The Dubin Method: Acquiring & Growing Businesses

Jordan Dubin, who started a company called Guild, is changing how businesses are bought, especially companies that make and install garage doors.

Instead of just trying to make a quick profit, he focuses on working closely with the companies Guild buys and helping them grow over a long time. This is different from how a lot of investment companies usually do things.

This blog takes a close look at Dubin's ideas on how to successfully buy and grow businesses, based on what he's said in interviews.

1. The Power of Partnerships

Guild's main strategy is to buy a big chunk of a company, but not all of it. This way, the people who started the company still own a good portion and keep running things. This allows Guild and the original owners to work together, combining their knowledge with Guild's guidance. This works really well in industries like the garage door business, where lots of small companies are competing and it's important to know the local market.

2. Identifying the Right Industry

Dubin says it's super important to carefully study the industry you want to buy into. Here are some things to look at:

• Room to Grow: Look for businesses in areas with lots of potential for growth, like the garage door business, which is booming right now.
• Lots of Little Companies: Find areas where there are many small companies. Buying some of these and combining them into a bigger company can make them much more valuable.
• Good Money Habits: Choose businesses that are already making good money and managing their expenses well. This provides a strong base to grow from.

3. Red Flags to Watch Out For

Dubin also points out some important red flags that should make you think twice about buying a business:

• Too Many Outside Workers: It's better to choose businesses with their own team of full-time employees. This makes things run more smoothly and gives you more control. Companies that rely too much on outside workers can be harder to manage.
• A Few Big Customers: Be careful of businesses that depend on just a few big customers for most of their sales. If those customers leave, the business could be in trouble. It's safer to choose businesses with lots of smaller customers.

4. Leveraging Multiple Arbitrage

Guild uses a clever strategy called "multiple arbitrage." This basically means they try to buy businesses for a low price and then sell them later for a much higher price. They also save money by buying supplies in bulk for all the businesses they own.

Dubin explains that this long-term plan works well because it matches what the original business owners want. Everyone is working together to grow the business and make it more valuable.

5. The Importance of Trust and Motivation

Dubin believes that trust and honesty are super important. He wants everyone to be open and share information. He even encourages people thinking about joining Guild to talk to other business owners who are already part of it.  He wants to work with people who are excited about the business and want to grow it for the long term, just like he does.

6. Navigating the Evolving Garage Door Industry

Dubin knows that the garage door business is always changing.  Things like online sales and building a strong brand are becoming really important. He also suggests being careful about relying too much on new home construction because that can go up and down with the economy. It's better to have a mix of different types of business.

7. The Personal Touch

Dubin believes it's not just about the money. He thinks it's really important to connect with people and share similar goals. He works hard and builds real relationships with the people he works with.

Here's what we can learn from Dubin:

• Work Together: Team up with others and use their knowledge of the local area.
• Do Your Homework: Carefully study the industry and watch out for warning signs.
• Think Long Term: Focus on growing the business over time and selling it later for a higher price.
• Be Honest and Open: Build strong relationships with the people you work with.
• Keep Up with Changes: Stay on top of new trends and be prepared for challenges.

If you follow these ideas, you can successfully buy businesses and help them grow!

Ready to take your business to the next level? At Breaking the Mould Consulting Ltd, we specialize in helping entrepreneurs scale their businesses, improve efficiency, and prepare for successful exits. Contact us today to start building the future of your business!