🦨 a dirty business

🦨 a dirty business


I was stuck. I built a million-pound publishing company. I hired a dream team and we are growing. Over the next few years, we hope to follow this formula to hit multiple millions. I should feel great right? But I didn't. I felt lost and unmotivated. It took me a while to realise I didn’t have a challenge anymore.

So I set about finding a new challenge for myself. I looked at a huge amount of ideas and industries. Then I found this chick called Codie. She kept talking about how boring businesses are the best way to get wealthy. I was curious.

I always thought you needed to build a HUGE tech company to get rich or invent some new crypto shit coin.

When I was younger I thought creating the next Facebook for tennis coaches or Twitter for budgies was the best way to get rich. Ok, so maybe not the second one...or the first one.

Can this strategy truly make me RICH in the next 5 to 10 years or are these businesses being sold because they are rubbish? Let’s find out.

The Great Retirement

Codie had spoken about something called the great retirement. The idea is that more and more people are retiring and their children don’t want to take over their boring businesses. They want to be a TikTok star or well YouTube sensations (just like ya boy with his 792 subs 😎).

I looked at some reports. Turns out she's right.

💡 Nearly two-thirds of small business owners questioned were found to be over 50, more than one in five are aged 61-70 and just 11 per cent are aged 40 or younger.
Of those aged over 60 years old, 64 per cent said that they do not have a clear succession plan for transferring ownership and control of the business, meaning that UK SMEs may be significantly under-prepared for the retirement of their owners.

There are nearly 6 Million small businesses in the UK. That means around 4 Million of these businesses are either at the point where retirement is on their mind or it soon will be.

Turns out Codie was right about the great retirement. But is she right about the businesses on offer? The next step was to find some businesses.

Are these businesses any good?

I set about trawling countless websites to find some potential businesses to buy. I sent off about a hundred enquiries and must have read over 1000 listings.

Here is the must-haves for the businesses I am looking for:

  • The business must have an operator in place OR have a staff member who could become the operator
  • I don’t want to be buying a job
  • Businesses that are £250k minimum a year in turnover and above (no small boy stuff)
  • Have been established for at least 5 years but really I’m after businesses that are 10 years plus
  • Businesses when I can add value through automation, processes, and better marketing
  • If I hear “we still use paper” or "I don’t really have a website", “what is an email newsletter” then I get very excited
  • Ideally, service-based as this is where I have the most experience

After a lot of scrolling, I found 3 potential businesses that fit what I was looking for.

  1. 🤓 A bookkeeping business
  2. 📕 A book wholesale company
  3. 🧰 A pump installation and repair company

I looked at all 3 in depth. One of these I rejected right away. The other I am actively pursuing and we have another meeting next week. On the third, we had a meeting and I very quickly made an offer.

Biz 1 - Bookkeeping - Offers Invited £245k turnover

✅ The Good

  • Diverse mix of clients
  • Well established
  • Good profit margin on turnover.

❌ The Ugly

  • Very high multiple - no contracts
  • Not a limited company
  • Owner-operated
  • Competitive market with low barrier to entry

Did that put me off because I said nothing owner-operated? Well, when I dug a bit deeper I found that the owner had 2 full-time team members that had been with the business for 10 years. They were more than capable of taking over from the owner and running the enterprise.

With this in mind, I made an offer. The offer was a little conservative because despite how much I liked certain parts of the business there remained:

  • uncertainty about if one of the team members could actually take over and be competent in an MD role
  • how much time I would have to put in to facilitate that transition
  • the owner had been running this as a sole trader and not as a limited company which made it harder to value and meant payroll etc was in a bit of a mess
  • On top of this 7 staff members all doing various hours and days- complex!

Lots to sort out but for the right price, this could have been a great acquisition. Unfortunately, the offer was rejected by the owner and they went with a higher offer. I could have upped my offer but given all the work involved that wasn’t something I wanted to do on this occasion.

Biz 2 - Bookseller to Schools- Offers Invited £1.6m turnover

✅ The Good

  • Crazy boring. Schools say we want 1000 copies of X book - get us the best deal. Publishers say we want to sell X new books to schools so please sell as many as you can.
  • 2 FT staff that run the entire business. 1 could take over and become the MD.
  • 2 directors drawing 2 salaries. Could use 1 of these salaries to hire another account manager to find new business.Would be an easy takeover and wouldn’t require getting involved too much in day-to-day running.
  • They also pay for a warehouse but more and more books now go direct to schools (the pandemic made this change) so that could be a BIG saving if can reduce warehouse size.
  • Could share resources with PP - it's a good fit.

❌ The Ugly

  • Didn't click well with the owners. That can be a big issue due when it comes to transitions.
  • Very far away from me.
  • Some of the major publishers like Pearson do this directly. They have huge budgets. Some of these companies turnover billions. Big concern and why I didn't make an offer.

Biz 3 - turnover 1.6m

✅ The Good

  • Almost no competition in 20/30 mile radius. High barrier to entry as they have trained all staff themselves (no training you can go and do). The only local competitor is a one-man band.
  • They own all warehousing and other servicing items outright with no debt.
  • The original co-owner was not from this industry originally, he came from a sales background.
  • A senior manager who has been with the company for 16 years who could take on the MD role

❌ The Ugly

  • Biggest learning curve.
  • One director retired but other who remains working here still quotes for jobs.
  • And can’t hide from the fact its a dirty business but when people need it they need it (will reveal more as this progresses)

The Summary

Business number three has a lot going for it and I like the minimal competition and high barrier to entry. There is a large learning curve BUT I have learnt new businesses before. With the right handover and getting the owner's knowledge down into an online knowledge base along with SOP's, that risk can be removed.

If all goes well at the meeting next week I will look to make an offer. The next challenge becomes negotiating the terms.

Follow along for the journey 🧳