Or the, the broker representing the seller didn't flinch. No, he great broker and I think had done a good job of educating the seller. And I think also it helped that they had been through the paces with a couple other buyers who had discovered it wasn't maybe the business you'd buy with 10% down and a 90 SVA note.
Acquiring Minds
A Few Hours Per Week, a Few States Away
Excerpts · 303 segments · ~1:31:18 long
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And this hair that you're referring to is their hair. Other than the customer concentration and the market being cyclical, I mean, there is. Some cyclicality in the market.
The business, to me Some of what mitigated it was that the business has been running for 30 plus years. Yeah. That there are different levers to pull. Certainly if you're seeing new construction ease up, you can start to look at doing more direct to consumer jobs.
Residential driveway replacements, RV pads, that type of thing. And we've got very few fixed costs. If we're, if we've got a week where we're not pouring my team's hourly salary and they realize that, you know, some weeks may be 20 hours.
Other weeks right now is one of those weeks where maybe it's going to be a 60 hour week and you know, you want to make hay while the sun's shining and you know, hopefully sock away some of that overtime that they're getting. But if we're not pouring, my cost goes substantially down. I'm not paying for concrete, I'm not paying for labor.
And so that helped in the short term. Think about some of those risks. Yeah, yeah. And then having the seller note.
I've got a very motivated seller who wants to see me succeed and has been great to work with. We ramped down the transition of time pretty quickly. But you know, as things come up, he's pretty responsive.
I'll text him and say hey, we have this warranty issue or looking to do this, what would you recommend? And you know that that seller note keeps him very engaged and you know, me being successful in the business. Yeah.
And does the seller note have any forgivability attached to it? So if you lose one of those big customers, for examp, you don't have to, you know, you can pay proportionally less of the seller note back. It doesn't. We looked at that with a few other deals but because of the, what we were able to do on the multiple as well as the terms of the seller note felt like we were getting enough where…
Risked it. But I think we were, you were already the limit of what we could already get out of that in, in. The term of the loan because one of the things this was actually covered in a recent webinar with Chelsea Wood of Acquisition Lab where there's this, there's this notion that seller financing, the more the better and it's always a net positive.
And of course, as I just kind of jokingly said to you, not suggesting you didn't realize it but, but I was more joking kind of in the face of this notion that it's still a debt. So everyone treats it like, it's somehow less onerous or less bad than a bank debt, but it's not necessarily. No. Yeah. I mean, it's still money that we owe and that has to be paid back.
And. And also, like, what are the terms of the loan?
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