Buy Then Build: How Acquisition Entrepreneurs Outsmart the Startup Game

by Walker Deibel

Entrepreneurs have a startups. Almost all startups either fail or never truly reach a sustainable size. Despite the popularity of entrepreneurship, we haven’t engineered a better way to start. …Until now.What if you could skip the startup phase and generate profitable revenue on day one?In Buy Then Build, acquisition entrepreneur Walker Deibel shows you how to begin with a sustainable, profitable company and grow from there. You’ll learn how ● Buy an existing company rather than starting from scratch● Use ownership as a path to financial independence● Spend a fraction of the time raising capital● Find great brokers, generate your own “deal flow,” and see new listings early● Uncover the best opportunities and biggest risks of any company● Navigate the acquisition process● Become a successful acquisition entrepreneur● And moreBuy Then Build is your guide to outsmart the startup game, live the entrepreneurial lifestyle, and reap the financial rewards of ownership now.

Genres: Business, Entrepreneurship, Nonfiction, Finance, Leadership, Startup, Audiobook

1 pages, Audio CD

Published March 1, 2021

Reviews

[Michael Korobov · Rating 2 out of 5]

This book grossly oversells the opportunity of entrepreneurship through acquisition and irresponsibly excludes numbers that go against the book's pitch. As a book that's supposed to give you an in-depth understanding of this investment type, the author is actively misleading the reader. A few quick notes to make my point:

* SDE should not be included in its entirety in your return because a part of it (or all of it) is the salary for the 8-12 hour days you are putting in to run the business. It's salary that pays for living costs that you'd be making as an employee working somewhere else. That should not be included in ROI.
* Business taxes are for some reason completely excluded from ROI calculations and because loan repayment is not tax deductible, the tax burden can be meaningful
* The author fails to mention that small businesses are notoriously more volatile and you need to have significant cash cushion
* SBA loans as mentioned in the book require you to personally guarantee all loans which hold your personal assets and credit score as collateral, greatly increasing the overall risk/reward

[Vedast · Rating 2 out of 5]

Buying and improving small companies is indeed a fantastic opportunity.

It seems to me that this book could had been shorter. Typos distract readers and make us think that you haven’t thought much about what you are communicating. There are also mathematical misconceptions, you can’t just calculate investment returns without considering when you recieve the money (it’s very different to recieve say $60 after 5 years than $12 a year during 5 years, the latter case being way more profitable). A way more appropriate metric is internal rate of return.

Also, buying businesses by borrowing 90% of the money and using your own assets as collateral is absurdly reckless. That’s playing Russian roulette. This book is supposed to be for beginners. You can’t sensibly suggest that to a beginner (nor to anyone who isn’t your enemy).

It’s too US-centric. Nowadays investors from almost anywhere can buy a business from almost anywhere. And this trend will keep growing, as companies are less location dependant.

[Taylor Pearson]

One of the most interesting investment opportunities I’ve seen in the last few years is acquiring and growing a small business.

There are two macro trends driving this opportunity. One is a huge wave of baby boomers that are retiring and looking to sell their small businesses. The other is the proliferation of niche businesses on the internet which expands the number of small businesses that can operate profitably.

As Deibel points out in Buy then Build, these opportunities are largely overlooked because of the widespread belief that “real entrepreneurs” must start their own business.

20 years from now, I think “acquisition entrepreneurship” will be as common as going to a MBA program is today. In the meantime, it’s a huge opportunity to hop on the train early and Buy Then Build lays out who is a good fit for acquisition entrepreneurship and how the process works, from finding to evaluating to buying a company.

[Tom · Rating 5 out of 5]

Yes, it is a good book. Good all-round information from why buying to actually concluding a deal. I must admit I was more after information for buying companies with LBO type financial engineering. After reading more about acquisition entrepreneurship lately and not just in this book, I have come to realise that you can read a lot, but you can't learn the soft skills or on the ground skills that are required unless you actually do a deal (handheld or not). Where the author has had a tremendous advantage is that he bought his first company off his parents.

[Ed Barton · Rating 4 out of 5]

A Great Optiom

Better than start up, the buy then build approach is a great option for the entrepreneur minded who want to reduce risk and get a head start with building a business. You’ll get a good overview of the process and the key steps and pitfalls. A must read to get started before you decide to start from scratch.

[Jamie is · Rating 5 out of 5]

Incredibly helpful. Lots of specific advice, little fluff. The frameworks and formulas were especially helpful. One of the 2 best books I’ve read regarding acquisition entrepreneurship. Check out the authors website for more helpful blog posts and spreadsheets. Considering paying for his advisory service (it’s between them and Acquira, but the latter focuses more on home service businesses and I’m looking more at health, analytics, and others)

[Diego Cerezo · Rating 5 out of 5]

Book in a sentence: shows how to do entrepreneurship through acquisitions, in which instead of you starting a startup, you buy existing and profitable companies.

Lesson learned: the kind of entrepreneurship I've most identified with and want to pursue wholeheartedly.

[Terje Tofteberg · Rating 5 out of 5]

Walker Deibel is an Aquisition Entrepeneur. He Buys established smaller companies, takes over as CEO, then continues to Build them.

He starts the book with the obvious. Most startups fail. Furthermore, starting a business costs money. It is surprisingly affordable, especially compared to this, to acquire an existing profitable company. Hence, there is a path to massively reduce risk for very little cost.

Deibel outlines the process of acquiring a company in a structured way. First, start with yourself. What do you want and where can you add value? You will be looking at a lot of companies and are dependent on people opening their doors, books and hearts for you along the way. This goes for existing owners, employees and customers, but also for brokers, suppliers and bankers. A solid articulation of what you bring and what you want is important.

Second, the book details the search for a company and how to value a small business - which is different from a larger business. The steps in the book helped me find local platforms and local brokers who sell companies. An interesting find in itself. Third, is the offering and negotiation phase with a breakdown of LOIs, Due Diligence, negotiation and closure. Words I had some familiarity with before this, but feel much more intimate with after the book.

The book concludes with suggestions for the first 90 days as CEO. Beyond this, it does not go much in the depth on the Build phase. There are, however, plenty of other business books out there on the topic so I am not too disappointed.

I borrowed this book from the Oslo public library in a paperback.

In sum, Buy then Build is a very good intro to micro scale Private Equity.

[Abhi Yerra · Rating 5 out of 5]

Most products that we use on a daily basis were companies that were bought by others. McDonalds, Google Docs, Tesla, I’d argue the second time that Steve Jobs came back to Apple. None of these were the founders. They were the people who took a product market fit business and turned them into large scale businesses.

This book I’d argue is one of the best end to end books on how to be private equity/acquisition buyer of one. It goes through vetting different companies to but and how to actually execute the purchase the company. Highly recommend if you want to get into the private equity game as an individual.

[HP · Rating 5 out of 5]

A hands-on, very pragmatic book about acquiring a small business.

Not too little but not too much information, just the right amount.

[Kendrick Vinar · Rating 4 out of 5]

Straightforward and simple without being patronizing, Deibel’s steps toward buying a business and the best practices thereof are excellent. For anyone contemplating buying a business, this would be an excellent place to start.

4.3/5.0

[Sumit Das · Rating 4 out of 5]

The book is a great introduction to buying a business. However you must do a lot more research beyond the book.

[Pablo Buenahora · Rating 4 out of 5]

Habrá que ponerlo en práctica para juzgar

[Jeff Evans · Rating 5 out of 5]

A "Must Read" for Entrepreneurs

Walker Deibel has written the most valuable book about the challenges and rewards of owning your own highly successful business. When read in conjunction with the available Audio Narration Walter's message is clear and easily understood...it is far better to Buy Then Build a business than to startup a new one.

[Richard Mowrey · Rating 5 out of 5]

This is an excellent book for all "would be" new business owners. The strategy outlined is spot on and is the type of advice I personally have given dozens of people over the years. The author, Walker Deibel, delivers on his promise to help "outsmart the startup game"!

[Diana Ding · Rating 2 out of 5]

Very little info (one short paragraph...) about the search fund model - instead assumes the buyer funds the acquisition using an SBA loan which requires a guarantee against your personal assets.

[cristobal barros · Rating 4 out of 5]

Inspirador y una buena guia sobre el proceso específico de como adquirir un negocio pequeño. Muchos conceptos y experiencias valiosas (SDE, multiplos, mentalidad comprador, contruir memo con lo que se busca, etc) y también conceptos mas basicos pero que siempre vale la pena repasar.

—————-

* p32. Riesgo asimétrico de posibilidad de exito entre entre startups (10%), VC backed startup (25%) y adquisición de emprendimientos (98% segun tasa de default de SBA)
* P46. Para emprender, antes de encontrar la compañia. Es importante tener claro los 3 atributos necesarios para manejar la empresa. Attitude, Aptitude and Action.
* P66. 4 cuadrantes de tipos de negocio que existen que es necesario identificar, enternable profitable, turnaround, high growt and platfom.
* P86. La razon por la que solo el 10% tiene exito. Es porque saben lo que quieren. Tipo de industria (producto, distribución o servicio), tipo de crecimiento, el tamaño de SDE y limitantes.
* P105. 2 alternativas para hacer el approach para la busqueda de comprar una empresa. Hablar directamente con la persona y decirle que utilice el servicio de un broker dado para trabajar la valorización, el que luego me dará preferencia. Ir a traves de un itermediario (broker) con un mandato específico para dar mas peofesionalismo.
* P121. Quiet light brokerage article on buythenbuild.com
* P136. Listado temas offering memoramdum. Asking price, name, lugar, producto o servicio ofrecido, numero empleados, rol de cada uno y sueldo, analisis clientes y concentración, razon de venta, plan de crecimiento mirando para adelante. A parte de info financiera.
* P180. Actitud correcta de humildad y de “venderse” frente al vendedor. Generar vinculo, credibilidad, meta en comun. Importancia de identificar las fortaliezas del vendedor para evaluar lo transferible del negocio
* P188. Importancia de reflexiones luego de primera reunion con el vendedor. Importante actuar, y orientarse al proceso para realmente entender que es lo que está buscando. Entender las tres As, evaluar las habilidades, saber el nivel de involucramiento y dia a dia que quieren, tamaño de SDE, etc.
* P192. Usar 5 fuerzas de porter para entender las particularidades del negocio y generar un business plan.
* P204. Para generar la estrategia usar el concepto del hedhegog. Intersección entre Pasion, aptitud y rentabilidad.
* P206. Business plan version resumida de Guy Kawasaki. “The only 10 slides you need in a pitch”
* P212. Libros sobre unicorn toolbox. Exponential organizations. Como apalancar tech modernas en industrias tradicionales. Libro sobre product subscription. Built to sell y automatic customer.
* P220. Compra de activos vs compra de acciones. Mejor para comenzar fresco en una nueva entidad

[Fay Wu · Rating 4 out of 5]

Well defended arguments to buy businesses

Walker does a very good job in the first half of the book laying out the arguments that being an entrepreneur and especially when buying a company rather than starting from scratch is the more profitable and bears a higher likelihood of success.

The second half of the book drills down to details what one needs to be mindful of throughout the acquisition process, from negotiation to looking at the balance sheet and checking cash flow. The accounting line items like accounts payable and accounting receivable and inventory.

What I liked about the book is more like the practical examples of how one applies for the SBA loan (like you need personal guarantee and you wouldn’t be able to get home line of credit afterwards) but the downside is that it is scarce in the real world examples of people who have conducted successful small business acquisitions and a profile of those buyers/sellers as well the businesses themselves. Walker made his first step into acquisition entrepreneurship through buying his own parents’ business, thereby peeking into the buyers and sellers’ sides simultaneously. This is probably not typical of others who are starting out. What I would have liked to see would have been more examples of people who have done search funds and what those are.

[Joseph Pepe · Rating 3 out of 5]

This was an all-encompassing "how-to" tutorial on acquiring a business. The author did a good job of articulating his over-arching premise/hypothesis: the statistics show it is generally more lucrative to buy an existing business than to start your own. Many traditional entrepreneurs fail, and with the baby-boomer population nearing retirement (many without a true succession plan), there is great opportunity to acquire durable/successful business at fair prices, be your own CEO, add value through your skillset, and grow/exit the business at attractive returns.

The author does cover all the basis from internalizing your skillset/interests, sourcing deals, raising capital, understanding financials, negotiations, the transaction process, and transitioning into the CEO and integrating your new team.

I would have rated it higher if there were fewer typos, and if it didn't read as much as a checklist (though that is likely appropriate). I do find the subject quite intriguing (which is why I read the book), and having gone through an acquisition and multiple tuck-ins, it was nice to take a step back and truly codify the process. Again, this was a great how-to on the process and roadmap for the acquisition entrepreneur, which I believe will be quite relevant given the current state of our economy.

[Ermicioi · Rating 5 out of 5]

Great overview on buying businesses (and also in cultivating the acquisition entrepreneurship mindset). Still, many details presented by the author shouldn't be taken at face value; one should do its own research with trusted sources because many things can change since this was written (legal, finance, etc.). Moreover, this book doesn't get very deep into the nuts and bolts of valuing companies, but this shouldn't justify a lower rating (as given by other readers). There are entire books that address this topic, and even if the author had used 100 pages to address solely the DCF model (just as an example) you may still find people that have opposite opinions and discard its advice

Anyway, the greatest conclusion of this book is that buying a business isn't as intimidating as it sounds as long as one knows what he does (which is learnable, but requires time and experience). You shouldn't read this book and go out there the next week to buy a business. Either you're a professional with enough experience to do that or you don't. If you're not, you welcome troubles down the line. So be careful.

[Hbombme · Rating 4 out of 5]

It's a great book for someone contemplating going down entrepreneurial M&A path. I think it would have been made even better and a five-star material by consistently offering situational examples across a few different industries throughout. Walker offers both sound tactical and strategic advise -- figure yourself out first, decide what you want to buy within a framework offered, get upstream, remember that the fair price will reveal itself later, and actually be vested in business and process to succeed, unafraid to show enthusiasm, which doesn't mean you abandon critical thinking throughout.

- "For an entrepreneur, working hard for something they care deeply about is a life worth living."
- "It's the brokers who have the listings and the deal flow. As long as you are out there talking with all of them, you'll know where the deals are. Moreover, once you meet with half a dozen, you'll know who you can count on to help you find the company you're looking for."
- "88% of poor and below average financially healthy businesses have revenues under $1 million."
- "Growth costs money."

[John Bingham · Rating 3 out of 5]

In Buy Then Build, Deibel takes the view that there is an unbelievable opportunity to take part in what is often referred to as a "Search Fund". These are small to midsize businesses where an individual person can swoop in, purchase a business, and (ideally) sell it for a profit a few years later. It's essentially Private Equity on a smaller scale.

Deibel undeniably has experience in the area having gone through the process a few times. This is clearly a business model that needs to exist, as small business owners often encounter circumstances where they need to sell their businesses, and there are often good deals to be had at this sized firm. His take that networking is the key to the business is undoubtedly correct.

That being said, I do take issue with a few of Deibel's assumptions throughout the book. First, on the fact that now is the perfect time to be doing a search fund. This is despite the fact that number of people doing search funds has increased 40% YoY for the last 5 years, so clearly the market is becoming more saturated.

The next assumption is the idea that 10% is the minimum expected growth rate once the new owner takes over. It seems like he pulled this number straight from his ass. Growing at that rate, despite entering a new business, in a new location, with no pre-existing relationships, and skeptical employees and customers, is a fair weather assumption if I've ever seen one.

The final assumption is the idea that business school is the best way to prep for these sorts of goals. Why? Because a few top business schools offer programs on it. Why not go learn the industry, network, and get a job at company in the industry before trying to break in blind like a messiah.

All reviews:
https://bingham.dev/book-reviews

[DailyReader · Rating 5 out of 5]

This book takes a practical look at buying a business instead of portraying it like abstract investment strategy. The author walks through how to narrow in on the right kind of business, how to approach brokers, what to look for in deals, and how financing actually plays out in the real world. It does a good job of showing why acquiring an existing business can be a smarter path than starting from scratch, but it also makes it clear that it takes real effort, discipline, and thoughtful due diligence. It felt realistic and sincere instead of hype-driven, which I appreciated.

What also stood out is how much of the advice lines up with what I have heard others talk about in interviews, YouTube discussions, and acquisition forums regarding things like managing the transition after the purchase, building trust with the seller, and focusing on steady improvements rather than big dramatic changes. The book helped me think more like someone stepping into an existing operation instead of chasing a new idea. Overall, I found it detailed, informative, and useful enough that I know I will return to it as a reference.

[Jonathan Birnbaum · Rating 4 out of 5]

Walker makes a compelling case to go off and buy a small business, especially compared to starting one from scratch. 7000+ baby boomers are retiring daily, and many of them have small businesses that need a new owner, and have growth potential. Buy at a low multiple, use debt, and grow.

After making the case, he then walks through how to go ahead and do it. He hits the major steps, from getting debt, thinking about due diligence, closing and transitioning, while avoiding gory detail.

I am growing quite interested in this path and really liked this guide. It suffered from some poor editing/grammar, and could have used a few detailed cases from his experience (rather than just saying he did it 6 times).

Reads more like a chronological guide of how-to so only fit for someone seriously considering the strategy or deeply curious about small business acquisition.

[Allison · Rating 4 out of 5]

As someone currently going on the acquisition journey, this book has been hugely helpful. I learned a bunch of what he writes about from working with a broker and evaluating many businesses, but I wish I'd known about this book before I started the process - it would've eased some of the learning curve.

One part that has been super important has been identifying my target deal. With so many businesses, and being a Maximizer (from Strengthsfinder), I tend to see how anything "could" work or be a good possibility. But there are simply too many businesses to evaluate if I look at everything, so holding close to my target makes the decisions about which to look at more closely a little more manageable.

I'm glad to have peeked into the future - past the furthest stage I've made (due diligence). I can't wait to put the rest of the stages into action!

[Andrew Chuang]

I know I don’t have the full right to review this book yet since I've only finished about 30% of its content. However, the concept of acquisition entrepreneurship is incredibly intriguing to me! I've unintentionally been doing something similar. I’ve been managing my parents’ shop lately, and I managed to increase sales by 30% and set up several systems. The store grew tremendously, and we even managed to open a new branch within four years! So, taking over an existing business isn’t as risky as bootstrapping a new one from the ground up. Of course, it still requires a lot of work and sacrifice, but in the end, I’ve gained more capital than many of my friends who work regular jobs.

However, because I live in Indonesia, where there’s no concept of business listings or business brokers, some aspects of the book don’t entirely apply to me.

[Riley Ormsby · Rating 4 out of 5]

A good book on a topic I’ve never explored before: acquisition entrepreneurship.

The skinny: Starting a company is hard… and oftentimes unsuccessful. Why not skip the hard part and acquire an existing infrastructure and find a way to make it a little bit more efficient? Deibel elaborates on how to properly assess, value, and acquire existing companies for sale in a way that would be extremely helpful if you were interested in acquiring a company.

I bought this book because for one, the topic intrigues me, and two, I wanted to know how people on the BUY side value a company, so that as I build my company, I can make sure to track these numbers and emphasize them to intentionally increase the value of the company I’m building. With that said, a big number to track is EBITDA, and even more important: SDE (Seller’s Discretionary Earnings).

[Jonathan Pan · Rating 4 out of 5]

This was a fantastic read that offers great insight into an often-overlooked form of entrepreneurship. I really enjoyed learning about Walker's process and the many fascinating statistics he brings to prove why acquisition is normally the way to go. The best part of the book for me was when he discussed the mindset needed for entrepreneurship in general. While he constantly tells readers not to make excuses, I do feel I am a little young to get into this quite yet (sorry for the excuse). However, this is something I would love to do a little down the line. I took away a lot of general info to help my current business and will definitely revisit this book a few times in the near future.

Favorite quote/stat: Only 4% of American businesses ever surpass 1mil in annual revenue.

[Sahil · Rating 4 out of 5]

Buy Then Build is a great introductory book covering the small-market deal acquisition cycle from start to finish. Not a light read per-se, it took some time to work through this one, stealing chapters bouncing from weekend trip to weekend trip. This book definitely made me look at small business ownership through a different lens and reaffirmed that there is quite a bit of truth to small businesses being the backbone of America's economy.

The book does have its limitations; for instance, it is not going to give the level of detail one would need to perform complete financial or operational due diligence but it does cover all the key elements of an acquisition at a high enough level to be useful. Overall, this was quite an interesting read and one I'd recommend.

[Matt Sears · Rating 4 out of 5]

Overall, this is a great book. I learned a lot, but I wish there were some practical examples included, with numbers. I feel like I now understand the THEORY of how to finance a deal - at a high level. But I get lost when I try to build a financial model, including loan payments, paying myself a salary, paying interest to investors, balloon payments, distributing profits to shareholders (including me), etc. I realize that all of these things are negotiable, and maybe there is no standard for how deals are done, but some examples of real deals would have been super helpful.

At the end of the day, I just need to be able to show projections of the cash flows that I myself will receive and the cash flows that potential investors will receive. After reading this book, I’m not yet able to do that. And now I feel like I need to go find another book about that…