1819 – The True Measure of Success with Boruch Akbosh

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2:14With us right now, Baruch Akbash. Baruch, thank you so much for joining us. You're an investor, you're a business mentor, and you are with the Akbash Investment Group. Your website is akbosh.com, A-K-B-O-S-H dot com. Baruch, thank you so much for joining us. Sure. My pleasure. Thank you for having me. Yeah. Well, tell us about who you work with and what that work typically looks like. Sure. I work with entrepreneurs, usually owner-operators that feel a burnout, feeling like they plateaued and not able to make a breakthrough. and usually the reason is they develop their sales to the point where their current team cannot handle beyond that.

2:57If they'll bring more sales, the quality will suffer and at the same time to bring additional teammates, they can barely keep up with their current team so they cannot bring any others. So they're kind of stuck in there. So when I come in, I introduce processes that alleviate and speed up some of the things. And in addition to that, help them attract better quality teammates where they don't have to experience turnover. And with the technology processes and teammates, all that together, they actually able to make that breakthrough and proceed into seven, eight figure businesses. Wow. Yeah, that's got to be a pretty frustrating position when someone's like, I'd like to grow.

3:40I certainly know more customers. I'd like to be, you know, having conversations with and getting them in the system. The problem is we just can't serve more. That's got to be really frustrating for folks. Yes. And again, it's not just the business that suffers. It's also impacting their families, right? It all at the expense of the family. They bring work home, work late nights, they work weekends, and ultimately get to the point where they cannot go on anymore, and then they just exit. And when they exit, it has to be at lower valuations because they're not really exiting a business. They're exiting a job that not everybody wants.

4:16Nope. Nope. Yeah. That's not unless your investor wants to buy a job for themselves. Exactly. So how do we begin to solve that challenge? And, you know, and again, let's just talk maybe generally for someone that's listening to us and they say, you know what, I'm kind of in that same boat. What would you have them start to do or start to take a look at so that they can begin to solve that problem of being hindered by the lack of scalability on the operation side? Sure. Good question. Very good question. Without going into too many details, we look at the vision, of course. That's where everything starts, where you want to be.

4:59In many cases, businesses focus too much on sales and revenue that's coming in. As long as that comes in, they can cover the expenses and they're good to go. But in reality, there's something that is much more important than sales, which is profits. You can attract all that business, but if your margins keep on being diminished because you're growing and need to bring all these resources to help you out, you're just making slightly more, but then you're a prisoner. You cannot go on. And so we look at the vision. What do you really want? Why we focus on profits? Because at the end of the day, valuation of the business depends a lot on the profits.

5:37Of course, if you have a management layer and also if you have continuous growth, you diminish the risk level for the investors. Return on investment is much higher, right? The profit margins looks healthy. That's much more attractive. So we start there. Then we go down and look at all the financial indicators to help us with, okay, what's the revenue? What's the gross profit? What's the operational expenses we have? What the cost of goods are? What's the salary looks like? What the marketing expenses look like? We start to evaluate everything on the financial side. Then we'll look at all the operational indicators, number of leads, number of goals you got to make, number of certain activities you got to perform to produce certain outcome.

6:23and then we go down even deeper, which almost no businesses do that. We go into efforts. What type of efforts in terms of quantity and quality you produce to create that outcome? How much are you paying for that outcome and how much are you getting paid for that outcome? At the end of the day, everything we do has to be an investment, not an expense. So we have a special way how we break all this down and then we identify most important indicators and have somebody own it and focus on improving it. More or less, that's the flow. Of course, there's a lot of details once you start to dive in. Yeah.

7:03Based on kind of what you're talking about, that might feel pretty overwhelming to people when they start to think about everything that needs to get done. If someone's looking at that prospect and they are feeling overwhelmed, what might be the most important thing that they could, what's something that they could do this week that you think might help them to get some clarity about maybe how to eat this elephant one bite at a time? I would recommend to reach out to me, of course. But the reason is not necessarily to get me as a guide and mentor. I would share for free at no charge resources and maybe even some blueprints and templates that business owners get leveraged and without any strings attached can take their business to the next level.

7:53And of course, if they would like some additional insights, additional support, I'll be able to get them those resources or maybe even engage myself in the project. Yeah. And so does the process, like when you think about the folks that you've worked with historically, Baruch, how long does the engagement typically last? Well, it depends how far you want to get, right? Everything is about the division. I've had the entrepreneurs, for example, started with me when they were at the 600K. We brought them into 3 million in revenue where that was, for example, a SaaS company. The margins looked very good.

8:36They were at the million or so in profits. the entrepreneur was able to exit at five and a half multiples, five and a half million, that's when he exited. So it all depends on you. If you want to go beyond that, of course, there's no end. So once you set the division of what you want to hit, we're going to hit that. On average, it would take anywhere between one to two years. If you want me to tell you that it's easy, it's not. It's toil, it's work, but it's well worth it. For example, right now, I'm engaged with one of the entrepreneurs who acquired the business at two and a half multiples. Right now, he's at the 1.1 million in profits.

9:14So once he introduces the management level, once we introduce all these processes, in a couple of years, that business could easily go for$8 to$10 million as a valuation if he decides to exit. So it all comes down to vision, where you want to exit. Yeah. Do you work better in certain types of industries? So I'm just wondering, you know, to our friend that's listening, you know, who might they know or, you know, what might be the indication that they should probably grab a call with you? My focus right now is home services, starting with the pest control, HVAC, home restorations, water damage restorations.

9:56But I'm very proficient with the technology, being an ex-web developer, then transitioned into marketing. I did sales, mentoring, coaching, businesses, business processes, and so on. So I'm pretty much comfortable with any business, but my focus is home services. It's funny you were mentioning, I think many of us as entrepreneurs came from that tech background, right? Where I was designing websites back in the nineties, late nineties. And here we are. That's my story. Maybe you had the same book that I did. I had a big old giant thick book. It was like three inches thick, HTML2. And that's where it all began.

10:38Yes, that's been a while. Yeah. Looking at the year, I'm wondering if maybe I could just have you share maybe some thoughts or insights about where we are. And, you know, if you're an entrepreneur, particularly, you know, if you're, you know, in the professional home services, right? What trends are you most excited about right now? or asked differently to someone that might be an entrepreneur, what should they be paying attention to right now? I would say that right now we're in a stage where a lot of baby boomers are looking to exit. And a lot of them grew their business to a certain level and they're not necessarily technology savvy.

11:21Those businesses have a lot of potential, a lot of growth, and they're not capable of doing it. And because they all own or operate it, usually their kids do not want to be involved. Kids do not have the same aspirations, the same tenacity necessarily. They all want to be on computers and just pretty much be hands off, look for something much simpler. So there's a lot of opportunity right now to come in and assist those type of businesses. You can maybe acquire other businesses. If you're in home service, you're doing great. Maybe your growth could be at much faster pace if you acquire your competitor next to you.

12:01And of course, you're going to need assistance to roll this up and to have it all under one umbrella. But it's doable. So you can basically acquire those businesses and grow through those merger and acquisitions and get your businesses to a completely different level by doing that. So I'm looking at that trend right now myself as well and on the market actually to acquire businesses that way. and roll them up into one major company. Yeah. So again, your website, akbosh.com, or maybe you would encourage folks to connect with you, LinkedIn or however, what is the best way for someone's been listening to our conversation to say, well, I'm interested in having a conversation.

12:45You know, I certainly, I was just thinking about this. Before I get into that, because that is, I agree with you. I think there are so many amazing small businesses out there. Again, kind of that owner operator, you know, it could be a boomer. They want to retire. They want to exit, but the kids don't want it, right? Listen, I've got two of those in my family right now. I don't want to do what they do, but there probably is somebody that might make a good person to kind of take the baton and carry it and keep running with it. But you think about the advantages of taking an existing business with an existing book of business, like they've already de-risked it so much for you, rather than starting from scratch.

13:29You know, why not take something? I mean, it's probably a huge advantage potentially, right? Exactly. As investors, we invest, right? The first thing we look at, what's the value of the business? Second thing we look at, what's the risk level? What would be return on investment and what's the risk level? So a return on investment can look good, but if a risk level is too high, we don't want it. And of course, if business in their first year, just like a baby, right? It's a toddler. So it cannot sustain itself necessarily. So it requires a lot of your attention and it's not as attractive to us as investors.

14:05We want something that's at least five years in business and it's on the upper trend, right? So it has the growth, but it has its limitations because of who's running it. The owner-operator, with all the respect, right? They're not necessarily in a position, not technology-savvy to accommodate that growth. Yeah. All right. Baruch Akbosh. Again, your website is akbosh.com. A-K-B-O-S-H.com. Baruch, what would you recommend that people do? Like if they want to get in touch with you or kind of have a conversation and, you know, kind of talk about either they're stagnating or sounds like you're open to conversations for people that are interested in maybe exiting or maybe acquiring as well.

14:52Yeah. If you'll go to akbash.com, there's a button there to inquire about business valuation. So you just provide your email and we'll provide you the valuation kit. Again, it's at no charge. You can start there. And then if you want to dive in zipper, I strongly recommend for any business owner out there, don't just go to work and do your day-to-day stuff. Find out what the evaluation of the business is. Find out where you want to be when you want to exit, what that journey would look like for you to close that gap. And I can, with my team, provide you that. But of course, at no charge, you can feel free to come in and start there.

15:38That's what I would do. Awesome. All right. Baruch Ashbash, again, investor and mentor. And again, your website, akbash.com. Baruch, thank you so much for joining us. Sure. My pleasure. Thank you for having me, Josh.

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