❇️ New Deals - 28 March 2024

An invoicing SaaS, commercial property manager, and 3 other interesting finds.

Today’s Sponsor

Hello SMB Deal Hunters!

Thanks for all the great feedback from the deals I shared on Tuesday!

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

Today’s issue is sponsored by Steed, a team of tax specialists that ensures you pay the absolute least in taxes.

📣 Want me to help you find a business to buy in the next 90 days and handhold you through closing your first deal? Apply to work with me.

1/ Invoicing SaaS

📍 Location: California (Remote)
💰 Asking Price: N/A
💼 EBITDA: $556,000
📊 Revenue: $930,000
📅 Established: 2014

💭 My 2 Cents: This is a very successful subscription-based invoicing platform. In a space with competitors like Zoho Invoicing, FreshBooks, Invoice2Go, WaveApp, and Invoicely, they’ve carved out their own niche of freelancer and small business clientele. I like that they have a great reputation in the open-source community, boast 5,000+ users on community and Slack support channels, and have thousands of ~4.5 star reviews. Reflecting this, they processed over $250M in online payments for  200,000+ freelancers and SMBs in 2023, pulling in $930K of revenue with an SDE of $556K (including a $120K operator salary). And, as a SaaS business, these over 50% profit margins should only get better. With almost all of their growth being organic, there’s real growth potential here by firing up marketing and paid ads, making this an overall excellent remote opportunity.

2/ Commercial Property Management

📍 Location: Los Angeles, California
💰 Asking Price: $1,875,000
💼 EBITDA: $528,177
📊 Revenue: $1,033,394
📅 Established: 1987

💭 My 2 Cents: This is a property management company with a commercial focus, which is a niche you don’t often see (you’ll typically find a lot more vacation rental property management companies for sale). This niche is great because tenants in commercial and retail spaces often sign more expensive and longer-term leases than residential tenants due to the business revenue they generate. The result for you is a simultaneously higher and more stable income, and as a bonus, you get to work with a lower maintenance, more professional clientele. I also like that the company has been around for over 35 years (proof of good work), already has 18 properties under management, has a team of 5, and has several revenue streams including property management, leasing commissions, and contractor and maintenance fees. However, I do want to dig into any client concentration, how revenue per client on the leasing commission side has fluctuated over the years due to market conditions, and what contracts they have in place. 

3/ 11 Liquor Stores

📍 Location: San Antonio, Texas
💰 Asking Price: $5,000,000
💼 EBITDA: $1,200,000
📊 Revenue: $10,500,000
📅 Established: 2014

💭 My 2 Cents: Liquor stores are great boring, recession-resistant businesses, as they are straightforward to operate and even in down times both the demand for spirits and their price basically don’t move. Most liquor stores are on the smaller end, so it’s really exciting to find an owner who’s selling 11 liquor stores in one deal. While the numbers are reasonable, there are a couple of things I would want to check out further. As they say, location is everything, so I would want to know about the competitive dynamics of the areas the stores are in as well as the traffic counts or footfall estimates for each store. I’d also want to know the terms of the current leases, the options to renew, and how sales and profits compare across the various stores. If everything checks out, there is real growth potential here. They currently do zero marketing so this is an obvious place to start, but you can also extend hours, provide delivery services, add ATMs, and start selling lottery tickets.

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4/ CPA Practice With 3 Offices

📍 Location: Florida
💰 Asking Price: $2,295,000
💼 EBITDA: $531,970
📊 Revenue: $1,660,577
📅 Established: 2000

💭 My 2 Cents: Like liquor stores, CPA practices are great recession-resistant businesses with lots of recurring revenue that isn’t losing prominence in our digital era, as people still have a tendency to go to someone local. This 24-year-old practice with 3 office locations provides everything from forensic accounting to QuickBooks setup and they primarily serve local homeowner and condo associations and property management companies, which are great sticky and recurring clients. There’s a full team in place with 4 CPAs, 3 office managers, and 6 accountants, but I would want to know how long the CPAs have been around, as it’s important to keep them since they own the client relationships. The owner’s role is also critical to understand, especially in relationship management, as a key thing to navigate with CPA practices is making sure client relationships get transitioned from the seller. Otherwise, with the business being SBA lender pre-approved with 10% down, this deal looks like a pretty good one.

5/ Staffing Firm

📍 Location: New Jersey
💰 Asking Price: $7,950,000
💼 EBITDA: $2,076,000
📊 Revenue: $32,621,137
📅 Established: 2012

💭 My 2 Cents: This is a staffing firm focused on the manufacturing, warehousing, and distribution industries, filling essential staffing needs for its clients, including forklift drivers, assembly workers, production workers, and logistics workers. I like their clientele (they even have some Fortune 500 companies!), but I’d want to dig into what type of products their clients are manufacturing, warehousing, and distributing, as I’d want to make sure these are growing and essential industries. Given they have some big clients, I’d also want to check on client concentration. Otherwise, I like that they have a staff of 11 in place and that the retiring seller (whose current role is general oversight) is willing to finance 20% of the deal and offer a 1-2-year transition, which shows me that he really believes in the business’s future, which is a great sign of faith. If you can expand geographically, this would be a real winner.

🐦 The Best of SMB Twitter (X)

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The 1-3-10 work rule (link)

The 4 types of SBA lenders (link)

How to run a good 1-on-1 employee meeting (link)

Fundamentals of SBA debt financing for business acquisitions (link)

Applying managerial leverage to delegation (link)

4 mistakes to avoid when signing a LOI (link)

🤝 Vendors and Lenders

I’m committed to helping the SMB Deal Hunter community close more deals, faster. Click on any of the links below and I will make a personal introduction to folks I trust.

SBA 7(a) Lender: The most common way to finance an acquisition up to $5M purchase price with 10% (give or take) down with the help of a government-backed loan. My preferred lender Elyse will help you out.

Non-SBA Lender: Best for smaller deals if you want to avoid the hassles of SBA. My preferred lender Grant and his team are the only private lenders I know who offer acquisition financing with long payback periods without any collateral requirements. Note: You must have great credit.

Quality of Earnings Provider: I always recommend conducting a QoE during due diligence to uncover any red flags. Get introduced to my preferred QoE provider that offers top-tier financial due diligence without breaking the bank.

Legal Counsel: A must-have on your team to help get a deal to the finish line. Get introduced to legal counsel with experience closing SMB deals that won’t rack up your legal bill.

See you next Tuesday!

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

1. Want me to help you find a business to buy in the next 90 days and handhold you through closing your first deal? Apply to work with me.

2. 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 investing in. Reply LP” and I’ll share more.

3. Interested in selling your business? I’ll help you connect with buyers from the SMB Deal Hunter Community.

4. Want to promote your business to my community of 55,000+ entrepreneurs and investors? Advertise in SMB Deal Hunter

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This publication is a newsletter only and the information provided herein is the opinion of our editors and writers only. Any transaction or opportunity of any kind is provided for information only; SMB Deal Hunter does not verify nor confirm information. SMB Deal Hunter is not making any offer to readers to participate in any transaction or opportunity described herein.