Acquisitions Anonymous - #1 for business buying, selling and operating - 200th episode celebration: Our 5 best moments - Acquisitions Anonymous 200

Episode Date: June 30, 2023

Fashionably late- our 200th episode is one you don't want to miss. Michael Girdley (@girdley), Mills Snell (@thegeneralmills),  and Heather Endresen (@EndresenHeather) go over some of our favorite moments from over 200 episodes of Acquisitions Anonymous. Thanks so much to all our loyal listeners and sponsors!!!______________Thanks to our sponsors!This episode is sponsored by Acquisition Lab. Acquisition Lab, created by Walker Deibel author of Buy Then Build: How to Outsmart the Startup Game, is an accelerator with a highly vetted cohort-based educational and support community for people serious about buying a business. After going through the Lab's month-long intensive, you have ongoing access to almost daily Q&A sessions with advisors, regular live deal review forums with Walker, hand-picked vendors for your deal team, and a very active Slack group with other searchers on this path. Our team personally understands how to buy a business and will help navigate all the complexities of the process, as well as provide a trusted framework, tools, and resources to support you from search to close. The Acquisition Lab recently celebrated its 70th business being acquired and well over $100m in aggregate transaction value. The Lab is there to stand by your side, so you can take the right action (at the right time) and avoid wasting countless hours trying to "go it alone".For more information, check out acquisitionlab.com or email the Lab's director Chelsea Wood, [e-mail].--------------CloudBookkeeping offers adaptable solutions to businesses that want to focus on growth with a “client service first” approach. They offer a full suite of accounting services, including sophisticated reporting, QuickBooks software solutions, and full-service payroll options.Subscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

Acquisitions Anonymous, episode number 200. Michael here, one of your co-hosts. Today, three of the four of us went through and went through five of our most favorite clips from our first 200 episodes, took things we learned from them and reflections on the moments. We did over the past few years of doing 200 of these episodes, and we'll play the clips and talk about him a bit. We miss Bill today.

He is out in Italy, having a fun time with his family, and so you only get three of us, but it was a fun time no matter what, and he'll be back soon. So here is the episode. Thanks to all of our sponsors, cloudbookkeeping.com, AcquisitionLab as well, and we had a ton of fun with this one, and I hope you enjoy it as much as we did. This episode is sponsored by Acquisition Lab. Acquisition Lab created by Walker Dybul, author of Biden Build, How to Outsmart the Startup game is an accelerator with a highly vetted cohort-based educational and support community for

people serious about buying a business. After going through the labs month-long intensive, you have ongoing access to almost daily Q&A sessions with advisors, regular live deal review forms with Walker, handpicked vendors for your deal team, and a very active Slack group with other searchers on this path. Our team personally understands how to buy a business and will help navigate all the complexities of the process, as well as provide a trusted framework, tools and resources to port you from search to close. The Acquisition Lab recently celebrated the 70th business being acquired and well over $100 million in aggregate transaction value.

The lab is there to stand by your side so you can take the right action at the right time and avoid wasting countless hours trying to go it alone. For more information on the lab, check them out at acquisitionlab.com. There's a link in the show notes, or email the lab's director, Chelsea Wood, at Chelsea at buy-than-build.com. And that's Chelsea, C-H-E-L-S-E-A at by-than-bill.com. All right, special day today. It's our 200th episode.

And in true acquisitions anonymous fashion, we are recording this after we've already recorded episodes 201 through 208. But this was the first day we could get organized enough to actually do this special episode. So Mills, Heather, great to see you both. Great to see you. So good to see you. I didn't get the memo to wear red, but please, next time, guys, let me know.

The coordination was important here. Come on. In true acquisitions. I had no idea. I missed the memo. In true acquisitions and anonymous fashion, I also had the idea to get us like little funny birthday hats and stuff like that and then proceeded to do no work on it whatsoever. So that's why it's just a normal episode. But, okay, so here's the idea.

I worked with Ty, who's producing the podcast now, and he went through all 200 of our episodes. And he came back with the five most interesting clips. And so we're going to do a retrospective today. We're going to, the editor is going to interlace in these clips, and we're going to talk about them and go from there. And I'm also supposed to do an ad read mid-episode, and y'all's job is just one thing.

Remind me not to forget to do the ad read, because it's about cloud bookkeeping, our longest-running, most badassist sponsor, and Charlie and his team for being with us. So anyway, that was the first ad read. I guess I'll need it to do another. the one. So, okay. So, okay, you guys cool with this format? All right. So we're going to start with this very first clip. And it's from episode 142, one of my favorites, titled, Should We Buy

This CrossFit Gym. These are stock photos. It's always funny to me when there's a health-oriented business for sale, and their reason for selling is health reasons. You know, like, not that That shouldn't be funny, but it's always kind of funny to me when I look at it. Like, it is what it is. Look, okay, so I have the first comment about this clip. I'm going to have a talk with Ty about he picked a clip where I look like a total jerk. Like, it's just not very nice. But anyway, go ahead.

What do you guys think about that? And it also, it surprises me how popular that CrossFit Gym episode was. Like, it did really well, 15 or 20% above our normal downloads. So, anyway, I'll shut up now. You're right, though. I mean, the ironies that present themselves when we look at these deals are sometimes very glaring and very comical. I mean, you hate to see it, right? Who knows what health reason this person had? It probably is not, you know, that they were morbidly obese in the cross street community. But yes, it hits on the fact that you always have these things, right? It's like, you know, hey, it's a, you'll see people say, no, it's totally passive ownership. I work 10 hours a week. And it's like, why are you selling the business? I want to spend time with my family. or I want to spend more time on my other business interests. And it's like, well, 10 hours a week is pretty good. Amen to that.

Amen to that. Cool. Any thought from you, Heather? That was before you joined the podcast. That was. It's always fun to look back at the older episodes and the ones that I've heard before, but that is a funny one. And, you know, I always just wonder if they're telling us the truth about why they're selling

because I get deeper into the deals as a lender. And I sort of find out hints that that wasn't really true. You know, and that I always find funny because I'm skeptical when I read what the reason is, the first reason. It was super interesting when we sold our coffee business and we had a first meeting with the seller or with the buyer and they were like, why are you selling the business? And I like told them the truth. I was like, this is a good business. It's just we're not the right owners for it. And like everybody was kind of blown away.

Like I just told them straight up the truth. And it was like a valid reason. Like, look, it doesn't align with our dreams of what we want to do with our lives and moved on. And the broker was like, huh? Right, that's not how this goes. We start out with some different weird reason and people figure it out later on. Yeah, yeah, yeah, for sure. All right, cool.

Let's move on to this next clip. This is from episode 80, which as we go look at like our top top five episodes of all time, this is actually number two, I think. Number one is number one. It's the one with Pertique and it's number one by a large margin because some bot keeps downloading all the episodes. But anyway, don't worry about that fact. But this was a great one with our buddy, Joe Cassandra, from episode 80. And here is the clip from how one tweet led to one S&B acquisition, episode 80.

Okay, I want to read the tweet that inspired me to reach out to you. And this is basically the story. And you wrote, how we bought a business in 2021, a favorite account of mine, real estate Trent. So it's at Real Estate Trent on Twitter posted about there are still deals on LoopNet. you got on LoopNet five minutes later. You found an amazing deal. You called the seller and you bought it 40 days later. And since then, you've dealt with a bunch of stuff.

What do you guys think? I think it's pretty cool, right? I mean, I forgot about LoopNet myself as far as once you get out of sort of the real estate, you know, end of things. You don't think about LoopNet anymore. I think that's pretty cool that someone got the idea and found something. Yeah, 100%. I think it's cool because, you know, everybody, you have to do, you have to cover all your bases. The table stakes of looking for a business is, you know, you do cold outreach, you meet with all the brokers, you talk to CPAs, you talk to alerts, like you do all the things. And you never really know exactly what's going to hit or why or when. And some people look for two years for a business to buy and, you know, they come up empty. And Joe looked for five minutes and he came up with something. And I know that's the short version of the story. And I think though it brings to light the fact that you don't necessarily know, like, you know,

when luck is going to strike. And also, probably more importantly, you don't really know, you know, post-close, like the dynamics are going to present themselves. And you could be picky, right? Most people are probably too picky. I have friends who've looked for businesses to buy for, you know, five, six, eight years. And they're like, I still can't find anything. And at the end of the day, you know, there is something to say for the deal that gets done. Yeah. You know, it may not be the perfect deal, but it's a deal that got done. And could it have been better. Could you have waited for a better opportunity? Absolutely. But in this case, you know, Joe isn't like regretting his decision, you know, and all the bumps and scrapes and

bruises along the way. But kudos to him for just ramrodding it and getting it done. Yeah. And it's just that bias to action that really helps people like Joe, right? They just, like, go for it and make it happen. And it helps that he's like super smart and articulate and, you know, and has grit to him. So, you know, kudos to him. And, you know, for all of us, like, recording the podcast and pooping on deals over and over again, like king pooper here. That's me. But like it's a fun reminder to see and to celebrate guys like Joe and any seller

or any buyer who like makes a deal happen. You know, that's why there's this like funny thing on, on like social media where people are like, don't celebrate fundraisers. Don't celebrate XYZ. I'm like, dude, do you know what percentage of those actually close? It's a miracle.

Like deals actually get done. So like anybody that says you shouldn't celebrate that stuff, just like to me hasn't done enough real world stuff. So deals getting done, like there's a lot of, they die all the time, all the time. And what about the notion that you can just get great ideas from Twitter, just out of the blue? Someone interject something.

You have a different train of thought. You're working in something else. And all of a sudden you read something and go, oh, hey, that works great for what I'm doing. That happens to me all the time. That's what I love about Twitter. That's a great one. Except for all this stuff I hate.

But anyway, okay, let's keep. I almost quit Twitter two weeks ago. I was like, I don't think I could do this anymore. You're having a rough time. I'm back, baby. I'm good to go. We'll coach you through it. It's going to be okay.

I figured out everything. Well, it was really funny because I posted this thing. I was like, oh, I don't think I could do Twitter anymore. Like, it's making me sad. I don't like where the platform's going. It requires, like, all this controversial stuff. And you have to be death threats. Like, I'm just not interested.

And then, like, somebody, DM'd me like four hours later and was like, oh man, do you want to just talk through this? Like, I've gone through the same thing. And I was like, no, no, I've already gone through all five stages of grief and I have a plan. Like, I'm good. Do like five hours? I was back to normal. You even do grief quickly. That's good. That's good. Yeah, yeah. Hoodo loops, man. Okay, live read time. So we're talking about some of our best episode clips. I want to talk about my favorite number one advertiser. And it is cloud bookkeeping. So pulling them up on the screen.

They have been our most consistent supporter since day one. When I met Charlie, who owns a company, who was my neighbor, took me out to lunch, bought me lunch, like great guy, and like just has been a consistent supporter.

And I think it's been a great partnership for us. And so, you know, I pulled up here, their website on the screen, you know, if you have definitely heard me go through and say the advertisement

for cloud bookkeeping because they advertised a lot and are still advertising with us. And we love them. So they're at cloudbookkeeping.com. They're located here in San Antonio. If you need bookkeeping services and you want to just focus on your business, call them. And, uh, you know, anyway, we're very thankful for them.

And also, like, their website looks really good now. I'm impressed. Yeah, he's updated. It looks really good. You got to say, consistency is probably the trait that you, you know, would most want to prioritize in your bookkeeping service. You don't want the best sales guy. You don't want the best business development person.

You don't want the most creative CPA who's willing to just play in the gray and get you in trouble. Consistency. So, Charlie, big thanks for being consistent for us. And the other thing I like about this website, which I wanted a bookkeeper, I want somebody that worries about the details.

There's a lot of details on this website. Like, there's some good stuff here. So kudos to them. And yeah, thank you, Charlie, and please go spend money with Charlie. That's our ask. All right, you guys are ready to move on to another clip? Okay.

All right, here it is. I'm not going to lead into this one. I want you guys just to watch it. And then I'm going to quiz you as to why we chose this clip. You're used to making, you know, I don't know, like they list all these different things. But if you're used to making, you know, FDA approved drugs and you have to have small, very, very small quantities of lubricant in your manufacturing process, you try not to change those things if you don't absolutely have to because you can make bad batches of pills, you know, just because you switched your loob. Yep. Yep. So the other thing, too, that could be the huge moat on this business is whoever manufactures the lubes, maybe they've got an exclusive territory. You know, depending on their contract, and this could be the greatest risk or the biggest

moat or both in this business, right? If they have one supplier of lubes and they've got like a protected territory or like that contract is really hard to get or there's 10 years left on it or, you know, there could be a real strong moat in that contract. Or there could be no moat at all in just a bunch of risk if, They'll sell to anybody off the street and can cancel a contract at any time. So that, you know, sourcing these loops for any distributor, sourcing the things that you distribute and understanding where they come from and how secure that supply is would be critical.

Yeah. All right. I have another wager for you since we've already bet two Chili's gifts cards. I will double or nothing. Double or nothing. Double or nothing that at least half of the people in this company speak Spanish fluently and at least half of them understand Latin American culture very well. Oh, that's an easy bet.

there's not because look at i mean here's very interesting the largest economy in south america is brazil that's only and they speak portuguese that's only 14% of their market mexico columbia and all these others they all speak spanish some better than others right mirko okay so we think we just that that clip you guys did tie choose that clip because of the number of times that we said as a as a heather as a 12-year-old boy and a 48-year-old man's body. Like, I'm just shocked I wasn't laughing. I went back to middle school watching it, you know?

I was laughing every time you said it. You guys were so serious and you really were conveying all this really important information. All I was doing was laughing. I think at some point in that episode, Bill and I were having a very serious, you know, analytical discussion. And then Michael just made some off the wall, you know, 12-year-old comment. I'm pretty sure if I remember right. I mean, I'm just shocked Bill managed to say Loub like 18 times in one sentence and nobody cracked up.

And I was just like, oh, this is great. You guys were deadpan. It was serious, but I was laughing. Good times. Unintentional humor. Unintentional humor. Okay. Here we are going on with the next clip.

And this is from, oh, by the way, the previous clip was from an episode titled, The Guys Get Excited by a $20 million year lubricant. exporter in Houston. It's like, even our titles are like a 12-year-old boy with title stuff. So, okay, anyway, the next clip is how to break into private equity.

And it is from episode 168, and it's Bill and I talking. So here's the club. What I've tried when I've kind of partnered with other people who are doing searches and stuff is they'll say, like, well, my partner has done this, this and this.

And that's helped. But even still in some markets where they're like, look, if you haven't done a deal in this space, like, you're wasting my time. it's very difficult. Like we've just been told no. Like we're not going to talk to you, for example. Like a lot of the financial services or manufacturing stuff,

they're like, yeah, I'm not talking to you until you've done one deal. So that chicken and egg problem is very difficult. So I don't know if you've figured out how to solve it. So I have a couple tips for folks because I've dealt with a lot of business brokers. From easiest to hardest. Let me see. I get this the right order. So from easiest, do not email business brokers from your Gmail account.

Buy a domain. I mean, I know you're laughing. Like, this is basic stuff, right? You know, buy a domain. It's $9. Throw up a website on that domain. It doesn't have to be fancy. Just with a little bit of information about, and it's not about you, like if it's the website

just like your LinkedIn page effectively translated, that doesn't work. Try to look like a firm. Try to look like somebody who has an investment thesis. And hopefully the business you require about fits the thesis that's on your website. So don't email it from your Gmail. buy a domain, email from that domain, and then the first thing the broker is going to do is click on your email so you can make sure the website, it can be short and sweet,

doesn't you be super complicated? It just at least mentions your investment thesis, and that should overlap with the businesses that you are inquiring about. The other thing the broker is going to care a ton about is whether you have committed capital, because they do not want to waste their time on Johnny Search Fund who wants to buy this business and is, is bidding with money he doesn't have and then has to go back to his LPs and then the LPs

veto the deal or tell Johnny he can't pay that price or whatever, right? There's just a recipe for a broken process. So brokers and sellers want to know that you have the checkbook. Even if it's not money in the bank, that's the best. Next best is we have committed funds. We feel as though we can close in X days. All right. That was a classic.

So serious, serious clip this time. Classic bill. There was no poking fun. Yeah. Well, he didn't use the word loop, which was like, all we needed that was kidding. Midway through, I thought you were leaving. I thought that was going to be the punchline of that clip was that you just walked off mid-ramp from Bill. But it was your stand-up desk being made into a stand-up desk.

So to me, I think this clip, I love that we chose it because I think it's what makes the magic of this show happen, which is, like, those are things that rarely or never would get talked about in. in anything else, any business textbook you're going to read, any YouTube clip, any tweet, because it only comes up in context of when you're really talking about doing a deal, right? And that's the magic, I think, of what this format creates. And that is a perfect example of that. Like, nobody even knows to really ask that or think about it on a podcast, but because, like, we're talking about, like, this particular real world challenge,

it becomes super valuable and interesting content. And we entertain you first, and you're going to learn some stuff along the way. And to me, right there, that is the magic. of why you take all of your devices and subscribe them to download our podcast every single time when it comes out and turns on notifications. Anyway, that's my commercial for the magic of what we do here. Yeah, it was great advice. It is good and practical.

That's what we're trying to do. It turns out Bill really knows what he's talking about, including, which was said by some guy on YouTube, he's like, could we just get rid of Girdley and have Bill talk the whole time? I was like, oh, man. Haters. Which we're missing, Bill. He's in Italy.

And we tried to hold out and do this with him. but he had more important things to do. Thanks, Bill. Arriva Dirtje, Bill. Anyway. Okay. Anything else there? Otherwise, I'll go to our very last

and number one clip of the show. All right. Here it is from, and I believe this is just you and me together, Mills, from the episode titled $8.5 million ski resort for sale. And nobody else cares about this mountain.

Like, why didn't Vail Corporation buy it? Why didn't any of the other folks? buy it, especially during the zero interest rate kind of phenomenon years. So that's kind of your first red flag, and you want to understand, like, oh, why didn't a classical operator go ahead and buy something like this? And maybe because the snow sucks, or it's too far away. I think let's talk about revenue, though, in these types of businesses, because you mentioned ticket sales, which is the obvious one, because it's kind of sticker shock.

But the way that these folks monetize professional owners, and I mean, probably even mom and pop owners, but just to a lesser degree, the streams of monetization are fascinating. And they're almost like, you have all the power. You have all the leverage, right? In, you know, in these ski villages over controlling food, controlling alcohol distribution, setting rent, right, for the retail and everybody who else wants to be there. HOA fees are phenomenal in areas like this. Because, you know, you, what are people going to do? They can't go anywhere else. And it's a, you know, it's a condominium scheme of ownership a lot of times on these, you know, townhomes and different things that get built. Not to mention anytime new stuff is coming out of the ground, they mention they have a,

you know, a master developer agreement with the county. They're able to fee off of so many different types of things. Man, I was really hoping this clip, when I saw the title, I was really hoping it was going to be the argument that you and I had on this episode, Michael, about whether or not this business is actually making money because you still owe me. I think. I think it was a gift card to your favorite establishment. I'm pretty sure you owe me $100. I think this was the moment, Heather, where Mills turned against me and decided Chili's was a place he was not going to patronize

ever again in his life. And I said, I want a $100 Rudy Tuesday. Our relationship has never been the same. Jots fire. I never been saying. But I think, you know, and I think you did this, Heather, in your career as a banker and now doing what you're doing on the loan side, like, this is where, like, this muscle of digging in

and truly understanding the dynamics that make a business work or not work is what Mills is doing there, right? And those of us that had entrepreneur parents, like, I grew up doing this, like, around the dinner table, we're talking about stuff. We go to Disney World, like, my parents are, like, showing all the economic factors going on and talking about them, doing that mental math underwriting.

And I think, to me, that's the other magical thing, that kind of happens here, and especially for people that didn't have that growing up or don't have it now. I love that about our show. Yeah. I mean, I learned a few things, Mills. And I think I, I know I saw a ski resort a couple years back, might have even been this one. So what I have fun with is, like, I actually see the financials after, you know, that come after this. But I think I learned a few things just from listening to you right there. So it is fascinating, the monetization streams. I think I had recently, right before this episode, I'd been to this private development down on the coast in South Carolina that got bought by a private equity firm. And I did like a deep dive into what makes it so attractive for a private equity firm to buy something like this as a financial buyer. And it's just how many numerous revenue streams there are. So I'd nerded out on it recently. I don't usually just keep all that in my head. That was great. Yeah, 100%. All right. So I think we'll cut it down there. First of all, thank you. Thank you both for being part of the show.

I look forward to doing every single one of these episodes. I have a ball doing them, and hopefully you guys do too. I've learned when we have fun, the audience is going to have fun. So that's first and foremost what matters. And it's been fun watching this journey over 200 episodes. I'm excited to do the next 200. And thank you both for being part of it, both as a guest and now as co-hosts. And full-time Mills from when you and I were like first talking about this.

And someday I'll meet you in person. I'm excited for that. Let's just keep going. We'll see how many episodes we can get to before me in person. You both may be AIs, and this is Truman Show stuff going out for me. But we'll figure that out. Simulation. Yeah.

But we were going to meet at SM Bash, but then I got COVID. And we'll find another time. Another time. And then I was in your backyard in Austin, and you wouldn't even come to see me. Dude, it's 80 miles away. Might as well, you might as well be in Canada. All right. So second thank you.

Goes out to obviously Bill's not here today. Thank you to him. Thank you to our team that helps produce all this stuff. We have Ty and before that Mirko and then all the editing staff. It's all super helpful. Thank you to the sponsors, cloudbookkeeping.com, who's been huge for us. And then I think we have Acquisition Lab. Acquisition Lab was the other sponsor for today.

I thankful for both of those. And then last thank you to you guys, the listeners. We're doing 800,000 downloads a year now of this podcast, and it's niche and crazy and not Joe Rogan. and it's good and happy and, you know, positive. And I think all that's really good. Like, that's the type of content. I think we all want to put out. So thank you.

Tell your friends about it if you enjoy it. If you're learning something, definitely do that. And, you know, the more spread we can do this, the happier and bigger impact we'll have, which is what we're trying to do. So thanks to everybody involved. And we'll click stop here and move on to the next one.