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- 2024.10.29 - Online Biz Acquisition Opps
2024.10.29 - Online Biz Acquisition Opps
Low multiple high quality ecommerce, or high multiple Elearning?
Happy Tuesday peeps. I hope you’re sailing smoothly into the week. We got some deals today.
🔫 Gun to my head question:
If I had to write a check for one of the businesses in this email, with no other details which one would it be?
// SBA Shopify Custom Home Decor | 2.4x Multiple
// eLearning Platform For Professional Education | 5x Multiple
// SBA Stable 27-Year-Old Patented Ice Wrap Ecom Company | 2.4x Multiple
… This is a tough one. There’s a lot to love here. The Shopify home decor business is SBA Eligible at a low multiple, but it hasn’t been in business very long and I question that accuracy of that 95% margin.. The patented Ice wrap business is also only a 2.4 multiple — its been around 27 years. The elearning business is interesting — it mentions teachers, doctors, dentists, and nurses; no specific niche which I find odd. At the same time the Ice Wrap Ecom business makes no mention of inventory handling, and you have pay for the inventory and the product being around since 97 means it may be dated. I’m going for 5x on the elearning business.
Here’s the thing, these elearning businesses, when they’re not tied to a guru person are pretty sticky, are hella scalable. With fundamentally no cost of goods, one good advertising campaign can exponentially grow the bottom line.
Here’s the deals!
// SBA Shopify Custom Home Decor | 2.4x Multiple
💰 Asking Price: $575,000 + Inventory
📊 Gross Revenue: $1,868,680
💼 Cash Flow: $240,457
📅 Established: 2020
Highlights:
High Gross Margin: 95% gross margin due to efficient made-to-order production in the U.S.
SBA Eligible: Business is pre-qualified, making it easier for buyers to secure financing.
Solid Repeat Customer Base: 20% of sales are from returning customers, reflecting customer satisfaction and brand loyalty.
Operational Efficiency: Eco-friendly, custom products with short lead times reduce overhead costs.
❓ How feasible is it to facilitate the custom model through Amazon, Wayfair, or other marketplace channels?
// eLearning Platform For Licensed Professionals | 5x Multiple
The valuation is steep but eLearning can be very passive and high margin. I’d look for a well established ‘brand’ behind the business to support this valuation.
💰 Asking Price: $1,600,000
📊 Gross Revenue: $550,989
💼 Cash Flow: $326,655
📅 Established: 2007
Highlights:
Evergreen Market: State-approved courses for licensure requirements provide stable, recurring demand.
Proprietary LMS: Custom-built system enhances operations, but its necessity may depend on the course quality and established brand.
Minimal Owner Involvement: Current owners work less than 5 hours weekly, with the business managed by 3 employees.
High Growth Potential: No current marketing efforts, presenting opportunities for expansion through targeted campaigns.
❓ How strong is the brand’s reputation, and do the courses require frequent updates to maintain compliance?
// SBA Stable 27-Year-Old Patented Ice Wrap Ecom Company | 2.4x Multiple
💰 Asking Price: $650,000 + Inventory
📊 Gross Revenue: $1,083,428
💼 Cash Flow: $267,547
📅 Established: 1997
Highlights:
Patented Product and Aged Brand. 27-year-old business with a patented product, providing a solid platform for growth.
Diversified Sales Channels: Revenue split across Amazon, wholesale, and Shopify, reducing dependency on a single source (41% Amazon, 43% wholesale, and 15% Shopify).
❓ What financial constraints have limited growth, and how can they be addressed under new ownership?
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