🆕 Coding Franchise Making ~$1 Million

Welcome back, my pivot people!

Today, we aren’t beating around the bush—we're, as my coworkers used to say in lame corporate speak, getting thrown into the deep end. We've got some awesome businesses for you to consider, including an IT manufacturer that's absolutely crushing it. Let's get to it!

Here’s what we have for you today:

Sam’s Perspective (Startup Founder & 1st Time Buyer)

🆕 Status Update: Found 8 businesses that fit my criteria, reached out to all of them, got responses from half and signed NDAs for further financials.

💪 Challenge of the week: Quickly finding what deals made the most sense financially. I found that even if the business looks good at first glance, plugging them into a calculator to better visualize important metrics like return on investment and payoff timing would be super helpful. So I created a calculator here to speed things up. Go check it out on corppivot.com!

Check out a snippet of the results from the calculator:

📈 Success of the week: Signing multiple NDAs to further look into company financials and creating the calculator to speed up the search process. As you go through listings and find the one you like, you might find that it’s hard to get responses from brokers on some of the main sites. I suggest following up once or twice to the initial inquiry and it should help out with the response time. My business partner and I are working on getting off market leads, so we don’t have to deal with the slow wait times. We plan on releasing off market deals as a service to make the process a lot more streamlined. Stay tuned for updates!

📚 Lessons Learned: If something has to be done more than once, you better automate or simplify. Searching through listings can be tedious so use those filters and use the free calculator to speed up the search.

Tyler’s Perspective (Multiple Businesses Owned)

🚨 Tip of the week: As you know, I’m a pool boy (if you don’t know, see our original post here), and as you might imagine, pool boys are likely to make a few mistakes in running a business. One of the many reasons I was drawn to buying a pool business was the high margins. High margins allow you to make mistakes, while still having a chance to generate positive cashflow. If you are just getting started, consider a business with high margins to mitigate some of the risks of making mistakes when you are first starting out.

💰 Deals < $500k

Business Name: Coding Company Franchisor w/ 30+ Franchisees
Revenue: $984,000
Asking Price: $499,999
Profit: $382,805 (Profit Multiple = 1.31)
Location: Miami, Florida
Established: 2020

✅ Pros

• 100% Remote Business Model: This allows for flexibility and potentially lower operating costs compared to brick-and-mortar models.

• Strong Growth Potential: Franchise sales have been doubling every year, indicating a robust growth trajectory.

⚠️ Cons

• High Dependency on Franchise Sales: The business's revenue growth heavily relies on the ability to continue selling franchises, which can be a risk if franchise sales slow down.

📈 Growth Opportunities

• Expand Franchise Sales: Increase revenue by attending franchise shows, developing an organic ad strategy, and creating an effective sales process.

• Diverse Offerings: Further capitalize on additional revenue streams such as school holiday camps, birthday parties, and in-school programs.

💰💰 Deals $500k - $2m

Business Name: Absentee paint/drywall Company
Revenue: $5,300,000
Asking Price: $2,000,000
Profit: $609,000 (Profit Multiple = 3.28)
Location: Weld County, CO
Established: 2006

✅ Pros

• High Revenue: $5.3 million in sales with a backlog of over $13 million and additional verbal commitments of $4.7 million.

• Low Owner Involvement: Owner works around 6 hours a week, indicating the business runs efficiently with minimal oversight.

⚠️ Cons

• Owner Dependency for Certain Tasks: The owner's spouse handles invoicing, data entry for payroll, contract administration, and other paperwork, requiring a new owner to hire an office manager to replace these duties.

📈 Growth Opportunities

• Advertising: Potential to grow through advertising, which is currently not utilized.

• Expand Single Family Contacts: Utilize and pursue existing single-family contacts to generate additional business.

💰💰💰Deals $2m-$10m

Business Name: Manufacturer of IT Racking Systems
Revenue: $5,880,986
Asking Price: $2,700,000
Profit: $1,864,732 (Profit Multiple = 1.45)
Location: Toronto, ON
Established: 1972

✅ Pros

• Long-Standing Business: Established for over 50 years with a strong market presence and reputation.

• High Cash Flow: Significant cash flow of $1,864,732, providing a strong financial foundation.

⚠️ Cons

• No Active Business Development: Currently relies only on incoming client requests, with no proactive outreach or business development.

📈 Growth Opportunities

• Expand Sales Efforts: Implementing an active business development strategy to increase client base and market reach.

• Increase Market Presence: Opportunity to expand market presence further across Canada and the United States by targeting new industries and clients.

The first book we will be reviewing is.....

The Lean Startup by Eric Ries

He starts off the book discussing entrepreneurial management and how it is a necessary part of building a startup. "Building a startup is an exercise in institution building; thus, it necessarily involves management." Many startups are wary of traditional management, as they should be! Unfortunately, this leads startups to turn into chaos, similar to Eric's first startup failure. How do you deal with management in a startup when traditional management is ill suited to handle the inherent uncertainty of a startup?

Well, Eric believes that entrepreneurship requires….

Read more on our website corppivot.com!

Hope you enjoy this week's insights and happy deal hunting! Remember, if find these updates helpful, share this newsletter with a friend and get our exclusive business calculator for free!

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