T-Shirts, Pests, Gas, and Social Security: Elliot Marks’ 4th Exit

Today we hear from a founder who has built and sold four very different companies – a t-shirt business before ecommerce existed, a pest control service, a gas station, and most recently, an informational website with an adsense revenue model.

How did he do it? Let’s find out!

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Breakthrough in Hair Care, Overcoming Tragedy, and a Successful Exit, with Beth Di Maio

From Kickstarter to Successful Exit, with California Beach Company’s Austin Wright and David Shoham

Laser Precision: How Strikeman CEO Scott Hutchison Built and Sold his Company

Netpicks’ 7-figure exit in the day trading industry

An ecommerce exit in the $150B+ supplements market

Cryptocurrency and Ecommerce: Brothers Bryan and Colin Aulds’ Successful Exit

How this 22-year-old built his eCommerce brand and exited for 7 figures

A high performance exit with GWA Auto Parts’ Gregg Alper

How RARI Exited the Supplement Space by Rising Above with Real Ingredients

How Adam Spiegel Built and Sold Ownloop

This episode of Deal Closers is hosted by Jason Gillikin, Doug Grindstaff, and Izach Porter, brought to you by WebsiteClosers.com, and is produced by Earfluence.

Transcript

Elliot Marks – 00:00:05:

 

It became work. It really became work. So once it becomes like that for me, I know that I’m not going to be able to give this site my best because I’m not passionate about anyone. As soon as that happens, it’s time to sell for sure. If you’re not passionate about what you do, I would say it’s not impossible, but it’s very hard to be successful. Very, very hard.

 

Jason Gillikin – 00:00:33:

 

You’re listening to Deal Closers brought to you by websiteclosers.com, a show about how to build your e-commerce business to be profitable, scalable, and one day even sellable. I’m Jason Gillikin, and on the show today, Website Closers, Doug Grindstaff, Izach Porter, and I talked to a founder who has built and sold four very different companies. A t-shirt business before e-commerce, a pest control service, a gas station, and most recently, an informational website with an AdSense revenue model. Elliot Marks was born in England to a family of entrepreneurs. His uncle had a packing plant, which produced the little salt and pepper packets for British Airways. His dad had a wholesale business selling luggage and purses. His grandfather owned 13 shops that sold women’s handbags and shoes. So he saw the ups and downs of entrepreneurship, and he knew it was for him.

 

Elliot – 00:01:19:

 

You can have more freedom. Plus the amount of revenue, money that you can earn. Can almost be unlimited. As successful as you are, you know, that is only limited by your success. So that appealed to me. You know, working in a job is fine, but it’s limited how much you can make. So that’s what appealed to me.

 

Jason – 00:01:44:

 

Elliot’s own entrepreneurship journey starts when he was just 21 years old and he decided to take a vacation across the pond.

 

Elliot – 00:01:50:

 

I came over to America. I messed around a little bit, met this girl, wasn’t really doing much. But I was really here on holiday. I could only stay for a few months. And it got to the end where I had $50 and a plane ticket home back to England. And I really wanted to stay. So I actually built that T-shirt business from that, $50. I found someone that could print T-shirts for me. And I gave him my driver’s license and said, if you print them for me, I’ll come back at the end of the day and I’ll pay you double what you would charge me, but I need to take them and sell them in order to pay you. And he did it. And that’s how I started. And I built it up from there.

 

Izach Porter – 00:02:35:

 

Whoa.

 

Doug Grindstaff – 00:02:36:

 

What’d you do with the plane ticket?

 

Elliot – 00:02:39:

 

That expired, unfortunately. And as it so happens, I still have it.

 

Doug – 00:02:44:

 

Oh, no kidding.

 

Elliot – 00:02:44:

 

Back then in the old days, we actually got paper tickets.

 

Izach – 00:02:48:

 

Yeah, man.

 

Elliot – 00:02:48:

 

I still have it.

 

Doug – 00:02:49:

 

What a great story. That is awesome.

 

Izach – 00:02:51:

 

Wow.

 

Doug – 00:02:51:

 

Started a business with $50. That’s incredible.

 

Jason – 00:02:54:

 

Yeah.

 

Elliot – 00:02:54:

 

Yeah, $50.

 

Izach – 00:02:55:

 

Oh, my gosh. What kind of t-shirts were you selling?

 

Elliot – 00:02:57:

 

I was doing t-shirts with all different like music groups and things like that. And eventually I got to sell to some quite large companies, Hot Topic and things like that. So it was, um, it really took off in a way that, um, I never would have expected at all. But eventually I sold out. That business after I built it up, that seems to be, that seems to be my path now is, is buying businesses, building them up and then selling them.

 

Jason – 00:03:25:

 

Wow. Okay. So you had $50 and you just borrowed t-shirts from.

 

Elliot – 00:03:32:

 

Well, the fifth for the $50 I bought, I can’t remember one or two dozen. T-shirts blank t-shirts, but I couldn’t, that’s all I could afford. I couldn’t afford to get them printed. And so I just went around different printers and found one that would, and it worked out for him because I kept going back to him and the business got bigger and bigger until eventually he told me that he couldn’t do my shirts for me anymore because it was too many. He only had a small little, little shop. So then I had to move on, which was kind of sad. I felt bad. He didn’t have the entrepreneurial spirit, I guess, because if it was me, I would have, I would have just bought more machines and kept going. I never would have told someone I can’t do, it’s too many, you know, but everyone’s different. That was a long time ago now.

 

Jason – 00:04:19:

 

I got to ask, what did your girlfriend think of this plan?

 

Elliot – 00:04:24:

 

Well, you know, we were both very young at the time. So I don’t really think, I mean, I was 21. She was 18. I don’t think she really knew anything about business or anything like that. Just, hey, sell some t-shirts. Why not? But the business side of it, I was always quite good at the business side. I think I was always good at the business side.

 

Jason – 00:04:44:

 

This is awesome. So you mentioned you sold it. How did you build it up enough so that it was sellable?

 

Elliot – 00:04:51:

 

Really just a lot of hard work and building up the customer base so you can have some good uh a good pnl at the end of the year and then there’s always going to be someone that wants to jump in and uh and take it over but it was really just a matter of building up um i mostly sold to record stores and things like that so i started selling all over the country and ended up with, maybe over seven, 800 stores that I would sell to around the country.

 

Izach – 00:05:21:

 

And this is pre internet?

 

Elliot – 00:05:24:

 

Pre internet. Yeah. Pretty. It started pre internet and, um, I never actually did anything on the internet with that business. Not one single thing.

 

Izach – 00:05:31:

 

Amazing.

 

Elliot – 00:05:32:

 

Yeah.

 

Izach – 00:05:34:

 

So you built up this t-shirt business, ended up selling that. What was after the sale?

 

Elliot – 00:05:39:

 

After that, I bought a pest control company with my brother-in-law. Well, he’s my ex-brother-in-law now, but with my brother-in-law at the time. And because that’s what he did. He’d been in pest control his whole life. But he didn’t know how to run a business. But I knew how to run a business, but I didn’t know anything about pest control. And I wasn’t really that interested in pest control. But he found this one business, this pest control business that was for sale. He didn’t really have all the money. He needed someone to come in. But I and I had the business expertise. So it kind of worked out well. So we bought that company. That was in 2005. And uh, I only had like three employees and just a small company but we again we built that one up over um. About seven years, ended up with 50, 60 employees. And we ended up doing work for other pest control companies. So we built that up and sold that in 2011.

 

Izach – 00:06:40:

 

Jeez. So three employees to 50, 60 employees over seven years. That is fast.

 

Elliot – 00:06:46:

 

Yeah. Well, you know, it’s a funny story with that. I was driving on the freeway once, and I saw we’re in LA. There’s billboards all over the freeways. And I just thought, what a great idea to maybe advertise on a billboard. Which is, I mean, that’s not a unique idea in itself, but for pest control, it hadn’t really been done at the time. So we just started our own department where we, you know, fumigation, where we put the tents over the houses, which is a whole other department. We were normally subcontracting that out and we started doing that ourselves. So I started advertising on the billboards and it was the billboards that it just absolutely took off. Our phone lines were nonstop all day. We ended up getting booked out for months. So that’s how we started growing and getting more employees, more trucks, more everything.

 

Jason – 00:07:36:

 

Wow.

 

Elliot – 00:07:37:

 

Yeah. Sometimes it’s just that one idea that it’s not even, you know, was using billboards a unique idea? Not really. A million people advertise on billboards, but just using it for this specific industry hadn’t really been done at the time. And, um, It just took off. So that really built that business up. So once I get something that can build up quite fast like that. Then I know it’s time to sell and move on.

 

Izach – 00:08:06:

 

You know, I think with a lot of businesses is you’ve got to test things out and it’s okay to run small tests on things because they can mean a home run for you and just a life change or a business change completely. And it seems like that’s what you did with the billboard. You didn’t know if it would work out or not, but maybe it’s $1,000 that you’re investing in this. And what’s the worst that could happen? You’re going to lose that $1,000.

 

Elliot – 00:08:34:

 

I wish it was $1,000.

 

Doug – 00:08:36:

 

Well, however much it is, right?

 

Elliot – 00:08:38:

 

Yeah, they’re expensive. But no, it worked out. Yeah, you just don’t know. And you have to try. The investment isn’t huge to try it out.

 

Jason – 00:08:47:

 

Yeah.

 

Elliot – 00:08:47:

 

You have to try.

 

Jason – 00:08:47:

 

Yeah.

 

Elliot – 00:08:48:

 

So I just got, you know, it’s a bit of ingenuity, a bit of luck. That’s really what it is. So yeah, so I sold that one in… I sold the pest control company in 2011. And then I went and bought a gas station.

 

Jason – 00:09:04:

 

Naturally.

 

Elliot – 00:09:06:

 

It’s naturally. I know this is my life. This is what I do. I really like to delve into new things. Figure out that industry. But I usually do it while I’m hitting the ground running. So it’s not always the best thing. The first six months can always be a bit shaky when you don’t know what you don’t know. Yeah, so I bought the petrol station and again built that up. But with a gas station, it’s really, it’s not about selling gas. You don’t make any money on the gas, a little bit. It’s all about what’s inside. So it was about building that up. And then in the end, when I sold it, it was the land that I made the most money on, not even the business itself. So that was quite interesting. And I nearly didn’t buy the land with the business. I nearly just bought the business because I had the option. I decided to get the land as well, which, looking back, was the best decision. That respect-

 

Izach – 00:10:06:

 

How many years did you have that?

 

Elliot – 00:10:07:

 

I had that from 2011 about six years.

 

Izach – 00:10:14:

 

Okay What was the biggest lesson that you learned in running a gas station?

 

Elliot – 00:10:18:

 

Well. The biggest lesson I learned is that all gas is the same. I had what they call an unbranded gas station. So it could be, you know, it could be anything. Elliott’s Gas. It was called Alliance, actually, but you could have anything. Elliott’s Gas. And then, of course, you have branded stations. Shell, Chevron. But everyone, the amount of people that would come into the station and say, oh, you know, I put gas from your station in my car and it started not running right. You know, but what they don’t realize is that the gas that we get every station is all it’s all the same. I used to get my gas from like 76 or Chevron. It’s all the same. So this was something that happened probably a couple of times a day. People would come in and say something about gas at these unbranded stations. So I always found that. Quite common, one guy one guy nearly tried to sue me saying that my gas hurt his engine in his car.

 

Jason – 00:11:15:

 

Okay.

 

Elliot – 00:11:16:

 

Yeah.

 

Jason – 00:11:16:

 

It’s the same stuff.

 

Elliot – 00:11:17:

 

I know. I know. But that’s business for you. But no, running a gas station is interesting because really, ultimately, you’re a money handler for the oil companies. It’s really all you are. So you get a delivery of gas. That will cost a whole truckload, say $35,000. And i i’ll sell that in a day and a half. So you buy $30,000 in gas, you sell it for $31,000. But you’re handling all that money, you know, and you’ve got to give the $30,000 to pay for it. You’re left with maybe $1,000, which just about covers a few costs and things like that. But, yeah, you’re essentially money handling for the whole companies. But my main reason for actually selling that business was. Quite a few of my best customers changed to electric cars. And it just started getting me thinking the gas station is a dying business. I mean, it’s still here, I agree, but I don’t really think it’s a growing business. So it just struck me as something that did I really want to start investing and maybe buy more gas stations? I don’t think so, because it’s maybe a dying business. So I decided that was one of the reasons I decided to get out of that.

 

Jason – 00:12:36:

 

Well, you mentioned that the differentiator is in what’s inside the gas station and not the gas. How did you differentiate yourself and why would people come to your gas station versus the one across the street?

 

Elliot – 00:12:49:

 

I’m not sure, to be honest. No, no. My gas station was a little unique because it wasn’t on a main street. It was on a sort of a secondary street in a sort of a local area. So I was lucky. We had a lot of residences very close by. So we had a lot of regulars coming in, a lot of regulars coming in. But the things that started increasing it, it wasn’t so much that I ended up, what I realized was I couldn’t attract more people because everyone in that area knew the station because it wasn’t a main street. There wasn’t that much traffic coming by people that didn’t know about the station. So it was just a matter of adding more things for them to buy. So when they do come in, instead of them spending $5, let’s see if we can get them to spend $10. So I did things like adding hot pizza and hot food and things like that. And really sprucing up the inside, lots of new shelving and really displaying, making things displayable. Look great. And, you know, always having specials and sales and… Giving a few freebies away and really focusing on being really, because when you have locals coming all the time, you have to focus on being really, really nice and friendly to them. Not that I wouldn’t anyway, but even with employees, you’ve really got to make sure that was a focus. So I really wanted it to be that people knew when they come into the station, it would be a happy atmosphere and they’d be welcome and probably know their name. So it was a very kind of a bit of a. The local bar gas station, you know, without the alcohol. We would have people come in and hang around for some reason. When you own a place like that for five or six years, you see a lot of things come and go. You know, the smokers, the ones that buy three packs a day, suddenly, you know, they stop coming because they probably, I mean, die probably smoking so much. But, yeah, you see a lot of things when you’re running a gas station. It’s quite interesting.

 

Jason – 00:14:52:

 

I bet.

 

Elliot – 00:14:52:

 

We did get robbed a couple of times.

 

Jason – 00:14:54:

 

I was going to ask that about safety, yeah. Gosh.

 

Elliot – 00:14:58:

 

Yeah yeah that was another concern of mine it was um just getting a little a little unsafe for my liking.

 

Izach – 00:15:03:

 

Yeah. So what was after the gas station then?

 

Elliot – 00:15:08:

 

And after the gas station, that’s when I went into the online territory.

 

Izach – 00:15:13:

 

Okay. Got it.

 

Elliot – 00:15:14:

 

And, yeah. Yeah. So that’s when I got. I actually purchase. ssofficelocation.com.

 

Izach – 00:15:22:

 

So real quick before that, out of the pest control business, gas station business, t-shirt business, what do you look back on most fondly? What was your favorite?

 

Elliot – 00:15:33:

 

T-shirt business, for sure.

 

Izach – 00:15:35:

 

Okay.

 

Elliot – 00:15:36:

 

But I think that’s because it was my first. And when you’re young. You’ve got nothing to lose, and you’re really hungry. You don’t sort of really appreciate it at the time, but as you get older and you look back, you realize how good those years were. It gets a lot more stressful when you have more to lose and you start investing more money and things like that.

 

Jason – 00:15:59:

 

Yeah, we’ve interviewed a lot of teenagers, younger people in their 20s, and they are able to take risks. And that’s one of the reasons that they’ve been so successful. They’re willing to take those risks. So you ended up buying ssofficelocation.com. How did you find that? Why did you decide, I want to buy this particular website?

 

Elliot – 00:16:21:

 

First of all, I decided to, when I sold the gas station, I decided to go into the online field because, to be honest, the number one reason was I was just sick of employees. I didn’t want employees anymore. They were just a constant hassle for me. So I just thought, you know, maybe going online would be good, wouldn’t need employees. So I started doing my research. Decided on the online advertising model. So really, I was looking for a website that had made its revenue from online, from advertising. That’s when I stumbled on ssofficelocation.com. I didn’t have any particular knowledge or interest in Social Security, but it looked like a good. A good website. I figure Social Security is something that people will be still needing information about and talking about in 5 years and 10 years. However long, well, maybe not forever, the way things are going, they say it’s going to run out. But yeah, so people will still be talking about it. So it just felt really like a good fit.

 

Jason – 00:17:29:

 

But out of the millions of websites that are out there, how did you find this one? Was it something where it was on a brokerage site that they wanted to be sold? Did you just stumble upon it and say, hey, are you available?

 

Elliot – 00:17:40:

 

Yeah, it was definitely on a brokerage site.

 

Jason – 00:17:44:

 

Got it.

 

Elliot – 00:17:45:

 

I just can’t quite remember.

 

Jason – 00:17:48:

 

It was on, Elliot, if I’m not mistaken, it was on Lenny’s website, right? So Lenny’s website had a firm, my business partner, he had a firm before joining Website Closers. Website Closers acquired him. So I think that’s where you found it.

 

Elliot – 00:18:01:

 

Yeah. Yeah. Yeah. That’s how I met Lenny. Yeah. So through, um, whatever his previous company was, I must have stumbled on it. Just online, just doing searches, you know, different web pages, different sites that will have listings. But I did send out a lot of inquiries. It was this one that really… caught my eye.

 

Jason – 00:18:22:

 

That’s great. And do you remember what caught your eye? Was it the SEO best practices that it had? Or was it you saw a lot of ways to improve this particular website? What caught your eye? And you’re like, I could I could do that.

 

Elliot – 00:18:35:

 

Well, obviously, the, you know, the financials were good. But But I think the main thing which I have already said was was the fact that it’s it felt very evergreen to me, it really felt like something that it was a well established site. And it was talking about something that people are always going to be interested in, always need that information. And really, I think it’s those two factors. And it also had quite a lot of content on it. There’d been a lot of work on the site. Because sometimes some websites they can be generating revenue and everything’s good, but when it comes down to it, maybe all its revenue is being 99% of its revenue is being generated by one or two articles or something like that, which scared me because you’re really essentially buying two articles for your money, whereas with this site, it was nothing like that. There was no one page that was dominant. It was very spread out. So if you lose rank on one page, it’s probably not going to affect your overall traffic because it’s maybe just a few views. So I think that’s definitely something that appeals to me. Although I didn’t know as much about all the online world at that time as I do now, obviously.

 

Jason – 00:19:49:

 

Yeah. And to go back to need and fulfilling something that people are looking for, that’s not necessarily a sexy type of business. Finding Social Security Offices is huge. And I don’t know a whole lot about Social Security at all. Growing up, I just kind of assumed it would be gone by the time I got to social security age. And it just wouldn’t, I just wasn’t paying attention to it. And so now I can go to this particular website and learn more about Social Security, what it actually means. When I turn 65 or whatever it is, how am I affected by that? Where to go for a social security office location? I feel like you nailed it in finding a website that’s just super helpful for so many people.

 

Elliot – 00:20:29:

 

Oh, thank you. Thank you. Yeah. It’s definitely helpful. I can see from the traffic and traffic patterns and people’s behavior, we would post new articles sometimes and people would be spending a lot of time on these articles and reading them. And so I really feel like over the years we’ve helped. We’ve helped some people. With a site like SS Office Location, where you’re dealing with social security. It’s very, very important. The most important thing is that the information is accurate, 100% accurate. Not only is that just the morally correct thing to do, because if you give someone incorrect information, it can really affect their life when it’s this type of thing. Google will eventually figure out if your site is giving inaccurate information, very outdated information. So that’s probably the most important thing for that particular website is that. Everything is updated, especially at the end of the year when we get to New Year’s and they have new numbers and new figures and updated and increases and decreases. So, yeah, keeping it up to date was the most important thing.

 

Jason – 00:21:38:

 

That’s great. So you didn’t buy the business to sell it for the same price. What did you do to try to build on SEO optimization? What were some of the changes that you set out to make right away?

 

Elliot – 00:21:52:

 

Well, initially, for the first couple of months, I didn’t do too much. I was really… Observing and trying to figure out, you know, learn and figure out exactly how everything works. I would say the first thing I did after maybe a couple of months, which was the single, single best thing I ever did to increase revenue, almost double, in fact, it did it doubled the revenue. Was because originally the site had just just had adsense on there so revenue was just coming from adsense and so what i did was i added Ezoic onto there i’m not sure if you’re familiar with Ezoic.

 

Jason – 00:22:29:

 

No, you explain.

 

Elliot – 00:22:29:

 

Yeah so i added this company called Ezoic on there and Ezoic they’re a google certified partner and they’re um well there’s lots of different aspects to ISO but they essentially um, they’re an AI company that will test thousands of times different ad placements, ad sizes on different pages for different people based on that person’s age, gender, where they live, what screen they’re on, lots of different things. And it also allows you, when you join Ezoic, it also allows you to become part of Google’s ad exchange, which is the premium Google ads, which are normally reserved for the really big sites, CNN. So, once I joined Ezoic and it starts doing its, it learns, it starts, it takes a couple of weeks to learn. It starts learning. Your viewers. Now, it didn’t help with traffic, but the revenue just went almost doubled for me.

 

Jason – 00:23:26:

 

Wow.

 

Elliot – 00:23:27:

 

Yeah. So that was massive. And so from there, so then obviously I stuck with the Ezoic. And then it was just a matter of building, keeping the site updated and adding new content and keeping the traffic going.

 

Jason – 00:23:43:

 

So that’s another one of those probably relatively inexpensive experiments that you ran. And all of a sudden, it was huge for your business.

 

Elliot – 00:23:51:

 

Huge. And I’ve recommended Ezoic to quite a few people over the years. Not everyone has been successful. So it’s not a guarantee or a slam dunk. It just really worked for me. I really should say it really worked for that particular website, for ssofficelocation.com. But almost everyone who I turn to Ezoic says it definitely increases. And I have no, I’m not making any money from Ezoic. But I do like to talk their praises because I found them very, very good. And obviously for increasing revenue, but just customer service, everything was very good.

 

Jason – 00:24:28:

 

That’s fantastic. And so you mentioned that it didn’t increase the traffic. Is that something that you worked on, trying to increase traffic to the website?

 

Elliot – 00:24:37:

 

Yeah, you know, I mean, you’re always trying to work on increasing traffic to the website. But… There’s not really anything specific I did to say, okay, I’m going to do this to increase traffic because it would be adding new content. Well, hopefully that increases traffic, but I would do that anyway. So it’s just a matter of keeping the site updated, adding new content. But of course, I had this site. From 2017 and it was building up, building up and then of course when the pandemic hit that’s when um I didn’t know all the social security offices were closing so for me it was like whoa what’s you know what’s happening something that i never in my wildest dreams thought would ever be happening but as it so happens you know like um a lot of people say we’re staying inside everyone’s going on the internet so traffic really increased during that time and and revenue increased exponentially because not only was I getting more traffic, But the ad rates were incredibly high during the pandemic because everyone was inside. So a lot of other advertising billboards, for example, probably weren’t doing so well because there’s not as many people traveling and out and about. But of course, I had this site. From 2017 and it was building up building up and then of course when the pandemic hit that’s when um, I didn’t know all the social security offices were closing so for me it was like whoa what’s you know what’s happening something that I never in my wildest dreams thought would ever be happening but as it so happens you know like um a lot of people say we’re staying inside everyone’s going on the internet so traffic really increased during that time and and revenue increased exponentially because not only was I getting more traffic, But the ad rates were incredibly high during the pandemic because everyone was inside. So a lot of other advertising billboards, for example, probably weren’t doing so well because there’s not as many people traveling and out and about. So all that money went into online, which was absolutely fantastic. But. You know, all good things must come to an end. So when the pandemic’s over, people start venturing back out. That’s when it got, it was very hard to really do anything. To make any positive changes because you didn’t quite know what the problem was or if there was even a problem. Because things, it was like Google was trying to figure out what people’s behavior after the pandemic. It didn’t quite know where to rank things, what to do, what to show them, what not to show them. And I still think it never really quite sorted itself out. It just kind of moved on to where it is now, which I don’t know about. I don’t think Google is showing the best results these days.

 

Izach – 00:26:36:

 

So Elliot, When did, and you’ve been through this, this will be your fourth time, I believe, of building and selling a company. When did you start to think, okay, now’s probably the time to start to look for somebody to buy this?

 

Elliot – 00:26:51:

 

Well, I had started about… A year ago, I also started selling on Amazon. So that took off. And what I was finding was a very, I lost interest in the social security side. So it became, although I still worked on it, it became work. It really became work. So once it becomes like that for me. You know, I know that I’m not going to be able to give this site my best because I’m not passionate about it anymore. And as soon as that happens, it’s time to sell for sure.

 

Izach – 00:27:25:

 

Yeah, that makes a lot of sense.

 

Elliot – 00:27:26:

 

If you’re not passionate about what you do. I would say it’s not impossible, but it’s very hard to be successful at that. Very, very hard.

 

Izach – 00:27:36:

 

That’s a great pull quote right there. Doug, when did you learn from Elliot that he was looking to potentially exit?

 

Doug – 00:27:46:

 

Yeah. And I’ve got all the stats pulled up. I want to run through them with you guys because there’s some, as the rest of Elliot’s story, there’s a lot of unique things that I think went on. But I want to say it was either end of September or early October that we got in touch with Elliot again, and he said he wanted to look at selling. So we looked at the P&Ls and gave him a valuation. I think he’s the type to make a pretty fast decision on whether he wants to go with something. And so we moved forward rather quickly from there.

 

Elliot – 00:28:13:

 

I’m not a procrastinator, that’s for sure.

 

Doug – 00:28:18:

 

I like that about you.

 

Izach – 00:28:19:

 

So what was the process like? You know, you’ve already got this information. You put a kit together. Is that right, Doug? And then you start to reach out to potential buyers.

 

Doug – 00:28:31:

 

Yeah, that’s exactly right. And I’ll give you a timeline too, just because I think this is pretty interesting. So we went live officially on… October 18th. And by going live, I mean, we’re live on the website, Closers Website. All right. So that’s when it first goes up on the website. Probably about two weeks later, it goes on the email blast. And so that’s when we went live from that time. To the email blast, we had seven total buyer-seller calls. And we had multiple offers. I think there was at least three from my notes. And then we had an LOI signed. On November 20th.

 

Jason – 00:29:09:

 

What?

 

Doug – 00:29:11:

 

Yeah. And then what gets even more interesting, we closed, APA signed on January 5th. And so from start to finish, this was a 79 day process. From the time we launched the business live on the website to the actual agreement, the APA being signed. Which is incredibly fast. And I’m going to go to Izach real quick and say, Izach, when a seller comes to you, and they say, hey, how quickly can you sell my business? What do you normally tell them? Now there’s nuances, there’s different businesses, but roughly-

 

Izach – 00:29:45:

 

Yeah, well, our average- Time for transactions is three to six months is usually the guidance I give. So, you know, having under 80 days start to finish is pretty. Pretty fast, yeah.

 

Doug – 00:30:00:

 

That’s faster than I would say most LOIs. So you get an LOI and by the time you close, a lot of times, you know, depending on what type of business, that can take 90 days.

 

Izach – 00:30:06:

 

Yeah, a lot of LOIs that require diligence will have, yeah, pretty much, you know, a 90-day timeline on them. Yeah, 60 to 90 days is not atypical for LOIs.

 

Elliot – 00:30:20:

 

You know me, Doug. I don’t like to hang around.

 

Doug – 00:30:22:

 

I know.

 

Izach – 00:30:22:

 

Doug, do you know how many NDAs we had signed or how many buyers inquired about the transaction?

 

Doug – 00:30:28:

 

Yeah, there was.

 

Izach – 00:30:29:

 

Because to me, it seemed like when I first looked at the deal, I was like, wow, this is a really niche little type of site. It’s very niche-y. Now, it’s niche-y in a very important space, but it’s very unique. So I was just curious, is that going to mean really good feedback or is that going to mean very limited but specific buyer interest?

 

Doug – 00:30:49:

 

Yeah, I’m trying to go back now. I mean, I think there was at least 100 inquiries, which isn’t terribly surprising. And I’ll tell you a couple of reasons why. And one of them is it’s a very simple business model to run. So there’s just not a lot to it. Now there’s, which I think buyers like, because a lot of times when people are looking to buy a business, there’s a lot of trepidation when they feel like, are there certain things that the owner knows that I don’t know? That’s going to take me a long time to know. And, you know, do I not have the level of acumen that they have? Well, I think when you pull back the curtain on this business, it was very easy to run. And I think easy to understand. Now there’s not a ton of moving parts to Elliot’s point. There’s not a ton of employees either. And so people like that aspect. Now, the other thing they really liked about it was the financials and more specifically, the profit margin. I mean, this was absolutely ridiculous profit margin, 90 plus percent. And when you look at Elliott’s financials, you’ve got your revenue line. You’ve probably got two lines below that, and that’s it. You’ve got your writer and your advertiser, and that’s it. And so people have that comfort knowing, hey, there’s not a ton of fixed costs going out. Every month that I’m going to be worried about covering my nut that month. You can kind of rest assured that, hey, I’ve got this revenue coming in, I’ve got a strong profit margin, so I should be able to make my money back and sleep at night.

 

Izach – 00:32:12:

 

Yeah, I was going to ask you why it was so hot, but now you just answered that.

 

Doug – 00:32:17:

 

There’s just two of the reasons. There’s probably more.

 

Jason – 00:32:20:

 

And so, Elliot, when you’re getting all this activity in there, were you surprised? And then how did you come to a decision like, okay, yes, this is the company for me. This is who I want to sell to. To be honest, I don’t think I really was aware of too much of what was happening. Behind the scenes, especially the inquiries, things like that. I probably would. I so is a hundred a lot sounds sounds pretty good to me to get a hundred.

 

Doug – 00:32:49:

 

It is given the short period of time, right? Because you were only on the market for 30 days. Most people, businesses are much longer than that. So it is for that short period. Absolutely.

 

Jason – 00:32:58:

 

Yeah.

 

Elliot – 00:32:59:

 

But, you know, it just takes the right person. So when we got the offer and the person was interested, why not? Once you’re selling a business, you decided you’re going to sell it. It just comes down to finding someone that’s going to give you as close to your asking price as possible with the best, most favorable terms.

 

Jason – 00:33:18:

 

Yeah.

 

Elliot – 00:33:19:

 

And that’s what we found. Yeah.

 

Jason – 00:33:20:

 

And the terms that some of the previous episodes, the founders have talked about. Is one of the big ones is how long the founder has to stay on or how long the owner has to stay on. Is that something that was an issue for you? Some wanted you to stay on for a while, some didn’t. How did that work out?

 

Elliot – 00:33:41:

 

No, that wasn’t an issue because, as we’ve said, it’s such a simple model, this website. I don’t think that was ever going to be a factor. And so I’ll always… I’ll say I’m available, phone, email for 90 days, but essentially I’m available. If the guy who bought it wants to call me a year from now, I’ll be happy there. Answer any question if I can help, but there’s just not many moving parts in this. So I just feel that staying on wouldn’t even, I’m not even sure what I would, what I would do to be honest.

 

Jason – 00:34:14:

 

Gotcha. And sometimes there’s all cash. Sometimes there’s cash plus earn out. I don’t know how much you can talk about it, but was it a all cash situation? Was it cash plus earn out? How did that work?

 

Elliot – 00:34:25:

 

No, no, it wasn’t all cash. It was cash with an earn out and a bit of seller financing as well.

 

Jason – 00:34:32:

 

Got it.

 

Elliot – 00:34:34:

 

Which most sellers are not that big on seller financing, but it’s really what you have to do. Most people would want to go that way.

 

Jason – 00:34:43:

 

Izach, is that a typical sticking point?

 

Izach – 00:34:45:

 

It’s something we talk about with every… With every seller. I think Elliot, to your point, a lot of deals do include some component of, of seller financing and you’ve sold multiple businesses and you’ve bought multiple businesses. So you’ve been on both sides of that, I’m assuming. I think. What’s important to understand from a seller, obviously, is motivated to get the cash for their business. And that’s understandable. What you have to think about from the buyer’s perspective is that there’s risk in acquiring a company. And so a seller note is guaranteed financing, but it does help the buyer spread out the payments. The earn out is a risk mitigation for the buyer. And so that helps the seller participate in some of the risks that the buyer is taking on. And that’s generally how deals get done. Those are… Those are three components of the capital stack that we see in a lot of deals, you know, in some combination. At Website Closers, we are often and almost always looking for the majority of the deal in cash at closing. We don’t really do any deals that don’t have cash at closing. There’s a lot of people out there talking about buying companies with no money down, and those aren’t the type of deals that we run. But there is often some component of the deal that’s going to spread the payments out for the buyer, like a seller note, and something that will mitigate their risk in terms of an earn out. It basically assures or a stability payment where the price is based on the business at least staying stable over a one or two year period.

 

Elliot – 00:36:22:

 

You know, I’m not very, never have been big on that. Seller financing as the seller, but most sellers aren’t. But, you know, because when I sold the pest control company, we did some seller financing. That was the biggest seller financing I’ve ever done. And I got. Screwed on that one. So, you know, I just had a bad experience with it. I have done others that have worked out, but that one left a bad taste in my mouth.

 

Izach – 00:36:47:

 

Do you mind if I ask what happened at the seller financing? Did they have a, was there a personal guarantee involved? Was there a, was there an…

 

Elliot – 00:36:54:

 

No, no, no. They, you know, the pest control company, we sold it. And then about a few months later, the guy started accusing us of all sorts of nonsense and things, but it was basically making stuff up as an excuse not to pay. Eventually we went to mediation costs me lot of money, $50,000, $60,000 just for the mediation. That lasted about a week. But in the end, he lost. We won it all. We won on every point, but he still never paid. Winning a judgment is one thing. Getting paid is a whole other story. So I’ll just plug in my computer back in. Oh, that’s brutal. Yeah, so getting paid is a whole other story, which is unfortunate.

 

Izach – 00:37:40:

 

Yeah, and that is, you know, I’ve certainly heard those stories. I don’t know the specific, we weren’t involved in that deal. I don’t know the specific terms of the note, but obviously. If you’re going to extend seller financing, then understanding the buyer. It’s very important. The buyer-seller relationship can be very important in these transactions. And the more you’re leaning on seller financing, the higher the comfort level you want to have with that buyer. And ultimately, hopefully have some type of a personal guarantee. Or a lot of times what we’ll negotiate is some type of a clawback facility where if the buyer defaults on the seller note, the seller can claw back the assets. There are some things you can do to improve and strengthen your position as a seller if you’re going to accept those terms.

 

Elliot – 00:38:26:

 

Well, unfortunately with this guy, he did. He kind of disappeared and he was an older guy. He was like in his seventies. And I guess he just, once he bought this business, he decided at the time he was just going to, he spent all his money, just really messed things up. So we had personal guarantees, but. But even though you got the judgment, finding him, and then the little bit of research we managed to do, we realized that he doesn’t even have anything left anyway. So what’s the point? Spending all this money going after someone who doesn’t have anything. So that was a really big pill for me to swallow. It’s only been in the last few years I can even talk about it. Before then, it was just too hard.

 

Jason – 00:39:05:

 

Yeah, yeah.

 

Elliot – 00:39:05:

 

It was a tough one. But Doug managed to persuade me to agree to some seller financing for this transaction. So fingers crossed, I’ll get paid.

 

Doug – 00:39:15:

 

We made a very small portion. As we do with most transactions. So thank you for that, Elliot. We got it done.

 

Jason – 00:39:25:

 

It sounds like this one will be a much better outcome for you, Elliot, than the pest control.

 

Doug – 00:39:29:

 

Well, it should be.

 

Jason – 00:39:29:

 

Yeah.

 

Doug – 00:39:30:

 

It should be, yeah.

 

Jason – 00:39:31:

 

Well, Elliot, this has been awesome. Thank you so much for sharing your story. What’s next? I feel like you’re ready on Amazon. You’ve got another business. What’s that business?

 

Elliot – 00:39:43:

 

Yeah, I’m already on Amazon. I do a lot of home goods, but my number one product right now is a stone bath mat. Believe it or not.

 

Jason – 00:39:53:

 

Okay.

 

Elliot – 00:39:53:

 

And one of the reasons, selling the company, SS office location, was so now I can… Invest more. One thing with Amazon retail is you’re going to need a lot of money. If you’re growing, you need money. So that’s the goal is to grow, get more products, and hopefully be successful with that. Come see Doug when I’m ready to sell that one.

 

Doug – 00:40:18:

 

That’s exactly it. Let’s do it in seven days.

 

Izach – 00:40:21:

 

Yeah, how much is 80 days, Doug?

 

Jason – 00:40:24:

 

It’s way too long for me.

 

Izach – 00:40:25:

 

I know. My personal record, Doug, is 48 days. It can be done.

 

Doug – 00:40:32:

 

Okay. We’re coming for that. All right. Get ready.

 

Izach – 00:40:34:

 

He’s 47.

 

Elliot – 00:40:35:

 

Here we go.

 

Jason – 00:40:37:

 

Start preparing.

 

Elliot – 00:40:38:

 

Yeah. Thank you very much, guys. I really enjoyed it.

 

Jason – 00:40:42:

 

Elliott, thank you so much for coming on the Deal Closers podcast.

 

Elliot – 00:40:45:

 

Hey, I appreciate it. Thanks, guys.

 

Izach – 00:40:46:

 

Yeah. Thank you, Elliott.

 

Jason – 00:40:54:

 

All right, that was Elliott Marks, serial entrepreneur. I can’t wait to follow up sometime soon with the sale of his next business. Thanks everyone for listening to this episode of the Deal Closers podcast brought to you by websiteclosers.com. If you like the show, be sure to rate us, write a review, press a follow button, or share with your network. And of course, if you’re looking for help selling your e-commerce business, be sure to visit websiteclosers.com. This episode was edited and produced by Earfluence. I’m Jason Gillikin, and we’ll see you again soon on the Deal Closers podcast.