Mark Daoust is the latest guest on the Niche Pursuit podcast. Mark is the founder of Quiet Light Brokerage, a company run by entrepreneurs that’s one of the leading authorities in the website buying and selling space.
Quiet Light launched 15 years ago, and over the past 12 months they have brokered over 200 million dollars of sales. The company has a unique and honest approach, and it’s interesting to hear what Mark has to say about the team behind the company and its core values.
The conversation starts with Mark telling us why and how he began Quiet Light and what makes them stand out as a unique service.
He talks about developing websites correctly and offers some excellent advice for those looking to sell their business in the future. We’re talking expert tips and advice from a guy who has been on both sides of the fence.
In addition, the interview discusses valuations, multiples, SOPs, content sites, and more. Moreover, he discusses the four pillars of value when selling your business and the mistakes to be aware of along the way.
Table of Contents
discussed With Mark Daoust:
- The importance of planning your exit
- Average multiples to expect for specific markets
- What plays a role in your valuation
- eCommerce multiples as of today
- Tips on how to create a content site that increases the value
- The importance of brands
- Keeping your books clean
- Why Joe Valley (Quiet Light Partner) wrote his book
- When not to sell your business
- Traffic sources to be wary of when planning an exit.
- Why you need to be careful with social media
- The value of email and SEO
- Why you should forget about multiples and valuations
- And much more.
Earlier this year, we had Joe Vally from Quiet Light on the podcast (link below). The Mark Daoust episode is a fantastic follow-up, with some excellent and honest advice from an expert in the field.
You don’t want to miss this one.
As always, take notes, and enjoy the interview.
Links And Resources:
Watch the full interview:
Read the full transcription:
Jared: Welcome back to the niche pursuits podcast. My name is Jared Bauman, and today we are joined by the founder of quiet light brokerage, Mark Daoust, Mark. Welcome.
Mark: Hey, thanks for having me Jared.
Jared: Yep. Good to have you on board. Good to have you very excited about today. Why don’t you, uh, kick us off in traditional fashion?
Why don’t you, you know, tell us a bit about who you are and I, I, I’m imagining a lot of people listening will have heard of quiet light in passing or maybe through experience, but certainly give us maybe a little bit before you, you went on with quiet light and then obviously catch us up to where you’re at today.
Mark: Yeah, sure. Well, again, thanks for having me on really appreciate it. I’ve been a fan of the podcast for a long time, and so, uh, happy to be, uh, on here as well. Um, as you said, I’m, I’m the founder of client life brokerage. I founder of the company in 2007, after I went through my own exit, um, I had, uh, an online newsletter.
This was, this was a while ago. So we, we just called it an online newsletter back thing. Yep. Yep. An email list before they were, uh, all the rage with sub stack and everything else, but that, that experience of going through and exit myself, spurred me to start quiet, light brokerage, to be able to help online entrepreneurs navigate the, the, uh, whole world of planning in exit and trying to figure out, you know, how to make heads or tails of what they should, or maybe should not be, be doing, you know, before that I’ve been in the online.
Ever since I graduated college, I worked for a company right out of college, uh, that was, uh, square in the internet world. Uh, and that led me to be an entrepreneur, uh, which led to my first exit. And then that led to quiet light. And that’s, that’s sort of the chain of reaction, chain of events that happened to, to lead us here.
Jared: I mean, exits back in that day, I mean, I don’t wanna make a sound old here, but back in that day, exits looks a lot different than they do now. Like what kind of exit did you have in terms of what kind. Business, was it maybe from the multiples, like take us back through what it looked like back
Mark: then? Yeah.
My multiple was low, especially for back then. It was low, but, um, which is not the case back then. All right. So back then, we’re talking 2005 ish is when I sold. And so the business was, it was called site reference. It’s no longer around anymore, but it was a articles, you know, tips, tricks. Uh, really heavily through email promoted through email.
Okay. I had about 220,000 subscribers. Wow. And our target audience was web masters. Now back then we didn’t have SEO experts, programmers, marketers, writers, people just did all of it. right. Yeah.
Jared: Yeah, it’s gotten a little more segmented over the years, right? Like you used to just be a marketer and now you are a social media expert, or even maybe an ads expert with Facebook only, or something like that.
It has gotten a lot more segmented. We’ve we’ve had it
Mark: specialized. I mean, it’s just because everybody’s gotten better at it. You have to specialize, uh, now back then you could be a generalist and do everything. So like I literally programmed that website. I did most of the writing. I sold the ads. You know, I did everything, uh, for that as a result of doing everything for it, a big mistake, it wasn’t a very transferable business.
So I got about it two times on my earnings, uh, for that business, but it was a two year old company. You know, the multiples back then were, were typically much higher than that on the earnings. Two years later, when I started, uh, quiet light, you know, multiples were averaging four, five, even six times, uh, earnings.
And that was just the average. Uh, sort of multiple that we were dealing with, there were other crazy multiples, but we didn’t know how to value , uh, internet businesses. So it was kind of a wild west. You get a lot of different, uh, prices for, for different businesses. I
Jared: bet. I bet. Well, that’s, that’s fun.
That’s fun. You might be the well, you’re definitely the, the, that’s the first business that I first online business I know about being sold in terms of timeline. So that is, uh, that’s cool. Well, let’s talk about, I mean, fast forward there today, maybe. Tell us where quiet light is today. I mean, are we talking 15 years now?
If I’m doing my math, right. And, and, you know, bring us up to speed on, on maybe the, where the brokerage is at right now and kind of some of the numbers behind, uh, how much volume you guys are doing.
Mark: Yeah. Well, it’s not, it doesn’t look the same. Um, that, that that’s for sure. I mean, when I, when I first started quiet light, uh, my goal was to help smaller website owners, you know, sub $400,000 valuations.
But that quickly, uh, changed. Right? I, I would work with people that were valued around 5,000 to $10,000 and people valued, you know, one to 5 million today. Our average deal size is 2 million last year. Over the last 12 months, we’ve done 103 transactions for like $202 million, um, combined right now. And that, that number’s been fluctuating between.
Uh, 101 10, uh, on a, uh, rolling 12 month basis. Now our team is much bigger. Uh, we have 15 advisors that work with quiet, light brokerage, and really our, our calling cards, something that we, we hang our hat on and we we’ll put forward pretty much at the beginning of a conversation. How, how are we different from other brokerages?
Uh, The people that work as advisors, as brokers, we’re all entrepreneurs I’ve bought businesses before I’ve sold businesses before I’ve started, uh, businesses. I actually just recently sold a business, um, a few months ago that that I had acquired and the entire team here is made up of entrepreneurs that have done some pretty impressive things.
Frankly, my resume is one of the least impressive on the team, which is great, higher, big, higher above your, your own, uh, uh, talent and abilities, which has worked out, uh, well for us. So today, again, we do higher volume. We definitely do larger value transactions, but we’ll still work with, with, um, uh, companies, you know, 250,000 to 500,000 in terms of what their valuation, uh, would be.
Jared: What are valuations, you know, ranging at today? And, you know, I think I would say. A good portion of our audience is in the online website business, whether it’s driven by affiliate ads, display ads, you know, a combination, maybe, you know, a private affiliate deals, these sorts of things. But certainly we have, you know, people who are in SAS and, and people who are in e-com, uh, and those sorts of things.
So maybe just give us a fly by, on multiples today. And then I do want to ask some questions about how you built this, this company to the size that it
Mark: is. Yeah, sure. Multiples. Uh, it’s it’s always a tricky question. Yeah. Uh, and, um, can I just start off by saying anyone that quotes multiples too easily, just maybe don’t trust them because it’s not as simple as just saying, you know, used to be about three times earnings, right?
That, that was kind of the, almost the joke. Everything’s about three times earnings, but as the industry has matured, we’re, we’ve seen different business types. Either get tight, multiple ranges or very broad, multiple ranges. Content is one of those ones that can be a broader multiple range, uh, and heavily influenced by the size of your company.
You know, your website, the revenue that you currently have, and also how you manage your audience. Right. Do you, are you reliant on social traffic? Paid traffic? Email traffic, you know, organic, these things play a big role. Sorry. I’m I’m, I’m kind of punting on the question a little bit here. Um, we’re seeing that’s okay.
That’s okay. , like I said, it’s, it’s a little bit complex. I just hate for people to take away multiple and then, you know, find out it’s completely wrong for their particular business. So just take this with a grain salt, but content generally speaking three to five times, earnings is a fairly decent rule of thumb.
If we’re to look at this like a bell. You’re gonna find the heart of the bell curve right. About there. Mm-hmm, what we do find with, with content. Uh, like if you’re in the finance space and you’ve got, uh, you know, some upward ability that that multiple can be pretty elastic, you can get upwards of 7, 8, 9 times pretty easily.
And we’ve, we’ve seen those numbers from that. SAS is sort of the same thing, right? With the. Metrics, you can have some pretty high Popp multiples, one other caveat for multiples when we’re talking about e-commerce companies. And I, I imagine that that makes up a smaller set of the niche pursuits audience still.
I think so. Yeah, I would say so, um, different companies, quote, multiples in e-commerce differently. We never include inventory in that that multiple, uh, inventory would inflate the multiple a little bit. So, but, uh, eCommerce is also right now, maybe three and a half to, to four and a quarter. For the heart of the bell curve.
It’s up a little bit right now from last year, from what we’ve, I just looked at these numbers recently and it is up a little bit, but there’s seems to be almost a bifurcation in the marketplace right now, in which really strong businesses have a lot of attention, have a lot of offers. Buyers want them weaker businesses are, are, uh, sitting in a little bit longer and having a harder time moving.
And some of them aren’t moving. Like they were, uh, last year. So a little bit of a bifurcation in the market right now, depending when you’re listening to. That’s going to change. Right? Right. This, this feels like a transitory market right now.
Jared: I’m gonna, I’m gonna ask you about that at some point yeah, no, I mean, it reminds me a bit of when I, we had, um, Eric on from media V and I asked him, Hey, what are RPMs at now?
And he said, well, that’s kind of a very large question. It depends on a number of factors, but I can tell you they’re going up. they’ve been going up. So I was like, okay, fair enough. Fair enough. I mean, for those people who are interested in. We did talk with Joe valley. Who’s also with quietly. I have his, I have his book here.
I got, I got it out for, for today’s interview to, to reference, but we did a little bit more of a deep dive on multiples. What affects multiples, how to increase multiples. I’ll include a link in our show notes to that. If you didn’t listen to that, and you want more about some of the nitty gritty about kind of how to influence your site for sale and increase that multiple we’ll we’ll kind of leave that deep dive for that conversation.
Cuz Joe did a great job.
Mark: Let me tell you just a really quick little tidbit about that book. Yeah. Do you know why Joe wrote that book? No, I don’t actually, he was tired of telling people the same thing over and over again. He, he literally said, I’m just gonna write this down and then tell ’em to read the book and it literally is everything that, that we talk about.
And, and the process that we go through on our side when we’re looking at a business. So if you really do want to get deep. And I would say, you know, just a general piece of advice here, don’t focus so much on the multiple with your business. It is what it is and is controlled. Uh, largely by macroeconomic factors, understand the levers that you can pull within those macroeconomic factors, um, with your business.
And that’s where dissecting and knowing what influences the multiple is gonna be super important for anyone looking to exit. Sorry, I don’t wanna take up too much time because they can do a deep dive. People can do a deep dive on this, but just really, you know, get away from thinking about multiples and think more about.
What can I do within my business to be at the top end within my multiple range that my business, or maybe even break out of that range and be an exception
Jared: to go to add to that. I mean, if, if that’s something you’re thinking about one of my big takeaways, whatever it is, nine months still to this day from when we did that interview a year ago is.
You had better start thinking about those things now, because once you start approaching a sale, many of the factors that can influence these things, it’s too late to really have much of an effect on. And so you.
Mark: Coming away when you’re talking to a buyer, asking him to stroke, a six figure check, trust me, bro is not a sales tactic or something.
That’s gonna get you money. Right? You gotta put it on the books. You gotta show that what you, what you’ve done has a positive, uh, impact on the business. And so, yeah, you, you wanna start, uh, well in advanced, Joe always says. Plan your exit don’t decide to exit. And he’s absolutely right with
Jared: that. Yep. With that phrase.
Well, let’s hear about how you, I, I mean, you’ve clearly done a really great job growing quiet light to where it is and something you said sparked this question, you talked about how you’re probably, maybe you’re being humble, but there’s probably some element of truth to it. You’re probably one of the least accomplished entrepreneurs in the company.
And it’s a company of accomplished entre. Uh, talk about how you grew quiet light and specifically why you chose to add these advisors that had such accomplishments, uh, in the entrepreneurial space, rather than maybe sales or, you know, uh, some of the more characteristics that you might, um, think of.
Mark: Yeah, maybe it is being humble, but it is very true at the same time.
I mean, I literally had one of my advisors receive his Emmy nomination while we were on a group call. Right. So, uh, this is the caliber of people that we’re, we’re dealing with, people that are nominated for Emmy’s. Uh, one of my most trusted advisors, Amanda was featured in time magazine. You know, that’s a pretty big accomplishment to be featured there.
I wish I could say I was a visionary and said, this is the route I want to go, but it wasn’t. I, I think when. Talk, uh, especially in the online world about building an online business, a lot of the focus is on SOPs. Creating processes so that we can plug in replaceable parts. And that’s not a bad thing.
It’s, it’s a very good approach to, to building a business. Um, but when you’re in a service based business, like we are the downside to just a pure SOP driven approach in which you have replaceable parts, is that it, it creates a lot of gaps in service that require. Somebody who’s really kind of fine tuned and an expert in, in what they’re doing now.
Again, I didn’t have this great vision and have this great realization till after I stumbled into this. Um, because initially I, I, I had brought on five brokers. You shortly after I started quietly, I brought on five brokers and they all flamed out. Um, and they had vary levels of degree, degrees of success.
Wasn’t I mean, most of ’em didn’t do that. Well, one did. Okay. And, and he got burnt out pretty quickly and left and it wasn’t until Jason Yitz, who was a previous client of mine. Join the company and, and frankly, I didn’t really want him to join the company at this point. I, I thought I was just going to maybe shut it down because I had these five brokers join.
They all left after about two years. And I was like, well, you know, I, I don’t want to do this forever just on my own. Yeah. Uh, but maybe I’ll make some money this year and go do something different. And Jason came and he said, Hey, I’m really interested in what you’re doing. I’d love to give us a try. I told him no multiple times and he was persistent.
So I thought, let me just bring him on. And I’m gonna give him junk and we’ll just, you know, we’ll let this kinda work itself out right over time he killed it. He absolutely started to crush it. And what I had realized, you know, I had hired these five people initially. And none of them were able to sell.
Like I was able to sell these businesses. They didn’t have the same levels of success. Their deals fell apart at a higher rate. They weren’t able to retain people. Uh, as clients, Jason was the first person I brought on board who was able to have the same success I had and even more. And so I looked at it and thought, well, why?
And the realization was well, he’s got the same sort of, uh, background I do. He’s an entre. He’s sold him his own business. He bought his own business. He’s been through this before, uh, personally, so he can speak to it a little bit more, uh, expertly. And so that’s the model that, uh, I ended up following Joe and Amanda came on next at the same time.
Uh, and both of them were, uh, highly accomplished entrepreneurs. Jason had sold Joe’s business. And so he came on shortly after that and Amanda was a buyer, uh, with quiet light and frankly, one of the smartest buyers I had ever dealt with. And, and so when she talked about coming on board, I thought absolutely.
Like she just, she really understands what she’s doing here in retrospect, and having the ability to reflect on this. But, you know, I think of businesses in a different, uh, light. Now we can build up replaceable part style businesses, SOP driven, and I think every business needs to have an aspect of that to, to some extent, but there’s certain.
Pieces of your business, where I think bringing in high level experts who are just ridiculously talented at what they do. Makes sense and you need to bring, uh, those people in and that’s the model that we’ve chosen. So our model differs from some of our friendly competitors in the industry that are built more on processes and growing and trying to do volume.
We’re never going to be the volume leader. I don’t want to be the volume leader. I want to do interesting deals that are awesome. That’s what we want to do. Right. And, and to do that, we want people that are like crazy experienced. Who can walk with our clients throughout the entire process? I, I think this is an interesting thing to think about for any sort of service based business, where you need somebody who can look into the gaps that a process might be blind
That’s what I was gonna ask you about. So how does somebody determine whether their business or their approach should be governed by an so P driven process oriented model or. Expertise people driven model. Is it cuz you kind of alluded to it? Is it, I don’t want the volume. I want some, you know what I mean?
Is, is it driven by the goal? And so you have to start with the goal or is it driven by the industry that you’re in or is it driven by other factors? Like what drives at the, at the core, how does somebody make that decision?
Mark: I, I, I do think it comes down, uh, somewhat to a complexity of what you’re dealing with and how many variables are you dealing with?
Right. Processes are great. Wait, look, we have processes. We have SOVs and we have a whole elementary team, uh, that runs off that, that sort of SOP driven, uh, driven thing. But when it comes to trying to evaluate somebody’s business, speaking about quietly specifically, and then maybe expanding to the broader question here.
No two businesses are the same. Mm right. We can draw lessons from our past experience. And we do, we can draw lessons from our closed sales, from the 103 transactions we did in the last 12 months. And we do. But no two businesses are exactly alike, right? They all have their own unique wrinkles and every deal is going to have as unique elements to it.
You need somebody who can extrapolate, look at the data, but not be slavish to the data and be smart enough to know what that data should actually, uh, infer and mean. So I would say, you know, when do you want to be, uh, expert based versus versus, uh, just purely process oriented? I would say it’s a matter of complexity.
And when you need to rise above what the data or the information that you’re receiving is telling you, or when you need to, uh, be able to process variables that don’t necessarily fit into a clean bucket. This is always the problem with, you know, valuation reports or any of the, the big data that we try and do in this industry is when you really start to segment down.
Any of these sort of reports into like, to like businesses, the data sets are ridiculously small, that you can’t even trust them. Right? Businesses are just too complex for that. I would say to some extent, marketing, right? You can have SOP. So if you’re doing any sort of marketing, uh, work for people, you can have SOPs to manage certain processes, but having somebody really talented on there makes a difference.
Look at the legal world. Do you wanna hire a, like a assembly line style law firm for a lawsuit? No, you want somebody who’s crazy smart and could look at the facts and say, this is the strategy we should do. So I think the complexity is really what should be governing.
Jared: Yeah. I think I think of health too.
I don’t want my, my doctor to say, well, I’m, I’m supposed to do this right now. So that’s what
Mark: we’ll do exactly. Right. I need to check box two. Well, we know box two. Doesn’t apply. I need to check box two. That’s that’s what we do. That’s the process. The process is blind.
Jared: maybe. Extrapolate a bit more. I’m gonna sit, I’m gonna put a role on your, on your, on you right now.
And you see so many businesses that are up for sale. And certainly, you know, in our world here in niche pursuits, we talk a lot about websites and eventual exit or sale. What can people who are running websites, whatever kind of website they are, learn from what we’re discussing here. In how they apply that to their business, especially as it relates to what you’ve seen in your experience with so many deals over the last 15 plus years.
Mark: Well, I mean, so let me, I’m gonna speak out of both sides of my mouth. heavily SOP businesses are easier to sell possibly
Jared: man. Okay. Okay. I didn’t expect you to say that. Okay. Fair enough. It makes sense. We’ve heard that before, right? It gives the buyer such an easier transit.
Mark: Uh, exactly right. I mean, we, we talk a lot about what we call the four, uh, pillars of value, right?
And it’s risk, growth, transferability, and documentation. That transferability is the third pillar. How easy is it for somebody to come in and run that business? And if it’s not super specialized with a lot of specialized knowledge to, to run that business, then it’s gonna be easier to transfer. Here’s the, the, the, uh, other, uh, side of that coin though businesses that are highly, uh, SOP.
And run purely off processes are less defensible. And so, um, if, if you have, let’s say that, that you are growing your business and let let’s say that you just have a content site and I’ll actually, I wanna run with this for a little bit here. Let’s talk about content sites for a little bit. I’ve looked at a lot of content.
I, I love content. That was my background before I started quiet light. It’s still what I love when I built quiet light. It was largely off of writing. Right. I did a lot of writing for a long time. Okay. Mm-hmm um, and, and built up, uh, quiet light through that. Um, You can, let’s say that you start a blog just for SEO purposes on chicken coops, and then you, you run out, you do the long tail sort of search for all the different, uh, articles you should be, uh, writing you do the content wheel on that.
You know, what, what sort of, um, you know, related articles need to be doing. And you’re, you’re building out building that out. You’re hiring inexpensive writers to be able to do that. Anybody can write on this because you’re going out and you’re you’re, you know, it’s it’s content. That’s gonna be attracting SEO traffic.
That’s one type of business, uh, that you can go now, let’s go another way. And let’s talk about a company that is writing about bicycles for bicycle enthusiasts, right? The, the approaches that you might take there would be, well, I’m just gonna do the same thing, SEO it out, and you might be okay. Or you can hire a staff of.
Bicycle enthusiasts who are gonna test new equipment, reach out to the actual leaders in the space, the different, uh, manufacturers, and actually test those bicycles and really become an authority in that space. Both those businesses are extremely sellable businesses. You know, the second one is gonna be highly defensible and probably worth significantly more because there’s a real brand associated with it.
The first business will be very easy to. But it’s probably gonna have a ceiling somewhere, right. Because there’s only so much SEO traffic that you’re gonna get and you’re gonna get diminishing rates of return, uh, on that. So I dunno if that helps. I haven’t really gone through this exercise before, but, but trying to identify, you know, where do you want to have these, these things in?
I do think in the content world, especially with where content’s going, that the second business model, you know, building on how something that looks more like a traditional magazine. Probably makes sense. Um, brands are where it’s at in the eCommerce, in SaaS, in, in, uh, in content, the
Jared: whole works. I think what you’ve outlined though is really clear, at least to me, a big takeaway is perhaps one is a little bit easier.
Perhaps one is a little bit harder. Perhaps one gives you results at a different pace and different types of long term results than another one. I. You’ve said it yourself, like quiet light, took a little while to take off. And, but it was the expertise that has brought so much value to quiet light over the years.
And you know, almost in a similar fashion, an SOP driven website or brand does probably hit a ceiling. Generally speaking that a authority type business or. Can supersede with that expertise. Yeah. And so, you know, it’s fun to think about certainly everyone at some points, whether it’s a business or a website starts talking about, man, am I the right person to do this task?
Or do I need to hire someone smarter than me to do this task? Or can I just make some squeaky clean? System around this task, which one do I do? So it’s, it’s a really good question. Ponder.
Mark: Yeah. And I think, look, I’ve been, uh, we, we talked, uh, initially saying back in my day, right. Uh, you know, nice, nice and old.
I’m feeling older these days. I just had a birthday, so I’m feeling older these days. Uh, but if we take a look at the, the, uh, evolution of the online world, um, the evolution of the online world is completely going towards sustainable brands. Brands that can live and, uh, survive over the long term.
Initially, as we were all trying to figure this whole internet thing out, it was very easy to find gaps and, uh, and exploit those gaps for profit and gain. But as. The whole space grows. More people move to the online world that doesn’t work as well. Right. And, and we see those things kind of squeeze out for drop shipping, take a look at drop shipping in the eCommerce world.
It used to be the standard for eCommerce right drop shipping made up the vast majority of eCommerce. And now it’s definitely a minority and shrinking. For a reason because it’s being crowded out by, by brands that are actually being, uh, built up. And I would say the same for content. There’s still definitely a lot of space for a lot of different content sort of plays.
But I do think what will survive long term will be those brands that are built up that have a loyal audience that is attracted not because they found you through Google. We know that Google is slowly kind of willing in a way that, that easy organic, that that was before, but more towards man. I love this, this website.
I love, you know, I get better insights from this site than any other, um, that that’s worth a lot. That’s worth a, a absolute ton.
Jared: And we see with Google, speaking of like there updates. You know, leaving the whole conversation about things like E a T and all this stuff out. Like they just reward authority.
Right. And they reward, you know, a brand that has invested in a long standing following. So, and that’s a very general statement, but that’s certainly what we’ve been seeing as the years go by
Mark: AB absolutely. Well,
Jared: uh, what else about quiet light has made. You has kind of led to that, that success. I mean, I took notes.
Did I take notes? Right? You did over 200 million in sales in terms of website business, overall, your, uh, sales portfolio, 200 million.
Mark: Oh, just over the past 12 months. Yes. In
Jared: the past 12. That’s insane. Yeah. Okay. I thought I wrote it down. Right. But man, what else has, has contributed to that? We’ve talked about this approach to, to expertise, but are there any other factors you feel like that have allowed you to, to grow in the way you
Yeah. You know, we, we recently went through an exercise of identifying core values and, and I’ll be honest. I am, you know, my, my ego, we, we talked about, you know, am I being humble? I’ll, I’ll say this I’m, I’m not, my ego gets in the way. So many times, because there’s some really good, tried and true business advice out there that have always been slow to adopt.
One of those has been this idea of, uh, identifying core values. Um, it’s something that we did about a year and a half ago. We, we really sat down and worked on identifying our core values. Um, and we did this because we have grown so much recently and as our team grows, we want to try and capture. What worked right.
Uh, what worked when it was just myself, Joe and Amanda and Jason. Right. How did, uh, how did that, uh, really help us explode into the 15 advisors that we are today? Identifying core values and identifying what your mission is? It, it just. It it’s so important for not losing the vision of what actually gained traction initially, uh, with their company.
So we, we did that. Um, and I think for, in our space, uh, particularly, um, you know, the one that is client facing, uh, we have a few that are client facing that, that, um, really have served us well. Um, if you don’t mind, I’ll, I’ll just share ’em with you. It’s please. The first one is just relentless honesty. And it’s such a cliche.
This is why I always kind of reviled against these. I imagine those silly motivational posters that you put up in a lunchroom and, you know, no one takes ’em seriously , but for, for us internally, we actually call this reckless honesty, not relentless honesty. And the reason we call it reckless honesty is.
Something that we will live by is we will say something that we, that will make us not retain a client if it’s the honest truth. And if it’s in the best interest of the client and oftentimes that’s, this is not a good fit, or you shouldn’t do this right now, or you should look elsewhere, or maybe you should evaluate different options, right.
To somebody who’s thinking about selling their company, that’s where that experience as entrepreneurs can really come in and, and play, you know, we’ve all sold businesses. We know what that’s like. We know what it’s like also to go through and to think. Am I doing the right thing. And then afterwards having that gut check, did I do the right thing?
Right. And that’s really important. I, I think anything you build, whether it’s your first or your 50th, it’s really hard to build successful online sites. It’s not easy. And so we wanna make sure our clients are, are really well prepared for that sale. Know what they’re getting into. Also know what they might be giving up in the future.
Right? Selling a business, uh, an online business, just for financial gain. I shouldn’t be saying this, but it’s probably not worth it. okay. Typically you’re better hanging onto that business. That’s just the way the math works out. Otherwise, a buyer would never wanna buy your business if it’s doesn’t work out for them financially, right?
No one wants to buy a business to lose it. So that, that relentless honesty. Uh, and then secondly, um, uh, the other one I’ll bring, or the other tool I’ll bring up is, um, that, that we try to be education oriented first, that kind of folds into that. And we’re not gonna tell anyone whether or not they should sell their business.
We’re gonna try and just teach, you know? Yeah. Uh, what, what what’s going on here, understand your business and what, what the values are. Um, and finally, we don’t treat our clients like inventory, and this is that push and pull. I’m gonna bring this full circle of what we talked about before with hiring, uh, and working with highly skilled individuals versus sort of this assembly line SOP approach.
Right. We don’t want to treat people’s businesses, which are very personal. Like a piece of our inventory. Mm-hmm, now in a way it is because that’s how we make our money, but it’s not our inventory. I don’t own anyone’s business. Somebody retains my company retains quiet light, and that’s an honor. And that’s something that we need to always keep at our forefront.
Every company has core values. If you’ve made it somewhere, you know, to some level of success. That’s come as the result of certain values that you follow, whether explicitly or implicitly being able to draw those out is your roadmap to being able to continue to grow. Um, and you know, maybe some of them will become aspirational, um, for you, but that’s the roadmap of how you’re going to get, where you want to go.
Jared: that core values are self-evident in most businesses that you see being successful or are they more that you have learned them? You have adopted them without speaking them. And then you sit down and you bring core values that are already there to light. And I guess maybe the deeper question is can you put a core value down that you’re striving for, but you aren’t living by, at this point in the business.
Mark: That’s a really good question. And, and I’ve seen both work. Um, I’ve seen both work for us. It was more that we were living by these values and, and we, uh, extrapolated them, you know, internally as far as how do I manage the company? Because I work with a lot of entrepreneurs. Entrepreneurs are. Extremely difficult to work with.
Right. Uh, whenever we bring people on, when, when I do something I hear from 15 people, why it’s not a good idea, right. Because we’re all very stubborn headed and we all have the best ideas in the world. And back to that honesty thing well, and back to that honesty thing, right. I heard one core value.
Somebody, it was from a different company, it was speak the unspoken. I’m like, oh, I like that. That that’s really good. Uh, I like that, that phrase, you know, so I, from core value standpoint, I wanted to look at okay, how, how I managed this and how I managed to. All of these entrepreneurs. We’ve only had one broker ever leave outside of that first five.
Right. And that’s because he had just started and then another big investment came through for him. People say why? Because we’re, we’re very UN uncorporate in the way that we manage things. And, uh, a lot of those values we’ve had to extrapolate those, but I’ve also seen companies start out where the owners say, this is what I need this company to be.
I was talking to a, a guy up in Canada, huge successful, uh, you know, uh, backstory and was starting a new company. And he was telling me that one of the core values that, that, uh, uh, he had identified that was gonna be necessary for the company was to do more with. Right. He didn’t wanna hire people that, uh, were going to say, well, I can do this, but I’m gonna need a team of five people.
He wanted to, to hire people that were gonna say, look, I’m gonna figure out a way to make this work by myself because I can do more with less. So that, that was, that was really cool. He had identified that in advance saying here’s where I want to go. What are the values I’m gonna need in order to, to, to get there.
And it’s not just my values, what are the values that this company’s gonna have to really embrace in order to get there? So I think we can go both ways. That’s
Jared: great. This is gonna be a total, you know, 180 degree turn in terms of topics, but I, I would be remiss if we had you on this podcast without asking you at least for some insight.
Into deals. And, uh, and I’m not, I’m not talking about multiples, cuz like you said, that is mostly macroeconomic driven by external factors. But um, maybe if I could switch gears and ask you for some tips on website sales and uh, whether it’s things that make them. Successful in terms of a sale or things that people do wrong, uh, going into a sale.
I’d love to get some insight from you on that. And I know it’s 180 degree turn.
Mark: No, that’s, that’s fine. Um, absolutely. Um, getting outta the, the theoretical and into the, uh, practical what to do. I love it. Honestly, you, you gave the best tip, uh, so far in this podcast and that is plan. You know, and here’s what I would say.
We’re gonna go back to Joe, Joe. We’re being very, uh, building him up quite a bit. Yeah. Quite, quite so. It’s good. It’s good. It’s good. Yes. But he, he used to do this exercise when he was giving talks at a conference and I thought it was pretty good. He would have people raise their hands. If they knew how much money they had in their checking account.
And then he would say, keep your hands up. If you know how much your home is. Keep your hands up. If you know about how much your car is worth, then you would go to retirement accounts, you know, and then, you know, eventually some hands would start going down and they would say, how much do you know, keep your hand up.
If you know how much your, your business is worth. And most of the hands would go down. Now, the point of this is that your business and, and, um, so many of us think of our businesses just as money and money out. We see them as an income produced asset. We forget that last, that last word, it’s an asset. It has value in and of its own.
Right? So here’s the, the, the takeaway from it, you should know the value of the asset that you owned. , it’s probably the most valuable asset you have, uh, or close to it, uh, right. Maybe the second, most valuable asset that you have. So outside of you, even thinking about selling, understanding why, uh, your business is valuable or what makes it valuable is a really important thing.
And, and that starts with, with getting an evaluation. Not for the sake of getting a number, but understanding what’s making your business valuable or not valuable because I, I can tell you, I mean, look 103 transactions over the last 12 months. We’ve done over a thousand transactions here. Most people don’t realize that they’re going to sell until they realize that they need to sell right.
And so if it’s not on your mind, that’s fine. I think the best business is one that you never have to sell, but you should at least be able to have that flexibility. Should the need arise. so I’m, hopefully I’m not talking all around myself here, but, uh, and, and that’s clear. So I think that that tip is, is one of the, uh, the, the, the best takeaways mm-hmm um, from this that, that you said is start early.
Um, the second thing would be finances, right? Um, keeping them clean books. Um, do you guys talk much about. Keeping, you know, like just keeping those records and, and what’s that
Jared: what’s, I’m kidding. no, it does not get talked about much. you’re not
Mark: low and I’ll be honest. Most people are like, oh, books. Sure.
You know, I, I, I kind of tease, um, online entrepreneurs cause we love our data. Right. We love running experiments. We can, we can start running multivariate tests and, you know, split tests and be able to see conversion rates down to the hundredth. A percentage point. Yep. But we ignore the financial metrics that have been tried and true for hundreds of years.
Um, I, I really think, I mean, you should have a bookkeeper, you should have clean books, you know, professionally kept. And if you’re doing over a million dollars in revenue, you should hire at least a fractional CFO for your business. Um, I, I think those are just basic prerequisites and we, we see people miss that all the time, all the time.
Um, when we talk about valuations again, uh, four pillars of value, uh, risk. Growth transferability. And that last one is documentation. Um, I said it earlier, you can’t sell a business on, trust me, bro. Uh it’s it’s what I said it is. right. No, one’s gonna buy that. They need to see it. And having clean documentation makes, makes a difference there.
Jared: I’m going to maybe surface something that I feel like a lot of people think, and maybe you can breathe light into. It certainly has crossed my. Which might expose me a bit here publicly, but I think it’s definitely in the conversations I’ve had with other website owners and even some business owners it’s, it’s come out.
So I think other people have this thought and that is kind of like, Hey, I gotta, I got enough every day to do. That is, you know, more important to the growth of my brand, of my website, of my business. And can’t when I decide to sell, I just play catch up on all the financial things I need. And maybe the answer is, yeah, you can, it’s just gonna be really painful.
Or maybe the answer is no, you really there’s things you’re not gonna be able to catch up on that will have an effect on your sale. What do you see on that? And maybe talk about that mindset, whether we admit it or not, ,
Mark: you know, I’ve never met somebody who hired a CFO who came back later and said it was, uh, it was not worth.
So I’m gonna start there. The, the there’s insights in your financials, which you’re probably missing out on now look, some, uh, content sites are extraordinarily simple and so they really don’t need much. And so I would say for those people, Can you get away with that AB absolutely. And do we see it?
Absolutely. Um, is it what I would recommend? Oh, , it’s too easy to make a mistake. Uh, you know, going back, trying, I look I’ve done it. I, I I’ve, I’ve done it. I’ve, I’m, I’m a complete hypocrite, uh, I’ve run businesses where I’ve played catch up a year later mm-hmm and it’s not fun to do. And you make mistakes when you do that.
You miss things and that can really torpedo a deal. If you actually do go to, uh, sell the company. And you missed something that was pretty important. Now, all of a sudden everything’s wrong and your buyer’s wondering, what else are they hiding from me? Right. Um, so I wouldn’t recommend it. Some companies sure.
They, they are pretty simple in that most of us though. Um, most of us you’re missing out on, on some good insights into your business that you should otherwise have. Um, and you know, are you going to, uh, figure out how you’re monetizing your visitors? If you don’t have a good track on your revenue, how are you gonna charge, you know, dial into some of the other, uh, metrics that come out to financials that there’s just no reason not to.
You can hire a bookkeeper for not a lot of money and that’s all taken care of for you. Um, it’s just one of those things I think we, we should just do and, and if you haven’t done it, you know, hire somebody, they can help you get caught. It’s not that that difficult to do. And once you get to a million dollars in revenue, again, you’re, you’re gonna start being able to forecast.
You’re gonna be able to start dialing in and planning, uh, your, your life much, much better.
Jared: So much of this podcast is focused around growth through, uh, surgeons and optimization. Organic traffic, you know, traffic from Google and these sources. And so I think we probably all have a bit of a bias towards growing that way.
Is there a bias in buyers in terms of what type of traffic they prefer? Are we making mistakes by putting so much emphasis perhaps on that type of traffic?
Mark: Yes. They care about. You want me to expand? Oh, I’ll expand. believe.
Jared: Great. I’ll get on the next
Mark: question right away. Moving on, moving on. Yeah. Yeah, no, they care about it.
Uh, a little bit. No, they care about it a lot. Uh, a lot. Um, and the look traffic sources are gonna come and go. Uh, the rule of thumb is what’s, what’s sustainable and what’s going to last them, uh, for the long term. And with that in mind, frankly, email is. Kind of king because you, you always have your email, uh, uh, uh, list, right.
That doesn’t go away. And it’s one of the more responsive, uh, audiences that you’re going to have SEO, um, built, right. Um, is a very powerful, uh, channel still. Um, there was a period of time, you know, back 2009 through 2012 with a lot of search engine updates, uh, where SCL was, was, uh, looked at as more of a risky traffic source.
Um, That settle down a little bit as, uh, searches, settle down, uh, a little bit from, you know, all the, the volatile updates. There’s still updates, obviously that can be volatile as somebody who will. So be careful people,
Jared: we all still feel like they’re pretty volatile, but no, I know you’re, you’re referencing back like the pen, the pen penguin, Panda updates, these landscape shifting types of, uh, switches
Mark: and search the, yeah.
The animal updates as I call ’em right. The, the, the, I remember seeing companies go from valuations of seven figures down to five within a matter of a. Right. I mean, it’s, it was brutal back then. I know that things can be volatile right now, but not like they were back then. That was, that was pretty tough.
Cuz they were changing things top to bottom with those updates. Um, the, the other traffic sources to think about though and, and, uh, be a little, be cautious of would be social media traffic. It can be really good, but it’s often built on influencer brands, um, which can be. Uh, difficult to transfer. Um, we’ve seen it done before, uh, but it, it, it’s a little bit more difficult to transfer and also the platforms can change as well.
Um, people have been around on Facebook long enough, know how that went, um, and with
Jared: interest as well,
Mark: and right. I mean, and this happens with these, with these platforms, right? As more businesses flock to them and see that they’re, they’re good for driving. The platforms have to look at it and say, well, what do our users really want?
The users don’t want just business. They want their friends, they want the people are following or whatever the case may be. And so they’ll figure out a way to do two things. One make sure that their users are getting what they want, but also force you to monetize , you know, paid in order to get that exposure.
Um, and so be careful of the social media. It can be very good. I’m not saying don’t do it. It’s a nice leg to a stool, um, of, of, of traffic. So I, I would, you know, my world. I see email as being king SEO, being kind of right there, uh, behind it, queen
Jared: king queen partnered up. Let’s talk about, uh, email. Let me ask you another question that, uh, might be a difficult one to answer, but sorry, it’s kind of my job.
I love it. No questions. Challenging. Let’s go. I mean, so I’m gonna say, obviously it’s gonna vary a lot, but with that being said, and, and, and that, that being okay, because it, obviously it will vary a. Help us understand a little bit better. What an email list is worth. Let’s call it for the sake of the conversation.
It’s actually an active one. So you’re not just putting up an auto responder, putting up a popup or whatever, and you got emails. They’re getting 10 drip emails and that’s it like something that a brand is actually investing in and considers a viable channel. Um, and so what, what is it worth like? What kind of add-ons or.
Does it give add-ons or does it just make it more sellable? How do we think about an email list and an email traffic when we are analyzing how to build our businesses?
Mark: Yeah. So be careful of value in our business as a plus B plus C plus D, right. That’s the sort of break apart sort of analogy that, that some people use, um, the better way to look at it would be the influences on the multiple, right?
So, um, E everything is always driven by ROI. Let’s say I have. Two email list, both with a hundred thousand, uh, subscribers. They have identical open rates. They have identical click through rates. They have identical mail. I identical mailings. The one that’s, uh, emailing for celebrity gossip is gonna be worth a fraction of the one that’s emailing for finance, uh, advice.
So, you know, the degree of monetization makes a big, big difference there. So the question. What does it do to the multiple of that business? If I’m seeing that, that there’s a very strong email list and that’s a big component of somebody’s traffic source, uh, of what they’re, they’re bringing in and it’s, it’s responsive.
And let’s say, you know, you’re getting consistent 20, 25% open rates, um, on, on those emails, you know, nice healthy list there. You know, that’s going to. Potentially a full point or more to your multiple, depending on the other factors that you have going on there, it’s gonna be some strong, upward pressure, uh, on that multiple.
And that’s the way to really think about it. You know, contrast that against an email list where you have high spam complaints or, you know, you don’t really email it all that often. Uh, or when you do, you’re getting a 7% open rate, uh, you know, Now it’s, it’s gonna be a nice LA on, but it, it’s not gonna make much of a difference with evaluation.
We’re gonna be looking at the other sources of traffic, uh, more in, in that, that sort of situation, the point being here, and maybe the takeaway from this is if you have an email component, You should work to optimize that, right? We’ve talked to some very, very well run businesses that, uh, when they focus on their email list have been able to grow their sales, been able to grow their traffic, um, substantially by just focusing on that email list and going into some good practices of cleaning those lists to increase the deliverability, to increase the open rates.
Really kind of massaging that channel. Uh, it can be a very nice evergreen channel, uh, for you. And
Jared: I remember, I think it was something that Joe said, uh, and I don’t want to over, I don’t wanna paraphrase and get it wrong, but he, he also, he did nicely distinguish that, Hey, there’s multiple benefits. When you do things like say an email list or when you, whenever you’re, you’re causing positive change in your business, not only can it raise the multiple, it can also make your site, your business, your brand more attractive, which then can lead to a faster sale or, uh, a sale that maybe never would’ve happened.
So these things have multiple kick on effects, you know, like, uh, an email list also makes your site makes your. More attractive, which could make itself faster. You talked at the outset about how, Hey, we’re seeing this slow down in terms of how fast some deals are moving. So, uh, that was, I remember saying Joe said that I thought was a really valuable thing that I hadn’t really thought about.
I just always think about the multiple, you know, how does it help the multiple, how does it help the sale price, but it can also move it
Mark: quicker. Yeah, absolutely. And, and I think it’s, it’s good, uh, to bring that up, right. Because we do kind of dial into, what am I gonna get for this without really thinking about what am I gonna have to do to be able to get that price and how hard is that going to be?
Um, and, and it’s absolutely right. Right. So a, a buyer again, think about this. Flip it around. Think about it as if you’re buying, uh, this business. Nobody buys a business, no one writes a check for $500,000 so that they can lose money. So they’re constantly looking at this and saying, how is this thing going to fall apart?
How is this going to blow up? Well, if I got a really healthy email list there. That feels really rock solid. So I’m gonna feel really good about doing that. And it’s not, you know, I’m still having ROI analysis that I gotta do on that. I’m gonna be willing to pace a little bit more because I trust that thing to last, you know, another year to, you know, four or five years minimum.
And, and I’m not so worried about it as much, but I’m also gonna be more willing to move on that faster. Because it’s just it’s rock solid. I don’t have to look at it as much. I don’t have to dig as deep mm-hmm . Um, as opposed to, you know, a site with a dodgy SEO pro you know, backlink profile, in which case I’m gonna really be digging in there and like, ah, well, you know, maybe I’m gonna hedge a little bit on price and maybe I’ll slow play this a little bit, and I’m gonna ask about 20 more questions on this
Jared: and you’ve seen it happen.
I’m sure you speak from experiences there. Absolutely. Is there as we, as we kind of tie a bow on today. And, uh, and this, is there anything that we didn’t touch on? And by the way, on both sides of the coin, we, we talked so much on the front end about growing a healthy business and how you grew quietly. We transitioned second half talking really about how people can grow their business to get better multiples, better sale price, quicker sales.
Is there anything we didn’t talk about that, that I missed, that we missed, that you think is really important? Or did we, did we touch on
Mark: everything? I mean, we covered a lot of ground, uh, which is, which is great. I love talking about, you know, the origins of quiet light. And because I think this idea between SOPs and talent is, you know, the talent side, I think in our world, this online world, we kind of.
Kind of back burner a little bit. We don’t look at it as much. Everything’s so SOP driven and that that’s oftentimes the sexy case studies that we see is, you know, bill an eight figure business using, uh, VAs from the Philippines. Right. That’s a very, I mean, I think we actually have a
Jared: podcast literally on that.
That’s my next podcast actually in two weeks. So
Mark: M just kidding. No, we literally have a podcast episode with that, uh, title. I think so. Yep. Yeah. Um, you know, we’re, we’re, we’re part of it too. No, you know, the, the only thing I would, I would say is, um, Just kind of extrapolating something I said earlier, and that is building an online business, whether it’s your fifth or your first or your 50th, it takes a lot of work.
And so if you have something that is profitable making money and doing well, first of all, congratulations. That’s awesome. Um, and, and something that you should definitely be very, very proud of. And, and second of all, you know, I would safeguard that, right. I would be very careful about taking those next steps.
I would try and understand the value of that, uh, early on, even if selling is never in the future for you. You know, I would at least aim to, uh, understand that, uh, you can talk to, uh, you know, a broker we we’d love to, to give that sort of insights, uh, to people. Um, or if you don’t like talking to people, um, as I often, uh, don’t, uh, just buy Joe’s book cuz it’s literally everything that we, we talk to people about.
Jared: Well, mark, this has been really fun. You know, we do a lot of episodes where we talk really tactical. We get super deep in the weeds and those are really. But on this one, we got in the weeds, but we also really, uh, explored some concepts that we don’t normally get an opportunity to talk about. And, uh, uh, I hope everyone listened with an open mind because these kinds of episodes, when you really begin to understand the concepts, you can kind of apply them across any range of businesses, not just an online website, but any range of businesses that people are running these days.
So I’ve really enjoyed it. Thanks so much for coming on the podcast.
Mark: Hey, thanks for trying me on really, really had a lot.
Jared: Cool. All right. Well, until we talk next time, we’ll, we’ll see you soon.