S: In this episode number 127, you’re gonna learn how marketing strategy and business investing dovetail and can support each other in interesting and lucrative ways. Our guest today is Brad Costanzo. He’s an entrepreneur, marketing strategist, and business investor who started and exited multiple companies and is seeking of acquiring new businesses currently. He’s the founder of Costanzo Marketing Group, Costanzo Capital, and also the host of the podcast Bacon Wrapped Business. Brad, it’s great to have you on the show.
B: It’s great to be here. Thanks for inviting me.
S: Yeah, of course. We met through Neil Strauss, through his Secret Society which isn’t all that secret.
S: It has a website.
B: Yeah. It’s not that secret if it’s got a website. I don’t know. Does Skull and Bones have a website?
S: I don’t know. I haven’t Googled it.
B: You know you’re going to.
S: Yes. Let’s talk about the whole web strategies sort of thing because I know you spoke at the event that we met at, the Neil Strauss Intensive. What was it that you spoke about and let’s start there.
B: Cool. If I remember right, man, you’re taking me back. I think this is like a year and a half ago if I’m not mistaken. When we were talking, we’re speaking to a lot of guys who some of them were just getting started being entrepreneurs, some were corporate, this was not necessarily all online entrepreneurs especially. I kept it a little bit broad. One of the very first things I talked about is really understanding who your market is, how you serve them and it doesn’t matter if you’re selling physical products, if you’re selling services, if you’re selling really anything. I think a lot of people jump into marketing without paying a lot of attention to who they’re serving and the results that they get from working with that person. Once more, this could be as a consultant, this could be a physical product, like why does the person buy from you and what do they really, really want? Maybe, how do you peel that onion back and get down to the layer? What are you really providing? For instance, one of my clients is in the conceal, carry space. They got a physical product. Gun Holsters, basically. For the longest time, they sell Gun Holsters for people who need some place to put their gun in their waistband. As we started to go down this path and really start to understand and how to talk to the clients, both on the website and in the email newsletters and everything else, we started focusing much more on talking about the peace of mind that having a good piece of equipment for concealing, carry, covers, and the personal protection, the safety. We just try to go out one level or zoom in or zoom out however you want to think about it and think about what is the person really trying to accomplish when they’re buying this product. This is harder to do with products. It’s way easier to do when you’re selling a service to somebody, where they get a result. I think it’s something that a lot of people skip over in order to just get the cash. Like, “Hey, I just want to sell some stuff.” I do know I talked a lot about that and then one of the other big things that I’ve done is, I consider this my little formula for leverage because I’ve always been the kind of guy who looks for short cuts. I want to get the maximum out of the minimum input. One of the biggest short cuts I found is by asking three and a half questions. I know I mentioned this in the speech which was, whenever I’m trying to accomplish something, whenever I’m trying to grow my business, or a client’s, or partner’s business and I’m trying to figure out a road block, I stop and I just myself, “Who else has what I need?” Number one. These are very simple questions but man, they can really unlock a plethora of opportunities. But who else has what I need? First of all, I have to know what I need. And I get really granular on this. Maybe I need traffic. Maybe I need an eyeball, an exposure in PR. Maybe I need product. Maybe I’ve got traffic and I’ve got a big newsletter or customer list of people who bought one thing but I need more stuff to sell them. Maybe I need expertise in certain area. I just make a big personal inventory of all these things I need. Now, I ask another who else question. I said, “Who else needs what I have?” By taking inventory of your assets, you’d be really surprised in how many opportunities you really do have and what we have is a lot deeper than I’ve got an email list or I’ve got a product. We’ve got relationships. We’ve got skill sets. We’ve either got capital or we know people who’ve got them. We’ve got connections We’ve got distribution channels. There’s a lot of things we have and this is by the way, Stephan, a really fun exercise to do if people haven’t really sat down to do it because it makes you just realize, wow, there’s a lot more than I can do here. Who else has what I need, who else needs what I have, then I asked a really big question which is a what if. I look for ways that I can connect these dots. I say, “Okay, I’ve got a big list in this market. Who else needs that?” What if we did okay, just a simple affiliate, dealer, joint venturer, or what if I can get rights to one of their assets? What if I could buy their company? What if I could structure a deal often referred to as triangulation where I help party A get what they need from party B and then party B helps me get what I need? It’s like a three way split. But this is where I have a lot of fun just brainstorming. I’ve got assets and I need something else. What if we found a more creative way do this or to skin this cat? And then the last part is why not? There’s a lot of things we could do in business and in life. There’s not necessarily as many things we should do. I have to ask myself, are there any conflicts of interest? Are there any resource shortfalls or is there any reason that this wouldn’t work? If there are reasons it wouldn’t work, I can go back to the what if category and say, “Okay, how can I make this work?” If I remember right, those are two of the big things in my one hour speech at Neil’s but they’ve served me really well in business, in growing my own in business, in working with clients and partners and then recently, in some of the acquisitions I’ve been doing.
S: Yeah. We’ll talk about the acquisitions in just a minute. One thing that came to my mind when you were describing your client who sells Gun Holsters and the conceal carry area, that reminded of the reason why the railroads went out of business, all these major companies.
B: I know where you’re going. I love this.
S: What was it? A hundred and whatever years ago. And then trucks came out and started taking over the roads. The railroads didn’t realize they were not in the railroad business, they were in the transportation business.
S: They got caught by surprise when the trucking industry decimated the railroad business.
B: What was I just reading that talked exactly about this. Oh man, I guess why I said I knew where you’re going because I read a book I think in the past few months where it used that as an exact example and it was so spot on. Because you’re right, they’ve got run over by the railroad because they just thought they were in the train business and everybody else came and ate their lunch.
S: Yeah. There’s a really good documentary series, I think it might be available on Netflix, about these famous industrialists.
B: That’s my favorite docu series. It is so engaging. I was blown away by it. I’ve seen the whole thing twice.
S: Yeah. I loved it too. I’ll include a link in the show notes to this great docu series. I love it. We have the questions to ask and you asked those questions, whether you’re deciding whether to build a website from scratch, whether to acquire a website, whether to do a revamp or site redesign for a client or for yourself.
S: For pretty much any major project, you’ll ask this questions, right?
B: Yeah. Absolutely. Yeah, it’s where I start. It’s so elementary, but who else has what I need, who else needs what I have, what if, and there is just dot, dot, dot, after that. Like, sit down and have fun because this is where you find leverage points. This is where you find the ability to do what’s called leapfrog theory and have you ever really heard a leapfrog theory by Robert Ringer?
S: No, I haven’t.
B: Okay, cool. Robert wrote, I think it was a New York Times best selling book and it was an absolute best seller called Winning Through Intimidation, back at, I want to say the late 70s or the 80s. The title is misleading because it makes it sound like how to win by using intimidation. But really, what he was talking about is there is so many things out there to intimidate us in life or in business, etc., that I’m going to show you how to win through it. Almost like winning despite intimidation. In it, he details the concept of leapfrog theory. I’ll read just one little clip from it because I try to live my life by it, where he says, “No one has an obligation–moral, legal, or otherwise–to work his way up to the ranks. Every person possesses an inalienable right to make a unilateral decision to redirect his career and begin operating at a higher level any time that he alone believes he’s ready.” He goes on to say that it is up to you to realize that if you have the skills and knowledge to be at the top of your game, it’s frustrating to know that deep down inside, you’re capable of so much bigger more but you’re busy fighting these little day to day battles because you think you have to. You’re like, “Oh, I’ve got to start a business from scratch. I’ve got to do all of this the hard way. I’ve got to figure it out myself before I can outsource it and I got to start outsourcing it before I can hire employees to do it. I got to build this whole business.” With leapfrog theory, he says that anytime you decide, you can start operating at a much higher level in personal life, in business or whatever but you just have to bring your A game to it. The way I look at that is saying, “Okay, I want to do big things, what if I don’t have to build it all myself, what if I don’t have to do absolutely everything and what if there’s somebody out there who is desperately in need of what I’ve got?” By the way, what I’ve got might just be the simple desire to do the work because there’s a lot of people out there who don’t want to do the work. But if they’ve got an asset that I can piggyback off of and use that to leapfrog over some of the hurdles, then life just got easier potentially for both of us. This is what brought me around at this mindset of going out and partnering with or acquiring a business that has already done all the hard stuff but they’re not doing the necessary stuff and I’m willing to do that. Maybe just some of it I’m willing to do, maybe some of it I know how to do and they don’t. But that allows me to instead of, if I need shelter, I don’t go to Home Depot and buy 2x4s and hammers and nails and then build the house myself. I’m going to go arrange financing. I’m going to go buy a house that’s already been built, that I want to live in. As entrepreneurs, we think we have to build our cash flow from scratch. We can go out there and arrange to buy that cash flow, to buy that business, to do something that still make sense. By the way, you don’t need to have $1 million in cash to buy a million dollar business, not by any stretch. I don’t want to get too far off the topic here and under the soap box, but this is the kind of epiphanies that I had when I started thinking more like an owner of the businesses as opposed to just the business owner.
S: Yeah. An owner versus an operator.
S: Yeah. You’ve acquired some businesses. Are you acquiring entire businesses or you’re just acquiring websites?
B: It depends. One recent one was a website. I acquired all of the assets of it. It’s an authority site that I got the URL. I got the website. I got the server. I got the email list. I got the courses. I got all the associated affiliate links that go along with it and there’s just a lot of opportunity there to add value to it and grow it and then, ideally sell it. Because the businesses I am acquiring are website based businesses, it’s like one and the same. At the same time, I don’t always acquire 100%. Sometimes, I come in for a smaller percentage like anywhere from 20% to 80% of the business. Sometimes, I bring cash. Sometimes, I just bring other assets in lieu of cash, such as access to distribution that they wouldn’t get without me. Sometimes, it’s sweat equity. You name it. There’s a different way to do it. But no two deals are almost ever the same.
S: How do you find these deals? Are you looking on Flippa?
B: No, I’m really not. By the time they made it to a website broker, I probably don’t want the deal. I would be lying if I said I’ve got this awesome magical source of where to find these companies because I don’t. A lot of it is networking and just getting out there and letting people that listen, I am in the market to acquire businesses. Typically, authority sites or ecommerce businesses, sometimes SaaS are my three little primary criteria there, and an opportunity for me to add value. I’ve got a podcast of my own, obviously. One of my opportunities came from one of my podcast listeners. As I said, by the time it’s actually already on the market and the person is like wanting to sell and they’ve put it out there for an auction, I feel as though the deal was probably not the one that I want to do necessarily because I don’t want to get into a bidding war with people with rare exceptions. But the hardest part about that entire business is simply prospective deal flow and finding the right people to talk to.
S: Right. That makes sense that you would want to find the opportunity before they’ve listed it anywhere, before they’ve had a chance to shop it around and then you can get the best price because there’s no competitor that you’re having to worry about out bidding.
B: Right, exactly. Ultimately, I’m never buying a business, I’m buying a situation. I’m solving a problem for the owner of those assets. It maybe that that they’ve plateaued, they’re stuck and they don’t know what else to do, that they’re sick of it and they want to go to do something else because they’ve got something else. It maybe that they are hemorrhaging cash and they don’t know how to turn it around. It’s the reverse of a plateau. Things are falling and revenues are going out the door. Maybe they’re losing SEO rank. Maybe they got slapped by Facebook or something of that nature and it’s a problem they don’t know how to fix. Well if I do and I know how to solve that problem and by solving that problem, it’ll add a tremendous amount of value that I can see, then that’s what I’m buying. I’m buying the situation. I’m never gonna go into a company that’s humming along and doing really well and buy that. I don’t want that because number one, I’m gonna get a price that’s gonna incentivise me to do it and because that person is not in the situation whereby they are looking to get out and to relieve some of the pain that they’re in. As I said, I’m always looking for situations and there’s a lot of people out there in situations where they’re just either burned out or they don’t know what next step to take. I pride myself as a business strategist with emphasis in marketing, I know a lot of things that need to happen in order to get a business rocking and rolling again. Utilizing my network, my connections, my ideas. I think that’s the important point. You’re almost never buying the business, you’re buying the situation.
S: Yeah. When you’re buying a situation where they’re in a buying essentially. I think of the home made signs on the street corners that say, “We’ll buy your house for cash.”
B: You know, it’s the exact same. It is the exact same. They’re not buying a house. There’s a million houses out there for sale. Just go to the MLS and get full price, no. Real estate and investors are buying somebody who needs to sell their house for one reason or another, and that’s where the margin is made.
S: Yeah, it’s like distressed inventory and what Robert Allen, the famous real estate investor would call it, ‘don’t wanter’.
B: Yeah, absolutely.
S: That you don’t want it. That you need to get rid of it and you need to understand what the seller’s motivation is, why do they want to get rid of this house so badly? Are they going through a divorce? Is their spouse ill and there are medical expenses? Is the person getting older and they can’t manage the property anymore? What is that situation and the motivation behind it? And then, making the problem go away and sometimes being creative with that problem solving rather than just, here, I’ll throw some money at it.
B: Yeah, absolutely. I don’t always want to buy a 100% or 80% of the company. Sometimes, I’m very happy to take a minority share, where the owner now gets a slightly smaller piece of a potentially much bigger pie. Because if I know that I’ve got a couple of levers that I can pull in order to put some real gas on that fire, this is why I moved away from straight up consulting. Because what would happen is I would pour the gas on the fire and the client would make two, three x, what they’re doing. They would sometimes make hundreds of thousands if not, seven figures from some small effort of my own, and here I was getting paid I don’t know $10,000, $20,000 in fees, and they made seven figures. Instead of that, often times I would tie those results to my efforts so that we can both make money going forward. I like to be incentivised for the performance. In that way we both have a reason to go together. But, often times there’s business who were just stuck but they don’t want to give up total control and ownership and I don’t always have to do that. But if I can solve problems doing what I do best, which is really understanding all of those barriers, levers that can pulled. It’s like I know that there’s more than one way to skin a cat. I’m not an SEO expert but I know the basics what has to happen with SEO. Facebook ads, I can buy them but I hire people to do that. Conversation rate optimizations same thing. I know what would make a website convert well and not, but I’m not going to get my hands dirty inside Shopify and do all of that other stuff, but I know where to go to get those things done.
S: Right. I wonder if only you knew where there is a really good SEO expert.
B: Exactly. If you find one someday, let me know.
S: When you’re talking about the MLS like, how to find these don’t wanters, essentially, the situations where it’s distressed inventory, the website asset, it reminded me of this story. I learned this from a real estate investing seminar, where one of the best ways to find these don’t wanters is from the newspaper, looking at the rentals. Which rental properties still keep showing up, week after week, month after month, in the paper? They’re not moving the rental still available, clearly, that’s not good for the owner of the property. They can’t get any tenants. Maybe they’re starting to feel the pain of that and then you call them up and say, “I saw your add in the paper. I’m not interested in renting but it looks to me like you’re having a hard time finding renters. Would like me to take it off your hands and I’ll solve that problem myself and you won’t have to deal with it any longer.” By the time, they’ve got weeks and weeks, or months even of an empty property, they might feel like, “Okay, that’s something I might consider.”
B: You’re absolutely right. In some of these cases, you can get really super duper creative. This is hypothetical but if you go and get, let me back up, let me preface this with one of my favorite pieces of advice from marketing guru Jay Abraham, where he said,”If you took away all of my memory of all the best strategic marketing tactics out there and you just left me with the ability to do one thing, I would want you to leave me the ability to know how to get the rights to an asset and then decide what to do with it later.” There so much power in that statement. How do I get the rights to an asset and then decide what I want to do with it later. For instance, this is not something I’ve necessarily done yet but it illustrates the point perfectly. We’ll use the Gun Holsters business because I just brought that up. If I can go get access to other businesses who’ve got big email lists, who have got big social following etc, if I can build a relationship with them in one way or another, sometimes I just pay for it, sometimes, what would you rent your list for, or how can I do them a favor, or how can I just get the rights to do something with that asset, maybe I negotiate a deal upfront and I get it in writing that says, “Okay, you’ll rent me your list.” Normally, you charge $5000, but you’re willing to do a task for $1000.” I am making this up as I go. I go around to a whole bunch of people and now, all of a sudden, I just built myself access to let’s say, a million person database with three different companies. Early on, I go make sure that I secure the access to those assets. And then, that now gives me the ability if I’m working with a client, a partner or a potential acquisition in a certain market, I know that I’ve got this tool in my back pocket. That I can then go and turn traffic on and make something happen, but it’s almost like that book, Dig Your Well Before You’re Thirsty. I think Harvey Mackay wrote that as, how do I go create access to the assets that I need and then, once I have that access, reverse engineer it and find out what I want to do with it. That actually dovetails really well into something I talk a lot about on my podcast because these two principles I think are the two hinges that open up the door to opportunity, which are access and influence. Access and influence are very simple words and a lot of people think of them as just, who do you know and how much do people like you. It goes so much deeper than that because if you think about what access really means, you have the right to access something. You may not own it, but you can access it. Uber is perfect example. AirBnb is a perfect example. These are companies that have given us the ability to access a car without owning one, acces a place to stay without paying for one. But also, you can access capital if you don’t have it by raising money. There’s now a million ways in raise money, from Reggae crowdfunding deals to Kickstarter to doing initial coin offering and you name it. You can get access to other people’s capital. You can get access to other people’s knowledge and skills. Hire mentor or a coach, join a Mastermind and all of a sudden, you’ve got access to some really brilliant people even if you’re starting from scratch. This whole concept of I don’t have to own it if I can access it is super, super critical but in the other side of this equation is influence. Influence can be interpersonal influence like you and me. Like influenced you to invite mo on your show, or I influenced my podcast listeners to think of me as an authority on the subject, or I have somebody who owes me a favor. There’s a lot of different ways to wield influence and to build influence. What’s really cool is that the more access you get to various resources and especially people, the more influential you become. The more influential you become, the more acces you get and then it just just goes up and up and up to the ladder. This is why I started my podcast. It’s so that I can get access to really brilliant people and build influence with my listeners, so that I could build access to bigger and better people, so I can have more influence. Those are the kind of things that create ridiculous opportunities when you realize, “Hey, I don’t have to own it if I can access it.” Influence just simply means getting somebody else to act on something you want them to do. I’ve really explored this topic a lot in my personal life, on my podcast, and in a lot of areas and I try to keep it the forefront of my mind what I’m trying to solve a problem.
S: Essentially, not having to own it if you have access to it, could that mean perhaps, leasing a website with the option to buy it if it works out?
S: Okay. Is that something that you normally do?
B: It’s something that I recently did.
S: Nice. Tell us more.
B: One of the things I did was one of the companies I was looking to buy was in Econ Business. We wanted a due diligence and I went to purchase them but there were some things, some potential red flags. There’s too much risk in couple of this aspects that I couldn’t quite control and I wouldn’t know what would happen until I bought it and took control of it. Now, I was like, “Well, I don’t really want to come with six figures down.” I was gonna own or finance like 90% of the business but still, I was gonna have to write a check for six figure, whether that was from my bank account or borrowed money. That wasn’t a risk I was quite willing to take. Instead of purchasing it or just letting it go, there was a middle option which is I took six month option to buy the business. I locked it up and then what that allowed me to do was create a relationship whereby for instance, let me manage the database. You got a couple of hundred thousand people on your email list that have never ever ever received email except the automated receipt. That’s either a tremendous asset or it’s a dead asset and we’re not gonna know. I created a deal where I said, “Okay, I’ve got the option to buy the business and then, I’m gonna manage the email database. I’m gonna engage it and reinvigorate it and we’re gonna split the proceeds from the email list at 50-50” Because that’s found money for the owner and he didn’t really know how to do email marketing at all. But in the meantime, in the past couple of months that I’ve been doing this, it’s been working really well. I’m getting paid cash because I’ve accessed this asset without owning it, I’m getting paid money for it and it’s feeding me good intelligence on whether or not this is going to be a good thing to actually exercise my option and purchase the business for. In a very real way, I leased it, took an option on it, and I got access to it and I started to get to do all my stuff that I would normally, a year or two ago, I would have just said, “Hey, let me be a consultant to you and pay me a fee.” But instead, I’m figuring out how good the asset is, what the operations we’re like. I’m getting a real open kimono viewpoint on how this businesses run. Now, what I’m looking to do is bring on some other potential, like really good ecommerce or operational experts because I’m not an operations expert at this. If I did buy this company, I’d be going, “Okay. Now, I have to either build a team or go out and hire people or do something else.” But instead, I’m looking to partner with somebody who is really, really good at the Econ operations aspect so that I can set it all up. They can run with it. We all make money together. But I bought myself a lot of time and I removed a lot of risk by doing it like this.
S: That’s awesome. Would you say, that you would have walked away from this opportunity if it weren’t for Jay Abraham’s advise?
B: I probably would have.
S: He’s amazing and I’m grateful to have had him on my show twice.
S: I interviewed him. That’s a fabulous episode. We talked about pre eminence and all sorts of amazing strategies.
B: He’s been a big influence for me.
B: He’s been a really, really been a big influence. I think a lot more like him probably than anybody else because I am looking for leverage and I’m looking for opportunities and relationships that can move the needle quite literally because I’m lazy. I don’t want to do all the work.
S: You’re not lazy, you’re strategic.
B: I’m strategically lazy or lazily strategic. It’s one of those two, but it is. I look at all the work that has to be done. There’s got to be an easier way.
S: Yeah. I’m gonna include for you listeners here, the link in the show notes to the Jay Abraham episode and there’s a second episode with Jay Abraham where he actually interviewed me on SEO. I’ll include both links. Let’s talk a bit about pricing strategy, I’ve bought some sites and some domains for very small amounts of money.
S: I’ve also sold websites for six figure, multiple websites for six figures. I haven’t sold any for seven.
B: Not yet.
S: But I have sold a business for seven, not a separate website for more than six figures. My cheapest price that I’ve acquired a website for was $500 and then the next cheapest is $650. The $500 one, I’m not gonna share publicly, but I’ll share publicly the $650 one. It was the domain scienceofseo.com. There wasn’t really a website there, well there was but it was nothing really. There is not much content there. I wanted to acquire that site and use that for an information product and as potentially an ebook because I have The Art Of SEO, that’s my book, that I co-authored and it’s very well known. But I think of SEO more as a science than an art and the copyright of the book is actually owned by publisher O’Riley so I don’t have a whole lot of rights. That’s the opposite of the Jay Abraham situation where you don’t need to own it if you have access to it. I owned it before because I contributed a lot of the content. Now, I don’t have any access. I have to go and ask for permission to publish a chapter for free on the website. They gave me access, I can publish chapter seven as a PDF, but they had to give that to me and it has all their O’Riley branding on it and a whole pitch to join their Safari books online program at the end of it. It’s not really my PDF that I can share. I have the opposite of that situation. I wanted to have something that I own and controlled and had full access to, that was the idea behind scienceofseo.com. $650.
B: That’s great.
S: That was a pretty good deal. What’s been your cheapest or best deal yet?
B: It’s an authority site that I purchased. I bought it for about one half of its annual net income. In essence, it takes me about six months to breakeven. I think I spent $25,000 on that one but it made $50,000 last year.
B: That went pretty well, but it was quite literally the situation. The owner did not have the desire the continue to grow it and let it go but that immediate $25,000 would make a big difference in his life. Because right now, he needed the capital for some other stuff as opposed to waiting six months. It’s a time value of money. There’s a lot of people out there who would love to take a check right now and run. I did this. I had an information product business that I sold back in 2012. I never thought in a million years that I can find somebody who wanted it. I was just gonna let it die on the vine because I had under a pen name of mine. It was a product under my pen name but it had my likeness all over it. I was gonna let it die. I was doing a bunch of other stuff. I ended up talking to a website broker just randomly about this. He’s like, “You know, I may have some buyers who might be interested in this.” We floated it out there and I sold it to an investor group out of New Zealand. Not for a lot of money, it was a six figure sale but not in a ridiculous big money. I was really blown away that there’s somebody out there, one person’s trash is another person’s treasure. I was gonna let it go. It was making okay money but I was just like, “I’m making bigger money elsewhere and the opportunity cost and I’m even thinking about this business was taken away.” But they paid me one times net income for that. It’s great. Some people we’re like, “If you would have just waited a year, you would’ve gotten that money.” I was like, “Yeah, but you don’t understand.” They gave me a year of my life, of not having to worry about that site, of not having to think about it. They gave me time. That’s how I looked at it and it was great. It goes to show you that no matter what you’re sitting on, there’s probably somebody who could really use that asset one way or the other.
S: Yeah. It can be helpful to talk to a broker. Not just assume that whatever your initial thought is true.
S: Quiet Light Brokerage is one example of a broker that I’ve heard of multiple times. People have had good success using them.
B: What’s the name of it?
S: Quiet Light.
B: Okay, cool. I haven’t heard of them.
S: Yeah, they buy and sell website or broker that purchase and selling of websites. I know you can list sites on websitebroker.com or Flippa, flippa.com. But getting an actual broker who you can ask these question to like, “Is this really worth it? Does this asset have my personal brand on it too much so that no one would want to acquire it without me?” Those are important questions to ask and you don’t want to just take a guess at it.
B: Right. One thing that I like working with brokers, as I said, I’ve worked with brokers. I’ve never bought one through a broker but I have sold one.
B: I’ve dealt with brokers and they can be great because a site owner, especially if you’re not a really business person, there’s a decent amount of stuff that gets the business ready to sell in order for a buyer to come in and feel good about doing it. If you want to get the most out of your business, you’re gonna want it package it up nice and neat. If somebody like me or somebody else comes to buy it, it’s not gonna be a big mess. We’ll pay more for a really tight ship. Brokers will help you do that. They’ll get all of that stuff. They earn their money and getting all of the organization right for the buyer. At the same time, they will also often times over inflate your business because they know that everything is negotiable and everything will come down. It’s like selling anything. You have to be careful not getting your expectations raised too high because what the broker wants, just like in the real estate transaction, they want you to sell it for the most money possible because they’re commission, let’s say is 10%. It’s tied to the sale of that as well. But often times, what happens is that they build up the expectations for the side owner almost to unrealistic proportions. You have to be careful if you do go to a broker and understanding that the broker doesn’t always have their finger on the pulse of exactly what the market will do but as I said, they’re really good but you have to understand the ins and outs of that game. However, if you are selling a business or if you have the decided to sell your business, starting off with the broker is probably going to be a very good way to start.
S: Or just contact me directly if you’re a listener of my show.
Stephen: Is that how you got that one opportunity you mentioned?
B: No, it’s not. It was one of my listeners, contacted me and said, “Hey, I think you can really help my brother. He’s just not doing much digital marketing on this stuff. He’s had a lot of success in offline channels and I think he would be willing to talk to you about doing digital marketing, helping, consulting.” He said, “Do you do consulting?” I still do consulting. It’s not like I don’t do it. It’s just not the huge crux of my business anymore, but I still do it because I’m good at it. I like it. If I like the situation I think I can add value, I don’t have to buy everything out there. I got on the phone. We started talking, I did something that very few people do and it’s so crazy simple, which is just to ask, “What are your plans for this business? For instance, have you ever thought about selling it?” A lot of people don’t ask that question. I ask it of everybody, every business owner that I’ve met who has a business that might be sellable because you never know, they could be thinking, “Oh, I would love to sell it. I would love to get rid of this thing but I didn’t even think I could.”
B: That happens a lot.
S: Such an important question to ask of yourself is what’s my exit strategy?
S: If you don’t have one, you don’t have a business. Because if there’s no exit strategy, you’re just self employed, essentially.
B: Yeah. I try to only really do stuff that there is an exit strategy involved. It’s not in my constitution to find one business and just say, “I want to run this forever.”
B: I get bored too easily but, I also want to know I can get out of this. I’m building up the value so that I can release that value to somebody else for several times what it’s worth. I think that’s important to really understand.
S: Yeah, because a proper business is one that has an asset value to it. If you’re self employed, you’re just earning a living and it just happens to be through whatever, an LLC or DBA or whatever. It’s not an actual business. That’s why the exit strategy makes all the difference in the world. I’m curious, do you have an example of where you used Jay Abraham’s strategy of not owning but having access to some personal situations, something outside of acquiring websites or businesses. I’d love to hear it.
B: Yeah. This was a fun one. I did this in the book business. This is something that does not require a ton of expertise. Actually, almost anybody can go out there and do this. It started off, I was consulting with a guy who was getting really big in the health and fitness space and he had already launched one book. h e had info products and coaching and all this stuff. He had a pretty decent size list. I got 100,000, 200,000 people, I can’t remember because this was years ago. But I had an idea for a book title. I don’t what to say what it is. I don’t want to reveal any names. That will become evident why in a second. I was in the gym, I had an idea for a really cool catchy book title. It just stuck in my head like this would be a really good book, but I’m a nobody. I had no public audience in the health and fitness market but my client did. What I decided to do, and this was my very first instinct as opposed to the third option, which is I thought what if I write this book or get it written and then have him promote it and put his face on it. In a ghostwriting agreement, the expert would pay somebody to write a book and then they relinquish their rights. They would pay me a royalty for doing it. I went to him and I said, “Hey, how would you like to have a best selling book and not do anything?” He says, “What’s your plan?” I said, “I already mapped out and outlined the book of what it would be and I knew enough about the topic. I could do this.” I said, “What I’m going to do is I’m going to write this book. I’ll write in your voice. I’ll make it really amazing and we’re going to put your name and your face on it. You’re going to promote it to your list.” I said, “I’ll pay you a 30% royalties.” He said, “Let’s see it. If it’s a good book, it’s done.” I wrote that book in probably two or three weeks. It wasn’t that hard. It’s a health and fitness book. It wasn’t too terribly hard to do. I got really inspired so I wrote this book, I put his face on it, and his name on it and I created this little launch campaign, a series of 10 emails to go out to his list. This book was number one in health and fitness on Amazon for an entire two weeks, I think, and it made a whole bunch of money. This is a case of I had no name, I just had an idea but I realized that I had access to somebody who had a big name and a big audience and credibility. He had influence. I had access to him. He had influence with book buyers. I guess it’s a reverse ghostwriting agreement and I just had licensed his name and his face and I marketed it to his people. As a result, he got a best selling book on Amazon, which even lead them more visibility for him. There was a lead capture mechanism inside the book that allowed him to grow his list and he didn’t have to do a damn thing but probably sold about a $100,000 worth, actually about less, I’m think about $80,000 and I made 70% of that.
S: Wow, that is really clever. I like that.
B: Did it again. Only I did it with less work involved. This was a friend of mine. His wife created this book of vegetarian recipes and she was a nobody and it sold like, three copies on Amazon. I said, “Hey, can I get the master resale rights to this book and I want to change some stuff in it. I’ll pay you 20% of everything I make.” He said, “Sure.” I went to another friend of mine. He has a really big health and vegetarian and wellness blog and had like 300,000 people on his list. I said, “How would you like to have a best selling book and not do a thing?” He said, “Cool. What do you got in mind?” It took me about one week to just create a new cover and create about three or four pages of introduction and just minor little edits and then, I took this new blog, this health blog, we’ll call it healthblog.com for confidentiality reasons. healthblog.com’s ultimate vegetarian recipe collection or something like this. I told them I’ll pay them 20% of all the sales. All they had to do is promote it to their 300,000 person list. They did that and they sold a bunch of it. I not only have the copyright to it, it’s mine, but I keep 60% of all the sales from those books, simply by being the toll gate. I matched the two people together. One of them had content, one of them had an audience. They didn’t know each other but I knew them. Now, I could have just said, “Hey, you guys should meet and do something.” But instead, I wanted to have control of the deal so I put it together to where with very little work, grab your content, slap somebody else’s name on it, tell that person to promote it and we had a best selling vegetarian recipe book on Amazon and then, they went on to use that and sell it on their site. I still got percentage of the sale.
S: That’s genius. I love it.
B: That’s one way. I’ve done it in the past where it didn’t cost much money, just a little bit of time and a little bit of creativity.
S: You have to think outside of the box and it’s easy to get so into autopilot mode.
B: Thinking linear, right?
S: Yeah. One example that comes to mind, that I just heard at the last Podcast Movement Conference, forget which speaker it was but he talked about reverse press kit and I thought, “Wow, that is definitely outside the box.”
B: What is that?
S: He would go to trade shows like CES and not being a vendor but being a blogger, he would go to the booths of the exhibitors and hand them a press kit. But it was like a press kit in reverse because he was the media’s site. Press kits are usually the vendor.
B: People who are trying to impress the media.
S: Samsung, for example, have a big booth at CES. They would have a press kit that they would hand to the journalist that come to their booth. What if you come to the booth, you didn’t spend any money on a booth, but you came with your own press kit as a blogger or a podcaster and say, “This is my press kit. I think you should be on my podcast or you should be interviewed for my blog, for my new site.” It’s really clever. I had all those social proof in there. I had the history and the story and the benefit and everything. It was really clever. That’s an example of thinking outside the box and another way to think outside the box is just what Tony Robbins teaches, is ask a better question and you get a better answer.
B: Huge fan of that.
S: I first applied this, the same weekend I had heard it from him. I learned that at Unleash The Power Within, his entry level event, which is amazing. The first night, you do the firewalk and it was very big turning point in my life when I did that firewalk, that first night in October 2009. I hear this, ask a better question, you get better answer. He tells a story about how he got a Rolls Royce Corniche for free, every two years for over two decades. What his thought process was and how that came about. I’m like, “Wow, mind blown.” I’m thinking, while he’s pitching later that weekend, Business Mastery to all the attendees, which was $10,000. At the time, I was still going through a divorce, my previous agency was in the process of getting acquired so I had no ability just go raid the coffers of my agency and get $10,000 to buy a ticket for myself to Business Mastery, but I really wanted to go. I didn’t have the funds personally either, because all of my assets were tied up in the business. I’m thinking, how can I get to Business Mastery for free? Because he had thought I asked a better question earlier in the weekend, so how can I get into this event for free? Then, I realized by the end of the weekend, I had the answer and I had my free ticket. What I did is I called up a friend of mine in the industry, Chris Baggott, who was one of the founder of ExactTarget and he had another company that was called Compendium Blogware.
S: He had been trying to get me to come and train his team on SEO. I kept saying no because that would just go into my company coffers. I wouldn’t see a dime of it and it’s just like, “Yeah, I don’t need to do that. It doesn’t interest me.” But I remembered that he kept wanting me to come and train his team in Indianapolis. I call him up and I say, “I got a deal for you, I’ll come and do that training you’ve been wanting me to do, you just have to buy me a ticket to Business Mastery, which is $10,000.”
S: I flew to Indianapolis for a day, did my training and got a free ticket to Business Mastery which would have cost $10,000 otherwise. And then funny enough, I get in to speak at Business Mastery a year later.
B: No way.
S: That was a huge win for me and that was about having access and when you’re talking about Masterminds and things like that. I was part of Tony Robbins platinum partnership and so, Tony got to know me a bit and it’s a big investment but the payoff was really big. I got more than my money back for sure. Six figure investment, but I got well into the six figures and direct client revenue because of speaking at Business Mastery twice. In fact, I spoke at it in 2011 and 2013.
B: That’s killer. You know, speaking another one, you just made me think of this and I think you may appreciate it as a fellow podcaster because this is one of the things we’re gonna be doing with actually couple of the businesses I’ve got. A lot of people will be able to use this and this falls perfectly into who else has what I need and who else needs what I have. As a podcaster, what is the number one thing that you want? And this is crazy easy.
B: Right, exactly, exposure to listeners. Exposure. That’s what we all want as podcasters. There are some very big podcasters who command, like the Tim Ferriss and Joe Rogan and some of the other ones who command tens of thousands of dollars and sponsorship dollars and they’re killing it. 95% of podcasters are not commanding huge sponsorship dollars and that’s fine. Most of them think, “Well, I just gotta keep on doing this crap for free and maybe people are buying my stuff if I’m ever gonna get anything out of it.” That’s not true. There’s a lot of people out there who would love to have exposure but they either don’t have this product, maybe they don’t have a huge advertising budget, they don’t have that but maybe they do have a big email list, maybe they’ve got a big social following and people don’t think about bartering exposure for exposure. Let me give you an example. One of the sites I bought has about 100,000 people on its newsletter as well as about another 100,000 or so on Facebook and social media. We would love to get exposure from a lot of these podcasts who are out there, none of these podcast are like, “Hey, I get a million downloads,” but there are a lot of enthusiast in this area and I don’t want to write a check for the exposure. But what I can do or what I’m doing, is I’m going to them and say, “Listen, every week, we’re going to do a what we’re listening to thing. If you mentioned our website and maybe even a special offer, basically give us a sponsorship for free and everyone of yours, we’ll tell our entire listenership, every time you do an episode,” they typically do once a week, “not only are we gonna post it on our social media, but we’re also gonna post it in our newsletter and say, here’s what we’re listening to. We’re gonna give you eye balls if you give us free ear balls.” The people we’ve approached for this is working out really well, because as a podcaster, it doesn’t take you a minute to mention a company. Stephan, I don’t know if you have any sponsors but let’s just say ClickFunnels was a potential sponsor and now Russell and ClickFunnels have a huge following. They’ve got a big Facebook group, pages and everything else. For instance, would be is if they went to you and said, “Hey, if you just mentioned that you love ClickFunnels on every one of your episodes, every time you do an episode, we’ll post to our social media and we’ll stick it under our newsletter of stuff we’re listening to now.” That’s a no brainer. Who wouldn’t do that? Because I’m getting exposure, you’re getting exposure and it’s just so brain dead simple and it doesn’t take any money. It just takes a little bit of reaching out and asking. The thing that makes it work is if you’re trying to get a podcast sponsor to sponsor you, you need to have an audience to tell them about too. You can’t be a total start up.
S: Right. Either way, you got to have a decent size audience. If you’re the person who’s going to be blasting your social media, you need to have an audience there on social media. If you’re going to mention in your newsletter, you need to have a decent size email list.
B: Right, exactly. Now, let’s take this another step. Right now, what you’ve got is, I’m getting exposure, you’re getting exposure. But what if I’m just starting? What if I only have a product but I don’t have a big email list and I don’t have a big money to outlay for that? Now, let’s get more creative, which is let’s think about, “Okay, how can I access somebody who does have a big audience and a list and how can I get them to mention Stephan’s Show?” How can I get them to mention your show as opposed to me mentioning it, but now, you’ve got what we call triangulation. I don’t know, there’s no easy answer. You see what I’m going. I don’t have real concrete example here. But if you start to think laterally, and outside of the box, and how can I get it even if I don’t have it? Especially now with social media, we are one or two degrees separation away from anything we need in this world.
B: But, you need to have influence. How do I build that influence? When I do take clients, I don’t have a coaching program but I do sometimes work with clients. I got what I call strategic partner program, which is where I sit down with people and we map these things out. We do a road map and they get to tap into my brain cells about, “Okay, I’m really good at thinking laterally. It’s really hard for me to think linearly and straight ahead, I’m always looking for these high leverage things.” But because other people aren’t, I am. That is one of the ways I do work with people. I love it because I get to apply my solutions to somebody else’s problems and I have just as much fun with it as I do. It’s actually easier to do it for other people than it is for me. This is also by the way, one of the ways that I end up leading to partnerships and potential acquisitions and different stuff.
S: That reminds me. I just did that same sort of triangulation last week. I had some face time with Dave Asprey.
S: They’re in Traffic & Conversion Summit and I had Byron Katie on my other podcast on The Optimized Geek. Huge win for me. She is an amazing, major self help author and expert. I mentioned to Dave, “Would you like Katie to have on your show?” He’s like, “I would love to have her on the Bulletproof Radio.” He would love to, he has been a big fan, followed her for years and years. I had already checked in with Katie’s team that they would want referrals to big podcast and they do. Just putting those two people together is a huge value add and it’s gonna be a value add for everyday. Once you can hear Katie getting interviewed by Dave Asprey on Bulletproof Radio, who knows how many lives will be changed just from that episode. That’s a great way to create value for both parties and move those two relationships forward, my relationship with Katie’s team and my relationship with the Bulletproof Team.
B: Yeah, you’re absolutely right. Those are some of the most high leveraged activities that we can all be working on. But unfortunately, not everybody has the time and energy to be working on the highly leveraged stuff because we’ll all trying to just keep the house together. We’re trying to keep the bills paid and make sure that everything is running smoothly. That’s where in listing the help of outside expertise to say, “Listen, I need a second opinion on what I’m doing. Could this actually be easier that I’m making it?”
S: Even just taking the time to do that big picture thinking yourself and scheduling it on your calendar. What Keith Cunningham refers to as his thinking chair is the place he will only sit if he’s going to do big picture thinking. He’s not bringing his laptop there. He’s not working on email. He doesn’t do anything other than the big picture thinking when he’s sitting in that chair.
B: Yup. You know the hard part is? That is my favorite thing to do and it’s the hardest thing to do for myself. It is excruciating and that’s why I have to hire coaches and mentors and other people to be my sounding boards because I don’t know what it is but I’ve got these things that, if it was my client or a friend that I was trying to solve these problems for, it would come to me like in a flash. But because I’m so in it and I’m so close to it, I can’t. I oftentimes can’t come up with the answer for me and I think that’s for everybody.
S: You know that real reason for that? You’re an external, so there are internals and there are externals. I learned this from Donny Epstein.
S: Nope. Donny Epstein is the creator of Network Spinal Analysis, and Somato Respiratory Integration, and Epi Energetics. He’s amazing. He’s a good friend of Tony Robbins. That’s how I met him. It was from a Platinum Partner trip. First met him in Israel in fact, on my very first Platinum trip. Donny. He’s like an alien. He’s amazing. He’s a wizard. He can cause your spine to go into this wave and you can see it. You’re just laying on a chiropractic table on your stomach and he doesn’t even touch you. He just starts by directing the energy without touching you and then you spine goes into this wave. I’ve seen it time and time again. It seems outlandish and crazy and like witchcraft or something.
B: But it works.
S: But it’s incredible and it’s even better to not just witness this but actually experience it. I’ve had out of body experiences. I’ve had an incredible experiences where I prayed for people, blessed them, and then after 15 years of not hearing from them, they call me on my cell phone within days from getting an entrainment from Donny. Anyway, this comes from Donny Epstein. I’m gonna have him on my other podcast. He’s already agreed to be on the show, on The Optimized Geek. Externals, their perspective is from the outside looking in and internals, the perspective is the opposite. Externals have no problem working at other people’s stuff. It’s effortless. They get energy from it. They’re just incredible at it. But working on their own stuff is very hard. It’s like pushing a rock uphill.
S: Whereas internals, it’s the opposite. Working on other people’s stuff, painful, difficult. It’s just draining and then, working on their own stuff. That’s where they get their energy. That’s where things just seem to flow. I’m an external. You’re an external. It sounds like.
S: What that means is that when we’re working on other people’s stuff, I am just in the flow when I am concusting and coaching. But if I work on my own stuff, it is painful and it never gets finished and I procrastinate it. It’s draining. I need to look at stuff in a way that I can see it as not me. If I look at my relationship with my wife as our relationship, then it’s internal, then it’s draining and it doesn’t bring me energy and it sucks. It sucks energy. If I see her as an outside person, no problem. My solution to you so that you get out of this rot is to see future Brad as a separate person.
B: I love that and you know it’s funny because I’ve done this before where I’ve sat down and I’ve had to put myself, imagining that I’m sitting down with a consulting client and I would list out. I would start of as Brad. I would list out all the little issues or challenges I’m trying to overcome and things I need to think about and I go for a walk and clear my head. I would come back dissociated from those problems like they’re not mine. They’re not mine. I’m just gonna help this guy, Brad or I think in the past I’ve given him a name, I don’t know, John. Okay, I’m helping John with this. Here’s what I would tell John to do in these situations. It’s amazing how it helps by dissociating it from being me.
B: I love that. Work on future. That’s cool to know what I’m not broken. There’s more people out there like me.
S: You’re not broken at all. It’s just you’re either wired one way or the other way and neither is right or wrong. It’s just it is what it is. If you want to hack the system, see future Brad as somebody different.
B: I love that.
S: One other quick distinction and then, we’ll close out the show. If let’s say, your podcaster and you want to get leverage or value and barter exposure for exposure or find ways to create leverage, don’t just ask for people, the guests for example, to blast out on their social channels about your show. This one just came to me not too long ago. Ask them to put a link on their media page or their press page, interview page, whatever they call it, to your show because then, you get SEO benefit not just a flash in the pan from some traffic that comes through Facebook or Twitter or whatever and then, it’s gone. Nobody looks at two weeks old tweets. That’s one. The other is ask your guest to email their list. I had Jay Abraham send out an email. He actually offered it. He said that he would be happy to do this. Send an email out to his entire list telling them about the episode that he was on Marketing Speak. That was the entire email. It wasn’t 1 of 10 things that were being talked about in a weekly newsletter. It was just the one thing.
B: That’s amazing. I found it. It was on December 19, 2015. I pulled that up because I’m on Jay’s list. I have literally just found it.
S: That’s awesome. What’s the expression? You don’t ask, you don’t get.
S: If you asked for it, you have massively increased the likelihood that you’ll get what you’re asking for. If you don’t for it, good luck, it’s not gonna happen. That’s pretty amazing and with that, how do we get our listeners to get intouch with you if they want to sell you one of their websites or businesses, if they want to hire you as a consultant or marketing strategist?
B: Obviously, the people listening to this are podcast listeners. I too have a podcast called Bacon Wrapped Business, sizzling hot business advice, guaranteed to make you fat profits and throw in some headlines. baconwrappedbusiness.com, you can find it on iTunes, Stitcher, Android, and all that places. That’s a good jumping off point to get in to my world. As I said, if they want to reach out to me, my personal is firstname.lastname@example.org. One of the things I do, if any of the things that have resonated for people like, “Hey, I may want to sell my business.” Or “I like the way you think laterally and I have a hard time doing that.” I’m happy to give you a second opinion for free just to see if there’s a way that I can help you or not and see if there’s an opportunity to brainstorm. Whether it’s one call or live, in person meeting or something like that. As I said, I’m open to all opportunities, you just have to email me at email@example.com.
S: Alright, awesome. That’s very generous of you, Brad. This whole episode has been generous of you sharing your knowledge, and your experience, and lessons learned. There’s a lot of actions to be taken out of this episode for our listeners. Listeners, be sure to go to marketingspeak.com for the show notes of this episode, a transcript of the episode, and a checklist of actions to take, where we distilled some of the best action taking advice from the episode into a checklist for you to download as pdf. That’s it. marketingspeak.com. We’ll catch you on next episode of Marketing Speak. This is your host, Stephan Spencer, signing off.