I Bought a Dead Snack Brand and Loving It! Here’s What I Look for Before Buying a Business

I Revived a Defunct Snack Brand and I’m Loving the Journey! Here’s What I Consider Before Acquiring a Business

A few months ago, I decided to purchase a defunct snack brand—not out of a desire for a bargain, but because I believed acquiring an existing business would simplify my chances of securing a loan. (Spoiler alert: I was completely mistaken!)

After facing consistent rejections while trying to launch my own food or beverage brand from scratch, I had my fair share of setbacks. I applied for loans for my consulting venture and a software project, but was denied thirteen times, which negatively impacted my credit score. At one point, I even contemplated returning to the corporate world.

I interviewed at a couple of promising Y Combinator startups, but the thought of becoming an employee again just didn’t resonate with me. Then, it hit me: “What if I could secure a loan to buy an existing company?”

However, I soon discovered that banks are hesitant to lend money for small business purchases unless they demonstrate consistent revenue. By that time, I was too invested to turn back. I did manage to get approved for a $25,000 personal loan from American Express at an unfavorable 11% interest rate (not ideal for acquiring a business), and I decided to take the plunge.

Here’s my approach to evaluating a business before making a purchase, along with the insights I’ve gained since acquiring it.

What I Evaluate Before Purchasing a Business

1. Product-Market Fit (The Key Element)

Although product-market fit leans more towards intuition than analysis, it’s usually evident when a product has it. The real question is: Are customers craving this product?

• Are customers eager to reorder?
• Do they express emotional connections to the product?
• Do they miss it when it’s unavailable?

In this instance, the previous owner shared numerous examples of customers reaching out via direct messages, emails, and comments on social media, asking him to bring the product back. Wholesalers were also inquiring about purchasing it.

He provided access to his former Shopify data, and here’s what I discovered:

• Nearly 300 individuals had subscribed for monthly or quarterly deliveries of the chocolate-covered dates.
• The brand boasted an impressive 4.86/5-star average rating, with reviews that read like love letters.
• The initial launch sold out a 300-unit batch in just three days at a local farm market.

To me, these indicators suggested the product wasn’t the issue; it simply needed someone to breathe new life into it.

1. Identifying Challenges in the Customer Lifecycle

Even with demand, I needed to understand why the business faltered and how I could improve it. I break down the customer lifecycle into three stages:

Awareness (How people discover the product)
– Was the original founder advertising? Somewhat, but not effectively.
– How strong was the social media presence? It existed but wasn’t impactful.
– Was there any influencer or affiliate marketing? Not at all.

This indicated a significant opportunity to enhance marketing efforts.

Acquisition (Converting visitors into buyers)
– The website wasn’t optimized for conversions.
– The checkout process was clunky.
– The email flows (abandoned cart reminders, post-purchase follow-ups) were lacking.

These basic fixes could immediately boost revenue from existing traffic.

Retention & Lifetime Value (Encouraging repeat purchases)
– No upselling strategies.
– No cross-selling opportunities.
– No post-purchase engagement to keep customers connected.

While customers loved the product, the business wasn’t structured to foster repeat sales. This was a clear area for improvement.

Insights Gained Post-Acquisition

1. Rebuilding Momentum is More Challenging Than Anticipated

Despite having a 2,000% increase in our email list, many subscribers had lost interest.