New Deals - 10 Aug 2023

by SMB Deal Hunter

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Today's Sponsor

Hello SMB Deal Hunters!

I’m excited to share:

  • 5 new deals worth checking out

  • Links to the best SMB content on Twitter

  • An important announcement regarding the SMB Deal Hunter Mastermind 👀

Today’s issue is sponsored by Franshares, the first platform of its kind (!) where you can invest in franchises to generate passive income.

1/ eCommerce Home & Garden Brand with YoY Growth

📍 Location: Remote
💰 Asking Price: $5,000,000
💼 Cash Flow: $1,673,000
📊 Revenue: $5,841,000
📅 Established: 2017

💭 My 2 Cents: Did you know gardening supplies and equipment sales are expected to grow to $127 billion by 2024? This eCommerce brand is catching the green thumb trend by providing gardening equipment for residential customers. The profit margins are an impressive 29%. I also like that they have a low SKU count, which makes inventory easier to forecast and manage. Plus, they’re already omnichannel with a current channel mix that’s 65% Amazon, 17% Walmart, 13% Lowes/Home Depot/Shopify, and 15% wholesale. Given the product/market fit they’ve found, there’s a large opportunity to launch paid search and social ads to grow their DTC business. Bonus: Seller is willing to finance 15% of the deal.

Click Here To View The Listing »

2/ In-Home Care for Older Adults

📍 Location: Fort Worth, TX
💰 Asking Price: $1,825,000
💼 Cash Flow: $517,819
📊 Revenue: $2,410,580
📅 Established: 2015

💭 My 2 Cents: In-home healthcare is riding many tailwinds. As America’s population rapidly ages, Medicare reimbursements are increasingly favoring value-based care treatments like home healthcare, which support better patient outcomes at lower costs. On top of that, more than ever, older adults are choosing one-on-one in-home care over senior living communities. No wonder employment in the sector will grow by a whopping 21% between 2021 to 2031! I like that this business already has a team of 80, and that they get business from referral providers within the healthcare community.

Click Here To View The Listing »

3/ Procurement Business Serving World's Largest Companies

📍 Location: Pasco County, FL
💰 Asking Price: $2,800,000
💼 Cash Flow: $570,000
📊 Revenue: $6,230,312
📅 Established: 1993

💭 My 2 Cents: This 30-year-old B2B services business procures materials and goods for some of the largest companies in the world. I like that the business doesn’t need to hold inventory or have warehouse space, which means more cash in your pocket. The owner is retiring, but the business comes with 7 employees. Since you’re buying an existing customer base and vendor relationships, you’ll really want to due diligence their brand equity and reputation. I’d also dig into what contracts they have in place with their customers and how sticky their customers are. Bonus: This business can be run fully remotely from anywhere.

Click Here To View The Listing »

In Partnership With FranShares

What do McDonald’s, Marriott, and Orangetheory have in common?

Answer: They’re all franchises!

A lot of you have been asking about opportunities to invest passively in cash-flowing SMBs, so I’m excited to share this new opportunity:

FranShares is the first platform of its kind that lets you invest in franchises with strong cash-flow potential (without being an operator!).

With FranShares, anyone can invest in proven franchises and gain the opportunity to generate passive income with as little as $500.

I like that Franshares does all the legwork, sourcing opportunities in recession-resistant industries with a strong track record, locking in the best deals, conducting due diligence, and hiring operators to run the show.

There are already 42,000+ people on the waitlist (myself included) and $18.4M in subscriptions! Fortunately, SMB Deal Hunter readers get priority access to this fund and all future funds.

Join The Waitlist Now

4/ Fast-Growing Commercial HVAC Business

📍 Location: Travis County, Texas
💰 Asking Price: $1,300,000
💼 Cash Flow: $542,110
📊 Revenue: $2,313,876
📅 Established: 2019

💭 My 2 Cents: This business provides HVAC service and preventative maintenance for commercial properties in Central Texas. Commercial clients tend to mean larger, longer-term contracts and recurring income (all things to love!). Plus, usually commercial jobs occur during regular business hours, meaning more predictable scheduling and fewer headaches. I like that the business comes with 6 employees, but I would dig into how loyal they are since there’s a nationwide shortage of skilled HVAC labor. A growth opportunity here is to expand geographically into Dallas and San Antonio.

5/ Patented Air Mattress Bestseller on Amazon

📍 Location: Remote
💰 Asking Price: $30,500,000
💼 Cash Flow: $5,535,797
📊 Revenue: $38,462,616
📅 Established: 2001

💭 My 2 Cents: This 22-year-old air mattress business is cash-flowing an impressive $5.5 million a year! Despite being around for 22 years, they’ve seen an 88% YoY revenue growth. They sell air mattresses in a variety of sizes and colors and are an Amazon Best Seller in multiple categories. They own two key patents on the mattress (one for the pump mechanism, and one for the mattress assembly), which likely is a key driver to the quality of the products. What’s interesting is one of the current owners owns the manufacturer behind the products and is willing to offer the same pricing as well as license the patents in perpetuity with no royalty fees.

Click Here To View The Listing »

🐦 The Best of SMB Twitter

How real estate investors, developers, and operators can make millions a year and pay almost nothing in taxes by utilizing a loophole called Bonus Depreciation (link)

The very first monthly KPI you should track after buying a small business (link)

How to save money on legal fees (link)

A business accounting cheat sheet (link)

6 tips on becoming the absolute best in your industry and taking your small business to the next level (link)

The interesting part of the “Penn-Disney-Barstool” transaction in a nutshell (link)

🧠 Mastermind Announcement - Applications Now Open!

I know I’ve been teasing you guys for a while now, but I’m excited to finally open applications for the SMB Deal Hunter Mastermind!

As a reminder, this is going to be an active community for serious acquisition entrepreneurs and investors.

We'll share insights, ask questions, and collaborate in bi-weekly Zoom calls and a Slack channel.

Spots are limited.

See you next Tuesday!

P.S. Whenever you’re ready, here are a few ways for us to work together:

1. Invest with me in cash-flowing SMB deals. I’m bringing on a select few investors from this community into businesses I’m buying and operating. Reply LP” and I’ll share more.

2. I'm launching an exclusive SMB Deal Hunters Mastermind for serious acquisition entrepreneurs and investors in a few weeks. We'll share insights, ask questions, and collaborate in bi-weekly calls and a Slack channel. Want in? Apply here.

3. Raising money for a deal under LOI and need introductions to investors? Reply “fundraise” for my help.

🤝 Advertise in SMB Deal Hunter

Want to promote your business to my community of 6,500+ entrepreneurs and investors? Replyadvertise” and I’ll share my media kit.

📚 What I’m Reading

Everyone always asks how I stay up-to-date, so here are a few of my favorite newsletters:

  • Sieva Kozinsky's Newsletter — The founder of Enduring Ventures shares weekly insights from his experience buying 17+ cash-flowing businesses

  • The Sweaty Startup — “Boring business” entrepreneur Nick Huber who sold his 7-figure service business and now runs a self-storage portfolio shares actionable insights with entrepreneurs and investors.

  • Houck's Newsletter — Tactical advice every week from an a16z-backed founder on how to build, grow, and raise capital for your startup

  • Early Bird Stock Market News — A daily email newsletter powered by MarketBeat that covers the top stories that will impact the stock market each day

  • Dinner Table Discussions — Financial news that matters to you and your family

All free, all quality. Check ‘em out.

⏪ Catch Up On Recent SMB Deal Hunter Issues

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If you refer 1 friend or colleague to my newsletter, I’ll also send you The Comprehensive Seller Interview Question Bank I’ve put together for free ($99 value). In it, I’ve compiled 50+ questions business buyers should ask during seller interview calls when evaluating a business.

Disclosure: This content is not investment advice, nor is it an offer to buy or sell securities. All investments carry risk which could include loss. [You can find FranShares’ full disclaimer linked here.]