How to Buy a $20m Business as a First-Timer

Great, Alan. Well, I'm so glad you underlined all that. Now back to the numbers in the business side of this business.

Yeah, of course.

Yes.

I assume that easily hit your million dollar threshold of SDE IT.

Yes. So interestingly, the business had. So in 2024 it did about $2 million in EBITDA, but that the business had performed, you know, at that level pre Covid. So like in the, in the late 2000 and tens.

But during COVID it had really hit a rough spot because you know, the business serves people in assisted living facilities. And when. When Covid happened, they. The facilities basically locked down.

They wouldn't let people outside the organization in. So there were some real tough years there. So there wasn't like a steady earnings at that level to look at going back four or five years.

And in fact, they had just really 2024 was like the first year they got back to that level. But what I saw was a story was here's a business that performed at that level had had some hard times for totally explainable reasons, but had now was coming back. And so, to me, it felt like an opportunity to buy a business of that size at a relatively good price.

Well, speaking of good price, then, do you factor into. Is the multiple based on a blended average of the previous three years when it was, you know, years one and two, it was much. Doing a lot less than it did last year.

The. The prior year, or did the owner kind of insist on just the last year?

Well, I ended up. So I paid about four times for that most recent year. But the way we structured the deal was that there was some downside protection.