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Take Five #003:

1. With 10k baby boomers retiring daily, there’s a business opportunity here:

2. Ten do’s & don’ts of finding, acquiring, and running a small business:

Do periodically set the tone of exactly what you want from each person within your company. Every quarter I take a lot of time to think and set metrics and goals for every person in my company. Then I publish them and if the team members hit the numbers, they get bigger percentages of the bonus pool which is based off the company’s quarterly profit. I can’t take credit for this; my predecessor implemented this and I just continued it but I think it’s a great practice. I’m listening to the autobiography of Sam Walton (great book to listed to for General Managers by the way) and he did something like this to make Walmart the behemoth it is today. You don’t get the behavior you ask for from people. Instead, you get what you incentivize. I want to incentivize every person in my company to show up and be fully engaged for the team and for themselves. I also want them to share in those rewards with one another and with me.

As a sidenote, I really was fortunate that I got a small business that measures everything so that we could implement this kind of feedback loop across the company. You want a raise? What do your numbers say? You think you someone else is overpaid? What do their numbers say? You can’t figure this stuff out if you have a crappy back office. So if you get a business that doesn’t have this together, then you’ll want to have a plan from day one of how you’re going to implement such a system.

Ten Do’s & Don’ts of Finding, Acquiring, and Running A Small Business by Bruce Vann on Searchfunder

3. Two perspectives on the Amazon FBA market:

The first thing you’ll notice in the table above is that our two eight-figure listings were both FBA businesses. We’d proven we were able to step up from our previous largest business size of seven figures since we’d sold so many businesses in this range.

What stands out about these eight-figure deals is the days on market: just 10 and 11 days. In less than two weeks, we were able to facilitate negotiations and connect the seller with the right buyer, with over $10M on the table. It also shows the extent to which buyers are willing to move quickly, even in the eight-figure range.

Amazon FBA State of the Industry Report 2022 by Empire Flippers

The key reason for paused acquisitions was that Amazon seller valuations were increasing up to the end of 2021. In the forty-eight-month span from 2020, they doubled. However, the trend didn’t continue into 2022. Valuations are stable, if not declining. Instead, the amplitude between lowest and highest valuations has continued to increase. The average multiple is no longer a representative metric because great businesses are valued multiple times higher than others. Not every seller has a buyer, too.

Some Amazon Aggregators Pause Acquisitions by Marketplace Pulse

4. How to come out ahead through tax savings when owning an SMB:

5. 17 checklists to reference when doing due diligence

From Roman Beylin, founder of DueDilio:

In a previous post, I asked the community to share with me any due diligence checklists they have created, came across, or used. There was a great response and I appreciate everyone who shared their DD list. As promised, I have compiled all the DD checklists in a shared drive. Please use the link below to access them.

Sharing Due Diligence Checklists by Roman Beylin on Searchfunder

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