🆕 Make the Move to Owning a Moving Business! 🚚

Welcome Back to The Corporate Pivot!

Excited to get to your home away from home, your cubicle?!... Me neither. That’s why The Corporate Pivot is here to guide you out of the corporate maze and into a business of your own. Let’s turn that daily grind into something that actually gets you excited to start your day.

Confusing Corporate Saying of the Day:

That lunch break is long enough, get back to work! = Take it easy, go get another slice of pizza.

Here’s what we have for you today:

Sam’s Perspective (1st Time Buyer)

🆕 Status Update: Tyler and I are on the move with some serious business prospects. We’ve sent out a few more NDAs, and now we have three businesses under due diligence. If you’re curious about our process, check out the tools page for our Due Diligence Checklist. I’ll be updating it as we go, adding tools and tips along the way!

💪 Challenge of the Week: This week, I’ll be talking with the owner of a blue-collar business that Tyler and I are considering purchasing. After getting some pointers from Tyler on what’s important to discuss, I’ve been strategizing on how to approach the conversation. This owner has built his business from the ground up, so establishing rapport is key. My engineering background should help, but what I really need to convey is that I understand business and have the experience to run one successfully.

📈 Success of the Week: I finally received financials for a potential business acquisition that are actually readable! It might seem small, but getting clear numbers is a big win—and these numbers look really solid.

📚 Lessons Learned: Storage business for boats

Went out on a friend’s boat this weekend, and they keep it in a locked storage lot. The lot has 19 spaces at $150 each, which means they could make $2,850 a month if fully occupied. From what I saw, 14 of the 19 units were in use, so they’re currently making about $2,100 a month. The setup is pretty simple—just a camera system, two working gates, and water meters at each space for flushing out the engine and washing off the boat. It’s one of those investments you always hear about, but until I saw it in action, I didn’t fully grasp how straightforward and profitable it could be.

My takeaways?

1. I want to buy this lot.
2. Pay attention to the small businesses you already use—there might be more profit there than you realize. Sometimes, the best opportunities are right in front of you, hidden in plain sight.

Tyler’s Perspective (Multiple Businesses Owned)

🚨 Tip of the Week: Following up on last week’s post, Sam and I had a conversation with the business owner this week. There are certainly different schools of thought, but my take has always been to be as transparent as possible. You obviously shouldn’t intentionally blow whatever leverage you have, but there’s also not very many benefits to “hiding the ball”. In a scenario such as the one we are currently looking at (i.e., where we will have a minority position in the company), regardless of your level of transparency, it’s important to be comfortable with your deal terms, to limit your concerns over everything involved in the business (including the majority stakeholders/founders). As we flush out what our terms will be, we’ll keep you posted.

💰 Deals < $500k

Business Name: Moving Business in South Florida
Revenue: N/A
Asking Price: $275,000
Profit: $270,000 (Profit Multiple = 1.02)
Location: Sunny Isles Beach, FL
Established: 2023

✅ Pros:

• High Profit Margin: The business operates with a profit margin of nearly 98%, reflecting its efficiency and low overhead costs.

• Absentee Model: The owner works only about 2 hours per day, making it an attractive option for investors seeking a semi-passive income stream.

⚠️ Cons:

• Newly Established: Being a relatively new business, it lacks the long-term market presence and customer base of more established competitors.

📈 Growth Opportunities:

• Market Expansion: There is significant potential to expand services throughout South Florida, capitalizing on the region’s strong demand for moving services.

• Service Diversification: Adding complementary services, such as packing or storage, could attract a broader customer base and increase revenue.

💰💰 Deals $500k - $2m

Business Name: Self-Running Trucking Company
Revenue: $3,500,000
Asking Price: $900,000
Profit: $700,000 (Profit Multiple = 1.29)
Location: Pierce County, WA
Established: 2020

✅ Pros:

• High Profitability: Despite industry challenges, the company has maintained strong profitability with a healthy cash flow.

• Scalable Operations: The company has successfully expanded its fleet from 8 to 30 trucks, demonstrating its capacity for growth.

⚠️ Cons:

• Market Volatility: The trucking industry has faced significant margin pressure in recent years, which could impact future profitability if conditions deteriorate.

📈 Growth Opportunities:

• Fleet Expansion: The existing team is poised to grow the fleet to 50 trucks, which could further increase revenue and market share.

• Operational Efficiency: Continued investment in newer equipment and technology could improve margins and operational efficiency, boosting profitability.

💰💰💰 Deals $2m-$10m

Business Name: Mechanical, Electrical, and Plumbing Engineering Firm
Revenue: $2,500,000
Asking Price: $4,500,000
Profit: $1,350,000 (Profit Multiple = 3.33)
Location: New York County, NY
Established: N/A

✅ Pros:

• Strong Market Position: The firm enjoys a “favored son” status in bid awards, leading to consistent project wins and a robust pipeline.

• Proven Resilience: The business has demonstrated impressive growth, even during economic downturns, with a 50% increase in Seller’s Discretionary Earnings year-over-year.

⚠️ Cons:

• Dependence on Word-of-Mouth: While successful so far, the business’s growth has been largely dependent on word-of-mouth referrals, which may limit scalability without a formal marketing strategy.

📈 Growth Opportunities:

• Scalability through Marketing: Implementing a formal sales and marketing program could significantly expand the firm’s client base and market presence.

• Team Expansion: Hiring additional professional staff would enable the firm to take on more projects, increasing revenue and profitability.

The Lean Startup: Ch. 5 Part 3

Today we will be discussing Value Growth and Genchi Gembutsu (its Japanese… I may not be able to spell but give me a break on this one). As we saw before with the Facebook example, two leaps of faith stand above all others:

• Value Create Hypothesis

• Growth Hypothesis

The first step to understanding a new product/service is to figure out if its value creating or value destroying. Eric uses value instead of “profit” because many entrepreneurs do not judge their success by profit. 

“As with value, it's essential that entrepreneurs understand the reasons behind a startup’s growth.”

You can have value destroying growth in a startup, one example could be continuous fund raising from investors and a ton of advertisements but not developing a value-creating product. Eric refers to this a success theater, using the appearance of growth to make them seem successful. One of the goals of innovative accounting is to help differentiate the false startups from the true innovators. It requires that the startup have and maintain a quantitative financial model that can be used to evaluate progress rigorously. In a startup’s early days they don’t have enough data to have an informed guess on what that model would be…

Read more at corppivot.com!

Hope you enjoy this week's insights and happy deal hunting! Remember, if you find these updates helpful, share this newsletter with a friend!

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