New Deals - 5 Sept 2023

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Hello SMB Deal Hunters!

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

Today’s issue is sponsored by BoringMarketing.com, a team of global SEO experts that leverages AI to improve search rankings and drive organic site traffic (at a price that isn’t boring at all).

1/ Pet Fish and Bird Medications eCommerce Brand

📍 Location: Remote
💰 Asking Price: $4,918,000
💼 Cash Flow: $1,229,506
📊 Revenue: $3,711,067
📅 Established: 2011

💭 My 2 Cents: This company takes advantage of a regulation quirk I would’ve never known about: Antibiotics for larger animals (i.e. dogs) are heavily regulated by the government and require a vet prescription, but for birds and aquatic and tropical fish, they do not. This 100% DTC business (Shopify) has been growing 30% YoY and has a very impressive 52% repeat purchase rate. I like that they have a relatively low SKU count (16) which is good for inventory management and a pretty decent AOV of $92. A big part of the reason their profit margins are so high for an e-commerce business is because they have a very strong organic SEO presence which drives 18,000+ unique monthly visitors to their site. As a result, they spend very little on paid ads (an opportunity!).

Click Here To View The Listing »

2/ Established Printing Company

📍 Location: Dallas, Texas
💰 Asking Price: $2,000,000
💼 Cash Flow: $780,000
📊 Revenue: $2,039,000
📅 Established: 1981

💭 My 2 Cents: This business offers full-color digital and offset printing (i.e. product materials, brochures, postcards, banners, etc.) to clients in the Dallas/Ft. Worth metro area. I like printing businesses because of the high margins (nearly 40% on this one!) and that they usually come with pre-existing B2B relationships. I’m also bullish on print marketing as digital ad costs skyrocket. I would want to dig heavily into repeat behavior and understand how much business is from repeat customers and how often and how long customers work with them on average. An opportunity here would be to grow the sales team to bring on new clients as well as capture more local paid search traffic.

Click Here To View The Listing »

3/ Specialty Hand Tools E-Commerce Business

📍 Location: Remote
💰 Asking Price: $14,650,000 + Inventory
💼 Cash Flow: $3,256,060
📊 Revenue: $15,562,443
📅 Established: 2010

💭 My 2 Cents: This business sells specialty hand tools to the woodworking and woodturning market on its own DTC site (43% of revenue) and on Amazon (53% of revenue). The woodworking tools market is surprisingly large to me—it’s expected to reach $13.3 billion by 2031! But upon further digging, it makes total sense because these tools are used in many industries such as construction, oil & gas, automobile, plumbing, carpentry, and more. I like that the business has grown its top line 15% YoY and its bottom line 96% YoY. Some interesting growth opportunities would be to add additional suppliers and launch a private label selling its own branded version of the top products from its catalog based on historical data.

Click Here To View The Listing »

4/ High Volume Liquor Store Chain Operating 7 Stores

📍 Location: Clark County, NV
💰 Asking Price: $7,500,000
💼 Cash Flow: $1,940,000
📊 Revenue: $9,000,000
📅 Established: 1996

💭 My 2 Cents: This 7-location liquor store chain is for sale from a retiring owner (but comes with 30 employees). What I like about liquor stores is they’re fairly recession-proof and easy to operate. Liquor has a long shelf life compared to perishables, which makes inventory management easier. This one is based in Clark County (where Las Vegas is) which means a lot of foot traffic from its 32 million visitors annually. What’s also interesting about the location is that Las Vegas is a 24/7 economy, meaning there could be opportunities for extended hours of operation.

Click Here To View The Listing »

5/ Commercial HVAC Company

📍 Location: Cass County, ND
💰 Asking Price: $1,300,000
💼 Cash Flow: $566,456
📊 Revenue: $3,682,741
📅 Established: 1981

💭 My 2 Cents: This commercial HVAC company in western North Dakota is trading for a great multiple and the asking price comes with real estate. Because North Dakota experiences both cold winters and warm summers, there’s a consistent demand for HVAC services year-round. The business comes with solid employees and some management, which is a plus. Since they work with commercial clients, I’d want to dig into what contracts come with the business, the average contract size, and how long they’ve been working with these clients. Bonus: The business is pre-approved for SBA financing.

Click Here To View The Listing »

🐦 The Best of SMB Twitter (X)

How to analyze a Balance Sheet, Income State, and Cash Flow Statement in less than 5 minutes (link)

Reflections on acquiring 5 SMBs in 3 years (including a breakdown of a playbook for an SMB holding company) (link)

A must-read if you’re making an SMB acquisition with real estate using an SBA loan (link)

How a real deal was structured and what terms looked like (link)

A reminder that every problem in business can be solved in 1 of 2 ways (link)

Advice on being cash flow positive (link)

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See you on Thursday!

-Helen Guo
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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.

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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 (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.

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

⏪ Catch Up On Recent SMB Deal Hunter Issues

• August 31, 2023

• August 30, 2023

• August 29, 2023

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