Executive Overview

This ecommerce store is a six-year-old, remote, niche design services studio that produces CAD drafting, 3-D modeling, CNC-ready DXFs and rendering coordination for custom furniture, millwork and architectural fixtures. The business shows exceptionally high reported profitability (annual revenue $91,216, annual profit $81,092, ~89% margin), strong repeat business (80%+), a lean remote contractor model, and a small, engaged email list (~455). These economics create attractive cash flow and upside through productization and modest marketing investment but the unusually high margin, low valuation multiples on record (profit multiple 1.5×; revenue multiple 1.3×), and single-owner operational profile raise transferability and sustainability questions that must be resolved in follow-up diligence.

Quick Financial Snapshot & Interpretation

Annual / monthly metrics (12 months provided)

• Annual revenue (sum Aug2024–Jul2025): $91,216

• Annual profit (sum): $81,092

• Calculated average monthly revenue: $7,601 (matches listing)

• Calculated average monthly profit: $6,758

• Reported profit margin: ~89% (confirmed against month data)

• Expense run rate (total): $10,124 for 12 months (≈7% of revenue)

Volatility & outliers

• Highest month revenue: $14,010 (Feb 2025)

• Lowest month revenue: $630 (Apr 2025). This month produced a loss of $101.

• Revenue standard deviation (monthly) ≈ $3,733, meaning meaningful month-to-month variance; however, majority months are strongly profitable.

Valuation commentary

• Stated profit multiple: 1.5× (conservative relative to business profile).

• If profit = $81k:

  • 1.5× → ~$122k (current listed multiple valuation)

  • 3.0× → ~$243k (reasonable market multiple if risks are mitigated)

  • 4.0× → ~$324k (aggressive but possible if growth and transferability are proven)

• The low multiple suggests buyer concerns (see Challenges) despite high margins.

Website Performance & Metrics:

Data available: site URL and listing details. Several important commercial metrics are NOT provided (AOV, # orders, conversion rate, CAC). I list gaps and reasonable next steps below.

Website Speed

• Actionable: You should run a speed test (Lighthouse/GTmetrix). No test results provided. Given site uses Squarespace per listing, baseline speed is typically acceptable but could be improved for SEO.

Product variation & SKUs

• Observation: This is a service-based business (no physical SKUs). “Product” units are scoped projects. Variability high (small drafting job vs complex parametric model + CNC prep).

• Implication: Hard to apply classic e-commerce SKU metrics; instead evaluate average project types and standard scope packages.

AOV & Customer Lifetime Value (LTV)

• Missing: AOV and LTV are not provided. Necessary to obtain: average project price, repeat order spacing, and average lifetime revenue per client. The 80%+ repeat rate implies high LTV but quantify with seller.

Repeat Customer Rate

• Reported: 80%+ revenue from returning clients (very strong).

• Risk: Need to know client concentration, e.g., is 80% driven by many small repeat clients or a handful of large accounts?

Website Conversion Rate

• Missing. For a service site, conversion can be measured as: contact form submissions → consults → paid projects. Get historic lead→close conversion and inbound lead volumes.

Website Design & Presentation

• Observation (based on description / Squarespace): Clean, professional, engineering/design tone; fits B2B custom furniture audience. Strength: technical deliverables are highlighted (3D browser viewers, CNC outputs). Potential improvement: clearer “packaged services / pricing” to reduce friction.

Brand Positioning & Customer Sentiment

• Strengths: Niche specialization (CAD + fabrication workflow), reputation for precision and reliability, content-rich deliverables (browser 3D viewer).

• Missing: Independent third-party reviews data other than Trustpilot reviews provided (please fetch Trustpilot entries). Verify testimonials, referral sources, and any negative reviews.

Marketing & Efficiency

• Channels active: monthly email to ~455 prospects, LinkedIn presence (1k+ weekly searches), previous Google Ads (not current).

• Efficiency signals: Lean spend (expenses ~7% of revenue). But CAC is unknown. Given small ad activity, organic/relationship marketing likely drives much of the work.

Customer Acquisition Cost & Scalability Potential

• Missing CAC. Estimated: if owner spends low ad budget and relies on referrals + email, CAC may be low but scaling will require documented playbooks to replicate lead generation (paid search, LinkedIn, Pinterest, content).

• Scalability: High. Services are remote, contractor model, no inventory. Through packaged offerings and hiring additional qualified freelancers, throughput can be scaled.

Product Offering & Marketing Angle / Repositioning Potential

• Current angle: Premium technical design partner for production-oriented clients (furniture, millwork).

• Opportunities:

  • Productize into fixed-price packages (starter CAD set, CNC prep + nesting, full design + render + CNC package).

  • Offer monthly retainers for recurring design support.

  • Sell templates / DXF bundles or process training to CNC shops.

  • Position as “CNC-ready partner” for US/Europe makers, market via LinkedIn, CNC forums, and trade publications.

Operational Efficiency & People/Process

Strengths

• Fully remote; founder working ~15–25 hours/week.

• Uses standard tools (Fusion 360, AutoCAD LT, Dropbox, Adobe Acrobat, Squarespace).

• SOPs, CAD templates, onboarding docs and contractor relationships included in asset list. This lowers friction for transfer.

• Low fixed costs; contractors scale up/down.

Concerns

• Key-person risk: founder handles client management and complex design tasks; degree of founder involvement unknown. Need to confirm how much institutional knowledge resides solely with the founder.

• Contractor dependency / rights: Ensure contractor agreements include IP assignment and non-compete/NDAs where required.

Operational actions recommended

• Review SOPs and run a test hire/assignment to validate reproducibility.

• Audit contractor contracts for assignability and continuity clauses.

• Confirm backups of all project archives and check folder organization/metadata in Dropbox.

Customer Data, Relationships & Commercial Risk

What’s positive

• Email list ~455 and 80%+ repeat revenue implies strong client loyalty and positive relationships. Deliverables are technically valuable (browser 3D models), which helps retention.

What you must verify

• Client concentration: Get top-10 clients revenue split. If >30–40% from top 1–2 clients, value is at risk.

• Contracts & terms: Are there written recurring contracts, retainer agreements, SLAs? Or mostly one-off invoices?

• Payment channels & AR: Review Stripe / Found records, unpaid invoices, disputed charges.

• Churn & pipeline: Average repeat interval and pipeline of booked work (backlog).

• Reference checks: Speak to 3–5 repeat clients to validate service quality and transferability.

Legal & Compliance Due Diligence

Immediate checklist:

• IP ownership: Confirm that all CAD models, templates, and deliverables included in sale have appropriate ownership / assignment language signed by contractors and clients where applicable.

• Contract review: Contractor agreements (IP assignment, confidentiality), client contracts (liability caps, ownership of designs), and terms of service for deliverables.

• Data/privacy: Ensure handling of client data complies with applicable local regulations; identify storage location of confidential project files.

• Tax & corporate records: Confirm filings for Hawaii entity (or owner’s jurisdiction), find any outstanding tax liabilities, and verify that owner compensation isn’t being understated as “contractor reimbursement”.

• Transferability: Verify domain transfer, Squarespace account, Dropbox account, email hosting, and Stripe/Found access can be transferred or assigned.

Strengths & Value Drivers

• Exceptional reported margin (~89%) and strong cash conversion.

• High repeat business (80%+), signaling sticky relationships.

• Leaner operations (no inventory/real estate; remote contractors).

• Niche technical expertise (CAD + CNC readiness): defensible skill set with real value for manufacturers and makers.

• Assets included (domain, email list, SOPs, templates, archives) meaning faster ramp post-acquisition.

Key Challenges & Risks (Detailed):

1. Sustainability of ultra-high margin: Must validate that all owner costs (salary, benefits, personal expenses) aren’t excluded and that contractor payments and wages are reported correctly. The margin level is unusual for service businesses and warrants accounting review.

2. Key-person dependence: Founder manages clients and technical complexity; loss of founder could impact quality and client retention.

3. Client concentration risk: If a few clients comprise large revenue share, buyer faces near-term churn risk.

4. Growth and valuation skepticism: Low 1.5× profit multiple suggests buyer market has discounted growth or transferability. You’ll need to demonstrate recurring contracts, diversified client base, and documented SOPs to lift multiples.

5. Lack of standardized productization and predictable recurring revenue: Most revenue appears project-based; converting to retainers would increase predictability and value.

6. Marketing / lead generation gaps: Current reliance on email/LinkedIn/referrals is good for stability but limits growth unless scaled with paid/organic channels and a repeatable funnel.

7. Legal/IP unknowns: Ensure contractors and deliverables have clear IP assignment.

8. Monthly volatility: One loss month (Apr 2025) and revenue swings may reflect seasonality or pipeline gaps.

Recommendations (Immediate Next Steps for Buyer & Negotiation Levers):

Due diligence requests (must obtain before advancing):

1. Accounting & bank records: Full P&L, balance sheet, and bank & Stripe/Found statements for last 36 months. Confirm owner draw/compensation.

2. Client data: Breakdown of customers (total #, orders, AOV, top 10 clients revenue %), churn rate, lifetime revenue per client, and pipeline/backlog.

3. Contracts & IP: Copies of client contracts, contractor agreements, NDAs, and sample deliverables proving delivery standards.

4. Operational proof: SOPs, project management workflows, example deliverable packages, and a list of active contractors with rates and availability.

5. Traffic & conversion data: Analytics access (Squarespace/Google Analytics) showing site visits, lead volume, source channels, and conversion rates.

6. Marketing spend & CAC history: Any ad spend history (search, LinkedIn), monthly CAC estimates, and email campaign performance metrics.

7. References: 3–5 client references and 1–2 contractor references.

Negotiation levers:

• If top-client concentration is high or IP/contracts are weak → ask for lower multiple or holdback/earnout to protect buyer.

• If accounting shows owner compensation omitted or one-off items driving profit → adjust earnings or request escrow.

• Consider structuring part purchase price as: base + 12–18 month earnout tied to revenue/retention metrics to mitigate key-person risk.

Operational & growth plan (post-acquisition quick wins):

1. Productize services: Create 3–4 fixed-scope packages with transparent pricing to increase inbound conversions and reduce sales friction.

2. Introduce retainers / subscription support: Offer monthly design support retainers for recurring revenue.

3. Hire a junior in-house or stable core freelancers: Reduce founder dependency by training a 2nd designer with SOPs and quality checkpoints.

4. Scale marketing: Launch a tested LinkedIn Ads + SEO content plan targeted at CNC shops, custom furniture brands and millwork firms. Use case studies and 3D viewer demos as conversion assets.

5. Upsell templates & training: Sell DXF template packs and short courses or onboarding bundles to CNC shops and small makers.

6. Quantify CAC and LTV: Build a simple CRM funnel to tie marketing spend to closed revenue.

Sensitivity & Valuation Scenarios

• Conservative (status quo + risk discount): 1.5× profit → ~$122k; justify if heavy owner dependency, weak docs, or top-client concentration.

• Base (mitigated risks; good docs & low concentration): 2.5–3.0× profit → $203k–$243k. Reasonable if procedures, contractor agreements and client diversification are verified.

• Upside (scalable model, documented retainer revenue & growth channels): 3.5–4.0× profit → $284k–$324k.

Recommend structuring a deal in the $150k–$240k band with holdbacks/earnouts to bridge information asymmetry depending on the diligence results.

Due Diligence Checklist (Practical, to send to seller):

• 12–36 months bank/stripe/found statements and reconciled P&L.

• Copy of last year’s tax returns.

• List of active clients with annual spend, start/end dates, and contract status (NDA/retainer/one-off).

• Top 10 clients revenue table and % of revenue.

• Detailed revenue by service type (CAD drafting, CNC prep, rendering, consulting).

• Standard operating procedures and a short walkthrough video of a typical project (owner-led).

• Contractor agreements (show IP assignment, confidentiality).

• Access to Squarespace/Analytics and marketing platform metrics (mail provider stats, LinkedIn campaign history).

• Domain / hosting / Dropbox / Git/Archive transfer plan.

• Any outstanding escrow, legal, or tax liabilities.

Final Recommendation

The business represents a low-risk cash-flowing specialty services business with very strong repeat metrics and exceptional reported margins. It is a great bolt-on for a design studio, agency, or strategic acquirer in the furniture/design ecosystem. However, before proceeding to a final offer, the buyer must validate profitability (confirm owner compensation and full expense capture), confirm client concentration and transferability of relationships, and verify IP/contract arrangements. If the above checks are clean, the business justifies a materially higher multiple than currently listed, and near-term upside is available through modest productization, marketing investment and institutionalizing operations.

Suggested Negotiation Email Language (Short Template):

Hi [Seller], thanks for the listing. Before we submit an LOI we’d like the following documents: 12–36 months of bank/Stripe statements, reconciled P&L, client list with top-10 revenue splits, copies of contractor agreements, and analytics access for the website/email campaigns. Can you provide these within 7 business days? Also please confirm whether any client accounts are on retainer and whether the founder will provide a 60-day transition post-sale. Thank you.

Appendix (Short Numeric Recap):

• Annual revenue: $91,216

• Annual profit: $81,092

• Average monthly revenue: $7,601

• Average monthly profit: $6,758

• Profit margin: ~89%

• Stated profit multiple: 1.5× (conservative)

• Key operational tools: Fusion 360, AutoCAD LT, Dropbox, Squarespace, Adobe Acrobat

• Email list: 455 subscribers (per listing)

• Repeat business: 80%+ revenue from repeat clients