The Business Inquirer #093
The Business Inquirer #093
In this week's issue, we highlight four listings including an IT services marketplace, a boat dealer in SC, and more.
The Business Inquirer covers the most interesting 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 - 0 listings
☁ SaaS - 1 listing
🕸 Content/Service/Other - 3 listings
🛠 Tools & Resources
This issue of The Business Inquirer is brought to you by Scott’s Daily Newsletter.
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🛒 eCommerce
☁ SaaS
WordPress Themes & Plugins - $250k
For sale is a 9-year-old business that sells WordPress themes and plugins that specialize in directory listings and WP job manager. Seller purchased the business in 2019.
Competitors: CridioStudio, StylemixThemes
SaaS pricing for plugins and one-time payment for themes
TTM Revenue: $100k; Profit: $89k; Margin: 89%
Asking: $250k; Multiple: 2.81x
✅ What I Like
WordPress powers 43% of the world’s websites and if we look at just websites that use a CMS, that number is 65%. We hear a lot about Webflow but only 0.6% of all websites use it.
WordPress has a huge TAM. Clients for the WP plugins tend to be sticky. There’s steady recurring revenue and one-time payments. These businesses have great margins. The valuation here isn’t crazy.
❓ Questions & Concerns
This is an extremely competitive industry. I’d want to understand the client base, churn, and conversion rates. How does this offering differ from the competition? How are new clients acquired? How are client reviews and service tickets? What has the current owner learned and why are they selling? Are the themes and plugins updated for the new Gutenberg WordPress editor? I think this would be best acquired by someone who already has a WordPress themes business.
🚀 Growth
This industry is incredibly commoditized. I would first analyze what makes this offering different. Does it serve a unique client base? Is it better designed? Is customer support better?
There are a few key growth channels for WordPress plugins and themes.
Content marketing and focus on SEO
Partnerships with web dev agencies & hosting companies
Affiliates
I would focus on partnerships and affiliates as those channels could show immediate results. Advertising through CPC may work but it’s an expensive channel - see below...
You can view the listing on MicroAcquire.
🕸 Content/Service/Other
BostonBusinessBrokers.com - Open to Offers
A good friend of mine is selling the domain BostonBusinessBrokers.com. Just the domain, nothing else. He’s flexible on the price but looking to get at least a few grand for it. This is a great domain name for someone in the Boston business brokerage community. Reach out to me if you’re interested or know someone.
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Upwork for IT - $825k
For sale is 2-year-old ScaleDesk that is Upwork for IT. The platform connects desktop support, network admin, and system admins with IT directors who require their services.
Competitors: MSPs, Staffing Organizations
2-employees; Fully remote; 58% of contracts are recurring revenue;
100% of customers come from e-mail campaigns
TTM Revenue: $550k; Profit: $226k; Margin: 41%
Asking: $825k; Multiple: 3.65x
✅ What I Like
I love the marketplace business model. Asset light with great margins. There’s nice traction here for a young startup. Some large competitors to learn from. Doesn’t seem like there’s a broker involved which may be a good thing.
Very large market opportunity…
Revenue in the IT Services market is projected to reach US$411.80bn in 2022.
The market's largest segment is IT Outsourcing with a projected market volume of US$144.80bn in 2022.
Revenue is expected to show an annual growth rate (CAGR 2022-2027) of 6.38%, resulting in a market volume of US$561.00bn by 2027.
The average Spend per Employee in the IT Services market is projected to reach US$2.45k in 2022.
In global comparison, most revenue will be generated in the United States (US$411.80bn in 2022)
❓ Questions & Concerns
Technical due diligence will be required. How are they recruiting for the supply side of the marketplace? Who is their ideal customer? What has been the main roadblock in scaling this further?
🚀 Growth
From the listing, it seems like they tried several growth channels with e-mail marketing being the most effective. It’s a relatively inexpensive channel that I would continue utilizing. Perhaps hiring a VA from overseas (Philipines) would make this even more impactful.
I would figure out some communities where IT directors and CIOs hang out. Invest in advertising on those platforms. Same thing with newsletters. I would also look at job postings on LinkedIn/Indeed and target companies who are looking to fill those jobs.
Hiring a B2B sales team can be an expensive upfront cost but the ROI may be there. This is something I would explore as well.
You can view the listing on BizBuySell.
Here’s a more mature (Asking: $5M) IT services business from BizBuySell.
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Boat Dealership - $1.4M
For sale is a retailer of recreational boats located in the midlands of South Carolina. Fun business for someone into boating.
Excellent location; Won multiple awards for sales & service;
2021 Revenue: $9.3M; Profit: $594k; Margin: 6%
Asking: $1.4M; Multiple: 2.36x
✅ What I Like
Fun business for the right person. The reputation and awards may offer a moat against competitors. South Carolina is a growing market with strong population growth.
I did a quick Google search of the area and it looks like there are clear winners that have more reviews and higher ratings.
❓ Questions & Concerns
Is there seasonality in the business? How do normalized financials look prior to COVID? Where can you get a higher margin - sales or service? What % of clients are repeat? How do the relationships look with suppliers? How are logistics handled?
🚀 Growth
Local businesses have some unique growth levers.
Host and sponsor local events
Direct mail campaigns
Partnerships with complementary local businesses (ex: Marina, Boat School)
Local SEO and Google CPC
Local Facebook Ads
Advertise in local newspapers
Doesn’t look like there is a lot of competition for local search results…
You can view the listing on BizNexus.
🛠 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.
The Website Flip - a newsletter that sends content sites for sale to your email inbox. They send deals each Wednesday and Friday.
Kumo - Find every deal in one complete platform. Spend less time sourcing deals and more time closing them. Kumo aggregates 180K+ business listings into one easy-to-use platform.
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.