How to Build a $28m Holdco (in 6 Years) | Colin King Interview

Introduction

This tutorial outlines the key steps taken by Colin King and his partner Joe in building a successful holding company, Circle City Capital Group, from a modest automotive parts distribution business to a diversified portfolio worth $28 million in just six years. The insights shared in their journey are valuable for aspiring entrepreneurs looking to make strategic acquisitions and grow their businesses.

Step 1: Start with a Humble Acquisition

• Identify a small, imperfect business to acquire. For Colin and Joe, this was a trucking company with $250,000 in revenue.
• Conduct due diligence on the business's operations and financials to understand its potential.
• Consider the market demand and competition in the industry.

Step 2: Operate the Business Actively

• Be hands-on in the management of the acquired business. Colin and Joe drove routes themselves to understand operations better.
• Focus on improving operational efficiencies during your tenure. Look for ways to streamline processes and reduce costs.

Step 3: Assess and Decide on Selling

• After gaining experience and improving the business, evaluate the potential for selling. Colin and Joe decided to sell the trucking company when they felt it was the right time.
• Analyze market conditions and business performance to determine if selling is the best option for your portfolio.

Step 4: Diversify Your Portfolio

• Begin acquiring different types of businesses to reduce risk and increase revenue streams. Colin and Joe acquired:
  • A décor distribution company.
  • An apparel business (All American Clothing).
  • A bookkeeping firm.
  • A Montessori distribution business.
  • A teddy bear business.
• Ensure that each acquisition aligns with your overall business strategy and complements your existing portfolio.

Step 5: Leverage E-Commerce Opportunities

• Adapt to market changes, such as the surge in e-commerce during the COVID-19 pandemic.
• Utilize online platforms to expand your reach and improve sales for your acquired businesses.

Step 6: Integrate Acquisitions Effectively

• Ensure smooth integration of new businesses into your existing portfolio. Colin and Joe integrated Vermont Flannel into All American Clothing to leverage synergies.
• Focus on aligning branding, operations, and management practices across the portfolio.

Step 7: Continuously Evaluate Potential Acquisitions

• Look for businesses that present strategic opportunities, including those that may not be performing at their best.
• Assess businesses based on their growth potential, market position, and alignment with your vision.

Step 8: Seek Feedback and Learn

• Engage with your network, including other entrepreneurs and industry experts, to gather insights and feedback.
• Be open to adapting your strategy based on experiences and new information.

Conclusion

Colin and Joe's journey demonstrates that starting with a small business and strategically expanding through acquisitions can lead to significant success. Focus on hands-on management, diversification, and effective integration to grow your portfolio. Consider the market landscape and continuously seek feedback to refine your approach. With careful planning and execution, you can build a thriving business that stands the test of time.