❇️ New Deals - 30 Jan 2024

A medical billing SaaS company, dog boarding and training business, and 3 other interesting finds.

Author

Helen Guo
January 30, 2024

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Hello SMB Deal Hunters!

Thanks for all the great feedback from the deals I shared on Thursday!

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

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Day 4: Next, we'll cover how to structure a deal. We’ll break down the most commonly used strategies in plain English.

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1/ Medical Billing SaaS Company

📍 Location: Remote
💰 Asking Price: N/A
💼 EBITDA: $2,250,000
📊 Revenue: $5,000,000
📅 Established: N/A

💭 My 2 Cents: Medical billing is typically a giant pain in the neck with mountains of paperwork. What companies like this do is provide services that facilitate the billing process between healthcare providers and insurance companies. I love these businesses because they typically come with incredibly high margins, as they take a percentage of collected revenue and can offshore a lot of the billing and coding work. This particular company has run this playbook to perfection to the tune of hundreds of clients (healthcare providers who deliver care to no-fault, PIP, and workers comp patients) and 45% (!) EBITDA margins. I do want to know how they acquire clients, what the retention rate is, and if there are any client concentration issues, but otherwise, this is a strong company with an owner willing to stay on full/part-time and a business model I love.

2/ Dog Training, Boarding, and Grooming Business

📍 Location: High Point, North Carolina
💰 Asking Price: $2,600,000
💼 EBITDA: $488,000
📊 Revenue: $1,100,000
📅 Established: 1998

💭 My 2 Cents: This is a dog kennel and estate that’s been in business for over 25 years. In other words, they provide grooming, training, and boarding for dogs, which are now owned by 56%(!) of millennials. When you consider that stat and the fact that this facility is located in a growing region (50,000 homes being built within 5 miles), it’s easy to see why the business has been growing 15% YoY purely from word-of-mouth. Who knows how fast this business could grow with some actual advertising? I also like that there’s no broker, the owner is retiring (and willing to offer financing), and that there’s a team of 11 already in place. If you’re looking for opportunities in North Carolina and love dogs, this seems like a golden opportunity to scoop up a turnkey operation that is rocking 41% EBITDA margins.

3/ Commercial Power Washing Business

📍 Location: San Diego, California
💰 Asking Price: N/A
💼 EBITDA: $401,650
📊 Revenue: $1,097,532
📅 Established: N/A

💭 My 2 Cents: This is a strong margin (36.6% net) business in a niche I really like, and that niche is commercial power washing. Basically, they clean the exteriors of multi-story buildings and sidewalks. I like this niche because it’s really the only effective way to keep the exteriors of large buildings clean. How else are you going to clean the side of an apartment complex? And because it’s the only viable cleaning method, it is basically an essential service for large commercial buildings that need to maintain their curb appeal and keep their buildings safe from the horrors of mold and mildew. The result is plenty of recurring revenue from commercial maintenance contracts, which I love. It also has 4 employees in place, a marketing team and call center to handle lead generation, and a reputation management company to ensure a positive online presence. With all that said, this boring business is an opportunity to jump at.

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4/ Landscaping Company

📍 Location: Dallas Area, Texas
💰 Asking Price: $1,500,000
💼 EBITDA: $475,000
📊 Revenue: $1,560,000
📅 Established: 2004

💭 My 2 Cents: This is a landscaping company that provides lawn services from mowing to tree trimming. It’s been around for 20 years, has strong 30% net margins, and has a team of 15 employees. I like the landscaping industry because it comes with a lot of recurring and repeat business. Nobody gets their lawn cut just once. It also doesn’t require skilled technicians like HVAC, so it’s not overly difficult to hire staff. It all adds up to a great boring business. However, in this case, I'd want to know how many clients they have, if the clients are mainly residential or commercial (with a preference for commercial), and what kind of maintenance agreements are in place.

5/ Eco-Friendly Home And Garden e-Commerce Store

📍 Location: Remote
💰 Asking Price: $1,500,000
💼 EBITDA: $348,837
📊 Revenue: $1,500,000
📅 Established: 2020

💭 My 2 Cents: This is an e-Commerce store selling eco-friendly home and garden products at a 24% margin, which is very solid for a DTC business. It’s also in a market that’s growing like crazy. The global green technology & sustainability market is expected to grow at a CAGR of 22.7% from 2023 to 2030 to reach $79.65B by 2030, and over the past five years, there has been a 71% rise in online searches for sustainable goods globally, according to The Economist. It looks pretty good, but I’d first need to know some basic e-Commerce metrics like AOV, LTV, CAC, and repurchase rates. I’d also like to understand their SKU counts, the sales by SKU, what’s on their product pipeline, and how big their owned email/SMS audience is.

🐦 The Best of SMB Twitter (X) and Beyond

How to win at buying a business (link)

The only two ways to find a company to buy (link)

What a business under $1M EBITDA is worth (link)

11 biggest traps to avoid when buying a business (link)

Asset vs equity acquisitions (link)

Some ultra-niche businesses that aren't plumbing, HVAC, and laundromats (link)

20 silent money mistakes to avoid (link)

How to become data-driven in business (link)

How to detect bad strategy (link)

🤝 Vendors and Lenders

I frequently get asked by you guys for recommendations on SBA lenders, quality of earnings providers, and legal counsel.

I’ve decided to streamline this to help the SMB Deal Hunter community close more deals, faster.

Fill out this form and I will personally make introductions to folks I trust.

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. Upgrade to SMB Deal Hunter+ to unlock full access to all deals I feature in this newsletter and get invited to weekly mastermind calls with fellow acquisition entrepreneurs and investors.

3. Interested in selling your business? I’ll help you connect with buyers from the SMB Deal Hunter Community.

4. Want to promote your business to my community of 36,000+ entrepreneurs and investors? Advertise in SMB Deal Hunter

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This publication is a newsletter only and the information provided herein is the opinion of our editors and writers only. Any transaction or opportunity of any kind is provided for information only; SMB Deal Hunter does not verify nor confirm information. SMB Deal Hunter is not making any offer to readers to participate in any transaction or opportunity described herein.