Well it’s been a big week. Have you ever wondered who buys traditional bricks and mortar businesses? I have.
A few months ago after close to a year of doing basically nothing, I started looking at business sales sites. I was in a position where financially I had to sell my house and I was tossing up between buying a cheaper house and continue doing basically nothing or buy a business. I bought 2. This is what happened.
I started looking at both online business sites like Flippa and Acquire.com as well as traditional business sales sites. To date I’ve only ever really started businesses from scratch. And this time around 16 years in, I just didn’t really have the energy to do it again. I’ve poured so much time and money into failed businesses, I just wanted to see what I could do with something that existed already.
I found a few kind of interesting ones but nothing that really jumped out. I wanted something that I could operate with my existing skillset, but I was tossing up between something cheap like a small web business to just pay me a small wage and something significantly bigger. In the end I did both.
I stumbled across a small hosting business, 80 or so clients, mainly small businesses. The current owner was working full time and running it on the side. He had a few servers and offered domain registration, SSLs and hosting. It’s been about a decade since I was in that world so I was a bit unsure whether I’d actually be able to even run the business. But where I am right now it was appealing. It would mean I could avoid getting a job, it would give me some recurring income, and it would give me a client list to market my WordPress support business WP Master to.
The problem was I had no money. I was about 2 months out from my house sale settlement date, and I couldn’t afford to buy it until the house settled.
So I waited about a month and stayed in contact with the owner. Then with about a month to go, I contacted him and said how about we do a deal that is contingent upon settlement of the house. He agreed, so we waited for 4 more weeks for the August 3 house settlement and the agreement was that I’d pay for the rest. I sold my vintage Volvo 🙁 for a bit of extra cash in the meantime and I used a small amount of that to pay him a deposit before settlement.
I figured this business would be enough for living costs and I could buy a cheaper house outright.
However while this was all happening I came across another business, a coffee roaster. My last business was beer and I’d started to get over the trauma of leaving that company. I’d begun thinking about what actual positives could I take out of the whole ordeal and the only thing really I got to leave with was my experience. So the idea of finding another company where that experience would be useful was appealing.
I got into beer because I loved beer at the time but I always said if I had to give up everything except for one drink it would be coffee haha. So when this coffee company came up for sale I was certainly interested. It wasn’t cheap and if I bought it, I wouldn’t be able to buy another house at least for now, so it was a big deal to go ahead with the transaction. Plus I didn’t know who else was interested and I wasn’t in a position to put down a deposit and my offer would again have to be contingent on the house settlement.
The family running the business knew about the sale but the staff did not, so all I got was one meeting with the family and I had to basically decide if I wanted to put in an offer. I met with them, I liked what I saw and the following morning I called the broker. He said someone else had put in an offer and he’d given them until 11am to send through their entity details and present it to the current owner. If they didn’t make the 11am deadline he would give me the opportunity to put in an offer.
It was 10am. At this point the idea of buying a house was still on the table and the house we wanted was for auction at 10:30am. I rushed to the auction thinking it would be likely that I’d miss out on the coffee business. I didn’t bid at the auction but if I did we would have won, it was passed in and put on the market at an amount that we would have been happy to buy it for. The opportunity to buy it was still alive if the coffee business was sold to someone else.
At 11:10 the business broker called me. I assumed it was bad news and that he’d received the details from the other buyer, and I was right.
“The other buyer sent me his details at 10:50am….” But in a gesture of good faith I’d like to present both offers to the owner. I sent him my offer immediately, asking price, short settlement, short due diligence period, no finance needed – but contingent on my house settling. He called back 30 minutes later after speaking to the owner, and congratulated me on being the successful buyer.
August 2, day before house settlement.
I get a call from the real estate agent who asks whether the smoke alarms are compliant. I have no idea, it’s a brand new house, I assume they are fine. She says she doesn’t think they are and they can send someone out immediately to check. If they aren’t, a % of the sale price would be discounted to the new buyer – something to the tune of about $5,000. I thought that was crazy but anything that would impact settlement at this point was making me very nervous. If I had to pay $5k so be it, but if settlement doesn’t happen for any reason, both business deals fall through and I’m back to square 1. In the end the inspector came out and said the smoke alarms were fine, so it was all down to settlement the next day.
August 3, settlement day.
I woke up pretty nervous. I figured I’d get a text or a message in the morning saying it was all sweet. I didn’t get anything. Hour after hour went by and I started worrying. There are only so many questions you can ask ChatGPT about house settlements. At 2pm I contacted the lawyer and asked if anything weird was going on. As far as she was aware there were no issues, they were just waiting for the buyer’s bank.
At 3pm she called back and said it was all done. Apparently someone at the bank forgot to click a button.
And that was it. I contacted the owner of the hosting company and the owner of the coffee company, and I was the proud new owner of 2 businesses.
Over the next few weeks and months I’ll share more about what I’m doing with both, make sure you are on my email list to be the first to know.
- East Coast Roast Marketing Plan - February 10, 2024
- Inside the P&L of my coffee / cafe supplies business East Coast Roast - February 9, 2024
- Why it’s almost always a good thing when staff quit - January 12, 2024