120 days in

I bought a business.

What a ride.

A ton of ups, downs, and lessons over the last year to rehash which I’ll be doing in the coming posts.

But I’ll start with how this even came about.

I started searching for a business to buy in March after being introduced to the ETA (entrepreneurship through acquisition) world just a few weeks prior.

I jumped on Twitter, heard about the book Buy Then Build, bought it, and read that thing front to back like that day.

I was sold.

Thanks, Walker!

Since college grad in 2019, I've done some real estate stuff, started a rental car business, and worked full-time in dental consulting (a fancy way to say we helped dentists get into private practice).

But after struggling to find my way through it all, this just felt right.

So I started searching.

I was quickly humbled by the fact that I had no idea what I was doing.

I don’t have an MBA, I don’t have true small business experience and I sure don’t know how to read between the lines of a financial statement.

When you dive into the acquisition world, there’s a blueprint you're convinced to follow.

“Buy the $1M + EBIDTA business or you’re buying yourself another job”

Sounds nice, in theory.

Making close to $1M a year running a small business with little to no experience?

I’m in!

But I wanted 2 things in my first acquisition:

• 100% ownership
• Autonomy

So with the cash I had available, buying that size business wouldn’t work.

And again, that voice was creeping... telling me that anything under $1M EBIDTA would be overpaying for a full-time job.

There’s risk in everything we do, and the risk I faced was staying the course and not doing what felt scary and uncomfortable.

If I failed and lost it all… at least I learned what not to do and could share that with you.

So I got to work.

Here’s the deal:

Business: Ice Cream Company (2 retail locations)

Purchase Price: $1,123,800

Gross Revenue: $1,200,000

SDE: ~$250,000

Loan Type: SBA 7a

Down Payment: $125,###-###-#### % of purchase price)

Loan Term: 10 years

Loan Interest: 11% interest (variable - can fluctuate up or down every quarter)

Due Diligence: 45 days

How I sourced the deal:

I took every approach to finding a business I could:

• Business brokers
• Online listing sites
• Direct-to-seller

This gave me a ton of deal flow and time to evaluate hundreds of CIMs.

Reminder - I don’t come from a financial background nor have I ever evaluated financial statements.

I knew 3 things:

-Revenue

• Expenses
• Profit

But that’s not enough to know whether a business is worth buying or not.

Within 3 months, I was committed to buying 2 businesses I came across:

• Landscaping (commercial and residential)
• Auto shop (aftermarket and maintenance)

I submitted LOIs on both but neither worked out after going a bit of back and forth on price and terms.

Soon after (still within 3 months of beginning my search) I was on the phone with a great broker (can introduce you if you’re in Arizona) who had sent me a few other deals and he mentioned he had spoken to an owner about putting his business up for sale.

He figured I’d be interested in entertaining a conversation with him to see if it fit my buy box.

The funny thing is, I had one non-negotiable.

Nothing in the food and beverage space, especially retail.

We all know how competitive of a space it is, the difficulties around building a brand, and the challenges you face at scale (people and operations).

But after connecting with the owner, learning more about the space, and seeing the potential the business had, I was all in.

Was it the most lucrative investment in the world?

Not upfront.

However, the idea of operating a local business and having an impact on my community was something I got really excited about.

The cool thing is, I can spend as much time as I want in the business…

Or I can let it operate at the same pace, spend a couple of hours a week, and let the incredible team I have run it as they always have.

Not sure if my philosophy around this space is sound or not but I got in the game.

That I can be proud of.

I’m almost 120 days in and it’s working.

Now what?

This journey for me is about learning the game of business, sharing my experience, and making some money.

As I get more and more in the weeds of Novel I know this will be the next legacy Ice Cream brand.

In 20 years from now, we will be known.

I’ve also learned the most valuable life skill through this experience - patience.

I’ve never had it.

But I’m applying it to everything I do now.

The goal is to continue to acquire more businesses, build a restaurant group, and continue building this small business community across the country.

Thanks for reading.