He 10X’d His Money in 3 Years With a Painting Franchise

Zac Smith was a mechanical engineer who wanted more flexibility and upside than a corporate career could offer. He bought an existing CertaPro Painters franchise in North Carolina with three employees and under $1 million in revenue. He put down about 10% in cash and financed the rest with an SBA loan and a small seller note, backed by a personal guarantee. 

Three years later, the company was on track for $3 million in revenue and $600,000 in profit. Smith sold it for $1.5 million, all cash at closing. In this episode, you discover how to: 

• Raise prices without hurting your close rate, which took Smith’s gross margin from 42% to 50% 

• Think of your business as a sales and marketing company first, no matter what you actually deliver 

• Win against low-cost competitors by selling trust instead of price 

• Walk away from customers who only care about price, so you avoid being busy without being profitable 

• Shift your revenue mix toward customers who send repeat work without new marketing spend 

• Frame a limitation buyers might see in your business so they notice its strengths first 

• Handle a surprise during due diligence in a way that builds the buyer’s trust instead of costing you the deal 

Show Notes & Links

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Definitions

Letter of Intent (LOI): This document outlines the basic terms and conditions of a deal before a formal agreement is drawn up. It serves as a mutual commitment between the buyer and the seller to move forward with the transaction on the agreed-upon terms.

Due-Diligence: This is a comprehensive appraisal of a business or investment undertaken before a merger, acquisition, or investment. It seeks to validate the information provided and uncover any potential risks or liabilities.

Earn-out: This is a financing arrangement for the purchase of a business, where the seller must meet certain performance goals before receiving the full purchase price. It reduces the buyer’s risk and aligns the interests of both parties post-acquisition.

About Our Guest

Zac Smith

Zac Smith is a mechanical engineer turned business owner. Looking for more flexibility and upside than a corporate career could offer, he bought an existing CertaPro Painters franchise in North Carolina that had three employees and under $1 million in revenue. Over the next three years, he raised prices, lifted gross margin from 42% to 50%, and built a base of repeat customers, putting the company on track for $3 million in revenue and $600,000 in profit. He sold the business for $1.5 million, all cash at closing.