Buying an eCommerce Business Instead of Starting One
Most entrepreneurs dream of building from scratch, but Michael Simpson took a different path. After running an Amazon arbitrage side hustle, he spent 18 months searching for an established eCommerce business to buy rather than building one from the ground up.Four years after purchasing an 18-year-old business selling Catholic products, Michael candidly shares what most buyers won't: the reality behind the broker presentations, the challenges of inherited technical debt, and the daily cashflow discipline that kept him in the game during survival mode.We explore the SBA loan process that made 90% financing possible, why he spent £30,000 on a Shopify migration that never happened, and the mastermind group advice that stopped him from making costly mistakes. Michael reveals his daily cashflow forecasting system, why demand capture businesses hit growth ceilings differently than demand generation models, and what he wishes he'd negotiated harder on during the purchase.Key Point Timestamps:04:34 - The Buy Then Build Philosophy09:10 - Finding the Right Business After 40 Evaluations11:06 - How SBA Loans Work for Business Acquisitions16:56 - The 3X Multiple Valuation Reality20:05 - Why Growth Proved Harder Than Expected29:52 - The £30,000 Migration That Never Happened43:09 - When Sales Dropped and Survival Mode Began49:57 - Daily Cashflow Forecasting That Saved the BusinessThe Buy Then Build Philosophy (04:34)Michael's acquisition journey began with Walker Deibold's book Buy Then Build, which challenges the conventional startup path. After running a small Amazon arbitrage business selling New Mexico green chillies, he realised he wanted something larger but wasn't passionate about scaling what he had."When you buy a business, that's what you're buying," Michael explains. "You're buying the existing customers and that goodwill and those supplier relationships. If it's a new business that doesn't have a lot of existing customers, there's not really a whole lot of value there."The appeal is straightforward: an established business has already solved product-market fit, built supplier relationships, and proven people will pay for what you're selling. But as Michael discovered, you're also inheriting someone else's platform choices, brand positioning, and technical debt.Finding the Right Business After 40 Evaluations (09:10)Michael spent 18 months evaluating 30 to 40 businesses before finding the right fit. His criteria were non-negotiable:No Chinese suppliers. As a National Guard member with security clearance for 22 years, the China arbitrage model raised both practical and security concerns. "I just felt like eventually that wasn't sustainable. Like at some point that arbitrage opportunity is going to disappear."Own website, not Amazon-dependent. Having experienced Amazon's unpredictability firsthand, Michael knew he didn't want a business that could collapse from one complaint or account suspension.Strong customer base and email list. This represents the real value in an acquisition—the relationships and proven demand.Genuinely interesting products. Michael didn't want to sell women's clothing or supplements he didn't believe in, even though the margins were attractive.When Discount Catholic Products appeared—an 18-year-old business selling medals, prayer cards, and crucifixes made in Italy and the US—it ticked every box.How SBA Loans Work for Business Acquisitions (11:06)The Small Business Administration loan programme gave Michael access to 90% financing—he only needed 10% down on a half-million-pound sale. During COVID, the government sweetened the deal further: they waived the typical 2% fee and covered the first three months of payments."Between those two things, that was like £30,000 that we saved just by getting...