Engineering Product Lifecycle Management Solutions: 16 Years of Business, Recurring Revenue, Low Churn
Website Closers presents an industry-leading software that has successfully been in operation for 16+ years. The target is a simple-to-use, Product Lifecycle Management (PLM) software built for engineering and manufacturing firms. Engineering data management is a specialized discipline, and this company has developed a unique and secure niche in the PLM software industry.
OPERATIONS
The business enjoys healthy revenue throughout the year. Many companies acquire new software tools in the first half of the year, while government contractors have an October annual business cycle. The business has no long-term obligations and operates primarily through outsourcing resources such as phones, network, web server, payroll, etc.
The business primarily operates through outsourcing resources, including phones, network, web server, payroll, etc. There are no leases, inventories, capital assets, real estate, or other encumbrances.
MARKETING AND KEY METRICS
Lead generation comprises SEO, Microsoft paid search advertising, and paid directory listings. Little digital marketing has been done by management, providing immense scale opportunities for a buyer.
The business currently generates leads through SEO, paid search advertising, and directory listings. There is significant potential for digital marketing to drive growth and expand the customer base.
More than 80% of revenue is derived from recurring annual support subscriptions. Most of the remaining income is from one-off perpetual license purchases. The business boasts excellent reviews, high customer retention rates, and low maintenance and support costs. At the end of 2022, current customers’ lifetime revenue averaged over $41,000. This unique software requires significant domain knowledge to replicate, coupling exceptional margins with a strong barrier to entry.
The typical customer for the company is a small-to-mid-sized engineering department or workgroup within larger enterprises. These customers focus on the design of moderately complex technology-oriented products and prefer to keep their mission-critical intellectual property within their private network.
BUSINESS MODEL & RESOURCES NEEDED
Primary business tasks involve customer support, subscription renewals, existing customer incremental sales, website maintenance, application development and maintenance, sales activities, marketing, and advertising. IT infrastructure, payroll, and tax responsibilities are outsourced as necessary.
THE INDUSTRY
The Product Lifecycle Management (PLM) market is the intersection of engineering computer-aided design (CAD/PDM) and manufacturing resource planning/manufacturing execution systems (MRP/MES/ERP). The market is dominated by a few large companies, but there is a growing demand for affordable solutions tailored to small-to-mid-sized technology companies. This company operates in the low-cost segment and serves industries such as consumer electronics, industrial electronics and machinery, aerospace and defense, medical devices, automotive and transportation, and more.
OPPORTUNITIES TO SCALE
As successful as the business is, there are several additional services that could be added, such as product development, internationalization, support for Mac, mobile, and cloud integration, cloud hosting, server management, and consulting services for legacy data migration and application configuration management. These scale opportunities can greatly increase revenue and profitability.
Asking Price: $2,000,000
Gross Income: $542,312
Cash Flow: $512,744
Year Established: 2007
Employees: 1
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