Acquisitions Anonymous - #1 for business buying, selling and operating - Does this $7.5mm metal fab business make the cut? - Acquisitions Anonymous 224

Episode Date: September 1, 2023

In episode 224 of Acquisitions Anonymous,  Michael (@girdley), Heather (@EndresenHeather), and Mills (@thegeneralmills) discuss a metal service center company for sale in Chicago. Initially promising, the deal loses its shine as they uncover pricing issues and nuances that make it less attractive. The seller's high price expectations and demands for inventory payment add complexity. They highlight the challenges of such deals, including lengthy negotiations that can deter potential buyers. Check out the listing here:https://www.bizbuysell.com/Business-Opportunity/Metal-Service-Center-Company-for-Sale/2129568/Thanks to this week's sponsors.Acquisition Lab and their team have been longtime supporters of the pod.Created by Walker Diebel author of Buy Then Build: How to Outsmart the Startup Game, is an accelerator with a highly vetted cohort-based educational and support community for people serious about buying a business.Acquisition Lab exists to help people buy a business and navigate all the complexities of the process, as well as provide a trusted framework, tools, and resources to support you from search to close.If you are serious about buying a business check out acquisitionlab.com or email the Lab's director Chelsea Wood, [e-mail].-------------CloudBookkeeping offers adaptable solutions to businesses that want to focus on growth with a “client service first” approach. They offer a full suite of accounting services, including sophisticated reporting, QuickBooks software solutions, and full-service payroll options.Subscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

Welcome back, everybody, to another episode of Acquisitions Anonymous. We talk about a really interesting deal today. It's a metal service center company on the west side of Chicago. And it kind of follows the arc of a traditional deal evaluation. You look at it and you're like, oh, this is awesome. This is amazing. This is just right in the sweet spot. It's a good deal size, really healthy margin.

And then you start pulling back the details. You go, you get into the weeds. I don't know. It's not so much. Then you get a little bit further and you're like, I don't think this deal would work. Their price expectations are too high. there's too much nuance to the deal. They want to be paid for the inventory in addition to the purchase price.

It's just got all the traditional elements that make it really difficult. We talk about the broker dynamics. We talk about kind of the specificity of what they do and whether or not it works for a searcher. For this size deal and this seller dynamic, sometimes these deals take so long to kind of get back down to market expectations that buyers have already moved on and found something else to close. But I think we talk about some things that are really helpful, both as a buyer from a buyer's mentality and the viability of doing a deal like this with, you know, with the debt that would be required for it. So big thanks to our sponsor this week and hope you enjoy the episode.

This episode of Acquisitions Anonymous is sponsored by Acquisition Lab. Acquisition Lab and their team, they've been longtime supporters of the pod and they provide a really great service for people who are looking to acquire a business. So it's created by Walker Diabell, who's become a friend, the author of buy then build, how to outsmart the startup game. So Acquisition Labs is an accelerator with a highly vetted cohort-based educational and support community for people who are serious about buying a business. So a lot of our listeners like you, you turn in every week to our deal reviews.

You want to get in on buying a business. You're on this podcast because you're trying to learn how to buy a business. But if you're not quite sure where to start, Acquisition Lab is a great place to start. So they exist to help people buy a business and to navigate all those complexities of the process, everything you hear us talk about on the show. They provide a proven framework, tools and resources that support you all the way from search to close. They do it. There's a whole bunch of educational material and support. So if you're serious about buying a business, check out AcquisitionLab.com, or you can actually email the program director, Chelsea Wood,

directly. Her email is Chelsea at buy, then build.com. Welcome back, everybody. Another episode of Acquisitions Anonymous. Let's go. Let's go. Let's go. and Michael's in the background. We're very amped. We're coming off of an episode where we decided that we are possibly going to buy a business. And so now with fresh eyes and fresh years and wind in our sales, I don't want to let people down because we are still going to be very critical. And we will probably like one deal out of 100.

But Heather is going to lead us today as we look at a metal service center company for sale. All right. So this is a metal service center company for sale in Cain, County, Illinois. Asking price is $7,500,000. Gross revenue is $3,469. Ibit. Da is $1,181. Inventory, $700,000. There's a rent shown of $5,400,000 a month. description highly profitable with with diverse customer base opportunity summary our client the company is a midwestern based metal service center focused on tool steel distribution it offers value added services which include production saw cutting surface grinding and six side squaring the company purchases raw materials directly from steel mills and wholesalers and then produce the steel

to customer specifications. The company's core competencies include high levels of service, product knowledge, availability, in addition to machining services. It differentiates itself from competitors by offering services that are not typically offered elsewhere in the marketplace, including next day delivery, non-standard plate sizes, value-added machining services, and free delivery. The company has produced strong financial results over the past six years or five years with 2022 sales and adjusted EBITDA of 3.5 million and 1.2 million respectively. Strong reputation in the market, diverse customer base with low levels of customer concentration, focuses on small to mid-sized jobs and serves many customers each year.

Investment considerations, growing and profitable, Kager of 6.2% from 2018 to 22, adjusted EBITDA of 34% of sales for 2022. They're sort of repeating themselves, top 10 customers. customers accounted for 35.9%. Diverse customer mix, future growth prospects, CNC machining centers to offer machining per unit. Let's see what else is in here. These are just growth prospects.

This is a whole list of growth prospects. Add another location closer to the metro area. Actively pursue surface grinding jobs, add a third shift. Scrolling down. They're in a leased building that, 17,000 square feet. So what do we think of this one, guys? So there is a link here.

They have a full teaser, Heather, that I just pull it up to share it. Yeah. I think what's interesting here is they give us a bit of the trajectory of the sales, cogs, and net income, which is usually on something like this, the first place I go. I think we've had a couple different guests come on who've talked to us about, you know, not all manufacturing or not all kind of metal kind of stuff is different here, right? It's like you have some of it that is like these guys who appear to be using very complex machinery that has a lot of CAPEX with it.

And you have folks like Red Zeller's business who's using stuff that's like 80 years old and doesn't break down all the time and have a bunch of CAPEX. So anyway, that's where I immediately when I see a small manufacturing or we're going to organization like this, I go straight to like NOI and I want to understand, you know, how much depreciation and amortization is in that adjusted even a number that they're giving us. Yeah, so there's a lot of detail actually on this page. And we're going from, you know, 2018 of 2.7 million in sales to 21, 3.8. So they've grown quite a bit on top line. And margins have improved. Gross margin has gone from 42% to 51. And adjusted EBITDA margin has gone

from 22.7 over to 34%. Oh, yeah, I'm sorry, I missed. The gross has actually gone to 53.8. So in 2022, they've got really strong margins, shrunk a little bit on top line from 2021, but, you know, looks like a solid performer for the last five years. Let's see, number of jobs. They've gone from $3,800 a year to 30,

well, still just $3,800, 37, 87, in 2022. So their job size has increased. Largest job size from 22,000 to 48,000. So they're doing larger jobs. Average job size, $719 to $917. So that's pretty small jobs, seems like. The average job size. These are like small batches, which is kind of an interesting niche because a lot of these tool and dye or, you know, kind of smaller metalworks providers. they're usually located next to some kind of larger manufacturing outfit, like a husk varn a plant or something. And they need just this little piece of metal that covers the trigger guard on the chainsaw. And it doesn't make sense for them to source millions and millions of these at a time from a larger company.

And they just need this kind of quirky one-off thing. Or it may not even be a part of the component. it may just be something that they use, like when they put together the pallets to ship the thing. Like, it's just weird kind of small lots. And there's a reason that these companies, like this particular company that's for sale, there's a reason that they don't get that large. And it's because they kind of have to play in this no man's land. And it's more than just a guy with a welder in a fab shop, you know, making, you know,

just one-off things and doing trailer repair. but it's not quite so big that it's somebody who can run millions and millions of parts. Like these average order is $917. I mean, you're talking about small kind of odd batches of things. So I looked up where this is. It's West Chicago. It's in the next county over from Chicago. So heartland of kind of industrial America.

There's lots of stuff being built there, all kinds of heavy industry. And so, Mills, are you reading like what these guys, The niche these guys are actually in is said factory has a part break. They need another one the next day. They call these guys if they fab them a new one and it's there overnight and back, they're back up and running again. Is that kind of how to think about it? It's a little bit hard to tell because they talk about tool steel.

So one of the interesting things about tool and dye shops and like stamping shops is that the replacement value of these things, kind of like Reg talks about and Josh talk about with Forges, it almost doesn't make sense to go buy new equipment, you know, and to start one of these from the ground up. It's very, very capex intensive. But you can kind of step into an existing operation and, you know, the depreciated value of those assets, they're usually very old,

but they still work and they still get the job done. It's hard to tell, though, with this because they talk about, tool steel distribution and some value add services says include production saw cutting, surface grinding, and six side squaring. So it may be, it may be that like they're talking about, they buy raw materials directly from steel mills, and then process into something for somebody else.

So a lot of these big manufacturing outfits may have like, like for example, like a large, planer. And those planers have these really, really robust cutterheads that have, you know, multi-sided discs that, you know, they're running wood through and they cut. Those companies don't necessarily buy directly from the steel mill because they have to get these things kind of, you know, specified in just a certain way or get them modified in a certain way. And that would make sense, right, why the orders are this way. They're just kind of odd and there are things that kind of last for a long time, but there is wear and tear, and they do have to buy them on a reoccurring basis.

It's hard to tell exactly what they're doing, though. So why is this listed on buy-biz sell, or biz buy-sell? Like, it's so small. There's nobody in private equity is going to roll all these up already? There's so many of these things, man. I mean, there's so many tool and die and like small kind of million to a million and a half, maybe $500,000 to a million and a half dollar. metal tool and dye, stamping, kind of metal post-production. Some of them are just taking things and processing metal after it's been produced. Oh, so realistically, what you're dealing with here, so from a roll-up perspective,

there's no economies of scale from aggregating these. Like you're only servicing nearby market, all subscale. Like freight, freight is a component for sure. I saw one person several years back who had vertically integrated really, really well. And they had basically, you know, said, okay, in large manufacturing operations, maybe they need like these huge, like, strainer baskets, right? That you put a bunch of components in and then it gets dipped in like a chemical bath. Well, we want to now source the raw ingredients for these metal baskets. we want to fabricate the metal baskets,

and we want to coat them with a very specific thing that allows them to be dipped into a chemical bath. And they had vertically integrated that way. That kind of makes sense. I know another weapons manufacturer that they have kind of vertically integrated to say, hey, not only are we going to make the kind of polymer, the plastic handles for guns,

but we're going to buy a machine shop that can do the rifling and the manufacturing of the barrels and the different components. And some of that is stamping. Some of it is C&C milling. Some of it is small batches. Some of it is really large runs. But they've just vertically integrated.

There's not a lot of people who say, hey, I want to take this one company that does this one thing and buy them all over the place like this. Because they're so, they're so kind of disintermediated, right? There's not a lot of economies of scale because they deal with these quirky kind of odd customer sizes. Yeah, I'm also looking at the multiples as being pretty high given what we're sort of, you know, guessing about this business. And they want, you know, not only seven and a half million on one point two-ish, a little sub one point two of EBITDA, but they're saying not

included in the asking price is $700,000 of inventory, which is always something challenging when they don't include something in their ask price and want you to pay extra for something that is needed to run the business. Yeah, I would say it's completely unrealistic. Right. So just from a market dynamic standpoint, I'm competing basically on geography, right, of where I'm located nearby these folks. And I have a kind of a light mode that there's a level of investment that it takes to go

start up one of these things and buy all the equipment and stuff like that. but that's easily replicable if I was to get to a certain size. Somebody else could just come in and start to chip off parts of it by buying some of these machines, secondhand even, and starting in their garage and that sort of thing. So you're dealing with that, and you can never really get bigger because once you get to a certain scale, you have no margins because the stuff gets out offshore to China

or wherever they're, you know, Canada or wherever they can produce, Mexico produces stuff cheaper if you're doing bigger jobs than what they have. So really, I'm buying, and I'm kind of thinking this is as big as it's probably going to get. Like, it's going to be challenging for me to make it larger. Because my geography is not going to grow. Yeah, I think it's very capital intensive to grow. Like, you'd have to go find something similar, you know, an hour and a half to two hours away.

And the organic growth, I think, is difficult. Now, there's always the case to say, like, they talk about adding a third shift. They talk about adding a CNC router. Those are like the equivalent, right, of our e-commerce deal. that say, you know, just go sell on your own.com. That's very, very difficult. Adding a third shift, my guess is, is that the skilled labor and semi-skilled labor that's associated with doing this, they're already stretched then. And there isn't a huge line of people who are like, hey, sign me up. There's no mention of union versus non-union, but I'd be willing to bet that's a huge dynamic here.

And, you know, the reality of at just, hey, just add a third shift. I mean, that's like, hey, just grow a third arm. I mean, that's a very difficult thing to do. But my question is, how sustainable, these are significant margins. I mean, like pretty freaking significant margins. How sustainable is it? And how sustainable is it not just can you grow and keep this margin profile, but can a new owner step in and actually substantiate these margins and maintain these margins? Somebody recently tweeted about it.

And I think it's one of the hardest things to do to step into a business this size where the owner, founder, most likely, is incredibly good at extracting all of the yield out of the business that they can. They may not be the most tech literate. They may not be the most savvy when it comes to, you know, building a robust sales pipeline or something like that. And they may not be the best, you know, modern managers, but they are incredibly good at yield on labor and yield on their production lines. And so to come in and think, oh, yeah, I'm going to be able to maintain these margins is usually not very realistic.

That makes a lot of sense. And any kind of manufacturing, any kind, as a lender, we say you've got to have a manufacturing background. You've got to have experience in the industry. But then this is so niche that, you know, whatever experience you're bringing probably may not even be good enough to do what you're saying, Mills, to really. This is a lot of customized stuff. And you're right, this is somebody working really hard and really smart to get to get to

where they are. So who can really buy this as a really tiny market? If we're saying it's not really good for roll-ups or someone who's looking to scale and it's not good for most buyers because they just don't have the skills, the buying pool is extremely limited here. All right. Taking a quick pause here. I have something to tell you.

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And they're a great partner for you to potentially call to help with all your bookkeeping needs so you can do the important stuff in your business rather than worry about getting your books right. So give Charlie a call, cloudbookkeeping.com, and now back to the episode. But then you have a seller that, my other guess as to why this is so publicly listed is because the seller here has decided they think it's worth big dollars. And, you know, this kind of is one of those,

the price really becomes a big problem, I think, for most potential buyers. Because you have to imagine there's somebody who is in this business nearby and would be happy to own this business, but there's just no way they're going to round up $7.5 million to go buy a business that they know very well

is probably should trade for two and a half to three times NOI based on what's going on here. So, you know, this is what happens. I think when you price your business at double what the market's paying for it. I went and looked at a deal a few years ago,

probably three or four years ago that was almost identical to this about an hour away from here. And, I mean, very, very similar dynamic. The margins were not as high. It was probably, I think, closer to about $5 million in revenue.

but similar amount of free cash flow. And it was one of those things that it ended up sitting on the market. I went to a site visit, really great people, kind of a cool, you know, semi-sustainable competitive advantage and like a nice little niche. But, you know, they just had unrealistic expectations and they just had to wait and wait and wait. And there was a weird partnership dynamic and, you know, that doesn't get better with time. Usually people get more and more resentful. It was quirky in that it was a C-Corp, and they wanted to do a stock sale, and they wanted to carve the real estate out. The real estate was owned by the entity, but they wanted to carve it out, and it had not been paying rent to itself, but then they wanted to charge rent and didn't really have a fair understanding of the way that that impacted the adjustments to free cash flow.

And so it just was like death by a thousand cuts and they had high price expectations. And so a searcher ended up buying it. And I don't really know how it's gone. But it was one of those things where it's like if this many people have passed on it and it's been on the market for three or four years, which this is a hint, right, that it's a little bit dated because we're in August of 2023 and we don't have any, you know, any kind of year to date financials for 23. I'd be curious, right, how realistic this seller's expectations are. And they've probably had a lot of people kind of kicking the tires. And this person probably is still, you know, still underwhelmed by what the offers they're getting. It's interesting.

I looked at the broker. I googled him. And this, what is it, Mark Partners. It's a one-person show. And he says he's done 17 transactions in our, 30 transactions in 17 years. I think it was the numbers he had. I was like, wow, that smells like a broker

who is totally comfortable with taking on clients with unreasonable expectations and then just stringing them along until they come to their senses. So anyway, that kind of backs up our thesis that that's what's going on here and why nobody already in the industry has taken a look at this,

why no search funder. And Heather, I mean, is there any way like anybody could get like an SBA loan or debt on these type of multiples in this market? Not at this multiple, you can't. I mean, unless you're paying, I always, I always describe it this way. You can put debt on, you can overpay if you want to. Lender's not going to stop you. They might look a little side eye at you because why are you doing that? But we're not going to tell you not to. You just only can afford so much debt. You know, so if you look at EBITA, you can always just sort of rule of thumb it and say, how many turns of debt could I put on this? And if you're going SBA, it's a little under four turns. in this interest rate environment. So sure, you can pay this price,

but you're going to be putting a lot of equity in if you do that. And again, your lender's going to look a little sideways at you as to why you would want to pay that once they look at the deal. And back to Mills, your point about rent and folks that own the building and aren't paying rent through the business, that is a really common problem that kills a lot of deals. People invest time. So it's one of those questions you should always ask in the beginning.

Do you own the real estate? Okay, what kind of lease payments are going through this business and how does that compare to market? It takes three questions and you can not waste your time or show them. Look, then your earnings are really this much less to any new buyer. It's simple math, but it's missed a lot like you said by the sellers and then they're brokers who should be who should not be missing that but are often. So what price would you want to pay for this? and is it about two and a half times or 50% of where it is priced right now?

Yeah, but this is a tough one because I feel like you also probably have a replacement salary in here that's going to reduce earnings a little bit more. So I'm saying it's maybe like 900,000 of EBITDA that you're hopefully buying. Yeah, cash flow of that's available for debt service. Mm-hmm, yeah, maybe, and then maybe no more than a four, but probably I would want to pay a little bit less just because this is so cap-X intensive and labor intensive. Yeah, we don't have the info here because I don't think it's really represented,

but the ratio of earnings, you know, the ratio of the EBIT to the DA, right? The depreciation and amortization on this is, I think, going to be a significant portion of their EBITDA. I don't think it's being represented. Usually you can tell the difference between net income and EBITDA, but in this case, there's almost none. And in a manufacturing operation like this, there has to be some.

So my guess is, is that, you know, either you're talking about fully depreciated assets already, in which case you need to factor for CAPEX, you know, because this, these numbers don't reflect, you know, the maintenance CAPX or just even the replacement cost CAPX that you would face. But I think when you actually pencil a realistic scenario, the free cash flow that's going to be available for debt service is substantially, substantially lower. Good point. So I take my 900 down to maybe six or seven. That's what you're buying. Yeah. So that sounds like a great deal. Who brought this deal? It was me. Oh, good. So we're not buying this one then. Actually, we're definitely not buying this. Definitely not buying this one. I mean, there's things to like about this. I mean, there's some tailwinds

with what's going on with, you know, more manufacturing company in the United States, the investment by the government, all that. Like, you know, in theory, this is going to be somewhat pretty durable. It's just, it's just tough to pay this price. I think that's what it all comes down to. Price matters. I don't know if I told you guys the anecdote, but one time one of my business partners went to a private equity conference and like this old, this old that private equity guy

gets up there and he's like 30 years of private equity. And I had one of my associates go through and analyze every single deal we've done over 30 years, try to correlate every single thing to what. made a deal successful or not successful. And he goes, we looked at everything. Geography, size, industry, trajectory, shrinking, growing, turnaround, scenario, price, everything, month of the year, like interest rates. He said, only one thing mattered in the end.

Did we pay a good price for what we bought? That was pretty cool. That was worth of the price of admission. You pay $1,500, you can go to a private equity conference to it. Here's stuff like that. That is good. Well, that's a very good point. And usually what is so nice about these small deals that I lend on so often is, you know, if you're within a three to four range, that's a good price. And you can probably be okay. And statistics show that folks are okay. But yeah, trying to pay a multiple like this when, you know, what for? I wonder if the seller's thinking here is all the CAPEX. I've spent, you know, X amount on all these machines and these machines are worth this. And I hear that a lot. it doesn't matter if they're not producing the cash flow.

That's not something you're going to buy that way. This totally smells like a, I need to get this number to pay off my loan and buy the boat I want, and that Florida house repairs I want to do. This is totally what it smells like. So the formula for sales price. And then, I don't know, if you're a broker,

like this is part of why being a broker is so hard because they're incentivized to take listings like this and priced them too high and wastes people's time. And with the hope that three years from now, they'll come to their senses and sell something at a reasonable price. And it's just, it's a tough business, very tough business. As a lender, I've seen people bring, one deal I'm thinking of, I think I saw four different buyers bring it to me over two years.

And in the end, finally, I don't even think, I didn't even do the loan, but I followed up and followed up. And it closed about two and a half years after, after it was initially listed much lower. And but it took this, and it got into, you know, got under LOI multiple times during that two and a half years. Yeah, a lot of people wasted a lot of time. Is there, I mean, is there a strategy here with a listing like this?

Let's say you knew that you wanted it. Do you go to the broker and say, hey, I'm interested, but here's the price I'm going to end up paying on it. If something changes, call me. Otherwise, I don't want to waste your time doing a bunch of work. Like, is that a fair strategy? Are you just wasting your time doing that? I don't think they're going to call you.

Well, I think, so I think what you do is you, you know, you show genuine interest, right? You sign the NDA. You get the SIM. You ask really thoughtful and genuine questions and you assess the situation because you can't really. I mean, what good is an I.O.I that comes from somebody that the brokers never talk to. They're going to be dismissive of that anyways. And maybe my, my tact is always to ask, you know, questions that get me past the broker into the seller. So if I'm asking specifically, enough questions that demonstrate that I understand the nuance of the business, the broker's going to be like, hang on, hang on, I've got to get the seller on the phone. This is going to be way better because they're going to jive with what you're saying. You have the conversation with the seller and you build report. You just show that you're

genuinely interested in the business and that even if you don't know the industry, you know enough to get to the kind of meat of what's going on. And then you say, hey, look, I'm really interested, but I can only pay a certain price relative to what the market will bear and you you write them an I-O-I or a proposed term sheet or hopefully not an

LOI because it's a little bit overboard for that stage and say, hey, look, this is, you know, this is my thoughtful and genuine offer. They say, you're crazy, I would never take that. And you say, no problem at all. I'm not going anywhere. I would love to, you know, pick back up the conversation anytime you're ready. The problem is, is that, you know, the vast majority of people who are in on this side of the table, right?

the buying side of the table is they can't necessarily say, hey, I'm not going anywhere. I'll see you in two or three years if you change your mind because they're going to move on. They've got to go close a deal within two years or they run out of their runway. And that's where I think these kind of long-term, you know, holding company, you know, long-term focus, kind of patient capital. It's one of their big strengths is they can kind of, you know, play the long game and let it play out and let it kind of mature. Good point. And the folks I've seen this happen to, they're still searching and the seller will go to a different buyer and sell to that lower price. So I think like psychologically the sellers are, there's a dynamic where they're insulted. And no matter what, even if they've come around to that price, you know, six months later, they're not coming back to you because you insulted them. So it's really tough. I say just walk away. If it's if it's priced really unrealistically, don't. find something else. It's just, it's hard to waste your time. Yeah. We had that precisely what you're talking about, Heather. We had that happen once where we offered two and a half times EBDA for a

business. And they were like, how dare you? We never sell it for that. It turns out they wouldn't sell it for that. They sold it for two times EBIT to some other guy later on. I've seen it many times, yeah. I think the other side of what you're saying, though, Heather, is if you're too picky, right, you'll never, you'll never get anything across the finish line. And so you have to go, you know, kind of quote, waste time. You know, you have to go on a bunch of site visits. You have to have a bunch of phone calls. You have to go through all those motions because if you just say, oh, you know, I, you know, I would only, you know, do things up and above this level, you know, that pencil this way, you'll, you'll just spin your wheels for years and years and years and you know, you're picky to the

point of, you know, no activity. True. And as long as I tell my clients when something doesn't work out, as long as you learn something from it and hopefully a lot and they usually do, you're right. To your point, you got a, that's the learning curve that you're coming up. So as long as you're getting something out of it that way, it's just don't waste. It's really hard how to know not to waste too much time. Like at what point should we cut bait and move on? Not easy. Or just go start a business. I see the thing I tell people like I've seen people go on searches

and I'm like you know how many business I've started in the 18 months you've found nothing I was like just to go build something so anyway I don't know I'm not supposed to talk like that on an M&A podcast so I'm very sorry yeah right we're going to do another episode

we just did one about how we're going to buy a business now we're going to do another episode on how we're going to start a business and document the process yeah yeah I don't know people have asked for that kind of stuff. It's really kind of boring. It's like it's not good radio. And I think that's,

that's part of the problem with people trying to learn business from media is there's one of two things happening. You have a situation like the podcast, like we don't have a ton of brokers as sponsors. Well, why? Because we talk for real about deals. So brokers aren't really that excited about us when we're talking for real about deals and calling brokers funny names. The other thing about it is just like real business is actually pretty boring like the same way like all of those like restaurant turnaround shows or like you know bar bar rescue like the system or shark tank those are not real business like there is no real business going on there and uh like because real business is actually kind of boring reality makes for terrible reality TV that's the thing i've learned

yeah we'd be coming on and we'd be like hey look we have our GM and you would not believe it they got $500 worth of sales this week, you know? And they're like, that would be ecstatic, right? If you're starting a business from the ground up from zero, like, oh, wow, we had our first $10,000 month. Like, nobody's, nobody's going to tune into that. Well, so the other problem is, it's like on Twitter or Facebook or social media, nobody talks about their losses. Why don't people talk about the losses? It's because none of these places, none of these places have algorithms that help with that. And just like, you look at it as just a very basic thing. People are like, why don't you share more losses on Twitter? I was like, okay,

go tweet one. Go tweet something bad happened to you and be like, something bad happened to me. My wife has cancer or like, you know, I broke my leg. People's options are retweet that

or click the like button. And nobody's going to click the like button when you break your leg. Like, how are you supposed to respond to that? So the algorithms naturally make it very difficult to publish reality and give anything but a skewed view of anything

because you're supposed to like things to get them to be shown to other people. So it's, anyway, as somebody who writes a lot of Twitter threads, I've thought about this. It has to be anonymously. That's the only way people will really tell the tough stories, I think. It's part of the genius of Twitter, like all these, the guys, you know, which hopefully we have some more gals. That's what I think are they's. We need to be more.

Are there more gals? Like the anonymous gals. You know, Heather, like, trailer park guy, car dealership guy. Oh, well, we don't have a good, okay, you guys have thread boy and everybody guy. We don't really have like a, what are we going to say, gal? I don't know. We don't have a catchy thing. Yeah.

Lady. You could start an anonymous one. It would be like SBA gal and everybody would be like, Heather, we know it's you. I do, I do know some people who are big creators. And as a big creator, you have to like be pretty positive and stick to your lane. And I do know some of them that open up these alternative. accounts and just poop on people. Just like all of the stuff that's been in there, like calling people, calling out people's BS, you know, like, you know, health influencers who are on

testosterone and drugs, like, you know, just like all, you know, people who say they own companies and reality is they, you know, got 0.1% of advisor shares, like just like calling. And so I know some of there, you know, and there's some in the real estate space, like, you know, like just, total calling out people's BS. And it's kind of fun to watch. And then I'm like, I feel dirty interacting with this account. And so I kind of forget about it. But there are people that do it.

All right. Well, this was a good one. Yeah. Man, that, yeah, that is a great example of a listing that you're like, huh, this could be something. And you're like, you dig in and you're like, oh, this is one of the worst listings we've ever looked at. Like, it's up there with like worst 5% of,

of businesses that you just should run away from. So anyway. Well, and there's the slight chance that you go dig into it, and there's something there, but that chance just gets smaller and smaller. Yeah. All right. Well, on that high note,

thanks so much for sticking around to the end of the episode. And if you enjoyed any of the conversation, please let us know. And we'll be back next week to review another deal. Thanks.