I am really taken back by how much support I have received since launching the blog.  Thank You!  Many people have asked about my experience so far, what it took, and how much time I have spent working on getting to where I am in the process. I thought that I would break down the journey:
journey timeline

What did I learn? The first lesson is that it takes a lot longer than you would think to source and close a transaction.  It seems very obvious but if you are like me, you are impatient & optimistic.  I really thought that the first deal I worked on would close despite being given advice to the contrary.  The second thing I learned is that spending a little bit of money on some professional help in diligence can save you a lot of money in the long run.  Thanks Centurica!

What would I do differently? I think I would have liked to better understand the SBA process when I started this journey.  I really thought that the banks would be in the business of lending since the SBA backed 75% – 85% of the loan.  I was wrong.

communication breakdown

This chart doesn’t even include the 1,115 alert emails, hundreds of emails with different brokers, dozens of calls with brokers.

What did I learn? Vetting deals takes a lot of time.  I really underestimated how much I would have to wade through.  By the end of it, I was pretty efficient and could look at deals quickly but at the beginning, I wasted a lot of time.  Although upon reflection, it was a necessary process.

What would I do differently?  I wish I there was a resource that pointed me in the right direction and cut out a lot of the BS. This is especially true with the brokers.  Someone should write a blog about this! 🙂

money spent

What did I learn?  It costs a lot of money to get an SBA loan.  Not only are there a lot of fees to the SBA, but you need a document packager and a valuation commissioned by the bank.

What would I do differently?  So far, I believe that I have spent money wisely and strategically.  I couldn’t avoid SBA fees, the Rhodium conference was worth its weight in gold, and legal is legal.  Hopefully I spend money this well while running the business!

acquisition breakdown

What did I learn?  The main lesson here was that just because the SBA will guarantee up to 85% of the loan, that doesn’t mean that will be the case for you.  In my case, I put up no collateral so the LTV ratio (loan to value) had to be lower.  Additionally, I didn’t think about how much working capital I would need in buying this business.  I always knew I would need it but when I signed on to buy a business that was probably 2x larger than I thought I would, I didn’t internalize the extra cash I would need.

What would I do differently?  I am not sure there is anything to do different here.  I am pretty happy with the way the funding came out.

Looking at the above, it really seems like a lot of work.  Truthfully, it was time but not work.  I enjoyed every minute and had a lot of fun….except for almost getting scammed and getting turned down by 12 banks.  That was no fun.

 

 

“Find something you love to do and you’ll never have to work a day in your life”

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