Good morning,

I had an extensive (and very interesting) conversation with a SaaS in the ag space, and I got a good update on another business in my pipeline.

I’ll cover both today.

Farm SaaS

Last week I told you about a farm management software I found, which I’ll call “Farm SaaS” (very descriptive).

I had a 1 hour chat with the owner, and… wow. This one is crazier than I thought it would be.

Here’s a high-level roundup on the business:

• It’s an ERP system for commercial farms — all-in-one platform to manage the farm

• Has had some of the largest farms in the U.S. as clients

  • Top 10 wine producer, Mormon church

• Owners split 10 years ago

• Soon after, the remaining owner (we’ll call him John) came into an inheritance

• 5 years ago, John (then almost 70) was rich and tired. He called every client and told them he was shutting the business down

• Since then, clients have been churning out

The guy I talked to (we’ll say Ed) is now the owner of Farm SaaS. He was a contracted developer for years on the platform and eventually bought Farm SaaS for a song.

To make matters even crazier, Farm SaaS was only one of three businesses John and his former partner built — all similar software for different niches/industries.

Ed told me commercial farms move so slowly that some clients (like the wine producer) are still transitioning out (five years later).

My conclusion on Farm SaaS

I got really excited. As Ed described the three businesses John and his partner ran, I heard hit many of the traits I’m looking for in my biz search:

✔️ Mismanaged business

✔️ Amazing “bones” — great clients, great history, great relationships

✔️ Tired owner(s)

✔️ Good niche

This would be the crown jewel of my search so far, if not for one thing. I think the business is too far gone.

I hit it off with Ed, the current owner. I found him to be honest and sincere. I asked him if there was any value in the remaining two businesses John owns that Ed didn’t buy, and Ed strongly advised there wasn’t.

Here’s the kicker: Ed has a consulting business and works with all the same clients in question in that business, too. Ed really knows his stuff.

I pushed a little harder. Why not beg the current clients to stay?

He told me everything he’s done to salvage the clients with Farm SaaS and… it was extensive.

So, I’m going to err on the side of wisdom. Ed knows his stuff in this space. I don’t, and he passed my internal lie detector test. I’m going to go with him.

I’ll continue to try and build a relationship with Ed. If for no other reason, he’s a blast to talk to.

You’re overestimating some owners

If John’s behavior in the Farm SaaS story sounds untrue to you, you overestimate how some business owners think.

I’m learning a lot about owner psychology from talking to them. Here’s the key point: Some owners solve for time and ease, not money.

Imagine you’re 70, wealthy, and tired.

You don’t know the first thing about marketing or selling your business — it just sounds like a lot more work.

You’re interested in decreasing your workload, not increasing it.

Remember, you have enough money.

The easiest thing to do is to just put up a closed sign and call it quits.

Owners who think like this are who I’m targeting. They are out there.

Ecom gov’t business update

Remember the ecommerce business that has government buyers? The one that wanted to see references and a LinkedIn before sending me an NDA to discuss the business’s financials?

That owner reached out to me to re-engage. Quick roundup on the business:

• 100% ecommerce

• Owned/operated 100% by two Baby Boomers out of their garage

  • In business since 2007

• Sells directly to government agencies (also sells to civilians)

• Wants to retire and go on a ton of cruises

I learned this week that the business did $350k of SDE (seller discretionary earnings) last year.

He doesn’t have employees and operates the whole business out of his garage. If you saw his website, you would be floored it’s the same site processing $1m+ of transactions each year.

I’m definitely intrigued and am planning a face-to-face visit this quarter.

I don’t know if an ecommerce business is for me, but I think this one has a ton of potential.

If it’s not a fit for me, I’ll at least make a new connection and will help him try to sell his business.

So, putting an early bug out there: if you have potential interest, let me know.

I’m having fun talking to the folks who reply to this email, and I appreciate you spending some time to keep up with my updates.

Have a fantastic week.

Mike