Buying Two Businesses at Once: A Couple's Journey into Entrepreneurship

In an inspiring tale of entrepreneurial ambition, Lindsay Buckite and Kevin Black, a couple from Austin, Texas, embarked on a journey that led them to acquire not one, but two businesses simultaneously. Their story offers valuable insights into the process of buying and managing multiple businesses, the challenges faced, and the strategies employed to overcome them.

The Initial Search

Lindsay and Kevin's journey began with a desire to exit the corporate world and gain more control over their lives and financial future. They joined a community focused on entrepreneurship through acquisition, initially with the intention of finding a business for Lindsay to own and operate.

"We joined a community together and at first I was joining as a way of supporting my wife," Kevin explained. "But pretty quickly I fell in love with the idea as well."

However, after eight months of searching while maintaining their full-time jobs, they found themselves no closer to acquiring a business. The challenges of part-time searching, combined with the difficulty of focusing on the right opportunities, led them to seek additional support.

Partnering with Aquamatch

In January 2024, Lindsay and Kevin began working with Aquamatch, a company specializing in connecting searchers with potential business acquisitions. This partnership proved to be a turning point in their search.

"We started working with her and her team in January of 2024," Lindsay shared. "Pretty immediately saw traction actually."

Aquamatch helped refine their deal box criteria and provided a more focused approach to identifying suitable businesses. This led to their first serious consideration of an acquisition target in April 2024.

The First Acquisition: An Ad Agency

The first business they seriously considered was an advertising agency based in San Antonio, Texas. The agency specialized in media buying, with a mix of digital and traditional media placements.

Key details of the ad agency acquisition:

• SDE (Seller's Discretionary Earnings): $575,000
• Purchase price: $1.6 million
• Revenue: $1.2 million in 2023
• Structure: Included a significant seller note (36% of purchase price)

The deal structure included performance-based seller financing, which helped mitigate some of the risks associated with the acquisition. This approach also aligned the sellers' interests with the success of the business post-acquisition.

Challenges in Securing Financing

Despite the attractive financials, securing lending for the ad agency proved challenging. The couple went through six or seven banks before finding a lender willing to finance the deal.

"We wasted some time working with a lender who it just wasn't in their deal box. And we didn't realize that. We didn't know the questions to ask up front," Kevin reflected.

The main concerns raised by lenders included:

1. Keyman risk
2. Client concentration
3. The business being primarily based on relationship transfers

To overcome these challenges, they worked with Matias Smith at Pioneer Capital to find lenders more suited to their specific situation.

The Unexpected Second Opportunity

While in the process of acquiring the ad agency, Lindsay and Kevin were presented with another opportunity through Aquamatch - a residential outdoor design and build business in Austin.

Key details of the landscaping business acquisition:

• Revenue: $750,000 in 2023 (previously over $1 million)
• SDE: $340,000
• Purchase price: $1.225 million
• Structure: 18% seller financing

This business presented a different set of challenges and opportunities. It was essentially a one-person operation, with the seller handling design, project management, and client communication.

The Decision to Acquire Both Businesses

The couple faced a significant decision: should they proceed with acquiring both businesses? After careful consideration and consultation with their network, they decided to move forward with both acquisitions.

"We're betting on ourselves," Kevin explained. "We knew that we were getting one business that was well established with really strong cash flow and it almost felt in a sense... we were derisking a little bit if one business failed."

This decision also allowed them to pursue individual "lanes" in their entrepreneurial journey, with Kevin focusing on the ad agency and Lindsay taking charge of the landscaping business.

Structuring the Deals

Both acquisitions were structured with seller financing components, which helped mitigate risk and align the sellers' interests with the success of the businesses post-acquisition.

For the ad agency:

• 36% of the purchase price as a seller note
• Performance-based forgiveness tied to gross profit targets over two years

For the landscaping business:

• 18% seller financing
• Increased purchase price to incentivize seller financing

The Transition Process

The couple faced unique challenges in transitioning into their new roles as business owners.

For the ad agency, Kevin focused on transferring client relationships and maintaining the strong cash flow. "We've brought on three new clients. We've been very successful in transferring those relationships over," he reported.

For the landscaping business, Lindsay worked closely with the seller to learn the intricacies of the operation. "It is hard," she admitted. "But a lot of what I did in my last role as a product manager was getting somebody to download their knowledge to me."

Lessons Learned

1. The importance of a well-defined deal box
2. The value of working with specialized acquisition support services
3. The benefits of seller financing in mitigating risk
4. The importance of thoroughly vetting lenders and understanding their criteria
5. The advantages of flat-fee structures for professional services during the acquisition process

Looking Ahead

As Lindsay and Kevin settle into their roles as business owners, they face the exciting challenge of growing and scaling their new ventures. For the landscaping business, Lindsay sees potential in building a team of designers and expanding the operation beyond its current one-person model.

Kevin continues to focus on maintaining and growing the ad agency's strong client relationships while leveraging Lindsay's operational expertise to improve internal processes.

Their journey serves as an inspiring example of how careful planning, strategic partnerships, and a willingness to take calculated risks can lead to successful business acquisitions, even in the face of significant challenges.

As they move forward, Lindsay and Kevin's story will undoubtedly continue to offer valuable insights into the world of entrepreneurship through acquisition, demonstrating the potential for success when couples combine their skills and ambitions in pursuit of business ownership.

Article created from: https://www.youtube.com/watch?v=OxVc9xjTmUc