He 10X’d His Money in 3 Years With a Painting Franchise
About this episode
Zac Smith was a mechanical engineer who wanted more flexibility and upside than a corporate career could offer. He bought an existing CertaPro Painters franchise in North Carolina with three employees and under $1 million in revenue. He put down about 10% in cash and financed the rest with an SBA loan and a small seller note, backed by a personal guarantee.
Three years later, the company was on track for $3 million in revenue and $600,000 in profit. Smith sold it for $1.5 million, all cash at closing. In this episode, you discover how to:
Raise prices without hurting your close rate, which took Smith’s gross margin from 42% to 50%
Think of your business as a sales and marketing company first, no matter what you actually deliver
Win against low-cost competitors by selling trust instead of price
Walk away from customers who only care about price, so you avoid being busy without being profitable
Shift your revenue mix toward customers who send repeat work without new marketing spend
Frame a limitation buyers might see in your business so they notice its strengths first
Handle a surprise during due diligence in a way that builds the buyer’s trust instead of costing you the deal
About Our Guest
Zac Smith
Zac Smith is a mechanical engineer turned business owner. Looking for more flexibility and upside than a corporate career could offer, he bought an existing CertaPro Painters franchise in North Carolina that had three employees and under $1 million in revenue. Over the next three years, he raised prices, lifted gross margin from 42% to 50%, and built a base of repeat customers, putting the company on track for $3 million in revenue and $600,000 in profit. He sold the business for $1.5 million, all cash at closing.
Definition of Terms
Letter of Intent (LOI):This document outlines the basic terms and conditions of a deal before a formal agreement is drawn up. It serves as a mutual commitment between the buyer and the seller to move forward with the transaction on the agreed-upon terms.
Due-Diligence: This is a comprehensive appraisal of a business or investment undertaken before a merger, acquisition, or investment. It seeks to validate the information provided and uncover any potential risks or liabilities.
Earn-out: This is a financing arrangement for the purchase of a business, where the seller must meet certain performance goals before receiving the full purchase price. It reduces the buyer’s risk and aligns the interests of both parties post-acquisition.
Every business owner wonders,
“Am I doing the right things for the future?”
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