Hello, and welcome back to The Breakdown.

Today, we are going to be breaking down a company that is for sale on the site, Flippa. If you want to look at the listing of the business I will be talking about, you can find it here.

This site is a blog making $16k+ a month in revenue... and guess the margin?

99.9%

And you want to know what I think about this business? I don't think you should buy it. There is one main reason why, but you'll have to read on to find out.

Here are a few things you may takeaway:1. Why blogs can be such great money makers2. The downfall of blogs, and other similar businesses3. Red flags to keep an eye on when buying a business

Breaking down "The Narcissistic Life" Blog

I thought it might be nice today to throw it back to my college days. I always was thinking in class, there are so many things I am sitting here learning that I am never going to use. One of those things was a SWOT analysis. At least in a formal way where I am listing it out.

A SWOT analysis is a way of analyzing things such as businesses in terms of their Strengths, Weaknesses, Opportunities, and Threats. Now, I do this often a lot actually, just in my head. When I am looking at cool businesses, I always am evaluating what is the strength of this business, what are it's opportunities or threats that may bring it to an end, etc. I just thought it would be fun to formalize it today.

P.S. I always thought my learnings about banking terms such as the reserve requirement, bond discounts, mark to market, etc wouldn't come in handy either, but then SVB happened. Maybe my professors did know what they were talking about...

Anyway, to look at the actual site of the business I am looking at for sale, it is above their. Really interesting, really niche.

The reason buying a business is interesting, is you can avoid a lot of the legwork that comes from that 0-1 phase of the business. You start making money right away, and often have a good outside view of some dead weight you can cut right away too.

But, enough about that. Let's actually analyze this business, and decide if I would buy it or not.

Strengths of this business

• This business has been around for 10 years already. That means it has 10 years of compounding built in to it in terms of visitors, and followers. There also is a theory that the longer a business has been around, the more likely it is that business will be around for that same number of years to come. So for example, this business has a pretty high likelihood to be around for another 10 years, just because it has been around for 10 already.

• 453 articles already posted on the site. You have a catalog of articles for people to look at, revisit, etc. Which means people already coming to your site, and will eventually find new things you post too.

• An interesting topic. I can't say it is of my personal interests, but it sure does grab my eye in terms of interesting topics, which I'm sure has an affect on a lot of people.

• 99% margins. Need I say more? Your only expense is hosting, at $52 a month, and it makes $16k now. sounds pretty nice to me.

Weaknesses of this business

• The BIGGEST weakness of this site, is right when you pull up the page. Look at this home page and tell me what you think it is.

You may think it's the colors? Very in your face, bright yellow. Wrong. Although that may be your opinion. A plain logo? Also wrong. Basic design? It is basic, but not what I am getting at.

The reason I would never buy this business, is the original owner's face is literally on the home page. 

Why is that bad, you might ask? Well, to me, that means I'm sure part of the reason people come back and people read this at all, is they are connected to the person who is writing. They feel a deep sense of connection with this person, like they know them, been with them for 10 years. That makes for a really engaged and valuable audience, hence the fact this guy makes $16k a month with this.

But, what that means for you as a buyer, is there is going to be a portion of your audience that drops off the second that guys face isn't on the home page anymore. The relationship is no longer there for those people, so their attention goes elsewhere.

This is the downfall of businesses like Youtubers, Twitch streamers, and creators in general. People are tied to you, and the second it is no longer you, there is no more people. The other downside, is the second you stop creating, these people move on too. You always have to be creating.

• Another weakness, is that the only stream of income is ads. You are constantly at the mercy of what someone is willing to pay for those ad spots, and you are not diversified. You can easily be wiped away at the mercy of an algorithm. There is a way I think to combat this though, that I cover in opportunities.

Opportunities with this business.

• With the rant I just went on, there is a bright side. I think while yes, you would lose a large portion of the audience right away, this site isn't totally personalized. You do have an opportunity to creating the same content without a face tied to the blog, continue making money, while having your original base of 450 articles already written to support you.

These are the articles that are being written. They could have been written by anyone for all you know, this guy could totally have outsourced his writing, and I think that is an opportunity for a buyer as well.

• The second main opportunity I see, is this type of content is easily translated to Youtube, Tiktok, Twitter, etc to build a following. I think of channels like Teaching Mens Fashion on Youtube, the threadboi's on Twitter, and TikTok's quick and engaging videos. Lists often prove very engaging, and thus make for good posts as the algorithms realize people are enjoying that post. This would require to again put a face with the company, but it could prove to be very beneficial as you add more streams of income than just ads as it is now.

• Additional to this is newsletters. This content could easily be sent out by gathering emails from your readers, which opens another ad income stream, and you then actually own your customers.

Threats for this business

• The most obvious threat, is just another player. The downside of the opportunity I just laid out, is anyone can do it. This guy is leaving the race with his blog, but the blog that WAS in second place, now has a shot to overtake you.

• Someone spending more. Look, everyone WANTS 99.9% margins, and to have a business that only costs $52 a month, but to stick around, I'm willing to bet some people would take 80% margins and spend on some ads to drive more traffic to them.

• A site based totally on traffic driven from Google, is that the algorithm one day decides they don't want to advertise "narcissists", and thus your site one day disappears from the face of the earth. Not literally, but Google finds something else they would rather drive traffic to. It's highly unlikely, but not out of the realm of possibility. You do not own your audience in this case, it is just whoever Google sends you. You don't know who they are, what they do, what they like, don't like, etc.

So, would I buy this business? Or would I encourage someone to buy it?

If you are someone who is willing to put your face on a page, in front of a camera for Youtube, TikTok, etc, and you have a deep interest in the topic of narcissism, sure, this business could be for you. But I think for this to work, you would need to diversify income as soon as possible, repurpose your content across platforms, and be willing to do all that while taking a hit because your audience will drop due to it not being the original owner anymore.

But, I would say, for the price it is at ($729k, which is 4x yearly profit), I would not at all buy this business. And, unless you meet all the criteria listed above, you probably should not either. I think it is too tied to the person who owns it, and the threats far outweigh any benefit.

It is not diversified in terms of income, I think this can be easily started up by someone now that a major player has decided to leave, and content companies are a constant grind. I'll tell you, I do these newsletters once a week, and it takes a lot of motivation and discipline to get just ONE out. PER WEEK. The second I stop posting, or whoever buys this site does, the traffic stops coming, and therefore the income does too.

But, this is my opinion.

What do you think? Would you buy this business? Let me know by responding to this email, and call me out on things maybe I missed, ignored, or that you disagree with. I would love to have a discussion about it.

And that's all for today, if you want to get more follow me on Twitter @Cam_LaChance, where I interact with people and share more thoughts similar to what I write about here.

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💯 Freaking sick dude🤷‍♂️ Meh, do better next time😑 Bruh, I might unsubscribe after reading that