Heyo,

Let’s talk synergies. One of the most common reasons an acquisition happens is for synergies.

This word has been overused and butchered for years. In theory, it makes sense. Company A buys company B in the same industry and they THINK they can merge marketing, back office staff and expenses, more leverage with suppliers and 10 other reasons.

Rarely does this actually work.

Incentives.

Back office staff or admins might have different incentives such as job preservation or they just don’t like change. No one does. They also might not like new management and are resisting that.

In my experience, even when you will make people’s jobs better and easier, they will still resist change. 🤷‍♂️

Executives have a different goal than employees. Some executives are deal junkies and that’s it.

Executives rarely are the ones IMPLEMENTING the changes — more so just mandating them or giving direction.

Merge Marketing

This is tricky to give generalizations here BUT merging marketing costs is hard.

The best scenario I see here is if your marketing team has extra bandwidth currently and they can start doing PPC, etc with the larger companies.

Supplier Leverage

Unless you are massively taking over market share, you won’t have any leverage. It is what it is.

Discount this advantage.

So when you are buying for synergies…

• Make sure everyone is aligned and incentivized — the devil is in the details.

• Reduce your % of assumed synergy cost savings and/or your improved marketing.

• Reduce your lofty goals for everything. You need a huge buffer to make sure this works.

But, synergies is a fun word to say.

Dave Lowell is fantastic. He’s not your parents’ financial planner where there is no fun till you hit 65. Dave is a financial planner that wants you to have fun too.

1. Exceptional Investment: High-Profit Amazon FBA Business (Automated)

Asking: $750K

Revenue: $2.8 M

Cashflow: $880K

You'll see a lot of these listings. Avoid them. Anything that preaches 'minimal effort' or basically do nothing, run.

These businesses hire an agency to run the Amazon FBA store for you. "While Amazon is an extremely competitive e-commerce marketplace, the team overseeing this business has a winning strategy to outperform rivals."

If this was true, then they would do it themselves and keep 100% of the proceeds versus the 25% they take now.

Just pointing out a terrible opportunity here on our first deal....

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2. 35+ Year Well-Established Family Medical Practice with $1 Mil+ EBITDA

Asking: $3.7 M

Revenue: $3.7 M

EBITDA: $1 M

What I like...4 years of $3.6M in revenue on average. 35+ years of course and loyal staff.

90-95% of the business coming from referrals and repeat customers. I'd verify this claim but if it's true...Many of these items are verifiable. I'd spend a big chunk of time understanding the market nad employees. What makes the employees tick here.

What I don't like... I know nothing about the medical industry. Why isn't someone larger (i.e. PE firm) rolling this up?

***Was the owner the main doctor OR the face of the business? Big risk if so.

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