Buying a Platform with an SBA Loan

How. How does. How does this retail feature of the flooring industry play with the fact that it's still fundamentally mostly a B2B revenue model? You know, as you flesh that out. Sure.

So we think about the business as three main segments. There's builder retail and commercial. And commercial. Our business wasn't really in whenever we bought it.

And the points that are better in one versus the other are the cash conversion cycle. And retail is much better than it is in builder. Typically you're taking a deposit that's between 50 and 100% of the total bill up front, and then Obviously you have 30 to 60 days to play pay suppliers, pay subcontractors.

And it's a better business for those reasons from a cash perspective. It's also a better business from a margin perspective. Retail margins are typically one and a half to two times what they would be on the builder front.

But the caveat is retail is much harder to scale in a given market than builder, which is B2B. So what we like about builder is you can have one client that will do, like we said, 200, 500 projects with you a year, and that's one relationship to manage as opposed to getting 200 people to walk through the door in a given year or an extra 200 people to walk through the door for that reason.

We like the thought of scaling builder, but we like the white glove service that a retail culture provides. So the thesis is today, lead with retail and service and optionality and selections, flooring selections, that is selections of tile and options for tile or LVP or carpet, and then use that service mindset to then translate to your builder customers where you can scale faster.

So you think that retail sharpens up your own customer service that then also you can apply into the B2B side, certainly.

And there's other businesses that have this dynamic. But if you do a builder home and a client reaches out to a builder after three years and said, hey, who did our floors? Or we want to match this room, but we need to replace another room.

You do get some of the benefit of having done that builder work on the back end a couple years down the road as well.

Mm. And you mentioned the third bucket commercial, which you're not in. So when you say builder, you mean new home developer builders. So we're not talking about the builders of whatever other types of buildings. Office, commercial, hospital, etc.

Correct.