The Business Inquirer #103
The Business Inquirer #103
In this week's issue, we highlight 3 listings including a landscaping business, a legal consulting firm, and a website management service.
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:
💼 Service/Media/Others - 3 listings
🛠 Tools & Resources
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💼 Service/Media/Others
Landscaping - $1.8M
For sale is a 30-year-old landscaping business in Lake Worth, FL.
$90k in monthly repeat maintenance contracts
17 W-2 employees
TTM Revenue: $1.7M; Profit: $523k; Margin: 31%
Asking: $1.8M; Multiple: 3.44x
✅ What I Like
A lot of operating history. The business is located in a consistently warm climate where landscaping demand is not seasonal. There is recurring revenue from the maintenance contracts. Valuation doesn’t seem crazy.
❓ Questions & Concerns
Labor is always the biggest point of failure with these types of businesses. How easy is it to hire and retain employees in this market? Are there any legal red flags in the employment contracts? How does the competition look like in this area? Why is the business owner selling now?
I thought this article from Landscape Leadership was interesting: Do You Know How to Identify Your Most Profitable Landscape Services?
The article highlights the importance of performing a revenue attribution analysis. Meaning - separate your P&L by individual service areas.
“The problem in looking at all of your numbers lumped together is that there is nothing actionable,” Herring continues. “What you need to do is create columns for all of your services so that you can determine your gross profit and net profit, by division.”
Of course, Herring recognizes that the mindset behind a full-service model may be that certain services are necessary to keep clients happy.
“There’s the strategy that you go in at market on certain services like landscape maintenance—but then make it up on enhancements,” Herring says. “The general rule of thumb with this strategy is to strive to break even on maintenance and then make the most profit from enhancements, irrigation, and lawn care. Traditionally, mowing and mulching are the two least profitable landscaping services—and at the bottom line may actually be unprofitable.”
Not all revenue is created equal. If the majority of the revenue is derived from low-margin services (like maintenance), that could be a red flag.
For fun - I asked ChatGPT about due diligence for a landscaping business with maintenance contracts:
You can view the listing on BizBuySell.
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Legal Consulting Firm - $7.6M
For sale is a 9-year-old legal consulting firm that assists in litigation cases. This firm’s clients are companies or regulatory establishments that need assistance finding expert witnesses, case analysis, witness reports, and more. Owner is retiring
HQ in Tampa, FL but operations are fully remote
8 employees
Owner is willing to finance or roll equity of up to 20%
TTM Revenue: $4.7M; Profit: $2.0M; Margin: 43%
Asking: $7.6M; Multiple: 3.80x
✅ What I Like
A lot of operating history to analyze trends. The business is in an evergreen niche with a large TAM. Asset light operations with good margin. New owner doesn’t need to be an attorney or have any licensing requirements. The seller is willing to finance a significant portion of the transaction.
❓ Questions & Concerns
I imagine that a buyer would need to have experience in this industry to properly operate the business. How many clients are there? Is there any client concentration risk? What parts of the business does the owner currently handle? Can those be handed off to employees? Is there any key-person risk? Is there any recurring revenue? How are new clients acquired?
A bit of fun - I asked ChatGPT to offer some due diligence questions around this type of business:
You can view the listing on BizBuySell.
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WordPress Website Management for SMBs - $828k
For sale is a 12-year-old subscription WordPress website management service for small business owners.
Owner-built systems and SOPs
Owner works around 20-hous per week
Focus on SEO with high ranking for relevant keywords
TTM Revenue: $552k; Profit: $307k; Margin: 56%
Asking: $828k; Multiple: 2.70x
✅ What I Like
Relatively simple business to operate with many parts open to outsourcing. The subscription model provides steady recurring revenue. Margins appear healthy. Valuation isn’t too aggressive.
❓ Questions & Concerns
Not a lot of detail in the listing. What type of client churn does the business see? What’s the CAC and CLTV?
For fun - I asked ChatGPT if a WordPress management service would be a good business to acquire:
You can view the listing on Quiet Light Brokerage.
🛠 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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