Justin returns to the podcast and discusses the challenges and lessons from acquiring three Apple-focused businesses since 2020 amid consolidation in the Apple consultant community and difficulty targeting Mac-using clients. He describes buying a small Iowa Apple consultancy with the seller kept on for business development, only to learn ownership doesn’t equal sales skill and that ex-owners often clash as employees; the owner left after disputes, but clients were retained and served remotely. He then explains acquiring a Colorado Apple training company to build a B2C training channel, but it failed due to lack of focus, content upkeep, staff turnover, and the effort required to produce non-evergreen training. A larger Missouri consultancy/Apple authorised service provider acquisition brought clients and a strong team but also personality conflict and a payment-structure mistake that strained cash flow. Despite stress and missed pay-checks, Justin says the acquisitions ultimately improved finances, team quality, and growth, stressing the need for stronger financial position and deal-specific negotiation.
00:00 Welcome Back
01:15 M&A Episode Setup
02:06 Why Apple MSPs Consolidate
07:43 Three Acquisitions Overview
10:03 Deal One Iowa Lessons
12:02 Owner Clashes After Buyout
16:21 Deal Three Missouri Personality
18:25 Deal Two Training Misfire
27:37 Deal Structures Cash Flow Traps
32:50 Big Takeaways And Closing
Listen on Spotify or Apple Podcasts
Connect with Justin Esgar on LinkedIn by clicking here – https://www.linkedin.com/in/justinesgar/
Connect with Daniel Welling on LinkedIn by clicking here – https://www.linkedin.com/in/danielwelling/
Connect with Adam Morris on LinkedIn by clicking here – https://www.linkedin.com/in/adamcmorris/
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We look forward to catching up with you on the next one. Stay tuned!
Transcript:
Dan: Justin, welcome back to the podcast
Justin: Oh, I’m so glad to be here again
Dan: And in the first bombshell, following our last episode, Adam has not watched “Taskmaster.”
Justin: Weirdly enough, so they just got picked up for six more series. You guys call them series over there, we call them seasons. and so, the Taskmaster fandom is going crazy because every five year, every five series they do a champion of champions where they bring the five champions on to be the best of the best.
And because now they got picked up for another six series, they will make it to season 26, which means at season 25 they will do champion of champions, and they will have now five champion of champions, which means they will have the ability to do champion of champions, and the Taskmaster Reddit community has lost their mind over this, and I am all for it.
But Adam still hasn’t watched, so we’re
Adam: Yeah, I didn’t have a clue what you just said there really, [00:01:00] but
Justin: It’s cool though, but it… Your audience does, I know they do. They all do. You know what? if you know what I’m talking about when it comes to Taskmaster, please email Adam at
Adam: Yeah.
Justin: insert Adam’s email here, and have them… Just send him clips.
Dan: And in a topic that does interest Adam and I, M- M&A,
and we’ve got a, we’ve got a working title that we’re gonna, we’re gonna, we’re gonna keep it, “How I…” And we’re gonna have to use the beeping machine in the, in the editing of this episode. “How I Fund Up Three Acquisitions.”
Justin: good. I was gonna say, I was gonna say effed up. I didn’t know what word like… Do you guys say bunged, B-U-N-G, bunged up? Is that a curse word? No. I’m trying to…
Adam: F-type is good. F, F is good. F,yeah
Justin: All right, that’s fine. Yeah, effed it up. Effed, effed them all up. listen, if you’re a small MSP and you’re thinking about acquiring other ones, don’t.
No, do. [00:02:00] I always say don’t, but, you know, it is a good way to acquire… here’s the sitch. Here’s the sitch, guys. as you all know, and your listeners probably know and hate me for, I am an Apple consultant, not a PC MSP, and there are a dwindling number of Apple-only-focused Apple consultants in the United States.
This is by no means anyone’s fault. Apple is attempting to, increase that number. Years ago, they opened it up and let Windows MSPs become Apple consultants because they wanted more people to do iOS things. now that the iPhone has captured the entire market, they said, “We don’t need this anymore,” and then all the Windows people just dwindled out.
And so the numbers have been getting lower and lower. And so that’s one aspect of it. The other aspect, and these are Apple’s numbers, I don’t, I can’t attest to them, but Apple is claiming to have, 24% of the market share be Mac [00:03:00] products. I don’t mean phone, I mean like literal, like comp- laptops and desktops, right?
24% is Mac products. And they are hardcore looking to make that number higher, and therefore they need technical partners, which is what consultants used to be called, and business partners, which are the resellers, sell more product, push more product, whatever it is. And they… There’s some new stuff that’s come out that’s really helpful.
Apple is really big on being like, “There’s all this opportunity out there,” but all of the technical partners are like, “Where is it? How do we get to it?” And Apple’s no, that’s for you to figure out.” So where I’m going with this is that, because client acquisition is hard for anyone, specifically, especially Apple people, because there’s no way to easily target customers who use Macs.
I mean, you can guess based on industry, like if they’re a graphic design firm, they’re probably using Mac, right? But if you want things that are outside the graphic industry, it’s hard to find those people using any sort of MSP marketing company that’s out there. And [00:04:00] so a great way to increase your revenue is to just acquire other companies, right?
Acquire these companies that are in geographic difference than your own. Acquire them if they have different services than your own, and we’ll get into why I did who I acquired, and see if you can expand your services outwards. Now, there’s a lot to do when you make that acquisition and we’ll, and I think that’s where we’ll lead to, but like that…
When I say don’t, it’s a lot of work. When I say do, the payoff in the end, if you do it right, will help your business
Dan: So it’s not a painless silver bullet, alternative to good old-fashioned prospecting and building up organically your client base. there are perils as well as the, as well as the promise and opportunity that comes with M&A.
Justin: Oh, 100%. I mean, right, nothing in our– nothing when it [00:05:00] comes to being an entrepreneur is silver bullet, you know, painless. other than just saying “I give up,” and just closing your business, but you don’t wanna do that either.
Dan: however, I’m not sure whether we talked about this in the green room or earlier on after we clicked record, but you were describing the changes to the Apple, population community. And, for some, historical Apple consultants, technical partners, they, they are now have exactly that mindset perhaps.
perhaps I’m done with this. And in, in truth, you need someone willing to sell, as well as someone willing to buy to make M&A happen. So i- is this
actually the best time to be a consolidator in the Apple community?
Justin: Yeah. It’s actually, it’s… Side note, and we talked about this on the last time I was on your show, we talked about my conference, right? And I’m still trying to get tickets sold for the conference, and I’m hitting up everybody that has been to the conference in the past. The amount of email addresses that are bouncing back because those people are just out of business, right?
They just gave up, right? [00:06:00] So yes, in the, especially in the Apple world, I’m seeing a consolidation of Ap- of official Apple consultants slash, they’re called Apple technical partners, but, Apple technical partners. On the PC side, I’m always meeting new PC MSPs. “Hey, I just got started. what do I have to do?”
And I’m like, “Get a customer.” I’m not… I am seeing, you know, a good amount of M&A on the PC side. There’s a lot of… Oh my God, and the amount of spam I get from people being like, “Hey, I’m an M&A, you know, company, and we wanna help. We have a customer that’s perfect for you, who wants to buy you right up.”
And I’m like, “Yeah? Are they gonna give me $5 million?” They’re like, “Absolutely.” And then they go, look into things and they’re like, “We’re not giving you $5 million.” I’m like, “No sh1t you’re not giving me $5 million.” that’s just the way this is. th- the M&A thing, yes, like you said, Dan, yeah, y- you have to have somebody who’s willing to sell, and you have to be willing to buy, and there is a lot of negotiation that goes into this, right?
Because jokingly, when [00:07:00] I say “I want $5 million for my company If you go based on QuickBooks data alone, my company’s not worth $5 million. I believe it’s worth $5 million because there are intangibles that go with a company like your brand or, anything else you do. Like my name hosting the shows that I host or doing the podcast that I do comes synonymously with my company name.
and so like I think there’s value there, but like you can’t put numbers to that value unless you’re like a Gary Vaynerchuk, right? So it gets a little, it gets a little muddy. So I’ve acquired, since 2020, I’ve acquired three companies. I acquired an Apple consultant, a 2% Apple consultant in Iowa, which allowed me to say something I never thought I’d ever say growing up on Long Island, which is I am the greatest Apple consultant in Iowa.
I acquired an Apple [00:08:00] training company in Colorado, which we kept alive for a long time, but like kinda bombed it, and I’ll get into that. And we acquired an Apple consultancy who was also an Apple authorized service provider, meaning they’re able to fix Apple hardware legally with Apple parts in Columbia, Missouri, which then again gave me the great saying of I’m the best Apple consultant in all of Missouri.
My mom’s super proud of these two sentences, I’ll tell you that much. she’s “Why don’t you go be a lawyer?” I’m like, “I’m 46. Leave me alone.” and I acquired each one of them differently. We did different setups each time. We had different lawyers each time. And each one of them kinda taught me a lesson about the next one because
This– the problem with M&A really is like you can’t cookie cutter it because every company you’re acquiring is coming with its load of problems, whether that’s personal, you know, like the people of the company, that’s [00:09:00] whether it’s their workflow, whether it’s their pricing, whether it’s their tooling.
You know, each one comes with some sort of problem, and you’re gonna have to deal with this as the owner. And like we love… IT people love systems. Like we want everything to, you know, follow the same ticketing system and workflow to billing and then do this thing. And if we can wash and rinse and repeat that, we’ll make a lot of money.
But you can’t do that with M&A unless you’re a PE firm, but like we’re ignoring that part.
Adam: So yeah.
what I guess what would be good to hear with each of those M-M&A stories, what was the motivation? What problem were you looking to solve for each of them? And to what extent after you’d completed the transaction or, and/or a few months later, did you realize how far you were off or maybe you did solve that problem.
So just at a simplistic level, the first one you did, this two-man small outfit in, where was it? Idaho.
Justin: Iowa. [00:10:00] Iowa. Iowa. Yeah
Adam: why?
Justin: it was a, it was weird. I think the situation, and we’re go- I’m trying to remember six years ago, but the situation was like this person wanted out of the game. They wanted to stay in the game. They didn’t wanna own anymore.
Adam: So they already knew you and you already knew them
Justin: They knew me. they had been an Apple consultant.
They had come to the conference. They knew who I was. And they were coming to me, I think, originally for advice, how to grow, how to do things. and, but they had admitted to me that they didn’t wanna be in the game anymore as an owner. The ownership of the business was taking a toll on them, and their relationship.
And,I think probably knowing me, I was like, “Why don’t we just join forces?” And they were like, “How would that look?” And I was like, “Well, we’re looking for a business development person. You’re looking to not have to worry about liability and ownership. Perfect.” And so it was a small purchase, in terms of numbers.
We did 25% up front and then 75% after six months, which we put as like a transition [00:11:00] time. We migrated them over, we brought all their tools over, and we gave them a two-year employee contract and here was screw-up number one. I assumed that person would be good at business development because they owned a company Wrong Just because you own the company doesn’t mean you’re good at growing the company.
It wasn’t a very large purchase and like in retrospect, I’m like, if the company was purchased for this amount of money, clearly they didn’t have a big enough company that he couldn’t grow the company, right? i- if I’m buying this person and I’m looking for them for biz dev,
Adam: It, so looking back on it now, it’s kind of obvious, right? If they’d been going a number of years and they were a two-man band and they hadn’t been… They got off, you know, they started, but they weren’t able to grow, then clearly, maybe
Justin: Biz dev is the wrong place for this person, right?
Adam: yeah. No, interesting. What was the outcome ultimately?
are they still part of the [00:12:00] team or
Justin: So they’re not, no. the, v- the owner of that company and I got into a pretty heated argument about nine months into things. They– I’d given him a two-year employee contract, and we were about nine months in, and we got into a pretty heated argument, and the,and I had done something, that they didn’t like, and the person literally said “You’re going behind my back on my customers.”
And I was like, “That’s where you’re wrong. They are my customers because we acquired you.” And it didn’t sit well with that person, and understandably. I think one of the problems is, especially when M- with M&A, when you’re bringing over the owner of the other MSP, most likely they’re an owner of a company because they don’t wanna have a boss, right?
I– if somebody were to acquire me, I would be the worst employee ever because I cannot have a boss. and like now, now all of a sudden you have a boss. You have s- and you might not see eye to eye with that person on how they run their business ’cause like [00:13:00] you started your MSP because you wanna run your business your way and now you’ve sold it, now you have to run it this other person’s way.
Well, if you wanna go left and they wanna go right and you’re forced to go right, that’s gonna make you upset. And like it’s understandable, right? and so we got into an argument about a particular situation for a client, and I was like, “This is the way we’re going to do it. I’m the guy in charge.
It’s my company. We acquired you.” I had to play that card, and it didn’t sit well, and they left, which is fine. Like it, it’s fine. the long of it is we still have those customers in Iowa. They’re all super happy with us. and we don’t have any physical boots in the ground in Iowa anymore, but at this point now in 2026, like who needs physical boots anywhere because everybody went remote or hybrid or whatever it is.
Adam: Luckily, our team in Missouri is only a four-hour drive, and we go up once a quarter anyway, so we see everybody, which is great, and everything else is done remotely, and the customers are happy at the end of the day. look, that, that makes an awful lot of sense. so rule number one, [00:14:00] if you’re clear on what you’re looking for, make sure it’s there.
Adam: And you just made an assumption he’d be a good sales guy. and rule number two, how realistic is it that a previous owner will flourish in your new business when they’re no longer the owner?
Justin: So this is why the title of the episode is the title of the episode, because the third acquisition in Colombia, I did the same thing. I did it twice because shame on me
Dan: but did you? Because, I’m gonna play devil’s advocate here and challenge, the first thing, if something was perfect, you wouldn’t be buying it for a lower price. You know, a- as you said, if, if the owner was great at sales and they were allowed to focus on sales, then the business would’ve been different.
But it, it would be perfectly reasonable to say, well, actually no, the, this MSP owner is good at sales, but they’re hindered from focusing on that because of all of the other elements of running a business. So therefore, we see [00:15:00] there’s an opportunity there, focus on sales
Adam: Nah, not buying it. Not buying it. no.
Dan: and the second challenge I would put to this as well is that, you’ve described a situation where you’ve successfully onboarded, a number of clients. so this is a successful acquisition, is it not? maybe not exactly what you had in mind, but, and m- maybe the numbers tell a different story, but you’ve managed to transition clients across and retain them.
So net, you w- you will have grown your business as a result of that process.
Justin: Yes. Yes, 100%. So this is why I was saying, don’t but do, right? Because much like anything that we do as entrepreneurs, it’s going to be hard, and this is going to be very hard. But in the long run of things, there is great value to be gained, right? ‘Cause even in the third acquisition, which I’ll get to in a sec, but I jokingly said, I made the same mistake.
I brought them on, I kept the owner. The owner was supposed to do biz dev. Shocker, couldn’t do it. the owner is now… That owner is now gone also, but what [00:16:00] is left of that company, what we have and the clients we have, is a positive net gain across the entire Virtua platform. But, I mean, there were a very f- there were many tight months because we’re paying extra salaries or we’re doing these things or they’re not doing what I want them to do.
that third company we purchased, because the second one was a, is an outlier, and I’ll get to that in a sec. But the third company we purchased, another Apple consultant, this time with the Apple-authorized service provider. I was hoping that this owner, who had a pretty big personality, would be talking to all of our customers and they didn’t, right?
in my opinion, they didn’t. They really only stuck to the customers they knew or a few customers in Iowa, ’cause we had been in Ohio then for a while, but never really talked to the customers in New York. Big personality in a small town was not able to carry a big personality in a big town, in my opinion.
and I don’t wanna talk too much out of turn ’cause I don’t know if this person, if that person listens to this, and I don’t want him to sue me for slander or [00:17:00] libel or whatever. But, that’s kinda just that situation. And so at one point that, that com- the owner of that company came to me and he’s “Listen, you are siloing the hardware team from the consultative team from the training team or whatever.
you gotta stop working like this.” And I was like, “Great. Let’s make it all one company.” And then he was like, “No, you can’t do that either.” And I was like, “Okay. Well, I don’t know what you’re asking from me,” right? So, for that it was a lot of personality clash, which is what another big piece of the M&A thing is.
If you’re bringing on and you’re keeping the owner, personality matters ’cause, like, when you go to hire someone for your company, you can choose who you hire after you talk to them. When you’re acquiring the company, you don’t have a whole lot of choice. The choice is they’re on or they’re not, and if they’re not, you’re gonna probably pay more for the company, right?
So, there’s a lot of personality and it’s also a lot of personality at once. You hire somebody, you hire one person, cool. You’re gonna deal with one person’s personality. When you [00:18:00] acquire a company, you’re now dealing with all of that personality and all of that company history and the company’s culture.
And so there’s a lot… that’s a big swing than just hiring one person and dealing with one
Adam: what was the original, again, problem you were trying to solve with this third hire?
Justin: So the third acquisition was actually based on the second one. We actually did two in the same year. We acquired this– and I’ll come to answer your question, Adam. The second company we acquired was a training company. It’s,a woman in Colorado. She was wanting out. We had written her out in the contract.
She wasn’t coming on board. Fine. And it was a more B2C-focused company, and the company in Missouri was going to be B2B on the consultative side and B2C on our hardware side. And so we were hoping that the B2C people coming in for hardware, we can then push towards the training company. So, in my head, these two things happen, and they– because they hap- one was in [00:19:00] April, and then we closed the other one in September of the same year.
Which by the way, again, if you’re doing M&A, don’t do two in the same year ’cause it’ll screw up your cash flow. But the problem we were solving was like, oh, we wanna be able to expand our services across B2B and offer B2C. Here’s two pieces of that puzzle, right? ‘Cause, in my head, there’s four parts to the com- there’s four parts to Apple.
it’s service, hardware, consultative business, training, and resale. And we don’t wanna do resale. So there’s three, and we already had one as a consultant at an MSP, so we picked up the service hardware, and we picked up the training from this other company. And if we can blend those two together, we would have this amazing new company, this amazing product to be able to push out.
And, it just didn’t work. It just didn’t work. We could not ch- we couldn’t figure out how to get B2C customers into the training platform. And so [00:20:00] the acquisition of the second company was an F-up because we didn’t really need it.
Justin: and we have plans, for what to do, but those plans have been sitting for over a year.
And,it’s not if we wait any longer, it’s gonna do any damage. the damage is already done. We can just resurrect the
so if I understand this correctly, you’ve got this, small training company and it exists and it has its own brand and it’s, you know, breaking even, whatever. It’s selling its training services. it’s not even doing that anymore. It already paid off its… We’ve already p- broke even for the sale, and now it’s kinda just
Adam: Okay. But the third company you bought where they had this consumer market would not buy the training And you’ve got no idea at all why that is or
Justin: the, I think the biggest problem we have right now is that the own- the owner of that third company who had this big personality wasn’t [00:21:00] able to sell a small product. the training was a small product compared… B2C selling is
Adam: high volume, a smaller ticket, higher volume product
Justin: Right. And so it was hard for them to capitalize on that and make that.
And then the people we have there that are dealing with the customers are really technicians, right? they’re, “Hi, I’m here to fix your iPhone.” They’re not natural-born salespeople, so they– it’s hard for them to, ad- we even tried to sell, a insurance kind of product to them.
They couldn’t do it. it’s a mix of… And I’m not trying to blame my team, but it’s a mix of, them being who they are plus the market itself. it’s a small college town, Columbia, Missouri. and so it’s a tough sell to these small-ticket items. It could also just be that I and upper management of my company haven’t focused enough to really make it sell on its own, which is 100% true, because upper management of my company has been busy dealing with [00:22:00] bigger…
you know, you’re not gonna s- you don’t wanna sell a million people a $1 item. You wanna sell one person at a million-dollar item, right? So, it’s where do we put our time? And we decided to put our time into the higher-ticket items. And so this low-ticket item, this training, has just been sitting and then just became, it just started
Adam: was there anything to do with the fact that it was, A, a different market and, B, a different service to what you’re used to?
Justin: A little bit of everything, right? That was why I’m saying, I screwed up because I didn’t really need to buy the training company. yeah, I– if I didn’t buy the training… Not that it was terribly expensive, but th- there wa- th- there was no add. It didn’t bring anything. ‘Cause, we even thought we would add B2B training and offer that to our consultative clients, and we just couldn’t put it together.
We just couldn’t get our act together enough to make it happen because training, and I didn’t think about this before I acquired them, training takes a lot of time to build up because, one, [00:23:00] it’s not like the, the– it’s not like a training service is evergreen because the OS changes all the time, the button moves from the left to the right, all these things.
And th- keep in mind, this is all pre-AI also, ’cause, with AI, I could build training day in and day out. but to go and then make a training that is generic enough to have people buy– to have many people buy into, and to be able to follow and make all of these videos and make all this content, and then edit all that video and edit all that content, that is a lot of hours.
There’s more hours in that setup than the value I paid for the company in total if you compare my– if you take my per hour price, right? So that’s where that screwed up. But in my brain at the time, I was so eager to crack a B2C market, and I knew I had both of these things happening close to one another that, in my head, I was like, “Oh, this works.”
Adam, you’re rolling your eyes at me. I know that this is audio only, so I want everyone to [00:24:00] know that as soon as I said that, Adam rolled his eyes at me with this look of “This kid’s an
Adam: Yeah, no, I was just trying to make sense of what you’re saying. I think you’re rolling your eyes. there’s a cultural gap here somewhere.
Justin: Okay, bye, bye, bye, bye, bye.
Adam: But, no, I
Dan: it’s a compliment in the UK.
Adam: I…
Justin: r- yeah, rolling eyes is a good thing in the UK. Got it.
Adam: yeah,
I guess, so, so yeah, I’m just sort of making sense of it. I, it just feels instinctively to, to me that there’s two big changes going on there.
There’s a market change and there’s a service change,
Justin: Mhm
Adam: and you’ve doubled up the amount of challenge, and both are alien to what you’re used to doing. And so had you just gone to a market change but the same service, maybe that would’ve worked, or just a new service but with the existing market, maybe that would’ve wo- maybe.
but, you’re asking a lot there, right? and you’re
Justin: Mhm
Adam: thinking, “Oh, it’s just Apple training. What’s,what’s hard about that?” Well, there’s actually quite a bit, right? It’s a completely different service to what you’re used to doing to a completely different market. So, so, so, I mean, I…
That’s always something I’ve been kind of very wary about e- in the MSP world, was sort [00:25:00] of going off piece too much, you know, and just because it’s there and then you think, “Oh, I can upsell this, cross-sell it across my user base. How hard can that be?” and I’m a, you know, I’m a fan of adding additional services, but I think once you start going new services and new market, well, you know, it might be education or it could be public sector or it could be consumer or something, I think you know, you’ve gotta be really clear about your skill set in being able to do that.
Justin: 100%, which is why th- we’re doing this episode, right? Because, that was definitely an F-up. I didn’t need that second company. and we didn’t bring over– We knew the owner was mar- w- was leaving, and then the employee didn’t see eye to eye with our employment agreement, and so the employee left also.
And so th- I think if we had kept the employee and we had made that work somehow or other, it would be a different situation. But then all of a sudden now we were, like, buying this company without the employee, and then we had to, figure out what we were gonna do as a tr- who was gonna be a trainer, and we’re gonna carry it over.
[00:26:00] and so… But you said something like, you know, you look at it on paper and you’re– and most entrepreneurs, in my head, want more all the time. we always want more. We wanna grow. we wanna grow. We wanna grow fast. We wanna grow big. and that’s an entrepreneur thing, not an ownership thing, right?
‘Cause I always differ the difference between an entrepreneur and someone who’s just a business owner. An entrepreneur wants to grow, they wanna move fast, they wanna do these things. And in my head, I’m like, “Oh, new market, new, new avenue, new source of revenue, new way to do things. We have, we have it done, right?
This is super easy. we do Apple crap all the time. We can totally do training.” And then screwed the pooch on it because I didn’t set up the pillars for this to work properly, ’cause in my brain, I was already closing one deal and working on the other one. And so just, again, timing, new market, new skills, new scope, having the right people, like it just…
The math didn’t [00:27:00] math at the end of the day for that acquisition. So the second acquisition was good to a degree, and we, you know, we were making money. we had a, a YouTube channel. She had a– The person we bought had a YouTube channel that was making money. So we were just making money on their YouTube channel.
But now we haven’t added any new content, which means now the channel’s been demonetized. The third company, like I said earlier, we brought them over. The owner, again, was a, it’s a personality thing, but the rest of the team that’s there is very good at what they do, and they’re all pushing to move forward, and they all wanna grow, which is great.
That’s what I want. the team that I picked up from this third company is making it work. But that being said, the first company we acquired, we did– Like I said earlier, we did 25 day one, 75 s- after six months. The second company we did was I think, 50 up f- and it was a low ticket cost.
We did 50 upfront, and then we did the other 50, monthly over 12 months. And then the third company we did, which was a much bigger purchase, we [00:28:00] did… And this is another place where I screwed up. We– what was it? It was, It was something like w- one-fourth. It was like a quarter. It was,it was one half of a quarter day one, the other half of that quarter six months later, and then we were paying yearly, but the problem I screwed up on was my yearly was on the initial… So like we did day one, we did day 180, and that second payment came up on day w- 360.
It should have come up 360 days after the six-month payment, because in that second year, I ended up paying a full year plus half of the original, right? So the, so like I got sacked for a lot of money that year also, and the company itself wasn’t making enough to carry that balance. So it was a big purchase with a lot of money being thrown out year two, and they just weren’t growing fast enough to acquire it.
‘Cause in my opinion, if you’re gonna acquire somebody, [00:29:00] the acquisition should pay for itself, which, like as a seller you don’t wanna do, but as a buyer you 100% wanna do. And so we got sacked on the numbers, that second year ’cause we should have made that second full year payment one year after the 180 days, not in that first one.
I know it’s a little confusing without the actual numbers being said, but I can kind of… I could, basically these aren’t the right numbers, but basically like we paid 50,000 day one, 50,000 six months later, and 100,000 six months after that ’cause that was the anniversary of the purchase. It should have been a year after that second $50,000 payment because th- basically we paid $150,000 in one year as opposed to $100,000 in one year, right?
Make sense?
Dan: And,I’m loving the fact we’re getting into the detail and deal structure. we- we’re at nearly over time, so we might actually have to have you back for a third episode
believe it or not. [00:30:00] but, I did just wanna summarize this and I think there’s a– I like the distinction you make between being a business owner and an en- an entrepreneur. And for all of the three deals you’ve described, I can absolutely understand, how you are and were enthusiastic and optimistic about what the outcome would be. And, and, and I really think there’s a lot of value that you’ve gained from this. may- maybe, maybe you could argue you’ve made the same mistake twice, but I would argue you’ve just made a different mistake that looks like the first one. And,
a- and for me, this is about, you- you’re, you know, you’re out there, you’re taking risks, and that’s something an entrepreneur does. Absolutely. They take risks, they get reward. And, and if you’ve, if you’ve got, if you’ve got some wins from this and you’ve learned something and you’re now more confident, you know, the fourth acquisition, will be very different. And-
Justin: Well, I can tell you that we were looking to acquire somebody else and we had learned our lessons and I had given my rules of [00:31:00] engagement and their lawyer came back and was like, “No chance in hell are any of these rules gonna apply or we gonna fly with any of this.” And I was like, “Okay, well back to the drawing board.”
So like it’s funny that you still learn and you think you know what you’re doing and you’re ready to go and my lawyer was on board with our new plan and the person who wanted to sell to us, their lawyer was like, “No.” So it’s, this is why I said in the beginning like… Well I said two things, right?
One is ev- every acquisition’s completely different, especially when you’re dealing small time. If you’re a PE firm buying up people, which no one I don’t think who’s listening is, different story. But if you’re an MSP and you’re looking to buy, every situation’s different. and then the second thing is, don’t do this because it causes undue stress.
Adam: there is, isn’t it– aren’t we missing something here though? if I’ve understood things correctly based on what you said, financially you’ve done okay
Justin: I’m still here. I’m still here. I’ve had a couple tough months, I’ll admit. there, there may have been months where I had to
Adam: you still got a loyal client [00:32:00] base from these acquisitions. Okay, the s- the second one didn’t come to anything, but you’ve got clients from the first one, clients from the third one, and some good employees as well, and you’ve got monthly recurring revenue coming from these clients.
Justin: Yeah,
Adam: Okay. And so I think one thing you got right from a buyer’s perspective was a relatively astute structure where you were managing risk and, you know, you said, if you’re looking to acquire, the company should pay for itself. Well, yeah, brilliant. But actually not great for the seller. So for you to achieve that, you know, I’m not sure how, what’s the word I’m looking for?
Realistic actually going in with that mindset might be actually. it’d great if you can pull it off, but what kind of seller would want to accept those terms would be, you know, the sort of, the question mark there and maybe… But look, I don’t know. Would you say ultimately looking back, if you ignore the stress and the sleepless nights, financially you’re in a better place?
Justin: Yeah, 100%. I would say, look, [00:33:00] it took a long time to get those companies right-sided and get them into a place that works for what Virtua is, and I think we’ve accomplished that. And I think that publicly people have seen what we’ve done in my community. People have seen what we’ve done, and they started to– They’re going, “Oh, we should do this.
Justin’s doing acquisitions. We should do acquisitions.” And I’ve seen other people… Pe- I’ve had people come to me being like, “Can you tell me how to, how do I acquire somebody?” And I’ve had people, once they started hearing we’re acquiring people, everyone came out of their, out of the woodwork being like, “Hey, I’ll sell you my business.”
And I’m like, “Your $30,000 business doesn’t mean anything to me.” but it, it is a good way to grow, right? at the end of the day, like any other risk, there is reward, and you’re going to go through stress. You’re going to have sleepless nights. There might be months where you can’t make a pay- your own pay-check, which happened to us.
I’ll admit it. what I’ve learned more than anything else is, be in a better financial position before you go and try to acquire somebody. Don’t just think you can acquire them unless you [00:34:00] have leverage points to do that from, especially if they’re not gonna take on to the idea that the company should pay for itself.
But, you know, is there a reward? Yeah. We’ve gained a much tighter team. we cut away all the excess. We cut away negativity. We cut away problems. We have a really astute team who’s on board. Everybody on my team is willing to put in the work. I mean, this year, 2026 alone, my team has absolutely crushed this year with the things that we’re building, the things we’re doing, the clients being happy, new customers coming in, things like that.
And we’re giving everybody what they want, and that’s the end of it, right? so there is reward. There is ways to grow with acquisitions. But just know that, like every other risk you take as an entrepreneur, you’re pushing a f- you know, a 40-ton boulder up a very steep mountain. But at the top of the mountain, there is anything that you would expect in a utopian society.
I was gonna say, I was gonna say something really dirty there, but you know, whatever [00:35:00] you want. There’s F1 cars and a million dollars and every possible, you know, person that you wanna, linger around with. whatever it is. Th- there’s something at the top of the mountain when you got– but you gotta get up there.
Dan: there’s a nice cold pint waiting for me up there.
Justin: There’s a cold pint.
there’s a Dr. Seuss book where all the dogs at the end of the d- at the end of the book run up to the top of the tree, and there’s a giant dog party, and everyone’s happy. yeah, there’s that. But you gotta get up the hill. You gotta push that boulder up the mountain, and that’s the toughest part.
and the biggest thing about pushing a boulder up a hill like that is that sometimes it’s gonna roll back on top of you, and you have to get up and keep going, because if you don’t, then it was all for nothing.
Dan: Yeah. Lo-love it. and, I think this has been a great episode. we will once, once you’re through your next event, we’ll hopefully find some time in the diary, get you back for a third episode, and, yeah, a- as always, really enjoy our conversations, and,
thank you very much for
Adam: I’d just, like to say thank you again for being so open and honest about this tricky subject. You know, it’s not often we have people that sort of bare their soul on these things, and I’d like to see a bit more of that, quite frankly, [00:36:00] ’cause otherwise everything’s just so perfect and so great, and it isn’t, right?
So, it’s, I think it’s really good to hear some other stories. good stuff.
Justin: Yeah. Thanks guys, appreciate it. Anytime, I’m, with the exception of the second week in May where I’ll be at Aces conference in Minneapolis, I’m here for you guys whenever
Dan: Super. Well, we’ll get you back in the summer for sure.
Thank you
Justin: All right, sounds good. Thank you