Joe Speiser ⚡️

Joe Speiser ⚡️

20-09-2022

18:19

The most practical way to make $1M: Buy a SaaS business and flip it for 4X in 12 months. I’ve done this multiple times. My exact 5 step blueprint on flipping SaaS businesses for millions 🧵

1. Finding a great SaaS business 2. Approaching the owner with an acquisition offer 3. Financing your purchase 4. Growing the product 5. Selling it

Step 1 - How to find a great SaaS business? This is a crucial step. You need to pick the company that you know CAN do well. Key indicators to look for while selecting: 1) ARR 2) Retention/Churn 3) Competition

Go to Filters you should start from: ✔ $100k ARR ✔ 65% retention ✔ Fewer competitors ✔ A strong value prop (a must have) ✔ Annual growth rate 10%

As I mentioned, this is the most important step. Go through everything diligently. Ask for help if you can't make sense of something. Everything you do from here on is your responsibility.

Step 2 - How to approach the owner with an offer? If you're on Microacquire, you can send a message to the owner on the platform. If you find a company not listed on Microacquire, here's what to do:

- Cold DM & email the owner offering to buy their SaaS Your outreach should seem legitimate. It should show that you have the ability to pay. Include your LinkedIn/Twitter, your current job title, and why you want to buy their business. For example, here's how I did it -

Step 3 - Financing your purchase Tip: Aim for companies above your purchase price. You can always negotiate it down or rely on seller financing/loans to meet the price.

My rule of thumb: Purchase price = 1-3x ARR If it's growing fast, you have to pay more. 3 ways to get the $: 1) pipe .com 2) SBA loan 3) Seller Financing

Go to pipe .com It allows you to use the company's future revenue to finance your acquisition. For $100k in ARR, you can get $50k - $85k upfront and pay them later as your customers pay you (expect 1.15x to 1.6x on your principal)

Or you can take an SBA loan (6.5%-10% interest). SBA will value the company and offer around 70-90% of their valuation You'll have to fund 10-30% of the sale price out of pocket.

Step 4 - How to grow it? Firstly, make sure you retain your current users. At least people who are obsessed with your product and can't live without it. Because of this, now you have an 'Ideal User Persona' you can target in your marketing.

3 ways you should do marketing: 1. SEO 2. Social Media 3. Influencer Marketing SEO (6+ months) Because SEO is slow, your rivals likely avoid it, which is precisely why it will be effective for you. Find relevant keywords and search terms for your ideal users and rank on them.

Use @ahrefs to find a search query that fits this criteria 1) Query is hyper-relevant to the problem your SaaS fixes 2) No big website ranks for this query 3) Has a search volume of >50K

@ahrefs You could become the top-ranked site for a search query and receive 50K visitors a year with as few as 15-20 backlinks. Once you achieve success for one search term, look for the next one on Ahrefs. Find terms, build links and repeat 🔁

@ahrefs Social Media (2+ months) Focus on channels where your ideal user hangs out. If the SaaS is about helping creators organize their content pipeline, create videos on TikTok and Instagram Reels. If the SaaS is for businesses to simplify their accounting, use LinkedIn.

@ahrefs Get in your ideal user's shoes and think where they hang out. If it's Twitter, create infographics, informational threads. If it's LinkedIn, repurpose whatever works on Twitter. If it's TikTok, create engaging videos. Note: Don't just promote your product. Provide value.

@ahrefs Influencer Marketing (3+ months) Once you execute your social media strategy, you will know for sure which platform gets you best results. Now, find people in your niche on the platform. Ask them if they'd want to promote your product. If the price is reasonable, do it.

@ahrefs For example, a social network for GenZ can use influencer marketing in the following ways: - Find accounts on Twitter who are young with >10k followers. - Approach them with an offer. - Do it at a reasonable price. Note: Don't make the posts look like promotion. Use your brain.

@ahrefs Step 5 - How to sell it? There's two ways to go about it: 1. List it on Microacquire 2. Tell people you know that you want to sell (online/offline)

@ahrefs None of this is an exact science, as every business has its nuances. Take care in your approach, and remember there is a large % of art that goes into this science, so don't be afraid to pave your own path, as this is only a loose framework to show what's possible.

@ahrefs If you found the thread useful, go retweet the first tweet. Follow me @jspeiser for more SaaS, startups, and investing.



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