After 15 years of being immersed in the SEO industry, I’ve finally figured out the best way to make a lot of money with SEO. This is a graph showing revenue over time since we started one of these projects,
First, let’s rewind a couple of years to the Change My SEO conference, with 800 attendees, must be in high-level SEOs and entrepreneurs. You can imagine there’s a lot of networking and a lot of deal-making going on.
An SEO buddy of mine hits me up and says, in more words or less, hey, are you free for dinner tonight? I have a huge business opportunity I’d like to share with you. I was like, well, I got a lot on my plate, and he was like, I’m buying the drinks. I’m like, okay, what time?
My team and his team went to dinner at this fancy rooftop bar. Of course, I ordered only the most expensive cocktails, and we enjoyed a fine meal. After the foreplay was done, he hit me with the pitch.
I own this real estate agency and do the SEO lead generation myself. We make 17 million per year. I want you to take over the SEO so I can focus on converting these leads and selling these properties. In exchange, I’ll give you actual ownership of the business. You’ll have stock equity, a percentage of the company. If you can take us from A to B, we’ll make a ton of money together.
He had my attention, and the numbers had my attention. I still had some critical questions on my mind, which I’ll share with you later, but I was damn to sleep on them. We eventually started to partner up.
So let me tell you how that went. At first, it was a slag. Bear in mind that the website we were starting with was in its baby phases, and we all know you need to be patient with SEO, but to make matters worse, real estate leads do not convert quickly. If someone says they’re interested in a home, it doesn’t mean they’re going to buy it today.
Plus you’ve got to wait for loan approval, and escrow, and sometimes buyers get cold feet. So patience was a requirement, but if you do good SEO, eventually, you start to see some results.
Our traffic grew over time on this project, and as you can imagine, cash flow followed suit. The thing is, in terms of SEO, it’s not the most challenging niche I’ve ever been in, not by a mile. I
I’m going to show you how you can create deals like this for yourself and why you want to. We’ll get into what kind of businesses are in agreement for these partnerships, how to entice them to do business with you, and the various types of deal structures you can and should make.
Smart Agency Model
I recently learned that there’s a name for this type of joint venture marketing partnership, and it’s called the smart agency model. I agree, it’s smart, but the agency part, not so much.
You’re not working with the client, you’re working on your own business, anyways, we can’t win them all. Let’s talk about some of the benefits of the smart agency model. First off, it allows you to specialize which is SEO and marketing. They focus on actually running the business, just like how I’m sure most affiliate marketers have thought, why don’t I start selling my ping pong tables instead of making a commission of 2% on Amazon?
They eventually back down because who wants to learn e-commerce? SEO is enough by itself. The innovative agency model takes care of this.
EAT Expertise, Authoritativeness, Trust
Next, you never need to worry about E- A -T expertise, authoritativeness, and trust. Google has said in its quality radar guidelines that they’re looking to promote articles written by trusted and authoritative subjects in each industry. This becomes challenging.
If you’re trying to create a website in the finance niche, and you’re just some guy hanging out on reds Wall Street bets, but with the smart agency model, E-A-T isn’t a concern. You’ll be partnering with the industry experts with degrees and everything. The third benefit is that in many cases, you won’t have to be responsible for the content, which is a cost saving.
If you partner with the surgeon, he will not let you write up some content on the latest tumor extraction technology under his name. It’s within everyone’s best interests that they take care of the content.
It would help if you still optimized SEO, though thankfully with tools like Surfer, 99% of the optimization is done in the writing phase. Bam, the last benefit is the big one.
Unlike regular agency work, you get to participate in an exit event. If your partner gets an offer to sell the business for 10 million, you get a piece of the pie too. You can sell affiliate marketing content businesses as well. At the time of this article, multiples are about 4X times annual profit.
So if you have an affiliate website making $10,000 per month, you can have a $480,000 exit. But if you smart agency up with a SAS business, you’re looking at a 10X on annual revenue. So if you’re making 10X per month in revenue, which isn’t that hard, you’re looking at a $1.2 million exit.
What Business Should You Target?
Now let’s start to talk about what kind of businesses are great partners for the smart agency model.
Ideally, you want lucrative but non-competitive niches. Right now, you’re like – I also wish I had a gold Lambo – but this is achievable with the smart agency. You need to go local instead of trying to compete nationally for something like plastic surgery.
Just try to rank in one city. Liposuction surgery in Austin is about the same price as in Los Angeles. So choose your battles and find the best ROI.
E-commerce is another angle. Trust me when I say there are many easy gaps to fill with e-commerce SEO.
How to Find a Deal
I want to share how to land these deals. Like anything, it all starts with a good reputation and track record. You want to be known as someone proficient and get the job done. You get that by being good at SEO and collecting case studies about your work.
Now there are two different approaches to defining partnership opportunities for smart agencies. The first is where you’re putting in the effort, and the other is passive, where you’re letting the options come to you.
Let’s focus on the active approach first. Now, when I say active, I don’t mean go out and start cold emailing businesses one by one. It’s going to go like this. “Hi, I’m the 30th SEO business emailing you today. I don’t just want to do SEO for you. I want a part of your business. Oh yeah, my name is Tom. What’s yours?
In the rare case that someone responds, you won’t have much bargaining power as you came in cold AF, instead, think outside the box, call some small business mergers and acquisitions law firms and tell them what you’re looking for.
Show them your track record, and they’ll do all the hard work for you. They know a bunch of small business owners already. They want a commission for putting together the deal. It’s in their best interest to match you with someone that needs this kind of scaling.
The passive approach requires you to have some level of influence. Whether that be through a blog or social media, you want to have a level of renowned to the point that deals are coming to you. This is one of the main benefits of having a personal brand, and I’ve always been tripped up over why some people who have an excellent rep for being capable SEOs haven’t made deals like this. I’m looking at you. Yes, you.
What Type of Deals Can You Make?
Now let’s start to talk about what types of deals you can make. I told you this is about getting a share of a business, but how much is fair, and how should you structure the deal?
Let’s say you decide to partner with the CBD company. When they sell a bottle of CBD on their website, they get paid instantly, and the product gets sent out. So if you started to take 15% of that business, you’re essentially getting money on day one of working with them without doing anything.
With these types of situations, expect a trial period where certain milestones are met, such as an increase of 15% traffic, then your 15% equity kicks in. This is called a waterfall.
If instead, you’ve made partnerships like I have where the businesses rely on lead generation, such as with the real estate business, then structures are more straightforward. On the day of the partnership’s start date, all leads going forward are 25% yours.
The downside is waiting for the cash flow to start coming in. There are ways to get money upfront, though. If you want some cash flow to help with your SEO machine, you could start taking a draw of 15 grand per month to offset future earnings. We’re getting super nerdy with the financial jargon, so it’s always good to get some M&A attorneys involved to watch over the deal, which brings me to pitfalls.
You’re merging with another business. What could go wrong? I hate to look at things pessimistically, but it’s really in your best interest to write your shareholder agreements and other documents as if you’re preparing for the worst.
That’s what these documents are for. They give you a playbook on what should happen if the worst possible situation comes up, or as one of my partners said, playfully, in the event you guys developed heroin addictions, here’s what would happen.
The next pitfall is you might not find a partner as hungry as you are. That’s why running a six-month trial is always good to see what it’s like working together. You don’t want to be putting in 500% when they’re putting in five.
Another pitfall is they might not be able to scale as fast as you can. So here’s an excellent question to ask in any meeting: if we can 10X your traffic in six months, could you scale up to meet the demand?
So what’s my feedback after trying this model for quite some time now? I love it for all the benefits I mentioned earlier, primarily because I can focus on SEO and traffic and don’t have to worry about E -A- T ever.
I like it so much that it made another one of these partnerships with the law firm where hopefully, we can start seeing some seven-figure months once the pipeline is built. We’re also looking to add a new smart agency project to the mix in the software or e-commerce spaces. So if you’re looking to scale up your software or e-com business or any business for that matter, make sure to reach out and drop a comment.