Reflections Four Years In

I bought my company in###-###-#### It was growing at 17% a year in the years leading up to the purchase. Here are my thoughts from searching and operating for a while. I sincerely hope it helps other people.

I paid $815,000 for my company with $90,000 down and my net worth at the time was about $180k. That sounds like a super risky move except that the company’s SDE was about $500k and my rate was fixed for ten years at 5 and a quarter. So the payment is about $8100 a month.

Just completed the tax return and this business did $993,000 in 2023 EBITDA. Here is some unsolicited advice on the search and the operation if you’d like it.

1)The wild part is that it never feels like we are as successful as we actually are. Almost every month it felt like I was getting my teeth kicked in. Then I’d look up and somehow we showed a profit.
2) Make offers quickly and frequently when searching. Don’t overcomplicate this. You can’t make this work if you don’t put out offer after offer and revision after revision.
3) Don’t be afraid to buy small. If it’s just you, it may make sense to buy small instead of paying 6x on a $1.5MM EBITDA company everyone on this platform is hunting for.
4) Fire non-fits quickly. Don’t waste time as they’ll mess up morale and harm your culture.
5) Management is all culture. That touchy feely stuff seemed irrelevant in business school but it’s crucial to the success or failure of your team.
6) Focus on simple goals for your team but push authority down. If you can trust people to lead under you then you should empower them to do so. It’s impossible to scale your business if you don’t properly learn to delegate and reward good execution.
7) Obsess over the customer. Tell them you want them. Tell them you appreciate their business. Ask them what you’d need to do in order to wow them with their experience with you. Warren Buffett said that firms who do this don’t worry about exogenous variables like Fed rates and geopolitical impacts on stuff. This is the key to a durable competitive advantage and it can only be grinded out over and over through obsessing over the customer and their feedback.
8) STAY OUT THE COMFORT ZONE! Do not let yourself or your people stay here. Constantly push them to figure out a way to go further and reward them when they do. This will push your whole company up the learning curve over time and that’s what makes the difference.