WEEKLY THOUGHTS

When we lived in Cambridge, we frequented all the common outdoor exercise spots — leisurely jogs along the Charles, grueling stairs in the Harvard Stadium, and heart-rate spiking intervals on the Newton hills.  As such, we enjoyed learning more about the “Tempo Loop” in the Harvard Athletic Complex. 

Our regular readers will know that our metric of choice is Free Cash Flow.  This is because the crux of our strategy relies upon our ability to purchase cash flowing businesses from retiring owners, and then, over the long-term, using the cash flows from those businesses to fund the equity requirements for growth—whether it be supporting internal growth initiatives or writing a check for our next acquisition.  Without free cash flow, our strategy stalls. 

We’ve written previously about Admiral William McRaven’s popular 2014 University of Texas at Austin Commencement address, which argued that “if you want to change the world, start off by making your bed.”  He goes on to say that if you begin your day accomplishing one small task to perfection, you will be encouraged to go on to accomplish another task well, and then another, and then another, so on and so forth.  By the end of the day, you’ll probably have accomplished a lot. 

There’s a lot of work that goes into closing a deal.  You have to find a business, figure out if you’re interested, convince the owner you’re the right fit, agree on a price, conduct diligence, negotiate legal terms, and secure financing, among many other things.