Graffam's agency business covers payroll and dwarfs his software apps
J.D. Graffam · 871 Which is Smarter: Buying vs Starting Companies · Dec 12, 2017 · at 13:31
J.D. Graffam, founder of Simple Focus, explains the operational scale and role of his agency businesses compared to his micro-SaaS portfolio.
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“I've got the agencies going as well, and they're much bigger than the apps. That's where the payroll gets made.”
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More from J.D. Graffam
Graffam only acquires profitable SaaS making $100K–$500K with zero staff
“I'm not going to buy anything that's not profitable, which means it doesn't come with a staff. It doesn't come with any significant overhead. What I'm not looking for is anything under a 100,000 dollars a year. So that's my range. A hundred to 500.”
Graffam prefers stable, plateaued software businesses over high-growth startups
“I place more of a value and emphasis on something that has stabilized or plateaued that's not shrinking than I do on something that's got one of those sharp growth curves.”
Graffam waits two to three years post-acquisition before driving growth
“It's year two or three before I really start focusing on taking the product in a new direction or trying to grow it heavily.”
Graffam's micro-SaaS apps deliver 60% to 80% net cash flow returns
“The returns I get on these apps are between 16, 80%.”
Graffam will not sell individual apps, only his entire portfolio
“I'm buying these for the long term and somebody wants to come by a controlling stake and make that type of investment where, where I can still be running the products and still be cash flowing them and get some sort of liquidity event. Then I'll consider that,…”