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🧐 What I Learned Last Week
Curated M&A, SMB, and EtA-related content for week ending 3.10.23
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An old post on Searchfunder recently came up and I want to share the link here. It’s a detailed view of what a new CEO can expect in the first 100 days. It’s a great read.
From my experience as a CEO of several companies as well as working with hundreds of entrepreneurial leaders and the new breed of Search Fund CEO's, here are my recommendations:
1. Look at it through a first six months lens vs 100 days. (100 days is an arbitrary number anyway, likely stolen from US Presidents during their inaugural address.) Take the time to learn about your new business from the inside. Find out what you really have to work with and what you really need to work on. In those six months, take the time to get to know:
o Your leadership team - the quality of this team will make or break you
o Your top 20 customers - they are the life blood that keeps the doors open
o Your top 10 vendor relationships - they keep the lights on and product moving
o Your Board of Directors - they should be asking the toughest questions
o Your processes and systems - where do things flow and where do they bind up?
2. You may want to move right into action mode and start putting your stamp on the business. Resist that temptation. Here are the things you can do that will create a positive and lasting foundation as you move from searcher to CEO in your first six months:
o Make few promises - You don't have all the facts yet and it's tough to walk back a promise.
o Realize your actions have 10x more impact than your words. Whether you notice it or not, everyone is watching. Do you take long lunches, cut out of work early to see you son's little league game, hold closed door meetings, tell off-color jokes? They notice.
o Meet everyone in the company. Learn their faces & names. If you can, find out what it is that drives them to come to work every day. It may be a passion to write good code or to pay for their kid's college. They don't care how much you know, until they know how much you care.
o Avoid hiring or firing anyone in your first six months (and certainly your first 100 days) if at all possible. Until you have understood all of the company dynamics, just take it all in.
o Expect at least one major crisis or disaster. It may not be COVID-19 or a trade war with China, but there will be something. By knowing what/who you have to work with, you better understand your ability to manage the crisis.
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EADS Bridge Holdings shares their list of the 10 software apps that they’ve found the most useful.
Importantly, this post is not about the future but rather apps that we know can be useful for you today and won’t break the bank. The main criteria for choosing these apps was:
Cost effectiveness – doesn’t always mean cheap, but you’ll get bang for your buck (although many of these apps are also surprisingly cheap or even free)
Flexibility – adaptable to your workflow rather than requiring you to adapt to the software
Connectivity – built for integrating seamlessly with other applications so you can build your business system
Superpower – the capability that sets this app apart
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The Wolf of Franchises is a great newsletter that I follow. Their recent issue analyzes a FedEx route vs. a UPS store. Great read, especially if you’re looking at this space.
Overall, both FedEx and UPS have hundreds (if not thousands) of operators that are able to leverage the brand to create their own individual business.
While FedEx Routes and UPS Stores do compete, the business opportunities are fundamentally different, as one is a brick-and-mortar business, while the other is purely service-oriented.
Like I’d say with any franchise, each business should be evaluated on a case by case basis. But on average, it appears that a UPS Store offers more predictable revenue, and likely more profits.
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I love this article from Axial. They surveyed their members to understand the main reasons behind deals falling apart. Highly recommend you read this one.
🧵 Best of Twitter
On how to structure a business acquisition that includes real estate…
This is a really great thread highlighting the differences between a search fund with investors and going all-in yourself…
Might be a good opportunity for someone looking in this space…
Working in the business prior to acquiring it is something I don’t hear a lot about. This is a really interesting view…
Make sure you focus on the right metrics and levers…
Good framework for “people and ops” diligence…
This looks like a great way to understand your employees better…
The Silicon Valley Bank collapse is worth following. It may not impact you directly but it definitely impacts a lot of the software you use. This is a big deal…
🤔 Thoughts, Events, Other
⚒️ Tools & Resources
I want to share some tools & resources that I have found helpful. Please note that some of these may contain affiliate links. This means that I may receive compensation if you sign-up and use them.
PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.
BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel. Local Boston company and I consider the founder (Adam Ray) a friend.
X5 Deals - Proprietary deal sourcing. They do the outreach and send you relevant, actionable deals directly into your inbox.
Import Dojo - a newsletter that sends eCommerce and Amazon FBA businesses for sale to your email inbox. They send deals each Wednesday at 9:00 AM CST.
Kumo - Find every deal in one complete platform. Spend less time sourcing deals and more time closing them. Kumo aggregates 180K+ business listings into one easy-to-use platform.
Cerebro Capital - Cerebro has a network of 1,500+ lenders who can provide debt financing for your acquisition, refi, etc. $500k minimum.
Curators - Proprietary deal sourcing. You need targets that fit your investment criteria, and Curators delivers week after week - we even update your personalized database on a daily basis with new information on best-fit targets.
Deal Flow Scout - Peer-to-peer deal flow exchange. Free, open, transparent.
Deal Sourcing Guide - A directory I put together of online marketplaces, brokers, DFY deal flow, and more.
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