Introduction
Discover how Justin Harris implemented a successful business acquisition strategy to double revenue within just 6 months. In this revealing interview, Justin shares his journey from exiting previous companies to acquiring two e-commerce candle businesses – Walter & Rosie and Stack – and his ambitious plans to 10x their value within three years. Learn the exact strategies he used to identify, evaluate, finance, and rapidly grow these acquisitions.
Founder Success Story QnA
Why don’t you give our audience a quick background on yourself as it pertains to what led you to ultimately buy these businesses?
Thanks Will, excited to be here. I had previously been a partner in two companies, one was a recruiting firm, the other a leadership software as a service company. I was a minority partner in both of those and ran operations for those. For seven or eight years, I just really thought about taking both of those from the basement to growth. About three years ago, I exited those two companies, sold my shares as a minority partner, and said, “Hey, I want to go kick the tires and try my own thing.” So I ended up starting a small business consulting company where I was doing essentially the same thing, taking smaller businesses that wanted to grow but maybe didn’t have the systems in place or they didn’t have the finances for a full-time COO, and was doing that fractionally. After a couple of years of that, I basically said, “Well, I want to do that same thing but with my own portfolio of companies.” And so that’s really when the business buying process started.
Tell us about the search process and how you ultimately identified this company.
My initial search, because prior to starting the company that we did, I was a Vice President of Operations for a really large service-based company, so I was thinking originally about service-based stuff. I was looking at those primarily, but that evolved fairly quickly into service but then into e-commerce, even though I hadn’t done e-commerce before, because I just saw the ability to scale it quickly, the ability to grab multiple and bundle them together and have kind of a similar operational system to set up operations that could run one or two brands or 15 brands right from an e-commerce standpoint if you did it right. So once I kind of realized that was possible, I started shifting gears a little bit more towards e-commerce. And I mean honestly, I just looked at deals so much like my eyes were just bleeding. I mean it wasn’t easy. That part of it to me was very arduous. It was looking at tons of P&L’s, talking to tons of owners, looking at tons of different products and niches, and really thinking through what are some of the criteria that I really think are the most valuable and where do I really feel like I could bring the most value.
When you say you were talking to owners and looking at P&L’s, were you working with business brokers, looking at listing sites online, or creating your own deal flow?
All of the above. Because I had done obviously some consulting in the past, that helped with some of just conversations from a deal flow standpoint. But I did, I mean I didn’t want to leave anything off the table, so I was talking to brokers, I looked at lots of sites, everything from Empire Flippers to Website Closers to quite a lot of the big ones out there that handle that. And then again, lots of good relationships with just brokers in the area in my geographic area as well. And honestly, that’s how I ended up with the first one with our first acquisition and ended up purchasing. I’ve been doing a national thing and they’ve been looking everywhere, but it ended up coming through just a relationship here in town with a broker.
How long did the search process take from beginning to end?
I was probably looking for about nine months before we ended up landing on something. I say nine months, I mean I would lightly for probably six months even before that, but it was probably nine months of “Hey, let’s get pretty serious with this.” And during that period, I did make offers on a couple of others that did not work out for various reasons, getting into due diligence, or they just didn’t accept offers, or they had multiples on the table and went with something else. So obviously all those things are factors into it that made it take the amount of time that it did.
How do you deal with the psychology of the months ticking by without finding anything?
Probably depends on the situation. Because of the exit from my previous companies, that helped. And because I had been doing some consulting, that helped. But what I did do is I did give myself a deadline by the end of 2020. It was 12 months would have been 12 months in total. We actually acquired Walter & Rosie in July, so I had six more months, and then the second company was a couple of months later, right before Q4. But yeah, I basically said if I can’t figure this out by the end of the year, I’m either going to really ramp back up consulting or I’m just going to go back and hop in within with another company. So I was like, but I did want to give it a solid year of “Let’s get after this, let’s see if we can find something that’s really going to work.” And if not, again, I might could have had a little more runway than that, but I just said at that point I would have given it a good old college try.
What were your target criteria when looking at companies to acquire?
I was pretty flexible from a numbers standpoint, and part of that really depended on where we were going to use. Was it going to be SBA eligible? Obviously, if it was, I mean I’m not crazy about working through SBA process, it’s just a lot to work with, but last year they had just phenomenal terms. I mean you couldn’t do much better. So I just said I’m going to leverage that if I can, which obviously opened up the range, the price range that I could look at. So I was generally looking at, you know, $250,000 deals up to, I mean honestly, three or four million. It is a big range, but I would put all those in a small business category. And for me personally, I understand the stages of growth in those areas, what type of team it takes to run those and then to push past that. So for me when I’m looking at, especially say three million and under, I really get that, I really you know from a sweet spot standpoint in terms of understanding what it takes to run one of those and then push it to the next level, I felt super comfortable.
What exactly is Walter & Rosie?
So the niche is we do Disney-inspired stuff. It’s candles, wax melts, room sprays, detergents, air fresheners, those are kind of the five big things right now. All fragrance oriented. And again all Disney-themed. We don’t have a licensing agreement with Disney, so we don’t obviously use any trademarks. But she, the founder, had already developed over a hundred fragrance types that you could, and names and things related to candles that obviously could be any of those products. So you know when we have a Beach Club candle that smells like literally smells like the Beach Club Resort if you walk into at Disney, I mean people, they love those smells, they love to remember those types of things. And so you like that candle, you spray the room spray, you put the wax melt on, you wash your clothes in the detergent, it’s all going to take you back to that happy spot. And that’s really the heartbeat of the brand. It’s hey, we want to take people back to those memories, we want them to think about the happy things in life and remind them of those experiences that they’ve had.
Can you tell us some of the deal terms – revenue, acquisition price, and financing?
So 2018 did about $280,000 in revenue. And again, if you’re talking about this is purely organic traffic and social traffic, so I thought that was phenomenal. And it gave me a lot of stuff. But then in 2019, again they backed off tremendously. They were basically only open on the weekends, even though it was an e-commerce store, you could only buy something on weekends, and some months she wasn’t even open all the week. So the revenue dropped to maybe, in 2019, to like maybe $120,000. And they netted, I think, only $40-ish off that, where the year before it was $80-100. So the margins are pretty decent. But again that’s where I was like this is this is great. So we ended up getting, and having a good conversation with the broker, I’m understanding what 2018 was, what 2019 was, and why, we blended a little bit of those financials together and ended up settling on $160,000 to buy it. So it wasn’t a large acquisition, but it was basically 4x the 2019 number and roughly 2x of the 2018 numbers. And then most of our, I mean anytime we can leverage we could have done it all with our own, but anytime we can leverage some other debt we will. So we took a $50,000 SBA micro loan, same thing there the terms were great, they paid for that for the first six months. So that’s roughly five percent of the business the SBA paid for. And then the rest of it myself and another partner we ended up doing just a little bit of IBC for that, so we used our own money and purchased the rest of it.
How did you double the revenue in just 6 months after acquisition?
We acquired it in July, and like I said in 2019 they did $100, right at $120,000. And so we were able to basically double that in the six months that we had it. So we said, “Hey, let’s can we rock this thing and get a couple hundred thousand revenue from July to December.” And we were able to do that, which is great. And that’s just kind of, and we were barely, we just barely got into Amazon and we weren’t even able to do FBA, that was just kind of fulfilled by merchant stuff that we had to do. It was just through we grew the email list, we tried to take advantage of it, we started running some social paid ads, optimized the website a little bit, still got a lot of work to do, but we did that. And again just barely for November, December got some sales moving on Amazon. So we did $200,000 in six months, whereas they had done $100 a little over 100 all of 2019 the year before.
Tell me about the second acquisition.
The second acquisition, again just good providence there, the manufacturer, the guy who’s actually helping manufacture our candles for Walter & Rosie, he says, “Hey, I’ve got another lady that I’m making candles for that may want to sell, would you be interested?” And I was like, absolutely. And then he told me what the brand was, and we had two of those candles sitting in our living room, right, so we knew it was a good product. The brand is Stack, it’s a luxury brand, and so the candles are more expensive, just a little higher in brand from a product standpoint. But I thought it would be great, and really similar scenario. A few years ago it was moving and shaking, her primary avenue was retail, and you can imagine what’s happened to retail in 2020, it was just crushed. Not only that, but she had some health issues and then COVID, the whole thing. She basically told the manufacturer, “Hey, can you just kind of run with this right now, like I can’t from a family and health standpoint.” So I knew the brand, I knew what a quality product it was, I knew kind of the same thing as it’s similar to the other in that she was very limited in online presence, and so I was like all those things added up, so let’s do it.
Can you explain the Infinite Banking Concept (IBC) and how you used it?
The core of it is you initially put your money into a whole life insurance policy. So that’s going to do a couple things. Number one, you’re going to earn a small amount of interest on that, typically you’re looking at four to five percent. So most people think, “Well that’s a terrible investment vehicle,” and you’re right, if you’re using that as the end game, it’s not good. But if you think of it as a supercharged bank account where you can become your own bank, then all of a sudden it changes. Because what you can do is, let’s say I put, you know, we put 50 or 60,000 into a whole life policy, then two things happen there. Number one, you get cash that’s there, there’s cash value there that’s going to grow at four to five percent over time. The second thing is obviously you’re going to have life insurance paid for because of that, which is nice. But then what we do with the infinite banking concept is we borrow against that policy, so we essentially become our own bank. We want to do what banks do, we put our money in and they borrow against that to go do loans. It’s the same thing conceptually. We take those dollars, we borrow against those dollars, and now I put that money into another asset. So now I’ve taken the same dollar and I’ve leveraged it to do two things, to grow in two places for me, because the policy isn’t going to stop compounding because I haven’t taken money out of it, I’ve borrowed against it. So if I had taken that money out of a savings account, it’s gone, it’s only going to be growing in one space. But now my goal is how can I leverage a dollar to use it multiple times, and that’s where infinite banking came in.
What are your ambitions for these two businesses in the next 3-5 years?
The goal was to at least make them 10 times 10x they’re worth in three years. So for Walter & Rosie, that means we would take it from $160,000 we bought it for, would it be worth $1.6 million in three years. I think we can do that. I mean this year we should probably do, we’re tracking towards about a half a million in revenue this year. And guys, there’s so many other things we need to do from a product standpoint, I mean there’s just so much we need to do that can continue to grow that. Stack, 10x would be, we can’t do that, I would love for it to be in the $1.5 million dollar worth range within three years as well. So yeah, if we do that I would be ecstatic. And like I said, I think this year, the goal this year by the end of the year would be for Walter & Rosie to be on a million dollar run rate, so north of about a half million in revenue, to be a million run rate. And the goal for Stack by the end of the year is to be on a $300,000 run rate, to get it back to where it was, and hopefully in 2022, you know I think we could double that revenue pretty easily, take it from $300,000 to that five to six hundred thousand dollar range.
Justin Harris Business Stats
Justin Harris has successfully acquired and grown two e-commerce candle companies, Walter & Rosie and Stack, with impressive results in just a short time. His business acquisition strategy has proven highly effective, with one company doubling revenue in just six months after acquisition. Below are some key statistics about his business portfolio and growth trajectory.
- Acquired Walter & Rosie for $160,000 when revenue had declined to $120,000
- Doubled Walter & Rosie’s revenue to $200,000 in just 6 months after acquisition
- Acquired Stack through seller financing with minimal upfront capital
- Targeting 10x valuation growth for both companies within 3 years
- Projected $500,000 revenue for Walter & Rosie in current year
| Company | Acquisition Cost | Revenue at Acquisition | Current Revenue Target |
|---|---|---|---|
| Walter & Rosie | $160,000 | $120,000 (2019) | $500,000 (2021) |
| Stack | Seller Financing | $30,000 (2020) | $300,000 (2021) |
Justin Harris Method
Justin’s business acquisition strategy focuses on identifying companies with strong product-market fit but underdeveloped growth channels. His method involves a systematic approach to finding, evaluating, acquiring, and rapidly scaling businesses by implementing proven growth strategies.
- Target businesses with established products and customer base but limited marketing efforts
- Look for companies with strong organic social media presence but no paid advertising
- Focus on e-commerce businesses with potential to expand sales channels beyond Shopify
- Implement immediate revenue growth through email marketing, paid ads, and platform expansion
- Reinvest profits to accelerate growth rather than taking distributions early on
Justin Harris Tools
Justin leverages several key tools and financing methods to execute his business acquisition strategy. These tools help him identify opportunities, structure deals, and implement growth strategies efficiently after acquisition.
- SBA Micro Loans – Used favorable government-backed loan terms to finance part of the first acquisition
- Infinite Banking Concept – Leveraged whole life insurance policies to access capital while maintaining investment growth
- Shopify E-commerce Platform – Core sales channel for both acquired businesses
- Amazon Marketplace – Key expansion channel implemented post-acquisition to drive rapid growth
- Social Media Advertising – Implemented Facebook and Instagram ads to reach new customers
Key Notes
Justin’s business acquisition strategy provides valuable insights for entrepreneurs looking to grow through acquisitions rather than starting from scratch. His approach highlights the importance of identifying undervalued assets and implementing proven growth strategies.
- Acquiring existing businesses with product-market fit is often faster than starting from scratch
- Building relationships with brokers can provide access to off-market deals
- Businesses with strong organic social media presence but no paid ads offer significant growth opportunities
- Seller financing can be an effective way to acquire businesses with limited upfront capital
- Reinvesting early profits back into the business accelerates growth trajectory
Get Started in Just 5 Steps
If you’re interested in implementing a similar business acquisition strategy, here are five key steps to get started on your journey to acquiring and growing your first business.
- Establish your acquisition criteria and target industries based on your expertise and interests
- Build relationships with business brokers and explore online marketplaces for deal flow
- Secure financing options including SBA loans, private investors, or alternative methods like IBC
- Conduct thorough due diligence focusing on growth potential rather than just current performance
- Implement immediate growth strategies post-acquisition, particularly expanding sales channels and paid advertising
Conclusion
Justin Harris’ business acquisition strategy demonstrates the tremendous potential of acquiring existing companies with strong foundations but unrealized growth opportunities. By focusing on e-commerce businesses with established products and organic followings, then implementing systematic growth strategies, he was able to double revenue in just six months. His approach to financing through a mix of SBA loans, partnerships, and innovative methods like the Infinite Banking Concept provides a blueprint for aspiring entrepreneurs looking to accelerate their business growth through strategic acquisitions. With ambitious goals to 10x the value of his acquisitions within three years, Justin’s journey offers valuable insights for anyone considering business acquisition as a growth strategy.