WP Buffs Finalizes First Acquisition, Purchases WP EZI – WordPress Tavern
Earlier today, WP Buffs announced that it had acquired WP EZI, a WordPress maintenance and support service. It was a five-figure acquisition for 64 active subscriptions and 343 total customers. Paul Tselekidis, the former owner of WP EZI, is stepping away from the project.
WP Buffs offers 24/7 WordPress website management. Its team works directly with website owners and startups. They also work with white-label partners in the WordPress space. Agencies, freelancers, and hosting companies resell the WP Buffs subscription services instead of hiring a global team of their own.
This is the first acquisition for the company and was done through their new Business Acquisition Unit.
For WP EZI users, nothing should change about how they use the service. “The day-to-day of the folks at WP EZI (aside from Paul) will continue unchanged as they’ve all decided to stay on board and are excited for this new chapter of the business,” said Joe Howard, the Founder and CEO of WP Buffs. “For the time being, they will continue to function as team members of WP EZI, although they’ll, of course, be given a warm welcome as new members of the WP Buffs family.”
At the moment, none of the pre-acquisition WP Buffs staff will move over to any WP EZI projects or vice versa. The two brands will remain separate.
“Mostly, this is for current WP EZI subscription clients, as keeping them happy and unbothered is our top priority,” said Howard.
One change coming to WP EZI is that it will no longer offer new care plan subscriptions. The goal is to send those leads to WP Buffs. WP EZI will continue serving current care plan customers and handle one-off projects.
“The strength of WP Buffs is in our strong systems and scalable business model of selling and executing on subscription services,” said Howard. “That’s why we’ll continue to accept new care plans there and send all one-time requests to WP EZI. They have experience with this business model, so we’re going to keep that team doing the work they’ve proved to be strong at.”
Howard did not give much away in terms of long-term changes. He said that while they are mulling over some ideas, their priorities were a peaceful transition for WP EZI clients and learning from and helping the current team.
“Most of the benefits for WP Buffs come from acquiring an already profitable business and client base,” he said. “Furthermore, the acquisition allows us to funnel care plan leads into WP Buffs and more one-time work into WP EZI. These silos will allow each team to be more efficient since they’ll be able to focus on their areas of strength.”
On Acquisitions and Growth
On the low end, the deal was likely at least mid to upper-five figures. We know that it was a five-figure acquisition. There were 64 active customers with an $87 per month subscription or more. This also assumes a consistent active subscription count for the last year or so. This is speculation but should provide some low ballpark numbers for others looking to sell a WordPress-related business.
While Howard did not provide an exact figure, his company provided far more information than is typical of business acquisitions in the WordPress ecosystem. Often, these deals are made only with an agreement that neither party share the sale price. The transparency from WP Buffs should come as a breath of fresh air to other small business owners. It can be overwhelming venturing into a first acquisition from either end.
One of his goals is to be transparent with how WP Buffs is run. His 2020 year in review post is lengthy, but he does not hold back on mistakes and successes. It provides a lot of insight that other business owners can learn from.
Howard has some experience scaling businesses beyond that $10,000 – $15,000 monthly recurring revenue (MRR) spot, which is where some small businesses begin to plateau. I asked him to share his experience with other business owners.
“WP Buffs now does $100,000+ MRR,” he said. “That means we don’t have the same issues as a care plan company at the scale of WP EZI — and if we do, we can pay to make those challenges go away.”
With WP Buffs now in control of the WP EZI brand, they can dedicate funding where needed and use their leadership and management where needed. Because their team has been here before, it should provide the experience to push past any hurdles.
“The reality here is just an economics of scale,” said Howard. “‘Bigger’ companies can simply flex a little more muscle to get rid of roadblocks. Plus, they have more financial flexibility to experiment and get things wrong to find that one thing that makes the difference when it comes to growth.”
He wrapped up his advice by saying that businesses should focus on their subscription metrics:
- Develop 1-2 predictable, lead acquisition channels and grow those (increase MRR growth from new sales).
- Get a ton of client feedback and make fast adjustments to keep them happy (lower churn).
- From the client feedback, implement new features, offerings, value to current clients so they’ll stay with you longer and tell others about you (increase expansion revenue and lifetime value).
“One basic piece of advice is it’s never too early to start thinking about selling, even if it’s not on your roadmap,” said Howard. “Whether you ever want to sell your business or not, the things that make the kind of business people want to purchase are the same things that simply make it a good business, so why not do them?”
Howard and Tselekidis had an open and honest conversation about the acquisition on the WPMRR podcast. Some of it is personal, but it provides a glimpse behind the curtain of a WordPress business sale.
Tselekidis talked about spreading himself too thin among his various projects in the podcast. After a self-analysis and reevaluating his interests, he decided to find a new home for WP EZI. This will allow him to focus on and pursue other goals. “It’s time to move on; like it’s my time,” he said of continuing work that he was not as passionate about. “I don’t want to do a disservice by my clients.”
Credit: Source link