Who here has bought a tiny project or small business and been successful in growing or scaling the company?
Not interested in companies acquiring other companies, but solo entrepreneurs or small teams acquiring a pre-built product or service business.
I bought a small B&M business--a bar--in 2010. I had 2 partners, which quickly became just one partner.
The existing business was using a small bar area, but the building had a much larger back room with a separate bar which we planned to move into after we got it ready. (The building was previously a VFW). The existing business was also poorly ran, dirty, and the customers frequenting it were not very--desirable? Lots of silly practices were occurring--for instance, if you did the math on the pitcher, it was more per ounce than the mug.
Over time we did move into the back, and after a few years of sticking it out, having good food, good service, and a good atmosphere, we had a nice steady business. It's doing quite well now, and I've mostly eliminated my own role there, whether via trustworthy staff, or automation (I'm a developer as well).
For numbers, I think our sales have scaled roughly 20x from the time of acquisition. Possibly a bit more, I am working off memory for the original sales. We also scaled from working it entirely ourselves, to having about 10 staff members--6 bartenders, 2 cooks, and 2 door people.
It was a minimal investment, but I was simultaneously all-in. We had to be profitable to start, and frankly that undesirable clientele kept our heads above water.
It was also easy to see how we could improve on an already-profitable business
When we bought the bar, I had never had a drink in my life! I was an active pool player, though, and pool league was important in our growth.
The bar scene definitely is still not for me most days, and I'm actively finding ways to stay out of there. It sucks you in and the people you spend the most time with are the 6- nights-per-week regulars.
It can be depressing, but I'm finally at age 37 starting to manage that pretty well.
I brought "all things computer" and a willingness to bust my ass. I also am the most logical and money-conscious, so I shot down a lot of ideas like spending 12k/ month or something in radio ads, as an early example. I also handled all the legal stuff, LLC, licensing etc.
I think what made it stick was just knuckling down, working our own bar, and caring about the customer experience above our own.
It amazes me how many places fail on these simple things. You walk into the toilet and that lock hasn't been fixed since last Christmas. The wobbly table is still there,or the kitchen that mix up orders all the time. But then I suppose It's no different to any other businesses, where simple things never get fixed too.
And if you had to do it over again would you buy the business again or did it change dramatically enough that you'd try to create it from scratch next time?
That's an interesting pair of statistics. Part time employees? Outside the US? A business that is heavy on inexpensive support personnel and light on engineering?
My business is on the buying end. I do however consult for a huge eBay seller that had some pretty deep experience in drop shipping. They got out of that business in a few years and switched to private label products to reduce competition. The problems with dropshipping are sort of obvious: no exclusivity, nothing stopping your supplier from entering the same business, and massive supply chain problems lately.
The Built to Sell podcast often features these types of stories from the sellers perspective > https://builttosell.com/