If I had $0 and wanted to start a Personal Holding Company (PHC), here's how I would do it: (IMO, this will be the most straightforward way for anyone to become a millionaire)
MACRO • $30 *trillion* of SMBs • 10,000 boomers retire every day • 2.4M businesses for sale • 70% are expected to be sold in the next 10-15 years
BORING AF Most of these businesses are boring, which means it'll be overlooked by a younger generation. Sexy = Tech Startups, Content Creator, eSports Unsexy = Laundromat, Lawn-care, Car washes The more boring you go, the less competition you will face. Here's the playbook:
1. ACQUIRE • Find a local niche • High margin, cash flowing businesses • Priced at 3x - 5x EBITDA • Make it a win/win for the seller (and not just a transaction) Here's a list of boring businesses:
contrarianthinking.co/130-boring-bus…
For example, I'd look for something like a cleaning business: • High repeat rates (weekly, bi-weekly, or monthly) • Billing can be set to auto-renewing subscriptions • Schedule through website • Partner with Airbnb hosts • Pay cleaners top of the market • Eco products
2. FINANCE • Seller Financing - buyout the company with revenue/cashflow • SBA 7(a) Loan - when rates are low but will require a personal guarantee • Raise Capital - from friends and family or debt providers
3. MODERNIZE • Shift from pen/paper to tech-enabled (scheduling, billing, website, social, etc). • Grow through referrals, organic, and acquisition marketing. • Operationalize via SOPs and training. • Hire great talent and offer tracks to rise the ranks.
4. CASHFLOW • Reinvest cash to acquire other boring businesses within the same niche. • Continue to streamline operations and hire great talent. • Build a local brand of multiple locations.
5. EXIT • Grow revenue to millions and sell at a higher multiple. • Or, continue to expand locally, regionally, nationally. • Or, hire CEO/GM to get out of the day-to-day and work on new things.
Over the next decade, this will be one of the biggest wealth transfers in our lifetime. If you have limited experience and capital but unlimited drive and energy, this is the most straightforward way to becoming a millionaire.
