Tom Dillon
@brokermybiz
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I value, buy and sell sweaty startups w @sweatystartup . Follow me to see new listings and learn about the art of building a business that can thrive without you
Chicago
Joined July 2023
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I value buy, and sell sweaty startups. Follow me to see new listings and learn about the art of building a business that can thrive without you.
Most bizs want to sell for big money and a high multiple. Only way to do that:
Build a business that isn’t dependent on the owner
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@sweatystartup
People take .75 seconds to react to a traffic light changing from red to green.
This happens millions of times per day and collectively costs millions.
I’m building a 4 color light. With a .75 second warning light (hot pink) between green and red.
Will save years of life.
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The funny thing about entrepreneurship:
The less valuable you are to the business…
The more valuable your business becomes.
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The most valuable businesses with the highest multiples of earnings have recurring revenue.
Pest control, SaaS, HVAC contracts, etc.
The downsides:
Heavy competition to acquire - not enough deals.
Extremely high customer acquisition costs.
—
There are a TON of great
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Most small businesses for sale aren't really businesses.
They are glorified jobs for the owner.
The owner makes all critical decisions. The owner does all hiring and firing. The owner answers the phone when there is a problem.
That is generally why the owner wants to sell
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The number one factor when assessing a business opportunity:
Hassle / Money ratio.
How much money are you making relative to your hassle?
How many employees? How many customers? How difficult are those customers? How much risk? Are you constantly selling new work? Are
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If you want to sell your company:
Build a business that can thrive without you.
The problem:
Most people have a business that is 100% dependent on them as the owner.
The truth:
They don't have a business, they have a job. And it is basically worthless.
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People love buying businesses that they don't need to go work inside right away.
Therefore:
Your business is more valuable if you don't have a job inside of it.
To you and everyone else!
Take back your time.
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There are tons of easy ways to stand out in life, and business buying is no different.
Create a “body of work” document.
A one page resume with your criteria, experience, funding sources, etc.
It’ll instantly give you more credibility.
And credibility is everything when
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If the owner is still the CEO of a company you’re looking to buy, he probably cuts corners.
It will be more expensive for you to bring in management firepower because the CEO likely does 3 or 4 jobs.
Budget accordingly.
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Every single term is negotiable when buying a business.
“You name the price and I’ll name the terms.”
You can negotiate debt, term, amortization, seller carry, earn out, earning targets and more.
I know people who have done 80%+ seller financing 3 times.
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The best way to build quality relationships is by spending quality time with people.
And that's exactly what we did last weekend in SLC.
Grateful for meeting all these amazing people
@CoFoundersNik
@KHendersonCo
@mph_guy
@chasemurdock
@ChandlerReedSMB
@RandBusiness
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Buyers of small businesses have the leverage.
There are simply more businesses for sale than there are competent operators willing to buy them.
Especially at sub $500k of seller discretionary earnings.
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I love old businesses.
If they’ve been around for 10+ years there is so much less risk when it comes to buying a business.
These businesses have something that is hard to explain.
“Staying power” is the best term I can think of.
And it is a serious competitive advantage.
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Below a certain size - generally $300k per year in SDE (seller discretionary earnings) - you aren't buying a company.
You are buying a job.
But it can be very profitable turning jobs into companies!
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My buddies in the restructuring business are cleaning up right now.
Nearly all of them are too afraid to leave the comfort of their J O B and buy one.
Find an operating partner and pull the trigger.
I'm no longer doing minority investments. I completely shifted to majority investments.
I can't justify putting $25k into a business to own a 0.025% of a seed company with liquidity in 10 years unless to support a friend or cause I care about.
There are about to be some dream
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Many folks who do a ton of work getting their business ready to sell end up learning it’s fun to own the business all of the sudden.
Team in place. Somebody else solving problems. Less work. Less stress. More money.
If somebody else wants to own it it might not be worth selling
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@DannyMagazu
You are constantly firing yourself from every “job” in the business. Eventually that’s the CEO job.
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People often think of business exits as taboo when starting a business.
Like... why would I even talk or think about selling if I'm just starting?
The truth is, you're better off if you build your business with an exit-ready mindset.
This means:
-Picking the right name:
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Looking for a corporate attorney with expertise in Business Brokerage.
We’re growing nationally and need some guidance along the way.
Any one have a recommendation?
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On my way to the
@SMB_ash
Glad I found this community. It’s amazing to watch people just flooring it towards massive goals.
Excited to meet a bunch of talented, cool people!
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Super informative! A must read for anyone looking at acquisitions.
M&A Monday: The Delicate Balance of Transition Services
Negotiating Transition Services (Seller's post-closing involvement in the business) is a critical aspect of the business's success.
Buying a business is complex. Often, the keys to a business’s success are located inside
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Very wealthy owners are the best to buy a business from.
They are in a good business.
They likely don’t try that hard to improve (because they’re already rich).
There is likely a lot of upside if you get aggressive.
Look for the wealthy owners.
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At the ETA conference here in Chicago.
Overheard the guy behind me talk about how
@sweatystartup
got him, a soon to be Stanford grad, interested in the SMB world.
This platform is wild.
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A problem I’m seeing that many businesses have:
Expenses have inflated massively since Covid. Many owners have given employees 20% raises. All costs have risen.
And revenue is now flat or down in many businesses due to weakening demand.
It’s a painful combination.
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Cashflow is king.
Not SDE (seller discretionary earnings) or EBTIDA or weighted EBITDA.
How much cash is the ownership pulling from the company?
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You aren't an operator. You are an investor of time.
It is precious. Your end goal is to get it back but keep the cashflow.
Work with that end goal in mind with everything you do.
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The Chicago SMB Meetup will be in the west loop on June 20th starting at 5pm.
Appreciate the honor to facilitate this
@RandBusiness
Please RSVP via the link in the comments.
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Quality of earnings is everything.
All money flowing to the owners is not the same.
How much headache comes with it?
How hard is it to earn?
How long has it been coming?
How reliable is it?
All questions you need to answer about every bit of cashflow.
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The best compensation for your management team is to only give them bonuses AT THE SAME TIME cash is getting distributed to owners.
It aligns incentives VERY QUICK.
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Leveraging a past skill into ETA can work.
Partnering with someone who has the specialized skill required; i.e., partner is a plumber, can work.
Buying an HVAC company with zero experience can be an absolute disaster.
From what I’ve personally seen play out, team member
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A cheap lawyer is way more expensive than an expensive lawyer over the long run.
If you know a good, cheap lawyer hang on tight.
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SEO, search rankings and organic traffic really matter when acquiring a business.
Learning how to rank a business on Google is a massive value add.
Domain Authority (I use Ahrefs free backlink checker) is a great way to figure out the potential of a site.
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When it comes to M&A, you can’t do a good deal with a dishonest business owner.
As soon as you discover a lie during due diligence, RUN the other way.
No matter how much money or time you’ve sunk into a deal or how excited you are about it.
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@mhp_guy
brought it this morning
He talked about his white whales. Taking calculated risk on big opportunities.
Thinking back to my white whales.
I wish I didn’t listen to my mentors.
I missed two white whales I’m still kicking myself on.
None of my mentors did it right.
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A management team is expensive but it is a necessary step if you want enterprise value.
I see so many owners who make every single decision at a company (and a successful company at that)...
There are two levels of delegation:
1. tasks - telling people what to do - the easy
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Look forward to meeting all our new sellers.
It’s my favorite part of building this company.
Note for all business owners:
If you own a company and you are considering selling it, I can help.
Last year, I started a business brokerage to help facilitate transactions between interested buyers and sellers in my large online network.
Our unfair advantage is distribution.
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An added bonus of building a business that can operate without you:
Time leverage.
You can spend your time doing other things to grow your personal balance sheet.
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I have an active acquirer looking for a bookkeeping service company.
$1MM - $5MM in revenue ideal.
Owner to stay on as CEO and scale it.
DM me if interested.
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As we approach Thanksgiving, I find myself reflecting on the many blessings this year has brought.
I am deeply thankful for my family, whose love and support are the bedrock of my life.
Gratitude also goes to the remarkable individuals I've connected with on this platform -
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@biztechgames
This is the way. Very challenging to achieve and best to seek guidance along the way.
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Don’t overpromise and under-deliver.
We could win more listing deals by overpromising but they likely won’t close or if they do the seller is unhappy with you.
Reputation over near-term wins any day.
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Thanks for hosting us at your beautiful course!
@SBA_Matthias
That was fun, rain and all!
@BishopsBayCC
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@andyharbut
@CoFoundersNik
@KHendersonCo
@mph_guy
@chasemurdock
@ChandlerReedSMB
@RandBusiness
Lobby bar. Not sure where everyone was…
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@RobertMSterling
@midmarketPEguy
@moseskagan
@fortworthchris
Solid posts Robert. You’re a class act.
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@atrollope
@Sam_Rosati
@ChandlerReedSMB
@cappaert
@CTW_SMB
@whentheresawill
@KrissBergTweets
@chasemurdock
@patrickdichter
@ClintFiore
Absolute pleasure meeting you!
Hit me up when you come to Chicago.
We’ll hit up the food and entertainment right.
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I’ve gone down the venture capital path before. The reality is you have a 1% chance of success.
Go buy a small business and grow it.
This will teach you nearly everything about running and growing a business w/w the Zero income and high failure rate that comes with startups.
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Lawyers can absolutely kill deals.
Find one that does fixed pricing.
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@SBA_Matthias
@sweatystartup
Thank you, Matthias. Appreciate the kind words and impressed by your story and what you’ve built.
Excited to see what we can do together to enrich the SMB space.
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Reminder to RSVP for headcount.
One minor change, we’ve pushed the start time up to 5pm.
Excited to see everyone next week.
The next Chicago SMB Meetup will be in the west loop on June 20th starting at 5:30pm.
Appreciate the honor to facilitate this
@RandBusiness
Please DM me if you're interested in further details.
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@ChandlerReedSMB
@CoFoundersNik
@KHendersonCo
@mph_guy
@chasemurdock
@RandBusiness
Can’t wait till next time we hang.
Hit me up if you come to Chicago
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Congrats all you tax accountants!
Another season officially wrapped.
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Thoughts for searchers attending bootcamps.
Bring a deal or two at a minimum to run through the wringer at the boot camp.
Deals are abundant. Finding the right one for you is unique.
Go into it with intention. Come out with action.
You’re wasting your time without a plan in
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I like this prediction esp in the seasonal geographies
My predictions on Industrial RE.
My family owns a moving company that’s 122 years old.
I started a tech company that quotes moving jobs virtually without physically going out to the home. We work the biggest moving companies in the world. We have more data than anyone in the
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Here we go!
PSA:
My brokerage (nickhuber dot com) is really taking off.
We're seeing a lot of deals across the USA in both real estate and small business.
We're looking for managing brokers in Colorado, Florida, California, and Oregon to work with us.
Note:
Must be a MANAGING broker.
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An earn out is perfect in this scenario:
The owner thinks they can continue to grow the business of the buyer is worried about the business shrinking.
If the business grows the seller makes more money.
If the business shrinks the seller makes less money.
It de-risks it for
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@CoFoundersNik
Some businesses don't have a good enough marketing machine to bring in the right customers...
The high paying customers...
Those are required to make this shift!
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@CoFoundersNik
Landscaping or powerwashing.
Challenge = some capEx.
You’ll learn mostly everything you need for business and they sell if built right.
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@SBA_Matthias
@sweatystartup
@SMB_ash
Good for you. Looking forward to golfing at your club before you’re back at it ⛳️
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Seller expectations too
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Don’t over promise and under deliver. We could win more listing deals by overpromising but they likely won’t close or if they do they seller is unhappy with you. Reputation over nearterm wins anyday.
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@jeffdtauzin
Our business owners are making well north of $80K. Most owners are focused on the wrong things and get stuck in this loop
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@SBA_Matthias
@CBarrett_CPA
Most interesting cheese curbs I’ve ever seen.
Know you’re not a fan but they were Delicious 🤤
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@ConnorAbene
Great advice. If you can build on the side until you’re relatively comfortably prior to officially leaving corporate…even better.
Don’t be mistaken, it’s not easy. Connor crushed it on distribution
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@SBA_Matthias
I have a client I need to get this in front of immediately.
Incredibly helpful. Thanks for sharing
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@CoFoundersNik
@KHendersonCo
@mph_guy
@chasemurdock
@ChandlerReedSMB
@RandBusiness
Search the GIF section. You’ll find this.
I think she read his new book. I ordered it and looking forward to learning about these new growth hacks
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@buyandsellabiz
@SMB_Attorney
@KHendersonCo
I believe they are focused on M&A.
That’s not what we’re looking for at the moment.
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I like this perspective
Anything worth doing in life has an equal amount of struggle and enjoyment.
Business. Parenting. Hobbies. Relationships. Health.
It is all hard and requires sacrifice.
Most people are selfish and have a low pain tolerance so they struggle to win at anything for this reason.
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@CoFoundersNik
Brilliant. Simple, de-risked, immediate value-add.
I’m going to launch a modeling agency
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@mhp_guy
@LeadershipAcad1
My Dad and me feel the same.
I will build less and allocate more though.
Coach vs player
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How bout them apples
If you own a company in a specific industry (for example - HVAC), you can buy another company in the same industry under the SBA’s expansion acquisition framework using no money down if you meet the below requirements:
📌Company being acquired is in the exact same 6 digit NAICS
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@sweatystartup
I am human…with a big heart. Happy to help you weigh through options as you make some serious life decisions.
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More business listings coming out very soon.
Buying a business is how I’ve seen folks get really wealthy. Follow Tom:
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@sweatystartup
I used to dread Murderous Monday during the W2 days.
Connecting with the team first thing Monday morning is the highlight of the day now.
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