Buying and Growing Blue-Collar Businesses with Malcolm Peace

Meet Malcolm Peace

This week on the podcast is one you don’t want to miss. We’re interviewing Malcolm Peace, president of Tsetserra Growth Partners, a company that buys and grows blue-collar businesses in Texas. Malcolm is here to share his expertise on buying small businesses, how he finds businesses that would benefit from their investment, how they maintain a business’s legacy, and why blue-collar companies are great for investment. 

Small Business Today

The American business landscape is shifting as baby boomer entrepreneurs begin retiring and stepping away from their family-owned businesses. These businesses, which are often important to their communities, face uncertain futures when they don’t have an obvious next person (like a child or grandchild) to take over. 

The Transition Challenge

As Malcolm explains, many family-owned businesses are at a crossroads. The original owners, who are usually in their late sixties to eighties, want to retire but often find that their children or grandchildren are not interested in continuing the business. 

Instead of closing the doors on decades of hard work, with Malcolm Peace’s company, business owners can explore options that preserve their legacy while also creating opportunities for others to step in – and it’s best to start these conversations early.

“The decision to sell is not just about timing,” Malcolm says. “It’s about preparing for a smooth handover that benefits everyone involved—from the current owner to employees and the local community.”

Preparing to Sell

If selling a business is on the horizon, Malcolm advises owners to start planning well in advance. Here are his top recommendations:

Assess the Business’s Independence: Owners should ask themselves, “If I completely removed myself, would this business survive?” A business too reliant on its founder may struggle in new hands. 

Consider an ESOP: One way to ensure the business remains in good hands is through an Employee Stock Ownership Plan (ESOP). This approach allows employees to gradually take ownership, which keeps the company culture and legacy intact during a transition.

Evaluate the Numbers: Understanding the value of a business is essential for owners considering a sale. Malcolm recommends calculating a business’s worth using a multiple of earnings or revenue. 

Remember that It’s an Emotional Decision: Selling a business isn’t just a financial decision—it’s an emotional one. Malcolm says owners often have deep personal ties to their businesses, which can make letting go difficult. This process can sometimes take years.

Why Blue-Collar Businesses Are a Smart Investment

Malcolm’s company, Tsetserra Growth Partners, focuses on acquiring and growing blue-collar businesses in Texas. But why blue-collar? These businesses often have steady revenues and are deeply rooted in their communities. They offer consistent value and tons of potential for growth.

For those considering investing in or acquiring a business, Malcolm suggests focusing on areas where they can tangibly add value to the business.

Finding the Right Businesses to Buy

Tsetserra Growth Partners focuses on blue-collar, industrial, B2B businesses where “hands get dirty.” For 2024, their primary interests are in manufacturing niches and government-contracted services.

Their business development process is relationship-driven. Malcolm remembers a recent trip to a Chicago trade show, where he pitched potential sellers nonstop for two days. "We walked away with 10-15 interested contacts, one of which is already moving to the next stage," he shares. While tools and lists can provide leads, Malcolm talks about the importance of building genuine relationships. “You have to marinate the conversation and the relationship over time. There’s no substitute for that.”

Long-Term Vision: When Businesses Aren’t Ready to Sell

Malcolm’s patient approach often means nurturing relationships with businesses that aren’t immediately ready to sell. With a goal to acquire ten businesses over the next decade, he’s willing to play the long game.

“Sometimes, we’ve put offers on the table, and the owner backs away,” he explains. “But the conversation continues. It’s about showing them the value we can add and the future we can help create.”

The Byproduct Philosophy

Malcolm also shared his “P&L Top-Down” framework, a philosophy that prioritizes revenue, cost of goods sold (COGS), and operations in that order. 

By focusing on revenue first, followed by optimizing COGS, and leaving operational matters last, Malcolm says the team’s energy aligns with the company’s goals. He talks about how important it is to connect individual actions to larger outcomes: “Good leadership means helping your team understand how their actions impact the business’s success.”

Connect with Malcolm Peace

🔗 Tsetserra Growth Partners