The Business Inquirer #106
In this week's issue, I highlight 6 listings including a newsletter and community for Airbnb hosts, an e-commerce store, 2 landscaping businesses, and more.
Hello Friends!
In this week’s issue, I want to try a bit of a different format. I’m thinking this may help me highlight more listings while still providing value to you. Not a huge change but please do let me know if you like this format.
🛒 eCommerce - 1 listing
💼 Online Service/Media/Marketplace - 1 listing
🏡 Main Street/Offline - 4 listings
🛠 Tools & Resources
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🛒 eCommerce
💼 Online Service/Media/Marketplace
Website, Newsletter, and Community for Airbnb Hosts (Acquire) - $350k
Established 2017
TTM Revenue: $93k
Profit: $81k
Margin: 87%; Multiple: 4.32x
✅ What I Like
“The business includes a well-established website with a popular newsletter that reaches over 30,000 subscribers with a 50% open rate. The business also includes a thriving Facebook community group with over 88,000 members.”
I like these types of very niche businesses that serve a specific market. In this case, there is a very large TAM of Airbnb hosts. Multiple revenue streams including advertising, affiliates, and digital goods. Built on WordPress which is an easy-to-maintain tech stack. Nice margin. A few competitors to learn from.
❓ Questions & Concerns
Traffic and SEO analysis would be a key part of due diligence for this type of business. How have Google algo changes impacted the rankings? How are they acquiring customers and for how much? Can they negotiate better affiliate deals? Valuation seems a bit aggressive at first glance.
🏡 Main Street/Offline/Other
IT Services Company in Texas (BizBuySell) - $450k
Established 2014
TTM Revenue: $390k
Profit: $330k
Margin: 85%; Multiple: 1.36x
✅ What I Like
A lot of operating history. Serves hotel and hospitality industry. The business is located in a large and growing market of DFW Texas. I assume revenue includes one-time installation as well as recurring maintenance. If the stated numbers are verified, it’s a good deal.
❓ Questions & Concerns
Tons of questions about this listing. The 85% margin doesn’t seem realistic for this type of business. Where are the labor costs? Does the business rely on new construction? The seller is selling the business due to “capital constraints/personal financial difficulty.” That’s not a good sign. The new owner must have a strong network infrastructure and IP telephony background. Businesses with < $500k SDE are more like buying a job.
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Commercial & Residential Tree Service in FL (BizBuySell) - $1.8M
Established 2007
TTM Revenue: $2.2M
Profit: $779k
Margin: 35%; Multiple: 2.31x
✅ What I Like
A lot of operating history. Evergreen niche. Good margin. Diversified revenue from commercial and residential clients. 13 employees who are all W-2.
❓ Questions & Concerns
This business is in Lee County which was recently impacted by a major hurricane. How has this affected the business? Labor is the major breaking point for this type of business - how easy is it to hire? Are there any maintenance contracts in place or is it all one-time? Does this business win county projects? How much time does the owner spend in the business? What does the owner do? Business includes $750k of assets including vehicles and machinery. Need to perform an independent valuation to determine the value of these assets.
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Healthcare Management & Billing (BizNexus) - $900k
TTM Revenue: $1.6M
Profit: $300k
Margin: 19%; Multiple: 3.00x
✅ What I Like
My mother owns a business in this space. These types of businesses can be operated from anywhere and typically have long-term clients with low churn. A lot of opportunities to consolidate in this space. Recession-proof business with pricing power.
❓ Questions & Concerns
There’s absolutely no detail in this listing.
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Commercial & Residential Landscaping in Naples, FL (BizNexus) - $995k
Established 2007
TTM Revenue: $1.8M
Profit: $360k
Margin: 20%; Multiple: 2.76x
✅ What I Like
The business owner gets to live in Naples, FL. The listing mentions that the equipment is brand new so there’s value there. Project manager in place for larger jobs while owner overseas smaller jobs. The existing owner has focused on cash flow instead of growth so there’s an opportunity for a new owner to grow the business. Valuation isn’t crazy.
❓ Questions & Concerns
At $360k SDE, you need to have a growth plan in place otherwise you’re stuck buying a job. This business is all about labor - how easy is it to hire? How are current employees paid? Is everything legal and above board? Are there recurring contracts in place or is all revenue one-time?
🛠 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.
PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.
BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel. I consider the founder (Adam Ray) a friend.
X5 Deals - Proprietary deal sourcing. They do the outreach and send you relevant, actionable deals directly into your inbox.
Import Dojo - a newsletter that sends eCommerce and Amazon FBA businesses for sale to your email inbox. They send deals each Wednesday at 9:00 AM CST.
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.
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.
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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