Acquisitions Anonymous - #1 for business buying, selling and operating - Buying an Excavation Business: $4.2M Revenue Deal Reviewed

Episode Date: March 6, 2026

In this episode, the hosts break down a 30-year-old site prep and grading business in coastal North Carolina, debating whether steady demand and durable relationships outweigh the heavy equipment CapEx risks.Business Listing – https://www.bizbuysell.com/business-opportunity/excavation-grading-and-hauling-business-for-sale/2464393/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/OeG9Vr💰 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!Tonnesen Accounting Services - Tonnesen provides full quality of earnings reports trusted by buyers, lenders, and brokers on over $500 million in deals each year. Fast, detailed, and affordable. Visit tonnesenaccountingservices.com or connect with Josh Tonnesen on LinkedIn for a free consult.This week, the hosts analyze a $4.2M revenue excavation, grading, and hauling business located near Wilmington, North Carolina. Founded in 1993, the company specializes in land clearing, structural demolition, grading, and material hauling—essentially delivering flat, build-ready dirt lots to developers and builders. The asking price is $3.6M and includes $480K of owner-occupied real estate plus a full fleet: excavators, dozers, dump trucks, trailers, and more.Key Highlights:- $4.2M revenue excavation & site prep company; $3.6M asking price- 30-year operating history with 13 FTEs and significant heavy equipment fleet- Major diligence focus: maintenance CapEx vs. true EBITDA- SBA 12-month seller transition rule creates relationship transfer risk- Strong local moat: equipment proximity limits out-of-state competitionSubscribe 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]

Hello, everyone, and welcome back to another episode of Acquisitions Anonymous. This is Bill Dallessandro. I am one of your hosts, and I'm here today with Mills, Snell, and Heather Anderson. And we talk about a site grading demolition, a kind of site prep business that you would hire if you're going to build a building. They deliver a flat, graded dirt lot. It is in Eastern North Carolina. It's got $4 million of revenue. It's really interesting business.

Mills has some really great inside baseball coming from, kind of. in the industrial construction side of the world for how we would diligence this one. But we really liked it. So without any further ado, I hope you enjoy this episode of Acquisitions Anonymous. We'll say Acquisition Anonymous. Hello, another episode of Acquisition Anonymous. We don't have 100% beers anymore. And thumbs downing on just the plus inventory line. Are you ready to take a 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 and Diebel, 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 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 of 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. Welcome to Acquisitions Anonymous. Me, Bill, Mills, and Heather. How are you guys doing? What's up?

I'm sorry, I have to brag. I'm enjoying the winter, summer that we're having here in Southern California. It's, everybody's freezing and it's hot here. Yeah, we got a foot of snow here in Charlotte, North Carolina, which is a generational amount of snow. I mean, once every 20 years, the fourth most we've ever had in the history of Charlotte, North Carolina. Whoa. So, I mean, it was awesome. The kids were had a blast.

Like, we're outside for three days straight. You know, it's finally starting to melt. But I've been, we're all going to a little stir crazy over there. Yeah. Over here. The videos of the interstate in Charlotte were abysmal. Yes. Well, we don't know for, if you guys don't understand North Carolina, we get snow like almost never.

So we don't have plows or salt or chains or like, nobody knows what to do. So when they forecast snow. like the grocery stores sell out of bread and milk. Everything is canceled. Like, nobody knows how to drive. Everybody's getting an accident. Like,

the smartest move is just not to leave your house because they can't plow the roads. Like, there's not any salt. Nobody can drive. So the smart thing is to buy all the bread and milk and hunker down until it helps. Sounds kind of fun in a way. It's fun because it only happens once a decade or something. Yeah.

Okay. So special format today. We are going to choose the deal. live on the show. So I have three potentials for us. I'm going to give you guys the headlines, Heather and Mills. Which is basically what we do right before we hit record. And Bill's like, I got three deals.

And we're like, all right, just hit record now. This is behind the scenes. This is how the sausage gets made. In case you ever doubted that this show was live, here's the proof. All right. Deal number one. And these are all in North Carolina, by the way, because I'm North Carolina, guys. So this is a semi-

absentee co-working and executive mailbox business, whether you can get like a suite where you can actually go in co-work or you can get mail at it. It has gross revenue of $652,000 and cash flow of $135,000, and they want about $3.000 for it. So that's deal number one. Deal number two, a craft distillery for sale near Greensboro, North Carolina. They're asking $375,000 for it. it appears to have its own building, handmade bourbon, whiskey,

Grappa, and single malt, at $225,000 of revenue and $300,000 of inventory. That's deal number two. Deal number three, an excavation, grading, and hauling business.

It has $4.2 million of revenue that's running around since 1993. And it looks like they're hauling tree trunks and dumping them on a burning pile of wood. And they're asking, 3.6 million for it. It's 30 years old this business. And it's in Castle Hane,

North Carolina, which I have no idea. Never heard of that. All right, which one do you guys want to do? I like the last one. I like the last one. There's assets. Heather's like, go for the assets. Yeah, we need some equipment here

and some sales. The other one, revenue was, the other two, they had really tiny revenue. All right. You can't SBA finance a distillery, right? You can. Oh, yeah, you can. Live Oak has a, has or had, I don't know, they still do a wine and craft bed beverage vertical focused on it, but it has been a really tough space of late. Yeah. So. Yeah. Where did you find this one? These are all biz by sell, a future sponsor, podcast sponsor one day. You have, you have an alert set up. Is this foreshadowing? You're getting all the North Carolina deals.

Well, I am looking into the Carolina deals, but it's just, you know, I like to do stuff this close to home. I totally agree. All right. So here it is. I will read it. I could also imagine, like, you know, like one of those on-screen polls where, like, all the listeners are live and, like, we see which one wins. And then that's where we go. Maybe we can get our tech game up to that level at some point.

So they're literally backing this dump truck up to a pile on fire. Yes. They're dumping logs into a giant, like. brush fire. This gives whole new meaning to dumpster fire, but go ahead. Yes. This is, the fire's not in the dumpster, but the contents of the dumpster are feeding the fire. So, I also found out where Castle Hane, North Carolina is. This is just outside of Wilmington, North Carolina. So this is on the beach for, you know, 20 minutes from the beach. It's on the coast of North Carolina. An excavation grading and hauling businesses for sale.

Gross revenue is $4.2 million. And they're asking $3.6 million. for it. They do not disclose the ebidah. It's been around since 1993, and they have $480,000 of real estate. So let me tell you more about it. Established in 1993, this profitable heavy construction company has built a strong reputation over 30 years serving the Castle Hane, North Carolina market. The business specializes in comprehensive site preparation services, including land clearing, structural demolition, grading, grading, material hauling, and property development preparation. As I said, 4.2 million in sales, consistent year-over-year growth and profitability. Strong revenue to asking price ratio demonstrates solid market positioning. That is an amazing line. It says nothing, but it sounds really good.

This full-service construction company provides essential infrastructure services, including site prep and land clearing, demolition, professional grading, and earthwork, material hauling and logistics, property development prep. experiencing high current demand with excellent market conditions, 30-year customer base, consistent growth trajectory, and strong market fundamentals in the heavy construction sector. The business presents significant expansion opportunities given consistent profitability and strong market demand. The established operational foundation and proven track record positioned the company for scale of growth under new ownership.

Owner-occupied property valued $480,000, $2,400 square feet of building space, so relatively small building, and a strategic Castle Hane location in New Hanover County. The reason for sale is the owner is retiring. He will offer you 90 days of onboarding and training and a smooth transition. It has 13 full-time employees. The lot is one acre with two buildings on it.

The first building is the office with two rooms and a bathroom. The other building is a large metal shop with a half bath to work on equipment or store. We have three excavators, four dozers, nine dump trucks, a skid steer, two equipment trailers, as well as two pickup trucks that all convey with the business. We are experiencing high demand right now, and the market is extremely good. Great time to sell your business. With our consistent profitability, and with the market demand, we expect this business will last much longer. I am retiring after a rewarding career.

That's cool. Business listed by, I assume, the seller. He said, I am. Yeah. Yep. All right. What do you guys think? So what does this business do? Well, I was going to let Mills answer it because I think, I'm not sure I'm right, but it feels like-

Bill's a beard. He's got to know with this business. Yeah, Mills would know. So like if you own a piece of land that has trees on it and you want to put like a, you know, three duplexes on it or something, you've got to do site prep work, which includes, you know, basic infrastructure, utilities, like water line, sewer line, all that kind of stuff. But before you do that, you've got to get all the trees and like scrub brush and all that stuff out. And then you're probably going to just grade the lot very generally, like if the topography is, they don't say anything about like building, you know, massive retaining walls or anything like that.

But just kind of basic lot clearing, grading. They said back to the equipment list really quick, Bill. I was Googling the guy's name. Yeah, here you go. So, yeah, three ex-examination. four dozers, nine dump trucks, a skid steer, two equipment trailers. So, like, they're self-fulfilling this. They've got 13 full-time employees. They're probably running, you know, two, maybe three different job sites at a time, depending on how big it is. This is not like, you know, major

heavy-duty earthwork where they're moving like millions of cubic tons of dirt, like on a massive, massive industrial scale. But this kind of thing, it happens all the time, like steady, As long as there's like some economic activity in the area, which there is, you know, in Wilmington, you know, there's always going to be demand for this. But it usually is tied even still to new construction. There's some of this is maintenance for like forestry related, but I don't get the impression that that's really their, you know, their bailout. Except for the picture, which is them dumping a whole bunch of logged trees onto a fire to be burned. Well, but like the guys who do this from a forestry perspective, they only do forestry. Like they're loggers, you know, and they come in and are like cutting trees to send them to a pulp mill. This just looks more like, hey, we just need to like get this crap out of the way so that we can build a house. Not like we're going to, you know, clear cut and timber 300 acres, you know, to go to the sawmill. Yeah. So, Mills, this is a B to B business, right? So you're customers are developers, home builders, commercial developers, like that type of thing, right?

I mean, you could, like, I own a piece of land and, like, there have been times where I've gotten quotes of like, hey, if I could go cut down all these trees myself and, like, rent a backhoe and, like, do it? Or do I just want to pay somebody who this is all they do? One, one, like, little subset of this that is really interesting is people who have mulch attachments and, like, cutterheads that are bigger than a bush hog. There's some active people on Twitter who talk about this, but it's on the front of a skid steer, and they just literally will clear an entire field of trees, not huge trees, but like small to medium size, and they just turn the entire thing to mulch, like in a day. It's incredible. Whoa. And then do they sell the mulch or is it just an easy way to read?

You just leave it there. Yep. They don't even pick it up. They just molt like literally standing trees that are like this big around and like the cutter head just like mows them down. Oh, I've seen it's like it squishes them into the ground kind of, right? Like it comes from the top and goes, yeah. The big ones they use like for right of way maintenance, the small ones, like if the trees are small enough, they just kind of push them over with the skidsteer and like mulches it in the process. There is a little bit more like recreational and kind of like maintenance case for that,

like people who are just maintaining like hunting land or recreational property. But I think the bulk of this business is more kind of construction, maybe some right of way maintenance, but it's probably like, again, somebody's going to build a gas station on a corner and they need the lot cleared. This is how you start. Okay. Right. So it says site preparation, land clearing, structural demolition, grading, material hauling, and property development preparation. Do you think they're pouring the pad? Probably not. They're just giving flat dirt, right? But I love structural demolition businesses because every town, like Columbia has one 800 pound gorilla who does it in like probably a two hour radius. And like every job we go on, if there's any demo, it's this one company. They're always doing it. And they own a dumpster business. And they do demo. They do asbestos abatement like in construction demo. I think it's a really cool business. In this case, it's probably just like, hey, there's like a couple barns, you know,

on the lot or like a shed that we need knocked over. Just get rid of all that stuff while you're here. I don't think that they're going in and like demoing the inside of a building prior to it being renovated or something like that. So at $4.2 million of revenue, what would you, what's the average? What do you think it costs to clear a lot? And it seems like they're probably serving more of these custom home builders rather than like a big developer that's developing a tract or something. Yeah, because like with this size business, like if somebody's like, I mean, Wilmington, like a lot of golf country, you know, I don't think if somebody. is buying and developing a golf course that they're calling these guys. You know, it would be too big of a job, my guess, you know, for them. Maybe if they're expanding the golf course and they need to do it in, you know, phases, but I think it would be too big for them. I don't know what to tell you, Heather, in terms of the average, like, costs for something like this. Sitework is insanely expensive. Like, we were involved on a roofing project that we invested in. It was a 200,000 square foot. building. I think not including the dirt, like buying the actual dirt, it was a $20 million

development all in. And the roof was like $900,000, which is, still, it's a big, that's a big roofing job. But on a price per square foot basis is not that big. I think the site work was $3.6 million out of the $20 million budget. It can be a really, really significant cost. Clearing is not, you know, as lucrative or kind of high value as, I think, more of like the grading and more earth moving and like putting in in-ground retention ponds or things like that. But the biggest thing about this business that there's no mention of here is the CAPEX. This business has a significant amount of maintenance CAPEX. Not to mention if you want to grow it at all, there's, it's very expensive to grow. Having bought a business that has heavy equipment in it, this current owner,

Clay, I'd be willing to bet you he is a master at getting life out of this equipment and uptime and not letting the equipment go down over something stupid and then just automatically buying a new expensive piece of equipment. He is probably a master at getting yield out of old equipment. Well, look what it says. It says the other building on site is a large. metal shop with a half bath to work on equipment or store. Yep. There you go. So you've probably got fully depreciated equipment here, which, okay, like, it's not

terrible, right? I don't think you cross this off your list. You just have to know going in, there's no EBITDA and no SDE number. But I've seen site work businesses, y'all, that have like $5 million in EBITDA, but have $2 million dollars a year in maintenance capex. Like, you cannot value it based off of what EBITDA. Well, they're not giving us any EBITDA, so that's the good. Correct. Correct. But like, honestly, you know, Heather, you would want to get, you know, and obviously this is part for the course, but like you can't just get one year worth of financials. You need to really look at, okay,

what are their like shop expenses line item? And are they, they're probably just expensing all the maintenance associated with these. So it's going to be really hard to, like, suss out, okay, you know, you bought a piece of equipment this year, you've been spending X amount of dollars maintaining these other things. Hopefully they have like an itemized, you know, equipment lists on their balance sheet and maybe have kept up with cost, you know, based on those equipment numbers. I agree with you. When they maintain and they tell you right here that they maintain their own equipment and their own people, their own shop, it gets impossible to. to actually track how many man hours,

what expenses are actually going to the maintenance of the equipment you don't know, really, as a buyer. So how do you get your arms around it? So like, you're a searcher, you have no experience in this business. This guy probably doesn't have good records of how many man hours he's put in. How do you underwrite this?

I mean, what would you do? I think, I mean, you roll up your sleeves and you really spend a lot of time understanding the asset list. Like, if you don't know anything about heavy equipment and you don't know like what a car is, like, if, like, if you would be lost in a, you know, a shop like this, a maintenance shop, I think it's going to be really hard for you to just bridge the delta of the information asymmetry, you know, that this owner is going to have on you.

We ended up implementing a tool because we use in-house maintenance, but we implemented a tool called Fleaio that is a fleet management tool. It's not like a telematics platform or anything, but it, we enter the VIN number for like a piece equipment like a pickup truck and it automatically imports all the data. I think it costs like $5 per piece of equipment per month. It's not a lot, but it'll automatically pull service records. Like, hey, this is a 2026 Chevy Silverado 2,500 HD. You need all these different things done on this schedule. And we track maintenance that way. When I came into the business, we had like this amazing file folder system of like binders on the wall on a shelf in our.

mechanic shop and I went and they had made all the binders and labeled them and had equipment numbers and everything. None of them had ever been used. It was just all in time. And so like, it's got to get adopted. That's a big thing. I would just be more curious, Bill, like, how have you been maintaining it? Is Clay the guy who goes in there and decides we're rebuilding the carburetor, we're rebuilding the transmission or we're buying a new one? Or is there somebody else in this 13 full-time employees who is a master mechanic. But you have to have a master mechanic who can work on diesel, regular gasoline engines, hydraulic equipment, like, electrical for this equipment. I mean, it's a lot to figure out. And the downtime, you know,

if you have three excavators on three different jobs and one of them goes down, it's really expensive to get somebody out on site to look at it and fix it. And this stuff is abused and beat to hell and just it earns its keep. So, okay, so you've got to understand the hard assets here and the maintenance capax, and then eventually the replacement capax because you've got, I mean, this is a material portion of the purchase price, right, is the fixed asset here, if you had to replace all of them. Maybe it's the whole purchase price. I don't know.

I mean, it's probably a seven-figure number. Yeah. That being said, assume the equipment is in relatively good shape or you can underwrite it. I feel like this is one of those annuity businesses because it's been around for 30 years in a relatively small market. I mean, you're close to Wilmington, which, as I would call it, a mid to small city,

but it's not a town. I mean, it's not like a, you know, podunk nowhere. And, you know, if you've got relationships with all of the major builders, you've got a 30-year reputation. The phone probably rings. Clay does.

You got to figure out how to navigate that. You got to navigate that. But like, if you can navigate it so the business's phone rings and not Clay's phone rings, I mean, this is, you know, moving dirt and scrape and pat. Like, it's not rocket surgery, as they say. And they're going to be building stuff forever. And I mean, I think this is a business you could buy. And it's not, you know, you don't need licensed tradespeople. It's not super technical. You're not selling to the government. You know, like there's a lot here where like a searcher, I think, could get their arms around this. assuming the spreadsheet pencils. Hey Michael here. This episode is brought to you by Toninson Accounting Services, the leading provider of quality of earnings reports for small and mid-sized business deals. Every year, their team reviews over $500 million in transactions, and the reports are trusted by buyers, bankers, sellers, and brokers nationwide. What sets Toninson accounting services apart is premium quality work at an unmatched price,

a full quality of earnings report for just $6,000. You'll get more depth and insight than firms who charge twice as much, which is why so many dealmakers turn to Toninson Accounting Services when accuracy and speed matter the most. There's a link to Toninsonaccounting Services.com in the show notes or reach out to Josh Toninson on LinkedIn for a free consultation, where he'll walk you through the process, step by step, and answer any questions that you have.

Tell them that Acquisitions Anonymous sent you. I would be really curious, too, like, is Clay going to stay in Castle Hain, North Carolina? That would be a really big question for me to understand like sitting across the table from him. Like he wants to retire. That's great. Is he like moving to Galveston?

Because then you're just left there hoping that all the relationships that he's had are going to keep calling you and that like he hasn't pissed them off in the last year and you just are only going to find out about it over the next, you know, six to 12 months. If he's staying there and his family's there and like that's a scenario that I think is much more likely, I think you find some negotiated structure. where you're like the son he never had. You know, you kind of need to be the surrogate here. And you need to borrow his institutional knowledge to give this business and him an orderly transition. I agree with that. And there's a problem if you try to get an SBA loan and do exactly what Mills said. Any of these businesses where relationships where the owner is really the owner of all the customer relationships, it's really, really key.

and what Mills said is so right. You need plenty of time kind of under his wing or to be viewed that way by the customers for that trust to sort of convey over to you. And the SBA has a rule that the seller has to exit any rule in 12 months. Now, not to say that you couldn't still have them around in some other way, but what happens to a buyer that's using an SBA loan is they've got to convince the bank that they won't need the seller to do that past 12 months.

On paper, they've got to be able to say, I can fully transition all the customer relationships to me, no problem, in 12 months. And that's really often the bank can kind of see that that's not really true. That can't happen. See, I would have thought that everybody just says that. The bank checks the box. Okay, the seller said that. That's, you know, the rulebook says they've got to be able to, you know, he hasn't said that he's keeping the seller around for 36 months.

Okay, check that box, move on. But you're telling me that banks have questions about your ability to transition an enterprise. or not even enterprise, but like a relationship with a general contractor over 12 months? Yeah, absolutely. They know enough to know that they should be wary in the contracting business of the relationship transfer, that it's a bigger, it's a harder thing to do in this space. And then they are compliance focused. They're compliance focused because 75% of the loan that they're making at the bank is dependent

on complying with the SBA rules. and so they create this conundrum where they say, well, the guy has to be out in 12 months, and you can't prove to me that you can really take this over in 12 months. So, well, not going to happen. Now, yes, some of the bankers will do what you said, Bill, and say, well, we know on paper we have to say that, but probably he's going to be there. But most of them will say, no, the rules are he has to be out in 12 months,

and you haven't convinced me that you can really take over in 12 months. I wonder to like, so my bull case on this, and I hear what you're saying, Heather, is I get a customer list from Clay, we systematically work through it. And there may not, I don't think there's hundreds. I don't think the majority of the revenue is spread out across hundreds of customers. And I co-create. It seems like a few projects a year like 20 maybe. Yeah. I co-create with Clay a systematic plan of how we're going to transition every single one of those top 12 client relationships over the next 12 months. And, borrow Clay's, you know, knowledge of the market and those past customers. And I don't go meet with them, you know, the first day I do a site visit. It's got to be very well thought out and planned. But I think there's a way to transition. People are so in our business, y'all, people are so used to it getting screwed up. Really, really great residential roofing contractor. We referred work all the time. Like old school guy, no website was on every roof, did all his own work, hand-nailed

shingles, which nobody does anymore. Because if you use an nail gun on an old house and you miss the gap in the wood, you don't know. But if you're handnailing, you know. Like, this guy was old school. He's amazing. And the company was called residential roofing services. Like, no branding. You know what I mean? And the guy sells the business and introduces us to the new buyer, younger guy. And the business is basically gone. I think it's been like six months or a year. The guy got rid of all the in-house crews, which wasn't big. and just was going to sub everything and the phone completely stopped ringing. Like you just totally miss the market.

That's what people are used to in this space is somebody coming in going, I've got amazing ideas. I'm going to totally revolutionize this thing that's been working for 30 years and has gotten up to a $4 million top line business, probably netting, I would say at the very least half a million to probably $750,000 a year, net of CAPEX. There's a lot that you could do with this. Every bank out there has a story similar to the one you just told in their portfolio from, you know, the last few years of somebody coming along and trying to run a business like this and not taking the transition seriously.

And that's the reason they push back so hard on can you really do this? Can you really transition these customers in 12 months? But I would just be peppering, Clay. Like, how did you build your business? What was important? And then let's go preach that that all your customers have heard you say. for three decades. Let's just go repeat that back to them and then show them in the first 30 days how we're just going to make sure if we told you we're going to be there. We're just not,

you've entered this sort of like prove it. Yes. And if you prove it two or three times, you're good. Yeah, everybody's fine. Yeah. Everybody's fine. I like, I mean, I think this is probably transferable. It's probably durable. The CAPEX thing is a question mark. But with, with Clay holding your hand, I think you buy this business. Yeah. I agree with with, with Yeah, yeah. The interesting thing about this to me is, like, I think it is a growing market. I don't think that this is like a super competitive. It's not like you're in, you know, Mecklenburg County, right? And every single one of these jobs is completely picked over. Like, it's a small enough total addressable market that people aren't beating the door down. But like, it's a very desirable area. There's high income, you know, in and around Wilmington. and like rightsful beach and like top sale. Like the nice thing about this business is nobody's going to come compete with you from Texas. The equipment has to be nearby or it doesn't make sense.

And so all the competitors are probably the same competitors who have been there for a long time. They specifically say they have dump trucks, which I don't know if this picture is accurate or not. But this is a semi with a dump trailer, which requires a class ACDL. I would really like this a lot more as a. buyer if they're just regular dump trucks which require class B CDLs and are easier to get because you just make everything a lot easier. You make hiring additional drivers easier. If it's like this, then you got to have a class A. And my guess is because the way they're talking about the equipment, you don't have to have all this. Well, inside baseball from the construction industry

right there. That's good. And I mean, this is, by the way, you're probably also getting your class B CDL if you buy this business because there's a chance to be behind the wheel of a truck, you know, if somebody called out sick. You know, it is, I mean, it's 13 FTEs. You might have one layer of management between you and the guy driving the truck, hopefully, but probably not too. So there's a chance you're going to be in a truck, which is not the end of the world here. I mean, you should probably probably kind of fun. You're knocking over trees and sheds and stuff, you know, I think people pay money to go do that, like in Las Vegas and stuff, you know, like swing or I think it would be fun to be in the trucks.

You know what's a great sign? I will tell you this too because, I mean, Clay, kudos to you. I think you built a great business. Google Street View, there is no equipment sitting on the yard other than a couple dump trucks. The excavators and the rolling stock equipment is not on the yard. That's a great sign because that's how businesses like this die is if you have debt or debt service associated with that equipment and it's not getting used. That's why crane companies

notoriously fail is they buy a million, multi-million dollar cranes and can't rent them. The other thing is the business has been around 30 years and they have like six reviews on Google, which I don't think matters a ton, but when it does matter, it's an easy thing. Like just go get some of those reviews. And it has not mattered for Clay at all, but as a buyer, I would want to figure that out. Yeah. Well, you want to understand where the business comes from. If it's a B2B business, it probably doesn't matter. So I think this is a good business to buy, if you figure out the CAPEX part, and you don't pay too high a multiple because I think it's pretty tough to scale or grow. I think you can depend probably on some very steady demand because Wilmington is a growth area,

and that's all good. I think in that, but I'd still keep the multiple on the low side just because of the unknown of whether you'll get the CAPX right, number one, and number two, because it's going to be expensive and difficult to scale. Yeah. Yeah. So maybe it's a 3x. Like to me, it's a 3x.

I think so. And you've got, I mean, you're going to put some debt on it. So you've really got a model the return on your capital. And you're getting a 15% return on your capital. I would look at investing in some funds, not buying an operating business that owns heavy machinery.

Yeah. And that's, I think people all the time go into deals and they pencil a 20% IRA. And they go, oh, that's what private equity does. That's great. But the massive difference is the private equity guys sit in a high rise in Manhattan and you're the CEO of this operating business. It's an entirely different level of commitment. You need to, your IRA's got to exceed 20% meaningfully. Yeah. And the way I would look at it too is I could, you know, what's kind of my opportunity cost to buy in this business? I could go get a six-figure job somewhere else, right? So the return of my

capital only counts after I've paid myself my opportunity cost, my six-figure salary, above it, the only amount above that count towards the IRA, right, if I'm buying the business, and it's still got to be attractive. And in this case, to your point, like, this business is not going to grow, so you can't kind of grow into the return. You've got to make money on the buy here. It's got to be, the cap structure's got to be right that this makes sense from the job. But you'll be busy and you'll have steady work, I think. Yeah. And there's probably, there is a price that you can pay that all of that pencils. You just, we don't know the EBITDA here, but it's probably two to three times

even though is probably the price. And I'll throw in one other little thought here. Clay doesn't, Clay is representing himself at this point. If you are negotiating directly with Clay, that can be kind of challenging. It would be nice if Clay has a really good M&A attorney or you can recommend one or, you know, you can get somebody in his corner because to do a deal like this, cap because there's a lot of complicated things that he needs somebody in his corner to explain and make sure that he feels comfortable. It otherwise becomes maybe a difficult deal for a buyer to negotiate without. And the attorney that he is closest with right now in life,

if he has asked, could you help me with this deal? The guy will absolutely say yes. And it may not be the best fit for his M&A counsel. Yeah, needs to be M&A counsel. Exactly. That will kill a deal. In fact, that is the worst way to get a deal killed because it gets killed very late. When a seller has the wrong type of counsel, you don't know it until you're all the way at the closing table. And the purchase and sale agreement comes out with absolutely insane terms that you cannot agree to. And you've spent all the time and the money already. So yeah, always check that out. All right.

So, Heather, thumbs up, thumbs down. A thumbs up for the right person at the right, I think the right price is most important to me. here. Yeah. Thumbs up. All right. Mills, you buying it? Move it. I'm very thumbs up. I just think that you've got to know as this business gets bigger, it is going to gobble up cash. So like, I really like where it's at right now. I don't think this market geographically could sustain a $30 million site work business. You know, I just think that this, it's probably slightly under where its sweet spot could be, but just know if you want to go like take over North Carolina with this, you're just going to spend tens of millions of dollars getting the equipment to do it.

That's a good point. That's a good point. You can't really grow without a bunch of capax. So all the more, and maybe you can't grow because who knows how big the Tam is. So for both of those reasons, you better underwrite a pretty stable growth trajectory and your returns have got to work. Which like, don't get me wrong. I think living in Wilmington, making $750,000 a year doing this type of work, is an amazing setup.

I think you would be very, very happy if you're willing to get, you know, your boots dirty every day, which is what it would take. Yeah. But, I mean, and also this is, that informs how I would think about setting up the business, too.

You know, if you're coming in as the new owner and you're not trying to grow but five to 10% a year, you're not going to come in guns blazing. You're going to be much more patient. You're going to think about, you know, how do I set this up so I don't burn out, how I set this up so my team doesn't burn out.

How do I set this up so my team? I have high tenure on my team because the thing's going to make my life terrible as if my team keeps turning over. I also know that sometimes if the business is three times as big next year, you're going to need to turn over the team anyway. That's not going to happen here. So you're really going to want to retain people. Yeah. So just everything about this should be steady, Eddie, when you come in. The price, the way you attack it, the way you finance it, everything should be.

Your equity, I mean, your equity is. Low leverage. Yeah. Yeah. Yeah. Low risk. Don't do anything crazy. You got plenty of time.

Just let it grow with the population and the development of Wilmington. So I like it. I like it. If you can keep it, keep those guard rails on it. Yeah. Good, good for like a long-term patient capital,

Holcoe. Honestly. Not good for like a go-getter young person who's like trying to make their mark on the world necessarily. So, all right. That was a good one. Thanks, guys.

It was fun picking the deal live. Maybe we'll start you that more. All right. If you guys like this one, this might be the first site prep business we ever done, but it's certainly not the first business that used really heavy machinery, a lot of maintenance CAPX. So there are 400, 450 episodes, I think, on ACQU and on.com, all kinds of industries, all kinds of businesses, good ones, bad ones,

interesting ones, stupid ones, funny ones, whatever you're into, is on the website. You can also get on the email list, and we will email you a little briefs about the episode. So if you can't listen to all the audio every week, but you want to know what's going on, we will email it to you full free. As also on ACQUAnon.com. And you can also find Heather and Mills and I and our absent host this week, Michael Gardley, on X, where you're very easy to find. And the pod is ACQU and on X as well. So we'll see you around. Thank you for listening. We'll see you on the next episode of Acquisitions Anonymous.