The Business Inquirer #100
In this week's issue, I highlight three listings including a SaaS for video creators, a kitchen design business, and accounting software for rental property owners.
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.
Let’s connect: LinkedIn, Twitter
Hello Friends!
In this week’s issue:
☁ SaaS - 2 listings
💼 Service/Media/Others - 1 listing
🛠 Tools & Resources
This issue of What I Learned Last Week is brought to you by Scott Oldford.
Scott Oldford is one of the top online business mentors and advisors and he also owns dozens of businesses that collectively generate tens of millions of dollars a year in multiple niches, countries (and even languages), across the world.
In his new "Investing with Scott" newsletter, he gives you a behind-the-scenes look into acquiring, building, and scaling businesses based on his experience of helping 100's of Entrepreneurs scale past 7 & 8 figures.
As an Entrepreneur since he was 7 and by 16 having a million dollar business while ending up a million in debt and now by 31, becoming a decamilionaire, he has a massive amount of insight, understanding, knowledge, and wisdom for scaling and building businesses.
You can check it out right here, perfect for Entrepreneurs and Investors alike.
☁ SaaS
Video Editing - $3.5M
For sale is a 4-year-old SaaS that empowers video creators to get more views & engagement on social with powerful editing features such as video captioning, resizing, trimming, animations, and more.
Competitors: Veed, Kapwing, Descript
4,500 paying customers; $254 CLTV; $1.1M ARR; -23% annual growth rate;
TTM Revenue: $1.2M; Profit: $649k; Margin: 54%
Asking: $3.5M; Multiple: 5.39x
✅ What I Like
A few years of operating history. Large customer base. Relatively high CLTV with a good margin. There’s enough “meat on the bone” to invest in paid marketing channels. I imagine that this software addresses two markets - creators & agencies. The listing shows a large uptick in organic search traffic as the acquisition channel. Below is a chart showing the search history for one of their competitors - Veed.
❓ Questions & Concerns
The decline in revenue is concerning. I’d want to understand their customer acquisition strategy and costs. How much technical upkeep is required? What do the support tickets look like? Overall, search trends for “video editing software” are trending down (chart below).
🚀 Growth & More
From the listing, it sounds like the business owners have focused on signing up individual creators. They’ve clearly been successful but I would also explore selling this software to agencies. Selling to corporates would increase the AOV and may reduce churn.
You can view the listing on MicroAcquire.
__ __ __ __ __ __
Rental Property Accounting Platform - $350k
For sale is a 2-year-old platform that allows users to track their income and expenses, classify transactions, and generate reports (for end-of-year taxes and also other financial health). It's QuickBooks but specifically for the real estate niche.
Competitors: Stessa
590 paying clients; $61k ARR; +88% growth rate;
Google PPC is a primary marketing channel
Owners spend 2-3 hours per week
Priced at $99/year
TTM Revenue: $64k; Profit: $39k; Margin: 61%
Asking: $350k; Multiple: 8.97x
✅ What I Like
Very niche software solution. There’s good traction and a solid foundation to grow the business. Very large TAM. Pricing seems low so there may be an easy way to quickly juice revenue.
❓ Questions & Concerns
The listing doesn’t mention anything about the technology component of the business. Who maintains it? Significant investment may be required to add features and test other marketing channels. Valuation is very aggressive.
🚀 Growth & More
As mentioned above, increasing pricing may be one easy win. Perhaps even adding various pricing tiers would be the right strategy for this software. Below are some great resources for figuring out SaaS pricing:
The listing mentions that the owner has only tried Google PPC as their customer acquisition strategy. I think advertising in the right newsletters and attending relevant conferences may pay dividends for this niche software solution.
You can view the listing on MicroAcquire.
💼 Service/Media/Others
Kitchen Design Business - $575k
For sale is a 20-year-old kitchen design business based in Florida. The owner is retiring.
Services include design & project management
Includes showroom and office space in high traffic area;
Clients include builders and individuals
TTM Revenue: $1.2M; Profit: $416k; Margin: 35%
Asking: $575k; Multiple: 1.38x
✅ What I Like
Main Street business in an evergreen niche. A lot of operating history. I assume the business is well-known and has a solid reputation. The valuation seems reasonable. Serves several end markets - builders & individuals.
❓ Questions & Concerns
Pay attention to the client mix. If it’s overly reliant on new construction then it could present some challenges. Housing data is turning sharply lower (see graph below) and that could negatively impact this business. Not clear if this is an owner-operated business or if there are employees. Is there any key-person risk? Is there any seasonality to the business? What is the TAM?
🚀 Growth & More
When I think about these businesses that have been around for 20+ years, a new perspective may unlock some immediate value. A new owner would bring new energy and a new set of eyes.
Here’s an article from Yelp: How to promote your business locally: 10 simple tactics
Write a blog and focus on local SEO
Social media marketing
Local directory & listings
Targeted ads
Direct mail campaign
E-mail list
Sponsor community events
Loyalty & referral program
Partner with local businesses & influencers
There are a lot of possible keywords to target in this niche with a wide range of CPC…
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.
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!
Help us improve with anonymous feedback. How did you like this issue of the newsletter?
If you enjoyed reading this newsletter, why not share it?
Let’s connect: LinkedIn, Twitter
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.