New Deals - 14 Sept 2023

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Hello SMB Deal Hunters!

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

Today’s issue is sponsored by More Staffing, a boutique agency that helps you hire exceptional manager and director-level talent from the Philippines that costs up to 80% less than US-based staff. ​

1/ Bi-Coastal Staffing Firm

📍 Location: Los Angeles, CA (remote)
💰 Asking Price: $5,700,000
💼 Cash Flow: $1,441,334
📊 Revenue: $4,245,039
📅 Established: 2012

💭 My 2 Cents: This staffing firm specializes in Marketing, Creative, and Sales positions in major US cities as well as remote opportunities. I like that they have a lead generation system in place as well as a full team spanning recruiters, operations, and sales. What’s impressive is the company has grown organically without paid advertising or even an outside sales team. I’d want to confirm there aren’t any customer concentration issues with the companies they recruit for, as I’ve seen this red flag with a couple of staffing firm deals this year. Overall, I think this is an interesting opportunity for someone with a background in building outbound sales teams as that’s an untapped opportunity.

Click Here To View The Listing »

2/ Event Rental Business

📍 Location: Broward County, FL
💰 Asking Price: $3,500,000
💼 Cash Flow: $1,087,638
📊 Revenue: $4,181,798
📅 Established: 1991

💭 My 2 Cents: This 32-year-old event rental business serves several southern Florida counties. They provide tents, flooring, tables, chairs, etc. to a variety of events such as weddings, charity events, etc. I like that event rental businesses usually have strong relationships with event planners, who usually use the same rental businesses over and over again with clients assuming they’ve had a good experience. I'd want to dig into what % of their business each year comprises of repeat clientele (I'd assume high). The owners are retiring, but I like that the business has a manager, several crew leaders, and 25-45 employees depending on the time of year. Note: Since the event business can be seasonal, it may be harder to finance with debt.

Click Here To View The Listing »

3/ Emergency Automotive Locksmith Business

📍 Location: Mid-Atlantic Region
💰 Asking Price: N/A
💼 Cash Flow: $663,183
📊 Revenue: $1,169,718
📅 Established: 2000

💭 My 2 Cents: This business specializes in emergency automotive key replacements for car dealerships. They can replace 95% of today’s automotive keys with their tech-driven approach, which is 50% more than their nearest competitors. I definitely want to understand why their competitors can’t do the same and what technological advantages they have developed. Three interesting growth opportunities: 1) Contract with banks, 2) Work with automobile auctioneers that require services for repossessed cars, and 3) Expand to new geographies. Bonus: This business is SBA lender pre-qualified.

Click Here To View The Listing »

4/ Cold Storage Units Manufacturer

📍 Location: Northern California
💰 Asking Price: $3,000,000
💼 Cash Flow: $940,000
📊 Revenue: $6,300,000
📅 Established: N/A

💭 My 2 Cents: I was pretty shocked to learn that cold storage is expected to grow at a CAGR of 17.5% from 2023 to 2030. Upon digging in, it’s clear why that’s the case: the e-Commerce grocery delivery space is growing like crazy (no wonder Instacart is going public). I like that commercial refrigeration equipment is an essential product that’s recession-proof, and that there are strict regulations governing temperature-sensitive products. This company is riding the tailwind—they design, manufacture, and install custom-built, commercial refrigeration equipment for markets, convenience stores, delis, restaurants, warehouses, etc. What’s interesting to me is they’re currently operating at full capacity and there is more demand from out-of-state customers than ever, so there’s an opportunity to expand into a larger facility.

Click Here To View The Listing »

5/ Online Photography Education Platform

📍 Location: Remote
💰 Asking Price: $1,800,000
💼 Cash Flow: $442,841
📊 Revenue: $1,639,270
📅 Established: 2011

💭 My 2 Cents: They say the riches are in the niches. This membership-based community fosters learning, business growth, and connection among photography enthusiasts. They run on a recurring subscription model with additional upsells in the form of workshops and in-person events. I like that they have a built-out team of 7 plus 30 contracted instructors. I'd want to dig into their retention metrics around LTV and churn and understand how they are acquiring new customers, especially since they’ve been growing quickly YoY.

Click Here To View The Listing »

🐦 The Best of SMB Twitter (X)

6-part mini email course on how to acquire cashflow-producing businesses (link)

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How to hire and use a remote assistant (link)

A collection of commentaries, checklists, sketches, and podcasts about due diligence (link)

How to hire from the Philippines for your back office (link)

How to think about buying a business (link)

Example of thinking creatively about SMB financing options (link)

Don’t believe bankers. SBA terms aren’t set in stone (link)

Expanding your geo to find better businesses (link)

Top 3 small business finance mistakes (link)

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See you next Tuesday!

-Helen Guo
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📚 What I’m Reading

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• 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.

• Side Hustle Central — How to find cash-cow side gigs that are low risk, make big $$, and can even nuke your tax bill.

• SMB Scoop — Learn to find, buy, operate, and invest in profitable & cash flowing companies

⏪ Catch Up On Recent SMB Deal Hunter Issues

• September 12, 2023

• September 7, 2023

• September 5, 2023

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