The Business Inquirer #076
The Business Inquirer #076
In this week's issue, I highlight seven listings including an Etsy marketing tool, a media & directory business, a timeshare marketplace, 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.
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Hello Friends!
PSA: I’m traveling overseas the rest of this week and there’s a chance I may not be able to publish WILLW on Friday.
In this week’s issue:
🛒 eCommerce - 1 listing
☁ SaaS - 2 listings
🕸 Content/Service/Other - 4 listings
🛠 Tools & Resources
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🛒 eCommerce
Diversified Dropship Store - $200k
For sale is a 2-year-old ecommerce business using the dropship model. The business sells wall art, yard signs, and drinkware.
Sold on Etsy and Shopify; 300-350 branded SKUs;
$106 AOV; 15% repeat order rate; Most growth is organic;
TTM Revenue: $143k; Profit: $58k; Margin: 41%
Asking: $200k; Multiple: 3.45x
✅ What I Like
I like the asset-light dropshipping model. High AOV. Very strong margins for a dropshipping business model. Doesn’t appear that they spend a lot on advertising. Opportunities to expand the product line. Could be a nice business for someone just starting out.
❓ Questions & Concerns
Not a lot of operating history. In today’s environment, I always think about logistics and COGs inflation when looking at e-commerce businesses. Those are the first things I would check. How are they acquiring customers? How are returns/exchanges handled? Is there any product concentration? Client ratings provide a moat for these businesses - how do those look?
You can view the listing on Seller Force.
☁ SaaS
Business Management for Pet Services - $650k
For sale is 5-year-old Scout which is a B2B SaaS that helps dog walkers and pet sitters streamline their day-to-day operations.
Competitors: Time to Pet, DoTimely, Precise Pet Care, Pet Sitter Plus
1-person startup; 5-star rating on Capterra;
$9.4M in credit card payments in 2021; $12.2M of total payments handled in 2021;
TTM Revenue: $171k; Profit: $153k; Margin: 89%
Asking: $650k; Multiple: 4.25x
✅ What I Like
Evergreen niche with a very large TAM. Great social proof through Capterra reviews. The app gets a lot of eyeballs from pet owners when they book the services. Maybe opportunities to explore other monetization options such as advertising, payment fees, and additional services. Very strong margins.
❓ Questions & Concerns
Appears to be a very competitive space. How is this product differentiated? Who handles the technical aspect of the software? How do support tickets look? What’s the CLTV and churn? Customer acquisition seems to be expensive in this space. Valuation is not bad if there’s growth.
You can view the listing on MicroAcquire.
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Etsy Seller Tool - $60k
For sale is a 2-year-old SaaS that helps Etsy sellers create SEO-optimized listings, increase sales through automated tools, and measure the performance of their listings.
100 customers; Priced at $12.99/month;
$19.8k ARR; Asking: $60k; ARR Multiple: 3.03x
✅ What I Like
Etsy is one of the fastest-growing online marketplaces. I don’t see a lot of tools come up for sale that serve that market. There’s some traction here. This could be a nice project for someone with marketing skills to take over and scale. Other tools see decent search volume.
❓ Questions & Concerns
Young project that still requires a lot of work and experimenting to scale. Listing doesn’t mention expenses but may not be important at this early stage. It’s always tough to figure out valuation for young projects like this.
You can view the listing on Microns.
🕸 Content/Service/Other
Vacation Property Marketplace - Open to Offers
For sale is the largest secondary marketplace for buyers, sellers, and renters of vacation properties. Resale and rental of unused timeshare weeks.
Revenue generated from paid memberships; Recurring revenue model;
2.7M users; 500k site visits/month;
+46% Y/Y growth in paid memberships; +63% growth in bookings;
Fully remote operations;
2021 Revenue: $8.5M; Profit: $3.0M; Margin: 35%
2022F Revenue: $12.4M; Profit: $4.9M; Margin: 40%
Asking: Open to Offers
✅ What I Like
Evergreen niche. I assume there’s some brand equity from being the largest such marketplace. Can be operated from anywhere with a fully remote workforce. Seeing strong growth in memberships as well as bookings. Nice margins. Some revenue is recurring via automatic renewals. Opportunities to explore other revenue sources.
❓ Questions & Concerns
Clearly, this business has been impacted by COVID. Need to understand the delta between pre-COVID and today’s numbers. How have the fill rate and bookings trended? How is the business acquiring customers and for how much? Overall search volume related to timeshare rentals has been going down.
You can view the listing on PrivSource.
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Michigan Managed IT Service Provider - $2.8M
For sale is a 19-year-old MSP that serves Southeast Michigan and Detroit metro area. They serve the local SMB market.
SBA pre-approved;
35 active clients; Typical client pays $3k-$5k per month; <10% churn;
80% recurring service revenue; 20% hardware/software sales;
TTM Revenue: $1.2M; Profit: $668k; Margin: 56%
Asking: $2.8M; Multiple: 4.19x
✅ What I Like
A lot of operating history. Strong margins. The owner is willing to stay on which means there could be creative financing options. A key team member could be promoted to run the whole business. A buyer could run this remotely.
❓ Questions & Concerns
Need to do a market research study of the area to see what the competition looks like and measure the overall TAM. 35 clients after 19-years seem like a low number but I could be mistaken. Valuation seems a bit high at first glance.
You can view the listing on BizBuySell.
————
Media & Directory Business - $150k
For sale is a 6-year-old media and directory business. F500 brands and major consultancies rely on this platform's content, reports, and analysis when reviewing various solutions to ensure their company and clients are complying with various business regulations.
Competitors: FinTech Global
Built on WordPress;
B2B SaaS companies in the compliance space pay an annual membership to be part of the directory.
TTM Revenue: $30k; Profit: $22k; Margin: 73%
Asking: $150k; Multiple: 6.82x
✅ What I Like
This is a great business model if you can gain traction. Very asset-light with a simple tech stack that costs nothing to maintain. There are a lot of opportunities with this type of business including advertising, adding services, expanding media brand to include newsletters and podcasts, and more.
❓ Questions & Concerns
Have to understand this market and the TAM. How many B2B SaaS compliance businesses are there? What’s the opportunity set? What type of ROI are clients getting from being part of this directory? Would they pay to advertise? What’s the churn? How are clients acquired? What does the web traffic and engagement look like? How easy is it to hire writers for this topic? Why hasn’t the seller been able to scale this business? Valuation is very high at first glance but there may be enough opportunity to grow the business to justify the higher multiple.
You can view the listing on MicroAcquire.
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Central Texas Restaurant - $1.8M
If you end up buying this restaurant and Clint asks who referred you - repeat after me - “The Business Inquirer” 😉
🛠 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.
X5 Deals - Proprietary deal sourcing. They do the outreach and send you relevant, actionable deals directly into your inbox.
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.
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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