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In our continued quest of radical transparency, follow along as we are openly sharing information to build trust and keep all stakeholders updated through a monthly newsletter. Thanks for joining us on this journey!
TLDR
Finding the deal flow as summer listings slow
Deal team assembled and we are ready to execute
Lessons learned from 6 months of searching
Final Thoughts: This is a marathon, not a sprint
Shoutouts
Our newest advisor, Steve Cardinal, for offering his insights and acquisition experience, and for passing along some interesting deals!
The SMBootcamp community and Slack group for being a valuable resource for advice, research, and access to current business owners and fellow searchers.
Dave Jeffers for joining the Brandt Point Holdings team! Dave is a trusted and highly capable former MBA classmate who has joined us to help improve our deal flow before he begins his full-time placement early next year.
Wins & Losses
Win: Increasing Deal Flow → With the start of summer slowing down new listings, we're scouring other online sources and increasing calls to local brokers to keep our funnel full and stay up to date on upcoming deals.
Win: Extending our Search → We initially allocated six months of self-funded resources for our search, and now that we are at the six month mark we have two contingency plans to secure additional funding and extend our search if necessary.
Win: Deal Team & Closing Processes → After SMBootcamp, we know exactly what needs to be done and when to close a deal, like a batter at the plate, ready to swing and waiting for the perfect pitch.
Loss: Impatience Leads to Mistakes → Frustration and impatience led us to overlook critical red flags nearing the 6-month mark, teaching us the lesson to slow down, stick to the process, and be patient yet persistent to avoid potential consequences.
Activity by the Numbers: June
344 = Newsletter subscribers
59 = Deal-specific outreach to CO business brokers
24 = Deals evaluated
8 = Meetings with sellers/owners
0 = LOIs submitted
Subject Deep Dive: Q2 Review
As we transition into the second half of the year and the third quarter of our search, we want to take time to look back and reflect upon our progress thus far. If the goal of Q1 was to “Build a High-Quality Searching Machine,” Q2’s motto was “Refine and Enhance.” We strived to make continuous improvements and quickly assess what works well that we can lean into while finding places in our process that need to be refined or redesigned altogether.
The books and podcasts on ETA will tell you that a “typical” search period can take anywhere from 6-24 months. As a self-funded partnered search team, we gave ourselves a goal (somewhat out of the necessity of burning cash) to condense that timeline into 6 months. This aggressive approach was beneficial in many ways - we stomped on the gas pedal in terms of building a searching machine and creating internal systems and processes very quickly. We gathered information and advisors and built a deal team of attorneys, lenders, and accountants in very short order.
However, this accelerated process and the “countdown” to the six-month goal also led us to overlook some critical steps in our processes and rush through some decisions and exercises that could have led to irreversible negative outcomes. Thankfully we have an incredible team of mentors and advisors who have patiently worked with us to address those errors and course-correct before we got too far out over our skis.
Key Takeaways from Q2
Extending our search and taking the pressure of time off the table
When we embarked on our self-funded search, we initially set a timeline of six months to secure alternative funding if needed. To ensure a thorough exploration of potential deals without the added pressure of time and funding constraints, we’ve implemented two potential contingency plans. These measures allow us the flexibility and time needed to find the right opportunity strategically.
Keep the funnel full: Increasing Deal Flow
As spring transitions to summer, market listings have slowed. To mitigate this, we’ve broadened our search scope beyond traditional channels. By actively sourcing from diverse online platforms and intensifying our engagement with local brokers, we are able to maintain a robust pipeline. This proactive approach ensures we stay informed about upcoming opportunities in real time.
Deal team creation and closing process
Guided by insights from our time at SMBootcamp, we’ve refined our approach to deal closure. Like a batter at the plate, we stand ready, poised to seize the right opportunity when it emerges. This readiness ensures we’re prepared to act decisively when the right pitch presents itself.
Refining our search criteria: Placing a higher value on the business model and operational fit
Beyond chasing impressive figures like high EBITDA or revenue, we prioritize holistic business models that align with our operational strengths. Understanding our capabilities and identifying immediate value-added opportunities are paramount. Rushing the process can obscure red flags that, if overlooked, could lead to significant setbacks. Our new mantra (as eloquently suggested by a trusted mentor): slow down to speed up. By maintaining patience and persistence, we enhance our ability to make informed decisions that align with our long-term objectives.
In Conclusion
Q2 has been a period of strategic refinement and proactive adaptation and iteration of our processes. By refining our operational strategies, enhancing the processes that are working well, and reinforcing our commitment to diligence, we position ourselves for sustained success in the dynamic and increasingly competitive SMB acquisition market.
We are inspired by what is on the horizon. With some promising opportunities in the pipeline, we are set up well as we move into the second half of what has already been an incredibly fun and exciting year.
Final Thoughts
Duncan here - It was a great first six months of the year. We have learned a lot and are now operating from a place of strength. We will continue to improve as the year goes on, but we have put in the reps, and it feels like we are a well-oiled machine.
Buying ourselves more time enables us to slow down to speed up. That feels right. While the search process can take up to 24 months, I see this as the beginning of a 20-year journey. Taking the time to make sound decisions now will enhance the decisions we make in 10-20 years.
Your support fuels our journey forward, and we are immensely grateful.