2024.07.24 - Online Biz Acquisition Opps

Hey hey peeps, its been 11 days since I’ve brought deals to your inbox!

In that time I’ve been busy with a deal… I am now under LOI for a business I included in the Acumen Wire letter. I’ll probably drop more on that in a separate email at some point.

For now…

🔫 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? This time it’s super interesting because I actually reviewed/wrote them a few days ago, so I forgot the full deets and am online operating on what is here.

I’d go with the ‘223k/yr Digital Product Subscription Business’. It’s got a proven customer acquisition channel (affiliates) and juicy profit margins to boot, all with courses NOT created by the owner. I like it all.

// 550k/yr SaaS Business in Advertising & Marketing Software

💰 Asking Price: $880,000
📊 TTM Revenue: $825,143
💼 TTM Profit: $588,518
📅 Established: 2019

This SaaS business presents an appealing opportunity due to its low multiple. However, the justification for this low multiple is 'odd' and draws my curiosity. Usually, businesses started by successful serial entrepreneurs are structured to minimize owner involvement. In this case, the owner's significant involvement in sales and marketing, coupled with a lack of standardized operating procedures (SOPs), is cited as the reason for the low, under-market valuation.

• Specializes in Pay-Per-Click (PPC) and paid ads software for local businesses and marketing agencies

• Fully remote team

• High margins: 71%

• 12,000 subscribers and 3,000 customers database

• Multiple product lines, including a coaching community

• AI-powered functionalities with plans for multi-language expansion

• Founded by a serial entrepreneur with extensive PPC experience and Fortune 500 client history

❓ How involved is the owner in daily operations, and what steps can be taken to reduce this dependency?

❓ What specific SOPs need to be established to streamline operations and enhance scalability?

❓ How has the coaching community impacted customer retention and satisfaction?

❓ What is the potential for cross-selling with complementary software and memberships?

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// 223k/yr Digital Product Subscription Business

💰 Asking Price: $628,629
📊 TTM Revenue: $28,516/month
💼 TTM Profit: $18,489/month
📅 Established: January 1, 2012

This digital product business offers subscription revenue and boasts an established affiliate program. With courses created by contributors who are influential figures within their respective areas, the business avoids the 'persona risk' commonly associated with info products. It has been running for 12 years and maintains an impressive 65% margin even after paying affiliates.

• Digital product with subscription revenue

• Established affiliate program in place; traffic and sales are mostly driven by affiliate partners

• Impressive 65% margin even after paying affiliates

• Courses created by contributors, eliminating the 'persona risk'

• 12 years old

• Summits featuring guest speakers are held throughout the year to maximize promotion and sales

❓ How much work goes into organizing online summits, and can this be streamlined?

❓ How effective are the current customer retention strategies for the subscription service?

❓ What are the specific terms and conditions for the affiliate and contributor relationships?

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// 227k/yr Online Certification Platform for Alcohol Servers

💰 Asking Price: $800,000
📊 Gross Revenue: $277,671
💼 Cash Flow: $227,502
📅 Established: 2012

This business lends itself well to someone with top-notch PPC skills. Converting traffic that needs certification quickly and prioritizes price over quality instruction is key. While no mention is made of advertising other than SEO, having approvals in states, which can take 4-5 years, creates a significant moat. The market, however, seems very competitive.

• In business for over 20 years with strong name recognition

• Approved in states, a process that can take 4-5 years

• Home-based with owners working 30 combined hours per week

• 99% passing rate among clients

• Superior product and customer service: live phone support vs. automated systems

• Courses available 24/7, accessible on all devices

• Exceptional customer support with quality videos and interactive activities

❓ What is the source of customer acquisition? Is it purely SEO, or are there successful advertising strategies in place?

❓ How competitive is the market, and what differentiates this platform from others?

❓ What additional certifications or training programs could be introduced to expand the business?

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