Hey everyone,
About six months ago I created a thread on WSO that ended up having a profound impact on my life. The thread was about owning and operating relatively "unsexy" businesses, and my goal was to pick the brain of other users to hear any thoughts or experiences they could offer (link: http://www.wallstreetoasis.com/forums/gas-station-car-wash-fast-food-ow…).
The idea for the thread came to me after working on a couple specific sell-side deals. These companies were in relatively boring industries, yet they were generating millions for founders that seemed to have a pretty chill lifestyle (i.e., they certainly weren't turning comments to a CIM at 3:00am). More importantly, these guys weren't super brilliant or anything like that; in banking, you quickly realize that founders/C-level types aren't nearly as smart as you think they should be. If they could do it, I felt like I could too.
So during a few 3:00am nights I began to realize that: a) I didn't want to do banking forever, b) I wanted to be my own boss, and c) I wanted to start a company in one of these "unsexy" businesses that was easy to understand and offered consolidation opportunities (almost all of the unsexy success stories I had seen were basically just roll-ups). I didn't have the faintest idea of what I actually wanted to do though, so I started the WSO thread to help jog my brain.
The thread had some great dialogue including a few ideas I had not previously thought of, in addition to a few websites for small business listings. I went to one of the listing websites and searched for businesses back in my home state (Tennessee), and after about 10 minutes stumbled on a listing that caught my eye: an established billboard company in an area of rural Tennessee that I knew very well. It was generating ~$125k in gross revenue and ~$100k in EBITDA, and was priced at ~$500k. I didn't know the first thing about billboards until reading that listing, but I did some due diligence and shortly became convinced that this business satisfied every qualification I was looking for: passive business model, location agnostic, niche industry that most people did not understand, opportunity for consolidation, and of course high cash flow.
I ended up having a few diligence calls with the owner before deciding I wanted to go for it. I drafted a comprehensive business plan and applied for an SBA loan with 10+ banks. The process was grueling; I had always heard that SBA loans are sometimes more trouble than they were worth, and I can now attest to it. Everything moves at a snail's pace, and the seller's taxes were a mess so I was having to walk the loan officers through all the adjustments (it was tough to even schedule these calls during my work day). That said, SBA also provides 80% financing with 6% interest, much better than I could do on a standard commercial loan with no track record and minimal collateral. Fortunately the seller signed an LOI with exclusivity, so we went far enough down the path that an extra month or two before closing did not cause him to walk away (but he was very close!).
After about six months from start to finish, I finally was approved by the bank and closed on the deal. I have owned it for about two weeks now, and it still shocks me that I actually went through with it. There were so many opportunities to walk away: can I actually do this? will I have enough money? what if I suck? what if I go bankrupt? what if all the customers leave? what in the hell am I doing??? But at some point you need to just take the plunge, and I am proud of myself for doing it.
My current plan is to work my banking job for another 1.5 years, collect two more bonuses, than quit to move back home and work on the business full-time. I need to grow organically to reach my annual income goal, and it is hard to do that from another state (not to mention while working a grueling IB job). As cheesy as it sounds, banking helped me realize that I am a "work to live", not "live to work" type guy, and I am looking forward to getting my free time back while making a nice income.
Sorry for the long post, this ended up being much longer than I anticipated. But I felt like I needed to post a follow up given how helpful the prior thread was for me.
If anyone has any questions, please fire away!
Hey everyone. Sorry for not responding for so long. Can't believe my last post was in January!
Everything is going about as well as can be expected with my business right now given that I am still at my IB job. My main goal is to be able to keep the business stable so I can make my loan payments, and I have been able to do that every month without dipping into any personal cash. That is a success in my book.
I am proud of the work I have done up to this point, but as all of you can likely imagine, there are times where I am getting crushed at my "real" job and can't do anything productive with the billboard business other than send out monthly invoices. My occupancy is lower than I would like and I can't do much about it right now other than hope people respond to current "Ad Here" signs on empty boards. It is frustrating to know I can be doing so much better but simply don't have the time to devote to it due to the responsibilities of my current IB role.
I've submitted a few job postings at local colleges back in Tennessee to try and get some help on selling my open boards. I'm trying to hire independent contractors that will work purely on commission rather than actual employees that will get paid by the hour. I don't think I'm in any position to manage employees right now but I see limited downside to getting contractors out there dialing for dollars. I'm in the early stages of this process but hopefully I can one or two and get some leverage out of them.
March 2015 has been circled on my calendar since I bought the business almost one year ago, as that is when I plan to collect my final bonus and start working on my business full-time. However, to be perfectly honest, it is a little scary to think about losing the security of two checks deposited directly into my checking account each month. I was much braver when this reality was 1.5 years away; now that it is 6 months away it is becoming much more real. I absolutely will still go through with the plan, but it would be naive to not consider that there is a chance I fail miserably. I'm sure these are thoughts that everyone considers when they are planning to leave the comfort of a full-time job for the excitement and uncertainty of owning a business, but it is definitely more "real" now than it was back then.
At the same time, I am extremely excited and can't wait for that day to come. I have so many goals and new ideas that I want to take on and execute. The next six months are likely going to fly by, and I can't wait to roll up my sleeves and see what I am capable of building.