Acquisitions Anonymous - #1 for business buying, selling and operating - Buying a Demolition Company: Licensing and SBA Loan Challenges

Episode Date: May 15, 2026

In this episode the hosts analyze a $10M revenue hazmat remediation business in California and uncover how licensing, unions, and regulatory complexity can make a profitable company nearly impossible to transfer to a new owner.Business Listing – https://www.bizbuysell.com/business-opportunity/high-demand-environmental-abatement-and-structural-demolition/2391095/Welcome to Acquisitions Anonymous – the #1 podcast for small business M&A. Every week, we break down businesses for sale and talk about buying, operating, and growing them.Looking to build a professional website in minutes? Try Wix: https://wix.pxf.io/c/6898629/3115214/25616?trafcat=templateHubSpot is the backbone for how businesses scale without chaos. Try them out here: https://go.try-hubspot.com/OeG9VrSubscribe for more episodes: https://www.youtube.com/@AcquisitionsAnonymousPodcast?sub_confirmation=1Subscribe to our Newsletter: https://www.acquanon.com/newsletter💰 Sponsored by:Acquisition Lab – Your fast-track to business ownership. Get hands-on support, world-class resources, and join a top-tier community of acquisition entrepreneurs. Schedule your free consultation at https://www.acquisitionlab.com and mention Acquisitions Anonymous!Viso Business Capital — Get the right SBA loan tailored to your acquisition needs with Heather Endresen’s firm. Sign up for a free live Q&A on SBA loans at https://www.visocap.net and click “Zoom Sign Up” in the top-right corner.In this episode, the hosts examine a Northern California environmental remediation and demolition company generating $10 million in revenue, $1 million in seller’s discretionary earnings, and approximately $650,000 in EBITDA, with an asking price of roughly $4.5–$5 million. On the surface, the business appears stable, with 60% repeat customers and long-standing relationships with government agencies. But the deeper they dig, the more complex the deal becomes.Key Highlights:- $10M revenue, $650K EBITDA, $1M SDE with a ~6.9x EBITDA asking multiple- Highly regulated industry requiring multiple environmental and safety licenses- Unionized workforce adds additional legal and operational complexity- Financing challenges due to licensing and transferability requirements- Risk that the business may be difficult—or impossible—to sell to a new ownerSubscribe to  weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking hereDo 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]

Hello, everyone, and welcome back to Acquisitions Anonymous. This is the internet's number one podcast on buying, selling, and operating small businesses. Today, we have a really interesting episode that did not go the way that I thought it was going to, but turned out to be very educational. We have a hazmat remediation business in California. And the crux that you're going to learn from this episode is diligence around a highly regulated and unionized business. and if you're going to buy a business like this, what are all the things you have to dig into and what makes a business transferable or not transferable

if you're buying it a regulated or unionized or highly scrutinized business? So I hope you'll find a lot of interesting takeaways from this hazmat business. It does have a million bucks of SDE. They want about almost $5 million for it. So there's some size here. It's in California.

Lots to learn from this one. I hope you enjoy this episode of Acquisitions Anonymous. All set, Acquisitions Anonymous. Hello, another episode of Acquisition is anonymous. We don't have 100% beers anymore. And thumbs downing on just the plus inventory line. Are you ready to take the leap into business ownership but you don't know where to start? Well, look no further than Acquisition Lab, the premier resource for entrepreneurs seeking to buy their dream business.

Founded by Harvard MBA and acquisition expert Walker Dybul, the lab is your fast-tracked success in the search diligence and acquisition process. With hands-on support, world-class resources, and a community of of like-minded entrepreneurs, Acquisition Lab gives you the tools and confidence to navigate every step of the journey. And we're proud to call Walker and Chelsea, the lab's director, longtime friends of the podcast. They're passionate about helping entrepreneurs like you take the next big step. So don't wait to make your business ownership dream or reality, visit Acquisitionlab.com today to learn more and schedule your free consultation. And when you do, be sure to tell them the Acquisitions Anonymous podcast sent you.

Hello, Heather. Happy Friday. Good morning. This is our, your morning. Yeah, listeners, we record this at 10.30 a.m. Eastern, which is 7.30 a.m. California time. So Heather gets up early for us on Fridays and has her coffee and is ready to roll. That's right. I got my coffee right here. Some morning she has her coffee. Sometimes you roll in and you're like, ugh. If I don't have my coffee, it's really bad.

Yep. Well, it's a caffeinated day and you found the deal today. Exactly. And I found a deal. Yes, I did. Of course, it's in California. You know, we're also location biased. I always try to find North Carolina deals. And you've got a cool California one. So do you want to read it to us?

I will read it to us. Okay, it is a high demand, environmental abatement, and structural demolition company. Asking price is $4.490. SDE is $1 million. EBITDA is $650,000. Gross revenue is $10 million. A central environmental hazard. abatement services, NorCal abatement and demolition company. It's got a number here. Financial information,

they just repeat all of that. Again, this abatement and demolition company is in Northern California, subchapter S corporation, and has been an operation for 45 years under the ownership of its founder. They have been a trusted leader in environmental remediation and general contracting services with five separate revenue streams, environmental remediation, demolition, coding, painting, hazmat hauling, and training and consulting. These divisions work seamlessly to deliver maximum value. It actually said liver, but to deliver maximum value quality and service across the project, thus fulfilling multiple needs under one trusted partner. They maintain a strong relationship across several regulatory agencies, Cal OSHA, DIR, SDPH, and EPA. California got a lot of

47 different regulatory bodies. Yeah, it's California. So this. This is a compliance kind of heavy state. And so this is a compliance business. Type of jobs they work on include schools, city, state, and county projects, federal government and military sites, bridges, homeless encampments, private and commercial office buildings, and residential homes and apartment complexes. The training division has been at the forefront of the environmental safety and education for 40 years. They are a signatory to local 67 laborers union and general laborers union.

I have hives after hearing that paragraph. The number of regulatory things and it's union and it's California. Yeah. Yeah. You better like regulations here. They carry several licenses including asbestos and hazardous waste removal. And here are some of those services they perform. Fire damage and demolition cleanup, general building demolition.

asbestos removal, lead paint stabilization, mold remediation, fire debris remediation, hazardous waste removal, disposal and transport, training for asbestos lead, has power, OSHA, confined space, mole and more. I think that was supposed to be mold. Asbestos lead, lead and mold testing, sorry, phase one and phase two environmental site assessments. That's something I know about. What makes them special. Recurring revenue with long-term contracts, 60% are repeat customers. That sounds better. Strong reputation and large market share. Loyal customer base, highly skilled team, strong asset base, license and regulatory approvals in place. It's based in Northern California. The reason the seller is selling is they are ready to pursue retirement. Let's see. There's a little more information here established in 1980. 49 full-time employees. Oh, SBA pre-qualified. No, that's a new one on me. Let's see, owner works 30 hours. Inventory value 318,000. Monthly rent is 24,000. Real estate is available, yes. It's not included in the price they're giving us there, though, but it is for sale if you want to buy it. Building size, 21,000 square feet. FF&E value 2 million. Sellers willing to provide 20 hours per week,

for four weeks. That's not very long for the new owner for training. And market outlook and competition. The U.S. Environmental Remediation Market generated $20.6 billion. It's kind of the overall market. There's nothing really specific to this business. So I'm going to skip that paragraph. And then there's just a little more of a real estate description. So the deal is listed by Brett Sargent of Sunbelt of Sacramento. What do you think, Bill? So this business, I love the picture that Brett Sargent included with this, which is a guy in a straight up bunny suit with a respirator in a

like taped off plastic room bagging up hazardous material, which probably is mold in this picture. So this is, you have asbestos, you have mold, you have any of the things that have they listed and you need it cleaned up.

You can't just call your local GC, or your local handyman guy, especially in California, there's all kinds of regulations for how you must, you know, handle the removal of it, but also the disposal of it. Yeah. So these guys are kind of your turnkey. They're going to send the guys in the bunny suits.

They're going to bag it up and they're going to make it disappear in a compliant and probably expensive way. Yes, of course. Right. I mean, this is like every municipality has this. Like every area has this. You have water damage. You have fire damage. You have an old building with asbestos that you want to.

remodel and so you need to clean up, remediate the asbestos. There's all never-ending need for this, right? This is certainly not going away, which I love. Yeah. It's not. It is something, you've got to become a guru of all these regulations. First, you know, you have to know what they all are. They probably vary a little bit by county as well. And you probably have to get to know the contractors in the area because a lot of times how you find these jobs is someone's doing some remodeling work and the contractors go, whoa, stop, there's mold, or there's something that looks like asbestos, potentially, we need to bring in the specialists for that. Which is the most expensive sentence you've ever heard if you're doing a real estate project.

Yes. Like, that's when you just jump off a bridge. You're like, my whole model is ruined. It's all over. Like, walk away. Exactly. And that's what these guys specialize in. They're the ones that come in.

And, yes, it's very expensive. It depends on the extent of the problem. the mold or the asbestos or whatever it may be. They also do phase one and phase two environmental. So I would assume, well, phase two means phase one is where you look at the background of a commercial property as to whether it's ever been used in a way, ever had tenants that might have caused, you know, might have spilled chemicals or things like that. And if phase two is what you do when you think, yes, there's probability there that somebody

may have spilled something and you take soil samples. and either confirm that the soil is clean or find that there's actually chemicals in the soil. And then it turns into, you know, ground remediation, groundwater remediation, all of that mess. So anybody that's ever bought commercial real estate knows a little bit about how scary the phase one and phase two process can be because you don't know what they're going to find. You're just preying it comes back clean or you're screwed. Exactly, exactly. So I want to highlight a couple things here that. Brett Sargent, I think, did really well, our business broker friend here.

So he's got SDE listed at a million bucks and EBITDA listed at $6.50. Yeah. So the way I read that is that seller thinks that you would need to spend $350,000 to basically hire a CEO for this. Yeah, right? Exactly. Seller is paying himself 350K on a W2. and if that's you, great, you take home a million bucks. If that's not you, you take home $6.50.

If that's what's going on is a level of transparency and also honesty about the actual W-2 salary of a general manager or CEO in California that I almost never see. Yeah, right. I mean, bravo to Brett Sargent for that. I really appreciate that as a buyer. The other thing I think I really appreciate about Brett Sargent is at the bottom in the real estate description, it says this business operates out of two locations. It describes the locations. It says rent on both spaces is $24,000 per month, triple net. Both locations are available for

purchase at an additional cost. I'm going to assume this means that Brett has already burdened the P&L for $24,000 a month. You're right. These are two basics. I think these should be basic in every listing, but it's missing in 99% of listings. The difference between SDE and EBITDA. is never shown. And something that tells you that, yes, this business owner owns the real estate, but we're always clueless as to whether the EBITDA we're looking at has been rent burdened or not. And here we feel like, yes, it probably has because he's been so clear about it. So, yeah, brokers, if you could just do those two things, that would be amazing.

Yeah. Well, it would go a long way to not getting your deal blown up later when buyers make you do those things, right? Yeah. And if you don't do those things up front with your buyer, buyer gets an unrealistic value expectation about their business. And then, or sorry, seller gets unreliable value. Buyer then puts in the price of a W-2 manager and the real estate and suddenly the business is worth half as much. And you've got a real kind of bid ask spread problem. Yeah.

If I could just get on my soapbox about that, we track how many signed LOIs in the lower, lower middle market, like the SBA size space, close. It's like 25 to 30%. The rest fall apart on issues like this, and it wastes the broker's time, the seller's time, and any buyers that have spent time on it. It just is such a unnecessary waste of time. If we could just be a little more clear up front, you know, we wouldn't enter LOIs on, you know, the wrong EBITDA and then have to break the deal later on. I mean, I would say, in my experience, Heather, Tom, if you agree, that when an, LOI falls apart, it is almost always on stuff where we were talking past each other or wasn't disclosed before the LOI.

And so all the time, you know, I'll be helping a buyer or looking at a business and I'll have data requests. And so, well, we're not comfortable sharing that until after LOI. And I'll go, well, everything that you don't tell me right now decreases your confidence that you should have in the number I put on paper, up to and including like either the L.I becomes not worth the paper it's printed on if I barely know anything. So, you know, I can say a number. You know, like I'm happy to say a number in a non-binding way. The problem is like now this is going to anchor you somewhere and it's probably not, and I'm going to lose-lose because I can say a high

number and you get you interested, but now you're anchored. Or I can say a low number and you give me the finger and then you never tell me the information that I could have used to give you a high number. Right. It's a crazy dance. And sometimes I just think it's because the seller wants to, doesn't want their bubble burst too soon about what the true valuation of their businesses. They just want to live in the fantasy that it's worth X a little bit longer. And then they get they get really mad when they find out later after a lot of work that it's not worth that. So it is, it is crazy. But that is how our, this end of the market. it works today. And I would say, Heather, sometimes it's the seller that doesn't want to face reality,

but I would argue worse, often it is the broker that doesn't want to be the one to break the news to the seller. And they go, oh, I'll just let the market tell the seller what the business is. I'll just let the buyer tell, because they don't have the spine to or they want to sign up the deal, so they'll let the seller believe it's worth however much. And I have encountered unscrupulous business brokers, of which I think I've discussed in the past in the show, but we will not discuss now, who have told me straight up that they will tell sellers a big number and then, quote, we let the market sort it out. Yeah.

Yeah. Exactly what's it. Yeah. We see it all of the time. That's why buyers, those buyers that are listening to us, don't let the lot of these listing prices are fantasy. most of them are. They're fantasy numbers. And so it's okay to, you know, don't be shocked by them. They're fantasy numbers, most of them. Yeah, which they're just asking prices. You can bid whatever you want.

And if you're a seller, this is why it can be reasonable to speak to a couple brokers and get ranges. And if one guy is like way above the other two, you should not think, oh, this guy's the best business broker I'm going to hire him. you should think, why does this guy think my business is worth so much more? Or is he just letting me be positive to try to sign up the deal? And then it goes for whatever the market says it goes for. Yeah. Yeah. So back to this business, Heather. Is this transferable, first of all.

I mean, with all the compliance and, let's assume the registrations, the certificates, all that stuff. Let's assume that's transferable. Is that even a fair assumption to make, or is that really unlikely? Well, it's unlikely because I have actually worked with buyers who wanted to buy in this space, environmental consulting services. It wasn't necessarily remediation, but any kind of environmental consulting. And what they found is there is a law in California that says the business, and this happens in HVAC companies in different states too.

The business must be 51% owned by someone with the license. So the only buyers then under that regulation that could do this are strategic buyers who want to add this territory or someone who just happens to have all these licenses, you know, personally or in a team. Or can you get them, right? Or maybe the employees have them here. So that's the other possibility is maybe these aren't all held by the owner. And if he's owned it for 40 years, he's had time to maybe get some of the employees licensed. But I wonder if the license problem is the reason Brett told us this is not SBA pre-qualified, you know, because there are, SBA lenders are super picky about making sure the personal guarantor on their loan has the licenses. Reasonably, right?

Yeah. Yeah, reason. So what you have to diligence here is each of the acronyms that you're subject to, of which there are many in California, so that makes the diligence more complicated on this one, just because there's a bunch of boxes you got to check. the question is, do each of these agencies license the entity or the person? And if it's the entity, well, now you're getting pushed into a stock sale, for one, but at least maybe it's transferable. And then you've also got to understand are there kind of cancel on transfer, you know, clauses of this licensing. So if you, if the entity transfers majority ownership, you've got to, it triggers a whole bunch of recertification. So you got to understand that. Or is the,

the license at the person level, and is that person an employee or an owner? And how's that going to work? And you're going to have to do that. You're probably going to have to speak to the agency directly on all of these. Yeah. And the owner said something, like a really short transition period. This guy's been running the business for 40 years, and he wanted to give a four-week, you know, transition period. So it's kind of like we're indicating that this seller does not want to stick around and beat your license holder long term. So that's, you know, that's maybe another reason. That's one other way of solving it with SBA is maybe do some rollover equity with the seller and let them stay longer term while you work on getting the licenses for a few years. But with roll over equity

in SBA, you now would have to have the seller personally guarantee your loan, definitely have to do a stop sale. And if you brought in minority partners, they would also have to guarantee. Those are all required if you do rollover equity. So this this becomes really tricky to do as an SBA deal. And unfortunately, it's small enough that this is not the size deal where, you know, commercial loans are available, you know, non-SBA commercial loans. The banks that do those, they want two to three million dollars EBITDA minimum. So that's what makes this one tricky is probably the financing. And I think they're asking a bit of a high multiple. Because, you know, the multiple of EBAA, is like 6.9 here.

Right, right. Hi, Heather here. When I'm not breaking down deals with these guys, I'm helping people get the right SBA loans for their business acquisitions. Because when you're buying a business, the best financing isn't one size fits all. There's the best rate, fastest to close, the specific loan structure that you need,

or a little of all of those things. That's why my company, Vizzo Business Capital, works with over 30 different lenders to find you the best funding in less time and with less friction so you can focus on the deal. Sign up for a free live Q&A session on SBA loans at VisoCAP.net, then click Zoom sign up in the top right corner. That's V-I-S-O-C-A-P dot net and click Zoom sign up. This really illustrates how the SDE EBITDA differentiation really makes or breaks it. You know, when you are, if you're trying to build a platform or a holding company, the first deal is going to be at a high multiple.

because you're probably going to have to pay a market multiple of SDE, right? Because that's kind of where the micro market clears, right? multiples of SDE because you're going to be bidding against someone who's going to work in the business and is going to look and he's going to bid on SDE. And if you are a holding company guy or a platform company guy who wants to hire a CEO, put a CEO in here and then do Bolton's and have that CEO run the whole thing, eventually you get to pay SDE or even better than SDE because you have synergies. multiples, but the first time, you really feel it like an EBITDA multiple. And it feels like six or

seven times, not three or four times. And I think all the whole co-brose do not see that coming when they can't get into this. And they're like, oh, I get to pay three or four times. Not on the first one. You don't. Well, and as a lender, I always work off of EBITDA because the loan is going to be predicated on EBITDA. The lender is always going to say somebody's got to get a salary. to run this thing. And the cash flow that's left over after that salary is what's available to service the debt. So your leverage is based on EBITDA, not SDE.

So that's the other difference between looking at the two. So it is nice to see that, you know, two side by side, because, yeah, if all you saw was STE, you're thinking, oh, four and a half multiple doesn't sound too bad. But if you're looking here at the true EBITDA, it's almost seven. So really? So let's say I was going to buy this business and I'm going to be the CEO and I'm going to work in it. They're still going to assume I pay myself 350 grand a year and lend. It doesn't have to be $350 to service my debt still. So it's, yeah, I get no credit for SD.

Not really. So I will say this, the lender doesn't have to apply $350 as your salary. What they can do is look at you personally and decide whether, you know, know, what is it going to take for you to live there? Do you have other income that might reduce the amount of salary that you need? So they'll work with you individually, but they're never going to plug in zero. Even if you could, even if you do have enough other cash flow, they're still going to want to say somebody would have to work here and run this thing. And what's sort of like the minimal market salary that that person would need? So they'll either use that, or if you actually need more than that to make your household work, they'll use

the larger number, but they will always plug in a salary before calculating debt service. Because basically they're assuming that you will default on the debt before you stop paying yourself. That's right. You're going to pay for your house and your food and all the things that your family needs before worrying about the SBA loan. Exactly. So that goes first. Interesting. So this is also a union shop, it seems. Yeah. Does that introduce transferability? concerns, questions? I've certainly seen people buy businesses that are unionized. So usually you can transfer.

It does add a whole lot of diligence. If I'm a buyer of a unionized business, I have to hire another attorney, not just my regular M&A attorney. I need a union labor attorney to review all of the history, the labor agreements, help me kind of predict how this relationship is going to go. the future, you know, am I about to see some wage increases, whatever. So it adds a lot of diligence and diligence cost to you. And you have to, you know, it's another risk factor. I mean, if I'm the union boss and new guy walks in, I'm going to be in his office the next day going,

yeah, we got all these grievances and we need a pay, you know, 25% pay raise and all this stuff. And it's like, geez, it is shocking how business household unions are. Like, it's going to make this business almost not transferable. Yeah, it could. It definitely could. And, you know, the unions in Northern California are very unique. They kind of have these pools of labor and businesses can just kind of pull people, you know, as they need them. It's almost like they treat them like contract labor. I don't know if this particular business works that way, but I have seen others that do like carpentry unions and things like that. So like the master carpenters are all part of a union. And every business that needs a master carpenter pulls from that pool of labor.

You just call the union and you go, I need a master carpenter and then one shows up, which is sort of convenient. Yeah, right. So there's that, if it's that kind of situation, which I have seen in Northern California before, that kind of offsets the risk a little bit because it does make your labor a little more variable, the expense anyway, and your ability to get highly skilled, trained people a little bit easier. man, I just, everything about this listing illustrates to me how business hostile California is.

I mean, just, like, we have barely talked about the fundamentals of this market. And we have, you know, been digging, the whole time digging into the licensing, the regulation, the union. I mean, like, you're a business buyer, right? You want to buy this remediation business? Or do you want to buy the exact same business in Nevada? We don't have to deal with any of this BS. That's true. On the other side, without all these regulations, this business would probably have half the revenue.

You know, like having all this compliance requirements drives the top line, I'm sure, a bit. Well, it does, but their SDE margin, you know, getting to the fundamentals of business, their SDE margin is 10%. It's not, you know, like what you would want to see in like a highly regulated industry is that you get rewarded for dealing with all the complexity of the regulation. And even after all this BS, you have a 10% net margin? Yeah. And the EBITDA margin, six and a half. That's terrible. Yeah, six and a half percent EBITDA margin. So what that tells me is like it's not really providing a moat. It's just ruining your life. Right. That's one way to look at it, Bill.

You know, because like if it were providing a moat, you'd be able to charge more and your margins would be better, right? But what the margin of this business tells me is that this business is not that defensible. No. Which remediation businesses are really not that defensible, right? It's got a couple of guys in bunny suits and the ability to follow the regulations. So the regulations you are not really scaring a whole bunch of market participants out to the point that you can charge more because you're always fighting with a whole bunch of, there's enough competition. here that's depressing margins. So you're just, you're getting into a knife fight here with unions and California

regulation and hazmat and just all this stuff to make 10% EBITDA margins. It's a fragmented market is what I believe it is. And, you know, people bidding not smartly, you know, in a fragmented market is why you have such bad margins. Yeah. Right. Which that, you know, buyers are like, ooh, it's a fragmented market with all these unsophisticated players, like, this is good. But a lot of times, like, that is bad because you've got

all these guys who, like, are bidding projects, and they're going to be the one in the bunny suit. And they don't really value their time. And they don't really understand, they don't have sophisticated enough financial reporting to understand how much money they're making or losing. And they'll bid projects at a loss, like, accidentally. Yeah. Or because they'll be the guy doing the remediation in the bunny suit. And you can't compete with that. And they're setting the market price. That's right. Because there's enough of a out there that somebody can always get a lower price. I think that's, you know, that's why people have come towards this market and think, well, maybe I could consolidate it, but

the licensing is actually the barrier to doing that. At least in California. Yeah, right, in California for sure. I imagine the licensing requirements for this probably very wildly by state. Yeah. Oh, yeah. Some states probably don't care at all. Do whatever you want. You know, breathe in all the mold you want. It's up to you. Other other states like California probably care a lot. Yeah. Yep. So this is a tough one.

I mean, just to me, like, there are other businesses that like it can be worth dealing with California regulation because you get access to the California market. That is, you know, it's a big economy or like there's a bunch of tourism or, you know, hey, it's worth dealing with all this because I get to be in the California market and make sure. supernormal returns because of things that unique that California. This business, California doesn't need any more remediation. I mean, lately they've had a lot of fires, but like generally like doesn't, especially NorCal, doesn't need like unique. It's not like a 20 times per capita larger remediation market than any other state. So to me, I'm like, why? Like,

why put yourself through this? You want to own a remediation business? I actually think this looks like a halfway decent one. I don't love the margins, but they got 60% repeat business. They got government contracts, which by the way also probably introduces other nightmare compliance. Transferability problems, form filling out, pain in the butt, you know, all kinds of pain in the butt. I'm just like, I'm just not buying this business just because California, pretty much. The headache. Yeah. Just a headache. Yeah. Yeah. Yeah. I think this is somebody who really wants to retire, got a number in their mind, and I doubt that they will be able to get close to that number, if they can find the right buyer.

I doubt they'll be able to transfer it at all just because of all the things we've talked. And that's what's such a bummer is that this person is probably going to have to close down their business, which financially is a huge bummer for them. They've created no enterprise value over a 40-year career, although they, classically, they do own the real estate. Probably all of the value of their business will accrue. to just the appreciation of the real estate that it operated in.

They'll make more money selling the real estate than they will sell in the business because they probably won't. They'll probably shut it down and all these unionized dudes are going to lose their jobs, right? Yeah.

All of those workers that are the most being protected by all this stuff are all going to lose their jobs because the business can't be transferred. Yeah, the business will just be absorbed. The client list will just be absorbed by the competitors in the local market.

I think that's what happens with businesses like this. Now, if this business were 10 times as big, you know, the friction to transfer it to do all this licensing BS and diligence, the union and all that stuff, like, those are kind of fixed costs in both hassle and dollars to transfer this business, right? So if this business were 10 times as big, those transaction frictions are smaller relative to the size of the deal, and it might be transferable. But at this scale, the transaction frictions are fixed, and so it's just not worth it. Right. The best

hope of selling this business, I think, is to somebody in the industry, either the competitor in the local, the market went over, or some young person who has gotten licensed and is working for a competitor, and then it needs to sell at a pretty low multiple of EBITDA. Yeah. Yeah. And this is a whole lot more than nothing, I think. Yeah. Yeah.

And being that I have no experience in this and no licenses, for that reason, I'm out. Me as well. I would not buy this business. And like I said, I don't, I don't think it's very low, low odds that it's transferable at all. So if you're Brett Sargent, why do you take on this list? I mean, you've got to know this, right? I wonder if they learn as they go sometimes. You know, it depends on how long he's been brokering businesses. I think a lot of times they learn as they go. And that could, be what's happening here because I don't know that he I wouldn't have taken the listing just based on what we discussed. Because Brett gets paid on continuously, right? Like he does the way the business broker business model works typically is you do a whole bunch of work up front and then you get a big fee if it sells. So in this case, Brett has probably done a whole bunch of work already.

And he's going to have a bunch of people kick the tires, which will waste more of his time. And nothing's ever going to get across the finish line and he will have done a whole bunch of pro bono and work for nothing. Yeah. And he'll probably learn less. He does seem to know it wasn't going to work for SBA. Yeah. He knew he knew, he knew, he knew, he knew, know it couldn't go SBA, but I think that sometimes you have to look at if if SBA lenders won't do it and it's of this size, how's it going to get done? Yeah. Yeah. Tough one. Yeah. All right. I mean, tough deal, but also interesting and hopefully educational for our listeners, if you're, you know, diligence points when trying to transfer a business in a highly regulated industry. Yeah. Yeah. Anything else, Heather?

No. All right. We'll wrap this one up. If you guys like this one, we have, geez, I now have to update it almost 500 more on our website, A-C-Q-U-Anon.com. We have done almost every business you can imagine, although we still find new ones. If you find a cool business, send it to us on X. You can find me at Bill DeA. Heather, what's your ad on X? Enderson, Heather. I did it backwards. I don't know why.

Anderson, Heather, or you can find the pod at ACQU Anon. Send us a deal. We do listener deals all the time. So if you have a cool off-the-wall deal you think we haven't seen before, we would love to analyze it. So send it to us on X. Thank you for listening, and we'll see you on the next episode of Acquisitions Anonymous.