New Deals - 22 Aug 2023

by SMB Deal Hunter

Author

Helen Guo
August 22, 2023

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Today’s Sponsor

Hello SMB Deal Hunters!

I’m excited to share 5 new deals worth checking out.

Today’s issue is sponsored by Acquire.com, the largest startup acquisition marketplace for profitable Internet businesses.

1/ AI-Powered Plant Identifier Mobile App

📍 Location: Remote
💰 Asking Price: $3,200,000
💼 Cash Flow: $712,000
📊 Revenue: $1,500,000
📅 Established: 2021

💭 My 2 Cents: Gardening is booming, and this mobile app caters to plant enthusiasts, gardeners, and botanists, offering features like AI-powered plant identification, health checks, watering schedules, and a rich content library. The app operates on a SaaS model, offering a tiered subscription system (free, $50/month, or $100/month). I’m very impressed that the current owner has bootstrapped the business to this level of profitability. I’d want to dig into the monthly churn, LTV, as well as how many subscribers are in each pricing tier. If the retention metrics are strong, there could be an interesting opportunity to grow the business by optimizing SEO to boost organic traffic, launching an affiliate program, upselling physical products through a partnership, upselling additional content, and growing through paid advertising.

Click Here To View The Listing »

2/ Managed Service Provider (MSP) Company

📍 Location: West Coast
💰 Asking Price: $7,150,000
💼 Cash Flow: $1,406,000
📊 Revenue: $8,340,000
📅 Established: N/A

💭 My 2 Cents: I was just talking to a friend who was sharing how hard it was to find MSPs for sale at reasonable multiples because of all the PE interest in the space, and then I came across this deal! I love this B2B service niche because MSPs usually come with long-term sticky contracts and are of course asset-light. This business has over 200 contracts with SMBs that require IT services and support. The company has three locations and services clients throughout the United States. I would definitely dig into client concentration (I passed on an MSP deal a few months ago because of this), how long their clients have been working with them, and how loyal their employees are.

Click Here To View The Listing »

3/ Medical Spa / Aesthetics Clinic

📍 Location: Chelan County, WA
💰 Asking Price: $995,000
💼 Cash Flow: $527,000
📊 Revenue: $1,039,000
📅 Established: 2019

💭 My 2 Cents: You’ve probably all heard my schpiel by now about how “Botox is the new Bitcoin,” but to reiterate, I like medspas because they usually come with reoccurring revenue from customers requiring regular maintenance. This is an extremely well-priced medspa I came across that is asking for approximately 2x SDE. The business has been growing like crazy, from $149,000 in 2020 to $703,000 in 2021 to 1,039,000 in 2022. I’d definitely want to understand what performance has looked like in 2023 year-to-date and dig into what repeat customer behavior looks like.

Click Here To View The Listing »

In Partnership With Acquire.com
Here’s My Secret Weapon for Finding Profitable Internet Businesses

Reviewing new deals on the Acquire.com platform is part of my weekly deal sourcing workflow (and it should be part of yours too).

Acquire.com is the largest marketplace of vetted internet businesses for sale, including SaaS businesses, agencies, e-Commerce stores, mobile apps, and even Shopify apps.

What I like about Acquire.com is that many of the deals are listed by sellers themselves without a broker.

While joining is free, I’ve personally been subscribed to the Platinum plan for well over a year now, which gives me access to larger deals with over $250,000 in TTM revenue (like this AI-powered plant identifier app that I featured above).

Join Now For Free

4/ eCommerce Pet Crate and Carrier Brand with 76% Profit Margins

📍 Location: Remote
💰 Asking Price: $885,000
💼 Cash Flow: $569,742
📊 Revenue: $750,204
📅 Established: 2017

💭 My 2 Cents: I love the pet niche for how much crazy pet owners (like me) are willing to spend on their fur babies. This is a multi-channel e-Commerce brand that sells a line of dog crates and cat carriers on Shopify as well as online marketplaces like Amazon, Chewy, Target, and Walmart. I like that the brand has a strong reputation with nearly 1,500 reviews at 4.7 stars. I don’t even understand how they are able to operate on 76% net profit margins, but this definitely means there’s room to scale the business through paid ads, assuming the average order value is high. I’d want to understand the sales channel breakdown as well as what the product development pipeline looks like, as new product launches will be key to growing this type of business. The listing (and the asking price) says that the seller is very motivated, so I would also dig into why exactly the seller is selling.

5/ Party & Event Rental Company

📍 Location: Des Moines, IA
💰 Asking Price: $2,700,000
💼 Cash Flow: $1,075,371
📊 Revenue: $2,737,381
📅 Established: 1981

💭 My 2 Cents: This 42-year-old party and event rental company runs on nearly 40% profit margins and is selling for a really reasonable multiple. The company provides a wide range of drop-off and/or turnkey rentals for events and parties. Their number of years in business has led to strong word-of-mouth advertising and presumably strong SEO. What I like about the industry is that event and party planners like to use the same vendors if they had a good experience with them. I also like that the business has a team of 17 employees. Since the event industry can be seasonal, I definitely would want to dig into monthly fluctuations in the business.

🐦 The Best of SMB Twitter

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A play-by-play on how Alex Hormozi broke the internet this past weekend with his $100M Leads book launch (link)

3 things to look for in a “great” business (link)

Business buying risk assessment checklist (link)

How to use a system called “effectuation” to build a business, from a Holdco owner who has started 9 companies and employs >1,000 people (link)

Important factors to consider when buying a franchise concept (link)

12 tactics to find an extremely profitable, cash-flowing SMB within 10 miles of your house (link)

How this entrepreneur hired a personal chef to save time and money (link)

🧠 Mastermind Announcement - Last Chance To Apply!

I’m excited about all the applications I’ve already received for the SMB Deal Hunter Mastermind!

I will be reviewing the first round of applications this weekend, so be sure to apply ASAP if you’re interested.

As a reminder, this will 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 and will be released on a first-come, first-served basis to qualified applicants.

See you on Thursday!

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 9,000+ entrepreneurs and investors? Reply “advertise” 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 (all free):

  • 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.

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

  • Frameworks & Finance by Kurtis Hanni — Join 25k+ business owners and leaders learning financial statements and growing their business every Thursday, for free.

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

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