Deal Breakdown: One-man Polish SaaS with >80% profit - worth the investment?

Are you ready for pierogis and profits?
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I’ve looked at thousands of businesses for sale, and learned to read between the lines. Every issue, we'll take a deeper look at a listing, learn something, and I'll rate the deal at the end! 

This week’s listing: a highly profitable one-person Polish-based SaaS company that makes conversion rate optimization tools for e-commerce websites.

The numbers: Asking just under $1M, with $388k in revenue with $324k in profit. The interesting number? All that comes from just 13 customers. 

Green flags

I like how ridiculously profitable this business is. I mean, 83% profit margins are pretty great, even for SaaS. 

I also like high ticket businesses. With only 13 customers, that means they’re collecting over $20k per customer. If cash is tight, I’d always rather hustle to close one contract than fifty. 

Then there’s 70% YoY growth. The demand for this company’s services is visible through its 70% YoY growth, which also justifies the mentioned resilience in the competitive landscape.

Aaaaand of course, having no debt means less risk, which means easier to finance, which means a cleaner deal.

Red flags

Anytime you see a one-person company, I ask questions. I’d bet this was originally supposed to be a fully self-serve SaaS, but over time became a one-person consulting shop with a bunch of widgets. Chances are high this is buying yourself a job.

Another danger is customer concentration. As nice as it is to have high-ticket customers, it means it hurts more when you lose one. If 15% of your revenue walks out the door, that’s going to hurt. 

And because this is a one-man shop in Poland with all Polish customers, you’re definitely going to want to speak Polish. That’s a barrier to entry for a lot of people.

At the end of the day, this is probably never going to be a hundred million dollar business. And that’s okay! But it’s not the scale I’m looking for.

What I’d ask

I’d want to really nail down whether this is a SaaS company or a consultancy. Because that tells you what the customers want: are they paying for software, or for access to the owner?

Next: What IP are you buying? I’d need to know what I get for the money, aside from the client list. If this is what I think it is (mostly a consulting shop) then you might not actually be buying that much.

Last, I’d want to ask if this is a side project or a main gig? 13 customers is not a lot for a 15-year-old company. A side project might have more room to grow.

My rating

While I’m impressed by the profitability and the client value, I’m just not sold on buying myself a job. Let alone speaking Polish. The job also talks about an apprentice-style transition, which kinda complicates an acquisition. 

Unless you’re that perfect buyer with the right set of skills and circumstances, it’s probably not the right fit. 

This is going to be two widgets out of 5 for me!

What do you think? Listen to the full breakdown on Acquisitions Anonymous!

UPDATE: Looks like this one got taken down!

Have a great week!