A $1.39M Wedding Venue Business — Too Good to Pass Up?

0:00Hello, everyone, and welcome back to Acquisitions Anonymous. This is the internet's number one podcast on buying, selling, and operating small businesses. Today, we have our first ever Facebook deal. So Mills went sleuthing around on Facebook and found a businesses for sale by owner group on Facebook and found a wedding venue business for sale by owner. If you're with us on YouTube, you will just love the screen share on this one. And you can see it looks like your grandma posted that her business was for sale and like no punctuation, but a whole bunch of detail, actually. So we talk about the differences or we talk about kind of the unique characteristics of businesses that depend on their real estate and also revenue optimization when you can only sell events 52 days a year because people usually get married on Saturdays and not usually in the winter.

0:50So it's even less than that. So this was a fun episode. We were also joined by Rand Larson from Scale Path, which is a community of small business owners to help us review this one. So without further ado, I hope you enjoyed this episode of Acquisitions Anonymous.

1:15Hey everyone, it's Bill. And I want to tell you about maybe the most exciting sponsor we've had in a long time on the pod. It's called CapitalPad. And it is the thing that I wish existed when I started my journey of operating and investing in small businesses. So CapitalPad is a marketplace for acquisition entrepreneurs, that is people who want to buy a business and need capital to list their deals and solicit capital from other people who want to invest in acquisition deals. So if you want to back somebody buying a small business, CapitalPad is the place to do it. And if you want to buy a business and need capital, you can go on CapitalPad to be introduced to investors.

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2:42All right. Welcome back to Acquisitions Anonymous. We've got a fun guest today. We've got Rand Larson from ScalePass. Nice to have you, man. Thanks, Bill. Thanks, Mills. Thanks for having me, guys. So are you coming to us live from a van down by the river or are you settled back into real person life now? No, no, we're settled back in. I came to Mills live from a van at his roofing company, so not quite down by a river, but I get those jokes every single time I go to and meet anywhere, anyone new in a city. So frankly, I love them. I love those memes. Well, for the people that don't know what I'm talking about, can you tell them why I'm making fun of you for being in a van down by the river?

3:20Yeah, this is an old SNL skit from Chris Farley. And I can't, if I tried to explain the joke, it wouldn't make any sense. And I would look like an idiot. So just look up Chris Farley van down by the river, just van down by the river. And you will see exactly what I'm talking about. It's hilarious. And you just did a seven month road trip. Yeah. Yeah. Technically nine. I bought the van in July. And from there, just started driving around. I probably spent three weeks at home at the start, but then between September and April, I drove from Cleveland, Ohio up to Madison, Wisconsin, zigzagged down the middle of the country down to Austin, straight across to Florida and spent the winter in Florida and then up through South Carolina, your territory, and then finally back to Cleveland.

4:03Doing small business meetups all along the way, right? Yeah. Yeah. Small business meetups. I think 20, 25 of them during that road trip. We've also done another 15 or 20 before that. So yeah, man, just spreading the gospel, own a small business, buy one, hopefully don't overpay and spreading laughter and cheer through small business owners across the country. That's awesome. I love that you did that. You were just like, screw it. I'm going on the road, bought a van and went and see everybody, like the whole community ran, came through your town and had an event. It was sweet. Yeah. Yeah. It was a ton of fun.

4:35And so, but you're not down by the river anymore. You're settled in and you just bought a business, right? Yeah. Yeah, that's right. I bought Michael Girdley's business scale path. So I, I don't know. I don't know. No one knows him. He definitely doesn't have several hundred thousand followers. Not that I know. So I started our own peer group community while I worked with John Wilson. I started the peer groups for free. A buddy was, you know, going to, or getting close to bankruptcy and he was feeling incredibly lonely at the time. So I built him a peer group of other people buying businesses, started another one for free, ran those for free for a while, just as a thing I was doing while I was working with John.

5:12And then eventually took building these things seriously around October, 2023. And then just recently, ScalePath was coming up for sale. They were looking for someone to steward the business for the next generation. And I thought there's a really ton of good win-wins there. We were good at peer groups. They were good at the online community side. They were really, really great at marketing. We had a pretty good product in a ton of ways, but they had a bunch of products we did not have. We were better at peer groups, which they had one of. So there's a ton of win-wins that happened with the deal.

5:47It was a really, really good. I mean, it fit like a glove. That's awesome. So now you see a ton of small business owners in ScalePath, which is why we wanted to have you on to talk about small businesses. So I have no idea the deal that mills is going to show us cold today we're on a tear lately of kind of weird quirky off the wall type deals but i mentioned something i think uh on last the last episode we recorded about uh have you ever i think i was asking chelsea has she ever seen a deal come from craigslist and she was like no i can't say that i have i don't have a craigslist deal today so i So I searched high and low and the best thing I got was a$39 ,000 highly successful painting contractor in Charlotte.

6:35But that was the biggest one I could find. But I did in my perusing, I did find something on Facebook. So this is some like US business for sale by owner Facebook group, which I think anybody who has done a search has probably gone down plenty of these like just random. rabbit holes. But this one kind of stood out to me for a few different reasons. It's in South Carolina. There's no way I'm going to read this whole description because while there is punctuation, it just reads like one giant sentence. But this is a opportunity of a lifetime, Jamie tells us. Seller financing available, 30 acre farm and profitable wedding and event venue and horse boarding business in upstate South Carolina.

7:24They are willing to sell 22 acres of the farm and a house without the venue if interested, but it's a 3 ,400 square foot wedding venue and event venue and a lucrative horse boarding venture with much more potential. It's a four bedroom, four bath house and it's in upstate South Carolina. There's a whole kind of description here. I'm not going to read all this, but I'm going to just pull up a picture really quick that kind of helps paint for not listeners. You're missing out. If you're viewers, this is a beautiful place. It's very picturesque, like rolling Hills. There are, let's see, there's some more pictures.

8:02It's like this cool metal barn. Everybody's wearing cowboy hats. There's all these like really nice pictures, you know, of people getting married on this property. If you're into horses, this looks like very picturesque, but there's actually some detail here that they give. So they say, they describe the house and the property and all these different things, all the upgrades. This kind of reads like a real estate listing, like, you know, four ton HVAC unit, septic tanks been maintained, like all this different stuff. But they say they're open to to seller financing, but they have a balance of a current mortgage, which is Bill's favorite thing to key in on is, pay me what the balance of my mortgage is.

8:48But they say they're asking 1.39 million for everything. They're accepting offers and willing to negotiate for a reasonable deal for both. There's$542 ,000 left on the balance of the mortgage. And they're saying that they would basically give you five to 10 years until interest rates come down to refinance, but they want a cash out to be able to pay off the mortgage. Current mortgage is at 3.99%, monthly mortgage payment of$3 ,474 a month. Property taxes are only$3 ,400 for the entire year. And they're saying if you're a serious inquirer, they'll send you financial info on the business. If you sign an NDA and have proof of cash down payment or financing.

9:37This is a for sale by owner Facebook page. And there's this person, Jamie Lee Bowling, who posted it. Literally business for sale by owner, facebook.com slash business for sale by owner. Yes. It's like the perfect storm. A stream of consciousness post on Facebook. but it says like i have seasoned recommendations that will increase revenue by 40 percent with a 24 to 35 gross profit but you've got to spend 40 grand to upgrade it like blah blah blah so like okay so this is a farm right like this is a piece of property on which they've got a lot of hustles right they've got a wedding venue hustle they've got a horse boarding hustle i mean who knows what other sort of hustle.

10:21How many acres is it Mills? It's like 30 something acres. It's 30, but they're selling 22. No, that's if you just, that's if you don't buy the venue. I think it's like, just if you buy the house and without the venue, it's 22 acres, but altogether it's like 30, I think it's like 30, 30 something acres. And there's no numbers behind the revenue and profitability of the wedding venue? No. Okay. So that would be helpful if we knew that, but I have, what's, what's interesting. I actually looked at a couple of wedding venues at one point because it can be, you know, if you have a big chunk of land, you can live on some of it.

11:01You can run the venue on some of it and then turns the whole thing into a business. But there's a lot of people that try, the first thing you got to know if you're ever going to buy like wedding venue or whatever. So a business like this, it depends on its real estate. First thing you got to know is what is the real estate worth just on its own, right? So you need a realtor that specialize in this market to just tell you what this real estate is worth. And what I have seen a lot of times is that what the seller does is they look at it and they go, what's my real estate worth? plus what if I frame this as a business like the value is higher right like if the business business at 3x cash flow or whatever the value is higher I'm going to sell it as a business so you first you got to understand like what you're dealing with from a real estate perspective and that's got to be that's probably what I'm offering just period unless you've got some this is a famous venue like there's a line out the door around the corner where you did a Kardashian get married here like, what are we talking about?

12:04Yeah. Like, I mean, this is defensibility on venue. Like there are lots of pretty places in the foothills of upstate South Carolina, Western North Carolina, et cetera, where you could have a pretty wedding venue and candidly, like you could build one for not a ton of money if you already had the land. So I'm trying to separate out the business from the real estate here. And, you know, like to me, the wedding, let's just talk about wedding venue business is a really fascinating business because I know tons of venues around here that are booked a year, 18 months, two years out. And they're each kind of remarkable in their own way, but there's not any element of it where it's like, well, if you don't get married here, you can't get married.

12:45Right. It's not like if the plumber doesn't come to fix my toilet, then I can't use my house correctly. Like it is, it's fairly discretionary. You can just choose different venues, but there is this subjective element where because of supply and demand and because of like perceived scarcity, most people only get married on Saturdays. It's a growing trend to maybe get married on like a Friday or Sunday, but you only have 52 weekends a year to sell. And so when you look at the businesses that do really well in the venue space, they get really good at revenue optimization. These folks have already figured out horse boarding because they've got the land and they probably earn into horses anyways.

13:27But one of the things that I don't like about this that would be kind of contrary to like a, this is a rural venue, contrary to like a downtown or suburban venue, is that it's really difficult to rent this out Monday through Friday. Nobody is coming there for like a corporate lunch or a small conference. Like they might do a little bit of that, But the bulk of this business is 52 Saturdays a year. You're on and probably 200 people show up and they drive onto your property and then they leave. But it's only a day and it's hit or miss. Yeah, this isn't a business you can just throw a co-working center on top of and suddenly have recurring revenue.

14:07This is, you have to get really, really good at building an entirely different business besides weddings for this to work. Or you got to get better at squeezing more juice out of the weddings. So like, that is a huge thing. Like if you're just a venue, well, you know what? People are spending a lot of money catering, like priest favors, DJ. I mean, there's like table rentals, right? There's chair rentals. There's the, in the South, it's gotten really, really popular as a business in Charleston. All they do is go reclaim old church pews and set them up in fields for people. Like they're paying for the venue separately.

14:42And they're like, yeah, we'll bring you, you know, 50 old church pews for people to sit in instead of chairs. Like there's all kinds of ways you can optimize revenue here. Like you said, catering. But a lot of times, even if they don't have a full commercial kitchen on site, they may have an affiliate agreement with a couple caterers that can, you know, make the food off site and bring it in. And they say, hey, we're going to put you on our list of top three caterers and you're going to give us a kickback. Yeah. Well, that's the lightweight way to do it is just get a kickback from the caterers.

15:12But like eventually you become a full turnkey venue. Yeah. And the fact that they have a house, I will say, if it's just an outdoor venue and a barn, then there's nowhere for the bride to get ready. There's nowhere for the wedding party to host, all those kind of things. The fact that they have the house and the barn, and it seems like most of these wedding pictures are kind of outside, you're charging separately for that. So there's ways to upcharge. I know somebody pretty well who does this in the greater Columbia area that is kind of very similar to this. It's a horse property. They have a barn.

15:46They converted the horse barn into like a place people could get ready with a nice shower. And pretty quickly, they were booked a year out. Now, they kind of had to do some extra upgrades to their property, not for revenue optimization, but for just lifestyle optimization because they're 365 days a year and there's people there 50 days a year and they don't want them creeping all over their property and kind of bleeding the lines of like their you know little safe haven and their kind of quiet space i'm curious if you're a searcher looking at this business i always think like how much of a pain is this going to be to run because you are the venue of the most important day in someone's entire life you have to deal with what's what's it called like the nightmare mother mother in law.

16:32People have entire jokes. Yeah, Bridezilla. And I'm just curious, how much as a venue is this, you're just the venue, everyone else is a different contractor that you recommend, you take a big step back, or if you get hands on, how much of this is going to be you managing 15 different businesses, catering business, rental business, venue? How much of this just becomes a massive, you're running 15 different companies in one small location? With very high stakes because the bribe will kill you if it doesn't go off perfectly. And so I used to own a business that catered to weddings, which was called Text My Guests.

17:10So this came out of, if you, Mills maybe knows the story. But when I got married in 2018, we got married in Charlotte, North Carolina at a wedding venue. Not an outdoor venue, but like an urban venue. And I wanted to schedule a bunch of text messages like, hey, the ceremony is starting. and put away your phones or, you know, the first dance starts in five minutes. Please take your seats or, you know, join us for the after party at wherever. And so I built a tool called textmyguest.com that was pre-scheduled text messages. So you could kind of guide your whole crowd through the day. And then I also set it up so you, the guests could text back photos, which turned out to be the real differentiator.

17:51So the bride could get a whole bunch of photos from people. So I set this up at my wedding and just like, let it rip. and all my guests loved it. And I turned it into a SaaS product. So we got to the point where like we were doing a bunch of weddings, but it would be, it was so weird because it was totally dead during the week. And then like the support tickets would go bananas on Friday and Saturday, right? And they would expect like five minute turnaround because they're like, the bride is like at her wedding. And it's like my, you know, I got to figure it out or this didn't work. And it was very stressful.

18:23And that was one of the reasons I had my wife running the business. uh and so we we had kids and she was like i can't keep dealing with these ladies you know like they're too intense you know and it was like all at once like on saturday so that's there are businesses like this that will ruin your like restaurants are one of these like nights and weekends like all your nights and weekends are consumed so i have a rule against nights and weekends businesses and while when your wife has a rule against it yes we our family has a rule against nights and weekend's businesses. They can be great businesses.

18:58I'm sure wedding venue is a great business, but as a searcher, if this is a venue, you probably got to be there or be darn close and you got to know the caterers around town and you got to make sure it goes off without a hitch. If you get good at that, you will develop a reputation for that and it will be good for business. But if you're not good at it, your business will evaporate quickly. Are you ready to take a leap into business ownership, but you don't know where to start? Well, look no further than Acquisition Lab, the premier resource for entrepreneurs seeking to buy their dream business.

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19:59And when you do, be sure to tell them the Acquisitions Anonymous podcast sent you. The ceiling on this is low. I mean, I think best case scenario, we don't have any numbers here, but I'm thinking best case scenario, you're not doing more than a million dollars in revenue. I think you can get to two. You think you can get to two? I know. Well, the upstate South Carolina thing throws me off. I know Nick Anderson, he's in Salt Lake City and their metro is huge. He's in Spanish Fork. They've got, I think, three or four locations, one near Salt Lake City, another Provo. And his business is doing well.

20:35But I do wonder what the average revenue of one of these venues is. I wouldn't guess it's above two, but I thought it was going to be much larger than$1 million. A couple of data points. We rented a nice venue in a good part of Charlotte. it. And I think this was also in 2018. I think it was$7 ,000, but that came with like chairs. That was like everything you need. That was not food. That was not banned. That was not anything that was just like the room and the chairs and the climate control and stuff, right? Like the tablecloths and like all that stuff. And that was seven grand. You know, there's a lot more you spend money on.

21:12So like, yeah, but you only, you multiply that by 50, uh, 50 weekends. If you're doing that. You're making what? $350 ,000. So that's$350 ,000. That's sort of the best business. That's your core business. If you only rent the property. Now, maybe, I don't know, maybe this commands more. It's a farm. It's bigger. You can ride a horse, take a picture on a horse if you're the bride. I don't know. But maybe not also because my seven grand is the urban data point. This is - Yeah, I think it's lower. I think it's probably lower, But there's some extra revenue that could be extracted. But again, the tradeoff is you're probably not doing corporate lunches on a Thursday for a lunch and learn for two hours or something like that.

21:56And I was going to say the extra million dollars we're missing is not coming from horse boarding. I really doubt it. But so I like this, though, in terms of somebody took something, they made it virtually out of nothing. Right. And they other than the cost of the dirt and the upgrades, building the barn, renovating the house, all those things, they have really probably created the highest and best use for this property and this asset. That is the question in real estate all the time is what is the highest and best use? There's not going to be an airport here. Right. There's not going to be a, you know, 300 unit apartment complex.

22:37this is probably the highest and best use. And for the existing owners, they figured out ways to maximize the heck out of it and probably not just pay their mortgage, not just cover the cost of taking care of their own horses. Now they're generating revenue from taking care of other people's, but this is a extension of a lifestyle and kind of a lifestyle business. Yeah, absolutely. This is also great if you want a land bank or something, or you think this land is in the path of progress in this town, or you've got another business in the town, or you own a catering company and you want to vertically integrate.

23:11I mean, there's a lot of reasons this can make sense. I don't know. This is like your pure searcher deal where you're just going to buy it and as a purely financial investment. You've got to have certain fees in and around it, I think. Yeah. It's practically a startup. Yeah. I think the buyer build equation is probably upside down on this. You would want to build a wedding venue into something else that you already own that it was complimentary with or already own something complimentary and buy into this wedding venue. I'd want to know what the land is worth before I went any farther at all and how truly unique it was.

23:48The thing that I like about this and what it highlights is, one, this is Facebook for sale by owner. And this is a decent sized business. This is not the Craigslist$39 ,000 painting contractor, but look at how much info they provide. You could probably, we didn't poke around, but you could probably find this property, figure out exactly where it is. You could look it up on the tax maps. You could get all the data around the property, but look at how flexible they are. They're accepting offers. They have a stated asking price, but they're accepting offers. And then look at how flexible they've insinuated the structure could be.

24:29which is the one thing that I really like about for sale by owner. It's a double-edged sword and there's a lot of negatives that come with it, but they're basically like giving you a layup. If you wanted this deal and this was something that was like really exciting and attractive to you, they're basically saying we will float the existing mortgage for you for five to 10 years. We'll sell or finance another tranche of this. And then you just bring some pre-agreed upon amount of down payment, that doesn't happen on the open market for a million dollar EBITDA businesses. but if this didn't have a low TAM, if this didn't have, you know, like a geographically constrained, you know, low ceiling on the revenue of the business and it was for sale by owner, you could take something, tie it all together, close on it, and then really scale potentially, you know, if the circumstances were different.

25:29I like how much it highlights that flexibility. Yes, I agree. I mean, it's, I love it too. When people start negotiating against themselves in the listing. Here's exactly what we're going to finance. Here's exactly the minimum amount of cash out we need. And then you just - Here's our dollar for dollar, how much our mortgage is a month. Which is probably one rental. It's probably one weekend, pays their mortgage. That's a good point. $3 ,400. And that's probably how they got started. They had this land or they bought this land and said, geez, we got to barely do it. And it breaks even, which is sort of the problem.

26:06There's like no moat in wedding venue at all, unless you've got a truly unique property. And that's what's hard to tell. You got a truly unique property or a truly unique reputation, like Kardashian got married there or something. Which is, I think, indicative of this whole industry, because you look at wedding photographers, you're kind of going, okay, I know somebody that used you, you come highly recommended, you don't have a ton of availability. There's a lot of perceived value and just what is the price point. If somebody is willing to do your wedding photography for 200 bucks, you kind of don't expect that much, but if they're going to charge$20 ,000, you know what, you're not getting like references.