Investment Debrief: Journaling Company
A behind-the-scenes look at one of my businesses and the acquisition and growth strategy.
Recently, I acquired a journaling company and I wanted to give you an inside look at this, how I structured it and my plan for building it into a multi-million dollar business and selling for at least $5M+
A few notes to get started…
When I say, I acquired, this was an asset sale. The business was started by an Australian Entrepreneur, who seemed to have some issues on a personal basis and sold it to two brothers— this was one of their first online business ventures, coming from real estate.
Because of that… they really weren’t able to do much with it. Which totally makes sense, it’s why I only invest in things I understand and why I own no real estate— because I don’t understand it.
For the entire time they owned it— it really didn’t do much. Further, I’m not sure they tried.
However, when I was looking at the deal, a few things popped out to me…
- 32,000+ customers have bought the journals, with phone numbers for all.
- Many people bought corporate orders from 10-500 copies.
- 30,000+ on Instagram.
- 47,000 copies of the journals were already printed and in shipping warehouses.
At full cost of the journal, that was $1.5 million in inventory.
Thing is— I’m not an eCommerce guy, I don’t really know eCommerce. However, what I do know is this.
People who buy journals, at least this specific type are likely women, 25-40, that are freelancers, entrepreneurs or at least are professionals.
Seems like my “belief” was true, when I dived deeper.
Majority of my portfolio of companies are education and certification companies targeting…
You guess who.
I decided to take a deeper look, after I first saw this, the guys who owned it wanted to get rid of it, simply because…
$776.77 in profit for almost an entire year…
Not sure anyone is that happy with that and if I’m honest, looking at the P&L, they probably really lost money.
It was interesting and it made sense why they wanted to sell.
But then… I saw this other number…
So, I asked… what’s this?
They replied, that’s the income from the podcast sponsorships… they collected $42,000~ in podcast sponsorships, with $40,000 in signed contracts upcoming.
That was pretty interesting… to add to the mix… it came with a podcast, with a lot of potential and a host who wanted to actually continue and expand his role.
At this point in the process, I’m thinking… “there’s no way I can lose on this”…
See, my belief is that the more traffic you have that is self-sustaining, the more ability to have to “own” the traffic and allow for the audience to pay for itself.
For example: I have multiple certifications for freelancers to help them, this alone would generate massive potential for those businesses, on day one and at $6,000 - $15,000 a pop, it isn’t hard to make this work.
Thanks for reading Entrepreneurial Investing with Scott Oldford! Subscribe for free to receive new posts and support my work.
I got on the phone with the owners, went full-on diligence, submitted a letter of intent (LOI) and…
In what was one of the quickest deals I’ve done, in less than 14 days took ownership of the entire brand, trademarks and audience.
I’m still very much in the process of building this, however, the future is about turning this journal brand, into a brand for the audience.
It’s been about a month since I took control and in that time, we’ve been busy…
In the next 60-90 days we are…
- Rebranding the entire brand, along with developing v2 of the Journal
- Launching Season 3 of the Podcast, including a rebrand and re-focus and have already sold massive sponsorships for the Podcast.
- Launching a newsletter, that will go out 2-3 times a week allowing us to build a deeper relationship.
- Deep Investment on SEO and Blog Articles
- Revising the entire socials and building more viral content for TikTok and Instagram.
- Launching a Summit Series and Masterclass series that will take experts and celebrities and allow for them to share their gifts with our customers.
… the list continues ;)
As we go into the future, this business allows us to have an integrated media brand, with products in multiple verticals, all supported by an audience of people that will continue to look for skills, knowledge and education as we move into the future.
So, Scott… what did this cost to do?
This was a low, 6-figure upfront investment. I structured it so that 50% of the money was transferred upfront, with the second half in 45 days after.
The operating investment into the business, at the current moment, for those that I’ve hired and the strategy we’re going with is about $20,000/month.
There is quite a bit of work to do, when it comes to the foundations, which I expect to take 6 months— however, due to the success of the podcast, I expect that this will offset (or nearly offset) these costs.
On top of this, with major holidays coming up, I’m expecting that by bundling and/or discounting the massive amount of inventory, that I received for very cheap, I can at worst, recoup my $20,000/month investment, while I’m in the “build” phase.
I expect this phase to take until at least Q2 of 2023, which at point, I expect to go into the scale phase. During this time, I’ll be doubling down on what’s working, our products will be into the ecosystem and we will have a multitude of traffic and revenue sources.
Speaking of which, let’s talk about growth…
Last week, I found a company for sale, that was another journal. To be clear, I didn’t want multiple journal companies. It was for sale for again, low six-figures.
I emailed them, spoke to them… and after seeing it, realized that it was a VERY bad deal.
I think they realized it as well… However, I asked…
Can I acquire your customer list instead? They agreed and for $15,000 I was able to acquire the customer list, along with two email blasts, via their current system.
The size of the customer list? 44,000 people, all in America, almost all who purchased through TikTok Ads that are 22-32 years old.
In our first email to that audience to introduce ourselves, I made $4,000 in journal sales and now I just increased the size of our audience to almost 80,000 people who’ve spent at least $20.
I know from mentoring many Entrepreneurs that there are many stages of business…
Build. Growth. Stablize. Scale. Profit
Each “mode” has its different gifts, however, the cool part of this purchase, like all deals that I do. Is that there are so many ways to win.
and… those are the deals, that I believe we should do.
I’ll be building the audience, the traffic, the revenue, the revenue sources, the team and really turning this into something great.
My intention is to have this as a media property that allow us to redirect traffic as needed to the various businesses that I own.
The great part is that by turning this away from eCommerce (not great multiples) and instead bringing together (media, newsletter, podcast, education, digital sales, brand) I’m able to set this up for a very easy exit in the future if I decide to do it.
My expectation is that in 3 years, this can easily do $3-5M in revenue (being ULTRA conservative) with a minimum 4x multiple for an easy 8-figure exit, while cashflowing profit and driving traffic to my other businesses.
Does it get any better than that? :)
If you enjoyed this send an email or comment below— I want to ensure this type of content is really useful :)
Amazing breakdown Scott! Though I'm in a relaunch and rebuild of my creator/coaching businesses, I love seeing how you think business-wise on this level. Such valuable content and opens my mind to other possibilities in the future (hopefully not TOO distant :)