Product-Market Fit in the Trades: 4x in 2.5 Years

But, yeah, I don't know if I would recommend my approach, to be honest. That's just how it necessarily unfolded for me.

Yeah. And so let's hear, Pat, the numbers of the business more specifically, please.

120 to 150 ish. We did get a valuation done on the business. And so Steve's books were really solid. His wife Jenny's done an excellent job with his books.

And we pulled in a broker. They did an evaluation business valuation for us. And the number that they kind of came up with and said the business was worth was about $370,000 based on other comparable deals.

And so Steve and I kind of getting our coffee together, we just talked about that. We said, hey, does that seem reasonable to you? I asked him. He would ask me. And basically, long story short, where we settled on was, he said, hey, if we don't get a broker involved or anything like that, he said, I'll sell the business to you for $330,000.

I then came back and said, Would you be interested if I did 10% cash down and 90% seller financing? He was. And so I ended up buying the business on paper for that $330,000. I did a 10% cash down, 90% seller financing, and I had a one year more or less, a one year grace period.

So I wasn't 100% sure how the cash flows were all going to work. So I said, give me at least a year to get in the business, and then I'll start paying on a monthly basis that owner's note after the first 12 months, and we'll have that paid off in five years. The one thing that I really didn't fully understand and I didn't really know how to communicate effectively was the concept of working…

So I knew that there was some money that needed to be used to keep the business going. And so what I ended up doing was pulling in $40,000 cash into the business to keep everything going, because we didn't really work out a concept of working capital. So I would say the final acquisition price really was about 370.

And it's all that little bit of cash up front. And then the seller note that I'm continuing to pay off today.

That was fantastic. Pat, thank you for so much transparency. The working capital, that 40 grand you so wisely, what you just said is that that should be considered effectively part of the purchase price. Even though it didn't go to him in your own, it was really off of your own, out of your own savings and onto the balance sheet of the business.

Correct, yeah. That's how I would look at it. Um, for sure, yeah.