2024.10.29 - Online Biz Acquisition Opps (2.0)

Yes, another one today!

You see, I spent Sunday catching up all the deals for the last weeks so I’ve got a few posts in queue. Thing is, I need to send these out before I request the CIM and sign the NDA for the ones I am seriously interested in.

🔫 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?

// 10-Year Premium Production Cookware Ecom | 4.5x Multiple

// Digital Product For Business Strategy / Innovation | 3.7x Multiple

// Driver's License Test Prep Business | 3.8x Multiple

First this 10 year old cookware brand seems like an AWESOME business. The details indicate it’s reached a point of maturity and scale AND it still cashflows 25%. I like it.

But I really like the Digital Product in the ‘business strategy’ niche at 3.7x. I love my digital products, I like this niche (I’m kind of in it with my accounting CPE business).

The drivers license test prep also seems like a good business, but I think the buyer would need to plan on making some Youtube videos to continue the momentum. Not that that is difficult, it’s just not my pony.

// 10-Year CPG Brand - Premium Production Cookware | 4.5x Multiple

💰 Asking Price: $5,020,000
📊 Gross Revenue: $4,015,204
💼 Cash Flow: $1,115,259
📅 Established: 2014

Overview:

This established cookware brand offers a robust product line exclusively designed and manufactured under its brand, boasting 19 patents and 10 trademarks. With a solid mix of 70% direct-to-consumer (DTC) sales and 30% wholesale to major retailers, it has carved out a niche in the competitive cookware market. The brand maintains multiple supplier relationships, ensuring smooth operations and fulfillment managed by a contracted factory team. It also benefits from strong social media engagement and a 25% net income margin, which suggests an estimated gross margin of over 50%.

Highlights:

• Extensive Intellectual Property: 19 patents and 10 trademarks protect the brand's unique product designs.

• Balanced Sales Channels: 70% DTC sales via their branded website and 30% wholesale through major retailers.

• Multiple Suppliers & Contracted Fulfillment: Diverse supplier relationships minimize risk, while a contracted factory team manages inventory and fulfillment, maintaining $200,000 in stock.

• Strong Brand Presence: Well-established in the cookware industry, supported by prosperous social media channels.

Questions:

❓ How reliant is the business on its primary suppliers, and are there alternative options to diversify?
❓ Could expansion into other kitchen product categories provide significant growth opportunities?
❓ What growth strategies has the current owner implemented to reach the current scale, and are there untapped avenues to explore?

View Listing

// Digital Product For Business Strategy / Innovation | 3.7x Multiple

💰 Asking Price: $890,500
📊 Gross Revenue: $392,000
💼 Cash Flow: $243,000
📅 Established: 2018

Overview:

This leading digital media business offers over 300 educational products, including business plans, templates, and courses tailored for entrepreneurs and consultants. Most of the website’s traffic comes organically from search, positioning it as an authority in the business strategy niche. However, the heavy reliance on organic traffic suggests a significant opportunity to expand through paid advertising, which could be highly profitable given the high-margin digital products. The current net profit margin, while decent, raises questions about expenditure, especially for a digital product—indicating potential areas for operational efficiency.

Highlights:

• Strong Organic Traffic: Majority of traffic comes from organic search, indicating an opportunity for paid ads to boost growth.

• Scalable Digital Product Offering: With over 300 products, there’s significant potential to expand the audience and offerings.

• Established Authority: High authority in the niche makes it difficult for competitors to replicate success.

Questions:

❓ Given that this is a digital product business, what are the main costs affecting net profit, and can these be reduced?
❓ How effectively could paid advertising be introduced to complement the organic growth strategy?
❓ What specific growth strategies have been implemented so far, and are there any untapped opportunities?

View Listing

// Driver's License Test Prep Business | 3.8x Multiple

💰 Asking Price: $610,000
📊 Gross Revenue: $165,897
💼 Cash Flow: $162,445
📅 Established: 2020

Overview:

This highly profitable driver's license test prep business has leveraged its YouTube presence to drive organic traffic and achieve consistent growth. With 72,000 subscribers and 9.5 million views, the business effectively uses engaging video content to attract customers, generating 70% of its revenue from ads and 30% from premium digital products. With a 98% profit margin and all 2025 content pre-created, the new owner can focus on growth opportunities, such as utilizing existing YouTube videos as ads to drive further conversions or expanding into the Spanish-speaking market, where growth is projected to increase revenue by 25%.

Highlights:

• Exceptional Profitability: 98% net profit margin with minimal operational costs.

• Substantial YouTube Following: 72,000 subscribers and over 9.5 million views drive consistent traffic.

• Future Content Ready: 90 videos each for the main channel and new Spanish channel are ready for 2025.

• Proven Upsell Success: 93% of purchases are for premium products, with 22% opting for upsells, increasing average order value.

• Scalable Opportunity: Low operational requirements (1 hour/month), but adding effort (e.g., 10 hours/month) could accelerate growth.

Questions:

❓ Could the current YouTube videos be repurposed as ads to further boost conversions?
❓ What is the process behind the YouTube content, and could a new buyer seamlessly continue creating it?
❓ What growth strategies has the current owner not yet explored that could increase the customer base?

View Listing

Interesting but def not for me…

35-Year-Old SaaS for Farmers - 3.07x Multiple

💰 Asking Price: $180,000
📊 Gross Revenue (TTM): $82,425
💼 Cash Flow (SDE): $58,636
📅 Established: Over 35 years ago

This is one is too small for me to be interested in, but damn is it INTERESTING. A 35 year old SaaS and they’re still operating MS Access 97 and visual basic AND still sending updates out via CD (like the old AOL desks). To actually make any moves here you’d basically have to start from scratch but the 35 year old web site and domain could be hella valuable, particularly if this had a larger customer base in the past.