12 months into our $1M Acquisition for a 38 year old Small Business
The good, bad and extremely ugly ride over the last 12 months. Maybe there’s light at the end of the tunnel...
If you don’t have time to read this, I’ve recorded a voice over for you. Give it a listen here: https://spotifyanchor-web.app.link/e/TZJtjtiwjNb
Buy a small business they say.
it’s a better return on investment that any stock market option.
At least that’s what I was led to believe.
And I just figured, why not own a business where I control the value of that asset at all times.
It’s a no-brainer.
As we celebrate? our year mark on our 2nd acquisition,
I’ve become deeply reflective of how the last 12 months have gone.
The brutal truth: the business is down 65% revenue from the previous year. (Nearly $600k down)
Read about it here.
The long haul
The first 3 months post acquisition were a roller coaster of emotions, the way a 16 year old boy with a new girlfriend feels during the early stages of high school “love”.
Sporadic orders ranged from $250 to $35,000.
The highs were high, and didn’t see a world where there were any lows in this thing.
December was slow, but I assumed it was just the time of the year.
January rolled around and the lag continued. Three months into a cold winter felt normal living in Utah, but I wasn’t used to this kind of frost in business.
I gave myself a few months before starting to proactively sell, wanting to feel comfortable with the entirety of the operations before disrupting too much of this 38 year old beast.
Besides, it was an industry I knew nothing about, selling parts I know nothing about from suppliers in foreign countries I know nothing about.
I felt the same way a 12 year old does walking through a biology museum, reading every sign and having to sound out every other word.
As I began engaging our top customers, I began to notice a gut punching pattern:
“Hey John, it’s Blake, you’ve worked a lot with Tom previously. I’m the new president of Appleton Electronics”…
“Blake, it’s great to hear from you. I’ll have you know, I’m 70, I’ve been doing this a long time, we’re trying to find my replacement right now.”
By February, I had heard this from 2 of our top customers.
By March, 3 more top customers told me the same.
The pit in my stomach grew. A feeling as if I had just taken $1m of cash and threw into a bonfire.
On top of this realization, the bank account was dipping lower and lower each month from the debt service and unforeseen expenses.
$12,000+ each month.
If you’ve read any of these previous articles, you’ll remember I only injected $25k of working capital at the beginning.
Man, not nearly enough.
At this point I needed cash, fast.
I wasn’t getting orders.
It seemed like it was slowing down more and more.
I’d lost contact with our 2 largest customers at this point in the transition of their retirement.
Customers that had places over $300k of orders last year.
My stress level grew by the day.
I wasn’t sleeping at night.
All I could think was “you’re such a failure, how could you spend your entire life savings and work so hard for over 10 years to buy a business that failed in 6 months”.
I questioned everything in my life.
It became harder and harder to see more than 24 hours ahead of me.
My world became really, really small.
It felt like I was standing in a pile of quicksand and any movement only sunk me deeper and deeper with less ability to move at all.
I shut out everyone and everything.
Went to a dark place.
My mind raced constantly with the heavy shame of failure and errored my confidence.
I wondered why I had ever perused small business acquisition in the first place and why I was such a phony for pretending to know anything about something I know nothing about.
It ate at me for months.
My lowest low
We took the kids to Carlsbad the last week of June. It has become an annual tradition for us, the kids love it.
We get to sit by the pool while the kids play for nearly 8 hours a day in the water.
I was looking forward to shutting off for 7 days and cooking myself like a slice of bacon on my flattop foreman.
Within 20 minutes of the sun soaking into my skin, the overwhelm set in.
A wave of uncontrollable anxiety rushed over me like lava engulfing a dead tree on the ground.
I couldn’t move. I shut out my wife and kids almost immediately.
For the next 6 days I would fight every minute in an attempt to be present, even just for an hour.
It felt like my world had completely closed in, nothing was left.
I had lost it all, I kept telling myself.
I had sunk every penny we had into this business on a bet I thought would hit…
but the reality was far from that.
We were 3 months into bleeding cash and the coming months weren’t looking any better.
I spent those 7 days in complete turmoil.
Shaming myself for wasting so much money and throwing away everything we had earned over the years.
“What was I even good for anymore.” I kept asking myself.
I mean, I’ve spent my entire career building successful sales teams and here I was taking the biggest sales L of my life.
On what seemed like a simple business.
Of all the things I didn’t feel competent at, sales was at least my forte, but this was proving otherwise.
That was it, I had been defeated.
After 12 years, 3 wildly successful tech companies, I found my match…
And I lost.
I gave in.
Now what…
I met with my therapist the day we got home.
Unloaded it all.
He chuckled,
“yeah, of course Blake… I mean, you’ve bottled all this shit up for so long and it was the first time in months you allowed yourself to “shut off”… this was your body’s way of dealing with it”
Holy shit.
He was right.
I had spent 6 months in fear, regret and paralyzing agony about my shit decision to buy this thing.
And it stopped my from doing damn near anything on the business.
No wonder it was dying like a bouquet of flowers in a waterless vase.
We did weekly therapy sessions to dig deep for the next 2 months.
My reality check.
At the end of the day, life goes on.
I’ve spent a good chunk of the last year driving by hundreds of small business every day and legitimately asking myself “how the fuck do they stay in business and pay their bills”…
But regardless of whether someone makes it in business or not, life goes on.
The sun still rises and it’ll set again.
My kids still grow up and hopefully, still live their dad.
And those bills? Well, they’ll get paid.
Eventually.
There’s kinda always a way I’ll figure it out.
It’s my nature.
I just find a way.
I tell my wife nearly 3x a week,
“this year was about me. About figuring out who the fuck I really am. As a person, not just someone who’s defined by the companies I’ve built or success I’ve had. This is my year to truly show up, for me.”
My Takeaways
Through all this, I’ve learned some life changing things.
Giving myself grace - I’ve been way too hard on myself to far too long. That does nobody any good, especially my family.
Playing the long game - it’s been easy to chase the short hits and live off each dopamine rush. That game is over. I’m so much more focused on playing the game in a way that I still want to and CAN play the game when I’m 45 or 60.
I’ll never retire - I thought for the longest time that I wanted to retire at 40. I’ve made bets and decisions to work towards that goal, but I’ve learned that and it’s not my truth. I enjoy the game, the game will just look different as I get older. The game is something I’ll play for fun, not for identity
Boundaries are everything - playing the long game means building a sustainable business around my life. Not and life around a business. Ironically, when I needed to triple down, doing it with strict working boundaries has helped 10x more than pulling 18 hour days.
Fear setting is one of the most powerful exercises you can do - if you haven’t seen Tim Ferris Ted Talk, check it out. I’ve done a lot of fear setting the last 9 months and it’s worked wonders. You’re welcome:
6. Nobody is out there quick crushing it like you think they are - small business is hard. Like, really hard. As I get to know more and more small business owners, the reality is that some years are good but many can flat out suck. Learn to ride the waves
Where are we now?
Whelp, we’re not out of business.
So, I guess that’s a win.
Luckily, this week alone, we’ve received POs that are 3x the last 3 months total revenue.
It’s a start.
But it’s a long road ahead.
If nothing else, I’ve learned a lot about myself & how to potentially run this business.
It’s a far cry from great, but I’ll take it as a win for now.
I’m optimistic about the momentum we’ve achieved over the last 30 days.
It shows that with a high level of persistence over a LONG period of time, it should work out.
Not quite the same story I’m used to of scaling from $1m to $10M in a single year…
But those days are far gone now.
So, I’ll continue to manage what I can control and hope for the best.
In the end, it’s all I can do.
If you liked this, check out some of my other posts:
Blake, you were part of my inspiration when I left corporate America. Former VP Sales, 100M in ARR. Today, Small business owner.
My first 6 months was horrific. Top 3 customers down 80%. Fast forward to the next 6 month and we have finally outpaced previous years performance (previous owner) and on track for next year to be +$1.5M Y/O/Y.
The biggest change was my mindset. Control what I can and focus on my strengths. Sales… in an industry I knew nothing about, we are growing. Fast. Finally.
Stay positive. Trust your network. Control what you can.
Charlie B
This resonates. I'm about 6 months into my first acquisition. It's been up and down, and we just hit a MAJOR roadblock last week we're working through.