Hey fellow Fastlaners,
So for a few years now I've tried and failed at a few different businesses, I followed this forum for almost 3 years now trying to figure out which Fastlane business to pursue and I've not been able to make my mind up. I currently am in real estate and I'm realizing every day that it is time to move on as I do not have any control of my business no matter how much I put into it.
Recently one night when I was evaluating things, I re-read @doitman's amazing thread as well as @Greg R's equally amazing thread on buying an established business. The next morning I set out searching for a business to buy. Starting out I specifically did not want to buy an Ecom business that revolved around Amazon as that violates the Control commandment or on Shopify via the Exchange as most of these businesses seemed to always have a huge spike in sales then fizzled out, then were put up for sale.
So one-day last week I was searching on one of the online business broker websites and I stumbled across an Ecom business that is in a very specific niche, I reached out to the seller to get the specifics, in our back and forth chats I came to realize that the business satisfies four of the five CENTS commandments but also satisfies 10 of the 11 business acquisition criteria that @doitman shared in his thread.
Due to the business's niche, I asked the seller for their most recent sales from Jan 2020 until July 5th, what I was expecting to see regarding sales and revenue was exactly what I did see. The business has been affected by C0VlD-19 and there is currently about a 60% loss in sales and revenue. While this is a concern due to the niche, I have to believe the business will bounce back once cities are back to Phase 4, and completely open since this specific niche is evergreen and people will never stop utilizing this niche.
With being said I decided to break down some of the pros and cons here for everyone's input:
Pros:
The seller is not offering seller financing at this time which is a bit of a bummer, i'm not sure if this is due to the seller desiring a clean break from the business or if this is due to the seller wanting to put the cash from the sale into the new business. I don't want to buy the business outright as I don't want to have most of my available cash tied up in this business. At the same time I know I can scale to increase profit by increasing social media footprint (currently it is abysmal at best), utilizing other Ecom platforms (eBay, Etsy, Amazon) and partnering locally with vendors within the same niche sphere. My immediate thought is to get a P2P loan but I feel like that is working backwards and going into debt? I do have the capacity to purchase via my credit cards but again, I feel like this would be working backwards.
The Financials
The seller currently is currently asking 30k for the business, included in the sale is the website (most important to me due to rank) Branding (which I feel there is none), the social media accounts, the current vendors, and the contacts previously negotiated and e-Commerce platform accounts. Revenue is currently a little over 15k for this year, however, last year's revenue was just shy of 40k. All of this was verified from the store stats and performance.
Am I crazy for not jumping on this now?
I welcome any and all input from the Ecom Gods @ZCP @minivanman @Walter Hay @Greg R @Kak @MJ DeMarco @Andy Black @Vigilante @Mike Partee @biophase @Ecom man and anyone else who has been down this road.
Thanks for reading.
So for a few years now I've tried and failed at a few different businesses, I followed this forum for almost 3 years now trying to figure out which Fastlane business to pursue and I've not been able to make my mind up. I currently am in real estate and I'm realizing every day that it is time to move on as I do not have any control of my business no matter how much I put into it.
Recently one night when I was evaluating things, I re-read @doitman's amazing thread as well as @Greg R's equally amazing thread on buying an established business. The next morning I set out searching for a business to buy. Starting out I specifically did not want to buy an Ecom business that revolved around Amazon as that violates the Control commandment or on Shopify via the Exchange as most of these businesses seemed to always have a huge spike in sales then fizzled out, then were put up for sale.
So one-day last week I was searching on one of the online business broker websites and I stumbled across an Ecom business that is in a very specific niche, I reached out to the seller to get the specifics, in our back and forth chats I came to realize that the business satisfies four of the five CENTS commandments but also satisfies 10 of the 11 business acquisition criteria that @doitman shared in his thread.
Due to the business's niche, I asked the seller for their most recent sales from Jan 2020 until July 5th, what I was expecting to see regarding sales and revenue was exactly what I did see. The business has been affected by C0VlD-19 and there is currently about a 60% loss in sales and revenue. While this is a concern due to the niche, I have to believe the business will bounce back once cities are back to Phase 4, and completely open since this specific niche is evergreen and people will never stop utilizing this niche.
With being said I decided to break down some of the pros and cons here for everyone's input:
Pros:
- The business has been operation for 6+ years (Longevity)
- Business's website is also 6 years old and ranks 2nd, 4th, and 3rd for the specific keywords related to the business. This is organic not via PPC or Google Ads
- Business holds no inventory as the item is specific to the client and takes 3+ weeks to arrive and the client is just fine with it.
- 50%+ margins on all orders, I verified this through sales orders
- Scalable as the current owner does not sell locally and does not sell on any other Ecom websites (ebay, etsy...etc)
- Daily time investment is less than 3 hours a day
- Owner willing to train me for 30 days after the sale and then support for up to 60 days after
- Profitable still with the loss in revenue
- The product does not have and is not a "need", it is more of a "want"
- No Branding - the current owner has not branded the product
- roughly 60% loss to business due to the pandemic
The seller is not offering seller financing at this time which is a bit of a bummer, i'm not sure if this is due to the seller desiring a clean break from the business or if this is due to the seller wanting to put the cash from the sale into the new business. I don't want to buy the business outright as I don't want to have most of my available cash tied up in this business. At the same time I know I can scale to increase profit by increasing social media footprint (currently it is abysmal at best), utilizing other Ecom platforms (eBay, Etsy, Amazon) and partnering locally with vendors within the same niche sphere. My immediate thought is to get a P2P loan but I feel like that is working backwards and going into debt? I do have the capacity to purchase via my credit cards but again, I feel like this would be working backwards.
The Financials
The seller currently is currently asking 30k for the business, included in the sale is the website (most important to me due to rank) Branding (which I feel there is none), the social media accounts, the current vendors, and the contacts previously negotiated and e-Commerce platform accounts. Revenue is currently a little over 15k for this year, however, last year's revenue was just shy of 40k. All of this was verified from the store stats and performance.
Am I crazy for not jumping on this now?
I welcome any and all input from the Ecom Gods @ZCP @minivanman @Walter Hay @Greg R @Kak @MJ DeMarco @Andy Black @Vigilante @Mike Partee @biophase @Ecom man and anyone else who has been down this road.
Thanks for reading.
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