Spotting gaps in the market is a skill many entrepreneurs claim to possess, but transforming those opportunities into successful businesses requires a systematic approach. In a small town where aging business owners are ready to pass on their legacies, one entrepreneur, Michelle Nohotima, has developed a three-point system for evaluating and transforming established businesses. Through strategic acquisitions and modernization, this methodical approach has built a diverse portfolio spanning six industries – from pet care to disability services – while maintaining consistent growth across sectors.
The Three-Point Evaluation System
When evaluating potential acquisitions, Michelle follows a clear framework.
Scalability First
When she’s considering potential acquisitions, scalability sits right at the top of Michelle’s checklist. “If I can’t scale it, I have a second thought about buying it,” she explains simply. This singular focus on growth potential allows her to pinpoint businesses with the capacity to expand far beyond their current operational boundaries. Numerous businesses, especially those run by owners nearing retirement, often perform well below their actual potential. This is not due to a lack of opportunity, but because the owners have become content with the status quo. This delta between current performance and potential opportunity is precisely what Michelle consistently targets in her acquisition strategy.
Technology Integration
Michelle’s second evaluative point centers on technological modernization, a key component in her strategy. “With the older people that are selling, there’s not a lot of technology in their businesses,” she notes, observing a common theme. Her recent acquisition of a news agency perfectly exemplifies this approach. The previous owner managed everything manually, with absolutely no computer systems in place. By identifying businesses that are ripe for technological upgrades, she can quickly improve efficiency and unlock completely new revenue streams. This is achieved through the implementation of modern systems and more streamlined processes.
Profit Potential Over Purchase Price
The third and final element of Michelle’s evaluation framework focus on profit potential, not simply on the initial cost. “The purchase price is irrelevant because as long as it’s making profit to cover that purchase, price isn’t really the issue,” she clarifies. This perspective allows her to look beyond the immediate negotiations and see what the business can become in the long term. Instead she concentrates on determining if current profits can cover not only the acquisition costs, but more importantly, whether she can increase profits through strategic operational improvements.
Staying Ahead Through Continuous Learning
Despite operating within a diverse range of industries, Michelle maintains that comprehensive, in-depth industry knowledge isn’t always a prerequisite for success. “I don’t have to know about that industry necessarily. I just hire people that do,” she explains. She keeps herself well informed through business shows and podcasts. This is how she continuously learns about different sectors. This approach has enabled her to explore opportunities across a wide spectrum of industries. These include her current interest in acquiring a trucking business, while still relying on experienced professionals to effectively manage daily operations.
Reflecting on her decade-long entrepreneurial journey, Michelle recognizes that having assembled the right team sooner would have undoubtedly accelerated her overall progress. “If I knew back then to get the right team around me in the beginning, I think I would have been further ahead now,” she reflects candidly. This crucial insight drives her current emphasis on surrounding herself with highly capable professionals who not only complement her existing skills, but also support her overarching vision.
To connect with Michelle Nohotima and learn more about her business acquisition strategies and cross-industry growth approach, visit her on LinkedIn.
