How to buy and turn around a
distressed business or 'roll-up' competitors

On this site you’ll read real life stories of how 23 entrepreneurs find, fix and then sell small companies on the edge of failure. Sometimes we buy our weak competitors in a roll-up and get new clients cheaper by acquisition then organic growth. If you like these concepts, come to the next workshop. Learn how we...

✓  Find distressed companies that are worth saving for capital gains
✓  "Roll-up" your competitors for rapid growth with little cash or risk  
✓  Why buying a distressed business is the BEST way to do a start up

From KC Truby Lonesome Cowboy Publishing Inc. 301 Thelma Drive #426, Casper WY 82609 (760) 207-6385

Managing your Business in 2 Hours

By on May 31, 2014

3 simple secrets for managing your business in just 2 hours a week.

By KC Truby The Lonesome Cowboy

Your opportunities for buying a distressed small company cheap, fixing the obvious problems and then reselling for capital gains in one year, are everywhere. The problem is – once you own it, you have to run the little sucker or it will start sucking you dry. Over the past decade we’ve owned 3 to 5 companies at any given time using these three steps.

 

1. Reporting systems: When I buy a company we immediately install CRM software, paperless workflow and update the accounting program. Then I have 3 screens on my desk with each of the report pages ‘live.’ Keeping on top of the ‘numbers’ allows me to see problems early and to speak with conviction when I’m talking to my staff. I run business on 3 screens 2. Operations manual: Two weeks before we buy a business we start working on the operations manual and strategic plan. The biggest reason is because we NEVER buy a company that we cannot already see a clear path to doubling cash flow from cost cutting and increasing sales by 25% The Big Book for running your business through sales meetings with the top 20 to 40 customers. The strategic plan includes our “Lean Canvas” work sheet that gives the team a clear picture of what we’re going to do with this new acquisition. Shared vision means good team work. In our situation we start with a pre-written business model that we call the BIG BOOK and then modify it to fit the new business. The book not only tells us what and how we are going to do tasks, but when. The due date is posted in our CRM schedule so my team won’t forget. The operations manual is divided into 8 sections that make up the business cycle. The employees do 90% of the work as they are the ones expected to implement. It is easier to get someone to implement their own plan, then my plan.

3. Hire a manager to do the daily work: when a business problem or opportunity comes to your desk your first question should NEVER be ‘how am I going to do this?’ The first question is always “Who is going to do this?” Your people come first. Don’t skimp on lining up the best managers possible.

We find managers in three places

A) From people working for us now, who we promote and move to run the new operation. B) By promoting someone currently working at our acquisition into the manager’s position. C) From personal observation. We never stop looking for talent Now the big news, pay your manager on performance. We set a low base

Using the Big Book

Our managers live and die by the Big Book

pay rate of $30,000 to $50,000 and then put 33% of the net collected profits after debt service and taxes into a pool that the manager can spread around. I expect the manager to keep 50% to 75% of that profit for themselves. I’m perfectly happy if a manager is making $250,000 a year someday if I can depend on my share of the profits to be a consistent $100,000 a year for 2 hours a week of my work.

Once you start buying companies on a regular basis you may want to start an ‘apprentice’ program so you have a steady flow of managers in your pipeline. I hire college graduates who want to become entrepreneurs and train them in our main company for one year. Then we promote those people to run our acquisitions if appropriate. These three steps work over and over for us. On average we can move the value of a distressed small business up by $200,000 inside twelve to eighteen months. We then sell it, or decide with the manager to keep it long term as an income stream.

 

Join the M&A Club for small business.  Learn how our members are using these steps to improve their current business, roll up competitors or buy distressed small companies for turn around. Click here for details.

 

 

About KC Truby

From their ranch in Wyoming, KC and his wife Linnea have bought or started 21 companies as a side line to their accounting business leading them into M&A as a full time business in 2012. These companies are located all over the Western Rocky Mountains, London and India. Since 1969 through their accounting and training companies, KC has taught 18,000 business owners how to improve cash flow and find more customers by installing standardized systems in their small business. Since 1989 KC has presented over 1,000 seminars and training classes to the small business owner.

5 Comments

  1. Jesse

    May 30, 2014 at 7:23 am

    Wow that was unusual. I just wrote an incredibly long comment but after I clicked submit my comment didn’t show
    up. Grrrr… well I’m not writing all that over
    again. Regardless, just wanted to say fantastic
    blog!

  2. KC Truby

    June 6, 2014 at 4:03 am

    All comments go into review for comments from people who are not on our newsletter list. If you would like your photo and comments to show up = sign up

  3. support.zepppelin.com

    June 8, 2014 at 7:53 am

    what means lol in english

    • KC Truby

      June 8, 2014 at 6:38 pm

      LOL means Laugh Out Loud

  4. thoroughly

    June 15, 2014 at 12:06 pm

    Hi there, I enjoy reading through your post. I wanted to write a little comment to support
    you.

Leave a Reply

Your email address will not be published. Required fields are marked *