Hi HN! Like the title says I recently purchased a SaaS (https://myclientspot.com/) that was desperately in need of updates and am gradually working through it. I'm planning to write a series of posts about the process. This is the first and covers the acquisition and lessons learned through that process.
You really seem to know your stuff. It sounds like you’ve been doing this as a consultant for a while and now are doing it with your own biz.
A couple of questions: Does this business have employees or is it all outsourced? How were the existing customers sold? Was it via ads online or by more high touch?
In the past they had outsourced pretty much everything about the site, but we've taken it all in house.
It's mainly just myself and my wife who handles marketing and UI. We joke that I build it and then she makes it pretty.
We do have an assistant who we'll probably hand 1st level support off to at some point but right now we're handling it all so we can keep a close eye on what's going on.
I'm still piecing together how customers were found in the past. I know the original owner did content marketing and at least some affiliate deals, since some user accounts have a referrer noted.
I'm planning to do at least some high touch sales in the markets that we seem strong in. So far we've identified attorney support firms and realtors are using it successfully.
I'm trying to stay one month ahead of the posts. For instance I've already finished modernizing the UX and re-launched on my own servers. Now I'll write that up and post it at the end of month
Nice work. Are you able to give some ball park figures around what this sort of thing has cost / yearly revenue for the site? e.g. are we talking low 10s, high 10s, 100s, millions...
A good rule of thumb for valuing a SaaS is to take trailing 12 months revenue and multiply by 2-5 depending on the growth potential of the the business.
In this case it was at the bottom end of that scale due to signups having slowed to a trickle.
I valued it a bit more since it has a huge list of past customers. My hope is that once the updates are completed I can convince at least some of the to resume subscribing by a tasty "6 month free" type offer.
Did you had any problem upgrading the CakePHP or the Tech stack in general? What are your future plans with respect to the continuing the existing tech.
Yeah I’m not a fan of the php, but I have written it in the past so don’t mind it that much. I’ve went through and updated it a bit but am forcing myself not to get sucked into updates that realistically wouldn’t add much value
As I’ll document next post, I’m writing new features in React with graphql. I’ve managed to integrate that fairly well without needing huge changes to the existing codebase
It is my first time purchasing any type of business. In the past I've mainly invested in commercial real estate.
My thought is that it has a much quicker pay-off than pretty much any other investment. If I only manage to hold the site together for say 3 years it should have a positive ROI. Plus if I can actually grow the customer base it'll be an even bigger win.
No plans to flip it. I'd like to see it grow to rival some of the other bigger project management solutions out there.
I contacted them about any that looked promising and they send you a prospectus that listed the name and the financials. After signing a NDA of course.
