2024.11.04 - Online Biz Acquisitions Opps

Happy Monday peeps!

I am eyeballs deep in a project to update my lead generation and distribution software for new FTC regulation taking effect on Jan 1 2025. It’s some complex stuff and it has taken me a while to find a developer that even understands it. Last week I found and hire some0ne… and we’re getting into. I’m eager to get this project behind me!

That brings us to the 3 great deals I’ve got today. They’re all pretty good.

🔫 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?

// Health & Wellness Supplement Brand | 3.9x Multiple

// Remote Fractional CFO Firm | 4.0x Multiple

// Accredited eLearning for Mental Health Clinicians | 4.6x Multiple

All 3 of these seem like GREAT businesses. Tough decision. Although if you’ve followed the newsletter and know which business I’m in already, you see where I am going.

To break it down, the health and wellness space has been very lucrative for many, but it’s not my style. I like the remote fractional CFO business making 880k/yr — how ever I think this business could suffer from dis-economies of scale. Meaning it gets harder to operate as it grows. It currently employs 25 people and deals directly with clients — I think there are easier businesses to operate. Like the eLearning for mental health practioniers. Digital product with no cost of goods, and the accreditation is a significant barrier to entry (relative) to other online businesses.

Let’s get into them!

// Health & Wellness Supplement Brand | 3.9x Multiple

💰 Asking Price: $1,590,000
📊 Gross Revenue: $976,248
💼 Cash Flow: $404,066
📅 Established: 2010

Overview:
This established health and wellness brand offers a proprietary line of natural weight loss and detox supplements with high customer retention (50% repeat rate). Revenue streams include DTC eCommerce and high-margin B2B sales. The business runs with just two part-time employees and a domestic warehouse, maintaining low overhead.

Highlights:

• Unique Formulas & Strong Customer Loyalty: Proprietary supplements and a 50% repeat purchase rate.

• Diverse Revenue Channels: Balanced mix of DTC and B2B sales.

• Lean Operations: Minimal staff, efficient operations.

• Successful Ad Strategy: Multi-platform ads with a 41% profit margin.

• High AOV: Average order value of $187, emphasizing premium positioning.

Questions:
❓ How resilient is the supply chain, and are there additional suppliers to support growth?
❓ Could expanding product lines enhance customer retention and acquisition?
❓ What growth strategies, especially in advertising or partnerships, remain untapped?

View Listing

// Remote Fractional CFO Firm | 4.0x Multiple

💰 Asking Price: $3,500,000
📊 Gross Revenue: $4,000,000
💼 Cash Flow: $880,000
📅 Established: 2017

Overview:
This fully remote fractional CFO firm specializes in premium accounting, bookkeeping, and financial strategy services. By strategically hiring in Mexico, the business maintains U.S. time zone alignment at lower labor costs, supporting 20% profit margins. With average annual revenue of $36,000 per client, this firm offers high-value, recurring monthly engagements. The recent shift to automated payments ensures smooth cash flow, and the absence of CPA/tax services broadens the potential talent pool while presenting an opportunity for a motivated owner to add these services.

Highlights:

• Strategic Nearshore Operations: Cost-effective team in Mexico, aligning with U.S. time zones for seamless client interactions.

• Automated Billing: Fully automated payments eliminate collections.

• High Revenue per Client: $3,000 monthly average revenue per client with steady, high-value engagements.

• Flexible Talent Needs: No CPA/tax service requirement eases hiring; optional to expand services to capture client demand.

Questions:
❓Has this business established a vertical market? I believe establishing presence in a vertical market is much more solid for this business model than being a ‘generalist’.

❓ Are there opportunities to expand into tax services, as frequently requested by clients?
❓ How can additional client services, like financial planning, increase average revenue per client?
❓ What growth strategies could further enhance profitability while keeping the current remote setup?

View Listing

// Accredited eLearning Platform for Mental Health Clinicians | 4.6x Multiple

💰 Asking Price: $1,600,000
📊 Gross Revenue: $763,172
💼 Cash Flow: $348,101
📅 Established: 2016

Overview:
This online education platform provides accredited courses and workshops for mental health professionals, fulfilling continuing education requirements. The company holds accreditations from U.S. bodies like the American Psychological Association and National Board of Certified Counselors, ensuring recognized value for its clients. Despite being a digital product business, the profit margin falls below 50%, raising questions about the cost structure, such as ad spend or instructor costs. The listing suggests minimal marketing efforts, highlighting easy wins for a buyer with digital marketing expertise.

Highlights:

• Comprehensive Accreditations: Recognized by major U.S. accrediting bodies, broadening client appeal.

• High Demand, Expansive Market: Serves professionals across the U.S., Canada, Europe, and Australia in a growing field.

• Minimal Marketing: Primarily reliant on word-of-mouth and an email list, suggesting significant growth potential with increased ad spend.

• Continuing Education Compliance: Programs satisfy CE requirements, making it essential for mental health professionals.

Questions:
❓ What is the talent pool like for licensed course instructors, and are there specific licensure requirements?
❓ Could refining marketing strategies, like PPC or SEO, raise the profit margin?
❓ Are there growth opportunities in offering additional services, such as occupational therapy training?