Pizza, French Fry, and the J-Curve

Pizza, French Fry, and the J-Curve

Buying a small business is EXACTLY like teaching your kids to ski. The J-curve gets ugly before it gets fun.

How you imagine it’ll go:

      • Everyone else seems to enjoy this
      • It’ll be some work but it’ll be worth it
      • I can handle this
      • This is what life is all about

    How it actually goes the first 12-24 months:

        • You’re tired before you even get to the start line. Finding a good business, navigating diligence, burning cash, burning time, and getting to close is exhausting – then you have to run a business. And before the first ski run your kids are tired, hungry, you’re running late, you’ve spent a shitload of money, and just as everyone’s ready to get on the lift someone has to pee.

        • You knew it’d be expensive, but not this bad. The seller ran the business lean and mean. Now you have to upgrade the marketing, pay for a CRM, give people raises, hire more help, and you’re not as efficient as the seller. Your budget blew up a long time ago.

        • Can anyone follow directions? Your kids french fry when they should pizza, and getting on a lift is a gamble every time. Running the business you feel like you repeat yourself 100x and even wrote a procedure down that gets ignored 73% of the time.
        • You’re tired and getting your ass kicked. It could be the 3 IPAs last night and altitude, or it could be carrying 2 kids and 30 pounds of gear. Similarly running a business your ‘to do list’ is always getting longer and you can’t let the team know you feel in over your head. Plus there’s no ski school for $350 per lesson to bail you out.


      Finally things start to change 24-36 months in:

          • The two happiest days of your year – the day your employees solve big problems without you, and the day your kids make it down a blue run with you.

          • Your marketing starts gaining traction and you start to see a predictable, repeatable sales process.

          • Tenured employees have bought into your vision, and your new staff follows the SOPs because they don’t know any better.

          • Your gross profit margin is finally under control, and you start to rebuild cash reserves in the business. Not enough for a Vail trip, but you get the idea.

          • Momentum baby. All the money on passes, gear and lessons are finally paying off – the kids can ski on their own. They skied with grandpa and the circle of life is effing magical. Similarly you’ve put together 5 quarters of consistent growth, good hires, and you have a few key employees you can always count on.

          • All gas no breaks. Now you’re ripping down a run on a blue bird day, your legs feel strong, your turns are connecting beautifully, the lift lines are short – core memory activated. Now your business is 3x bigger than when you bought, you’ve doubled cash flow, your competitors ask if you’ll buy them, and private equity is reaching out to buy you for 7x.

        The J Curve effect is a popular framework for good reason. Almost everyone who buys a small business goes through the same rollercoaster experience….and much like the pains of learning to ski – it’s all worth it if you hang on.

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        Jay Jay

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