Think Big, Buy Small Listeners’ Questions, Rick and Royce's Answers
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Sep 9, 2024 Rick and Royce tackle listener questions about transitioning from academia to acquiring businesses. They delve into the pros and cons of self-funded versus traditional searches, sharing common pitfalls to avoid. The conversation shifts to the complexities of valuing small businesses and the importance of real estate in acquisitions. They also explore entrepreneurial opportunities in emerging markets, underscoring the need for local knowledge and flexibility. Finally, they reflect on key lessons learned, including debunking myths around the risks of buying established companies.
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Geographic Focus and Hands-on Approach
- Prioritize buying a company in a location that aligns with your lifestyle.
- Focus on smaller businesses requiring hands-on management in the lower end of the market for better opportunities.
Key Acquisition Characteristics
- Look for businesses with recurring customers, non-cyclical revenue, and strong cash flow.
- Seek companies with low customer and supplier concentration for stability.
Self-Funded vs. Traditional Search
- Self-funded searches offer greater ownership but require personal financial stability.
- Funded searches provide a salary and cover expenses, but offer less equity.