Transcript: Growing a Fitness Brand, then Selling It – Elaine Eason – DS495

Doug: Hey. What’s going on? Welcome to the Doug show. My name is Doug Cunnington. And today, we have a pretty fun interview with Elaine.

So Elaine is an advisor over at Quiet Light where she helps entrepreneurs sell online-based businesses. She has a background in e-commerce, which is what we’re gonna talk about today, and started her first profitable ecom business on Etsy in 2009. I didn’t even know it existed back then. And you built a lot of businesses since then, including a content site, an online subscription service, and a fitness e-commerce brand that you exited through QuietLife before joining the team as the, uh, 1 of the advisors there. There’s quite a few.

So I wanna start in the middle of your story and then jump around a little bit. So let’s go and talk about the big exit. And tell me when you started that brand, how you grew the company, and when you sold it. So very big question, and I’ll just kinda turn over the floor and let you tell the story a little bit here

Elaine: Yeah. Absolutely. Thanks for having me on, Doug. So, um, The brand we’re talking about is my e-commerce business called Uplift Active. And it’s a aerial yoga fitness arts brand That I started in 20 16. So I started it as more of a hobbyist myself at the time, um, and saw a niche that there was not, Um, any company online that was really specializing in this type of equipment and how to use it at home, how to set it up, safety things people should be aware of.

So I saw an opportunity and decided this is gonna be my next kind of e-commerce endeavor. So I started that, started off slow, but slowly kind of ramped it up year by year, Gained traction through paid ads, trying different things and it was kind of a slow steady growth over about 5 years. Then I after about 5 years, I found myself in COVID, which absolutely exploded sales and was amazing For our business, but at the same time was also extremely overwhelming. I found myself really burnt out and wanting to do something else, but also feeling a little bit trapped in my business. And that’s why I decided to sell it, and I came across QuietLife.

Doug: Okay. Wow. That’s pretty crazy. Yeah. You hear a lot of businesses Says that really exploded over COVID because people were at home, and maybe they weren’t taking vacations or spending money going out to eat or movies or whatever.

So they Yeah. Were investing in in things that they could do at home. So is that kind of what happened with you with your business?

Elaine: Yeah. I mean, think about it.

All the gyms were closed at the time. I don’t know if you remember. It was like, you could resell your gym equipment for stupid amounts of money on, Like, Facebook Marketplace and Craigslist. Everyone was sold out. Everyone’s, you know, doing their home fitness thing.

And So aerial yoga was a more creative thing people could do. Kids love it. Um, just like a really great kinda like at home Activity that you can stay fit and also have fun at the same time. So just demand exploded. We had good inventory at the time, so we’re, like, really Well prepared going into it to meet that demand.

And it got just a little more challenging as you know, just getting products overseas during that time was really, really tough and got more and more expensive. It was a whole host of things that that was just it was a wild time. It was it was really a whirlwind. I feel like super lucky that, you know, it’s like it was a, you know, really difficult time for our whole society at large. But you know, the silver lining is that at least our business was Able to really gain some traction as a result of it.

Doug: Okay. So you started the company in 2016. We will go back because I am curious about some of the early businesses that you started. But in 2016, Did you know what you were doing or getting into, or it was just, like, 1 of the opportunities that showed up and you were like, hey. I’ll give it a try.

Uh, it sounds like maybe you were into aerial yoga.

Elaine: Yeah. I didn’t know what I was doing so much from an ecommerce perspective A little bit. Like, I had started this Etsy store many years previously. So I knew kind of, like, the process of, like, how to how to source products from China, how to enforce them, what At a very basic level, I had that understanding, but I didn’t know how to run paid ads.

I’ve never used, like, Shopify before or, you know, Gone through that process, so I was new to that. And I followed several influencers at the time On the drop shipping space to get started. So I actually started by drop shipping existing products from China initially, which is not really, like, a viable Business model today, but at the time it was. So I’d started selling other people’s products before starting to import and then private label And designing our own products. As a result, that kinda happened organically over time as the business grew, and I got more feedback from customers.

Doug: Okay. Perfect. And it sounds like you you tackled each new challenge as you went, and you weren’t thinking, hey. I need to know everything all at once. Because I see some people kind of making a mistake where they try to plan everything out, like, 2 years ahead And things are gonna change.

It’s not gonna turn out like they think. So you just kinda stair stepped up as you went. Right?

Elaine: Yeah. Yeah.

I think that’s a common Misconception. Like, I’ve had friends that want to get into e-commerce or running an online business. And sometimes I see people get stuck in the trap of Researching everything and feeling like they just don’t know enough to get started. Whereas the best way to learn is just by doing it. You’re gonna you’re gonna make mistakes.

You have to know that even once you even have, uh, you know, established successful business, you’re still gonna make mistakes. But that’s the only way you’re gonna learn and grow is by trying different things and just doing it.

Doug: So now let’s go back to 2009 in Etsy. What’s the story with Some of the early projects you worked on specifically that 1.

Elaine: Yeah. I was a teenager. This was my first online business. And I wanted to do this business for, like, 2 years before I actually was able to because my mom wouldn’t let me make an Etsy account and, like, hook up the bank information to get paid. She’s like, oh, I don’t trust this. It was in, like I don’t know if it was, like, Teen Vogue or Girls Life.

It was in, like, a teen magazine that I learned about Etsy. And I have always been a really, like, Crafty artsy person. And I was like, I this would be my dream to, like, make crafts and art and sell it on Etsy. As as, like, a child, this is like, I was I love this idea. So I finally come into my mom, and I that business was Masquerade Masks.

So I imported, Like masks from China. And then I’d paint them, decorate them, design them, and sell them on Etsy.

Doug: Okay. And I take it then you didn’t know what you were doing then either. You saw the magazine article.

Alright. How did you how did you figure out how to import from China? Yeah. Honestly,

Elaine: I don’t really remember. It was really probably I just I probably just giggled.

I was just a kid looking at looking up stuff on the Internet. How do I get, Um, product in bulk and probably was like, oh, well, how do I buy things in bulk? And probably Alibaba was 1 of the first search results, and that’s that’s how I started.

Doug: Okay. That’s pretty cool.

So so you were a teenager then. You had this exit. You started the other, uh, the e-commerce brand Uplift active is what you said. Right? In 2016.

So did you go to, uh, college? Did you have a corporate gig? Can you talk about that? So we’ll go on a detour here. What’s the story?

Elaine: Yeah. So That math business I started in high school. And then when I went to college, we ended up selling it to a family friend. Not nothing notable, but really just, hey. I don’t wanna do this anymore in school.

I don’t have the time. Family friend took it over. And I studied entrepreneurship in college, so that was What I wanted to do, I knew that I loved working for myself. I loved having, you know, creative freedom, freedom of my time. But I also was, Like, I was a kid.

I didn’t really have any expertise. I didn’t have, you know, any, like, you know, industry expertise to be able to build a business from. So I graduated college. I worked for a start up briefly that ended up folding and found myself in a corporate gig working as a data analyst. So I worked as, like, a spreadsheet junkie for, like, 3 or 4 years out of college.

And it was not for me. I did not like the 9 to 5 kinda job. I did not like working in an office. But it was enough that kind of put a fire under my butt that it was like, I need to do something for myself. I need to figure something out.

And so, they got me kind of dabbling in the online business world. I worked on a couple of content sites before I found Uplift Active.

Doug: Did you know right away at the corporate job that it wasn’t for you? And I’ll buy you a little time here. So for me, I have an engineering degree, and I got a corporate job.

And the thing is when you get there, they sort of they send you to orientation. They Doctor Nate you with, like, the with Kool-Aid. And they’re like, alright. Like, in a couple years, you might get promoted, and then 5 more years after that, and then, like, see these people, they’re so successful, and you feel important, and you’re like, this is the way to do it. And I was like, okay.

But I wasn’t really into it, but I, like, played along for a little while. So how was it for you?

Elaine: Yeah. Yeah. I mean, I also knew pretty early on that it wasn’t for me, but I also felt like I didn’t really have another Path.

It was like, okay. I’m I’m making an income. I can support myself. I don’t really have another means. So I was a little bit trapped in that.

It’s like I have to make the most of this because This is my best path towards, you know, just being able to support myself and have a decent life. So, Yeah. It wasn’t ideal, you know, starting out, but I made the most of it. I was I’ve always been, like, a little bit of a try hard, so I’m like, I’m a little bit, like, I’m gonna I’m gonna do the best that I can at job and, like, be the best person in this role that I can be. But on the flip side of that, you know, in a corporate world, you’re not really, like, rewarded.

You know? You’re not necessarily compensated directly related to your work. So sometimes it’s like I have a little bit of resentment that I feel like I’m putting in more than my colleagues. We’re all making the same amount of money, but I’m also, like, I have this, like, kinda drive inside of me that, like, I just can’t be, like, a slacker. And I don’t wanna, like I feel like I have to do my best, You know, even though it’s not necessarily, like, coming back to me in a financial or other benefits, really.

So that kind of harbored some resentment in me that also kind of fueled, You know, my side projects that I hoped would be able to get me free eventually.

Doug: That’s funny. I had the same observation, but instead of working hard. I was the person you resented because I was like, you know what? If I’m not gonna get a raise or promotion anyway, I’m doing, like, bare minimum here.

And yeah. I’m I’m sure that’s why so many people didn’t wanna work with me. That wasn’t that bad. But, yeah, I was just like it doesn’t I mean, I could put in, like, a hundred percent more effort and then get, like, a tiny raise or, like, work on my own stuff, and that pays off way more. So when did you leave the corporate job?

Elaine: Yeah. Um, I left it in 20 18. That was a really difficult transition, actually. I don’t think enough people really talk about that, but it was, like, a huge mental shift to fully commit to My e-commerce business and just shed my data analyst career that I felt like I’d put, you know, so much time and effort and, you know, some years of work at that point into. It was like a really big mental shift, and I had a hard time committing for maybe, like, the first 6 months.

I was like, oh, I could always, you know, maybe do some, like, data analyst work on the side or, like, you know, Some consulting on the side. It was like, I really, like, had a little bit of, like, mental difficulty making that shift, but I did get there eventually and, I’ve never looked back since. Yeah.

Doug: Yeah. Could you imagine having a job now?

That’s crazy. No. So Did you have any of your identity tied up with the corporate job?

Elaine: Yeah. Definitely.

Definitely. Did you experience that too? Did you feel like your identity was part of your career there?

Doug: I a little bit, But by the time so I got lucky. I got laid off, so I didn’t have to make an active decision.

But once I got laid off, I had the opportunities in front of me, so I had a couple things going on the side already. But it it made a huge difference because it like I said, I Probably wouldn’t have quit on my own, but if they laid me off, then now, like, the universe is, like, opened up, and I’m like, I have a chance now. But I probably for about 3 or 4 years, I was slowly I have I had a bad attitude if you didn’t catch it earlier. Right? So for about 3 or 4 years, I was slowly, like, not playing along as much, and I started to listen to, like entrepreneurship podcast and Tim Ferris and stuff like that.

So I was kinda checked out by the time they laid I mean, I got laid off because I was doing, like, Very autonomous, like, entrepreneurship type things in my role because I had a lot of freedom, and that didn’t work that well. So, Basically, I wouldn’t, like, ask for approval for certain things. I would just say, uh, this looks like a cool idea. I’m just gonna implement this on my team and see what happens. And, You know, management doesn’t like that very much.

So I had a very slow transition that made it much easier, so I didn’t have, like, an identity crisis, basically. That’s good.

Elaine: Yeah. Because it was yeah. It was difficult.

Like I said, it was like a weird just a weird transition. In some ways, it’s like a blessing to be laid off. It’s like you Have a forced reset. Whereas it’s different when I’m, like, leaving my job and everyone’s like, what are you doing, Elaine? I didn’t even tell my colleagues that I was leaving that I even had this business.

Like, it was totally secret the whole time. Nobody knew. Um, I just told them I wanted to take a break to go travel, which was true because I wanted to travel and run my business remotely. But, like, they all just thought I was crazy to throw away, you know, this career and this job. And, You know, when you’re with these people 40 hours a week, like, you’re very much inundated in that culture.

So it’s definitely like, woah, a big lifestyle change.

Doug: And then well, like you said, I mean, not everyone has a lot of friends at work, but they’re the people that you spend the most time with. And then, like, You cut those ties, basically, and, like, you think, hey. I’m gonna hang out with them. But if they’re not in your normal environment, then you’re probably not gonna hang out with them again.

So I don’t know. Do you have any comments on that?

Elaine: Yeah. Yeah. For sure.

Like, I have not really kept up with any of my my coworkers. Not not in any serious way since then. Yeah. I mean, that’s another thing whole thing we could talk about is, like, being an entrepreneur Can be also isolating at times because you don’t have those coworkers, especially working remotely. But luckily, there’s been a lot of great communities that You can meet people online and make those connections just in a little bit different way.

Doug: Well, actually, yeah, let’s go there. We’re we’re gonna die divert from the notes that I had. But yeah. So working alone is completely different, and you went from the corporate job and you were working on the side. You’re probably working a lot of hours, Total if you were working full time and then running the business and it was big enough for you to leave your your gig.

So what was the transition like when all of a sudden you were just working on your business.

Elaine: Yeah. I mean, It was a little bit difficult, honestly, to stay motivated at first because I felt like, oh my gosh. I have so much time. And I was like, I was hoping going into it, oh, I’m gonna be able to, you know You know, look how big my business possibly could be if I’m working on my business now 60 hours a week instead of, you know, 40 hours of corporate, 20 hours business kind of situation.

Like, I did not I did not do that. I definitely took a break. We went on a bunch of trips that summer after we quit. My boyfriend and I, Boyfriend at the time and I quit at the same time because we both had e-commerce businesses, and they’re both at a level that we could quit. We were kinda doing it in tandem.

So, yeah, it like I said, it took me about 6 months to be, like, normalized and, like, figure out, like, my routine and my workflow and cadence wasn’t an immediate shift.

Doug: And then how is it working alone? I take it you had a team, but not in the same location. But, yeah, what is it like working alone? Is it Lonely?

Elaine: Sometimes. Um, I think it’s just a little bit different. You know? You have to really be Self-motivated. Just, I guess, you know, pre-quitting, I was, like, really confined to, like, I have to work on my business during these hours, and these things have To be done, and I have to do it.

Whereas post quitting, I had a lot more time. So it was kinda like managing that. And it was definitely very isolating at first because I didn’t I wasn’t really plugged into a lot of, like, groups or communities at that time. I really kind of discovered that a little bit Later as we started traveling, actually. So we quit our jobs in 2018 and then started traveling over that summer.

And then 20 19 we traveled the entire year and went to, like, 17 different countries. And everywhere we’d go, we try and find events and conferences to go to. So we make business trips out of it. So we’d go to different, you know, entrepreneur events, and we met so many people. And that was Hugely transformative for my business because I learned different ad techniques, you know, so so so much from the people we met.

And it was it was It was amazing. Just realizing, oh my gosh. Like, we’re not alone in this. There are so many people doing the same thing. We made some amazing friends that we still keep up to.

Um, and that that’d be, like, my best advice for anyone is just, you know, if we had gotten plugged into these communities earlier, I think we we would have grown sooner even than we did.

Doug: Great advice. Yeah. Around here, I live in Colorado, and there’s, like, a financial independence community, like, in this town that I’m in. And it’s great because people have, you know, a lot of free time generally, so you can, like, go out for a hike in the middle of the day, in the middle of the week, and, like, kinda missed the crowds.

And, again, people just have a lot of free time and flexible schedules. So I’ll see people at the gym in the middle of the day and usually so it’s crowded then. It’s kind of a nice thing to do. But the other thing is, like, just, um, like, around the holidays, there’s like, parties and stuff like that. So, again, community is huge, and it’s Great timing that you were able to get the travel a lot of this travel out of the way before COVID.

Right? Yeah.

Elaine: Yeah. Because, like That was just pure luck Yeah. With the timing.

Doug: Alright. So let’s talk about when you decided to sell. It sounds like it it sort of snuck up on you a little bit, but can you talk about making that decision and any struggles with, like, actually making the decision and then following through with it.

Elaine: Yeah. I mean, when I started this business, I wasn’t thinking about Selling it, it was really, like, what if I could my dream was to be able to, like, have a business to support myself so I could quit my job.

That was the dream going into it. I didn’t even know that, like selling businesses was a thing when I started this in 2016, but I learned about them at a conference that I went to over in 2019. 1 of Quiet Light’s competitors was there, and I was like, oh, This is this is interesting. I had no idea that I could sell my business, and I think at the time, it was it was worth, you know, a few hundred thousand. I was like, oh, that’s cool.

Like, I don’t wanna sell for that, but it’s cool to know that that’s an option for me. So after that point, I was always in the back of my mind. I’m like, okay. Hey. If we get this to a point where we can sell it and it makes sense, and I can have some financial freedom.

Like, that’s great. It’s kinda like I have the exit idea in the back of my mind from that point forward. And when COVID came and our sales just exploded, the workload just exploded. And I had a really hard time keeping a good team in place. Like, I hired 16 people over the course of a year for really only, like, 4 positions that that we actually needed.

It was just constant. I couldn’t keep people. I was never like a manager before, so I was really like learning as I’m doing. I’m like, okay, I need to be more up. I need to be more careful in, like, the initial, like, screening process and you know, hiring slow.

There’s a lot of lessons that I learned over that year, but it was also super exhausting and super time consuming for me to hire and train all these people that, like, most of them were not working out, Um, at least in the beginning. But I finally got it to a point where I had, like, a really, really good team. We had just the best best group of people working with us. Um, but I still was like, I just can’t. Like, I was I was exhausted.

It had been so much work to get to that point, And I knew that I wanted to kinda revisit selling again. So I reached out to Quiet Light. I don’t remember how I initially found out about Quiet Light. I think it might have been their podcast. But I reached out to them.

I talked to 1 of the advisors, and he gave me evaluation estimate, which Sounded great. I was like, yeah. I like, let’s let’s sell. Let’s let’s I I would love to be free. But he told me that it would be a little bit difficult to sell because, There were some risks with my involvement.

Like, I was pretty heavily involved. I’m still working a lot. Like, I just put together this really great team, But I was still working, you know, 50 hours a week in the business. And also, we were shipping some things out of house, like, we were managing returns. We’re we needed to outsource everything to a 3 p l to make that the easier transition.

And trying to think. There was maybe 1 other thing, um, just buttoning up our processes, making sure that it gonna be really easy for a buyer to take over, and he said he really recommended that I do those things before listing for sale because we would have a better response. So I as much as I wanted to sell, I, like, took his advice, and I did those things. I got the 3 p l set in up. I, um, Got a lot of my work outsourced to my assistant who’s became our operations manager and really got our processes buttoned up Over the course of 6 months before going and revisiting Quiet Light and listing it for sale.

Doug: Okay. In the 3 p l, they they handle, like, fulfillment and everything. Is that right?

Elaine: Yep. So we got a warehouse in California that would handle, Um, fulfillment of all of our sales returns so that nothing was coming through our house.

Doug: Okay. And then I mean, you were doing that to prepare to sell it, but, basically, that took you and most of your involvement out of the business. Right? So then you were just, like, overseeing stuff. The operations manager, like, did everything, and it’s just like you’re there for emergencies and stuff.

Elaine: Yeah. I mean, I’m still, like, involved. I was still involved in the business to a certain degree. Like, I’m managing, you know, inventory orders, but the day-to-day, My assistants were handling and that made it a lot easier to sell because they have my expertise and knowledge.

It’s like they’re trained. They know everything that I know About any issues that come up, about any product questions that made it a lot easier for that transition. I was really needed very minimally after closing.

Doug: Very cool. And how actually, I I won’t jump ahead yet.

So let’s talk about some, like, mistakes that you’ve made or mistakes that you made along the way. I you know, you mentioned hiring people, and you didn’t have management experience and perhaps not interviewing. So you can’t really like, no 1 could blame you for that mistake. Like, you have to go through that experience, and you didn’t have, like, a mentor showing you on the job. So 1 benefit, I while I complained about my job, I learned how to, like, hire and build teams because I had people with, like, 15 years experience, teaching me how to do it.

So if I when I had to do it, it was it was pretty easy. Um, so what are some mistakes? Yeah. Go ahead.

Elaine: Yeah. That’s tough. That’s exactly my realization too. I’m like, if I was managing a team When I was still working in my data analyst job, I was like, yeah. You have so many managers around you. You can call.

Oh, the situation came up. Like, you know, You have, you know, so many people you could phone a friend for, whereas in this business, I don’t really have that. I like going off of, like, you know, my gut feel of googling things, sometimes, like, posting in forums, Like, is this normal? Like, should I how do I respond to this situation? Like, it was really, like, fending for myself.

I think I it it was like a mix of mistakes in terms of, like, initially, um, initially, I was a little too soft, And so I had people that just, like, just work not getting done to the level it needs to be done and taking 5 times the amount of time I would expect it to take kind of stuff, Um, and then being billed for that and not being fully satisfied, but, like, feeling like, yeah, we can make it work. Whereas, like, when I found my right people, it’s like I knew, like, Almost right away, like, this is my team. These are a players. It’s like and I had full trust in them from the beginning. If I Properly set out guidelines in terms of, like, what we need, timelines, what’s expected.

Like, that is super, super important. Um, I can tell very quickly if someone’s a good fit or not. So I made, like, an interview process where it was like a, um, I do a questionnaire. I’d have I’d give them I test them a little bit. I’d have them, like, review things on our website and ask more complicated questions that we get Uh, all the information is out there just to see, are people gonna do the research?

Are they gonna notice these little details? I definitely test them like that, kinda judge kinda like how what their tone is like for, like, a customer service type of role. And I just kinda, you know, put them through tests in the interview process, and that really, really made a difference. So I could see who is serious or not And also, like, really focusing in the very beginning. If I had somebody that wasn’t meeting the marks in those first couple weeks, it’s like, Don’t even try to move forward.

Just, like, you know, part ways. If it’s not gonna be, like, a fit, you have to part ways. It’s like you’re you know, we’re a small business. We can’t we don’t have room for b players. We don’t have room for people that aren’t pulling their weight or that are gonna require me to, like, be overly overseeing their work And a high type of way.

It was really being I don’t wanna say I’m being, like, a little bit cutthroat, but I I kinda had to be because I wasted time with people that were, like, Most of the way there, but not quite the perfect fit.

Doug: And it feels bad. Right? Because, like, You’re, like, disappointing them. Right?

But at the same time, you don’t have time to mess around, And there’s so many other people that you could hire. That’s the thing. Like, it’s so easy to hire someone else. I mean, you still have to go through the screening and interview and Yeah. And make sure you’re doing due diligence, but there’s just way too many people that are probably more qualified and you just have to find them.

Elaine: And then and then also learning just, like, Once I had really good people, it’s like taking really good care of them. And it’s like, once I find these people, like, how do I make sure that they feel like They’re valued, and they’re getting that feedback on a regular basis, sending them you know, tracking birthdays, tracking important events in their life, and, like, Having that relationship really made a difference also in terms of getting people to stick around.

Doug: Any other mistakes or things you would do different that you could think of.

Elaine: Not necessarily From, like, the management type of perspective, um, uh, Yeah.

I can’t think of something not specific right now.

Doug: That’s good. That’s good then. So I’ll go a little bit deeper and just see. You said you got a little overwhelmed during the COVID time frame, and you sold you seem happy now.

You’re working with Quiet Lite. Is there anything that you think you could have done? Not that you want to do it, but is there anything you could have done to prevent the overwhelm and still have the business now?

Elaine: Yeah. I think it would have been hiring sooner because I went through so much turnaround that that was I I waited a little bit too late, but it also was a little bit unpredictable.

So I can’t totally fault myself for that, but I probably had capacity To have hired somebody earlier than I did looking back. So hiring sooner, getting that outsourced sooner is that would have lowered my workload going into it to give me capacity to flex Should something unexpected come up that requires a ton of my time again, like COVID did, a lot of that stuff was really just, like, kinda unprecedented in terms of, like, I mean, warehouses were shut down in California. Like, that’s why part of the reason we were shipping out of our house When we hadn’t been doing that before, like, we had a I had a container of physically swing set frames shipped to my house. And I was shipping these out of my garage, like, these 60 pound boxes. I’m packing them myself, and the UPS guys coming every day and picking them up.

Our whole garage was, like, Just pallets of product because, you know, nobody could ship out of the warehouses in California if it wasn’t, like, an essential I don’t remember what they what the wording was. If it’s not, like, essential goods for COVID, like, those warehouses were, like, shut down. So, yeah, if I had things outsourced a little bit earlier, I would have a little bit more flex time, and it wouldn’t have been quite The workload that I had experienced at that time, just doing everything.

Doug: Alright. So let’s Hit a couple of tactical things as much as we can.

I went on a long tangent, and thanks for coming along on that. So For the, like, the traffic and sales and stuff like that, where were you getting traffic? Was it mostly ad based or for social or what. Yeah.

Elaine: It was a mix.

It was a it was pretty diversified in terms of our traffic channels. Early on, I got the most traction off Google Shopping, and I still think that’s a great place to shop or to start selling depending kind of what your product is. But, um, the buyer intent is really high. They’re really low in the funnel. They’re looking on Google Shopping like they’re ready to buy.

They’re ready to shop kind of similar to Shoppers on Amazon. So I found a lot of traction there. There was nobody selling aerial yoga equipment on Google Shopping when I started those ads, so we kind of, like, were first movers there and crushed it. So that was always a really nice channel for us. Of course, I’m we did Facebook ads.

Um, that was maybe, like, 30 percent of our revenue. We did, um, A little bit of sales on Amazon. Not a ton. Like, we barely scratched the surface of what might have been possible with Amazon. And then we had some organic sales as well from building content.

So that was 1 of my strategy with the business was to be, like, value driven. That’s a lot of kind of the principles that drop shipping models were teaching at the time is how do you sell products They’re adding value beyond just what you’re selling. So is there, like, digital guides you could put with it, tutorials, um, expertise? I I still think that’s a viable strategy today. It’s like, what can you add value to that makes makes customers become Fans of your brand and really trust you.

So we did a lot of, um, content. We did, um, an online subscription service of Classes that people could subscribe to to use the equipment with. We sold tutorials. We sold teacher training courses. Um, becoming kind of like a leader in the space was 1 of my strategies.

And it’s like, how do we, like, add value? People trust us and then and therefore also Trust our equipment, want to buy from us, and become brand loyal.

Doug: Got it. And you mentioned you were a little bit ahead of the curve. Were you, like, pretty far ahead of the curve?

Because, like, you were or the company was an industry leader by the time you sold. Right? Yes.

Elaine: Yes. I would say so because it’s a pretty niche space.

There were other companies selling aerial yoga equipment when I started, but there was no company That was specialized solely in aerial yoga. Actually, when I started it, we recalled aerial yoga gear. Just aerial yoga gear dot com was the company, and I rebranded it, Um, midway through to Uplifactive to be able to sell things beyond just early yoga.

Doug: Okay. And let let’s talk a little about the niche selection.

So like I said, it sounds like you were part of that, but, like, what advice can you give people and, you know, you could weave your story into this as well. Yeah.

Elaine: I love talking about niche selection because I have a very different perspective now being as an adviser and helping people sell businesses, And then I see what’s popular and what’s not popular, and this is so, so important. Like, your niche makes a huge difference in terms of what you might be able to sell your business in the future. So starting off right and being aware of this is, like, very important.

So I chose aerial yoga because of Personal interest in it, but also, um, it also aligned with, uh, what I saw as a big opportunity because, Um, it’s a higher ticket item. So it’s like, you know, this is higher end equipment. People are willing to pay a premium for really good quality equipment like this. It’s very important that, you know, It’s been tested. It’s it’s safe and reputable, and it can charge a premium price for that.

So I saw that as an opportunity, and I’m a big fan of, you know, higher ticket items Still to this day. But in terms of niche selection, if I was starting another brand today, I would Definitely consider average order value. Something that’s small is gonna be really hard to scale just because, like, your fixed cost, cost of advertising is gonna be high. Like, You really like products under 30 dollars, I think would be hard to scale with. I’d probably wanna stick with higher end items.

And then Items that you can charge a premium for, so, like, avoiding commodity type niches, things that you can build a community around, hobbies We’re always, like, great niches because it’s really easy to find your customers. Like, there’s Facebook groups where you can find customers. It’s really easy to get people to be really Passionate about what you’re selling and passionate about your brand if it’s something that’s, like, a hobby for people. And then anything that is Has the ability to, um, have some kind of, like, repeat purchase component to it is always it’s always great. Everybody loves recurring revenue in terms of a a business value That really, really adds to what you could sell for eventually.

And then There are some other things to think about. Avoiding trendy niches. So things like apparel and jewelry businesses are hard to sell because they’re seen as trendy. They’re seen as, you know, more work to operate because you’re constantly having to launch new products. Your product life cycle is shorter.

Um, if you deal with higher amounts of inventory when you have sizing, that’s something I would avoid. So you’re looking for evergreen niches With products that you can really build a brand around and the community around.

Doug: Great advice. Did you find so you had a personal interest in in your niche. Do you think that’s good or bad?

Because some people, like, Turn it into a negative, um, you know, an example. People like photography. They become a photographer, and then they hate their hobby.

Elaine: Yeah. I generally think it’s a good thing.

I certainly have heard of that happening too, but I, Myself, I would have a hard time building a brand and working, like, really putting in the work to get it to where it needs to be and to to to for me to be happy with it if it’s something that I, like, Really just don’t care about it all. Like, I have to be able to understand it and also, like, relate to your customers and understand their perspective about what you’re selling as well To, um, you’re just gonna be more successful, I think, if you are able to understand that connection.

Doug: So let’s shift a little bit more into, like, the state of the industry. So there’s a there’s a couple things. And, actually, I I asked you for some notes, and here’s 1 of them.

State of the market for ecom and content businesses looking to exit. So over the past couple years, There’s a it’s I’m in the content, uh, site space more so, but there’s a wide range of listeners and viewers out there. But, you know, advertising has been lower. There have been a handful of Google updates that have really shaken everything up. And I know that some of the multiples have gone down specifically for content businesses, and I think it it probably varies for other stuff.

But what what is the state of the Market out there these days.

Elaine: Yeah. Yeah. Things have definitely shifted a lot over the last couple years, and it’s gonna depend On what your business is. We can talk a little bit about ecom, then I’ll talk a little bit about content.

So ecom, We had the aggregators come out of the scene. You know, 20 20, 20 21 was really the peak where we had these aggregators with private equity money, Um, flush with cash, buying up businesses, mostly Amazon heavy businesses in drugs for really high multiples. The market has since kinda stabilized. Most of those aggregators are not purchasing anymore. That being said, there is definitely still A big buyer pool for online businesses that are profitable and growing.

Um, Quiet Light’s been around for 15 years now. We were selling Amazon FBA businesses before, uh, the aggregators came on the market. We’re still selling them now. We still have buyers. It’s a lot of Smaller groups of buyers, um, you know, mom and pop buyers or entrepreneurs that manage portfolios of brands.

They’re not necessarily, like, you know, A funded aggregator per se, but they have expertise growing and scaling brands, um, that they are buying. And you’ll also have financial buyers, people that, um, come from, you know, maybe a corporate background wanting to start their own thing, but not wanting to Start from scratch, buying a business can make that transition easier. So you see those buyers across, uh, e-commerce and content. So multiples right now in e-commerce it depends on kinda what your breakdown of sales looks like. I think the my the buyer demand has kind of restabilized To wait the way it was looking pre COVID, whereas businesses that are more diversified in their sales channels are selling for higher multiples than Purely FBA businesses.

So if your business is mostly Amazon FBA those multiples have fallen a little bit below where businesses that are more diversified are selling. So Amazon FBA businesses are selling 2 and a half, 3 and a half x SDE on average. And when I say SDE, that is your seller’s discretionary earnings. So it’s your net income plus you get to add back owner benefits or any 1 time expenses. So it’s like how much money you’re financially making as the owner operator of your business.

So FBA is 2 and a half, 3 and a half times that. Diversified e-commerce businesses can be higher. It can be 2 and a half to 4 times that on average, and we’re talking about, you know, sale prices under 5000000. Content side of things, um, has really, really been disrupted over the last year with AI, with the last You Google updates, help the content, core update. Like, that has really, really shaken the scene as I’m sure that you’ve heard and seen yourself.

That I’d say it seemed that demand for content was really slow over the past kind of summer, but it started to pick up a little bit again in recent months As for sites that have been able to weather the updates successfully with, you know, minimal, you know, impact or maybe, you know, So I’ve seen a lift as a result of them. But I’d say buyers are still a little bit shy about content, you know, that I’m still hearing that sentiment. You know? AI is still relatively new. We don’t know kinda, like, the full impact of how this is gonna impact the space, how this is gonna impact service in the future.

Like, there’s a lot of unknowns there. So the multiples and content can be very high still if you have you know, a really resilient site that Has diversified income, good growth trends. We’re seeing still strong multiples. It could be anywhere, you know, 3, 5 x, a really high side. But sites that have been hit by those updates are selling for significantly less and very there’s not a lot of buyers that are wanting to take from those turnarounds right now.

So it could be 1, 2 x, maybe even under a 1 x if the site has really taken a nosedive, depending kind of the whole picture Where the revenue is coming from and etcetera. Interesting.

Doug: Yeah. Sure would be scary to buy 1 of these sites, especially I mean, I imagine that the people that would buy a content site probably have experience in it. But if not, I I would I would feel so bad for them not knowing what they’re walking into and the risk and all that kind of stuff.

Yeah. There’s plenty of sources is out there for them to get that information, of course, if they do some research. Um, but, yeah, still crazy. I know some people Don’t do their research. So

Elaine: Yeah. Things are changing so quickly in this space. So, if you’re Regardless if it’s content or ecommerce, if you’re looking at doing a turnaround, I you you wanna make sure you have expertise in in that business model, whatever it is. It’s not Not for the faint of heart, for sure. If you’re new to a space, stick and you’re wanting to acquire, stick to something that’s growing, has good foundations, and has a buyer, As a seller, that’s, um, willing and able to train you through that process.

Doug: Okay. So another note that you sent over is being prepared to So when you will get the most value and give you the most flexibility. And 1 thing that, I guess I don’t say it, like, on the podcast too often, but if I’m coaching someone or if I have, like, a private conversation, I’ll tell them, hey. It seems crazy, but you should maybe consider selling your site or your asset or whatever. And it’s crazy because it’s on the uptick. It’s growing.

Yeah. And the thing is, I’ve got burned like this twice. I know a couple of my friends have as well. But, basically, you should sell something when everyone thinks you’re absolutely fucking nuts for trying to sell it, and it looks like a bad decision. Because as soon as it looks like you should sell it and you’re tired of it or the the sales have plateaued or something, Then it’s not as attractive, and you can’t get the good multiple.

So can I hope I’m on the right track, but can you expand on your point here?

Elaine: Yeah. Definitely. It’s really if you have the time and ability to do so, which you should, if you’re in for running a business You wanna be able to reverse engineer your exit and know what is there a goal figure in mind where you’re like, yes. If I hit this number, if I can sell my business for this number, it makes sense.

Let’s sell. You should know what that number is for you so that you can keep tabs on it because it’s really hard. It’s kind of like you’re playing like a slot machine at times where you’re like, wow. This business is growing. It’s Going great.

Like, everything’s chill. I’m working so few hours. That might be the right time for you to sell, and it’s really hard to kinda, Like, pull the stops and sell. But if you’re at your financial number, if you wait too long and ties change, you know, you get complacent, you neglect the business, it starts Declining. There’s algorithm update.

Whatever, external force or something that you’re doing yourself changes the tide. Suddenly, you can be on a much longer timeline to get back to that number That you would have been happy had you just sold when you when things were up. So it’s like, do that math of, like, knowing kind of what are what are the multiples for your business model. Like, You can reach out to me. I’d be happy to give you kinda like a current state.

If you wanted to sell today, this is what it would look like. That way, you can kinda make your plan from there. Like, oh, you know, I’m close. I need to, like, really be kinda washing my numbers and thinking about that. Or I’m a little further away.

Let’s make, you know, some now is maybe the time would make some, you know, bigger investments, maybe some riskier investments and kinda see how those pan out in the future. But it’s very important that you’re kind of keeping tabs on that because it It makes me really sad, especially I see people, like, getting close to retirement and, like, you know, things are going well. It’s like, oh, you know, a year or more, a little bit more, and then a year comes by. Okay. Now the business has started to decline, it’s actually worth less.

If you had sold a year ago, you would have been retired an extra year, and you would have walked away with more money. But now It’s worth less, and you’ve worked another year. And it’s you know, we can still there are still buyers for, you know, this situation, but We kinda missed that ideal Mark had we’ve been thinking a little bit, uh, more strategically and holistically about, like, What your goal is and what you’re really trying to achieve there.

Doug: And a couple of things that you mentioned before from your specific business. You needed to remove yourself from it.

So you were the CEO or founder and have all the operations taken care of. And that probably solves most of the problems for most people when thinking about selling their business. Right?

Elaine: Yeah. It’s there’s a few things.

It’s not simply the transferability risk is 1 aspect of it. If you are heavily involved, that’s an aspect. But there are other risks as well that can have a really big impact of what you can sell your business for, and knowing that in advance can allow you to make some tweaks and adjust things. Like, maybe Maybe you have a dependency. If you have an ecommerce business, you have a dependency on, like, 1 you have this huge wholesale client That’s making up, you know, 30, 40 percent of your sales.

Like, how how solid is that? Buyers are gonna see that as risky, and you may sell for a lower multiple. But if you’re able to grow some new wholesale accounts, you know, grow Some other sales channels to kind of balance that risk, you’re gonna be worth more when it comes time to sell. Same thing, like, on the content side of all of your income is, you know, Display ads or, like, you know, 1 specific revenue source that’s gonna be riskier. So diversifying things in advance, that’s that’s work that you need to do ahead of time that’s gonna pay off when it comes to sell.

Doug: Is there anything else that sellers need to know about the process to help them out when they’re thinking of selling?

Elaine: Yeah. I’d say, um, if you have the chance to plan ahead, that’s well worth your while. So, I mean, even if you’re years ahead of potentially selling, it’s worth Getting evaluations, you can contact me. Um, be happy to give you kind of, like, state of the market for what your business is and what it’s worth And, um, make any changes that need to be made.

I’d say the most common thing is really getting books cleaned up, Especially on inventory based businesses because moving those books from cash to accrual can show a really big difference in what that profitability looks like depending on, like, What how you’ve been managing your inventory, how much you have at a given time. So doing that in advance is really important. It’s gonna be need to be done before you list for sale. So If you wait until you’re actually ready to sell to do kind of some of this cleanup work, it’s just gonna push your timeline out further. So the average timeline to sell right now is about 3 to 4 months From start to finish, from, hey.

I’m I wanna sell the business, make that decision, sign up with Quietlight to actually closing. It’s about 3 to 4 months. So you can kinda think about that as you’re planning ahead and definitely reach out in advance of that just in case there’s any little things that you need to be doing to kinda tweak, um, the business prior to actually listing it to yourself some leeway.

Doug: Okay. And is there any anything else that I should have asked you that I didn’t before we let everyone know where they could Find you?

Elaine: I think that really sums it up. I’d say it’s just definitely reverse engineering your exit is the best way that you can Get the biggest return. Um, there’s some stats. Like, 60 percent of all the income you ever will earn from your business comes on the day that you exit. So making a plan for that ahead of time is gonna set you up in the best way, and that’s gonna make it go as smooth as possible, get you the best price, and, Um, just the least headaches through that process.

Doug: And then where can people find you?

Elaine: Yeah. Um, you can email me at elaine at quiet light dot com. Be Happy to set up a call or answer any questions anyone has.

Doug: Okay. Cool. And what kinda, like, advice would you like, what what kind of people Should be contacting you. What’s the right person so you don’t have, like, just random meetings with people that you can’t help?

Elaine: Yeah. I’d say I mean, our to list with QuietLite, I’d say you wanna be making around 50 k a profit per year or on a trajectory towards towards that.

So if you’re a little smaller than that, but you’re you’re not ready to sell yet, you’re more future planning, I’m happy Gonna have a conversation and kind of, like, walk you through kind of what you might expect and some things that can help get you there.

Doug: Awesome. Cool. We’ll put the email address in the show notes so people can find it. And thanks a lot, Elaine.

It’s been a lot of fun catching up with you. Thanks, Doug.

Elaine: Likewise.

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