Take Five #149: ETA expert explores risky deal examples, creative ways to make them work, and more
Top five must-reads this week in the world of SMB acquisitions and operations
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Take Five #149: ETA expert explores risky deal examples, creative ways to make them work, and more
1. Lender explains how $7.5M deal with 5% equity injection, SBA 7(a) and Pari Passu loan combo, and a seller note closed in 30 days
2. “The CEO's Guide to Strategic Rhythm”
The constant flow of energy into your business—whether that's new information, new team members, or changing market conditions—absolutely demands this kind of adaptability.
Companies that rigidly stick to outdated strategic plans aren't showing discipline—they're showing early signs of rigor mortis.
Your business isn't some static thing—it's alive, constantly changing, and requires ongoing adjustments to thrive. These periodic reviews give you a framework to make those adjustments with confidence.
Setting up regular cadences for reviewing your business scorecards and strategic direction isn't just some nice-to-have practice—it's often what separates businesses that scale successfully from those that hit a wall.
By consistently reviewing at set intervals and replanning each level periodically, you'll develop that invaluable gut feel for your business while maintaining the flexibility to roll with whatever punches the market throws at you.
And isn't that the whole damn point? To build something that's not just profitable today but adaptable enough to stay in the game tomorrow?
Find the rest of Joshua Schultz’s post here.
3. Rule #1 in search deal structures: there are no rules (ok, maybe a few)
4. ETA expert explores risky deal examples and creative ways to make them work
High customer concentration is a great example. This is when you have one customer making up an outsized percentage of revenue – still within the same business (unlike the last example).
I previously worked with a Lab member who ran into this exact issue. They found a business they liked, but one customer accounted for 30-33% of the revenue.
When they came to me asking how to deal with it, and, namely, how to structure the offer, this is how we approached it:
First, we separated the earnings into two parts: $2 million from the diversified customer base and $1 million tied to that one concentrated customer.
The $2 million represented the core operating business with all the typical challenges, risks, and upsides. The $1 million tied to the single customer was treated as a separate issue entirely.
Next, we valued them differently. Hypothetically, we decided the $2 million core business was worth $6 million, at a 3X multiple. As for the $1 million customer concentration issue, we didn’t assign a traditional multiple, because the earnings weren’t dependable.
Instead, we structured it like this: the buyer would pay 100% cash at closing for the core business, and for the concentrated customer, we proposed an earn-out model. The seller would receive 15% of revenue from that customer for two years or, alternatively, 3% of revenue from that customer forever. The seller chose the option they preferred, and it worked out for both sides.
Read the rest of Walker Deibel’s post here.
5. 🔖 Bookmark-worthy watch: Lender covers 10 aspects of SBA acquisition financing that buyers should know
Lender SBA Ray talks about some of the most important parts of finding and acquiring funding for an SMB acquisition, including buyer pre-approvals and what lenders look for, the ins and outs of equity injection, how to use (and not use) addbacks, and more.
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