How Luke Peters Turned a Used Bar Fridge into an $80M Acquisition Target
On the Built to Sell Radio podcast, Luke Peters shared his incredible journey from selling a used bar fridge to building an $80 million company. As the founder of NewAir, a home appliance brand, Peters' story is packed with valuable lessons for entrepreneurs.
Starting Small with Big Ambitions
Luke Peters’ business began in a garage, where he sold a used bar fridge. This sparked an idea, and in 2001, he launched NewAir, focusing on compact appliances like mini-fridges, air conditioners, and wine coolers.
From the start, Peters sold directly to customers through his own website, which was a bold move at a time when most businesses sold through traditional stores. This direct-to-consumer (D2C) approach helped him control profits, customer experience, and branding.
Growing Through Online Sales and Retail Partnerships
The rise of e-commerce, particularly platforms like Amazon and eBay, helped Peters scale NewAir without the need for physical stores. He was an early adopter of online sales, and it paid off.
But Peters didn’t stop there. He partnered with big retail chains like Walmart, Home Depot, and Best Buy, selling NewAir products both online and in stores. This mix of online and retail sales gave the company a strong, steady revenue stream.
Facing Challenges in Business
Growing a business isn’t easy, and Peters faced his share of challenges. Managing cash flow was one of the toughest. As demand grew, so did the need for more stock, and that required more money upfront. He had to find ways to balance growth with maintaining profitability.
Hiring the right team was another challenge. Peters realized he couldn’t do everything himself. He needed experts to handle key areas like marketing, customer service, and logistics. Delegating these responsibilities allowed him to focus on scaling the business.
Creating a Sellable Business
A key lesson from Peters’ story is the importance of building a business that can run without the owner’s constant involvement. In the early days, Peters was heavily involved in the day-to-day operations. But as NewAir grew, he began to step back, putting systems and leaders in place to handle the daily work.
This not only made the business more efficient but also attractive to potential buyers. A company that doesn’t rely on the owner is more valuable because it can continue to run smoothly after a sale.
Standing Out with Unique Products
As competition in the appliance market increased, Peters knew NewAir needed to stand out. He focused on making his products different from others. This meant adding unique features and offering designs that appealed to customers. This strategy helped NewAir carve out its own space in a crowded market.
Getting Ready for Acquisition
After building a successful business, Peters began receiving interest from private equity firms wanting to buy NewAir. Instead of rushing into a sale, Peters took his time. He worked with experts to understand the true value of his company and found the right buyer who shared his vision for NewAir’s future.
In 2022, Peters sold NewAir for $80 million. The acquisition was the result of years of hard work, smart decisions, and creating a business that could thrive on its own.
Lessons for Entrepreneurs
Luke Peters’ story offers several key lessons for entrepreneurs:
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Start Early with E-commerce: Peters took advantage of e-commerce platforms like Amazon early on, helping his business grow quickly.
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Diversify Your Revenue: Selling both online and in retail stores helped protect NewAir from relying too much on one sales channel.
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Build a Strong Team: Delegating tasks to the right people allowed Peters to focus on the bigger picture and grow the business.
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Differentiate Your Products: By offering unique products, NewAir stood out in a competitive market.
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Prepare for the Future: Peters made his business attractive to buyers by ensuring it could run without him, which led to a successful sale.
Conclusion
Luke Peters’ journey from a used bar fridge to an $80 million business is an inspiring example for entrepreneurs. His strategic approach to online sales, building a team, and product differentiation led to NewAir’s success. Entrepreneurs can learn from Peters’ experience, especially his focus on building a business that can grow and eventually sell for a high value.
Learn how Luke Peters grew a small appliance business into an $80M acquisition. Want to scale your business? Contact Breaking the Mould Consulting today!
