How Boomn’s portfolio scaled to $40m in annual revenue with just 11 brands

Zach Johnson

Dylan Carpenter

Colin Mcguire

Episode
93
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Colin Mcguire

,

CEO

Boomn
Apple PodcastsGoogle PodcastsLive on SpotifyLive on Youtube

Colin is the CEO of Boomn -- an 8-figure eCommerce brand portfolio. Colin leads a team of 25 building and growing eCommerce businesses. Colin has been featured in Forbes, Inc Magazine, and many other top publications.

Episode Summary

TAKE AWAYS

  • How Colin made the jump from slinging services to building an equity portfolio of ecommerce brands on the rise
  • How Colin negotiates 6 month royalty buyout agreements from his clients… aka the Mr Wonderful of Ecommerce
  • How Colin and his team create high converting ads with the exact same AIDA Formulas

RESOURCES/CONTACT:

Transcript

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Episode
93
Transcript

Colin (00:00):

You ultimately make it a lot easier for you to be successful in advertising when you have higher AOV and more margin to play with, um, for scalability. So when you're, when we're trying to advertise cheaper products, you have to be so much more better at advertising. And I like to say like work smarter hard, and it's really hard to make $30 products work with, you know, 10 to $15 margin, much easier to make, you know, $40 of margin work on a $58 AOV. I can look like a much better advertiser. So.

Zach (00:44):

You're listening to the rich add poor ed podcast, where we break down the financial principles that rich advertisers are deploying today to turn advertising into profit and get tons of traffic to their websites without killing their cash. These advertisers agencies, affiliates brands are responsible for managing over a billion dollars a year in ad spend. You'll hear about what's working for them today. They're rich ads and we'll roast their Epic failures and crappy ads on the internet with poor ads. Let's get into it.

Dylan (01:12):

All right, everybody, we're back in business with another episode of the rich dad, poor ed podcast. We've got your host, Dylan and Zach in the house. Zach. What's good. My man

Zach (01:21):

I'm pumped. This is going to be a great episode. This, this guy, this guy today's guest made the jump, you know, like there's so many folks that never make this jump. They just, they start an agency and they look up a decade later and they're just focused on getting one more client this quarter, one more client this month. Um, so yeah, man, I'm excited to chat with them on how he did it and how he did it so quickly. Right. So, yeah, man, thanks for, uh, getting today's guests on Dylan's is going to be a good one.

Dylan (01:54):

Yeah. All fricking pumped, man. I text this guy. That's how close we are, you know, Oh, I had to met, you know, this specific guests, maybe two or three years ago, he was speaking at an ice event. He was dropping knowledge bombs and it's got a, and we got connected, but you know, the one and only, um, calling McGuire, he is the CEO over at Booman and eight figure e-commerce brand portfolio and call them leads a team of 25.

Zach (02:24):

Bowman does. Cause like I love that.


Dylan (02:27):

Yeah. So they grow e-comm businesses and he's been featured in Forbes, Inc magazine and tons of other top publications and shoot last year alone, they generate over 45 million of revenue for their clients and brands they partner with essentially. So I'm over here, sweating. We got the hype is real Colin. What's good. My man,

Colin (02:46):

You guys not be too, uh, excited to get into this with you guys. It's been fun.

Dylan (02:51):

Oh, it's going to even get better, man. I know you got some good stuff cooking in the kitchen over there, so we're going to open up the curtains and see what's over there. All right.

Dylan (03:00):

Well heck yeah man, but give everybody a little context of kind of who you are, what you're getting into, what Boo-Man does. So everybody has an idea of what they're getting.

Colin (03:06):

So yeah, I mean, you know, you, you laid it out pretty, pretty well there. Um, so when we started booming, our fourth birthday will be this year. Um, when, when we started Boo-Man the goal was to be a half agency, half e-commerce portfolio. Um, our, our approach has always been, um, how do I use other people's money to make myself, uh, rich and make more money? Um, and so we used client money, um, in our skills to basically essentially bank role and fund us hiring and building our own team internally, um, and very slowly moving towards an e-commerce portfolio model. So we run brands on a royalty basis and also have an equity brands in our portfolio. Um, my bio must've been a little bit old because we have about 30 people on a team. Um, and growing this year, uh, we have three main hubs, uh, Chicago, Kansas city LA, uh, we've got offices in each, uh, but our team's fully remote.

Colin (04:12):

Um, that just kind of happened by way of us wanting to work with the best of the best people. Um, and you know, but we have some small hubs where we get together and meet up from time to time. Um, but yeah, I mean, Booman, you know, we, we've grown quite a bit over the last few years. Um, yeah, I think we were one of the really early adopters to basically like rev share slash commission sales or, uh, uh, you know, relationships with clients. And that's really what got us over to us being a royalty based e-commerce portfolio and ultimately kind of bankrolled us being into an equity base, uh e-commerce portfolio. Um, but yeah, you know, we've, I've been even previous to Boo-Man actually, um, I was running, uh, viral cart ventures, which was a holdings company that I was using to build and flip e-commerce brands.

Colin (05:04):

So even before I started booming, I had actually built, uh, depending on how you want to say what, what, what was finished and what was not finished about 14 brands. And I actually sold 11 of them, um, like very, very, very early on in e-commerce, you know, really low exits, you know, I'm getting like 50 to 75,000 basically building like business in a box opportunities for people that, uh, wanted to get into e-commerce. Um, and then Connor got into the, the consulting side of things, helping, you know, traditional CPG brands that selling in brick and mortar to go direct to consumer online. And now we're here.

Dylan (05:42):

That's awesome, man. I want to talk about the jump from services to revenue base or loyalty model, not revenue based model, right. Let's slightly different. And then, um, now, uh, now on the equity side, so how did you structure the, um, was like basic model for you on the loyalty?

Colin (06:05):

Yeah, so it's, it's royalty, not loyalty. So just so everyone understands, if you ever watched shark tank, Kevin, Mr. Wonderful. He loves to do royalty deals. People go on that show and they're like, I want a hundred thousand dollars for 10% of my business. And then Mr. Wonderful says, how about, I'll give you a hundred thousand dollars for 6% of all of your sales, right? So royalty can either be like a per widget spiffs or per product spit. So if I send a hundred thousand, uh, you know, widgets that I have a $1 per widget royalty, then you have to pay me a hundred thousand dollars for selling and manufacturing, a hundred thousand widgets. And then the other way is percentage of revenues. Uh, typically it's on net revenue, not profit. Uh, so revenue and after discounts, uh, breakages, uh, after discounts and refunds and exchanges typically.

Colin (07:02):

Um, and that's how it works in the DDC model. So the way that we made the pivot, uh, there wasn't even really a pivot. It was kind of planned all along. Um, you know, just like I said before, when I was running an e-commerce portfolio, building smaller brands, um, but didn't have the funding available to me and knew that I wanted to build like a long-term team that I could go toe to toe with major, major DTC brands and ultimately disrupt the goal is to basically disrupt a space, which, um, I'm pretty confident we have one of those right now on its way, but the, the way that we transitioned was, you know, if you think about it, you know, if you're a good at running Facebook ads, if you're good at doing email marketing, if, you know, if you have a small team of freelancers that you're managing and you can essentially get paid $10,000 a month to do that work, you can essentially then afford to employ and work with and build systems and processes and refine your skills as a group together for $10,000 a month, maybe you add three, four or five more clients are starting to do 50, you know, $50,000 a month.

Colin (08:11):

Let's say, um, you can use that money in that savings to go and hire more people until your teams more and more built out. Um, and then eventually, you know, start saving enough money to build and, or buy your own brands. Um, or once you build out your team enough, which is what we did, we were able to start, you know, so we built cust. So at bloomin' we have, um, full customer and fulfill and operations in house. So we do all of our own inventory management. We have all of our own, uh, domestic customer service teams here in the United States. Um, and we also do fulfillment vendor management. And then in addition to that, we have all things related to marketing content production is here in LA. Um, we have, you know, media buyers on all major platforms. Of course we have a full design creative team.

Colin (09:02):

Uh, you know, we have copywriters email marketers, influencer marketers, you know, influencer marketing specialists, uh, social, uh, social media managers. Um, you know, we we're fully integrated, um, you know, project management and we used client money on the agency side to build our team to the point where we could start negotiating with these brands for a royalty, Hey, I will step in and run all of your marketing and all of your growth, including customer operations for let's say 10% recurring revenue. So the point where we're not in excellent timing, we've no one's nickel and diming you. So they were able to get rid of their customer service teams and multiple agencies, or we were able to get to the next level where we need to go and fully integrate our team into what they're doing. And when those deals get structured, it's typically, uh, either a sales commission service agreement, or you go the full royalty, uh, you know, you, you go the full royalty partnership agreements, uh, you know, uh, angle, which typically comes with a royalty buyout agreement.

Colin (10:13):

You know, these royalty buyout agreements, basically state that, you know, when, and if you decide to part ways you are typically paid a fee, you know, typically it'll be something like, you know, a fee equal to the last, the, the average of the last three months, time, six let's say. Um, and so then these fees, there are shotgun clauses in place. So if they get acquired, you know, they exit, they want to part ways in the relationship. I'm, I'm basically dedicating a lot of my team and have a lot of liability and employment liability in these brands as well. And so both parties are protected, um, from, from these agreements. So, um, that's kind of how we structured those deals and how we have aligned ourselves into, you know, doing royalty based off. I love the, also just the focus on the royalty model over sales commission, right? It's like sales commission is just another way to get cash, but the royalty buyout agreement allows you to build in some equity on your rev share deals. Right. And, um, there's all kinds of ways that like kind of agencies, you know, they, they get ecstatic about these revenue share arrangements, but they're just another way to like justify a retainer. And then the rule of large numbers kicks in and they're like, wait, what? We're paying you like 50 grand a month, like let's renegotiate, right? So your royalty buyout agreement is, um, smart. Yeah.

Colin (11:51):

I appreciate that. Not only do

Speaker 4 (11:54):

People love to renegotiate, but mostly people actually like to renegotiate when they feel like you're getting paid $50,000 a month for not providing enough value. And they're still having to hire as they grow and their expenses are getting larger without your expenses getting larger, you know, think about it. We're doing all influencer outreach, we're managing all social media, we're producing and shooting all of our own content. You know, we're doing all of our own media buyers. You know, we have our full suite of, we have, you know, we have a full design and creative staff that specifically specializes in content for D to C brands. Right. So every single month, like we get paid 250, $350,000 a month sometimes during like Q4 for some of our big brands. Right. Like, think about the fact that we're provide, like, there's nothing that these other brands have to do. Right. And so we're running, like we are a strategic partner in a sense that we're running their company with them and or for them alongside them. Right. And so they don't have to go and hire these other, uh, you know, the, these other roles in order to get there. Yeah.

Dylan (13:06):

What are some of the clauses that you put in place to protect yourself? Right. Because you are making those investments, um, which, you know, a lot of cases can be considered equity investments. Right. But you're getting it out of a royalty. So what, what are some things where

Speaker 4 (13:22):

Outside not necessarily there there's really no equity at play. Um, I mean, you can draft up a service agreement by the way. None of this is legal advice. I hope everyone listening, insults attorneys, and I don't want to end up, um, uh, you know, uh, on the news, but, um, you know, there, there's a lot of different ways to structure these deals. Uh, there's no one way that's right for anyone. Um, you know, when you have a more mature team and business model and more mature systems and processes, and, um, you know, you have the, uh, financial capabilities to work with attorneys that are really high level and actually have enough leverage to negotiate with these brands. Um, it, it's, you're playing out a little bit of a different level. Now. I think most of the people watching are going to be in like the earlier middle stages of trying to consider doing something like this.

Speaker 4 (14:19):

So we'll go like the service agreement route. I mean, you can write in shotgun clauses into an, a service agreement where if, you know, to, uh, to people part ways th th sorry, the two parties part ways, um, that there's some sort of fee involved. Um, and, uh, that's a really early way to get it. Now that fee can be calculated a number of different ways. I, you know, spoke to the ability of, you know, averaging the, the, the equivalent of the last three, the average of the last three months of payment, time, six, you're getting

Colin (14:52):

Six months worth of compensation based on how the last three months went. Um, there's also a lot of other creative ways to do the deals where it's just a flat fee, right. Um, those are sometimes a little bit more scary for a lot of brands when you're starting off with them small. Um, and also, you know, there's another way to just write it in. And it's just like, Hey, with written notice, you know, we have like, we're going to get paid for 90 days based on whatever revenue you do with, or without us. Um, when you're doing these types of service agreements though, um, one thing to note is, you know, an agreement is just an agreement between two people. And, you know, I can say F-you to anyone just like anyone else can say, after you to me, and you can go to a lawsuit. So, um, lawsuits are time consuming or expensive. They take much longer than most people realize, and our agreements are made to essentially be broken at some point in time. And so when you're doing these, make sure you're not just working with a low level attorney, who's drafting up very generalized languages, uh, or using generalized language and nothing specific enough. And, you know, there's there, you need to have a very, very, very well-built agreement, um, in order to pull, pull these off, otherwise you're ultimately unprotected you're you have a fake shield of protection. Yeah,

Dylan (16:18):

That's awesome, man. I feel like we'll have you back for a whole nother episode on, uh, just, uh, contract agreements, uh, when it comes to structuring it. I mean, there's, there's, um, there's art to it and it sounds like you really, you know, come up with some creative ways

Colin (16:34):

To, to really do

Dylan (16:36):

Differentiate yourself. Right. And like, um, you know, it's not just, you know, standard service agreement, so that's awesome. Congrats on that, uh, deal any rate again,

Colin (16:46):

I am, but calling when it comes to a portfolio of, you know, brands, how many can y'all, how many do you all have right now? And with y'all as you know, 30 little boom minions I'd like to call them what's y'all's bandwidth is. Yeah. Um, everyone on the team refers to people as boomers, which I don't like blue minions or boomers anyways. Uh, we have 12 brands currently. Um, we have, uh, two brands that we're in due diligence on acquiring currently. Um, and one that we're building, you know, I talked about the really, really, really long-term vision of, you know, using other people's money to, you know, cash flow or a team meeting, you know, maturing your systems and processes and moving into a royalty model where, you know, you scale up your revenues by, you know, uh, performing better with the group of people you're working on.

Colin (17:43):

Um, the next move for us is to, uh, build a category disruptive brand like you, Josh, from, from snow, Joseph, you know, Josh and all is that Shea like, you know, having a category, disruption in teeth whitening or oral care, um, you know, uh, in, in dog food, you know what I mean, all of these different, uh, plays that that's really what the, what the move is. So this year we have a big emphasis on building a DTC, um, condiment company. Um, the only like major DTC Economen company, um, right now is trust. In my opinion, um, 95% of condiments are purchased in store at grocery stores. The options are limited. There are high-end, you know, options available, but the flavors are limited. And so we're looking for that small batch handmade, our teas and all gourmet condiments and dipping sauces, direct to consumer, um, which we have been working, which I've been working on for the last like two years. Um, and it should be rolling out like pretty early this year.

Dylan (18:51):

Hell yeah, man. It's cool. I haven't met, I was kind of curious there, so we'll go back to the podcasts, but man, you know, we'd love to kind of dive into AKA the rich ad and what's working really good for you right now. So, I mean, what's your rich had in this world of digital marketing. Yeah.

Colin (19:10):

Um, the, the way that we're approaching, uh, Facebook and discovery ads. So whether it be Snapchat, Pinterest, Facebook is having, you know, a platform specific strategy for communication. So what we're doing on Pinterest and the way that users interact with that, uh, you know, social media platform is significantly different than Facebook and Instagram. So we'll talk about Facebook and Instagram specifically, but the, really the thing that we're doing really well, the strategy that's working really well from an advertising basis is number one, making sure that our average order value is $58 or more with the CPMs, um, with the CPMs everywhere. If you, you know, if you have a $25 cost per purchase, you know, you're still above a two row. Um, you know, so making sure like, you know, it started out like 52 and over the last couple of years, based on CPMs increasing and competition and conversion rates, like we always try to make sure that we're shooting for a $58 AOV.

Colin (20:14):

Um, and so that's one of the cornerstones of success for us on, um, things where advertising from the DTC space, because you ultimately make it a lot easier for you to be successful in advertising, um, when you have Ziar, uh, AOC and more margin to play with, um, for scalability. So when you're, when we're trying to advertise cheaper products, uh, you have to be so much more better at advertising. And I like to say like work smart, not hard. And it was really hard to make $30 products work with, you know, $10 a margin, much easier to make, you know, $40 of margin work on a $58 AOV. I can look like a much better advertiser. So that's number one, the number two thing is stop discounting and we're giving free gifts away. Um, you know, instead of, you know, we do have some clothing brands, which I know is a really popular space, lots of people sell hats and t-shirts, um, you know, when you spend $65 more, you unlock like a decal three pack and acoustics, you know, these decals costs 65 cents each, you know, landed in our warehouse in a cruisy cost, you know, 85 cents.

Colin (21:24):

And it's a great addition to a hat or a t-shirt or a hoodie whenever they're, you know, so we're, we're incentivizing people spending $65 more in order to unlock these free gifts from home free gift promos. Uh, no discount code needed, uh, automatically gets added to cart. Uh, those are the promotions that are working really well. Now, if you go into, well, like what are we advertising? The reason I brought all that up is because we like to show our best-selling products in ads and then show the free gift offer, right? Like, um, so sell the product and then make the offer of buy this, get this, like, here's this extra bonus kicker. Um, and then when you land on the landing page or the product page, wherever we're sending traffic to post-click, um, you know, we have communication and we show the free gifts in addition to selling the items.

Colin (22:18):

So that's really what's working best run. So you can take all of your best performing products and add this free gift promotion to it. Either use it as a tool to increase AOV. So someone sees a hat that they really like, and they know, Oh, if I buy this hat and this t-shirt, I'm going to get one unlock, this free gift, which a lot of people like. And then the other thing is, um, when you're using these no discount code needed promos, you can also have these mini evergreen offers. As we like to say on the page for like 10 answer your, your phone number for 10% off. Um, and so using an SMS discount and a free gift, people are getting 10% off to buy a hat, a teacher unlocking a free gift. This is the type of promotion that's working for us very well on Facebook. I know it's not a specific ad. You know, we've got video ads, we've got static ads. You just show your best performing products, the ones that are proven, take your most proven ads and leverage a, you know, a good offer. Um, you know, so that that's really what's working best for us. Um, and platform

Dylan (23:27):

Complete sense. And I mean, when it comes to that magic AOV number, if you come on with a brand and they're 50 bucks, you know, and you want to get the $8 more, do y'all incorporate all the upsells down, sells, cross sells and all that kind of stuff to kind of make it to that threshold, to give y'all some more wiggle.

Colin (23:42):

You know, there's a lot of really brilliant people like as are Firestone and, you know, people that are really able to get upsells and cross-sells to work very effectively and, and, you know, um, you know, probably you guys as well, um, you know, funnel by definition, some of the funnel bash stuff I think would give you, you know, metrics into that. We've never been a post-purchase upsell or an in cart upsell Greg. Um, I think it's kind of shiny object syndrome and distracts people from what we were doing. We were laying over cards out. Initially. I like a lot of the backend. Um, I liked, I liked to let my backend do a lot of that stuff. Um, and it, there's also a lot less variables to measure the impact on when you have post-purchase post-purchase and in car, again, there's a lot of different ways to do this. That's just my opinion on it. We very rarely do it. We do have some in-car upsells, but cross sells and upsells like on-site before or after the purchase in that same session, uh, we don't focus on that makes complete sense. And I mean, yeah, when you get a free goodie, that's, that's a good little sense of there. I fall for the trap weekly, it seems like. So that's solid.

Speaker 5 (25:01):

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Colin (26:19):

Funneldash.com. Now, while that is working good, you know, we love to beat around the Bush to find out what's not working so good. So of course, with our poor ad segment, what's something you thought would kill it that crashed and burned, or maybe lost ya get 'em out. Yeah. Um, man, I'll tell you the thing that's really killing us now,

Speaker 4 (26:44):

Is there, like there was a lot of long form video ads that, uh, when I say long form, like longer than a minute and a half, that, um, were always working extremely well for us. And the success of, of long form ads has decreased quite a bit. Um, we specifically have a, a, uh, a like performance cosmetic for eyelashes and eyebrows, uh, in the beauty space that, uh, we're, we have invested hundreds of thousands of dollars into, uh, product testing on a quarterly basis, uh, into ad testing alone. Um, and long form video is kind of dying out. I think, uh, you know, people's attention span is not working. It's not what it used to be. People are sick of getting sold to long form. Uh, I think is that starting to happen, a lot of people have kind of ruined it or manipulate it or exploited. It is probably the best word for it. You know, marketers ruin everything and I think marketers have officially started to kill. And I've started to see a decline in long form video ads.

Dylan (28:00):

That's super interesting now with y'all's kind of ads in general, what's your go-to under 15 seconds. I know some people are saying six seconds or less is killing it for Q4, but what y'all's kind of sweet spot for what you see that, you know, it's just kind of been more common. Hey, if we need some content pushed out, you already kind of know some of the ratios you want to go for it. What y'all's, you know, goal there essentially.

Speaker 4 (28:22):

Yeah. Um, we're a big fan of the AI D a ADA, uh, copywriting format, whether it be a video script, writing, video communication writing, uh, it doesn't have to be a script. Um, and so we like to stick to that as, as much as possible. So attention, interest, desire, action, you know, making sure we have, if you want to get all of those elements, we think that like 15 seconds is probably the shortest amount of time. You can be effective in doing that. Um, so we, we stick to 15 seconds. Um, we don't really go any shorter 15 that 15 to 20 seconds sweet spot has been performing best for us. I think probably,

Dylan (29:04):

Yeah. So long story, short, long form videos aren't doing as hot as they used to. So y'all, of course you get the hints of the name, rich ad, poor ad, very close to another, you know, thing. So we'd love to kind of find the crossroads of marketing and the, you know, financial side of things. So what's some sort of financial principle or it's sitting, we can kind of share with the audience based off your expertise background opened up the curtains man,

Speaker 4 (29:29):

The financial to, um, honestly, you know, I think a lot of people get caught up, um, you know, trying to personally like hoard and save money from what they're doing and like the, uh, DTC or the agency space, or even, uh, you know, affiliate it's. Um, and one of the things I've learned over the last like three, four years has been, you know what I mean, like to pay myself what I basically need in order to live the quality of life that I want. Um, but not to be greedy and to continue to reinvesting, um, in team, um, because I'm starting to see the beginnings of, uh, being able to actually visualize and mentally map and actually work towards, um, you know, those really big you exits that everyone always talks about. And, um, it takes a lot of, um, you know, short term sacrifices for, you know, what I mean, depreciating, depression, creating assets and things like that in order to get to a point where, you know, you have enough capital available to you to take things to the next level.

Speaker 4 (30:45):

Um, and so investing and your team like build a team like you can go really quick by yourself and with a small team, but you can go really far the big things with a large team. And so it takes money to get there. Uh, you know, don't be cheap, hire good people. Um, I found that, you know, hiring one very quality person who's dedicated and feels compensated is better than three, you know, under compensated people, uh, people that you know are not good. Um, and there's really good people at lots of different compensation levels all over the globe. If, you know, if you're, uh, located in the U S you know, you can start to use, uh, you know, uh, the, the value of the dollar, um, that the U S dollar and the exchange rates for, and the cost of living, uh, in other countries, um, you know, one of the things Dylan, you just mentioned, you know, we hire in Lithuania, why do we hire in Lithuania?

Speaker 4 (31:38):

Because they're, you know, English speaking, they understand Western culture. Um, they're very, data-driven, they're extremely, well-spoken, they're educated and you know what I mean? Like it's a very progressive country actually. Um, and they just work really well. Like they have, it's like working with Americans, you know what I mean? Um, you had your dollar goes farther over there, um, because their typical, you know, annual compensation, isn't, isn't as high, you know, we pay them as if they're Americans, um, personally, but, you know, your dollar can go far, um, farther and other places. And, you know, so we have employees in Mexico and so on and so forth, but, um, it'll be cheap, hire good quality people, you know, use the money you're making to reinvest back into your business. You know, the way that I've gotten, the way that we've purchased in four years from very small agency doing low level work, to having enough working capital, to buy and acquire businesses and, you know, bankroll a fully integrated eCommerce team operating 12 businesses was constantly reinvesting back into the business and paying my people first, before I was paid. Um, knowing that, you know, my big cash out day is someday in the future. And, you know, there'll be enough to share with everyone on the team as well. So that's kinda been my thing, like reinvest back into the business, um, um, you know, have a big vision and stick to it. And, you know, like Zach was saying earlier, just like, don't be afraid to take the jump. Like don't get, you know, don't, don't, you gotta, you gotta wean off the T you know, of, uh, the good, the good cashflow from agency life.

Dylan (33:18):

Oh, this has been amazing, man. Thank you so much for sharing like that journey. And, uh, it's pretty cool stuff that you're up to. I'm excited to see what you do in the condiment space. Um, I, I really think, uh, somebody needs to do some more bacon ranch condiments. Um, I got you, man.

Speaker 4 (33:41):

I'll be one of the first people that I send the economy box that I want some UGC.

Dylan (33:52):

This is 34 year old dude. Uh, like, Oh my gosh. Oh, Colin, how can people get in touch? How can we support you on what you're up to?

Speaker 4 (34:04):

Yeah. Uh, appreciate asking, um, you know, um, um, semi active on Instagram at Collin Magoo mcg O O uh, we asked her to be on Instagram, comm Maguire. Um, you know, if you want to chat there, I'm probably most responsible. They're very bad at email. Don't really look at Facebook too much. I'm not on Twitter. So I, I remain pretty focused on what we're on, what I'm working on. So reach out to me on Instagram. Um, we'd love to answer any questions and connect with you guys. Um, also if you have a, you know, a brand and e-commerce brand app early traction with branded products, and you're just interested in how much you can get for that business and whether or not I'd buy it from you, I would love to talk to you your business isn't for sale. And you're like, Hey, I might like to make $150,000 this year and, you know, move on to the next thing. Um, I would love to talk to you because

Dylan (35:02):

Businesses just like humming along. It let's just say like 250 grand a year. What do you, what do you think those like, uh, how would you value an e-comm? Like, what's the range there? What's the going rate on, on an e-com business.

Speaker 4 (35:15):

And then, um, the traditional way to value a business is based on at least having 24 months of profitable history and or revenue history at all. A lot of these young DTC brands don't have that. So the traditional model of taking your EBITDA and, you know, giving like a three or a four times valuation on net profit, um, you know, including owner compensation is typically not a very good model. It depends on a lot of things like, you know, is their IP involved? Do they have, you know what I mean? Are they manufacturing something as there are a lot of competitors in the space is an original product. Can I get IP in it? Um, but all, all things said, if you have a young business and it's done, you know, 25 to $50,000 in profit over the last 12 months, or more than that, um, you know, three, you know, a three times valuate a three times, uh, you know, about a three X valuation to, to, to, to buy that.

Speaker 4 (36:14):

Um, plus you get paid on whatever inventory you have at, or slightly below costs sometimes, um, based on, you know, whether or not whether or not you can negotiate to get paid, uh, for your shipping of that inventory. But, um, yeah, I mean, a lot of, a lot of the sweet deals will be like brands that are doing that 250 to a million dollars a year in revenue. And, uh, those are great deals for us because we can sell finance them. Yeah, no, there you go, man pocket in a pocket pocket, a hundred K 200 K hit up Collin, uh, you know, go live on the beaches for 12 months. Go start another DTC brand, sell TACOM jam. Hey, I'm here for that. Awesome. Well, thank you so much for your time. This has been, uh, super, super helpful, and we'll definitely have you on the rich headboard podcast again soon.

Speaker 5 (37:09):

Thanks guys. Appreciate it, Zach and bill, have a good day. Thanks so much for listening to another episode of the rich ed or at podcasts. If you're like me and listen to podcasts on the go, go ahead and subscribe on Apple podcasts, Spotify, YouTube, and rich [inaudible] dot com slash podcast. And if you absolutely love the show, go ahead and leave a review and a comment share with a friend. If you do take a copy screenshot of it, email me [email protected] Show me you left a review and I'll give you a free copy of the rich add or add book to learn more about the book. Go to rich dad, poor dad.com to leave a review that a rich ed or at.com/review. Thanks again.


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About The Podcast

Jason Hornung is the founder and Creative Director at JH Media LLC, the world’s #1 direct response advertising agency focusing exclusively on the Facebook ads platform. Jason’s proprietary methods for ad creation, audience selection and scaling are responsible for producing $20 million + of profitable sales for his clients EVERY YEAR

Zach Johnson

Zach Johnson is Founder of FunnelDash, the Agency Growth and Finance Company, with their legendary Clients Like Clockwork solutions. Under Zach’s leadership, FunnelDash has grown to over 5,000+ agency customers managing over $1 Billion in ad spend across 41,000 ad accounts on. Zach’s private clients have included influencers such as Dr. Axe, Marie Forleo, Dan Kennedy, Dean Graziozi to name a few. Zach is also a noted keynote speaker and industry leader who’s now on a mission to partner with agencies to fund $1 Billion in ad spend over the next 5 years.

Dylan Carpenter

Dylan Carpenter

Dylan Carpenter will be diving into what he and his team are seeing in 200+ accounts on Google and Facebook when it comes to trends, new offerings, and new opportunities. With over $10 million in Facebook/Instagram ad spend, Dylan Carpenter had the pleasure to work with Fortune 500 companies, high investment start-ups, non-profits, and local businesses advertising everything from local services to physical and digital products. Having worked at Facebook as an Account Manager and now with 5+ years of additional Facebook Advertising under my belt, I’ve worked alongside 60+ agencies and over 500+ businesses. I work with a team of Facebook, Google, and LinkedIn experts to continue to help companies and small businesses leverage the power of digital marketing.

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