Note: I shared this on Twitter via multiple threads (linked below), but am repurposing to this platform to reach this audience as well. Please reach out if I can be helpful in any way!
I’m happy to now be able to share that I am the proud owner of The Print Authority, a commercial printing business in Brentwood, TN, outside Nashville.
I got introduced to ETA and search funds during business school at Kellogg and thought it seemed really cool but I was too afraid to go all-in coming straight out of my MBA. In retrospect, I’m glad I waited because I feel much more equipped to run an SMB now. I’ve spent the last three years working in CPG brand management in Nashville. Prior to b-school, I got my undergrad in Accounting at Penn State and worked in a variety of financial services operations roles in the Philly area.
Post-MBA, I had an awesome time in my corporate role and worked with some amazing people, but I still had the entrepreneurial bug, which is how my vending machine business was born. If you’ve seen me on SMB Twitter, you’d know that I’ve been running a vending business on the side for a few years now. It hasn’t been extremely lucrative or anything (it puts a few hundred extra bucks in my pocket each month), but it made me realize that being an entrepreneur is for me. Building a business and generating economic value out of thin air has probably been the most empowering feeling I’ve ever experienced besides my experience getting and staying sober in my personal life – I don’t think any professional endeavor or business venture could feel more empowering than that.
While I was doing my thing in CPG brand management, my wife and I fell in love with Middle Tennessee and decided we wanted to stay here for the foreseeable future. We also bought a house and found out we were expecting a baby girl last year. Becoming a father was another huge motivator for me taking the leap into ETA. I knew that life was only going to get more complicated and that doing something entrepreneurial full-time was only going to get harder with every year/month/week that I waited.
I knew I wanted to start making moves to become an acquisition entrepreneur but was happily geographically constrained to Middle Tennessee. All the searchers I knew from b-school raised a traditional fund or worked for an accelerator, and I hadn’t seen any of them doing a geographic search, but I knew that’s what I wanted to do. Thanks to platforms like this and SMB Twitter, I discovered how to make the self-funded model work. I also talked to quite a few searchers about how to make it happen. I met with a guy locally who was also a Kellogg alum who bought a small business here by doing a geographically focused search while working full-time with small children at home. He challenged me to get out there and make it happen. This was the motivation I needed. I started searching outside my 9-5 hours (early mornings, evenings, weekends, etc.). Pretty much all hours outside work not consumed by preparing for the arrival of our daughter and my vending business were spent on my search.
I pursued both brokered and proprietary, but ultimately found brokered to be a significantly more effective channel due to my time constraints (full-time job, family, and side hustle) and skillset constraints (no IB/PE background). I also found locally focused, brokered outreach to be much more effective at generating quality deal flow for a geographic search. I was introduced to the deal I ultimately closed through a broker, and it was actually my first seller meeting. I didn’t have a website or a company email (I just used my Gmail for broker outreach) and didn’t do a lot of fancy things I see searchers that are way savvier than me on here doing.
What I think I did do well was demonstrate a genuine interest in owning my own business. This allowed me to effectively “sell” myself as the right buyer of the right seller’s business. I didn’t have any tricks up my sleeve besides my authentic story about my family, our desire to contribute to our community in greater Nashville, and my desire to run my own business. I also think I was able to successfully find and close a deal because I was totally open to suggestions from people who know more than me about getting deals done. I would take action, hit a roadblock, ask for advice, action that advice, and continue taking more action. The learning compounded over time and before I knew it I was on my way to closing a deal…
A third key to my success getting a deal done was flexibility on and prioritization of my criteria. I heard somewhere early on that you should have a list of 3-5 of your most important criteria and be happy with a deal that checks 2 or more boxes.
My criteria was: • Located in Middle Tennessee • Owner has high integrity/good, trusting relationship with seller • $500K+ in SDE • Opportunity for my skillset to add value • Easy-to-understand business model
I knew that the perfect business doesn’t exist, and that I didn’t want to be searching forever. I see searchers on here all the time talking about how they’re dying to buy a small business and operate it, yet they pass on every deal they see and have submitted maybe one LOI. They say they want to operate, but they really want to search. Don’t let perfection be the enemy of progress. I found a really good business run by a really good person, so I decided to take a shot at it, and it worked. TBD on how the operating part goes, but I have become a big believer that firing many shots is necessary for success in search. When you’re submitting an LOI remember that you’re submitting an LOI, not signing an APA.
So why printing? Isn’t it a super competitive, dying industry? In some ways, yes, and this was my fear initially. But I really liked this business in particular for a few key reasons… 1. The seller I bought the business from is an extremely high integrity, high quality individual. I cannot overstate enough how important of a factor this was in my decision. I often hear about the importance of this criteria on SMB Twitter and in the PE space, but frankly, I really don’t see people valuing it highly enough. I placed a huge emphasis on this. 2. Print isn’t going anywhere. Yes, it’s not necessarily a tailwind industry, but it’s an industry that has been around for ~600 years. The Lindy Effect tells us it’s likely to stick around for another ~600. Even if the pie is shrinking, the pie is unbelievably massive and statistically likely to be relatively massive for a while. 3. Speaking of Lindy, the business I bought has been around for 30+ years – a reason to love any business and why so many of us are attracted to the search model. It has endured 3 economic recessions and COVID in a tough industry. That’s a resilient business. 4. There are tons of opportunity for growth and the growth opportunities are tied to what I believe I’m good at and want to do as a business owner – it’s a people-heavy business (both internally and externally) and has opportunity in sales & marketing. 5. Great team – many employees have been with the business for 10+ years. Not only is this extremely helpful as the new owner and new to the industry entirely, but it is a signal of great leadership and a great business. 6. In a super competitive industry, the team has done some really smart things to differentiate their offering – i.e. contract re-occurring (not recurring but better than most in this industry) revenue. 7. Geographically situated in a growth market. This was obviously a given for me given where I was searching, but from an investment standpoint, I believe that businesses situated in growth markets will disproportionately generate and capture value purely by dint of where they are geographically. I’m obviously also bullish on real estate in the region for the same reason. 8. Seller also owns the real estate. I didn’t buy the real estate, but knowing and having a strong relationship with the owner of the property gives me opportunity to potentially capture more value down the road via buying the real estate or a sale leaseback.
The deal itself: The business is on track to do ~$2 million in revenue this year with solid EBITDA margins. I’m not able to share specifics beyond that at this time but shoot me a DM if you want to know more. It was financed via a combination of conventional non-SBA debt, an earnout, and equity injection.
Sidenote on my perspective on SBA vs. conventional: the SBA 7a program is amazing, but I got advice early on that if you don’t need the SBA then don’t use them. I was able to get a conventional bank loan from a regional bank to finance a substantial portion of the deal, so that’s what I did. The debt is cheaper and quicker to close, easier to refinance, and more flexible generally than SBA debt, so if I do buy another business in the future, I’ll avoid taking on SBA debt if possible.
Some more thoughts and reflections… • I had way more fun putting a deal together than I thought I would. I’ve never done a deal in my life until now, and the whole process was challenging, interesting, and exciting. During b-school I remember thinking “I love the idea of ETA, minus the finding a business to buy and putting a deal together part.” I ended up actually liking that part a lot. • I made tons of mistakes and wish I had done quite a few things differently, particularly around working capital. I can write up a separate post on mistakes made at some point if you guys want to hear about it. • Obviously, I have to caveat my entire thought process with the fact that I literally just started, so I may be totally wrong about my assumptions and beliefs but am comfortable owning my wrong-ness because I do think my judgement was sound overall, albeit imperfect. • Around the time of closing is when the fear and magnitude of what I was doing finally set in. The anxiety was intense. It still is. But I’m glad I have spiritual tools and people in my life that help.
That’s my search/deal story for now. The operator story is being written and I’ll continue to provide updates so that you can follow along the journey. Again, let me know if there’s anything I can do to help.
And if you’ve made it this far and want to help me, I’m looking for connections to you or anyone in your network who: 1. Makes print purchasing decisions for a small to medium-sized franchisor or multi-location business with between ~25 and ~500 locations or territories. 2. Has extensive experience in or knowledge of the print industry. 3. Has a point of view on putting together an SMB board for a single member LLC, how to structure it, and how to get the most out of it.
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