B2B workflow software for small accounting firms
A made-up business. Figures marked "reported" come from the seller and haven't been checked.
- Business type
- Subscription software
- Asking price
- $74,000
- Revenue
- $6,800/monthreported
- Screening
- 84 / 100
- Profit
- $4,900/monthreported
- Price vs. yearly profit
- 1.3×price ÷ 12 months of profit
- Age
- 3 years
- Red flags
- 41 serious
Why it looks interesting
- Recurring revenue: customers pay every month instead of once.
- A small customer base (112 paying firms, reported) that one owner can manage.
- Most new customers find it through search, not paid ads (reported).
- The asking price is low for the profit reported. Worth a closer look, if the numbers hold up.
Red flags
- SeriousThe price is only about 1.3 times one year of profit. That's cheap for software, and cheap usually has a reason.
- MediumThree customers bring in 41% of the revenue.
- MediumThe owner does all the sales and support personally.
- MinorRevenue is what the seller reports. Nobody has checked it yet.
Questions we'd ask the seller
- How many customers generate most of the revenue?
- What has customer growth looked like over the last two years?
- How much work does the owner still do each week, and on what?
- Why are you selling, and why at this price?
What we'd check
- Traffic: where visitors come from, and whether that's growing
- Customer concentration: how much revenue depends on a few customers
- Churn: how many customers cancel each month
- Operating costs: hosting, tools, contractors and the owner's time
Screening is a quick first check of whether a business deserves a closer look. It isn't a valuation or advice to buy.