Clef

The best way to find a small business to buy. 120,000+ listings in one search.

[Clef @tryclef]

The thesis around blockchain/crypto in general I wouldn't call gambling, it has a real use case. However the volatility and sentiment around trading it, is basically gambling. Similar to options. So like others mentioned, it's a fun moonshot diversification play with ~5% of your portfolio. But hey a lot of people I know are ~80% all in on it. To each their own!

[Clef @tryclef]

Live now: https://t.co/SzQ76sFRuy

[Clef @tryclef]

How much of off-market sourcing can you actually automate?

We just launched an off-market engine on Clef.

You describe what you want to own and it helps you draft a thesis. Say an HVAC company in the Southeast, at least $2M in revenue, owner near retirement.

From there it pulls matching companies from proprietary databases, researches each one against live data, and comes back with the few worth a call. Owner's name, phone, email, and a first outreach already drafted.

Finding, early vetting, and skip-tracing, done for you. Your time goes to the outreach instead of building and cleaning a list.

It won't replace real relationship building but it takes the legwork out of finding your next targets.

Take it for a spin and tell us what you think.

#ETA #smallbusiness

[Clef @tryclef]

Full breakdown is on our blog: the spend thresholds, how to stress-test a supplier price increase, and the diligence questions to ask before you sign.
https://t.co/ItTs3VJrd2

[Clef @tryclef]

Everyone buying a business checks customer concentration. Far fewer check the supplier side, even though a supplier problem is harder to fix.

Lose your biggest customer and you have a sales problem you rebuild over time. Lose your one critical supplier and you can't produce or deliver at all.

Supplier contracts add a second risk. The exclusive-distribution ones often carry a change-of-control clause, which lets the supplier walk the day the business changes hands, when a new owner has the least leverage.

One supplier at 20 to 30% of spend is when you need to start asking questions. Above 30% usually moves the price.

One last thing. The good pricing and payment terms a business gets from a supplier often depend on the seller's personal relationship rather than a written contract. Ask which it is.

[Clef @tryclef]

New to buying a business? Here's a trap that catches first-timers and costs real money: working capital.

Every business needs a cushion of cash and unpaid invoices to cover payroll and expenses until customers pay. When you buy, that cushion isn't automatically yours. The seller can collect the receivables and take the cash right before closing.

So you can close on a profitable business Friday and not have enough to make payroll Monday. The business earns money. The cushion that funded it left with the seller.

The fix is a working capital target: an agreed minimum that stays in the business at close, with the price adjusted if it comes up short.

Skip it, and your first month gets scary fast.

[Clef @tryclef]

20 years can fly by. And if you never build it into more than a job, this is where it ends.

Talked to a neighbourhood shop owner yesterday who sold his 20-year-old business on Kijiji last week.

No broker. No BizBuySell. Kijiji. Next to a used couch and a snowblower.

One offer came within a few days. He took it. And this wasn't a distressed sale. He just felt it was time to move on. Said he's tired of managing everything. So he posted it on Kijiji.

He's staying on as an employee for a year.

Said he really only ever thought of his business as a job. Never treated it as anything but that. No systems, no real value at the end, except the inventory.

The Main Street deal market is more broken, and more human, than anyone thinks.

#smallbusiness

[Clef @tryclef]

A reliable signal when you're buying a business is how the team talks when the owner leaves the room.

Ask them something real with the owner there. Then ask again once they step out.

If the answers change, believe the second one.

[Clef @tryclef]

New to buying a business? One term you'll see is: add-backs.

The "earnings" number on a listing isn't the profit on the tax return. It's higher.

Say the tax return shows 100K. The owner also paid themselves a $150K salary and runs $30K of personal costs through the business (car, phone, travel). The listing adds those back and shows $280K earnings, on the logic that a new owner wouldn't carry the same costs.

Sometimes that logic holds. Sometimes it doesn't. A new owner still needs someone running the place. Some "personal" costs are really the business's. And price is a multiple of that number, so at 3x, every dollar added back is three dollars of asking price.

So run every add-back through one question: would you actually avoid this cost once you own it? Your answer, not the seller's, is the real number.

[Clef @tryclef]

47% of a business's key employees leave within the first year of an acquisition.

75% within three years. Roughly 3.6x normal turnover. (per EY)

You can run flawless diligence on the numbers and still watch half of what you bought walk out the door in year one.

You're not just buying revenue. You're buying the people who make it.

Anyone have creative ideas on how you actually lock in the key people before you close?

[Clef @tryclef]

The checklist to catch it before it's your problem: https://t.co/D6yVMUdDM8

[Clef @tryclef]

Buying a business means inheriting its assets. It also means inheriting its active legal problems.

A company acquired one that had been shipping to Cuba, unlicensed. After the deal closed, nobody re-screened what the business was actually doing, so it kept shipping. 36 more times.

The fine hit the buyer. $608,825. For something the seller started. But the buyer inherited.

Sanctions are strict liability, intent doesn't matter. The day you close, whatever's still in motion becomes yours, to stop or to pay for.

What's the worst thing you've seen a buyer inherit in a deal?

[Clef @tryclef]

This. Anyone searching. Do this.

[Eric Hsu @lawyer4SMBs]

Still the cheapest edge in ETA right now:

Fifteen minutes with an attorney who's watched 170+ deals close BEFORE you send the LOI. Not after. Not once the seller ghosts. Before.

15 minutes. Free. No pitch. 800+ done.

[Clef @tryclef]

A business you can't run is a bad deal at any price.

Every number on a listing assumes someone capable is running it. If that's not you, the numbers don't hold.

You don't have to already know the industry inside and out. But you do have to be honest about whether you're the right person to operate in it.

So the real question was never "is this a good business." It's what can you run, what can you bring to make it grow, and what do you actually want to run?

There's no perfect deal. But there is a business for YOU.

[Clef @tryclef]

@JD_DeYonker Sounds like a fairytale that’s for sure! I’m going to dig in, make sure I’m not passing on Cinderella.

[Clef @tryclef]

Today's deal on Clef 👇

Commercial cleaning company, St. Louis. Retiring owner. Priced ~70% below comparables.

Asking $550K · $1.5M revenue · $611K earnings · 41% margin

The multiple: 0.90x earnings.

Comparable cleaning companies have been selling around 3x (typical range 2.8x–3.5x).

What the listing gives you: long-term recurring contracts, 39 employees, owner retiring.

A price that far below the norm is either a motivated seller or a catch you'd only find in diligence. We just find you the deal, the call's yours.

At $550K, digging in or scrolling past?

[JD @JD_DeYonker]

Met two guys that used to work in PE who 0 to 1'd a resi plumbing company.

$800k year 1, almost $4m last year, run rate $7m in year 3.

They met a local plumber who wanted to start his own biz, guaranteed a salary for 2 years, and built a nice vesting schedule.

Smtg there...

[Clef @tryclef]

https://t.co/zhZGF7CmoW

[Clef @tryclef]

One of 120,000+ businesses for sale on Clef right now at https://t.co/OsaIynF4Ru