Welcome to The Business Academy with Sieva Kozinsky. Here's what we have in store for you today:

1. The original boring business: Rat poison
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2. Buying $3M for Free
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3. A $9 million landscaping business

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Do you manage 5+ bank accounts across multiple businesses? Me and my finance team used to spend hours each week checking each bank account balance. It was a pain…

Then my friend introduced me to Vesto.

Vesto made it easy to connect all of our banks into one simple dashboard. With real-time balances, transactions, and cash flow monitoring – we went from 50 account logins to one.

For any company managing multiple banks, Vesto is a no-brainer

Thanks to Vesto for sponsoring today's newsletter

​Check out Vesto here​

A simple invention in 1935 gave birth to one of my favorite business franchises...

Samuel Blanc was an inventor and tinkerer. His son, Roy was a plumber who often complained how hard it was to clear tree roots and debris from sewer pipes. This gave Samuel an idea! He invented a motor-powered machine that could clear clogs in pipes.

In 1935, he created a company around his invention.

That company is called Roto-Rooter.

And it's still around today with over 600 locations and over $700 million in annual revenue.

As Samuel grew his local plumbing business, someone wrote to him asking to rent his machine.

He agreed to license the machine for use in a four-county territory (for just $400).

That was the start of how Roto-Rooter began expanding via franchising.

The Roto-Rooter machine gave the company a clear advantage over competitors:

They could clear hard-to-reach clogs in a few minutes, while competitors spent hours fixing the same problem.

Guess which one the customer preferred.

This patented technology helped Roto-Rooter expand accross the country

Here's a few ways the company grew over the coming decades before selling for $23 million in 1980:

• Franchising: Roto-Rooter expanded aggressively through franchising, which allowed for rapid national growth. They licensed over 100 territories in the first two years of the company. Franchisees were often local entrepreneurs who could operate with local knowledge while under the Roto-Rooter brand, ensuring consistent service quality.
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• Marketing: The company became well-known through catchy advertising; their slogan "Away go troubles down the drain" became iconic as the business went national. Radio and later television ads helped build brand recognition.
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• Service Diversification: Over time, Roto-Rooter expanded its services beyond just sewer line clearing to include plumbing repair, water cleanup, and drain cleaning.

Now let's go back even further.

Pest control was an industry ripe for innovation in 1901.

That's when Otto Orkin started selling rat poison from a horse-drawn wagon and later developed the "Orkin System" for controlling pests.

His system was the basis for Orkin, the pest control company we know today with more than 400 locations.

124 years later, it's incredible that a seemingly simple system has withstood the test of time.

The lesson:

Find a unique system or technology. If it's innovative enough you may be able to use franchising to expand.

If you're interested in this concept, I did an interview with Aaron Harper. He found a business with a unique system and technology, and has franchised it to 200+ locations within two years You can listen to the interview here. Episode two is coming soon

🔑 Buying a $14 million revenue business for...FREE?

You'll like this...

Carlo finds a manufacturing business with $3M of EBITDA. He agrees to buy the real estate and business for total: $16M.

The seller gives him a $2M seller note. He is able to sale-lease back the property for $10.5M. Which means he just needs $3.5M to buy the business. He learns there is $14M of inventory in the business, so he's able to get the $3.5M as an asset backed loan from a lender.

He gets the business for zero money out of pocket.

​Check-out the story here​

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🔑 One interesting deal

Here's a nice business to check-out...

What I like

Who doesn't like a profitable landscaping business? Especially one that's been around for 15 years.

The 5x multiple seems on the higher end. I'd prefer closer to 4x. The business' margins seem healthy as well.

However, the listing is only a small sample of the information that the broker wants us to see - You'll always uncover stuff after getting in touch with the broker and asking some questions. But the listing looks good to me, so I'd definitely reach out and get some more info.

What I don't like

One thing I noticed in the listing is that the lease for the company's location seemed to have expired at the end of January (the listing was written a few months ago). I'd want to know if that lease got renewed and at what price. Better yet, if the seller owns the real estate, you may ask to buy that too.

​Check out the listing here​

Have a great week,

Sieva

P.S. Last week I announced our yearly Enduring Ventures Duration Summit. We hand-pick the attendees which includes holding company owners, investors, business owners, and long-term thinkers. If you'd like to apply for a spot, learn more and apply here.​

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Disclaimer: nothing here is investment advice. Please do your own research. The information above is just for information and learning.

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