Recently acquired a landscaping business in the Midwest. Interested in SMB and Commercial RE.
Joined May 2021
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Running a local service business shifts your life to understanding the value in relationships.
Not only financially, but you quickly figure out how much more fun it is to build the business with customers you enjoy “just checking in on”
Had a couple bad reviews come in, tried to respond fairly. Mostly things out of our control and we did all we could.
I took my frustration out by giving a bunch of 5-star reviews to local companies I’ve enjoyed working with.
Remember reviews are someone’s livelihood these days
A fully seasonal business gives you a built in “reset” button on systems and processes that you’d like to improve
On the other side it can be hard to make sensible changes midseason because you’re about to be done with the season
Don’t waste the “reset” times
Friendly reminder - there are now a full three years of data post-covid business results in CIMs
Make sure to look at 2018-2019, you might see a completely different business for sale
Seems like most things in business happen in “bunches.”
Maybe I’m superstitious but when we get a big sale in the morning, it’s follow up day on all our quotes awaiting responses.
I also think landscaping responses are very much impacted by the weather today and vacations.
Had a no show for an interview today
Been a few months since this happened, confirmed with him an hour before.
Does this mean we’re headed back to the 1/10 interviewees showing up?
In corporate, I worked primarily on a $7+ Billion proposal with suppliers that had a min order size of >$2Million
In SMB, 5-figure weekly payroll is much more stressful
Crazy to think about the impact some of those orders had on the small business suppliers we worked with
Growth is expensive, being aware of which costs you’ll incur before buying a business is huge.
Landscaping has 4 primary drivers I’ve found -
1) equipment (buy or lease or..),
2) people (hire before the need or wait until you don’t have enough?)
Tyler Erhorn retweeted
The 50 most important things you need to know about buying a business:
Part 1
1. The better you are with finance, the more you need to do a quality-of-earnings (QoE). Everyone should do a QoE.
2. Certainty to close is the most important factor when choosing a lender. Over-shopping for rate is a mistake.
3. Build relationships with good brokers.
It's how you'll find a good business.
4. An off-market deal might come with better terms, but it will be 10x harder to close than a brokered deal.
5. Buy a business from a good person. It will eliminate a lot of unforeseen problems.
6. Raising capital is not as hard as you'd think. Don't give away the farm b/c you don't want to ask for money. Many folks want to give it to you. Find them!
7. There's nothing wrong with buying a job, if you want a job.
8. If you want to buy a larger company, that's more achievable than you might think. See #6 above.
9. There are actually some good businesses sitting in plain sight on BizBuySell.
10. "Getting an SBA loan is like getting a mortgage from the DMV," a pain in the ass. But the terms are great.
11. Before your transaction heats up, and deal fatigue sets in, get everyone locked into a binding purchase agreement.
12. You can't control who the seller hires for legal counsel. They can kill your deal if you don't hold their hand.
13. Some sellers don't want to sell to PE and they don't want to sell to "diet PE" (searchers). Present yourself as an average Joe and you'll get a better deal.
14. The resources you can find on Twitter, LinkedIn and other sites are real. We've seen under the hood and people are doing deals.
15. "Mile to the first, inch to the second." Buyers who figure this out, are buying a ton of businesses, and fast!
16. Searching is lonely. Find a tribe of other buyers who you can bounce ideas off and commiserate with.
17. "Do no harm" is overhyped. Many buyers break the glass and make changes early and it goes fine.
18. Sellers will talk nice up front. They get tense down the stretch.
19. The chances of your acquisition going to zero are low. The real risk is the time suck of getting stuck in an unscalable grind for years and years.
20. Hide your Twitter feed and never tweet about an active deal. The seller will see it.
21. Find a business in a city where you're happy and have support. It's going to be hard.
22. Make sure your spouse is on board and understands the assignment. If they say "it's me or the business," you're in deep sh't.
23. Some sellers are "dumb like a fox." Watch the financials closely.
24. Seller's push back on exclusivity in an LOl is a massive red flag. Don't waste your time.
25. Push back on the noncompete in the purchase agreement is a massive red flag. If they compete, they'll crush you.
Being a business owner (no matter how small) can open doors for cold outreach
Since I've acquired my business, it's been immensely easier to get time with other business owners. The most recent payoff for this was buying the industrial building this past week.
The unique thing is he famously never sells property (one of those guys that owns half the town if you ask enough questions to find that out). Said he had only ever sold one thing in his life so he had to think about it.
This week, I bought my first commercial property!
I didn’t think I’d be doing this in 2023. I had a long term lease with someone I thought was a friend. In an effort to make his finances better he found a way to void our lease
..to present his property better suited for a sale. Effectively kicking me out of where my business operated on short notice.
There’s a lot of debate on buying the real estate with an acquisition, as a heads up, getting kicked out of your building is not fun..
Tyler Erhorn retweeted
SMB vs. W2:
Me (SMB owner): not tied to an office, tons of flexibility, tons of financial upside … but zero guarantee of income, tons of downside, and generally always on call 24/7/365.
My wife (W2 healthcare): strict 7am-4pm in office with zero flexibility, rules for everything … BUT a guaranteed income and zero work after hours/weekends.
There’s no one right answer. Only the right answer for you.