Jaryd Krause used to be a plumber working 60+ hours per week and hated it. Fast forward to today and he now owns multiple online businesses himself and many of his clients earn thousands to tens of thousands of dollars per month from their business they bought working with Jaryd. His Buying Online Businesses Podcast is rated in the top 3 best passive income podcasts online.
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[00:00:00] Jaryd Krause: I advise people not to start the business, an online business or any sort of business if it's just the only goal is to make money. A, you're going to be focused on the wrong things. You're not going to also do justice with your product and your services to find product market fit, and actually help people with a, with a good viable solution and actually care about it enough because you just focused on the money because you want to replace your income. That can really lead to destruction and failure a lot easier than something that you're passionate about, something that you want to create for the world.
[00:00:35] Joseph: You're listening to Ecomonics, a Debutify podcast. Your resource for one of a kind insights into the world of e-commerce and business in the modern age. This is Joseph. I'll be presenting a wealth of industry knowledge from interviews, with successful business people and our own state-of-the-art research.
Your time is valuable. So let's go.
One of the niche topics we've only covered once before on the program courtesy of our episode with Mark Daoust of Quiet Light Brokerage is the market of buying and selling online businesses. Today's guest, Jaryd Krause, continues on this important I hate to say a scarce discussion from his unique point of view, coming from his career in a strictly non-digital background.
I want to emphasize that the way into this market really is open to anyone willing to have a look.
Jaryd Krause. It is good to have you here on Ecomonics how are you doing today? How are you feeling?
[00:01:33] Jaryd Krause: I'm really good. Thank you. And I'm feeling good. Thanks for having me.
[00:01:37] Joseph: Great. Yeah, I appreciate that. Uh, we w I, not that I'm keeping a specific track, but I think like one in every seven guests, uh, hails from Australia and, and, and I do feel for people on the other side of the hemisphere when they've got to get up early in the morning.
So, so thank you for being here at your, your 7:00 AM. Uh, are you, are you, are you a morning guy?
[00:01:55] Jaryd Krause: I am. I was awake before this came to, came to be, so, yeah.
[00:02:00] Joseph: Okay. Yeah. I don't ask that question very often. Um, and I will stop asking that when I talked to somebody who says that they never sleep. So, um, until, until that day comes. Right. Here we go.
We got a lot, we got to get to, uh, very excited for this conversation. Uh, but first and foremost, tell us the audience and myself, what you do and what you're up to these days.
[00:02:19] Jaryd Krause: What do I do? Uh, so work-wise, I teach people to buy a website businesses, uh, and then scale them and grow them. Um, that's what I spend most of my time doing now.
That's what I get most of my fulfillment from.
[00:02:34] Joseph: Great. I want to start with, it's a pretty sobering stat that, you know, you've shared prominently on your content. 90% of startups fail and 90% is good news if it's a test, bad news if it's the health of an ecosystem, there's some things I'd like to understand about that.
One of them is I guess, the distinction between startups at count versus ones that don't, um, if you, if you can speak to that, like, I mean, I, as somebody, if a kid decides to open up a lemonade stand and quits after two weeks, I don't know if that counts as a stat, but I think it also speaks to, I guess, the, the, the broader issue of, you know, a lot of people give us a try and not a lot of people make it.
So what have you extracted from that information?
[00:03:17] Jaryd Krause: Yeah, so I got the stat from the SBA, which is the small business administration, um, from the US and I have noticed myself that a lot of people do fail, uh, in business as startups. And I came from that background, right. I've I've found into of my first businesses.
And it was really, really tough. And what I've realized is that my goal was just to make money online, to. You know, replace my income so I can have a better, you know, have all those things that people want, location, independence, financial independence, and more time freedom. When I came across that stat, I thought, why don't I go and buy businesses POS that 90% failure, right?
That's already got good processes systems and it's, um, you know, profitable every single month and making a passive income, um, because it's, uh, got a proven machine, right? It's, it's found the whole hot thing. That's hot thing to do, which is product market fit. Um, you know, it's ready for scale because it's got a proven system and I sort of come from the background that lacked all the full process that most of them, most of the people that, you know, consume any of my content or come into my membership and work with me is they don't really, they main goal is just to make an income online and to.
The how to achieve those goals of financial independence, location, independence, time, freedom. Um, and I advise people not to start a business, an online business or any sort of business, if it's just their only goal is to make money because you're not really a, you're going to be focused on the wrong things.
You're not going to also do justice with your product and your services to find product market fit, and actually help people with a, with a good viable solution and actually care about it enough because you just focused on the money because you want to replace your income. Um, and that can, that can really lead to destruction and failure a lot easier than something that you're passionate about, something that you want to create for the world.
So that's what I, that's what I believe. That's my belief system. Um, everybody else can have their own, of course. That's what I've found is, is my experience of just trying to make money just because I want a better lifestyle is, you know, starting a business just for that is not going to be the best option.
[00:05:41] Joseph: I'm happy to say that. Um, having been recording conversations such as this over the course of the year is that we have been able to collect a lot of different opinions on the subject, but that said there are also some pretty consistent through lines for Al and one of them is, uh, to backup. Um, uh, one of the points that you're making is if somebody gets into a business for the most sincere reasons possible it's because they have consistently consistently across these are guests that I've talked to, they had a problem.
They needed to figure out a solution for themselves. And I just, a few names come to my mind. Um, you know, Keya James who was doing a skincare, um, Paris Northcutt, who was making candles. Other people reached out to them too and said, can you make this for me? I trust you because you know, you're, you're, you're an individual.
Clearly the solution worked out for you. The, the story, the story they're identifying the story before the person even thinks to tell the story of themself.
[00:06:36] Jaryd Krause: I've I totally agree. And that's the best reason to start a business is when people are coming to you and saying, Hey, can you, can you help me with this?
And this, the same reason that my business came to be is I struggled with the problem of trying to make money online and have a better lifestyle. And I bought, a multiple, a few businesses, both three businesses. And then I was, I had that lost all of, a lot of the travel and the location, pendants, all that sort of stuff on actual independence.
And then people like, hang on second, man. Like, you don't have to work each place you go, you can just work a couple of hours on the laptop. And like, people like, man, you need to like, can you just stay here for an extra week? I'll pay for your accommodation, whatever it is, just teach me how to do this. Um, and that's, that's a great reason for somebody to start a business.
[00:07:27] Joseph: I'd like to know about you, about your perspective, uh, being, having the, having the worldview that you do. And I haven't asked this particular question in a really long time. I think this, the last time I asked this was like the second guest where you see the, the limitation of how many people can, um, reach a level that you've reached.
And then what happens to all their main or people who don't make it is, is there's a, there's a lot of issues here that that would unravel. And for us to really dig into this, it talks about sociopolitical issues. It talks about the health of an economy altogether, not just in the entrepreneurship. And usually I say the, the limiting factor in getting into entrepreneurship is that it always encourages risk and not everybody wants to take risks. And in many cases, they shouldn't. People are depending on them. Um, they have, they have their responsibilities and they just want to be happy and foam, you know, people work nine to five jobs and they don't have homes. So clearly as you know, system. So some works for a great number of people. But I think the limiting factor is effective here too, because I think as much due diligence as you can do, which we'll get into buying a business is still incurring a pretty significant chunk of risk.
It's just, you're looking for ways to mitigate it.
[00:08:38] Jaryd Krause: Everything we do has risks. You right. And same with buying a business. And I guess to answer your question, is it your question how viable is this for people in five, 10 years, 20 years down the track?
[00:08:51] Joseph: Is, is there a limit to how many people can, uh, are there, are there enough businesses to buy for everybody who wants to buy one?
Maybe that's the best way I can ask it.
[00:09:02] Jaryd Krause: Yeah, I've certainly, um, there, you know, there is a, it's a hot market right now, to be honest. Um, a lot of people want to buy an online business, which has means the prices of online businesses have gone up, right? Because the man has. Now, the reason why that is, is because a lot it's very attractive it's to buy an online business because of that 90% failure rate thing.
But people are like, wow. My only goal is to make an income online. I could, the risk is really high. May trying to start my own online business because I just want to make an income, but it's, it, it can be it's, it's less, uh, if I buy a business because I can buy it in, as soon as I transfer that into my name, I'm making any income.
Um, there is risk with buying it, of course like we're talking about due diligence to answer your question is like, I, I certainly believe there's always going to be enough businesses to buy because there's so many people starting businesses, um, and new different types of businesses, different types of business models.
Um, that to say that barrier to entry for starting businesses, I feel is getting high. 10 years ago, you know, you could do this with very little money and some of your time, you know, start, uh, start a WordPress site, start a Shopify site, do some drop shipping. You know, I've, I started a drop shipping business with found all my suppliers in a month.
So the whole business up within a month and in a way to the rise as I was, and I just really needed to create some blog posts to get traffic, right. It's very different now where the barrier to entry is that you need some money to create a good brand, to build an audience, to build trust over time and to do marketing and even get a proven marketing system, which takes, you know, um, you're going to burn money through creating that in testing and trialing and time and all that sort of stuff.
So the barrier to entry I feel is getting, is getting harder for beginners in that sense for starting a business. Um, and I think it's going to, it could go the opposite way with, with buying a business because that means, you know, you have so many different teams. Businesses you can purchase that have sort of passed that 90% failure rate.
And, um, there is the risk though. There's still going to be that risk that you talked about, that you do need to put money in. Um, at some stage, if we want to achieve anything, we're going to, we're going to have to give up something. Even if we, uh, if I look at an athlete, if an athlete wants to become a profession, Well, somebody is an athlete and they want to go to the next level.
They get to have to give up something and it's going to be time, money, training, whatever it is to, to achieve that. Um, and people really struggle with parting with money because they value it differently than time sometimes. And, um, other things they may value.
[00:11:48] Joseph: Yeah. And, you know, at one point I don't get to make very often about athletes.
Um, there tends to be a great deal of resentment for how much money they make, but, um, they've sacrificed a lot. Um, and if in a physical sense, uh, to say nothing of, um, what goes through their heads to really only be able to play for like 10 years, depending on the sport, how often you get clobbered. And then they have the rest of their life to live off the money that they had earned in that window of time.
So the, the, you know, the compensation. It is, is there to make up for a great deal of sacrifice that they make. So I think it's a great example of, yeah, it does take risk and it does take sacrifice to, to give something up. Um, which I think is a, is a, is as good a time as any to, um, bring her backstory into it.
I I'm always, like, I always feel like, okay, when do I want to do the backstory thing? Oh, I don't know. I don't always want to start like right off the bat.
[00:12:38] Jaryd Krause: Uh, I, I, uh, you know, everybody goes straight off the bat a lot that you've just makes it out. It's cool.
[00:12:44] Joseph: Sometimes I do, like, depending on the guests, like sometimes the backstory was just like, oh, you got to get in there right away.
You had how many near, near death experiences. So we are getting into that. You were, you were in plumbing and the idea of buying, I mean, in that frame of mind, the idea of buying a business is rather disparate from, I think your, your usual day-to-day experience because it's very rooted in. Um, a classic economic structure.
In fact, I don't even think you technically need the internet to do plumbing other than, I guess, like getting your invoices online and it gets so there's, there's a, there's a divide between that experience and the experience you're having now. So I'm glad I waited because now I can ask, uh, two questions instead of the one that I had prepped.
One of them that I had, the one that I had prepped is, you know, to hear about, I guess, the, the milestones of this journey and like how you were able to figure it out. But the question now that I also want to work into it is what were you, what were you giving up? Actually, I guess I can kind of see where are you going?
Like giving up consistent income. But I, you know, I would like to think that there's more to it than that in the, in the psychological sense.
[00:13:48] Jaryd Krause: Yeah. So just to confirm, you want me to talk about how did I get to this? And then also, what was I good? What did I give up to get to this? Yeah. Okay. So that's the awesome questions.
I'm glad you asked them both at the same time. It's great. Some good deep thought going into it. Uh, so what did I have to give up? I had to give up time. Uh, I was working as a plumber and I was working 60, 70 hours a week and I was commuting an hour to work an hour and a half home from work.
[00:14:15] Joseph: I very rarely cut people of that, but I was this close to a spit take.
[00:14:21] Jaryd Krause: Yeah. So I was working big hours and I just couldn't, I just couldn't fathom doing this for the rest of my life and, and, you know, batting your, my body and stuff like that. So. What I gave up was more time or in educating myself how to do, how to try and make money online. So basically what I did was I working and then I'd come home and I worked, you know, three to five hours on the computer each night.
So I'll do about, usually I do about 25 hours of work on the internet, trying to learn how I could make money online and start my own online businesses and trying to grow them and try and make them work. Um, and there was so much time that I gave up. Uh, in fact, I went traveling and a lot of my time traveling, I was always on the computer trying to learn this.
So that was something that I gave up. And then eventually when I cracked it, like I was trying to make money online for years. Right. And it's just, wasn't like I was making a little bit of money. It just wasn't really enough to carry me through the lifestyle that I wanted of traveling full time. And. I saved up money and I had that, some of that in the stock market.
And then I wasn't getting a result, you know, ROI on the stock market anymore. Uh, realized that everybody was, you know, I was competing against everybody and people with big money and algorithms and computers that could, you know, do micro trades and just beat me because I'm just an amazing human being, um, compared to these computers.
So I was like, all right, I can S and then I found out about 90% of startups fail. Then I've been, I went into the whole, hang on. If they fail is the surely I can buy something, you know, sure that I can buy one of these businesses. And that's when I turned and started doing some research, found that I could buy these businesses from different marketplaces.
Um, and then I gave up some of my money by buying one and my time. And then I bought one, I bought another one and bought another one. And, and it just spawned from.
[00:16:21] Joseph: Uh, considering how much extra time you had to spend in, and also continuing a, a, a job that involves a great deal of physical labor. I'd also like to know is, you know, where did the energy come from?
Uh, was like four cups of coffee a day kind of energy, or?
[00:16:35] Jaryd Krause: That's an awesome question. The energy came from. I want to swearbut.
[00:16:40] Joseph: Oh no, we we've. We've uh, gone to some dark places on that. Feel free.
[00:16:44] Jaryd Krause: Yeah. The, the, the energy came from sheer fucking ambition. I was so invested and so ready to, to not continue doing what I was doing.
And I think that's the real gap. Like anybody you can achieve anything if they actually want it bad enough. Uh, most people that are on my list and watch my stuff just don't want it bad enough for me. If you ask a lot of my friends, they're like, fuck, this guy wants it. And that's where the energy came from.
I don't. Don't drink coffee or any of that sort of stuff, but it was just like I'm, it was just so much hunger.
[00:17:25] Joseph: I, I, one thing that I observed, uh, in your story is with the amount of time that you had to, um, that you had to work at your pump plumbing position, it went over this threshold. Um, and by the way, this is the first time I've really thought about this, but let's just say somebody has a threshold of working 40 hours, nine to five structure.
I get home, eat dinner, watch American idol. What I think is a fair observation is if there are enough, um, moments on a week to week basis, you know, on a day-to-day basis that provide catharsis and relief, um, that can actually kill, I think the hunger that was within you. Whereas it sounds to me like you were so busy.
Already that there, the, that, despite that might've kept you in that place never came. And so it was just like, I'm just doing this all the time where you can see in your head where you would rather be in the, in this, in this case, it's a physical location. Yeah.
[00:18:23] Jaryd Krause: Yeah. You're right. Like if you, most people choose to numb out at a certain stage, right.
Like go home vege, um, and have the excuse of, I don't have enough time. Right? Yeah. Sorry.
[00:18:38] Joseph: No, I just, I'm just like, um, castigating myself. Cause I'm, I'm still like that. Yeah. And small steps, but it's still.
[00:18:46] Jaryd Krause: I'll look at it as inhabits. Right. It's easier to, um, it's really hard to break an old habit. It's super hard.
Like the repetition of doing something differently, um, is like five times, 10 times as much to be able to, to be able to break that and create a new habit. Um, so you're right. Like the longest somebody does come home and what, something on TV, um, and that's the rest of their evening, the hotter it is for them to go like, ah, I'm going to do something different.
So let's put that in an example, if somebody is to do that for five months and they come across the, the ideology of like, oh, I'm gonna, I'm gonna like stop spending my time on, you know, educating myself in the evenings and trying to work on either buying a business or growing my online business, whatever it is, that's going to be easier than somebody that's been watching TV for five years.
Right. Cause an easier transition. It's less, it's less embedded. Um, that habit I've got, so. Yeah, it's it's I, I definitely agree. It's it, it can be hard for people. And that's why I say the energy doesn't come from external, external things like coffee or exercising, or, you know, I have a really strong belief that everything that you want comes from the inside out.
In fact, I worked with my cousin who created a whole business named inside, out around personal training when we try and do something for the sake of just like, I just want to, like, I want to achieve this so I can have some vanity metric or anything like that. It's we're not gonna, we're not going to be able to do it, but when we own it, when we work on our mindset, that's the, that's the number one thing is when we have the mindset and we, then we create the ambitious.
Right. We need to be able to have a vision, like a vision before we anything happens. Right. And that, that comes into manifestation and all these different things and manifestation, I've got my own sort of problems with that, where it can be, some people will take it and run with it the wrong way and want to get the result.
Um, people that don't know how to be grounded and have a good approach to it. But I, my I'm I'm of a strong belief that if you want to achieve anything, you've got to have, you've got to have the ambition, and that comes from having a good mindset.
[00:21:07] Joseph: And one point that I want to make too, just to touch on this and support this is the way I have noticed it. Um, recently for me has been, um, treating, uh, mental habits the same way, one treats, muscle memory. So first time somebody learns to tie a shoelace, uh, pretty difficult. Uh, for me I'm like, oh, you know, screw with us. I'm just going to go back to Velcro. Great 12 rolls around.
Uh, and so eventually I got to learn that I'm just, I'm kidding. It was sooner than that, but, um, little by little, we, you know, we, we forgot how to do it. And then eventually it's, it becomes an unconscious thing. And what I think happens to a lot of people and it's certainly happened to me, um, is those habits become embedded because the body, I think even if somebody is, uh, you know, just like a permanent vegetable, the body, I think still, um, looks for ways to be efficient throughout the day.
So it it's possible to be like efficiently, lazy. If a person is so used to what they're doing, that the body still feels like they've actually resolved a lot of matters throughout the day.
[00:22:10] Jaryd Krause: We were always trying to find as human beings, biologically, the path of least resistance. Right. What just wait, just cause we just want to survive.
We wanna, um, we want to conserve energy. We want to just make sure, you know, we can, you know, we optimize for things to be as easy as possible in so many aspects. Um, I've got a store, I've got a, um, a story as well that can tie this in nicely is that my mum, um, really, really wanted to lose weight for a long period of time.
And she kept having that habit of like eating corn chips before going to bed. Um, and like you're eating food. Doesn't matter, even if there's junk food, but you eating it before you go to bed. That's not good. Like that's easily going to turn to, um, you know, being overweight. Not that my mom was severely overweight.
Uh, she just wanted to lose weight and uh, she kept saying it for so long and I, and I eventually once one point I said to mum, um, you're fat. You're up. You're fat and you're never gonna lose weight. And I was quite young at this period of time and, and mum was ready to belt me like absolute, like you could see the look in our eyes, like sheer anger and, and then she, and then she said, well, how could you say that to your mother?
Like, why could that, you know, why would you say that to her? And I just laid it out. I just said, look, mum, it's, it's true. Like, you look at your habits, you're never going to lose weight. If you keep doing this, like you're, I'm, I'm telling, I'm making something conscious for you. Um, I'm sharing with you that, like, this is not gonna, this, the input that you're putting in right now is not going to give you the output you actually want.
So we need to change the inputs. But I say that you never going to lose weight because you don't care about losing weight bad enough. You don't want it bad enough because we only ever do something if we want it bad enough. Right. Now actions, actions speak louder than words is what people say. So I said to mum, if you actually wanted it bad enough, you'd be, you'd be slimmer.
Right? You wouldn't, you, you would have lost weight already. But the fact is that you actually don't want don't want it bad enough. So until you want it bad enough, that's when things will go.
[00:24:23] Joseph: You reminded me of a, of a, of a similar situation. This doesn't tie in as well, but it's just as a funny story and apologies to, to, to my mother that i, uh, you know, in the Nintendo week and met with all of these peripherals, one of them is called we fit by this balance board and it was a game attached to it.
So my, my mother, God bless me. I'm so sorry. But I have to tell the story. She, she gets on the, on, on the, when the, we balance word for calibration and, you know, I guess the one saving grace is that because he doesn't play a lot of games, the idea of calibration isn't as intuitive, even if they try their best to make it intuitive.
So when they gave her her assessment, they flat out told her she was obese and I'm standing there being the ambassador for Nintendo thinking, oh God, what have I done?
[00:25:08] Jaryd Krause: Sorry, mom.
[00:25:08] Joseph: I'm like, well, mom, hang on. It's based in Japan. Okay. I mean, they have different standards there.
[00:25:13] Jaryd Krause: How could they probably have that?
You know, that, I guess that, um, calculational, whatever it is, the algebra that works out out. Correct.
[00:25:25] Joseph: Yeah. I mean, there's only one way to know if you're a beast, you stand on the board and it smashes. I think everybody else is like, you know what I mean? Like if you keep your feet kind of fit on it or you don't have the energy to get up on it.
Okay. So I just want it to, I mean, you, you told me another story, I just had a trade. It just, uh.
[00:25:39] Jaryd Krause: But the point is that like, yeah, I was, I was just saying like, if somebody wants something bad enough, they'll get it. If they don't, they won't, it's pretty simple.
[00:25:57] Joseph: All right. So there's, there's a couple of things that we can, uh, I want to tie this in. Um, we're going to wait. I to, so we talked about, we talked about muscle memory and we talked about, you know, uh, working up. So for purchasing online businesses, which is the thing that we really want to normal Newmont today.
What I want to know more about today, I get the logic of, um, investing in an online business is a. Um, amazing way to generate income. And I think for a lot of people who have been attracted to set up their own Shopify stores or doing online businesses or wherever the case is being drawn to the income has been a, uh, an incidentally, a limiting factor.
I I'm, I'm doing my own, my own store because as I mentioned before, we record it, it's hard not to do a year's worth of this content and not wanting to do it myself. Um, and my, and I could have, uh, jumped into it a lot sooner with a lot more vigor, but I also was trying to find a balance between if I'm going to run a store, am I going to have a brand that I actually want to talk about?
And so it was from, you know, my own, my own creative side is from having some degree of emotional connection to it, to like what the people who make the candles and the gluten-free cookies. And all of these other products have really genuinely solve problems. And then part of it was also strategic, strategic.
By having blog content, having a clear vision of what I want to say and what I'm trying to accomplish, I can use affiliate marketing as a strategy. So, you know, for me personally, I just tried to find a balance between, you know, I want to make gobs of money, but, you know, I also want to make a difference.
And, uh, it's, it's, it's a hard line to walk. Uh, not, not everybody makes that. So with being able to purchase online businesses, I think in order to understand where step one is, I guess the hardest question is how much money does somebody need to have to, to get involved in this?
[00:27:46] Jaryd Krause: Great question. It can be any at any stage.
Um, you know, you can buy people, we'll call them a business. If they're selling something for around 1000 to $3,000, what you really are doing is you just buying a website, you buying the structure of the site and you know, it being built, right. Um, You know what I like to see. I like to say that if you're investing anything under the $10,000 price range is you're buying a startup because it still needs a bit of work to get to that point that it's kind of, uh, you know, I've got a proven system, uh, and it's making money, uh, in that can be e-comm.
That could be a different business model, like an affiliate website, like you mentioned before, um, which is, you know, a different type of gain way to gain affiliates, but yeah. Um, and then there's different business models, but we don't need to get into that. Like I would say that anything under that $10,000 price range is you asked or buying a startup that said if somebody has absolute no, absolutely no experience with operating a website or anything like that, it can be good for them to just start a Shopify store, play around, see what it looks like, see what needs to be done and build some confidence before they go and buy one.
That's sort of making a couple of thousand dollars a month, uh, in terms of pricing from there, you know, $10,000 out. You can go as far as high as you like, you know, 10 million, a hundred million dollars. Um, a lot of my clients are buying businesses in between the 10 to $50,000 price range. And then we have a few people buying in between 50,000 to 300 and 500,000.
[00:29:23] Joseph: Have you noticed where? I mean, there's, there's so many reasons why this is going to really be a case by case basis because you talk about niche. You talk about, uh, what figure territory it's in. Um, but when it comes to scaling business, has there been an ideal point to scale things most effectively being the outsider coming in?
[00:29:42] Jaryd Krause: Great question, I'd say, you know, the bigger, the best life.
This is very general what I say here. So take it all as very general, um, thoughts, you know, you get what you pay for, right. And also, I like to say that, um, You know, the more expensive, uh, businesses, usually the, the better will be usually this is very general. And with that said that the bigger the business, the more resources you have to reinvest into it to scale it.
So I don't know if there is a perfect point, um, to, to like how big should the business be in order for it to be able to get some really good scale. But let me give you an example. If you buy a business for say $30,000. Okay. And that business is probably going to make about a thousand dollars a month, passive income net profit.
Um, I shouldn't say completely passive cause you might have to work one to two hours a week on it. It will make about roughly on average, a thousand dollars in net profit per month. Now, if you were to buy something for $300,000, it's going to make about $10,000 in net profit per month. It's going to be a lot easier to invest more resources, say $10,000 per month into a business to get more scale than it will be for a $30,000 business.
Now you'll probably get the same sort of scale, right? But over the long term for $300,000 business, you're going to end up making far more money than $30,000. A hundred thousand dollars. Uh, so buying a business under the $10,000 price range, it's not really making much money. You're going to have to pretty much, like I said, in the S in the startup phase, you're going to need to invest a lot of your own time and mostly some of your money to get that system proven to go. All right. If I put X amount in per month, it'll amount to X amount back.
[00:31:45] Joseph: And yeah. And that's actually one of the things that I was, uh, that I would be worried about is having to fall into a management trap. No. I, I completely understand that once somebody is willing to invest three hundred thousand dollars to purchase a business, things should be running pretty well.
Cause otherwise, how did the business get that much? That they're not, they're clearly not laundering anything cause we did due diligence. So it's, it's a, it's a legitimate business and knows what it's doing. Um, and you don't, and you don't exactly have that same. You have some clues, you have some indicators that things are going well, but it is going to take more work.
So it is fascinating to think about this. The balancing act between the, the, the time someone's willing to invest the energy to have invest in the money they have to invest. So it's, I just, I, that's an interesting takeaway for me right then. And there is the disparity between, okay. I don't have a lot of money to invest into a business, but I still got the time to do it, but it also sounds like there could be a trap here where next thing I know, I may end up spending almost as much time on this versus the time that I was spending on my own income anyways.
[00:32:45] Jaryd Krause: Yeah. You know, if you buy a business for $30,000 and it's making a thousand dollars per month in net income, and it takes you one to two hours per week, um, and then you've got a start up that you've put $10,000 into you built the site and you, and it's making, you know, probably $500 a week or less, I mean, $500 per month or less, maybe not even net, just that's revenue.
Um, you're probably going to be spending more time on that startup than on the business. That's making a thousand dollars per month just to get it, just to keep it like, to get it growing and stuff like that. There's if you look at it, like if you zoom out on both of these types of businesses and the examples, um, there's been a lot, you know, there's the feedback we'll have something that's quite small to you.
You'd like if you look at it as a snowball, right? The smallest snowball there's, it's the longer it's going to take for it to get bigger and bigger and bigger and bigger and bigger. The bigger the snowball is, is already got size. Right? So it's going to pick up a lot more snow on the way down the hill, a lot quicker.
Um, it's just, it just, it's just a bigger business as you, you know, made less time, less time you put in. If you look at the inputs, like you put a lot of inputs into a smaller business to get a result, um, that could be equal to the input that you put into a bigger business to get the same. Right. So you usually need less input on a, on a bigger business if you've got team and processes and a proven system.
[00:34:18] Joseph: Well, I think it's a, it's a really important takeaway for, for anyone listening to understand is that is not directly comparable with say buying stock, uh, which is the work has to be done prior to buying the stock to know what the stock is. And then the work, I guess, assuming that, you know, they're doing work for it, and it's not just generating dividends, you know, th this, this investment, um, is, uh, is a hybrid of time and money.
And I think that's an important thing for people to keep in mind.
[00:34:43] Jaryd Krause: I think there's so many important things that people don't consider when, when investing. Um, I look at investing from a, from a form of risk, right. And control. Now, the more control we have of something, or the more control in our life, the less risk we have.
Right. So all the more control we have in our business, the less risk we have as well. Right. So. Let me give you an example. If I want to walk across the street, the more control that I've got the better. So if I can control the traffic to walk across the street, the less risk. So how do I gain that control?
Go press the button. You know, the walk across the signs, um, you know, uh, traffic loss. I can stop the traffic, right? I've got control there, which means less risk. But if I just go and try to walk across the street, without that there's far more risk. Would you agree?
[00:35:40] Joseph: And I, and I appreciate this analogy a lot because there's other points, like there's other things to identify about it.
Like, for instance, so I'm, scentless, I'm sending at the crosswalk and then somebody else is maybe a half a block away. Um, and they jaywalk and I'm standing there waiting for the light to go because I'm a paranoid wreck. And I assume I'm being spied on at all times. So I wait for the light to go, however, this person, he saved time because he took that risk and it was a calculated risk because there were no cars coming one way or another.
[00:36:10] Jaryd Krause: Yeah. Yeah. That's, that's totally true. Right. Calculated risk comes into it as well. My point is that, you know, the more control you have over something in your business and in life, usually the less risk now, when people invest in other things, I don't really think of that. How much control do I have over this?
So for example, if you're going to invest in stocks, Forex, crypto, all that sort of stuff, You can purchase that, but you can't control if that stock is going to perform or underperform. Right. And you can also value add. So if you go away and buy a business, right, you can control how the, this is going to be some external factors, of course, right.
Different changes to algorithms and marketing and all these different things. But you've got, let's be honest. You've got far more control over, over this investment than you would with a stock because you can make it perform right. You can, you can have it perform where you can have an underperform. The other cool thing is that you can value add, right?
You can renovate the business. You can add more value to the business and sell it at a higher price and re-invest and all those sorts of things. It's the exact same with buying digital property, like buying an online business is very similar to buying real. You have more control, you have less risk, right?
So there's your right. Is this the timing factor that you may need to spend a bit of time on a business, right? A couple of hours a week or whatever it is. Um, so it's not totally passive, but you've got to a certain extent. You can have less risks than say in a stock because you've got control and you can value add.
So there's so, and then there's going to be more things that we can talk about in terms of risk and control and, and all that sort of stuff with different investments. But it's a, it's a really interesting point for people to understand.
[00:38:01] Joseph: Lately where I've been thinking about my own investments, which aren't exactly numerous, but I've tended to look at investment lately as more of like self validation than anything.
Um, I'm a massive nerd. Love, love me some video games. Um, and, and I. I have been invested in intend to way before I purchased my ADRs. So I invested in those ADRs and I don't expect money out of them. Uh, however, what I do expect is control and the reason why is because I expect to be part of those investors meetings, um, where, you know, they, they have a teleconference and I might actually have a say, uh, I, by, by saying that I, that I'm an investor in it, I, I stake my own reputation on it.
There, there, it gets into like Blackhat territory where investors are doing things they shouldn't do to affect. Um, if they're trying to stay short of stock, there's a whole can of worms there. I ain't going to open up, but that's just where I've been saying on investment lately. And I bring it up because it reminds me of my own, um, state of mind with the running of my own online store, which is.
It's self validation. There's an idea here. There's a mission. There's a premise that I'm basing the store on. So I don't know if I would have, if I would be able to, because I'm just thinking about this one right now is the first time I've thought about in a long time is if I would be able to apply that self-validation philosophy into buying a business, I guess it would have to be around which kind of business I buy.
And if there an idea that I'm going to support. And so there's a kernel of my own of seeing a bit of myself in, in, in the business. And so let me, let me frame this to you as a, as a, as a simplified question, because I kind of went off into space there, which is, do you see trends of people making, I guess, more, um, emotional or personal decisions in the businesses they buy, uh, versus making more calculated, focused on just generating the income?
Uh, is there a balancing act there or take it away, I guess.
[00:39:59] Jaryd Krause: Great question. About 90% of people that bought that first online business. Do it completely based on emotions if they're going to go and do it themselves. Um, now a lot of people that join my membership is I try to remedy and solve this problem.
And they have a sounding board which has me, um, to set, you know, sort of point out the risks and, you know, the things that are involved with the business and, and sort of like we highlight whether it's a good investment or not. A lot of people will. The tough thing about emotion is like, once we're, once we've got that strong emotion or we've built that vision of us having that type of business, um, then we tend to just go, I needed, I needed, I needed, I needed.
So the scary thing is that people will see a business that say it's like $30,000 to buy this business, but it's making twice as much as what it should be. Right. It's making $2,000 net profit per month. Right. But it's got single source dependent. Meaning that all of its revenues coming from one traffic source and one affiliate, or, uh, you know, it's got single source dependency.
Let's talk about econ businesses. All of its ads are coming from sales, coming from Facebook marketing. Now that is a risk because if Facebook shuts down your ad account, like it does for so many people, then, you know, you've got no business, right. And, but people will block out that or not even know, or not even be conscious of.
That's a risk, right? When buying a business, that's making $2,000 per month and the other one's the same price, but it's only making a thousand dollars per month. And this is a very rough example, but that would go, I'm going to go away and I'm going to go out and buy that business. And because I've got the like, oh $2,000 per month, this is what my life's going to look like.
You've got an extra $2,000 per month, right. So to become emotionally attached to that and they go away make a decision that may not be. Uh, a good decision for them that said that sometimes people will be, unthink what you're alluding to with what you explained about before is that people will have an ideology around, like, I need to buy a business that I'm passionate about.
Now, this the same thing you could go away and be like, I'm really passionate about surfing. I like, for me personally, I love surfing. It's one of my number one things. So if I'm going to buy a business and I've heard somebody say, you should follow your passion, your passion is the pension, all that garbage that, you know, people regurgitate, uh, then.
[00:42:36] Joseph: I never heard of that one, passion.
[00:42:38] Jaryd Krause: Passion, passionate profits, all these sorts of things.
It can be good to a certain extent, but it can also, it's got its flaws as well, but say somebody has a passion about one of these businesses because in that type of niche and I want it for self-validation, um, or whatever, and they go. There's this business that's for $30,000 is making a thousand dollars per month, but it's got like five revenue sources.
It's got Instagram, Facebook, Google, Pinterest, and say Twitter or LinkedIn. Right? So it's making money from five different sources. And then you've got this other one that's made it's $30,000 making $2,000 per month, same example. But it's in that niche. Like I need to buy this because it's like, surfing is my thing.
And that's going to be the best business for me because I'm going to be invested in emotionally and I'm going to be invested in it that I'm going to do whatever it can, whatever I can do to make sure it works and runs. But they're blind. They're blinded by some of the risks there. Right? You can be passionate about something, but being too passionate about something can cause destruction to a point where if you, the business starts to fail because Hey, I've got only one revenue source from Facebook.
And then I go, ah, I can't let this fail. Right. Cause I'm invested in with my passion and it's like, it's a vanity thing that I made to make sure that I'm so passionate about this type of business in this niche. I can't let her fail. So I go and buy, invest like another $30,000 into try and get an ad campaign running on Google and all these other ones.
And I just can't get it done. So it's going to be more of a risk and it's going to cost them more money while just trying to go away, invest in something that they were emotional about. So investing and buying anything with our emotions is, is a scary thing. And I'm talking about, even if you, you know, emotional about the color of a bike compared to the performance of another black, like that's anything we buy as an investment.
Sometimes we buy good investments. Sometimes we buy bad.
[00:44:42] Joseph: I'd like to think that there, if there, if there is an advantage to having a higher degree of knowledge on something, AKA a passion is that it could come through in, I guess, knowing more what's in the business's best interest, being able to say vet products better, or be able to have a little bit more of a say in the brand.
So I think like an old things that there was a balance between, um, over passion, but also being totally calculated about it.
[00:45:06] Jaryd Krause: Yeah. I mean, there's people that say somebody that is great at digital marketing, uh, or Facebook marketing and they go, all right, I see this e-commerce business. All of its revenue is coming from Google ads.
Um, and they're selling gluten-free cookies for example, and this business is being sold, but I'm, I know a lot about Facebook ads and I've worked on many different campaigns, um, in say, you know, selling consumables like. And drink, um, on Facebook. I can certainly replicate what they're doing on Google with Facebook.
That's a, that's a smart decision. That's a really good value add. That's an example of like, when you buy a stock, you can't value add to it. You can't make that stock any better that as, as the owner of a business. And then you've got a skill that you can, you can build that up and you can make the performance of that investment.
[00:46:10] Joseph: By the way, if you're a current user of Debutify, or haven't tried this out yet, Debutify version three has been released and now is a good time to upgrade or get started as any. A streamlined user interface along with an ever increasing array of conversion boosting add-ons is waiting for you. So download today for free and start your journey. Who knows, maybe I'll be interviewing you before too long.
I want to bring back this was a note that I took down much earlier on. I want to make this about the, about, about motivation and what people are going to be doing to act if they reach the, the level of, in that they are the goal that they have in their mind, um, uh, such as what you were able to do. And, and I think the, the, the point of having that passive income is yes, to have the lifestyle that we want, but I think it also has to do about, you know, what's the kind of work that we want to do.
I know what kind of work I would do if I didn't have to pay bills or anything like that, full disclosure, I probably keep doing the show anyways, but there would be some other things that I would make time for as well. And what I would like to know, you can tell me, I, you kind of, I'm, you're doing your, your, your work now you're sharing this with others.
So there there's that. And then you have your, your passion with surfing. So I imagine that there's a work that you'd like to do perhaps in, in that field, if you're not already doing it, but it would like to hear about maybe some of the people that have reached out to you and some of the people that you're working with.
What has been, uh, what have been the indicators are people who've made it to that, to that level, that the white on their mind, and then what work do they end up doing.
[00:47:38] Jaryd Krause: Uh, wanting to buy a business? Uh, so I don't, I don't quite understand the question. I'm sorry.
[00:47:44] Joseph: Okay. No problem. Uh, nothing to keeping track, but I think this is like the fourth time since I started doing this show, I haven't quite asked the question right. So when people, um, you have your, your I'm calling the clients and they, I think they're running along and they're getting this income and they move into a different place and they're doing different things. Now, I imagine that they're not just sitting around doing nothing. I imagine that they're working, but they're working at something a little bit closer to their field.
So what I w I was just wondering if you've noticed any trends in the kind of work that they end up doing when they get to that point.
[00:48:15] Jaryd Krause: For me personally, it's more about getting more fulfillment out of your business. Um, and if they've got, like, you got to say, they're making an income from their business and that's all good.
And they've got all this extra time, what are they going to do with it? Right. Like I think what they should be doing is they should be the time that they do spend in their business. Only spend on things that are really fulfilling for them, like, um, going out and, you know, giving their products to people that need the most, that can't, you know, and they get a lot of fulfillment out of that, but it's really good for, you know, media and branding and marketing and all that sort of stuff.
Like there's some things that you can do and you'll be like, Uh, provide you a lot of fulfillment, um, after that, if they, if they don't want to do that, I think that if they've been through that period of trying to grow the business for so long and spending so much time on it, and they finally have some free time, I think what's really important is they've that cup of the business is filled, but they've probably depleted their own personal cup.
So I think it's time for them to do some self-love and just start doing and finding some hobbies and things that can actually fill up big hop personally, outside of business. Um, and that's what I see some successful people do is like, I'm like cool. Like one of my clients, some really well in business, you know, when he joined my mastermind doing 400 K a month, he's doing 1.5 a month now.
And I'm like, dude, go buy, go buy a car. Like he really wanted a Subaru guy and he bought one and then he bought another one. I'm like, see, now you've got this time that. I'm motivated to go away and spend doing something that you're excited for is so valuable because you have these, these, these moments where you're just driving the car and some thought will pop up in your mind about business.
That is going to be an absolute game changer if you go away and implement it. So I think what is a really good thing for people that have achieved some level of success in their business is to try and fill that cup up personally. But it'll also have this cross-pollination of being able to add value to the business as well.
And I think people forget that, like they are the asset you need to protect the asset, right? The business is only going to perform as well as you are. And the better you fill your cup up, um, the better the business will perform. So that's why I think for people and that's what I've seen and I advise is once they've got, you know, they've gotten out of the survival.
Like, how do I pay the bills? How can I make sure I can put the kids through school and all that sort of stuff. Once they've gotten out of that, it's like start working on filling up their cup to a point that that's full and it can only overflow into their business and their life and their relationships and everything else.
So I think hobbies are one awesome way to spend that.
[00:51:03] Joseph: And I, and I think it also speaks to a, uh, a far reaching, um, philosophy of, you know, the quality quality investments, which is, you know, you invest money into something, it makes you more money back, you invest energy and, and, and love into yourself. And it brings about this creative spark that, um, is the kind of positive energy that people then use to, to, uh, improve their business along those lines.
You know, it's, it's not never, but no one wants to spend their entire life on the back foot to, to summarize it like that.
[00:51:31] Jaryd Krause: Yeah. I mean, just, we do though, like we, we do have to get through this. Like I don't say that we all have to cause some, some of us, uh, you know, born into some wealth, some of them, some of us aren't.
Um, but I think that we, most of the world do, has to do have to go through that survival period of this doing the crap that you don't want to do, being a plumber and sticking with it until the point that you, you can get out of the survival phase. Um, and then, yeah, just doing you. And when you're so fulfilled, how can like it not radiate out from you into everything that happens?
It would be, we should actually, probably in hindsight, we should actually do that more. So when we're in the survival phase and give ourselves more self-love because they could actually allow us to achieve our results sooner that we don't prioritize it. Most people don't prioritize it under the I didn't.
And so I got to a certain phase. Yeah.
[00:52:27] Joseph: It's important to think about, but it, I think it, uh, it clashes with something that we had mentioned earlier on. So there's, again, there's a balance here to find, which is the kind of self-love that's productive versus the kind that is a reductive. Um, I will throw American idol under the bus numerous times, but they will, the, the kind of, um, quick dopamine release kind of fulfillment.
It, doesn't elevate people above that feeling of the back foot and more like a takes people's mind off of it for a while only to find that they come back to it. And in many cases, um, in a worst situation, because it feels like, well, I didn't know these problems. They got worse since the last time I checked in on them.
[00:53:03] Jaryd Krause: Yeah. Yeah. There's um, Tim Ferris talks about, and Tim Ferris got this from one of his friends. Who's kind of like a mentor. He talks about, um, easy choices, hard life, hard choices, easy life. I really liked that philosophy because it blends in well with one of what my mentors says, um, about green line decisions versus red line decisions.
And it plays into the, um, plays into the, the whole thing about compounding. Right. Um, and long-term, um, long-term results. So easy choices, hard life is where if you make an easy choice, over a hard choice, it's going to end up making your life harder. But if you make a hard choice or an easy choice, if I make your life easier, like I'll give you an example.
So it makes sense. Um, a younger me would go to a party and everybody party be partying, drinking a lot of alcohol and all of surfing. So everybody is, I don't want to drink because the next morning I wanna wake up. I don't want to go surfing. Uh, and everybody's peer pressuring me. Jarred. You have to drink, you have to drink Callum potty with this.
Have a good time, you know, let your hair down and have fun. Drink, drink, drink, drink, drink. Right. So I've got a choice. I can make an easy choice. I can make a hard choice. The easy choice is like, all right, I'm going to go drink and party and have a good night. Right? That's going to make my life harder because in the morning I'm going to be hung over.
I'm not going to be able to go surfing and give myself the self love and, you know, clear my mind. I'm going to be feeling bad for myself, stocking bed, eating junk food, and it's going to cause these red line decisions, right. Drinking is I'm going to cause me to stay at home, not get the things that I need.
Eat bad food. Feel sorry for myself, still flow all these different things. It's a red line decision. Whereas if I make a hard choice, I'm, it's gonna make my life easier because I'm going to say no, it's a hard choice, especially when people like peer pressuring you and you're in that vibe. And you say, no, that's a hard choice, but it's in the morning.
My life's going to be so much easier because I'm going to wake up fresh and feel good, feel good about myself. Feel great about making that hard decision, go for a surf, clear my mind, go eat a healthy breakfast and be set up for the day and have a great day. That's a Greenland decision versus a redline decision.
So easy choices equals hard life hard choices equals easy life. So I think that's a good one to highlight with, um, what should we be doing with our time and our decisions?
[00:55:39] Joseph: Yeah, it reminds me of, um, uh, some, some people I don't, uh, uh, talk to much anymore, but I remember I would be in the same situation that you're talking about.
Yeah. And numerous times I gave in. Um, but I remember, you know, there's those times where I'm just trying to explain, look, you know, yeah, this feels good, but there's a direct correlation between things I feel good in the moment that end up costing you, you know, tomorrow, or I wasn't expecting you to say the next morning, I was expecting you to say, you know, these are the things that end up costing you well-being in five years and 10 years, when those choices start to add up.
And as, I mean, it's still true, but I, I didn't even think it was going to be as, uh, as direct as like, you know, what happens the next morning?
[00:56:17] Jaryd Krause: Well, you've got micro and macro right, you got long short-term results and like short-term things. And then long-term things like if we would have put the incident in context of like, I'm the same as you, like, I don't hang around those people anymore.
We've all, most of us have evolved, um, from that. And you know, at times I did go, of course, let's make the easy choice. I'm going to go away and drink. And I did that for a long period of time, which is, which is why I use this example because I used to drink a lot. Right. And if I kept doing it, I would be in a very, and I was, I'll put myself in a dark place, over many, many times of making the easy choice.
And that compounding effect of like is years down the track. I was unhealthy, unhappy, like all of those things, which was caused from. A few bad choices. And the longer we, the more we make those bad choices, like I said, at the start, like of watching TV of a, not the same with drinking, like if I spend, you know, five, five a weekends, I say, yes, make it easy choice the next weekend, it's going to be so much easier for me to just say yes.
Right. And then it gets easier and easier not to get stuck in that habit. And the longer I'm stuck in that habit, it's harder to break.
[00:57:37] Joseph: Yeah. It's a, it's a, it's a bittersweet thing about the human experience, you know, because especially, um, the younger person is the more favorite and they can do for themselves in the long run.
But the harder it is to convince, uh, people to, to do that, you get to like, um, middle of the field and the last chance to shape up and ship up. Uh, and then, you know, it gets to the, uh, latter half, which. I don't know, I don't, I don't wanna start cascading on that, but it's just, um, it's just what I can't help, but think about in the, in the overall perspective of, uh, of the human experience.
[00:58:10] Jaryd Krause: Yeah, I totally agree. The overall perspective is really good. And if we're talking about perspective here, like, and success and results and wanting to achieve anything like anybody that's achieved, anything is somebody that has delayed gratification, not wanting it now on the stand, it's going to take a certain period of time to be able to achieve it.
And those people that achieve things are the ones that have a long-term thinkers. And I think anybody that's got any results is a good long-term thinker. And I just don't think that most people haven't been taught, what long-term thinking is and how to make decisions, healthy decisions for ourselves and for our business.
[00:58:53] Joseph: Yeah, I, I I've mentioned it, you know, a couple of times throughout different episodes is cause I'm not like I'm not anti matrix. If that makes sense. Like, I, I, again, I understand the need for there to be a structured economy and systemize a ways of living because a lot of people just need to be able to, uh, to do that for their own personal priorities and it's, and it's interesting cause we talk about the other 90% versus the 10%.
And that to me seems to reflect just honored, not just e-commerce but entrepreneurship altogether is, you know, the 10% of people that don't exist in that structure are the 10% that not only try the business, but make it.
[00:59:32] Jaryd Krause: Yeah. It's like a, it's like a overall, um, the, you know, 90, 90 to 95% of people are unhappy, unhealthy.
Don't have this, don't have that when there's a certain 5%, only a certain small people are wealthy in the world, all that sort of stuff. It's it's it's as a pattern, right? There's a huge.
[00:59:53] Joseph: So we, uh, we've got, I think we just got over. Yeah, we just did an hour. Awesome. I I'll ask you a couple of other questions too, because there's some other things that I wanted to, um, uh, clear up on, uh, on the agenda.
But I just want to say it's been great talking to you.
[01:00:07] Jaryd Krause: So I'm happy with more questions. Yeah.
[01:00:11] Joseph: Right on. So one of them is, uh, this is like a resource question. So, um, last person I spoke to about this Mark Daoust of quiet light brokerage. Um, he mentioned, uh Flippa um, as like one business, uh, resource, if you look and look into, um, I just was wondering if you can add to that, if there's any other resources that cross your mind as ones that people should be looking into to get a better sense of, you know, what businesses people can look into and how to make those investments.
[01:00:39] Jaryd Krause: Oh, wow. That's very humble of Mark to say Flippa since he's a broker and he's got his own brokerage. So guys, I would say, Hey, go away and, um, check out Mark's, uh, episode with Joseph. It's probably really good. I know Mark is a great guy. Um, I've had many chats with him on my podcast and other places. Um, so check out that podcast.
I would also say quiet light brokerage. You can go and check out them, which is Mark's. Um, he's like the co-founder of that business. They're um, brokerage, quietlight brokerage.com. Um, they, they do for, it's not really for a beginner because they do sell businesses that are like, you know, 5,000 K up.
[01:01:15] Joseph: And that's why I asked about like, you know, different tiers.
And that's why he mentioned Flippa.
[01:01:19] Jaryd Krause: Flippa is a good one. Uh, there are some smaller ones, like motioninvests.com, motioninvest.com uh, you know, a, a brokerage where they usually sell businesses under the $70,000 price range and not e-commerce businesses. They're more media businesses and content websites.
Uh, and then the one that we've got, we've got to mention here for your audience is, um, Shopify exchange, like Shopify exchange marketplace. Have you heard of that before?
[01:01:48] Joseph: Only because I was looking into your content. That's the only reason why I heard of it before.
[01:01:53] Jaryd Krause: Yeah, most people don't know it exists. And Shopify exchange is a place where people that have Shopify businesses can just list them for sale.
Um, so yeah, check that out there. You know, you can, it's, it's very similar to flipper. Uh, you, I'm going to say, um, there's a huge caveat here is you. If you're going to buy one, make sure you get some help from somebody. It doesn't need to be me, but you just want to at least know how to do due diligence and have somebody look at it because, uh, there are people that set up Shopify businesses and say they're making X amount when there may not be, or yeah.
Say they're producing a result, but then not. So, but Shopify exchange do have some good businesses. I've had multiple clients buy businesses from Shopify exchange, decent businesses as well. So that's a good one for your audience.
[01:02:43] Joseph: I, I will I'll even do that myself. So due diligence. So I'm counting down, I got three, three left for you.
Three third run being the user up question. So the due diligence was wa was another one that I wanted to ask and you transitioned into it. So I already spoke to mark about what his due diligence. Um, so I don't want to, uh, do that question again, but what I do want to, just to help, I guess, triangulate, my understanding of it is, is due diligence firmly a consistent thing, regardless of, you know, who's doing it or it does.
Are, is there a variation with say your take on it versus say what marks would be? Um, granted I think some of it has to do with the scale of the business, but beyond that, is there anything, do you have like your own personal due diligence that you, uh, factor in.
[01:03:31] Jaryd Krause: Yeah, I do. I've got my own doodles framework that, um, I give away for free and a lot of my clients use.
Um, and it just makes it easier knowing what questions and things to ask and what information you need to find out about the business, the more information you have, the better decisions that you can make. And that's what we need to do when we're buying a business. Um, one thing that I would, something that I say to my clients, which is like, kind of become a quote thing in our group, uh, is that I like to think about buying a business or investing in something very differently to most people, probably 90%, if we're going to go through full circle on that sort of stat.
Um, what I like to say to people is like our goal is to not, um, prove a business as a, um, good investment. Our goal is approved business. It is, it proved that the business is a bad investment. And if we can't, we must buy it because a lot of people I'll give it context. A lot of people will go to. Well, my business and now have this image of lack.
It's making X amount of money. I need money to buy it. So I'm going to prove it's good enough to buy. That's super dangerous. Instead, what you want to do is prove that all the business you look at and just crappy businesses, and if you can't prove that one of those businesses, a crappy business, the only thing left to do is to purchase it.
Right. It's good. It's a good investment. So don't come up from the angle of like, I need to buy this business. I need to prove it's good enough because that's very dangerous and that's what most people do. So that's my philosophy around it. And yeah, due diligence like this, I've got a framework. Um, and this it's what Tony Robbins says is like the better question.
Do you have the better answers that you're going to get? Uh, it's the same when doing due diligence is, is just this critical questions that you should be asking to find out information and the better information you have, the better, the decisions.
[01:05:25] Joseph: That's a huge takeaway for me is just the idea. I don't know if it's the exact same.
I'm just, I don't know. For some reason I was relating to like a court case, improving innocence of proving guilt. I don't, I don't quite, I'm not trying to draw it in my head. I don't quite, I'm not quite there, but the idea of, okay, let's figure out the, how, how could this fail and if not, well, we've that okay.
I, this is me processing information, so yeah.
[01:05:50] Jaryd Krause: Yeah. There's another one that, um, whether you lock him or not, there's a man, his name's Donald Trump and he has a quote that says the, uh, Sometimes the best investments are the ones we don't make.
[01:06:03] Joseph: Yeah. That's a, that checks out as well. And, uh, not that I feel like alien any half my audience, .
[01:06:08] Jaryd Krause: But that's what I say with your lock a mono.
I don't know anything about it, like I'm Australian, so I try not to follow any of that stuff.
[01:06:18] Joseph: Well, I'm, I'm Canadian and my running philosophy is that Canada is just basically the United States of wearing a helmet. So we we're, we're, we're more invested in the states than we are our own politics. I couldn't even tell you there, there was a, there was a window of like 10 years, right.
I don't even know where a mayor was nor did I care. Right. All right. Um, so second to last one, the penultimate question, this one's just kind of a silly one, but I maybe there's some to me here to extract, which is. Is money the only metric, or have you been able to identify other metrics that might lead to it being a wise investment like traffic or engagement or community presence is like, have you ever seen like a business or I guess this time typically a business, but have you seen when, or have you even seen, for instance, you just tell that something has got the potential and you just know that if you have a few tweaks, this will really take off or is money king.
[01:07:15] Jaryd Krause: Wow. That's such a great question. Um, it's definitely not king. Uh, if we go back full circle to the example of, um, a business that's making $2,000 per month and it's $30,000 to purchase it or a thousand dollars a month and it's $30,000 to purchase, you know, but the, the one that's making thousand dollars per month has five revenue streams. It's going to be far less risky to purchase that, that all the business, all right. And pick a pot, one of those revenue streams or two of those revenue streams, and re-invest into those, um, and optimize them, um, because you, if you do that with multiple ones, you can grow the business. You could probably quickly get into two grand.
Um, but with less risk, so money, certainly not king. Another example is that a site may be getting a bunch of traffic, right. And let's stick with e-commerce. So it might be getting a bunch of traffic and they come to the site and they they're on the site. And then. And they're on the site for a wall, right?
We look at the analytics on the site for awhile. They clicking around, I go to a few pages and bounce rates, not high. And we like, how come they're not actually buying here? Like they're the right audience, but you know how to design a great Shopify store and you are really good at CRO conversion rate optimization.
You can just go, you can go in and start doing some CRO testing and optimize the business to funnel that traffic into more sales. Um, and. It's going to make you more money, but if the product is good, you going to be helping far more people. And that is probably the best mystery to track is like, how many lives are you changing with the product or the services you have?
[01:08:59] Joseph: That's beautiful. I love that. Yeah. I that's a the, I couldn't ask for a better answer to that question. Um, all right. Well that concludes the lightning round. And with that, uh, uh, Jared it's, uh, it's, it's been an honor and a privilege to be able to. Uh, I had this talk with you today. Um, my, my, my, this is my kind of episode, my kind of show where I get let's go off into space for a little bit.
Let's come back to some practical, do some, uh, do some Moomoo.
[01:09:25] Jaryd Krause: And it's being so fun. Like, I just want to say you've got a brilliant brain and such good question. So thank you.
[01:09:31] Joseph: Thank you. I, there was, there was one point where you said, you know, you ask better questions, you get better answers. And, uh, yeah, there's a part of me was like, yeah.
Yeah, I see that. So final question is, uh, per a, if there's any other bits of wisdom, you feel like sharing like a Chinese proverb or I just, I don't know anything that sticks out to you feel free, but you shared plenty. So you're basically off the hook and then the other half is tell the audience how they can find out more about you, what you're up to.
And I would say if they're really rare when to go on this station, we checking out your podcast and one more shout out to a quiet light brokerage as well.
[01:10:06] Jaryd Krause: Yeah. quiet light brokerage is good. I don't know if I have a quote or any, any wise things, I guess. Stuff just comes out of my mouth sometimes. So, um, I won't try and focus on that, uh.
[01:10:19] Joseph: Running joke where I would just like, say things that are clearly not Chinese Proverbs and call them Chinese Proverbs, like no money, no funny bunny, honey.
[01:10:28] Jaryd Krause: Um, you know, I think, I think mindset's probably like if people would have focused on one thing and probably, you know, mindset and stuff like that, um, everything else comes from there. Like everything, everything else comes from the brain, everything else come from your thoughts. So, um, focusing on a good mindset is probably, uh, if anybody's wanting something to lean into as a call to action for me is, is, is go, go forwards and work on your mind.
Yeah, people want to find out more about me. They can just go. And, you know, if they liked listening to me and they want to hear more, um, have a podcast buying online businesses podcasts, um, it's on my website, buyingonlinebusinesses.com. They can go away and check out all that sort of stuff there. Um, or if they want to email me, they can email me at jaredatbuyingonlinebusinesses.com and happy to answer any and all questions.
[01:11:18] Joseph: All right. Well that is going to be it. To my audience as always it is an honor and a privilege to collect this information, absorb it as best they can, and then share it with all of you and once more to my guests. Um, thank you so much for your time and take care. We will check in soon.
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