Start-up hustle a fairytale: ‘build it from scratch’ not only success story

Start-up hustle a fairytale: ‘build it from scratch’ not only success story

Don’t start a business, buy one. Co Founder of Flippa @Mark Harbottle says ‘Buy your way to growth’. ‘Why aren’t more founders considering acquiring an existing business with traction — not only as a growth strategy but as a go-to-market strategy for their start-up? Why not acquire a business with existing products, customers and cash flow — something they can leverage as a foundation to grow their empire?’


 

According to the Small Business Association (SMB), 30 per cent of businesses fail in the first two years and 50 per cent within five years. US census data suggests only 9 per cent of small businesses, where the owners run them full-time, have more than $1 million in sales annually. So if you manage to “hustle” your way through the first few years of your start-up, chances are your business won’t grow beyond $1m in revenue.

Of course, it’s not all doom and gloom. There are many great founders capable of producing amazing products. Some early-stage start-ups solve real problems and have a huge market opportunity, but the majority struggle to find sustainable distribution channels and consistent growth.

 

This was originally published in The Australian, click here to continue reading.

Broker Interview – Domain Magnate

Broker Interview – Domain Magnate

This week we caught up with Michael Bereslavsky, the founder of Domain Magnate a broker partner of Flippa. Michael has used Flippa for several years and has had 49 transactions on platform totaling $446k.  In the video interview below, Michael talks about his experiences on Flippa, his advice to buyers and sellers and a run through of three businesses he currently has listed for sale on Flippa. See the full interview below and a summary of Michaels advice. 

 

Advice for buyers

Don’t look at buying a website as a passive investment, but as a business. As such any business has risks, it needs a strategy, procedures, clients, employees/contractors, management and growth. Viewing it this way will help you get a clear picture of the main components of a deal: risks and how to assess and mitigate them; short and long term growth opportunities; trends and numbers.

 

Advice for sellers

Be more upfront about your numbers and risks, and what it really takes to manage the business, and provide good after sale support. Focusing on the long term perspective, and really helping your buyers, rather than simply trying to get the deal closed quick every time, will help you get repeat buyers, good deals, and even higher prices.

The three businesses in order as mentioned:

Business 1: TopTool Advisor $16,500

Business 2: Advertising business $64,500

Business 3: SaaS business $75,000

To find about more about how Domain Magante can help with your business sale, you can submit your site to see if it qualifies for direct acquisition. Domain Magnate is always looking for content businesses and likes to close deals quickly and professionally, and can often give you an offer and start a deal within days.

Alternatively, If you have a question on a specific listing you can reach out via Flippa. 

 

 

Seller interview – All My Friends Are Models

Seller interview – All My Friends Are Models

This week at Flippa, I caught up with Sasha Benz the owner of All My Friends Are Models, an online publication that is currently for sale on Flippa. In the video below Sasha talks about the power of the brand, the business’s success to date and how a publication like this makes money. We also touch on the opportunity for prospective buyers and how they could take this business to the next level. 

Flippa Seller Showcase – RomperJack

Flippa Seller Showcase – RomperJack

This week, we spoke with Justin Clarke the founder of RomperJack. RomperJack sells romper suits for men and the business was established after Justin discovered an opportunity and niche market via a Kickstarter campaign. Since then, RomperJack has hustled and exceeded all expectations, with annual revenues of $594,000. Romerjack is currently for sale on Flippa

Check out the full video below.

Seller interview – Business selling cremation urns and jewellery

Seller interview – Business selling cremation urns and jewellery

Looking for an established business, in a booming industry with monthly profits of $38k? We recently sat down with the Asha Martin, the founder of an eCommerce and wholesale business sells cremation urns and jewellery worldwide. In its 12 years in operation, the business has continued to grow and evolve. Their pets category which includes urns, keepsake pendants and tags, is currently experiencing significant growth. 

Asha started a funeral products business and was inundated with requests for urns and cremation jewellery, seizing a gap in the market. What does it sell?

The business sells funeral accessories and memorial books, cremation urns and keepsake memorials. Their collection can be used for adults, pets and includes a selection of biodegradable urns for the environmentally conscious. 

Interview with seller Asha Martin 

What is your background and why did you start Life Cycle Urns?

At the age of 23, I started my first own small business as a furniture upholster. A year before selling the upholstery business I started the funeral products business. The business first opened as a retail online store. It grew steadily over the first few years and soon enough I added B2B wholesale sales. 

We kept getting requests for funeral urns and cremation jewellery. The funeral homes wanted better quality products at cheaper prices. There are only so many times you can hear the same request over and over again before I thought RIGHT, I’m going to find a way to make it for you!I set about designing a range of different funeral products which we continue to have made at our factories in India and China to this day

For many, this industry will be unfamiliar. Tell us a little about the industry and why people choose Life Cycle Urns?

We operate from a medium-sized warehouse with upstairs office. We hold bulk stock of over 130 different types of funeral urns for ashes and jewellery that has a hidden void for storing ash. Cremation jewellery is very popular, we sell thousands of pieces a year. 

Our company has grown and gained momentum over the years because of our constant focus on supplying high-quality products, great customer service and shipping out orders at lightning speed.

How does the business make or acquire the product?

Over the past 12 years, we have formed trusted relationships with our factories in India and China. Its first name basis stuff and that’s the way we like it. Having good communication with our factors is so important, otherwise, it would be very difficult to manage. We have independent QC on the ground in each country to check each other which means we get the high-quality finish we are after.

 Who are your paying customers?

We supply a range of different customers from the general public via our retail eCommerce store, funeral homes, pet crematoriums, cemeteries, crematoriums, jewellery stores, online stores. We are also about to start supplying a US wholesale funeral products distributor which is very exciting. The market in the US is ginormous compared the to Australia to the potential for things to explode over there is unreal.

How have you acquired customers to date? Where do they find you and why do they use the service?

Our main way of acquiring new customers has been a combination of direct mailing our catalogues, website SEO and trade shows.

What are the biggest challenges in this business? What would I want to know if I was starting this business from scratch?

The biggest challenge is keeping track of stock and manufacturing all of the different lines we carry and supply wholesale. Some weeks certain products just fly out the door like hot cakes and we can’t keep up.

What do you think you have done really well to date? What have customers been really happy with?

I am most proud of our range of exclusive designs. Seeing these items sell really well and having happy customers who buy them regularly really is a pleasure. Our customers have come to rely on us for being able to provide them with high-quality funeral products and the fact that we delivery so fast just makes the service so much better

 What is your best seller?

We have a number of best sellers. Our range of premium cremation jewellery and also our stainless steel cremation jewellery sells really well. Our pet crematoriums love these items and buy large amounts regularly from us. They are small and cheap to ship so I like it when the jewellery sales come rolling in.

Where do you distribute to?

We distribute Australia wide which is our core market. We also distribute to HK, NZ, USA, UK and Canada.

Why do I want to sell if you love it so much?

I’m a creative, this business is built now and is ticking along nicely. I need to build and create something new. If I’m not learning, I’m not living life to the fullest. This is a brilliant industry, the people are warm and easy to deal with. 

Seller interview – Romperjack

Seller interview – Romperjack

They followed a Kickstarter campaign and beat the competition at their own game.

Every now and then we come across something truly unique. It’s the uniqueness that captures the hearts and wallets of consumers making what was a clever idea into something highly successful. Below we interview Justin the founder of Romperjack which was founded in 2017 and since then has experienced incredible growth. They’ve tapped into a fashion niche and from their strong beginnings as a men’s only fashion line they’ve successfully expanded their footprint. 

The business sells romper suits and was established after seeing a Kickstarter campaign. They hustled and have exceeded all expectations, with annual revenues of $594,000.  

Interview with the Founder

You’ve built an impressive eCommerce business. How did it all start?

We came across a campaign trying to raise money to launch male rompers.  The Kickstarter campaign had a goal to raise $10,000 in 30 days. They surpassed this goal instantly and were able to raise $350,000 in just 3 days.  We instantly realized this was going to be very successful. So, we quickly went to work to launch our own brand with an aim of beating them to market. Romperjack was born. 

Your business is built on creative genius and quality manufacturing. Tell us about how it all comes together?

The creativity of our brand really comes from our customers.  Every style we design and decide to launch is voted on by our customers.  It’s the perfect product-market fit for us! We have found some really great manufacturers overseas that are extremely patient with our focus on quality.  They always go above and beyond for us and make everything just right before going to full production with new styles. 

The audience response is something most companies would dream of. Why do they engage / what is your ‘secret sauce’?

Our audience really engages well (with Romperjack) because the products we design and sell are something they have never seen before.  80% of our buyers are LGBTQ and they are the kindest and most supportive audience. We really care about our followers and we always make sure to share quality content and respond to all of their comments.

A company like this is reliant on a team of fantastic marketers, designers etc. How is the team structured?

Actually, this company only has 2 people that actually do the marketing and designing.  We found a way to make marketing and designing simple and make it run like an efficient well-oiled machine.  A lot of the time, designs are sent to us from our customers or influencers and we kind of just roll with them. It makes it super easy for us.

You are moving on to a new passion project. Why are you leaving such a great business and what are the opportunities for accelerated growth?

Yes,  we are moving on and we are sad to let our baby go, but we have a brand new exciting company that needs a little jumpstart.  We started a company called Whiz Tutor. Whiz Tutor is a mobile app and web app that allows students and parents to book on demand local in-person tutors anywhere, anytime. We need funds to boost this company and to take it to the next step.

The good news for the new owner is that Romperjack has so much potential and there are so many ways you can take this company to the next level.  First, is to offer our products to customers in other countries like Brazil. We have more Brazilians visiting our website than anyone else. Second, Romperjack has had offers to go into retail stores but we didn’t have the money readily available to get a large enough inventory order at the time. Third, is to market our products to other interested markets, we have really only focused on the LGBTQ market to date.

It would seem you are dependent on social media to advertise. What kind of risk is there in such a dependency?

Actually,  social only makes up 45% of our sales.  We have a lot of organic and direct customers.  Meaning they search for the rompers or jumpsuits on google and we pop up.  Not only do we show up on PAGE 1 of Google, we show up on PAGE 1 SPOT #2. Which many companies never make it to this level, Romperjack has amazing SEO power.

What does the competitive arena look like? Who do you worry about at night?

We really only have one 2 competitors: one is RompHim “they are the original company that launched on Kickstarter”  and the second is Zesties. Zesties is a bargain low-quality brand that is sold on Amazon.

Romperjack is focused on selling premium rompers and jumpsuits that are actually stylish.  If you actually look at these companies style you wouldn’t even catch yourself dead in one. So many of our customers have said they returned their Romphim and bought a Romperjack instead. Plus, competition is good!! It keeps us striving to do better and to continue to give our customers an amazing product. 

A smart businessman once told me “if you don’t have competition you are either a complete idiot and no one will ever buy what you are selling or you are a complete genius!”