New Deals - 31 Aug 2023

by SMB Deal Hunter

Today’s Sponsor

Hello SMB Deal Hunters!

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

Today’s issue is sponsored by Smobi, a Y Combinator-backed startup that is building a marketplace that makes it easy to buy brick-and-mortar small businesses.

Want to promote your business to my community of 9,500+ entrepreneurs and investors? Replyadvertise” and I’ll share my media kit.

1/ HVAC Service & Repair Business

📍 Location: Cleveland, Ohio
💰 Asking Price: $1,180,000
💼 Cash Flow: $489,650
📊 Revenue: $2,693,130
📅 Established: 2009

💭 My 2 Cents: This well-priced HVAC business comes with a team of 10 seasoned technicians and office staff. Their largest revenue stream comes from residential services and repairs, and the average residential job size is an impressive $8500. I like that their sales and profit growth have consistently increased YoY, and that they have a strong reputation with 4.9 Google ratings. Plus, they have a strong cash conversion cycle with little to no accounts receivables. I’m curious about what service contracts come with the business. Bonus: The business is SBA pre-approved.

Click Here To View The Listing »

2/ Full-service Architectural Firm with Developed E-Commerce Business

📍 Location: South Carolina
💰 Asking Price: N/A
💼 Cash Flow: $868,572
📊 Revenue: $2,328,397
📅 Established: 25+ years ago

💭 My 2 Cents: This is a fascinating architectural firm that offers a large database of stock house plans, which are pre-designed home plans that include the most requested features consumers seek in a new home. For consumers, this means affordability, time savings, and a higher resale opportunity. Not surprisingly, selling PDFs for thousands of dollars means their EBITDA margins are exceptional (averaging 38.6% from 2020 through 2022). I like that there are two growth opportunities: 1) grow paid marketing to increase DTC sales, and 2) establish additional B2B relationships with builders nationwide.

Click Here To View The Listing »

3/ Marketing Agency for Gyms and Fitness Centers

📍 Location: Houston, TX (Relocatable)
💰 Asking Price: $2,500,000
💼 Cash Flow: $723,000
📊 Revenue: N/A
📅 Established: 2020

💭 My 2 Cents: This business runs paid marketing for 110+ recurring gym clients and helps them generate new customers. They charge gym owners $2000 per month, with $1000 going towards ad spend. Client LTV is about $10,000, which means the average client sticks around for 5 months. What's interesting is they haven’t done much cold emailing or cold calling to acquire new customers, which I think is a large opportunity.

Click Here To View The Listing »

In Partnership With Smobi

Tired of weeding through thousands of unverified listings?

Meet Smobi, the new Y-Combinator backed marketplace that makes it easy to buy brick-and-mortar small businesses.

Here’s what makes Smobi different:

1. Gain access to a list of pre-vetted listings with data rooms and relevant financial and business documents to speed up due-diligence

2. The Smobi team will help prepare and guide you through the buying process, from finding a business to closing (all for free)

3. The Smobi team will help you with financing and legal by connecting you to their partner network of banks, loan marketplaces, and M&A advisors

Did I mention Smobi is completely free for business buyers?

Check Out The Listings

P.S. I found the Marketing Agency deal above on Smobi!

4/ Well Established Medical Spa with 3 Locations

📍 Location: Orange County, CA
💰 Asking Price: $3,700,000
💼 SDE: $1,200,000
📊 Revenue: N/A
📅 Established: N/A

💭 My 2 Cents: Is it fate that this deal came on the market just in time for Season 17 of The Real Housewives of Orange County? This medspa has 3 strategically located locations throughout Orange County in Buena Park, Lakewood, and Newport Beach. They offer standard services from Botox and fillers to laser facials and body contouring. What I like about medspas is they usually have strong recurring revenue from services requiring regular maintenance. The asking price is very reasonable considering the market demand I’ve seen for medspas from PEs rolling them up.

Click Here To View The Listing »

5/ West Coast Based Tax and Accounting Practice

📍 Location: Washington State
💰 Asking Price: N/A
💼 Cash Flow: $2,468,859
📊 Revenue: $6,775,000
📅 Established: N/A

💭 My 2 Cents: Taxes and accounting are boring, but I think tax and accounting practices are very underrated because they come with strong recurring revenue and exceptional margins. This tax and accounting practice has over 1700 active and loyal customers as well as a tenured staff of over 30 employees. P.S. You don’t need to be an accountant to own this business (but it may help!).

Click Here To View The Listing »

🐦 The Best of SMB Twitter (X)

Strategic finance fundamentals to maximize the long-term value of your business (link)

Let’s talk about covenants, agreements, and stipulations when acquiring a small business (link)

10 favorite follows with <10K followers (link)

How to turn $30,000 to over $3,250,000 in 10 years from purchasing a successful small business (link)

The macro state of PE based on new data. Is PE “so back”? (link)

Your business needs a brand guarantee (link)

Insider info: One thing you should know about SMB deals (link)

Pros and cons of personally guaranteeing a seller note (link)

Financial statements are nice but incomplete. Here’s the setup you should have (link)

How to grow a business via boring franchises (link)

🧠 Join the SMB Deal Hunter Mastermind

If you want to be part of an active community for serious acquisition entrepreneurs and investors, apply here.

We 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 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. Join the SMB Deal Hunters Mastermind, a community for serious acquisition entrepreneurs and investors where we share insights, ask questions, and collaborate in bi-weekly calls and a Slack channel. Want in? Apply here.

3. Interested in selling your business? Get an offer from me.

4. Know someone ready to sell their business? Scout a deal for me and I'll make it worth your while! I pay finders fees of $25,000 to $200,000+, all you have to do is make the introduction.

🤝 Advertise in SMB Deal Hunter

Want to promote your business to my community of 9,500+ 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 (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.

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

  • The PyQuant Newsletter — Join traders & quants from Goldman Sachs & JPMorgan. Real Python code for algo trading & market data analysis twice weekly. Read in 5 minutes or less.

  • SMB Scoop — Curated SMB content for SMB owners and those aspiring to acquire through the entrepreneurship through acquisition (ETA) model

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