✨ High-End Wellness Clinic making $1.6M/yr!

Cool Business Idea: 

Turning Logs Into Long-Burning Profits 🪵

Confusing Corporate Sayings:

“Let’s table this conversation”

Professional Translation
“We’ll revisit this topic at a later time.“

Corporate Pivot Translation
“Respectfully, this conversation makes me want to body slam you through a table.“

Sam’s Perspective (1st Time Buyer)

🆕 Status Update: Diving into the financials of a business Tyler and I are considering buying, I wanted to share something helpful—a calculator I use during Phase 2 due diligence.

Here’s how things have gone so far:

1. Signed an NDA: Always the first step in these deals.

2. Preliminary call with the broker: A quick feel-out for mutual fit.

3. Received detailed financials: Honestly, these are hit or miss. Sometimes they’re messy, like a toddler with a crayon. Other times, they’re surprisingly clean and even tell a story.

4. Call with the sellers: Where we dig deeper and start figuring out if this is the one.

Right now, we’re in the "analyze-the-numbers" stage for a hydraulics repair business. Below is the calculator I use to check if:

1. We can qualify for an SBA loan.

2. The payback numbers make sense.

Feel free to poke around! For this business, even in a worst-case scenario (a 30% revenue drop post-sale), it’s still projected to make $90K in profit after Year 1. Not bad, right? If everything checks out, this could be a pretty sweet deal.

Business Buying Calculator

Open Calculator

Take a look, mess around with the numbers, and see what you think. Just don’t break it—Tyler still needs it! 😅

Tyler’s Perspective (Experienced Buyer)

🚨 Status Update: Well, as the saying goes, the holidays bring people together. This holiday season, one of the previous off market leads that Sam and I worked on came back to us and supposedly fixed some of our initial concerns. We still have some major concerns, and now we will really have to dig into the diligence, but it was nice to have a lead come back to us on its own. Supposedly, we should be getting updated financials, and I believe that will help us determine pretty quickly if some of our initial concerns have been remedied. This is one where we would have a minority position, so we certainly need to be confident and comfortable with both the business and the majority owners. Hopefully, similar to the holiday spirit, something will come together. 

💰 Deals < $500k 💰

Business Name: Package of 2 Daycares
Revenue: $1,061,707
Asking Price: $470,000
Profit: $257,315 (Profit Margin = 24.2%)
Location: Baker County, FL
Established: 2021

✅ Pros:

• Steady Income: High occupancy rates (up to 90%) and a mix of private and subsidized clients ensure stable cash flow.

• Turnkey Operation: Brand-new renovations and absentee management make this a ready-to-go investment.

⚠️ Cons:

• Staff Reliance: Success depends on retaining existing staff, including the director.

📈 Growth Opportunities:

• Increase Enrollment: Expand current enrollment from 75% capacity at one center to maximize revenue.

• Offer New Programs: Introduce niche programs like specialized infant care or extracurricular activities.

💰💰 Deals $500k - $2m 💰💰

Business Name: Safety Product Company
Revenue: $713,481
Asking Price: $795,000
Profit: $485,791 (Profit Margin = 68.1%)
Location: Berkeley County, SC (Relocatable)
Established: 2005

✅ Pros:

• High Profit Margins: Exceptional profitability due to lean operations and licensing revenue.

• Established Market Presence: Over 130,000 units sold with endorsements from Fortune 500 companies.

⚠️ Cons:

• Concentrated Revenue: Heavy reliance on two licensing deals for income.

📈 Growth Opportunities:

• Expand Globally: Target untapped regions for international distribution.

• Increase Product Lines: Develop new safety solutions to leverage existing market presence.

💰💰💰 Deals $2m-$10m 💰💰💰

Business Name: Wellness Clinic
Revenue: $3,300,000
Asking Price: $3,000,000
Profit: $1,600,000 (Profit Margin = 48.5%)
Location: Scottsdale, AZ
Established: 2020

✅ Pros:

• High Net Income: $1M+ annual profit demonstrates strong operational efficiency.

• Prime Location: Affluent area with a loyal client base and growth potential.

⚠️ Cons:

• Capital Requirement: High upfront cost requires cash on hand to purchase.

📈 Growth Opportunities:

• Expand Services: Add regenerative medicine or telehealth consultations to broaden offerings.

• Membership Revenue: Launch subscription programs to generate recurring income.

**If today is your first day reading, go to Chapter Recaps to get up to speed!

The Lean Startup: Ch. 12 Part 1

For those of you that have been with us from the beginning I’m glad to see you’re still here. We have spent 6 months on Eric Ries’ The Lean Startup and we have just started the final chapter… INNOVATE. Obviously as a startup you expect innovation, yet Eric believes that it can also happen in large organizations, contrary to popular belief. 

Startup teams require three structural attributes: 

1. Scarce but secure resources

2. Independent authority to develop their business

3. Personal stake in the outcome

In large companies it can be common where budgets can be given out politically. We aren’t talking Trump or Harris political, I’m talking about ass-kissing by the water cooler “you scratch my back I’ll scratch yours” type of political. They often acquire as large a budget as possible and prepare to defend it against incursions from other departments. If a crisis emerges elsewhere in the company their budget could be sliced to accommodate helping solve that crisis. In a large organization that’s not catastrophic… but in a startup it could be. Startups are EXTREMELY sensitive to midcourse budgetary changes. That is exactly why resources must be secure for a startup to be successful.

Startups need to be able to conceive and execute experiments without having to gain an excessive number of approvals. Handoffs and approvals slow down the BML feedback loop and inhibit both learning and accountability, hence why Eric believes all startups should have cross-functional teams. They have to be able to build and ship actual functioning products and services, not just prototypes. 

Lastly startups need to have their employees to have personal stake in the outcome of their creations. Many times, you can see this in stock options or a flurry of other financial incentives, but it doesn’t necessarily have to be financial. 

Parent organizations need to make it clear who the innovator is and make sure the innovator receives credit for having brought the new product to life… if its successful. 

Next week we will discuss how to protect the parent organization, how to hold entrepreneurial managers accountable, and how to reintegrate an innovation back into the parent organization if it is successful.

As always, if you want to discuss topics of this chapter (or any previous or future chapters) join our Discord channel.

Read more at corppivot.com!