When I first started buying web properties on Flippa I thought that simply applying a bit of marketing would be the winning ticket to improve their earnings. However, over the course of 4 years and and a number of transactions, I found out that that wasn’t the best model for me.
Having experience with influencer marketing and traditional content marketing, I tested a lot of different new businesses. In testing a handful of growth tactics on multiple new businesses over the years I discovered a few really important aspects. Before diving into the findings, it’s important to mention that everyone operates businesses differently. If you have a specific skillset or can hire someone that’s an expert in marketing to grow a brand new business, it’s definitely worth trying. In fact, it can be easier for many operators I’ve met that are experienced in branding and growth marketing.
Data Is The New Oil
When buying a brand new business on the Flippa marketplace you will need to set up a go-to-market strategy and standard operating procedures (SOP). This will allow you to plug and play with contractors and other experts to grow the business. As the owner operator of the business, you need to nail down your three P’s:
Once you have your operations set up, the biggest difference between an established business and new business in this day and age is data. Data is valued more than oil and should be a consistent focus of your business. The primary issue with buying a new business (if you aren’t already operating in that niche) is that you have zero data.
As an example, you have just purchased a beautiful new car without fuel in the gas tank to reach customers or generate revenue. Many operators now are turning to Facebook ads to begin to collect data as quickly as possible. They’ll post an engaging post on Facebook about the new business, promote that post, and then target everyone that has engaged with that post with their businesses ads.Data is valued more than oil and should be a consistent focus of your business. – @stvmcg Click To Tweet
If you aren’t familiar with running Facebook ads, there are plenty of fantastic advertising agencies and consultants out there that can help. However, there are exponentially more new, so-called “experts” that will have just graduated from an online guru’s Social Media Marketing Agency (SMMA) course that will charge $2,500 to $5,000 as a retainer and may not deliver. Be very cautious when looking for a consultant to operate ads.
How To Quickly Grab Data Without Ads
One of the key takeaways I’ve learned from buying businesses is that building a following on social media is the fastest way to collect data for both new and old businesses.
Similar to how operators are promoting a Facebook post and then promoting their ads to anyone that likes that post, followers are the same. If you have just bought a new or established business, I’d recommend immediately starting a Facebook, Instagram, Twitter, and YouTube channel for the business. These platforms will allow you to vacuum up followers and market to them.
This is how social media influencers launch their own brands. They spend years building a large following on social media and then promote organically to their audience. This has been called the “audience first approach” by the well-known YouTuber Casey Neistat. Once these influencers have driven thousands (in some case millions) of their followers to their business, they have collected enough data to really turn to traditional paid marketing and advertising. I’ve followed how influencers have run their businesses very closely over the last few years and it is definitely the future of data driven marketing.
Once you’ve setup your social media channels, begin posting news topics in your niche and engage with thought leaders in your space. Ask the thought leaders for interviews and begin sharing as much content as possible to build a small following. This process of collecting data is free and extremely valuable to a brand new business.
Once you’ve reached 1,000 followers on each of your platforms or one primary one like Facebook you can begin to advertise to these followers. Facebook even allows advertisers to use something called Lookalike audiences where you input 1,000 customers and it generates 100x potential customers you can advertise to who are similar to those already following you organically.
Running paid ads to followers is a shift in the business. Organic promotion should be a priority for 3-6 months beforehand in my experience. Learn from engaging with your followers on social media and ask them what they like about the business. Constantly ask for testimonials and other content that will help drive more followers and customers.
The Key Benefit To Acquiring Established Businesses
The key benefit, as you may have guesses already, for buying established businesses is customer data. Most established businesses have already set up their social media profiles and have built a following. In most cases, there will be overlap with customers and followers at this stage which is extremely powerful for paid promotions.
Once you’ve purchased an established business on Flippa, similar to new businesses, you will need to nail down the three P’s and ask for the standard operating procedure from the owner. This will give you a full picture of the business and show you where the holes are.
I’ve bought businesses in the past that have had 20,000 customers and emails had not been sent to them for 6 months. This is an example of a massive gap in their marketing leading to an easy, instant opportunity. Within a few days of discovering the lack of email communication I partnered with a business in a similar niche and we sent out emails promoting each other’s products with commissions for sales.
Evenly matching their email list of 20,000 customers, I was able to almost immediately make half my investment back by doing a quick and valuable promotion to the virtually untouched email list. This affiliate based partnership is something operators do all the time to boost revenue for businesses and I like to do this with all new businesses I buy through Flippa.
Data is the most valuable piece of any business as it can be used to scale your business quickly. There are ways to collect data for both new and established businesses on Flippa. I’ve found that buying an established business is much easier and less time intensive, but I’d also say that buying a new business has actually yielded more learning. In my opinion, buy one of each and see which one you prefer. Then, focus on moving forward in the best way for you.