How to Turn Your Side Hustle into a Billion Dollar Business

A letter to my friends, on their journey to financial independence and retiring early,

I am grateful that fate has led you to discover this small corner of the world. If you’re reading this, it’s likely that you’re striving to break free from the confines of the typical 9-to-5 job. The purpose of this blog is to assist you in launching your own business or side hustle, accelerating your journey towards achieving financial freedom and retiring decades earlier.

I hope your enjoy reading this blog as much as I enjoyed writing it 💕

If you’re an online startup owner striving for financial independence, you’ve probably heard of Thomas Smale, founder of global M&A Advisers, FE International.

He shares his inspirational story and the side hustles that eventually made him tens of millions of dollars. 💰

Table of contents

• A letter to my friends, on their journey to financial independence and retiring early,
• If you’re an online startup owner striving for financial independence, you’ve probably heard of Thomas Smale, founder of global M&A Advisers, FE International.
• He shares his inspirational story and the side hustles that eventually made him tens of millions of dollars. 💰
• A letter to my friends, on their journey to financial independence and retiring early,
• The Side Hustle That Got Thomas Started
• The Beauty of The Forum
• “So what I was doing back then is for a really small business, join a relevant forum for that business, whatever it might be, build up a little bit of a reputation just doing basic stuff, like answering questions. It wouldn’t I wouldn’t be paying for advertising anything like that. And then after a while, you could start to organically promote your business. It might be like, Oh, we have my website does X”
• Selling Courses & The Magic of Compounding
• “And if you think about business over the years and you go back 10,000 years ago and how people are running businesses, it would have been word of mouth then as well. It’s exactly the same today, so that’s kind of what I found”
• The Secret Sauce: Be Consistent in Your Side Hustle
• “But if you at least have an understanding of what you’re worth today and what you’re trying to achieve, your strategy, your exit strategy, then dictated by where you’re trying to get to and what that timeline might look like”
• Selling Your Startup: A Strategy
• How can Saas Business owners diversify their customer base?
• “Just find ways to scale them, and every source can be scaled more”
• Don’t Chase Trends
• The Art of Goal-Setting
• Final Thoughts
• What advice would you give to entrepreneurs who are thinking about starting their business?

A letter to my friends, on their journey to financial independence and retiring early,

From my own personal experience, the greatest way to achieve financial independence is to:

1. Start a side hustle,
2. Nurture its growth into a full-fledged business, and
3. Scale it into a million-dollar enterprise.

Last summer I had the pleasure of interviewing an entrepreneur I’ve admired for such a long time, Thomas Smale, founder of FE International. If you’re an online startup owner striving for financial independence, you’ve probably heard of Thomas Smale.

FE International is a global, multi-award winning brokerage company specialising in Saas, ecommerce and content businesses.

I came across Thomas Smale’s advice, when I first began planning my exit strategy from It Really Works Vitamins. (This is the startup I founded in 2015 – a little more on that here).

While there is an abundance of content on setting up an online business, there is a total dearth of information on how to sell it.

This is where Smale comes in. His stellar advice, gives founder’s a realistic action plan on how to sell their business for the best price possible. As an authority in selling online businesses he has been invited to speak at countless business events, podcasts and on business blogs and he is here today!

Check out the full video here 👇🏽

The Side Hustle That Got Thomas Started

“So when I started out in the industry and this was back in 2010, so 12 years ago I was buying and selling small websites for myself. Really small websites that were basically just a website weren’t really making any money. Also, I was a student, so I didn’t have much money. I was buying these for $100, 200 dollars.

Back then, what I was doing is, I was buying the website, finding ways for it to make some money. And we’re not talking about thousands of dollars we’re talking about finding a way to make $10, $20, $50 and then once I did that, I would essentially repackage it and sell it. So I might have bought a website say for $300 found a way to get it making $50 a month, and then I would have sold it for $1000 or $2000 at the end of the month. The market back then was completely different than it is today.

There was not a not really a mainstream marketplace you could go sell on, that would always be too small for like, an M& A firm or a broker. And so that was like my first money online.

THOMAS SMALE’S STORY IN HIS OWN WORDS:

And then in 2010, I pivoted into courses so teaching people how to buy and sell. That was quite successful for a while. And then off the back of the course, people who have established businesses, started coming to me and say, “Hey, Thomas Can you just sell my business for me?” So that’s how I got into M&A which is what we do today and the very early days. It was really just word of mouth because there was there was no FE international for selling your business. It was basically you didn’t really have a choice.

So back then there wasn’t really, um, social media. I mean, there was, I think, like maybe MySpace probably would have been the popular platform. I think Facebook was just about to be around then, but, like Web forums were everywhere almost any. And they kind of still exist today. That is not as popular any any sub industry you could find there would be a forum that existed for it, just like today. I guess there’s a like a YouTube channel or a Facebook group that exists for pretty much any industry you can think of back then they’d be very specific forums.

The Beauty of The Forum

“So what I was doing back then is for a really small business, join a relevant forum for that business, whatever it might be, build up a little bit of a reputation just doing basic stuff, like answering questions. It wouldn’t I wouldn’t be paying for advertising anything like that. And then after a while, you could start to organically promote your business. It might be like, Oh, we have my website does X”

So selling courses was exactly the same thing. I was just answering people’s questions about buying, selling websites or businesses for free and just giving tips. Which is kind of still what we did today is what do YouTube, Whatever. It might be exactly the same concept. It doesn’t really go out of fashion. So answering people’s questions. And then people came to me and said, I want to learn more about this. How do I find that? Hey, I have a course or a book or whatever you want to sign up for. It was either bus Summer’s coming from that or word of mouth, so people telling their friends being like a actually check this out or this is a good course. Maybe you should learn. So we’ve got a lot of referrals in the early days. And then, even though we pivoted into M&A today, it’s still a lot of our businesses referrals as well.

Um, so early days, I say what the one thing about referrals is they really compound over time. If you do a good job and you start to build a good reputation, you start getting more and more referrals. And then the more people who have worked with the more people that are happy with the work you’ve done, they will start telling more people hence, why compound?

So if you tell one business for one person or you sell one course to one person, they like it and they tell five friends. That’s only five referrals. If you have 100 clients and they all tell five people, that’s 500 referrals. And then if you can find ways to increase the likelihood of someone making a referral but usually quite simple, like asking them or incentivising them, maybe you can increase that number by 20% so your 500 referrals become 600 so it starts to compound. And then when it starts to compound, you can also do things to increase the number you’re getting from existing customers. Um, we’ve always found particularly this industry like word of mouth for a high end service.

For example, we found people are way less likely to sign up for a service where you’re probably paying us five or six or maybe even seven figures in fees, much less likely you’re going to decide to sign up off the back of an ad, but you might be significantly more likely if your friend or appear or somebody you know, like a mastermind group or whatever, it sold a business with us, so it sounds like a lazy answer. But the reality is things that work early on really can continue to compound. The key is being consistent and continuing to do the same thing. And if you can just make 1% 2% 5% improvements of things as you scale that compounds quite significantly. When you’re early on and you have 10 customers and you make a 5% improvement, you’re not really going to notice it.

But if you have 1000 customers or 1000 leads or 1000 anything and you can increase it by 5% you then have 1000 and 50. Then it starts to compound quite nicely.

So the reality is some things will forever work.

Selling Courses & The Magic of Compounding

It’s always worked well, the very first thing to do before you really start your strategy is figuring out what you’re trying to achieve, because that really then starts to help dictate what the strategy is so and understanding what your business is worth today. So let’s say you get evaluation, which you should do before you even start exit planning from any good M & A firm like us will provide a free evaluation. So let’s say your business today is worth a million dollars and and you say you personally think “Well, actually, I would like to sell my business for $10 million”.

Then there’s a certain type of plan that will help you get from 1 to 10. If you say, Oh, I’d like to sell my business for $1.2 million and you’re a million right now. Then the plan is completely different, going from 1 to 1.2 than it is going from 1 to 10 million.

“And if you think about business over the years and you go back 10,000 years ago and how people are running businesses, it would have been word of mouth then as well. It’s exactly the same today, so that’s kind of what I found”

The Secret Sauce: Be Consistent in Your Side Hustle

“But if you at least have an understanding of what you’re worth today and what you’re trying to achieve, your strategy, your exit strategy, then dictated by where you’re trying to get to and what that timeline might look like”

So most people have some sort of value goal in mind. Some people just want to be millionaires. Some people want to pay off the house. Some people want to buy a house.

If you’re in the U. S. Some people want to pay off college debt or medical debt, or whatever it might be. Everyone has their own personal reasons why they’re trying to achieve what they’re trying to achieve. So the very first thing is understanding what you have today.

One way of trying to get to and then your strategy will really change. There’s no one size fits all strategy. You didn’t have to figure out what it’s gonna look like from a timing perspective, what you might have to do within your business to get to the level you want to. So if you’re coming out a million trying to get to 10, chances are you either have to wait quite a long time or do some things dry, drastically different to get that level. Whereas if you currently have one million and trying to get to 1.2, chances are to get to 1.2 million. You probably don’t really have to wait that long, and you might not even have to do that much different in your business.

Selling Your Startup: A Strategy

So the very fundamental point of an exit strategy is what are you actually trying to achieve in the exit if you’re just blindly going in saying I want to do an exit strategy because I wanted to sell my business one day completely different spectrum of what you might need to do based on what you’re trying to achieve as a like outcome.

How can Saas Business owners diversify their customer base?

Are you trying to diversify in terms of where they come from or what kind of cohort there in? So maybe you have a product, which is $20 a month, and then the top end is $2000 a month. Chances are what works to attract. The $20 a month customer is not the same as the $2000 a month customer, so I think first you need to think about the cohorts and who you’re trying to target and then you don’t necessarily need to have. Lots of new traffic starts is to scale. You don’t necessarily need to get customers from different sources, as we’ve already spoken about.

You can get customers more customers from the same place just by doing a better job. And often that’s easier, because you already have something that’s working. So let’s use an example of like what we’re doing right now on your YouTube channel.

The solution to getting more subscribers to your YouTube channel in almost all cases is launching more videos. So instead of having one video week, you might do one a day or like to two week and you’ll start seeing that compounding effect. And then, yes, there are. I’m not a YouTube expert.

But then there are other things you can do, like maybe a clearer call to action, to get people to subscribe. So in most businesses, things that work a very small scale will also work at a bigger scale. I think if you ask me this question 12 years ago, I would have said every good business should have 20 different sources of traffic or users or customers, or whatever it might be by thinking a small business, particularly as you or maybe have, like a very small team you should only really focused on, like maybe 1 to 3 sources.

I think the worst thing you can do is spend a little bit of time when everything but never really get good at. So I’m gonna try paid ads who try paid ads with $500 and it just doesn’t go anywhere, and you say OK paid ads doesn’t work or you do social media and or YouTube, but you create a YouTube channel. You put five videos up and you leave it. You don’t do anything again. Chances are that’s just never going to be successful. But you might write off and say No. YouTube doesn’t work in my industry. It sucks. But the reality is the problem is the consistency, so I think it’s always good to continue focusing on sources that are working.

Are you trying to diversify in terms of where they come from or what kind of cohort there in? So maybe you have a product, which is $20 a month, and then the top end is $2000 a month. Chances are what works to attract. The $20 a month customer is not the same as the $2000 a month customer, so I think first you need to think about the cohorts and who you’re trying to target and then you don’t necessarily need to have. Lots of new traffic starts is to scale. You don’t necessarily need to get customers from different sources, as we’ve already spoken about.

You can get customers more customers from the same place just by doing a better job. And often that’s easier, because you already have something that’s working. So let’s use an example of like what we’re doing right now on your YouTube channel.

The solution to getting more subscribers to your YouTube channel in almost all cases is launching more videos. So instead of having one video week, you might do one a day or like to two week and you’ll start seeing that compounding effect. And then, yes, there are. I’m not a YouTube expert.

But then there are other things you can do, like maybe a clearer call to action, to get people to subscribe. So in most businesses, things that work a very small scale will also work at a bigger scale. I think if you ask me this question 12 years ago, I would have said every good business should have 20 different sources of traffic or users or customers, or whatever it might be by thinking a small business, particularly as you or maybe have, like a very small team you should only really focused on, like maybe 1 to 3 sources.

I think the worst thing you can do is spend a little bit of time when everything but never really get good at. So I’m gonna try paid ads who try paid ads with $500 and it just doesn’t go anywhere, and you say OK paid ads doesn’t work or you do social media and or YouTube, but you create a YouTube channel. You put five videos up and you leave it. You don’t do anything again. Chances are that’s just never going to be successful. But you might write off and say No. YouTube doesn’t work in my industry. It sucks. But the reality is the problem is the consistency, so I think it’s always good to continue focusing on sources that are working.

“Just find ways to scale them, and every source can be scaled more”

In no small business, would you have maxed out the number of referrals. You can get organic visits, you can get subscribers. You can get over that. It might feel like you’ve hit a bit of a wall in terms of like customer cohorts.

Maybe if its enterprise clients you have to reach them in a slightly different way to the lower end clients. But that really depends on the business you have. So again there’s no – it’s not like enterprise. Clients will only be acquired through cold calls or cold emailing or whatever. Maybe that would be an effective channel. Maybe it won’t. And it’s not a one size fits all for every business. Obviously, I’m lucky, unfortunate. I see lots of successful businesses every day, and one thing I do know is that there’s not really anything common between them, like one common channel of sales that works for everybody. It could work really well, for one thing, could work really well for one business and not work at all for another.

Are there any particularly interesting businesses or particular niches or industries that you find really attracting a lot of interest on FE International?

We have a real range of different businesses, and we really get interested in everything, which is our job. Our job is not to get. Let’s say we’re representing 30 clients at any one time.

Our job is not to get 10,000 inquiries to one business and then two inquiries to all the others. Our job is to get 1000 inquiries on everything and have a consistent amount of interest in any kind of business.

I don’t think anyone should build a business around the business model they think is like trend yourselves for higher multiples or chase a certain industry because it’s popular, because if you said that a couple of years ago, everyone had said, Yeah, crypto and I’ve seen a lot of crypto related businesses recently, and you look at the P and L Yes, last year, going up like that and then this year are down to basically zero. If you chase that trend, I don’t I don’t really know anything about crypto, so I’m not saying you should, that that industry is dead or anything like that. But it’s quite clearly down this year.

So if you had to chase that trend, whereas a boring industry, think about things that were around 10 years ago, around 50 years ago, that industry will be around in 10, 50 years as well.

So yes, chasing trends can be great.

Any popular listing we have and we represent will always be making money. It will always be cash flow positive, which is ultimately what investors are looking for.

There’s a lot of investors you really don’t care what the business is as long as it’s making money. So that’s that’s really the key. It’s not the industry you’re in. It’s not how fancy your website. It is not your business model. Um, it’s making money, being profitable,

Don’t Chase Trends

Fortuna: I’m really interested in how you set your goals because I read online that FE International consistently doubles its revenue, so I’m just interested in how you kind of go about goal setting.

Yes, every year we set, um, goals for the next year, and I’m saying, as we’re growing, it gets, I guess, consistently harder to keep growing at the same rate. So we we look at a lot. It’s got a lot more scientific. In the early days, it was like, Let’s just double revenue, Easy target. We don’t really have a huge amount of overhead. That’s fine. Now we have seven figures months going out in overhead. So we actually do need to plan better where you end up with a business that is a complete mess.

If you’re not planning for payroll rent, all the other things that all the other costs that you incur up running a service business at at scale hiring kind of smart people who are are not cheap to hire. So we look at things like, how many leads do we have coming in and then we have a lot of data, like if we get an inquiry. How long does that take to, um how many? How many enquiries turn into valuations? How many evaluations turn into listings? How many listings will then sell as a percentage? How long does that take? Um, so we generally start at the bottom of our final year and look at what do we have lead wise? And then we look at all of our data around how long things take, and then we can then define what our target is for the next year. And then we then break that down by the team into lots of different lots of different things.

The Art of Goal-Setting

So the marketing team will have targets by channel by week, which all really feeds into our annual target.

So I think early on, when you’re a small business, I wouldn’t say you shouldn’t. You should definitely set a target, but I don’t think you need to spend a huge amount of time worrying about how you get there.

Like often, the answer is, just get on with it and do the work As you scale you definitely need to get a little bit more scientific about it.

Um, so we look at tonnes and tonnes of different data points we track. Everything will always be aggressive with targets. But this is like ours because it often takes people time to get to know us, go through the process, decide they want to sell. We often have a pretty good idea what we’re gonna make next year. Already just from our existing pipeline and people were talking to it’s not like all the money will make and say 2023 will come from leads we generate in 2023. The reality is, some of it might come from someone we first met five years ago. They got evaluation, they were worth a million dollars in are worth 10 and they want to sell in 2023 they come back. So we have a very long or can have a very long life cycle like that.

Fortuna: Would you like to share any interesting or cool news or updates about FE International?

If you’re in the industry and you actually looking to buy and sell? We did just publish some mid year reports for every business model, which gives an idea of, like, current demand trends, um, and things like that. So definitely worth having a look and checking that out. If you’ve not already, you can find it on our website. We have one for Saas. We have one for e commerce content businesses, and you can also download all of them. I think if you’re a buyer seller or just someone who’s casually interested in the industry lots of good data in there, particularly because what’s happening beginning of 2022 is completely different from the beginning of 2021 completely different from the beginning of 2020. So always worth if you have a business, even if you’re not planning on selling, keeping out of what’s going on.

Final Thoughts

What advice would you give to entrepreneurs who are thinking about starting their business?

So I think the first thing to do is like, not get hung up on lots of things. Many people get stuck on things like, What if my website look like what the name be? What should the logo be? What legal stuff do I need to do? What should I call the company? Who should I get a bank account with, like Yes, you probably need to do all of those things, but the reality is in the early days, you just need to launch something, start working on it, find out ways to make money and then figure out figure out how to go from there.

I think most people that fail, I think, spend way too much time planning, and then you end up in this, like, paranoid circle of having no idea. If it works, you never actually do it. Most people who are successful just try things. Chances are what you what you start with. What you launch is not actually going to be the thing that makes you money in future.

Anyway, it might be similar. So for me it was started with courses and then transitioned.

“So most businesses, I say it’s important to start building a reputation in the industry for being helpful”

And then if a particular product you have or service you have isn’t working, you can sell them something else. Whereas if you don’t bother doing that, you don’t build any reputation. No one’s really following, you know and respect your opinion, Um, whatever your main marketing channel might be, whether that’s a YouTube channel, Facebook, blog or whatever it might be, then it’s going to be very difficult to get anything off the ground in any industry. So focus on being useful and having a readership of viewership or listenership, whatever it might be. And then you can kind of pivot and sell whatever you want.

Yeah, I’m not really early on selling courses at time. I was a student, kind of needed ways to make extra money and pay rent. Um, And then when I graduated in 2010, I decided that I wanted to run my own business and not be, um, not being an employee. And I was like, Well, that was a good time to do it. The economy back then, if you remember, was not particularly good. Wasn’t a very good year to graduate your boys. So I thought, Well, if I’m going to do it and that was a good time because I had already had that, like word of mouth and the popularity started to get people who wanted help selling their business because I had no money.

The only real option to make money was with a service business. I couldn’t really launch a product because I didn’t have any money to build it or find a supplier or whatever is going to be couldn’t build a software business because I don’t know anything about what I do now. But I’m not technical, so I can’t write code. I couldn’t build it from nothing. So I guess a content business, so to speak – that’s essentially what we’re doing. Producing content for free and the funnel was, of course, and then the secondary funnel after that became set your business. So all the kind of things we’re talking about today are the kind of things that we have been talking about 12 years ago. I just have significantly more experienced now. But the fundamentals don’t really change that much. So very early on, it was basically just me, essentially selling my time. I was providing the service. My time.

As the business started to compound, we started to get word of mouth, and then we could hire people.

Um, and the business has kind of kept going from there. Now we’re well over 130 people worldwide, and that’s really guess taken 12 years to get there, but things do really compound over over time. Um, yeah. So again, it sounds like a lazy answer. When we started early on, we started small.

We started out just selling businesses. All we do today is sell businesses as well. We just do at a much bigger, a much bigger scale. And ultimately we’ve stuck to it, may be a good or a bad thing. We’ve never really pivoted. We’ve just done the same thing. I think a lot of people start out and they kind of get bored or change their mind or they get tired or whatever after a couple of years of doing one thing, whereas that was never really something that happened to me. So we just kept going.

Thank you so much to to Thomas Smale for taking the time out of your busy day! Check out FEInternational.com when you are ready to sell your online business