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A rare opportunity to acquire a fully operational, owner-light software design and development agency with a proven track record and infrastructure ready for growth.The Business This thriving agency delivers software development and digital product expertise to a diverse range of companies, from early stage to Fortune 500 companies — offering custom solutions for clients seeking AI enablement or digital product innovation (mobile apps, IoT, ecommerce, data visualization). With 10 skilled developers and a strong CTO managing day-to-day technical operations, the current owner works just 20 hours per week.Stable, Recurring Revenue With several client agreements in place and 8–12 major projects executed annually, this business offers a diversified, contracted client base that provides consistency and predictability from day one.Strong Team in Place The leadership and talent infrastructure is fully in place. A new owner can step in without disrupting operations, making this an ideal acquisition for an entrepreneur, investor, or strategic buyer looking for immediate cash flow.Growth Opportunities Sales have largely been driven by client referrals and the company’s strong reputation. Establishing a more structured business development and sales function could significantly accelerate growth. The business would also benefit from a CEO or dedicated leader focused on day-to-day operations, client development, and strategic growth initiatives. Additional opportunities include expanding strategic partnerships (e.g., AWS Partner relationships) and continuing to focus on higher-value AI enablement and AI integration projects.Highlights at a Glance· 10 experienced developers on staff· Strong CTO managing technical operations· Custom solutions, AI enablement and digital product innovation· 8–12 major projects per year with strong customer relationships· Owner works ~20 hrs/week — significant upside for a hands-on buyer· Cash flow $641k with asking price of $2.5 Million
Why we like it
- Strong cash conversion with $641k cash flow on $1.7M revenue translating to 37.7% margins, indicating disciplined cost management and premium pricing power. The business executes 8-12 major projects annually with contracted clients, providing predictable revenue streams and reducing project acquisition risk.
- Owner-light operation with established CTO managing technical delivery creates institutional knowledge beyond the seller. Ten experienced developers on staff provides immediate operational continuity and capacity for growth without lengthy hiring cycles or technical ramp-up periods.
- AI enablement focus positions the agency in a rapidly expanding market where enterprises are allocating significant budgets for digital transformation. Fortune 500 client relationships demonstrate ability to win and retain large contracts, providing both credibility and revenue concentration from creditworthy customers.
- Referral-driven growth model indicates strong client satisfaction and organic market expansion potential. The absence of structured sales processes suggests significant upside for operators who can systematize business development while maintaining the quality that drives referrals.
How to improve it
- Implement structured sales and marketing function to capture demand beyond referrals, starting with LinkedIn outreach and content marketing targeting CTO decision-makers. Establish clear lead qualification processes and sales metrics to create predictable new client acquisition within 90 days.
- Formalize AWS and other strategic technology partnerships to access co-selling opportunities and referral programs. These partnerships can provide additional revenue streams and credibility with enterprise clients seeking certified implementation partners.
- Develop recurring revenue streams through maintenance contracts, ongoing support agreements, and retainer-based consulting relationships. Target 20-30% of revenue from recurring sources to improve cash flow predictability and business valuation.
- Expand AI and data analytics capabilities through targeted hiring or training to capture higher-margin projects in machine learning, automation, and enterprise AI integration. These services command premium pricing and longer engagement cycles.
- Establish clear project management and delivery processes to increase project throughput from current 8-12 annual projects to 15-20 projects. Standardize scoping, estimation, and delivery methodologies to improve margins and client satisfaction.
- Create case studies and thought leadership content showcasing successful Fortune 500 implementations to attract similar high-value clients. Position the agency as a trusted AI transformation partner rather than just a development vendor.
- Implement performance management and retention programs for the 10-person development team to reduce turnover risk and maintain institutional knowledge. Consider equity participation or profit-sharing to align team incentives with business growth.
- Explore vertical specialization in high-growth industries like fintech, healthcare, or logistics where AI enablement projects command premium pricing and longer client relationships.
Diligence notes
- Verify client concentration and contract terms for the Fortune 500 relationships, ensuring no single client represents more than 30% of revenue. Review contract lengths, renewal rates, and payment terms to understand true revenue predictability and client stickiness.
- Analyze developer retention rates, compensation levels, and non-compete agreements to assess team stability risk. Interview the CTO to understand technical leadership depth and succession planning given their critical operational role.
- Examine project profitability by client type and service offering to identify the most valuable segments. Review project scoping accuracy, change order frequency, and margin trends to understand operational efficiency and pricing discipline.
- Validate the referral-driven growth claims by reviewing lead sources, client acquisition costs, and sales cycle data over the past 24 months. Assess pipeline visibility and conversion rates to understand true growth potential beyond current owner involvement.