Buying Small to Then Buy Larger $1m SDE | Joe Soelberg Interview | Acquiring Minds

Joe Soelberg, a two-time business acquirer, shares his journey, focusing on lessons learned from his first acquisition, Sunny and Ash, a 3D rendering business, and how it shaped his approach to acquiring Point B, a branding agency. Soelberg details his shift from a corporate career to entrepreneurship, initially self-funding his search due to a desire for greater ownership. He discusses the challenges of navigating COVID-19's impact on Sunny and Ash, pivoting to home furnishings to offset losses in hospitality. A key insight involves recognizing the limitations of project-based revenue and targeting an agency with recurring revenue streams, emphasizing the importance of relationship-driven sales and strategic acquisitions for growth.

Outlines

Part 1: Background, Corporate Exit

Part 2: First Acquisition, Sonny and Ash

Part 3: Management, Transition to Passive Income

Part 4: Second Search, Marketing Strategy

Part 5: Point B Acquisition, Deal Structure

Part 6: Operations, Business Development

Part 7: Reflection, Future Growth

Sign in to continue reading, translating and more.

Open full episode in Podwise

Buying Small to Then Buy Larger $1m SDE | Joe Soelberg Interview

Acquiring Minds

Part 1: Background, Corporate Exit

00:00Joe Soelberg's Background: From Cabinet Shop to Acquiring Minds

Joe Soelberg's Background: From Cabinet Shop to Acquiring Minds

00:30From Corporate Frustration to the Idea of Buying a Business

From Corporate Frustration to the Idea of Buying a Business

02:31Self-Funded Search: Ownership Goals and a Crucial Conversation

Self-Funded Search: Ownership Goals and a Crucial Conversation

Part 2: First Acquisition, Sonny and Ash

07:55Finding Sonny and Ash: Financial Criteria for the First Acquisition

Finding Sonny and Ash: Financial Criteria for the First Acquisition

11:14Geographic Flexibility and the Big Three: Prioritizing Business Size

Geographic Flexibility and the Big Three: Prioritizing Business Size

14:45Sonny and Ash: 3D Rendering for Designers, Developers, and Architects

Sonny and Ash: 3D Rendering for Designers, Developers, and Architects

17:37Acquisition Details and COVID Pivot: From Hospitality to Home Furnishings

Acquisition Details and COVID Pivot: From Hospitality to Home Furnishings

22:24SBA Forbearance and Revenue Peak: Navigating COVID Challenges

SBA Forbearance and Revenue Peak: Navigating COVID Challenges

Part 3: Management, Transition to Passive Income

25:40Hiring a Manager and Current Involvement: A Successful Outcome

Hiring a Manager and Current Involvement: A Successful Outcome

28:38Finding a Great Manager: Consulting and Gradual Transition

Finding a Great Manager: Consulting and Gradual Transition

Part 4: Second Search, Marketing Strategy

31:40Lessons from Sonny and Ash: Seeking Recurring Revenue in Advertising

Lessons from Sonny and Ash: Seeking Recurring Revenue in Advertising

33:07Recurring Revenue in Marketing: Creative Services and Retainer Relationships

Recurring Revenue in Marketing: Creative Services and Retainer Relationships

35:56Revenue Quality and Share of Wallet: The Senior Living Space Opportunity

Revenue Quality and Share of Wallet: The Senior Living Space Opportunity

40:33Branding Agency Focus: A Flywheel for Organic and Acquisition-Based Growth

Branding Agency Focus: A Flywheel for Organic and Acquisition-Based Growth

42:37Branding's Recurring Nature: New Products and Creative Work

Branding's Recurring Nature: New Products and Creative Work

45:25Corporate Clients and Media Placements: The Architecture Tour Example

Corporate Clients and Media Placements: The Architecture Tour Example

Part 5: Point B Acquisition, Deal Structure

49:32Point B Acquisition: Size, Structure, and Rock-Solid Foundation

Point B Acquisition: Size, Structure, and Rock-Solid Foundation

52:36Unpacking the Math: Lender Scrutiny and Broker Listing Price

Unpacking the Math: Lender Scrutiny and Broker Listing Price

56:28Supporting the Offer: Comps and Industry Standards

Supporting the Offer: Comps and Industry Standards

59:05Point B's Numbers: Revenue, EBITDA, and Headcount Growth

Point B's Numbers: Revenue, EBITDA, and Headcount Growth

1:01:03Revenue Growth and the Sweet Spot: Healthy but Not Crazy

Revenue Growth and the Sweet Spot: Healthy but Not Crazy

1:04:27Transferable Skills and Owner Retention: Telling the Story to the Lender

Transferable Skills and Owner Retention: Telling the Story to the Lender

1:08:53The SBA Rule Change: Impact on Rolled Equity and Partial Buyouts

The SBA Rule Change: Impact on Rolled Equity and Partial Buyouts

Part 6: Operations, Business Development

1:11:10Joe's Role and Business Development: Relationship-Driven Challenges

Joe's Role and Business Development: Relationship-Driven Challenges

1:14:08Alternative Outreach and Accountability: Working with the President

Alternative Outreach and Accountability: Working with the President

1:17:17No Direct Reports and a Repeatable Sales Process: Building the Engine

No Direct Reports and a Repeatable Sales Process: Building the Engine

1:20:06Running Without Joe: The Sign of a Great Acquisition

Running Without Joe: The Sign of a Great Acquisition

Part 7: Reflection, Future Growth

1:22:15Resources and Story: Why Sonny and Ash Was Necessary

Resources and Story: Why Sonny and Ash Was Necessary

1:24:32Lender Specificity and Bias: The Story That Worked

Lender Specificity and Bias: The Story That Worked

1:26:30Client Base as a Source of Deal Flow: Freelance Agencies and White Space

Client Base as a Source of Deal Flow: Freelance Agencies and White Space

1:29:14Vertical Integration and the Acquisition-Minded Entrepreneur

Vertical Integration and the Acquisition-Minded Entrepreneur

1:32:55Exhibit A: From Sonny and Ash to Point B

Exhibit A: From Sonny and Ash to Point B

1:34:43Reaching Out and Connecting: LinkedIn and Point B Communications

Reaching Out and Connecting: LinkedIn and Point B Communications