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#16 | Buy vs. Build - What Should I do?

May 21, 2024
#16 | Buy vs. Build - What Should I do?

When I set out to buy a small business, the plan was to find a business that is complementary to ProjectionHub.  I started my search by listing different types of businesses that I thought I would be interested in, and then I started researching.  I have found many off market businesses that I am interested in, but the problem is I have had very little interest in selling from the current owners.  

Admittedly it is discouraging.  

I am trying to think about it as planting seeds right now, and maybe in the future when the owner is ready to sell, they will think of us.  

But at the same time, I can’t help but wonder if I am wasting my time trying to find a business to buy that is complementary to ProjectionHub and instead maybe I should just hire additional team members to help build that new division of the company.  

To give you an example, I think an obvious opportunity for ProjectionHub is to expand into Real Estate financial model templates and custom financial modeling services for real estate developers and investors.  We have built an initial set of financial projection templates for multifamily apartments, self storage, strip malls, and commercial office buildings for example, but there are probably 100 more real estate templates we could build to support various scenarios.  What if you want to build a mixed use property with commercial space on the bottom, apartments for rent, and condos for sale along with a parking garage with a contract with the city for city employees to park.  

Every real estate project seems unique which provides great opportunities to build new and better templates as well as provide custom modeling services.  

Ideally I would like to buy a business that already does this kind of work, but I haven’t had much luck yet with the companies I have reached out to.  

Here is an example I came across last week from one of our newsletter readers - https://www.realdata.com/ 

The site has good bones, has been around for decades, and probably has a great customer list.  It could probably use a design refresh and we could implement our sales and customer service process, but I do think it could give us a nice head start when compared to building the tools and experience internally.  

That being said, since closing an acquisition might be a long shot, I am starting to wonder if I should just spend my time and effort building this division?  

I struggle to spend time and potentially have nothing to show for it, which is what this acquisition process feels like sometimes.  

I would love your feedback, how do you think I should focus my time? If I have good growth opportunities for the existing business should I focus there, or should I continue to spend time trying to acquire the right business?  I think I will continue to look for acquisition opportunities, but at what level of effort is the real question. 

Until next week,

Adam

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I would love your feedback, how do you think I should focus my time?