Most deals that look this good on the surface fall apart when you run the numbers. This one didn't. I put it through the Bulletproof criteria, and here's what the math actually shows.
THE DEAL SNAPSHOT
Industry | Health & Wellness Supplements (E-commerce) |
Location | California |
Asking Price | $700,000 |
Annual Revenue | $530,000 |
SDE (Cash Flow) | $530,000 |
Years Established | 25+ |
Team Size | Under 5 |
BULLETPROOF SCORE CARD
Criterion | Target | Actual | Verdict |
DSCR (Stress-Tested) | 2.0x+ | 4.50x | PASS |
Purchase Multiple | 3.0x or less | 1.32x | PASS |
Owner Cash Flow | >$100K/year | $435,824/yr | PASS |
Working Capital | 3+ months revenue | Not Disclosed | INCOMPLETE |
80/10/10 Structure | Clean structure | Standard terms | PASS |
Bulletproof Score: 4/5 - WORTH A LOOK / NEEDS MORE DATA
THE 80/10/10 BREAKDOWN
Under the Bulletproof 80/10/10 structure, a buyer would put down just $70,000 to control a business generating over half a million dollars in annual cash flow. The seller carries 10% as a note - keeping them accountable after closing - while SBA financing covers the remaining 80%.
Here's what the math looks like:
Your Cash In: $70,000
Annual Cash Flow After All Debt: $435,824
Payback on Your Cash: 2 months
DSCR: 5.63x (Bulletproof target: 2.0x)
I ran this through the Bulletproof calculator at DealScore Pro - you can plug in any deal you're looking at and get the same scoring in 60 seconds.
What's Working:
The DSCR comes in at 5.63x - nearly three times the Bulletproof minimum of 2.0x. Even after stress-testing with a 20% revenue decline, it still holds at 4.50x. That kind of cushion means you could survive a serious downturn and still cover every payment.
The purchase multiple is 1.32x. You're paying $1.32 for every dollar of earnings. Industry average for e-commerce businesses runs closer to 3.0x. This is priced to move.
After all debt service, the owner takes home $435,824 per year. That's not revenue. That's cash in your pocket after every loan payment is made.
The business has been operating for over 25 years with proprietary formulations, FDA permits, and over 1.8 million bottles sold. That's not a startup. That's a brand with real market credibility.
Watch Out For:
The revenue and SDE are both reported at $530,000. That's a 100% margin. Possible in a lean e-commerce operation where the founder is the entire team, but it needs verification during due diligence. Look at the bank statements, not the broker's numbers.
Two employees and a retiring founder means this business likely runs on one person's expertise. Key-person risk is real. Can the formulations be transferred? Are the supplier relationships documented? Those questions need answers before you write a check.
Working capital is not disclosed. At $530,000 in revenue, you'd need roughly $132,500 set aside for three months of operating expenses. That changes your total cash needed at close significantly.
The $7,500 monthly lease on a 3,000 sq ft facility is $90,000 per year. Verify the lease terms and renewal options. A lease that expires shortly after closing gives the landlord leverage you don't want.
THE ANALYSIS
Here's what makes this deal interesting. A 25-year-old health supplement brand with proprietary formulations, FDA permits, and established distribution channels is asking $700,000. That's 1.32x earnings. In a market where e-commerce businesses regularly trade at 2.5-3.5x, this pricing is aggressive in the buyer's favor.
The math is strong. $70,000 down. $435,824 in annual cash flow after all debt. A 2-month payback period. A DSCR of 5.63x that holds up even under a 20% stress test. On paper, this is one of the strongest deals I've scored in The Buyer's Brief.
But the red flags matter. Revenue equaling SDE at 100% margins is unusual. Either the broker is including add-backs that won't survive SBA underwriting, or this business truly runs on almost zero overhead beyond the founder's time. You need to see two years of tax returns and bank statements to verify. Run your own numbers at DealScore Pro before making any assumptions.
The founder retirement creates both opportunity and risk. Opportunity because motivated sellers make better negotiating partners. Risk because 35 years of proprietary formulation knowledge doesn't transfer in a two-month training period. Smart buyers would negotiate an extended consulting arrangement and get every formulation documented before closing.
MIKE'S VERDICT: WORTH A LOOK / NEEDS MORE DATA
The numbers here are outstanding - some of the best I've scored. But the 100% margin claim needs verification, the key-person risk needs a transition plan, and the working capital situation needs to be disclosed before anyone should move forward. If the financials hold up under due diligence, this could be a strong acquisition. The price is right, the structure works, and the fundamentals of a 25-year brand with proprietary products are hard to replicate. Get the bank statements. Verify the margins. Then move fast - deals priced like this don't sit on the market.
Want to learn how to evaluate deals like this yourself? I break down the entire Bulletproof method - the same criteria I just used on this deal - in a free 28-minute masterclass. Want to learn how to evaluate deals like this yourself? I break down the entire Bulletproof method - the same criteria I just used on this deal - in a free 28-minute masterclass. Watch the Free Masterclass
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