So Much Fun: The Buyer of Choice in a Fragmented Industry

She was, she remained the leader of the business, to your point, but she was not, not the seller and. Right. And, and so I, I, I share that distinction because when she left the business, she did so against her will and actually was attempting to buy the business back when the seller decided to, to sell it to me.

So the things that she did that I found to be maybe less than high integrity and these things, to be specific, we're attempting to not united, not even always just attempting, actually hiring some of our key people, setting up a competitive business in the same geography. Those are things that I don't entirely begrudge her. I mean, she, she felt like, you know, slighted and.

Very enlightened of you, Mark. Great. Okay, so you, you buy the business in what year was it? 2012. In 2012. Okay, take us into the journey.

Yeah, 2012 the profile, 16 locations, 17 million of revenue, pushing 2 million of EBITDA. There were four or five locations that were relatively newer that had opened in the preceding couple of years that were ramping. So there was an earn out component to their performance over the ensuing 12 months.

And yeah, I, I set about trying to do what I said I was going to do, which is to open a couple of locations per year. I'm glad Will, you brought up the, the founder of the business who hired away some of our key people because one of the key people she hired away was the person who had been responsible for opening the new locations. And so with that person went all, or at least most of the…

So there's quite a void in this pretty critical function. And when there's a void and you're the CEO of an entrepreneurial business, you, you become the, you fill the void. So I ended up becoming the real estate guy.

So I learned how to open an early education business. And I will tell you, I did not make it look easy. The first location we were meant to open was intended to open in September, which kind of matters in the, in the education business.

It's not super correlated with the academic year, but there is a little bit. And yeah, we, we didn't open until November, which is a good way to disappoint your, your new customers and really aggravate your, your employees as well. Anyway, so made some expensive mistakes.

We opened a couple. If you were to look at my underwriting materials, it would tell you that I thought that they were going to cost about $250,000 per location. I can come back if you're interested, to why I was so egregiously off on that assumption. Because then the, the first couple that we opened ended up costing us more than a million dollars each.

And it turned out that math was it actually, believe it or not, still worked, but it was nowhere near obviously as favorable as what we had expected it to be. So we thought about, geez, are there other ways that we can grow this thing? And that led us into acquisitions.

If you had underwritten to opening new locations to novo for 250 and it ends up costing four times that. While I hear you say unbelievably the math still work, it would still, the math worked in terms of like, you still have a profitable operation, but that must have really hurt projected returns. That must have been a very scary realization.