Replacing Your Income by Acquiring an Online Business
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The landscape of online business acquisitions continues to evolve, offering unique opportunities for those seeking financial independence.
Jaryd Krause, a prominent online M&A advisor shares his journey from plumber to successful digital entrepreneur and wealth creation strategist.
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Journey to Digital Entrepreneurship
Jaryd’s path began unconventionally in 2015 when frustrated with his plumbing career, he sought ways to make money online. After attempting to build businesses from scratch, including a travel blog and dropshipping store, he discovered a crucial statistic: 90% of startups fail.
This revelation led him to pivot towards buying established online businesses instead. His first acquisition, a $15,000 membership site for wholesale suppliers, marked the beginning of his journey into digital business acquisitions.
Strategic Approach to Online Business Acquisition
Jaryd emphasizes several key considerations when approaching online business acquisitions
- Investment Brackets and Strategy
- Under $20K: Considered more of a startup investment with higher risk
- $20K-200K: Cash purchases are typically preferred at this level and focus on operator-level involvement
- $200K-500K: Potential for leverage, shift towards owner/CEO role
- $500K+: Recommended you delegate operator roles at this level and owner oversees operations
- Risk Assessment and Capital Preservation
Jaryd emphasizes Warren Buffett’s principle: “Rule number one: don’t lose money. Rule number two: refer to rule one.”
He advocates for:
- Prioritizing businesses with minimal risk and proven track records
- Considering higher multiples for established businesses to reduce risk
- Looking for opportunities with growth potential while maintaining stability
Building Generational Wealth
Jaryd’s philosophy extends beyond just online business acquisitions. He advocates for what he calls the “infinite loop of wealth”:
- Using online business profits to invest in real estate
- Leveraging real estate equity for further business acquisitions
- Balancing fast-growth online assets with stable real estate investments
- Creating a diversified portfolio for long-term wealth creation
Advice for Aspiring Buyers
For those considering entering the online business space, Jaryd offers several key insights:
- Don’t underestimate business size differences – a $5K business is not comparable to a $50K business in terms of stability and risk
- Consider your life vision and timeline when choosing investment size
- Focus on preserving wealth while seeking growth opportunities
- Build resources before attempting philanthropy or impact initiatives
Connect with Jaryd
For those interested in learning more or working with Jaryd, find him at the following:
Website: https://buyingonlinebusinesses.com
LinkedIn: https://www.linkedin.com/in/jarydkrause
Email: [email protected]
Sell Your Online Business With Flippa
Access expert guidance and the technology you need to list, market and close your deal.
400,000+ Weekly Active Buyers
20+ Multi-language Brokers
Seamlessly Negotiate and Receive Offers
Integrated Legal, Insurance, Finance and Payments
Nick Chi spends his time writing and connecting with Flippa's audience through the Daily Newsletter, Humans of Flippa podcast, and Flippa's social channels.
He loves connecting with interesting entrepreneurs and learning about what makes great businesses, drawing inspiration from each conversation to help the Flippa community thrive.
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