This page may contain links from our sponsors. Here’s how we make money.
The process of growing and selling an online business can be life-changing in several ways. For Kristin Jacobsen, it resulted in a six-figure payday and the birth of a new career.
Kristin launched his first business, an online financial services company, a few years after completing his formal education. Today, he works as an advisor, helping other online business owners accomplish their dream exits while avoiding the pitfalls that threatened to derail his.
From Employee to Business Owner
After graduating with an Accounting degree in 2011, Kristin spent a few years working in finance, including a year with Australia’s largest financial services company. During that time, he identified a gap in the market, which led him to start his own business.
Kristin said about the business’s origin, “I saw a gap in the financial services market for specializing in providing financial services and strategic financial advice for young professionals.”
In 2013, Kristin started Connected Wealth, an online financial planning and services company. He recognized that traditional financial service companies catered to pre-retirees with large asset bases. Through Connected Wealth, Kristin targeted young professionals with high incomes but small asset bases.
The younger generation preferred online meetings, personal finance apps, and paperless administration instead of the in-person and in-office communication desired by the older audience.
Connected Wealth aimed to serve a niche audience, and Kristin developed services around that audience’s preferences.
Since he was targeting young professionals, Kristin decided to reach them where they already were. He used social media marketing, including Facebook and Instagram ads, and published content on his website. Kristin points out that this approach was “not really done in the financial services industry, at least for independent financial advisors” at that time.
Additionally, Kristin relied on webinars and in-person events for lead generation. He organized and hosted events, both online and in-person, relevant to his target audience. These events provided attendees with valuable information they could use in their own finances and also allowed Kristin to promote his services.
Kristin’s marketing methods worked, and the business grew quickly. Eventually, the Connected Wealth team included three virtual assistants (VAs) who specialized in financial services. “I did try to hire VAs that didn’t have a background in financial services,” Kristin said, “but I found it was really hard to train and manage them myself.” As a result, he engaged the services of a company that provided VAs specializing in financial services, and the output was significantly better.
Kristin also hired an internal financial services technical manager who handled technical analysis, compliance, and delivery of the technical aspects of financial services. This hire allowed Kristin to focus on his strengths (managing client expectations, sales, marketing, and consulting with clients) while offloading the other tasks.
The Six-Figure Exit
Kristin sold Connected Wealth in 2021 after running the business for eight years. He decided to sell because he no longer enjoyed working in the industry. He said, “The main challenges were the ever-changing compliance landscape and increasing complexity of service delivery requirements from governing bodies, that didn’t translate to adding value and delivering quality outcomes for clients.”
Additionally, Kristin felt like he’d taken the business as far as he could based on what he was willing to do. “In order to scale further,” he said, “I would need to install a significant amount of infrastructure and capital.”
After weighing the options, Kristin decided to sell the business rather than take the risk of investing a lot into it. “I decided the best way forward was to cash in my chips and capitalize on what I had built to that point,” he said.
When it came time to find a potential buyer, Kristin didn’t have to look far. He had a pre-purchase agreement with the company that provided his financial services license to operate, so he was guaranteed to have a buyer if he couldn’t find one independently.
Kristin did pursue other potential buyers through his network, but with each of them, either the timing wasn’t right, or their offers were less than the pre-purchase agreement price. As a result, he sold to the company with the pre-purchase agreement.
“Even though it seemed to be a good option to have a pre-purchase agreement at the time,” Kristin said, “the company I had that agreement with and that I eventually sold to tried every trick in the book to either not honor the deal or reduce the pre-agreed sale multiple.”
In the end, Kristin sold Connected Wealth for 4x EBITA, which resulted in a multiple six-figure exit.
Becoming a Broker
Through the challenging selling process, Kristin realized he would have benefitted from the help of a seasoned business broker. He expected to handle the process on his own easily, but “In reality,” he says, “it was the complete opposite and one of the most stressful, resource-consuming projects I’ve ever taken on in business.”
Interestingly, that experience led to Kristin’s current role as an exit advisor. Now, he can help other business owners navigate the complexities of an exit so they avoid the challenges that Kristin had to overcome.
As a Business Development Representative with Flippa, Kristin enjoys guiding online business owners through one of the biggest decisions of their business journey. He says, “It can be a positive, life-changing decision for a business owner and opens the doors to a lot of opportunities on the other side.”
Through his own experience, Kristin learned just how challenging it is for a business owner to transition after an exit. He said, “It can be a challenge to move on and transition from something that you’ve been doing for so long and poured your heart, sweat, and tears into.” Kristin consults with his clients about the mindset shift needed when selling a business.
Buying and Selling Websites in 2024
The industry has seen a lot of changes in recent years, including a buying frenzy followed by a significant slowdown. When asked about the current trends, Kristin points out, “Buyers are becoming more selective and discerning and have a lot more options of businesses to acquire. Quality assets are still in demand; however, poorer quality assets with poor operations are going to struggle to sell their business moving forward.”
Kristin also mentions that Google algorithm updates of 2023 have increased the importance of experience, expertise, authority, and trust (EEAT) and treating your website like a business. He says, “It’s becoming increasingly difficult to just whip up a site, add some content, and then expect to sell at a high multiple.”
Despite the challenges of the current market, Kristin feels there’s still a strong demand for content sites, but buyers are more cautious, and sellers may need to accept slightly lower multiples if they want to sell quickly.
Interested in being featured on Flip My Site? We’re always looking for entrepreneurs with great stories. If you’ve bought or sold a website or online business, please contact us about being featured.