Buying A KDP Asset

Cash to Cash Flow In Action

A few weeks ago I wrote a post on transferring cash into cash flow.

The core idea is how can you transfer your CASH into CASH PRODUCING ASSETS.

Without risking too much (both monetarily and time-wise).

The short version of the answer is to buy assets within your circle of competence.

For me, I’m always looking for businesses that are fully digital that are already within our circle of competence.

On top of this if you can find a motivated seller, so you can get a good price for the asset, this is a no-brainer.

There’s of course things that can go wrong but as long as the maths works, it’s worth looking into properly.

The Maths

The business cost $89,000 and generates an average of $5-6k/month profit. Roughly a 15X monthly profit multiple, which is really good. Most businesses of this size sell for around double that.

In this case the reason why the multiple was lower was due to a.) The niche of the assets being sold and b.) The new(ness) of the business. It’s only really about 9 months old.

What’s also promising is that the business is still trending upwards, so although our biggest risk is around an overall decrease in the niche itself.

Once we clean up the business a bit, generate some more reviews and our marketing process for each individual book (both in the US and UK), this business should be pretty close to hitting $10k/month profit within the 3-4 months after purchasing.

Meaning our investment should be fully returned within around 10 months total.

These earnings will obviously not be included in the case study of building a KDP business to £100k value within a year.

Future

I’ll be writing more updates on how this integration and marketing of this new brand goes in the future and whether it was a “good” purchase.