In this episode of the M&A Launchpad Podcast, hosts Casey Minshew and Feras Moussa have their first in-person interview with Walker Deibel, author of “Buy Then Build” and Co-Founder of Acquisition Lab. Walker shares the inspiration behind his book, which aims to teach and educate individuals on how to purchase their first business. He reflects on his experiences with his first and second business acquisitions, emphasizing the importance of overcoming challenges and understanding that there is no perfect deal.
Walker delves into the origins of Acquisition Lab, a selective program he conceived with the goal of nurturing entrepreneurs. Acquisition Lab builds a community of active participants in the M&A world. He discusses the program’s logistics and the success stories of its members. Highlighting the importance of the individual in the success of a business, Walker argues that the risk in M&A and entrepreneurship lies more with the person than the business itself.
We explore industries that, while not traditionally seen as attractive in the ETA (Entrepreneurship Through Acquisition) space, may offer great opportunities. Walker advises potential entrepreneurs to carefully consider whether an industry aligns with their goals and capabilities before diving in. This is a great episode and gives insight into the life of one of the most influential individuals in ETA.
In this podcast episode, we discuss:
- Buy Then Build
- Acquisition Lab
- Business Acquisition Success Factors
- Industry Opportunities
You can connect with Walker by LinkedIn: Walker Deibel – Acquisition Lab | LinkedIn
You can learn more about “Buy Then Build” and Acquisition Lab Here:
Additional Resources:
- Access our archive of video interviews on YouTube
- Checkout our upcoming Conference – https://malaunchpad.com/
- Get in touch with show hosts Casey Minshew and Feras Moussa at – info@equitylaunchpad.com
- Looking to invest in M&A opportunities or partner with an advisor to acquire, scale or sell your business? Visit Equity Launchpad
Transcript
00:00 all right on today’s episode we
00:02 interviewed Walker dble author of the
00:04 book bu and build and sold over 100,000
00:06 copies top seller of Wall Street Journal
00:09 and USA Today and you know all around a
00:12 very kind of funny guy so Casey what me
00:14 big takeaways and you know Walker’s got
00:16 a great story he’s one of the first to
00:18 move into this space and really take it
00:20 away from just being you know I went to
00:23 college I took this ET program and he’s
00:25 really talking kind of to everyone
00:27 saying hey we democratizing Crusade this
01:30 whole private Equity space to go hey I
01:32 can go in six months buy a company and
01:35 become a CEO and how do I do it no I
01:38 totally agree and I think on you know on
01:39 this episode we really talked through
01:41 kind of how did that come about right
01:43 and how do you start to I like the word
01:45 you said democratizing the information
01:46 right for a long time people didn’t
01:48 really think about buying a business
01:49 right the opportunity that unlocks and
01:51 so with this episode Walker kind of goes
01:53 through some of that thought process and
01:55 he also talks about his Acquisitions lab
01:56 right and how some of those students
01:58 really what are they doing to find
01:59 success and what are they not doing that
01:01 find success right works and so if
01:03 you’re a if you’re a potential buyer
01:04 definitely an episode to listen into
01:06 yeah and you and I both grew up in that
01:07 world where we thought we had to start a
01:08 company from zero in Revenue grow it
01:10 scale it and exit right and then you
01:13 come across the way Walker’s thinking is
01:14 like well hold on if I could buy a
01:16 million in revenue or two million or
01:17 eight million or 10 million man I can
01:20 get there much quicker absolutely I mean
01:22 it’s starting a business is hard to say
01:24 the lease and that’s why we’re doing
01:25 this show so definitely tune in check
01:27 out some of the information that Walkers
01:28 learned from him and his students
02:33 all right on today’s episode we have
02:35 Walker die first time doing an inperson
02:38 interview Walker is the author of the
02:39 famous book buy then build which has
02:41 sold over 100,000 copies Wall Street
02:43 Journal in USC today best seller and you
02:46 know also the founder of Acquisitions
02:47 lab and a wealth of information Walker
02:50 welcome to the show Baris Casey thanks
02:52 so much for having me it’s thrilled to
02:53 be here oh glad to have you here in nice
02:55 sunny Houston great to me too yeah yeah
02:58 so Walker I mean we’ve obviously known
02:00 about your book we’ve known about you
02:01 for a while I’ve got to known you over
02:03 the past six months to a year so maybe
02:05 tell the listeners right what should
02:06 they know about you well I I think that
02:08 you know ultimately um Ferris it’s one
02:10 of these things where you know the
02:12 reason I wrote by then build is because
02:13 you know I really was a startup
02:15 entrepreneur or trying to be one right
02:17 and you know I lived out in the Bay Area
02:20 I you know I got my MBA and sort of
02:21 studied entrepreneurship and you know
02:23 I’ve been in through a couple you know
02:25 startup accelerators a couple of times
02:27 and ultimately I was just like how come
02:29 like here I am Liv in St Louis right and
03:31 I would walk up and down y down which is
03:33 like the most one of the most wealthy
03:35 streets like in all of Missouri and you
03:37 just walk around and it’s like how come
03:39 we’re all trying to be Silicon Valley
03:41 right this was like 2000 2002 2004 time
03:44 frame and I was like these people are
03:46 not Tech like Leo Missouri is one of the
03:49 top 10 richest neighborhoods in the
03:51 world I think if not the country
03:52 whatever it is but like it’s one of
03:53 these where not a single internet
03:55 entrepreneur was there and these people
03:58 like you know they own like six Subways
03:59 or like like a light fixture company or
03:02 like you know um like like a like a a
03:05 belt company or just like can I cuss on
03:08 your on your P just some kind of
03:09 [ ] you know like that was like and 03:11 I was like okay well well I keep I keep 03:14 trying to start these companies out of 03:15 thin air and like create markets right 03:17 and it’s like why don’t I just focus on 03:19 cash flow and that’s when it clicked and 03:21 I was like I bet you I could buy small 03:23 businesses just like real estate and 03:25 like go to the bank and get loans 03:27 because you’ve got these go going 03:28 concerns and they’re exiting you’re 04:30 actually buying them on historical 04:32 valuations rather than speculative 04:34 future valuations and it’s sort of led 04:36 to me buying my first company and then 04:39 ultimately six more and all the rest of 04:40 it and I started getting introduced by 04:43 other entrepreneurs as someone who buys 04:45 and sells companies and this is early 04:47 2000 time frame well I’m fast forwarding 04:49 a little bit to to like past 2010 but 04:51 the but the thing is is like it it just 04:53 I mean I had the idea for the book the 04:54 whole time but like what really ended up 04:56 sparking it was the frustration that as 04:59 dope as that sounds to be like Walker 04:00 buys and sales companies they didn’t 04:03 understand that I was an entrepreneur 04:05 just like them I was just doing it 04:06 differently and I sort of thought to 04:08 myself if entrepreneurs understood that 04:11 there’s a different way to do it you’re 04:12 you’re in real estate it’d be it’d be 04:14 like if every single real estate 04:16 investment was ground up and like not a 04:18 value ad for example it’s terrible it’s 04:20 you can’t just do that like there’s all 04:22 these different classes so that was the 04:24 thing ultimately that led me to um to 04:27 write by then build and and sort of 04:29 start to build this concept of the 05:31 acquisition entrepreneur so when I ran 05:33 across your book it was a really big eye 05:36 opener for me because I had done three 05:37 startups you know yeah and I felt the 05:40 frustration right yeah I’m in my 40s I 05:42 didn’t have the Big Exit I’m not the big 05:44 Tech guy and I came across your stuff 05:47 and I’m like man this is fantastic I can 05:51 do this I’m really good at making other 05:52 people’s ideas better a right but 05:54 getting to that first million in Revenue 05:56 to get it’s a fiveyear slug for some 05:58 people right yes so then you think about 05:01 okay what if I buy somebody’s Revenue 05:03 yeah that’s already over that number it 05:05 should be easy so just to jump yeah so 05:08 thank you so so the first company I 05:09 bought was eight million in Revenue 05:10 right which which even as someone who 05:12 has an NBA eight million is 05:15 like still not even worth your time 05:18 right it’s like it’s so small and it’s 05:20 one of these things where I was trying 05:21 to go as big as I could right and 05:24 ultimately um I that got I got in EO and 05:27 I started reading Vern hardish and I 05:29 learned that 06:31 96% of companies in the United States 06:33 never exceed a million dollar in annual 06:36 revenue so if you buy a company that’s 06:38 just doing a million dollars in annual 06:39 revenue it’s one of the largest 4% of 06:41 companies in the country okay so so it’s 06:44 like it’s a really really low bar and of 06:47 course you know especially with like the 06:49 the updates in the SBA in like 2016 they 06:52 were giving out loans of up to 90% of 06:55 the total transaction price which meant 06:57 that you could actually buy one of the 06:59 biggest 4% of companies in the country 06:02 for like about the approximate down 06:04 payment of a house and that’s what 06:06 that’s when I was like holy [ ] and
06:09 like I started realizing the impact of
06:11 what which a lot of people that
06:13 understand real estate don’t realize
06:14 it’s actually the same idea right
06:16 outside of the groundup example you’re
06:18 buying an existing business it happens
06:19 to be a apartment a retail Center you
06:22 know whatever it is right and then
06:24 you’re growing it and improving it I
06:26 think the difference with the business
06:27 side though right not only do you have
06:29 good debt similar to real estate y you
07:32 also are able to basically do the
07:33 operational upsides you know at a
07:35 magnitude level different than what you
07:37 can get into businesses and so I think
07:39 it makes it obviously really sweet and
07:41 so I’ve always been a big fan of the
07:42 name and I’ve always thought like man
07:43 that’s catchy buy it and then build it
07:44 up and that’s the whole thesis so at one
07:46 point you had an online program it was
07:49 like your kind of your entry level kind
07:51 of buy can go through the program online
07:53 you had the videos and all that good
07:54 stuff six months to CEO that’s it six
07:56 months to CEO so I got that program and
07:58 dude Game Changer like yeah it just
07:00 changed the ideas and the thoughts and
07:02 so why don’t you talk to us about that
07:05 like the lab like what does that mean
07:08 what is a lab you know the laboratory
07:10 yeah first let me let me side note real
07:12 quick because six months to CEO is one
07:14 of those names where we ended up um uh
07:18 sunsetting that product and it sort of
07:20 emerged into the buy then build master
07:21 class but I loved that title because
07:25 what happened was the second time I was
07:27 out looking for a business and I tell
07:29 this all the time to you know members of
08:31 our community it’s like it’s like um you
08:34 know it’s like when you’re 20 you know
08:38 you’re like I’m gonna marry Margot
08:41 Robbie and there’s not really a number
08:43 two you know what I mean it’s just like
08:44 I’m going for like you know like top of
08:46 the top yeah and then and so the the
08:49 woman who I ended up marrying you know
08:50 she wanted to marry George Clooney or
08:51 whoever it was but the thing was was you
08:54 know once I figured out that um Margo
08:58 Robbie was invisible to me I knew that
08:01 if I hung out next to her she would see
08:02 the opportunity and I was okay I was
08:05 okay so the point is is I got her to
08:06 lower the bar right right and so the
08:09 thing is is a broker said to me once you
08:11 know I was like looking for that Margo
08:13 Robbie business right I’m like I’m
08:15 trying to drisk this thing as much as
08:17 possible and I’m looking for and and he
08:19 didn’t say it to me he was basically
08:20 saying like Walker the magic isn’t in
08:22 the drisking right it’s like it’s like
08:24 taking that leap of faith and being that
08:27 entrepreneur and like taking this like
08:29 malleable
09:30 you know thing that’s moving through
09:32 time and just jumping in and leading it
09:34 right this is the game this is the game
09:36 you’re in it or you’re not right so what
09:39 he said to me was Walker you can buy a
09:40 company in six months if that’s your
09:43 goal and it changed everything for me
09:46 like like it was like oh my God and once
09:48 you start working backwards from that
09:50 it’s like okay I’m just looking for an
09:51 opportunity I’m not looking for you know
09:53 the perfect business I’m just looking
09:55 for what’s something that I can get into
09:57 and start working right um should I go
09:00 into the lab stop I think that that
09:02 holds same true in real estate right
09:04 some people are out there and we see
09:05 this at our meet up for years the same
09:07 person comes looking for the perfect
09:08 deal and I’ve never bought a deal that
09:09 was perfect right there’s deals that
09:12 have operational upside that we could
09:14 clearly identify and we did things to
09:16 mitigate the downside risk and you hop
09:17 in and you trust in yourself to work and
09:20 solve the challenges as they arise right
09:21 every business has its own challenges
09:23 and ups and downs and highs and lows and
09:25 so keep going Walker well you know I
09:28 mean the acquisition lab was so I the
09:30 idea for by then build the book you know
10:33 um around 2004 when I started my first
10:36 search and it’s one of these where you
10:38 know I was coming out of business school
10:40 I was so familiar with like every aspect
10:42 of business having like textbooks and
10:44 best practices and this was like a major
10:48 Financial market and there was like no
10:51 information right I mean it was
10:53 fragmented it was opaque I couldn’t get
10:55 good data there was certainly no best
10:57 practices or any like it was crazy easy
10:60 right and you know in every single data
10:02 point there was like no statistical
10:04 significance to any of it right it was
10:05 just sort of like this guy over here
10:07 that person over there like whatever
10:08 whatever was going on so I was like
10:10 someone needs to write this book right
10:11 and so and so I was like I could write
10:14 it now by interviewing people that have
10:15 done it but the truth is I’m not really
10:17 on the list of people that are allowed
10:18 to write this book yet it would just
10:20 sort of be like the intern interviewing
10:22 the Masters right so I was like screw
10:24 that I’m not going to waste my time
10:25 writing a book and maybe one day I’ll be
10:27 in that position I did end up publishing
10:29 it after I had bought you know seven
11:31 companies and sold two or three I don’t
11:33 remember but like so you know you get
11:35 you get the experience first right and
11:37 the lab acquisition lab um I got the
11:39 idea in 2010 when I first started
11:42 working with this company called Veritas
11:44 Prep okay and what ver so I I owned a
11:47 book printing company and we ended up
11:48 getting the Veritas account we were
11:50 printing all of their uh GMAT books
11:52 right and the concept here was sort of
11:55 like they were building a better mouse
11:56 trap for um test prep right
11:60 and it was like it was like okay you
11:02 could take Kaplan or Princeton reviewer
11:04 or whatever but the concept was if you
11:06 wanted to go to an Ivy League school
11:08 like you want to go to like one of the
11:09 top 10 NBA programs out there what are
11:12 you going to go get the Kaplan book like
11:14 everybody else it was this sort of like
11:16 Elite Test Prep kind of model right and
11:20 it was like okay well how interesting
11:21 would it be to build some kind of like
11:23 business buyers boot camp but like sort
11:26 of build like the Harvard or the Y cinat
11:29 version that so even though we were the
12:31 first ones to and you know starting a
12:33 couple years ago people were like why
12:34 should I buy your program instead of
12:36 somebody else and it was we were just
12:37 sort of like I don’t even know what
12:38 you’re talking about good luck you know
12:40 you know like if you have to ask a
12:41 question I I’m sorry that probably
12:43 sounds egotistical but it was like what
12:44 are you talking
12:46 about thank you but so it’s like it’s
12:48 like I know I know that we’re and I I
12:50 said this at Chelsea right my co-founder
12:52 it’s like if you if we are if we are the
12:55 first ones in a space you’re not usually
12:57 trying to build the best one you’re just
12:59 just trying to like build one right we
12:01 came in and tried to build the best one
12:04 from the beginning right and so I think
12:07 the little thing that makes us different
12:08 on when we started and today is that you
12:12 know about 70% of people who apply to
12:15 the lab are not extended in offer to
12:17 enroll okay and that might sound like
12:19 we’re just being total [ ] or 12:21 something repeat that 70% get rejected 12:23 right uh are not extended in offer not 12:26 extended about 25 or 30% of of 12:30 applications are extended offer to 13:31 enroll our strategy call is a true 13:34 strategy call it’s not like a lightly 13:36 veiled sales call like and so the thing 13:38 is is we turn away Revenue at a at a 13:40 rapid rate right we turn away Revenue 13:43 faster than we accept it which is a 13:45 backwards way of thinking but the thing 13:47 is is that like I’ve never been part of 13:50 a better community and that’s not what I 13:52 was trying to build at the beginning 13:54 it’s just now I’m sort of taken back and 13:56 I’m completely in awe of you know the 13:58 the community that we’ve built there’s 13:60 about um 200 million in um member 13:03 Acquisitions over the last uh 24 months 13:06 that that have closed and uh yeah and 13:09 you know you know it kind of blows you 13:10 away that people will spend hundreds of 13:13 thousands of dollars to go to college 13:15 right yes they they say hey go to 13:17 college get a good job all these good 13:19 things but now we’re seeing the numbers 13:21 are coming out right where hey now I’m 13:24 in student loan debt unless it was 13:25 forgiven right all of those challenges 13:28 and then there know that there is a 14:30 system that I can get into I can spend 14:34 relatively what would it cost for 14:35 somebody to join to join the lab it’s 14:37 $8,500 for Lifetime access our goal is 14:40 to get you to your deal I don’t care how 14:42 long it takes that’s not just the first 14:43 semester you mean the first month when 14:46 we when you already feel like you we we 14:49 we actually we we actually probably 14:51 spend close to that on every student in 14:53 the first month no kidding question who 14:56 are the kinds of people that actually 14:58 come through and get accepted like give 14:60 me a little bit context on them are they 14:01 college educated are they not are they 14:04 military people are they not are they 14:06 experienced or are they Fresh Off The 14:07 you know college or what I mean I mean 14:09 look I like I don’t like um the risk in 14:13 saying this answer to you is that 14:14 someone is listening to this and they’re 14:16 a great candidate and they can do it 14:18 right and what we’re really looking for 14:19 is is this person able to actually 14:23 execute right so one of the things we’re 14:24 looking for is do you have some money 14:27 okay like buying a business there’s a 14:29 lot of headlines out there right now and 15:31 it’s just like hey buy a business 15:33 without any money like go yeah go sell 15:37 use seller financing to like whatever 15:39 and like the thing is is like if it’s 15:42 the analogy is like if you’re in Miami 15:44 and you’re asking me can you get me to 15:46 La and I say and like I’m like sure do 15:49 you have enough money for a plane ticket 15:51 and they’re like yeah I’m like great 15:53 you’re a great candidate come on in 15:55 right but like if they’re like no I 15:57 don’t have that money and I’m like cool 15:58 you have a car and they’re like no I 15:60 don’t have a car I’m like cool do you 15:01 have shoes and they’re like no I don’t 15:03 have shoes I’m like okay cool 15:06 you you can still get there you can 15:09 still do it but that’s not my business 15:11 right my my business is let’s get [ ]
15:14 done like let’s get people that are
15:15 competent to to move through what I find
15:18 is um you know I mean look we we we have
15:22 a lot of students student members we
15:25 have a lot of members that you know got
15:27 their MBA 10 or 20 years years ago right
16:30 and they’re extremely competent in what
16:32 they do they know you know they they you
16:34 know they’re middle-aged like you
16:40 Casey and you know like like we’re the
16:42 same age just so you but but um I know I
16:45 look much younger than just
16:48 Kidd but it’s one of these where um you
16:52 know it’s it’s that profile of person
16:54 that you know it’s it’s not like the
16:55 search funer coming in who’s like a
16:57 freshly minted NBA although we have them
16:59 right um it’s not that um it’s not that
16:02 person who like just found out it’s
16:04 usually someone who has even started on
16:07 their search and then they start to
16:08 realize like here’s the thing when you
16:10 first learn about a subject guess what
16:12 happens first you’re like the most
16:13 confident person in the room you’re so
16:16 confident like you’re the you talk
16:17 really loud about it you’re like in love
16:19 with the idea like you know you say all
16:21 kinds of things about like how easy this
16:23 is going to be and then you start
16:24 working at it and once you start working
16:26 at it you’re like oh [ ] this whole 16:28 thing has a there’s a lot going on here 17:30 and you start to realize you’re not the 17:32 master you thought you were right those 17:34 are the people that do really well in 17:37 the lab right because those are the 17:38 people that that are like okay I’ve I’ve 17:40 actually started doing this and now I 17:42 realize what I need and so we anchored 17:44 in world class education you know all 17:46 the tools and resources that you need 17:49 and that we’ve got about 14 advisers um 17:51 on staff um uh you know the slack 17:54 Channel all the rest of it and of course 17:55 the vetted community so it’s it’s the 17:57 it’s to me it gets you out out of your 17:59 living room out of your bedroom trying 17:01 to make one of the most important 17:02 financial decisions of your life and 17:04 gets you in a room of you know competent 17:07 people with similar language and and the 17:09 same tools you know we had a guy named 17:11 Bill snow on one of our other podcasts 17:13 he’s an investment banker and he talked 17:15 about you know the three stages of 17:17 buying yeah right it was you know it’s 17:19 the idea of being able to one get the 17:21 financing right he said knowing the 17:24 financing that’s the easy part y right 17:26 it is negotiating the deal is the fun 17:28 part y right yep but searching when 18:30 you’re the buyer when you’re the seller 18:32 man it’s stressful I’m just saying we 18:33 both know true very true and then the 18:36 third one was searching and he was like 18:38 it’s the most painful process you’re 18:40 ever gonna go through it’s so painful 18:42 and it’s long and you feel unemployed 18:45 you know you are unemployed you are 18:47 unemployed there was no word Searcher 18:49 didn’t exist in 2004 my Searcher is a 18:52 nice way to say someone unemployed 18:53 looking for a job exactly exactly like 18:55 when someone yeah yeah yeah I’m a 18:58 searcher imagine that my mother who 18:00 became my mother-in-law was just like 18:02 what do you do like and I’m just like I 18:04 I’m looking for a business to buy you 18:06 know and it was like huh must you must 18:07 be rich and I’m like no I I barely have 18:10 two pennies to rub together but you know 18:12 I’m G to get it done yeah exactly I mean 18:14 I put my entire net worth into buying 18:16 companies multiple times right I mean 18:19 just to throw that out there like this 18:21 isn’t something I mean it’s a longterm 18:24 like said it’s not a or a partnership 18:26 usually they’re not shortterm things so 18:28 you got to have a plan and work for the 18:29 Long Haul yeah so question I mean the 19:31 you know you’ve obvious had a lot of 19:32 students come through the labs M how I 19:35 guess maybe let me ask you this way what 19:37 are the kinds of businesses that a you 19:40 guys coach people you buy right I know a 19:42 lot of Searchers are coached on and you 19:43 know you want to buy business with 19:45 recurring Revenue you want to buy 19:46 business that’s more digital than hard 19:49 assets you know all of these things 19:50 there are a specific type of business 19:52 you coach students on and then I’ll ask 19:54 the other side of that which is what are 19:56 the kinds of businesses that you’ve seen 19:57 students be the most successful with 19:59 great so the answer is kind of one and 19:02 the same right and the truth is is that 19:06 I think that most people actually 19:09 approach it completely backwards right 19:10 Brokers includeed right I mean you know 19:12 you start going and talk to a broker and 19:13 the first question they ask is well you 19:15 know what did you do before this like 19:17 what your what your resume look like 19:19 like what industry were you in right and 19:20 it’s actually backwards and and the 19:22 thing is is that when people are looking 19:23 at a business they’re trying to analyze 19:25 what happened right but when you buying 19:28 that company what you’re doing is you’re 19:29 chopping the head off and you’re 20:31 replacing the head with your head okay 20:34 do you understand and so the thing is is 20:36 like what what is your head going to do 20:39 to this instrument like that’s the lever 20:41 point right and so the thing is is you 20:43 know if you read by then build you know 20:45 I I’ve got a prep funnel in there that’s 20:47 all about focusing on you first and then 20:50 looking at you know the sort of 20:51 opportunity right and um so I think that 20:54 it’s number one understanding what it is 20:56 that you bring to the table as the CEO 20:59 is more defining of what business you 20:02 should buy than you know a bunch of 20:04 characteristics um that have been 20:05 outlined by search fund investors which 20:07 I’m happy to talk about uh number two is 20:10 um you know like when I first started 20:12 writing the book I I like idolized Jim 20:14 Collins right so I was like I was like 20:16 I’m gonna write the good to Great of 20:18 acquisition entrepreneurship and and you 20:20 know um and uh my editor was like buying 20:23 a business is an entrepreneurship that’s 20:24 the antithesis of it I’m like no you 20:26 don’t understand 20:27 yet you yeah yeah so so so the thing was 21:32 was I I started doing it right I started 21:34 interviewing I think I did like 36 21:36 interviews and then I was like okay 21:38 because everyone would say I’d ask them 21:41 like so what were you looking for I had 21:42 the same questions right and what were 21:43 you and they would all say the same 21:44 thing they’re like oh you know I was 21:46 looking for the same thing everyone’s 21:47 looking for I was looking for and then 21:49 they would say something different from 21:51 everyone else and so I just started 21:53 writing all down and two things occur to 21:54 me number one um Jim Collins has like 24 21:60 phds on staff all the time so like the 21:02 amount of volume right of empirical 21:06 evidence that he’s able to push through 21:08 is not is not capable of one man alone 21:10 he’s really that good right but but 21:12 secondly um this this industry couldn’t 21:16 have that style of of a book because 21:20 there is no data out there not like that 21:23 right and so what I realized is that 21:25 what it needs is not best practices what 21:27 it needs is Frameworks so that people 21:29 can understand what the hell they’re 22:30 looking at so as you start to understand 22:34 what you bring to the table then you 22:35 start to understand what type of 22:37 opportunity you’re looking at right and 22:39 so I sort of call it like you know 22:40 eternally profitable or turnaround or 22:42 high growth or a platform business right 22:44 and I use platform not in the way that 22:46 private Equity does I use it as the 22:49 ideal business that can that you can 22:51 maximize with your own skill sets right 22:53 and the things that you want to do with 22:55 your time like I used to race bicycles 22:57 like road bikes and it’s one of these 22:59 where all I want to do is hang out in 22:01 the bike shop but the truth is is if I 22:02 had bought a bike shop all you’re doing 22:05 is working in a bike shop on nights and 22:07 weekends when you just want to be riding 22:09 right you you don’t want to ride ever 22:12 again ever again right so that was my 22:15 first business we bought a bar we we 22:17 started a bar Yeah Austin right college 22:20 and I was like I love to drink and I 22:23 love to have fun so why not be in the 22:26 bar business they make so much money 22:29 terrible idea that’s not where you want 23:30 to be that’s awesome that’s awesome but 23:33 you know for for example for example I 23:35 was sitting at a um my kids you know 23:37 play soccer or whatever and and you know 23:39 they’re we went to this indoor place 23:42 right and it’s a um in you know outside 23:45 of St Louis and it’s got It’s it’s like 23:46 a pole barn okay and they’ve got the 23:49 indoor soccer things and they’ve got 23:50 like an adult league I saw like the big 23:52 banners for it and whatever and and I 23:54 was just sitting on one of the chairs 23:55 and then over on the side they’ve got a 23:57 little food courp can buy like you know 23:59 cheap food for high you know you can buy 23:01 a hot dog for four or five bucks or 23:03 whatever it is and then they have an 23:05 enclosed bar and it’s like beer drink 23:09 full bar drinks like like you know 23:11 different bar menu is that true on the 23:14 bar menu I’m not sure but anyway the the 23:15 point is is I was like this is a pole 23:17 barn and they’re selling like draft 23:19 beers to parents and I was like this 23:22 thing is awesome right you know and I 23:25 ended up meeting the owner and I was 23:26 like this is I want to buy this company 23:29 said you can buy it in February that’s 23:30 what he said to me and I was like okay 24:31 great and I was like I like it’s it’s 24:33 brilliant it’s a pole barn selling beer 24:35 and he was like it’s a it’s a cash 24:37 machine I’m like great so the thing is 24:39 is like I gota ask why do you want to 24:40 sell it in February probably because 24:42 everyone goes back outside or all the 24:44 revenues done for the year I don’t 24:47 know seasonal right you don’t want yeah 24:50 exactly right right but but it it was 24:52 just one of those where I was like this 24:54 is literally like two really cheap 24:56 things that’s just like a cash machine 24:58 right so that would be an eternally 24:59 profitable style business but without 24:02 those Frameworks you don’t understand 24:03 what you’re looking at that’s not a 24:04 business that I’m going to go in and you 24:06 know do a roll up across the country and 24:09 you know buy a hundred of these things I 24:10 mean actually now I’m saying out loud 24:12 that’s probably a pretty good idea but 24:14 but uh yeah Al so but you didn’t really 24:16 answer my question yes right so what 24:18 have you seen being the most successful 24:20 right from students that have done you 24:21 know been there done that right is it 24:23 that you’ve seen hey the guys that go 24:25 into hard manufacturing have done well 24:27 or the guys that go into software 24:28 Consulting have worked out well I mean 24:29 what is it that your students came back 25:31 and said man I’m glad I did the class 25:33 I’m glad I bought this business yeah 25:35 well I mean you know there’s stories 25:36 where you know people have bought a 25:37 company for $400,000 and the most recent 25:40 valuation is 24 million like that stuff 25:42 happens right and usually that has to do 25:45 with things a bit outside of your 25:46 control right um right Tailwinds Etc uh 25:50 we’re having the right product and the 25:51 wrong Channel and there’s some of those 25:53 opportunities out there but by and large 25:56 that’s that’s an outlier and and I think 25:57 that to answer it in reverse I would say 25:00 that 25:02 um honestly the people that end up in 25:04 trouble are the ones that buy businesses 25:06 with low margins um you just don’t have 25:08 a lot of room for for a hiccup right and 25:12 so like if you know if I have enough 25:15 margin if if my key man leaves right I 25:18 can just hire I can backfill that person 25:20 and I’ve got time to do it even if 25:21 you’re over paying him yeah exact yeah 25:23 especially if I’m overpaying them 25:25 because now I’m going to make more money 25:26 right because they have the margins to 25:26 be able to overpay that’s right that’s 25:28 right yeah so so it’s just one of these 25:30 like you know whenever I see really 26:32 tight margins I’m I always tell my 26:33 members I’m like look I can’t tell you 26:35 to buy or not buy a business but I don’t 26:37 like this one at all like you know I’m 26:39 just letting you know like my two cents 26:41 right so it’s you know it’s every once 26:43 in a while FIS like I’ll see a business 26:46 that someone will bring in and we’re 26:47 looking at it and it’s just 26:50 like wow this is a good one and you know 26:53 it’s it’s just a combination of you know 26:56 business risks growth opportunity 26:59 you you know um uh 26:01 transferability you know um every once 26:04 in a while like you get a good deal 26:06 because like the documentation is 26:08 terrible that’s actually the big key 26:10 like if there’s if there’s a business 26:11 with a transferability issue like like 26:13 it’s dependent on the seller and the 26:15 books are a total mess most business 26:18 buyers are fair weather buyers and they 26:20 will just pass up on it they’ll just 26:22 pass on it and the people that spend the 26:24 time especially the ones that get the 26:27 the seller to invest time in them right 26:29 and just build rapport and start to get 27:31 in and really understand the business 27:33 those are the ones that can kind of see 27:34 past the market and those are the ones 27:36 that can actually extract the diamonds 27:38 right you’ve got to be able to put in 27:39 the time on things that look like I’m 27:41 gonna I’m going to spend time on this 27:43 path and I I’m not sure if it’s going to 27:44 pan out if you’re fair weather you’re 27:46 going to get a fair weather deal that’s 27:47 right right and so if you’re looking for 27:49 the diamonds you can get a diamond yeah 27:51 but I would imagine that you’re going to 27:52 be dealing with accounting issues on a 27:54 lot of these small businesses right 27:56 they’re going to be totally I’m kidding 27:57 I’m sorry 27:60 so I mean you know that it’s not going 27:01 to be perfect right and so there’s 27:04 that’s why we do equality of earnings or 27:05 you do one of the you know reviews and 27:07 so yeah I can imagine that’s a big part 27:09 of it but let me ask you this is it the 27:11 business or is it the person I think the 27:14 I think the risk is in the entrepreneur 27:16 that’s what I 27:17 think I’ll I’ll extrapolate on that I I 27:20 think like I think that look I think 27:21 that if you put if you put businesses 27:24 look a lot of these search fund 27:26 investors like traditional search fund 27:28 okay we can unpack that if you want to 28:31 but but like they sort of have the so so 28:33 let me say it this way um The Alliance 28:34 of m&a advisers brought me in um to run 28:38 a um a talk on you know what the hell is 28:41 a Searcher what is a search fund like 28:43 you know all these em& advisers all this 28:45 was like three years ago they were like 28:47 I don’t know what this is and um before 28:49 I went out to talk I was talking to a 28:51 bunch of them and they were like yeah 28:53 these like Searchers come in with these 28:54 requirements and they show me their list 28:56 and and they’re like I’m just laughing 28:58 at myself like if I if if that business 28:00 ever existed that hit all these check 28:02 marks like they would never see it 28:04 because like they’re going to buy you 28:05 know I mean anyone’s going to buy it 28:07 like it’s it’s like so it’s like it’s 28:09 like it’s like recurring Revenue margins 28:11 of 100% you know like um it’s got to be 28:13 in in a fragmented industry with you 28:16 know like no you know and they’ve got 28:17 just all of these sort of check marks 28:19 that make the ideal business right and 28:22 and that sheet is not wrong right but 28:24 the thing is is like you know Ferris if 28:27 I say to you hey I have a um a six unit 29:32 in 29:33 Houston with you know uh two Studios two 29:37 one-bedrooms and two 29:39 two-bedrooms and it’s in this ZIP Cod 29:41 you’re going to know exactly what the 29:43 price of that building is okay like like 29:45 it’s just you already know what it is 29:47 and I don’t have to tell you anything 29:47 else with a business the analogy here is 29:50 like you walk in and like there’s no 29:54 kitchen anywhere and you’re like oh my 29:57 assumption was there was a kitchen and 29:58 then like one of them has a bathroom and 29:60 the other one has like six bathrooms and 29:02 you’re just like I don’t like because 29:03 there’s there’s every business is built 29:05 differently because it’s really a bunch 29:07 of intangible [ ] that’s like glued
29:10 Together by The Entrepreneur that’s sort
29:12 of like running through time right and
29:14 like a lot of things are just kind of
29:16 there’s a lot of relationships there’s a
29:17 lot of internal relationships there’s a
29:19 lot of processes there’s a lot of like
29:21 well how do you know how to do that well
29:23 you know it’s Susie knows how to do that
29:25 or whatever you’re like who’s Susie you
29:27 know you
29:29 you’re Ching down from one to the next
30:31 to the next to figure out what where
30:32 reality is exactly what is what is this
30:35 yeah like what is this thing is is like
30:37 the big question all right well so for
30:40 those listeners that don’t want to buy
30:42 the labs right yeah tell them hey what
30:45 is the one big piece of advice you
30:46 really want them to go do right you know
30:48 because again you kind of you know your
30:50 answer was any business that makes sense
30:52 yeah where the entrepreneur can probably
30:54 step in competently and perform y right
30:56 but is there something that you know
30:58 that a lot of people shy away from that
30:59 you’re like hey you should go pursue
30:01 this in terms of people that want to buy
30:04 a business yeah you know a bu like maybe
30:06 maybe I’m ask like an industry right an
30:08 industry that everybody shies away from
30:09 that you’re like you know what there’s
30:11 real potential in this industry if you
30:12 guys go do this or maybe not don’t have
30:15 acquire in a specific industry yeah like
30:17 is there’s something that you see
30:18 students constantly turn away from that
30:20 you’ve seen others really Succeed In And
30:22 for those that are just listening
30:23 wanting to look at their first business
30:25 that it’s your little negative advice
30:28 um I mean look I think that I’ll start
31:32 this way um you know like the m&a
31:35 Launchpad podcast is free okay it’s it’s
31:38 awesome it’s great uh you guys have a
31:41 conference it’s coming up fast um by the
31:44 time someone’s listening to this it’s
31:45 next it’s next year yeah yeah but but I
31:48 mean you know there there’s there’s a
31:49 lot of um you know free and lowcost
31:53 items like writing by then build cost me
31:56 millions of dollars over a decade of my
31:58 time in 4 and A2 years of actively
31:01 writing right so like it’s like $17 you
31:04 know what I mean like if you’re not
31:05 going to spend
31:07 $17 then like you probably shouldn’t bu
31:11 business hey we pay Walker say any of
31:14 that so one the next thing I would tell
31:16 you Ferris is let me let me give you um
31:19 what I would have answered probably a
31:22 week ago okay and that’s the following
31:25 um I all of a sudden I was cornered at
31:27 this conference and one of the members
31:28 was there and he said um what industry
32:30 should I buy in I was like well I don’t
32:32 know I was giving him all my answers and
32:33 he’s like no Walker what industry should
32:35 I buy in and I’m like smok screen number
32:36 two blah blah blah and then he like he
32:38 took me over and he sat me down at and
32:40 and he was like look man tell me what
32:43 are you thinking in your head right now
32:46 and I was like boat marinas and he was
32:49 like tell me and I’m like they’re all
32:51 over the place it’s just like a [ __ ]
32:53 sorry can I say that I’m like I’m like
32:55 you know it’s like people are renting
32:57 spaces they’ve got their boats there
32:58 like it’s just like like real estate
32:00 play yeah yeah it’s it’s more real
32:02 estate it’s sort of like you know people
32:03 talk about um um coin laundry and and
32:07 and um this kind of stuff as if you’re
32:09 buying a business you’re not it’s real
32:10 estate right this is this is real estate
32:12 but the but the but but um but boat
32:14 marinas also have beer didn’t we cover
32:16 that I’m just kidding yeah but here I
32:19 mean the thing is is that like I was I
32:21 was thinking that’s a cash cow and that
32:24 like if this guy was wanting to like go
32:25 buy a whole bunch of businesses in one
32:27 vertical so I was like go that way he
32:29 was like cool and then uh we talked uh
33:32 last week and he met somebody in private
33:35 equity and it turns out I didn’t even I
33:38 didn’t know this but private equity’s
33:39 apparently been in that space for a
33:41 decade and he sat him down and he was
33:43 like look Eric I forget the numbers
33:45 forgive me but like you know it’s
33:46 basically like look so there’s you know
33:48 whatever 100,000 boat marinas in the
33:50 country and you know uh but the truth is
33:54 that only you know 20,000 of them have
33:56 over you know 12 boats or whatever and
33:59 so operate at scale and all of those
33:02 have already been acquired like there’s
33:03 like two people youram is zero yeah yeah
33:05 exact yeah exactly so so it’s so it’s
33:07 sort of like I think it’s a I think it’s
33:09 a like I really advise against buying
33:11 that starter business in order to Leap
33:14 Frog it because you’re going to end up
33:15 with a with a distraction like a side
33:17 business that is too small that now you
33:19 got to spend time on you don’t want to
33:20 deal with it you know but like if you
33:22 were to just be like I want to buy
33:24 something and just start to get you know
33:28 maybe something like laundry or you know
34:30 a boat marina might might be down that
34:33 path all right there’s an answer so it’s
34:35 the non- answer like that’s what I
34:38 recomend what you for president it’s
34:40 such it’s such a it’s such a hard
34:42 question right because I think really at
34:44 the end of the day you know someone’s
34:46 got to be somewhat passionate passionate
34:49 about what they’re doing a little bit
34:50 right they can’t just go oh well I’m not
34:52 I’m not into that right yeah I like
34:55 heavy machinery stuff right I love Tonka
34:58 toy as a kid I like to do all that stuff
34:60 so when I get around factories and
34:02 Manufacturing I can’t explain it I do I
34:05 get excited I want to see it we have
34:07 trucks I have 15 18 Wheels right when I
34:09 get around them I’m like man these are
34:12 awesome they don’t make a lot of money
34:14 but you know but but you still got to
34:15 understand the business model so I would
34:17 imagine some passion has to be around
34:19 totally some of the business if you
34:20 don’t if you if someone asks you what
34:21 you do and you don’t you feel not
34:24 thrilled to answer don’t buy that
34:26 company yeah right that’s that’s
34:28 actually a very good point this yeah and
34:29 so I think that you know I also think
35:31 that
35:32 um
35:34 uh I’m sorry I forgot what I was going
35:36 to say I was thinking about what you’re
35:37 talking no I mean but to the point you
35:40 said earlier right whenever you first
35:42 learn an industry you get really excited
35:43 about it oh right and you have a lot
35:45 that you you know there’s the highs and
35:46 lows of the industry you need to stay
35:48 some level of passionate about what
35:49 you’re doing so it’s also it’s also you
35:51 know we talked about skill set a little
35:53 bit and one of the things that I learned
35:55 look I mean Casey we talked about this
35:56 last night one of the things that you
35:57 learned is you didn’t get right the
35:58 first time right or the second or the
35:60 third right yeah probably mean NE but
35:03 but you get but you get better you get
35:05 better right and the thing is is like
35:06 the first company I bought I learned
35:08 this lesson and the lesson was I can I
35:11 can manage bluecollar workers I can
35:13 manage white collar workers I have a
35:16 really really hard time managing both in
35:20 the same company so like I have a
35:22 company right now that’s all white
35:23 collar I have another company that’s all
35:25 blue collar but like I’m not putting
35:27 them all in a room and trying to talk to
35:29 both of them and like thread that needle
36:31 like to get respect from from blue
36:33 collar workers you’ve got to do
36:35 different things right and like and like
36:38 when you’re doing those things some like
36:39 I’m not going to go so far as to say
36:41 you’re like losing respect from the
36:42 white collar workers because like you
36:44 have to like earn that too but it’s it’s
36:46 just it’s a different game right it’s
36:48 like being a service provider and
36:50 operating a machine are two completely
36:52 different you know Lifestyles and so I
36:54 decided that I didn’t like those things
36:56 and I was talking with someone in the
36:58 the lab last Tuesday and they love that
36:03 like vertical management and I was like
36:05 wow that’s that’s like an art form so
36:07 know you have to be passionate and so
36:09 maybe before we run out of time one more
36:11 quick last question what is the biggest
36:13 mistake you see people do on the
36:15 acquisition
36:17 um okay I’m gonna say something
36:19 incredibly unpopular right now
36:23 um I think they get in their own way
36:25 like it’s like the deals that don’t get
36:27 done right I I think that there’s a lot
36:29 of deals that could get done and people
37:33 just they they spend a lot of time
37:36 people spend a lot of time warming up
37:38 right is this not maybe this isn’t your
37:39 question like are you at like for you’re
37:41 talking for closed deals I was talking
37:43 about post deal but I mean that’s
37:45 probably a good answer too right I think
37:47 yeah I think one get in your own way is
37:48 and I see that a lot in the real estate
37:50 side too so so can I like can I like
37:54 look I mean if if you’re if you’re
37:56 buying a stock in the in the in the
37:58 stock market right you’re paying like a
37:00 19 times earnings on that company all
37:03 right and yes I’m not managing it it’s
37:05 passive it’s like you know here’s like
37:07 five bucks or 100 bucks or 10,000
37:09 whatever your you know portfolio is and
37:11 so and so but the thing is is like
37:12 you’re not thinking about it and that’s
37:14 one thing but just to compare it to like
37:16 these Main Street let’s just say sub5
37:18 million businesses like million to5 Mill
37:21 one million to $5 million transaction
37:23 you know you’re talking about companies
37:25 that are trading at three four five
37:26 times right and you know know people
37:28 they like a lot of first-time buyers are
38:31 they get they want to apply real estate
38:34 axioms to to business buying and they’re
38:37 like I make money on the Buy and they go
38:39 waffling back and forth on the
38:42 $25,000 thing that they want the seller
38:45 note or you know it’s just like
38:48 dude I pay like I look at I look at what
38:51 they’re asking I like Brokers people
38:53 want to go around Brokers I’m like good
38:55 luck you’re going to figure out that
38:56 those sellers aren’t ready to sell like
38:58 you’re going to waste a lot of time I
38:59 like going to Brokers because the
38:00 sellers are ready and there’s a price
38:03 usually right on the thing and I can
38:05 look at it and be like that’s a x
38:06 multiple of whatever I know what the
38:08 seller wants I know what’s in their mind
38:10 and if I like the business the odds that
38:12 I’m just going to walk in and pay that
38:13 asking price cash at closing are close
38:15 to 100% I don’t I don’t really like
38:18 messing around I just go in and say boom
38:19 here you go it’s a good point to wrap up
38:21 with which is ultimately if you’re dead
38:23 set that hey the business was worth 4X
38:25 let’s say you stepped up and you paid a
38:26 4 and a2x what does that truly mean it
38:29 means you’re operating the business for
39:30 another six months longer than you
39:32 expected that’s all it means right but
39:34 you still got into the business you know
39:36 the business had all the cash flows to
39:38 be able to pay it for another half you
39:39 know half a year and in the grand scheme
39:41 of things half a year is not really a
39:42 long time yeah right so would you let
39:44 that four vers four and a half X break
39:45 the deal right you really shouldn’t
39:47 exactly right all right so we’re going
39:48 to jump into our rocket round okay we
39:51 want to know about you right our
39:53 listeners want to know all right so
39:54 we’re gonna ask you three questions okay
39:56 just give us give us what what you got
39:58 so what do you like to do in your free
39:59 time um you know I hang out with Ferris
39:03 and Casey yeah yeah I I’m spending a lot
39:05 of time writing right now I’ve got
39:06 another book in me and um I’ve got a
39:09 table of con so you know I mean I guess
39:11 I would answer writing but but the I
39:13 mean the truth is I’ve got three girls
39:15 uh 13 11 and nine and so I play backyard
39:17 soccer man my footwork is getting better
39:20 good you’re gonna make
39:21 it all right next question what is your
39:24 most memorable moment in your business
39:26 Journey so far
39:28 uh it’s either when I almost went
40:30 bankrupt or when I sold my first company
40:32 for seven figures all right the highs
40:34 and lows right there I thought you were
40:35 gonna say the podcast with Ferris
40:38 then what’s your favorite business tool
40:40 or resource like to use okay
40:45 so I mean guys is it a cop out if I say
40:48 my network no I mean I I think you’re I
40:51 think you’re I mean what do they say
40:52 your net worth is your network it’s very
40:55 true I spent I spent decades building my
40:58 network and it is so rich I just I value
40:01 it more than anything else and um just
40:03 to be able to sit down with you guys in
40:05 Houston here today is test I totally
40:08 agree with that right I mean you know
40:09 one of the phrases I heard that really I
40:10 like is just not just about who you know
40:12 or what you know it’s who knows you
40:13 right and it goes both ways and being
40:15 able to add value and also get value
40:17 well and I know this is a rocket round
40:18 but I think that I think the thing is is
40:20 that in life whenever we’re experiencing
40:23 either something really good or really
40:24 bad you’re dealing with something that
40:26 is you know like three stand standard
40:28 deviations away from like normal life
40:30 and you’re either struggling or like
41:32 uniquely celebrating whatever it is and
41:34 you’re trying to figure something out
41:36 and the truth is is that there’s always
41:38 somebody in my Network that has the
41:41 answer and so like you can always go on
41:43 sort of a treasure hunt to figure out
41:45 who is it that I know that can help me
41:48 work through this thing right here and
41:50 um that’s that’s that’s my favorite
41:53 resource at the end of the day awesome
41:55 love it well there you have it yeah and
41:56 I just want to say and and we get no
41:59 sales no commissions or anything off the
41:01 book but if you are listening to this
41:02 and you have not read buy then build go
41:04 out and get buy then Bild I’m telling
41:06 you join the lab get the education
41:09 because for people like myself that kind
41:11 of tried to bypass a lot of those things
41:12 I could have shortened the learning
41:14 curve and have this network of Walkers
41:17 to be able to answer the questions and
41:18 get them done so go out there and get it
41:20 done get that get that buy then build I
41:22 completely agree and Walker last
41:23 question for those that want to get a
41:24 hold of you what’s the best way to get a
41:25 hold of you probably LinkedIn LinkedIn
41:28 yeah all right Walker well hey thank you
41:30 very much for having on show glad to
42:31 have you on thank you so much honor is
42:34 mine thank you for listening to the m&a
42:36 Launchpad podcast if you’ve enjoyed
42:38 today’s podcast and would like to
42:40 support us please leave us a rating and
42:41 a review after you listen I’m Casey menu
42:43 and I look forward to talking with you
42:45 next week
