Let’s talk about the importance of your team when acquiring a business and the difference that it can make to the success of your deal.
When you buy a company, it’s not just you. It’s going to involve your team whether that be one that you recruit from your network or an existing team within the business. Just yesterday, I talked with someone who had read Buy Then Build, went out and bought a small “side” business. It was an online business that he acquired for between $100,000 and $200,000. He worked on that business for three years, raising the adjusted EBITDA to nearly $5 million this calendar year.
He was able to create tremendous amounts of growth.
When I asked him, “How were you able to create this level of growth?”
He said, “Walker, not only was it reading Buy Then Build and getting the confidence to be able to do this, but also having a team that I could leverage”.
In other words, sometimes people forget the build part of the equation and just want to buy and chill, right?
This individual… this acquisition entrepreneur… this CEO saw the difference.
He was able to recruit a lot of the people from his network that were able to really capitalize on the growth opportunities of his business. He was able to use equity and appropriate salaries for key people because this was a side hustle at first, so he didn’t need draw cash out of the business.
I’ve had similar experiences doing turnaround acquisitions simply because I knew the right turnaround person was available. My railing company was something that I acquired because I knew the person who has fabricated and finished more aluminum than anyone else in the regional Midwest.
In both cases, I knew “the” person. I knew that the team was able to execute and in both cases we have.
Often, I recommend that you come in with a team or a network of people that you know while also understanding what your downfalls are.
For example, “I’m really good at revenue generation.” or “We’re really good at online marketing.” or “I’m really good at B2B sales.” or “I’m really not good at keeping books running, day to day operations, or running production.”.
This simple understanding is going to tell you who you need in this business. The build opportunity should be something that you or your team brings to the table.
We created the Acquisition Lab to be a world-class service for you to be able to learn work with a vetted cohort of people, get access to a suite of tools and access to me and my team of advisors in a do-it-with-you program to help you find and buy a business on your terms.
