Looking to buy a bootstrapped business ($1-2k MRR)
Hi All!
I'm looking to buy a bootstrapped business that does around $1-2k in MRR per month. Mainly focused on SaaS businesses as that is what I know best - looking to take over in order to focus on marketing, customers and grow it.
If you have a product/SaaS app laying around doing $1-2k in MRR (with low costs), I'd love to talk to you!
My email is ohhelloitsjake@gmail.com
Out of curiosity, what's the market for this kind of thing like? I know there is a fairly large industry around buying family / small brick and mortar businesses and re-investing in growth, sometimes called the "search fund" industry. There is a lot of really good tactical advice for how to implement this "search" for a small business to buy, Stanford has a lot of great resources.
https://www.gsb.stanford.edu/faculty-research/centers-initiatives/ces/research/search-funds
That playbook may be helpful to you. The potential acquirers source deals through direct outreach to their networks or even through cold outreach. They find a type of business they want (sector, size, growth etc), make a list of leads, then just brute force their way to getting in touch with the businesses. Usually the buyer has to convince the seller to sell, rather than the seller actively marketing the business. Businesses actively looking to sell seem more likely to be lemons, and also the deal process is more competitive, so buyers tend to avoid that deal flow.
If you find success doing this, I'd be interested to hear your story!
What kind of valuation are you offering? IH is all about helping people learn, so there's no need to keep your metrics secret!
@from_30_to_greatness (James Tayler) made a great post above. It's tough to just give a valuation because it can vary on a multitude of factors. Most importantly, what kind of user growth is there, churn, how easy is it to manage, etc...
How about some metrics of typical past acquisitions you've made, then? You posted this suggesting 1-2k MRR. You must put some thought into those numbers. What kind of budget did you have in mind when you named that range?
Surely you have some kind of decision framework!
I don't have a budget specifically but rather like that range of MRR because it demonstrates a need for the product yet also has good potential for growth. I've started and run a few SaaS businesses before so it's a great place for me to jump in.
I think you should use one of these websites out there they're pretty useful
All I know is
https://transferslot.com
But you can find others on Google, it's usually more safe that a 1 to 1 trade
Flippa is another good option.
Thanks Ahmed & Logan! Already familiar with the sites so I'm looking for someone who hasn't posted their but would consider selling for a fair amount. It's incredibly hard to find quality apps for sale there.
What is a fair price according to you? Curious because I may have something to sell that's doing $2.5-$3k/mo
For $2.5-$3k MRR for a Saas you'd be looking at over 3x - 4x annual profits if you have good growth. From there, depends on how easy it is to manage and other stats like churn, etc..
Thanks for your insights Jake!
Id be curious @poehah to hear more on this one too. Also have the funds to execute
What you need is FEInternational.
+1 don't bother with flippa.
Thank you @AhmedMaherS for mentioning Transferslot! :)
You're absolutely welcome @cnicodeme, it's a great website I can't wait for it to be really famous and gets more attraction soon!
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That's why you go through a proper brokerage agency. Anything else and you are asking to be scammed.
I met Thomas from FEI at MicroConf and had a pretty good chat to him a few times actually. His take on it is the multiple is between 2.5x to 4x and where it sits depends on a multitude of factors. They have roughly 100 metrics/questions they assess when doing the valuation.
Also they have around 30 ~ 50 staff (he said they were growing) and to support that level of expenses and turn a profit they must have pretty solid deal flow, so it seems there are plenty of people buying and selling SaaS businesses. He mentioned the average deal was around $700k and they do everything from $10m ARR right down to what the OP is looking for. $2k MRR business expect to cost around ~$80k.
patio11 has a blog post about this when he sold one of his companies:
https://training.kalzumeus.com/newsletters/archive/selling_software_business
basically one of his main marketing channels was becoming less effective, and he didn't have time to maintain it. someone who has time to invest in the business could theoretically grow it
i think the negotiating range for these kinds of deals emerges bc of this phenomenon. a seller has a nice passive income stream, and won't sell for a price that's financially equivalent to just sitting on that income stream. the buyer has to believe he / she can do more to grow the business than the seller, so will pay more for the business.