The Business Inquirer #107
In this week's issue, I highlight 4 listings including a CPA firm, niche toys dropshipping, a Notion tool, and a collection of internet businesses started in the 1980's.
Hello Friends!
In this week’s issue:
🛒 eCommerce - 1 listing
☁ SaaS - 1 listing
💼 Online Service, Media, Marketplace - 1 listing
🏡 Main Street, Offline, Other - 1 listing
🛠 Tools & Resources
This issue of The Business Inquirer is brought to you by BizNexus.
BizNexus is a combination of a marketplace + off-market deal origination in one platform.
The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.
🛒 eCommerce
Children’s Toys Dropshipping (Acquire) - $754k
A business that sells high quality, low profile, and very niche (Montessori) children's toys to end customers, using a combination of Amazon, its own inventory via 3PL (US), and direct Chinese supplier as fulfillment. We generate traffic through paid ads (the main channel is FB, secondary Google. We also monetize our email and SMS subscribers list.
Competitors: Lovevery, KiwiCo, Monti Kids
Established 2020
TTM Revenue: $2.8M;
Profit: $302k;
Margin: 11%
Multiple: 2.50x
✅ What I Like
A niche product that appeals to a very specific audience. Montessori is a very popular education program. Owners grew the business through paid ads at a time when the channel was very volatile. I think this is a good thing as they probably have a solid strategy in place and you can see historical results during due diligence. Valuation isn’t crazy.
❓ Questions & Concerns
There isn’t a lot of history in the business. How are the products differentiated from the competition? As typical with dropshipping, the margins are very thin. Not a lot of room to maneuver if costs go up. On this topic, how have the COGS trended over the last year? What’s the CAC? Can cost increases be passed on to the client?
☁ SaaS
Notion Website Builder (Acquire) - $400k
SaaS that creates custom Notion websites in minutes. It adds the magic, generating a speedy site with custom domains, styles, and great SEO.
Competitors: Super, SimpleInk
Established in 2020
TTM Revenue: $57k
Profit: $47k
Margin: 82%
Multiple: 8.51x
✅ What I Like
Notion is one of the most popular solutions for a unified workspace. It’s used by individuals, SMBs, and enterprise clients. It’s a good platform to build a business around. This product has decent traction. Would be an interesting acquisition for someone who is already building add-ons for Notion.
❓ Questions & Concerns
Still a young project with a lot of competition. Notion itself has the functionality to create websites. How is this solution different? Which marketing channels have worked to drive signups? Valuation is very rich.
💼 Online Service, Media, Marketplace
Software, Branding, Digital Marketing Agency (BizBuySell) - $6.4M
Stakeholder that launched on the internet in the 80's and has created, maintained, and methodically improved several brands in the lucrative spaces of the internet such as: Software Development, App Development, Advertising, Digital Marketing, Branding, Public Relations and Web Design.
The brands are:
Four established software firms/brands that dominate in the most lucrative areas of the United States; Seattle, Los Angeles, Portland, and New York City.
Four separate marketing and Advertising firms/brands that completely dominate Google in Seattle and Oregon.
Two Public Relations firms that completely dominate Seattle and Bellevue, Washington.
One small web design firm/brand that owns the market in Bellevue, Washington.
In addition, the stakeholder operates several subsidiaries each offering additional revenue streams not mentioned above that exist in super niche sectors of the internet space.
Established 1987
TTM Revenue: $4.0M
Profit: $3.4M
Margin: 85%
Multiple: 1.88x
✅ What I Like
Just an interesting listing. You don’t often see a conglomerate of internet businesses launched in the 80’s come up for sale. Valuation looks attractive at first glance.
❓ Questions & Concerns
There’s a lot going on here. Not a lot of detail in this listing. Sounds like all the entities rely on SEO to drive traffic. How is SEO maintained and by whom? How have previous changes to the Google algo impacted this business? Is this just a collection of lead-gen websites? A lot of questions about this business.
🏡 Main Street, Offline, Other
CPA Firm (BizBuySell) - $2.9M
The firm's clients are about 50/50 personal to business, and they do about 800 tax returns annually. Approximately 75% of the revenue is recurring from bookkeeping clients, payroll clients, quarterly projects, and tax. The firm's client base is heavy into construction, but also manufacturing, medical, real estate professionals, and other small businesses. There are 7 full-time employees and 10 part-time (mostly remote).
Established 2008
TTM Revenue: $2M
Profit: $602k
Margin: 30%
Multiple: 4.82x
✅ What I Like
There’s a lot of operating history. Serves the SW Florida market which is expanding. A lot of the revenue is recurring. The listing mentions that they have more business than they can handle and turn away clients. The owner is looking to semi-retire and is willing to stay on in the business. Maybe some creative financing or deal structures are available.
❓ Questions & Concerns
The majority of clients are in the construction business which can be very cyclical. Why wouldn’t one of the employees want to buy this business? The valuation looks a bit elevated.
Here are a few helpful articles:
🛠 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. Local Boston company and 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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