Can I buy the Convenience store?

It’s not exactly note-worthy, or that interesting, however… Should you buy the convenience store?

Let me back up…

Let’s say you’re a real estate owner… and you own a lot of real estate in a concentrated area.

One day, you see a convenience store go up for sale.

You think, hmm, that’s interesting.

Normally, it wouldn’t be interesting. However, you just so happen to own everything around the convenience store.

The land. The attention. The people.

Where normally you’d have to attract customers, you could, in theory, advertise for free on the land you’re on.

Where normally, it might be difficult to hire people, you could, in theory, recruit from that area for free.

Of course, there’s a metaphor for this—the “tuck-in.”

A tuck-in is a business for sale that otherwise wouldn’t make sense. However, when added to your portfolio—it makes a lot of sense.

This is if there is a single reason to own many businesses in the same niche or sector.

Being able to “tuck” a business into a pre-existing ecosystem supplements the core issues of the business you’re buying.

An example of this is the website builder we bought for coaches. By itself, it’s not a very good standalone business.

It doesn’t have any special features.

The marketing cost would eat up growth.

There’s no real moat to put around it.

All-in-all… not a great deal.

However, add it to an ecosystem where over 20 of our businesses target coaches, consultants, mentors, experts, or Entrepreneurs in general and… you have a very high growth potential business.

In short, by tucking it in… we can control the marketing and sales, eliminating the cost of marketing and sales.

Another example: I bought a content website with about 70,000 unique visitors a month, purely from SEO.

On paper, it’s generating about $60,000/year via paid advertising. However, when combined with another one of our businesses in the same niche generating $1.5M a year (purely through paid ads), we quickly increased the value of both businesses.

A “tuck in” is building a micro roll-up of a business.

It’s why my belief system around acquiring businesses is simple. If I’m going to go “into” something, I don’t go a little bit—I go all the way.

By mid-next year, we’ll own about 18 Entrepreneur-focused media properties inside my Media Company, Wisdom Media.

Why 18 and not just a couple?

As we prepare for the next 3 years, many websites and businesses in this segment will likely go up for sale.

By themselves, they won’t be good businesses.

As part of a group, they are easy profit and value multipliers.

These tuck-ins are generally undervalued.

Why?

It’s simple.

By itself, it’s not a good business.

Either…

Marketing and sales doesn’t work.

The offer sucks.

The delivery doesn’t make sense.

Operations are out of order.

Or, the financials don’t make sense…

Sometimes, it’s a few of these at once, which stops it from being lucrative whatsoever— to the point that they often aren’t even for sale.

Recently, I acquired a company with 60,000+ customers who spent at least $34 on a product. But the business by itself? Terrible.

It had no relationship with customers.

It had no upsells or viable upsells.

The numbers don’t make sense.

There’s no way, in any reality, this business will work. However, if I’m able to reposition the relationship with customers, include new offers, build a new marketing and sales method and integrate with other businesses? I believe we have a winner.

Thing is… buying tuck-ins requires self-trust along with an ecosystem of businesses. It requires buying a business that will take some upfront investment.

However, if you nail it? Your margins and ability to “flip” it later, or bring it into a larger roll-up?

They have massive potential.

Like most things in life, follow not what sparkles but pursue what can be made sparkly.