Using AI to evaluate an interesting business for sale

Got some good feedback from my last post about analyzing a business to buy, so figured I’d do 1 more, but with a twist.

Not only did I do a review myself, I also enlisted my good friend, Gemini, to help.

For those who don’t know, I’ve been on a big Google Gemini AI kick since their newer, better LLM was released, so I figured why not merge 2 things I enjoy - analyzing businesses for sale, and AI.

Let’s jump in:

The business

This time I wanted to cover a smaller, “cheaper” business to show you that yes you can go buy massive businesses, but if you’re a lil guy like me (operations/finance wise, as I’m quite tall), you can also go buy really small businesses too:

• maybe you have an audience but want to buy a good product/service to sell them

• maybe you have a good product/service but no audience so you buy an email list or other traffic source

• maybe you have none of the above and you want to buy it all

Anyway, here’s a small biz I seriously looked at:

Here’s some basic info and asking price directly from the profile:

• It’s a landing page/funnel selling an e-book on how to build a profitable SaaS business

• Annual revenue: Expecting around $5,424, currently (March and April) it is $754

• Annual profit: Expecting like $1,200

• LTV: Unsure right now

• CAC: 1.2x

• Business margin: %15-20 profit

• Asking price: $2,100

Team: I do the ads, content creation, marketing, coding, all.

Tech Stack: Next.js, AWS SES for emails, Notion for ebook.

Marketing and growth: Facebook ads and my network is the activity, I get enough on Facebook Ads.

Revenue and profit: This is important. Our ROAS on FB ads is 1.2x, April revenue was $606 but $522 goes to Facebook Ads. That means, it sells but you need a good knowledge of Facebook ads to increase its ROAS.

Startup assets: Website codebase, Buyer info, around 10 for now, Ebook itself: spent like 60-70 hours on it.

My feedback

I took a look at this because I like the digital product space and this seemed to be a potential combo for good traffic generation (FB ads, email list) and a product, all in one.

I messaged the seller and he confirmed his current email list is about 1,300 people, but he only collected their emails and hasn’t sent them anything (so it’s a cold list).

Overall, I decided it wasn’t a good fit for me because:

• the client list is small, and the list of leads is cold

• a lot of his success seems to stem from his FB ads expertise, of which I have very little

• while the product seems good, with AI and other resources these days, e-books and landing pages like that can be created pretty easily anyway

Gemini’s feedback

I took all of the above data and fed it into Gemini with a simple prompt:

I’m pasting below information on a business that is for sale. As I have my own email list in the business/solopreneur space, I’m open to buying businesses that would be a good fit and that can either help increase my email list size, drive more traffic and/or increase revenue. What do you think of this business and its asking price?

It generated a really long and interesting answer, including:

• potential positives

• potential negatives and concerns

• alignment with my goals

• thoughts on the asking price

• key questions to consider before making a decision

and finally, a recommendation:

“If you have strong expertise in Facebook Ads and a clear strategy for improving the ROAS and scaling the business, this could be a worthwhile acquisition for its assets and potential. However, go in with a clear understanding that it will require effort and investment to make it significantly profitable and to leverage it for substantial email list growth or traffic.

I would recommend:

1. Deeper Due Diligence: Ask the seller for more detailed information on their Facebook Ads strategy, audience targeting, website analytics, and any historical sales data.

2. Focus on ROAS Improvement: If you proceed, your immediate focus should be on optimizing the Facebook Ads to achieve a significantly better return.

3. Evaluate Integration Potential: Carefully consider how this ebook and its marketing can be integrated into your existing business and how it can benefit your current audience.”

Pretty wise words, eh?

While I’m not super active in looking for businesses to buy, I do enjoy it and keep an eye out here and there.

Did you realize businesses as small as this are even for sale?

In case you’re interested in 1) that business above, and/or 2) finding others just like it, make sure to check out the marketplace I found it on, at https://www.microns.io/

Have a great day,

- Josh Schachnow

Canadian lawyer, CEO at Visto.ai