How we've hired 100+ operators (some amazing some spectacularly bad).
A π§΅
How to find this elusive human who will do all work while we cashflow?
Stop, no free lunches, expect skin in z game.
I started as an operator. Like a RE property manager.
They took $ risk, I took time risk.
Done right. You are giving only path to REAL wealth... ownership.
THE BEST PARTNER OR OPERATOR.
Always is one of two things:
- Potential talent - someone you know and trust or someone
OR
- Proven talent - who has done the job before
I don't like having people learn on our dime at the top.
If we can bring someone up in the biz that's ideal.
If not we go find a known commodity.
Our trick when we don't have a bench (rule #1 always have a bench)
We were looking for an automotive shop manager. Here's what we did:
Step #1: Call or Visit the TOP local franchises or Companies
- Become a client
- Asked for the manager
- Dropped a card or asked them to call me back in their off-time if they are interested in an opportunity to run their own garage.
- Only 1/2 of 10 will do it.
Step #2: Compensate well: Pay for Performance
Proven talent will cost more.
Consider a bonus-based pay or an earn-in or buy-in for equity.
βIf you think itβs expensive to hire a professional, wait until you hire
an amateur.β β Red Adair
A skilled laborer cannot always step up to lead.
Look for experience as well as leadership in their past.
The past is the best predictor of future.
Step #3: Look for military
- A military officer
- A leader in a past role
ie: @whatruss or @KKR_Co and search funds always snapping up SOF
Skill can be taught, but leadership often shows up on a resume prior to the hire.
Step #4: Or CPA's/Former Finance
- Oddly a LOT of former finance burnouts (this lady here included) who turn to SMB acquisitions
- If I can get one early to run a company for me I LOVE IT, they'll often be perfect for roll-ups
ie: @matthewghinson@sam_rosati etc
Step #5: Mind F' Em
I really mean, do a behavioral assessment. We use DISC.
There is a type you are looking for, don't deviate.
Step #6: Structure the deal for 3-5-10 year periods
- People change.
- Your business will change.
- Give them different payouts depending on how long they stay & how they perform.
Otherwise in 3-5 years you'll be pissed when they look to leave w/ 40% ownership.
I LOVE hiring ex military. Don't sleep on that one.
They served us, now is our chance to get them ownership.
TLDR:
- you bring $
- operator brings time
- steal talent
- pay WELL
- proven vs potential
- military
- CPA's & exfinance
β’ β’ β’
Missing some Tweet in this thread? You can try to
force a refresh
And narrows down which to buy often in 30 seconds...
A 𧡠featuring my new homie @SievaKozinsky DD process:
How to go from 3,000 -> 1,000 deals
Narrowed down by looking quickly at these 4 things..
Know your parameters = save your time.
- Type of business
- Cashflow amount
- location
- profit
Only 1-3 hits those amounts rest.. (30sec review)
1,000 --> 500
- Financials (learn how to spot a healthy biz is largely in the #'s)
Oh, they're a mess & you're actually not profitable.
Well, except I think the SBA loan programs are pretty d*mn close.
A thread on OPM from the good ole' US government:
SBA loans... a quickie π
- Can get loans up to 90% of your qualifying biz purchase price
- Govt backs a portion of your loan
- Max usually $5M
- Loots of new benefits during Covid to read up on
They're basically copies of what big PE firms do with their partner lending firms.
I beseech thee... if you learn one thing, learn to structure deals.
Nothing else has made me more $
WARNING: This is technical - but I'm not here to entertain you, I'm here to mutually grow.
Let's go to school eh?
EVERYONE IS OBSESSED W/ The VALUE of a Business.
OMG - how much did @TheHustle or @MorningBrew sell for?
I guarantee that # is less interesting than the terms.
Devil is always in the deal details.
Know how to work the details, you'll own the deal.
Remember this:
Every deal has two aspects Price & Terms.
My saying, "You can have your price and my terms, or my price and your terms... but you can't have both.