Lesson 81: Flexibility
About the Searcher
In college, I worked part-time as a weight room associate. This is a fancy title for the person who cleans up the weights and makes sure clients operate equipment safely. This role allowed me to chat with clients about their exercise routines and to work out myself. The weight room’s only drawback was there was not enough room to sit down and stretch; I needed space to improve my flexibility. I would step into the hallway next to the staircase and lie down on the carpet to stretch after my workout. When I reached across my body toward my toes, I tried to resist the temptation to seek comfort. Instead, my flexibility improved as much as my strength and endurance.
When it comes to acquiring a business, your Search Process needs strength, endurance, and flexibility. These are the three measures of the effectiveness of your Process. Strength is measured by the focus of your search and outlines the specific steps you take to generate deal flow. Endurance is measured by your ability to maintain your Process with the same vigor in week 6 as in week 60. Flexibility is measured by your ability to perform the variety of tasks search requires without limited range of motion. The Searcher who is flexible resists the comfort of doing the tasks most familiar and stretches their muscles for each part of the Process.
About Entrepreneur Through Acquisition
Drafting an Investment Thesis is a critical part of the Search Process. In ETA, you need a deep understanding of the industries where you plan to search, and the Investment Thesis includes your Industry Analysis. Understanding the industry builds conviction and improves your chances of buying a business that will grow during your ownership.
During my analysis of the Career and Technical Education (CTE) industry, I found several reasons to believe this industry will grow over the next ten years:
Aging population drives demand to build up the workforce
A gap persists between the cost of CTE programs and the cost of substitutes such as a 4-year university
The House/Senate CTE Caucus shows bipartisan political support for pro-CTE legislation
Three facts about CTE are not enough to find a great business; it is simply a signal to keep stretching until I reach my goal. I spoke with Rodrigue Djikeuchi about building an investment thesis. He graduated from Chicago Booth this year and launched his firm, Everstone Succession Partners, to begin his Search. He told me his investment thesis was over 15 pages. “ETA is not difficult in the same way laying cement in the hot Arizona sun is difficult. ETA is extremely uncomfortable because you face hundreds of rejections before you find the right opportunity. But you can do it,” he emphasized.
About the Bigger Picture
Several sections will go into my Investment Thesis, including my Search Process, my Industry Analysis, and my Values. My values are to act with love, humility, and wisdom. As I build my Investment Thesis this Fall, I will seek discomfort. I enjoy many pieces of ETA. I enjoy learning about searching, acquiring and building great businesses. However, ETA requires every Searcher to stretch further than they have before in their career. We are required to stretch, even if we have to go out in the hall. This humble attitude makes you flexible enough to take the steps necessary to succeed.
This is Lesson 81: Flexibility. Next week is Lesson 82: Visibility.
