New Deals - 3 Aug 2023

Hello SMB Deal Hunters!

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

Today’s issue is sponsored by Appletree, a premier partner for bookkeeping, payroll, and tax services catering to small businesses nationwide.

1/ Profitable quarterly recurring DTC e-commerce club in kitchen and culinary space

📍 Location: Wisconsin
💰 Asking Price: $5,500,000
💼 TTM Profit: $1,100,000
📊 TTM Revenue: $3,100,000
📅 Established: 2014

💭 My 2 Cents: This is a prime example showcasing when a DTC subscription works, it really works. The business offers curated cooking products & recipes delivered 4x per year to 12,000 subscribers. They charge $52/quarter and run on 35% net profit margins, which is phenomenal. I also like that the business has grown at a steady 20% YoY. As with all subscription businesses, you’ll need to dig into churn and retention. On the acquisition side, you’ll want to look into what their customer acquisition cost looks like, what their payback period is, and what channels they’re relying on to acquire new customers.

Click Here To View The Listing »

2/ Drain Cleaning Service

📍 Location: Edmond, OK (Oklahoma County)
💰 Asking Price: $1,233,000
💼 Cash Flow: $730,000
📊 Revenue: N/A
📅 Established: 2009

💭 My 2 Cents: I like that drain cleaning is an essential service that deals with anything from small clogs in households to larger drainage issues in commercial buildings, but I LOVE that this business is selling for an incredibly attractive multiple of 1.7x its yearly cash flow (the owner needs to relocate). Plus, this business comes with a strong crew of 7 employees. Drain cleaning businesses often come with recurring revenue from maintenance contracts, and this can be especially interesting if you partner up with construction and property management companies.

Click Here To View The Listing »

3/ Specialized Recruiting Firm

📍 Location: Mountain West US
💰 Asking Price: N/A
💼 Cash Flow: $959,000
📊 Revenue: $5,000,000
📅 Established: N/A

💭 My 2 Cents: This business specializes in recruiting for middle-market manufacturers. I like that the business has seen a very steady 17.3% CAGR between 2020 and 2022. Plus, there is no significant client concentration. In this case, I’d want to dig into what contracts come with the business, the length of its existing relationships, and what the average manufacturing company spends with them and how much that fluctuates.

Click Here To View The Listing »

4/ 20 Year eCommerce Veteran in the Saunas, Steam Showers & Related Products Vertical

📍 Location: N/A
💰 Asking Price: $4,900,000
💼 Cash Flow: $1,234,746
📊 Revenue: $4,838,451
📅 Established: 2003

💭 My 2 Cents: Search “sauna” on Google trends, and you’ll see how much heat exposure therapy is exploding (I myself am definitely drinking the Huberman and Wim Hof Kool-Aid). This business is actually one of the first players that became a certified online seller of sought-after sauna brands, establishing a strong name and reputation for itself. They leverage a hybrid model of stock and dropship which is great for their cash conversion cycle. The owners (who are retiring) work full-time but also have a team of 3 full-time and 3 part-time staff. They run on an impressive 25% net profit margin and have seen 39% YoY growth. Their marketing is also very efficient (2% TACOS), presumably because they have strong SEO and organic presence from their 20 years in business.

Click Here To View The Listing »

5/ Dry Cleaning Company in Great Location

📍 Location: East-Central Florida
💰 Asking Price: N/A
💼 EBITDA: $1,038,000
📊 Revenue: $6,157,000
📅 Established: 60+ Years Ago

💭 My 2 Cents: This dry cleaning company serves over 40,000 active customers in 14 locations. Its sales breakdown consists of Dry Cleaning (75%), Laundry (15%), and Alteration (10%). I like that other than in 2020 (Covid), the business has been very consistent. The EBITDA margins are low compared to the average dry cleaning business, so I would definitely want to understand what the cost-saving opportunities are that a buyer could implement.

Click Here To View The Listing »

See you next Tuesday!

-Helen Guo
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