❇️ New Deals - 4 Jan 2024

A craft distillery, online real estate academy, and 3 other interesting finds.

Author

Helen Guo
January 04, 2024

Today's Sponsor

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Hello SMB Deal Hunters!

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

Looks like the Amazon FBA pet food brand (with the strong subscription program) I featured was a big hit.

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

Today’s issue is sponsored by Michael Girdley, Chairman of a $100M+/Year Revenue HoldCo who just launched his new course, How to Find a Great Business to Buy.

💡 I’m testing a new Upvote feature: Upvote your favorite deals and I’ll share the results in next Tuesday’s issue!

1/ Senior Living Centers

📍 Location: Utah
💰 Asking Price: $16,610,000
💼 EBITDA: $1,274,231
📊 Revenue: $3,865,000
📅 Established: N/A

💭 My 2 Cents: Don’t let the asking price scare you off on this deal, because this collection of senior living centers includes real estate worth $16.26M. This is nice because regardless of what happens with the business you still have an appreciating asset in the real estate, as long as the facilities are well-maintained (which is something to check into). Leaving aside the real estate, there’s a lot to be bullish about here. It has a team of 70 employees, enjoys a strong reputation, and is pulling in an impressive 32.97% net profit margin. I’d want to know more about the process for hiring staff and finding customers, but overall, this looks like a good opportunity to capitalize on the country’s aging population. All you need to do to juice revenue even higher is to increase the number of beds, which they have already begun doing.

2/ Craft Distillery

📍 Location: Oneida County, NY
💰 Asking Price: $5,000,000
💼 EBITDA: $1,029,918
📊 Revenue: $4,713,770
📅 Established: 2012

💭 My 2 Cents: I actually skipped this deal at first, but after some research I learned that the craft spirits market is growing at a staggering pace (31.8% CAGR projected between 2023-2030). For reference, eCommerce is only expected to grow at a CAGR of 8.95% between 2024 and 2028. Part of this growth is definitely due to the love millennials have for whiskeys and gins from independently owned distilleries with an emphasis on quality ingredients, small-batch production, and traditional methods. The other part is due to the higher prices craft spirits sell for (the average price of a 750ML bottle of gin in the US last year was $16.77. The average artisan gin was sold for more than $30). This specific distillery produces their own award-winning line of spirits, co-packs other spirits across the country, and has multiple large contracts in the works for 2024. I’d want to dig into the exact breakdown between the proprietary and co-packing side of the business to see which should be emphasized. I’d also want to dig into the terms of the contracts to make sure those are as positive as they sound. In any case, the tailwinds are strong and there are plenty of ways you can grow this thing. You could introduce new products. You could expand distribution. Or you could start a tour and tasting offering, if there isn’t already one.

3/ Remote Home Service Business

📍 Location: Remote
💰 Asking Price: $3,000,000
💼 EBITDA: $818,616
📊 Revenue: $1,678,941
📅 Established: 2020

💭 My 2 Cents: This company lists itself as a nationwide online platform for home services (such as moving), but basically they are a marketing company that takes care of advertising while independent contractors in their network do the actual work. It’s actually kind of a genius setup since most independent folks don’t know how to run digital marketing effectively. These guys are killing it with three strategies: organic (19 Google My Business profiles and 3,000 reviews with an average of 4.8 stars), word of mouth (25% of all business), and paid ads on Craigslist. You probably noticed they don’t use Google or Facebook ads. That’s simply because they don’t know how to. If you could get that going, growth would likely skyrocket. The owners are currently absentee, so if you have the right marketing background, you could really take this to the next level.

In Partnership With Michael Girdley

The old ways of finding a business to buy just don’t work anymore.

I’m Michael Girdley. I’ve been a part of nearly 20 small business sales and purchases. And I’ve found the search is the hardest part.

The advice out there now simply doesn’t work in today’s reality.

So I built a course. How to Find a Great Business to Buy is laser-focused on how to run an effective search and short enough to take in an afternoon.

We’ll cover:

-Narrowing your search with a tight thesis

-Scaling your outreach to maximize your leads

-Running your funnel like a pro

It’s 18 video lessons packed with value.

Check it out! → holdco.girdley.com/greatbusiness

4/ Pool Maintenance Company

📍 Location: Florida
💰 Asking Price: $2,200,000
💼 EBITDA: $586,721
📊 Revenue: $2,180,725
📅 Established: 2008

💭 My 2 Cents: This is a pool service and repair company serving high-end customers. I like a few things about this deal. I like the Florida location because it means people use their pools year-round. I like that they cater to well-off customers who don’t have the time or desire to clean their own pools and have the pockets to pay for someone else to do it. I like that it’s not too difficult to find and hire people to clean pools, since it doesn’t take a specialized skillset like plumbing or HVAC. And I like that they also service 16 commercial accounts in addition to their 544 residential customers. I’d want to better understand the arrangements they have with their customers, the retention rate, and the marketing efforts, but ultimately this looks like an opportunity to scoop up a profitable boring business with recurring revenue and strong margins from a retiring owner. And, because the current owner chose to stay within a very focused geographical area, any new owner could significantly boost growth by just simply expanding the service area.

5/ Online Real Estate Academy

📍 Location: Florida
💰 Asking Price: $1,850,000
💼 EBITDA: $332,224
📊 Revenue: $919,484
📅 Established: 2004

💭 My 2 Cents: This is an online school delivering classes on Florida real estate. I love eLearning businesses because they are high-margin, on-demand, and remote. They also have a high barrier to entry because it takes a while to get accreditation and approval from the state (which is something you should dig into more, especially if they are up for renewal soon). This company is particularly attractive because it is a legal necessity in a fast-growing market. Florida is the fastest-growing state in the nation, which means a lot of demand for real estate and a lot of potential new real estate agents. It is also a state where real estate agents have to log 14 hours of continuing education every two years to keep their licenses. Basically, as long as there are real estate agents, it is legally guaranteed that there will always be demand for this business. That’s something you don’t find every day. I want to know more about the course creation and updating process, but honestly the guaranteed demand and growing market make this a super compelling opportunity.

🐦 The Best of SMB Twitter (X)

A few anecdotal observations on the SMB acquisitions market for 2024 (link)

6 step process to buy your first business (link)

10 common mistakes when buying a business (link)

7 ways to understand financial statements fast (link)

The simple, foolproof meeting formula used to oversee dozens of companies generating over $100M/year (link)

This is the person selling your product (link)

50 examples of boring businesses (link)

What to do to get your first customers (link)

How to improve your ability to know your numbers in your business (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 next Tuesday!

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 27,000+ entrepreneurs and investors? Advertise in SMB Deal Hunter

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Disclaimer

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.