How to Buy and Grow a $400/Month SaaS into a Six-Figure Business

So let's look at this SaaS that's for sale. Can we buy it, uh, add a lot of value to it? How would we add a lot of value to it and flip it? Now remember, the thing is that like basically we're just talking about digital marketing principles and applying them to businesses that are not using them correctly. So let's take a look. Okay, so let's dive in. Let's look at this. It's on Acquire. I can't show you the stuff that you have to have signed an NDA for, but we can look at it at high level for now easily. It is Poshmark sales automation tool that helps you sell more, grow followers, and organize closets. Now, for those of you that don't know what Poshmark is, buy, sell, and discover fashion, home decor, beauty, and more. Basically, people like resell their clothes, right? Um, I'd say it's probably pretty heavily female-focused. Obviously, the man here, but, um, from my experience, what I've seen, it's mostly female-focused. You have these sellers who are like, just some of them are just resellers for a living, and some of them are people that are just, uh, yeah, just wanna sell their clothes they bought that are expensive. So, as we look at this, um, let's just break down this listing a little bit. Asking price is $12 grand, 4x profit, probably a little bit high. Normally at this size, unless it's like a super obvious win, we're gonna be seeing people that are going more like a, um, a 3x profit. Uh, 2 to 4 will fit those for software. So $3,000 in the past 12 months, $400 a month in profit, right? Last month's top line is $460, last month's profit is $400. Reminder, this is like a side hustle, right? Like this is not gonna be some giant, you know, game changer if you're making a quarter million dollars a year. This could be a cool little side hustle to buy. If you want to, if you're a Poshmark seller, this could be a cool side hustle to buy, but this is not gonna be the one that changes, um, your entire trajectory day one. You could definitely grow this and we'll look at how I think you could add a couple hundred thousand dollars in value to it possibly, or $100K in value, maybe flip it in 12 months, either hold it into your portfolio or you could, uh, yeah, sell it. Like I said, flip it. So it's really a Chrome extension, right? Super interesting to think about. It has existed since 2020, so that's interesting. Let's look at the way it makes money. It charges monthly, monthly subscription from $20 a month or $200 a year, 7-day free trial. Perfect. I think they've probably optimized that out. When they talk about comps, since I can't show you the actual URL of this one because it's behind an NDA and I can't sign the NDA and share it to you with you guys afterwards, but 'cause you haven't signed the NDA, let's look at the comps 'cause the comps will say exactly what it is. So Posh Tools is the main one. Poshmark Bot to Grow Your Business. Um, you know, basically it, you know, it does all these automations for you so that you, to grow your profile and get in front of more eyeballs. Um, there's a couple other comps, but I don't wanna waste our time diving too much into it now. You know, the things that they say they have a lack of time, everyone says they have a lack of time. Take everything when, when someone, reason for selling, let's take it as a grain of salt. Um, you know, one thing I wanna see is consistent sort of like growing or stabilish revenue. Over time. Users is, you know, the users here is nothing crazy. It's up and down a bit, right? But it's not like super, super, super insane. There are a little bit of drops, but I would say that, you know, obviously recently, as I said, $4,000 last month's profits— sorry, $400 last month profit. That's really not bad, right? That really would put it at a 12x of $4,800. A year. So, uh, you know, a little over 2x. But we wouldn't want to base it on the trailing 6 to 12 months, um, a multiple of that. So let's— now that we know what this business is, it's a comp to Posh Tools, right? It's a— and we understand what Poshmark is. Let's look at some of the ways we might want to sell it. Okay, so right off the bat, I mean, my gut instinct is that probably Poshmark stuff is very visual. I would bet Pinterest crushes with this. I would go pretty hard on Pinterest and I would find influencers to partner with. Like if we go here and just type Poshmark on IG, you know, first off, Poshmark itself has 1.2 million followers. You could start doing interactions with the people that comment on this stuff. Um, you know, I would check out a tool like Phantom Buster. It's a pretty simple one. There's a bunch of others., and you could scrape the profiles. You could scrape all the followers of Poshmark. I don't think that's a super, super sweet spot though, because poshmark.com, this Poshmark probably has people that are also buyers on it. We want Poshmark sellers, right? So if we go to like, and people that are following Poshmark, Poshmark reseller, Poshmark reseller, you know, Poshmark and eBay reseller. So if we go to this account, ReCloth Collection, right? She's got 37,000 followers. You know, balancing life and the 6-figure reselling business. What this says to me is that the people that follow her also want a reselling business, right? So they are people that are very likely to want to use Posh Tools. I want to use this business that's for sale on acquire.com, right? So I might want to go scrape her followers, right? Might scrape them and then pull their, uh, it's gonna pull all their information and then do some cold outreach to them. Right. Let's look at the way to do that. Okay. Sorry. Back to it. So we know that Ashley, right, that all her followers are people that want to do the same thing. So here's 37,000 people that we could scrape and then we could either DM them, we could follow them and like their content. We could comment on their stuff. We could probably pull a bunch of their emails and cold email them. And I think you could probably go grab another, you know, for context, this is only making $400 a month right now. Right. So do I think that we could get another 100 people on it over the next year? Yeah. And 100 people would add $2,000 a month in revenue to this. Right. Very, very reasonable. If we're doing 100 people, we're talking about— ignore churn for a second. I'm just running this math in the top of my head, the back of the envelope numbers. We're doing, you know, we are looking at 100 people. Let's say there's, you know, we want to gain 15 a month, right? Over the year, that'd be 180 people. Let's say half churned out. I'm making this up, right? Over the year, but like, that'd be 100 people. It's $2,000 a month in addition. So now we're at $2,400 a month as a side hustle. If you are, if you are someone like Ashley, you can then probably contact those people as well to upsell them coaching. For, you know, you know all those people, that's the front end offer in your funnel. They're using that. And now for $100 a month, I mean $100 an hour, you do coaching calls, $200 an hour, you do coaching calls with them, right? And help them with their business more. The other thing you could do is go partner with Ashley, right? You could go, you reach out to her and say, listen, I'm gonna give you 20% of this business and 20% commission. So you get commission for every sale you bring in, but we're also, you're gonna own 20% because the plan is we're gonna grow this. If we can get this to, you know, at $3,000 a month, this becomes a $100,000 business. So 150 people, can she get 150 people out of her 37,000 to use it? I think it's quite likely, right? So that's one way to do it. Let's go find another example though. Like if we just go to search again, we do Poshmark reseller.

What happens? Oh, it's only bringing people here. I want a hashtag for it, but You know, here is—

if you, um, go to Poshmark, here's another woman who's talking about it, right? 2,500 followers. We could chat with her. You chat with any of these people, you know, that are here. Posh Ladybug, 3,500. There's tons and tons and tons. Anyone who's tagging Poshmark, you could go and reach out to, I would just get personalized with it. The question is, do you wanna put in that work? Most people will not. So here are the options. Let's, let's do some math real quick. This is actually one of my favorite uses of ChatGPT, of AI. There's so much stuff it's terrible at, but the truth is for certain things it's actually really good. Um, and it's just like for me running back and envelope numbers for something like you, you have to double check it every now and then if it just seems wrong. But I'm gonna type it in so you have to wait around while I type it in and watch what we're gonna do. Okay, so I find that having a plan makes everything about 100 times easier, even if I already know it. But like following step by step, obviously this way you could then outsource it to a VA as well. So here's what I typed in. I'm looking at buying a Poshmark SaaS business and it currently makes $400 a month and charges a $20 monthly fee to access to it. I think the business is worth about 3 times its yearly profits. Uh, I want to grow it with scraping profiles from IG and then doing cold outreach to them. Can you give me a plan to do so? We're gonna do 2 things. I want to have a basic plan to follow. Right. Um, let's see what happens. I haven't done this output yet, so we'll see if it comes up with anything. And we updated it. And then I wanted to do evaluation thing. That target audience, right? Set of criteria. We don't need to do that much here. It's giving me these other tools, Octoparse, Apify, right? To, uh, to scrape, organize the data. I'm going to pause this while it does it. Okay, so it gave us like an actually pretty useful plan. It's too, there's too much here. I wanna make it more simple, right? But set up Instagram scraping, organize the data, cold outreach campaigns, telling us to use Lemlist, Mailshake, things like that. Um, great tools. Giving us an idea of the messages for emails and DMs. Um, offering them a free trial. Agreed. Scaling the automation, the automation using tools like Phantom Buster, like I suggested. The follow-up process, et cetera, et cetera. Let's make it a little bit more simple. Um, what are the—

please give me a daily to-do step by step in under 30 minutes. Once I have the IG profiles to DM and interact with on IG. I don't want to come across as spammy, and I want to try and convert one person.

Okay, one person a day, right? And one person a day, just to be like I said before, what was the numbers I said? 15 people a month. That's one person every 2 days. So let's see what it puts out. Okay, cool. So it's given us a very basic to-do, right? Engage with 5 to 10 profiles, like and comment on their recent posts and stuff. Again, what are we gonna do though? We're gonna go and now anyone who's hashtagged Poshmark, hashtag Poshmark reseller, Poshmark, any of those things, people that we know are our ICP, ideal customer profile for this, right? Um, we wanna send them very specific personalized DMs about things they've posted, right? So it's not just like spammy. They're saying 2 personalized DMs, 2 profiles a day. I would up that. I would do like 10. It's definitely doable in the timeframe. Again, this is just a rough guideline. Follow up with the previous leads and track in a spreadsheet. Boom, 30 minutes a day. You could absolutely, absolutely do this in 30 minutes a day and convert 1 person every day, right? Or 1 person every 2 days. Now you might say like, okay, 30 minutes is only getting me $20 in revenue,. But if that person sticks around 6 months, that's not true at all. You're actually getting $120 in revenue. And if that, if you, if that, if you're getting 3 times the yearly net profit, $120 in revenue means that they're really worth $360 when you flip the business, right? So over that 6 months, you're getting $120 plus $360 on a flip, $480 of that 30 minutes of time. You have to think sort of further out here in terms of that regard, right?, and this applies to much bigger businesses, right? Like I've bought much larger brands, you know, brands doing $50K a month, took them to $300K a month, worked on sort of these larger triangular reverse mergers doing tens of millions of dollars. It's these— I'm trying to show you how to do the small process here to then take it to the bigger process later on. So that'd be a good step. So now let's look at some of the math again. Okay, cool. So I said, okay, let's assume this brings one customer a day at $20 a month. They stay an average of 3 months before they leave, and the business is worth 3Xs yearly profit. What does that do for me at the end of 12 months in terms of month profit and the value of business? So let's, let's let it just do the math for you, right? Like I'm not asking it to do it. It's using my thoughts and just doing things for me that would take a while on a spreadsheet. Don't forget, by the way, this would be pretty outsourceable. Once you did this, I would screen record this like I'm doing on Loom, hand it to a VA for like $5 or $10 an hour, and they'd be doing the same things as you right now. Again, I don't think this business becomes a multimillion-dollar business, but does this go from $400 a month to maybe, you know, uh, Uh, oh wait, it's doing the math wrong. Let's see. Hold on. Okay, so it's, so it took a couple prompts to get ChatGPT to not do the math wrong. Cause it's important to recognize that. Okay, so we're basing this on, right? So we're saying initial comes with $400 a month in profit. Each new customer pays $20 a month, stays 3 months. Your average one a day is 30 new customers a month, but there is churn, right? There's, we're saying, I'm admitting people are going to leave. They're not gonna stay forever, right? 3-month churn, sticking around 3 months seems more than fair. I would assume they stick around longer. Okay, month 1, you have $400 a month in profit. You add $600 to it, you're at $1,000 a month after month 1. After month 2, you're at $1,600. After month 3, you're at $2,200. Now eventually you start losing the battle unless you can outbeat the churn, right? So we're netting out $2,200 a month after 3 months, you know. So we do the math on that. From months 4 through 12, we're making $200 a month. Final month profit is still, you're making $200 a month. On average, because obviously we're saying it's over the trailing 12 months average monthly profit, the business is doing $24,600 a year. You bought something that was doing $5,000 a year, right? Business valuation. Now it's worth $73,000, right? How much do I make on year 1 with all that?

24, 6, So total, if I sell the business at that value, see what it says.

It's going to tell you, bada bing, bada boom. Pause real quick. Okay, a couple more mistakes from ChatGPT today, which is interesting, but it puts total earnings for the year over $100,000. Not bad for a side business that you spent like $10,000 acquiring. So if we go back to this, right, it's like, let's see, they're asking for $12K. I don't think that's insane, you know? Um, the truth is it's, I would probably try and get more for $10K. You could structure it interestingly. You could probably use a line of credit to buy it. You could probably get the seller to finance $2,000 of it. That's what I would try and do. I'd try and buy it for like more like $8K to $10K in cash upfront. You could put it on a— I wouldn't recommend you do this, but hypothetically, you put on a 0% APR credit card. I would make sure you have the money for a deal like this. So there's no traditional lender that's lending for this acquisition. So you'd have to do it in a line of credit or underwrite it yourself, you know, PG it, personally guarantee it. Um, but I would try and leave the seller from 3 months to help you with that transition, right? So they can help you with marketing and say like, it's $2,000, I'll pay out the last $2,000 over the next 3 months. Um, and it would be completely like totally possible. Um, and all the math that we just put forth is totally, totally possible, right? So anyway, every business is not for everyone. This is just a top of the mind way I thought about breaking this one down and the way it could grow. If you have any questions, let me know in the comments below. Let me know what kind of business you're looking at. Buying and selling these businesses is not rocket science. Anyone can do it. I'm a college dropout who managed to start doing this stuff for a living a few years back and has had some few wins. But you just gotta learn the basics of marketing and then apply those principles to all the businesses you see. Make sure that you don't just go believe everything that everyone says. I did not go through due diligence today. That's probably another 20, 30 minutes. I just wanted to get a quick 10, 15-minute video at the door to show you the opportunity that exists. You might not be interested in a Poshmark business. I totally get that. For the right person, it might be the perfect, perfect business. Um, and eventually you could scale it out to be income replacing. Um, uh, or it could just be an awesome side hustle to go on top of the Poshmark business you're already running. So anyway, let me know any questions. Subscribe for more. I'll break down more of these videos and break down more, uh, businesses and ways to grow them. Cheers.