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 Philosophy

09:10 - Finding the Right Business After 40 Evaluations

11:06 - How SBA Loans Work for Business Acquisitions

16:56 - The 3X Multiple Valuation Reality

20:05 - Why Growth Proved Harder Than Expected

29:52 - The £30,000 Migration That Never Happened

43:09 - When Sales Dropped and Survival Mode Began

49:57 - Daily Cashflow Forecasting That Saved the Business

The 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 it closed in time," Michael notes.

This government-backed financing is a massive advantage for US buyers, similar to how mortgage availability drives up house prices. For UK entrepreneurs, it's worth noting this acquisition financing simply doesn't exist here, making US businesses potentially more valuable due to easier buyer access to capital.

The catch? The acquisition process took five months and felt adversarial at times. Michael's advice: get your own representation. The broker works for the seller, not you, no matter how friendly they seem.

The 3X Multiple Valuation Reality (16:56)

The business was priced at a 3X multiple of seller's discretionary earnings (SDE)—roughly profit. In 2021, with COVID boosting eCommerce and cheap money everywhere, this was market standard. Some businesses were fetching 4-5X multiples.

Looking back, Michael identifies two negotiation regrets:

The inventory. With 11,000 product listings, substantial stale inventory came with the purchase. "Four years later, some of it is still sitting on a shelf. We probably overpaid for it even at 25 pence on the pound."

The business size. It was at the bottom end of what he was looking for. A business twice as large would have provided more buffer between loan payments and living expenses.

The danger? Emotional decision-making. After 18 months of searching, when something finally fits your criteria, it's easy to offer full asking price. The broker mentioned another interested buyer, but the seller later revealed she'd already chosen Michael and his wife after meeting them.

Why Growth Proved Harder Than Expected (20:05)

Michael discovered a fundamental challenge with his business model. Most eCommerce falls into two categories: demand generation (Facebook ads, influencers) or demand capture (Google, SEO).

Discount Catholic Products is pure demand capture. They can't generate more people searching for prayer cards—they can only capture more of existing search demand. "We're kind of at the whim of the market. There's just a limited slice of the pie that we can capture."

Currently, 50-60% of sales come through Google Ads, 15% from organic Google traffic, 15% from email, and the remainder from direct traffic. They've tried social media repeatedly without success.

"We made a decision early on that we can't do everything," Michael explains. "Better to focus our efforts on the Google ads, which we know work, than trying to get 10,000 Facebook followers and get one or two of them to come to our website and actually buy something."

Daily Cashflow Forecasting That Saved the Business (49:57)

When asked for his top advice, Michael doesn't hesitate: cashflow management.

"It doesn't matter if your business is profitable or not. You can be wildly profitable and still go out of business if you run out of cash."

Rather than the standard 13-week forecast, Michael went daily. He forecasts every single pound, looking roughly a month ahead. This daily discipline reveals problems weeks in advance—giving him time to send an email campaign, call customers, or tap the line of credit before a crisis hits.

Michael also learned about debt spirals the hard way. Services like Shopify Capital advertise 6% fees but the actual interest rate is much higher. The game-changer was establishing a proper line of credit through their bank at prime plus 1% (currently around 8%), allowing them to borrow money and pay only interest monthly.

"If we didn't have that, either we would have gone out of business or I would have been liquidating retirement savings to pump money back into the business."

Today's Guest

Today's guest: Michael Simpson

Company: Discount Catholic Products

Website: discountcatholicproducts.com

LinkedIn: Connect with Michael on LinkedIn