Introduction
Discover how Keith Leinbach transformed a six-figure business acquisition into an eight-figure exit in just over two years. This remarkable business acquisition exit strategy showcases the power of buying an existing business with growth potential and implementing the right expansion tactics. Keith’s journey from corporate executive to successful entrepreneur provides valuable insights for anyone considering business acquisition as a path to financial freedom.
Founder Success Story QnA
Can you share your background and corporate experience leading up to your decision to buy a business?
I graduated college in the late 80s with a degree in mechanical engineering and went to work for what’s now Accenture – it was Arthur Anderson at the time. I followed that career path and worked for several companies including Insweb, which we took public in ’99, and BEA Systems, which we sold to Oracle for 17 billion. My last position was as CEO of a pretty big company, but I got fired after a disagreement with the board. That exit made me realize I didn’t want to go back to corporate world, and I started thinking about building my own businesses instead.
How did you discover the power of business acquisition versus starting from scratch?
I discovered it on my own, though it took me a while. I first tried building businesses from scratch – I built three laundromats, attempted to build four car washes, and spent time on lease negotiations for salon suites. All of these were ground-up ventures that took a lot of time and money. Then a business broker called me about a business listing. I had signed up for listings from several brokers including Quiet Light, and this particular business caught my interest. When I saw that it came with existing revenue and could be grown, I realized acquiring a business might be better than starting from scratch.
Tell us about the acquisition process and how you found this particular business?
I had signed up for listings from Quiet Light, Empire Flippers, Website Closers, and Transworld. Chuck Mullin from Quiet Light sent me this particular listing. It was a business manufacturing automotive parts with both wholesale and retail online sales. The business caught my interest because it was in an industry I liked, and I was passionate about that area. This was a hot listing with several offers, and we ended up closing within two months of making an offer.
What did you do in the first few months that led to such rapid growth?
The owner gave me the answer key – she told me she hated social media and was a great engineer but had no Facebook account. I realized this was primarily an awareness problem. The product was well-engineered, but people didn’t know about it. I hired a digital marketing firm to increase awareness through social media and online channels. Then, as I talked to customers, I noticed they kept asking if our products worked with other products. After hearing this question hundreds of times, I realized I should develop those compatible products myself. I started creating products that worked with our core offerings, which increased our average order value from $1,600 to over $3,000.
How was the previous owner making sales if she wasn’t doing marketing?
The founder came from the industry and had some connections. She also had a friend who understood social media and did some work on the side, but not enough to show significant returns. The business had some awareness through these connections, but it wasn’t being maximized. That’s why there was such room for growth when I implemented a professional digital marketing strategy.
Did you have an exit strategy in mind when you acquired the business?
I initially thought I would keep it longer than I did, but this past summer I got spooked by potential tax changes. I thought if those changes came to fruition, I would have to grow the business a lot more just to be worth what it was worth today. That got me seriously thinking about selling. I hired a boutique investment bank to help me sell it, and I told myself I needed to be out by the end of the year. We managed to close the sale in December, just over two years after I acquired it.
Can you tell us about your other business ventures like the laundromats and Smash My Trash?
My Amazon FBA business was the fastest way for me to lose $100,000. The challenge was that I couldn’t talk to customers directly – Amazon puts a filter between you and them. I couldn’t find out what they wanted or needed, and I couldn’t make the product better based on their feedback. The laundromats are doing well – they generate about $30,000 a month in revenue. Once the debt is paid off, they should do 32-35% net, which is pretty good. Smash My Trash is a franchise where we smash the contents of dumpsters to reduce haul frequency. A fully ramped-up truck should do about $500,000 a year, and I have 10 territories, so that’s potentially a $5 million business running at 20-30% margin.
What are your thoughts on different entrepreneurship paths – starting from scratch, franchising, or buying an existing business?
I think building a business from scratch is a young man’s game. It takes a lot of work and the runway to profitability is long. When you buy someone else’s success, you know it works, but you pay a multiple of earnings for that. The great thing about buying smaller businesses is that you’re not competing with venture capital or private equity firms – they typically look at businesses with over a million dollars in EBITDA. You’re competing with other individuals like yourself who want to buy a business to support their family or eventually sell it. Each path has its pros and cons, but for me, buying an existing business provided the cash flow and growth potential I was looking for.
Can you share your experience with the plane crash and any life lessons from that?
I was flying home to Denver when I lost my engine at 400 feet above the ground. I knew I wasn’t looking for a place to land – I was looking for a place to crash. I ended up crashing in the median of a highway and survived by absolute grace. This experience reinforced something I already believed – life is short and fragile. There are so many things people want to do in their lives – learn a language, live somewhere else, get fit, leave a job they hate, become an entrepreneur – but they keep putting it off. If you don’t go pursue those things, you could run out of time or have it taken away through some tragic event. Write down what’s important to you, identify what’s in the way, and go do it. The journey itself is valuable, and you don’t want to die without having pursued what matters to you.
Keith Leinbach Business Stats
Keith’s business acquisition and growth strategy resulted in impressive metrics. The automotive parts business he acquired for six figures was grown 20x in just over two years before selling for eight figures. The following table and bullet points highlight key statistics from his business journey.
- Acquired business for under $1 million (six figures) in August 2019
- Grew revenue by 100% in the first three months of ownership
- Achieved 20x growth in just over two years
- Sold business for eight figures in December 2021
- Increased average order value from $1,600 to $3,000+
| Business Metric | Value |
|---|---|
| Acquisition Price | 6 figures (under $1M) |
| Exit Price | 8 figures |
| Ownership Period | 2+ years |
| Growth Multiplier | 20x |
| Average Order Value (starting) | $1,600 |
| Average Order Value (at exit) | $3,000+ |
Keith Leinbach Method
Keith’s success with his business acquisition exit strategy can be attributed to several key approaches. His method focused on leveraging existing business strengths while addressing obvious weaknesses that the previous owner had neglected.
- Identified the business had an awareness problem, not a product problem
- Hired professional digital marketing expertise instead of trying to do it himself
- Actively listened to customer feedback and developed compatible products
- Expanded sales channels internationally to Europe and Asia
- Implemented exceptional customer service as a core brand value
Keith Leinbach Tools
Keith utilized various tools and resources to implement his business acquisition exit strategy. He focused on leveraging professional expertise in areas where he lacked interest or experience, allowing him to concentrate on his strengths.
- Digital Marketing Firm – Hired professional marketing experts to increase brand awareness
- Fractional CFO – Brought in financial expertise to analyze business metrics and guide growth decisions
- Operations Manager – Hired a full-time employee to handle day-to-day operations and order fulfillment
- Customer Service Platform – Implemented systems to provide exceptional post-purchase support
- Boutique Investment Bank – Engaged professionals to handle the sale process and maximize exit value
Key Notes
Keith’s journey provides several valuable insights for entrepreneurs considering business acquisition as a path to success. His experience highlights both the opportunities and challenges of buying an existing business with growth potential.
- Business acquisition provides immediate cash flow compared to starting from scratch
- Focus on businesses where you can leverage your strengths and outsource weaknesses
- The “just add marketing” cliché can be true if the product is strong and awareness is the real issue
- Customer feedback is invaluable for identifying new product opportunities
- Be prepared to exit when the right opportunity presents itself, even if earlier than planned
Get Started in Just 5 Steps
If you want to replicate Keith’s success with business acquisition exit strategy, here are five key steps to get you started on your journey to acquiring and growing a business.
- Sign up for business listings from multiple brokers like Quiet Light, Empire Flippers, and Website Closers
- Identify industries you’re passionate about and businesses that align with your strengths
- Evaluate opportunities not just on current performance but on growth potential
- Develop a plan to address obvious weaknesses like marketing or product range
- Be prepared to hire expertise in areas where you lack skills or interest
Conclusion
Keith Leinbach’s journey from corporate executive to successful business acquirer demonstrates the power of the business acquisition exit strategy. By identifying a business with strong fundamentals but untapped potential, he was able to achieve remarkable growth in just over two years. His story shows that you don’t need to start from scratch to build a successful business – sometimes the fastest path to success is acquiring an existing business and implementing the right growth strategies. Whether you’re looking to leave corporate life or diversify your income, business acquisition offers a viable path to entrepreneurship with immediate cash flow and proven potential for growth.