Avoiding Costly Mistakes in Business Dealsntent with Jaryd Krause

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Jaryd Krause and Daryl Urbanski discussed the impact of COVID-19 on their businesses, emphasizing the importance of acquiring digital assets such as email lists or YouTube channels for traffic and lead generation. They also shared insights on buying and selling businesses, highlighting the need for understanding market fluctuations, reducing key person and personal brand dependency, and having financials in order. Daryl Urbanski and Jaryd Krause also discussed valuation and acquisition strategies for online businesses, including identifying the right business to acquire and scaling for profit.

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Episode Highlights

Changes in the online business industry during and after COVID-19, including increased valuations and a shift to a buyer's market

  • Jaryd Krause shares insights on building sustainable income in a post-COVID world.
  • Daryl Urbanski and Jaryd Krause discuss the impact of COVID-19 on their businesses, with Krause highlighting the increased demand for online businesses and e-commerce brands.
  • Krause notes that the pandemic has led to a surge in ego and money in the market, with micro and large private equity firms competing to acquire e-commerce brands at high multiples.
  • Jaryd Krause shares insights on the fluctuation of business valuations during COVID-19 and its aftermath.
  • Interest rates increasing and money becoming tighter impacts business sales, with a shift from seller's to buyer's market.

Buying and selling businesses, common mistakes to avoid

  • Daryl Urbanski and Jaryd Krause discuss buying and selling businesses, with Jaryd sharing his personal experience of failing at starting businesses and then buying existing ones.
  • Jaryd highlights common mistakes people make when buying businesses, including not properly researching the target company and not having a clear exit strategy.
  • Jaryd Krause advises on how to prevent acquiring a bad business investment by focusing on proving it's a bad investment during due diligence.
  • Daryl Urbanski highlights the importance of being able to walk away from a negotiation and knowing what options work for you.
  • Daryl Urbanski and Jaryd Krause discuss common mistakes people make when selling their businesses.
  • Key mistakes include personal brand dependency, key person dependency, and not having financials in order.

Buying and selling businesses, with focus on valuation multiples, payment terms, and the process of taking over a business

  • Daryl Urbanski and Jaryd  discuss types of online businesses, including media, e-commerce, and recurring revenue businesses.
  • Jaryd Krause highlights different types of businesses with recurring revenue streams, such as membership businesses, SaaS products, and media businesses.
  • Daryl Urbanski asks about the average multiples for these businesses, with Jaryd Krause explaining that it depends on factors like scalability and the lease in place.
  • Jaryd Krause Multiples for businesses vary depending on industry and quality of the business.
  • Daryl Urbanski: Ideally, a 36-month plan is needed for post-COVID business acquisitions, but 12-18 months is common.
  • Seller's involvement in the business depends on its size and price range.

Legal considerations for buying and selling businesses

  • Jaryd shares insights on legal considerations for buying and selling businesses, emphasizing the importance of understanding the legal aspects of real estate and online business transactions.
  • Jaryd discusses the importance of lawyers in real estate transactions, particularly for businesses with intellectual property or contracts to transfer.
  • Krause highlights the need for lawyers to verify ownership of assets, such as domains, traffic analytics accounts, and Facebook Ad accounts, in larger transactions.

Acquiring businesses for passive income

  • Daryl Urbanski and Jaryd Krause discuss strategies for buying businesses and replacing income.
  • Krause shares his experience of starting as a plumber and acquiring businesses for passive income.
  • Jaryd Krause shares strategies for acquiring businesses and replacing income.
  • Acquire and replace income, then use business to acquire larger assets.
  • Merge acquired businesses, acquire expenses, and sell for profit.

Assets and systems in online businesses

  • Daryl Urbanski and Jaryd discuss the assets of an online business, including recurring customer base and traffic sources.
  • Daryl and Jaryd also consider the potential risks of relying on external platforms or servers for an online business.
  • Digital assets for E commerce brands include courses, email lists, YouTube channels, and sales channels.
  • Daryl Urbanski: Business value lies in acquiring a system that produces a result, such as lead generation, conversion, and client fulfillment.

Digital trends, business opportunities, and habits for success

  • Daryl and Jaryd discuss the future of digital atmosphere, VR, and the metaverse.
  • Jaryd is bullish on the potential of the digital atmosphere for businesses, citing the increasing attention and focus on virtual environments.
  • Daryl Urbanski is more cautious, expressing concerns about the impact of the digital atmosphere on mental health and preferring a simpler, more analog lifestyle.
  • Daryl Urbanski asks Jaryd about habits and behaviors for successful business owners.
  • Jaryd emphasizes discipline, focus, and resource allocation as key skills for entrepreneurs.

Time management and effective use of 24 hours a day

  • Daryl Urbanski quotes Arnold Bennett's poem on time management, emphasizing its preciousness and daily miracle nature.
  • Urbanski encourages listeners to live each day effectively, spending time on health, pleasure, and spiritual evolution, while avoiding waste.
  • Daryl Urbanski and Jaryd discuss the importance of time and finding a good business to invest in.
  • Krause shares his experience of failing twice in business and the lessons he learned from those failures.

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