👀 Is this website the perfect side gig?

What up Side Hustle Central fam!

Y’all know my love for car washes.

But long ago I was seduced by another mistress:

Websites, ecom, and internet businesses.

They are - in my mind - still THE BEST business model ever devised and will be for the foreseeable future.

The benefits are obvious: scalability, work from anywhere, outsourcing potential, and low headache factor are all unmatched IMO.

That’s why I have 4 of these businesses.

So when an interesting ecom business crossed my feed a few weeks ago I thought I’d break it down for you here at SHC.

It’s a great ‘passion play’ too.

LFG:

First glance: multiple is on point, subject matter is fun and interesting for the right owner, and its age indicates it is durable.

Now let’s dig further. Things that jump out from the listing:

Since 2005, this stable Canadian fly fishing brand: older site which is great for SEO. Does it matter if you’re not Canadian? No, not to me. If you like fly-fishing and can speak English, it is immaterial IMO. It talks about a small warehouse/fulfillment team in Canada. That can be handled remotely fairly easily and is probably ripe for outsourcing anyway. BUT, it does present one big problem, we’ll talk about it below.

Minimal effort was made to grow the brand until 2018: so older site, it was probably a blog and content site and they just started ecom in ‘18. That would explain the relatively small revenue.

There is an ambassador team that helps create content, YouTube videos, and social media posts: the most critical thing in ecom is: where is your traffic coming from? It must be reliable, scalable and effective. Youtube is massive and growing like crazy, this is good.

The business has 31K emails, and over 40% of revenue is attributed to email marketing: This is yuuuuuuuuge. Email marketing is THE MOST critical marketing channel online as it the one channel that (as of now) cannot be ‘rugged’ like Facebook, Youtube, socials (meaning they can just shut your accounts down and you’re !#$%ed). Most ecom sites do close to zero email marketing, so this is not a growth opportunity but it’s certainly indicative of a healthy business. Good news. 31k subs is a big list too for a business this small.

The business also receives 41% of traffic from PPC, 20% from email, and 14% from direct: More good news. They have a cold traffic (PPC) program. So they have a way of getting new customers (PPC) and of getting more money from those customers (email).

Growth opportunities include expanding to Amazon, wholesale requests, expanding the product lines to fly fishing gear, and adding content to their YouTube channel: wait, huh? I thought we were selling fly-fishing gear. This begs the obvious question, what are they selling now?  

The current owner bought the business in 2017 and works 4–5 hours per week. He has spent the past several years optimizing his business to run with little in-person oversight. The owner has traveled the world while running this business remotely (including spending the last nine months in the Philippines): now you know where the VA team is based! But this is exactly why we like this type of business, minimal work input and opps for growth.

But - we have a big problem. It’s a Canadian company, so if you’re NOT Canadian financing options are limited. No SBA. No banks. But in every problem is an opportunity. The buyers pool is also greatly reduced, so they’re going to have to finance some of this deal to get it done most likely.

Here are some questions to ask, then the offer I would make if everything checked out:

How many staff and what does everyone do?

Can we outsource fulfillment?

Walk me through the PPC, social media, Youtube, efforts, - why are these not being scaled?

Can the site be expanded to a US audience?

What exactly are you selling and to whom?

What is the seasonality of this business?

How can we increase profit margins?

How does this become a $500k/year profit business in 5 years? Why didn’t you do those things?

Are you willing to finance and under what terms?

If all that checks out I would consider a near-full price offer but with these terms:

$279k with $100k down payment with remainder on a 5-year note at 5%. That makes the monthly payment a manageable $3377 BUT I would consider making 6 double payments a year (during the busy season) to manage cash flow. You need them to finance the deal, don’t insult them with some crazy 2% interest, 10% down, half price offer.

That’s your starting place, I’d be willing to go to 50% down payment and go to 7% interest if fly-fishing is my jam.

If you are willing to work a little more, build relationships with manufacturers, go to industry events, etc., you’ll get access to more gear, more SKUs. You’ll get dealership contracts, new product releases, and get to test them yourself.

This could be a nice, fun side gig for the right person. You may never grow it/blow it up and thats probably just fine. You can ride what is hopefully a growing industry (verify that!) and have fun doing it.

What do you think? Would you make an offer?

Let me know, just reply to this email…

Kriss “Side Gig” Berg

PS: Check out my side hustle at TaxFreeCashCow.com 

PPS: And check out Quiet Light for other website deals, IMHO they do the best of weeding out trash listings with a solid vetting process (unlike just about every other ecom listing service). Go find something that interests you…