The Business Inquirer #095
The Business Inquirer #095
In this week's issue, I highlight ten listings including a music agency, an accounting SaaS, a pain clinic, 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:
☁ SaaS - 2 listings
🕸 Content/Service/Other - 8 listings
🛠 Tools & Resources
This issue of The Business Inquirer is brought to you by Jon Stoddard & his Deal Flow System Course.
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Jon created this course from what he learned from acquiring three companies and interviewing over 90 Serial Acquisition Entrepreneurs.
This Course Also Includes:
⭐ The LinkedIn Deal Flow System a $150 Value
⭐ The Direct Mail Deal Flow System a $47 Value
⭐ 1 Hour Strategy Session with Jon a $500 Value
⭐ My Pitch Deck Secrets Book, templates & More: $27 Value
I’ve been on Jon’s podcast and listened to his LinkedIn prospecting session. I think there’s tons of value here.
Learn more 👉 Learn How to Buy Your First Business and Create a Serial Acquisition System
☁ SaaS
Accounting for SMBs - $575k
For sale is a 6-year-old accounting SaaS and bookkeeping service for SMBs. Not clear if this is a profitable business.
Competitors: Bench, Pilot
Two revenue sources - SaaS + bookkeeping
TTM Revenue: $185k; Profit: ?
Asking: $575k;
✅ What I Like
I’m highlighting this listing because I think there’s a good lesson here.
From the listing:
Reason for selling
We acquired this company while also operating another (much larger) company, with the anticipation that we could operate this as a low-touch side hustle -- the previous owner told us he worked 5-10 hours per week on the business... nonsense. It needs more like 15-20, or more, to execute, stay focused on growth and add value. Over the time that we have operated this business, it is clear that we simply do not have the bandwidth or marketing prowess required to successfully execute. Our other larger business is taking up significantly more time than it did even a year ago and, frankly, its needs more of our attention. This small accounting business has been very fun to work on, but without more commitment, TLC, and marketing prowess we are afraid that we are not doing it justice and it is not living up to its potential.
The buyers here made a very common mistake. Never trust the time commitment that a seller estimates. There are very few businesses that can be successfully operated with just 5 to 10 hours per week.
I like this type of business model that combines SaaS with a productized service business. This could be an interesting opportunity for the right buyer. The sellers seem to be transparent and know where they went wrong and what it takes for a new buyer to grow the business.
❓ Questions & Concerns
Is or was this business ever profitable? Where is the current revenue going? It’s good to niche down but I’d also be cautious about going after a market that’s too small. This is a very difficult business to value. There are no profits. The new owner is going to have to spend a lot of $$$ on marketing and may not see an ROI for a while. What’s the right valuation for a business like this?
🚀 Growth
As the listing mentions, it would be a good idea to niche down. A niche doesn’t have to be a specific industry. A niche can be revenue (i.e. we help SMBs with $500k to $2M in revenue), geography, business age, and more. This helps with brand positioning and optimizing marketing.
Thompson Reuters Institute has a good article that outlines some ways to optimize an accounting practice: 7 steps to better promote accounting firm growth
Partnerships are the most cost-effective growth strategy for many B2B businesses. It’s worked very well for DueDilio. I would figure out who serves a similar market and see if I can get affiliates/partnerships in place.
There’s decent search volume for the key terms…
I wouldn’t try CPC advertising as it’s very expensive…
You can view the listing on MicroAcquire.
— — — — — —
Online Payments
For sale is Cartfuel.io…
You can contact the owner directly on Twitter.
🕸 Content/Service/Other
BostonBusinessBrokers.com - Open to Offers
My friend is selling this great domain name. He’s open to offers. Ping me if you’re interested.
__ __ __ __ __ __
Chain of Las Vegas Wedding Chapels - $3.4M
This listing was highlighted by Michael Girdley and his excellent “Michael Girdley’s Newsletter”.
Here’s the summary:
High gross and net margins (52% adjusted net income)
Customers making once-in-a-lifetime (ok, maybe once-this-year) type decisions and willing to splurge
You get to manage Elvis impersonators marrying people (!)
At the perfect size to be SBA 7A (the US gov’t’s small business loan program)
You get to be part of special days for people
This business makes a ton of money
And it’s priced right (2.72x FCF)
Check out Michael Girdley’s Newsletter to see his full take on this business.
You can view the listing on First Choice Business Brokers.
__ __ __ __ __ __
Pain Management Clinic - $1.5M
For sale is a 5-year-old pain management practice based in northern New Jersey. Services include patient consultations, MRI reviews, telemedicine, in-office / out-of-office pain management procedures, and intravenous vitamin infusions.
2,500 active patients; 1,700 sq ft turnkey renovated facility;
TTM Revenue: $1.1M; Profit: $556k; Margin: 51%
Asking: $1.5M; Multiple: 2.70x
✅ What I Like
At DueDilio, we see a good amount of due diligence requests for healthcare services and pain management clinics. I won’t pretend to know anything about this industry but it seems to be a very popular acquisition target based on what I’m seeing.
At first glance, the fundamentals of the business look very attractive. You have a 51% SDE margin and a 2.70x multiple.
Take a look at this search trend…
❓ Questions & Concerns
You need to know this industry. I assume you’re dealing with revenue cycle management and insurance companies. Staffing for this type of business can be a challenge. I believe the seller is a doctor so if you’re not an MD, you’ll need to find and hire one.
🚀 Growth
Here’s the growth commentary directly from the listing:
Growth Opportunity:
Growth opportunities are limitless for pain management. Pain management is the gate keeper for any hospital network or private medical group. Pain management is the specialty that brings in patients who will likely need further services including spine surgeries, physical therapies, imaging needs (X-ray, MRI), electro myelogram studies, and in hospital care etc. The market for pain management will only grow due to the amount of injuries in urban area and the aging population. Having a pain management is the key to growing a multi-disciplinary medical practice. A practice of medical entity left without a pain management service will not survive the market in this particular area.
You can view the listing on BizNexus.
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IT MSP and Tech Outsourcing - $235k to $8.8M
I came across a couple of listings of IT managed service providers and outsourcing firms. I know there are several newsletter subscribers who are interested in this industry so I’m just going to briefly highlight the four listings.
MSP & Hosting Firm
Asking $8.8M with $2.2M in cash flow. Seller is offering to carry 30%.IT Services for Healthcare Industry
Asking $1.3M with $421k in cash flowIT Staffing & Services
Asking $990k with undisclosed cash flow.Digital Solutions & Tech Outsourcing
Asking $235k with $72k in profit.
__ __ __ __ __ __
Music Agency - $2.5M
For sale is a Detroit-based music agency.
80+ acts signed to exclusive contracts (1-to-2-year terms)
Robust artist scouting protocol signing on average 3 acts a week
Non-exclusive booking rights for Snoop Dogg, Ice Cube, OT Genasis, Xzibit, Warren G, Bizzy Bone, B.o.B, and Bone Thugs N Harmony
Over 1,000 performances booked in half of a calendar year (2022)
TTM Revenue: $1.2M; Profit: $1.0M; Margin: 83%
Asking: $2.5M; Multiple: 2.50x
✅ What I Like
83% profit margin at a 2.5 multiple and you get to hang out with D O Double G.
❓ Questions & Concerns
Watch Hustle & Flow, Straight Outta Compton, Empire, 8 Mile
You can view this 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.
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.
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.
Logology - Best automated logo & brand identity tool I’ve come across.
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.