SMB integration tip:

At takeover, look out for the folks who are both key-men and serious problems.

Immediately set to work peeling back and eroding that key-man status.

You'll be glad you did. We were. Too many business owners find themselves in this situation.

They end up feeling held hostage by the team member.

Other employees want the owner to take action, but they "can't."

We dealt with this recently. Here's how I approached it:

Creating an adaptable learning organization is one of the most impactful things you can do for your business.

It's not just for the big orgs.

Here's what I'm thinking about with my plumbing company: Excessive call-backs destroy our productivity and hurt our credibility.

We watch this metric closely to identify techs that need more "love." Any decent plumbing co does.

But there's more to be gained here.

Time-Slot Dispatching sucks.

My plumbing business is ditching time slots.

Here's why & how: Once the day gets rolling, time windows become hard to hit and nearly impossible to guarantee.

To compensate, many co's end up giving wide windows: 8-12, 1-5, etc.

This turns into a lose-lose situation. Everyone hates it.

There's a big difference between Productive and Non-Productive costs.

Not understanding this difference will lead to stagnation in your business. Productive costs:
- Advertising
- R&D
- Sales
- Production capacity
(increase bottom line, lead to more business)

Strive to outspend your competition in these areas. Be ruthlessly efficient elsewhere.

SMB Tip:

Fight to gain control of your business' online reviews.

Don't leave it up to probability. Early on, I set an auto follow-up email containing a review link to be triggered days after an invoice was paid.

Slick, right?? Well, no.

Available cash & timely action wins the day.

Got a cold-call today from a small plumbing shop in my area looking to sell their 250 commercial service accounts.

We weren't his first call, but I had an offer to him within a few hours. He replied within 5 mins w/ a counter. Deal. We're nearly 100% residential service, so this is a great bolt-on for us.

The service provided (backflow prevention testing) will have ~80% gross margin for us and is req'd by law to be performed annually at a minimum.

SMB vs. CRE - Which one should an operator pursue first?

My take: SMB first.

Here's why: First, key assumptions:
-You're using your own capital
-You're "dangerous" enough to feel competent in either realm
-Simple examples: no growth, closing costs, WC, etc.

Stats show that a majority of business partnerships fail.

It's important to get the partnership on the same page on the things that matter.

The following are my plumbing partnership's guiding principles: First, Do No Harm.

This is currently a profitable operation that we must be careful not to de-rail. In the early weeks and months, observe and take notes. The time for implementation of change is not Day 1.

Something I'm observing:

~3 out of 4 calls we get are from folks aged 70+. Why?

For the past 30yrs, seller had very little marketing. He's grown by word of mouth referrals and customer retention.

And his customer base has aged with him. My assessment: As we ramp up our digital and trad. marketing efforts, we'll be targeting an entirely new demographic without expanding our service area.

Not out of the question for us to 2x (or more) our customer reach in the same geo.

SMB lesson:

Day after acq. announcement, heard rumblings that our senior plumber felt job-insecure and betrayed by the transaction.

Big problem when my largest vulnerability is the skilled trade talent. I looked at the schedule and saw he was beginning to install a water heater close by.

This was Friday around 12:30. I knew he'd been planning to leave work around 2pm to take his family on a trip.

Not gonna happen if he's working alone.

Books I've found most useful to get smart on small business acquisition and operation:

1. Financial Intelligence for Entrepreneurs

An excellent primer on understanding the numbers of business. Easy read. Actionable.

amazon.com/Financial-Inte… 2. HBR Guide to Buying a Small Business

Centered around the search fund model, but full of great info on business search, selection, negotiation, closing, etc.

amazon.com/HBR-Guide-Buyi…

I often talk to my students (budding Marine officers) about gaining an advantage.

When faced with even or unfavorable odds, how can a relative advantage be created at a single point - either in time or space? Exploiting one single gap is often enough to unravel an opposing system. The relative advantage gained snowballs. 

See B.H. Liddell Hart's "Expanding Torrent" speech for an excellent metaphor. regimentalrogue.com/misc/liddell-h…