Acquisitions 101: You Don’t Have To Buy A Whole Business, With Roland Frasier

Foreign. You're listening to Business Lunch with Roland Fraser. This is your seat at the table. Welcome to the show. This is Darren Clark, the producer. In today's episode, our acquisition guru and fine host, Roland Fraser talks about the easiest way to dip your toes into the waters of acquisitions. If you're ready to grow your business creatively, Roland lays out some brilliant ideas that have worked for him and his partners time and time again. If you're finding the show helpful, make sure to hit the subscribe button and go to businesslunchpodcast.com for show notes and more. Okay, let's begin.

So what's interesting is you can buy whole companies, but remember that buyers frequently prefer to purchase assets. So don't be afraid to be like the robber barons of the 80s that were buying companies and splitting them off and selling off all the assets. And don't be afraid to buy just an asset. So you can buy a website for media. You can buy a company, obviously. You could buy a newspaper, right? You could buy a blog, a Facebook group, an Instagram page, a YouTube account, anything. Anything that is aggregating eyeballs. It could be media, could be an association media, could be a television channel, a radio channel, a satellite channel, a distributed network. It's all kinds of things that you could consider to be media. So thinking about that I think helps a lot. Like, it's way easier to buy an Instagram account or a Facebook page than it is to buy a company. So that might be a good place to start to dip your feet in the water of the acquisitions game. And we follow, we learn from Ryan Moran, used to be in War Room when there were only 20 people in it. And he was buying websites long, long ago. And we basically stole his trick for it, which is, okay, how much money are you making off of it? Because we typically pay a multiple of net profit. How much are you making off of it? Most people aren't making anything. Most people are really not making anything off of a Facebook group or a YouTube channel. And if they are like YouTube especially, they typically sell T shirts. That's the only thing they know to do to monetize. So they've got views that are paid if it's a monetized channel and T shirts, and that's all you have to work with. So it's really easy to afford and, and to acquire these things super, super cheap. What usually happens is that they created it to start with because they're passionate about it. And the problem is that it's become a challenge because they're Continuing to support it, but they're not getting anything from it and they've got to work another job that they don't like. So what we do is we'll go in and say, how much are you making from it right now? And if it's $1,500 a month, $2,000 a month, $3,000 a month or nothing, then we'll just offer them the same thing. We would have to hire somebody to come in and pay to do it. So we have continuity of personality and we have continuity of voice. And they're there and they're happy now because they can quit the job that they hate and they can go full time on this job and they're now doing what they love. It's a real win win. It might be an operational team, a salesforce, a development team. It might be that they have some distribution. Right, that you don't have. One of my favorites was a company that was a camping gear company. Wanted to get distribution in all of the retail stores, but knew how hard it would be. And so they said, well, who's everywhere? And so they bought the Diamond Match company because The Diamond Match Company already had SKUs everywhere that sold matches. And so the company was Coleman that bought them. Coleman got distribution in all the retail stores and, and built a ridiculously huge business. So there might be some backdoor to get through some hard thing or maybe they're not accepting affiliates or customers or something like that anymore and you want to slide in, just go buy the company. Really, really fun. To me, the things that you can do with this services, not just the thing that you sell to your customer. If you sell widgets to your customer, it's not that you necessarily want to go buy another widget company or you need to buy somebody that's providing those. It could be financial services, business, publishing, advertising, brokerage, those are all pretty universal. So if you have people that are in business or thinking about being in business, buying somebody that's providing business services makes a whole lot of sense. That's why we bought the mail company. And everybody in the world wants financial companies. Financial companies have giant, giant multiples, right? So you might think about acquiring a company that can provide financial services or add a financial dimension to your company that you don't currently have. Publishing too. Let's say that you would instantly like to be able to have Tony Robbins and Guy Kiyosaki and Brendan Burchard and a bunch of other people and they're all on an imprint. Then go buy the imprint. There's a lot of small, small imprints under publishers that have huge names. And now you own all of the distribution rights for all the content. And by the way, if you buy that intellectual property. I know because I did the contracts for Tony with book companies, right? Most of the authors give all the rights to the publisher, including audio, visual and live performance rights. They don't think about that. And most of the attorneys don't read the 60,000 page contracts that you have to go through. But when I was representing Tony and a bunch of those other people, I had my own contract that I would get back from Simon and Schuster or Random House. They're like, oh yeah, here you go, this is the one. Yeah, we don't have to do that again. We've been through that, right? But they put it all in there. They throw the kitchen sink in the publishing agreements because why not, right? But the world has changed. And so audio rights are huge. Audio rights means that you could acquire a company that's published big names, especially big dead names that everybody knows, but the people aren't around anymore and the heirs aren't thinking about this. You can buy those publishing rights, those publishing rights or the publishing company, you don't have to buy the company, you can buy the rights too. But if you buy those rights now, you can do a podcast, you take the audio rights and do a podcast, you can take the performance rights and do live events. It's really amazing what people don't think of. So there's a lot of, lot of things that you can do with services and products, with products. The way you identify those is, are the products related to the things, the products that you are selling or your people are buying now? Are they potential upsell or downsell products? Are they potential cross sell products, meaning they're not related directly, but somebody might buy this other thing too. Are they a substitute product for what you've got? When you want to talk about the all time you blew it deal when Netflix was not purchased by blockbuster. Was it 50 million, I think it was $50 million that they could do. And that was a substitute that mail, direct mail at the time with an idea towards streaming, when it came into being, was a substitute product for Blockbuster's main cash generator at the time when Blockbuster was at the top. And Blockbuster, by the way, I don't know if any of you guys remember, but Blockbuster, you'd go into a Blockbuster and they'd have popcorn and coffee machines and all kinds of other crap that they sold because they were trying to figure out how to make money. And they just completely overlooked this substitute threat that existed that they could have bought and owned all of. They just overlooked it. So be thinking about because remember when I said I work as if five years from now, every bit of income I've got is going away because I've been out, engineered or substituted away. If you know that and you're thinking about that, you'll be looking for substitute products today. And the easiest way to acquire them is just to buy them.

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