The Game-Changing Strategy of Acquisition: An Interview with Walker Deibel - Walker Deibel | Horizon Search 21
Aug 18, 2023
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Walker Deibel, an expert in acquisition entrepreneurship, discusses the game-changing strategy of acquisition. Only 4% of companies hit the 1 million revenue mark, with a mere 0.5% reaching 5 million. Baby boomers dominate the business landscape, and 48% of US companies face a transition due to owner retirements. The ETA model needs revamping to handle these massive transitions. Tech advancements influence ETA's trajectory, and decisiveness is key with determining acquisition potential within 48 hours. Stability is assured with pay and benefits remaining unchanged post-acquisition. Deibel shares his pivot from starting businesses to acquiring them and mentoring through Acquisition Lab.
Search funds have the potential to outnumber private equity firms if more MBA graduates pursue this career path.
Building a board of directors when acquiring a business provides valuable expertise, networks, and guidance that contribute to the success of the acquired company and reassure employees during the transition.
Deep dives
Search Funds and the Potential for Growth
The podcast discusses the potential for growth in the search fund industry. While search funds are still a minority in the entrepreneurial landscape, they have the potential to outnumber private equity firms if more MBA graduates pursue this career path. Additionally, there is a significant opportunity for growth in small business acquisition, as a large percentage of companies are smaller than what private equity firms typically consider. With a large number of baby boomer-owned businesses needing transition, there is a demand for talented entrepreneurs to step in and acquire these companies. Overall, the podcast highlights the expansive opportunities and potential in the search fund industry.
The Importance of Building a Board of Directors
The podcast emphasizes the importance of building a board of directors when acquiring a business. Having a board provides valuable expertise, networks, and guidance that can contribute to the success of the acquired company. By reaching out to experienced and successful business owners in the community, even recent MBA graduates can form a board that will assist in making strategic decisions and holding them accountable. Building a board also helps in creating stability and reassurance for employees, ensuring a smooth transition after the acquisition.
Lessons from Writing a Bestselling Book
The podcast dives into the experience of writing a bestselling book, with focus on the book 'Buy Then Build' authored by Walker Dibel. Dibel waited 10 years before releasing the book to ensure he had enough knowledge and experience to make it an authoritative resource on entrepreneurship through acquisition. The process involved extensive interviews, data gathering, and framework development. Dibel also invested significant time and effort in the book launch to ensure its success. The podcast highlights the importance of thorough research, planning, and continual improvement in writing and publishing a book.
Recognizing and Managing the Post-Acquisition 'Dip'
The podcast addresses the common occurrence of a slight dip in performance after acquiring a company. This dip is attributed to various factors such as the settling period, capital expenditure needs, and potential changes in the business's trajectory. It is seen as a normal part of the acquisition process rather than a cause for alarm. The podcast emphasizes the significance of recognizing this dip and focusing on building and improving the business, addressing neglected areas, and stabilizing the workforce. Managing expectations and maintaining open communication with employees can contribute to a successful transition and subsequent growth.
Walker Deibel is an expert in the field of acquisition entrepreneurship, having purchased not one but seven successful businesses over the span of a decade. Through his journey, he realized that buying companies can be a more viable and profitable option than starting from scratch. He's also the author of a best-selling book on the subject and the founder of Acquisition Lab, an acquisition accelerator. Get ready to learn from Walker's expertise as he shares the strategies, challenges, and rewards of Entrepreneurship Through Acquisition (ETA). Whether you're a first-time buyer or a seasoned entrepreneur, you’re certain to find value in Walker’s insights.
TL;DL Highlights
Only 4% of companies hit the 1 million revenue mark, with a mere 0.5% reaching 5 million.
Baby boomers dominate the business landscape, owning businesses that represent 48% of the US economy.
An impending wave: 48% of US companies face a transition due to owner retirements.
The ETA (Entrepreneurship Through Acquisition) model needs revamping to handle these massive business transitions.
Despite the allure of ideal businesses, search funds admit that perfect companies are rare.
Tech advancements influence ETA's trajectory.
Decisiveness is key: The speaker determines a company's acquisition potential within 48 hours.
Stability message to employees: Pay, benefits, and vacation remain unchanged post-acquisition.
The speaker's pivot: From starting businesses to acquiring them, now even mentoring through Acquisition Lab.
For businesses earning over a million in revenue, the speaker endorses the EO (Entrepreneurs' Organization) for peer advice and networking.
Expertise spotlight: The speaker specializes in guiding first-time acquisitions.
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