Here are the key takeaways from the Wednesday’s Episode - 11 May 2025

Bawar Ahmad, co-founder of Ecomma, has flipped over 40 e-commerce stores in 4 years. His strategy? Buy micro e-commerce businesses, add quick value, and flip them within 3 months for minimum 40% cash-on-cash returns.

Most investors avoid micro e-commerce stores because they're risky and harder to run. Bawar disagrees.

"The more people think it's hard, as riskier, the more values to be made, the less competition we have," he explains.

Here's his complete micro-PE Playbook:

1. Stop Looking for Perfect Businesses

The biggest mistake buyers make? Waiting for the perfect deal.

The Reality Check:

• Every deal is distressed in some way

• Perfect businesses command premium prices

• Imperfect businesses = less competition = better deals

Key Insight: You make money on the buy, not the sell.

2. Master the 3-Filter Deal Sourcing System

Keep your filtering simple. Bawar uses just 3 criteria:

a. Revenue Trend

• Is revenue growing or declining?

• Declining = immediate pass

b. P&L Stability

• Too much up and down in financials?

• Look for consistent performance

c. Industry Match

• Does it fit your target niche?

Best Platforms for Deals:

• Primary: Flippa (high volume = better odds)

• Also use: Acquire, BizBizSell, Empire Flippers

• Strategy: Check daily, move fast—good deals disappear in 48 hours

Volume Game: List 20+ minutes daily reviewing new listings, make quick offers

3. Target Evergreen Industries Only

Top Targets:

• Children's products - Parents don't save money on kids

• Fashion & Beauty - Constant consumer need

• Home & Decor - Moving = spending sprees

• Toys - High margins, repeat customers

• Electronics - Always in demand
  

The 4-Point Market Test:

1. Growing market?

2. Easy to target audience online?

3. Audience has money to spend?

4. How big is the pain point?
   

   The first three are non-negotiable.

   
   
   

4. Use the 40% CoC Valuation Formula

Forget traditional multiples. Use this cash-on-cash approach:

Simple Valuation Example:

• Business makes → $100K profit annually

• Expected 20% growth = $120K year 1, $144K year 2
  

  

• Total 2-year profit: $264K

• Desired 40% return = $264K ÷ 1.4² = ~$135K max investment

• Working Capital = $10k

• Final offer = ~$125K

Typical buying multiples: 0.5x to 2x yearly profit

Working Capital Reality: Think like buying a car—you get the vehicle but need to add fuel.

• Average requirement: 2-3 weeks of expenses

• Components: Inventory, payment processor delays, cash buffer
  
  

5. Execute the 90-Day Value-Add Playbook

Four Quick Wins That Add Massive Value:

• Go line by line through P&L

• Negotiate every expense (even ask for 10% off software)

• Contact suppliers with: "We found competitors at $X price. Can you match?"
  
  

b. Email Marketing

• Most underutilized channel

• Can add 10% revenue with minimal cost

• Simple fix: More emails, better design, targeted offers
  
  

• Double the creative production

• More images, more videos = significant impact

• Keep same process, just increase volume
  

d. Pricing & CRO

• Small pricing increases often don't hurt conversion

• Remove friction points

• Case Study: 40% conversion increase by removing pre-checked shipping insurance
  

6. Master the Due Diligence Essentials

• Full access to all business accounts

• Conversations with every team member

• Complete financial verification

• Western countries only (for legal protection
  

1. Financial: Verify P&L with invoices and account access

2. Operational: Interview suppliers, freelancers, team members

3. Legal: Confirm ownership, contracts, copyright compliance

4. Commercial: Check real reviews, call random customers
   
   

• Declining performance trends

• Marketing account restrictions

• Underreported time investment

• Copied images or content

7. Transition Like a Pro

• Day 1: Operations discussion

• Day 2: Marketing deep-dive

• Day 3: Everything else

• Month 1: Shadow the seller

• Month 2: Seller shadows you

• 20-50% of purchase price

• Higher earnout = less confident about takeover

• Keeps seller invested in your success

8. Exit for Maximum Value

Make It Irresistible to Buyers:

Key differentiator: Offer to manage business post-acquisition

• Removes owner dependency risk

• Buyer doesn't get a new job

• Creates ongoing revenue stream

Professional Presentation:

• Detailed P&L with forecasts and percentages

• Professional pitch deck covering company, customers, market, products

• Always be transparent about issues upfront

Multi-Platform Strategy:

• List on as many platforms as possible (we list on 25+ platforms simulatne

• Never sign exclusivity agreements

• SEO optimize with keywords: cash flow, profitable, growing, Shopify

Best Times to Sell:

• When showing growth momentum

• Just before high seasons (Black Friday, Mother's Day, Spring)

Average time to sell: 3-6 weeks from listing

The Numbers Game

Bawar's Track Record:

• 40 stores flipped in 4 years

• 36 still active post-sale (90% success rate)

• Last year: 17 sold, 18 acquired

• This year's goal: 24-25 acquisitions

What Makes the Difference:

1. Speed - E-commerce moves fast

2. Team - Don't try to do everything yourself

3. Experience - Comes with repetition

[Bonus] Partnership Success Formula

After 7 failed partnerships, Bawar learned there are only 3 reasons to partner:

1. Money - Different capital access

2. Time - Different availability

3. Skills - Complementary skill sets

Success Factors:

• Find someone who pushes you to be better

• Similar values and vision

• Compatible lifestyle choices
  

[Bonus] Advanced Deal Sourcing

Effective Outreach Message Template:

• "Hi [Name],
  
  I like that you've done Facebook ads for very long time, very stable spend and the ROAS is very strong. (Be specific on what caught your attention)
  
  My name is [Name]. I am the co-founder of [Company] where we buy and sell businesses.
  
  We've done [X] transactions over time and we'd love to investigate yours to see the potential for the next deal."
  

• Follow-up Strategy:

  • Personalize every message

  • Show you've researched their business

  • Include your track record

  • Push for meetings, not email exchanges

    
    

Thank you for reading Behind The Acquisition.