How To Sell A Business For 7 Figures – May Update

  • Do you ever get the feeling that you’re just wasting your time?
  • Like, everything you do is not actually helping any person or any business?
  • It’s as if the business child you have just given birth to didn’t exist, no one would care?

Though it may sound extreme, this is a common problem for startup founders…

Here’s an extract from Ben Horowitz: The Hard Thing About Hard Things:

“Every time I read a management or self-help book, I find myself saying, “That’s fine, but that wasn’t really the hard thing about the situation.” The hard thing isn’t setting a big, hairy, audacious goal. The hard thing is laying people off when you miss the big goal.  The hard thing isn’t dreaming big. The hard thing is waking up in the middle of the night in a cold sweat when the dream turns into a nightmare.” 

The reason I raise this is that it was the feeling I got when I checked our May Revenue forecast after the booming, best ever month for Virtual Valley in April.

Less than half…

Goal Update

Here are the goals we are working towards for the next 2 years: Goal_Pyramid_-_Google_Sheets_🔊

And metrics from the past month:

Goal_Pyramid_-_Google_Sheets_🔊

MRR/Hours Charged – A significant reduction in the amount of hours charged and therefore MRR through the platform from April, this was mainly due to technical glitches in the marketplace driving the churn of a couple of key Entrepreneurs plus inactivity on the marketing side with resources tied with with AskTina.

Blog Subscribers – If you follow our podcast, you will aware that I spent some time learning more about opt in rates and list building, and then used this knowledge to destroy our optin rate, to be continued…

Guest Content Spots – I am still participating in and hunting down podcast interview opportunities, couple this with the weekly requests for us to submit to expert roundup blog posts should see us hit the target of 100 guest content spots by the end of June.

Twitter Followers – As per our learnings from #garyvee last week, we will discontinuing this vanity metric in Q3 despite the steady growth and my account almost reaching 10k (real) followers:

Tom_Hunt___tomhuntio____Twitter_🔊

Anyway, after re-watching the Y-Combinator course: “How To Start A Startup”, I decided to analyse some more meaningful metrics to try and derive some learnings from the data we have collated over the past 5 months:

image (12)

Note the steep drop of total revenue and hours in the month of May. The Virtual Valley revenue continued to rise due to the sale of a $497 sponsorship package for the 0-$4 Million podcast.

The amount of Entrepreneurs that have signed up and have used the platform to charge time with one or more Virtual Assistants each month since launch:

image (13)

And the amount of Entrepreneurs that have signed up, charged time with one or more Virtual Assistants and then stopped the next month (churn):

image (10)

The churn rate of 30% in May suggests that we may be yet to reach product-market fit.

What to do to address this problem?

Send out a nice yet strategic survey to all of our Entrepreneurs of course.

Here are some of the highlights:

Results___Typeform_🔊

Over the next two months, we will be hiring a part time PHP developer to work with the qualitative and quantitative feedback from this survey to improve:

  • The user interface and experience of the hiring process for our Entrepreneurs
  • The ability of our Entrepreneurs to derive insights from our tracking software

As we believe that the reason for our high churn rate is simple:

Our Entrepreneurs are not able to derive value worth equal to or more than the 20% salary uplift we charge, and if Virtual Valley is to scale into a thriving platform, this needs to change.

In other news, our Net Promoter Score is currently 6.38, this will be tracked over time.

Results___Typeform_🔊 x

And then mixed results to this question:

Results___Typeform_🔊y

When selling a business, the new owner/owners will look to see how independent the system is from the current owner (more independent the business, the lower the risk associated with the transfer of ownership).

Thus, the results above show that both I AND our existing customers have been instrumental in driving new signups.

If this system is ultimately to be sold, I need to find a way to reduce it’s reliance on me.

Three Key Learnings

1.More Skills Need To Be Learnt/Acquired

We have successfully built and launched an online marketplace with approximately a $5k investment to $1k per month in revenue. Our current skillset have enabled us to reach this stage. 

Though as Peter Sage once told me: 

“What gets you from A to B, does not get you from B to C”

In order to take Virtual Valley to the next level, I or someone that I hire needs to either have or develop the following skills: 

  • User interface design
  • User experience
  • Extreme product management
  • Membership site set up
  • Information product creation

Once we have this skill set in place, have optimized Virtual Valley for the Entrepreneurial experience and have built the best Virtual Assistant training program that exists in the world today, reaching our next revenue goal will become a triviality.

Moving forward to scale to the $4k revenue projected for the end of 2017, assuming product market fit has been achieved, the following skills will be required:

  • Facebook advertising
  • Affiliate recruiting
  • Referral program set up

2. “This is the real world homie, school finished…”

Yes, that is a Kayne West lyric.

It became brutally apparent this month that being an Entrepreneur and starting a startup occurs in the real world.

If you are not contributing enough value to the environment, you will either die from lack of resources or be eaten by a competitor.

This is not sitting within a 400k person corporation, where the total amount of value provided per month can reach billions, though is not averaged evenly amongst the human resources, allow those that do not create the value to be sheltered from reality.

3. SEO IS A Long Term Game

Check this out:

Channels_-_Google_Analytics_🔊

Despite the fact that the actual Virtual Valley domain itself: http://virtualvalley.io/ has little on-page SEO optimisation, we have still seen some love from Google re. a couple of significant keywords:

“virtual valley”

virtual_valley_-_Google_Search_🔊

And with the help of the awesome SEO tool: Ahref’s (our podcast sponsor) and some hardcore link building, we expect our ranking for further search terms to increase dramatically.

Three Key People

In this edition of Three Key People I have select three very young and promising online entrepreneurs that we have interacted with recently, I would highly recommend bookmarking and checking in on their progress over the next few years…

1. STEPHEN ESKETZIS

Stephen is a young AND very advanced internet marketer, to help others become as successfully as himself, he built this BEEFY list of online tools that any marketer should be using that I highly recommend checking out, he is also an online sales funnel ninja.

2. BRIAN ROBBEN

Another successful young man, Brian decided to build a list of things to do over the summer, to help you become successful, check out number: 195.

3. Tung Tran

Tung built his first WordPress site when he was 13, he’s now 20 and is tracking his journey to a $10k a month online business on his blog: Cloud Living. We collaborated on a couple of pieces of content (including him mentioning us in his Simple Virtual Assistant System), if you are trying to build an online business, I highly recommend going to check his stuff out.

One Key Tool

1. AHREFS

We usually share three key tools of the month in this section…

However, the full month I have almost been completely focussed on learning how to boost organic Google rankings with a BIG tool that any online business should probably want to be using if they are serious about SEO: Ahrefs.

To learn more about what we are actually doing with Ahrefs, check out this podcast episode and lookout for a interview with Tim Soulo, Head Of Marketing at Ahrefs and a full brutally honest review of what has been achieved with the Ahrefs tool over the three months we will be using it.

Three Key Focus Areas

1. UPGRADING VIRTUAL VALLEY BASED ON FEEDBACK

I had this as a focus area for May, however, we made no progress.

I guess this was becuase we were basking in glow of Virtual Valley’s best month EVER in April. Couple this with a lack of focus on the platform with AskTina’s emergence, it feels like Virtual Valley has been neglected (Here is a post about Tina’s early startup traction).

But no more…

Now we have the results of our survey, it is clear what needs to be done:

Virtual Valley’s users interface AND experience must improve to support our Entrepreneurs to give back 1 million hours of their time by January 2018.

2. Increasing VA Quality

As the second “most frustrating thing” about the current Virtual Valley service, we must increase the quality of Virtual Assistants that are registered and available for work on the platform.

Now, there are two ways we could approach this:

a. Invest heavily in recruitment – just as we did prior to launch (as described in this post), we could head out and recruit more awesome assistants.

OR

b. We could create the best training program for Virtual Assistants that exists anywhere in the world to attract new Virtual Assistants. Only those Virtual Assistants that have passed through the training would have access to the platform.

As well as increasing the quality of the Virtual Assistants on the platform, this will also form an additional profit centre for the business.

3. Link building to increase organic traffic for key keywords

Now we have secured the number 1 ranking positions for “virtual valley”, we are turning our focus to ranking for a number of highly potent keywords for our industry:

  • virtual assistant philippines
  • hire a virtual assistant
  • filipino virtual assistant
  • hire a filipino virtual assistant

Through onsite optimisation of blog posts, specific pages within the marketplace itself and some tactical link building we plan to reach page 1 for each of these by the end of Q3. Progress will be tracked in upcoming podcast episodes.

Summary

Let me take you back to the question I raised at the start of this post: 

“Do you ever get the feeling that you’re just wasting your time?”

As you may expect, the answer is a resounding… No.

Because what else would we be doing?