“The only way to get good at anything, is putting in the reps”
Buying a business, especially in the beginning, is a numbers game. 13 years on and we have reviewed thousands of CIMs, taken hundreds of meetings, done in-person visits to over a hundred companies, and closed 8 transactions. That may seem like an inefficient process, but the knowledge I have gained from just looking at different businesses and speaking with their owners is priceless.
At this point, we receive inbound offers. We have built enough of a reputation and pipeline where business owners contact us directly looking to sell. But I still go through broker emails and websites scanning hundreds of opportunities a week. Why?
There is nothing that will prepare you for analyzing a business like reading about other businesses. Sales trends, gross margin differences, operating structures, etc. I have a mental file of these companies and that makes it easier to identify the business economics I am looking for.
Building the “No” filter. Being able to quickly identify the business characteristics you are NOT looking for is the most efficient way to get through many opportunities. I have a clearer definition of what I do not want to buy than what I do want to buy.
I love it. I love reading about businesses. I love talking to business owners. I do not consider what I do every day to be work. Of course there is stress and of course there are moments I cannot believe I took on the pressure of owning SMBs, but I still would not trade it for anything. I love the process.
You never know where you are going to find an opportunity. Charlie Munger tells the story of reading Barron’s weekend magazine for the last 50+ years. Through all that reading he has identified 1 investable idea. I do not want to miss one because I was not putting in the work.
Here are two brokers that I continue to use to get my reps in:
Generational Equity sends me a monthly email with over 200 companies doing over $1m in EBT. I go through each opportunity.
Axial allows me to create filters so that the deals are tailored to what I am currently looking for. I get about 5 opportunities a week sent to my inbox.
Happy hunting!