Ep. 14 The $10 Million Membership Model
Small service-based businesses are typically not worth very much, but Walter Bergeron made one simple change to his business model that garnered a $10 M acquisition offer. Bergeron started a small company servicing circuit boards for large food processing plants. It was a “break/fix” business with lumpy demand and cash flow. Struggling to grow, Bergeron starting offering a membership model where instead of calling when they had a machine to repair, subscribers paid a monthly fee so they could have their circuit boards serviced at any time. The switch to a membership model transformed the business and Bergeron quickly grew the company to $7 million in annual sales, at which point he was offered $10 million to sell it.