Good morning and happy Monday!

I hope you're feeling energized and ready to kickstart the week ahead. It's time to rise and shine because we've got another exciting issue of the Club Acquire newsletter waiting for you.

Let's start the week off strong together and jump right into the action!

On the deal docket this week:

💸Riches In Niches: A highly profitable YouTube channel “Just Rolled In”

♣️Deal Me Out: Is this link-building site set for a hard fall?

🧠Idealation: Let’s talk about the future - a resource guide

🔗Helpful links: What do dating and buying a business have in common?

💸 Riches In Niches

Established money-making YouTube channel

In my experience, it’s rare to come across a YouTube channel for sale, especially of notable quality. Often, these channels are closely tied to a key individual, making it challenging for a new owner to seamlessly take over.

I encountered a similar scenario with a previous listing I considered acquiring. The difficulty of disassociating the content from the former owner made it less appealing, especially considering the effort and resources required for rebranding and rebuilding.

However, this new listing presents a different scenario. As a "faceless channel," it generates nearly $500K/year in revenue through a straightforward yet brilliant concept: funny, crazy, and wild videos and images of cars arriving at auto-shops in all sorts of strange conditions. It really is addicting content.

The channel, aptly named "Just Rolled In," sources content from user submissions via its website and licensed clips from agencies like ViralHog and Newsflare. With 570k subscribers and top videos garnering over 5 million views, it boasts significant reach and virality for a channel of its size.

Let's delve into some key stats:

ASKING PRICE: $1,668,326 USD

Risks: 

Platform risk is inherent in many businesses reliant on existing internet infrastructure. For instance, FBA and KDP depend on Amazon, while content businesses hinge on the Google algorithm. Similarly, YouTube channels are subject to the whims of YouTube's algorithm, posing the risk of demonetization or algorithmic changes that could impact the business.

Opportunities: 

• Outsource: With a staggering 98% profit margin, there's ample room to outsource tasks currently handled by the sole operator, such as A/B testing thumbnails, video editing/uploading, and filling out descriptions. This would free up time for the new owner to focus on growing the business through other social channels and avenues, like increasing user submissions.

  • TikTok, currently not monetized, presents an opportunity for a US buyer, as TikTok doesn't compensate creators in Canada. Additionally, Instagram (16k followers) is currently not monetized and could potentially benefit from sponsored posts.

• Increase subscriber count: With 86.7% of viewers currently not subscribed, efforts to boost subscriber numbers could significantly enhance the channel's reach and revenue potential.

• Merchandising: Exploring partnerships with agencies to handle the design-to-shipping process in exchange for a share of profits could open up a new revenue stream. Much like the company has done with outsourcing Facebook videos.

Questions for the Seller:

1. Can you provide detailed insights into the performance and revenue generated from Facebook for December 2023?

2. How do you ensure the quality and authenticity of user-submitted content, particularly regarding exclusivity agreements and licensing?

3. What strategies have you employed to foster engagement and community interaction across social media platforms, and how effective have they been?

4. Have you explored any partnerships or collaborations with brands or influencers to further monetize the channel?

5. How do you envision the transition of responsibilities and operations post-sale, and what level of support can be expected during the transition period?

The only limitation to this business is how fast you can source and pump out the content. Having one main channel and source of income is dangerous so the key would be expanding into multiple channels to diversify and reduce risk. Any chance to reduce the buying price or get seller financing could be an attractive deal to acquire this cash flowing channel.

♣️Deal Me Out

Is this link building site set up for a hard fall?

Let’s check out the key stats:

At first glance this appears to be a promising opportunity. Last year, the site generated over $91k primarily from selling links. Its notable strength lies in its domain authority of 60+, enabling it to host guest articles or incorporate links in articles that boost other site rankings.

Listed for sale at $239K or a 2.8x profit multiple, the site shows significant potential. There are untapped opportunities for optimization in terms of ads, sponsorships, and affiliate partnerships.

Much of the workload is outsourced to subcontractors who handle content creation and link insertion, suggesting room for further streamlining and automation. With new orders coming in daily without active marketing, there's ample scope for expansion. The site boasts over 35 repeat customers from around the globe.

Despite these promising characteristics, it's essential to proceed with caution. The recent Google update has the potential to disrupt this business. The update's focus on site reputation abuse aligns closely with the activities of this link-building site, posing a significant risk. While the exact impact remains uncertain, it's evident that this update presents a considerable risk factor that prospective buyers must carefully consider.

This case highlights the importance of staying informed about potential risks to a business model, particularly in dynamic industries like online content. Before I heard about the March update I was wondering where the downside to this business was. now I would be a lot more careful in pursuing any deal.

Questions for the seller:

1. Can you explain what you think the impact of the March Google update will be on the business?

2. Can you elaborate on what you would do to optimize the SEO strategy to improve the site's speed?

3. Can you provide a few ideas of which marketing channels you might target if you wanted to increase the number of leads?

🧠Idealation

Let’s talk about the future

In business it’s all about anticipating people's needs and meeting them. But history reveals that predicting the future is challenging. Often, people extrapolate from their present or past experiences, but the future is much more than that.

I love this quote because it suggests that the future exists if we know where to find it. For those of us interested in entrepreneurship and providing valuable products or services, it means gaining an edge by knowing where to look today for what will be popular tomorrow. Here are some strategies, tools, and concepts we use at Club Acquire to stay ahead of the curve or uncover emerging trends.

Top-down Analysis:

Understanding an Industry

• Reference journals, newspapers, and trade publications contain industry insights.

• CEO interviews on YouTube can cut through the noise.

• The SEC Database (www.sec.gov/edgar) contains IPO documents and financial reports that hide a ton of valuable information on how a business operates.

• Analyst questions on earnings calls are clues into what key metrics investors are looking at.

• Resources like AnnualReports.com and Companies House (the UK equivalent of SEC.gov for private company information) contain a ton of insight as well if you have a specific business you are interested in learning about.

Bottom-up Analysis:

Ask customers what their dream technology would look like

• What capabilities would it have, what data would they want to push or pull, how would it help them succeed?

This newsletter

• We look at online businesses for sale that have had recent success in order to uncover what is working at a micro level. We look at the niche and the relevant data combined with a top-down industry level evaluation to determine the longer-term feasibility of the business.

https://web.archive.org

• Pick a business that is doing well and look at how their original website looked and the messaging that was communicated.

  • For example Athletic Greens started as a cheap looking website that was a click-bait affiliate offer (and look at them now)

Facebook Ad Archive

• Pick a business and look at the Facebook ads that have been running for a long time - they are probably still working or they wouldn’t still be running

MOAT - Ads on Google

Jungle Scout - Amazon SEO tool

Glassdoor - Look at what employees are saying

LinkedIn - Look at employees' roles to learn how a business operates, they often write in-depth about their experiences and responsibilities

Similar web - Look at traffic guesstimates and sources

Consult Experts

• Engage with professionals on platforms like Upwork

  • You can pay for a meeting just to pick their brain

• Read what investment bankers and analysts are writing about

Trend research

Patent Drop from the Daily upside

Exploding topics - Discover trends before they surface

Trending Data - Very similar to exploding topics

By combining these resources and tools, we can predict market changes, spot upcoming opportunities, and pattern-match our way to new opportunities.

🔗 Helpful links

• 28 lessons from buying 20+ companies

• The good will hunting meme is back! This time for acquisitions

• Let’s not overlook traditional businesses…You can change your life with a 300k SDE business

Give it to me straight (I can handle it)

Disclaimer: nothing here is investment advice. Please do your own research. The information above is just for information and learning.

Do you know someone who would like to learn more about online businesses directly from the best listings on the internet?

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