Business Overview

This is the business you’ve been looking for; you wanted a business with unlimited growth potential, a genuine seller ready to retire with no heir, a business with over 30 years of experience as an industry founder, a business that has leveled off due to a lack of active management just waiting to take off. This business is at that inflection point every buyer dreams of. The scale of this business model has been proven over and over with billion dollar giants like Momentive (formerly Survey Monkey which was just bought by Zendesk), Qualtircs, and hundreds between all ready to make this business a potential target for acquisition with the addition of a little modern management.

This company has been providing actionable customer and employee satisfaction survey’s to Fortune 500 companies for over 30 years. In doing so, they have collect enormous amounts of valuable industry benchmarking data creating meaningful value for their clients. That data is then stored and compared to prior years making their customers very sticky.

Top line opportunities: The customers are large national and multinational accounts with tons of room to grow inside of their current customer base. There is a lot of low hanging fruit and with no outside sales people, the fruit is unpicked. Sales leads are put on an email marketing drip but no one is calling the leads and actively selling. Why hasn’t the seller done this? Because hiring and training sales people would cut into the work life balance the owner has come to enjoy.

Bottom line opportunities: Their advertising is almost exclusively unmonitored/unmanaged PPC, their rent is much more than their needs, payroll is above market, etc… Why hasn’t the seller done anything about this? Because a comfortable living income leaves the owner passive regarding cutting expenses.

We think the valuation is justified by the steady history, clear opportunity, actionable immediate cost savings, and low key man requirement. The owner is willing to stay for a transition period but they are ready to retire and feel this company is meant for more and would like to see that achieved in their lifetime. Additionally there is an effort to value the enormous potential of their recently finished, but pre-revenue, SaaS program developed over the past 3 years at a cost of over $500k which makes their 30 years of data points accessible directly to end users. This pre-revenue SaaS opportunity is valuable because; it meets an established need, has something proprietary, and is being led by a qualified team. We think there is some meat left on the bone regarding how lean the business is ran and if a buyer takes a deeper look they will see that the business is just idling at its current capacity.

The opportunities go deep and I’d really love to share more with you. Let’s get an NDA on file and continue the conversation about the opportunities for improvement and why your investment group should consider this business for your portfolio.

Financial

  • Asking Price: $3,000,000
  • Cash Flow: $500,000
  • Gross Revenue: $2,200,000
  • EBITDA: N/A
  • FF&E: N/A
  • Inventory: N/A
  • Inventory Included: N/A
  • Established: N/A
Purpose For Selling:

retirement

Why is the Current Owner Selling The Business?

There are all sorts of reasons why individuals decide to sell companies. Nevertheless, the true reason vs the one they say to you may be 2 absolutely different things. For instance, they may claim "I have too many various responsibilities" or "I am retiring". For numerous sellers, these factors are valid. But also, for some, these might simply be justifications to attempt to conceal the reality of transforming demographics, increased competition, current decrease in revenues, or a variety of other reasons. This is why it is extremely crucial that you not rely entirely on a seller's word, yet instead, use the seller's solution combined with your overall due diligence. This will paint a more sensible picture of the business's present scenario.

Existing Debts and Future Obligations

If the existing company is in debt, which lots of businesses are, then you will need to consider this when valuating/preparing your deal. Numerous companies borrow money in order to cover things such as supplies, payroll, accounts payable, etc. Keep in mind that in some cases this can imply that profit margins are too thin. Many businesses fall into a revolving door of taking loans as a way to pay back other loans. Along with debts, there may also be future obligations to consider. There might be an outstanding lease on tools or the structure where the business resides. The business might have existing agreements with suppliers that have to be fulfilled or may result in charges if canceled early.

Understanding the Customer Base, Competition and Area Demographics

How do companies in the location draw in new clients? Often times, operating businesses have repeat customers, which create the core of their daily earnings. Certain factors such as new competition growing up around the area, road building and construction, and employee turnover can impact repeat consumers as well as adversely influence future profits. One vital point to take into consideration is the area of the business. Is it in a very trafficked shopping center, or is it concealed from the highway? Certainly, the more people that see the business regularly, the greater the possibility to construct a returning client base. A final idea is the basic location demographics. Is the business situated in a densely inhabited city, or is it situated on the edge of town? Just how might the regional average household income effect future income prospects?