💳 Payment Processing Business making $547k/yr!

Here’s what we have for you today:

Cool Business Idea: 

🎪Bounce House Rentals

Confusing Corporate Sayings:

“New Normal”

Professional Translation
“Adjusting to current realities.“

Corporate Pivot Translation
“It’s the same old mess, just marketed differently.“

Sam’s Perspective (1st Time Buyer)

🆕 Status Update: This week, I spent some time working on my off-market lead tool. Right now, it pulls info from Google Places—things like owner names, reviews, and some other basics. You just put in the type of business and location you’re interested in, and it gives you a list to work with. Nothing too fancy yet, but it’s already pretty handy. In the future, I think this will be super useful for finding off-market leads and even calling up the owners directly.

I’ve been brainstorming ways to make the info on the list even better. Adding data from places like the Better Business Bureau could help weed out sketchy businesses, or maybe including things like how recently the business was established or if it’s had any major changes, like new ownership. There’s a lot of potential here, and I’m excited to see where this goes—stay tuned!

Tyler’s Perspective (Experienced Buyer)

🚨 Status Update: The hits just keep coming. This time, it was a nice reminder to ask questions and be patient. I am currently on vacation (first one in a long while for me, so as an additional reminder, take the vacation…your corporate job doesn’t care about you enough to not take your vacations) with my girlfriend’s family and some of their family friends. One of the family friends was telling me about how their entire family (2 kids, so 4 people total) works for a family member’s lawncare service over the summer. So I of course asked some questions about the business and it turns out, the owner wants to sell the business. There are some intriguing components, including (allegedly) public entity contracts, as well as some obvious challenges, including the location and seasonality, but in my view, an organic off market lead is always worth asking some questions on. This one will take some time, but the more people that know you’re interested in buying businesses, the better chance you have of getting organic leads.

💰 Deals < $500k 💰

Business Name: Dumpster Rental Business
Revenue: $263,168
Asking Price: $299,900
Profit: $212,308 (Profit Margin = 80.7%)
Location: West Palm Beach, FL
Established: 2020

✅ Pros:

• Home-Based Model: The business operates from a home setup, which minimizes overhead costs such as office rent and utilities, leading to higher profitability. This flexibility also allows the owner to dedicate limited hours to operations.

• Established Assets: Includes over $250,000 worth of vehicles and dumpsters in the asking price, meaning the buyer will have minimal immediate capital expenditures for equipment.

⚠️ Cons:

• Limited Marketing Presence: The current owner relies on minimal marketing efforts, creating untapped potential but requiring significant work to establish a stronger brand presence in a growing area.

📈 Growth Opportunities:

• Expand Contractor Relationships: Building relationships with local contractors for ongoing projects could establish a consistent revenue stream. A targeted strategy to reach roofers and remodelers would be especially effective.

• Increase Digital Presence: Leveraging social media or Google Ads could attract residential clients, particularly those looking for one-time or seasonal cleanup services.

💰💰 Deals $500k - $2m 💰💰

Business Name: In-Home Care Business
Revenue: $850,000
Asking Price: $800,000
Profit: $360,000 (Profit Margin = 42.4%)
Location: King County, WA
Established: 2019

✅ Pros:

• Well-Established Reputation: This business benefits from glowing client reviews and an accredited Better Business Bureau rating, which are critical differentiators in a competitive market. The trust built within the community ensures steady referrals.

• Experienced Staff: With 15 trained employees, the business is well-positioned for absentee ownership or easy management, reducing operational burdens for the buyer.

⚠️ Cons:

• Competitive Market Dynamics: While demand is growing, King County is home to multiple providers, requiring the buyer to focus on maintaining exceptional service quality to stand out.

📈 Growth Opportunities:

• Private-Pay Expansion: Shifting focus to private-pay clients or introducing premium services such as post-operative care could increase margins and diversify revenue.

• Referral Partnerships: Strengthening ties with hospitals, senior centers, and healthcare providers would solidify referral pipelines, ensuring long-term stability.

💰💰💰 Deals $2m-$10m 💰💰💰

Business Name: Payment Processing Business
Revenue: $984,323
Asking Price: $5,980,000
Profit: $547,167 (Profit Margin = 55.6%)
Location: Georgia
Established: 2018

✅ Pros:

• Recurring Revenue Stream: With 95% of income coming from recurring contracts, this business offers a predictable and stable cash flow, making it easier for new ownership to focus on growth rather than maintaining the status quo.

• Scalable Operations: Virtual operations require minimal overhead and allow for easy expansion into new markets or verticals without significant investment in infrastructure.

⚠️ Cons:

• Overpriced Valuation: The asking price of $5.98 million represents an excessive multiple on profit. A 3x multiple, or around $1.5 million, would be more aligned with industry norms, likely making it difficult to attract serious buyers.

📈 Growth Opportunities:

• Market-Specific Solutions: Developing tailored payment solutions for niche industries, such as healthcare or e-commerce, could attract high-value clients and increase transaction volumes.

• Enhanced Marketing: A strategic focus on inbound and outbound marketing could significantly increase lead generation, leveraging the already strong customer base and high transaction volume as selling points.

**If today is your first day reading, go to Chapter Recaps to get up to speed!

The Lean Startup: Ch. 8 Part 1

Happy Monday, and welcome to the week of New Year’s!

As we close out the year, we’re diving into Part 3 of Chapter 12 of The Lean Startup. Today’s focus is on creating an innovation sandbox and cultivating a management portfolio. Now, when I mention "sandbox," you might think back to those childhood days of playing in one—or maybe even eating the sand (we’ve all been there). But unfortunately, this sandbox isn’t edible. Instead, it’s a tool for empowering innovation teams to experiment freely while keeping their impact controlled. Here’s how Eric Ries breaks it down:

• Any team can create a true split-test experiment, but it must only affect the sandboxed parts of the product or service.

• A single team must see the entire experiment through from start to finish.

• No experiment can run longer than a specified time.

• No experiment can affect more than a set number of customers.

• Every experiment is evaluated based on a single, standard report with 5–10 actionable metrics.

• All teams working in the sandbox must use the same metrics to measure success.

• Teams are responsible for monitoring both metrics and customer reactions.

The sandbox can start small, but unlike concept or market tests, customers in this environment are treated as real. Innovation teams should be cross-functional with a clear leader and have the autonomy to build, market, and deploy within the sandbox—no prior approval required. True experiments are straightforward to evaluate: either the metrics move, or they don’t.

Now let’s climb out of the sandbox and talk about cultivating the management portfolio. Once a product or service establishes its market, it will face imitators and fast followers (think mechanics, plumbers, or other trades that succeed despite competition). At this stage, routine procedures take over, and operational excellence becomes critical for improving margins by lowering costs.

In this final phase of operating costs and legacy products, investments typically don’t drive top-line growth. It’s the phase with “none of the glory and all of the critics.” As Eric Ries puts it:

Here’s to building smarter sandboxes and cultivating innovation as we step into the new year!

Read more at corppivot.com!