Carl Allen has been buying and selling businesses for the last twenty-six years. Although he lives in the UK now, he says he grew up on Wall Street, an impressive resume behind him. He was an investment banker, worked in private equity, and took part in corporate transactions as well. With the birth of his son, Josh, Carl had a moment where the stars all aligned, and quit his job on the spot! He retired gracefully at the age of thirty-eight from his corporate work to adventure into the unknown of entrepreneurship.
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Knowing he had one skill set, to facilitate the purchase and sale of businesses, Carl knew that’s where he would start his journey. Quickly, interest grew in his success and Allen felt it was time to invest in those people who wanted to learn from him. Ninja Acquisitions was born for people interested in scaling via acquisition, but ultimately, those who want freedom for the corporate world or the “employee” title. He now actively owns numerous businesses and continues in his buy/sell activities on top of leading, serving, and coaching clients through their own empire-building.
Of course we all want to know how he’s winning so big! Allen offers a blueprint for what he teaches and implements in his own acquisitions. He points out that the important part of getting started is for the buyer to do a “leveraged buyout” aka using other people’s money to get the transaction closed.
The deal needs to serve the buyer in some way. “Buy a business that you’ll be passionate about,” he offers. The best success comes from an acquisition that naturally helps the current business. An important factor is the ability to cross-leverage customers and/or products. Ex- Amazon can leverage its customers to shop at Whole Foods, etc.
Grant chimes in that some obvious examples for real estate agents might be credit repair agencies or home staging businesses since it provides value to their current clients within their own business.
Look for a distressed seller, not a distressed business. Carl shares that a recent acquisition was built on the seller wanting his business to be in good hands while he deals with his wife’s cancer diagnosis rather than his need to get out because it is falling apart. Other motivations might include death of an owner or a decision-maker.
Cash flow and assets are everything. Don’t purchase a business that is not already functioning well. Carl notes his observation that successful companies have organized operations that can scale, and have clarity on the benefits of their product that they’ve built their business and growth on.
Carl’s secret ingredient in his understanding and execution of the process is understanding one crucial element, “the logic of buying is totally related to the outcomes, not the mechanics of the process. People buy feelings. Shake shack example: culture makes customer feel respected and happy. Allen doesn’t think that the draw has much to do with the burgers and shakes, and Grant agrees and notes the Starbucks experience has little to do with coffee.
Carl offers a special freebie to us here at the podcast! To learn more about Carl and his methodology: free 90-minute training available at https://ninjaacquisitions.com/grantwise