Hello all,
After a few years on Wall Street, I have come realize a few things:
1) The money is not there the way it use to be
2) The fun and socializing is not there either (sounds silly but post-covid it's dramatically different)
3) With AI, the industry will most likely see even more downsizing
For these reasons, I did some soul searching and I think I have found a better way of life. I am inspired by some people who made their money the old-fashion way. That is by acquiring boring cash businesses that are for sale.
The funny thing is everyone who has done this says the same thing, and that is that they are weirdly satisfied with their lives. I have whole thesis behind why which I can share in further detail if you are interested.
When I think of boring cash businesses, I think of Laundromats, Self-Storage, Moving Companies, etc.
Businesses with little overheard, require very few employees, and are simple to understand.
I am looking to assemble a team of entrepreneurial financiers who share this sort of life philosophy. That is to actually work with people you enjoy, being your own boss, and being in a position to make as much money as humanly possible.
Interviews will literally be having a cup of coffee or drinks to see if you're a good personality fit.
Requirements:
1) At least 30k plus in capital
2) 3+ years of experience
3) Maturity
4) You are social
DMs are open!
Based on the most helpful WSO content, it seems like you're on the right track with your idea of acquiring small, "boring" cash businesses. These types of businesses can indeed provide a steady cash flow and can be satisfying to run, especially if you're looking for a change from the Wall Street lifestyle.
Here are a few points to consider:
Choose the right industry: Not all industries are created equally. For instance, food and beverage businesses often have structurally low margins due to costs of goods sold, labor, and rent. Service-oriented concepts, on the other hand, may not have any COGS and sometimes don't require much labor either.
Do your due diligence: This applies to both the industry and the specific business you're considering. Make sure you understand the business model, the market, and the financials.
Consider the simplicity and lack of "value-add": Once you have one or two businesses up and running, they shouldn't require too much effort from your end. All that's needed to scale is capital and a good manager or operator on the ground.
Profitability: Some industries can clear well in excess of 30-40% 4-wall EBITDA margins. Even at a small scale, with around 5+ locations, you can start clearing 7-figures in EBITDA/cash flow.
Consider the possibility of an SBA loan: While the process can be grueling and slow, SBA loans provide 80% financing, which can be a great help when starting out.
Remember, the key to achieving financial independence is to generate reliable passive income. Owning a small business on the side can be a great way to do this. Good luck with your venture!
Sources: Personally Buying a Small Business - Quitting the Rat Race, Personally Buying a Small Business - Quitting the Rat Race, My Story: The Sequel to the "Owning Unsexy Businesses" Thread, Leave banking to start a PE fund?, Corporate Finance Q&A with accountingbyday, BJM85, STorIB, and djfiii
Lol
lol
Lol like I am crazy or Lol this something you think about as well? I am all ears on this matter. Very open minded to constructive dialogue
I'm a big fan of qualification number 3.
Very important
Have the same mindset as you. Really tired of the corp grind. Been looking in my spare time for a while (I know I know all the podcasts/books say you have to do it full time). Hoping I can find something good. Keep us posted on your journey!
Have been thinking about doing exactly this, would be happy to connect.
I've bootstrapped a bunch of brands into the 8 figure rev range, bought some, and sold some.
I am confused why you do a boring small business when you have a background in PE and can easily raise $$$ to try something more interesting. You will not be intellectually stimulated buying some SMB doing $2m a year in rev.
Instead, find a company with at least $30m - $50m in rev and try to do something bigger. It's easier in a lot of ways and more importantly you can have more fun.
The only reason I didn't jump straight to that is because I have a wacky background lol
m_1 - are you writing / documenting your journey somewhere? Seeing a bunch of Youtube channels around what you do. Could any of them be you? ;)
What are the channels?
I definitely do not have a youtube channel. I've been on a few chunky podcasts but I will stab myself with a fork in the eye before I start a youtube channel.
I would point you towards some type of the more asset-light commercial services business vs. the consumer-focused small businesses you mentioned. Look at highly fragmented industries that are being rolled-up by PE and then find a micro player you can grow that still has a few good commercial customers. Below are three examples of industries where I have seen small companies scale quickly with minimal capital (not necessarily where I’ve bought businesses, but this will give you a flavor). I’m including some public company examples where you could find some industry information:
1. Commercial insurance brokerage (AJG/BRO).
2. Uniform rentals (CTAS/VSTS).
3. Staffing (MAN / RHI).
Within these industries, try to find a niche player that serves a growing end-market well vs. a more generalist firm.
Hope this helps!
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