Welcome to the Before You Buy or Sell the Business podcast, where we help buyers and sellers learn more about the acquisition process, discuss recent transactions, and stay up to date on the latest news in the market. I’m your host, Jared Johnson, and today we have a special guest, Alina Joseph, who has acquired two businesses and is in the process of selling one. We’ll be diving into her background, the challenges she faced, and the valuable lessons she learned along the way.
Background and Journey to Business Ownership
Alina Joseph has a diverse background with a bachelor’s degree in political science and a minor in business. She initially considered going to law school, exploring various fields such as sports entertainment, criminal law, and business law. However, after some consideration, she decided that pursuing a career in business was the best fit for her. She moved from Florida to Los Angeles to pursue a dual degree in MBA and JD at Pepperdine University.
While studying, Alina gained real-world experience by working in the finance and regulatory department of California’s leading utility company. She spent five years in this role, dealing with rate cases and other complex financial matters. This experience provided her with a strong foundation in finance and a deep understanding of the regulatory landscape.
After completing her degrees and gaining valuable work experience, Alina and her husband decided it was time to pursue their entrepreneurial dreams. They wanted to be more independent, start a family, and create a lifestyle that aligned with their goals. They spent months devising a plan and exploring different business opportunities.
The First Acquisition: An Auto Repair Business
Their first acquisition was an auto repair business in Arizona. Alina’s background in finance and her ability to analyze businesses from a financial standpoint played a crucial role in evaluating the potential of this opportunity. She focused on the business’s profitability, growth opportunities, and the financial goals she wanted to achieve.
Alina emphasizes the importance of conducting thorough due diligence when evaluating a business. While the SBA may vet the business to some extent, it is essential for buyers to do their own homework and evaluate the business independently. This includes analyzing the financials, understanding the key players in the industry, and assessing opportunities for growth.
In the case of the auto repair business, Alina looked beyond the top-line revenue and focused on the seller’s discretionary earnings (SDE) to understand the true profitability of the business. She also considered the industry dynamics and the potential impact of changes in regulations and market saturation.
According to Alina, “You want to make sure it’s a fit for you and for your family. And then, you know, you want to make sure that you look at your goals financially and how the business can help you achieve that and your goals for the business.”
Lessons Learned from the First Acquisition
Alina shares valuable lessons she learned from her first acquisition. One of the most important lessons was people management. She realized that managing people’s expectations, both within the business and in the community, was crucial for a smooth transition. Alina and her husband found themselves in the middle of a community with high expectations and concerns about big corporations entering the industry. They had to navigate these dynamics and build trust with the community.
Another lesson was the importance of patience and taking the time to understand the business before making significant changes. Alina advises buyers to wait and observe, focusing on learning and building relationships with the existing team. This approach allows for a smoother transition and better buy-in from employees and stakeholders.
The Second Acquisition: An E-commerce Snack Business
After realizing that the auto repair business was not the right fit for them personally, Alina and her husband decided to sell it and pursue another opportunity. They acquired an e-commerce business that sells snacks from around the world. This business aligned more closely with their interests and skills, and they felt more comfortable in this industry.
Alina highlights the importance of finding a business that fits your personal life and values. While financial performance is crucial, it is equally important to consider the industry, the people you will be working with, and the overall fit with your lifestyle and goals.
Now, Alina is the owner and CFO of MunchPak.
Challenges and Successes in the Second Acquisition
The second acquisition presented its own set of challenges. With a newborn baby, Alina and her husband had to juggle their personal and professional responsibilities. They relied on a strong team to manage the business initially, allowing them to focus on their growing family.
Once they were able to dedicate more time to the business, they faced challenges with the existing team and external service providers. They had to make difficult decisions and replace some of the service providers to align with their goals and expectations. This experience taught them the importance of finding the right team and ensuring that everyone is aligned with the business’s vision.
Despite the challenges, the second acquisition has been successful. Alina and her husband have implemented changes, focused on marketing and advertising, and have seen positive results. They are now in a growth phase and have exciting plans for the future, including a commercial and a special candy bar to celebrate the company’s ten-year anniversary.
Advice for Buyers and Sellers
Based on her experiences, Alina offers valuable advice for both buyers and sellers. For buyers, she emphasizes the importance of thoroughly evaluating the business and understanding its fit with your personal and financial goals. Conducting independent due diligence, analyzing the financials, and assessing growth opportunities are crucial steps in the process. Alina also advises buyers to be cautious. Aspiring business owners should not solely on the SBA’s evaluation and to seek professional assistance if needed.
Additionally, Alina highlights the importance of keeping clean books and maintaining transparency throughout the process. Being open and honest about the business’s performance and challenges can help build trust with potential buyers. Sellers should also consider the industry dynamics, their personal fit with the business, and their long-term goals when deciding to sell.
Conclusion and Future Outlook
In conclusion, Alina Joseph’s journey as an entrepreneur provides valuable insights for both buyers and sellers in the business acquisition process. Her experiences highlight the importance of evaluating the fit of a business with your personal and financial goals, conducting thorough due diligence, and maintaining transparency throughout the process.
As Alina continues to grow her businesses and explore new opportunities, she remains focused on finding the right fit and building successful ventures. Her story serves as a reminder that success in business acquisition requires a combination of financial analysis, industry knowledge, and personal alignment. With the right approach and mindset, buyers and sellers can navigate the challenges and achieve their goals in the ever-changing business landscape.
If you have questions for Jared, visit JaredWJohnson.com
DISCLAIMER: The views and opinions expressed in this program are my own and/or those of my guests. They do not necessarily reflect the views or positions of my employer.