Today in 5 minutes or less:

✔️ The PERFECT Business to Buy…

✔️ Why Buy Instead of Start?

✔️ The Chicken and Egg Problem

✔️ Your Price, My Terms

The PERFECT Business to Buy…

Here it is. The perfect business t—

…Alright, if you seriously thought we were going to sit here and tell you there’s a specific “perfect” business to buy, well, joke’s on you bud.

But you’re not alone. One of the most common questions we get goes something like this:

“What’s the right business to buy? Laundromats? Car washes?”

Forget looking for an answer — there isn’t one. More importantly, it’s the WRONG question to be asking.

The business you buy should be in sync with:

• What you can handle
• Where you see your lifestyle heading
• Your financial requirements

Instead, you should ask, “What’s the right business for me.”

Thankfully, there’s a good way to hone in on one, and that’s where today’s story begins…

A couple of years ago, my friend Olman wanted to buy a business with his wife Jen, and I helped give them some pointers.

Before anything, we dove into their ✨Zone of Genius✨

Essentially, what do you uniquely bring to the table? Here’s what it looks like:

Passion is everything you love to do, even if it doesn’t seem directly related to business.

Skills are those things you can do better than most people you know; things that can translate well into running a business.

Your network is who you know that could help make your future business successful.

So Olman got thinking… Could a laundromat work? Eh. A property management business? Nah. But then he had a thought…

“My wife had gotten her lips done at a med spa. It cost $800 and she spent 20 minutes there. That’s when I started thinking maybe this is a good business to get into.”

So he and his wife did some more research. Things they noticed about the space:

• A whole lot of inefficiencies
• A general lack of transparency
• A TON of room for optimization

But most importantly… DING DING DING.

They were able to fit this business into their Zone of Genius — and we’ll get to how.

Add all this up, and eventually, we get a text from Olman.

“Hey, I’m almost done reconstructing the P&L for a med spa. What are the items you need to get things moving?”

So we go back and forth, work through some questions, help him determine how to move things forward, and a few months later…

That's right, Olman and Jen got it done. How cool is that?

But Why Buy a Business?

Before we dive into the deal specifics, let’s take one BIG step back.

Why did Olman and Jen even want to BUY a business instead of start one?

Think about it... Here’s what starting one (probably) would’ve looked like:

• Start with $0 in revenue
• Spend heavily getting set up
• Hustle your ass off finding clients or die

Or… they could buy a business with a history of profitability, inside their Zone of Genius, with existing inventory and clients, a good reputation, and clear growth potential.

In this case, buying was a way to remove some risks associated with starting.

“Starting a business is actually harder and more expensive when you do the math,” Olman told us. And when we visited Olman and Jen in Austin, it quickly became really f*cking clear why he thinks that…

“That machine, that’s an $80,000 machine.”

“That one is about $40,000.”

“All the inventory that we have here is another $50,000.”

“When we bought the spa, it had about $165,000 worth of furnishing and equipment.”

“All this stuff is probably going to come out to about the same amount of money as it would be to just buy the business.”

Plus, Olman and Jen were able to leverage a solid infrastructure to hit the ground running and focus on growth.

When they took over the med spa, they had 56 membership subscriptions. Today? They’ve got 420. Revenue when they took over was $370k. The next year hit $644k. And this year? They’re aiming for $1.25M.

Super impressive growth, and not what you usually see. But here’s what’s important…

Every single dollar that you can accurately predict you’ll make can help decrease your risk. And that’s what makes buying a business so interesting.

It’s not that it’s easy, it’s HARD. But, as Olman put it, from his view, “You’re getting a head start… Profitable from day one and you’re breathing.”

Solving the Chicken and Egg Problem

If you’re smart, you’d already be asking yourself these questions.

Once Olman and Jen began thinking about buying a med spa, they realized something…

They didn’t know sh*t about running a med spa.

“Jen needed to learn how to be an injector. She’s a great nurse and worked in the hospital, but had no experience in med spas. How do you get a job without experience? And how do you get experience without getting a job?”

Chicken and egg. On top of that, she was working full-time. So what’d they do? They got creative and made some sacrifices.

“I told her, ‘Why don’t we email a bunch of smaller med spas? You can offer to work for free and learn. People pay for school, here we’ll pay with time. And that’s what we did.”

The duo cold-emailed about 20 different spas. Eventually, one responded — they were open to the idea.

“I told Jen, whenever the owner feels frustrated, just mention, ‘Hey, if you’re frustrated, I can just buy the business from you.’”

Eventually, the owner — who’d spent decades running the show and growing tired of dealing with… things — said they were open to it.

Great news, but FAR from time to celebrate.

The business wasn’t exactly buttoned up. Financial documentation was virtually nonexistent. “The owner was an older operator,” Olman said. “She didn’t have time to be doing all this accounting. She just knew that she had more money at the end of the month than she started with, and that was good enough.”

Without proper documentation, the deal almost fell apart. But Olman took the lead. He worked with the owner to get a hold of sales records and bank statements and offered to build a P&L. And just like that, the deal’s back on.

In fact, it might be because of that process that they were able to build trust with the owner.

“A lot of the patients were friends and relationships that she had built. She wanted to leave them with somebody that she trusted. She didn’t want to sell to any random person.”

The Bottom Line…

People often don’t do things, saying, “I can’t,” “I’m not qualified,” “I don’t have the license,” “There’s no way.”

But is that an excuse… Or is that reality?

“It’s an excuse,” Olman says.

“Apprenticing is an investment, but the time’s gonna pass. It was maybe 2 or 3 years that she was doing this apprenticeship while working a full-time job and made it happen. And now she’s the expert. Now SHE’S teaching people.”

Screw you, chicken and egg.

Your Price, My Terms

Buying a business is scary business. No doubt about that. “I almost threw up,” as Olman put it. “Several times.”

Olman and Jen were looking for deal-breaking red flags to use an excuse to be able to back out, they told us. Only one problem…The numbers made sense.

“Everything was adding up. At some point, it was like, let’s stop being little b*tches, okay?”

So they dove into negotiations.

“When she gave us a price, I remembered another thing Codie said: ‘Your price, my terms.’”

Remember this line: You can have your price and my terms, or my price and your terms... but you can’t have both.

“So,” Olman explained, “We proposed seller financing, and she was open to it. She wanted to work with us to facilitate the transition. Plus, an SBA loan was just gonna take too long and we didn’t have enough P&L history.”

(If you want to learn more about what that all means, come to our virtual business-buying training on September 17th.)

Olman and Jen ended up buying the business for $362k, and almost 3/4 of that was financed by the seller. Fast forward to today, and both Olman and Jen are dedicated full-time to their business.

“I left my job recently. Jen kept her job for the first month. I’m like, ‘Don’t quit. In case this business blows up, we need that job.’”

Are they making more money now than they were making in their 9-5’s? “Jen’s making more. I’m making less. Next year, I’ll make more,” Olman said. But here’s the really cool part…

The business they bought was doing $370k in revenue. They’re now moving toward $1.25M. With healthy margins, the business they bought for $362k could potentially sell for multiples of that today.

Steal These Lessons

3 secrets to Olman and Jen growing their business so fast?

• Transparency: “We’re very transparent with our pricing. Our patients really appreciate knowing how much something is going to cost before they actually show up.”
  
  
• Community: “We really want people to feel comfortable, like they’re at their second home.”
  
  
• Doing What’s Right: “I like to be very honest with patients. I’ll actually tell them, like, ‘No, you actually don’t need more filler,’ or whatever it may be.”

But perhaps their biggest lesson of all?

Find the Experts

For Olman and Jen, disaster nearly struck when their $80k machine ran out of the refillable supplies it needs to operate.

Because the machine had been purchased by the previous owner on the grey market, it wasn’t registered with the manufacturer, and buying more supplies would’ve meant spending $15k just to get it certified.

Luckily, they were able to buy supplies from another med spa. “But if I had done the deal over again,” Olman told us, “I’d look more closely at the machines. Are they under warranty? Where were they purchased from? Are they certified?”

“But these are things I didn’t know. If I had sat down with a med spa owner and paid them $300 for an hour of their time and insight, I might’ve saved a lot more money.”

When it comes to biz buying, you really need to have:

• An attorney
• An accountant
• An expert

Somebody outside of the deal, who’s actually owned this kind of business before. A person who will let you know where all the bodies are buried.

Remember that.

In Work We Trust

There’s a great saying... Pray like it’s up to God, work like it’s up to you.

It’s in the work we trust. That’s what makes a Main Street Millionaire.

What Olman and Jen are doing here is beautiful. And the truth is, they’d probably tell you they’re not that actually that smart.

They just work a little bit harder than everybody else...

For a little longer than everybody else...

And maybe with a little bit more creativity than everybody else.

Most importantly, they do the work.

Will you?

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

Hit reply to let us know. How ya feeling? Did we crush it? Blow your mind?

Want more where that came from?

✔️ Head to our website. For practical tips on biz-buying, we have another newsletter you might like... Sign up free here.

Powered by HubSpot

Adelante = always moving forward

This email was brought to you by Codie Sanchez, Jacob Cohen, and Jazmine Anderson