The Business Inquirer #064
In this week's issue, I highlight five listings including a pet POD store, a GovTech micro-SaaS, a Managed Service Provider, and more.
The Business Inquirer covers the most interesting tech-enabled business acquisition opportunities. Written for entrepreneurs, search funds, investors, and business owners. It’s completely free and you’re guaranteed to learn something new.
Let’s connect: LinkedIn, Twitter, Facebook Group, Calendly
Hello Friends!
I’m back from overseas travels with some great memories, souvenirs, and COVID. Luckily I’m young, healthy, vaxxed, and have every Joe Rogan approved remedy at my disposal 😂. First day of symptoms was a bit rough but now it’s just a stuffy nose. All good in the household. 🙏
In this week’s issue:
🛒 eCommerce - 3 listings
☁ SaaS - 1 listing
🕸 Content/Service/Other - 1 listing
🛠 Tools & Resources
The Business Inquirer is brought to you by DueDilio.
DueDilio is a due diligence concierge connecting business buyers and private investors with quality, pre-vetted due diligence service providers.
Our deep network of 150+ independent professionals, boutique and mid-size firms, and subject-matter-experts enable us to address finance, technology, legal, operations, marketing, and other diligence projects.
Submit your project. Review qualified proposals. Hire diligence provider. Free.
🛒 eCommerce
Off-Road Vehicle & Watercraft Cleaning Products - $2M + Inv
For sale is a 12-year-old ecommerce business selling a brand of proprietary cleaning products for off-road vehicles and watercraft.
17 SKUs;
23% of sales are Amazon; 77% are own website;
TTM Revenue: $5.6M; Profit: $507k; Margin: 9%
Asking Price: $2M + Inv; Multiple: 3.94x
✅ What I Like
A lot of operating history. Proprietary formula that the sellers created. Product lends itself to repeat orders and possibly a subscription-type offering. Sellers focused on growth over TTM so there’s a proven marketing playbook. Currently only sold DTC and maybe an opportunity to do wholesale.
❓ Questions & Concerns
Not a lot of detail in the listing regarding manufacturing and logistics. Sellers really focused on driving growth over the TTM in possible preparation for the sale. How sustainable is this growth? What’s the repeat order rate? Is the formula patented? How does this product compare to the competition? Have to dig into that margin because 9% is ridiculously small for a non-dropship product.
You can view the listing on Quiet Light Brokerage.
————
Pet Portrait POD - $27k
For sale is a 10-month-old print-on-demand business selling disney style portraits of pets drawn by artists from a photograph and print onto canvas or a framed portrait.
Competitors: Crown & Paw, West & Willow, Van Woof;
$106 AOV; Fulfilled by POD like Printful and Gooten;
Sold on Shopify website and through Etsy;
SOPs included; Very detailed listing;
30-Day Revenue: $2.8k; Profit: $1.3k; Margin: 46%;
Asking: $27k; Multiple: 20.77x monthly profit
✅ What I Like
I love the detail in this listing. It’s clear that the seller has put a lot of thought into the business. POD is a very simple business model and would be a great first-time business for someone. Pet owners are a great target market. They’re engaged, easy to target, and spend money. Seller is open to seller-financing. Take a look at this listing for a great breakdown of the business.
❓ Questions & Concerns
This business is all about customer acquisition. FB ads, Etsy ads, influencer marketing are the sales channels here. As those costs go up, your margin goes down. Have to really dig into this “Disney” style portrait description. I know for a fact that these types of POD businesses have been sued before for licensing issues.
You can view the listing on MicroAcquire.
— — — —
Aviation Accessories - $2M
For sale is a 11-year-old family run e-commerce business that sells aviation accessories such as specialized GoPro camera mounts, audio cables, and adapter cables.
First to market in this niche with seller designing 90% of the products
80% DTC and 20% wholesale; DTC is 77% Shopify and 23% Amazon;
Manufactured in China and stored and shipped in own warehouse in TX
Business is easy to relocate; 2 employees including owner;
TTM Revenue: $1.1M; Profit: $509k; Margin: 46%
Asking: $2M; Multiple: 3.93x
✅ What I Like
A lot of operating history. Great margins. DTC and wholesale distribution. Lean operation with just two employees.
❓ Questions & Concerns
Need to understand the competition and what makes these products differentiated. Is there a patent or any type of IP? How have the recent supply chain issues impacted this business? How are clients acquired and for how much?
You can view this listing on BizBuySell.
☁ SaaS
Roll Call GovTech - $400k
For sale is a 2-year-old micro-SaaS that enables transparent and efficient roll calls. This software is used by lobbyists to communicate and collaborate with each other and their sponsors during the roll call process. Looking for a strategic acquirer.
Only competition is status quo (phone, Excel)
Sells to gov’t affairs teams and large and small corporations
SaaS model with 2-year contracts
TTM Revenue: $20k; Profit: $20k; Margin: 100%
Asking: $400k; Multiple: 20.00x
✅ What I Like
I like that this was built by someone to solve their own pain point. These types of projects typically have a higher rate of success. There are pros and cons to being first to market.
❓ Questions & Concerns
They’re clearly looking for a strategic acquirer. There’s really no business here yet and it’s just a project. I think they’d need a lot more sales to attract a strategic and get something close to their asking price.
You can view the listing on MicroAcquire.
🕸 Content/Service/Other
Managed Service Provider - Open to Offers
For sale is a 16-year-old MSP provider serving SMEs with an emphasis on Managed Cloud Solutions. Based in Massachusetts with a nationwide footprint and can be relocated.
10 employees; No client > 3% of revenue; Multi-sector client base;
85% of revenue is recurring;
2021 Revenue: $8M; Profit: $800k; Margin: 10%
Asking: Open to Offers
✅ What I Like
A lot of operating history and well established reputation. Relatively lean operation. No client concentration risk and diversified client base. At DueDilio, we see a lot of these types of businesses being scooped up.
According to a research report "Managed Services Market the global Managed Services market size is expected to grow at a Compound Annual Growth Rate (CAGR) of 7.9% during the forecast period, to reach USD 354.8 billion by 2026 from USD 242.9 billion in 2021. Enterprises across the globe and verticals are highly investing in their IT infrastructure to maintain their competitive position and attain operational excellence. As enterprises are adopting highly complex technologies regardless of their size, they turn to MSPs to manage their IT infrastructure, thus delivering services faster and more efficiently. These technologies are forcing enterprises to redefine their business strategies and emphasize information security. Managed services help enterprises maintain and manage the IT infrastructure and address risks associated with IT assets in an efficient and cost-effective way. This helps enterprises focus on their core competency without increasing the IT footprint.
❓ Questions & Concerns
I’d want to understand the day-to-day operations of the business and how involved the owner has to be. I imagine that staffing is a constant concern for these types of businesses since their employees are in high-demand and have many options in front of them. How do existing client contracts look and when do they renew? MSP margins range from 8% to 18% so this one is on the lower end.
You can view the listing on Interexo.
🛠 Tools & Resources
These are tools & resources that I personally use. They may contain affiliate links so I’ll get a few shekels if you sign-up.
Cerebro Capital - Cerebro has a network of 1,500+ lenders who can provide debt financing for your acquisition, refi, etc. $500k minimum.
BizNexus - Proprietary deal flow, deal aggregator, and exit prep.
PrivSource - Deal aggregator for lower and middle-market listings.
Calendly - Leading scheduling platform to easily schedule meetings without the back and forth. I’ve been using it for several years now. Free 14-day trial.
ProjectionHub - Access to 50+ CPA-developed financial projection templates. 25% discount using code “duedilio” at checkout.
Logology - Best automated logo & brand identity tool I’ve come across.
DeepBench - Access a cutting-edge expert network. $200 discount.
OpenPhone - The best business phone solution that I have found. $20 credit.
Eloquens - Knowledge marketplace. I’ve bought a few guides and templates here.
Deal Flow Scout - Peer-to-peer deal flow exchange. Free, open, transparent.
Deal Sourcing Guide - A directory I put together of online marketplaces, brokers, DFY deal flow, and more.
That’s all for this issue of The Business Inquirer!
Help us improve with anonymous feedback. How did you like this issue of the newsletter?
If you enjoyed reading this newsletter, why not share it?
Let’s connect: LinkedIn, Twitter, Facebook Group, Calendly
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.