The Best Tools To Buy & Grow a Business in 2022

April 21, 2022 •

Cutting down a tree can take a lifetime with a nail file or a few moments with a chainsaw. Thankfully, you get to choose your tools.

I’ve built 9 companies, invested in 100+ companies, bought and sold dozens of others, and had some luck hitting the 7-8 and even 9-figure club with our investments. However, it’s taken me slowing down, writing more, and creating nomenclature around our frameworks, to realize that it doesn’t always have to be so hard. So I’ll share with you the tools, and tactics that I wish I had 15 years ago when I started.

Today in <10 minutes:

A terrifying truth. If you haven’t felt this… have you really lived yet?
Stuffing our toolkit. What are the tools I wish someone told me about as you buy and build companies?
Buying v Building: Here’s what to use in either scenario

A Terrifying Truth

If you’ve never gotten so lost in work you don’t want to be found…you won’t understand this.

It may surprise you, but I don’t feel bad for those who work long days and burn the night hours. I don’t feel bad for those who have never heard the words work-life balance. I feel deep crippling sorrow for those who never know what it is to love every moment of the work you choose to spend your life lost in.

I feel a gripping terror at the idea that my whole life would be spent, “looking forward to the weekend.”

Someone asked me why I write. The truth is, I don’t write for YOU. I write for me. Some people get massages, others have affairs, I write.

I write because it takes the lunacy out of my head and traps it on paper. It wraps that always constant voice in pen-drawn chains. I write because it’s a thing I cannot stop.

If you are a writer, you understand me, although maybe very few understand you. Your blood isn’t red, it’s black. Coders you follow along, although your blood flows with 0’s & 1’s. Hardware engineers, you speak my language but in wires and currents. Painters you hear me… on canvas. Builders you hear me in dollars and cents and P&L’s lined up.

For the rest of you, if you haven’t found the thing that you get so lost in you pray to every God to never be found…keep searching.

I don’t know about religion. I don’t know about heaven or hell. But I know that bliss isn’t found in drugs or excess, in sex, in escaping… it’s found in creating. Once you’ve tasted that drug, nothing else will satisfy you. You’ll be a hunter in search of your prey. Everything else is a shiny distraction.

Work-life balance? A funny joke among the children who don’t yet know what they’ll grow to be capable of one day. Or a tragic jest to those who let others build their lives.

I can’t promise you much, but I can promise you the point of life is not passive income to sip tequila on the beach. It is to let out that thing inside of you and leave it stamped on the world.

If you don’t understand this now… one day you will. Or you’ll die uncompleted.

Prepping your armor: Tools I wish I could tell a young Codie about…

The world is noisy. The tools for financial freedom are aplenty. The tools to ownership, just as many. The truth is the tools are just the sideshow to your main act, but I write this piece in the hopes that you may have found that thing burning inside of you. If I could go back in time, the ones below are what I’d tell young me to use to start “my thing,” to buy my first business, to begin to leave my mark on the world. Each grouping has the steps you should take to buy, build, and then run your business.

Here’s the framework… the B’s:

Blindsides – what don’t you know but should ponder
Buy – how to buy the dream you want
Build – how to take the dream you now have and build your empire

Blindsides

1: What You’re Doing RIGHT NOW, is probably wrong

If you’re reading this, there is one framework I want you to know above all others… the sunk cost fallacy. What is it and why? Well first… only 29% of Americans are happy with their work. So the truth is you’re probably part of the 71% of humans in the unhappy category. It’s ok, your secret is safe with me. But it’ll never be safe with you. There is no hiding from the mirror. So I want you to realize one thing. Just because you’ve spent time getting an overpriced MBA, a Ph.D., 10 years in sales, 30 years at a job… doesn’t mean you should keep going. The sunk cost fallacy means humans continue on a path even though they know it’s wrong because they have “sunk” a lot of time, effort, or money into it. Remember this line: there is no past, only future. So if the future is not one you like, forget the past.

2: Why > What

Be honest and accept this is the one you’ll want to skip over. It sounds like a self-help guru possessed me. It didn’t, so listen. WHY you are doing this is just as important as what you are doing or how you are going about it. Are you trying to generate steady cash flow for a lifestyle change? Or to stop renting your time for causes you don’t believe in? Maybe you want to pass along a cash-flowing asset to your family. Here are the tools I use to get honest about my why:

My daily journal → The Best Self Journal
Man’s Search for Himself – Rollo May
If you don’t know what you want to buy or build…
- A list of the 130 boring businesses I love
- Trends where ideas come to roost
- Explore your curiosity, and then choose something. It’s ok if it’s not where you end up, you just need to start. Then iterate, iterate, iterate.

Now, this is the part where you get to choose your own business buying adventure. Here are your two options:

You want to buy a business. Skip down to the next section titled “Buy”.
You want to build from the ground up or add to the business you just bought… skip this next section and go straight to “Operate and Optimize” below.

Buy

So you want to buy a business? Alright, fam.

3: The Business Buying 10 Step Journey

There are 10 steps in buying a business. It starts with:

The foundation: aka this is an opportunity, holy sh*t I should do this
Deal Clarity: What is a good deal to me? What would make me happy? Investment thesis?
Origination: How do I find a deal?
Selling You: How do I position myself as a serious buyer?
Negotiation: How do I communicate with sellers to get info and then move to close?
Due Diligence & Valuation: What is a business worth? How do I value a business?
Financing: I’m not a multi-millionaire, how do I buy this thing?
Structuring: Price & terms. Learn to speak the language of acquisition
Closing: Legal, accountants, paperwork, CYA… get the thing locked down
1st 90 Days: Holy hell, I own a business… now what?

This is the buying a business journey we teach in our How to Buy a Small Business course. IF you are serious about buying a business I think you should take the course. Otherwise, I wouldn’t have wasted my time creating it. Much higher ROI being in PE than selling courses, to be honest. Why do you think KKR, Blackstone, and Sun Capital don’t write books or sell courses? Because everyone wants to get rich quietly. Meh – that’s not fun to me. I’m a journalist at heart. They should have never let me into the club.

4: Find your business

If you’re looking for a physical brick-and-mortar business, take section 3 of the course (origination) seriously or try these tools to find deals:

BizBuySell – buying brick-and-mortar businesses.
Loopnet – real-estate heavy businesses.
Other brick-and-mortar, like Ice Vending, Car Washes, RVs and RV parks, and Tiny Homes can ALL (that’s right, playbooks for ALL those businesses!) be researched.

Or maybe you want to start smaller with fractions of businesses rather than the entire biz:

FundRise allows you to buy fractional real estate
FranShares is a platform for purchasing fractionalized shares of franchises

Brick and mortar, not your bag? Searching for online businesses or online cash-flowing ideas?

Flippa – to buy an online business outright. We partner with them constantly and I love their UI/UX and analysis.
Or, if you’re looking to sell digital products for cash flow, check out Appsumo or Gumroad. Thinkific is another great partner if you have online course offerings.

5: Incorporate as an LLC or become a sole proprietor. Build a digital home base for your new corporation.

6: Set up your finances

NOW we’re getting closer to what most folks think of when they hear ‘start a business.’ Choose your bank (different needs = different personal and business banks, in all likelihood) and put funds in there. If you need funding, look to our friends at Multifunding for advice or compare loans with Fundera.

7: Buy your business

Newly incorporated, with a business bank selected and funded, valuation and due diligence conducted, now make your offer and buy your business. Congratulations, you’re an owner! Don’t let it go to your head…this is where the real work begins.

Operate and optimize

8: Operational efficiency

Increasing operational efficiency here is all about tracking worker productivity, keeping maintenance and upkeep costs low, and otherwise managing your PP&E. Whichever flavor of business (brick and mortar or digital) you bought, you’re going to need:

CRM – Moral of the story is you need one, Odoo is a pretty solid choice, Jobber is another. Consider using out-of-the-box software to get started. Use these to communicate with your customers, invoice, follow-up, and document.
Pay your people – If located in the US use Gusto, if you have international contractors we like deel. Either way, it makes paying, tracking, and taxes effortless but it’s not the cheapest.
Notion – we use it for content management but many of our SMBs use it for processes and systems
Slack – The best tool for managing communications overall.
Don’t use cash EVER – people steal it, use Stripe, or another payment processing service always.
Google Drive – the best, easy, and cheap way to upload everything. Don’t keep anything in binders or on desks, just go paperless, just buy a scanner and printer.
Task management – Right now we use Notion for task management but I actually prefer Trello, Monday.com, or Asana.

9: Hiring – This is HARD

If you’re running a business you know a unique pain that is the hiring process these days. While we can’t take that pain away, we can help shorten its duration.

Trainual – for training and onboarding new team members to your business
Upwork – We have multiple business leaders who spend 6-7 figures hiring on Upwork.
Support Shepherd – This is where we get our international outsourced talent, they find them for you.

10: Marketing Your Business

Now you need a website and a hosting service, here’s our tech stack below.

If you can only do ONE form of marketing for your small business, make it reviews. We wrote an article on how one cleaning company used NiceJob with their CRM, their customers got an automated SMS text immediately after their job was finished, leading them to Facebook/GMB to leave a review. If that went unanswered, the SMS text was followed by two well-timed follow-up emails, each asking for a review. It led to 300+ reviews.
WordPress – where our website is hosted.
Memberpress – allows us to take digital reoccurring subscriptions.
99designs for our logos, branding, and marketing materials.
Fiverr – for ongoing graphic design and misc tasks.

11: Media

If you used my business buying resources above, you found and bought or are building a ‘boring’ business. Usually, that means your current business has little search engine optimization, web presence, social media marketing, and may still be using a fax machine to communicate with its customer base….you get the idea. Now’s the time to change that business’s outdated, antiquated media presence into a kick-ass, 21st-century media star.

Build your email list with – ConvertKit
Expand your Twitter reach with Hypefury, there’s a whole SMB twitter group. Search #SMB
Create lead magnets that lead to emails with Beacon for lead magnet management.

When I first started out I took cash payments, wrote notes on pieces of paper, sent individuals emails, had no CRM, and paid people via PayPal one-off. What I mean to say is – I was a nightmare operationally. You hopefully are infinitely better than I am. With these tools, I don’t think there is any way you won’t be.

Sharpen your ax & question everything,

Codie

The Not-So-Boring Section

Free market or, nah?: Twitter is adopting the Poison Pill provision to prevent a takeover by Elon Musk if he acquires more than 15% of the company. If he doesn’t have the right to buy Twitter at those valuations, there’s something corrupt happening in the free markets (IMO).
Women are Chief: Chief, a private network designed to put more women in the C-Suite, has raised $100m at a Series B, putting their valuation to $1.1b.
3 things are certain, death, taxes…and paying for taxes: The FTC is suing Intuit over its deceptive ads for ‘free’ products delivered by the TurboTax software. Which, if you’ve used them before, you know that’s (hardly) ever the case.