Tiny Acquisitions
tinyacquisitions.com
tinyacquisitions.com
You're also unlikely to find a great deal on a really special project on a marketplace. People who post on marketplaces like Flippa or MicroAcquire or SideProjectors (there're dozens of them) have either:
1. Realized the time it takes to maintain is not worth the revenues/profits
2. Realized the income is not sustainable and are trying to cash out at the end of a great run
3. Realized that some folks are willing to pay very high multiples and will list their projects at prices most (but not all) people will balk at.
If you're really interested in taking over a project that's profitable, network with people, do cold emailing, and find opportunities to take over projects that the owners are simply not interested in any more.
In other words, look for the elderly couple who is ready to move on from owning their profitable, outdated shop.
See: browser extensions. Or anything with traffic that is otherwise hard to monetize.
The person that bought it from me did make those changes and did make more money, but I just didn't have the time to get there. Win-win for me
Someone bought it with 2.7 years break even ? Assuming close to zero ongoing cost + labour. That’s surprisingly high I expected a .5-1.5 for micro sized revenue
Also this is the first and only time I have done this so please don't take my experience as representative. I do not know
I will never buy a business, real estate is a much safer bet.
Perhaps I'm naive, but I think your risk in buying a business goes down if the current owner under-appreciates what they have, and you have the skills to do it better than them.
This is completely true, my sentiment is more for the idea of a "turn-key business" acting like an annuity. I don't think every business for sale is going down but I think there's a large enough risk case that I'd rather avoid it.
To be fair, almost any software based business could be irrelevant in 10 years.
First is the large capital outlay as compared with a small web project, which means many more eggs are in that one basket.
Second is the slow turnover, which means that you may be waiting for years for a good property (since if it's a good property, there are only a few situations where the owner would sell), and if you choose poorly, you will be stuck with the poor property for many years (as no one would want to buy it).
Third is you will still have to watch out for your property becoming irrelevant, for example for a retail store, either due a downturn in the trendiness of the neighborhood driving out business, or perhaps undesirable construction in the area (e.g. a mall across the street that takes all your foot traffic).
Really the safest way to invest in real estate is through REITs, where the risk is spread across many properties.
If it's very profitable, then they might consider talking to FEInternational (or another firm like them). They take a cut, though. But they do pay referral fees, so make sure you get that cut!
Edit: Before someone says I'm crazy for saying things sell for 1x annual profit, I'm not saying that's typical for a brilliant business. It's more typical for something with heavy maintenance, or with really low profits. If you're really interested, check out the link in my bio.
I think there's some element of passion (like you said), though also just around the skill set needed to really take the business somewhere.
https://www.mortgagecalculator.org/calcs/business-valuation....
Take an app that makes $500 net monthly and requires 1-2 hours per week of work. Solid hourly rate, why sell? Except:
- Sudden change in family responsibilities leaves founder without the small amount of time needed.
- The business might net $5k in a sale, and the founder has an urgent need for cash (for ex for home purchase/repairs). The founder resigns to a fire sale because she needs money now.
- Founder realizes the business will remain sub-scale until someone injects another $50k. Founder has a day job but not $50k, and has no interest in raising money.
- Founder's job reviews side project and decides it's too close to "competitive" and asks founder to dispose of it.
- Founder takes a new job that prohibits side gigs.
- Founder gets sick and isn't able to maintain the business.
- Founder gets divorced and is ordered to split the value of the business with ex-spouse. (A sale may be the founder's only option to produce the cash.)
- Founder built the app using tech X 3 years ago. Founder now viscerally hates tech X and would rather have $5k than keep using that tech.
- (Edit: adding this one) Founder was just learning business when they started this business, and now wants to aim bigger. This business could be a good starting point for someone else in their personal development cycle.
Basically, there are a lot of reasons a founder might sell that have nothing to do with the business or its prospects. There are also reasons that have to do with the business not being a fit for the founder at that time. Due diligence is key when buying anything.
The company that bought it got sick of the users within a few weeks but unfortunately their attempts to pivot and rebrand didn't work.
Markets are crazy right now, and #3 could fairly describe transactions in the stock market, housing market, commodities market, etc. occurring now.
Also for sub-scale businesses, it may not be useful to value them based on revenue or profit multiples. For example, if the app is not making much money because there's been no money spent to promote it, how can one know if it's "expensive" or not? I might instead look at it and decide that I would need to spend $25k on development to build the app, so spending $5k to accelerate launch is cheap. Value really is in the eye of the buyer.
In regards to being cheaper to buy than to build, that’s certainly possible. Depends on your skillset.
Consider that theoretical 2h -> $500 / month project:
- Would those 2h for the founder be 2h for the buyer, or much more? - How much initial training would it take for the buyer to sustain those economics? - Are those 2h sufficient to protect / grow the business in a changing market, or just an instantaneous rate? - Are the assets of the business actually secure? (unambiguous ownership / confidentiality, etc.)
Those are all pretty big unknowns, and even if the founder is confident about them the buyer would spend significant effort to verify -- very possibly more than the $5k sale price. It might even be cheaper (incorporating risk) to build a $500 / month business than to verify the purchase of one. Small projects have to sell at a VERY unfavorable discount to counter this.
The exception are buyers who make their own business out of efficient diligence and exploitation for many similar projects (like high-traffic sites for a single community). If you fit into such a category, it is probably better to find a specialized marketplace or a buyer with a reputation than attempt to sell in a broad market.
But you are obviously correct that there are no risk-free transactions.
> It might even be cheaper (incorporating risk) to build a $500 / month business than to verify the purchase of one.
Here I want to point out that I know a number of talented people who want to launch a business, but for whatever reason cannot get to the "launched, accepting money" phase of their projects. These people have no problem improving an existing business, but have trouble going from 0 to 1. (I believe this population is as much as 100x the population of people who have successfully launched & gotten revenue in an app.) For these people, it might be entirely worth knowingly overpaying for a working SaaS because it gets them past the launch phase. Putting it bluntly, would they rather spend $10k on an app with revenue that you can grow or another $50k of nights and weekends over the year with no launch to show for it?
Edit: I also forgot that there's the entire category of buyers who just want to keep the app as-is and either integrate it into a bigger suite, use its traffic for lead gen, or otherwise leverage it for some other purpose. If the buyer considers the purchase as part of its marketing budget, $5k is not very much at all. (Plus the bar is low as most marketing spend is wasted, see the adage.)
https://training.kalzumeus.com/newsletters/archive/selling_s...
He bought a literal Mom & Pop outfit that made thermocouples for a specific application. The "Pop" was going blind and Mom wanted to retire. They were barely making money but my friend realized that it was mainly because they were underpriced and their marketing was nonexistent.
He bought the business for a song and immediately called all the customers and told them he was raising prices to market rates. After turning things around, he sold the company about five years later for a healthy profit.
Disclaimer : I run it. :)
That's why curating, reviewing, examining real projects is needed in order to keep the quality and not quantity.
So far, it looks like he's having fun but putting in a lot of work. He seems to be doing a lot of little code updates and fixes when apis change or other little things break.
Maintaining DNS records and SSL keys is not 3x as hard for 3 domains as for one. Probably neither are taxes. Or keeping on top of security fixes for projects using the same tech stacks.
There’s a couple groups out there who do something like this for public sector projects, sort of taking over the devops aspects and keeping the lights on. And in that case creating project generators could be feasible as well, because it’s easier to run a project that’s built the way you prefer them to be built.
I could imagine someone basically picking these up and collectively monetizing with ads, or other methods. Likely not suitable for a massive business, but likely able to sustain a sole operator or even a small team if operated frugally.
Do you have any personal experience or any other sources that estimate this kind of thing? I'm legitimately curious, I've often wondered what kind of revenue these types of things pull in. Obviously if they're not running ads and don't have any explicit monetization then it would be very little. But I always wonder about the ones that do.
Would it? Like, Google isn’t going to boot you for running AdSense on your site.
I’m guessing the money is made off search engine visitors rather than recurring visitors that would figure out how to do it by command line.
also, how would a search engine visit make money?
Simply running ads doesn't really seem like an issue as long as you're not making the site unusable. I'd be more concerned about the fact that the average user in need of a base64 converter is arguably more likely to be using an adblocker.
If you compare the typical big-money SV-style startup sales to be like people building/flipping properly, this would be the equivalent of fixing up and flipping cheap cars or furniture. It’s a fun side hobby that makes you some extra spending money, not something to make you rich.
In the end I shut it, because I realized that with a newborn in the house I didn’t actually have the time/energy to run another one. Also prev. owner had priced it such that it was impossible to source legit good quality products.
I did run it for a bit and just about got the investment back (it only cost $3k) before shutting it down.
However this is very different to buying/selling businesses (i.e. going concern with books up to date), and the search interface doesn't let me specify that I want to buy something with at least one paying customer (i.e. a business).
I'd be interested in buying a going concern (even if it's going off a cliff), but not someone's weekend attempt to learn a new web platform whose only hits are from search engine indexing and people who got there by mistake.
Seems like all you'll be buying here are snippets of working code, which is not very valuable in and off itself.
The load time is unbearable for something as simple as this.
Any proven open source database should be able to handle that, sqlite included. It's most likely some form of bloat sitting in the middle slowing everything down. And probably more due to the way the page is generated via 'low code' framework vs. the intention/design of the author.
Frankly, it's been hard to find something that seemed serious or at least real and somehow worthy of existing in the world (I get that this is my own internal value judgement). I left with the impression that this sort of thing is like the tech version of /r/CrackheadCraigslist.
Also, it didn't help that at least one of these sorts of sites demands users link to their LinkdIn account to even see the projects that are for sale. I think LinkdIn is creepy enough on its own and that really put me off.
I'm kind of hazy on how to fund such an LLC to buy stuff in the first place - do most people structure the initial money as a loan so it's tax free?
I'd love to hear practically-speaking how to do this on a small scale.
I have often wondered how providing yourself insurance and a dollar salary works out financially.
https://taxfoundation.org/us-has-more-individually-owned-bus...
Maybe I have an exaggerated notion of this after having been part of an 8-figure exit to an S&P 100 company, but I would figure you take on anything like this you're potentially buying something with an imminent lawsuit, patent infringement problem, etc. unless you do due diligence, but that said due diligence would be ridiculously expensive relative to the $ involved.
Do they provide any help with this issue, or are they a no-legals as well as a no-code startup?
Marketplace https://microacquire.com/ - SaaS https://flippa.com/ https://empireflippers.com/ - Focus on Amazon but also SaaS and other online businesses https://exchangemarketplace.com/ - run by Shopify https://latonas.com/ https://websiteproperties.com/ https://www.sideprojectors.com/ Investors.club https://app.centurica.com/marketwatch https://tinyacquisitions.com/home
Brokers: https://www.quietlightbrokerage.com/ https://feinternational.com/ https://digitalexits.com/ https://thefbabroker.com/ https://www.websiteclosers.com/ https://www.globalwiredadvisors.com/ https://helloexit.com/ https://www.wearebarney.com/ https://acquisitionsdirect.com/
Listings only: https://www.bizbuysell.com/ https://www.businessbroker.net/ https://dealstream.com/ https://www.businessesforsale.com/ https://www.loopnet.com/
Minimal amount of profit is also somewhat preferred.
My email is my username + varela @ the google mail.
I’m just curious about the offers and I can afford that kind of money for an experiment as long as there’s a long shot of making something out of it.
A $5k price tag is roughly $100 a month in profit/SDI (seller discretionary income), and there are a lot of good projects that could have much more revenue that are currently at or below the $100/mo SDI level.
Fwiw, while you not be the target market, there are many sellers (of businesses in general) that like to see something they made grow, even if the growth is done by someone else.
Scrollbar got acquisited
- they've just had enough and can't be bothered
- they know the business needs investment of money and/or time to go to the next level
- they've identified some more lucrative business elsewhere and want to concentrate on that.
If they can go a step further and send out press releases about the acquisition automatically that would be great, but without revealing the sum of the acquisition.