Alejandro Arce — home Thinking in Public

Here's a list of deals, scored by the upside.

The top 50 businesses for sale up to $1M, updated every morning, with the math on what it's worth if it grows.

Read more

Every morning this page pulls businesses for sale up to $1 million, with the seller's numbers for the last 12 months.

Then it does the math you should do before buying one. What the price is in months of profit. How many people visit and what each visitor brings in. And what happens to revenue, profit and the value of the business if traffic grows.

Move the slider to choose how much it grows. Each deal's upside is what the business would be worth above its price at that growth, and the page keeps the best 50. The value assumes you sell later at the same multiple you paid.

This is a model to learn from. I'm not a financial advisor. Numbers come from the seller's listing, so check them yourself, and talk to an accountant and a lawyer before you buy anything.

+50% How the math works
Top deals
—
Typical price
—
Typical upside
—
Loading today's list…

How the math works

  1. Price in months of profit. The asking price divided by the average monthly profit over the last 12 months. That's how online businesses are priced. Today's typical price on this page is —.
  2. Revenue per visitor. Monthly revenue divided by monthly visitors, for listings where the seller shows traffic. Amazon, Kindle and YouTube businesses sell through the platform, so their math grows sales instead.
  3. New revenue. Revenue grows by the slider's percentage. This assumes new visitors spend like today's.
  4. New profit. Today's profit plus the new revenue times the share kept. The share kept comes from the seller's own 12 months: in the months revenue went up a dollar, how much did profit go up? When those months are too uneven to tell, or the listing shows only a year of totals, the page uses what the business keeps of each dollar today.
  5. Value. New monthly profit times the same months of profit you paid.
  6. Gain. Value minus the asking price.
  7. Upside. The gain as a share of the price. The list ranks by it, and it moves with the slider.

The cut. Each morning the page reads all the businesses for sale up to $1M and keeps 50. Thirty are the deals with the most upside among listings that show 12 months of numbers. Twenty come from listings that show only a year of totals: their upside always equals the growth, so they're ranked by the lowest price in months of profit. It leaves out any whose revenue fell more than 20% in the last 6 months against the 6 before, and any priced under 12 months of profit, where the numbers are unlikely to hold.

The score (out of 100) is a second way to sort: a low price in months of profit (30), revenue growing over the last 6 months against the 6 before (20), visitors coming from Google search (20), few hours of work a week (15), and traffic the seller shows (15).

What the math leaves out: the cost and time it takes to grow traffic, ad spend, taxes, fees, financing, and the multiple moving up or down when you sell. Listings come from public marketplace and broker pages, and leave this page when they're sold or taken down.

Want a machine like this one?

If you have an idea like this you'd like to build, message me at hi@arce.ca.

More Thinking in Public