How can investors buy service businesses facing succession gaps?
Short answer: Renan says he looks for service businesses whose owners lack succession plans. He meets owners in person to check for a fit with them and their employees. His team adds management structure and operating systems to businesses it acquires.
On the Family Office Club podcast, Renan discusses acquiring construction, restoration and other service businesses whose owners lack succession plans.
Renan on succession gaps
Renan says owners without a succession plan may wind down their businesses, leaving 50 to 100 employees looking for other jobs. His team aims to grow the companies it acquires. (at 5:07)
Renan on his first purchase
Renan says he bought his first company, a water restoration business, with 100% seller financing and no money down. He describes it as an $8.6 million business. (at 8:22)
Renan on off-market sourcing
Renan says his team talks with owners outside business-for-sale listings and LoopNet. He says those conversations can lead to stronger deals and more authentic relationships. (at 7:26)
Renan on updating operations
Renan says his team adds management structure, organizational efficiencies, technology, policies and automations to companies it acquires. (at 5:33)
"We make it a point to actually meet the owners in person. We establish the relationship and we see if we're a good fit to begin with"
From Richard's exclusive Billionaires.com interviews
Lessons from Richard C. Wilson's one-on-one interviews, as published on each interview page.
- Anu Aga: Check before you give. Study the work of an NGO, ask more questions, and visit it if you can. This leads to an informed decision.
- Tim Draper: Make your customers your sales force. Hotmail put a message at the bottom of the screen inviting people to get free email. It spread to 11 million users.
- Don Wenner: Commit to scale. Don's major turning point came when he decided to build a great company that makes an impact. Making money and being successful was not enough for him.
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Frequently asked questions
How can investors buy service businesses facing succession gaps?
Renan says he looks for service businesses whose owners lack succession plans. He meets owners in person to check for a fit with them and their employees. His team adds management structure and operating systems to businesses it acquires.
What kinds of service businesses does Renan target?
Renan names construction, restoration and reconstruction companies, along with HVAC, plumbing and other infrastructure businesses.
Why does Renan see demand for these businesses?
Renan says people may delay vacations or home additions when costs rise, but call for help when a pipe breaks or an air conditioner fails. He describes service businesses as recession-resistant and says nothing is recession-proof.
Sources
Quotes are copied from the video captions and checked against the transcript. Timestamps link to the moment in the video. General information only, not legal, tax or investment advice.