Acquisitions Anonymous - #1 for business buying, selling and operating - Should we buy this Crossfit Gym? - Acquisitions Anonymous episode 142

Episode Date: November 18, 2022

Want to receive this listing in your inbox? Signup for our weekly newsletter:https://www.getrevue.co/profile/acquanon-----Michael Girdley (@Girdley) and Matthew Ford, we talk about a Crossfit Gym for sale in Florida. We will examine whether this business opportunity has a chance of success and investigate what is going on with the lease.Finally, Mike and Matthew will discuss some strategies they would use to sell CrossFit Gym if they were business owners. In this episode, Mike also explains why going inland, away from the beach in Florida, is not a good idea for a business, especially if you live there.-----Thanks to our sponsors!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.----- Show Notes: (00:00) - Introduction(00:35) - Our sponsor is CloudBookkeeping.com(02:10) - Deal & financials: Crossfit gym for sale(03:08) - What are the terms of this deal?(05:57) - How’s the operation looking?(06:22) - Why are they making little profit?(07:15) - Is this a franchise? Do they pay franchisee costs?(10:41) - How important is the membership base for this deal?(11:57) - Is there only one Crossfit gym owner problem?(12:34) - Why is opening more Crossfit gyms difficult for other owners?(17:20) - Is building a community going to change the flow?(20:52) - Why is getting away from the water a bad idea in Florida?(23:03) - What exactly is going on with the Lease at this point? (23:55) - If we owned this company, how would we sell it to potential buyers? (28:00) - Deal & financials: Established family medical practice in Brownwood, Texas(28:45) - Why is this deal interesting?(29:24) - What is the current Boomer retiring trend?(33:40) - Matthew’s funny dental story-----Additional episodes you might enjoy:#141 - A very profitable B2B Internet Business in the Petcare Vertical#140 - Let’s SBA the heck out of this deal - with special Guest Heather Endresen#139 - Will we make bank with a Medical Equipment Supply Company?#138 - See-food but for plants? With special guest Xavier Helgesen 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]

Hey, Michael here. Welcome to Acquisitions Anonymous. Today, my buddy Matt and I dug through a couple of businesses with no sellable value. And I think it was a really good example of kind of the lessons that we're seeing and looking at a lot of businesses. Some of these just aren't going to sell at all for anything more than a sum of the parts. So the first business we looked at was a CrossFit gym. And then we looked at a couple medical practices after we realized the CrossFit gym was a terrible idea. So I had a ton of fun doing this one, and I hope you enjoy it as much as I did. Here is the episode. Hey, Michael here, want to talk to you about today's sponsor for the episode, which is cloudbookkeeping.com. So cloud bookkeeping is actually run by my neighbor, Charlie. So I've met him in person and can attest

that he's a real human being and a good person. And what cloud bookkeeping does is offer a full suite of bookkeeping services all in the cloud for you around QuickBooks and other technologies that you're using as a small business owner. So if you're interested in getting the bookkeeping part of running a business off of your plate and focusing on running your business, Charlie and his team are one to call.

They can put together a bunch of other stuff in terms of helping you manage and grow your business besides just bookkeeping, sophisticated reporting, definitely help you. you get your QuickBooks online set up in the right way, and a number of things around payroll as well. So definitely know them and recommend them. If you want to find out more about Cloud Bookkeeping, you can go to their website at Cloudbookkeeping.com, reach out to Charlie. I know many of you have and see if he can help you, make running your business easier and more fun by

letting them help with a lot of the bookkeeping solutions. And when you call, mention this podcast, it would help us and help Charlie know that we're supporting him as well. So thanks a bunch and cloudbookkeeping.com as the sponsor for today's episode. All right, Matt, welcome back. I'm very excited about the deal we have today. I am very excited to be here. Well, I think it's time to redeem ourselves because the last time you were on the show, Mirko wasn't here, Mirko, producer, NGM for the podcast business.

But Mirko, literally within four minutes, the podcast, kind of ground to a halt because the deal we were talking about was so bad that I said it was the worst deal I've ever seen. And then we just kind of chit-chated for 21 minutes and click stop. Yeah. It wasn't it wasn't the ground to a halt. It just like we just kept digging deeper. And like every, every layer of the onion, it just got progressively more rotten, I think was the problem. All right. Well, we're back to redeem ourselves. And today's plan is near and dear to our heart. and it is a CrossFit Gym that's for sale in Florida. And most people don't know, you and I met each other at a CrossFit Gym

and have her main friends ever since. And today we have a CrossFit Gym that is for sale in Florida, and we're going to do it. So let me go ahead and read this one, and then we could talk about what they have to say. So did a CrossFit Gym for sale in Laudder Hill, Florida, which I think is near Fort Lauderdale. Is that right?

Let's assume so. Yeah. And they have their logo here, and it is very CrossFit as a CrossFit logo would be called CrossFit Milit, which I think early on I really got into the bro aspect of CrossFit. And now it's, then I got over it. And now I'm back to loving it again just because it feels endearing. And they have like a very, for those of you not on YouTube, they have a very masculine Eagle logo. And they use this kind of like design language that looks like they're about to jump out of. an airplane. So it says CrossFit Militia. They are selling the business for $70,000. Cash flow is not applicable. So we're off to a good start there. Gross revenues, $129,000. They have $50,000 worth of inventory, which I think is more like equipment. And they're paying $5,000 a month in rent. And the business has been around since 2009. Business description. This diverse community was established around 2009. It was built with people that centered their

lives on serving the public, firefighters, EMT, military police, lawyers. judges, nurses, and teachers, and it has grown to be an exclusive exercise facility that supports each other through encouragement, yada, yada, yada. The facility that they're in, so this is a micro gym that is a small workout facility that is 4,800 square feet, two bathrooms and one air-conditioned office space in the back, where they also have a body fat scanner, which comes with the scale of the business they say, two large bay doors, fans on the walls, and ground for airflow, and two AC units that they don't use. They expand the space in 2020, so it now has two bays together, and the lease is up September 2023, and a renewal is an option. All coaches who work there are part-time, and most

have been with the community since it was established. We have one person in charge of sales and account management. They also take charge of scheduling body fat scans, communications, and foundation sessions. Neighbors, there's a cheer facility next door in an auto repair shop on the corner. All neighbors are helpful, friendly, and supportive, and the area is safe to run night or early mornings, lots of residential areas around in the gym, and some members like to bike or walk. There are no other CrossFit gyms within Sunrise, which I guess is the master plan community where they're located, and they have had very little social media marketing work done and continue to grow. There are six classes a day with a need for more morning classes, and there's

also a need for kids' classes, but they don't have the staff to support that. Members would enjoy some more stuff like a nutrition and accountability program, and they could even get bigger. Oh, and here's a picture of where they are, Matt. So they're like between Boca Raton and Fort Lauderdale towards the alligators, towards the west. So you have been a customer of our CrossFit Gym longer than I have. What do you think about buying this CrossFit Gym for $70,000? Well, they could do with some members, couldn't they really? So how many members do they say they have?

They don't say, but I'm guessing at gross revenue if they're 100 bucks a month, then they've got 100 members. Right. Which is really low for CrossFit, as we know. Like, it seems like you're... That's really bouncing along the bottom in terms of a membership pool that they need to even function. They're only, you know, they're two times rent at this point in terms of revenue. Right.

You know, 60,000 a year revenue, 130,000 a 6,000 year in rent and 130,000 in revenue there. I guess a bit tight. Yeah. Which ultimately becomes kind of the problem, which also becomes kind of the problem with a business like this, right? You know, until you get it to a certain scale, which these guys have not gotten there, you're basically buying yourself a job, right? So if you do the math of they're bringing in $130,000 a year and rent is, we just figured it out it's close to $6,000 a year. So they're spending 50% of revenue on rent. And that basically turns into a situation. where this person by themselves is teaching two to three classes a day, probably. And these are hour-long classes. Yeah. And you got a situation where you're buying, you know, the person that owns this is basically trapped. They've got $60,000 to $70,000 worth of equipment that they've bought over the years.

They've got this huge lease. And then they've got a situation where, you know, they're just paying themselves $60,000 a year to teach CrossFit classes, basically, when it comes down to it. Yeah. I mean, it's what at Boston. Actually, they said they've got six employees. I don't know if they're all coaches, they're part-time coaches. How much you're paying your coach?

25 an hour, 20 an hour, 30 an hour? You've got to be in that sort of range somewhere. So it doesn't take too long to realize that this is not making any money right now. Also, looking at the equipment, that's going to be something well worth measuring because they're talking about their inventory, which we assume is going to be equipment. Often you get these valued by the pound. So, you know, does that mean they've got a hundred plates collectively weighing? I've lost the numbers in front of me now, but a hundred plates collectively weighing an enormous amount,

or do they actually have the expensive equipment that people may or may not like using, like the row machines or the decent erg bikes, etc., etc., that make it all work. Yeah, when you look at that day, it's a 6 a.m. start, then a 9 or 10 class, a 430 to 830. So basically you're starting at 5.30 in the morning or 6 o'clock in the morning and shutting up shop at 9 o'clock at night. I mean, that's a full day for most people. Maybe there's a couple of gaps in there, but that's a full day. Like if you were to teach, if you were to teach all these classes yourself, there are seven classes a day right now. Yeah. And as you're saying, like, your day every day except for Sunday and Saturday is waking up at 5.30 in the morning and shutting down nine o'clock once the last person leaves the gym. And we haven't even talked about how they're affording cleaning their gym, repair and maintenance on the gym, all that kind of stuff. So I looked, I just pulled up who. who the coaches are.

And it looks like it's a husband-wife team. So this Rachel owner and Rich owner, and they're doing this together. And then there's a bunch of part-time coaches. So that may be some of their saving graces. They're teaching a third of the classes a week. And the rest of the time, they look like they have five or six other part-time coaches.

Seven, eight, ten, eleven. I think they have more coaches than members based on these numbers. well again you know okay we're giving them free membership and we're paying them to to actually train the class take the class and uh yeah i mean i think in this sort of situation it really comes down to what equipment they got and uh plus a little bit of something for the business and that's kind of how you're going to end up valuing it like is this equipment worth buying and a little bit of something for whatever the sort of functionality of the business is actually going to be if you actually want it. The question then really comes down to is how do you build the membership base?

Because the membership base is a living, breathing thing. It needs to be constantly fed. You need to be constantly adding new people because there's obviously an inevitable attrition. You need to build an environment that people want to come along to. And as much as anything, I mean, I think the, the approach. Programming is absolutely the cornerstone of the place's success. And if you've got weak programming or boring classes or poor pedagogyas in terms of how you're actually structuring those classes, people just aren't going to stick around. Hey, there's a few rowers in the background there. So they've got some in some boxes.

Unless these are stock photos. Yeah. It's always funny to me when there's a health-oriented business for sale. and their reason for selling is health reasons. You know, like, not that that shouldn't be funny, but it's always kind of funny to me when I look at it. I'm like, oh, like, it is, it is what it is. Yeah, they, they, they, there's a couple of words missing.

It was like bank account health reasons was what they're, yeah. I mean, I do you think this highlights a problem with the CrossFit model. And there's two big problems with being a CrossFit. owner. So number one is, like, you're not a franchisee. Like, CrossFit doesn't actually do franchises. They do what's called licenses. And so on top of, like, all of this deal where they're only taking it $130,000 in gross revenue and their rent is $60,000 a year, basically 50%. On top of that, they still have to pay CrossFit for permission to call themselves CrossFit, whatever. So there's another three to five, maybe more $1,000 off the top that they're paying before they can pay

themselves. The second thing is because you're not a franchisee, there is no control around anybody being able to open up directly across the street from you and use the CrossFit name. And like the CrossFit gym, you and I go to, there's a CrossFit across the street, like right across the street. You could see it from, like you're working out in our gym, you could see the other CrossFit gym across the street. And so CrossFit does really well on that, They're getting paid by both gyms. But if you're the gym owner, that kind of sucks. And, you know, that's the other problem here is, what are you buying?

Like, immediately tomorrow, two CrossFit gyms could open across the street and take half or two-thirds your business. It's not easy to have a lot of residual when that happens. I mean, that's obviously a pretty significant threat. And as you point out, I mean, we could literally throw a kettleball bell and hit the other gym. Yeah, I mean, it is. Now, I will say actually in the last couple of years, I think, in terms of franchisee, in quote mark, support because one of these things where are they really, are they really not really a franchise? Well, they're kind of right on that gray area.

That's probably not so gray in terms of having a franchise. But what we have seen is like they've really stepped up their coaching services, their support to the, the, the, the, the box owner and what they can do in terms of programming. And again, I come back to the fact that I think programming is everything. It's a comparable would be, you know, do you go and watch a sports team because you like the facilities or you like the popcorn? No, you want to see, you know, dynamic players. And it's the players who are responsible for getting people into watch a sporting event

because I'm going to see great rugby players or I'm going to see great basketball players or whatever it might be. And in the case of a CrossFit gym, you're going because the programming's good and it's getting to it where you want to be. And there's a great community and you're developing as an individual, as an athlete, etc. And without that, you've got nothing. I say CrossFit has come back and done a good job and made it quite accessible for better programming for the boxes. So you've got a much more sort of standardized product. But as you say, you've now, you are exposed to one opening down the road or an orange theory.

I mean, let's face it, there's a thousand things that you could be doing. And the flavor of the month, or last couple of years, perhaps it's been Orange Theory, could be whichever one's next is going to pop up. So you've really got to be out there. Yeah, the newest ones around us are Hot Works, which is, I guess you do a workout on a TV screen when it's really hot. It's super weird. And then F-45 is a new thing.

It's kind of like half orange theory, half. have CrossFit, which is fun. I went to a fancy dinner last night, by the way, and like, everybody there is like, we're doing F-45. You know, it's not CrossFit, Gurdly, but it's still pretty tough. That's everybody would say that to me. Like, okay, well, cool. You know, you're still special.

Oh, Camp Gladiator, which always makes me chuckle. Those people are so sweet. And we see them out in the park and they're doing their little like half push-ups. It's adorbs. Anyway, one thing I just did notice from the. the listing is Rachel is, looks like the wife of the husband, wife team here. She is actually the person that appears to have been, be the person listing the business for sale, Rachel Worchester. So that has me actually kind of interesting. It just shows how little market there is of resale of these

gyms. And frankly, how smart CrossFit headquarters has been to make it so that they created the situation that totally benefits them. If you look at this and read, like, you go to the website and read the way these people describe their business, describe what they do, describe the actual gym itself, like one thing that was really striking about this listing, and this is where paying attention to what they're saying, I think, is valuable. They did not talk about this as a business at any point in this whole thing. They referred to what they're doing as a diverse community. So basically, CrossFit has created the situation in which they've convinced these people, they're part of a community that is privileged to spend five or ten,

send five or ten thousand dollars a year to CrossFit for the right to use the CrossFit name. Like, think about like a pretty genius business model. That's some good stuff. Like, you got to give you got to give some credit for that. Yeah, totally. The idea of the sort of the community, though, is I think you need to be developing as the community and as an individual within that community, right?

You can build a community around bingo. I mean, bingo is a community, but are people developing and growing within that community? Or is it just sort of a static place you go enjoy being where you are, right? And that's, you know, I think for these businesses to grow, develop, etc., you need to focus it on a growing, developing community that you're actually trying to build. And I'm not seeing a whole lot here that is saying we've really sussed how to develop this business. And they've been, they've had 12 years at it now, 13 years, 2009. And, you know, it's just not there.

It's just not there. Yeah. Well, I mean, I think you're talking about exactly the right thing. Like when you own one of these gems, like your product is the community, but the business has to be a real viable business behind it. And you look at their website and they don't list their prices anywhere. And there's no button where I can give them money. Like it's just a brutal type of situation where that's the other problem with this type of business being in is a lot of times you're attracting these religious zealots who aren't in it to actually make any money.

right they're in it just because they love it so much and want to spend their day talking about it and it's the same thing you see like when i was a younger person you see people that you go in and people had baseball card shops and that's just because they wanted to talk about baseball cards all day they didn't actually care about making any money so same thing like if you're competing against somebody like this who doesn't really care about making money like and just wants to like get by like good luck if you have a priority where you really want to build a business. So again, man, I thought today was going to be the day where we had like a great deal. This is total crap too. Well, I mean, it depends if you get all the equipment and a small membership as a as a

starting point. Yeah, I mean, you're accelerating. You've got you've got a leg up and you've got something to start with. But you really absolutely need to go into this with your eyes by opening of how am I going to build a membership? How am I going to retain a membership? And how am I going to, we're looking for a better word than sort of stimulate the membership to want to come back on a regular basis and use and tell their friends and say, hey, this place is great.

Enough that they want to pay money, right? That's the other problem here. Like, if you have like these guys do, you have more coaches on your payroll than you have paying members. And I'm exaggerating a bit. but it's not that far off. Like they have 10 coaches for 100, 100 some odd members.

I mean, we're assuming it's 100 bucks a month, but I mean, it might well be 150 a month, you know, reasonably. So they could be only at 75, you know. Yeah.

Well, that also brings up something here. Like they, a lot of times you see listings like here, like this one, where the people filling out the stuff, especially if they're representing themselves, like this Rachel appears to, a lot of times you see these listings,

and it's, it's a question mark as to whether they actually understand what the terms mean. Like gross revenue, they may think that's like, oh, what did the two of us working here put in our pocket last year? So this could be a much bigger CrossFit gym than we think. I doubt it. Because we haven't even talked about the biggest problem with this CrossFit gym is, you know, in Florida, the further you go away from the water, typically the lower the dollar like income and disposable income goes. And these guys are right before. you get to swamp, like right before it gets the everglades, which is typically some of the lowest

dollar stuff. And there's exceptions around it. But that's the other, that's the big knock about this thing. They're like, oh, there aren't that many CrossFit gyms nearby. And I'll tell you why, because you're most like, you need to, you need to have a, a group of target market, like in that area who are going to want to pay a couple hundred dollars a month. And like, this is probably why you don't see like this. You don't put your CrossFit gym in an area that can't afford it. Yeah. And it's right next to a auto body work.

And what was the other store? A cheer, a cheer place where you can go take your daughter or son to become a cheerleader. Other than that, it's great. Well, I think that's why you see also like these CrossFit gyms when they sell, like you and I have seen a couple that have sold.

And they end up selling for the value of the parts. like they sell for assets. It's kind of like a restaurant in that way. Except this is a restaurant where you actually have to pay CrossFit $5,000 a year to be able to call at a CrossFit gym and be part of the quote-of-cote community. It's just like the best brainwashing ever. It's so good. I mean, just looking at the pictures, I mean, there's a lot in there that has value.

I mean, the pull-up bar frame system they've got is good quality. They've got the right rowers. They've got the various boxes. they've obviously got a ton of plates and bars, etc. That all has value, but it's just got, you know, secondhand parts value. And it's really like, what does the membership base look like? How have you, because all the values in that base. If it's a regular base that wants to show up and you've got the opportunity to build it,

that's one thing. If it's not there, then, you know, you're kind of dead in the water. Oh, we haven't even talked about the best part yet. I thought we just did about it, oh, okay, okay. You buy this thing and you may end up having to move all of that crap in nine months. Yeah, reason to sell lease health reasons, right? Lease is not healthy.

Yes. Oh, boy, I mean, if there's any medical issues, we're not mocking that at all, but there's a number of things here that would raise red flags. So let's invert this. Is there any world in which, let's say you own this business, how would you actually try to sell it? Would you go on Biz by Sell where we found this listing and try to do it? I know how I would do it.

And it is somewhat akin to how our CrossFit gym changed hands as well. But if you're the seller of this, how would you go about this? Would you do it like these guys are doing? you have to find another evangelist someone who's brought into the concept and wants that lifestyle and loves the idea of it and wants to you know is is less willing to look at the business numbers and more willing to look at the um a more wanting the lifestyle that and the um the the the kudos of actually the gym and trying to be part of that community and so you're looking for someone who is who is who is a fan of crossfit already and it's

probably going to come out with membership base or at least a very close affiliated membership base because they're the ones that want to be in this environment. Yeah. Well, that that kind of blows my mind. Like they have one, two, three, four, five, six, seven, eight, nine, ten. By the way, pretty fit looking coaches, by the way. That's the one thing. You're out of CrossFit is that the employees are pretty jacked. I mean, look at this guy. His name just says coach. Oh, no, Timmy. Timmy looks pretty jacked. But like, that's all. also another kind of red flag here. You're like, wait a second, like, none of the 10 coaches that you have are that interested in buying the business, especially when it's right now, they're asking

$70,000 and they claim to have about that much in terms of equipment. Like, none of these people are interested in buying it, like zero of them. And I know, like, they may not have the capital do it, but like, you know, I think we've seen a lot of times these gyms, if they sell as intact things that are established businesses and you expect to keep running them, the buyer gets 90 to 100% seller financing. Yeah, I say it's all owner financed. Yeah. Yeah.

So it's like, okay, well, if this is such a good community, how come none of your 14 coaches are interested in buying it? Even with seller financing and stuff like it, doesn't make sense. It just doesn't make sense. Interestingly, I mean, I don't know what they did with the listing, but there's at least six or eight coaches there, and the listing has six staff.

So I'm not sure if they're counting somebody else in there or not. And they've clearly tried to add on other things like this, this body fat measurement has been added several times. Yeah. In the listing to say, okay, we're diversifying into this, but it's a bit kind of clutching at straws. There's not even really swinging the fences is clutching the straws. But yeah, it's all about how you're going to build that community. And have you got the, have you got the products that people are going to want to show up for month in, month out, be stable members and who are going to develop under that? under that regime.

Yeah. So, yeah, I would pass on this one. Come on, we're trying to make this work. Try to redeem herself after the last episode. Yeah, I mean, I think reading through this, like, I'm looking at the owner's deal here, that he's had some devastating injuries. You know, I think this, I think we both know people like this, that, like, they have their dreams to be competitive as an athlete,

but just like they're not built to do it for the long term. And it's kind of interesting to see, you know, guys, like, it looks like this owner is rich and he's, it says, I've had to put my dreams on the backburner due to some devastating injuries. And it just like tears at my heart when you see somebody like him who wants it so bad. And right now I got to imagine, you know, he's gone to, he's gotten into CrossFit hardcore and then managed to injure himself there. I don't, I don't know.

He says, he says, my dreams are playing professional sport. came, were throughout, but they got the depth. So I don't know if the injury is related to the current CrossFit. Oh, I'm just assuming he's gotten injured at CrossFit, just like a lot of other people we know. It just reawakes, reawakens the pathologies you've already got in a lot of ways. Absolutely. Yeah. Absolutely. All right. Well, we hate this one. Nice work. Thanks for coming back. Hey, I bet I can find a worse business. I was just looking at dentists. Oh, man. Yeah, I mean, that was, for those of you listening, that was our other thing, was like, well, let's go find something interesting in, like, the dental or medical practice space. And, like, I think the one you brought that we almost did was the, oh, here, I'll pull it up, the established family medical practice in Brownwood, Texas. First of all, have you been to Brownwood, Texas, Matt? No, I looked up on the map. If you go towards Abilene, but don't quite get there, that's about where Brownwood is.

I have been there. I didn't stop. I just kept driving. Well, your breaks aren't that good because you'd have to stop in a hurry, I think, to actually be able to stop within the city limits. You need to break pretty hard. But I think that's, I mean, you're, I think the theme here, which is really interesting. And so I pulled up this medical practice, the guy's asking a million dollars, basically,

for the business for real estate that's basically worth $800,000. Like most of the residual value in this primary care medical practice in Brownwood, Texas is totally in the building he built for himself, which is actually kind of a nice building. I mean, this has a bathroom and everything, which is kind of more than I expected for Brownwood, Texas to have indoor plumbing. Anyway. I mean, the interesting thing about the photos is there's lots of doors open, which are probably a HIPAA violation. But, you know. Okay. But it's interesting, like there's this theme, like the CrossFit Gym, this thing in Brownwood, like for the primary medical practice.

And then we pulled up some dental practices too. And it's just like people keep talking about this tsunami of businesses that are going to sell as baby boomers retire. But like so many of them look just like this medical practice. Like basically no residual value whatsoever. Like first of all, it's a medical practice in Brownwood, Texas. So, like, right then, you limit your universe of buyers to basically zero. Like, do you want to be a doctor taking over a sleepy practice and stuck giving primary care out the middle of nowhere?

Like, nobody wants to do that. And this CrossFit gym is the same thing. Like, you got to be one. There's no residual value here whatsoever. Like, who's going to buy this and move to middle to nowhere, like Florida, and live their life coaching CrossFit classes all day for $60,000 a year? Like, it's just not. There are no buyers.

They just aren't going to happen. And it's fascinating to me to see this trend that people think is this big, massive baby river transition. I'm like, most of these businesses are not worth anything. There's nothing to buy here. It'll be interesting to see what happens to these people. I mean, well, there's been two things to buy in both the businesses. There's the inventory in the CrossFit place and the building in the medical practice.

But the actual core business itself, they're not ascribing any value to. I mean, they're asking $9.50 for the medical practice and with the real estate valuation of $800,000. So, you know, for a 20-year business that this doctor's built up, he's asking $150,000. But what was interesting is bringing some personal experience. They've got a friend who started a concierge cash doctor business. And they basically said because the first 20 to 30 patients they were seeing on a daily basis, they needed just to keep the light. on. And this guy's doing, I think he said, 39 visits a day. So let's say, well, you know, 20 of those or under 15 of those are ones that they're actually trying to make some money on.

You know, it's, it's, it's tough. It's really tough. So, so yeah, so he's almost, almost no value being ascribed to the business whatsoever. It's, and it does come down to a theme that we've seen a lot, doing this podcast is we'll see over and over again some baby boomer retiring and he's selling his business for a million dollars and then the business he the buildings he's in and the three buildings he's bought in the vicinity are all worth 20 million dollars like over and over again that being in business was really just an opportunity for them to get into get into a better business and it turns out being a baby boomer and owning stuff before you your generation stops letting everybody else build things is like a really, really good business to be in.

It's really smart. Yeah. That was a very sly dig in the middle of that statement. I just, just against the listeners missed it. I love, I love my baby boomer friends, but they, you know, they've, they, they nimbied, they nimbied our entire economy. Yeah. That's the thing.

I got here first. I got here first and you guys didn't get here first, so too bad. Yeah. And all pulled up the ladder. Let's pull up the ladder. Yeah, it's like, thank you guys. Been nice knowing you. We're going to pull up the ladder behind us.

And also that college, that'll be $80,000 a year. Thank you. Thank you very much. Yeah, that's good. Yeah. There was something interesting that when looking through these ones, it was that the doctors and the dentists had different profiles. So when we look at the dentist, they started to move into actually having the cash flow.

low multiples or the EBITR multiples in asking for their businesses. And so that a number of times to say, there seems to be some sort of trend here. And really, I think what that came down to when looking at it was just, you know, the ability to sell add-ons above and beyond what someone's going to get reimbursed through insurance.

You know, and actually, funny story. My dentist left a bad taste in my mouth last time I went. actually could be had an old after that. I need to get, Mirko, could you,

Merco, could you add a little chich in the, uh, in post-production. Actually, hilariously about this podcast, one of my buddies, I was like,

hey man, what would you make better in the podcast? And he goes, you need more music and sound effects. And I texted him back and I was like, you mean like fart noises and can laughter and stuff? And he was like, yes.

I was like, God. Yes. More. Okay. We can sort that out. Anyway, add that. So he left about, because I went along, right?

And I'm, you know, sit in the chair and got all the staff of my mouth. And he said, right now I can do a cancer screening of your mouth for an extra $25. And I said, oh, no, I took a couple more about it. I said, oh, so you're an expert in spotting cancer, are you? He said, yes, yes. I'm an expert in spotting cancer. and I'm going to check your mouth and make sure there's no cancers in there for 25 bucks. Yeah.

And I was sitting there in the chair thinking, what kind of prick have you got to be to sit there and say, I'm an expert in spotting cancer, but if I see it and you don't give me 25 bucks, then I'm not going to tell you. Right? What? So I'm like, oh, you know, yeah, yeah, his wife became a widow, his kids became without a far, because of mouth cancer, but 20 bucks is 20 bucks, and I wasn't going to tell him. I mean, it's not like you're going to, you know, get your brakes checked or something,

and the guy's got to take the wheel off and check your brakes. I mean, he's already digging around your mouth anyway, and to not tell you for 20 bucks or 20. I was like, right, great. Anyway, I've not been back. Yeah. Well, I mean, I think it is a testament, and we're about running that time on today's episode. So, but anyways, the last point for me, I think it is a testament that, doctors by and large have never seen themselves as business people first. Like a small percentage of them do, but dentists, I would say the majority see themselves as running a small business that is in the dental care business, whereas most doctors

tend to think of themselves as first and foremost serving humanity, right? And like, there's acceptance there. But the more doctors I talk to, they don't really think of, you know, like one time when I was in my teens, my uncle, who's a psychiatrist, was complaining about all the ways that the medical insurance companies were hammering doctors. And I said, well, why don't you go form a union? And he said, why would we do that? We're servants to the community. People should just pay us a fair wage. And I was like, oh, like, this is the mindset. These people do not see themselves like normal people. There's a spectrum of normal to God. And they're somewhere like closer to God than I am to where

they just have a different perspective on life. So anyway, on that note, since I've alienated Brownswood, all the baby boomers and doctors. And dentists. But no, Dennis are smart. I just, I said good things about Dennis. Okay. Brilliant. All right, on that note, good job, Matt. Thanks for being here. Maybe next time we'll find a deal that we don't hate so much. No, we're going to find one. There's a good one out there. I just know it. I'll talk to you later. Cheers, bye.