How to successfully purchase companies with operator in place?

searcher profile

July 18, 2024

by a searcher from North Carolina State University in Fulton, MD, USA

I know this is a cliche question in the ETA space and that you should first work in a business of any substantial size before hiring an operator. However, I am looking for ways that people have successfully ramped into the ETA space and built a healthy cash flow before quitting their W2 job (or keeping their W2 job). I am mainly looking for ideas of how others have been successful doing this (outside of acquiring little stuff like ATM routes, vending machines, etc.) Thanks.

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Reply by a searcher
in Philadelphia, PA, USA
The only way I've been able to do it is to find a company that has one key person who can manage the company pretty well without the owner being there full time. It doesn't matter how large or small the EBITDA is.
commentor profile
Reply by a lender
from University of Missouri in Denver, CO, USA
If you are relying on a key person to operate the business I would consider giving them an equity stake. Of course that can complicate things but it keeps them on the hook much more than otherwise would be.
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