PROS For Purchasing a Company for Under $1M

by a searcher from University of Massachusetts at Amherst

4 years ago

Pro: Depends on the industry and the margins. Platform...maybe depends on the type of business and market etc. If it an software based/ecommerce/services where you can scale digitally then being at $1M or less could be very profitable with limited staff, overhead etc. For example, you could purchase an retail/consumer orientated website/inventory with strong margins###-###-#### % recurring revenue subscription based that generates 20-25% net profit on $1M= $200-250K is A OK! 

Thoughts: WHY YOU CAN? 

1 like
160 views
2 comments

searcher from Massachusetts Institute of Technology - MIT Sloan School of Management

I looked at a small manufacturing business that might have been in that range. The main issue was that the owner was central to many important pieces, such as cost estimating, that there would have been a steep learning curve to take over. It can work for the right person and with the right transition plan in place, but there is a definitely a risk stemming from the lack of depth in the talent bench.

4 years ago | like reply | 1 like

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

Examples of self-funded searcher websites

Investor seeking Self-Funded Search Deals

What are market terms for Seller Notes?

2 Best Ways To Find Motivated Sellers, Off-Market Deals

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.