The Business Inquirer #086
The Business Inquirer #086
In this week's issue, I highlight five listings including a skincare brand, a digital menu SaaS, two MSPs, 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!
In this week’s issue:
🛒 eCommerce - 1 listing
☁ SaaS - 1 listing
🕸 Content/Service/Other - 3 listings
🛠 Tools & Resources
This week’s issue of The Business Inquirer is brought to you by DueDilio.
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🛒 eCommerce
Natural & Ethical Skincare - $8M + Inv
For sale is a 13-year-old e-commerce brand that sells natural and ethical skincare products through Shopify. This is a liquidation from an aggregator.
Most sales DTC through Shopify. Amazon recently added.
TTM Revenue: $5.8M; Profit: $1.4M; Margin: 24%
Asking: $8.0M + Inv; Multiple: 5.71x
✅ What I Like
This business has an interesting history. Started in 2009, it was purchased by an e-commerce aggregator in 2019 which ran into cash flow problems. They are liquidating their portfolio and this is the last asset to go. I wonder if we will see more of these types of distressed sales in the near future.
❓ Questions & Concerns
I typically stay away from nutrition and beauty products. Just too many risks IMO. Not a lot of detail about the actual business. Valuation is very aggressive. Advertising costs are up. ROIs are down. If we are (or heading into) an economic slowdown then luxury skincare products would probably be some of the first purchases that consumers cut back on.
You can view the listing on QuietLight Brokerage.
☁ SaaS
Digital Restaurant/Bar Menus - $2.2M
For sale is a 12-year-old SaaS solution that provides digital menus for bars, breweries, and restaurants to manage and market their beverage programs.
700 customers and 900 physical locations
85% of revenue is recurring; $78k MRR; 1.3% churn;
38k e-mail list of prospects; SBA-prequalified;
Owner works 5-hours/week; 1 FT employee handles day to day;
TTM Revenue: $944k; Profit: $604k; Margin: 64%
Asking: $2.2M; Multiple: 3.64x
✅ What I Like
A lot of operating history. Very large TAM. Business model benefits from the labor shortage. Great margins and low churn.
❓ Questions & Concerns
Restaurants are extremely cost-conscious as they operate on thin margins. I would imagine that this business has a long sales cycle. What was the sales/marketing strategy that this business used to get to where they are today? What did the margins look like 5 years ago? Why is the owner selling?
You can view the listing on QuietLight Brokerage.
🕸 Content/Service/Other
Digital Marketing Agency - $1.8M
For sale is a 7-year-old digital marketing agency that focuses on website development and SEO. The owner is moving out of the US.
64 active clients; Most new business is from referrals;
TTM Revenue: $1.3M; Profit: $1M; Margin: 77%
Asking: $1.8M; Multiple: 1.80x
✅ What I Like
Some operating history. Evergreen niche. Can be operated from anywhere. The valuation looks attractive at first glance. The 64 active clients are a good base to build on. Good acquisition for an existing marketing agency to acquire clients & revenue.
❓ Questions & Concerns
Marketing agencies are known to bring in cash flow but take a lot of time to operate and are difficult to scale. Why would the owner sell the business and not operate it from overseas? Is there any key-person risk? No detail in the listing about day-to-day operations.
You can view the listing on BizBuySell.
Here’s another interesting marketing agency listing - Website Closers.
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2x Managed IT Service Providers (MSPs) - $3.9M & $9.7M
MSPs are popular acquisition targets so I want to share two that recently came across my inbox. Interesting to do a compare and contrast on these two listings.
20-years-old; Serves OH/PA/IN; 85% recurring contracts;
TTM Revenue: $3.5M; Profit: $740k; Margin: 21%
Asking: $3.9M; Multiple: 5.27x
You can view the listing on BizBuySell.
16-years-old; Nationwide footprint; 85% recurring contracts;
TTM Revenue: $8.6M; Profit: $1.2M; Margin: 14%
Asking: $9.7M; Multiple: 8.08x
You can view the listing on BizBuySell.
🛠 Tools & Resources
I want to share some tools & resources that I have found helpful. Please note that some of these may contain affiliate links. This means that I may receive compensation if you sign-up and use them.
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. Local Boston company and I consider the founder (Adam Ray) a friend.
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 VoIP phone solution that I have found. I use this for DueDilio. You get a $20 credit if you sign-up.
Eloquens - Knowledge marketplace. I’ve purchased a few templates from them.
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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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.