... CONTINUED FROM PAGE 4 initial concept for Canva was too ambitious. Instead, they started smaller by creating Fusion Books, an online school yearbook design business. They made a website that allowed students to design their profile pages and articles, while Obrecht and Perkins printed and distributed the yearbooks to Australian schools. The couple secured an investor, and the Fusion Books application went live in 2008. Within five years, Fusion Books became Australia’s largest yearbook company.
company starting in Australia and decided against funding it. Tai wouldn’t give up on Perkins and Canva that easily, though. He encouraged her and Obrecht to take up kitesurfing and come to his unique retreat for investors and kitesurfing enthusiasts. At the retreat, Tai introduced the couple to their future tech advisor and co-founder of Google Maps, Lars Rasmussen. They also met an ex-Google employee named Cameron Adams, who would become a co-founder of Canva. With these new advisors, Canva secured $1.5 million from investors and another $1.5 million from the Australian government to keep the business in Australia. Today, Canva is used by 125 million people every month, bringing in over $1 billion annually in revenue. Perkins isn’t doing terribly, either. She’s worth over $6 billion and is still Canva’s CEO. Canva has continued to be at the frontline of graphic design programs, continually releasing new features and tools. With AI usage on the rise, they’re developing new ways to utilize it in Canva. Perkins’ journey proves that if you have a good idea, you should stick with it until it sells.
In 2010, Perkins received her big break when Silicon Valley investor Bill Tai visited Perth. Perkins, Obrecht, and Tai met briefly for dinner, and Tai invited Perkins to San Francisco to pitch her ideas. When Perkins met with Tai in California, she thought she blew the pitch. “I thought that he didn’t really like what I had to say,” she recalled. “He was on his phone, and I thought that meant he wasn’t really engaged in what I had to say about the future of publishing.” Tai was actually connecting Perkins with other investors and tech entrepreneurs.
Unfortunately, Perkins’ pitches to Silicon Valley investors and executives proved fruitless. Many were concerned about a tech
WHAT KIND OF BUYER ARE YOU?
Several years ago, a friend of mine happened to own a boutique hotel in the Caribbean on the island of St. Croix, an island that’s part of the U.S. Virgin Islands. One day, he mentioned to me he had decided to sell it to spend more time with his family. Immediately, I began to review his books and records and noticed that he was doing very good business by the fact he was running a 90% occupancy rate. He had been having profitable years for quite some time. So, I began to work on selling his hotel. I can’t tell you how many people I had look at his hotel until finally, I found a businessman and his son from Ohio who went and visited the hotel, met with the owner, and had even gotten his accountant involved in the purchase of the business. But just when I was about to write the purchase agreement, the deal came to a screeching halt. The buyer said that he could not buy the business. I asked him why. Was it because of the asking price? Was there something wrong with the cash flow or the numbers of the business that did not look in order? No, it was none of those items at all. The numbers were great, and the assets of the hotel were in excellent condition. The answer to why he could not buy the business still rings through my ears today as clear as
if it was yesterday. He said he could not buy this gentleman’s hotel because he is doing such a good job of operating it that there is no more upside left for him. He said he could not begin to operate it any better than the present owner because he has done everything right in operating the business and continues to do so even during the hard times.
Then, there are the visionary buyers who are looking for and are able to find a business that is not performing to its maximum profitability, may have been poorly run in the past, and is in need of some fixing up both in the property and the personnel side too. These buyers like finding projects because they know they have the greatest upside to them in profitability. These businesses have only one way to go, and that is up. And generally, they like to fix up the businesses and keep them. All three of the buyers mentioned will make money and be profitable. But the one with the most upside is the buyer who finds a project and rebuilds the business into something beyond its present state. And which one of the buyers has to do the most work? The one who takes on the project! The moral of the story is that there is no free lunch. You get what you pay for in money and hard work, which will determine how much profitability you and your team want to invest. Next time you are looking to acquire a business, ask yourself: Which buyer am I — No. 1, 2, or 3? –Terry Monroe
This led me to determine there are three kinds of buyers when it comes to buying businesses.
There are the buyers who are buying knowing they plan to sell the business right after they purchase the business, which, in this case, they have to buy at a wholesale price so they can sell at a retail price and make a profit. We call these buyers “Flippers” because they like to find deals and flip them to another buyer as soon as possible. Then, there are the buyers who are buying to hold and keep and are not looking for a project; instead, they are looking for a solid- performing asset that they are going to keep for many years. These buyers are looking for solid businesses that have a long track record of profitability. The buyer will want to add their personal touch to the business, but the business does not need any major changes to it.
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