In episode 464 of the Built to Sell podcast, host John Warrillow talks with Jim Lindstrom, an experienced entrepreneur, about how he buys, grows, and sells businesses. Lindstrom shares useful tips for business owners on managing this process. Here’s a simple summary of the key points, focusing on how to buy businesses, grow them to increase their value, and sell them successfully.
1. The Art of Buying a Business
Lindstrom starts by sharing his approach to buying businesses. His key idea? "Buy a business you know you can improve." Instead of just buying successful companies, Lindstrom looks for struggling ones that have room to grow.
Key Strategies for Buying:
- Research: Lindstrom highlights the importance of doing thorough research. This means not only checking the finances but also understanding the company’s culture, customers, and market position.
- Deal Negotiation: Lindstrom suggests being flexible when making deals. He prefers using seller financing or performance-based payments, which often makes the handover easier.
2. Growing Value: Improving and Expanding the Business
After buying a business, Lindstrom's next focus is on making it better and preparing it for future growth. He shares a few strategies he uses to increase a business's value after taking over.
Key Building Strategies:
- Making Operations Efficient: Lindstrom believes in improving how a business runs by simplifying processes. He shares examples of cutting unnecessary steps, lowering costs, and boosting profits by fixing inefficiencies.
- Investing in People: Lindstrom focuses on building a strong team. He looks for talent within the company but isn’t afraid to bring in new leadership if needed. He thinks the right people are key to business growth.
- Focusing on Customers: A big part of Lindstrom’s strategy is always keeping the customer in mind. He works on improving the customer experience, which helps keep customers happy and makes the business more attractive to buyers.
3. Preparing for Sale: Timing is Everything
Lindstrom points out that selling a business is all about good timing and proper preparation. His method involves making the business profitable and attractive to the right buyers.
Key Selling Strategies:
- Building a Sellable Business: From the start, Lindstrom runs the business as if it will be sold one day. He sets up systems, ensures steady income, and reduces reliance on any one person—especially himself.
- Increasing Value: When it’s time to sell, Lindstrom focuses on increasing the business’s value by highlighting its growth potential, stable revenue, and loyal customer base.
- Finding the Right Buyer: Lindstrom talks about the importance of choosing a buyer who shares the company’s values and long-term vision.
4. Lessons Learned and Common Pitfalls
Lindstrom's journey had its challenges. He openly shares the mistakes he’s made and the lessons he’s learned.
- Underestimating Integration Costs: Early on, Lindstrom made the mistake of underestimating the costs and difficulties of merging a new business. He found that, even with careful planning, unexpected problems can come up during the process.
- Being Too Involved: Lindstrom also learned that sometimes it’s better to step back. While he likes to be hands-on, he realized that being too involved can prevent the team from growing and the business from running on its own.
Final Thoughts: A Blueprint for Success
Jim Lindstrom’s journey shows how smart business buying, improving operations, and planning strategic exits can lead to success. His talent for spotting potential in struggling businesses and focusing on building strong, scalable companies offers valuable lessons for any entrepreneur. Whether you’re thinking of buying a business, growing one, or preparing to sell, Lindstrom’s advice from this Built to Sell episode provides a clear plan.
By following his method—doing thorough research, building solid operations, and choosing the right time to sell—you can successfully navigate the buy-build-sell process and reach your business goals.
Ready to take your business to the next level? Breaking the Mould Consulting can help with expert guidance on buying, growing, and selling businesses. Get in touch today to start your journey!