Hey Biz-Buyers,

Right here is where we share some of the best insights, tips, and stories from our private biz-buying community.

Today, we’ve got some real talk for ya: word-for-word advice our community offered one aspiring biz-buyer who’d been feeling discouraged in their acquisition efforts.

Before we dive in, mark your calendars…

If you read this newsletter, it’s probably because you’re interested in the framework below:

1. Buy a small business, using primarily outside money or seller financing

2. Implement an updated website, social media, and reviews

3. Raise prices to match value and inflation

4. Add a subscription option

5. Offer more services to the same clients

6. Grow, and use the profits to buy another business

Is this over-simplified? Yes, it certainly is. After all, where do you find these businesses? How much should you pay? How do you structure seller financing? What should the transition period look like?

But if this got your gears churning, you’d benefit from this free event Codie’s hosting on Thursday (1/25):

My 10 Steps to Buying a Business that Cashflows

Check out the event page, sign up, then come back here and get down to business.

Today, in 5 minutes or less:

✔️ Buyer tips: What to do if you’re feeling discouraged

✔️ 3 boring biz listings to check out

✔️ 3 links from the week in biz-buying

✔️ Who’s looking to buy a biz?

Buyer tips: What to do if you’re feeling discouraged in your search

Recently, one member of our community opened up about the uphill battle that is becoming an owner. Doubts, challenges, fears, all the above.

Not an easy thing to do, to say the least…

“Anyone else hit that low point in the deal sourcing process, reviewing business after business without ever finding ‘the one,’” they asked the group.

Their deal box, in short:

• Price: Less than $1.3M
• Greater than $100k if in a growing industry, greater than $200k if not in a growing industry (after debt service)
• Must be capable of filling any role in the interim, if needed
• At least 6 years of financial history
• Decent reputation (Ex. Google reviews, etc…)
• If there’s a lease, it must be secure
• Mid-low competition profile

So far, they’ve reviewed around 70 businesses.

“I keep thinking on deals I passed and wondering if I shouldn’t have, like a metal recycling company with strong earnings where the debt service was JUST a little too high for me to get comfortable.”

Sound familiar?

Many people experience these feelings, along with some other things that’ve been on this aspiring owner’s mind:

• An uncomfortable mindset shift: “Anyone else confronting their ego and recalibrating their expectations on the first buy?… I’m wrangling my brain to pivot from an image of me in a sharp blazer on the front page of Forbes (jk, sort of) to being in a warehouse, dirty, and hauling jugs of cleaning supplies into a truck at 2:00 in the morning for a janitorial supply service.”
  
  
• Managing emotions: “I didn’t realize how emotional I was in my decision-making until trying to buy a business… I’m trying to apply a new mindset of stripping the emotions out of decision-making and just looking at the financials. Does it check all the boxes? Yes? Then submit an LOI.”
  
  
• Slugging through the pain: “I want to build, work hard, and get sh*t done. I’m tired of waiting around for new listings to come up. I’m tired of reviewing businesses that aren’t worth buying. I’m tired of trying to force myself into loving a business just so that I can have something to buy. I just want to get busy and make sh*t happen but I feel stuck.”

Enter, the advice column

This time around, advice came in from across the spectrum:

(Member) Sean R. on reframing expectations:

• “Taking a janitorial company from $1M/yr to $3M/yr with higher profit margins won’t get you on the cover of Forbes in a sharp blazer. It’ll get you experience, a bunch of cash, massive equity holdings, possibly real estate, and most importantly it’ll get you positioned for a bigger acquisition next time.”
  
  
• “So what if the business isn’t sexy? The things you’re going to do with it are. The raving customers are. The happy employees who see new opportunity with you are. That’s the real reward.”
  
  
• “The biggest mistake you can make right now second to making NO acquisition is making one that’s too small to grow and improve with you as the leader and NOT the manager. And by all means, don’t have ‘loading trucks with cleaning supply at 2:00 a.m.’ on your task list. If that’s what you need to worry about, you won’t have energy for the important work.”

Facilitator 1 on what makes a good deal:

• “Looking at 70 deals is something to be proud of… [And] I have a slightly different take on what was noted above. I feel you (at least for me) should have some connection to or interest in a business to truly make it succeed. It’s got to be more than ‘a job’. So while it doesn’t have to be glamorous, you have to have a connection to it. Yes, 3x-ing sales is a huge accomplishment, but are you going to have that same drive in industry A versus industry B to do that?”
  
  
• “What I take from your story is you’re refining your deal box, you’re learning what you want to focus on, versus not, and you’re building a muscle of knowing when a deal’s worth it for you. It takes time.”
  
  
• “And, it’s not a guarantee you will own a 2nd business, so 1) find one you want to invest your time and money in, 2) ensure it’s a good financial return because it will be yours financially and emotionally, and 3) have fun with it. (Don’t do a bad deal just to get started.)”

(Member) Justin T. on trusting the process

“I believe whatever business you buy has to feel good, and the financials need to look good. Once you own a small business it is difficult to exit — so I think you want to choose something where the underlying work gets you excited and gets you up in the morning AND the business position and financials make it worthwhile. And as such, I like your process — you’re looking at a lot and when you see enough you will have a good gut to recognize the right thing for you when it comes along. So, just keep doing what you’re doing!”

(Member) Emily C. on finding the “right” deal

“When I spoke to [CT Facilitator] Chris Petkas a few months ago, when I was coming in guns blazing, he told me to look at hundreds of deals to find the gem. It does have to be right. Right chemistry. Something you want to invest your one life working on. Right math. Something you can grow. So maybe one of the 70 could have been it, or maybe not.”

Facilitator 2 on finding motivation

“From my experience, it took almost 200 businesses before I made my first actual purchase. I will reinforce that it’s important for your first business to be small enough to manage the risk but big enough to handle your vision… Find something in the business that motivates you. It could be the industry. It could be the location. It could be the team. it could be the customers you serve. It could be how you provide the missing piece for success. That way if it requires your time and attention, you’re all in.”

3 boring biz listings to check out

Listings sourced from BizBuySell. No affiliation, just seemed interesting!

1. 🌻 Flower farm and bespoke florist

Bio: Located in NC, est. 2016

Financials: $220k asking price, $624.9k gross revenue, $86.9k free cash flow

Let’s think: It’s not every day you come across a vertically integrated florist, and this biz is exactly that. The listing says it employs a full staff of florists and farm management skills are required, but no “physical farming” is necessary. Also interesting, aside from a newsletter with 3.5k subscribers, there aren’t any other marketing efforts to grow the biz. Downside? The current owner wants to sell this biz to a local buyer, as they move closer to family. Good news? They’re available to “fully assist” with the transition.

2. 🐶 Boutique pet care biz

Bio: Located in NYC, est. in 2003

Financials: $400k asking price, $146.3k cash flow

Deets: $334.9k gross revenue, 8 employees

Let’s think: Profit, pups, and walks in the park? This listing claims to offer it all. As a general, long-term trend, the pet-sitting market is experiencing robust growth, and if you’ve been to NYC recently, you might’ve noticed it feels like everyone and their dog has a dog. On one hand, that means competition is likely very high for this business. On the other hand, the biz claims to have a long-standing reputation with loyal customers and skilled employees who undergo rigorous training.

3. 🏹 Archery range and shop

Bio: Located in IL

Financials: $1.4M asking price, $710k gross revenue, $900k real estate included

Let’s think: This biz offers an archery pro shop and indoor range, with a focus on new sales as well as repairs, and a knack for hunting-focused customers and product sales. What stands out about this listing, though, is that the facilities include 2 acres with 3 buildings: the archery range and shop, another currently-rented building, and a currently-rented 4-bedroom house, from which the owners claim to realize a combined $33k in annual income.

3 links from the week:

🔥 Read: CT Facilitator Clint Fiore’s latest thread, “How to find a business to buy”

🚽 Read: Curious what differentiates a $900k plumber from a $400k one?

⚔️ Watch: Nothing better than a meme about “Blackstone and KKR fighting over the last family-owned manufacturing company in America”

Who’s looking to buy a biz?

A partial list of REAL people who began their Contrarian Community journey in recent weeks…

• A senior software engineer at a large tech company
• A sales manager of a medical device company
• A director of sales of a municipal tech company
• A territory manager of a flooring company
• A strategy director at a marketing agency
• A general manager at an outdoor events company, who said this as part of their “why”:

“I’ve been a part of a VC acquisition, a world where there is never enough (profit, growth, etc). I want to create a company that is enough, that cares about legacy and long-term value, and grows in the right way. I want to do meaningful work and make an impact on people’s lives for the better.”

What’d you think of this week’s newsletter?

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