Acquisitions Anonymous - #1 for business buying, selling and operating - This Fencing Company Runs on ZERO Marketing – And It’s Super Profitable!

Episode Date: March 11, 2025

This fencing company in Albuquerque is a hidden gem—high cash flow, no marketing, and massive growth potential.Business Listing - https://www.bizbuysell.com/Business-Opportunity/highly-reputable-and-profitable-fence-and-gate-company/2232872/🚀 Our Sponsor:Ready to buy a business but don’t know where to start? Join Acquisition Lab, founded by Harvard MBA and acquisition expert Walker Deibel. Get hands-on support, world-class resources, and a community of entrepreneurs to help you acquire the perfect business. Schedule your free consultation today at AcquisitionLab.com and tell them we sent you!🎿 Holdco Conference 2025 – The premier event for Holdco builders is coming to Utah next spring! This intimate event is for those running or planning to build a Holdco. Get your tickets now at HoldcoConference.com.Episode Summary:In this episode, we analyze a highly profitable fencing company in Albuquerque with $5.24M revenue and $1.25M cash flow. This business serves both residential and commercial customers and operates entirely on word-of-mouth referrals—no marketing! We discuss why fencing is an underrated business, the potential for growth through sales and expansion, and why the first buyer’s deal fell through. Chelsea Wood from Acquisition Lab brings a deep dive into valuation, financing, and growth strategy for this kind of deal.Key Highlights:$5.24M revenue, $1.25M cash flow—a strong-performing business.Residential vs. Commercial fencing mix—what’s the better strategy?Zero marketing, all word-of-mouth—how much growth is left untapped?Real estate opportunity—should you buy or lease?Why the first deal fell through and how to avoid making the same mistake.Labor strategy—managing subcontractors vs. employees.Is fencing the next big home services acquisition opportunity?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]

Fencing to me is one of those home services and commercial services that has the potential to be so strong, so highly fragmented, lack of professionalization. Like first glance, this is like the unicorn, right? When you hear what people are looking for, it's this. It's a good company that typically is fairly easy to wrap your arms around. So the Acquisition Anonymous. Hello, another episode of Acquisitions Anonymous. We don't have 100% geared anymore. And thumbs downing on just the plus inventory alone. Welcome back, everybody, to another episode of Acquisitions Anonymous. I'm Mills Snell, one of your co-host. I'm joined today by Chelsea from Acquisition Lab, who is a repeat guest, and she brings a great

perspective to this episode. We talk about a company. I don't think we've ever talked about a fencing company before, but we talk about a really great size, a little over $5 million in revenue, $1.5 million in cash flow, fencing business in Albuquerque. We talk about the residential. commercial mix, the different types of fencing that a company like this provides, whereas their value. It's a very reasonable purchase price. We talk about why this deal probably fell through in the

first place. Chelsea brings a great perspective on a bunch of different fronts. This is a great, great business, I think. And now I want to find a fencing company that is like this in my market, because this is all the way across the country. But if you've looked at home services, if you looked at residential services or anything, you know, kind of in this sector. I think this is one of those kind of missed opportunities. I hear a lot of people talk about other trades, but this is not one that I hear most more commonly. So stick around for the episode after a quick word from our sponsor. Are you ready to take a leap into business ownership but you don't know where to start? Well, look no further than Acquisition Lab, the premier resource for entrepreneurs seeking to buy

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

And when you do, be sure to tell them the Acquisitions Anonymous podcast sent you. Chelsea, how are you? Hey, well. How are you? Doing great. So to set the stage, I just told Chelsea right before hitting record that I have a deal. I'm really excited about. I don't know if we've ever talked about one of these businesses before, but it's been way too long for us to have gone this far without.

Chelsea, have you ever looked at fencing businesses? Yes. Yes. I knew it. I knew you would have coverage on that. I was really waiting for you to be like underwater basket weaving. Yeah. Yeah.

It's a massage parlor. That's really shady. Yeah. It's like waiting. I was like, what are we going for? We did. We did talk about a fencing,

not like, yeah, yeah. No, yeah, like the fence that is around your house or around your business. Yeah, I got that one.

We did talk about a bingo hall the other day that I was pretty excited about. And we also had never talked about one of those. So I love that. I think fencing to me. is one of those home services and commercial services that has the potential to be so strong. It's so highly fragmented, lack of professionalization. Everybody talks about plumbing in HVAC, and then I think like a tier or two below that is, you know, outdoor services, especially fencing.

So I'm going to share a screen. One thing as a, this is maybe just anecdotal, is I thought it was actually kind of hard to find a fencing business to talk about, which is probably a good sign or maybe a bad sign. But I'm going to read this one and I've got it pulled up on the screen for folks on YouTube. This is on Biz by Sell. It's in Albuquerque, New Mexico. It's a highly reputable and profitable fence and gate company. It says sale pending on Biz by Sell. The asking price is $3.7 million. Cash flow is $1,253,000. They say that their top line revenue is,

is 5.24 million. They have 150,000 in inventory. They don't list EBAA specifically, but they do say cash flow. Rent is 5300 a month. The FF&E furniture fixture and equipment is about half a million dollars, they say, and the business has been around since 1985. Kind of nice over 35-year-old business. 2024 numbers are up. in all caps, exclamation point in this description. LOI fell through due to buyer qualifications, hurry will go quickly. That's in all caps if you're not following along. This business has been in operation since 1985 and comes with a long list of repeat

clients, including state and local municipal agencies. They provide installation and rental of different types of fences, including wood, chain link, commercial fencing, rod iron, pool fencing, white PVC fencing, ornamental fencing, aluminum or steel, temporary construction panels for lease and automatic gates with control systems. This business serves Bernilio County area. I don't know if I'm pronouncing that right. Sorry to Albuquerque people. The real estate is for lease but can be purchased as a package deal with the fence business. Business has grown considerably over the last seven years. They work out of a one acre, 5,000 square foot office, approximately 2,000 square feet,

and warehouse welding shop, approximately 3,000 square feet to better service customer needs. The operations earnings consistently see growth every year in 2024 has a 30% increase in gross sales and cash flow. The seller expects a continued increase in, revenue and earnings. Most of the company's business comes from word to mouth, repeat customers, no marketing effort currently done. Growth, opportunities abound with additional marketing and expansion into Santa Fe, Las Cruces, and Northwest New Mexico markets. It says the inventory is included in the asking price. The lease expires February 25th of 2028. So you got about three years left on the existing lease,

but they do say that the seller owns the real estate, or at least it's insinuated. that way so you could probably negotiate something on the lease. 17 employees. They give some more description about their building, which I don't think is super relevant right now. Competition business stands as a turnkey operation backed by an experience team, reliable suppliers, and a solid sales foundation. Proven track record of success.

It has emerged as one of the premier fence contractors in the region. they let's see growth they've kind of talked about most of this and the reason for selling is that the the owner wants to retire it's listed by a guy named damien maruka from business broker development group i've never actually seen a sponsoring broker either i'm just wondering i'm like that's weird i've never seen sponsoring broker before toby barker so yeah what what do you think about this chelsea um i think upon on like first glance, this is like the unicorn, right? When you hear what people are looking for, it's this.

And I find it sad, again, my assumptions being asserted as the truth here, that what likely happened here, right, because it is the unicorn, it's what everybody's looking for, is somebody went and snashed it under LOI without having their ducks in a row, which just causes the entire market to get exhausted, right? And it's not in anyone's best interest, so please stop doing that if you're doing that. And so it's a great business, right? I personally, I interviewed a woman that acquired a fencing company, and it wasn't quite this style, right? It was traditional house fencing, right?

Which I do think they do a little bit of. It's just a, how do I say it? It's a good company that typically is fairly easy to wrap your arms around, right? And it's not, like, I feel like people inherently think about landscaping companies. as like a, oh, God, please, God, forgive me. I don't mean to sound insulting to any, I love my landscapers, right? But they feel like it's almost like a business light, right? Like it's something easy to kind of get their arms around.

It's not overly technical, which I've been to differ, but that's a whole other conversation. And so fencing, right, is another one of those areas that you never really hear people talk about, to your point. I almost feel like pest control is very similar, right? where it's like there are certain businesses that they're not, you don't have to have the technical know-how. Like landscaping, you do actually need to know-how, especially hardscaping, right, know how to do it in the event that things go sideways. But this is, is the sale, selling a manufacturing, clarify that for me.

I don't think so. So I don't think if there's any manufacturing, they mentioned having a welding shop. Correct. So it may be that they're like fabricating, you know, metal brackets or, you know, sections of metal fencing. I think they do have a picture of a metal fence. It looks like a very commercial, you know, or municipal setting. And they used the term commercial and electric. And so it looked like it had, again, I'd have to go back and read through it myself

just to make sure I understood it all because it was a lot. But it looked like it had a pretty good mix. I would obviously want to know how much of any residential construction is tied to new residential. because we know certain markets that's booming in, and I don't know if Albuquerque is one of them, not to, you know, I don't often hear Albuquerque as being the next, you know, big booming market. Ironically, my dad was born Albuquerque,

so, you know, it's a great place to birth my family line, apparently. I think that the things to think about, though, with this listing, I mean, this listing is so perfectly unicorn, because if you remember down at the bottom, It's like they've never done sales. It's a referral-based business only. It's like every seller or every buyer I talk to, right, is looking for this type of business. Yeah.

And the best buyers are the ones that have done sales. Like I just hung up with an applicant for the lab and he has a sales background. And being able to do sales is one thing, which is important. But I think it carries a different weight than somebody that's able to build sales teams. Right. And so the conversations that I typically have with folks that have that sales background is, I think it's really important to understand your unique flavor of sales to ensure that your sales background is appropriate for the type of sales required for that business. And so if you have the type of sales background that's going to be right for this business and you've built sales teams, this is going to do really well. It's got all of the important characteristics, right? of a buy-and-build business, right? Yeah, and I'm thinking at $5 million in revenue kind of top line,

they said the business grew 30% year over year last year. So you're talking about a business that, you know, has been very small for, you know, almost 40 years. And, you know, if you have, to your point, if you have enterprise sales or SaaS sales experience or building, you know, teams around enterprise sales, that is totally irrelevant in a lot of ways to this, right? This is, you know, door to door, Facebook ads, you know, Instagram ads, like local billboards.

I mean, this is a totally different thing. But if you, you know, if you care about it, it, you know, I think there's there is potential low-hanging fruit. I just really like these businesses because they are eternally profitable in the sense of like, you're always going to need fencing. Right? And I feel like there needs to be a little bit of a flex between residential and commercial because it does become more discretionary. And regardless of where you stand on the political spectrum, we are in an uncertain time. So when times are like this, I feel like consumer behaviors tend to get a little bit less predictable. So if you can lean a little bit more on commercial accounts, that's helpful.

I have to be honest, though, a lot of the fencing listings I see, and I don't know if they did this on purpose. appear to be much more residential. Like you're talking like either they'll specialize in vinyl or, or you'll have one that's like an ornamental fencing company where they specialize in more high-end. And so I don't often see the ones that can do motorized fencing, which I think is a whole different, right? Because then you're talking about neighborhoods, right?

Like high-end neighborhoods, resident or agriculture, commercial, and high-net worth, like, where they're going to have their own gated property. So it's a different market. And I really like that about this listing. I phoned a friend as I was walking into my office, Mike Botkin. Do you know, Mike? So Mike, I'm giving him a shout out.

He rolled up a handful of landscaping businesses, I think five or six of them in Florida and exited in like a relatively short amount of time, I think 18 to 24 months. and then is now on the prow, again, he's doing things that are related to like water, like wells, landscaping, and, but he's got a great knack for residential services, especially outdoor residential services. And I thought, I misremember, but I thought he had a fence company under LOI. And he was like, I don't, but I wish I did. But as we were talking about it for a minute, I mean, there is. There's so many, you know, it's like anything, you double click on it and go, okay, there's a lot to whatever it is.

Like there's kind of a whole universe that you could explore with it. But the residential commercial mix is a big one. I work in commercial construction. I own a commercial construction company. And I hear a lot of GCs complain about not having a great fencing contractor. I think because it seems like even in a pretty like well-defined geographic area, it's a smaller total addressable market. You're never going to be, you know, in one state, $100 million fencing company or a $200 million

fencing company. They're just, I just don't think they get that large, you know, per se. And so I think people kind of slub it off and go, I want to do something that could be a lot bigger, a lot faster. But I've heard numerous homeowners, numerous, you know, home builders and numerous commercial GCs complain about, you know, it's just leave something to be desired. And you have this range, like you said, from just very simple wood fencing that you can buy, like very generic, all the way up to, you know, you got chain link fencing, which is also

kind of generic. You've got vinyl. You've got, you know, more ornate wood. You've got more ornate metal. You've got brick. Like there's all kinds of room in the spectrum for what you're doing. And then if you are layering on the really high touch, high dollar things like calibrating somebody's gate to be motion sensor activated. Now you've got electronics.

Now you've got, you know, specialty controls. And maintenance. Oh, totally. Yes, because those things are so finicky. They break all the time. I have a friend who owns a large commercial GC and they put a really nice brick column and metal panel fence around the veteran. Hospital here in Columbia. And it's on a main thoroughfare. And it's a huge fence. I mean, it's like, I think it's over a mile long all the way around the thing. And it's like the best

recurring revenue source for them because they installed the fence, but it's on a main road. And it gets hit like once a month. And they keep having to go back out and, you know, repair the column, put a new metal piece in. Like, it's going to be the best like bond forever. They're going to just continue to print money. I think it's interesting that you point out. So one thing to think about is the, like, so I was just talking to somebody maybe with, I don't know, an applicant yesterday maybe that had a strategic partnership background. Like this would actually be really interesting because there's a lot of potential partnerships. So another space that's using this kind of mechanism is self-storage, like those that are

automating self-storage facilities because gated, right, with button access. Yep, yeah. Allows it to be, I mean, a lot of these facilities now are not manned at all, right? It's all off-site. Yeah. And so there's certain niches that you could then develop that B2B relationship with that would also, I think, make this very interesting. One piece that I want to circle back to that we haven't talked about yet is that real estate piece. And so I find at least most of the time in the lab, the real estate kind of unravels the economics of doing this.

But sometimes it can work really, really beautifully. right, in really strengthening the cash flow by extending the loan. And so it'd be interesting to see what the value is of the real estate and whether or not it would be in the best interest of this deal to include it or not. Because the one thing to be aware of is it says the rents $5,300. And so I would just want to make sure, because one thing I've seen a lot in lab deals is where the property is owned. And then when they do the ad back kind of course correct for rent, it's like it eats away most of the earnings. Yeah. And so you'd want to be very careful.

And this is super outside of my area of expertise. But I have a speaker coming in to talk to the lab about lease, sell lease back. Yeah, yeah. Something like that. Sell lease back. And so that goes outside of my area of expertise. But it's like, there's a lot possible in that regard when you do want to buy the real estate. And so like, is that a possibility here?

I think this deal has a lot of potential. I think if I was going to buy a company tomorrow, you know, if the lab suddenly started running itself and I didn't have to do all the things I do. Fencing is one area that I've often thought of and spoke to my husband about because I just find it, it's, again, it's one of those spaces that I feel like legitimately. Maybe it's because I was raised by a carpenter, but it just feels like something that is pretty easy for the whole family. My kids to understand, my husband to understand. Not that my husband would struggle. He's a kivist. So by God, he should understand those things.

But I don't know. I really like dancing. And I also really like garage doors. Garage door repair, personally. Three years ago, Kelsey and I decided that we wanted to launch a conference. It was in a space that nobody else was talking about yet, Holdco's. I only attended three live events last year and only one big conference. And that was Holdco conference.

We ran two amazing events in Cleveland, one in 22 and one in 23. And after the event in 2023, we decided that we really had to take it up to the next level. We took a little bit of a break. We started looking for how could we turn this conference into something that a decade from now, we can be proud that we launched it. Someone and some team needed to step up, and we're doing that. I'm partnering with Kelsey and John to host Holdco Conference in 2025. We're so excited to partner with Gurley and his team for Holdco Conf 2020.

If you're somebody who runs a Holdcoe wants to run a holdco in the future, isn't our buddy named Matt Paulson who hates hold co's because he has problems. And you want to learn how to manage multiple businesses at once, want to learn how to incubate companies. That's my joy. I love doing it. I'm excited to talk about it. And you want to connect with other people that are building portfolios of companies as a hold co practitioner, then this is for you. The big news is it gets to be a ski conference plus whole co conf. So this conference is for folks that are building a holdco as their main strategy. So you're going to be incubating businesses. You're going to be buying businesses. And you're going to be growing through holdco.

You should come to Utah next spring. We're not doing this like other conferences because frankly, I hate those other conferences. This is much more of a sense of camaraderie and very little of the let's get drunk and have a cocktail party and pretend it's progress type conferences that a lot of things are. So space is limited. Get your tickets now and we'd love to see you. It's going to be very small, very intimate and filled with great people. Check out holcoconference.com for more deeds. I think there has been, so there's been a lot of consolidation. You mentioned pest control before. Even in garage door, I think there's been a lot.

I don't, I think this is, this has kind of not been picked over as much. I have a friend who is in the foundation repair business and they own a very, very large business in the Midwest. And they were kind of branching out into other, you know, residential and home services. And they kept looking at fencing and didn't end up going that route. They did something more garage focused. and they just have absolutely been kicking themselves. They said that like, you know, a year in, 18 months in, fencing became like one of the number one. There's a lot of big fencing franchise concepts that kind of help package and make this kind of turnkey.

Whenever you're talking to people, Chelsea, because you talk to a lot of folks who are repeat buyers or first-time buyers, you know, if they're looking at something like this versus a franchise, how do you help them, make that delineation between what would be the right fit for them? What I'm about to say represents Chelsea's opinion, no one else's. It's not the official standpoint of anyone. So I think franchises are great for certain people and not great for others, right? And so when we're talking to lab members or applicants to the lab, it's really about figuring out what your pain points are and making sure that you're buying a company that addresses your pain points appropriately, right?

So like if you've never done operations or if you are someone, I guess if you've never done sales is a great example, right? Like lead gen is not something you want to deal with. Franchises are great for that, right? Most franchise models will feed you the leads, and you don't have to worry about that. If you are a creative person who wants creative control, a franchise is going to make you want to do bad things to yourself.

Yeah, you're stifled. Correct. You have no authority over the marketing side, right? And so I think that for folks that aren't that familiar with operations can take comfort. in franchising because franchising separates it a little bit, right? You have like that top tier support. It's kind of like business ownership with training wheels, I think.

But you just have to make sure that you're not like jeopardizing your returns based on insecurity, right? Like really be true to who you are and where your skills lie because that there's a lot that comes with franchises that you have to be very mindful about, right? Especially a franchis or agreement

make sure that a lot of franchise agreements are entirely one-sided and can put you in a position of risk without realizing it. And so I think it's great for some people and not good for others. And then my universal statement is don't buy new franchises that is silly. It is a startup. And so if you are going to go the franchise route, you want to buy one that is established and cash flowing for the same kind of criteria that we use for businesses. Otherwise, you're literally just gambling. Yeah. Yeah, if you're in the first five, 10, 15, 20, you know, franchisees, they're still learning. Correct.

Once they have, you know, 350 franchisees, it's probably already, like, largely been picked over. I have a belief that there's kind of a great sweet spot where, yeah, there's a benefit of getting in early, but you could also get in early to a thing that's not very good. And then you want to get out. And especially franchises don't have product market fit, right? And so you buy a new territory. that hasn't proven successful in your territory yet. So this whole idea of buying over that hump, right, avoiding a startup so you can buy over that hump, that has not been overcome yet, right? You are just basically like bypassing the infrastructure stage, maybe, right?

Assuming that the franchisor has actually gotten their act together and can provide that infrastructure. But there's nothing to say that you're going to be able to execute that new franchise in your territory, right? And that's why buying one that's already existed so beneficial, right? It's proven. It works. There's customers, right? The other thing about this that I think is really worth talking about is the labor piece of fencing. So, you know, in the hierarchy of kind of in-house versus sub-labour and skilled versus

semi-skilled versus unskilled labor, I think this sits in a really nice spot. There's not the perceived complexity. like roofing, there's not a lot of people who are like, I'm going to roof my own house, you know, and kudos to them if they do. I think that's very, you know, that's very ballsy. But there's a lot of people who like, you know, we're like, I might, you know, I might build my own fence. Like that's a common DIY project.

But I think what you find is that, you know, if it's just a small fence, people are, you know, more likely to go, I just need to do it from like the side of my house to the side of my lot. But when you talk about, you know, running 200 feet plus of fence, all of a sudden, this goes from a weekend warrior project to a totally different kind of level. And it's not that technically complicated. They're probably renting an auger, even in the early days, right? You can rent an auger to go dig your post holes so you don't have to dig them by hand. You're setting four by four posts in concrete and you're coming back and doing not even trim level carpentry. work. It's just basic framing of mostly wood members. Now, like we said, the complexity goes up from there.

If you're doing masonry, if you're doing steel, if you're doing aluminum. It gets way more complicated. But there you could build a, I think in most markets, most decent size markets, you could build a business this size doing predominantly wood and kind of simple metal fencing. The labor associated with that, I think is probably largely subcontracted. They have 17 employees, so I don't think they fit in this category. I'm not sure they don't tell us the dispersion of their staff across sales, project management, shop, fabrication, all those things. But this could be a largely subcontracted business, unlike maybe like manufacturing, right, or professional services where it's pretty much going to be in-house labor.

I think the caveat to that, which is a challenge with all of these home service-based businesses that are contracted-based is consistency, right? Quality consistency. And you have to make sure that, and this company's been around a long time, and so they've got that going for them, but that you are, that your contractors are as good as your brand. Yeah. Right. Because I do think that's where a lot of companies will go wrong. Like, you can go to Home Depot and order a fence, right? And they'll do all the installation of everything. you can imagine, there is a vast array of the skills that you're going to get.

And so I think to differentiate yourself, you have to be very mindful about how you vet contractors, right, and that you're very quick to move past contractors that are problematic in any way. And so I think that's something that all of buyers listening to this need to be mindful of is like when you're buying, and so many of these businesses, these small businesses are contractor based, right, regardless of if it's service or anything. right? It's like a cost control mechanism is that you have some method in place to manage the control, right, and the quality of the contractors you're using because it can tank your business really fast if you're not picking the right contractors to work with. Before we wrap up, let's talk about valuation and purchase price on this. It's roughly three times multiple. And for over a million dollars, let's just say the earnings are real, you know. I mean, that catches a lot of people's eye.

that that moves it probably pretty pretty high in the list. You had said something, let's talk about valuation first. Then I want to follow up on something you said early on. What are your thoughts on valuation on this? Spot on. Awesome. My guess is it'll go higher, right? The thing that I love about this lovely broker is that if this is real, they priced it appropriately, knowing that they will, you will actually get Chelsea's opinion again. I think you will all, you will often get more for your seller if you price reasonably. then if you go to market with a high price that no one wants to understand, right?

You're just going to come back and push back as to why you're asking for an astronomical amount. I have seen that tank more deals in the last three months in the lab, just that unreasonable space that our buyers get put into between a broker and an unrealistic expectations on asking price. This is awesome, right? Like I can easily see a lab member depending on obviously getting the actual confidential information memorandum and all those supporting.

documents offering more, right, than what they're asking. And so it's actually in the broker or in the seller's best interest to do it this way, assuming again that the numbers are being presented to us or true. Yeah. Yeah. You had mentioned earlier the kind of phenomenon of the buyer falling through. And I've seen it a bunch of times. I know you see it and live it day to day, but, you know, I think it manifests itself in a few ways. You've got buyers who, you know, probably offer too much. They put the business under LOI for something that is not reasonable. And the way that that manifests itself in my experience is they can't put together equity and they can't put together debt.

And, you know, the market is telling them, hey, good job getting a business under LOI because you don't have anything until you have that. But you've mispriced yourself out of the equity making sense and then also probably the, the debt service won't underwrite. Correct. And I think like I'll have members come in, join the lab with a debt or with a deal in hand, which is fine. Like we support people post-close all the way, you know, pre-close, whatever you want to do, right? 99% of the time, I swear, what they've offered isn't reasonable.

Number one, it's not actually allowed, right? They're not familiar with the requirements of the SBA. number two, to your point, the debt service, like, again, I understand what they're trying to achieve. And I'm like, you're never going to be able to pay yourself what you're trying to pay yourself with this debt service and with the growth plans you've outlined. Like they're going to cost more than you're allocating there. I am thoroughly convinced, again, Chelsea's opinions only, that everybody out there on podcast telling people buy as big as you can, that that's only because they didn't buy big enough to support their goals. And so they're telling everyone you need to go by as big as you can because they didn't think about how much they needed to plan for growth, right, to fund their growth. And they either had to sacrifice growth initially or their own pay.

And so this is why our acceptance rate is so low and why I still run all the strategy calls for the lab is because I want to make sure that someone coming in at the lab knows how big of a company they actually have to buy to be able to afford all these things so that they don't go and put an LOIs on companies that they have no means putting in, right? Yeah. The market is exhausted. And it's like anything we can do to help. But like always plan for growth. Always guys. Always plan for growth. I think that's the one thing that doesn't get planned for.

And for a little bit of cushion, working capital burns way faster than you think. Yeah. And so making sure that you're not draining all of earnings is just best practice, right? Yeah. This was a good one. Chelsea. I appreciate you joining us to talk about it. Where can people find you?

and Acquisition Lab. So you can find out about Acquisition Lab on our website, AcquisitionLab.com. You can find me on LinkedIn. I have a Twitter handle. I never go on Twitter. I think I'm S&B Chelsea Wood. You can find me on LinkedIn as well under Chelsea Lynn Wood. Well, thanks everybody for sticking around and listening to this episode.

I was super excited about it. It didn't disappoint. Now I'm going to be thinking about fencing for the next week or so as I drive home. I'm going to be looking at like, okay, how many of these houses have fences? How many need them? You know, what's the composition? Part of being in the space now is like I drive around and I, everything, every business is like, I'm like, I wonder what their net income is. I wonder what their margins are.

Yeah. I love business. I'm a nerd. Agreed. Well, thanks, everybody. We'll see you next time.