A Beginner’s Guide on How to Create Deal Flow
Here’s how to find great deals for online businesses without searching for them yourself
Entrepreneurship through acquisition can be one of the quickest ways to build your wealth.
Finding lucrative assets and snapping them up to bolster your portfolio is the dream. The reality is not always so simple.
You can spend hours upon hours searching through businesses that aren’t what you’re looking for. There’s no shortage of online businesses available, but to work efficiently, you must have a system in place.
This is where deal flow comes in.
What is Deal Flow?
While there is no widely agreed-upon definition of deal flow, its loose meaning is the rate of good quality deals you receive.
Think of it as a funnel. All the businesses enter into the top of the funnel, and those that are far away from what you’re interested in are discounted immediately.
The best part of a good deal flow system is that this part of the process can be outsourced. Leaving you to work on the higher ROI tasks, such as buying quality assets and growing the ones you already own.
What’s defined as a quality asset will be different for everyone. The first part of creating a deal flow system is to outline what kind of asset you want to buy. The basic factors include:
- Monetization
- Niche
- Listing price
- Monthly net profit
- Age
This will give you a good basis from which to outline potential targets. The best strategy involves finding businesses that match your skillset.
If you’re a good link builder, then find businesses that have a weak backlink profile. If you’re skilled in paid advertising, then look for e-commerce stores that aren’t fully utilizing all the advertising platforms.
There are lots of ways you can leverage your skill set to find opportunities, but the above criteria are the foundation of creating deal flow. When you set up thorough criteria, it minimizes the chances of finding deals that aren’t a good fit.
With the concept of deal flow understood, it’s time to discuss how you find these lucrative deals.
Networking
Being “in the know” is one of the best ways to get a head start on the competition. Hearing about a business that’s interested in selling means you can swoop in before anyone else even knows about the opportunity.
To be able to do this, it requires you to get involved in the community. This can be done through joining Facebook groups, connecting with people on Linkedin, and even attending events. The added benefit of networking is that involving yourself in these communities is a great way to learn more about your industry from people just like you.
The downside is that if you’re just concerned about deal flow, it’s not the most effective use of your time. It’s always good to keep your ear to the ground. You never know when an interesting opportunity might pop up.
Use a Team of Virtual Assistants (VAs)
To get the kind of deal flow we’re after, it’s possible to hire VAs to do the initial work. This method revolves around having detailed processes set up. For this reason, it can take more work initially but will pay dividends down the line.
Create a standard operating procedure for the type of asset you want to find. For example, your criteria could look like this:
- A website in the pet care niche
- DR of over 40
- Over 25K monthly page views
It would be easy for a VA to find a long list of sites with this criterion using a tool like Ahrefs. You could even write out an email template that could be sent to the site owner inquiring if the site is for sale. The VA can then filter out the negative responses, only leaving you with the leads.
This kind of deal flow system works well if you have precise needs and can’t find businesses for sale in a marketplace. As with any kind of cold outreach, be prepared for a lot of rejection and hesitancy when first dealing with people.
Businesses for Sale Aggregators
Aggregators are websites that create a feed of deals from a wide variety of sources. These deals might be scraped from other sites with no level of vetting or human verification.
This means that there’s likely to be a poor quality of deal flow, which can be time-consuming to sort through. You could have a VA periodically check through sites like this if you set up a detailed framework. Overall, this option is probably more of a hassle than it’s worth; there are better ways to create high-quality deal flow.
Brokers
A broker should act as a middleman connecting buyers and sellers. The advantage of this is that you are dealing with a mutually beneficial relationship. You want to buy an asset, and someone wants to sell theirs.
A broker should also be vetting businesses that list on their marketplaces. This gives you an added layer of security that the businesses you’re viewing have verified earnings and are protected if something were to go awry.
Because this quality assurance is in place, it makes it much easier for you to create the kind of deal flow you need. Although, not all brokers will be able to match your needs, especially if you’re after something precise.
To make the most of a broker, there are some ways you can take advantage of their services. If you’re serious about buying and know what you’re after, get in touch with their sales team. Someone should be happy to get on a call with you, find out your criteria, and deliver any suitable deals right to you!
The starting point, if you’re unsure about what kind of deals you’re after, is to sign up to their email list. Brokers will send out a weekly email with the new businesses that are hitting their marketplace. This is usually the best way to get a regular deal flow of high-quality deals delivered straight to you.
If you register for a free account on the Empire Flippers marketplace, you’ll be able to use search functions to find businesses that are already for sale. This will also allow you to save listings to a watchlist to help you keep track of your acquisition targets. When you’re dealing with a large amount of deal flow, little things like this can help save you valuable time.
Before you know it, you’ll be on your way to creating a pipeline of highly profitable deal flow.
