Acquisitions Anonymous - #1 for business buying, selling and operating - Celebrating 300 Episodes: A Look Back at Our Favorite Moments - Acquisitions Anonymous 300

Episode Date: May 24, 2024

In this episode we make a pause to we celebrate our 300th show. We get nostalgic, reflecting on the journey from our rough first podcast to now, with a higher quality production. We dive into some cool business talks, share laughs over memorable moments, and discuss insights from our listeners. It’s a chill session, just catching up and having fun. Hope you enjoy this episode with us. Thanks to this episode's sponsor:Have you thought about exiting your current online business or buying one to start a new journey as an entrepreneur but have no idea where to start? Unlock business opportunities with Boopos.com!  Boopos is the #1 platform for buying and selling profitable online businesses with built-in acquisition financing for qualified buyers. Boopos can offer pre-approved financing for recurring revenue businesses, allowing you to access fast funding with no personal guarantees.Want to find out more? Go to go.boopos.com/michaelgirdley, sign up, and get qualified to sell your business or find your next deal.Learn how to buy a business.If you are interested in buying a business but unsure how to start, you should check Michael's Buy a Business Course:You will learn:• Build a thesis for the type of business that's right for you‍• Learn how to stand out in a sea of buyers• Create a working, scalable Deal Engine getting you leads• Maximize your chances of finding great dealsSubscribe 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]

It's kind of like when you start dating somebody and you're like, you start having like month anniversaries and stuff and you're just like, really? But I was like, hey, we haven't published the episode. There's some of the things we're thinking. And it turns out we were right about some things and we were wrong about some things. And we're just totally. Made my work just brought a whole new dimension to it. It's really, really fun.

This is one thing I've learned at least recording 300 episodes this podcast is you have to be more energetic on a podcast than you are. in real life to get it to come across the right way. Hello, everyone. My name is Bill Dallisandro, and it is my great honor to welcome you to the 300th episode of Acquisitions Anonymous. That means for almost 300 hours. The four of us have been reviewing small businesses for sale on the internet. So thank you to every single listener who's come on this journey with us over the past

almost three years. Listen to our podcast, interacted with us on Twitter, sent us deals, or even worked with Heather to borrow money for SBA and buy a business of your own. We hope this podcast has been really educational for everybody. This is a fun episode where we go back over six or seven of what we thought were kind of the funniest and most memorable moments from the first 300 episodes and check back in on how we feel now about those businesses and those moments. So it was a really fun episode to record.

There's a lot of laughing, some quick cuts. I think you guys will really enjoy it. If you like this episode, I would love it if you would co-follow us on Twitter and also go to our website and get on our e-es. email newsletter. We send out every episode to the email newsletter and also include some commentary, links to the deals, and then you can also find the episodes on YouTube. So thanks so much for being with us for 300 episodes. I hope you enjoy this fun episode of Acquisitions Anonymous. Business buying comes with a lot of questions. What type of business should you buy? Where are you going to get the money?

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I mean, that is insane. Since the first episode when I was like, okay, well, I will now host this podcast. What are we going to do? What is your name, Bill? And I couldn't understand you because you had a terrible microphone. It was a laptop camera. And now you look like you're in a Hollywood studio set. All of our audio is really good.

We have Gustavo here with us, a professional CEO for this podcast, professional editing. It's amazing. And even Gustavo looks amazing. People can't see his video. but like I think he could be on the podcast with the camera he's got going on. That's true. Good. That's true.

Well, I would, I wonder if there are any listeners out there who feel as though they have listened to all 300 episodes. If you think you have listened to all 300 episodes or close to all 300 episodes, please send us a tweet. We would love to know who you are. We'd love to know who the super fans are. We need to give them an award. Yeah.

And then ask you what, yeah. Then ask you what's wrong with you. That too. That too. Actually, it would be pretty cool to say like, what has. Have you learned? Like, have you bought a business, et cetera? If anybody has bought a business, like as a result of this podcast, also tweet us because

we've been talking about this for 300 hours. So I'm hopeful at least one person use these insights to buy a business. I hear, you know, being the loan broker in the group here, I actually get calls from people who have looked closely and taken a run at some of the businesses that we've covered. Or they know a little bit about the industry and they'll tell us what they think we got right and wrong. and it's actually really, really great. I love it when people do that.

Oh, me too. One of my favorite examples of real world business listens to the episode we did was coming up at the end of this 300th episode. The last one on the set list here for today is one of my. So, yeah, if you dig this podcast, we would love to hear from you. I mean, we have really enjoyed recording 300 episodes of it. We've become really good friends since way back the first episode, which you should not go listen to because it's probably. When this podcast called Deal Talk, and Mills and Michael called me, and they were like, Hey, do you want to like co-cote?

You guys were like, you guys are like, you want to co-ist this podcast? I was like, are you sure you want me to do this? So I said yes. And then we were a couple episodes in. And I was like, guys, there are four other podcasts called Deal Talk. You know, we call up with some of the different. And then we rebranded acquisition of anonymous, which I think has been a good call. It's definitely unique.

It just doesn't really mean anything. We're talking about acquisitions, but we're not anonymous and the deals, well, I guess are anonymous. I just, all right. Now, Michael, you let me, as the guy who coined the name intentionally, I says maybe let me give the official explanation here on our 300th episode to the meaning of the name acquisitions anonymous, as I see it anyway, which was the idea is that we were deal junkies and that we were addicted to deals. And so the name was a play on Alcoholics Anonymous, but it was acquisitions anonymous.

It was people who were deal jockeys. But then it also has the double meaning that the acquisitions themselves are anonymous because we don't sign NDAs. We're just working from teasers. So the company names are anonymous. So it's a double meaning of both people who are addicted to deals, but also the deals themselves are anonymous. And so that is the official meaning.

of the name. And we also get a lot of emails saying, like, I'm sure one of you guys is a former member of Alcoholics Anonymous. And they're sure that's why the name wants being that. And I'm here to say it is at least a little bit related to that from a naming perspective. All right. On that note, I guess so Gustavo, we're going to talk about some deals. You picked out clips from our very best deals. Indeed. Okay. This may need to get edited out. But I was going to try to pull up this clip and I have access denied. So I don't know if that's intentional or not. Yeah, Michael Gustavus started to catch you out.

They don't, we don't really need you anymore. Yeah, it's totally fine. Just leave me on the cap table. That's really all we care about. As long as I stay on the cap, oh, here we go. Okay. It's like, as long as I stay on the cap table, I'm fine. Yeah.

Though I would be really sad. This was like, you know, this was. like the highlight of my week. Yes, this is fine. All right, we got to play the clip. I know we'll play the clip for the listeners. We've got to play it for us so we know what to react to here. So I have a question for you.

I mean, you know, how much do you think about the fact that, okay, whenever I see a franchise up for sale on a mass market website, and this is off of Woodbridge International, which this is an out-of-character deal for a Woodbridge. Like, if you look at their other listings, it's a lot of, like, print shops and that sort of thing and, you know, more Main Street-type business. and then you have this very large franchisee that has somehow been passed on by all the other franchisees.

Like, is this one of those things that I'm like, well, wait, why are we the lucky buyer? You know, because you and I don't know anything about this. Why are we even seeing this listing? That's the thing I'm confused about. Very true, because within a franchise community,

they're going to trade that way first. And so, yes, there's got to be a reason that the other franchisees don't want it. My initial reaction to that, clip was, why did it take me two minutes to ask a three-word question? That's my first reaction. Anyway, I'm my own worst critic. All right, we'll keep on.

Just be how remote it is. You know, it's too far away from their other operations. And no one wants, you know, you'd really kind of have to live there to be on top of it. And maybe if you, if you own another franchise. So the franchise here, Heather, was what? It was a Hertz dealership like an Anchorage, if I was. Yes. It was, yes, it was, I think it was three different brands of,

of auto rental dealership in Alaska. Yeah, pretty unique. Yeah, which I guess if you're a business nerd and you've ever wondered why when you go to different airports, like the one, you know, the Hertz in Charlotte is totally different than the Hertz in Corpus Christi. And some of them you show up and it, you know, it looks like, looks like the fallout video game. And then some of them you show up and it looks like, you know, a Swiss ski resort and nothing in between.

It's because a lot of them are franchised. So, yeah. And it was doing really well. It was earning quite a bit, but it had been through COVID. So I think that's what we were sort of figuring out. Yeah. Yeah. And they had all kind of weirdness because what we learned was a lot of these dealerships are the car rental franchises. There's a whole game with buying and selling the vehicles and then depreciation and tax shielding and when you buy things and when you sell them. And then having vehicles, you know, there's just like a whole set of kind of tricks that they pull to make those. make those things like really profitable. Chies in Seattle or wherever the nearest airport is, that's just too far away to be managing. So it could be that, but it could be that maybe there's something not that great about this. Yeah, there may just be some aspect of this that we're like, oh, this sucks. So we just have no idea.

Yeah. You know, so, you know, let's say I think this comes up often, right, because we're oftentimes looking at deals and we're like, well, I don't know anything about that. I mean, I knew a lot about fireworks, but I don't know anything about buying. car rental franchisees. Like, how would you, and maybe you did this through your banking career, like, how do you advise people to go, like, learn about an industry they don't know anything about? Like, if I was to consider this business, like, what should I do?

What's your recommendation, people? I mean, a lot of them start with publicly traded companies and looking at the financial analysis of those companies. Yeah. You know, it can tell you a lot, especially if they're, you know, being followed and there's a lot of notes on them. So you read those. Obviously, a lot of interviewing of people who are in the industry, find anybody that you can to interview. This is kind of a retail business. So, I mean, it takes a certain kind of person to want to deal with a business that's dealing with the public

in large numbers. So I think you can kind of draw some parallels from other industries that have that and make sure that that's something that you're going to be happy with. But you're right. This is the kind of business where we're not going to find too many buyers who, if they're not already within these franchises, who say, yeah, I have experience in this industry. It's going to be someone without experience. And that's a little scary for something like this. And Bill, one of the things we talk about with this podcast, and I think that clip was like a great example of it is like topics like what Heather was just talking about there, like those don't show up in any other podcast unless you're like get prompted by like the course of a deal, right? Like how do you learn about an industry? Like

I've never seen another podcast really talk about that. And there's no Twitter threads about it because it's just not sexy, but it's like such an important thing we all have to do if we're looking at a business. So I don't know if you ever go. Well, you know, that's the thing you've always said, Michael, which is the very best way to learn about an industry is to talk to 10 business owners in that industry, right? If you want to buy, and this is what I always advise people who want to buy a business, they'll say like, oh, I want to buy, I talk to searches all the time.

I want to buy a B2 services business. And I'm like, dude, that is not specific enough. at all. Like, you need to say, I want to buy a fencing construction business in the southeast, because if you do that, then you're going to talk to 10 owners of fencing businesses and you might actually have a hope of understanding the fencing construction business and you might have a hope of finding one and you might have a hope of actually transacting on one without getting creamed on, you know, on terms or missing something huge in diligence. But like B2B services, is you can't get knowledgeable enough on B2B services not specific enough.

So I've always thought, Michael, that was great advice you gave. It was just talked to 10 owners that are specifically doing the thing that you want to invest. It actually someday, if I ever get, like, stupid rich and could just throw around money, I would sign up for one of those like PE firm unlimited expert network accounts that they have, where you pay like, you know, 200 grand a year and you get to talk to all the networks experts you want to about anything. You can just be like, you know what I'm going to do today? I'm going to have some. I'm going to talk to people about.

worm farms in California. Like I'm gonna go find the world's expert on war farm. And it turns out, this is the best segue I've ever done, by the way. We're gonna bring up a clip from our favoriteest episode ever. And I think this is a clip where you just go nuts about the worm farm bill, which I could so did. This is not terrible, right? Is this the first Acquisitions Anonymous deal? I mean, I know we wanna do the pizza boat, but pizza boat, this is-

Sorry. Also, I'm laughing at the video that just poked up because this is when I'd had my cancer surgery. So I have like a big bandage on my face. Like, I guarantee it's the only time in the history of the universe that there's been on a podcast about buying businesses that a guy who just had cancer surgery is talking about the difference between a pizza boat business and a worm farm business. That has never happened in the universe. Better than pizza boat, I think. I don't know, Bill. Do you like this worse? I mean, it's a little less sexy than pizza boat. It's less sexy than pizza vote, but it's pretty cool. I like, so like this, this is like the quintessential. It's cool. Do you want to be cool? Do you want to be cool at like a whole co conference by this business and then tell

people that one of the businesses in your whole co is a worm farm in Northern California and there's like a small segment of nerds that will just be so aroused? Right. Okay. So let's make, let's figure out how to make this deal work. So, okay, Heather, do you have the episode? Really well. 11 businesses.

And you're about to see why, because I was like, oh, let's go, let's go buy this word business. What could go wrong? Do we need an SBA loan? We should get, we should get the NDA, and sign it and decide whether or not we want to publish the episode. If we're going to, if we're going to try and get it under L.O. I, we need to wait and not publish the episode and not create all of our competition for

the deal. Oh. Broker Warren Bullock is not listed to our podcast. No, no, I know. If we publish this, right, and then simultaneously we're trying to get the SIM, or I mean, there's probably not a SIM, right? If we're trying to have a conversation with the seller, and Heather's going on the site visit for us.

And, you know, and then simultaneously all of, you know, S&B, Twitter is also trying to hit up this broker. He's going to feel like he hit the lottery. Do you know what? Well, look, I've not actually. that interested in owning the business. I just want to go tell my wife that I have to go on a business trip to a worm farm. This is it. I just want to record that. I think it makes some good short form content. I don't actually want to own the warm farm. I just want to have to go explain why I'm going

to a worm farm north of Sacramento for the weekend. But Heather wants to own the worm farm. You don't have to still. Yeah. If you'll remember, Michael, your deal is always someone else buys it. You'll just invest and go on the deal with trips. Yeah. Yeah, I was going to move up there with my horses and live happily ever after on the worm farm. It is a testament, I think, and Bill, I'm interested in your thoughts on this. As you look back on our most popular and most talked about episodes, there's not a correlation between what's truly actually a very good investment and a good space to be playing in and what makes for the best radio, right, in terms of these episodes. Like, that made for amazing radio. The pizza boat made for amazing radio.

But to some extent, like, it's interesting how our challenge is to try to be entertaining in this podcast and then the learning and, you know, wisdom kind of comes in for free or whatever. But like, it's that, you know, that tension that we have to deal with. Sorry. Was there a question in there? No. Okay. Our other problem with the podcast is I give really vague prompts and then I just pause. I was but I need philosophical yeah yeah but Bill I'd be interested in your thoughts on this statement and I was like

I was like I don't know how to I got nothing else I was very safe well okay it's it's the tension between entertaining and educating yes right and I see a lot of people start educational podcast and they get nowhere because they're not entertaining right yes and like there's a tension there where like sometimes the most you can't be maximizing educational stuff and stay entertaining. Well, you have to do both. If you don't entertain, you don't have the chance to educate. Right. And I think that's why we do intend to, we pick deals like the worm farm or the pizza boat,

which, you know, is this like a realistic the pizza boat like searcher deal? Like, I don't know. But it gave us the chance to talk about a lot of things that are broadly applicable to lots of deals, not just pizza boat, which is what we're trying to do in this podcast. And that's actually, I think, why this podcast works is that. is that so many of the lessons are generalizable. Right? It's not about like so many of the of what we teach about on this podcast is not about a commercial

fencing company or a pizza boat or a worm farm. They're how you would diligence or finance anything. All right, moving on. I know this next clip is going to be really good because I'm not in it. So what I do really like about this and this is why I think this deal is going to trade for a bananas multiple is because it's not one car wash. It's 10. and it is poised to be 40, right?

And that is what you're buying here. Like this thing has a brand, a set of standard operating procedures. It probably has already paid architects. Like if you want to build another car wash, you already have the blueprints, right? You already know what the site plan is going to be. You already know how to permit it. Like you already, like, you're ready. You've done 10 of them.

You are ready to rock. You have a sign guy. You have a pavement guy. I mean, you know where to buy the car wash equipment. you know how to configure it. Like, you are ready to go. So I think private equity is going to see this and go and just see dollar signs and go, we're going to buy this business.

And what it gives you, and this is, by the way, if you're a business owner, this is how you sell your business for banana money, right? Is you set it up so the buyer can deploy more capital into it predictably. Right. Right. And that's what this is. And that's why they use the magic word platform in this listing. A platform means you.

buyer can buy it and expand it predictably. Like we have a way where you can just pour more capital into it. It's de-risked. I can show you the last five we built and the exact rate of return on the capital we spent to put those five in. I already have all the blueprints from the architect. Let's go. I assume private equity already bought this one for a crazy.

I'm sure they did. You probably were signing the LOI when we were recording that. Yeah. Yeah, that was one of the better deals I think we've ever seen on the pod. It does tie back to something I think is a compliment for you, Bill, is how often people come back to me and or send me a DM or whatever about a particular episode. And they're like, you know, Bill, Heather, we're just like spot on about A, how to think about that deal and like where it was going to go.

So like, y'all's instincts are like super good. And I hear it over and over again. And that, yeah. I would be worrying to bet a lot on your predicted outcome being what actually happened. Yeah. I learn a lot from all of you on this podcast. Myself, just being on it with you, I learned something every single episode. So it's amazing.

And for me, how not to ask questions. Zua, what do you have next year? Oh, this is where, oh, Bill, this is one of our favorite moments. This is where Heather went nuts about med spas. Like, who are mine? We lost Bill. These deals are so hard to do because if the owner keeps the real estate, you've got to then burden the P&L with the prospective lease.

And if you're trying to buy the real estate, usually the LPs are different. Like if you're a searcher, you've raised money, they're not trying to invest in real estate. They're not trying to invest $3 million out of the $3.8 million in real estate. They're trying to buy a med spa, you know? So like you have this alignment problem. So Heather, how does this work out when somebody comes to like a surfer wants to do this? It really doesn't cash flow. I mean, to your point, how much debt you've got to take on, even though the $3 million, you can finance that over 25 years. Okay, so the debt burden isn't as high on that,

but it's not going to cash flow. And this is a problem with any of the California listings that include real estate. It's almost always a problem because real estate values are so high relative to, you know, what the business might be producing. It just doesn't work from a cash flow perspective. always comes back to California real estate. California. Yeah, we're a problem. California's crazy. But yeah, I still love med spas.

I've got a few of them I'm working now. But I think... Go ahead, Bill. Go ahead. No, I didn't have anything smart to say. Oh, well, I was going to say, like, this is another example of someone smart, like, how they're having seen a lot of deals where the real estate away. ends up hanging up the deal. And so even if you were listening to this episode and not interested in

medspas at all, that's a generalizable lesson that if your deal's got real estate, especially California real estate in it, it's just you're going to have to strip that out or you're just, it's not even worth continuing to talk about. Yeah. And you only get that. And especially if the business is, lots of deals die because of that, right? And you have. Yeah. I have. And if the business is location dependent like that, retail or even manufacturing where it's, it's hard to move, then it really becomes a problem because if you can't move the business and it's kind of attached to that real estate and the real estate value is too high, you really have a challenge. And so does the seller. Yeah. All right, Michael. Show us the next.

Great. Okay. What do we have next year? Yeah. Oh, how do you guys feel about marketing agencies specializing in dental? Oh, I like this one too. Yeah, I like this one too. Let's play it. Oh, and our fourth co-host who's not here. I think the most, interesting thing about Mills missing so many episodes at the last minute is like he usually texts, you know, and he's running a roofing company in South Carolina. And usually text five minutes before the episode. He's like, guys, I'm sorry I can't make it. Like somebody dropped an angle grinder on their foot. I got to go take him to the hospital or like my controller, you know, whatever. Somebody like showed up on, you know, some sort of thing that would keep them from coming to work that was just like

always crazy stuff. But just like through his sure like missing habits is. explaining how how and what it's like to run a small business. But he was here for this episode. Look at a, look at that beer is looking great. Let a rip. Bill, your camera's looking freaking amazing.

I wanted to give you a testament on the evolution of this. This is so good. So if you're watching on video, it's pretty amazing. Thank you. I appreciate it. I have learned from the best. That is you.

I've been trying to keep up with you for two or three years now, before to this podcast. It's a, yeah, It's a dark, it's a dark place to go being a camera nerd. Yes. Expensive also and takes a whole room in your house. Which that's what people don't tell you is like you got to stick your desk in the middle of the room and consume the entire like the room cannot be used for anything else.

It is a studio first, not at all. And if you have pets, you have to get rid of them for a while or get them in another part of the house quickly. Heather, you're next. We'll get you there. Yeah. All right. Are we, do we have another? What's next?

Someone has to push play. Oh, I'm, oh, I thought, I thought we were playing one. No, you guys were talking. I've been watching a clip from 40 seconds. I was like, why do you guys keep talking? Oh, my goodness. They're all places. No, no one's seen the clip, Michael.

Maybe, maybe by the 400th episode, we'll have this dialed in. Worst, worst co-host ever. Were you? Did that shock you? No. So postcard direct mail, this is insane. So I'll look back to the future. in 2023,

2024, postal direct mail is having a massive resurgence because clicks have gotten so expensive on the internet and everybody over the last decade abandoned the mail

and all ran to Facebook and now everybody's going, wait a minute, direct mail actually did work. People still check their mail. People still check their mail every single day, right? And it's not quite as attributable,

does work. So there's kind of this new wave of digital marketers that are a, hacking postal mail in a more automated attributable software-centric way. I'm actually an investor in one called PostPilot, which does it for e-commerce. So I'm not at all surprised they're doing database marketing via postal service. What they're probably doing here.

So let's kind of break down what they say they're doing. A three-pong approach, internal marketing, database marketing via postal service, and external marketing. So what's that mean? Internal marketing and e-commerce, we would call this retargeting. or we would call this retention marketing, right? You come to the dentist once. Like, we want to make sure you come back for your checkout next year

where we're going to sell you some other service once you're in the chair. Like, you don't want churn in your customer base. So there's a whole, if you're running a dental practice and you're not doing like really good retention marketing, you're always bleeding, right? So stopping the leaky bucket is internal marketing. Database marketing via U.S. Postal Service.

That would be, so what is database marketing? It basically says, like, let's find all the information about all the people in Charlotte, North Carolina say and segment the households by age, by whether they have kids, by whether they, you know, their income by the neighborhood average. Yeah. Yeah. In their neighborhood, all that stuff.

And let's create a targeted blast. This is what they used to do before Facebook could target you better than that, right? So that's database marketing via the post service. And then external marketing would be sort of everything else. Like let's go get new people who might want veneers and come to our dental practice. And I'm sure that encompasses Facebook. everything from Facebook ads to build. This was another one I loved. My favorite thing about this, the dental marketing practice is that there are a gazillion digital marketing firms out there that

could do dental marketing for dental practices. But these guys said, this is what we do. This is all we do. We're going to get really good at it. And they spoke to a specific niche. And they're probably, as far as capabilities, not a ton different than a whole bunch of other, you know, SEO digital marketing firms. but they are positioned extremely differently, and that caused them to have a ton of success. Yeah. And I think it's a testament to one of my favorite, like, business nerd things, which is, okay, you can take a commoditized service, right? Or like, let's say a commoditized service like being a lawyer, right?

And one time I knew a guy who said, okay, I'm going to take this commoditized service of being like a general corporate lawyer, but what I'm going to do is I'm going to just do it only for fireworks companies. So he became the fireworks lawyer. So suddenly he can charge 20 or 30 percent higher because nobody knows fireworks rules like this one guy does and you call him when you need it. So like I think, you know, there's just digital marketing or staffing or any something like that, right? You just pick your niche and you own it and suddenly you create, you know, a blue ocean as opposed to a red one. Exactly. Be one of one, not one of many. Yeah. When I figure out what that one of one is for my online persona, I'll let you know. Oh, hey, Bill's.

So welcome to the recording. I say welcome to the recording. You're breaking up a little, Mills. Yeah. Now you hit your microphone again. Do not touch anything. Yeah. Mills, you may need a new USB cable or a new microphone or something.

Like after this, sorry, brief aside, don't record this. After this, Mills, open up like local recording on your computer and just record locally and then play it back and see if you are getting clear audio or if it's breaking up. app. And if it's breaking up with a pure local recording, then you'll know you have a cable or microphone problem. Half a dozen. Anything USBC is good. All right. Go ahead. You were talking about the digital marketing agency. I think. No, your microphone screwed again. Sorry, your microphone cut out again. All right. We'll play this episode. I think the answer died.

Hit the next clip. Oh, this one got a lot of comments. This was the SaaS business integrates Monday.com and QuickBooks that Heather decided she needed and then by the end of the episode, she's like, I don't know. We're going to build from here. So, I mean, that's the danger here. Like, if you buy this, you have to worry about how the task tracking app ecosystem works, right? There's a handful of platforms that are all kind of competing for. You have everything from, you know, Asana to Trello to Monday.com to like everything in between. and the danger is the first time one of those platforms decides that it is going to professionalize and include this sort of integration with QuickBooks, which has effectively 100% market chair

in small business accounting. The first moment that one of those platforms in that fragmented market decides that it becomes strategic for them or a way for them to get an advantage versus the other platforms and builds this integration into it, that is when Monday and all those other guys will respond competitively to add it to their platform and they will push this totally out of business. It'll become an integrated feature. That is the challenge with this business and you have to figure out if you're going to pay whatever four times earnings, four times cash flow for this, how likely is it that Monday.com

does not eventually just build this into their platform? In the next four years. I don't know. Right, because you're paying four times, right? you have to, this has to survive or grow beyond four years for you to even break even. So, very good point. Yeah. Yeah, but I talk myself out of it. Like you said, Michael, I was going to buy it for my business. And then I was like, no, I don't think I really need it. And I haven't bought it.

So I guess I was right. It's also, it's also funny watching that. And I'm like wearing a jacket in my office because I was like during the winter. And I, you know, like, as Bill, you talked about, this whole space is optimized to look good on camera. Not for my, not for my, not for. from my pleasantness. And I'm sitting in here and freeze my ass off because it's like 32 degrees in my office. And I got a jacket on it. And you can't have the hum of a heater or air conditioner in the background, right, for the audio recording. So you just suffer.

But look, I think this is a testament of why I love this podcast. Like, I've never listened to another podcast or Twitter thread or LinkedIn post where somebody is able to give you and show you in practice what it looks like when you're looking at a business. And you're thinking about, okay, what happens to this business over the next five years from a trend and a strategic kind of risk standpoint? Like, we were able to just have that discussion in a way that, like, it just is unique. And it's something that is dangerous for everybody. Like, I think I look at our Amazon FBA fulfilled by Amazon friends now on Twitter. And they're all miserable. And none of them are making money anymore because of this idea of platform risk and not, and what can happen to a business when the platform decides to come in and take.

your margin from you or copy you in this case. And anyway, that's worth the price of admission. The good news is admission is free to this podcast. We don't charge. This podcast, acquisitions anonymous, worth what you pay for it. Oh my gosh. This next one, Heather, are you ready for a clip of Bill? I'm actually most excited.

This is the clip for you. This is the best one. I'm so pumped. Bill got, this. This was the only episode where Bill was like, we started a controversy. You're going to check this out. great. We did. We're relevant. We're relevant. People listen to our listen to this one is high drama. This is high drama. I can't imagine running a 207 foot boat with 76 people on board for a week.

I mean, food, like this is a legit cruise line. Yeah. Right? You need a doctor on board. Like you need an evact plan. Like the compliance is probably crazy. You know, you can't just buy a boat and crack into this industry. Yeah. So barriers to entry are and the permit. alone, you know, just even if the permits weren't difficult, you're right. All those other things would be huge barriers to entry. So you do have a very insulated market. But, you know, then there's a question of growth. Okay, we're in a little insulated market. We only have so many boats or ships. Maybe we should be calling them ships. I don't know. You know, you only have so many. And so, you know, is there growth potential? Where are they as far as capacity? You know, could they add on some weeks?

They're not really telling us much here. But that would be sort of interesting to know what are the capacity constraints if demand were to grow the way they're sort of suggesting at the bottom. But you are sort of insulated and you are sort of limited, I would think. And also, I want to say this is another one of those businesses, to Mills's point about keeping, maintaining the ships and the maintenance CAPEX. This is not an EBITDA kind of business. We shouldn't just be adding back depreciation and saying that's for cash flow, because it probably is probably your maintenance cap X is at least equal to your depreciation. You know, so we wouldn't be adding that back.

But, you know, cash, so this is, let's just say that $2 million is really $1,5. Now this isn't really, you know, it's SBA sized, but I don't know many SBA lenders that would, you know, be especially good at underwriting something like this. So, Bill, maybe this we're talking about what happened after we talked. talked about this deal, which was, it's an Alaskan cruise line. So what, what happened? So I want to reiterate the name of the podcast again, Acquisitions Anonymous. We did not sign an NDA on this deal. This is an Alaskan cruise line for sale. We downloaded publicly available information from the broker's website. We did not even know the name of the company, nor, you know,

I don't even think we conjectured about it. But within a few days of us publishing this episode, we got a serious nastygram from the CFO of what turned out to be, we didn't know what we recorded it, but this company that was for sale, basically saying, you know, all this information is inaccurate. I can't believe, this business is not for sale at all. I don't know where you got this information. They put out a press release saying, I forget even what the name of their business was called. And I wouldn't even say it here as I did because I want to make it clear. We did not know the name of their business. We record the episode. But they outed themselves by. saying the people on acquisitions anonymous are ridiculous. We don't know where they got this information about us. We are not for sale. This is not true. And we're like, we downloaded it from your broker who is marketing the business for sale from their public website. And these guys were hot and put out this like intense denial of everything that we said. It was very weird. It was like a tempest and a teapot in the Alaskan cruise industry because there's probably four of them. Right. And it was probably obvious to the four.

them, which one we were talking about from the public information, but anyone else in the world would have never known had they not done the press release and everything. Oh, I remember what this one was. Okay, this was a cool. This was a cool deal. So, you know, we talk about this idea that brokers, buyers, because people use rules of thumb to value businesses, that means, you know, different types of industries have different rules of thumb.

Some trade at 10 times earning. Some trade at 10 times, you know. revenue, right? So that means you'll start to see games where you have to read the listing and try to figure out, well, is this really a software business or is this just like a consulting businesses that somebody is calling a software business because they happen to use Microsoft Excel and program some macros in there? So this is one of those examples where I think Mills, you and I get seen it in your face about 30 minutes in the episode, you're like, oh, this is a software business at all. Right. And again, these guys are doing 3.6 million gross revenue on

1.9 million in profit. So then I think it begs the question, why is it so cheap? Is it because it's so fragile? My suspicion is that it's more of an agency and less of a SaaS business. Yeah, which would make sense. Then you're talking about, they're asking, what was it, between three and a half and four times, profit? The other question I have about this clip is, why am I so calm?

Like, am I own Xanax or something? I'm so chill. It's like, it's like overnight radio voice. They're asking 4.6 times ARR, no, 4.6 times your profit and 2.4 times your revenue, which are kind of, that's closer. The 2.4 times revenue is closer to the software multiples. So let's say you sign the NDA. You get the info on this and it is labor arbitrage. And they're very firm on their asking price, but they're willing to offer some kind of flexible terms. Is there a scenario where you would say I can align. I can align our risk-reward incentives, our risk-reward dynamics enough that you you look at this seriously.

I would never do a deal like this, just me personally. I would never get, I don't think there's any scenario where I can feel comfortable, even if they said we've had zero churned since 2017. I can't imagine it. But is there a scenario where you would?

I mean, this is definitely, this is definitely one where if you had outside money, combining it with your own, and you wanted to do kind of, of a higher, higher beta, you know, higher variance outcome here, which, look, this, at this price and this growth rate, if you keep growing at 100% a year over year for the next five years, the thing gets pretty freaking big, pretty fast. And the purchase price was irrelevant, a long time

ago. Absolutely. Yeah, it's my, it's my pet line that only I seem to like, which is every deal underwrites if it goes up by 50% in revenue every single year for the next decade. That's the, That's the Dell Technology's thesis, by the way. It's like, it doesn't matter what price you're paying if it grows 50% per year for a decade. Yeah. I think this, it targets back to our first episode. I'm watching this and I'm just cringing because I'm just like, why am I so low energy? Because, like, I tell people when they do podcasts, like, if you want other people to feel like you're in an 8 out of 10 energy, you need to be at like a 10 or an 11 out of 10 because the microphone deadens everything.

Like, I'm watching this. I'm like putting myself to sleep. So I apologize for this episode. Thank you for bringing this clip, Gustavo. I'm embarrassed by this one. I actually think, can you guys hear me know. Energy terrible. We can.

We can hear it out. This is one thing I've learned at least recording 300 episodes this podcast is you have to be more energetic on a podcast than you are in real life to get it to come across the right way. So like I got to like have my coffee show up, like engage, like lean forward as you can see I'm doing now. You got to bring the energy because if you don't, like you lose 20% just in the recording of it. So you got to be at 120% energy to come across feeling like 100% energy. Yeah, I was thinking then I put Michael to sleep. That's on that clip. So sorry, Michael.

I feel like I'm to blame. You just have it. That was bad. Sometimes, sometimes on Mondays I show up and I'm like full energy because I'm like hyped from the weekend and have rested up. But by Fridays, a lot of times, I start to, start to feel my age. This is why I got a new coffee maker. So, you know, double espresso before the episode, everything's okay. Yep. Super good. All right, we have our last one here. This is like consulting, but with revenue share, consulting for small businesses.

Oh, this was great. Okay, I remember this one. So Heather, this was the business. accelerator. Yeah. And by the way, I eventually did get the SIM on this. Cool. So, which is one of the most fun things. We, we record something like this anonymous, and then later on I could see, okay, well, when I get the SIM, what did I actually learn? Interesting. So I will now try not to violate the NDAS of the SIM. Focusing on, you know, these companies that have great potential for growth because they're still small. And they're doing consulting in a way that I wish the big consulting companies could do, which is, you know, they only get paid if they're successful revenue share.

And obviously, they're very successful. So I love this model. At least that's what I think it is. What do you think it is? That is exactly how this works. So they will go to you and let's say you own a business. The one thing I appreciate about this is I love how definitively I'm talking about this business, of which I have no proof.

It exactly works this way. Let me tell you how this is. I read one page about the company totally amoutamized. I'm an expert. It was the beer. Consulting, right? And you're struggling to grow. What you do is you go to.

Yeah. Did the beard make me look smarter? How did you, I mean, how does it? It was just confident. You're confident. It was. You know, Mills. When you grew a beard and everybody thought your IQ was 30 points higher,

how did that change your life? That's a great question. I didn't even notice the difference, but people would just not forget it. You go to these guys, and this is where it gets a little there, right? You go to these guys, you will typically pay them some cash. And then what they do is they require you to give them a cut, like a royalty on growth that you have above that. So, for example, they will go to you and say, you go to them and say, okay, I need you to help me grow my gym business or my professional services business or whatever. and you disclosed to them where your business is.

Yeah, I think there was more to the story on this one, but the clip engine. I don't know. But they were making a lot of money. That I remember. It was a very interesting business doing very, very well. But yeah, there was a little question about how fair that might feel to some of these small businesses that sign up for a service like that. But whatever they were doing, they were doing something right. I think it's interesting how often we.

running these businesses and you look at them, you're like, oh, there's clearly something shady going on here. That was my reaction, I think, at the time. And I said it in the episode that it can get into a gray area. Let me put it that way. Definitely. Very interesting. I could see the seasons through those episodes because I was wearing sweaters a lot in the very cold Southern California winter that we have. It's very cold here. Gets into the 60s. Yeah, well, I've noticed that the coldest climate on the whole podcast is probably me in Charlotte, North Carolina, because we have Southern California, Texas, and South Carolina. And I am the northernmost podcast host, which has never really sunk into me. No Northerners allowed on the pod, I guess. Well, cool. So, I mean, as we wrap up, like, I just want to say it and say it on the podcast, because I think it also applies to the listeners, like, I'm having a ton of fun doing these. Like, we mentioned, I think, It shows up every time, you know, when we talk about us making it to these recordings,

there's, frankly, like, more lucrative things we could all work on. But we have such a good time. And we're getting smarter. And it's great to be along on this journey with you guys. And I look forward to the next 300 episodes, both with, you know, my three co-host, Gustavo, who's now producing and telling us what to do, the other people behind the scenes, but also the listeners. So thank you guys for being here.

And thank you to you three. Thank you, Michael. And thank you also to listeners. It's one of the coolest things ever when I come up to somebody I don't know and they go, oh, I love your podcast. I listen all the time. And I've gotten a number of emails of people we have really, really helped. And also the one of the other coolest things is this pod gets used in college courses a lot, which also blows my mind. So shout out to the college kids if you're listening. Thanks for sticking with us. Bill, you see trepidacious based on your microphone networking. Super awesome. So you look happy. And Heather, so glad you. joined us. Oh, I'm having, thank you. I'm having a blast and I enjoy all the comments that I get back from all the folks that I work with who are either searching to buy a business or they have something under LOI and they've watched the episodes. It's really made my work just brought a whole new dimension to it. It's really, really fun. I think one of my favorites now is more is people tell us we were, you know, right or about something immediately.

I talked to the broker this morning on that structural steel business in Columbia. And, you know, I still don't know the name of the business. I haven't said it because it's under LOI. But I was like, hey, we haven't published the episode or some of the things we're thinking. And it turns out we were right about some things and we were wrong about some things. And we're just totally. Super cool. All right, everybody.

We'll see you next time. Thanks for being here for the first 300. We'll have fun. I guess what's the next milestone, 500? Should be good. 400. Why not? Never too soon to celebrate.

It's kind of like when you start dating somebody and you're like, you start having like month anniversaries and stuff. And you're just like, really? Yeah. Let's go. Yeah. But it also happens with kids. So you end up with this like, the first kid gets all these like, okay, we're having a one month birthday for a little Jimmy. It's like, I don't know.

It's like, I don't know. It's only a month. Just relax. And then kid number two, you're just like, ah, whatever. Don't hurt yourself. By kid number three, they're barely hanging up. 100% true. All right.

100% true. All right. That's it. We'll see you guys next week. Deep.