Texas Business Buyers Q1 2018 Report

Company News|4–5 MIN READ

Texas Business Buyers Q1 2018 Report

by Clint Fiore

We’ve decided to follow the lead of other private companies we admire by doing a quarterly report and sharing it both internally and externally with our audience.  We hope this will show our audience that we ‘walk our talk’ on how highly we treasure transparency in our organization. This Q1 2018 report will be the first of its kind, and we will be repeating it each quarter hereafter.

We hope that this helps people better understand our business and industry (business brokerage is often seemingly shrouded in mystery, and we want to change that), but we also hope this quarterly report will inspire you to pursue excellence and transparency in your business and consider following this example in your own company.

These reports will serve to keep us accountable, and also share the lessons we are learning along the way: mistakes as well as successes.

So, let’s jump into the Q1 2018 Report.

Financial Results

We closed 4 deals this quarter (a new record for closings per quarter!) and although we didn’t beat Q1 2017’s revenue, we have a stronger pipeline this year.

Here’s our closings count per quarter since we started, to put that in perspective:

We brought in $255,521.64 from brokerage, investor fees, and interest income this quarter, which is just a little behind where we need to be for our ambitious 2018 goals. Here’s a look at our quarterly revenue collected over time since we started the company:

Over 99% of our revenue was generated from the flurry of closings (see our Press Release pages for the details on Kustom Klean Car Wash, Nueces Country Smokehouse, Charter School Success, and Number Crunchers Bookkeeping).  Closing four deals in one quarter took a lot of energy and attention!  Next quarter will be different, since we will start seeing revenues from our first company acquisition (more on that later).

Our total transaction volume was $4,181,000 in Q1, putting us at over $12,300,000 in total transactions since we launched in Q3 2015.  We broke the $10,000,000 barrier with our first closing of 2018, on January 5th.  Great way to start the year!

Here’s a look at our cumulative transaction volume over time:

Our Three Core Key Performance Indicators (KPI’s): The Three Measurements in Which We Strive to Be Industry Leaders

Percentage of Asking Price Received at Closing was 108.33% this quarter, which was higher than normal due to one particular deal where we received 129% of ask (long story, but we’re good negotiators).  Since inception, we’ve achieved 98.28% of asking price for our conforming business transactions (defined as established, profitable businesses priced on a multiple of earnings).  We are obviously pleased with this metric: we may be the best in the Business Brokerage world at managing our clients’ expectations with accurate pricing that we can actually go out and get in the marketplace.

Success Rate is the percentage of how many of our conforming brokerage deals we successfully close versus how many we lose for any reason (i.e. contract expiration without selling, deal falling apart and not coming back, company closing/liquidating). We believe we are the only brokerage to share this number publicly. With 4 winning closings and zero losses in Q1, our all-time record is now 19 wins and 1 loss, so we are at a ~95% success rate.

Selling Speed for our 3 conforming deals that closed this quarter averaged 164 Days between first putting it on the market to the day it closed. This was faster than normal, and brought our lifetime average down to 203 days from initial offering on the market to closed deal. We believe this is significantly faster than our peers.

Other Interesting Stats

  • Our VIP e-mail subscriber count increased this quarter from 813 to 1034. This is our captive list of profiled buyers and referral sources, which is where about half of our buyers come from. We continue to enjoy an incredible 34% open rate on our VIP blast e-mail (Industry normal is 12%) by not over-emailing and sending quality deals out first to the VIP’s, then to the marketplaces.
  • As a company we sent out 1,606 emails, had 1,612 phone conversations, and held 49 in person meetings this quarter.

Our First Acquisition

The big news around here was that we took off our Broker hat and put on our Business Buyer hat and purchased a business from one of our clients for the first time this quarter.  Using one of our own employee’s personal cash, we completed a 100% asset purchase of Number Crunchers Bookkeeping and are integrating a market-leading Quickbooks bookkeeping company into our business. We will continue to operate under the same brand name with the same great employees and services and may switch our Appraisals and Valuation work to the Number Crunchers brand name eventually as we feel it has a good ring to it for analysis work.

This acquisition brings us 4 wonderful new team members, 60+ new clients, and over a quarter million in annual recurring revenue into our company. We daily see the need for this type of service and now will be able to refer companies that need help with their books to the great Number Crunchers Bookkeeping team. We also took over their lease and have a great office in San Antonio now we’ll be able to use for our business and teams, further expanding our geographic foothold in that market. More updates and announcements to come on that as we complete the transition.

Currently, Jane Mach, our amazing Executive Administrator is commuting to San Antonio from Kerrville daily to train with Karen Anderson, the Founder/Seller of Number Crunchers. Karen is a wonderful person and has agreed to stay on as a remote bookkeeper and consultant with us after the transition.

Team

Total Team Members: 12

  • Producers: 2
  • Financial Analyst/Appraiser: 1
  • Executive Administrator: 1
  • HQ Operations: 1
  • Inside Sales: 1 (New Hire in March, starts April 9, relocating from Illinois)
  • Bookkeepers: 4 (Came with Acquisition of Number Crunchers Bookkeeping)
  • Independent Affiliates: 2 (1 New this Quarter)

We are delighted with the quality growth and quantity growth of our awesome team. We also hit a fun team goal allowing us to enjoy playing hooky one day this quarter together and enjoying Brazilian Steakhouse lunch and watch Marvel’s “Black Panther” together.

Looking Ahead

We signed up 4 new businesses that will be coming to the market place in May.  We have a Restaurant, Day Care, Interior Design and Staging Company, and Powersports Dealership that will hit the market soon so stay tuned.

We will also have a team of 6 attending the International Business Brokers Association conference and the M&A Source conference in New Orleans May 3-10. It will be a great time of learning and team building where we will be sharing best practices with other industry leaders. Clint once again has been asked to lead a workshop on the high-tech side of Business Brokerage there.

Thanks for reading our first ever quarterly report. Many more to come!

Published May 1, 2018

Topics: Company News

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