Acquisitions Anonymous - #1 for business buying, selling and operating - Selling LSU branded suits for big bucks - Acquisitions Anonymous 253

Episode Date: December 12, 2023

In this episode, Girdley and Heather discuss a unique business opportunity involving a mobile bespoke suit franchise specializing in LSU-themed clothing. They raise questions about the business's sustainability and the low asking price relative to its cash flow.Despite initial skepticism, they suggest this business could be a lucrative side hustle, especially for someone already engaged in the LSU alumni community. Thanks to today's sponsors! The Copy Council is your gateway to success in direct marketing.Zarak is the founder of Mailer Profit, a boutique direct marketing agency, and is recognized as one of the best copywriters in the world. He has a course he’s offering to our viewers called the Ecom Direct Response Playbook for 2024. This comprehensive resource includes three game-changing modules:After taking the course, you’ll be able to craft compelling headlines and leads that make customers open their wallets and maximize your email marketing to generate up to 40% of your annual revenue.------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]

Welcome to Acquisitions Anonymous, Internet's number one podcast about business buying, investing, and M&A. I am your co-host, Michael Girdley. Today, Heather Anderson and I had a lovely GenX corner, and we talked about a very interesting deal that at first looks terrible. And then as we dug into it, we're like, actually, this is a pretty good deal. And it involves some really interesting stuff around selling branded college apparel merchandise to fanatics of that particular college. So I think you really enjoyed where this one went, and here is the episode. Are you ready to supercharge your marketing skills and take your business to the next level? Today's episode is brought to you by the Copy Council, your gateway to success and direct marketing. Our listener, Zerick, is the founder

of Mailer Profit, a boutique's direct marketing agency, and is recognized as one of the best copywriters in the world. He has a course he's offering to our viewers called the Ecom Direct Response Playbook for 2024. This comprehensive resource includes three game-changing modules. After taking the course, you'll be able to craft compelling headlines and leads to make customers open their wallets and maximize your email marketing to generate up to 40% of your annual revenue. Grab your free e-com direct response playbook for 2024 from the Copycouncil today and unlock the path to marketing success. Visit their website now via the link in the show notes and thanks to them for sponsoring today's episode. Heather, it's an old Gen X episode today. No kids involved.

Gen X all the way. Yeah. We have our great generation. We were like the last ones that played outside on our bikes. Man, you know, I think I look at my kids and I wish they would go outside, but then I go outside around here and I'm like, I can't really blame them. Like the built environment in my neighborhood and look, we chose our neighborhood because it's like the best schools we could possibly get our kids into. And then like I look at our neighborhood and it's just like there's no amenities for them. There's no parks. There's no walking trails. And then even when we do have parks and walking trails. They're so like milk toast. They're like so bland now that like

I can't really blame a kid for not wanting to go to them. I don't know how it was when you were a kid, but literally I could remember being 12 years old. My dad had given me a go card. And my buddies and I would use the go cart and a chainsaw that we were using totally unsupervised to chop down trees to make high-speed race courses through the forest across from my house. Like, that's what we would do. Yeah, that's pretty wild. But it sounds right.

You know, like, we had no supervision. We did crazy things. You know, the best thing your parents could let you do is ride around in the bed of somebody's pickup truck. You know, and not just on a farm, but, you know, out on the street, it was great. On the big highway, it was great. I was on my bike until the street.

streetlights came on. We had a creek. We would catch crayfish. We would go to different kids' houses. It was like we had our own world. It was pretty fun. So yeah, I think, man, I think there were some positive to all of that, you know, where kids were just like, they were out all the time. And like, I could remember when I was 12, like here in San Antonio, it was 1987. And maybe I was a little younger, 1986, but they held like a massive snowstorm. And I just spent the whole, they closed school down, like 12 inches of snow in San Antonio was like a huge thing. And it just stayed around for like a week. And like I just stayed outside the whole time. Like all we did was just run around and be idiots. And man, yeah, it makes me really sad about what we've done with some of our development policies.

Because like the kids should be out being kids and not being screen zombies. Okay, well, that was your next corner. Thank you everybody for listening. We'll get on to the deal. Oh, yeah. Oh, deals. Okay, sorry. Yeah. Now, this is an interesting one that we found here from Biz Buy, Sell. Should I read it? Yes, please. All right. It is Austin Absentee, Mobile Bespoke Suit franchise with big profit margins. You have to scroll down for me there.

Asking price is 77,000 cash flow 140,000, gross revenue, 210,000. doesn't do a lot of sales, but great margins. Okay, absentee and mobile bespoke clothing franchise. No inventory and massive profit marg. I guess that's margin. This high-end 100% bespoke men's and women's suit and blazer franchise is a perfect addition to anyone looking to add passive revenue or a career change, currently being run part-time and killing cash flow.

run it full time and double or triple earnings strong customer base official clotheer of the lSU football and other sports teams oh interesting no inventory zero employees all clothiers are 1099 contractors full turnkey social media from franchisor lead generation from franchisor business in a trunk low cost high margin around 70% plus plus profit, absentee model to or run it day to day, too many positive solicitor. Information deemed reliable but not verified. We encourage all prospective buyers to verify. What do you think, Michael? What is this? But wait, there's more. Oh, there's more. There's more. Employees, number one, I'm sorry, one employee, I guess, the owner, facilities, mobile, mobile, slash home-based competition. None. You will have the market cornered. Sorry, laughing. Austin and other U.S.

territories available, full franchise support and training. This business is home-based. They say that again. So they really want to drive that point home. And the business is an established franchise. I mean, I've never heard of such a thing. What's going on here? I have heard of these things. because I have been pitched by these folks. And so the way this works is there are these folks who've become what I would describe as independent, like, clothing consultants. So think of what, like, stitch fix meant would try to do for you, but it involves, like, somebody coming to your house with a big trunk of clothes.

So it's almost like they do a trunk show at your house and they show up and, like, it's become a thing because, like, some of my buddies do this. like, oh, like, you know, and it's often a, like, attractive 28-year-old lady. She comes to your house. It says you look great, everything. She got a trunk full of stuff. And she, like, you know, like comes to your house, sits in your living room, and, like, starts trying clothes that they bring on over to you.

And basically, she sells you suits and shirts and pants and all this kind of stuff. And, you know, as an aside, the older I get, the more I dress. like a five-year-old whose mom dressed him to go to church. That's why I told my wife I was like, why do I dress like a five-year-old

that his mom was dressed to him to go to church? But anyway, but like they end up giving you those kind of clothes. And then the way it works is there's a manufacturer somewhere who is,

they're the rep for it. And all these clothes come from that manufacturer distributor and you can see how it all works, right? There's a cut, probably 40 to 50% of these suits

that go straight to the sales person who's the typically the lady who's there selling you the suits or whatever and then the rest goes the manufacturer and it's kind of like the um it's kind of like the girl scout cookie model that's the best way I could describe it yeah there's a woman's clothing frant I don't know if they're franchises but there's a woman's clothing brand that does that I remember that they're called cabby so I think it's sort of similar I guess now I sort of get what it is but you're like a traveling salesperson with clothing yeah pretty much So I have like one of my buddies does exactly one of these services.

And my experience was he gave my number to this lady who is one of the sales reps. And she calls up and literally she has called me 10, 12 times over the past two years, like just been relentless. Hey, your buddy, Jim, let's call him Jim, is having a great opportunity. It looks so great. I think you could look so great too. he thinks you should meet with me, and she just hounds me. And she called me like a month ago.

And I thought I had gotten away from it, but it's six months, six months later I hear from her. But yeah, you're in there like, this is like you're hustling, sell on clothes, you're hitting up, you know, you're hitting up dudes to sell them suits, and then, you know, you're pitching them on. You do that weird thing where you have to be like a partner on their side. Oh, I don't like that suit. But this one looks great.

Buy this one. You have to do that game. which to me feel so yucky, so yucky when you're only selling one type of suit. But anyway, and that's your gig when you do one of these franchises. You're just like hitting people up, go to their houses and selling them stuff. Yeah. So this is really, I guess, a side gig for somebody who's a stay-at-home mom or, you know, that's kind of how I think of it with the women's clothing brand that I know about,

but it doesn't feel like really a business. What was the part about the football team? they have, go back to that. Yeah, so that's really interesting. It says here they are the official clotheer of LSU football and other sports teams. So interesting humorous anecdote for you. The, you know, my son, we went to go see his doctor the other day and he shows up. The doctor walks in and it's the day before the LSU football game and the doctor literally is wearing everything branded top to bottom L.

just over the top, like LSU printed pants, LSU stuff. Like the pants maybe had a thousand little LSU logos on them. He had like an LSU hat on. Like I'm sure there was LSU underwear in there somewhere as well. LSU shoes. Like he had the whole thing that he was wearing because he was getting ready to go to the football game the next day. So evidently if you're in Louisiana, you are a rapid LSU football fan a lot of times.

But then does that mean I just don't get it. If you're selling blazers, you're going to the football players and saying, I'm the official blazer for the team. I guess maybe there's a team blazer that they're supposed to wear for certain functions and this person goes out and fits the team for that? I don't know.

So my guess is, and what maybe I like about this business, is they, the supplier has gone to LSU and said, LSU, we want to make you a deal. We're going to give you, we're going to give you a base fee and we're going to give you a cut of every, suit that we sell that is LSU branded and here's the fabrics we're going to use and like literally you know you've seen those guys who will wear suits for their alma mater and it is just like the logo all over it just like over the top kind of branded stuff so I think what they've done here is

whoever the supplier that you're a franchisee of has gone to LSU cut a deal with them and then they are the only people that can legally sell the like over the top LSU jackets and all that kind of stuff and pants and that sort of thing. All right, taking a quick pause here. I have something to tell you. This is Michael. I hate bookkeeping. I hate bookkeeping.

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So please give them a call, call Charlie, cloudbookkeeping.com. Tell them we sent you. They're a great way if you're a business buyer, if you're a business owner, you're tired of hassling with getting your bookkeeping done. He's got a whole fleet of people that are well trained and work for him. He's located here in St. Antonio, so I can tell you because of that, he's awesome. And they're a great partner for you to potentially call to help with all your bookkeeping needs so you can do the important stuff in your business rather than worry about getting

your books right. So give Charlie a call, cloudbookkeeping.com, and now back to the episode. All right. So you have sort of a little bit of a ready-made market there that you can tap into, but you otherwise have to go around and find people and get referred to other people and be relentlessly calling them like the lady that's been calling you. So it's really something for someone to really. It's a hustle.

Really, this feels like a hustle. You know. It's definitely a hustle, but here's the aspect of this hustle that I like, which is potentially when you do this, you are selling something pretty differentiated, which is LSU has alumni, there are members of alumni organizations, like there is a pretty laser-focused group of people

that if I did this, I would be like, I'm the only one that can sell you these ridiculously stupid, and I mean that the nicest way possible, over the top fan suit jackets and coats, and I'm the only one that can sell you a jacket where it has the LSU logo on the liner and all that kind of stuff, I'm the one that can do that stuff for you. And I think it makes it easier to get those customers

because you're selling something unique and you're not just spraying and praying. You could join the local LSU alumni thing. You go to the LSU watch parties. You just go where those fans are and then you try to sell them clothes and network them. I like that aspect of it rather than doing hand-to-hand combat

to try to get like anybody watching on video can see how fashionable I am today. I have my Beastie Boys T-T-shirt on. like trying to get jerks like me to pay up for like a polo shirt like it doesn't sound like fun but this LSU angle like I like that like that's not a terrible business and if if someone is an LSU alumni then you know then it's huge right they're they're part of the family and they can definitely network within that so if that's the main driver of the revenue here yeah there's that would be a much more interesting business than sort of a generic brand um that that is definitely

something to white. I like that. I like that. And that may be why this works, because this does claim that the person is doing it as a sideline, which I don't understand how they're doing this kind of revenue, you know, which is, let's say, $210,000, right? So that means, let's say they're selling on average suits for $500. That may be low, but that means they're selling 420 suits per year, right? So that's like, that's a lot, right, to try to put that all together if you're just doing as a part-timer. Yeah. On a monthly basis,

you've got to be out there talking to a lot of people every week. 420 suits. Let's say you sell one suit. Let's say you sell on average two suits

for each person, let's say, right? So that means 200 days a year you have to be making a sale. So it means you need to basically every workday, you need to make one sale. Yeah,

to hit $2,000. That's tough. Yeah, I don't know. It seems hard. But as a sideline, and with this locked in thing, like I like the LSU thing. So I think that's pretty fun.

And maybe if you're somebody that is rabid about LSU and you're a huge LSU fan, like this could be a nice side hustle. If you don't like LSU, it would be kind of weird. That would be weird. You'd be like the atheist showing up to church, being like, yeah, yeah, praise Jesus.

Don't do that. Like, yeah, exactly. But I'm really an LSU fan. I went to, you know, whatever LSU's big rival is, Alabama or Mississippi, Oldness, I don't know. I don't know my college sports at all. Most SoCal answer ever. Yeah, sorry.

Yeah, we don't even care about the professional sports hardly. You know, how are we going to follow college sports? That's too much. It's also the most Gen X answer ever, which is very characteristic of Gen X as we don't like to join organizations. We're like, we don't trust those. Like, why would I join an organization? Like, they have no use for me to which are like the generations older than us and younger

than us just think it's super weird. Like, why are you guys so difficult? It's like, well, we don't trust institutions. Like, they couldn't be trusted when we were young, so we don't trust them now. Yeah, I still don't. My kids used to get out of me because I stopped giving money to the PTA. We do the same thing. And they're like, no, mom, you're supposed to put this cat.

I like, no, there's something happened with the PTA that I didn't like. It just, you know, it was no big deal, but I just, I didn't like it. And I said, no, I'm not sending them on money anymore. My kids were so embarrassed. It's adorable. So stuff to dig into with this one. Look, I think for the right person, this could be a good business.

If going to LSU events is maybe something you're already doing and you want to do it as a sideline, like this sounds amazing. I would be willing to bet that this current franchisee is probably somebody that's already big in the Austin LSU community. And you know they have all kinds of stuff where people get together and have LSU watch parties and all that kind of stuff.

They're rabid fans. So I bet you that's somebody who did this and found it because they were already part of that community and has been selling these types of suits to their friends and colleagues and stuff like that. And they may be just getting old. And so I think this would be interesting for somebody who's in that community

because I think that's this whole business. Like, are you already in that community that would be a great way to monetize it? First of all, you just show up to the events and you wear a ridiculously cool suit each time. And then somebody says, where do you get that? And you say, well, I actually, I sell them.

So would you like to buy one? And I think if you're somebody in this community already, I could see it being a good fit. And that would be a great headline for this business because I think it would be a better headline than what they've got there. It's kind of long and wordy. This is like great opportunity for an LSU alum. You know, wouldn't that catch people's eyes that would be probably a good fit for this? That's my recommendation, broker.

Well, let's check our broker here where they listed. Yeah, who's our broker? He's bringing me mad at me. Michael Stavranakis. Okay. So, yeah, I think that, you know, and I think I originally found this one when I was looking around, and I was like, this is going to be a crap business, but interesting to talk about. And it actually turns out I think it's a pretty good business. Like, I think if you're looking for a side hustle and, and, you know, you like being part of that LSU community, like, man, this is pretty good, you know?

And you do this as a sideline. You get paid to go to all these LSU events. Like, you can monetize that. Like, I like it. And I take back, I laughed at the bullet point that says you have no competition, but now I sort of get it. If it's the LSU market, right? Now we kind of pieced it together. Maybe you don't have competition over the LSU product.

So I just think you could change this around and probably have conveyed what this business is a little bit better, better headline and more emphasis on the LSU exclusivity. Yeah. It is interesting. Why hasn't any, this seems like a pretty good lucrative business if it's painted, if it is indeed the way we painted it. my big question is, why haven't they found anybody else in the LSU alumni community to take it over? And maybe they just, you know, don't want to. The seller would have known somebody, you think. Yeah, that's a good point. So there's that aspect. You know, I try to coach people on it to say, like, ask the question, like, why am I the lucky buyer?

And like, does the story make sense that this is a business that's come to you? And if the story doesn't make sense, that's when you really should try to understand what's going on, right? And so if you can't understand why you're the lucky buyer, you should be scared. That's my experience. Yeah, I agree. I agree. Interesting. Dude, I mean, another interesting thing about this, and I'm sorry to call you dude,

but the other interesting thing about this is like how much of the actual money that comes from this is cash flow actually goes to the individual sales rep. Yeah. So it's commission, I guess. Well, here, the gross revenue is $2,000. And then the cash flow to the owner is more than half. It's two thirds of it, right? 70,000 is a third of 210,000.

So like you're getting two thirds of the money for these suits and stuff that you're selling people to you as the owner of this franchise. And then they're selling it for basically a little more than six months of earnings. So that's the other thing that doesn't make sense to me about this is like, wait a second. I have rabid LSU fans. They're going to be here forever. Like, what's going on with this contract in the long term that I need to know about? Like, is LSU going to renew this? How long does it last?

How long will we be the only people selling this stuff as the only LSU representative? And my worry is, you know, you want to figure that out during diligence. Because if it's going to expire a year from now, like, then you're going to be left with just like hand-to-hand combat, you know, with the lady who keeps calling me, which sounds awful. Yeah, that's a good point. Why are we going for such a cheap price here if that 140 cash flow is sustainable by somebody else? Yeah, it doesn't make sense. Something's going on here.

So I would dig into that if I looked at this deal. But yeah, man, like this is another example of a deal. When you look at it at first, it looks kind of crappy. It looks really crappy. And I think there's a pattern here where you can look at deals that look kind of crappy from a presentation standpoint. but then you double click on them, you're like, wait a second. Like there's actually something here that's somewhat interesting. And yeah, I like this.

I like this for the right person. Yeah, I think we uncovered something interesting about this one for sure. Super cool. Okay, well, anything more to talk about on this one? Otherwise, like, I think this one will come out slightly after Thanksgiving, but I'm excited. Tomorrow's Thanksgiving is my favorite holiday. It's going to be great.

And I have to go to the grocery store now. That is very sad the day before Thanksgiving. Oh, man. Speaking of hand-to-hand combat, I hope you have fun with that one. This is going to be brutal. Yep, I'm already. All right.

You're wearing myself for the worst. We'll click send on this one. If anybody does this one, let us know. Man, this is a cool business. I like, but I hate it, but I love it. Yeah, LSU alumni. Come out, come out and tell us about this one. Oh, good.

Oh, do you want to hear a funny LSU story? So this is hilarious. The college fans have, have so much fun dealing with it, the whole college fandom thing that we were talking to the doctor, and he said, yeah, like when I go to tailgate

at the LSU games, one of our favorite things is to play the Florida teams because then all we eat is gator meat and the tailgates. I was like, you guys are weird. That's weird.

No, thank you. Well, it's kind of like the first person in Louisiana where you like, you know what that looks like, it looks like a tiny lobster that spins its life in poop. You know what we should do?

Let's boil it and eat it. Maybe with some sausage and corn together. Like, who is the person that thought, like, oh, let's go eat mud bugs, right? Which are crawfish. You know, like somebody there to be like, you know what that looks like? That frog looks kind of tasty. I think we should boil that and see what it tastes like. Like, who thought that was a good idea?

Same with the gator meat. Yeah, kind of gross. Super fun. All right. Well, cool. We'll wrap it up there. Heather, happy Thanksgiving. Everybody else, thanks for being with us, and we'll see you next episode.