Hey Biz-Buyers,

Welcome to this week’s Boring Business Brief, where we share some of the best insights, tips, and stories from our private biz-buying community.

But first… A message to take with you through the rest of the week:

Now, on to this week’s good stuff…

Today, in 5 minutes or less:

✔️ How fast can a biz afford to grow?

✔️ What to do if a biz requires a license…

✔️ Broker advice: How buyers can stand out

✔️ 3 boring biz listings

✔️ 5 links from the week

How fast can a biz afford to grow?

You know an article is good when it’s more than two DECADES old and people are still finding it insightful and relevant.

We were reminded of that this past week when a member shared an in-depth piece from Harvard Business Review on the affordability of revenue-driven business growth 👇

We’re not going to lay out the 4k-word explainer here (though we HIGHLY recommend you go check it out), but this’ll help you get the main idea…

A core challenge of any business is to balance using money and making it. To measure and manage a biz’s self-financeable growth (SFG) rate, you’ll need 3 factors:

1. The operating cash cycle, or the amount of time money spends as working capital before customers pay for stuff. (See Patrick Campbell’s “Journey of a Dollar’ analysis”, which he learned while hunting targets at the NSA.)
2. The amount of cash needed to finance each dollar of sales.
3. The amount of cash generated by each dollar of sales.

Read HBR’s piece to help understand how to calculate a sustainable growth rate for a biz. In the process, you’ll learn about the biz’s operational efficiency, profit margins, product lines, customer segments, and more.

What to do if a biz requires a license…

We’ve said this before… Heck, we’ve probably said it 1,000 times before… And we’ll happily say it another 1,000 if need be…

In biz-buying, there’s NO SUCH THING as silly questions, especially not when the question in question is actually a highly relevant and interesting one, like this 👇

This question was about a roofing biz, but a whole bunch of members found it relatable and useful, even including those looking into early education and pest control biz’s.

🚨 Advice incoming 🚨

Here’s some wisdom one (amazing) member bestowed upon others:

• “It is a big risk because without the license you can’t operate or do business. If it were me I would try and work the license risk into the deal. Can the current employee holding the license stay on? Make that part of the deal or factor in an offset in case they leave as that would mean business stops.”

And here’s a crucial tip from one of our community facilitators: How you’re financing plays a role.

• If SBA: The lender will likely want someone with a license to be a guarantor of the loan and will likely not allow an ordinary employee to be the license holder.
• If cash or seller financing: You just need a responsible person and confidence that your employees are capable.
• Also, the difficulty in getting a license is very much state-specific. Do your research!

Broker advice: How buyers can stand out

If you wanna know how to stand out when contacting a biz broker, who better to learn from than… a biz broker? Here are some notes on what you definitely should and shouldn’t do, per broker and Mastermind facilitator Lloyd Silver👇

🔴 DON’T:

• Don’t do the minimal amount of work to contact a broker. Do you really think a broker is going to take the time to respond to someone who only filled out half of a form?

🟢 DO:

• When you’re reaching out to brokers via BizBuySell or similar platforms, take a minute to add some commentary and it will go a long way in setting yourself apart.
• Make it clear why you are interested in THAT business.
• Make it clear why you think you could run THAT business successfully.
• Make it clear why you think you can close the deal.
• Maybe mention that you’d like to sign an NDA to get more information. That shows you’re knowledgeable.

Q: But what if it takes 20 minutes to fill out each form and brokers aren’t responding to me?

A: That’s a whole different issue and just gets down to bad brokers. It could just be that the deal is in escrow and they haven’t updated it. Or they have a ton of offers and aren’t really interested in getting more. But that’s just plain rude… Some brokers are just bad business people.

Long story short, the unlock in so many parts of life, including in biz-buying, is just going the extra mile.

Boring biz listings

Sourced from BizBuySell

1. 🚽 Turnkey Idaho plumbing biz

Bio: Located in ID, est. in 2017

Financials: $950k asking price, $314k cash flow

Deets: $1.54M revenue, $203k EBITDA, $175k FF&E, 7 employees

Let’s think: This listing highlights the biz’s steady revenue growth (with SDE up 38% between 2020 and 2022). Better than that, no plumbing experience is required, at all. In fact, the current owner reportedly has none. It’s a turnkey operation with growth potential across service offerings, invoicing efficiencies, software improvements, hiring, advertising, and more. As always, if something sounds too good to be true, it probably is. Do your due diligence.

Check out the listing here.

2. 🌲 Fire, forestry, and landscaping biz

Bio: Located in AZ, est. 2014

Financials: $1.8M asking price, $439k cash flow

Deets: $1.4M revenue

Let’s think: This biz is actively involved in serving over 40 communities in the Prescott Area and the surrounding states. The listing highlights sustained growth, a strong reputation, recurring revenue, and limited owner involvement. Yup, it claims the owner spends just 6 HOURS per week actively involved in the biz. As for them, they’re leaving to work on “creating fire trucks.”

Check out the listing here.

3. ⬜ National shrink-wrap biz

Bio: Located in CA, est. 2012

Financials: $1.4M asking price, $986k revenue

Deets: $250k FF&E, $50k inventory, 5 employees

Let’s think: Here’s a biz you don’t think about every day: Shrink-wrap. This biz serves clients across the US freight, storage, aerospace, military, marine, hurricane, construction, and movie industries. There’s an opportunity to expand through marketing and media efforts, and existing ownership can be retained for 6 months of training.

Check out the listing here.

This week in biz-buying:

🏛️ From a member: One of the quickest summaries on the new SBA loan changes.

📄 Understand how the main financial statements are connected with this infographic.

😮 We’re into small biz acquisitions, but that doesn’t stop us from reading about absolutely ENORMOUS ones

😕 A somber but important post about a biz owner closing their biz after 18 years…

💡 Another post titled: “If you had to start all over and only had $10k what would you do?”

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