How to Structure Around Risk in a $250k SDE Acquisition

I'm. I'm sure, you know, you guys want to have some money coming out of the business as quickly as possible. And when I, you know, when we consider your background, I mean, boy, you are really well suited to this. Not only all the construction, your own passion, the, and, and then the fact that you've also done all of the, the digital marketing through your experience at Kohler.

You know, how to generate leads in residential remodeling, residential construction. So you're actually kind of the unicorn fit for this business. And you, and you, you knew the business itself.

Yeah, Yeah, I think you summarize that very well. And I think you also captured why I just couldn't let this go. You know, I just. In all those 15 months that I waited, from the first LOI or the first phone call, it just, just, it felt like this was the right one that I wanted to do because of all of those factors that you mentioned and finding ways to de.

Risk to try to balance out the risk, I think was critical to getting the deal done. But I just did not find myself very excited about garage renovations when I had something that had this much going for it on the other side.

Well, then that is probably going to be your answer to my next question, which is, what about all of the project based nature of it, the working capital challenges of this, the seasonality and cyclicality of construction.

And if I may, I mean it just feels like this is a great case of what we unimaginatively call the X factor, which is there is a lot you can look at a deal very objectively, but you need to also bring in the protagonists, entrepreneurs, your interest and passion and just something for the business. The X factor, because that is a huge needle mover.

If you're just drawn to this and you're, and it's, it's the prospect of getting out of bed every day to work on this business excites you, that is worth that more than compensates for all the supposed weaknesses in this business. But anyway, do address those supposed weaknesses, please.

Yeah, I think you're right about that. And I've heard some of your guests say before that you know, when they're looking at businesses, if you, if, if, if you can buy something that you wake up excited to do, then when you're having to do all of the stuff and address all these weaknesses and go through all the, the slog of owning a small business, you'll still be excited to do it.

And it changes, I think it changes the, not only the course and the experience of your life in a better way, but also it allows me to, to relate to my customers and my suppliers, my subs in a better way because I actually do really care about, about what I'm doing and I get really, really hyped up on like the, you know, what we're planning and what we're doing. But it is project based business.

I, in my, like if you go back and pull up my original pro forma from when I was trying to look at this deal and make it all work, I was way too optimistic in how fast the sales cycle was. I thought people would be making decisions on their $200,000 projects in two months and that every two months maybe we'd find a sign, another project. And that just, it hasn't been true.

And you know, the longer projects, they have a much longer sales cycle than I had anticipated. You know, six months, eight months. We have some that are, you know, going on two years.