Neil Patel

Yeah, so first off, you got to hit up companies and a lot of them don't want to sell. The ones you want to buy, a lot of them will not want to sell. And the way we look at it is it's math. And in private equity, they have the saying one plus one equals three. So how can you combine what someone else has and what you have and make more money than the combined entities?

So a great example of this is we're in call it 20 countries. If we get a lot of customer demand for, let's say, the Middle East, which we're not big in yet, and we find an agency that we like in the Middle East, if you're listening, we are actually looking for agency in the Middle East. we would be like, all right, if they're at, call it 10 million in revenue to keep the math simple.

So a great example of this is we're in call it 20 countries. If we get a lot of customer demand for, let's say, the Middle East, which we're not big in yet, and we find an agency that we like in the Middle East, if you're listening, we are actually looking for agency in the Middle East. we would be like, all right, if they're at, call it 10 million in revenue to keep the math simple.

And let's assume we're at 90 million to keep the math simple. Cause 90 plus 10 equals a hundred. Our goal would be to go from a hundred to 110 with the acquisition. And I'm making up numbers that are just random numbers, but let's say we have a lot of customers. and they want Middle East marketing, but we don't offer that.

And let's assume we're at 90 million to keep the math simple. Cause 90 plus 10 equals a hundred. Our goal would be to go from a hundred to 110 with the acquisition. And I'm making up numbers that are just random numbers, but let's say we have a lot of customers. and they want Middle East marketing, but we don't offer that.

What we would do is we would say, hey, we're going to take all our customers and sell them now on the Middle East region. And that company offers it. So we predict we can make extra four or five, six, seven, eight, 10 million in extra revenue. We then also look at their customers and say, huh,

What we would do is we would say, hey, we're going to take all our customers and sell them now on the Middle East region. And that company offers it. So we predict we can make extra four or five, six, seven, eight, 10 million in extra revenue. We then also look at their customers and say, huh,

if we can generate five million revenue from sending our customers to the middle east and take their customers and we look to see if there's demand for their customers to want marketing in america or other parts of europe or latin america or asia and we're like okay if we can estimate we can bring five million there you combine both you're generating more revenue

if we can generate five million revenue from sending our customers to the middle east and take their customers and we look to see if there's demand for their customers to want marketing in america or other parts of europe or latin america or asia and we're like okay if we can estimate we can bring five million there you combine both you're generating more revenue

Then we start looking, saying, oh, you have a CFO. We don't need a CFO. We already have one. Oh, you have a head of HR. We don't need a head of HR. We already have one. So you start figuring out cost synergies and savings too. So you're adding more revenue. You're becoming more efficient in saving money on the cost end. That's how we decide what to buy.

Then we start looking, saying, oh, you have a CFO. We don't need a CFO. We already have one. Oh, you have a head of HR. We don't need a head of HR. We already have one. So you start figuring out cost synergies and savings too. So you're adding more revenue. You're becoming more efficient in saving money on the cost end. That's how we decide what to buy.

The other type of company we look to buy is not necessarily regional based. It is, let's call it industry specific based. So let's say we only offered SEO and we offer more than that, but for this example, let's just go with that. And let's go back with, let's hypothetically say we make 90 million a year. And let's say someone else offers paid advertising services and we don't.

The other type of company we look to buy is not necessarily regional based. It is, let's call it industry specific based. So let's say we only offered SEO and we offer more than that, but for this example, let's just go with that. And let's go back with, let's hypothetically say we make 90 million a year. And let's say someone else offers paid advertising services and we don't.

And let's say they also generate 10 million a year in revenue. If we know we can take all our customers paying us 90 million a year for one product and say, hey, what's the demand for paid? And let's say it's 30 more million bucks. We close that business and we get another $30 million. We're now at $130. We take their customers that are paying $10 million.

And let's say they also generate 10 million a year in revenue. If we know we can take all our customers paying us 90 million a year for one product and say, hey, what's the demand for paid? And let's say it's 30 more million bucks. We close that business and we get another $30 million. We're now at $130. We take their customers that are paying $10 million.

Maybe we get $5 million in revenue from selling them SEO. Now we're at $135 million. And that's the model with M&A that we really optimize for.

Maybe we get $5 million in revenue from selling them SEO. Now we're at $135 million. And that's the model with M&A that we really optimize for.

Yeah, but sadly, you still have to pay money for it up front. Sadly. Yes. But if you use bank debt, a bank usually can lend you, if you have no investors, two and a half to three and a half times profit, assuming you're at scale. Scale being, call it $20-ish million minimum a year in profit. And if you're buying a company, if we call it six, seven times, eight times profit...

Yeah, but sadly, you still have to pay money for it up front. Sadly. Yes. But if you use bank debt, a bank usually can lend you, if you have no investors, two and a half to three and a half times profit, assuming you're at scale. Scale being, call it $20-ish million minimum a year in profit. And if you're buying a company, if we call it six, seven times, eight times profit...

and you can double, triple and cut the cost down. Well, maybe at the end of the day, that six times turns into three times because of the growth and the cost savings, the bank will float it all.