hh, the J curve.

This is the phenomenon that happens in probably most acquisitions where profits dip after you buy the business, and then rise again, and hopefully much higher than they were when you bought.

The name comes from plotting earnings on a graph. The line looks like a "J".

Now the question for your acquisition would not be, are you going to experience the J curve?

You probably are; you should expect it.

Instead, it's:

How long will the J curve last?

I was at SMBash this weekend, and more than one business buyer felt discouraged after having owned their business for well over a year, maybe 2, and still feeling like they were "in the J curve".

You'll hear a similar sentiment from today's guest, Matt Drndak.

Matt is looking at having doubled revenue and earnings, but it's taken him 3 years.

And those 3 years have felt long.

I'm not sure what the average J curve is, and anyway it would be dangerous to try to pin down an average because every situation, every business is unique.

But I would suggest this.

Like the search, like the transaction, like so many things in buying businesses...

It's going to take longer than you think.

Back to Matt.

He bought a really interesting business. An ecommerce-enabled parts business for construction equipment.

Listen for how Matt, without his own experience around such machines, learned this business, and how there's a moat that keeps Amazon and other would-be entrants at bay.

Please enjoy this conversation with Matt Drndak, owner of DHS Equipment.