Acquisitions Anonymous - #1 for business buying, selling and operating - A process server in the southeast US & a nursery business with land in the midwest - e17

Episode Date: February 8, 2021

This week, we talk two businesses for sale.-A process server in the southeast US-A nursery business with land in the midwestGot a small biz listing for sale we should analyze? Send us a deal!-----* Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel.* Do you enjoy our content? Rate our show!* Follow us on twitter @acquanon Learnings about small business acquisitions and operations.-----Past guests on Acquanon include Nick Huber, Brent Beshore, Aaron Rubin, Mike Botkin, Ari Ozick, Mitchell Baldridge, Xavier Helgelsen, Mike Loftus, Steve Divitkos, Dzmitry Miranovich, Morgan Tate and more.-----Additional episodes you might enjoy:#62 Two Landscaping Businesses for Sale - Mike Loftus CEO of Connor's Landscaping#66 Analyzing Software Businesses for Sale with Steve Divitkos, experienced industry CEO#42 $900k Moving and Storage Company / $500k Rural Mini-Storage#61 Two Manufacturing Businesses for Sale - Brent Beshore - Founder and CEO at Permanent Equity#24 $5mm pool services and lifeguard staffing co / $2mm septic services business -  featuring baller @WilsonCompanies as a special guest!#45 $800k/yr cleaning business in Midland, TX / a $565k/yr window cleaning business in San Antonio, TX #48 Two Landscaping Businesses for Sale - Mike Botkin of Benchmark Group--- Support this podcast: https://anchor.fm/dealtalk/supportSubscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

All right, everybody. It is Friday. We're recording another episode of Acquisitions Anonymous, the world's most popular podcast guys about small businesses for sale. Did you guys know that? We're number one. Do you know why we're doing it? For the only one. Yeah, look, we're crushing all the competition, all none of them. Well, great. So thanks everybody for sending in deals and the feedback. I don't know if you guys saw our statistics are looking pretty good. Like we're getting seven or eight hundred lessons. I think it looks almost as good as the GameStop chart when you look at our statistics. At least the first half of the GameStop chart. Let's hope Wall Street Betts finds us soon.

Yeah. Cool. Well, we have two deals today and actually we had four listeners submitted deals, but we only have time for two. So we picked two of them and we'll save two more for a future one. And Bill, you have our first one. So I'll turn it over to you. Yeah, great. So this is a listener submitted deal. Pretty cool one because I think it's a business that not a lot of people think about. So this is a process server company. So if you're you're being sued or there's a procedure initiated against you, you need to get served with legal documents. This company shows up at your door and says, you've been served. I'm sure there's probably other less glamorous ways they do it as well. But their clients are law firms, law enforcement, financial institutions, insurance companies,

anybody who needs to kind of uphold the due process of law by delivering legal documents notifying defendants of pending legal proceedings. They say that they're differentiated because of their commitment to excellent customer service, a superior rate of successfully serving dependents, like actually getting the papers in people's hands, and the fact that their process service have been doing us for a long time, and they're really professional. They say there's a lot of process serving kind of every day.

Process serving isn't going away. It's required by law that this be done in person. So they say it's defensible kind of from a digital, you know, internet's not going to take this over. Point of view, from 2019 to 2020, they grew 105%, which is pretty impressive. They say they have an established network of relationships and deep understanding of the local court processes in their geography, which includes Alabama, Georgia, and Mississippi. They said they've got a proprietary, in quotes, secret sauce method of client acquisition, which I guess as a buyer, I'd be very interested to see how actually.

actually proprietary that was. I wonder if that's like, you know, McDonald's created that special sauce by mixing, what was it, ketchup and Thousand Island dressing? And then you, anyway, that was the first thing I thought of. I was like, is this mayonnaise and ketchup mixed together? Anyway, Google ads and Facebook ads mixed together, probably. This says very little working capital, no material cap X. They did $480,000 of cash flow on $1.2 million in gross rates. Avenue, and they're asking $2.2 million for the business, which has been around since 2015. So, you know, kind of first take, this business has been around for seven years or so, seems relatively stable, and they're asking four times or five times or so, four to five times,

right? So nearly half a million in cash flow, and they want a little over two million. So roughly four X. So what did you guys think of this one? I kind of like the fact that this type of business has a ceiling on its growth. Sure, there could be a national provider. Maybe there are national providers of this. If somebody who's listening knows, please let us know. But it seems like the kind of thing that pops up in, you know, major or semi-major metropolitan areas. And there's no, there's no consolidator, I would think.

Because I think if there was, then they wouldn't have margins like this. And they wouldn't be able to, you know, grow into adjacent markets like, like it seems like. they have. So I like that about it. Yeah, I'm very curious. How do you think, what do you think this secret sauce is? I've just been racking my brain. This is, this is like catnip for Gurdley. It's like what you write something like that? I'm like, what could it possibly be? And I think my bet would be when you dig into it, it's something like, oh yeah, I find all my clients because I'm a member of the local country club. That's the secret sauce. You just got to try. Tricor. Yeah, it's right. Nobody else figured it out yet, except for me. I go there and I just hang out in the

barred for the lawyers show up and then I buy them drinks. There's worse jobs, right? Yeah. Have you ever heard of a secret sauce that's truly secret sauce, though? Almost never. Although a lot of times what I see is when sellers say this, what they really mean is we have a buttoned up process that is more advanced than most of our competitors. That is typically when you see secret sauce, that's really what they mean. And I love that. You go in, they go, we have SOPs for how we pull the names of every lawyer, you know, in this town. And then we've got a script whereby we call them and we offer them to serve their first five clients for free and, you know, bump, bum, bum, and it converts at X percent.

And I would say it was fair if you described that as, you know, a secret sauce. It's not anything mind-blowing, but it's probably better than most process servers are doing. So best case, that's what I would hope to see when I talk to the seller. something like that. Well, there's a lot. I mean, there's a lot to like about this business model. You know, in the SaaS world, you talk about net revenue retention. Like, what happened? Can you do account expansion and sell more to the same folks if you're in B2B? They definitely have that here where if you get on with the right law firms who start to use you as their process server or the right, you know, the right courts, as their business grows, you can grow with them as well. So I definitely love that aspect of being in this business.

Yeah, I wonder how local it is because they mentioned that they have a pretty good understanding of the court system in the three states where they operate. Yep. I wonder if, you know, different states are all so different that, you know, you got to have local guys on the ground and you've got to join the local country club and hang out at the bar and everything to crack a market. Or, you know, I would also wonder, are they actually in, they've listed three states in this kind of teaser, are they fully penetrated in those states? Or, you know, does this guy just kind of live on the border of Alabama and Mississippi? and does like a 100 mile radius from his town, you know, and there might be major expansion. They might have all the infrastructure for all of Alabama and Mississippi. Yep.

And you can expand much broader than that. So I'd be interested to know kind of crossing state lines, how different is it really? And do we have infrastructure that we're not fully exploiting as far as understanding certain states, legal systems, and not being fully penetrated? How much do you think it costs? You know, if you're the law firm and you say, hey, we need, you know, these 10 people to be served this week. and they process all the paperwork. How much do you think it caught?

To get to $1.2 million in revenue, they only have six employees. You know, it's like, is it 50, does it cost $50, you know, for the law firm to pay these guys

and they go driver? I mean, because it is some work, right? If you guys ever been served, I got served once. And, you know, like,

thankfully they just came to my house, right? They weren't like tracking me down the street or something like that. It's not a dog, the bounty hunter here for supply mills. Yeah, it's exactly what came to work.

To me. It's like dog the bounty hunter. You know, like, I don't think these people have to be like, you know, former Navy SEALs or something like that. It's not like they're repoing people's cars and like getting into altercations. But, you know, they've got to go find you. And if you're not at home and you're not at work, like that to me is a really interesting part of the business. But pricing to me in the unit economics, like how much do you think you can charge for this? Because if they're doing $1.2 million in revenue at $50 to transaction, that's $24,000,000 people being served.

per year and there's only six people doing it. Yeah, I think it's higher than that, Mills. I had to serve someone once. And I think I'd like to be on that side instead, Bill. Let me be clear, I personally did not have to serve. But I had to have someone served. And I do think it was a couple hundred bucks. Okay. I can't really remember. I mean, these guys, it's basically in 95% of cases, they're basically a courier. Right. And you can courier someone documents across town for under $100. And so I imagine the risk premium on this and the lawyer premium and all that. Maybe it's $250, I'm guessing.

I just Googled it pretty quickly. At least here in Texas, this one firm is $75 for regular service, $90 for what they call quicker service, which is slightly faster. And then they have top slash priority service, which is $105. Yeah, for sure. Yeah. And I've been served before, not recently, thankfully. It's not exactly, it doesn't exactly attract the most intellectual of employees.

Like there's some stuff that is not, you know, it's not like you have to really get a, you know, a Harvard HBS graduate to come through this job. Well, you just literally need to see them in person, look them in the face, hand them some papers, and say, you've been served. Yep. At least here in Texas, there's just, they got to go through a quick certification is what it says here. And it's a state, state kind of test.

I assume it's like becoming a notary. It's very similar. Yep. That makes a lot of sense. Cool. So I think we've discovered we don't know a ton about this business, but at least our guesstimates so far are pretty appealing. You know, like everything else, this, this, what I'd worry about here is just how stable do we

think that revenue is if you're going to be paying, you know, five times SDE for the thing. Yeah. I'll have actually one more thing that is adjacent to this industry, but may be interesting for this listener who's doing due diligence. I recently had to have a bunch of stuff notarized. We're doing a business deal, and I had to sign a whole bunch of things with a notary. And we were trying to close on 1231. And my bank was like, no problem.

We'll have a notary at your door. And I was in rural Pennsylvania, my in-laws. And like, sure enough, you know, some lady showed up in her car like mobile notary service. And what was really cool is when I was with her, I got a look at her phone. She was getting blown up, like, constantly via text message. Like, can you be available to go notarize this thing at this address? Like right now, pay is whatever. And it turns out there is this like central clearinghouse of mobile notaries where like

if you're a bank, you can subscribe to this. And then all the notaries are, it's like Uber for notary. But you have to be a bank. And I saw the interphrase. It was like super old school. But like that's all these notaries are all freelancers that are getting deal flow. And so I wonder if there's something like. like that for a process serving. And if there's not, that's probably a huge opportunity to aggregate it

and deal with all the compliance and kind of build that clearinghouse. But banks definitely have access to some and a notary at any address in the United States within five hours of notice. So it would be pretty cool if you could do the same for law firms and a process server. And I think the pricing on that was like 250 bucks or something. Have you used any of the online notaries like notary.com? I've used notarized.com myself. But the bank required a physical infertical. for this. But so I would ask if I was doing diligence on this business, you know, is there, is there something like that? Is there a way we could acquire more leads, you know, in that way?

Could we participate in this? Do you already participate in this? You know, that might be, you know, maybe only certain states have it. You know, I would look for kind of aggregators of deal flow like that. Maybe it doesn't exist. But if it does, I'd want to know that. I think this is an example, too. Just final comment for me, if you live in this geography and you know a bunch of attorneys or law firms. But it's a totally different scenario than, oh, I live five states away and I think I may relocate and try and buy this business. I mean, if it's in your backyard and you know their customer base already, or, I mean, I don't think a law firm would acquire a business like this. But if you're, like you're saying, Bill, if you're tangentially touching it,

you could probably fold this in to something that you're already doing and it would make a lot of sense. Yes. And similarly, I would be asking the seller, could we add notary services? I mean, like, what else to all the, if we have a proprietary secret sauce way of acquiring law firms as customers, what else can we sell these law firms? You know, what else are they already buying in addition to process serving? You know, I'd be asking a- I've got a friend here in Columbia who owns a court reporting firm, and it's very similar. You know, they don't have anybody on staff as court reporters. They just have a bank of 1099, you know, court reporters. And it's, it's the same kind of thing. The lawyer goes, hey, I have a deposition, I need a court reporter.

I really like Janice. Can you make sure that she's available for me? And they just are a middleman. Quick, quick closing for me, just playing with Google for a minute. Nobody in this space has figured out digital yet. It's unbelievable. These websites look like they're geo-cities. I love it. That means there will be a YC company funded to go after this, probably with two weeks of this podcast. Given how many hundreds of listeners we have now, it's probably because of us. Look at that. If a butterfly flaps in the wings on this podcast, what happens? And it changes, it changes Silicon Valley. There you go. That's right. That's right. You heard it first, folks. You heard it first. If you're looking for a bad idea, we got it for you. Okay, cool. I have deal number

two today. This is also listener supported. As a meta comment, it is interesting how people try to put Twitter. Listen to this, the letter he said us, it's interesting how people try to fit Twitter into their previous understanding of the world, right? Well, maybe Twitter's just like a radio station where people talk or it's like a room where everybody's screaming, but just listen to, listen to how he describes this. That was really interesting. Good morning, Michael. I was on Twitter when you recently mentioned the Acquisitions Anonymous podcast.

I was like, oh, you, you know, so he's like implying like it happens real time. Like, I'm there talking to him. It's pretty cool. I didn't know you how to podcast. So I subscribed. I wanted to listen before I sent you this listing of this business I'm looking at. It is in the Midwest. I'm not sure if this is a podcast material,

but I hope you guys will take a look and consider talking about it. Best regards, Anonymous listener. So pretty cool and great to meet with people on Twitter no matter how they envision it. It's super fun. And so what this is, it's a Midwestern Greenhouse and Garden Center.

The broker describes it as a turnkey operating business opportunity that has been family owned. It comes with the land and the business. So basically, pictures of it here, it's one of those like, I don't know, just garden centers, right? It's got like seeds and plants and all that kind of stuff, forklifts, greenhouses, all that stuff that's on the side of the road somewhere. So it comes with land, about five acres, has a retail store, office space, basement, greenhouse, warehouse, warehouse space, all that kind of stuff. So about 40,000 square foot of enclosed space. So again, real estate plus business that comes with it and a bunch of stuff, office equipment, bobcats, tractors, attached. tracts, flatbed trailers, dirt. They throw in the dirt for free.

That's a joke, by the way. Oh, and they also have signs. So pretty fun there. And, you know, I think this is an interesting business because, and I'll pull it up here, this is a business that just went nuts in COVID. So they've been averaging about a million dollars in sales, running about 40, looks like about 40, well,

60% or so gross margins. So they're selling for a dollar. It's costing them 40 cents. So typical retail markup. And they've been over the past three or four years, been averaging about a million in sales out of this property. And again, they're asking $500,000 for the business and land. And then basically just doing okay. I would say just taking home 70, 80 grand a year. And then COVID happened. Sales went up by 50%. And when you have high fixed costs and you're able to get higher prices because everybody's at home gardening. Suddenly it turned around and just went nuts. And the business went from kind of making a nice living, a school teacher living, to making medium city-sized lawyer money. So made about 350 grand through a partial 2020. So pretty nuts.

And you have a seller here who appears to be selling the business basically at the very top of the market, which is smart. Seeing a lot of those this year. COVID impacted businesses. say, I'm selling my business right now. This is great. Everything for sale. Yeah, totally true. So just breaking down how this business works. So out of $100 in sales, about half of that will go to cost of goods sold. So it looked like in 2019, it was about 50 percent that dropped down to about 40 percent of cost of goods sold out of that $100 in sales in 2020. Payroll up until this year was in the high 20s of that of expenses. So you have $100 in sales. $28, $25 of that would be payroll.

This year it dropped way down. Their payroll expenses went up, but percentage of sales went down. Then they would spend money a couple percent on repairs and maintenance. A couple bucks would go to taxes and licensing, some basic advertising. They spent about 3% on advertising. And then other random expenses and deductions are listed as an other deductions bucket of about 7%. So in the end, between cogs and the total expenses, it would be 41% for expenses in total out of every $100 in expenditure.

And then the cost of goods sold would be up until this year about 50%, but this past year dropped down to about 40% in terms of their materials. And so up until about this year, they were doing 6% or 7% EBITDA. This year, they jumped up to over 20%. So COVID giveeth and COVID taken away. way. And so right now this business is priced at, with the land, is price at one and three quarters or one in two thirds, a multiple of EBIT at 1.75 of 2020. It appears. One thing that was super interesting to me, and I have to give this listener props, they found this business on LoopNet,

which is a real estate site. And so this business, what I found was very interesting is this is positioned kind of half as a sale of a business and half as just the sale of the real estate that it sits on, which is not, I don't think a deal flow source most people think of, especially for local businesses. But also there is a fair bit of kind of asset value here because it's kind of being sold as the land and in some ways you get the business for free. Now, I have no idea about the value of this land at all if it's worth anything or nothing. but what's interesting is the broker is a real estate broker and kind of views it through that lens. Yep. And there's also, according to them, they claim there's about $250,000 of personal,

what they call personal property, forklifts and things like that. So they're asking half a million bucks for this business. You get 250 grand of property. I would diligence that heavily to see if that was actually worth anything or that was just what they paid for it. And you're getting the land. I mean, you could be getting this business essentially for free. Now, of course, you got to really like gardening because you now own a nursery pretty much. So you got to probably live in this town where it is and be, you know, be psyched about it. But this could be, you know, it could be a good deal. I mean, like from a landlord's perspective, and that's another thing I'd be asking, you know, what is this rent for? What would this rent for if my business weren't here? You know, you might be able to underwrite this deal purely on the land and the business is free. So that was interesting to me, the kind of the real estate angle here. I actually love that as a signal. If the listing is on LutNet, to me, that absolutely gets me excited because you're right. All of a sudden, you realize that between the owner and their advisor, whether they're a broker,

a business broker, a real estate broker, they're thinking about it primarily from a real estate standpoint. I love that as a signal. I would run hard just to explore it more. to me, this type of business is really fascinating because it serves this niche of people who are shopping at this store are probably needing to get something that is not available at Lowe's in Home Depot. It's a specialty plant. It's a specialty product or something like that. Michael, are you familiar with Calloways in Texas? So they've got 20 locations. They're publicly traded. They're in this niche where it's like,

I need this plant and it's not on the shelf at Lowe's, but I care about my yard. And the price of the plant almost doesn't matter. Wild Birds Unlimited is another one of those. I would never go there, right, except for the fact that, like, they have this crazy cult following. And if you want bird seed and good bird feeders, you're going to go to a wild birds unlimited. Yeah. If that's not your interest, you're never going to step foot in there. So one thing I did just look up that I was curious about, you're competing to some extent with Home Depot and Lowe's. This is in a town that's sizable enough that there are both of those. So it's not like you have to worry about. somebody like that coming in. The other thing, and I think comes back to your point, Bill,

that's really interesting. If you go drive around Houston, there are these Houston garden centers. There's probably 50 of them. And they're all these same kind of carnival looking places that are exactly like this business. And you have, with them, you have a real moat that they've built up, that they own that real estate that they bought in the 70s, 80s and 90s. It's totally paid off. Their cost basis is infantestinal. So that creates a moat for them where it's pretty much nonsensical for anybody else to come in and compete with them because you just you can't make it work with the amount of rent or cost you're going to have to pay to put in another one of these once it's in the market. Yeah, I thought one thing was interesting on the P&L of this thing.

They have no rent, no rent, no rent on their P&L and then they have $78,000 of rent this year. And it makes me wonder, like, because at first what I want to know is are they maintaining an arm's like the relationship between the business and the real estate? Because if they were, then maybe I could see kind of what the market rent on the real estate was and I could try to pencil what's my rate or return going to be on the real estate and how do I need to underwrite the business separately. So that would be a first kind of question is what would this rent for? What's the value of the land? I would definitely get that praise and figure that out. But also it makes me wonder, hmm, maybe their business went up. Maybe they're like renting the yard next door now

because they got so many plants and dirt. Maybe that's it. So that was something I noticed that I'd be asking about. In ideal world, you see an arm's length, kind of the seller might hold, you know, the business in one LLC and the land in another LLC and pay himself rent, you know, arms length at a market rate. But this is small business. So you tend not to see that. What do you think about this as from a buyer standpoint? Is this one that you could look at and say, okay, like I'm going to be a passive owner here? Or do you think this is only a entrepreneurship through acquisition type deal? You've got to buy yourself a job. It depends so much. on what management's in place.

I mean, I bet there are lots of these that are totally passively owned, and I bet there are lots of these where the owner is a total gardening nerd and goes there every day. You know, it just, you'd have to ask. I really think. Well, when you look at, I mean, if you look at their P&L, their total payroll expense is, you know, around $300 to $350,000. So, you know, I'm hoping, I'm guessing that the owner is included in that, right?

but yeah if you're thinking about this from a passive standpoint you know can you really afford to get the right type of guy and then you're going all in on that person even if you're paying them a hundred grand right you're banking on the fact that they're going to be there thinking about it in perpetuity so that you don't have to at least on a day to day basis those people are kind of hard to find somebody who's super competent can run this business can wrap their arms around all the different functions and by the way they're going to be content to be there for 10, 15, 20 years. Yeah, which kind of gets back to the distinction between EBITDA and SDE, seller's discretionary earnings here. Because if this business is, you know, a lot of these small businesses get sold off of SDE. But if you, you know, put on your investor hat and you don't want to work at a garden center 40 hours a week, you need to bake in that salary that Mills just described. And that's going to change how you underwrite the deal. And the multiple is going to look very different to you. So you need to understand kind of the economics of what I work in this business or will I need to fully burden the P&L, and that needs to impact the price

that you pay. And for all the reasons we've talked about, the moat here, if you have one, makes it very, very hard to expand, right? You can't, if you're in one city and you decide, hey, look, our revenue basically stays at between one and one point five million. And I really want to grow this thing to $5 million in revenue. You probably can't do it in the same location because you're reasonably saturated, I would guess, even if you improve your offering a lot.

I don't think you're going to get that big. So then you've got to go to an adjacent geography or open an additional location. And that's going to be hard to do for the same reason that you have a moat. Somebody else probably has a moat there. If you're going down the street, proverbially, or if you're going to the next town over, I think it would be really hard to elbow your way into a new market like this. Unless you bought your way in,

unless you bought another one in an adjacent town. Yep, yeah. And there's probably a lot of mom and pop operators of places like this. I've got some friends here in South Carolina who roll. up Motorola dealers. So two-way radio communication. It was almost all mom and pop related. Municipalities bought from them, the fire station, the police department. They're never going to go only to cell phones. And these guys acquired, I think, 15 or 20 locations, rolled them together and then exited the consolidated entity. But you got to do a certain amount of due diligence

if growth via acquisition is your premise, because you don't want to build that house of cards if it ends up being super fragile or hard to actually transact on. Yeah, hard to sell. Like maybe nobody wants a portfolio of 20 independent garden centers. You know, your strategic acquires set is kind of low. I mean, didn't you mention Michael the one in Texas is public? Like a local garden center chain went public? Yeah.

That's kind of odd to me. Yeah. Well, I think it's also, if you look at this opportunity relative to other ones, it definitely smells to me like something that if you're very passionate about the gardening space and nothing sounds more fun than you than hanging out on the side of the highway in front of a greenhouse and peddling people, you know, tulips and talking about which fruit to plant when. If that sounds like really a ton of fun to you, this sounds like a great opportunity to build wealth, right? Because you can you can finance it and mortgage the real

estate really easily. If you think about it in the context of, are there easier ways to make money and get rich or get wealthy. I mean, businesses that are doing a million one or a million two a year at 50% gross margins, like, that's very much a no man's land. Like, it's tough. Like, your average Starbucks does that in three months. Like, and Starbucks is a different animal, but like, that's just a matter of perspective on this size is pretty tough.

We looked at the two men in a truck franchises last week. Like, the average one of those does three times this amount of revenue. Like, there's better places. probably to get rich if that's what matters to you. But if you love plants and you want to talk tulips, why not? If you want to talk tulips and make six figures, right? One year on average. Yeah. Remember they were making less than 100 for years after year, including one year where they lost money and then COVID was huge. Yeah. This is kind of nitpicky to me, but on the on the financials, I can't stand when people show me total revenue or total expenses

for multiple years. I feel like it's a little bit misleading, you know, because in this case, it's like, hey, look, total earnings over the past, I guess, four years is $460,000. So you look at that and go, oh, okay, like I'm maybe paying this thing off in four years. I think that's the justification. The problem is, is that, you know, 90% of that or 80% of that came in the last year, in the last 11 months. Every time I see that, I just, I can tell, like, this does not happen to a market. an investment banker is not going to show you total revenue, total EBITDA over a multiple year period because they know that it doesn't matter.

Right. Same thing with average EBITDA. Yeah. Like, you know, it's like down, down, down three years in a row and they're like, average is, you know, way better. Well, I've talked to a lot of people who are working on acquiring a business and they'll, you know, really just twist themselves into a pretzel to say, should I use the multiple off of two-year average EBITDA, three-year average EBITDA, five-year weighted.

And it's like, it doesn't matter at all. Like, that should not be what you're spending all your time and energy on because it's just not that important when you really get down to it. Mm-hmm. And maybe just to make sure that we say it out loud, trailing 12, evadda, is the gold standard. Not forward 12, no. Not 412 unless it's really hot. This is an interesting one.

We started off really bullish on this one, and I feel like it took a really bad turn. I think it just depends. It just depends. It comes back to what I feel like should be like a theme of this podcast, which is acquire business fit. Yeah. Right. If it fits you, this could be great. If this doesn't fit you, you're probably not going to have a lot of fun.

Right. Right, right. Very cool. All right. All right. All right, man. Well, for our nearly a thousand listeners, I'm excited to publish this episode and we'll go from there. All right.

We'll have a good day, guys. See you next week. This was fun. See you guys next week.