That'S something that we didn't, I don't think we underlined earlier, which we should have, that this business had 20 margins as a distribution business. Set it apart from your typical distribution business, right?
Acquiring Minds
Comfortable Concentration for a $800k SDE Business
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Yeah, yeah, yeah. 20 was definitely on, on the higher end of what I had seen for, for distribution businesses. Most of them, like I said, were closer to 10. I think they're great.
You know, I think I don't know how somebody else would, you know, not having like a supply chain background, manage large amounts of inventory and have the, the right processes and procedures to do that. But I think chances are when you're buying a business like this, you probably have somebody, you know, you're probably not getting one employee, you might be getting Five and somebody knows, you…
And I think it's something that's, you know, can be learned as well. So I, I think generally I, you know, I like them. I would encourage people to look at them.
I think you just got to find the ones with, you know, that have reached that critical mass where they can, you know, pay for their fixed expenses and their, you know, bottom line margins aren't so thin.
And again, I may be generalizing, but I am generalizing. I may be over generalizing the concentration on, on both up and up the chain and down the chain. You'll find it more commonly in distribution than you will other categories.
So you got to get, you got to get comfortable with that. You got to already expect it and not necessarily just disqualify a business because there's some concentration because you are likely to find that in a lot of the distribution businesses. Fair.
Yeah. And I think it is, you know, again, like, if I was painting that perfect business, I might say, you know, having two or three suppliers that can produce the same products is a strong, is a strong place to be. Will I get there at some point?
You know, hopefully, if there's some barriers for me there too, because, you know, I have commitments that I need to have, have with my, you know, German manufacturer and, you know, I can't take purchases down, you know, in half, you know, otherwise they'll, they'll not renew my contract. And so, and so there's some challenges there for me. But, you know, I guess if I was going to draw out that…
Three there, there is some, some lock in. I may not be using that precisely, but there's some de facto lock in with your manufacturer because you have basically a commitment to sell a certain quantity of product every year. And if you started diversifying your own portfolio, that means eating into the. Their product that you're supposed to be moving.
Yeah, yeah. Unless we can, if we can grow and have the demand for additional product, then it can warrant this additional supplier. Right? Yeah.
Phil, you had mentioned that your grandfather is something of an inspiration to you as a business person.
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