From Corporate to Travel Entrepreneur: How Shell Zang Acquired Nada's Italy

Shell Zang's Journey to Business Ownership

Shell Zang's path to entrepreneurship is a testament to the power of seizing opportunities and following one's passions. Born and raised in China, Shell came to Texas about 20 years ago to study. Her professional career began in finance, where she spent 4-5 years in management consulting before transitioning to corporate strategy and M&A. After nearly a decade in corporate America, Shell joined a technology startup for three years before deciding to pursue business ownership.

The Search Process

Shell's search for a business to acquire began about a year ago. Although she had heard about search funds and entrepreneurship through acquisition (ETA) a few years earlier, it wasn't until she saw a friend's success with acquiring a business that she decided to explore this path herself.

During her six-month search, Shell focused on businesses that aligned with her interests and values. She was particularly drawn to companies that:

1. Were enjoyable to operate
2. Had a solid foundation
3. Offered flexibility in terms of time and location
4. Had potential for growth

Shell's search criteria included:

• SDE (Seller's Discretionary Earnings) range: $300,000 to $1 million
• Industry: Agnostic, but avoiding blue-collar and home services
• Location: Remote or digital businesses preferred
• Structure: Businesses with existing teams or management in place

Discovering Nada's Italy

After evaluating numerous opportunities and submitting six offers, Shell found Nada's Italy, a luxury tour operator specializing in small group tours to Italy. The business immediately piqued her interest due to its strong reputation, high-quality product offering, and potential for growth.

Key Attributes of Nada's Italy

1. Established brand with 20 years of experience
2. Exceptional customer reviews and word-of-mouth referrals
3. Small group tours (maximum 12 people) offering personalized experiences
4. Strong relationships with local vendors and tour guides in Italy
5. Asset-light business model with negative working capital
6. Remote operations, allowing for flexibility and scalability

The Acquisition Process

Shell acquired Nada's Italy for just under $2 million, representing a multiple of slightly above 3x SDE. The deal included working capital in the form of customer deposits for future tours.

Due Diligence and Valuation

During the due diligence process, Shell focused on several key areas:

1. Historical financial performance, including pre-COVID revenue levels
2. Future bookings and revenue visibility
3. Customer reviews and satisfaction levels
4. Team structure and capabilities
5. Vendor relationships and contracts

Although the business had experienced revenue fluctuations due to COVID-19, Shell was confident in its potential for growth based on its strong product offering and the founder's ability to build a successful business pre-pandemic.

Post-Acquisition Strategy and Growth Opportunities

Since acquiring Nada's Italy, Shell has focused on maintaining the high-quality service while identifying areas for improvement and growth. Her initial priorities include:

1. Enhancing online presence and digital marketing efforts
2. Optimizing the website for better conversion rates
3. Expanding the customer base while maintaining the core demographic
4. Exploring opportunities to offer tours in adjacent countries
5. Gradually increasing tour capacity and frequency

Immediate Wins

Shell has already implemented two significant changes that have positively impacted the business:

1. Negotiating lower payment processing fees, reducing costs from 6-7% to just over 3% of revenue
2. Improving security measures by eliminating the storage of customer credit card information

Lessons Learned and Advice for Aspiring Entrepreneurs

Shell's experience offers valuable insights for those considering entrepreneurship through acquisition:

1. Be open to opportunities outside your initial search criteria
2. Look for businesses with strong fundamentals and growth potential
3. Build a good relationship with the seller during the acquisition process
4. Focus on immediate improvements that can impact the bottom line
5. Balance growth aspirations with lifestyle considerations

The Future of Nada's Italy

With Shell at the helm, Nada's Italy is poised for growth and expansion. By leveraging digital marketing, exploring new tour offerings, and maintaining the high-quality experiences that have made the company successful, Shell aims to increase revenue while preserving the personalized touch that sets Nada's Italy apart in the luxury travel market.

For those interested in experiencing a Nada's Italy tour, visit nadasitaly.com and use the code ETA2024 for a special discount.

Shell Zang's journey from corporate America to owning a luxury tour operator demonstrates the potential for success in entrepreneurship through acquisition. By carefully evaluating opportunities, conducting thorough due diligence, and focusing on both immediate improvements and long-term growth strategies, aspiring entrepreneurs can find fulfilling and profitable businesses to acquire and operate.

Article created from: https://www.youtube.com/watch?v=_5Z4O0-Tucg