🆕 This Nail Salon is a Steal at This Price! 💰

Welcome Back to The Corporate Pivot!

If the only thing keeping you at your desk is the thought of a steady paycheck, it might be time to pivot. The Corporate Pivot is your guide to stepping off the corporate treadmill and buying businesses that put you in control. No fluff, no jargon—just straight talk on building a better life through business acquisition.

Confusing Corporate Saying of the Day:

“Let’s talk about the elephant in the room”

Professional Translation: “There's an obvious problem that we need to talk about.”
Corporate Pivot Translation: “Nobody is going to say it huh? Ok I’ll be the bad guy.“

Here’s what we have for you today:

Sam’s Perspective (1st Time Buyer)

🆕 Status Update: Success Comes in Waves

After grinding away to track down off-market leads and juggling meetings with brokers, everything hit at once! I landed my first off-market lead on a local business, even though the owner wants to start a bidding war (but that’s a story for another day). It’s a huge accomplishment for me and you have to take the wins win you get them. I’m sure in the future the 100% success rate for these off-market deals wont be the standard, but I’ll take it!

Then, after that I was finally able to talk with the owner of the service business I’ve been pursuing. It was a great first call because he was a straight-up, no-nonsense guy. He answered every question, got creative with financing options, and didn’t sugarcoat the challenges. Here’s the breakdown and key highlights:

• Client Base & Operations: 80% residential, 20% commercial, with at least 60% repeat customers. Clients include HOAs, churches, and other local businesses.

• Revenue & Expenses: No debt on equipment. Business saw increased expenses due to higher insurance and fuel costs, but profit margins remain solid.

• Owner's Role: The owner manages everything by hand—scheduling, invoicing, and estimates. There's a massive opportunity to automate these tasks with tools like Calendly or a CRM.

• Key Employees: The foreman is crucial for the business's future. He could become a part-time owner with creative financing, but the success of the business hinges on him continuing to run day-to-day operations.

• Financing: SBA loan is an option. Although the foreman didn’t qualify, creative financing might allow for a $0 down deal.

• Growth Opportunities: Growth is limited by weather, labor, and equipment issues. However, there's potential in further automating operations and exploring additional contract work with the city.

• Main Takeaway: The business will only succeed if the foreman takes the reins and maintains the strong community relationships. It’s a tight-knit small town, and an outsider might struggle to keep things running smoothly.

💪 Challenge of the week: Brokers. Last week, one broker left me high and dry by canceling without any notice. This time, he showed up 10 minutes late, didn’t know how to merge the call, so I had to do it. Then halfway through, he just left the call! Here’s the kicker—he stands to make 10% of the deal for that performance. It’s like that one person in a group project who does absolutely nothing but still gets an A.

📚 Lessons Learned: I keep hearing this phrase when talking about highly successful people: “They have a high bias for action.” What does that even mean? It’s just a fancy way of saying they think less and do more. As an engineer by education, that goes against everything I was taught, and I’m sure many of you feel the same way.

The reason I’m bringing this up is that I could’ve easily overanalyzed this business until I found something wrong. I could’ve come up with a million reasons why it would be a waste of time to talk to the owner. But what I learned is that if you push past those thoughts and just act, you might discover something you hadn’t considered before—like the offer for the current manager to become a part-time owner. It was eye-opening and, honestly, a great experience.

The more calls you make, the more confident you’ll get. So go out and “have a high bias for action” this week.

Tyler’s Perspective (Multiple Businesses Owned)

🚨 Tip of the Week: As of now, our minority investment deal is on hold. It was tough to walk away, but it was the right decision. We have a few other irons in the fire, but it’s back to the grind of looking for leads. For the amount of pain and suffering that I went through for the past few weeks on taxes, I have continued searching for leads in the financial services industry. One of the best ways to find leads, is to work backwards from your daily. It’s pretty interesting how many different business we interact with on a daily basis. If you’re struggling to narrow down your search, consider breaking down your day and identifying the types of businesses you interact with the most. 

💰 Deals < $500k

Business Name: Nail Salon
Revenue: $645,438
Asking Price: $299,999
Profit: $209,749 (Profit Multiple = 1.43x)
Location: Orange County, FL
Established: 2012

✅ Pros:

• Prime location: High-traffic area with an established customer base and excellent landlord relationship.

• Room for expansion: Opportunity to rent out additional rooms for more recurring income.

⚠️ Cons:

• Owner absentee: Requires active management or a capable manager to ensure smooth operations.

📈 Growth Opportunities:

• Expand services: Rent out unused space to increase service offerings and revenue streams.

• Increase marketing: Target social media marketing to attract more clients and grow brand visibility.

💰💰 Deals $500k - $2m

Business Name: Commercial Glass & Glazing Business
Revenue: $1,023,859
Asking Price: $900,000
Profit: $322,771 (Profit Multiple = 2.79x)
Location: Indiana
Established: 2003

✅ Pros:

• Niche expertise: Specializes in solving complex glass projects, giving it an edge over competitors.

• Strong customer base: Long-standing reputation and consistent referrals ensure ongoing business.

⚠️ Cons:

• Leased facility: Operating from leased space may pose long-term cost challenges or relocation requirements.

📈 Growth Opportunities:

• Expand geographically: Leverage the company’s reputation to take on projects in neighboring regions.

• Introduce new technology: Invest in advanced glass technologies to further stand out in a competitive market.

💰💰💰Deals $2m-$10m

Business Name: Concrete Sealing Company
Revenue: $2,150,000
Asking Price: $2,100,000
Profit: $646,505 (Profit Multiple = 3.25x)
Location: West Valley City, UT
Established: 2016

✅ Pros:

• Strong growth: Achieved a 71.64% revenue increase between 2022 and 2023 due to high-quality service.

• Repeat business: Established client relationships and high customer satisfaction lead to consistent repeat business.

⚠️ Cons:

• Competitive industry: Concrete sealing and polishing can face fierce competition, requiring constant innovation.

📈 Growth Opportunities:

• Expand workforce: Hire more personnel to manage increased demand and take on larger projects.

• Diversify services: Offer additional floor finishing services, such as epoxy coatings or decorative finishes, to capture a wider market.

The Lean Startup: Ch. 7 Part 2

Welcome back! Today we will be discussing the second learning milestone, “Tuning the engine”, with examples from IMVU as well as how to utilize Cohort Analysis to optimize this process. Every product development, marketing, or other initiative that a startup undertakes should be targeted at improving on of the drivers of this growth model! Eric brings the example of a company improving the design of a product to make it easier for new customers to use. That assumes that the activation rate of new customers is the driver of growth for that company, and the company is unhappy with its current baseline. To demonstrate the validated learning the design changes MUST improve the activation rate of NEW customers. An important rule is born of this:

“A good design is one that changes customer behavior FOR THE BETTER.”

If it doesn’t change the customer experience for the better than it should be considered a failure. Over time a startup that is learning in this way (attacking their DRIVER OF GROWTH) will start to see their baseline transition to something that represents the ideal one established in the business plan. If not, then their ideal will get farther and farther away from them. If you’re not moving the drivers of your business model, then you are not making progress. That is the sign that you should:

IMVU used innovation accounting to test their MVPs. They assumed their lack of sales was due to their MVP, when first released, having many defects. Well, that doesn’t seem like an outlandish idea but what they realized was that no matter how much time they spent trying to improve the quality of their product they got the same response… a lack of sales. The quality improvements were not yielding any change in customer behavior, and naturally led to some real crappy board meetings where they could show great product “progress” but not much in the way of business results. 

One way they tried to measure their improvements was through tracking the funnel metrics that were critical to their engine of growth: customer registration, the download of their application, trial, repeat usage, and purchase. They spent $5 dollars a day to buy clicks on the new (at the time) Google AdWords system. It was a priceless learning exercise, but not much from the point of view in marketing. Everyday they were able to measure their product’s performance with a brand new customer set, and every time they revised their product they got a new report card! So, take a guess what happened next… no new business growth…

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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