🆕 Like Numbers? 2 CPA Businesses For Sale! 📈

Welcome Back to The Corporate Pivot!

If "circling back" and "looping in" are the only action items you have this week, maybe it’s time for a real change. The Corporate Pivot will help you leave behind the endless email chains and buy a business where every action gets you closer to financial freedom.

Confusing Corporate Saying of the Day:

“Customer-Centric”

Professional Translation: “Focused on understanding and meeting the needs of our customers to enhance their experience.”

Corporate Pivot Translation: The go-to excuse when you haven’t started the work yet: "I wanted to make sure my approach was customer-centric, so I've been really taking my time to understand the core issue."

Here’s what we have for you today:

Sam’s Perspective (1st Time Buyer)

🆕 Status Update: LLC Creation

Now that things are getting serious with the business acquisition, I’ve started digging into the legal side of things. Brokers always seem to want a buyer profile to squeeze as much info as possible out of you—proof of funds, why you want to buy a business, and sometimes even my social security number and mother’s maiden name. KIDDING... but it almost feels that way!

In all seriousness, I realized I need an LLC to shield my personal assets from business assets. I hadn’t thought of it like this before—why would I need another LLC to buy an existing one? It sounded confusing, so I consulted Tyler, who explained that it’s pretty typical for acquisition firms.

So, that’s what I’m working on this week—creating my own LLC with the state. And of course, making sure the name sounds cool. Stay tuned!

📚 Cool Business Idea: Mailbox Replacement Service

You know what's surprisingly lucrative? Replacing mailboxes. Yeah, I know—it sounds mundane, but it’s a service with real demand and potential for great margins.

Let’s break it down: Mailbox replacement services involve replacing damaged, outdated, or broken mailboxes for residential properties, HOAs, and even small businesses. A lot of homeowners don't have the time or tools to deal with it themselves, and when you consider the number of mailboxes in your area alone, the opportunity starts to become clear.

The Numbers:

• Market Pricing: A new mailbox can cost anywhere from $50 to $300, depending on quality and features. Installation charges usually range from $75 to $200, and many providers charge extra for concrete setting or specialty mounts.

• Service Fees: A typical replacement, including parts and labor, often costs between $150 and $500. Assuming you complete just 10 replacements a week, that’s easily $1,500 - $5,000 per week.

• Potential Revenue: That’s an annual revenue potential of $78,000 to $260,000—from a business that’s pretty simple to start!

Startup Breakdown:

1. Initial Investment: You'll need some essential tools: a post digger ($40), concrete mix ($5 per bag), basic hand tools, and a truck or van. For an initial inventory, start with a selection of mailboxes and posts, which could run around $1,000 to $2,000.

2. Marketing: Local advertising is key—think flyers, door hangers, and listing services like Google My Business and Nextdoor. People don’t always know they need this until they see it!

3. Partnerships: Partner with realtors, property managers, and HOAs. They often need mailbox replacements in bulk and can be consistent clients.

4. Add-On Services: Offer mailbox customization—house numbers, custom colors, or decorative posts. These small upgrades can easily boost profits.

This is a low-barrier, high-margin service that can grow into a significant income stream with recurring revenue from HOAs and property managers. Plus, it’s the kind of simple, unassuming business that thrives by solving an overlooked problem.

Tyler’s Perspective (Multiple Businesses Owned)

🚨 Tip of the Week: Good news. I finally heard back from a broker. I know, I was as shocked as you are. To be fair, they were calling to tell me I needed to fill out a “Buyer Profile” that I previously rejected. We don’t fill those out. Sellers don’t need to know that much about our financial situation (either personally, or collectively as an investment group). Admittedly, there are plenty of people that do not have the legitimate financial ability to acquire businesses, and that clearly is the purpose of asking for such information. Our approach is to show proof of funds, however, this is always tricky. If you only show proof of funds for a down payment on a loan, you justify the Seller’s concern over your ability to “afford” the business, but if you show proof of funds for the entire purchase price, you automatically lose a step in the negotiation and unsophisticated Seller’s are less likely to listen to your justification for your valuation of the business. 

💰 Deals < $500k

Business Name: Construction Clean-up Business
Revenue: $345,244
Asking Price: $224,999
Profit: $124,104 (Profit Multiple = 1.81)
Location: Orlando, FL
Established: 2018

✅ Pros:

• Home-Based Business: Minimal overhead with no need for a physical office.

• Strong Subcontractor Network: Established relationships with subcontractors enable quick response times for jobs.

⚠️ Cons:

• Limited Owner Involvement: Absentee ownership may limit growth potential without active management.

📈 Growth Opportunities:

• Expand Geographic Reach: Grow the subcontractor network to expand operations beyond central Florida.

• Add Marketing Efforts: Invest in targeted local marketing to attract new builders and contractors.

💰💰 Deals $500k - $2m

Business Name: Accounting Firm with Recurring Revenue
Revenue: $382,270
Asking Price: $764,540
Profit: $266,434 (Profit Multiple = 2.87)
Location: Escambia County, FL
Established: 2008

✅ Pros:

• High Client Retention: Strong client loyalty with ongoing contracts and annual reviews.

• Recurring Revenue: A significant portion of revenue is from monthly contracts, ensuring stable income.

⚠️ Cons:

• Limited Marketing: The business relies solely on word-of-mouth, missing out on potential growth through digital marketing.

📈 Growth Opportunities:

• Implement Digital Marketing: Develop an online marketing strategy to attract new clients and increase brand visibility.

• Expand Service Offerings: Introduce more detailed financial reporting and online QuickBooks training to diversify income streams.

💰💰💰Deals $2m-$10m

Business Name: CPA Practice
Revenue: $2,041,743
Asking Price: $2,300,000
Profit: $1,883,870 (Profit Multiple = 1.22)
Location: Virginia
Established: N/A

✅ Pros:

• Outstanding Cash Flow: Extremely high profit margins with almost all revenue flowing directly to the owner.

• Experienced Staff: Team in place and ready to support the new owner, ensuring smooth transition.

⚠️ Cons:

• Seller Retirement: Seller retiring may require a strong transition plan to retain existing clients.

📈 Growth Opportunities:

• Client Transition Planning: Offer tailored client transition services to maintain client loyalty post-sale.

• Expand Service Lines: Explore offering new services, such as advisory or consulting, to grow revenue beyond traditional tax and accounting.

The Lean Startup: Ch. 7 Part 6

Wow, we’ve done it… made it through chapter 7. Today we are going to continue to talk about Grockit, how they tested their hypotheses, & the three A’s of metrics: actionable, accessible, and auditable. Grockit decided to test their major features with something called lazy registration. Lazy registration was very popular in online services & it’s when the customers do not have to register for the service up front to use it. This basically allows you to have nothing that is prohibiting you from starting to use the product! It sounds great right, at least as the user… I hate having to give my email and then next thing I know I’m getting a FLURRY of emails from a company and have sent $1000 to a Nigerian prince. He said he could provide me a 1000% return and all I have to do is give him my SSN and bank login; I can’t wait to be RICH. 

The problem with lazy registration requires a company to deal with multiple classes of users, and for Grockit these were the 3:

1. Unregistered Guests

2. Registered (Trial) Guests

3. Registered Guests paying for the premium version

The more groups the more complicated and expensive it can get. So, Eric decides to suggest a different route for Grockit, a split-test. They took one cohort of customers and required them to register immediately, this led to something SUPER surprising. The cohort’s behavior was the EXACT same as the lazy registration group; that means that the extra effort needed for lazy registration was a complete waste of time. It also meant that customers were choosing to use Grockit for reasons other than their product. This suggested that improving Grockit’s positioning and marketing might have a more significant impact on attracting new customers than would adding new features. 

Actionable is the first A of metrics. For a report to be actionable it must demonstrate clear cause and effect. Otherwise, it is a vanity metric. Vanity metrics wreak havoc because they prey on a weakness of the human mind. When numbers go up, people think the improvement was caused by their actions, by whatever they were working on at the time. 

“Actionable metrics are the antidote to this problem. When cause and effect is clearly understood, people are better able to learn from their actions.”

Accessible is the second A of metrics. Departments too often spend their time learning how to use data to get what they want rather than as genuine feedback to guide their future actions. An antidote to misuse of data is to make reports as simple as possible so that everyone understands them.

“Metrics are people too.”

That’s why Eric believes that cohort-based reports are the gold standard of learning metrics, turning complex actions into people-based reports. The reports deal with people and their actions, which is way more useful than piles of data points. 

Auditable is the third A of metrics. You must ensure that data is credible to employees. Most data reporting systems are unfortunately not designed to answer the challenges successfully. You need to be able to test the data by hand, by talking to customers. Managers need the ability to spot check the data with real customers!

“Only 5 percent of entrepreneurship is the big idea… The other 95 percent is the gritty work that is measured by innovation accounting: product prioritization decisions deciding which customers to target or listen to and having the courage to subject a grand vision to constant testing and feedback.”

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!

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