Neil Patel

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.

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.

$2 million, assuming they're growing at a good pace.

$2 million, assuming they're growing at a good pace.

And if they're growing on an annual basis and they have low churn, they're probably going to get $12 million for that business.

And if they're growing on an annual basis and they have low churn, they're probably going to get $12 million for that business.

Okay. But the $30 million in revenue may only equate out to, call it, $6 million in profit.

Okay. But the $30 million in revenue may only equate out to, call it, $6 million in profit.

Correct. So it takes some time. It takes a year to two years, usually two years, to really integrate and ramp up. But at the end of the day, you're at six. You bought it for 12. All right. You only pay two times. Right. You just got to figure out how to float the money, whether it's you're using your own cash up front or bank.

Correct. So it takes some time. It takes a year to two years, usually two years, to really integrate and ramp up. But at the end of the day, you're at six. You bought it for 12. All right. You only pay two times. Right. You just got to figure out how to float the money, whether it's you're using your own cash up front or bank.

You just got to make sure you have the cash up front or you're getting investors to help you out.

You just got to make sure you have the cash up front or you're getting investors to help you out.

whenever you're happy and content. So people are like, oh, I can go from 100 to 200 or 20 to 30 or 40. Well, if someone's offering you enough money where you don't ever have to work again and you're happy and you genuinely want to retire or do something else, go and sell and move on. If you're getting enjoyment from continually growing the business and you don't care for the money, don't sell.

whenever you're happy and content. So people are like, oh, I can go from 100 to 200 or 20 to 30 or 40. Well, if someone's offering you enough money where you don't ever have to work again and you're happy and you genuinely want to retire or do something else, go and sell and move on. If you're getting enjoyment from continually growing the business and you don't care for the money, don't sell.