How I Bought a $3.4M Business For $200K｜My First Million

If you've ever thought about buying a business, then this episode's gonna be for you.

Because on the internet, there are a lot of people telling you about how amazing it could be to just go buy a business that's already working.

You just take out a loan, you put very little money down, and boom, you're cash flowing and you're working passively.

But those are also people that are kind of selling you the dream.

Now, my buddy Dan is one of my best friends from college, just actually did this.

A couple years ago, he bought a business, a very random, unsexy business that he had no experience in.

He didn't have a lot of money coming in.

He had never bought a business before, but he did it.

and it's actually worked out pretty well.

And I asked him to come on and tell the real story.

So tell us like, what was it like?

What'd you do the first hundred days?

How did you actually find buying the business?

How much money did you have to put down?

How much money did it make?

What are the downsides?

What are the traps, all the real stuff?

And I love it because Dan was very honest. He was very open about all those things.

And then at the end, he actually brainstormed a couple of business ideas that he saw.

Cause when you buy a business, you look at hundreds of businesses.

He actually saw it has a couple of his favorite spaces that he thinks people could go into and we brainstormed that at the end.

So this episode, I think, is going to be a lot of value for anyone who's ever thought about buying a business and then we have a fun brainstorm also at the end for other businesses that people could check out.

All right, enjoy this episode with my buddy, Dan.

I feel like I can rule the world.

I know I could be what I want to.

I put my all in it like no day's all.

On the road, let's travel, never looking back.

All right, this is a special one.

My buddy, Dan, from college is here and me and Dan, we've started a sushi restaurant together.

we've owned a pet mouse together we've tried to bring down the house at a casino together we have gone through many schemes and dreams and then Dan called me a couple of years ago and I convinced him to try to buy a business and then he he's done it now he bought the business and he's here to tell the story of that whole journey of going from a guy who never could thought that he would ever buy a business to now owning one of the most random businesses that you'll ever hear about and then I got Sam here who doesn't know Dan so it's me and my college buddy and then Sam you're You're sort of the third

wheel on this date.

Are you ready for this?

Yeah, sign me up. This isn't the first time it's happened, but I'm going to ask questions.

Usually what I think is what the audience thinks, so I'll ask some questions.

Yeah, exactly. All right, so Sam, where do you want to start?

Just maybe first questions, like who the hell is this guy?

Who are you? Yeah, who are you?

Sertner, Dan Sertner.

So I wasn't his roommate in college.

I was like the next -door neighbor.

So for the Seinfeld references, I was like the Kramer.

I'd show up from time to time unannounced, lived with this guy for four years.

So I go way back with Sean.

And by the way, Sam, the funniest part of meeting Dan the first day of college, I walk in and Dan, the way he looks now, he looked exactly the same at age 18.

And so Dan is standing there and he used to wear a visor because he's like, I don't know, cool guy from New Jersey.

So I thought he was someone's dad.

I saw him from the back and he knew everything.

He was like, laundry's down there.

Yeah, you have to do this.

Your meal plan is not going to work until you activate it.

He knew everything about the campus, and I was totally clueless.

I didn't know anything about going to college.

And so he was, and he had a single, he was like one of the smart guys who like requested having a single room, didn't have to have a random roommate.

So Dan's been ahead of the game for a long time.

And okay, and what business did you end up buying, by the way?

So I bought a company called Fleet Packaging.

So it's a packaging distributor.

distributor. So effectively, we work with large retailers in the U .S. who need any sort of packaging.

So if, you know, you go to a mall, you know, you leave with one of those to -go bags, we help companies buy those and then we help with warehousing distribution.

We make it easy to buy bags overseas.

So he is Dan the bag man now, which is all you really need to remember.

Dan the bag man. But to get there, I think it's a fun kind of journey, right?

So we're going to skip the part about me and Dan in college and then the company we tried to start together.

We're gonna skip that for now.

We can go back there later.

I think the buying a business story starts in actually kind of a funny way.

So after we kind of try and fail in our first business, we go off and do different things.

I go move to Australia.

Dan moves to San Francisco and he goes and gets a job at Facebook.

A few months later, Dan calls me and he's like, oh yeah, sorry.

I don't know what he said, But he was like, yeah, I was just quickly just fixing a bug.

And I was like, fixing a bug?

What are you talking about?

And he's like, yeah, I'm coding now.

He's like, you're coding?

He was like an economics – he was like our finance guy.

Why is our finance guy – what are you doing in code?

And basically what he did was – I don't know if you know this, Dan, but I guess at Facebook, they have just like a coding academy internally at Facebook.

Dan, is that how you describe it?

Like a boot camp. camp basically any non -engineer could go like become an engineer just while on the job is that is that how it works it's not explicitly so it's actually for the engineers when they show up so when you show up and i actually think they just got rid of this like a few weeks ago so this might be old news but you know for the first 20 years of facebook's existence uh you know when you get a job as an engineer at facebook you go to this eight -week crash course on how to be an awesome facebook engineer and it's not typically open to non -engineers but you know why uh why accept the status

quo so i was actually one of the few people who early on was able to take classes there so i started in fraud do you have a good farmville fraud story what does an average person like has not know about like fraud on a farm like farmville sounds like the stupidest thing in the world the fact that there's even fraud going on it's like you know am i stealing crops from sam's farm you are stealing crops well what you're doing is you're probably you're wanting to make a a better farm than sam but you don't have time is this for pride or money it's well the fraudsters are doing it for money so the the buyer

is doing it for pride they're like i want a bigger farm than sean but i don't have time to actually spend my time playing the game so i'm gonna go online to the black market wherever that is and someone's gonna sell me whatever 200 mushroom seeds to plant in my farm and they've procured those illegally because they've stolen someone's credit card and And there's this whole world of Facebook games fraud that existed.

So Farmville was basically like, I don't know, is that the laundering part?

Basically, the guy steals the credit card, uses it in Farmville, sells the Farmville stuff to me, which looks harmless, and he gets cash out the other side.

Precisely. This is like a much less cooler version of The Wire.

Pretty much. Well, there was also like real money laundering, too, where people would make their own app and then launder money through that.

That one was a little more intense.

Dude, Sam, one time I was like, damn, what are you even doing at Facebook, dude?

What do you mean fraud?

What is the Facebook fraud?

And he goes, have you ever opened up your timeline on Facebook and just seen a dick?

And I go, no. He goes, you're welcome.

No, that was the later iteration.

I moved on to community tooling, but effectively preventing porn on Facebook.

So that was my go -to line.

And what did you do after Facebook?

So after Facebook, I all of a sudden, you know, had transitioned into engineering.

I went to a startup called Namely.

It was a payroll company.

And I joined as an engineering manager, eventually worked my way up to be CTO of that company.

You got to tell Sam the the brilliant.

So Dan's Dan's actually a marketer at heart.

He just never worked in marketing for some reason.

But the way he framed himself in the job market was amazing.

So he's he's at Facebook.

He becomes an engineer there.

Right. So it's not like he's like MIT computer scientist. Right.

Like when you think about like I'm a Duke Spanish major.

He's a Duke Spanish major.

When he was at Duke, he kept he kept taking this class called lemurs where he's going to the zoo and looking at lemurs all day.

Like Dan was, that's what Dan was going to do.

But then he trains himself to be an engineer.

And then when he goes into the job market, he has this brilliant way of framing himself so that he ended up becoming a CTO of this like fast growing startup.

All right. So I leave Facebook.

As you will see, most of these things are schemes that Sean and I have done in our lives that slowly elevated to good ideas.

But I left Facebook, you know, basically the best of the best at the time.

Like it was, you know, still is, you know, one of the best technology companies.

But I'd say, you know, I was, I was, i joined facebook there were 3 000 people i left when there were 60 000 people so i saw a lot of things and i'm not like old school facebook rich i missed that and i wasn't an engineer in the beginning so just want to clarify that too but i left and i had you know kind of this weird amount of experience like i had whatever four or five years of coding experience which is cool maybe enough to make me like an eng1 or eng2 at a normal company um but you know i had moved into management while I was at Facebook.

And the way that I positioned it was, you know, I am a Facebook manager.

I know how things work at Facebook.

Let me come into your startup and let me whip your team in shape.

Let me help your team run like a Facebook engineering team.

All right, so I've built a few companies that have made a few million dollars a year.

And I've built two companies that have made tens of millions of dollars a year.

And so I have a a little bit of experience launching, building, creating new things.

And I actually don't come up with a lot of original ideas.

Instead, what I'm really, really good at, what my skill set is, is researching different ideas, different gaps in the market in reverse engineering companies.

And I didn't invent this, by the way.

We had this guy, Brad Jacobs, we talked about him on the podcast. He started like four or five different publicly traded companies worth 10s of billions of dollars each. He actually is the one who I learned how to do this from.

And so with the The team at HubSpot, we put together all of my research tactics, frameworks, techniques on spotting different opportunities in the market, reverse engineering companies and figuring out exactly where opportunities are versus just coming up with a random silly idea and throwing it against the wall and hoping that it sticks.

And so if you want to see my framework, you can check it out.

The link is below in the YouTube description.

But Sam, isn't that great to just be like how to rebrand yourself to be like, I'll make your engineering team run like a Facebook engineering team.

And if you're a startup founder who's, you know, sitting like namely was in New York, right?

That's kind of aspirational to have somebody say that versus just I have five years of experience, right?

Yeah, man, that's great.

Yeah, it's all about storytelling.

So the story is so far is like, you know, whatever, pretty good.

You're stumbling into things.

Just a smart guy. A smart guy with a smart guy with a dream and a little bit of scheme.

And now you're in a position where you're like, I'm at the startup.

We just raised a bunch of money at a good valuation.

I'm the CTO. I got these shares.

I'm going to be rich. Going to be rich. What happens?

Didn't get rich. Second time.

Facebook. Cool. Really didn't get rich. This time didn't get rich. You know, so, you know, long story short, we found ourselves in a place where in order to do what we needed to do, we needed to sell the company or in order for the company to do what it needed to do next.

We need to sell the company.

And it became very clear that this wasn't going to be kind of this massive windfall that I had been expecting.

Long story short, the company sells, I find myself out of a job because as part of the transition, the acquiring company is like, we have a CTO, so we don't need you.

So it's like five years of hard work and kind of that dream of like, hey, we're going to take something and turn it into something else, kind of goes away pretty quickly.

And that's kind of where things start to get interesting, because, you know, I have Sean on speed dial.

So I had a fortuitous conversation with him that day.

Was he the one who inspired you to do this, or did you listen to the MFM, or how did that insight come to be?

Because it's not normal for a Duke Facebook Unicorn startup guy to buy business.

Correct. So no, it wasn't even like a, hey, Sean, I need advice.

It was just like a random, let's catch up.

Catch up call, yeah.

Yeah, let's just catch up.

It's been a while. Wait, so Sean, did you say, like, I use this bad company?

No, no, no. We're on this college catch up call.

What's going on with you?

you. What's going on with you?

Dan tells us this story.

We got acquired, you know, there can only be one CTO.

They already have one.

So great. I'm going to be.

And so he was just saying like, if you know any cool companies, let me know.

I'm going to be looking.

And then I kind of just mentioned to him, I was like, dude, Dan, you're so like, like ever since I'd known you, you've been entrepreneurial.

And I think like Naval said this once, he goes, you know, other people sometimes see your gifts easier than you can see them.

So he was saying for Naval, he also used to think I'm going to be a scientist. And his mom was like, no, no, no, you're going to be a business person.

He's like, what? No, science, right?

And she's like, oh, like every time we walk by a pizza shop, you're telling me all the three different things that they should be doing to run their business better.

Like you're always doing that.

You're naturally, you're a natural fit for a business person.

Like that's what you're good at.

And so Dan, same thing.

Dan was always somebody who was like shooting a shot.

Like when our freshman year at Duke, all of a sudden there's like this huge package and Dan has like a lifetime supply of stride gum.

And I'm like, Dan, why did did you buy this much gum he said i didn't buy it i want it and he would always be entering contests i went you know one day with dan i go to um i go to work and dan goes uh hey i gotta get off early i got an audition i'm like what what are you doing he's like i'm going to try to get on wheel of fortune right now and so we i went with him and we both got casted onto wheel of fortune well yeah you leave out the point we like we came we were doing the sushi restaurant on the time so So we like, we're both like been working all day.

We have the bright green headbands.

Like we have not, like we came in with knives.

Like we had our sushi knives on our belt.

We come into this interview, like no wonder we got cast. It was like, this is good TV, man.

Yeah, these clowns.

But he was always doing this.

He was always like, early on he started recording like product review videos for like, I don't know, two cents a pop or something like that.

Like he was just doing random shit all the time.

So it just seems strange to me that he was like going to get a corporate job.

like this didn't it's not like the vision I had so I was like dan you ever started thought about starting a business he's like I don't really have like a killer idea I feel like I need like a killer idea if I'm gonna like put my whole life on the line for something like oh that's fair I said you know I've been doing this podcast and it's not something I was doing a lot of but like I've met a few people who go and buy businesses and it's honestly seems like a little bit of a cheat code like um as in the business if you find a business it's already working you don't have to to come up with a genius idea.

It's already validated.

It's already working.

It's got years of profitable history.

You can buy it at a fair price.

And then if you're good at executing, like you can grow it over time and you know, there's retiring business owners, like there's reasons these are up for sale.

And so I just kind of like planted that seed.

It's like, would you kind of like consider that?

And Dan, I don't know what your first reaction was, but I bet it was probably just like lukewarm.

I don't know. It was lukewarm.

I mean, it was two part one.

You know, I, in the beginning I said, Sean, you know, always knows what he's talking about.

Seems to seems to have his life figured out my first response like sean has no idea what he's talking about he's never bought a business before uh to this day that is still my first you know my main thing is like you don't know matt um but the second one was like but sean is a pretty smart dude like and he you know if he's saying this is a good idea it's a good idea but you know my real my second reaction after that was with what money am i buying this business because let's recall missed the boat on the facebook riches missed the boat on the namely riches but it actually turned out and, you know,

we'll, I'll get into this more later.

Like you don't need that much money to buy the business.

That's the crazy part.

And I think it, it took a little bit of digging initially to figure that out.

And I'll, I'll talk more about that in a minute.

Let's do a quick Tarantino. So let's give the ending first. So let's say you, you buy, you ended up buying a bag business as in like literally if you go to a shopping store and you buy something and they have a custom branded bag, when they check out, like there's a decent chance I made that back so it's it's it's that big it's that big I unfortunately can't I like I'm under confidentiality agreements with most of my clients but if you go to a mall there's a pretty decent shot that you're gonna touch one of my bags we're gonna get it out of you somehow we're gonna we're gonna get it out of you

I mean I'll tell you after I'm not bound by any confidentiality maybe I can say some things all right so but but Dan let's give the headline so you buy a business let's we're gonna we're gonna work backwards for like because it's gonna sound cool and then we're gonna be like, here's the crazy journey of how I got there.

All right. So how much did you buy that business for?

I bought the business for $3 .4 million.

So he buys a bag business for $3 .4 million.

That business had been around for how long and about how much money was it making when you bought it?

Yep. So it was about 15 years old.

Uh, the business had been making anywhere from, and it was right after COVID.

So it was a weird few years, but it had been making anywhere from eight to 11 million dollars a year in revenue in revenue and it was doing on average about 800 000 in profit and what's the url what's the fleet fleetpackaging .com best bags in the business best bags do you have like a do you have like a slogan yet so jingle we're we're working oh maybe we could come up with it later on the brainstorm later it's like uh no we're working on a rethink your packaging partner or rethink packaging partnership.

Cause what we're trying to do is, you know, there's a lot of people that sell packaging, but what we're trying to do is just do it better than everybody.

Just kind of go that extra level of like, let's make your life easy as a packaging.

So Dan explains. So you said you bought this business, this is about 18 months ago.

It was doing 11 million in revenue, about 800 ,000 in profit that the seller, that the guy who owned it was able to, that was his living.

He's making Like an eight -and -a -grand a year.

And now, last year, how much revenue did it do?

You grew the business.

Last year, we had a record year.

I think we did about $13 .8 million in revenue.

That was pretty easy to get the information out of him.

Didn't he just say he can't tell you?

No, I just said I can't share client names.

I'll share everything else.

You can share his own information.

How much money did you put down to buy this business?

Because, again, you talked about like, dude, I didn't.

Most people assume if I'm going to buy a business for $3 .5 million, cool.

cool, where am I going to get $3 .5 million from?

And really quick, how much profit does it do now on the 13?

On the 13, we did like $1 .7 million profit last year.

So you creamed it. Oh, crushed it.

Yeah, last year was amazing.

Suck on that, Zuckerberg.

I don't need you anymore.

There you go, man. All right, got it.

So you bought a business that made $800K in profit.

You've more than doubled it.

Yeah. And there were lots of, you know, was it every, you know, things that I did that doubled it?

Certainly that was part of it.

a lot of it was getting out of COVID and figuring out how we position it.

Um, and it turned out, you know, the business had not kind of reached its potential yet.

And back to what Sean said, you bought it for 3 million or so.

Where'd the money come from?

3 .4 million. So we did it through an SBA loan.

Um, and we ended up putting 200 ,000 down.

I say we, cause I say me and my wife, cause we put our house on the line.

Like we went, we went all in in on this business.

We spent $150 ,000 from our savings.

And then my wife took a loan off her 401k for the other 50.

So that was the, again, house on the line, 401k on the line, like this was it.

Was she just down from day one to do this?

Or did it take a lot of persuasion?

How did you position this with the wife to make that happen?

She was down. I mean, she has a similar kind of philosophy on, you know, we should do something that's going to be kind of a step change in where where we're at.

You know, if we're going to bet on someone, we should bet on us.

And, you know, she knows, Sean, she knows what we've been up to for the past, you know, however long.

She knows she married a stallion who just needed to run.

So this wasn't like, oh, my goodness, where did this idea come from?

This guy's crazy. It's like, no, that sounds about right that this is what you're doing.

How much of the loan have you paid back now?

But Sam, so he put down 200k, he got an SBA loan, and then he had a seller note also, which i think is a key part of this so we want to explain where the rest of the money came from so 200 000 from you where'd the other 3 .2 come from sure so um 1 .8 came from the bank um 200 000 came from me and then the other 1 .4 came from the seller uh which effectively we said hey like you know we're not going to pay this up front over the next five years assuming the business continues to do well you know we'll pay this second part of the business or sorry second part heart of the debt.

So it's a forgivable seller note, which means effectively, if the business doesn't do what it's supposed to do, that debt's forgiven on any given year.

So that was part of what made me feel better about the deal.

Uh, you know, cause you run all these scenarios when you first buy it, it's like, all right, we're going to put our life savings and house on the line.

What happens if things go bad?

And it's like, all right, at least half of this debt, if things go bad, we'll go away.

Why'd they want to sell the company?

That seems like, uh, he was retiring.

retiring. He just wanted out.

He wanted out. And that's kind of what I loved about kind of this world once Sean kind of turned me on to it is like the baby boomers are retiring.

Like the past few years, the next 10 years, I forget what the window is, but like a lot of them don't have kids or they have kids that don't want it.

This guy had three kids.

None of the kids wanted the business.

Dan had told me he goes, anytime I ran into a business that looked really cool and the guy who owned it was 26.

He's like, I don't want to buy this off a 26 year old.

Why are you selling on this business.

It's like, I want to buy from a boomer.

That is my goal. I want to buy from a guy that wants to move to Florida and play golf.

Like that to me is like, this business has been great to me.

And now I'm done. I've made my money.

I'm ready to go. Like, that's the type of business I want now.

And he would probably still answer your phone calls when you had questions.

Exactly. Like, and you know, spoiler alert, I found like the nicest buyer in the history of the world.

Like I got incredibly lucky.

Cutting your sales cycle in half sounds Sounds pretty impossible, but that's exactly what Sandler training did with HubSpot.

They used Breeze, HubSpot's AI tools to tailor every customer interaction without losing their personal touch. And the results were incredible.

Click -through rates jumped 25%.

Qualified leads quadrupled, and people spent three times longer on their landing pages.

Go to HubSpot .com to see how Breeze can help your business grow.

so to me there's two kind of good things out of this episode one i get to hang out with my best but all right the second would be for other people who are listening to this that they hear what i'll call like the real life take of this because dan's not selling courses he's not telling you you should do this he's not like a business buying guru he's got a book and a mastermind none of that i think he's got good opinions and like a real story of like all right where do you start so to me this episode would be interesting because if i'm interested in buying a business i kind of want know what is it

like from a person who's smart but came in with no experience um no money and no like kind of clue where to start because even though i was like hey you should do this it's not like i was there helping you every day or you know you were wandering around figuring this out you know by yourself so he told me this uh i called then like last week to be like all right what do you want to talk about he had said something great he goes he goes all right i started and i was high excitement and low knowledge so i bought the book oh you ever you ever heard this framework like like no one through four it's

like you start high uh high excitement low knowledge and then you become you know you kind of go up in knowledge and down in excitement you kind of enter into the pit of pit of despair which is low knowledge low excitement and then you learn more and you slowly kind of get out of this uh this pig his quote was this is great it's gonna be great this is gonna be easy i'm gonna be rich and he goes then i started and i realized this is not easy this is not going great and i might not be rich and so um do you want to talk about like how you actually like what'd you do your first maybe 100 days what'd

you do well first how'd you find the company uh so i ended up finding the company through a broker got it um so a lot of what i started to do and i'll go back to the beginning in a second but um you know there's a ton of business marketplaces out there acquire .com probably the most known for for tech uh biz by buy -sell for more of those main street businesses.

But there are these brokers that effectively represent buyers and put together these packets of like, hey, I have this bag business.

Here's what it does.

And most brokers, I was telling this to Sean, hate searchers because they just assume people are, they just saw a Cody Sanchez video.

They're about to buy a business.

They're pumped. This morning they saw the video and now they're ready to buy the business.

So they reach out to the broker.

This one broker actually understood.

He's like, I get it.

I understand in this jump from tech to this.

And then like, several months later, he calls me back, which is rare, like most people didn't.

He's like, I got this business, you know, check this guy out.

So it ended up happening through a broker, but and to go back to Sean's thing, the first 100 days, so the first thing, hit Google, started reading books, started watching videos started to just learn like, what is a search fund, that was something that like Sean didn't use that word. But eventually, I found it where effectively, there's kind of a few models to do this.

One One of them is kind of a search fund where someone will actually, you know, you get someone to finance you looking for a business and then you take a small piece of it and they effectively own most of it.

Like there's lots of courses now in business schools, you know, teaching entrepreneurship through acquisition is kind of the fancy way of talking about it.

And then there's kind of like this other model of, you know, you just do it yourself.

You know, you effectively bootstrap it, find the money yourself, do it through an SBA loan.

So first it was kind of like educating myself on the different models.

You know, I thought a little bit about getting the funding.

But at the end of the day, it's like, no, if I'm going to do this, like, it's going to be me.

I don't want to answer to anybody.

And then it was really like finding this community.

And there's a really cool community in search. It's been growing pretty steadily over the past, you know, call it five -ish years, I think.

Um, but there's a, there's a, there's a website called search funder .com.

Um, like those were my people during the time.

Cause, uh, search is like, it's a very lonely process.

When you guys say look at a hundred, what does that mean?

Does that mean browse a website with a hundred or does that mean actually due diligence on a hundred?

So it's something in the middle.

So you, you basically see kind of like the headline on the website.

It's like laundromat for sale, you know, $4 million.

Like usually you'll get like the flashy headline and not much more information.

Then you kind of got to double click in and request information.

And so you usually sign kind of an NDA and you'll get something called a SIM or a confidential information memorandum.

So it's kind of look at like a hundred of those because that's really going to show you like here's the finances of the business.

Like here's kind of the story that they're putting together.

It's like a summary of the business today.

And so that's the one where it's like, you know, I think setting a mistake is people think you fall in love with the first few businesses you see.

Oh, this is great. Yeah, I can buy this.

And you kind of really like, I mean, you're just like a teenager that has just went through puberty and you just fall in love with the first, you know, the first set you see.

And you're like, well, no, that's probably not the right way to do this.

Let me actually just plan that it's probably going to take me over 100 to even find one good one.

and let me have that mental expectation and let me start counting how many I'm looking at and not just like being desperate to find, you know, the one right away.

And then you're saying like, you know, you're looking at an HVAC company.

You're like, I don't know what HVAC is.

You're looking at the financials.

I don't know which number to look at.

It's overwhelming, but you kind of got to go through those reps and figure it out before you even have any idea of what you're looking at.

I kind of liken it to looking for a house because I think that's a pro, you know, or an apartment even, because that's something that most everyone goes through, even if they're renting.

You know, usually the first time you see it, you have nothing to compare it to.

So you end up kind of getting to a place where you can, you can spot the winners from the losers faster.

But like Sean said, when you, when I first started, it was like super exciting.

Cause it's like the ultimate career fair.

It's like, Oh cool.

I'm going to be a landscaper.

I'm going to be a, you know, I'm going to own a, you know, a scrap metal recycling center.

It's like, you just get so excited.

And again, the business brokers, especially like they make these things sound amazing.

It's like, of course I want to buy this business.

So what were some of the cool businesses you saw?

Like, give us an example of one that you kind of liked, but you didn't end up pulling the trigger.

So my favorite example is I got pretty close to buying a sausage company.

It did about like $10 million a year in sausage.

You know, my favorite anecdote on this one.

Sam is also a fellow sausage man, actually.

I know that. Kindred spirits.

If we held an event, it might also be a sausage fest. We don't know.

you're uh you're almost a purveyor of fine wieners that could have been i i could have been and still maybe so you went but you didn't just like look at you didn't just read the sim you're like no i went there i went to this austin i went to the talk i'm like walking through like pretending to know what i'm talking about like you know how hot does this oven get like it's like that's the figure out what questions to ask this is a really common have you guys heard of uh the secretary problem yeah somebody explained it somebody told us that on the pod so i used it when i was looking for an apartment

the other day and it was actually pretty magical and so the thing is is that uh so i'm repeating from memory so i might get it wrong but basically if you have it started with the secretary if if you're hiring a secretary you'd want to interview let's say you had uh 10 interviews lined up you wouldn't want to pick who to hire until you saw at least 37 percent of the applicant pool.

So for example, if you saw 10, or if you had 10 to see 10 interviews, you'd want to go through the first four.

And then after the first four, you would select the first person who you met that was of equal value to or close to the highest person you saw in the first four.

Does that make sense?

So if you see an apartment, let's say you go and see 100 of them.

The first 37, you don't do.

But the next one after the first 37 that you see that is As good as the best one that you previously saw, that's the one you select.

And that's called the secretary problem.

So you can't go back and buy that first one?

You can't go back. You cannot go back.

But you need to spend time exploring the first third to see what all is out there.

That's fair. I bought the house that I found on the first day of touring.

So I just want to make sure I didn't violate the secretary problem.

But I did. You did.

But you didn't with the business.

I didn't with the business.

And so of the hundred or so that you saw, were there any that looking back, you're like that was a winner um no it wasn't until we saw and you know there were a few close ones where like i think i was under loi maybe three or four times for example that sausage company had like one huge client they had one huge client and no contract no contract but you thought they were amazing that's kind of my point is you thought of some were so good that you're under loi uh yeah but then you get you know you're under loi and then you get you know the full amount of information and then you very quickly see

like LOIs are also in this business is like a very it's kind of like agreeing to a first date more than it is an engagement people people make LOIs they'll have three LOIs out at the same time and it just says it's an agreement to it's we agree to look more right we agree to take this seriously to show you some interest here but it's not like it's not binding in the way that you would that you think when you first go into this or if you're the seller you're like oh we got an LOI it's like well well, hang on, I would bet the LOI to close ratio is probably, I have no idea, but I would guess it's

like under 20%, you know, in terms of just LOIs received during a process.

Yeah, because, you know, you're not giving the, a lot of the information you're not even getting until that point anyway.

So, you know, you're checking all the boxes up until they're like, this seems good.

I think this is going to be good.

And then, you know, you get their financials, or you go toward it and you find kind of that, oh, this is why, you know, you're selling it, or this is why it hasn't been bought yet.

That's another thing.

One thing you did that was great, I think I kind of was like, the one piece of advice I think I was pushing on you was like, hey, write a memo for every one of these deals that you like.

Basically, he would write me like a one -page notion memo that was basically like, what is the business?

Why does it, you know, like, what is the current state of it?

Just speak in numbers only, right?

Why is the seller selling?

You know, what's the one reason that you would buy this business?

What's the one reason you would not buy this business?

this uh you know what are the kind of and you would just go there and you would write these memos and i feel like that was key because i remember you would call you were like excited about let's say uh like i don't know what was an example one you were excited about that then after the memo and we talked it we beat it up and then we were like no this is not worth doing it was a clover app i remember the conversation uh so basically like so the the clover point of sale system like when you're like checking out of a restaurant and it's like you know they flip it and you're like what's your tip uh

this guy made different apps for it so like you know like when you round up for charity for instance i think that was one of his apps um so it was actually pretty interesting it was like hey clover's a growing super niche yeah very niche um but you own 20 of these things it was you know more up my alley in terms of tech but you know when i actually hash it out with sean you know it was kind of like at the end of the day it was very niche very small and there wasn't necessarily a good path to grow that business it was just something that like was interesting now, but probably didn't have the longevity

of, Hey, you're, you're about to swing.

You know, this is going to, that's another thing you said to me, Sean, you were like, this is going to be, you know, don't, don't listen to all those like blogs out there.

I'm like, yeah, you're going to buy this flip it.

And the next year you're going to buy two more businesses.

Like, no, you're probably going to be working in this business for, for a little bit of time.

Make sure it's good.

Make sure it's lasting.

And I think that first one was an example of like, sure.

If I was going to buy 10 businesses, maybe that was one of them but like that's not the game we're playing right now a couple other i thought like key points one was um don't buy a job so i think early on when you go to search you see big price tags and you get scared a little bit because it's like how am i gonna afford this and like this is too risky and so you gravitate towards things that feel like kind of safer and more achievable but it's actually a bit of a trap because it's like yeah this is safer more achievable it nets 100 grand a year of profit i can buy it for only you know he only

wants 180 180 or something like that you know and and so you get excited because it seems cheap but the problem is it's still going to take all of your time to own to buy this business to run this business and you basically bought a job versus the thing you bought which was like 11 million dollars in revenue doing a million dollars you're almost a profit real dollars yeah that's not a job anymore now that's like an asset that's like a real business and yes it took more risk and it took more time to find a good one of those but it was like well worth it so i feel like like, that was another kind

of, like, key learning, I think we both had during this process, like, became blatantly obvious.

Yeah, not rushing the search. And you want to, trust me, like, call it, like, five months in, you know, when you really hit this pit of despair of, like, I'm never going to find anything.

Everything under $5 million is trash, you know, private equity scooping up all the good stuff and anything that's left, you know, under this point, like, there's a reason it's there.

You kind of just get to this place, like, you're never going to find it it's easy to want to just grab one and say like those things are fine like we'll kind of ignore those yeah those holes in the business i've made so many bad decisions like most all bad decisions that i've made it was uh i could like it's like i had principles leading into this and i got fatigued and i didn't stick to my principles fatigue yeah exactly exactly there was one that was like an seo business as it was actually like a good business but what was the the situation with that one yeah so that one was it was like a competitor for like Like

SEM Rush, it was a solid business.

It made, I think it did like a million.

It was like half a million to a million a year in profit.

It was a nice business.

But this was right as AI was really starting to becoming kind of the center point of the conversation, especially as it relates to search. I helped a friend buy a company that was in the SEO space.

And anytime an SEO company wants to sell, it's sort of like at a time, do you guys remember Bitcoin miners?

uh like the it's like so if these are so good why are you selling a money money printer yeah and seo is sort of the same way where it's like wait so if you're just getting like a fountain of traffic and customers why would you want to get rid of this well that's the same thing it's like when you meet a 30 year old selling a business it's like you know why and that that was exactly that and i think going into you know let's call it the ai headwinds it was like there's was a lot of reasons this business might be completely different.

And I think Sean said like unless you feel like you're the best suited to take this SEO company into the you know the next five years there's more risk than upside.

And it's like that is not my background.

You know that's not the game I want to play.

And funny enough I was actually in LOI with this SEO company when I found Fleet.

And I was I almost wrote off Fleet.

Like it seemed really interesting and I like there there was some part of me that, you know, didn't have me rejected, even though I was kind of in very late stages with this other company.

Thank goodness I, you know, I made that pivot.

So let's tell the story.

So you, you, the broker calls, you says, check out this business.

What happens from there?

So from there, I think this was before I was under LOI, but, you know, effectively fleet looked very different than a lot of these other companies.

Like the finances is at first glance like we're super clean you know the story made a lot of sense like a lot of these sims and a lot of these brokers like you know yes they're padding things and trying to make things sellable but there was always like a blatant gotcha in a lot of these like let's take the sausage example they're like oh yeah this makes half a million a year oh and by the way he also makes another 400 ,000 in cash but we don't pay tax on that so like you can't see that anywhere and it's like a part of me is like That's kind of cool also sounds a little dangerous like selling $400

,000 worth of sausage on the side of the road but there's always something like that with a lot of these businesses but Fleet was very clean everything was kind of buttoned up the story was really tight and it kind of checked all the boxes of this is a recurring business people are rebuying the bags several times a year they have these amazing clients they have these amazing factories it looked very different than these other companies.

Sort of sounds like Dunner Mifflin of bags.

Exactly Yeah, exactly.

I am Michael Scott.

It's a necessity that these companies need.

So what'd you do? You go, you meet the guy?

I was actually going to say no to the broker.

Because again, this SEO thing was heating up.

I hadn't had my come to terms talk with Sean yet.

He's like, hey, the seller wants to meet you.

Let's all go out for lunch. I was like, all right, free lunch. That's cool.

um so we meet for lunch um and like my goal was like you know entertain this business but at the end of the day like i'm under loi so i really shouldn't uh free lunch yeah free i should i should break up with him after this lunch but we start talking and like you know just had this instant connection with this guy like he was the most stand -up guy i had met in in the past few months especially when it comes to like the business ownership you know he wasn't trying to to, um, you know, pull something over my eyes.

Like he wasn't trying to spin the story.

He's like, this is the story.

Like a lot of people like, you know, put lipstick on a pig.

Uh, this guy was like selling a rabbit or selling a different animal.

Like it wasn't like, he kind of said it as it is.

And it was, it was very refreshing.

Um, and like in that moment, it was like, I kind of abandoned the, like, I'm going to break up with you.

And like, we kind of went the other way.

We started talking about like, okay, well, how are we going to work together during the transition?

How are we going to grow this?

Um, and then And my favorite part is they, you know, they asked if we wanted any dessert and he's like, oh, do you want to share a Tartufo?

And I was like, yes.

And we shared a Tartufo.

I don't think I've shared dessert with my wife ever, but I shared a Tartufo with this guy.

And like, I remember calling my wife after and I was like, you know, I didn't do what I was supposed to do.

Like I was supposed to break up with this company, but like we shared a Tartufo and like, I think we're going to buy a bag business now.

now um and it was just like this like complete 180 um but in hindsight literal michael scott right it doesn't even have a scene at chile's that's like exactly this yeah exactly it would be like a lava cake or something like that a tartufo a tartufo it's very i don't i don't think that was my first tartufo i've ever had too who knows what a tartufo is i had to google it you're you're my type of people dad i tell you that there we go and then you know from there i you know i broke it off with the seo guy you know we ended up like diligence took a while that's like the second part was like okay like

now you're committed to buying a business how are we gonna do this now um and like it actually took four months um because again like i'm signing my house away signing my life savings away um like i needed to be damn sure that this thing was going to be solid before i did that um and then like the world of search like took on kind of like that next chapter of like all right well how do you actually like figure out you know are the assumptions you've made in this quick few week period of dating like are they correct and we kind of transition to that uh that phase of the process what uh what what was wrong

and what was right for your assumptions and what was the difference in his asking versus the paying so we actually negotiated the price of it pretty early like that part actually happened during the loi for the most most part, or like 99 % of it.

And there were actually five bidders, which I thought was a lie.

Like I kind of assumed this was them bluffing because they were like, yeah, we got four people in the packaging industry that want to buy, and then there's you.

So, you know, it's going to be competitive, blah, blah, blah.

But again, I just figured that was a tactic to try to drive the price up.

But to this day, the, you know, the seller maintains that that was the case.

So at at this point i have no reason not to believe it we ended up taking i think they wanted three five or three six for the company so we ended up uh agreeing to three four the part that took the most negotiation was that forgivable seller note uh so the biggest kind of uh red flag in the business uh was that one client was over 50 of their revenue so my biggest fear rightfully so was you know everything's great today they've been a client for 15 years you know what happens if next year they leave all of a sudden there's a very different business so what we did was you know kind of ran the numbers

of the bank and said hey in order for us to finance this like this is this is the number that we'd have to have if for whatever reason we lost that client so that part was probably the you know the most intense of the negotiations but for better or worse like most of what he said ended up being true like there weren't any of these and then and he said that in the sim like that that wasn't news what was surprising to you or what was different than the dream that gets sold on social media so if you watch the videos and you see cody sanchez telling you to buy just buy a laundromat it's gonna you'll

be rich whatever that that type of shit like was it in line with that was it different than that what was the difference if there was one yeah it's not nearly as easy as uh cody sanchez makes it seem um and i i probably went a little more overboard. I think like when I think about the amount of time I spent in diligence, the amount of money I spent in diligence, you know, I like I'm a risk taker for sure, but I'm a calculated risk taker.

So it's like before I make this gigantic gamble on the rest of my life, I want to make sure I've done everything humanly possible.

And I think when you watch a lot of these videos about buying the business, like they make it seem like, you know, you can just find one and then kind of transition right away.

And the whole process is really easy.

The process of getting the loan, some people liken it.

Actually, I think Cody Sanchez likens it to this.

So maybe she actually isn't setting unrealistic expectations, but it's a financial colonoscopy.

They want to know everything about you.

And that part's tough.

And then you give the company a colonoscopy to try to figure out everything about it, quality of earnings, that sort of thing.

And one of the things that I did, I think that I'm happiest that I did, cause it got me the most comfortable outside of, you know, paying for accountants and lawyers to scour things was, um, I shadowed the guy.

So every week. Cause he happened to live in New York city too.

Oh, the whole thing was serendipitous.

Like he lived 20 minutes from my house and I, the, the, the, you know, before I signed the SIM, it was like packaging distributor in the Northeast. So like, you know, it could have been in Boston, could have been wherever, uh, this guy lived 20 minutes for me.

That's how the tartufo was so accessible.

But I literally went to, I went to the office every week sat with the guy for several hours and just he walked me through packaging he walked me through his day -to -day and it just gave me it you know it started my training of like okay well how am i going to run this business but it allowed me to really kind of take what was on that paper and figure out you know okay this is these are the skills that i will need to run this business this is how i might be able to grow it this is where i might need more help it made it more real and i think i was lucky in that i was able to do that because cause

I've talked to other searchers and it's like, you know, let's go back to the laundromat.

You know, you buy a laundromat.

I would imagine day one, you kind of walk in and the machine breaks and you're like, oh crap.

Like, what do I do?

I know nothing about these machines.

Now I need to find a mechanic.

Like everything is a little more complicated and nuanced, uh, with regards to even like how laundromats are, you know, I went down the laundromat path.

Like I spent a while thinking that was going to be my destiny.

And it's like, well, no, like valuing a laundromat, like actually has a number of facets and you need to kind of really get into the weeds there.

So, you know, I'd say like the biggest takeaway is like it is hard and it takes time.

It's not something that you can just do, you know, for a few minutes a day.

Like you really got to invest in making this happen if that's what you want to do or you're going to end up, you know, with some surprise down the road.

I think that's probably my biggest relief is like I've been waiting for, you know, the shoe to drop somewhere and like this is what I missed and like, you know, knock on wood, haven't had that yet.

How many hours a week are you working on it now and how many hours a week was he working on it?

he was probably working let's call it 25 to 40 i think he definitely was working less he kind of had it on autopilot i think he had started to you know kind of tune out a little bit but not in a way that like he neglected the business it was just like he'd been in packaging all his life like he could run it in his sleep he wasn't as focused on kind of doing the growing or renegotiating things with suppliers is building the supplier base.

I'm probably working on 50 to 60 hours.

I spend a bunch of time on this.

How much were you able to take home?

So that's the million dollar question.

It's like, okay, cool.

Your business is making all this money.

At the end of the day, two years in, I'm still only making 150 a year.

I take the minimum amount that I need to for IRS compliance clients because i'm saving the rest enabled to finance growth like i like i've made enough to pay back the loan but i'm not paying back the loan because i need that cash to fuel the growth it's a very cash intensive business and i'm not in a place quite yet where i can take as much off the table although sean has been uh giving me some other framework saying like hey you actually should be doing this what's that framework which is like if you want to replace yourself you have to pay yourself the replacement costs no not that but basically

i did this in one in my business is not right for everybody, but I think it's easy to go into rainy day mode as a business owner when you play like two conservative stuff.

You know, several of our businesses right now have just like, like one of our businesses has just like two, $3 million just sitting in the bank account.

And the bank, like it goes up every month.

It's not like we have this like wild swings where you need this big cash reserve buffer.

It's not like a heavy inventory business.

It's like, you know, all of your operating expenses is salary and you know your salaries.

So there's no surprises coming next month.

month. And even if there was like one of my friends, our buddy told me this, I was like, how much do you keep in there?

Like three months of working capital, six months, 12 months.

Like, I think I have like 12 months of working capital sitting at the bank right now.

He's like, no, I just take it all out.

I'm like zero months.

He goes, yeah, he goes, I own this business myself.

So if I ever need the money, I just lend it back into the business.

Like I just, I can always write the check back.

It forces you to make a profit as well.

Yeah. And so Andrew Wilkinson came on this podcast and had this book.

He was talking talking about profit first. And I really liked the philosophy of it, which is basically with normal business, you have your revenue, then you have all your expenses.

And then it's like, surprise, here's how much profit's left over after all that.

And usually what actually happens is there's not as less profit than you would have guessed.

And it's why, because expenses were a little higher, blah, blah, blah.

And you're always in this profit comes last. Profit first was basically you decide upfront, you say, okay, I want to have a 20 % profit margin.

So you take your revenue, you set aside money for taxes, which you know is going to be, or so you take your revenue, you take your profits, you set aside amount for taxes.

What's left is your expenses budget.

So instead of making profit the thing that comes last, you make the expenses come last. And then you have to say, all right, cool.

Then my marketing budget can only be this much because I've decided to take this much as a set profit margin out of my business.

And I don't adhere to it a hundred percent.

I don't think it's right for every business.

But I do think that, you know, Dan, in this case, I think he's being a little overly conservative as to how much cash he's leaving in the business.

I did that too. And the longer I delayed it, I took away one very valuable thing, which is if you pay yourself every month out of the business and one month that's light or another month it's heavy, the body just reacts to it.

If it's light, you're like, yo, what the hell?

And you will go fix a part of your business that was broken.

If you just leave it in and it's just like a P and L it's just numbers on a spreadsheet.

it's not money you actually receive you know you'll wait 15 months before you end up correcting that problem because it's all fictitious money anyways it's not money you're actually getting and so I think that actually getting that check every month creates this feedback loop that's actually like quite valuable to a business owner it'll cause you to scrutinize unnecessary expenses or like go after it because once you taste a big month like Sam we have this with MFM if we have a big month in the next month I'm kind of like I kind of like the feeling of that one what do we need one extra episode

two should we go get a guest what's monish doing today let me see what's going on over there right like you start to think about what you could do to go to go drive it back up and i think there's an unhealthy version of that but there's some healthy components to that yeah so i think i that's a a lesson learned for me i think i'm still in the very conservative um you know what if i need this money and and i i do have high working capital costs especially around now kind of pre holiday i'm about to have to write a bunch of checks um but very soon i should get to a place where i can take more out

um and or start paying back some of the the debt a little faster all right listen up turn the volume up because your boy sean and i got a little message for you i talk to hundreds of founders a week and when i talk to founders everyone says the same thing that the one thing they need the most is not funding it's not more resources it's just having having more time.

The goal here is to win, and the way you win is you get yourself free time to do stuff that's high impact.

How do you do that?

Well, I'll tell you my solution.

The answer is Gabby.

Well, you might be wondering, who is Gabby?

Gabby is my assistant.

She is my wonderful assistant.

Gabby lives in Latin America, and she helps me save about 20 hours a week.

So what she's doing for me is every morning, my inbox is sorted and triaged, and the most important stuff is right right at the top with draft replies ready for me.

So I'm never behind on email.

And then as I'm on the go, I'll just send her voice notes saying, hey, could you find my kids a soccer class?

Hey, could you take care of this car registration thing for me?

All these little tedious BS things that would take up time in my day, she takes care of for me.

And so that's free time I'm getting back.

So if you are a CEO who's serious about growing your company, you need to get yourself an assistant.

The best place to go is somewhere .com.

Somewhere sources the best assistants from low cost areas for you.

So you can get an amazing executive assistant who's got business experience and has supported other CEOs for $7, $8, $9, $10 an hour.

And so go ahead, go to somewhere .com, tell them I sent you, they'll hook you up with a good deal and get yourself an assistant and you can thank me later.

All right, back to this episode.

So Sam, I'm curious, what's your reaction to this whole thing?

So I think that for people who have your personality type, which is you're a very serious person, I think.

Like you're a person, like if I was a broker and I met you, i would not think you were kicking tires i'd be like oh this guy's for real like it's you have that very obvious for real energy and if you have that very obvious for real energy we're like no i'm going to do this this makes sense i think that the path that you're taking is so wonderful and i my assumption is that you're going to be wildly successful um and so i think it's very wise to do i think that if you if you are an unserious person where you are not willing to to put your house up or something like that that's kind of like the one

of the tells like if so if you're like not serious like that and you are not willing to do the diligence and say i'm willing to look at 100 things i would say do not do this yeah i think there's also one i think you said it perfectly there is one more thing to it which is what situations do you shine the the most and so like for dan i think he always had an entrepreneurial streak that was used as like like, random side quests in life.

Like, we would go try to win the McDonald's Monopoly game every year.

Like, we tried to, like, actually win it.

Not just, like, hope we win it.

We thought we were going to win it.

We were, like, dumpster diving trying to win this stupid thing, right?

Or, you know, we started a blackjack club on campus and we're running simulations to see how much money we could make if we started a blackjack club.

Like, we were always trying to come up with ideas.

It was more fun to come up with our own idea versus just, like, go get a job and do the thing.

and so i feel like if you know that you actually turn up the most and you're the most version of you when you're doing this type of shit when you're like in control of your own fate and you have your own project as arbitrary as like you know bags are doesn't matter it's like i'll take bags super seriously i took he took gum seriously blackjack seriously sushi seriously like all those things i think that that's the other part which is not only the part you said but then also if you really are like at your core more entrepreneurial and you're more switched on doing that then you're going to have a better

result doing this than you are if you, you know, stay in a more traditional job.

That's my I think I think people, you know, when I tell them about, you know, first, it's always like the unbelievable way you do what?

But then the second, like their mind goes like, oh, I should do that because, you know, it sounds great in hindsight, right?

Like when everything works out, it's like, cool.

Of course, this is easy.

Of course, anyone can do it.

But I think people miss the point that there's a lot of ways that this doesn't go like that.

and it's not necessarily the most glamorous i also think most people shouldn't do this so for example i agree this is not something i like this does not fall within my skill set so my like uh if i had to guess you when you were buying the company like you guys were negotiating over 10 20 30 40 000 things like if i had to guess you were incredibly anal about the paperwork you were asking you're like what's this 300 what's this 3 000 charge what's this that is not what i do i do not do that that kills me that does not fit my personality type so i've bought and invested and done a bunch of real estate

stuff in my time and uh i lose on all of it because you make your money when you're buying it and when you sweat the details up front which is dumb that is not what i do i don't think necessarily that is what sean likes to do and i think that if you are the type of person who plays a board game and you memorize all the rules and you like sweat the details um and you have that attribute, then buying a company could potentially work well for you.

I'm the guy that takes the rulebook out of the box and reads it to explain to everybody.

Exactly. If you have that trait, this could be awesome.

Life -changing. Yeah.

So Dana, one of the other cool things about doing a search for business is you realize how big the universe of businesses is.

And I asked you, I said, usually we try to brainstorm business ideas with people like, what opportunities do you see?

You said you would come up with a couple ideas.

Give us a couple of your ideas of what you think other people could go do.

This is just like the sort of random section.

Yeah, I think the I mean, the biggest takeaway, like from buying a business before I get into into the ideas, like, everything's a business, right?

Like you walk to, you know, go look at any store, you know, every little piece of that business is something that someone sells, like that display that says for sale, like someone sells that like the holder for the gum on the store, like that's a business like, I don't think I really appreciated how random and how basic some of these businesses can be and people make really good money doing it even packaging it's like you don't really think about that by the way I'm pretty sure Robert Kraft the owner of the Patriots he owns the craft group I think that's a packaging company it could be there are so many

packaging companies they make corrugated cardboard yeah okay cardboard okay one of our best episodes ever if you want to go listen to a great episode is the Sarah Moore episode on this podcast and she's the I think it's called the Egg Carton Queen.

And her thing was she did the same thing you did, basically.

She went and found a retiring guy who owned a business that sold egg cartons.

Like not the eggs, the carton they come in.

You don't even think that's a business.

When you go look at it, you're like eggs.

Yeah, okay. There's a farm that sells eggs.

You don't even realize that the farm has to then buy egg cartons.

And there's somebody whose job is to make egg cartons.

And they sell it at the best price and the best value, blah, blah, blah.

and so her episode I think is amazing and you see that the other example Sam that I always give and I explain what this podcast is to people is I talk about like everything you see is there because someone sold it like nothing gets there by accident and so I was like you know even in the workplace if you go to your break room and there's a poster on the wall that's like the labor code there's a guy in Minnesota that sells that he makes a million dollars a year selling you the poster every year once I heard that I was like oh shit it's like a physicist when he learns about string theory or some

shit you know it's like oh it's everywhere I get it oh the waves are particles you see the world of the components yeah all the components themselves are businesses too and then you realize like if you're not making it in business it's mostly because of a lack of you know creativity and effort it's not because of a lack of opportunity because literally every item everywhere is itself you know a business that somebody is running to get it there and so you know there's no lack of opportunities in that sense yeah so now i'm like hardcore on the other end of the spectrum of like as unsexy as possible

i want to do that like i want to i want to be the guy that has like the most random thing like packaging is pretty random like you know in a future world once i you know if and when i'm done with this like i want to go even further yeah by the way do you have what do you lay when you're laying in bed at night what do you think like in 10 20 years we're gonna we could be this like do you have do you do you think this could be a hundred million dollar company do you think you could sell it for a certain amount what's your your sort of North Star that excites you?

So, you know, at this point, I don't have any plans to sell it.

I do think it could be a hundred million in sales company easily.

Like there's like some of these big packaging players are huge.

And we're able to compete with them.

That's kind of the, you know, we're small in the scheme of things.

Like it's a nice size business, but we're small in the scheme of things.

But what I'm finding is as we, as we work with these brands, like we actually do have a pretty differentiated offering because we are small, We're scrappy.

And people love that.

And, you know, as we've been able to kind of add clients, I'm like, oh, this thing can really take like we can really scale this up and, you know, start to gain more traction with these large brands.

And, you know, the crazy thing is people spend 10, you know, these big companies spend tens of millions of dollars on their packaging.

So you could easily get like five clients to get you to 100 million like that if it's the right five.

So my goal is to grow it.

I do think in a few years, I'll hire an operator to run it.

One of my biggest pieces of advice to people searching is like, don't assume you're going to hire the operator day one, especially if you're putting your house on the line, because there is not a single person that I trust to run this business when I'm going to get kicked out on the street if it fails.

When I get to the place that I feel better about that, like only then will I then decide, OK, well, maybe I'll hire someone and just do more strategic work.

But yeah, like I'm loving doing what I'm doing now.

Yeah. So I think it's eventually scaling my time.

So it's not like I'm very involved in all the processes right now.

And I designed it that way because that's how I learned.

You know, I'd love to be able to go away and not have to take a call because the blue isn't blue enough.

Like, you know, I get a lot.

I do a lot of color matching.

When we were doing the sushi restaurant, Dan was not only sweating the details in the finance side, but we were like, dude, we don't really know how a restaurant works.

None of us have ever worked at a restaurant.

So Dan went and got a job at noodles and company.

happening oh yeah and he studied him from the inside and we treated it like it was like oceans 11 like every day he'd come home and we were like what did you write a report yeah yeah he's like draw the workflows or he's like what did you learn and what did you bring me give me the pesto cavatappi yeah then he'd bring the pesto cavatappi and he'd be like trust me do not eat the tomato basil soup we're like why it seems just tomato soup he's like don't eat the tomato basil soup guy and so he was like went undercover and he was like willing and then i had like the big reveal like the big undercover

boss reveal at the end when i quit yeah by the way were they blown away by the fact that you're like i am creating a sushi i think i tried to hire the gm and she's like all right like that sounds better than what i'm doing here at noodles and company like she was like like i thought you'd like you betrayed me it's like cool you're like oh you're trying to move next door great like we can trade food at lunch so dan you um let's do uh let's do to actually do you have that the business plan that we made do you still have that binder yeah one sec let's find it so the story here is that uh not only

did dan work undercover at noodles and company at some point also this was not a i didn't just put that there like that's lived there behind you just keep that there i don't have one i need to get a copy of this all right i have this i also like our sabi sushi hat is right there oh nice yeah so basically the first business we me Me and Dan and our buddy Trevor had out of college was to create, it was a brand called Sabi Sushi.

The idea was to create the chipotle for sushi.

So go get sushi the way you eat chipotle, where you just walk down the line, you pick your ingredients, and you get the thing.

This is our big idea.

Which was, I maintain a good idea at the time.

It's been proven. It's been proven it's a bad idea, but I still want it.

Okay. So not only did Dan work undercover at Noodles Company, we then go and, I don't know how, we get a meeting with the founder of Noodles and Company.

And we show up to this meeting with this binder.

This binder is our business plan.

We had been working on this for months while we were searching for a location.

And can you just hold up the thickness of this binder so people see?

Oh, yeah, it's thick.

Let's see. Yeah, this is probably a couple hundred pages of a business plan in there.

And there was stupid things.

So part of it is what you would expect.

Here's the startup cost. But part of it was dumb stuff like the uniforms and how we're gonna like progress people from from entry level to manager and what their values are and all we had not sold a single role to a single customer and we're worried about all this other shit so but what we think we're tricking ourselves into thinking that planning equals productivity and you know spoiler planning did not equal productivity uh we're basically doing a very fancy form of procrastination and so we get to this meeting with this guy from noodles and company i think his name's aaron if i remember correctly

and he I forgot that guy's name.

He's like, all right, so like what's the plan?

And we think we're about to wow this guy.

And we're like, plan?

Oh, funny you should ask.

Whip out that binder, slam it on the table, and it's basically like here's our plan.

Look how great this is.

And I remember he looks at it, and first of all, it looks like a kid's project.

Even the cover is like we inserted this colorful thing in the front plastic thing.

And then he flips through and he's like realizes pretty quickly, oh, these idiots wrote a 250 -page business plan for their sushi restaurant.

And they don't even have a location.

They don't have any customers.

They're starting on, you know, from scratch. And I remember the look on his face.

And then I remember, like, the moment that was rock bottom for me in the whole sushi journey, which was that he should have just ripped us and been like, guys, what the hell are you doing?

This is so ass backwards.

Like, why don't you get out there, start testing your concept, see if people actually want this, and then, like, you know, you'll learn by doing.

and instead he kind of took pity on us and didn't say that i could tell he wanted to say something and then he was like and then he just tried to be nice about it and i was like oh my god we're so bad that he feels like he needs to be polite about this that means we're even worse than just being bad and i just remember realizing like well i don't know what the right answer is but whatever we're doing is dead wrong i could tell you that right now after that meeting i just remember years years later years later someone did tell us that though um in boston there you know we were talking about we

were about to sign a 10 -year lease um and we literally just met this guy like 10 minutes ago and he oh he was uh it was a guy uh he like owned a bunch of boston markets i don't know john john prendergast oh my goodness i don't know he said call that's his name uh he was not he was doing a tech company now but he was like you know early in my career i own 20 or 30 boston markets tickets and um so he's like so i know a little bit about the quick service industry let me you know be your mentor yeah but he basically just tore the whole thing to shreds like within five minutes was like this is wrong

don't sign that lease and like trevor like wasn't in massachusetts us when we when we were doing this we like he was like about to sign the lease we like called him like wait no um well this guy this guy was great because he's like you know so like he asked us a question and we gave him the answer we'd been giving everybody else so i think he was something So what makes you think that there's demand for this?

And we were like, well, sushi's been on the rise.

We gave him this spiel.

He's like, all right, so is this going to work or what?

And he basically cut through the nonsense and he's like, how do you know?

Are you testing this?

You're just going to sign a 10 -year lease with a personal guarantee with no clue if the market actually even wants this?

Doesn't that seem insane to you guys?

And he gave us real talk and I'll forever be grateful for him for giving us that real talk because he saved our ass pass from signing that lease.

And he gave us a different plan.

And he was like, why don't you test this?

Rent out a commissary kitchen like bakers and caterers use.

What turned out, they were like $20 an hour.

It was like super cheap.

No, and no long -term commitments.

And he's like, rent those out.

Do it delivery only.

Validate the demand.

See if people like your recipes.

See if people like the price points.

You'll learn so much by doing that.

And then you'll know what you need out of your first location if you're going to go there.

and um that saved our ass that advice saved saved us and you know that if i whenever somebody asked me for like any advice or help um i just remember like can i can i give them one -tenth of the value john gave us is the new like north star for that that situation yeah i remember he introduced us to like lean startup and you know actually figuring out um you know we we used to poll people were like you know would you eat sushi once a week like how many times a week would you eat sushi?

Which is a bad, badly phrased question anyway.

Yeah. Uh, in hindsight, like, Oh, I'd come two to three times a week.

And it's like, we, we did this proof of concept, um, on the cheap, um, as, as quickly as we could.

And like the answer was like not even once a month.

Um, like night and day.

Right. Outside of, outside of like LA SF, New York, the answer is like, if I eat sushi at all, like, right.

To make a concept like this work, it needs to work in Texas, Colorado, you know, it needs to work everywhere.

And the answer was, if I eat sushi at all, I eat it about once a month.

And I'm happy with that.

I'm not trying to eat it three times.

And I'm going to go to the nice restaurant to do it.

Right. And we were looking for like the three people who validated us rather than ignoring the 97 people who were saying no, we were like, yeah, see those three.

He also did one other amazing thing that as an entrepreneur, I now see like this pattern over and over again.

So he suggested to us, he's like, do it delivery only.

And we were like, ah, but he saw the look on our face.

He's like, what? And we were like, delivery just sucks.

And we started, you know, he's like, why?

So we're like, delivery, I mean, you order food.

You don't even know when it's going to come.

This is before DoorDash, by the way.

I think the biggest thing is we probably invented DoorDash and didn't know it, and we were fixated on the sushi, but we really, you know, came up with a better model.

Exactly. So this is before all those.

We were like, you know, you call in an order.

You don't know when it's going to come.

It shows up an hour later.

The packaging is all shitty.

The food is cold. It's leaking out the bottom and just feels cheap.

And we're like, that's why like it sucks.

And our takeaway was, therefore, no. And his was, wow, looks like you found all the things to improve to make this a 10x better experience.

And like since then, now I see this all the time.

If you talk to entrepreneurs, it's like you think about a space and you're like, oh, that's that's horrible.

That's horrible for these reasons.

And the entrepreneurial response, the customer response is, it's horrible.

The entrepreneurial response is, wow, what an opportunity.

Because if I just change those four things, I now have created this huge level up in the customer experience.

And so we ended up doing it where our delivery times were sub 30 minutes.

You knew exactly when it was going to come.

We stamped on the food when we made it.

So you knew it was fresh.

We put a webcam in our kitchen so you could see us working on your order.

We did all these other things to try to make delivery actually a cool experience.

And the bar was so low by basic delivery standards that that kind of actually worked.

And so I thought that was the other really brilliant thing that John did for us.

Yeah, rethinking what everyone kind of assumed we would make with a restaurant and kind of flipping it on its head.

And it allowed us to fail faster.

So back to the business ideas.

You had a few here.

Are there any that you think are cool or interesting that you think somebody could go do?

Yeah, I'm very into what I'm calling fun -to -run businesses.

businesses um so i actually looked at a few of these towards the end i think i found fleet when i when i saw some of these like laser tag bowling alleys like kind of these family entertainment businesses um and i have kind of two hypotheses around them one is like i think i saw like one or two pnl again do your own research don't just blindly accept that this is a good space um the one or two i saw like wildly profitable very low cost um there's probably a high startup up costs in the beginning but like climbing gym or something like that it's like once you get it set up they have like these autonomous

ones now too you don't even need that much labor um but also as a dad i have two kids like i'm always spending money on these things like my son had a laser tag birthday party um there's like one person working at this laser tag thing they like own the laser tag game in town they charge you for the adult standing at the birthday party and i'm like wow like i could do this better i want you know they and they have you hostage all the arcade games you got to buy their food um kind of these very easy to run um like almost a single person but you know let's call it like a teenage business so you hire

teenagers to work there like anything that they're not going to mess up yeah like a bowling alley and then how do you find things that like have multiple purposes like there's a bowling alley in my town and i you know it's you know during the day it's for kids like they have the kids activities and like after afterschool activities.

And then at night it's the bowling league for the adults and they have a bar.

So it's the local dive bar.

It's like, you know, then there's like five, you know, five vending machines in there.

Again, teenager working like the no frills.

But I have to imagine if you can find the right business like this kind of great to be able to just go bowling at your bowling alley.

I can't do much with my paper bags.

Like I go and I check them out and maybe walk around with them, but like not much. Like why family entertainment?

Why this out of home entertainment why now like is there anything that's changed in the market why because you know these have been around forever laser tag public bowling alley whatever my hunch is they've been profitable for a while like i think a lot of these are like sneaky businesses that you don't think of um you know i think there's also kind of more of a trend i was reading about this like you know millennials like don't drink as much they want more like sober events um i think this This idea of doing more games is starting to take on, again, a small sample size of things in my town.

But you go to these unlimited, there's an arcade in my town.

You pay like eight bucks for an hour, you can play unlimited arcade games.

This place is packed.

That sort of thing never really existed, but I think there's this desire to leave the house and do things.

Maybe it's a post -COVID thing, I'm not sure.

The thing that I think is really interesting about this is like, and this is probably true across the country.

Like, if I think about like, I always drive by like these large commercial real estate, you know, old malls, these big buildings that no one wants to buy anymore.

And then when I see one, when I see what people put in them, like, it tends to be kind of like these newer, you know, more interesting things like pickleball courts.

Like, I think I read something.

It's like, oh, they're taking all the old bed baths and turning them into pickleball courts.

so it's like to like take something that maybe you can get that's not being used and you know make a climbing gym make it a ninja course where i think is like the most incredible marketing where they like just marketed gymnastics to boys and now all of a sudden they've doubled they've doubled the amount of like demand for this and then there's like the climbing team and like this place is packed all the time um so that one is one so so one of my biggest investments over the past two years has been in my brother -in -law's commercial real estate.

So he does what everybody thinks is dying, but is actually like thriving.

So for example, these kind of like mall, like strip mall locations, not like a mall, like an indoor mall, but basically a shopping center.

And a shopping center with a grocery store, you know, maybe, so there's got a Trader Joe's, there may be like a Crunch Fitness, there's like whatever, there's a bunch of these types of locations.

And then how do you fill up the rest of the boxes and people think that shopping centers are probably dead because e -commerce or whatever everything's on Amazon now or whatever these things have like 97 % occupancy it's like really it's like higher than multifamily and office like it's a really great category and even the few concepts that are like kind of going out of business like a bed bath and beyond or like Joanne's fabric he's replacing them with trampoline parks and pickleball and Tesla charging networks he's like there's just new tenants that are always there And he's like the best part

of this entire model, because the returns are bananas for this thing.

Like, it's like, it is by far like the thing I've been most bullish on in the last 24 months has been investing into this.

I basically took all my spare cash, put it over here.

And the reason why was, A, he's a good operator, but B, there's no supply.

So nobody builds any new shopping centers.

So like, even though, like, you know, everything else people build more, they build more condos, they build more stuff.

Nobody builds new shopping centers.

And so, it's all just retrofitting existing centers.

You buy them usually, like, below the actual build cost of the center themselves.

And so, I've seen this.

My kids go to this thing called Little Kickers.

It's in San Ramon, like, a little town, like, you know, in the Bay Area.

And it's exactly what you're describing.

A teenager runs it.

Like, I asked to speak to the manager, and the manager was 17 years old.

He had, like, a chain on and, like, the F -boy haircut.

And I was like, what?

But you're in charge of this.

He was great, by the way.

He was actually like a really good manager.

But everybody who works there is young.

Like, he's young. He's like, you know, probably, he's definitely like, I don't know, under 23 years old.

And all the coaches, there's two coaches per class, they're all also like just kind of soccer players who are high schoolers probably.

But this thing is packed.

And it's just like one large venue for kids' soccer.

And this thing has to be printing.

Like, I'm just doing the rough math on it.

This thing has to be printing.

They have definitely over 1 ,000 members.

It's like $200 to $300 per month.

This is a very big business that's basically, like you said, sort of like a fun business that's teenager -run.

Yeah, and it's – you don't need to – And it's AI -proof, right?

So if you're looking for where do I do business if I know the whole world is changing with AI, well, AI is probably not going to do a trampoline park or do a kid's soccer center.

Those are pretty safe businesses.

Yeah, and they're predictable.

I mean, kids are always going to want to jump.

It's not like you're buying a product that, you know, all of a sudden you don't know if it's going to last. Right.

You put a bullet point on here.

The least sexy business is possible.

Touch the taboo. What do you mean by that?

Right. So this is, I start again, when in the pit of despair, you start to, you start to go crazy with ideas where they are.

Well, what are what, you know, I started looking at like medical ambulances, which I still think could have worked, but effectively, you know, the government subsidizes medical transport for disabled and elderly from, you know, nursing homes to their medical appointments.

So it's actually government contracts.

If you have a fleet of, you know, these special handicap accessible vans, you know you effectively can you mobilize this fleet every day you kind of fill up your appointments with the people um and you just transport them to and from super simple you don't really think about it but like the demand is is there especially as the population is aging that's a that's a good example of an unsexy one I would love to buy a funeral home like something that's just like oh man like you work in that it's like how do I mean all of the deal like if you want to find a deal that's kind of like you know punching

above your weight if you will like there's going to be some hair on the deal like at the lower end of the market like like i said like private equity is going to scoop up the easy ones um there's going to be something like if that something can be that it's just like weird and like no one really wants to touch it or think about it like to me that's a great a great reason to buy it right because because it might mean that you know let's say there's a really sexy business on one side right there's a business business that's like, maybe it's like software only.

You don't have to run it.

It's low operations, blah, blah, blah.

And it's about whatever, party planning or something fun.

The hair on that deal might be, it may be just that the valuation is extremely high.

So it's going to take you a long time to get your cash back.

Or it might be something else like, users are very fickle, the competition is very intense, whatever.

There's going to be hair in every deal.

The good thing about what you're saying is that, if you choose the hair that it's not the most fun thing to run well yeah or the hair is going to be like you got to cremate someone it's like right actually like i don't actually know if i want to do that like now that i'm saying it out loud like right that's i mean i'll hire a teenager to do it then uh but like that's a better hair that's about a better amount of hair like you kind of know what it is it's like the hair is the thing almost right versus like the pnl has hair or the there's a lot of debt on the business already there's other problems

in other areas exactly so if there's something that like yeah like if 20 people are going to flock to the software only party planning one but only like too crazy enough.

People are like, well, let me roll up these funeral homes.

I'm sure people do this.

I'm not the first one to think about this.

But I like that. The other thing I really like right now, Party City just went out of business.

Where are you buying balloons?

There's a guy, like 20 minutes from me, he had a fireworks store.

His fireworks store happened to sell balloons.

The day Party City went out of business, he rebranded, man.

Now his store is called Balloons.

It used to just be called fireworks.

Now it's called balloons.

He's taking out all the ads on the street.

And we went there, you know, for my son's birthday and he's doing awesome.

So it's like, how do you like kind of, and don't copy Party City.

That clearly didn't work.

Right. The demand for balloons still exists.

And the supply just shrank.

Exactly. The supply just shrank like a whole lot.

Right. And I imagine as things change, like the landscape, for better or worse, is changing very rapidly these days.

um you know maybe something goes out of business because they can't compete because of tariffs or whatever like how do you think about being you know opportunistic in that sense and doing it and you can do it um you don't even need like you could start selling balloons like get a permit and start doing delivery only balloons like that i actually saw a truck doing that when i went to monish pobri's house he's a great investor and he on his desk there's a where you have a name placard normally you just have your name engraved on it engraved on it.

It just said, trouble is opportunity.

And he just had it on his desk because at all times, he's reading the news or he's hearing something as a reminder.

Trouble is opportunity.

I love that. Yep, that's awesome.

Cool. Well, Dan, dude, awesome hanging out with you as always.

I'm glad you got to tell your story and congrats, man.

I'm blown away by what you did with the business that you bought.

You are officially Dan the Bag Man.

Thanks for telling the story.

Yeah, thanks for having me on.

It's exciting to be here.

Cool. All right, my friends, I have a new podcast for you guys to check out.

It's called Content is Profit, and it's hosted by Luis and Fonzie Cameo.

After years of building content teams and frameworks for companies like Red Bull and Orange Theory Fitness, Luis and Fonzie are on a mission to bridge the gap between content and revenue.

In each episode, you're going to hear from top entrepreneurs and creators, and you're going to hear them share their secrets and strategies to turn their content into profit.

So you can check out Content is Profit wherever you get your podcasts.

[평범한 직장인이 34억 원 규모의 사업체를 인수하기까지: '댄 더 백 맨(Dan the Bag Man)'의 실전 창업기]-[How I Bought a $3.4M Business For $200K]

📋 Summary

사업 인수: 꿈과 현실 사이의 실전 가이드

1. '댄 더 백 맨'의 탄생: 우연과 필연의 경계

2. 사업 인수의 3가지 핵심 교훈

첫째, '직업'을 사지 말고 '자산'을 사라

둘째, '비밀의 100개' 법칙

셋째, '판매자'와의 관계

3. 사업 아이디어: '지루함' 속에 기회가 있다

결론: 창업은 '계획'이 아니라 '실행'이다

🎯Key Sentences

📝Key Phrases

📖 Transcript