I’ve been an entrepreneur for most of my career, primarily building online media brands. I sold a few of those businesses, but I’ve never been on the buyer's side of the table. Recently I became curious about buying a business.
I found myself browsing the for-sale business marketplaces, imagining the possibilities. And while there were plenty of listings to explore, I couldn’t find much information to guide me through the process of acquiring a business. Unlike start-a-business entrepreneurship, there are not countless channels and podcasts devoted to buy-a-business entrepreneurship. There are still fewer public stories about entrepreneurs who have taken the plunge to buy a business and done well - though I knew such successes are plentiful.
Acquiring Minds is a channel to both correct that, and educate me on the journey toward buying a business. Business acquisition is an exciting prospect, and I intend for Acquiring Minds to make the path more accessible to myself and others.
What I'm trying to figure out is how is this profitable if you're charging $20-$60 a visit. Even if you have 10 reliable returning customers at $60 a visit the high end that's still $600 a month if each gets 1 visit. You'd have to market and get 40-50 maybe even 100 clients to be doing minimum fairly well, so how are people claiming they make millions doing this. When the structure doesn't add up because they aren't high ticket sales services and i highly doubt people are getting 300-500 houses a month. As a salesman myself I'm not understanding the numbers and the outcome for profit can someone explain this to me.
What about all the fraud committed by seller ? Not sure how they could get away with all that. There are usually provisions for if fraud is uncovered then seller financing etc takes a hit. And how is the seller allowed to over rule the sweep account. What about all the legalities around that?
Painful to watch this one. Some mistakes were made but it sounds like he was doing a great job on the underlying business. Very tough one to start with given large size, complex WC nature of the biz, and seller interference. IMO he was completely let down by his legal team both pre closing and afterwards
Holy s---... I can't believe how grounded Justin is through all this... But more practically, maybe it's too soon in the journey to ask these kind of follow-ups... but isn't everything that happened here with cooking the books, ignoring the non-compete/non-solicitation, etc grounds for seller fraud and breach of the purchase agreement? Will Justin have any recourse to get the sale proceeds back from the seller to help offset his foreclosure, his personal guarantee on the senior debt, etc? But how did the Confession of Judgement on a subordinate loan supersede the Bank's Senior Debt in the first place?
As an Alabamian and someone who is searching for a specialty apparel/retail company, I love this! It's unfortunate you're in Auburn, though lol (Roll Tide!) Glad your experience is going well so far. As always Will - I love how you acknowledge the various financials of searchers and your listeners.
I commend Justin for his transparency and candor. One learning I would add on to his list is purchasing such a large business as a first time entrepreneur. Not trying to pile on him at all, it sounds like he was incredible unlucky to deal with an unscrupulous (maybe even fraudulent) seller, but all of these consequences would have been more manageable if the deal required less debt. I wish him the best moving forward. Thank you Will for allowing him to share his story.
Justin is an amazing individual to withstand such a stressful and dire situation and then openly discuss it with the world. Maybe he should write a book on this experience?! This is SO valuable of a learning for anyone looking to buy a business. Just for further input 'Confession Of Judgement' is not typical in M&A deals anymore. I know in hindsight 20/20 vision Justin (or anyone) would have never agreed to it for these reasons: They bypass due process: A confession of judgment allows a creditor to obtain a judgment against a debtor without the need for a court hearing or even notifying the debtor. In an M&A context, this means a buyer could potentially seize the seller's assets with little to no warning if certain conditions aren't met. They limit defenses: The debtor often waives their right to defend themselves in court. This is a major disadvantage in complex transactions like M&A, where disputes can arise over various issues. They can be seen as predatory: Due to their one-sided nature, confessions of judgment can be perceived as taking advantage of the debtor, especially if there's a significant power imbalance between the parties.
if some of the chips fell bit differently , this story could have had happy ending. one word that come to mind is seller sabotage and professional that were involved in business consummation were less than adequate.
Wow. I'm so glad you are still moving forward in life and have such a great attitude! I wish you all the best....I believe there is good karma that will come your way for such a huge effort. Best of luck!
I’m terribly sorry for what you went through. Thank you so much for sharing your story. You have helped me so much in what to consider when buying a business. Great advice on what to look for. Can you sue the previous owner for what happened to you? I wonder if you can sue them for the downfall of your business.
Justin- Your strength in the face of such injustice is truly inspiring. To hear how you were taken advantage of by the seller and yet refused to let it fuel your anger or diminish your resolve is a testament to your character. In a world where unfairness often seems to thrive, it’s remarkable to witness someone like you remain grounded, focused, and undeterred. I am deeply sorry that this happened to you. Karma will undoubtedly find its way to the seller at some point, but your power lies in how you continue to rise above and channel your energy elsewhere. Will- thank you so much for having him on.
What a boss! Owned his mistakes, slept well, and lived to tell the tale. Talk about a twist halfway through the podcast! I would have never guessed the seller pulled the plug. I am curious if buyer sought a legal opinion as to whether litigation against the attorneys should be pursued, though as I think it through ultimately it is buyer beware.
True strength, we live in a world of karma those who have done such wrong will be hit back by it, thank you for your openness & resolve to educate us so we can prevent this in our future aspirations very selfless great conversation
Very sorry all this happened to you Justin. From one engineer to another, thank you for sharing this very helpful OE, and I hope your next business makes up for this experience and then some! Much Respect.
Never heard of hydromulch before - it's fascinating to see these niche subcontractor industries. Greg was a great guest, surprisingly candid. His point on credibility with customers vs employees was really insightful. He's pretty funny too, which made the episode even more enjoyable to listen to. All in all, a great episode.
I wanted to take a moment to congratulate Greg on the excellent interview. Your insights were truly impressive, and I appreciate your openness, advice and honesty regarding the figures you shared which most people don’t share. I have no doubt that with your vision and determination, you will continue to excel in your business ventures. Wishing you the best of luck with the new acquisition and all the exciting opportunities ahead! Kudos to Acquiring Minds for putting all this together 🎉 I love and appreciate your hard work.
Every situation is different, but having worked through a company bought and sold by and least three PE firms, I can say that each one made the company culture worse. I would never subject people I care about, whether employees or customers, to the evils of PE.
Question? If I have stumbled across a brokered deal that would make a great searcher deal. How would I go about pitching it to a searcher in exchange for equity since not in a position to close it myself currently
Will, I’ve just started watching the YT version of this, rather than the podcast. I’m noticing your guests using the same headset. Coincidence? The sound is good!
3.5x SDE is NOT a good price for a small, low/no growth business with a high working capital requirement / poor cash conversion cycle and a massively underinvested fixed asset base.
