📍 Prime Location Dry Cleaner Netting $327k!

Here’s what we have for you today:

💡Cool Business Idea: Front Door Christmas Decorations 🎁

Confusing Corporate Sayings:

“Let’s put a pin in that”

Professional Translation
“That's a great idea; let’s make sure we come back to that.“

Corporate Pivot Translation
“that could be possibly the worst idea I've ever heard.“

Sam’s Perspective (1st Time Buyer)

🆕 Status Update: Got the silk flowers and I think we have a name. There were a couple good ones out there that my buddy told me, like “Real Fake Flowers”, which now that I’m writing it is kinda growing on me 😂. I think we are going to go with “Simply Silk Flower Rentals”. Stay tuned on the day to day on that side business and tune back in to hear all the good and the bad along the way. I’m an open book so hopefully it’s a huge success and I never have any issues. That’s how all businesses go right?

Tyler and I are also in the minority investment space for another business that has done well. It’s a pontoon rental business that has put together some great numbers and carved out a nice chunk of the market for themselves. The owner is awesome and really knows his stuff. Fingers crossed, but that would be a huge step in the right direction.

Tyler’s Perspective (Experienced Buyer)

🚨 Tip of the Week: Organic leads can be tricky. Especially if the owner/seller wasn’t already considering selling, and even more so if you are considering a minority investment with the owner/seller remaining on as the operator. The latter is what we are currently working on, and it can certainly be a lot of work. Preparation for a change in ownership takes significant time and effort as a small business owner, and often times with organic leads, that time and effort hasn’t taken place. All that means is that as a potential investor, you need to soend extra time on your diligence and really get an understanding for the business, and the financials. Financials are usually the biggest hurdle, especially for smaller businesses, so drilliing into those takes more time than when a business is prepared to sell. More to come. 

💰 Deals < $500k 💰

Business Name: Organic Dry Cleaner in a Shopping Center
Revenue: $519,230
Asking Price: $475,000
Profit: $327,204 (Profit Multiple = 1.45x)
Location: Delaware County, PA
Established: 1970

✅ Pros:

• State-of-the-Art Equipment: Fully equipped with high-quality, modern equipment, ideal for handling high volumes of business.

• Prime Location: Located in a busy shopping center near residential neighborhoods, ensuring consistent foot traffic.

⚠️ Cons:

• Seasonal Fluctuations: Potential for varying demand due to seasonal factors.

📈 Growth Opportunities:

• Add Delivery Services: Introducing a delivery option could attract more customers and increase revenue.

• Expand Client Accounts: Develop contracts with local businesses for regular, bulk cleaning services.

💰💰 Deals $500k - $2m 💰💰

Business Name: Absentee Turf Company
Revenue: $685,764
Asking Price: $599,000
Profit: $351,323 (Profit Multiple = 1.7x)
Location: Weatherford, TX (Relocatable)
Established: 2022

✅ Pros:

• Scalable Model: Business can expand to additional regions with the existing remote management setup.

• High Profitability: Strong profit margins with efficient, absentee-run operations.

⚠️ Cons:

• Newer Business: Established recently, which may pose stability or longevity risks.

📈 Growth Opportunities:

• Increase Marketing Efforts: Expanded marketing in high-demand areas could attract new clients.

• Broaden Service Locations: Expanding to additional states with similar demographics could increase revenue.

💰💰💰 Deals $2m-$10m 💰💰💰

Business Name: HVAC Government Contracting Business
Revenue: $1,300,000
Asking Price: $2,500,000
Profit: $1,300,000 (Profit Multiple = 1.92x)
Location: New York, NY
Established: 2016

✅ Pros:

• Stable Revenue Source: Primarily contracts with government entities, providing stability even during economic shifts.

• Certified Minority-Owned Business: Certifications open unique government contracting opportunities, enhancing competitive advantage.

⚠️ Cons:

• Growth Limitations: The business may need additional resources to scale further.

📈 Growth Opportunities:

• Expand Contract Capacity: Increase bonding limits to bid on larger contracts.

• Enhance Workforce: Hiring additional skilled labor can support growth and manage more projects simultaneously.

**If today is your first day reading, go to Chapter Recaps to get up to speed!

The Lean Startup: Ch. 9 Part 3

Happy Monday and welcome back to our discussion the Lean Startup! Today we are going to continue our discussion on small batches, specifically on the insight of SGW Designworks & School of One. We will also discuss the Large-Batch Death Spiral, and ways to recognize it in your business. 

Eric first brings up small batches in action using the example of SGW Designworks. They were contracted to work with a military customer to build a complex field x-ray system to detect explosives and other destructive devices at border crossings and in war zones. They had to design a framework that was stable enough to ensure a quality x-ray image, durable enough for use in a war zone, easy enough to deploy with minimal training, and best of all, small enough to collapse into a backpack… Not too difficult, right? Using CAD software (S/O engineers who know what CAD is), they were able to churn out a prototype in 3 DAYS! Using CAD allowed them to go back and forth with their customer in quick intervals to help them make early design decisions. Their client took the prototype and immediately brought it forward for military review. With minor design modification SGW was able to have their first production run of 40 ready for delivery in 3.5 weeks after the initiation of the development project. If you don’t believe in small batches, here’s another example!

School of One’s goal was to challenge the original education system. How could a teacher possibly utilize small batches in education when they basically have to wait a single year to see if their concepts were successful? School of One utilizes personalized “playlists” for student’s daily learning needs, based on that student’s readiness and learning style. This inherently provides a much smaller batch. A batch of ONE vs a batch of THIRTY. If the teacher wants to try a new sequence of how a particular subject is taught, they could immediately see the impacts of those changes based on their student’s scores when they reach that part of the curriculum. If it goes well the teacher could roll it out to all the students, and if it goes poorly they can see it quickly. 

Now, to the LARGE-BATCH SPIRAL. Eric defines it as the idea, or trend, that large batches tend to grow over time. The inefficiencies grow with it, causing more rework, delays, and interruptions… with the incentive to maximize batch size to minimize overhead. See how the larger you go the more issues present themselves. 

Does your business work on large batches or small? Do you also see how the larger you seem to go the larger the issues seem to get?

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!