New Deals - 28 Sept 2023

by SMB Deal Hunter

Author

Helen Guo
September 28, 2023

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 Goldco, the Gold IRA kit built to protect your retirement savings.

Want to promote your business to my community of 10,000+ entrepreneurs and investors? Reply “advertise” and I’ll share my media kit.

1/ Healthcare EdTech Company Focused On Alzheimer’s

📍 Location: Midwest, USA
💰 Asking Price: N/A
💼 EBITDA: $639,000
📊 Revenue: $1,290,000
📅 Established: 2003

💭 My 2 Cents: This business does something quite unique: create and sell online trainings, certifications, and credentialing for those caring for people with Alzheimer’s and other forms of dementia. It may sound like a small market, but there are 6.7 million people with Alzheimer’s in the US, and that number is only going up as the country ages. I like how well-researched their products are (20 peer-reviewed studies in the last 15 years), that its revenue comes from recurring multi-year software subscriptions, and that 90% of its clients are healthcare organizations, as business clients tend to be larger and stickier. There’s a clear path for a new owner to grow this business by expanding to international markets or simply selling to more healthcare organizations. However, before diving in, I’d want to better understand what the course development process is, who develops the courses, how much it costs to build the courses, how often the courses are updated, and whether they are accredited.

2/ CRM Integrator For Salesforce And HubSpot

📍 Location: San Francisco, CA (Remote & Relocatable)
💰 Asking Price: $3,500,000
💼 EBITDA: $684,498
📊 Revenue: $2,025,454
📅 Established: 2019

💭 My 2 Cents: Longtime readers of the newsletter may remember the Salesforce and HubSpot CRM integrator I shared last month. That deal got a ton of interest from you all, so I was very excited to find this gem. What I like about this kind of business is how crucial CRMs are these days. To be blunt, it’s impossible to be a competitive business without a strong CRM system, which explains why the CRM market is now worth $57.38 billion and growing at a rapid 12.5% CAGR. What I like specifically about this company is that it integrates with Salesforce and HubSpot (the two largest CRMs), they have large clients like Adobe, Ford, and Twilio (signaling a good reputation), all of their sales have come organically (presenting an opportunity for growth via outbound sales and marketing!), it’s growing quickly (44% increase in sales from 2021 to 2022), and there’s a strong team in place. Overall, it’s a great opportunity for remote entrepreneurs, but one thing I’d check is how many of the clients are on retainer deals, as that would mean a lot of recurring revenue.

3/ Growing And Profitable Home Cleaning Company

📍 Location: Lake County, FL
💰 Asking Price: $1,200,000
💼 EBITDA: $460,000
📊 Revenue: $1,200,000
📅 Established: 2013

💭 My 2 Cents: This is a home cleaning business with a whole lot to like. There’s a lot of recurring revenue, as home cleaning is one of those things that people order over and over again (this business offers cleaning every one, two, or four weeks). With payment due at the time of service and cleaners paid the following Friday, the cash conversion cycle is outstanding. It grew an impressive 9% in the first quarter of this year. And, because it’s not part of a franchise, there’s a whole lot of room to expand free from the burdens of territory limitations and higher profit margins. For example, it would be very possible for the business to grow by better penetrating the Airbnb owner market (which is extremely popular in Florida). However, because this is very much a staffing business, I’d want to understand how long the current staff has been around and how difficult it is to hire new cleaning staff.

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4/ Eyebrows Cosmetic And Makeup Brand

📍 Location: Tampa, FL (Relocatable)
💰 Asking Price: $3,850,000
💼 EBITDA: $1,070,168
📊 Revenue: $8,236,091
📅 Established: 2019

💭 My 2 Cents: Eyebrows can absolutely transform your appearance. Trust me on this one, I literally use three different eyebrow products every day. And that’s not the only reason I’m excited about this eyebrow makeup brand. I also like the solid 35% repurchase rate, the very impressive 500,000-strong email list, and the features in magazines like Allure and Marie Claire, which speak to the strength of the brand and the quality of the products. Because most sales are D2C, I would gear my growth strategy towards expanding on marketplaces like Amazon and leveraging the email list to launch new products. But first, I’d want to dig into what the product launch pipeline looks like. If it’s super challenging to launch a new product, the Amazon expansion and email list suddenly look much less appealing.

5/ Profitable Dry Cleaning Business

📍 Location: Suffolk County, NY
💰 Asking Price: $1,790,000
💼 EBITDA: $730,000
📊 Revenue: $1,300,000
📅 Established: 2004

💭 My 2 Cents: There is something beautiful about simple businesses, and it doesn’t get much simpler than dry cleaning. Not only has this dry cleaning business been chugging along since 2004 (meaning a bunch of loyal customers, and thus, reoccurring revenue), it is selling for a very attractive 2.45x EBITDA multiple. I also like that the owners are retiring, its Hamptons base comes with high-end (translation: wealthy and busy) clientele, and they specialize in French-style dry cleaning with their own cleaning plant, guaranteeing a high quality of service. The current owners manage it full-time, but with the right manager, this could be an outstanding opportunity for some passive income.

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See you next Tuesday!

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📚 What I’m Reading

Everyone always asks how I stay up-to-date, so here are a few of my favorite newsletters. Click on the below links to sign up in one click (all free):

  • GirdleyWorld — Business buyer and Holdco owner Michael Girdley shares lessons from building a $100M empire.

  • SMB Scoop — Learn to find, buy, operate, and invest in profitable & cash flowing companies

  • 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.

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