"How Do I Buy a Business Without Breaking Mine?" — Transcript

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1. 0:00Hey, Alex.
2. 0:01>> Yes.
3. 0:02>> Uh I own a company that uh basically
4. 0:04scoops up dog
5. 0:06>> Sweet.
6. 0:07I love these types of businesses. No one
7. 0:08cancels.
8. 0:08>> Yeah. We got We're doing about 2 million
9. 0:10a year, and I want to get to 10 million
10. 0:12a year as fast as possible. Uh and
11. 0:14>> profit. Sorry, go ahead.
12. 0:16>> What's [laughter] that?
13. 0:18Uh
14. 0:20And our business, it's it's somewhat
15. 0:21seasonal as far as the acquisition goes.
16. 0:23We basically double every first quarter
17. 0:25of the year when all the snow's melting
18. 0:26off and everything. Uh but through the
19. 0:28rest of the year, I want to uh start
20. 0:30looking at acquiring other dog
21. 0:32companies, basically.
22. 0:33>> Uh
23. 0:35>> [laughter]
24. 0:36>> Uh So, my question is when you're going
25. 0:38to acquire other companies, how do you
26. 0:40integrate it with your company to uh
27. 0:42basically not
28. 0:44light your money on fire and to maximize
29. 0:46the enterprise value for an investor.
30. 0:48>> So, obviously the the
31. 0:51that is going to be a huge factor in how
32. 0:52you structure the
33. 0:54Um are you keeping the operators on
34. 0:56afterwards or no?
35. 0:57>> Uh probably depend on the uh on the
36. 0:58business and the deal.
37. 1:01>> I would have some sort of big incentive
38. 1:02for them to have
39. 1:04bonus basically post integration. And
40. 1:06so, that way they're going to be highly
41. 1:08incentivized to you know you could put
42. 1:09half
43. 1:12Okay, like we're in this together. If
44. 1:13this doesn't work, then you're not going
45. 1:14to get paid. Um and I think that that's
46. 1:17that's fairly I think it's pretty fair
47. 1:19um for especially a small
48. 1:21um cuz I'm assuming the
49. 1:25be somewhere in there. Am I less
50. 1:26[clears throat] loud if I have my hands
51. 1:27in my pockets?
52. 1:29Ah.
53. 1:30Sneaky, sneaky. All right, good. Okay.
54. 1:33There we go. [snorts]
55. 1:34Um
56. 1:35What were we saying? Poop poop ladder um
57. 1:38profit, yes. So, making making the deal
58. 1:40structure. Um
59. 1:44I would try and separate the business
60. 1:45out into what what the components are,
61. 1:47right? So, it's like you have the routes
62. 1:48that they do for you know poop poop pick
63. 1:50ups or whatever, right? So, you have
64. 1:53you've got the customer list, then
65. 1:54you've got the the people who do the
66. 1:57poop scooping.
67. 1:58Um and then you probably have some sort
68. 1:59of administrative stuff. I don't know if
69. 2:01they have they have sales or marketing.
70. 2:02I'm guessing you're pretty good at sales
71. 2:03and marketing, so you don't need their
72. 2:05sales and marketing to try to buy the
73. 2:06book of business.
74. 2:06>> Mhm.
75. 2:07>> Yeah, so um it's just I think it's
76. 2:10you'll probably just end up having an
77. 2:11SOP for each of the core components. And
78. 2:14there's a really good book um
79. 2:15for you. No one else needs to read this.
80. 2:18Uh it's called uh how to make a few
81. 2:19billion dollars. Um
82. 2:22the guy just did three roll-ups over his
83. 2:24whole career and he roll-up he sold for
84. 2:26like 10 billion. Um and so it's really
85. 2:28just understanding that
86. 2:30all the business have components and you
87. 2:32basically just have a massive checklist
88. 2:35that you do when you integrate a
89. 2:36business. Like that's literally it. It's
90. 2:38just the world's longest checklist and
91. 2:40every single integration you do you get
92. 2:42a little bit better and you add things
93. 2:43to the checklist until eventually like
94. 2:45you've covered every single thing and
95. 2:46you can go faster and faster. And have
96. 2:47you studied waste management?
97. 2:49>> Yeah.
98. 2:50>> Yeah, I mean cuz literally I
99. 2:51>> Yeah.
100. 2:52>> You should.
101. 2:52>> Yeah.
102. 2:53>> [laughter]
103. 2:54>> Uh I mean that's literally how you grow.
104. 2:55So, finding routes. I mean I would study
105. 2:58everything about that business. Um but
106. 3:00it's really just breaking down the
107. 3:01components and having SOPs that are
108. 3:02associated with them.
109. 3:03>> Uh do you need to rebrand the businesses
110. 3:05you buy under the same brand to make it
111. 3:06more attractive to investors? Does that
112. 3:08not really matter as much?
113. 3:09>> Um
114. 3:11I would probably rebrand it. If you
115. 3:12really want to do the big play, you'll
116. 3:14get a premium for it.
117. 3:15Yeah.
118. 3:16>> Thank you.
119. 3:16>> Yeah, you bet. I can't give you every
120. 3:17single SOP. That would be ridiculous. It
121. 3:19would be like this long. But these are
122. 3:20the top five SOPs that we have used to
123. 3:22scale that Leila [music] actually put
124. 3:24together for us cuz she's really been
125. 3:25the one who operates the business. And
126. 3:27so yeah, I don't know what's inside of
127. 3:28it. But um it's [music] good. So, you
128. 3:30should check it out cuz Leila made it
129. 3:31and she makes good stuff. It's free.