The Business Inquirer #067
The Business Inquirer #067
In this week's issue, I highlight seven listings including a bicycle manufacturer, six Shopify App portfolio, a subscription design business, and more.
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Hello Friends!
In this week’s issue:
🛒 eCommerce - 1 listing
☁ SaaS - 2 listings
🕸 Content/Service/Other - 4 listings
🛠 Tools & Resources
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🛒 eCommerce
Bicycle Manufacturer & Retailer - $1.6M
For sale is a 12-year-old bicycle manufacturer and retail brand that manufactures and sells bicycles, parts, and accessories.
Sold through dealers, distributors, DTC, and Amazon; US, Canada, Chile, and Europe;
25k e-mail list; 10.5k IG followers; 30.9k FB followers;
Owners plus two staff and one contractor are employed;
Could be relocated and run remotely;
TTM Revenue: $3.0M; Profit: $506k; Margin: 17%
Asking: $1.6M + Inv; Multiple: 3.16x
✅ What I Like
A lot of operating history. An in-demand product that appeals to multiple market segments. Strong social media presence. Diversified distribution strategy. Most sales come from retailers, distributors, and dealers. I like that it doesn’t rely on social media ads. Easy to increase prices so that inflaiton doesn’t impact the bottom line too much.
❓ Questions & Concerns
Listing doesn’t talk about the actual manufacturing process. Are there any supply chain risks? Cumulatively employees work less than 60-hours per week - how? Financials are extremely (100%+) inflated by the COVID surge in bicycle demand. Margin isn’t great. Have to think about valuation as I’m sure it’s inflated when using normalized earnings without COVID.
You can view this listing on Quiet Light Brokerage.
☁ SaaS
Client Tracking for Shopify - $200k
For sale is 5-year-old StoreView which is a Shopify app offering merchants the ability to track customer interactions in their store. Particularly in the checkout area.
Competitors: Cart Activity, Cart Insights
800+ customers; 104 reviews; 4.7 rating;
Subscription model at $5/month with 7 day free trial
TTM Revenue: $27k; Profit: $25k; Margin: 93%
Asking: $200k; Multiple: 8.00x
✅ What I Like
This is one of just a few apps that are able to track the user journey in the shopping cart/checkout area. Other apps with similar functionality charge significantly more. There is a strong customer base with great reviews. The owner has direct feedback on the features that need to be added. Raising the price could be an easy win.
❓ Questions & Concerns
It sounds like some additional features need to be built into the app in order to scale it. Hiring developers could get expensive. There’s no marketing strategy in place. Valuation is aggressive.
You can view the listing on MicroAcquire.
— — — —
Six Shopify Apps - Open to Offers
For sale is a 5-year-old portfolio of six Shopify apps offering functionalities such as upselling, ad retargeting, pre-ordering, and quantity based-pricing features geared towards improving a store’s conversion rates and AOV.
28 person team transfers to the new owner
38.4k active merchants; 15.1k paying clients; 4.7-star rating on 3.2k reviews;
TTM Recurring Revenue: $5.3M; EBITDA: $3.1M; Margin: 58%;
Asking: Open to Offers
✅ What I Like
Great opportunity to enter the Shopify app space. The fundamentals here look solid with a large install base, good ratings, and strong margins. You’re probably looking at a 5x - 6x profit multiple on this.
❓ Questions & Concerns
The first question would be to understand why they are selling the business now. What’s the relationship between active merchants and paying clients. Is that simply free trial vs. paid? What’s the historical free to paid conversion rate? How are clients acquired? How do these apps perform versus the competition? Examine support tickets and client feedback.
You can view this listing on FE International.
🕸 Content/Service/Other
Market Research Service - $200k
For sale is a 4-year-old market research business that recruits research participants and conducts market research studies and interviews (focus groups, product tests, etc).
Competitors: Focusfwd, Recruitandfield, Pollfish
TTM Revenue: $236k; Profit: $103k; Margin: 44%
Asking: $200k; Multiple: 1.94x
✅ What I Like
This type of business has a lot of use-cases and can serve many markets. Listing makes it sound like there is a strong recurring client base. There is a proprietary panel of 30k users that voluntarily signed up to participate in studies. The end markets can be direct or a white-labeled solution sold to agencies. There are also a lot of possibilities to add services. Valuation isn’t aggressive.
❓ Questions & Concerns
This is a hands-on business that’s tough to automate completely. I think you have to have some knowledge of market research. How many clients are recurring? What type of reputation does this business have? How are clients and market research participants acquired?
You can view the listing on MicroAcquire.
————
Unlimited Design - $800k
For sale is a 2.5-year-old subscription-based unlimited design agency. They offer graphic, UX/UI, and web design services.
Competitors: Hatchly, Design Joy
Single founder operates the business
Tech Stack: Webflow, ManyRequests
TTM Revenue: $210k; Profit: $170k; Margin: 81%
Asking: $800k; Multiple: 4.71x
✅ What I Like
I love seeing these 1 employee businesses that are massively profitable. This business took a marketplace model and turned it into a monthly subscription serving corporate clients. If you want to learn about a similar type of business, follow DesignJoy on Twitter.
❓ Questions & Concerns
The market is getting crowded with similar offerings. No mention of who does the actual design work but I assume they’re overseas freelancers. I do think there’s a ceiling on how far you can scale this type of business. Valuation seems a bit aggressive.
You can view the listing on MicroAcquire.
Here’s another similar business (Asking $200k) on MicroAcquire.
And here’s another one (Asking $50k) on MicroAcquire.
————
Interpreters, Transcribers, Translators Service - $1.2M
For sale is an 8-year-old service that offers access to interpreters, transcribers, and translators.
SBA pre-qualified;
3 employees; 7k contractors in database;
Clients include government, legal, medical, and other organizations;
70-80% client reorder rate;
TTM Revenue: $683k; Profit: $288k; Margin: 42%
Asking: $1.2M; Multiple: 4.17x
✅ What I Like
Interesting listing. A well-established business that serves multiple markets. Contracts and relationships within government organizations. Strong repeat order rate. Decent margins.
❓ Questions & Concerns
Really curious about the day-to-day of this business. How involved is the owner? How easy is it to hire contractors if you’re going to scale the business? Is there any key-person risk? Any client concentration? How is innovation such as AI and NLP impacting this type of business? Any impact from COVID and everything being done remotely? Valuation seems a bit high for a service business.
You can view this listing on Website Closers.
— — — —
VR/AR Mindfulness & Wellness for Aging Adults - $450k
For sale is an 8-year-old business that sells VR/AR experiences into the senior care and hospice markets. Includes a VR app and custom library of 100 immersive experiences.
Competitors: MyndVR, Rendever
Annual contracts for 1 or 2 years;
TTM Revenue: $97k; Profit: $39k; Margin: 40%
Asking: $450k; Multiple: 11.54x
✅ What I Like
A business you can actually feel good about. Sounds like they took the COVID downturn to focus on the tech and improve the product. This business requires a marketing/sales reboot.
❓ Questions & Concerns
They couldn’t do in-person sales during COVID so the business took a dive. Feels like they need to really figure out the right sales process without having to do in-person demos. How was the business performing prior to COVID? Could something like this be paid for by Medicare/Medicaid or some other programs? I assume that they’re valuing this business on a pre-COVID run rate. How quickly can a new owner get there?
You can view this listing on MicroAcquire.
🛠 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.
Curators - Proprietary deal sourcing. You need targets that fit your investment criteria, and Curators delivers week after week - we even update your personalized database on a daily basis with new information on best-fit targets.
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!
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