Ep 298: 8-Figure Ecom Brand Acquisitions & Scaling Secrets with Neil Twa

Acquiring eight-figure e-commerce brands with zero of his own money. Hi, I'm Jaryd Krause. I'm the host of the Buying Online Businesses podcast. And today I'm speaking with Neil Toie, who is the CEO and co-founder of Voltage Holdings, a company specializing in launching, consulting, selling, and acquiring brands with a focus on the e-commerce channels such as Amazon FBA Multi-Channel as well. More than 15 years experience.

Neil has been selling private label products on Amazon and his company. For over 17 years, Neil has been constructing businesses both online and offline after departing his senior IBM role since 2012. And he's launched five personal brands himself, generated tens of millions of dollars in revenues as eight-figure sellers, and assisted in the growth of over a thousand other e-commerce brands through consulting, coaching, mentoring, and being a partner with Reed and their Voltage team.

Now in this podcast episode, Neil and I dig into how he goes away and acquires e-commerce brands. We talk about how he raises capital with veterans and gives veterans jobs. Also sometimes sells these companies back to veterans as well. So how he finances these, what sort of business they go away and acquire, how they acquire them.

We talk about rolling up businesses and buying other businesses. And then we talk about, like, how he grows these businesses as well, what his overall goal is in the next two years, and how he does a roll-up or whether he sells some off, and the difference between them. We also talk about the difference between e-commerce brand owners and online business owners that grow and don't grow and the mindset they need to have. And that leads us into talking around: How does somebody go from like seven figures to eight figures?

In their e-commerce brand, what are the three levers that sort of prevent them or they need to flex and use to be able to get scalability out of their Now, Neil is a beast. He's achieved amazing things in his life, career, and business. And this is a podcast episode that you should not miss if you're looking at acquiring an online business and/or scaling it. Let's dive in.

Neil, welcome to the pod. Thanks for coming on.

Thank you for having me on. I’m honored. I appreciate it. I'm excited to chat.

You've been in Econ for a very long time now, and you've done so many great things and helped so many great businesses scale. But you also talk about acquisitions, or you have acquired brands as well, right? So typically most people ask, like, How did you get into Econ? What sort of steered you towards Econ? In digital marketing.

Right. Direct to consumer marketing. was doing a lot of affiliate marketing and paid media traffic for lead generation online. And through that process learning, you know, the ropes of media buying, and in the days in which I did it, there weren't web interfaces and you that kind of stuff.

I'm going to date myself. We were doing your old school, you know, media buying before you could go to YouTube and fire up a campaign. And people don't realize how easy they have it now. They complain about all these ad networks. And I'm like, dude, you have no idea. You have so much selection.

Yeah. So we learned how to be really good at the direct response, the creative, the marketing, the narrative, the person talking into them, speaking the problem reaction solution into their lives. And so that just translated for us easier into push-button traffic.

When I say really me for a while, they're looking to build business and got into the affiliate marketing side and found out it was really good at it, running other people's offers, dating offers, cost per install offers, lot of mobile traffic back in like 2009 and 10.

And discovered that I was good enough at it that I could run through offers or they would limit and cap my offers or I was outpacing their ability to grow. And so I get something going really well, and then they'd want to shut it down or they wanted to slow it down or they wanted to do all these things I couldn't control.

So the end result was I needed to control the other side of the offer too. So I started looking into the digital side of things to create and develop. And it just kind of dawned on me what I could create digitally to do that. I know that sounds kind of weird, but I'm kind of like, what value could I create here?

And it was kind of coming difficult to my brain. And so what came easier was physical products. So I'm like, well, what if I just owned a physical product? I've worked on those before. And then realizing that owning the brand was really the biggest opportunity. And that kind of led me into the private label branding side of e-commerce. Being able to understand the direct response, marketing, traffic, conversions, know-how, narrative, and the problem reaction, agitation, solution, combo, but then actually owning the physical product pipeline and supply chain that would allow the ability to grow and scale as fast as I could go. And so I kind of put those two together.

Never look back on building private label brands if you became a part of the business. Congrats. Yeah. It's when you have a campaign that's just crushing it and you're like, Let's just spend more. can make you more money, and they don't have the ability for scalability in terms of inventory and supply chain.

I could see the frustration there for sure. I like having a little more control. There's a variable that is to the degree that I don't own the manufacturing location or other things, but there are lots of other manufacturers where I could take a product that's a branded trademark. It's mine.

Might have a design of some allowance on it, on it for design or whatever. And I could take it to another manufacturer and double down capacity, change locations. have flexibility and control that I like about that. And because of that, it gives us creativity over the entire pipeline of a product, basically. Absolutely. Absolutely.

And so you mentioned not owning the manufacturer. want to lean down this route and talk to you about like what you've done in terms of acquisitions with acquisitions, like being a, it's a really good strategic move for an e-commerce brand to acquire manufacturer and acquire a bunch of different, like, for example, at ecommerce, you just buy an e-commerce brand or your own e-commerce brand selling products, it works your way to buying out your biggest expenses, and just as businesses, putting it all under one roof, like a hold co, is a really good strategy to build wealth and maybe sell that as a package later on.

Now, with you, have you done that like other e-commerce brands? Say you've got an e-commerce brand in, say, surfing, selling surfing products. Would you go away and acquire other surfing e-commerce brands? Like you've mentioned, you have acquired a few brands. I'd like to dig into how that worked for you. Yeah, we've acquired small, midsize, and now we're going into larger brands.

So as of today, there's a brand that's running about 50 million views a year, and we're putting on an LOI for it right now. It's going to give us an opportunity to create a kind of roll-up, as it's a traffic-related site that e-commerce is it's kind of forte from the advertising side. We're going to add on a physical product component. And then we're looking for other brands that are going to kind of roll up into this portfolio of basically traffic and brand niche around the home and kitchen space, and then look to acquire additional brands that will create kind of a portfolio out of that.

So if you've got one operator running spindles, it's a little easier for them to see the different verticals when it's all in the same niche. And so we can kind of pull those together into more of our portfolio. So my company, Voltage Holdings, owns the digital marketing, the software division, and the product division. It owns the rollup of those brands.

And now we've got partnerships in private equity that we can talk about. But I'm actually probably never going to own the actual manufacturer, just given the amount of capacity and the ability to move through other vendors and create secondary or tertiary relationships. I've had, you know, 21,000 square feet of warehouse and 12 employees before. I really don't want that again.

So the companies I look to acquire don't have that kind of infrastructure. In fact, this one, for example, has no employees that are within it and creates that flexibility in the business model that we love so much. So I could go surfing in Bali if I wanted. I do not have to worry that there's a location that I have to be at. Absolutely. That's my goal as well. I don't want to be owning big structures that need human beings to run them and then HR getting involved.

You know, it's just with the systems and processes we have now with the automations and mechanisms we can deploy. A lot of people argue Amazon's problems and its fees and other challenges, but we love the FBA, the Fulfilled by Amazon side, because it is the sixth largest logistics company in the world.

And when we go into that channel and open up that opportunity and use their warehouses and infrastructure, I can go to a Shopify store and open one up and distribute product that way. I can take it to wholesale or retail. can take it out to tick-tock shops. I can use that logistic as a hub for all the other opportunities that I'm going to create in a multi-channel opportunity, right?

Which really creates a rounded holistic e-commerce business, which defines the kind of companies we're looking to acquire. They must have multiple omnichannel opportunities. And we just acquired an interest in a partnership for a betting sheet company that actually has done really well. They just can't capitalize on the growth, and they don't have the strength of marketing and capacity to take it to the next level. And so we're actually bringing on a capital partner. We're taking over a percentage of ownership, and we're going to expand that one out in the next couple of years.

So we've done small, medium; now we're going after larger deals—10, $20 million deals now. Cool. Congrats. Yeah. Like you said, just the people listening is like having an admin, like I'm more for people that are brand new to the space and starting out more like against them buying, acquiring an FBA business when they don't have the marketing skills yet to add on these other channels and make an omnipresence like you say, unless they have worked with a digital market that has done that in the past that can help them do that.

The risk can be higher being pigeonholed into just selling on Amazon. But to be able to use that, like you said, run Google ad campaigns, TikTok, Instagram, and Meta, to be able to run that whole system through fulfillment by merch or fulfillment by Amazon. It's great because you're not so pigeonholed into just the Amazon listing that you have. The risk of them taking the Amazon listing down is not as scary if you have a lot of sales from a lot of different channels.

Yeah. And just separate market mechanisms in order to bring in that traffic organically or pay traffic. Otherwise, I mean, it just could be just as detrimental to a Shopify website that doesn't have their SEO game on point and they lose their meta account. Right. Those things could be just, just detrimental.

And I know a lot of people don't always focus on that. Think, well, Amazon takes your account and such it all down. I'm like, dude, I've lost million-dollar Facebook ad accounts and had to go through that whole nonsense. So there's a series of problems to solve; you just have to choose which channel you're vertical in the best. And we chose Amazon FBA.

And for 12 years now, it's been a great vertical starting point to incubate a brand, capture demand, and see the maturity of that brand grow and see where the customer audience really dials into the language, the narrative, the problem, the reaction solution, and then say, okay, great, we can take that out to TikTok shop, or we should take it to Wholesaler. We can go open a Shopify store and go double down on YouTube videos because that's really where we see our market segment and audience for this brand setting.

You can be strategic in those additional channels and then not be the expert in them. Not really at the end of the day; the challenge in this business is to go long enough to find those who you can trust enough to run the different verticals or have expertise in those different verticals and then pull them into a combined unit that can go in there under contract and help us exploit each of those channels correctly. It's too much for one person to do by themselves. Yes, totally.

And so what was the first acquisition you made, and what sort of got you there? Let's acquire instead of just launching and starting. Yeah, there's been a couple of small ones that we've acquired that are really taking off. Like I mentioned, there's a new one I just acquired, and I know it's upside potential, and numbers are just literally to double down on inventory and marketing and watch this thing turn into a juggernaut.

It's a simplified product and brand of another brand we watched go to 16 million in four years. So with this, I see the market, the segment, and the same opportunity. It's not in direct competition with the other brand. And so we can run that in the 80% known vertical and see the expected outcome of it. So I'm excited about that one.

The bedding shade company? Yep. Yeah. It's a home and kitchen space, specifically a space with a lot of upside potential on that one. We've got, you could sell anything under the sun when you figure out how to do it right. Anything in the box. It's kind of like, you're training somebody to achieve a certain goal, and you've done that certain and you've helped them achieve that.

Why wouldn't you go away and acquire that thing that you could just run the same sort of systems and processes and pretty much not be in competition or ching? Right. Any. Well, I'd say my favorite acquisition of it isn't done yet. Well, yeah, it's we're set to acquire five brands by the end of 2025, maybe more, maybe a little bit less, but it's really kissing a lot of frogs.

So the one that I would say I'm the most proud of, I haven't acquired yet. The most I'm excited about, I haven't acquired yet. I guess that's way to say it. We've got a couple of exit opportunities. Part of my ability to focus on this channel and be the CEO of Voltage and go through the whole see the ship and watch out for the icebergs and kind of set up the crow's nest of the business is that I sold my interest in my other business to my partner, who's been with me for the last 12 years. So he could focus on that.

And do keep his heads down. He's an operational component. He's our COO, CFO, and that runs as part of our operations. But with that, I was freed up to do what I do better, which is to get out and kind of see the vision, go out, make the deals, see these opportunities come to fruition. We were actually set to go become an Amazon aggregator and had gone out and raised capital for about 18 months. had two home offices, two home offices that were set to drop about 50 million into the business.

So we were going to acquire about 50 brands. And when we ran the numbers at the end of 2021, around November or so, they just didn't work anymore. Everybody was buying at 40% above market. That was a crazy period of time. So many people got smoked because they just were. Allowing people to just outbid each other, which is why the multiples are so much higher. Sent 40% above asking price.

And we're looking at the numbers, and my partner comes to me; he's like, dude, we can't do this. Like we can't take the money. Like we were this close to signing agreements. And he's like, after doing all the time and energy to raise that, I'm like, Well, you have to do what?

He's like, No, we can't take the money. We can't do it. It's going to bomb. It's not good. And so we pulled out of it. And thank God, because now that you see what's occurring in the market, BlackRock is following up. They're capitulating. Thrasio's going under. It's like, Oh, boy.

Yeah. Now's the time to go out and acquire. Yeah. It's an absolute buyer's market right now. It's great. I can't express that enough to like my audience and my clients. Like, people are very worried about AI and so much, so many things that there's so much speculation around. There's too much opportunity to worry about that. Yeah. Just like right now is such a good time. I would have thought you said a minute ago about not acquiring without expertise.

Not requiring without some good knowledge of the market or space, either, you know, invest in what you know, or invest in the knowing. If you're going to acquire a business, invest in people who will teach you how to correctly operate, run, become a CEO operator, and then look to acquire.

I know it sounds so sexy and good, and it's like, well, it's done for you. And it's already got an operator and all this stuff. It's like, if you know the P and L, you don't know the operations; you don't know the business itself. You don't understand what the brands are doing. You don't have the ability to have insights into the way that, you know, thing makes money.

You're going to crash it just a matter of time, you're going to make a bad decision on the limited amount of knowledge, and someone's going to end up jacking up the system who you trusted because you bought it and they were running it. And all of a sudden you don't know what to do.

And I have people come to me with these sad sob stories about their poor baby and like, Save my baby. And it's like, I can't, like this thing is terminal. It's terrible. And you spent so much money getting it done. It's like, Geez, you can't turn it around. It's bad. This is exactly why I have a job. Right? That's what I do: I help people not buy lemons.

Not by lemons. And there's a big push for that. And it sounds really sexy. Like the done for you Amazon automation scam. So really sexy. Yeah. Flipping product profits and all this crap. And then watch the FTC come after you for that nonsense. mean, rebuild a real business, intrinsic IP, own the business.

If you're going to partner with somebody, make sure you really know how to do the business. If you're going to buy the business, make sure you really know how to run it. That is, it takes a little bit longer, a little more due diligence, but it's really in your favor. These businesses aren't extremely complicated to run.

Really? But they have major failure points. With these bad decisions, the whole thing can collapse on itself. Like you said, it really is in your favor to do due diligence on multiple businesses. And the way I explain that to my audience and clients is that the more businesses you look at, the more you learn about business, and the more you learn about working in other businesses, it's not working in other businesses.

It's basically like, typically if you do DD on 20 to 40 businesses, you're typically going to get a better education than just doing like an MBA degree, and we're going to probably look through a thousand companies before we find the five that we end up with.

Diligence gets down to; their bank accounts don't reconcile with what they said on their financial forecast. Like, you're to increase the valuation by two points, and anything's going to happen. Exactly. Exactly. So you acquired a few small ones, and you're looking towards acquiring larger ones.

Yes, and congratulations on you taking yourself out of the operations and working on the business and overseeing it versus in the business. It's hard to do that. Man takes a lot of 17 years to be an overnight success. Yeah, exactly. To take the reins, take away the reins and then just oversee it. But now you can see how fast you can go when you're just not at the start of the business phase, which takes so much longer than the acquisition.

Right. And you can just now; you're right. It sounds like you're raising capital and you're just going for acquisitions. Are you raising capital? And if so, how?

So capital has been raised. We are working with a company called Patriot Growth Capital. They are veteran-funded, veteran-backed, veteran-invested, and when we acquire the companies, veteran-operated brands. So we will be training and building up in the vision of this opportunity, the ability to take veterans in, out, or around the business until such time as they can operate it and then even acquire it after 60 months.

So our heart is for a purpose-driven mission for veterans in or out of their current active duty state to have an opportunity to bring their families up and come along for the ride, train them in the processes and stuff, and then build up our portfolio based on that. they've raised the capital. You've got veterans that want to invest. Correct.

And they invest in the business, and you teach in the business, and they end up. And we're hiring veterans into the business. That's right. Wow. The same veterans that are investing. No.

Veterans helping veterans. Right. That's so cool. What's this called? It's called Patriot Growth Capital. Patriot Growth Capital.com. Jonathan Bates oversees it. Zach Miller is the CEO. Carl Allen is the CFO. He's done billions of dollars in deals and mergers and compact mergers and other things that he was involved in to oversee the funds, but they've raised the capital required to go out, so now we're in full due diligence.

So as we go through that process of determining which business meets our buy box, we'll go through and determine as a team if it's going to work. They look at us last and say, Neil and Reid would run this company that we're going to acquire. If we give them the thumbs up, we go to an LOI, we finalize the due diligence.

If it's a good deal, we purchase it. So the funds for each company would be pre-validated before we go after the company. And so we're set to acquire those under that process. And we're actually bringing in a new person who's got good experience, sold to other Amazon businesses, and has &A experience operating two of them right now. He's also moved himself into a really great position where he doesn't see the daily, weekly, or monthly tasks anymore.

He's just more of the OKR, KPI management level. And he's going to come on and be helping us flesh out new deals and process those deals and be able to help us see the insights. So we're growing the team as we go. Yeah. Congrats. You got your own inside by side. Yes. going to take the pressure off of some of us. I read to myself, are both on separate brain links. Know, Reed, has my partner been with me for 12 years?

He's the COO, CFO, tactical daily weekly monthly brain operations, loves to see the processes, and does everything in a particular way. And this is his thing, right? Me, on the other hand, I'm not that guy. I'm the other half's brain.

See the big picture, the vision. can kind of see the disparate parts coming together. And he's like, but we have to do it tactically. I'm like, no, think bigger. So we work really well in that capacity. And so where I see the gentleman coming on as he kind of sits in between us.

And he's going to be able to flex between both of those and help us really take off the ability to speed up the due diligence process on these deals. Knowing both the &A and the e-comm side, he's going to help us get these deals done a lot faster. Also just tapping into his network and getting off-market deals. He's going to hunt; he's going to eat what he kills; he's going to go get it.

He's already got a pipeline built, so I'm excited to see that go. So we can really get those deals done because it's going to take a lot of kissing frogs to get to those princesses. That's the other thing about people who don't understand. There's all these businesses for sale, and probably 80, 90% of them aren't worth buying. So we got to really get down to the ones that are worth. Exactly.

That's why people hire me as a buyer. &A advisor is there, you go. Buying the network off-market deals, knowing what waste time on DD on typically if we're going to go buy a business that will do DD on maximum, like three businesses max, typically we'll DD on one because being in a space, knowing so many businesses, the same with your advisor and your company, can execute a lot faster versus waiting time on dud deals or doing DD on dud things just because you need to learn.

Exactly. And he's going to open up that due diligence process to rollups, which we don't have currently in our buy box. So what he's going to be able to do is pull two or three brands together that fit that particular portfolio. And we'll do more of a roll-up against them. That'll meet the minimum criteria we're going after for the deals we want.

Yeah, so we raised that capital through them, and it was formed as part of this initiative, and Voltage is in a strategic partnership and an arrangement to operate and run and optimize those businesses and bring in the operators and control it. And they're on the buy side, deal-making, and lead flow, as well as the capitalization side. So it partners up really well. Yeah, that's great. And so with the funds that you've raised, what sort of cash are you putting any of your own cash in? personally? Well, company.

What's the structure of the deal, I guess, in terms of like offers that you can get away with, with the type of financing you're using? Yeah, so we're going to use a combo of cash in from investment with SBA. So we have a very, very strong relationship with the SBA lender firm that does very, very good, high wins, great deals.

And so we've got that partnership on the PGC side, which means once we've got capitalization in for a particular investor, instead of them putting five million in, they can put the 500,000 up and be qualified for 10 million in SBA funding against one of these businesses.

And then, because it's a PGC and it's in the Patriot Growth Capital PGC, they can pull in two or three other investors into that group, lower their risk, and then invest in a business together and bring the individual capitalization of the SBA behind it. And because of the type of businesses we're going after, as we've worked through the numbers and went through the P&L and went to the forecast and the pro forma, we're like, Here's where the fees fit in.

Here's where the SBA fits in, and we made sure that we chose a buy box for businesses that would service that debt correctly while allowing profit to be thrown off quarterly or monthly, depending upon how we run it. And of course, with the upside potential of being able to grow and expand the channels, the marketing, or whatever's necessary to fund that growth. So that comes with expected fund growth for that.

So he said we're north of last checks, 10 to 20 million in capital raised for the front end funding to offer cash deals and then SBA qualifications of each of those verticals up to 10 million, thanks to the new SBA rule set. So we can capitalize 50 to 100 million through that process easily.

Right. So that 10 to 20 mil is the veteran-backed raised cash that you are setting aside on the side are ready to deploy to the business. We're to go after that. Yep. So we can do a combination. That's what I know about business. It's creativity and finance at the end of the day because it's whatever the deal is worth to you and the buyer and could be by sale agreement.

It could be, you know, 100 percent cash. could be 60 percent and 40 percent owner-carry. If it's 40 percent owner carry, obviously that makes the deal a little easier. We just have to, of course, play by the SBA rules to ensure compliance and legalities of that, but then we can fund that through the SBA with the owner carrying on the back end.

So we don't quite always need as much cash upfront if the deal looks great. And of course, if the numbers work well, there's just that creativity to make each deal sort of unique, if you will, when it comes down to negotiating. Then, like you said, you get in, scale it. And then what's your goal?

Is your goal to scale it to a point that it just grows exponentially over time and holds for a while? Are you making rollups and exiting? There's a roll-up to exit the overarching agenda.

But there's cash flow, of course, that nobody dislikes. And if it ain't broke, don't fix it. If it's growing, if it's capitalizing, if it's opening additional channels, we'll let it run. I think what we're going to end up looking at most likely, and this is kind of the vision of where this is going to go most likely in the next three, five years, all things considered with the market and acts of God and anything else we can't control, the affect will be to roll it up into a portfolio that will ultimately be a final end game, if you will.

In that process, though, as we bring up each of these veterans, as it gets out to 16 buns, we can sell that business back to the veteran with a 201 opportunity for no capital gains tax to and also build up a war chest within each of that as part of the initiative so that the owner operator gets to the at sixty months where they can qualify and we can sell it to them without a capital gain tax and they have the ability to acquire it through an SBA loan on their own which will help them structure, then we will provide the cash down for them to buy that business away from us along with the funding.

So they'll take over full ownership and cash out of that business, and we'll walk on to the next one. If their cash is flowing and running great, we'll leave them as a part of the portfolio and keep the top tier, whichever those businesses are not being the top tier because not all of them are going to pan out exactly as we expect. That's business. Some of them are going to fall down.

Some of them are going to have problems. Some are going to meet market troubles or brand troubles. It's just the way it works. And those may end up being sold off. Right. Yeah. Sold off separately. Maybe not to veterans, maybe to the marketplace. Marketplace, off-market deals. Those are my favorites, right?

Everybody has to go to the broker, but it's kind of knowing people like you off market that's like, Hey, look, I got this deal. Where's your guys? Let's skip the broker fees. Let's go straight to the sale and see what we can get this done. Right. Absolutely. That's why I'm able to acquire businesses a lot easier than people wanting to sell them. Well, those are typically the better deals, too.

Right. And it's like, well, I could sell, but I don't have to say, OK, now you got my interest. It's the ones you're like, have to sell. This is great business, and you've got to have it. And it's making all the problems, doing all this stuff. And I'm like, ding, ding, ding, ding. Like all the red flags are going off.

And then save five to 8% on the cart, like offset the sale instead of going through a breakdown. Like it's just, that's a huge win for people. Yeah. It's a big win depending upon the size of the business. can be a lot. 2% to 10% can make a big difference at the time of Yeah, absolutely. Like you said, you started off acquiring smaller businesses, and you've just gotten more and more comfortable as you've grown to acquire larger and larger businesses.

Correct. With the capital that you have access to, are you looking—like you said, you're looking—to acquire three to five brands in the next couple of years? Is that right? And yeah, by the end of 2025, five is our goal by the end of 2025 in our specific buy box, which means they have to have a minimum of a million and a half EBITDA, preferably closer to three to five million EBITDA and omnichannel branded specific products. Yeah. And what media centers?

If they're a media center, we're good with that. If it has no physical products, that's when we'll tack on the next level of opportunity. Right. Right. And so that Brown, that price range in that buy box. Are you looking at roughly a two-ish multiple, or are you trying to get below that, or what do you? If it's a single channel, you'll see, I mean, if it was an Amazon-only FBA business running 10 million, 11 million, or 12 million a year, if it's got at least 18% at the bottom, preferably more, but at least 18%, you're going to be around 2.8 to 3.2, just depending upon what other. 18% from another channel? 18% EBITDA. So net profit.

Total total nonprofit business bottom line. Yeah. So at that point, I'm saying 2.8 to 3.2 could be realistic if it's a single channel only. If they've opened up some percentage—five to 10% of other revenues from other channels—then that multiple could be as high as four to five. If it's above 10, 20%, there's maybe even 50, 50 Amazon, and 50% other channels. It could be up to eight to 12 X. It could go higher if they're subscribing, say on one side.

And there are subscription-based businesses or something on the other side with, you know, recurring monthly revenue that's acquiring a customer. Absolutely. Average order value, repeat customer, constant movement. Those businesses may see 12 to 15 X on the higher end. Yeah. So it's really going to be a pin-up on some of those variables. Yeah. I mean, it's so attractive to see multiple, like say you've got three channels and they're 33% recurring in terms of; that's just like the goal, right?

And they're doing something great at every component of the business; they're good. I should say, but they're not particularly great at any one of those channels, which is where the opportunity steps in to say which channel has the maximum to become great because this business can shift extremely fast in 12 and 24 months. If you exploit a good channel into a great channel. Yeah, absolutely. What about that? I just lost my train of thought there. Excuse me. Hold on. I'm just going to cough. I'm halfway through a cold at the moment.

Well, that's okay. It's happening everywhere. We're fighting off some colds in our house right now. And there's just one time of year; it's October here. And so everybody kind of starts feeling bad. It's a balance between a little sickness in the house. I have four daughters that are home with me, and we have 50 acres out here in the country, and we homeschool them.

So we're always around; we're always operating as a unit, which also makes it more difficult when somebody gets sick to kind of try to get the next person not sick. And then if somebody gets sick, we're trying to cycle back, you know, to make sure everybody finally gets healthy. So that can be a bit of a challenge.

Yeah, absolutely. Four to six weeks to turnover. Yep. Trying to get the first person who got sick from getting sick again. Yeah. As we're getting the last people out. Yeah. I just got back from Australia, where my siblings all have kids, and it just runs from family to family, just like a little carrier onkey. Yeah, absolutely. Yeah, no doubt. Cool. And so do you have particular products, or you're not like looking for certain profit margins? kind of brands. Well, profit margins. Absolutely. Yeah. Like above 18%.

You mentioned before. Yep. Yeah, exactly. If they have that on an Omni channel and their triple net, that's perfect. If it's a little lower, then we have to see a path through changes or optimizations that we could make that the owner simply wasn't making through knowledge experience; execution could be a capitalization problem. can bring the capitalization problem to the table. How do we make that 15 to 18? How do we turn that 18 into 20 through optimizations? We'll look at that as an opportunity for business buying. We don't buy on futures, but we buy on the last. 12, 24, 36 months or older. Typically, I want to see a business three to five years old or older first. Before we see where the plan is established. The question I'm going to ask is, like, the age, years, right? No, there's either too much growth in a market that's maybe could easily become saturated and they rode a wave, kind of like the one-hit wonder. Or if they're too old, they have been in the market so long that maybe they haven't adapted new technologies or changes to the marketplace, or they're simply. operating in a specific market for the last 10 to 20 years. And it's kind of, there's your max. It's like, well, if you wanted to pull out an additional 20% or 30% growth next year, you're going to find that extremely challenging to do. If you are okay with it's continued three to 7% growth year by year, it's a stabilized business; it's tossing off cash. It'll do it for another five or 10 years. That's fine.

You've got yourself a stable cash-flowing business. That's cool. And we wouldn't necessarily turn it down, but I'm really looking for those that are just kind of underserviced inside the business. Maybe there's multiple channels of revenue they haven't even tackled yet. And for us, we just look at it and go, dang, that's easy. They had the product, but they didn't tap on the education.

Well, we tap on the education, and there's 250,000 to a million a month and opportunity setting in their current base that they just haven't capitalized on yet. Let's put an LOI on that thing. Let's find out what it can do. Just a million dollars in education a year minimum, maybe a month sitting inside of that business just because of the way they haven't gone after.

So that'll kind of change up the way we use it, the buy box. Now there's certain products we won't go after to your point. I really don't like fighting in the electronic space. So I don't want to touch anything electronic, right? The main reason is just because of the depreciation of the product. Turnover Murphy's law is now like two minutes. It feels like not six months anymore.

And so things constantly are evolving and new iterations, and AI is making this even more difficult to break into with the larger companies deploying so much capitalization to it. Just, you know, technology itself is reaching certain points where, without significant capitalization, there's not going to be major breakthroughs. Even Apple has said, Hey, we're not moving iterations until every year now.

And I'm like, well, that was stupid. And I like where Apple went, but when they lost jobs, they lost their vision. But in other ways, there's just manufacturing and defects and customer support and all those other concerns and returns that have to occur. So we'll do electric products, but not electronic products, right? Yeah. A bone to supplement and healthcare line won't do that again. That was fun for a little while, but there's just too much alphabet soup on top of that.

Anything in the supplement world. Yeah. Yeah. On the skin or in the mouth. This is just too much now. Too many big companies. Reading down your neck all the time on every angle, every word, everything you say, everything you might claim or not claim, or anything you insinuate that you might claim because of something else. Yeah, no, none of that stuff.

And the last one we really want to touch is apparel. If it's apparel is part of another part of the brand, let's say it's a home and kitchen that or a home brand, and it's got apparel that ties to somehow. I've seen one of those; it's kind of unique, but other than that, apparel itself is just going to require too much brand capitalization, brand ambassadorship, and other things you've got to do to really differentiate it in the market, or you're just going to fall to the bottom of the apparel market and returns are terrible.

And there's just a lot of other things you don't like to do with that. Other than that, there's millions of other product opportunities that don't fall into those. And in that case, it's all down to the profits. Yeah, typically it's the unique ones. Now, I wanted to ask around; you've helped so many, thousands of people go from six to seven figures in Econ and seven to eight figures.

And with the business that you're buying and the people that you've helped, more so with Econ brands doing seven figures, there's two or three common things that they need to change to unlock in their business to get from those seven to eight figures a year. Most of the time, if they've reached that place, it's not because they don't per se know their numbers really well to the end, you know, to the degree that they know the opportunity in the profits they're making or the next product they're going to do. A lot of times it gets down to risk. gets down to risk-reward ratio, and they've kind of reached a place where to get to the next level; the risk kind of feels way too great for them.

And they keep thinking that there's some sort of growth hack or change or this miraculous change in their PPC or some kind of outside marketing thing. And it just gets this growth hack or whatever, and I'll get to eight figures. When in actuality, they're just not willing to do what the risk reward requirement is to go from seven to eight figures in that business. And it's typically capitalizing on inventory and capitalizing on PPC budgets. If they're not willing to kind of do those two things, they're not going to grow.

If they're not willing to look at the pricing of both of the product itself at the manufacturing and retail pricing levels, those are really three things that most of them are not willing to look at at the level that it's going to require for them to get the eight figures. If they're willing to change those three things, change their risk reward structure, then it's just a matter of time before the business will grow to the level they want to.

And I would just say if you had to order them, it's usually going to be number one, the capital deployment. Right. Number one, and just because I've had a marketing mentor that he said all the businesses that stopped doing so well are the ones that just start spending less money on marketing instead of like just spending more money on marketing. He got a little tougher, a little harder to acquire, a little more challenging the market competition.

And instead of staying the course, they hesitated; they blinked, and their competition took them over. It's spending more money, and then it's harder, and you just crawl back from that. is harder and harder. There's a great case study and good to great of that exact example.

Right. If you look at Jim Collins, Good to Great Walgreens is a perfect example of that. Having gone from good to great in their personal spending, marketing, and moving from a good to great position because of the way they put culture first and they put a great advertising campaign together and really spent to get that growth.

But now they're falling apart, and they're on the verge of bankruptcy. Right. They went in the complete other direction. They got out innovated in the market by brands like CBS. So it's a good case study on the other side to see what a great company does when it fails. And I just see a lot of that getting down to not the business, the market, or the opportunity.

It gets down to the owner. It gets down to the mindset of the person behind that ship and what they're willing and not willing to do, what they're willing to risk and not willing to risk, and whether or not the business will actually grow from it or it will lose in market share. Absolutely. Like a crazy growth mindset and happy to just continue to deploy capital into marketing, or are they wanting to take profits a bit?

Maybe too early. and it's up to them, right? It's really a personal preference, but I agree with you. It's definitely the mindset. The toughest thing in business, I believe, is having the mindset to just keep going and staying in the game. Perseverance and finacity. Yeah. Yeah, absolutely.

Yeah. I'd like to say there's like one or two super levers that I could tell somebody on this call. Well, you want to get the eight figures. Here's your super lever. But in actuality, when they come, there's a lot of similar, consistent conversation in the language between those business owners.

And it really gets down to staying the course on the fundamentals and looking for those opportunities to continue to innovate in their brand and product differentiation with what they've already worked in, what they've hedgehogged into their vertical, and simply looking at it and saying, Okay, if an example of Amazon, it's an algorithm.

If I'm willing to double my inventory inside of Amazon's ability to reach that product and brand in my niche, if it's 20 million searches a year and I have 1% of the market share, well, I've got to be able to capitalize on the inventory of the rest of those people who are taking over those searches every year. If I'm not willing to do that, I won't take over the market share.

Right. And that's specific channel right there is algorithmic driven when it comes to growth. When it comes to capitalization and PPC, that's what it's looking for you to do. There's an engine and an AI behind that. The same thing happens with paid media and traffic too. It's like, well, if you only want to spend $5 a day, you get one preference. If you're going to spend $500 or $5,000 a day; you get another preference.

Right. And for most businesses, this is what I like to teach: the inside-out philosophy of, like, don't go away and look for another marketing strategy. You're looking to grow your business; look at what's already working and say your CPA is quite good, and you're acquiring a bunch of customers; it's working, and you want to grow the business.

The easy thing is to just put more money in there. just time and market your perseverance and tenacity and willing and your risk reward. it greater than the competition you will win. Right. And there's some great case studies on my podcast, if I can give that a shout real quick.

Yeah, absolutely. Yeah. The high-voltage business builders podcast, the high-voltage business builders podcast on Spotify and Apple, and all those places. A couple of great case studies to go reference what we're talking about. One of them in particular, David LeBlanc, was a business running about 30,000 a month when we came to us, and he couldn't break through. couldn't undo it.

In fact, he was going to shut it down. And we spent a better part of about six months helping him turn it around. 12 months after that, he's half a million a month on Amazon. He's a hundred thousand on Shopify. He's scaling.

Yeah. Cool. So a lot of that is all his, but he, because he actually executed the strategy and he did the work. He put in the effort. He did what we asked him to do. He followed the processes we asked him to do. He took the risks that we encouraged him to do in his business, and he gets the reward for being the one that did it. I could show that thing to 10 people, and nine of them would say, It's not going to work. And he was the one that said, I'm going to do it anyway."

Exactly. That's the thing. It's like nine to 10 people will say it's not going to work, but the person that, and that's in any vertical, is like somebody's going to make it. If somebody wants it bad enough, they're to make it work anyway. Yeah. Whatever the truth is, most everyone can, like, almost eververtical, ride a bike.

Right. Right. But you all start with training wheels. So the difference between somebody who gets the training wheels off sooner or later is just the one who is more tenacious about how many times they get on the bike and go until the training wheels come off sooner. And pretty soon they're riding up the mountains and down the hills and off into the and everybody's like, well, I can't go with you because that's all got training wheels on. It's like, well, whose fault is that? Yeah, exactly. It's a great way to explain that.

Neil, thanks so much for coming on. We've already mentioned the Voltage Digital Marketing podcast, guys. I'll put a link to that in the show notes. Where else can people come and check you out?

Yeah, VoltageDM.com, VoltageDigitalMarketing.com. To be clear, we're in Amazon, and each channel, I guess, is the best way to say it, an incubator of products and brands, always looking for great people who want to become operators or those who want to become better operators like David in growing their brands because our brand and our business depend upon great operators.

So I have no employees, but when I raise up an operator and help them become successful in their business, we give opportunities to partner in profit-sharing opportunities, either the building or acquiring a business's operators within my network to become a part of that later on.

And so our businesses are run by operators and CEO operators who we trained. We're always looking for great unicorns in the market to help train up and go check that out. Yeah, reach it out. I'll put links to that in the show notes. Again, Neil, thanks so much for coming on. Everybody's listening.

Thank you for listening, and I'll see you on the next one.