Acquiring a SaaS Business & Scaling it From $5k - $80k P/mth In 1 Year with Chanakya Yerneni
Buying Online Businesses Podcast
Top Red Flags to Watch in Due Diligence
Chan lists missing traction, unclear customer base, lack of competitors, and overbuilt features as major warning signs.
What if you could turn a $5K/month business into $80K/month in under a year?
That’s exactly what Chan Yuenenyi did.
In this episode, Jaryd Krause chats with the founder and CEO of EssayGrader AI—the world’s leading AI grading platform trusted by over 100,000 educators.
When Chan bought the business, it was generating only $5,000 per month. Fast-forward less than a year later, and he’d scaled it to $80,000/month, hitting $1M in annual recurring revenue.
But here’s the twist: Chan didn’t chase shiny tactics or massive ad budgets.
He used precision. Systems. Deep understanding of what users actually need.
Before founding EssayGrader AI, Chan managed a billion-dollar product line at OpenText. So, he knew one thing most first-time buyers miss—buying a business is easy. Growing one takes vision.
In this conversation, you’ll discover how he:
🔥 Spots red flags before closing a deal
🔥 Turns customer feedback into a growth engine
🔥 Shifted from “operator” to “owner”
🔥 Discovered the single most powerful strategy behind his $5K → $80K leap
🔥 Built what he calls “inside-out growth”—and why it changes everything
This isn’t just a story about scaling. It’s about clarity, focus, and designing a business that grows because it serves people better.
If you’re looking to buy your first SaaS—or scale the one you already own—don’t miss this one.
It’s packed with real lessons from someone who’s actually done it.
Episode Highlights
08:08 – Chan reveals his process of evaluating 25–30 businesses over 90 days, learning to identify patterns, red flags, and what truly matters when choosing the right acquisition.
13:56 – Why product-market fit and traction matter more than polished features or perfect design when evaluating early-stage SaaS.
15:51 – Chan breaks down the valuation and deal structure—he bought SAGrader.ai for $125K in cash at a 2x revenue multiple.
19:46 – Red flags to watch for when buying a business—no traction, unclear customer base, lack of competitors, or overbuilt products.
27:42 – How involving users in building new features turned customers into loyal advocates and multiplied sales through word of mouth.
28:27 – The impressive growth story—from $5K to $80K MRR in a year—by focusing on fundamentals and customer insights over flashy marketing tactics.
30:34 – Why execution beats information overload: Chan’s advice to stop chasing every online guru and start acting on core business principles.
Key Takeaways
➥ Acquiring an existing SaaS business offers a faster, lower-risk entry into entrepreneurship compared to starting from scratch, letting you focus on growth instead of setup.
➥ Evaluating dozens of deals before buying helps refine your investment instincts—each review teaches you how to spot red flags, assess traction, and recognize scalable opportunities.
➥ Product-market fit is the single most important factor in acquisition success; without genuine demand and active users, no amount of marketing can sustain growth.
➥ Direct customer communication—through live chat, feedback loops, or support channels—unlocks powerful insights that shape product improvements and retention.
➥ Growth doesn’t come from adding complexity but from deeply understanding your users and iterating based on their real-world needs.
➥ Cash deals can streamline acquisitions and build seller trust, though they require strong conviction in your due diligence and vision for growth.
➥ Listening, testing, and improving continuously can turn a modest $5K MRR business into an $80K MRR success—proof that fundamentals and focus outperform flashy tactics.
About Chanakya Yerneni
Chan Yerneni who is Founder & CEO of EssayGrader AI, the #1 AI grading platform trusted by 100,000+ educators to save 10+ hours every month grading student submissions. Former Senior Product Marketing Manager at OpenText ($1B+ product).
Connect with Chanakya Yerneni
➥ https://www.linkedin.com/in/chanakya-yerneni-338869378/
Resource Links
➥ Connect with Jaryd here - https://www.linkedin.com/in/jarydkrause
➥ Sell your business to us here - https://buyingonlinebusinesses.com/sell-your-business/
➥ Buying Online Businesses Website - https://buyingonlinebusinesses.com
➥ Download the Due Diligence Framework - https://buyingonlinebusinesses.com/freeresources/
➥ Google Ads Service - https://buyingonlinebusinesses.com/ads-services/
➥ Hostinger (Website Hosting) - https://bit.ly/3HUqW0s
➥ Surfer SEO (SEO tool for content writing) - https://bit.ly/3WWMKjM
➥ Ezoic (Ad Network) - https://bit.ly/3NuVR5P
Buy & Sell Online Businesses Here (Top Website Brokers We Use) 🔥
➥ Empire Flippers - https://bit.ly/3RtyMkE
➥ Flippa - https://bit.ly/3wGa8r5
➥ Motion Invest - https://bit.ly/3YmJAmO
➥ Investors Club - https://bit.ly/3ZpgioR
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