Six months ago, we opened an auto repair shop where the previous operator had failed.
It’s easy to look at a failed business and assume something must be wrong with the location.
Sometimes there is.
A weak market, poor visibility, limited capacity, or a bad lease can place a permanent ceiling on a business.
But not always.
When I evaluate a potential acquisition, I don’t start by diagnosing everything they did right or wrong.
I truly don’t care how I could improve their business model.
Because I’m not buying their model since I already have one that works.
Instead, I look at whether the location fits our criteria:
- 5 to 8 bays
- Major retail road
- Inside our existing footprint
- Rent less than $10,000/month
This location checked the boxes.
But opening it still required me to personally guarantee approximately $2 MILLION in rent and property-tax payments over the next 13 years.
Then I had to invest another $200,000 upfront in renovations, equipment, and marketing.
That’s a lot of risk.
And there was zero guarantee we would make money in a location where the previous operator had already failed.
But I was confident in three things:
- Our business model
- Our acquisition criteria
- Our team’s ability to execute
So I took the bet.
Last week, that shop had its highest sales week yet: $47,600 in revenue.
We’re on track to recover our entire $200,000 upfront investment less than 12 months after opening.
After that, we expect the location to produce $250,000 to $350,000 of cash flow per year.
Isn’t that wild?
Where else can you invest $200,000, recover all of it within a year, and continue earning from that investment for years afterward?
But don’t misunderstand me: This isn’t passive, easy, or guaranteed.
If we stop executing, the profit could turn into a monthly loss. That 13-year lease obligation isn’t going anywhere.
That’s why having a proven model matters so much.
We don’t need to invent a new way to operate every time we open a shop. We do the same things over and over again.
That repeatability improves our ability and our confidence to:
- Choose the right locations
- Install the right playbooks
- Hire the right people
My competitor’s failure won’t determine what this location could become for me.
Our criteria told us whether the location fit.
Our model and execution determined the result.
So when looking at an acquisition opportunity, ask yourself: “Does this location fit the business model I already know how to run?”