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. 

 

 

Flippa Pricing Update – Reduced Listing Fee of $15

Flippa Pricing Update – Reduced Listing Fee of $15

This month Flippa has again demonstrated a commitment to building out a frictionless sales experience with the world’s largest network of buyers. Did you know that 4250 new verified buyers join Flippa each month?

Adding to our Quickbooks online integration launch last month we’ve added a new Google Analytics integration, Non-Disclosure Agreement functionality for higher value listings and free syndication to a network of partner sites.

 

Google Analytics Integration

With one-click connection to GA, business owners can now publish traffic data on their listing and in-turn assist buyers with verifying the health of a business.

How does it work?

 

Step 1

Simply choose to list your website or online business with Flippa, step through our simple listing builder and choose to connect your Google Analytics account. You’ll be asked whether you wish to connect your traffic data. When prompted, log in to GA and choose the account associated with your website.

Step 2

Once you have connected and launched your listing, a pop-up box will be visible to buyers that your business has connected your site traffic from GA. 

 

 

There will also be a table displaying your websites monthly page views and number of users to the site. 

 

Non Disclosure Agreement for Higher Value Listings

High-value listings can now protect sensitive information with a simple to use Non-Disclosure Agreement.

 

Buyers that want access to key confidential data, like your business name or profit & loss statement will now have to register as buyers, create a profile, go through Identity Verification, accept the NDA terms and finally, identify why they are interested in your business. This replaces the old NDA functionality on Flippa.

 

Free Syndication

Flippa will now syndicate your listing to multiple directory businesses for free. Simply ask your account manager. This is available for listings over $50,000 only.

 

So what is the new pricing scheme?

It’s simple. You pay a listing and a success fee. The listing fee is due on all listings and the success fee is payable when you sell.

 

All listings, regardless of type, size or location, are charged at a $15 per month listing fee. While we are the only true marketplace and platform to buy and sell a business this also makes Flippa less expensive than the mainstream directory websites.

Of course, you can choose to cancel your listing at anytime.

As it relates to Success Fees. These are payable by the seller or designated owner of the account. These fees are now variable and are based on your final selling price. For further detail, refer to success fees

 

The breakdown:

If you sell a website, domain, app or business between $1m to $5m your success fee is now 5%

If you sell a website, domain, app or business between $500k to $1m your success fee is now 7.5%

If you sell a website, domain, app or business between $1 to $499k your success fee remains at 10%

 

Finally, Flippa also partners with a network of brokers. Instead of owning the sales process yourself and working with a Flippa account manager, you can choose to work with one of our network of partners. These brokers will manage the sale for you and you will still get the benefit of the Flippa platform and the world’s largest network of buyers. If you do choose to partner with a broker the success fee is 15%. This is shared between Flippa and the broker.

 

We currently do not charge buyers for use of Flippa.

 

We are committed to building out a frictionless sales experience and we think we are making good ground. That said, we are always looking for feedback so if you require clarification or would like to provide feedback feel free to get us on [email protected].

 

Sold on Flippa: A SaaS business that builds your Instagram following

Sold on Flippa: A SaaS business that builds your Instagram following

With 800m users worldwide, Instagram is a critical marketing medium for small business. Brands can tell stories, share customer stories and start a dialogue and all this leads to engagement and ideally paying customers. Pushgram, a SaaS business that sold on Flippa helps businesses and users grow their Instagram community and increase engagement with their brand.

 

What is the product?

Pushgram is marketing software that helps small businesses on Instagram by automating activity including comments, likes and follows. It’s designed to boost interactions, engage with users and to connect with their target audience. Rather than manually carrying out such activities and searching for your target audience, Pushgram does it all for you.

Pushgram charges its users a monthly fee and has three different pricing plans based on the number of ‘actions’. This differs to most competitors who charge based on time. ‘Actions’ are the tasks the software undertakes on its user’s behalf. When a users Pushgram account likes a picture, comments, follow or unfollows a user, each of those actions is counted as 1 action.

 

What makes this such a popular product?

The service is reliable, effective and reasonably priced. If users settings are optimized and they’re using likes/comments/follows and unfollows, they can expect to gain as much as 75+ real and targeted followers a day. It mimics a user’s natural behavior.

Pushgram also works from a branding perspective. It can be set up so that it engages with audiences that are interested in your brand. This is particularly important for users and business that rely heavily on Instagram as a sales funnel. It’s also safe to use.

Customers are not breaching any Instagram rules by using Pushgram. Instagram has terms and conditions around selling or purchasing fake followers and likes but not for this type of software. The increased engagement that you gain from Pushgram is organic, from real users with real accounts. It is an easy solution to an otherwise manual and arduous task.

 

Who is the Pushgram customer?

The Pushgram customer is individuals and users who use Instagram for business and want to increase their following and grow their brand.

 

What made this business so appealing to prospective buyers?

The business has been operating for almost three years and has annual profits of $40,000. The business has a low time commitment to run, with the previous owner spending a few hours a week replying to customer emails and engaging the assistance of a developer when necessary. The business is well set-up, has an established customer base and a social presence of over 10k.

How did Flippa assist with the sale?

Flippa carried out a direct marketing campaign for Pushgram which included an interview with the seller which was written up and sent out to our database in a marketing email. From this, a buyer came forward and made an offer. Pushgram’s listing had over 648 views and the owner utilized Flippa’s escrow service which guarantees safe and secure payment.

Sold on Flippa: A SaaS business that integrates Dropbox to servers

Sold on Flippa: A SaaS business that integrates Dropbox to servers

DropDAV is an 8 y/o SaaS business that connects servers to Dropbox for a monthly fee. 

 

What is the product?

The product connects Dropbox to businesses IoT devices that don’t have first-party clients. For those of us who are unfamiliar with the Internet of Things (IoT), it includes a wide range of software and items but in this instance, mainly things like file servers and legacy devices. First-party clients imply that the business does not have an in-built provider to authorize credentials.

 

Essentially, Drop Dav safely connects businesses software or file servers to Dropbox, so that items can be stored safely and securely in the cloud.

 

What makes it such a good product?

DropDAV lets businesses and users connect their Dropbox flows deeper into their tools, allowing them to be more productive. The previous owner has not needed to invest in the product or carry out any upgrades since its inception in 2011. Since then, this simple but highly functional software has continued to work without any customer issues, creating a steady revenue stream for its owner.

 

DropDAV operates in a niche and it hasn’t had a credible competitor since 2012 when their direct competition closed down. This is due to the challenging nature of getting a WebDAV server implementation correct. Thus, DropDAV has been tuned for the most popular WebDAV clients and currently dominates this market. 

 

DropDAV charges their customers $5 per month, making it a reasonable and easy purchase for customers to make.

 

Who is the DropDAV customer?

The DropDAV customer is a business or individual user who wishes to seamlessly connect their file servers to the cloud sharing platform, Dropbox.

 

Why was it so appealing to prospective buyers?

DropDAV has a history of being reliable, fast and secure. It has served almost 100,000 users 5,000,000+ requests, over 256-bit SSL and 10-Gbpsservice with 99.9+% uptime. It also works across multiple apps including many with custom implementations.

 

DropDav prices haven’t changed since it started in 2011, presenting an immediate opportunity to increase revenue by raising its prices. Despite the reasonable price point, it has been generating over $14,500 in annual profits.

 

How did Flippa assist?

Flippa now has over 120,000 registered buyers representing purchase intent of just under $1.2bn. This combined with marketing efforts meant that DropDAV was targeted at Flippa buyers looking to purchase a SaaS business below $50,000. DropDAV’s listing had over 1,260 views and the owner utilized Flippa’s escrow service which guarantees safe and secure payments.

 

6 security best practices leading up to a sale

6 security best practices leading up to a sale

Author bio

Dan Fries is a freelance writer and full stack Rust developer. He looks for convergence in technology trends, with specific interests in cybersecurity, micro mobility, and smart cities. Dan enjoys snowboarding and is based in Hong Kong with his pet beagle, Teddy. His website is danfries.net.


 

If there is any one thing that is absolutely essential to surviving the eCommerce landscape in today’s world, it’s data security.

 

Too often online businesses overlook data security by focusing more on marketing strategies to gain more sales, but the truth is that data security can have a huge effect on your sales as well (not to mention your reputation).

 

“Roughly 60% of online customers today say that they are wary of data breaches, and if they find businesses with compromised payment systems, they’re simply going to find somewhere else to spend their money.”

 

The most successful businesses right now are learning to incorporate the best security practices that lead up to a sale, and not just security that is a byproduct of their organization. With that in mind, here are the top security practices to follow leading up to a sale:

 

1. Migrating Servers & Content

It’s no secret that content gets migrated all the time, as part of a transfer of ownership or simply for a site redesign. Often a business starts with a server provider that is basic and unable to keep up with speed and performance as the company expands its online audience.

For example, many businesses struggle to choose between a website or blog and then start to outgrow the bandwidth and limitations provided. Making the transition to a larger, more reliable server is always a good thing for growing businesses. Unfortunately, it also comes with some significant security risks.

Imagine losing some or all of your important data in the transition. Or imagine personal customer information getting breached during the migration. As a result, you need to make sure security helps sales by making every migration to a more secure server, where it can be one hundred percent safe.

Microsoft’s Storage Migration Service can you help make the transition the most effectively and with as few of security vulnerabilities as possible. Once all the data is transferred, you can then rest more soundly knowing the information is now stored on a more reliable host.

 

2. Controlling Employee Permissions

The CISO or CSO of an organization is not only a guardian of personal data and keeping the company and its technological procedures safe, but is also a curator and custodian of the overall brand.

Security teams should have their hands in every single detail of day-to-day operations, with the goals of defending company assets, meeting market criteria and compliance, and implementing the right technologies at the right times.

Like a ranking order of a military, your employees should also have different permission levels when it comes to helping generate sales. Not every employee should have the exact same access to your systems.

Only the most trustworthy people should have access to the most sensitive information. Apps like Square Employee Management can constantly let your IT team adjust and monitor permissions.

Keeping control of your back end prevents unnecessary leaks and breaches, leading to safer day to day operations. Furthermore, it becomes a domino effect as it builds trust with your customers, knowing you are reputable and take security seriously, knowing they can trust their personal information with you.

 

3. Integrating to the Cloud

There is a reason why so many organizations have moved to the cloud: the cloud has allowed information, and especially sensitive data, to get stored more securely.

Of course, this is a gigantic element of many businesses that care about safety and security. So if your business has not already made the transition, the cloud needs to be your answer if you want to cut costs and improve security. More than 70% of companies in the U.S. now use some form of cloud software — don’t be left behind, and left vulnerable.

Sensitive information that is stored on a computer is no longer the best method. If the computer gets hijacked, lost, or stolen, then everything is compromised. Cloud-based data is encrypted, making it extremely secure and reliable.

 

Are you looking for a premier cloud service? Dropbox, Nextcloud, Google Drive, iCloud, SpiderOak and OneDrive are among the most popular.

 

4. Compliance and Data Privacy

Due to the massive amount of information that is stored and transferred digitally these days, requirements to keep customers information is not only a thing that any company should do to remain ethical but also a legal matter.

More of the developed world is creating compliance procedures and other regulations that businesses must follow. So you’re also supporting and following the law when you act compliant.

Online forms, for example, are a great means for collecting customer information. However, you need to adhere to certain procedures in order to remain compliant. GDPR and CCPA are two examples of compliance measure that are implemented to help protect consumer privacy.

Depending on the industry you operate in, you may have additional measures you need to take. For example, an insurance company has to notify customers what personal data is being tracked and what is not.

Companies that work in the healthcare industry must stick to HIPAA compliant forms and utilize security practices provided by HiTRUST. Failure to secure sensitive data can end up costing a company heavily, including potentially the closing down of the business permanently. The fines can range from $100 to $50,000 per violation, depending on the violation and the severity of the security breach.

 

5. Implement Employee Security Protocols

What you can control the most about your sales is not external, but rather internal matters. In addition to many of the other security practices that help build a client vs. customer trust, organizations much also build management vs. employee trust where you know every single employee, regardless if they are IT or not, are mindful of the best security practices.

 

Even salesman need to understand the basics of cybersecurity in order to contribute to the overall growth and well-being of the company.

Questions you can ask yourself include:

 

  • What are the best practices for accepting credit cards online?
  • What changes in the online payment technology are evolving and how are you adapting?
  • What are the latest security threats and vulnerabilities that target customer credit card and bank account information?

 

All of your employees need to understand that they are responsible for maintaining security protocols in every interaction. According to a study done by Kaspersky, 46% of the businesses surveyed stated that data breaches only happened after irresponsible employees did not follow security protocols. If there isn’t a protocol in place, this is the best time to implement one.

 

6. Transferring SSL Certificates

SSL certificates are a website’s best friend and when it comes to business practices you need to have one in order to expect any reasonable and logical person to entrust you with their personal or financial information.

When a domain gets transferred it must remain secure either with an existing SSL certification or by setting up a new one. In the first security practice section, we covered migrating servers. This is where it becomes applicable.

According to a report from AccuRanker, SSL is not only a ‘nice security feature’ but mandatory if you want to rank well on Google and other search engines. Google now has mandates that require all websites it lists as having to provide an SSL.

Rankings sometimes get impacted negatively when an SSL certificate is changed or updated. It may result in a temporary drop in rankings for your business, although within a few days it should recuperate. Your web host can also help you troubleshoot the problem if it’s still affecting rankings (and therefore sales).

 

Conclusion

Wrapping everything up, we can see that:

  • eCommerce security must be one of your top priorities.
  • Migrating data can put your data at risk.
  • You need to train your employees on proper security protocols.
  • Not all employees are the same; limit their access and permissions.
  • The cloud is great but can be dangerous if not properly secured.
  • There might be more security compliance codes you need to follow.
  • A website MUST have an SSL certificate for any financial or customer sensitive information.

 

In order to keep sales strong and build up trust with customers, consider all of the security practices listed above and implement them immediately if you have not done so already.

 

While it may seem trivial at the moment, it is better to address these issues before something and/or someone messes up. Unfortunately, the human element leads to too many cyber breaches each year. You can work on reducing that in your company through proper security protocols and training. Now is the time to make sure your data is secured properly.