Welcome to Upper Market

Each week, I sift through what’s hit the market and bring something worth talking about to you.

I try to imagine that this is the way the modern man “pans for gold”.

Now I’m just thinking about how stunning Arrowtown is in Autumn.

What’s ahead in this Newsletter:

This coming Wednesday (6th May, 7pm NZT) I’m hosting an online workshop on structuring deals.

There’s no upsell. No product for you to buy. I’m going to walk you through what I’ve learned.

That includes:

If you’re in; here’s where you can RSVP - and if there’s anything you want in the workshop, just let me know

My book; Speedrunning Capitalism is finished. I’m getting the copyright of it done as we speak.

To celebrate, I’m going to be pulling small bits of it out over the coming weeks to carry on from the Briefing Series we’ve just finished.

The book slots Small Business Assets into the Wealth Creation world. How this works, why they’re worthwhile and most importantly:

How it helps you play a stronger hand with life

There's a version of school where they teach you how the world actually works.

How money moves, how assets are built, and how people create leverage from nothing and compound it into something significant.

That version doesn't exist.

What you got instead was twelve-plus years of learning how to follow instructions well.

Most people arrive at adulthood technically educated and practically clueless about how the system around them actually operates.

I was no different.

The frustrating part is that the rules aren't complicated.

Through all the noise, Capitalism operates on three simple permissions:

That's it.

Everything else (think markets, businesses, prices, wealth, innovation) is just those three rules playing out at scale.

The game has one core principle underneath all of it:

Resources move toward whoever can use them most effectively.

Not fairly or equally - effectively.

Which means two things actually matter:

The first is who you are. Your ability to make good decisions, identify opportunity, and be trusted with resources. Your character.

The second is what you build. How you organise capital, people, time, and systems in a way that actually produces something. Your machine.

When your character communicates to the world how you plan on working (or building) your wealth creation machine, resources will flow to you.

Next week, we’ll be covering the Four Economic States you’ll move through on your business acquisition journey.

Short Summary:

I hope you’re not anti-meat.

Two established butcheries. Sold together. Five minutes apart.

Both inside large shopping complexes. Surrounded by complementary retail. Hello foot-traffic.

The larger site handles the majority of processing and packaging for both. Which makes a lot of sense and adds consistency across the operation without adding effort. That's a structural advantage most multi-site businesses take years to build. This one already has it.

Revenue for FY2025 came in at just under $3m. Rent sits at 3.5% of revenue. Wages at 6.5%.

Anyone who knows food knows those aren’t normal numbers.

Rent and labour are where the economics go to die. Here, they're under control. Which means the profit margin that follows is should be strong.

The current owner is present 3-4 days a week. A general manager runs the day to day. The team is in place. Systems are documented. I’m not entirely sure what the owner is doing.

Vibe Architecture? Perhaps.

What I'd Want to Understand

First is the GM situation. Everything here leans on that person. How long have they been there? What keeps them? What happens if they leave six months after settlement? This is the key person risk that needs to be interrogated before anything else. I’ve seen people have to work an equity deal in for the existing management team to keep them. Might not be a bad idea.

Second is where the $3m actually comes from. All current revenue is walk-in. That's both a strength and a flag. It's a strength because it's proven, consistent, and doesn't depend on a sales machine. It's a flag because it means the business has done nothing to build demand and it's been carried by location. It isn’t guaranteed you can start wholesaling, but you might need to ball up and do it.

Which brings me to the upside.

Wholesale supply to local food operators, online ordering, and local delivery using the included refrigerated truck are all listed as untapped. The question is whether that’s genuine, or if it hasn’t happened because they’ve tried and failed.

Third is the lease. Brand new terms are ready to be negotiated, which is presented as a positive. This would take place before you’re unconditional on the deal. You’re likely to get a gauge on how long you can have the site for, which is imperative to know. If you have to set up from scratch in a new building in 10 years time, that’s going to be expensive. Indoor chillers aren’t sold in 2 for 1 deals.

Fourth is stock. The asking price is $1.3m plus stock. We’ll need to understand how this is being structured in the purchase. Full upfront or paid down as it’s sold? (note this for the deal structure workshop)

The Growth Angle

The infrastructure is already there.

You have a processing and packaging operation capable of handling volume beyond what the two retail sites generate. That's the foundation for a wholesale business, not just a retail one.

If you can identify three to five local food operators (restaurants, cafes, meal prep services ) and supply them consistently, you're layering a recurring B2B revenue stream on top of a walk-in retail base.

That's a meaningfully different business.

The Drawbacks

Food retail is operationally demanding. Cold chain management, staff who handle product daily, consistent quality across two sites - the standards required here are non-negotiable and they need to be maintained.

Key person risk is not something to discount. The GM is the business in a lot of ways. Understanding that relationship and what it would take to replace it is not optional due diligence. Or hey, maybe I’m overthinking this one. Investigate.

And like all food businesses, you are at the mercy of input costs. Meat prices move and if that will hur the customers wallet, it will hurt yours.

Final Thought

The numbers here are hard to argue with. Strong revenue, controlled costs, genuine margin, and a business that doesn't need the owner in it every day.

The upside can be defined. But is it possible?

Reply to this email if you want the details and I'll put you in touch.

If you want more details on either of these businesses or would like an introduction to the sellers, just reply to this email.

This is the type of business that gets taken off the market quickly.

Buyers understand exactly what they’re looking at. High-margin, recurring revenue, low overhead, and embedded into the operations of hundreds of customers is a combination that doesn’t sit around for long.

At ~$2.13M revenue and ~$1.15M EBPIT with ~85% recurring (~$1.82M annually), the numbers immediately tell you what this is.

It’s a cashflow engine that’s already running and throwing off meaningful earnings.

The reason these businesses are so attractive comes down to how they sit inside a customer’s operations. Once a business has its telephony, connectivity, and cloud systems set up, switching providers becomes disruptive, so most clients stay put unless something goes seriously wrong.

That creates a level of revenue durability that’s hard to replicate in other service businesses, because you’re not relying on constant re-selling. You’re effectively billing for something that just needs to keep working in the background.

The client base reinforces that position, with ~500 active clients and ~95% repeat business showing a broad and stable spread of revenue. There’s no obvious concentration risk (TBD), and more importantly, the relationships appear to be long-standing.

The model itself is what is doing a lot of work here. This isn’t dependent on a physical footprint or a specific geography, which gives flexibility and makes the business easier to operate and scale.

From just the listing, it is clear that there’s a high chance that this business just works.

The real question is how robust the underlying structure is and how much of that earnings is protected.

What I’d Want to Understand:

First is churn, because even strong recurring models can lose clients over time. Understanding how many customers are leaving and how that compares to new additions gives you a clearer picture of true revenue stability.

Second is contract structure, as there’s a big difference between clients who are contractually locked in versus those who simply pay monthly. If the majority of revenue is non-contracted, the stickiness relies more on service quality than legal protection.

Third is supplier relationships, since telephony businesses typically rely on upstream providers for infrastructure. If there’s dependency on a small number of suppliers or limited pricing control, that can impact margins over time.

Fourth is technical reliance within the business, particularly whether key knowledge sits with the current owner or team members. If systems are well documented and transferable, the risk is lower, but if not, that becomes a key transition issue.

Fifth is support intensity, because 500 clients can either be smooth and predictable or operationally demanding depending on the nature of the service. Understanding ticket volume and support requirements will tell you how scalable the model is - or how much of a pain in the ass the support requests are going to be.

Growth Angle

Growth here is less about reinventing the business and more about tightening what’s already working. Converting more customers onto longer-term contracts improves visibility, while expanding services into mobile, fibre, IT, and video increases revenue per client.

There’s also likely opportunity in repricing legacy accounts that haven’t kept up with the market (be aware, you risk losing them if you do this).

Beyond that, if the systems are solid, this type of business lends itself well to acquiring smaller customer bases and rolling them into the platform.

The Drawbacks

Technology risk is always present in this space, as platforms and standards evolve over time. Staying current requires ongoing attention, even if the core service feels stable.

Need I introduce AI as a threat? If you’re bullish and understand AI deeply, this could be an opportunity for you to roll our AI services to the customer base.

There’s also some exposure to commoditisation, particularly in connectivity and voice where pricing pressure can emerge. Is this a race to the bottom?

And while the revenue is recurring, the service still needs to be delivered consistently, so this isn’t a passive asset.

Final Thought

This is the kind of business buyers compete for. Strong recurring revenue, high margins, and deep integration into customer operations make it a very attractive asset if the underlying structure holds up under scrutiny.

My primary concern is what AI will do to this business. Perhaps it’ll destroy it, or be a great platform to launch AI products and services from.

If you want more details on either of these businesses or would like an introduction to the sellers, just reply to this email.