🆕 Trash Into Cash: Biz for Sale💰

Welcome Back to The Corporate Pivot!

Ready to stop running your brilliant ideas by five levels of management? The Corporate Pivot is your chance to leave behind endless approval chains and start making decisions that grow your business. We’re all about freeing you from corporate gridlock so you can finally build something that makes sense—and makes you money.

Confusing Corporate Saying of the Day:

“I’m gonna piggy back off of that point”

Professional Translation: “I have some valuable information to add on”
Corporate Pivot Translation: “I have absolutely nothing to add, but my boss said I need to look more engaged.”

Here’s what we have for you today:

Sam’s Perspective (1st Time Buyer)

🆕 Status Update: I sent out more NDAs and actually found some great leads this time around. We’re specifically looking for businesses with management already in place, which makes it a bit tougher to find the right ones. The ideal scenario is having someone who can step in and handle the day-to-day operations, while we, as owners, focus on the admin and strategic tasks. This setup is a recipe for success.

If you’re unsure where to find public leads, here are a few places we use:

• bizbuysell.com

• bizquest.com

• tworld.com

• bizscout.com

• businessesforsale.com

Our Acquisition Alerts section does the heavy lifting by finding the best opportunities from each of these websites and posting them below. We provide a brief analysis, covering the pros, cons, and potential growth opportunities, making it easier for you if you’re actively looking.

To streamline your own search, you can set up filters. For example, if you’re targeting a business around $500k, use that as your filter along with a cash flow filter. Ideally, look for businesses with at least $100k in cash flow. This gives you some cushion for any revenue dips during the transition of ownership and provides enough to potentially hire a manager if one isn’t already in place.

Keep in mind, you’ll likely be applying for an SBA 7a loan, so be sure to use our Deal Calculator on the website to see if the business would qualify: Deal Calculator

📚 Cool Business of the Week: Service Businesses Perfect for Subcontracting the Physical Work

I came across a post that highlighted five businesses ideal for subcontracting. These businesses have high margins and are perfect for targeting local SEO:

• Septic Installation and Maintenance

• Concrete Repair

• Moving

• Fencing

• Tree Trimming

All of these businesses are great acquisition opportunities or solid startup options—if you have the patience for a new business to take off. The best part? These jobs aren’t going to be replaced by AI anytime soon, which is why we love them. Plus, there’s a surplus of subcontractors eager to do the work. All you need to do is find the leads and get paid for being the matchmaker!

Tyler’s Perspective (Multiple Businesses Owned)

🚨 Tip of the Week: One of our potential new leads is in the same industry as a previous lead we worked on. This, of course, makes diligence somewhat easier this time around. I certainly feel more comfortable working on a lead where I have at least a basic understanding of the industry and the business’ role in such industry. Thorough diligence is certainly still important, but it’s much more efficient when you’re dealing with a similar lead. I’m a proponent of casting a wider net when it comes to leads for potential acquisitions, but the familiarity with an industry certainly speeds up the diligence process. 

💰 Deals < $500k

Business Name: Geotechnical/Soil Testing Company
Revenue: $377,358
Asking Price: $395,000
Profit: $158,174 (Profit Multiple = 2.5)
Location: Florida
Established: 1998

✅ Pros:

• Turnkey Business: The business is fully operational with all equipment and systems in place for a seamless transition.

• Established Reputation: Known as the go-to firm for engineering projects in North Florida.

⚠️ Con:

• Dependency on Government Contracts: Growth could be impacted by changes in city and county contract awards.

📈 Growth Opportunities:

• Direct Government Contracts: Secure direct contracts with the city and county instead of working through prime civil engineering consultants.

• Regional Expansion: Expand services into South Georgia for additional growth.

💰💰 Deals $500k - $2m

Business Name: Trash Removal Company
Revenue: $907,117
Asking Price: $949,000
Profit: $310,902 (Profit Multiple = 3.05)
Location: Orange County, FL (Relocatable)
Established: 2001

✅ Pros:

• Low Owner Involvement: The current owner works minimal hours, making this a semi-passive business.

• Established Client Base: Long-term contracts with commercial clients provide steady cash flow.

⚠️ Con:

• Heavy Equipment Maintenance: Costs associated with maintaining a fleet of trucks and trailers can impact profits.

📈 Growth Opportunities:

• Increase Fleet Size: Expand fleet to handle additional contracts and grow the service area.

• Add New Services: Introduce complementary services like recycling to increase revenue per client.

💰💰💰Deals $2m-$10m

Business Name: Water Treatment Services Business
Revenue: $3,195,529
Asking Price: $2,200,000
Profit: $1,117,822 (Profit Multiple = 1.97)
Location: Norfolk County, MA
Established: 1988

✅ Pros:

• Exclusive Distribution Rights: The business holds exclusive distribution rights for high-quality water treatment products in Massachusetts and Rhode Island.

• Recurring Revenue: Strong recurring revenue from bottle-less water cooler leases and service contracts.

⚠️ Cons:

• Limited Geographic Expansion: Growth may be limited to MA & RI due to the exclusive territory rights.

📈 Growth Opportunities:

• Expand Service Offerings: Leverage the existing customer base of over 10,000 for additional home services beyond water treatment.

• Increase Market Share: Focus on acquiring more commercial contracts to grow beyond the current customer base.

The Lean Startup: Ch. 7 Part 4

Today we are going to talk about actionable metrics vs vanity metrics & how a startup named Grockit, and its founder, Farbood Nivi used actionable metrics to grow their business. Now, if you remember from our last write-up, vanity metrics are those that make your business appear like it’s going well, but in reality, give you a false sense of success. 

Farbood spent a decade working as a teacher at two large for-profit education companies, helping prepare students for standardized tests such as the GMAT, LSAT, & SAT. Sidebar, why is it that we had to wake up and go and take the stupid SAT on a Saturday and now kids don’t even need to take it to get into college… I’d like to petition for my money back from the SAT board, who’s with me?! Regardless, Farb found it frustrating using the traditional teaching methods used by those companies. He concluded that traditional lecture models of education, the one-to-many approach, was inadequate for his students.

Farb was fascinated by how effective the student-to-student peer-driven learning method was for his students. Mainly for two reasons:

1. Students could get customized instruction from a peer who was much less intimidating than a teacher

2. They could reinforce their learning by teaching it to others. 

Over time, Farb’s classes became increasingly social, & successful. So much so that he realized that he didn’t need to be there. His idea was to bring social peer-to-peer learning to people who could not afford an expensive class. He truly didn’t believe that the large for-profit educational companies were innovating in the way that we need them to & he didn’t believe we (the customer) needed them anymore. He created Grockit’s simple MVP, teaching test prep via WebEx (we all know what this is now thanks to COVID). Farb didn’t build new custom software, or new technology, just attempted to bring a new teaching approach to students via the Internet. 

News spread quickly and soon Fard was making a solid monthly revenue ($10k-$15k). He didn’t just build the MVP to make a living; he built it with the vision of more collaboration, more effective teaching for students everywhere! They followed the agile development methodology known as Extreme Programming. Basically, they would proceed in a series of sprints (one-month interaction cycles).

Each time they “sprinted” Farb would prioritize the work to be done by writing a series of user stories that would describe the new feature in technical terms, in the POV of the customer. This would keep the engineers focused on the customer’s perspective throughout the development. He could move ideas as he saw fit, prioritize or deprioritize at will. The only thing he couldn’t do was interrupt any task that was in progress. It truly is agile, allowing you to change direction quickly. Farb was concerned about the company’s overall progress, so Eric met with the team and asked: “How do you know that the prioritization decision that Farb is making actually makes sense?” Their answer would be astonishing to me, “That’s not our department. Farb makes the decisions, we execute them.” I don’t know about you, but…

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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