Written by Ben Church

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https://notion-ga.astrocket.vercel.app/collect?tid=UA-175007928-1&host=notion.so&page=/Shopify-Gift-App-Breakdown-6f09dac4a7ac4ab38fcd04d102d880aa

<aside> 💡 Welcome to our second public breakdown! This is where we take a look at a product for sale, understand what it does, how we'd grow it and ultimately if it's a good buy. (For us)

</aside>

• Table of Contents

Here's the type of SaaS we're after:

• [ ] It must have one paying customer
• [ ] The purchase price should be no more that 4x ARR
• [ ] It cannot be replicate-able by nocode
• [ ] Opportunity for [Expansion Revenue](https://www.profitwell.com/blog/how-much-expansion-revenue-to-be-successful#:~:text=Expansion revenue is any revenue,is generated by existing customers.) and Net Negative Churn
• [ ] Support Time Per hour / Profit per hour should not be below $50

In addition to this wishlist we'll be evaluating the product on a scale of 1-5 in the following areas.

1. Product Quality (How good is it?)
2. Porter's Five Forces of Competition (How defensible is it?)
3. Growth Potential (How could we increase it's value?)
4. Time Scale (How reliable are current metrics?)

Let's see if what we found stacks up.

An Invoicing App with the Superpower of a High Appstore Ranking.

What we're evaluating today is a Invoicing Software (web/ios/android) that allows small business owners to quickly and easily:

1. Create estimates
2. Send invoices
3. Request and receive payments
4. Record Expenses
5. Track financial health

It's a classic bundle with a lot of features.

The app is priced at $9.99/month or $49.99/year and has approximately 1000 active subscriptions.

The business is for sale for $320,000 which at approximately $60,000 ARR is a 5.3x multiple.

Initial thoughts

Invoicing has been around for awhile and I already use a free competitor to this app, so right away I'm a little skeptical of the product and the price tag.

Where's the dragon hiding 🐲?

Going into due diligence I've already got a few things on my mind:

• High ARR multiple will need a solid track record to justify it, also are we sure we can grow it enough to justify the large price tag?
• This is a crowded space with big players, can we avoid getting squashed?
• How did he get these users? Is he holding onto them? Are new ones coming in?

Due Diligence

SEO