New Deals - 10 Oct 2023

By SMB Deal Hunter

Author

Helen Guo
October 10, 2023

Hello SMB Deal Hunters!

Been a crazy start of the week for me here. I’ve been on back-to-back calls with investors from this community for the deal I shared with you guys last week that I’m working on.

Thanks to you all, I’ve already gotten many soft commitments in just a few days. If you haven’t reached out yet and are interested in investing passively in a cash-flowing SMB opportunity in the next 2-4 weeks, reply “invest with Helen” and I’ll share more.

Today, I’m excited to share 5 new deals worth checking out.

1/ Newsletter For Flight Discount Alerts And Travel Planning Services

📍 Location: Remote
💰 Asking Price: $3,000,000
💼 EBITDA: $623,289
📊 Revenue: $856,729
📅 Established: 2017

💭 My 2 Cents: This business is a paid newsletter in an interesting niche: announcements on significantly discounted flights. After all, who doesn’t love cheap flights? When run correctly, newsletters are both very profitable and require little time from the owners. This newsletter checks both of those boxes, as the owners work for less than 10 hours a week and profits were at a healthy $623,289 through August. I like that growth has come primarily through giveaway partnerships (an organic source) and that there’s a variety of revenue streams, as they profit from paid subscriptions, sponsored ads, and travel planning consulting. I also like that there’s still room to run here with simple strategies. One such strategy would be to bump up paid advertising and paying for it with affiliate dollars on new signups by recommending other newsletters with programs like Beehiiv Boosts and SparkLoop Upscribe. As these affiliate programs can easily make $1-2 per subscriber, this would lead to what is essentially free growth. However, I’d first want to know the revenue split between paid subscriptions and sponsored ads (subscriptions are a more reliable source of income), what percentage of free subscriptions convert to the paid plan, the monthly churn and LTV of paid subscribers, and what percentage of paid subscribers take advantage of the travel planning consulting (to see if it’s even worth continuing).

2/ Flags and Flagpoles eCommerce Brand

📍 Location: N/A
💰 Asking Price: $3,750,000
💼 EBITDA: $1,056,197
📊 Revenue: $7,367,776
📅 Established: 2010

💭 My 2 Cents: This seller is actually selling a flag and flagpoles brand and an outdoor lighting brand…but it’s the flag business that really caught my eye. That business sells flags to both residential and commercial clients and it boasts an impressive $733 AOV. That AOV and the very impressive 8.3x ROAS on Facebook means there’s a lot of room to scale the paid advertising efforts. I also really like that there’s a B2B play here with the commercial clients, as they are a preferred vendor for the contractors and builders working for large businesses, government entities, and housing developments. I’d want to dig deeper into what percentage of the business is B2C versus B2B (the more B2B, the better IMO), and what exactly the subscription flag offering is because I don’t quite understand it yet (although it’s definitely interesting!). But, overall, with such strong AOVs, ROAS, and SEO (2538 first-page keyword rankings on Google), this is an extremely intriguing opportunity.

3/ Vacation Rental Management Firm

📍 Location: Los Angeles, CA
💰 Asking Price: $3,520,000
💼 EBITDA: $704,552
📊 Revenue: $9,756,959
📅 Established: 2013

💭 My 2 Cents: I love businesses listed by the seller, as this means the seller doesn’t have to pay a broker fee and could maybe pass those savings onto the buyer. Luckily for us, this business is a good one. A vacation rental management firm focusing on high-end luxury properties in LA and Orange County, it has a team in place, an owner willing to train the buyer for 6 months, and a 365-Day Extended Home Sharing License, which is very hard to get and allows you to offer rentals all year round instead of the usual 120 nights per calendar year (which is a huge regulatory advantage). I also like that they already have 115 client homes under contract, although I do have some questions about these contracts. Specifically, I want to know how long clients stick around, how often they churn, and what the process is for finding new clients, as contracts are nothing if you have to constantly find new ones.

In Partnership With ShareWillow

How To Build, Launch, and Manage A Profit Sharing Plan

I’ve been looking at tons of SMB deals over the past year and one thing I’ve noticed is that the best SMBs have awesome, loyal employees. And a common thread that I’ve found amongst those SMBs is that they have profit sharing plans.

I was excited when Ryan Shank reached out to me with ShareWillow, a platform for SMBs to design, launch, and manage a profit sharing plan (not surprisingly, they just raised $6.5M!).

ShareWillow helps SMBs design a profit sharing plan that includes payout triggers, vesting schedules, and calculations that are aligned with company goals.

Both employers and employees have a dashboard where they can view everything.

Exclusive Offer: ShareWillow is offering a free download of a profit sharing excel template here. But really you should sign up for their platform instead of doing this all manually.

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Want to promote your business to my community of 10,000+ entrepreneurs and investors? Reply “advertise” and I’ll share my media kit.

4/ Profitable HVAC Company

📍 Location: Chester County, PA
💰 Asking Price: $5,999,000
💼 EBITDA: $2,035,786
📊 Revenue: $4,971,622
📅 Established: N/A

💭 My 2 Cents: This company is a very profitable and very well-priced HVAC business. HVAC businesses are great because they are always in demand; people need heating in the winter and AC in the summer. I like that they mainly serve the stickier and more valuable commercial market and that they do virtually no marketing, which means there are opportunities to grow with even basic strategies like SEO and paid advertising. I also like that the business is pre-approved for SBA financing, which is always nice to see. One thing I’d like to know is what percentage of revenue is recurring, as the more revenue that is recurring, the less pressure there will be on the new owner to hit the ground running. Ultimately, at over $2MM in EBITDA, this is a good platform deal for someone looking to start an HVAC roll-up.

5/ SEO Agency For Fortune Businesses

📍 Location: Mountain West, USA
💰 Asking Price: On Request
💼 EBITDA: $884,000
📊 Revenue: $2,229,000
📅 Established: N/A

💭 My 2 Cents: If you’re reading this newsletter, you probably know that paid ads are getting increasingly expensive. Thus, many brands now are turning to SEO, and, more specifically, SEO agencies, like this business. What’s great about SEO agencies compared to paid ads agencies is that churn is lower, as it usually takes 6-12 months just to start seeing results from SEO. You can see evidence of this from the businesses’s 12-month contracts, which I like (although I do want to see what churn looks like). I also like that the team has the ability to handle additional contracts without increasing fixed costs, the owner is willing to stay on long term, and they have customers from a variety of different industries (they aren’t just screwed if eCommerce goes through a downturn). With impressive profit margins and growth (CAGR of 58.5% from 2019 through 2022), this looks like a good get in a market gaining in importance.

🐦 The Best of SMB Twitter (X)

How just $75K can buy a $1M business that can pay you $200K (link)

Employees don’t want autonomy, they want structure (link)

How to apply the rule of 3 and 10 (link)

Find and play winnable games (link)

How to properly handle A/R (link)

11 ideas to unstuck your teams (link)

Why you need to start using a “work with me” guide (link)

The definitive guide to launching a million-dollar company in the next 30 days (link)

Want to quickly move through the SBA financing process? You need this (link)

The difference between a full charge bookkeeper and a basic bookkeeper (link)

In Partnership With Tondo Fulfillment

Beat your current 3PL’s pricing or get paid $250

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They specialize in working with e-Commerce and B2B Companies shipping small and light items and regularly work with clients that do 100,000+ orders per month.

And they’re so confident they can beat your current 3PL’s pricing, they’ll pay you $250 if they can‘t.

If you’re ready for stress free order fulfillment, get a FREE quote here.

🧠 Join the SMB Deal Hunter Mastermind

If you want to be part of an active community for serious acquisition entrepreneurs and investors, apply here.

We share insights, ask questions, and collaborate in bi-weekly Zoom calls and a Slack channel.

Spots are limited and will be released on a first-come, first-served basis to qualified applicants.

See you Thursday!

P.S. Whenever you’re ready, here are a few ways for us to work together:

1. Invest with me in cash-flowing SMB deals. I’m bringing on a select few investors from this community into businesses I’m buying and operating. Reply “LP” and I’ll share more.

2. Join the SMB Deal Hunters Mastermind, a community for serious acquisition entrepreneurs and investors where we share insights, ask questions, and collaborate in bi-weekly calls and a Slack channel. Want in? Apply here.

3. Interested in selling your business? Get an offer from me.

4. Know someone ready to sell their business? Scout a deal for me and I'll make it worth your while! I pay finders fees of $25,000 to $200,000+, all you have to do is make the introduction.

5. Want to pick my brain? Sign up for a 1-on-1 coaching call. These are 1-hour calls where you can ask me anything.

🤝 Advertise in SMB Deal Hunter

Want to promote your business to my community of 10,000+ entrepreneurs and investors? Reply “advertise” and I’ll share my media kit.

📚 What I’m Reading

Everyone always asks how I stay up-to-date, so here are a few of my favorite newsletters. Click on the below links to sign up in one click (all free):

  • The Sweaty Startup — “Boring business” entrepreneur Nick Huber who sold his 7-figure service business and now runs a self-storage portfolio shares actionable insights with entrepreneurs and investors.

  • Houck's Newsletter — Tactical advice every week from an a16z-backed founder on how to build, grow, and raise capital for your startup.

  • First Class Founders — Learn proven strategies to grow your business each week from today's top entrepreneurs

  • Sieva Kozinsky's Newsletter — The founder of Enduring Ventures shares weekly insights from his experience buying 17+ cash-flowing businesses.

  • Your Next Breakthrough — Every Monday, Mark Manson (the author of #1 NY Times Bestselling author of The Subtle Art of Not Giving a F*ck) sends an idea, a question, and an exercise that could spark your next breakthrough.

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