SBA Acquisition to $9m Cash Exit in 5 Years

It's really hard to say in terms of just the quality of information. Tracking I think has gotten better in the past couple years of sort of deal pricing. Averages. It's something where, when I brought it to investors, there was not a, hey, you've got this deal at a great price.

It was something where this is an acceptable price based off the issues this business is facing. So I had, you know, I had one investor say this business only would make sense if you were buying it for two and a quarter times based off that customer concentration.

Okay. And Andy, going back to the other hair on the deal that so much of it was on the shoulders of your seller, of the founder of the business, Rick, how did you, how did you get comfortable with that or how are you gonna address, mitigate that when you got in there? Just take it all on your shoulders.

Yeah, so that's, that's what I get. A good, a good thing for a searcher who's looking at a business is to actually try to map out what they think the day to day of the seller is. So the one way to do that is you ask the seller to actually keep a journal.

Which I like is say, hey, can you keep a journal for three days and just write down everything you did today? And that's a really useful sense of saying, how is this person spending their time? Other thing is when you're with them, see how many phone calls or how many times they look at their phone.

So if you can find like a three hour chunk of a middle of a workday and the guy is constantly glancing at his phone or silencing calls or like, hey, sorry, I have to take this. That tells you a lot versus someone who can literally not look at the phone for three hours and not think the building's on fire. Because every, I think a lot of sellers will say, hey, I'm absentee or I'm semi absentee.

And then really anything you can sort of do to pull out how actually involved they are. And I knew stepping in the business, he was heavily involved. So it wasn't something where Rick was trying to say, you know, I show up and I leave, right, right away.

But you have to say, can I step into those shoes? Something that, you know, I knew I'd have to step into immediately was estimating. So he was doing all the quoting for customers and pricing, which at the time I knew nothing about how to quote any of those things.

So it's saying, hey, how Comfortable do I feel taking on that sales role not only in the interaction with customers, but also quickly becoming a subject matter expertise. So that's why I negotiated, you know, six month, six month owner transition period where Rick stayed along and he was able to do a sort of left seat, right seat type transition which was very helpful.

And then understanding do I physically feel capable of doing the work in the field? So getting understanding of the work that he was doing in the field, helping out and understanding do I think I could take this on both again as a technical expert, but also physically. So something where you're spending a lot of time out digging post holes and mixing concrete.

And I felt comfortable doing that as a 27 year old guy taking into the business.