The Playbook by SMBootcamp

This week, we’re exploring how building the right network can transform your acquisition journey by turning conversations into new deals, potential investors, and operational help you didn’t know existed. Too often, networking gets dismissed as a vague “nice-to-have” rather than a critical driver of success.

We’re going deeper with help from Rand Larsen, CEO and acquirer of Scalepath, who’s built a national community of small business owners and acquisition entrepreneurs. Rand has spent the last two years meeting thousands of operators face-to-face (often by van) and has seen firsthand how the right connections can save tens of thousands of dollars, compress learning curves from years to months, and unlock deal flow you can’t find anywhere else.

He also has a great newsletter offering monthly insights on what he’s seeing in the ETA community (he sees a lot). Would highly recommend subscribing to his newsletter. If you enjoyed this, please consider sharing this SMBootcamp newsletter with a friend.

We’re also excited to announce that enrollment for our October and December LIVE cohorts is open. These cohorts offer a hands-on opportunity to master small business acquisitions the right way. Seats are limited: secure your spot today!

Introduction

Have you ever heard the phrase, “Your network is your net worth”? It’s an almost omnipresent cliché when around professionals of almost any industry. It’s been repeated so often that it doesn’t resonate the same way that maybe it used to. Conceptually, building a network sounds self-evident— the more people you know, the more opportunities you’ll have. And this is really the simplest form of what building a network means, regardless of its professional or personal purpose. But we’d like to examine the entire concept of building a network, as it relates to your small business. Fundamentally, we believe that relationships don’t just create opportunities and “open doors”, they are truly the lifeblood of your personal and professional life as an acquisition entrepreneur, W2 employee, or small business owner. While often touted as a vitally important element of your W2 job, the potential rewards of a strong network in small business and entrepreneurship through acquisition (“ETA”) are exponentially higher.

Yet, many times the network is forgotten in favor of higher perceived value activities and tasks for a few common reasons:

• Networking is extremely tedious and time-consuming, especially in the common W2 setting

• Networking can be unproductive if in the room with the wrong people

• It’s difficult to ascribe a direct monetary value to networking

We’d like to make the argument that building your network for your ETA journey and/or small business is one of the core time commitments you need to make. In order to illustrate this, we’ve teamed up with Rand Larsen, the CEO, acquirer, and owner of Scalepath, a community designed to facilitate small business networking. Over the last two years Rand has met thousands of business owners in person (Rand has been driving a van across the country meeting small business owners and Searchers…), and is our resident expert on effective networking that does not make you want to claw your eyes out. We’ll illustrate exactly what can result from good networking and why you need to implement it into your daily life as an acquisition entrepreneur and/or business owner.

Creating Feedback Loops

For the acquisition entrepreneur, feedback loops aren’t exactly “loops” and are more of just “feedback”. Nonetheless, they are of vital importance, specifically for those who do not have acquisition or investing experience. Acquisition entrepreneurs are in a constant state of operating “in the grey” where there are no objectively wrong answers. This dynamic (and difficulty) is all the more reason to generate feedback loops from your network and triangulate how effective you are at analyzing opportunities.

A good friend recently came across an interesting opportunity in a highly cyclical industry closely tied to real estate. Initially, he had some major concerns about the customer base and service mix since he wasn’t particularly well versed in the industry.

So he reached out to those in his network with similar business models, similar end customers, and similar industry dynamics. One experienced real estate investor shared perspectives on luxury multi-family real estate development timelines. Another contact shared insights on the services they provided, specifically which tend to be higher revenue quality and the drivers of each.

These external perspectives provided clarity, prompting him to refine his assumptions about growth, risk mitigation, and price and structure of the deal. Ultimately, this feedback provided clarity that allowed him to move far quicker than he would’ve otherwise. And in today’s deal environment for acquisition entrepreneurs, speed kills.

For the operators already in the seat, it’s often difficult to know what the right path is on crucial decisions— but it might be more obvious for someone on the outside. For instance, one Scalepath member who acquired a small towing business presented this problem to a group of other business owners: “Does anyone have best practices for hiring and training a General Manager to ensure their success? My time is increasingly constrained by many small tasks, and I need to hire a generalist who can take on a lot of this work off my plate.”

After a longer description of the tasks falling on the shoulders of this owner, he discovered he wasn’t asking the right question. Instead of onboarding an expensive GM for $80k, another Scalepath member stepped in to offer his opinion: “Do you really need to spend $80k hiring a new GM? Because it sounds like a lot of this work can be handled by an office manager, or maybe even an intern.”

Once he said it out loud, it seemed like such an obvious answer, but tunnel vision in the ownership seat is extremely common. Sometimes it just takes an outside perspective to triangulate the best course of action. As seen here, simply getting someone else’s point of view can help you avoid spending an extra $30k unnecessarily.

Stories like this illustrate the tangible value of consistently seeking and thoughtfully applying feedback from those in your network. Acquisition entrepreneurs and operators who regularly solicit advice from seasoned investors, former operators, and industry experts accelerate the learning process and significantly enhance their odds of success. Over time, each interaction and each piece of feedback builds on the last, refining the entrepreneur’s judgment, reducing risk, spurring growth, and helping avoid costly mistakes.

Within SMBootcamp’s alumni community, we encourage proactive feedback, both formally and informally, to help entrepreneurs regularly test their ideas and thought processes. We've designed our Accelerated Success program to support entrepreneurs through structured, personalized 1:1 feedback. While feedback loops naturally emerge from active networking, having dedicated, experienced sounding boards is another powerful tool-- one that can seriously accelerate an entrepreneur’s journey toward a successful acquisition.

Access to Opportunities

Ever heard the phrase “create your own luck”? Luck creation is largely an output of network building over time. A recent example from last month:

A former colleague introduced me to one of his former colleagues who moved down to Tampa a few weeks ago. He shot me an email introducing this person saying we’d get along nicely. We had him to our office, and he learned all about our activities at Pursuant Capital and SMBootcamp. Right after the meeting he introduced me to a small investment bank that was trying to shop three separate deals that were firmly SBA size! I mentioned that we had hundreds of alumni who are active buyers of these-sized businesses, and he asked if we can shop the deals to our alumni base. One was a perfect fit as an add-on to an existing alumni business, the other was a nice fit for anyone interested in the geography. This is the power of “compound networking”-- a friend of a friend knows somebody somewhere who can add value to your Search. We just drummed up three deals with two brand new broker relationships in a matter of days.

Another recent example, a good friend of SMBootcamp who’s highly focused on a geographical search recently found an owner looking to sell his business. And he got introduced to him at church! Now they’re having discussions about a potential acquisition. This one conversation opened up doors that he never knew existed; it launched a weeks-long process of learning an entirely new industry that he wasn’t interested in before meeting this Seller at church. It remains to be seen if there’s a deal to be had, but even if one does not occur he is well-equipped to move quickly on the next deal that comes along in the space regardless of how it’s sourced.

This is a recurring theme that we see across SMBootcamp alumni. Rather than just hitting the broker channel, they announce (either publicly or privately) that they’re looking to acquire a small business, which opens opportunities from friends, family, colleagues, and even other small business owners.

Perhaps the most profound outcome from networking as a small business owner is the ability to drive the sales engine. One of Scalepath’s members—an acquirer of a demolition business-- recently won a leading subcontractor role on a $70M+ construction job! Not only did this owner win the job by building a relationship with the general contractor (i.e. networking), but he is also performing the work through his existing relationships. Part of the job scope requires him to subcontract out work, and luckily he had a handful of trustworthy relationships he could call on.

Not only is he benefiting from winning a large portion of this mega-job, but he’s also able to award millions of dollars of work to these subcontractors and vendors in his network. What a win for him and his network! Now full disclosure, these relationships weren’t built over night. They required years of relationship building before bearing fruit. But building worthwhile relationships is a core function of your role as a small business owner, and one of the best ways to grow your business.

Ultimately, networking accelerates access to opportunities that would otherwise remain invisible. By actively building relationships, buyers create exponential increases in potential deal flow, partnerships, and investment possibilities. These opportunities rarely come fully formed; they arrive as introductions or casual suggestions. Being networked means recognizing these signals, quickly acting on them, and turning chance encounters into tangible business opportunities.

Knowledge Transfer of Best Practices

A related topic to “Creating Feedback Loops” is the knowledge transfer of best practices from your network. Networking accelerates the acquisition entrepreneur’s learning curve by dramatically expanding access to best practices. Rather than relying solely on personal experience, which is often acquired slowly, sometimes painfully, entrepreneurs tap into the collective expertise of their networks, absorbing lessons from those who've navigated similar territory.

Consider common challenges: How should entrepreneurs effectively evaluate and screen potential deals? What are effective methods for creatively structuring deals, particularly with the constraints of the SBA? Which terms should (or shouldn’t) be included in a Letter of Intent (LOI), and how do successful entrepreneurs negotiate key terms effectively while maintaining goodwill with Sellers and brokers?

When acquisition entrepreneurs leverage their networks, they immediately access strategies across every critical knowledge area needed to close an acquisition. For instance, SMBootcamp alumni frequently share broker and proprietary deal-sourcing tactics, including effective cold outreach scripts and successful broker-engagement techniques to streamline the deal sourcing process. A very common example is utilizing creative approaches to seller notes and continent seller notes that can dramatically improve the probability of closing a difficult deal.

This shared knowledge extends naturally into financial analysis. Rather than developing the entire financial analysis skillset from direct experience, entrepreneurs can refine their approach from the combined experience of their peers. Equally important, entrepreneurs can quickly learn from their network how best to manage sensitive seller or broker dynamics, minimizing misunderstandings and ensuring smoother transactions.

Recently, the Scalepath network uncovered a better way to manage attendance. What they found is commercial cleaning businesses struggle with the same thing: employee attendance. Many cleaners will call out on Mondays and Fridays, leaving their small teams struggling to keep up with the daily workload, and burdening managers with finding replacements, or filling in as a cleaner themselves.

Since Scalepath places their operators in industry-specific groups, they were able to share perspectives from numerous different commercial cleaning businesses. One business owner solved this problem with a combination of employee incentives and disincentives, and shared his strategy with others in the industry group. In this case, he used ConnectTeam and built a “Call off/Late” channel where employees have to communicate with the entire company if they’re going to miss work, and if they call off on Fridays or Mondays without proper notice, they’ll miss up to 2 whole days of work in the future. This small process has completely changed employees who were previously calling out consistently and leaving their teams scrambling.

Building a network with others in a similar industry can help you solve hyper-specific problems much faster than you normally would yourself. In this case it took this owner over a year of attendance challenges before finding a solution, and now he can share his strategy to everyone else in his industry as well as other industries facing similar issues.

Final Thoughts

Of course, at SMBootcamp we formally teach these core concepts through structured coursework. However, supplementing formal education with knowledge transfer from an active network is a surefire way to compound your knowledge base. Entrepreneurs who embrace this dual approach of structured learning with insights from peers accelerate their journey, avoid costly mistakes, and significantly enhance their odds of acquisition success.

Thank You!

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If you're ready to take your acquisition journey further, check out our programs below. We've designed them specifically to give you actionable, real-world frameworks and support to successfully buy and grow your own small business.