From Software to Concrete Cutting (and $1.4m of SDE)

No, it was very steady. And that was something that gave me a lot of confidence. Right. So I asked for financials again.

I make several rookie mistakes through this whole process. Right. But I asked for financials. They came back with seven years of PNLs and balance sheets.

So I'm looking at a 20 plus percent earnings to revenue. Right. Which is extremely healthy. I like the way that the revenue is all spread out.

We do work for probably four or five hundred customers in a year. So the diversity of all of that revenue was very, very good. And they told me they hadn't done any sales effort in the last seven or eight years.

So this was just answering the phones. Right. People would call in and they brought in 6 million a year. They had 25 years of good reputation in the Twin Cities market.

There's only three cutters really that are, that are in, that are our size, I should say, that are this big and can do large complex projects. So there was no reason for me to think that any of that was at risk or going to change with a change of ownership.

And the again, the diversity of jobs and customers is fantastic. So the customer concentration seems to be a non issue. But again, cyclicality is something that if you're, if you're in the construction market, big markets will build more or less in given years.

And you said you could actually see that. They gave you so many, they gave you seven years of P. Ls that you, you saw some of that flexing up or down based on what was going on Covid and pre covered.

Right.

Just talk us through that. Do you, do you feel like the business will contract a lot in a year where the economy pulls back and in construction follows?

Yeah, I did kind of the, I can't remember what the calculation is called. Right. But I had looked at this to say how much would it need to shrink before my loan payment becomes more difficult to make. Right. So I had kind of looked at that and said, boy, it would need to shrink significantly.