Should You Buy This American Flag Business?

Looks good for a veteran.

December 11, 2024

I got a notification about a listing for a business that looks like a veteran should take a look. This is a super fast overview of how I look at it.

The TLDR:

“WebsiteClosers® presents a thriving eCommerce shop with a strong platform on Amazon, marketing their line of Premium Quality Flags and related accessories. With the Flag Manufacturing industry valued at $8.8 million in 2023, this company has amply demonstrated how to attract customers in this niche space. Offering American, State, Military, and World flags, the company has appealed to a fast-growing customer base that is politically conservative, very patriotic, and eager to buy SKUs that are made exclusively in the USA. That has become one of this business’ most distinctive selling points, along with the fact that its SKUs are fully trademarked and sold under the company’s brand name.”

Here is what I like:

  • Flags are exclusively made in the US. People care about this and it becomes a differentiation.

  • 9 years in business. I would like to see more but that’s pretty good.

  • Only have 14 SKUs. That is super lean, which makes it easier to start and leaves a lot of room to add new products.

  • Social media presence is pretty solid, with 3,800+ followers on Facebook, and TikTok and Instagram are untapped- which leaves potential.

  • Amazon handles most of the logistics

  • It is a very reasonable asking price of 2.6x cash flow. I use 3x as the benchmark.

Here are some challenges:

  • $650,000 for an asking price is a tough spot. A lot of lenders do not want to do deals this small.

  • I suspect that their advertised $243k of cashflow is more like $150-200k. After putting some debt on the business, that doesn’t leave a ton of room for you.

  • They may want a big buyer.

Next Steps

  • Sign the NDA. I know one of the brokers at Website Closers pretty well and can put you in touch with him also.

  • After you sign the NDA, go talk to a bank.

Still don’t know what to do but interested? Reach out- I’d like to work with you.

Go crush it,

Mark