Business Buyer Diaries: the Reality Before, During, and After
<p>Welcome to the Business Buyer Diaries. My name is Nathan Platter, I’m a full-time employee, and I bought a business! I did everything right from finding the deal, handling due diligence on 63 different opportunities, and ultimately buying a profitable gym, and boy was I in for a surprise as a new owner! I chronicle everything in real time, including the biggest wins to the stressful nights at 2am. I’m sharing my journey without sugarcoating anything, so you don’t repeat the same mistakes I do.</p>
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Business Buyer Diaries: the Reality Before, During, and After
343. How I react to pressure, management next steps, Unknown upside.
Hiring the right people can make or break a business, and my experience with a new general manager taught me this lesson the hard way. This episode uncovers the regret of not acting swiftly when issues arose, emphasizing the need for strategic foresight in staffing decisions. Facing financial strains and pondering whether to keep investing or step back, I explore alternative income streams and share insights into handling business transitions with care. Tune in for a heartfelt narrative of resilience, responsibility, and the relentless pursuit of entrepreneurial dreams amidst life's chaos.
Happy Friday, alright. So as pressure builds up and things look uncertain, I'm figuring out how I react to difficulties and how I plan for adversity. There goes a car and so just it's tough just putting money in and folks like folks think like, oh, business owner, like everything's so easy. And then all of a sudden, like you put money in and then it folks think like, oh, business owner, like everything's so easy. And then all of a sudden, like you put money in and then it just goes out the window and end of month, and then it's always kind of crazy. So the last two or three days of the month we have a surge of revenue. Like or 30 percent of all of our revenue comes in the final like four days of the month and it just like comes spewing in because we've had historical challenges and that's the auto enrollment that we have after the challenge, and so, uh, that's just how it happens to be a larger influx, because that's when people like signed up, and so there's also the sba payment, the commercial rent payment and like paying off the credit card. That all comes at once. So it's just tough because it's a big surge of revenue, big surge of expenses, and so it's a big like up and down and it's hard to handle that pretty smoothly.
Speaker 1:But, anyhow, I got my day job bonus and I've been battling some envy. I got my day job bonus and I've been battling some envy. So my coworkers one of my coworkers is getting a new, my coworkers is getting a new Lexus. I don't know if it's like a super fancy one or what, but he's getting a Lexus. Someone else is renovating their home in San Francisco. Someone else is getting a couple like project cars out in Washington where he lives. And so I'm I'm seeing like I'm seeing the fun things that people get to spend their money on their bonus on, and that's going to be two months of keeping the gym open. Part of me wants to just call it quits, put the money for myself and do something on my own. So, um, it's a bit of something. I've been battling some envy that people get to enjoy their bonus and I'm putting my bonus into being responsible.
Speaker 1:And, well, I'm putting into some, into something that I've committed to that I'm gonna stick with for now, but something that I kind of a fun trivia thing I did years ago. I found out about a spot where I can buy basically like returned merchandise from a retailer and like when you buy. And so I bought like 10 flat screen TVs, like 65 inch full size flat screen plasma TVs. I bought 10 of them for like I don't remember, like seven grand or something, and at the time the value of all of them together was probably like $18,000. And so people buy them, like oh, it doesn't fit quite in my living room, and then they return them to like Best Buy or Target and then those stores now sell them at a massive discount, like 70%, half of retail value. So I bought them for $7,000. I probably made $8,000 in total on it, but it's an experiment.
Speaker 1:And so, after this bonus, realizing, okay, what can I do? And I haven't done it in years, I just did it and it was just a lot of hustle to try to sell them and it was more than what I wanted to keep doing. So got the influx of cash for the bonus I want to put it towards the business and being responsible. And so, like, what else can I do? What can do? That's like similar. And I had the random like memory of like, oh yeah, I remember when I flipped flat screen TVs.
Speaker 1:So I looked on the site and I found basically a lot of. So I looked on the site and I found basically a lot of and I don't mean like a bunch, I mean I could actual like a couple pallets of like a pallet of MacBooks that either a business or like a school had sold, and they're just liquidating them out. They're selling them as a bundle, and so I'm like all right, let's do this, like so, put, put a chunk I don't know 20% of my bonus towards a lot and bought like 18 used MacBook Pros, and my goal is that these are in really good shape, they're refurbished, they're running, they're operating. Someone just wanted to get rid of them. They don't want to maximize revenue. So I bought the lot and they arrived at my house and in the past couple of nights, my wife and I have been taking these laptops, turning them on, powering them up, buying charging cords for each laptop, cleaning them up, scrubbing them down, making sure they're completely wiped and good to go, and then updating their platform so that they're bug free. They're updated, they're recent. Some of these are not like super new.
Speaker 1:So then, but trying to just do some hustle muscle and flip these with the hope of making 100, maybe 200 profit per laptop to generate. I'm aiming for a hundred dollars a laptop, that's my goal, and so $2,000 for I don't know. We worked together three hours together, so six hours of work. We'll say an hour of due diligence, probably two hours Cause some stuff I did not buy this was when I did. So it's two, eight hours, eight hours of work, and then listing them, that'll be another four hours, 12 hours of work, selling them or like um packaging and shipping, that'll be another three hours of work. So 15 hours. I don't know um, just napkin math. Two thousand dollars for 15 hours of work and that's, and this whole time I don't have a business entity set up. So this is all paying the taxes on the purchase, paying taxes on the sale, paying a lot of expenses and fees that I could be writing off, and so, as a consumer doing this, making like $100 an hour is what I'm hoping for, that's what I'm targeting. And then, if everything looks good, by doing the exact same everything but having more write-offs along the way, um, maybe like 120 bucks a laptop, so like 2000, maybe 2200, and um and revenue or profit per laptop.
Speaker 1:But just trying to be creative. I know I'm taking forever to get to the point, but being creative on how to find value. It's not being done, and something that I've that I've like reverted back to. Just my style is I like to go bargain hunting kind of the stuff you see on like american pickers or like garage flipping, but finding stuff that's overlooked and neglected. Overlooked and neglected Stuff that can be bought at a bulk price and then sold as individual pieces, but stuff where I'm basically a merchant or a retailer, it's just what I stumble into. That's not good or bad, but if I'm going to make this worth my while, I'm going to have to do a lot more than just this. If the studio is losing eight grand a month, I basically have to buy gosh thousands and thousands of dollars like many thousands of dollars worth of laptops a month and be flipping them. And I've been going slow. I haven't been working on this every single night. I probably could have gotten this all done in two days if I had really focused on it. But it's more of a test run to see if the products are good, if my process is tight, if this is a repeatable thing Something I'm noticing just with this experiment with the TVs.
Speaker 1:People don't care about them. They kind of care about the brand, but they more care about the viewing experience and the size. So with the TV, it's a pretty basic measurement how big is the TV, is the color good? And that's about it. Laptops are a lot more picky. People care about like processor speed, memory speed, the year of production For MacBooks. If you have a 10-year-old MacBook, they only can update to a certain software level. You can't get the latest iOS system with a brand new MacBook. You're probably good for another two or three software stages. So having a good old MacBook, you're going to get capped on your latest and greatest platform. So just little things like that. Laptops are more finicky, more picky by the buyer and the aesthetic is really going to matter. If a TV has a dent on it, people don't care. If a laptop has a dent on it, people care a lot more.
Speaker 1:So just learning about the product industry I know my process and I know my margins and so, um, I know my process, I know my margins, I know how to list, I know how to deal hunt. I don't know if my product category is any good, but I'll stop there about the, the details of it, just learning how I operate under pressure, how to revert back and how do I figure out how to get unstuck on something? And I, I double down, like somebody told me recently that I'm a gambler, like a strategic gambler, and in this arena they're kind of right. Like nobody pulls out their American Express card and buys 18 used laptops with the gusto and confidence that they're going to make money on it. I may be right, I may be wrong, but I'm going to at least pull out my credit card to give it a shot.
Speaker 1:And with the business and the studio, you could make the argument that well, I can make as much money if I was cold calling leads for scheduling appointments, if I was doing in-person sales. Potentially I don't think it would be as profitable use of my time, and so it sounds bad. But I think my time is more valuable flipping physical products. I don't know well, we're giving it a run, but not giving up trying to figure out how to do it with my gm today and we're in a good spot. Basically, we figured out uh oh, there's a big nest over here. There you go.
Speaker 1:Um, we figured out what an departure looks like. So this coming week on monday, we have our team meeting. He's basically be announcing that he's wrapping up his time as the GM and then on Saturday he's going to do a departure post the members only page and then we'll figure and I'm not going to disclose like how he and I are doing like the golden parachute wrap up thing. That's his info. That's confidential but we want to. I want to make sure he lands in his feet well and can find a job that pays him fairly and that he's able to to leave on good terms and get paid well for it. And so all I have to say I think I'm optimistic there's gonna be some glimmer of hope feels, because right now instructor engagement is low. I think instructor morale is a little bit low. Out of my 13 or 14 instructors, only like three are actively engaging on our instructor page. So I think people are just going through the motions right now, which is disheartening, um, and so I think, acknowledging yep, this person's wrapping up.
Speaker 1:Don't know who the future is, but here's how I'm finding my next permanent hire. I think it'll be a sigh of relief for a lot of people and it sounds bad. I still think it's a heartless thing to say. But it's the classic hire slow fire, fast. And when I hired my GM I didn't have any other options, but I had to find someone instantly. There was no one in the wings, no one who was getting trained up to be that future leader, and so it was either like me or nobody, and I couldn't afford to do it. It would cost too much to be the GM of the studio. So, for better or worse, he was the best pick and I knew probably within three weeks there was a two weeks, no, two weeks.
Speaker 1:This is a heck of a lot of friction from members, from instructors, just a lot of friction, just not going very well, and I probably should have done like a 30 day, pivot away faster for his sake and for the studio's sake, which sounds so heartless. But I think they would have dodged a lot of attrition, a lot of frustrations from people. And so part of that is I need to have backups and plan Bs earlier on, because if I'm left holding the bag, then I'm basically hiring whatever's left, and that's an awful spot to be in. So that's where that is at. Management team finds out Monday, members find out Saturday. He'll do his two weeks notice at that point. That's what he's mapping out at least, and then I have one or two people in mind for taking over lead. But we'll figure it out from there.
Speaker 1:I don't have a full plan. I talked to the banker today, basically vented to him about the state of the business. He was not very helpful. So I'm not quite sure. I'm not quite sure what I can do for the business other than keep putting 10 12 000 a month into it and hope that something magically turns around. I don't know what to do. I really don't, and so how long do I just keep doing that, waiting for a miracle, versus just seeing the writing on the wall and calling it quits?
Speaker 1:I don't know the answer, but that's why I do these out loud. Help me think so. When there's pressure, how do I react? How do I find value in the marketplace? What other side gigs can I do Other than finding a traditional W2 role, because there's usually not going to have the income potential needed. And that's what the next couple steps looks like, with the current GM wrapping things up. So he's feeling good about it. I think there's partially a sigh of relief, but I don't know. Well, as long as he's leaving on his terms, in a way that he feels good about his time concluding, then we're in an okay, spot, that's where we're at, that's where we're going. Let's rock and roll.
