🆕 Power Washing Business That Prints Money 📈

Welcome Back to The Corporate Pivot!

Ready to reach the peak of the corporate world and get employee of the month?! Yeah, me neither. It’s time to stop dreaming about what life could be and start buying back your time. The Corporate Pivot is your no-BS guide to stepping out of the 9-5 grind and into the world of business ownership. We don’t sugarcoat the risks, but we also won’t waste your time with corporate jargon. Whether you’re new to the game or a seasoned pro, we’re here to help you turn that daydream into a reality that sets your family up for generations.

Confusing Corporate Saying of the Day:

Can I ask one quick question? = We’re gonna be here a while…

Here’s what we have for you today:

Sam’s Perspective (1st Time Buyer)

🆕 Status Update: Working through due diligence for potential investments. Buy a business they said, it’ll be fun they said… In all seriousness this is probably the most important part of buying, but it can also be confusing if you don’t know what to to look for. Check out our Due Diligence Checklist that’s free on our tools page, where we put together all the tips and tricks we’ve learned along the way so that you can take actionable steps in the right direction!

💪 Challenge of the week: This past week I had a call with a broker with a business that was SBA prequalified. He tried to push that the deal needs to be a cash offer since there is “a lot of demand”. The challenge is not letting someone talk you into something that isn’t a part of your plan. Don’t let these brokers bully you around. Since I’m a glass half full kind of guy sometimes I tried to think of it as an opportunity to get creative with the financing of the deal. If it truly is cash only then you better be getting a heck of a deal. Possibly work out seller financing and even a lower purchase price. Either way, be confident in your approach. Especially as a first time buyer it might seem intimidating, but after following along with us it will be a walk in the park.

📚 Lessons Learned: This weeks lesson learned is to be proactive. Crazy concept right? It’s like saying “just be smart and you’ll succeed”… Why I’m saying this is because transitioning from a 9-5, to business ownership comes with some extra responsibility. You need to create systems in place to be able to still live your life and go on vacation once in a while. Systems not only help you be more efficient, but they will help you sell your business if that’s ever your goal. Businesses don’t have that same cushion that the 9-5 jobs do where you can easily disconnect. For me, I knew I had a golf trip coming up this weekend and a majority of The Corporate Pivot team have things going on with it being the holiday weekend, but we still had a job to do. The goal was to get this newsletter out and continue trying to buy some businesses. The point of this lesson is to plan ahead so your tomorrow self will thank you.

Tyler’s Perspective (Multiple Businesses Owned)

🚨 Tip of the Week: Trust but verify. . .This is the perfect way to describe my thoughts on how to handle just about any information/documentation that you receive from a seller/owner during diligence. Sam and I are currently in the process of working through the seller/owner’s responses to our initial questions. I am working on creating a proforma P&L from scratch (but using some assumptions from seller/owner), as in this case, the proforma provided by the seller/owner will take significant work to revise. We found numerous concerns with seller/owner’s proforma, which is where the “verify” component comes in. Seller’s/owner’s never want to hear why you think their assumptions are wrong, but sometimes they need to hear it (especially if you want to move forward with the deal).

💰 Deals < $500k

Business Name: Established Power Washing Business
Revenue: $1,000,000
Asking Price: $300,000
Profit: $330,000 (Profit Multiple = 0.91x)
Location: Jacksonville, Florida
Established: 1990

✅ Pros:

• Recurring Revenue: Established commercial maintenance agreements ensure a steady stream of income.

• Proprietary Equipment: Unique equipment that allows for efficient cleaning of multi-story buildings, creating a competitive edge.

⚠️ Cons:

• Dependence on Equipment: The business's success may be heavily reliant on its proprietary equipment, which could present a risk if maintenance issues arise.

📈 Growth Opportunities:

• Expansion to New Markets: Potential to expand services to additional commercial sectors such as retail or hospitality.

• Increase in Service Offerings: Opportunities to introduce new services, such as residential power washing, to diversify income streams.

💰💰 Deals $500k - $2m

Business Name: Safety Product Company
Revenue: $713,481
Asking Price: $1,822,000
Profit: $485,791 (Profit Multiple = 3.75x)
Location: Berkeley County, SC
Established: 2005

✅ Pros:

• Patented Product: The company’s patented product reduces worker compensation claims and increases safety, providing a strong selling point.

• Dual Revenue Streams: Generates income from both direct sales and licensing agreements, ensuring diversified revenue.

⚠️ Cons:

• Limited Market Penetration: Although successful, the company’s market reach is still a fraction of the total potential, indicating that there is much more room to grow.

📈 Growth Opportunities:

• Domestic and International Expansion: Significant potential for growth by expanding into new markets, both domestically and internationally.

• Product Line Extension: Opportunities to develop and introduce new safety products that complement the existing offering.

💰💰💰Deals $2m-$10m

Business Name: Digital Marketing Agency
Revenue: $2,298,660
Asking Price: $3,000,000
Profit: $1,086,739 (Profit Multiple = 2.76x)
Location: Austin, TX
Established: 2016

✅ Pros:

• High Recurring Revenue: 95% of revenue is recurring, which provides a stable and predictable income.

• Low Client Concentration: Low client concentration reduces risk, ensuring that the loss of a single client does not significantly impact the business.

⚠️ Cons:

• Dependency on Key Clients: Despite low client concentration, the business may still have key clients that are critical to revenue stability.

📈 Growth Opportunities:

• Scalable Operations: The remote team structure allows for easy expansion into new markets without significant additional overhead.

• Service Diversification: Potential to introduce new digital marketing services or products to attract a broader client base.

The Lean Startup: Ch. 6 Part 1

We’ve made it to chapter 6! Test, no it's not test time, that's the name of the chapter… Eric starts off this chapter talking about Groupon and continues to talk about the minimum viable product (MVP)! 

Groupon stands for Group-Coupon, if you didn’t know that already. It's a huge deal, so much so I’m sure your mom, your wife, and your kids all know what it is. Would you be surprised to know that it didn’t start off as a smash hit. Their first customer took a 2-for-1 pizza deal in the restaurant on the first floor of their company’s Chicago office. It wasn’t even intended to be a coupon company. Andrew Mason, Groupon’s founder, wanted to make a “collective activism platform” called The Point that could bring people together to solve problems they couldn’t solve on their own. Think fundraising or boycotting a retailer. 

Their early results were disappointing, however by the end of 2008 the founders decided to try something new. They built a minimum viable product (MVP) to keep their new product SIMPLE. Handmade PDFs, a pizza coupon, and a simple blog were enough to launch Groupon into their record breaking success…

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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