You've got various pieces of data that will tell you, well, it's more likely one or it's more likely the other. There's a whole host of critiques of analysis, of competing hypotheses. But what it seemed to me was there was something to pull from that.
Acquiring Minds
SBA Deal Structuring to Manage Risk in a Cyclical Industry
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And so my thesis for Hopewell was that Hopewell was a compliant, stable manufacturer with a certain amount of SDE that I could grow.
And so instead of thinking insurance, hr, financial, legal, due diligence, let's push on every element of my thesis, which is compliant, stable, certain level of SDE that I can grow, and then let's take all those data points and say, well, does the data support this thesis I have, or does it support some other thesis? Now, you don't have to go so far as to say, is it a good business or is the…
And I proved the seller's a fraud. No, that's not case. The, the point. The point is to say, you know, okay, do we believe that the business is compliant?
Okay, well, there's going to be some elements of legal, there's some hr. This business has a great bunch of benefits. So have they complied with erisa for the 401k plan?
You know, does all this stuff start to. To come together? Same thing with the sde. Right. So, well, does this business actually have the SDE level?
It has. Well, this is where your Q of E comes in. Right. But that also comes into your post close conversation, which is just because it made X dollars for the seller, is it going to make X dollars for me? Are the property taxes going to change just because there's a new owner?
In this case, the answer was no. But in other cases, the answer might be yes. You know, Will, you've had people on the podcast who have told stories about, you know, it turns out some of the revenue came from a family member, the supplies came from a family member, and suddenly, oh, the new guy.
Well, the prices for you are 20% higher. You know, for us, we, we do have good benefits here. Am I going to be able to secure the same rates for benefits and for health insurance that the seller got?
Because you can suddenly find that just because it was X dollars before. Well, it's not going to be X dollars for you. And that means not just listening to the seller, but what are the data points?
Who did you talk to? Matt o', Brien, a previous podcast guest years helped me think through trucking insurance because we have a fleet of 18 wheelers in the business. And so, you know, Matt doesn't have.
He's not correlated with the business. Right. His perspective is one that's totally Unrelated to the, you know, no financial interest in the deal, no knowledge of actually the company that's involved. So you can take his data point, but it's totally independent of what the seller or the seller's broker told you because they've got different interests and motivations.
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