2024.07.14 - Online Business Acquisition Opps

Hey hey peeps!

Today we’ve got a digital product business, and a an ecom business. Yes, just 2. Overall it was a quiet week in the world of online businesses hitting the market.

🔫 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?

I would take the pressure washing ecom business. It’s a stable 20 year old business with evergreen products. On the other hand, the digital product (guitar course business) is tied to the sellers persona and that really scares me. I’ve seen businesses heavily reliant on a persona fizzle out without that ‘person’.

On that note; here’s what we got!

// 114k/yr Online Guitar School

This business looks good on the surface but has the achilles heal of being owner persona driven which makes it a risky acquisition. The business makes for an interesting study, but I would recommend buyers steer clear of this unless they could work-out a favorable earn-out type of agreement. If the seller wants to maximize exit value they need to proactively seperate themselves from the marketing content.

💰 Asking Price: $340,000
📊 TTM Revenue: $248,128
💼 TTM Profit: $114,841
📅 Established: 2015

This online guitar school is one of the largest in the world (according the listing broker), generating revenue through evergreen online guitar courses marketed to an email list of approximately 105,000 subscribers. The business benefits from 1.4 million visitors annually, ensuring a steady influx of new potential students. Operating with minimal working capital, the school follows a predictable promotional schedule with 13 different courses and 10 email marketing funnels. Additionally, the business generates around $5,000 in monthly recurring revenue from its membership component.

• 45% margins — kind of low for a digital product, and the listing doesn’t mention anything about ad spend.

• 9 years in business

• Steady traffic with 1.4 million annual visitors. This may mean an opportunity to monetize the traffic with affiliate programs.

• 13 evergreen courses and 10 email marketing funnels

• $5,000 in monthly recurring revenue from memberships

• Seller willing to assist with transition for up to six months

❓ What specific strategies will be employed during the six-month transition period to mitigate the impact of the owner’s departure?
❓ What is the current churn rate for annual subscribers, and how does the business plan to retain these members?
❓ How does the business differentiate itself from competitors in the online guitar course market?
❓ What are the day-to-day operational requirements for managing the business, and how can these be streamlined further?

View Listing

// 620k/yr eCommerce Business in Pressure Washing Industry

💰 Asking Price: $2,400,000
📊 TTM Revenue: $4,818,851
💼 TTM Profit: $620,461
📅 Established: 2003

This business looks like a solid opportunity in the evergreen niche of pressure washing equipment, but there are a few considerations to keep in mind. The company differentiates itself by selling kits and being an authorized distributor for established brands. With 20 years in business, it's well-established, but there are potential challenges and opportunities that buyers should consider carefully.

• Differentiating themselves by selling kits

• Authorized distributor for established brands

• Multiple sales channels: website, Amazon, Walmart. Amazon is now 75%

• 20 years in business. Very long time for an online business

• $50 average order value (AOV) on Amazon, $400 AOV on the website

• Amazon brand registered

❓ What are the margins on the website sales with a $400 AOV (opportunity to scale with ads?)
❓ Could this business transition to a 3PL model, or is human input required for assembling the kits too significant?
❓ Is inventory included in the sale?
❓ How sustainable is the business's heavy reliance on Amazon for 75% of its sales?
❓ What exclusive vendor agreements are in place, and how secure are these relationships?

View Listing