Ep 326: Buying Multiple Online Businesses Under $100K with Shlomo Freund

How do you keep going with acquiring businesses, even though some of your acquisitions don't work out exactly the way you planned? Hi, I'm Jaryd Krause. I'm the host of the Buying Online Business podcast.

And today I'm speaking with Shlomo Freud, who is an author, speaker, and digital marketer. He helps e-commerce brands scale by building strong marketing channels outside of paid ads. He's also acquired many online businesses himself and uses the growth by acquisition strategy to build a portfolio of online businesses.

And in this episode, we talk about the types of businesses he's bought. The first business he bought, the second business he bought, how he's partnered with other people and acquired businesses, how he has brought different people into his team and shared operational roles with people, how his operators operate the business, and what he does in terms of incentives for them? Does he pay them a wage? Does he have them?

Have equity in the business, and what that looks like. We talk about his mistakes that he's made and what he would do moving forward. And also the advice he would share for people who are looking at buying businesses. We talk about due diligence.

Of course, if you haven't got my due diligence framework and you do wanna buy businesses, make sure you go to buyingonlinebusinesses.com for just free resources and get that due diligence framework. It's made people millions of dollars and saved people millions of dollars. It takes the guesswork out of buying businesses.

And also later on in the podcast episode, Shlomo asked me a question like, How did I build buying online businesses? How did I build the community? Which is something he's looking to do with his businesses: build a community. And I think it's very valuable to share with you guys, to know as business owners wanting to grow their businesses too.

So there's so much value in this podcast episode.

Enjoy.

Shlomo, welcome to the podcast. Thanks for your time.

Thank you very much for hosting, Jaryd. Pleasure.

Yeah, yeah, welcome. Absolutely. So when I reached out to you, you said you've been listening in for a little bit. When did you find out about the pod?

So I've been following your YouTube channel, looking at the interesting guests that you bring and your videos. Because I also have my videos, it was kind of nice to see who else is in the space, what they do. This is how I found out about your business and community. So I'm again, very glad to be here and kind of meeting a colleague. Thank you.

Yeah, absolutely. And so, when did you buy your first online business?

So I've been doing internet marketing for about 20 years now. I always had something to do with internet marketing, even when I had a real job. It's kind of a, can't tell by, but doing entrepreneurship, I'd say that. And I knew about buying businesses back in the days, but when there was only Flippa out there and it was the wild, wild west, kind of was, is this real?

So I forgot about it. And then at the end of 2020, I finally bought my first asset, not building but buying. It took me about four or five months of looking at hundreds of deals. You probably know the process. Yeah, this is when I bought a significantly large business for me. That's the first one.

Are you open to sharing a little bit about it? Figures, the type of business, obviously not disclosing everything, but you open to sharing?

So it was a content website. They're not as popular today as they used to be. Many of them crashed. And unfortunately, this one also crashed about a year ago. Right. It's not dead, but it's significantly crashed.

Yeah. Okay. What have you bought since?

Since then, I bought a small no-code platform. And now I'm adding a partner there because I can't work on that. Small was I bought no code. No code. Yeah. I invested with a partner on a few directories, and I also, and I think that's the best gem that I have. And this one is a no-code quotes platform, where people are coining their quotes.

We have a quarter of a million quotes that people just want to give to the world, and people just keep adding this. There's adding there, there's a nice community there. I'm currently rebuilding it because I need a new branding and it needs a new design, but that's a nice asset to have.

The funny thing is, and you might also have seen that Jaryd is that sometimes you get really good deals at a low price, have huge traffic, and just don't understand how come they're such that they're under-monetized to that extent. And this is what happened with this one. So it's an interesting story. And I'm kind of looking at this asset and like, can't be. And when you dig in, it makes more sense.

Right. So, how does the business make money? How did it make money when you purchased it? And then, how does it make money now? Like what revenue streams you added to it?

It started with ads, and then I changed it to an ad network, and it did bump up. However, since then, I haven't touched it. Just like many content websites, as I mentioned, it did crash. However, there's still all this potential there with those quarter of a million quotes, where you can do a lot with. So it's building a daily quote newsletter, which is already up there.

You can build a merch with this website. We have a service where we verify people's quotes. So if somebody wants to say this is my quote, they pay us, we give them, we make a search, make sure that there's nothing similar. If there's something similar, then we tell them also, and then we verify their quote. So among all my digital assets, I think this one has the most potential with this one.

Right. And so you're working on growing that because it's been hit by the algorithm changes. Is that right?

Yes, that one because it has the community around it. And when I'm saying community, I'm saying it's not that there is a paid community or a Facebook group or any of that, but versus the first website that I mentioned, the content website where people buy, where people come to get information, and go with that one. Get emails from people how much they love the website and they're going through this. So it's more substantial there.

So I know that one is just waiting to be grown, although again, it was hit.

What other businesses have you purchased? So you've bought those two. Have you bought any others in between or after?

So that was also the no-code one. And then I moved more into doing coinvesting. So those were the two directories that I mentioned, and not related to online businesses. But recently I also started investing in offline businesses, kind of diversifying my investment. So these are, this is my portfolio.

So, King Grads, so you've got two different directives, is that right? And you co-invested, is that right?

Yes, so we have two directories. These are in two different niches. Three directories. It's a package, eventually.

Did you buy them separately?

No, no, no, no, no, no. So we bought them, and somebody started building it. I bought 50 % of that, and then I bought another one from him. And then we kind of then, as part of an agreement, we got to a third one to partner in that one together. So, all those are three very different niches. One of them is now we're working on harder to grow it, versus the other. Then we'll go for the next one and the next one. That's the plan.

Right, cool. And so you've got three directories, two content businesses, and you're looking at purchasing offline businesses now. Is that right?

Yes, and there is another thing, no code is another. Yeah. Yes. And I also have my business and my website, but that's a different thing.

I could once have lots going on, man. What have you learned? Like, what's maybe the two to three biggest things you've learned since your first acquisition in 2020 to now? What do you think are the most valuable things that you've learned? Maybe two or three things.

So, first of all, the market is very volatile, and something that succeeded one year ago or two years ago might not succeed now. It doesn't mean that things that are dead, but you might just need to change the angle of that one. For example, with that content website, the first one that I mentioned, now I'm building a directory for it.

I have a mailing list with that on, and maybe we'll grow a community with that one. So you're changing the angle from content, pure content, not into something else. So this is one thing.

The second thing that I've learned is that the best things come, and I'm going to say something obvious here with experience. So the quotes website that I mentioned was just after seeing hundreds of deals.

And then you find this gem, and it was like, okay, but that was hard to find. So you need to put in the work and sift through all these listings and find the right ones. And once you start buying businesses and are not in the market, you start getting private deals.

Now I happen to try to think if any of the deals that I bought eventually were... So none of the deals that I bought were private deals. The most private one was from a Facebook group, but that's not private. But what I'm saying is that the best deals come from private deals, though.

None of the ones that I looked at have materialized, but you have a competitive advantage once you tap into that. And once people know that you're buying, they will approach you; this is what happens to me today. So from time to time, somebody approaching the sensor, are you interested in this? Are you interested in that? You might have the same experience, Jaryd, and these are off-market deals.

I mean, it helps when you've got a brand and a name in the space and people want to sell you their business. Word of warning, you do have people who want to sell a business, and it's easy for them to just come to you to see if you want to buy it versus listing it somewhere for sale.

You can get some good off-market deals. Typically the best off-market deals that I find are the ones that I sort of sniff around for versus them just coming across my desk, but I have had seen deals that have come across my desk and be like, damn, that's good.

I mean, you've got to be in the right spot to purchase, and it should align with what's going to suit you moving forward. Your acquisitions, the first one, all of them, are they sort of sub 100K, or what sort of price range are we talking about?

They're all sub 100k. I focused on the smaller ones. Yeah, for now, these are the sizes I'm dealing with. I have a family and all those things. We'll go to those also.

Yeah. Awesome. Awesome. Have you sold any of these or thought about selling?

Yes. So I also buy an automotive one an automotive website that was mainly based on Amazon associates as monetization. Affiliate, unfortunately, with that one, I lost, I bought it for around, that was a tiny deal, really tiny deal, but it still looked like a good paper. It was, and then I decided that I didn't want to work in that.

I'm not interested in just lost interest. You know, sometimes we just buy something, and then we just lose interest. It's time to move on. And just at that time, the traffic also started to fall. It was even before the HCU. I don't know what's going on with that today because they sold it.

Unfortunately, it was around the 65 % loss with that. Maybe 60 because I also got some money during that time. So that was a content website on antennas and truck radios. Very niche.

Interesting.

Yeah, so that was an interesting ride still.

Might have seen that one.

You might have seen that one.

I might have a sale, not when you were selling it, but I might've seen it when you were, I mean, I've looked at some similar ones to that. Mean, we can get so many deals put across our desk with our members. We see we know the market very intimately at all price ranges and niches.

Yeah, it's an interesting space. Like there's only so many, there are more and more brokers coming out now. It's good because it spreads. It's a load of, and more deals are coming to the market, which is great. But still, there are a lot of deals, and the majority of the brokers still are.

Facebook groups have died off since the helpful content update, fewer people are into content websites because AI and search engines have all been changing. My SEO team and a marketing agency have helped those people sort of grow out into different, like build out established businesses like Ecom Arms, so their content business and stuff like that.

It's not to say that's been easy. It's been very, very difficult. I feel the pain of a lot of people who have purchased content sites, including myself. I've lost out on content sites, lost traffic, lost money, and that's a part of investing. What's your advice? I mean, I've got my advice to people moving forward, like those who have lost money on deals, but what's your advice?

You've bought some that have been hit. Like, how did you handle it? How does the inspiration to move forward and continue see that the market has changed to buying, let's say, combine businesses? So, for example, now with the SEO world, people are talking about adding an e-commerce to a content website.

And that will revive or might revive your traffic because now Google sees you as a real business. And you should be a real business. If you're adding e-com and drop shipping, you're there. They just need to see that you're real.

And then you're not in that same category as pure content websites going into the market. Just getting some information for somebody that you can now produce with AI, and people believe. So it's not the same thing.

So it's kind of building a strategy of having, in this case, e-commerce and content websites, but also in other terms. So, if you already have your own business and you can buy a newsletter with the audio that is related to that topic.

That's also a good thing. Reallyy, not seeing an asset as just on its own. like what I already have and then put something on top of it, and then maybe put something on top of it, and then get a bigger gear pie.

You mean growth by acquisition, right?

Right. What's interesting enough, so you've got a couple of businesses in your portfolio. What's your goal? Like, how do you manage these, and what's your focus moving forward? In terms of growth, what do you want? Where are you at now? What do you want to do? And what do you want your portfolio to look like eventually?

So I found out that I'm very good at finding deals. I also enjoy that process more than the operations. So I prefer to find deals and then work with partners. And this is what has happened with my digital assets over time. Some of them have partners from the beginning, but even the one that didn't, most of them, then I said, let's be on a partner that can help, which is more on either SEO or operation to move things forward.

Cool, and how did you find these partners?

I can't say they're not friends, but they are all people I've met. And then you saw, yeah, I'd say just happened to be because I was doing a digital asset, have my skillset. They have a difference that we can match.

Maybe you were expecting an answer like, found them in this community, in that community, just like it's reason I ask is because there are people that buy businesses as well. They're growing them, but they've also got a day job, as they can bring people in who are more experienced in terms of SEO and different things.

And I think it's great having partners in the business. But the reason I ask is that your business is a sub-hundred K. So like, what does that look like in terms of the partnership agreements? Like, do you bring them on and they're doing operations, and they're getting a bit of a or are they getting paid a wage? Or like, what does that look like for the one that you have?

Most of them, all of them, one of them is more complex. Most of them, I was happy to give 50 % for that, for their operation and partnership, because they will do, I can't say most of the work, but a lot of the work. And I'm okay with that. I see the value there.

Yeah, yeah, awesome. Yeah, it's a good thing moving forward. And what do you want your portfolio to look like in the future?

So I would like to build up probably a hold-co of a few of those more successful ones. Probably want to grow each one to around 10,000 a month, and then either selling everything together if there is a match or maybe selling them one by one. It's too soon to tell.

Cool. But eventually build out a whole cup. Cool. Awesome. Awesome. What you have any questions for me? If any, know that you sort of found me online years ago, and yes, yeah, we're both in the space. Like it's great for me to come and ask you questions and learn from you, but yeah, have you got anything for me?

Yes.

I'm very interested to know how you built your communities because nowadays building communities, it's kind of one of those modes that I mentioned, like building that is hard, but once we have it, it's very, very powerful. So I'm impressed with your work of building that community and I want to learn and hear more.

Yeah, for sure. Great question. The answer is showing up is I've got 320 something podcast episodes, thousands of YouTube videos, and I answer all of the, we answer all the emails. I've got somebody who helps me with emails.

Now the answer is just showing up and helping people and just giving insane amounts of value. The best way to grow it is for me to grow. So the more I grow, the better it grows because the more value I can add, which attracts more people.

How I've just grown it is like, just started like literally, I bought a couple of businesses myself, and people like, dude, you need to teach me stuff. So I just started teaching people for free, and I just gave my course away for free.

The very first version of it, of course. And I did it for free for 15 people. And then I started charging, and then yeah, I just coached so much and just showed up. That's it's people will get behind a movement if they've got a leader who will fight for them and not just fight for themselves.

They'll fight for them and want the best for people. I don't need to continue doing what I'm doing, but I just don't want people to get stuck over and buy bad businesses. That's the reason I... People are like, I'm going to buy a business. Like, well, let me make sure I look at it, and you just don't get scammed.

Yeah.

I just want to use like that. Yeah. So I don't have a specific answer on like a formula other than just like showing up. I don't think a lot of people can do that these days.

Can you show up for nine years?

Yeah, man, like very disciplined. It's very hard to be disciplined. Even when times are rocky, I've nearly, I nearly lost this business. We went backwards for a year. Things changed, business model changed, but it's just, I've committed and stayed the course.

And I think the focus of the game is staying in the game. And yeah. In the team, we've got me, Lin, my assistant content manager, Eden, and a business analyst. So we keep it pretty tight. And simple, like I don't.

How many people in the team want a big team? Most people know, as my assistant, she manages my inbox, the other, and then also our analyst, business analyst, but most people don't really like know Eden, who is the content manager.

She's a real hero. And then we also have like a bunch of different contractors that do different things, but pretty tight, pretty tight team and small team. And it's been like that for years now, which is fun.

Nice, very impressive. Thank you for sharing.

Yeah, no, thanks. I hope everybody listens. Mean, I don't share much about that side of it. And hopefully that's insightful for everybody listening to the podcast. And thank you for sharing as well.

Shlomo, it's so good to know that you, you know, this is so inspirational for people that have bought businesses, smaller businesses under the hundred K range and have been affected, but you see a lot of the tunnel and you are committed and you bought more and you're acquiring and growing and it can be done.

That's why I wanted to get you on is to show that, like, there are great people like you doing this and staying the course. Thanks for the inspiration. Appreciate it.

Thank you very much. Thank you very much.

Yeah. I can send people to check out more of what you're up to. You've got your YouTube channel, free financial self. You want me to put a link to that in the show notes?

Yes. We just mentioned before we spoke that somebody putting on YouTube my name for some reason, they don't show my channel. yeah, that's weird. link there. And also I work, except of what we spoke about, work on a bunch of other projects and stuff. my work on Shlomo Freund, my name, shlomofreund.com. can see that. That's kind of my…

Will do.

And also specifically advising for e-comm, buying, growing to &A. I have assetbolt.com. That's my business.

Awesome. Thanks so much for coming on. Appreciate you,u and I'll see you soon, guys.

Thank you very much, Eric.

Thank you very much.