The Business Inquirer #012
In this week's issue I highlight a marketplace, a CBD subscription box, an affiliate website in the vape/CBD/cannabis space, and what I learned last week.
Every week I highlight interesting online businesses which are for sale adding my own commentary. This newsletter is for those who are interested in business, finance, and entrepreneurship. Subscribe below to receive it directly in your inbox.
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Hello Friends!
In this week’s issue:
Marketplace - Live Workout Platform
eCommerce - CBD Subscription Box
Affiliate - CBD/Vape/Cannabis
What I Learned Last Week
Marketplace - Live Workout Platform (Asking: $10k)
Description
For sale is an online platform for live workout and wellness classes founded in March 2020. My assumption is that users pay a monthly fee for access to instructors. The seller is a graduate student who is joining the corporate world and selling the business.
Details
Founded March 2020
Priced at $9.99/month per user
160 paying clients
20+ influencer instructors with a following of 960k on social media
Partnerships with semi pros ports team and D1 athletic team
Pending partnerships with athletic wear, yoga, and meal delivery companies.
Tech stack is Zoom and Wordpress
Last month revenue & profit: $1,500
Asking: $10,000
LTM Profit Multiple: 0.55x
🤓 Why I’m Highlighting This Business
Fitness industry is incredibly competitive but it’s also very profitable with a lot of avenues to generate revenue. It’s always worth a look when there’s an established business selling for such a low multiple in the space. Obviously this business is inflated by COVID but even if we give it a 70% haircut, you’re still in this thing for 1.9x assuming all numbers are verified.
In case you’re wondering how COVID impacted the “home workout”…
✅ What I Like:
Assuming the numbers are verified, you can pick up this business with some margin of safety in terms of valuation
Fitness is an evergreen niche and offers a lot of expansion opportunities. Many ways to monetize the client list
Simple tech stack. No need for a developer
Price is negotiable and seller is open to staying on as a partner
❌ What I Don’t Like:
At-home fitness is very competitive industry. Not clear what the differentiator here is. Maybe it’s the variety of classes offered
Impossible to predict how this business would look without COVID
Working with 20+ fitness influencers could present headache
Seller doesn’t list any CAC, growth, tech expense, churn, or other details so you’ll have to subscribe to MicroAcquire Premium to contact the seller and get those details
You can view the listing on MicroAcquire.
eCommerce - CBD Subscription Box (Asking: $500k)
Description
For sale is Hemp Crate Co which is a CBD subscription box with an ecommerce store. The business was founded in March 2019 and works with 40 brands/manufacturers to include their products in the monthly subscription box. Once a customer finds what works for them, they’re able to buy that particular product in the ecommerce store.
Details
750 active paying customers. $70 AOV
Relationships with 40 brands/manufacturers
One private label hemp seed oil chapstick brand (Hippie Hemp Balm)
$20k of inventory included
Trademark
TTM ARR: $500,000
Asking Price: $500,000
Revenue Multiple: 1.0x
🤓 Why I’m Highlighting This Business
Popularity in CBD products is exploding at the same time as regulation around advertising, shipping, and commerce are loosening. This acquisition opportunity presents a great entry point into the market.
Public interest in “CBD benefits” has been steady over the last several years…
✅ What I Like:
CBD is an attractive industry from a growth perspective
750 active subscribers just with organic growth. No paid marketing
You get a private label hemp seed oil brand included in the sale
Website design is terrible. Could be an easy win to update it and make it more user friendly & eye catching
❌ What I Don’t Like:
MicroAcquire listings seem to be consistently vague. We don’t know what margins and expenses are.
Fulfillment is done by the owner so this isn’t a set-it-and-forget-it type of business.
Today regulations are loosening but who knows what they will look like in the future. You need to have a lawyer on retainer to help understand this landscape.
No paid marketing has been done so you don’t have a blueprint or an idea of CAC
You can view the listing on MicroAcquire.
Affiliate - Vape/CBD/Cannabis (Asking: $125k)
Description
For sale is Vapor Vanity which is a 6-year old affiliate website in the CBD/cannabis/vape space. The website generates affiliate revenue from 10 affiliate programs.
QuantView
🤓 Why I’m Highlighting This Business
Motion Invest typically has higher quality listings and this one is no exception. You’re paying much less for your traffic compared to industry and overall benchmarks. At the same time, you’re monetizing those visitors more efficiently compared to benchmarks. On traditional profit multiple metrics this listing is priced slightly higher but it’s a higher quality one as well. I like that this listing has a diversified revenue stream and a very high quality domain. The website design is spot-on as well. One negative here is that the highest viewed page is “how long does THC stay in urine”.
You can view the listing on Motion Invest.
🧐 What I Learned Last Week
Business is boomin’
More specifically, the business of buying a business is boomin’. I had to do a double take when I saw some of these Google search volume numbers for the US.
“business for sale near me”
We had a discussion about this in the community and member Drake Dukes made some excellent points around the causes of the spike…
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Privacy concerns are top of mind again
DuckDuckGo, an internet browser that does not collect your data and actively blocks websites and their tools from tracking you, is on a download tear.
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The State of Micro Private Equity
A really great read from Mario Gabriele on the history, current drivers, landscape, tools, and opportunities in micro private equity. It’s a must read.
Opportunities
Though significant wins have been logged, we are just at the start of this movement. Indeed, there appear to be substantial opportunities that have yet to be touched.
A few I intend to keep an eye on.
Riding new platforms. Just as WooCommerce has profited from Shopify's rise, I expect new hold cos to emerge that focus on other fast-growing ecosystems. Figma, with its extensive range of community plug-ins, represents a strong bet.
Thrasio for X. The success of Thrasio (and its cohort) illustrates the value that can be created by bundling similar assets and aggressively implementing operational best practices. Builders could apply this playbook to different spaces. A few examples: a conglomerate of Substack publications (perhaps kept on-platform, perhaps not), a collection of Teachable courses, or a roll-up of community forums.
Tiny for X. Wilkinson's shop succeeds partially because of its demonstrable tech-savvy. While other buyers look like venture firms or other financial institutions, Tiny looks like a product company. It possesses a cachet more or less equivalent to brand name VCs. Others should follow this approach. While Tiny has carved off several niches, so much space remains. What would Tiny look like if devoted to APIs? What about remote work tools? Or logistics?
Community and education. No matter one's experience, buying a first business is a daunting task. And operating it, once the papers have been signed, represents a lonely one. While a few classes and communities exist, there is relatively little competition. Creating an exceptionally detailed, serious course could help more entrepreneurs find a suitable target. A community would ensure operators were supported as they grew.
Read the full blog post here.
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That’s all for this issue of The Business Inquirer!
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Important Disclaimer: This newsletter is provided for informational & educational purposes only, and should not be relied upon as legal, business, investment, or tax advice. This newsletter may link to other websites and certain information contained herein has been obtained from third-party sources. While taken from sources believed to be reliable, it has not been independently verified. The Business Inquirer makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. References to any companies, securities, or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any business, tax, or investment decisions. Content in this newsletter speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.