I didn’t buy a business last week, but I thought long and hard about it.
It was an online training course and community for people who want to start a bookkeeping business.
What I liked:
- Recurring revenue with $49 / month memberships
- Two contract employees running the course and answering questions
- Confidence I could improve the customer experience and increase revenue
- Size of the business
- Financing needs of the seller
The business is smaller than my target, which means I would need to acquire 1-2 competitors for the total profit to hit my financial goals.
Rolling up niche online training courses is interesting and that possibility is now on my radar, but it won’t work this time because of the financing needs of the seller.
He wants a cash buyer who can close quickly and doesn’t need to go through the 2-3 month SBA loan process.
I didn’t see a way to reconcile my need for financing acquisitions of a certain size with the seller’s need for a quick cash closing, so I decided to pass on the deal.
But just to be sure, I called a friend with experience in this area to see if there was something I was missing.
What he said made perfect sense and gave me confidence in my decision to continue searching:
“If you’re doing acrobatics to make the deal work, it’s not the one.”
As much as I liked the business and the seller, it wasn’t the deal for me.