Building a portfolio of small businesses
Does anyone do this on here? I remember during my internship one of the partners at the firm, who was a very successful investment sales broker, would buy small businesses. He had a few restaurants, owned a bunch of property and kept his day job. Also know another guy that owns those halal food carts you see everywhere, he has like 5 or 6 now but I don’t know how he manages them or keeps his employees from stealing. Still makes good money for what it is.
So there's obviously the Stanford-style search fund model, which can be used for this sort of thing. You can go down the rabbit hole here (https://www.gsb.stanford.edu/experience/about/centers-institutes/ces/re…). You have other independent sponsor models where people take their own money and leverage it with SBA 7(a) debt and purchase these sorts of businesses.
In any case, people who do this are often buying a job, not a real business that can manage itself without substantial input from the owner(s). Common marketplaces for this sort of thing include Sunbelt brokers and BizBuySell on the brick-and-mortar side and Empire Flippers on the e-commerce side. Beyond that, you would have roll-ups, and at a certain point that becomes regular private equity.
That's the 20,000 foot view. I can answer more specific questions if you have them or if any of this interests you.
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