Hello friends and supporters,

At Purpose Group, we buy, grow, and hold purpose-driven businesses. We believe business should be a profitable force for good in the world, and we’re inspired to help prove that notion one portfolio business at a time.

People-based businesses

This October will be our two-year anniversary as a fund, and as we reflect on our journey thus far, it has become clear that our thesis is best suited for what we call “people-based businesses.”

Our definition of a people-based business is one in which people work together (typically in the same office space) to accomplish the company’s goals. While many private equity funds strive for businesses that can scale rapidly because they are not people-dependent, we lean in the opposite direction. That’s not to say we overstaff our companies or don’t enjoy the benefits of technology or process improvements to make our companies more efficient. Much to the contrary, we pride ourselves on running efficient businesses, and our operating experience as a team helps us do just that.

The best way to think of us is as a “mini-Berkshire Hathaway”. However, our purpose-driven operational approach makes us decidedly different from Berkshire (aside from the obvious way we’re different, which is about a $945 billion valuation discrepancy.) Otherwise, we are very similar. We’re long-term, patient investors. We like to buy and hold our companies indefinitely. We give the leadership of our portfolio companies a tremendous amount of autonomy. And we use the cash from our companies to buy more businesses. Rinse, repeat, and let the snowball roll downhill.

(It should be noted that our similarities with Berkshire come from a straightforward reason: we deliberately copy them.)

A commercial lawn care company is a perfect example of a business we originally thought would fit our model perfectly. Imagine a lawn care company that has annual contracts with corporate office parks, maintaining the grounds on a daily basis. These businesses hit several of the core attributes we look for in the businesses we seek to acquire:

• They produce relatively consistent and healthy margins.
• They have long-term customer relationships.
• The industry isn’t going anywhere.

In a company like this, however, it would be tough for us to implement our Purpose Playbook™️ as the workers are broken up into very small teams, and the entire group rarely comes together as a single unit.

Our methodology is at its strongest when we can create a unified, passionate team of people who can support each other, working together toward a common goal.

That’s not to say we can’t run our process with a distributed workforce. In fact, Dragon Army, the first business I created that runs the Purpose Playbook, has been a remote company since 2020, only coming together as a single unit a few times a year.

Dragon Army, however, benefits from the fact that the team ran the Purpose Playbook for five years while they all worked in the same office. It has only been since 2020 that the company has been virtual.

Case in point

We acquired Gerald Printing & Liberty Imaging, a 70-person print, apparel, and signs business in Kentucky and northern Tennessee, in May of 2023. The company has six offices and comes together regularly throughout the year.

While only a little over a year into running the Purpose Playbook at Gerald, how the team has embraced the process has been nothing short of astounding. We have team members who memorized, word for word, the company’s PVTV (Purpose, Vision, Tenets, & Values) within a few short months of creating it.

Soon, we will implement the third and final phase of the playbook: The Great Game of Business, which you can learn more about in my book, The Great Team Turnaround. This phase of the process unifies everyone in the company toward a common financial goal, where everyone wins when the team accomplishes its goal.

As always, if you’re curious about the Purpose Playbook, there are several ways to learn more, including:

• Subscribing to this newsletter if you haven’t not already
• Reading any number of my books in The Turnaround Leadership Series
• Reaching out to us directly about potential consulting opportunities

Additionally, in October, I’ll publish the fifth book in my series, appropriately called The Purpose Playbook. That book will provide a much more in-depth dive into the process.

Until next time, I appreciate your support and partnership on this journey. If there are any businesses you know of that are looking for an acquisition partner like Purpose Group, please let me know. And because we believe in reciprocity, if you refer us a business that we acquire, we’ll write you a $50,000 check.

I hope you’re happy.