest on a regular basis?

Chris:                     Over the last three, four months, between an hour or two a week. So it’s not been crazy. The big spikes of like to two to three hours a week, would be when I’d write an email or write a new blog post, but nothing crazy at all.

Speaker 1:           But also, if someone were to come in and want to keep this as a passive business, you could always outsource the content.

Chris:                     Oh yeah, you definitely could. This is an area, I think, that there’s a lot of ability to outsource because there’s a lot of content areas that can be expanded upon. So I think that’s available there, but we never got to that point and have just done it in house, type of thing.

Speaker 1:           Is there a reason why you, seeing as how you haven’t been able to put the time in recently and it’s been kind of running on autopilot, is there a reason why you haven’t tried to automate some of this and outsource the content, to make sure that it still gets done?

Chris:                     That’s a very good point and I don’t have a great answer for that. I would like to say that it’s because I just hadn’t got to it yet, but being in this area, I never expected to build something like this, so I never really had a plan for the outsourcing side of things. And then when it started coming, it was just like, “Oh, I’ll get to it tomorrow or I’ll get to it next week”, and then it never really happened. So there’s really no good reason that it shouldn’t have been. I just never got around to doing it.

Speaker 1:           And that’s fair. And it’s also a big opportunity for someone coming in who wants to take over the business.

Chris:                     Oh, yeah, I would definitely agree with you on that.

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 you 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.

                                When talking about all the opportunities available, we’ve already covered that adding content and keeping consistent with the content adding is probably the biggest opportunity to grow the business. And that could be also done through outsourcing the blogging, you could hire someone to do the podcast show for you, you could definitely outsource this content and we’ve covered that, but are there any other big opportunities for growth that you want to touch on?

Chris:                     Yeah, so the things I always wish I could have done, if I could figure out a way to do a membership site, would have been great. I think there, we tested small runs of this 2016, with some great success for about a month or two and then ran out of time. So that was another issue out there, but I think there was some great potential in that.

                                I think if there’s the ability to do courses or training, where you do like a four week series of sorts over specific topics in the area, I think there’s a huge market for it. That was actually one of the JV’s that we just finished up and it was just over one topic area, within the niche and I know what we sold on that end of things and I know what other people sold in it, and there was some great potential in that area.

                                So I think some of the content that is buried in that site, can be turned in or repurposed into sellable info products, courses and/or, just opportunities to give some premium content to some people as well. I also think if you can find some additional affiliates within that niche, there’s some huge potential. We only have three or four that are big ones on the site. If you can expand that to 10, in that niche, with different softwares or different products that go through there, I think there’s some potential for growth there as well.

Speaker 1:           Do you feel like there are any big risks associated with this business?

Chris:                     The only big risk that I would see, is that I think if you had to don’t do anything with it and you kind of just keep it as it is, I think some of the content may get stale. And I think that, we’ve noticed that when we put out the fresh content, there’s a jump to it. And I just would be concerned if there is no growth or expansion of it, that the income levels that are currently there will stay steady for a while, but may dip over time.

Speaker 1:           Is there a big knowledge required for this business? Say someone coming in wants to take over the content and they, but they don’t have a ton of knowledge and they want to write the contents themselves, is there a big learning process?

Chris:                     When I started writing the content for this site, I knew absolutely nothing about the niche. It was self trained. I think that a lot of the stuff that’s on the site can help with the education. And I think if you just, would look at some of the comments on the pages or the videos or look at what styles were done before, you would be able to learn pretty quickly. I’m not the most complex person within the niche at all. There are some great minds out there that you can pick and learn from, to do that. I would say the learning curve would be about a two or a three on a 10 point scale.

Speaker 1:           You know, with all of these opportunities, as you mentioned, some of it, a lot of it just comes down to the lack of time you’ve had, but why are you selling the business, rather than trying to take advantage of these opportunities yourself?

Chris:                     Well, it’s the time aspect. So when this was first started, I wasn’t working a full time job. When, over the last few years, I’ve gotten to a place where I really love what I do and I just don’t have the time to commit to it. And when it comes to that, I would rather be able to invest the earnings or the payout from this, into something else that is a way more passive stream for, on my end, in an interest area I have, instead of continuing to do something in this area.

                                I was very passionate about it when I started and since then, I’m not as interested anymore. And I’m more of one who bounces from project to project. So I know it’s worth money and I know somebody can make a really awesome something out of it, but I also know that I don’t have the passion or dedication to do it. So instead of letting it sit and go to waste, I’d rather sell it, have somebody else be able to take the opportunity of it, and then go into something else that I’m more passionate and interested in.

Speaker 1:           Would you commit to a noncompete?

Chris:                     Definitely.

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

Chris:                     I believe in the listing it stated that we do a few Skype calls and email support, but I think that I’d be willing to help in any way I can, to make sure that the person who buys it understands what it is I’ve done, what it is the niche is over and just a full understanding of how it operates and even some of the thought processes of what I would do in the future. So I’m there for help. I don’t want to see the thing I’ve built not get off the ground any further or fall apart. So I want to make sure I’m there to help in any fashion.

Speaker 1:           Awesome. And are you willing to negotiate on something like an earn out?

Chris:                     Yeah, you were explaining exactly what that meant earlier and I think I am. So it’s all going to depend on what that looks like, but I’m flexible. This, if nobody’s interested in the site and it doesn’t sell, I’m not going to be heartbroken. There’s some great opportunities and when I get some time, I will take advantage of them. If someone wants to take that, I will make sure that we negotiate in any way possible.

Speaker 1:           Chris, thank you so much for taking the time to be here with me today and I really hope that whatever happens with the business, that you find someone to take it over who is passionate about the content and can invest. Because I definitely see something, that if the time gets put in, even if you outsource it, if someone puts in the time, this business can grow.

Chris:                     Exactly.

Speaker 1:           I do have one final question for you. Before we get to that though, I want to go ahead and run through the quick summary of the business again. The business was built in August of 2014, has a monthly revenue of $8,077, expenses of $227, to make for a net profit of $7,849, which is generated on a 12 month average.

                                Included in sale of this business are the domain, site content and files podcast, Facebook group, email list, three affiliate accounts, YouTube account, and Gumroad account. Please note that he must currently have an approved AdSense account before purchasing this business, to assure a successful migration of the business.

                                Chris, can you just kind of recap and in your own words, give me your 30 second pitch on why this is a business worth buying.

Chris:                     Yeah, no problem. So this business is one that I think has extreme growth opportunity if you’re willing to figure out the system to outsource it or invest time into it. I think that it’s a niche that I see that continue can grow. And I think I personally missed out on some of the opportunities. And I think if you are an online marketer, this is something you’d go, “Oh wow, the opportunities are endless within that.” So I think somebody has the love and care and passion to do it, can make some huge strides with the site.

Speaker 1:           I agree. I mean it’s definitely something where, as you’ve shown, when the time does get put in, the business grows. So if that can just stay constant, there is no telling how large it can grow. Chris, thank you so much for the time today.

Chris:                     No problem. Thank you.

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 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.