Acquiring Minds Buying a Business to Build a Life
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Oct 31, 2024 Dan Drake, owner of Industrial Applied Electric, shares his journey from CPA to entrepreneur, emphasizing family and community ties in Bend, Oregon. He dives into negotiation strategies, including seller-financed deals and the intricacies of bundling real estate with business acquisitions. Dan discusses overcoming challenges like sales dips and improving inventory management. He highlights the significance of understanding customer needs and maintaining a strong connection with the community, embodying the lifestyle change they sought through their business investment.
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- Dan prioritized Bend as his location and the industrial/construction supply chain as his industry.
- His target purchase price was up to $2 million, ideally with an SDE of around $300,000.
Bundling Real Estate
- Despite an initial SDE of $140,000, below Dan's target, the deal included real estate.
- The real estate added $90,000 in rent, making the deal financially viable.
Real Estate Ad-Backs
- When considering smaller businesses, evaluate potential ad-backs like owner-paid rent.
- Bundling real estate can increase SDE and provide better financing terms.
