Acquisitions Anonymous - #1 for business buying, selling and operating - Brokering metal for $47mm a year? - Acquisitions Anonymous 270

Episode Date: February 9, 2024

In this episode of Acquisitions Anonymous, Michael and Heather discuss a successful $47 million scrap metal brokerage business that connects suppliers of scrap metal from various sectors with buyers, eliminating the need for inventory storage. They highlight the company's high operational efficiency, strong supplier and customer relationships, and steady financial growth. The conversation also touches on the challenges of transitioning such a business to new ownership and the potential for acquisition through apprenticeship. The hosts conclude that the business's model, focusing on networking and service, makes it an attractive opportunity for strategic buyers or individuals looking to enter the industry through innovative pathways.  Today's deal comes from Axial.  Axial is a trusted deal-sourcing platform serving professional acquirers in the American lower middle market. Thanks to this week's sponsors! Acquisition Lab and their team have been longtime supporters of the pod. Created by Walker Diebel author of Buy Then Build: How to Outsmart the Startup Game, is an accelerator with a highly vetted cohort-based educational and support community for people serious about buying a business. Acquisition Lab exists to help people buy a business and navigate all the complexities of the process, as well as provide a trusted framework, tools, and resources to support you from search to close. If you are serious about buying a business, check out acquisitionlab.com or email the Lab's director Chelsea Wood, [e-mail]. ------------- CloudBookkeeping offers adaptable solutions to businesses that want to focus on growth with a “client service first” approach. They offer a full suite of accounting services, including sophisticated reporting, QuickBooks software solutions, and full-service payroll options.Subscribe 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]

Do you like making money? How about making money at only 6% profit margin on your business? Well, actually not even that good, 4% profit margin on your business. Heather and I found a really interesting business that we think is doing $47 million in revenue with what we guess is maybe three employees. So the revenue number is high, but then we'll check in on the second part. So tons of fun today with Heather, Michael Gurdley, or co-host. Enjoy this one.

It was a cool deal off of Axial and much bigger than we usually do, but one is some good corners, and of course, because we're both Gen X, we had a good time talking about young people. So here's the episode. Enjoy it. Hey, Michael here, want to talk to you about today's sponsor for the episode, which is cloudbookkeeping.com. So cloud bookkeeping is actually run by my neighbor, Charlie. So I've met him in person and I can attest that he's a real human being and a good person. And what cloud bookkeeping does is offer a full suite of bookkeeping services all in the cloud for you around QuickBooks and other technologies that you're using

as a small business owner. So if you're interested in getting the bookkeeping part of running a business off of your plate and focusing on running your business, Charlie and his team are one to call. They can put together a bunch of other stuff in terms of helping you manage and grow your business besides just bookkeeping,

sophisticated reporting, definitely helping you get your QuickBooks online set up in the right way, and a number of things around payroll as well. So definitely know them and recommend them. If you want to find out more about cloud bookkeeping, you can go to their website at cloudbookkeeping.com, reach out to Charlie. I know many of you have and see if he can help you, make running your business easier and more fun by letting them help with a lot of the bookkeeping solutions.

And when you call, mention this podcast. It would help us. help Charlie know that we're supporting him as well. So thanks a bunch and cloudbookingbuking.com as the sponsor for today's episode. 100% Gen Z today, Heather. It's going to be a good episode for sure. We're Gen X. Don't tell anybody.

Oh, Gen X. Yeah, I didn't even catch that. Yeah, we are the forgotten generation. We can't even remember who we are. We don't even know. So I do have a piece coming out on Twitter and YouTube and LinkedIn about how to work with Gen Z. And what inspired me to write it,

I don't know if you saw this, but there were these two different young ladies. I saw their videos were both laid off from remote tech jobs, and they went and recorded it and put it on TikTok. Did you see these? I did see them, and it was pretty weird to watch. It was unbelievable.

Because, you know, for those of you that are not old, like me, you're not old, Heather. I am old. I am old. But, like, Heather, doesn't that seem like something crazy? Like, would you ever do something like that? No, what really struck me, I would never record something like that. It's like your most embarrassing, humiliating moment.

Why would you want to revisit yourself? You must just invite anybody else to it. But also, the way she kind of wanted to argue with the HR people, I don't know. I think I just would have understood that that's, it's what the company is doing, is they're doing a bunch of layoffs and they have to say this nonsense to you and you shouldn't take it too personally and you should just go with your dignity. That's it. Well, I mean, I think my first reaction, mostly because I have low self-esteem, but my first reaction was to be like, if I get laid off in something like that or I get fired or people don't want me, I think it's

my fault. Like, I'm ashamed that I wasn't in the top 90% when they laid off 10% of the people. So, like, seeing that as a Gen X where sub-Gen Z is like, you know what I'm going to do? I'm going to argue and then I'm going to post it on the internet. It's like, well, Yeah, like how unfair this is. It's just what happens. It's not unfair. It just happens. But you're right.

You're right. You definitely know you're in the lower tier or you're in the wrong part of the company that's getting the whole arm lopped off or whatever it might be. But such a weird thing to post publicly. Well, no excuse about how Cloudflare let the young woman go. But also she was there for almost four months and didn't sell anything. And if you're a sales rep and you don't close any deals, Spoiler alert, they ain't keeping year round.

That's just how that works. But anyway, so this sounds like a great segue into something totally unrelated, a $47 million a year scrap metal brokerage company that I found and wanted to talk through with you because I find it interesting. So this one, I mean, you can tell us as this $47 million comes from our friends at Axiol.

So the business overview, the company stands as a prominent ferrous and non-farris scrap metal broker in the Southeast, specializing and sourcing from auto marine rail agricultural manufacturing and industrial equipment sectors. Operating as a broker, the company facilitates seamless transactions from vendor to end customer, eliminating the need for physical inventory storage. Okay, so basically, you have a customer that does this business, so could you explain how it works? Well, it's like recycling a broker, right? So they're not handling the actual metals, but they have sources, right? They know where they're going to

get the scrap from. And they, have, you know, customers that need that particular type of metal, and they're basically putting the two together, right? So it's actually kind of a nice business when it's a brokerage like this, when they're not storing, they're not the scrap yard. And it really, it's kind of a supply side business, I think, more than anything, because it's all about where you get the scrap from and what price you pay for the scrap and, you know, what kind of condition, what kind of size, you know, it is. I've also looked at. something very similar to this, which was tire recycling broker. Same kind of thing. Like a

recycling broker is kind of what this is. Okay, so this person or persons has an office somewhere. They have a Rolodex of sellers. For these, don't know what a Rolodex is. It's this little paper thing that used to sit on your desk next to your phone, which had a cable into it that plugged into the wall. And then you would pick it up and spin a little thing to make phone calls to people whose numbers were in the Rolodex. So they have a Rolodex and background of all of these folks who potentially are going to generate excess needed, unneeded scrap metal. So let's say that you're, well, like one of my buddies here, he runs a window company and it's a glass company and we go visit it. I'm like, they don't actually make any glass. They make window frames. So they

have all kinds of excess metal that they're building up in a giant pile in the corner all the time. This broker would say, go buy that pile of metal from them. Or I guess maybe there's like these recycling shops that pay you for your metal when you take it over there. I guess they could also be having relationships with those folks. And then so that's the one side. That's the buy side of this. Is that right? Yep, exactly.

Got to be able to source all kinds of different demolition. You know, there's demolition of buildings. That whole industry creates a lot of scrap. But that's exactly right. That's the buy side. And then on the other side, there's the cell side where they are matching those deals with people who want to acquire that kind of scrap metal. So that could mean somebody that's just going to repurpose it like physically, I guess, or that's going into a foundry somewhere that's going to get melted down and turned into new, you know, aluminum cans or steel or whatever.

Is that that kind of how it works? Yeah, I think so. And I would imagine most of it is, you know, going to a foundry eventually. Yeah. Depending on what it is. Yeah. I had a buddy for a while that he, and I don't know if he's still doing it because he was working on a software business,

but he would actually do exactly this type of brokerage, but he would do it for dirt, for fill dirt. So he would like find, he would like, he knew all the construction sites in town and he would figure out who had excess dirt and who needed dirt. And then he would go, he would go like run,

they would broker the dirt between the two sites. So people needed Phil and had excess fill, like they would match there. And like, he made a lot of money. He'd be like, yeah, well, this software thing doesn't work out. I'll just make $100,000 a month brokering dirt, just answering his stuff. So really interesting.

That's awesome. Okay. So reading more about this particular deal, I think it was exciting at $47 million. It's going to get a little less exciting here. Key highlights, revenue dynamics. Historically driven by Ferris Scrap, The company has diversified with approximately 10% of revenue attributed to non-fair scrap metal.

Gross profit has surged from $1.55 million, so that's 6.4% in 2019 to 3.14 million, 7.8% in 2020. So gross profit. That's not net profit. Heather, that is gross profit. So that's between what they sell the scrap for and what they buy it for is 6 or 7% of the total sales. So that's the margin is six or seven percent? That's what they're saying? Gross margin, yeah. Gross margin is six percent. Wow. That puts the gross back in gross.

It's gross. It's gross. Okay, operational efficiency. The dedicated business development team focuses on pursuing active opportunities and building client relationships. Efficient operations have yielded an almost 100% customer retention rate

reflecting market intelligence, transaction simplicity, and exceptional service. Investment, appeal, they have supplier relationships. The company boasts a loyal network of 110 suppliers fostering stability and supply schedules and tonnage through exceptional service and financial assistance. Strategic contracts, monthly purchase contracts with customers, guaranteeing tonnage at fixed market prices, contributing to profitability control, and significant profit

increases. Repeat business in 2022, nearly 99% of revenue was generated for repeat customers, including major publicly traded companies under monthly purchase contracts. Strategic growth plans. Management's refined value proposition, let me scroll up here, positions the company for substantial growth, additional offices for regional development, customer acquisition, and vendor diversity, along with direct export opportunities,

offer avenues for expansion and international outreach. Some more stuff here about the brokerage. Revenue, 46.6 million in 2021 with $2 million in EBITA, 2022 is 45 million with $2.5 million in EBDA, and 2023 estimate is $47 million with $2.7 million in EBDA, and their EBITA margin was 5.6%. Hardly any objects, yeah. So you can kind of do the math here.

They said that gross margin was 8%, and EBITA margin was 6. 6 to 7%, was that? Yeah. So EBITA margin, let's say, average is 6.5%. or I'm sorry, gross margin. So the margin between what they sell it for and buy four averages, let's say 7%. And even a margin averages, it looks like, about five and a half.

So that means they're spending 1.5% of sales on expenses. So what is 1.5% of 45 million? It's not much. I mean, it's low-op-x business. So that's $500,000, $650,000 plus or minus. So 45 million times 0.015 is 675,000 a year in expenses. So that's office, benefits, salaries, everything. It sounds like...

It's a small shop. It sounds like this is the owner and three assistants. That's right. It reminds me of like a freight brokerage I went into a few years ago and, you know, have this big top line sales figure. So I have this picture in my mind and we got out there in, literally it was a dirt road by the time we got to the tiny little building and it was like five people, four people maybe.

This sounds like it's less. This is probably less than that. Yeah, this is. They talk about the dedicated business development team. That may be a guy named Jim. That's your team? Probably. Or a galding, Heather.

It could be. Well, no, no. I mean, if they were named Heather, they would be much more profitable. That's true. Oh, that's a good, good point. Wow. So this is a, yeah, this is a really interesting business. to what I said earlier, 110 suppliers, it is a supply-side business. You can always find, I think, buyers for scrap metal, you know, and it sounds like that's probably the easy part because they've got fixed monthly contracts and they say, yeah,

we'll take a certain amount every month, just keep it coming. Yeah, that's the easy part. So this is definitely a supply-side business where it's those 110 relationships. And then the word relationship is really, maybe it really is really, really, relationship driven, and maybe Jim or whoever is really, really critical to maintaining those relationships. So that would be something I would dig into because it's definitely a small shop. It's going to have probably some huge dependency on someone.

And then how transferable are those relationships on the supply side? That would be what I would be worried about. So, I mean, you work with a lot of folks. So they buy businesses where, and I think there's nothing wrong with it. like you use an SBA loan to go buy yourself a job. And part of the reason you're buying yourself a job is those relationships have to transition to you as the new owner. You know, as you've worked with borrowers,

have you seen the smart ones do anything to make that transition work well? Or have you seen any nightmares? Both. I've seen a little bit of both. I think to make it work well, they really get a feel for how important the personality part of the relationship is going in. And a lot of them will walk away.

A good smart buyer will walk away from a deal where it feels a little too dependent on someone's personality, their friendships, you know, and that that's too volatile. But, you know, for a good smooth transition like this, they're going to want to meet the top suppliers before they close. And, of course, a lot of sellers aren't going to want to let them do that. So there's a little dance that goes on there as to whether they're going to allow a new buyer to have that kind of access. And they're also going to want to do a lot of sleuthing around about the competition, you know, what other brokers are out there. What are they doing? How long have they been in the business? You know, how easy, how easy is it to switch? They have to just ask a ton of questions and try to get their foot as far in the door before closing as they can.

That's my opinion. And yes, I've seen some not. do a great job of that and really be sorry for it. I really hate life. It's also interesting when these brokerages seem to change, you know, and sell, like commercial real estate brokerages tend to get bought by big roll-ups where they bring you in, you become a division. And then, you know, the owners are out of there at some point.

They're just buying your book of business. Same. The thing that that happened to a big accounting firm here in town that was doing like all the mid-market accounting, They got bought by a big Jane, which has not been really good. We had to fire them. That's why I think a lot of the exits of businesses like this tend to go to a big strategic because they know they know they can always service the book of business with somebody else rather than get stuck with it.

Hey, everyone, this is Bill. I'm just taking a quick break from this week's episode to tell you about a long-time sponsor, major fan of the podcast, Acquisition Lab. So a lot of our listeners that you guys tune in every week for, or deal reviews. You want to get in on buying a business, but you're not really sure where to start. The cool thing about Acquisition Lab is they were created to solve that problem. So they exist to help people buy a business and also to navigate all the complexities of the process. They provide a trusted framework, tools, resources. They kind of support you all the way

from search while you're looking to buy a business, all the way to close. So if you're serious about buying a business, you want to learn more about the process and you want someone to Sherpa you through buying a business, check out AcquisitionLab.com. Or you can email the labs director, Chelsea Wood, directly. It's just Chelsea at buy then build.com. Yeah, an individual buyer would be, could be taking an awful lot of risk that isn't apparent in these numbers, you know, on the people side. Yeah, this is also a great example. And I think back to like one of my friends contracting business and you're like, you're doing $100 million year in revenue, and then they make $2 million.

And it's like, oh, like, this is tough work. And it kind of reminds me of some of these businesses that just have massive revenue. And then you realize, oh, there's just like, there's not much profit on the other side, compared to the size of the revenue. I mean, these guys are moving $47 million worth of stuff in the end. And I guess maybe these margins, to correct myself, these margins probably look like what a real estate broker looks like, right? Because they're getting paid 4 to 6 percent.

And it's like, oh, okay, well, yeah, cool. You're picking up your little part as the money flows down the river next to you. But it also kind of says there's no salespeople because, you know, the OPEX, the $650,000, that's not sales commissions. Yeah. You know, there's one guy, like you said, Jim or somebody doing all this work. What I would be interested to know, too, on the top line, the 47 million, what's the average ticket size? You know, maybe it's not that much work if it's 47 deals, you know, or maybe it's a ton of work if it's, you know, 300 different deals that have to happen. So I would be, I'd be curious to know that and how automatic, like how involved does the broker have to be in the pricing of each deal?

They say there's fixed market prices, but of course, you don't really want fixed prices in commodities, I don't think. But maybe I'm overcomplicating that in my mind. But I think you want to understand the pricing model here because anytime you're talking about a commodity product, you can get burned, obviously, on the margin. Well, in theory, this guy, and I'm going to assume it's a guy because I don't think it's the most diverse industry. This person running this, I mean, in theory, they want to get a situation where they're sellers like this are pricing the stuff and they have a fixed contract so they don't have to

negotiate that and they just know they're going to get 100 tons of you know nickel coming out and they're going to pay whatever some spot price is for that once they find a buyer and the spot price is the you know whatever the prevailing thing at the Chicago Board of Trade is or wherever the wherever the wherever pricing of these type of commodities is I think it's the Shargo porch trade, but use those prices and then the buyer pays, you know, a fixed markup on it? Probably. I mean, did the margins look pretty consistent every year? I think they did.

They did. I actually did never click show on this, so I will share it with you. You're making me memorize it. This is hard. Man, you know, you're a big time business badass these days. You've got to do this, Heather. So, by the way, from my Gen Z thing, you want to know what the one of the, their top 10 complaints was, it's really funny.

They complained that they, because they were young and understood technology, like all the boomers and Gen X would ask them to, like, teach them how to, like, sign PDFs and stuff like that. So they would all get like super mad. Why would you get mad at that? That's what you're, everybody, the young people are helpful. They're going to be in the same situation someday too and, you know, the younger's are going to help them.

So Gen Z, and I have all kinds of data on this that I researched over the weekend, because I had a long weekend. But the Gen Z is all at once the most polarized generation in history. And you see some of this now where like, I don't know if it's been weird to you, but like on Twitter, there's like 23-year-old guys who are like,

I found Jesus. And like, all they said, suddenly all they do is talking about Jesus. And I'm like, that is not very common, right? Like that happened later in life for a lot of my friends. Not in the 20s. And it wasn't like, you weren't doing that as a 22-year-old.

very commonly. And it's happening so much. So Gen Z is like the most polarized generation in history. They also have grown up as the first generation with totally ubiquitous internet and always on knowledge and things. So to them, like, they don't care about anything unless it's practical. And like trying to convince my 17 year old that he needs to understand algebra because he might need it someday to do the career he wants to. It's like, I might have. will be talking to an alien. And that took years of us being like, okay, if you would like to do what you want to do in life, there is a straight line to where you have to pass algebra now. Do you understand? Nope, don't get it, dad. I'm like, okay, let me run out again. So anyway,

so you tie all that back together as to why Gen Z gets mad that you ask them to help you with signing PDFs and stuff like that is because, A, they think you're an idiot because you didn't grow up with technology like they did. But B, like they think they're wasting their time. They think you should know this because it's totally impractical and in their way of getting stuff done if they're having to show some boomer how to sign a PDF. So that's why they get so mad about it. All right. Well, we are idiots sometimes with technology. At least I am.

We're not boomers. I appreciate all the Gen Zs who have helped me. And I think you're very smart with technology and I wish I was better at it. But, you know, I was the young whippersnapper at one time. I'm sure you were too. Look, Heather and I had to put paper in the fax machine at one point. Make sure that thing was plugged in. Okay, so anyway, here are the EBIT of margins on this deal,

averaging about five and a quarter or five and a half percent. And they're getting a little better as the top line has grown, which sort of suggests to me that you're right, that's probably a fixed cost of good sold margin. And then the OPEX, you know, they haven't really grown it. So as they grow top line, they just make, you know, a little bit more of that falls to the bottom line. they get a little bit of operating leverage.

Yeah. Which is nice. I mean, I think it's a nice business. If someone could, you know, really replace whoever this person is, whoever this wheeler dealer, I'm expecting there's a wheeler dealer there on the other end of the phone at this business. If you can replace that person, then, yeah, this is good living, good amount of money to be making. It seems like a nice, steady business. Metal is what it is.

So the other thing that's kind of interesting, they don't at any point talk. about any sort of automation in this deal. Like there's no software. There's no, like, it would not surprise me if the whole thing is managed by some admin who's been at the company for 25 years and there's a master spreadsheet and it has like a column, like a worksheet per month.

At the end of the year they take and they send the whole spreadsheet to their accountant who puts it into QuickBooks for them. I would be willing to bed. That's the way this company is run. I think so. I think so. Yeah.

That freight brokerage I mentioned, they had paper. They had books and paper that they were managing all these routes and things on. So, yeah, you still see it. And that wasn't that long ago. Probably a spreadsheet. Hopefully it's not paper. But then on the other hand, what technology could you plug in here that would really, you know, if our cost of good soul is fixed, all you can really do is whittle away a little bit of that op-ex, I guess, the $675,000.

Yeah, or potentially scale to be able to handle more business. Though I think you're saying this is totally constrained upon, constrained by the supply side. Maybe you save some money and you hire another sales rep. I mean, that does feel like, you know, that does feel like the opportunity here is to go out and they have a business development team that if they're only spending $675,000 a year on sales

or on all of the people that they have in the whole thing, like, man, is this as simple as to grow this? you spend some more time going out and hire a couple sales reps to grow your supply side and go from there. Because it seems like you're saying the demand is easy to come by. Yeah, you've got to go find more supply, basically, is what you'd have to do. But yeah, that's a good point. You could use technology to give you the money to afford the salespeople to go out and do that. And again, this is kind of one of those things.

You have to get to know the business. What is that sales cycle like? How hard is it to get new suppliers? I think, you know, it's kind of one of those sticky, sticky kind of things. You've got your guy that comes and picks up your scrap. You don't really have a good reason to change. So I don't know how easy that is, but, you know, it could be done. And to your earlier point, that's why maybe this gets sold to a bigger player rather than an individual buyer. Yeah. So you think that's where this ends up, like somebody who's already one of like a national

brokerage around this stuff. There's got to be, there's got to be somebody has already built a national version of this. Absolutely. That's, that's who I I think buys it, which is interesting to why is it on Axial? Why is it being marketed? Why hasn't it already been picked up that way? Are they asking a little more than those other players are willing to pay? Kind of interesting. Yeah. Well, you know, Axial. Axioles, it doesn't have a listing price. So, yeah, be interesting. Yeah, that makes me, you know, it makes me wonder, that's one of the things like to dig in here. Like, what's the story? Like, why is this, why is this the way it is. I bet it's a fascinating thing. I bet that's one of my favorite things to do would be to have a

call with this seller. And I bet you would learn so much about this market. And there's a 90% chance the guy steps outside to have a cigarette halfway through the meeting. That's my prediction. So we think this trades through strategic. We're curious why it hasn't traded to a strategic. And is there any way this business becomes unprofitable? It's pretty much no, right? You have to make No, I think this is like you make $2 million every year. That's two to three. Yeah, I think this is a steady, great business to be in, as long as you have confidence that you keep all those suppliers.

Where, how much do you think this trades for? Almost three million of EBITDA. That's a fiber six, six, maybe six. I thought five, five in terms of trailing, you know, five times 20, 22. So 10 million up front, two and a half million dollar note. Kind of how it felt. Yeah. So unfortunately, it's at that size where it's too small for private equity to care,

you know, a lot of the big players and too big for like an SBA type deal, right? They've grown out of that. It's just a little too big. Yeah, really, it's really a tough. So many good businesses in that no man's land space that just don't fit financing wise. Yeah. Though you are seeing a lot of like the search fund, like, majority search.

A lot of those guys who are funding search funders that are trying for this like 15 to $25 million EV range. But I think it's a pretty smart thesis. Yeah, because there's great businesses there. You really just have to raise more equity. You know, so as long as you can do that and you've got a good fund that's kind of focused on that space, it's just the individual SBA type borrower doesn't want to, you know, they want to own more of the business.

and they don't want to bring all those investors into the cap table and sort of give up, so to speak, you know, too much. And that's why it can't be done SBA. But it could go SBA if someone wanted to raise the equity from investors and really spread out the ownership quite a bit more than I think most SBA borrowers actually intend to do. Yeah. Well, it's also, I think, a lead in to how a lot of these businesses trade if they don't sell to a strategic, is some junior guy shows up,

and over time they buy out the senior guy with payments, and then eventually you look up in 10 years in, basically the junior guy by starting to run the business, our gal has generated enough cash and profits to pay the senior person the five times, but it's just delayed over 10 years. And the way the seller does it in those situations is because they inch out the equity over time

with these payments to the junior person, they retain control and protection to basically sell or finance the business is kind of the way you think about it. And along the way, they get a junior person coming in doing all the work and they train them and everybody wins. So I see that a lot with contracting companies and brokerages as well. Like this seems like that kind of deal. And you're handing off the relationships gradually over time so that risk is gone.

And yeah, I think it's a great way to go for something like this. Yeah. That'd be an interesting play by somebody. Go to this guy and be like, hey, let's. Let's get you retired right now and I'll start to do all the work. And over the next year, I'll become your guy and take over all the stuff. And you be my boss for a couple years. Then eventually I'll just start making you payments until you make, you know,

until you make good money. And you know why that doesn't happen? Because there's a broker here listing this business. Oh, it's. They don't. Yeah, exactly. It is the right, it's really probably the best way to buy this business. and the right way to do it,

but a broker wants to get paid now. That may be... That may be why... Maybe coming back to the root cause of why this business is still for sale, there may be a very interesting personality as started this brokerage and runs it. That's what...

That's a code for something. Yeah. Cool. But it's a good idea for those folks out there searching, like that's an angle you could take, maybe not with this business, because it's already listed the way it is. But, you know, you could find businesses like this and make that kind of an offer.

And I think someone in my network, we talked about this before, and he called it acquisition through apprenticeship. Yeah. With ETA or I'm sorry, entrepreneurship through apprenticeship. Excuse me, I said that wrong. ETA, but thinking of it a different way. And I think that's really smart. That could be a really great play for some people to think about. Yeah, a million percent.

Yeah, I think it's. That would make a great Twitter thread. Maybe I should work on that. There you go. Yeah, my buddy did it. It was genius. And he went in, apprenticed, and with not much capital on his own, turned it all into, you know, he's going to have a multi-million dollar outcome from the whole thing. And along the way, it was de-risk.

He got to pay the salary. Pretty smart. I'd make a note about that. I'm going to write that up. That's good. Yeah. How did we find those businesses would be a really cool one, too? How do we find those?

Because they're not going to be listed with brokers. The broker is not going to let that happen. So you have to find those on your own. Yeah. I think there are a bazillion of those that are out there. That's my opinion. I think you network around. You're like, hey, are you looking for somebody to do you not have a child that wants to come into your business?

I will be your son, our daughter, and death from there. Exactly. Cool. All right. This is a good one. Anything else from you? Otherwise, I'm going to start kissing people's butts asking them to do stuff for us. Look, hey, listeners, by the way, thank you for listening. You made it 30 minutes

this episode. Great job, Heather. If you are a listener and a fan of the show, it's 2024, go tell a friend about it, tell them, hey, if you want to learn about business and how to think about business and how to evaluate businesses, and then how to listen to jokes about business, tell them that this is their podcast. And that would be a huge shout-out to us and our advertisers. We hope you shop with them. So thanks for being here. We'll catch you next week.