Bot a small dying trades edu company, now trying to grow 100% also lost car dealership to divorce, lyla's college fund to bank, but buddy's bar is killing it
mountains
Joined February 2024
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9 months post-close on first self-funded search deal, a $300k EBITDA professional edu company bought for 3x:
-standard advice to buy >$500k EBITDA is totally right. I take out >$200k tc including family health insurance, and the resulting (slight) cash-burn is stressful + brutal
Finally put up a 100% growth month with nice cash-flow, and we should sustain that growth rate thru Q4.
Real challenge will be >50% next year over difficult comps, to get us up to $2m in year 2.
Acceleration since Q2 was mainly our new website and digital marketing kicking in.
I had planned to have new website ready before closing last yr. (Old one was 20+ years old/horrific, >90% of sales e-com.)
Then 2 designers overpromised and delayed (last yr just before Claude got good), and we only launched new site and growth in April. >$100k EBITDA opp cost.
loved this am episode, very grateful to guest for honestly sharing difficult journey.
paid 4x $300s sde for a hard 1-man company job making auto aftermkt parts.
I think that company was probably worth more like 1x, b/c owner must work long hours doing everything or sales = 0.
in addition to overpaying, lost sales due to vendors disappearing post-close + insufficient inventory at close. great lessons for the rest of us to try to avoid.
guy sounds smart and will prob figure it out /do well, with industry background. I hope so!
acquiringminds.co/articles/w…
$rddt today feels like facebook after the ios tracking privacy decapitation thing 4 years ago
amazing how low the % is of indeed job applicants who read to bottom of a very short listing, that requires them to email a 3-5 sentence response. love this sorting mechanism.
What a moat for $TTAN
i can't do 30x ebitda tho, the value mind virus
I get calls every week to professionalize a business before it's sold. And when your residential HVAC/plumbing/electrical business is on ServiceTitan, you get a higher offer. Why? Because every major private equity/franchise company runs on it, and it's easy to add new tenants to their enterprise stack. We're doing a couple of jobs right now where we're building a central pricebook and pushing it to tenants once it's done. Then we train the owners because, candidly, many don't know how to run an HVAC business. The return in revenue capture/profitability is off the charts good.
savage self-criticism, as he's likely one of top operators in his state's industry already.
very scary for people like me coming into search from stock spreadsheet world. even self-reflective PE guy with good experience in real companies starts at D- level for years apparently.
This doesn’t make for a viral Twitter thread, but I wrote a long discussion on if buying a small business was actually worth it for me.
If you’re honestly considering this path, I’d suggest starting here rather than with BizScout’s engagement bait.
bigdealsmallbusiness.substac…
Amazing hiring call, found perfect candidate for a top growth opp after dozens of easy No's over 3 months. V likely >10% revs boost.
For one of the first times, feeling WAGMI, and 100% growth "guidance" achievable next year.
Now my balls will probably get kicked again this pm.
After moving from investor to operator seat last year, increasingly judging most of my old investor friends as lazy, "low agency," and unaware of 99% relevant AI use-cases.
And I was lazier than them when we worked together! RIP the vanishing beautiful long-only flaneur life.
Bidding 2x on a shrinking bolt-on yesterday, with $40k LTM EBITDA down from $60k peak.
"We turned down an offer twice as high before going to market"
I don't believe you, but maybe somebody does want these and there is occasionally a tiny bit of competition
