A Quick Word On Why I Target Smaller Online Business Acquisitions (that I would offline businesses)

As I am about to send out a deal round up with 3 businesses that are on the smaller side I though I would take a moment to share my insight on ‘deal size’…

Here are the 3 I am about to send out:
1/ Marketing Video Agency | Home Improvement Niche - $55K SDE - 1.5X

2/ SaaS Trading Journal Tool | Online Trading Niche - $122K SDE - 3.7x

3/ Lead Gen SaaS | Form Builder & Analytics Tool - $63k SDE - 4.3x

With the largest at 122k SDE, and the other 2 at hardly a modest full time income, all these deals are smaller than I would look at if I were buying an offline business. I’ve acquired home service business that were all much larger and if you were interested in acquiring an offline business I’d tell you to look much larger.

Here’s the thing, with the overhead and operational difficulty of those businesses, it’s nice to have some ‘meat on the bones’. For example a 100k SDE HVAC business its basically going to be a guy, a helper, and maybe person answering phone. And all the customers are going to personally know/expect ‘Bob’ (the seller). This means you’ve got to be prepared for getting your hands dirty, dealing with every headache, and hoping the customers transition as well. This 100k SDE HVAC business is going to require 100% of your attention and bandwidth.

With online businesses, you don’t have those issues. Your staff is usually freelance/remote. Your talent pool is global and can be as-needed. And the customers typically aren’t in your face. For those reasons I don’t mind looking at smaller online businesses. And in some cases the smaller ones appeal to me as I can simply ‘crank ads’ to them and let them grow.