Acquisitions Anonymous - #1 for business buying, selling and operating - Towing Business for Sale: $6.8M Deal with Family Drama

Episode Date: August 2, 2024

In this episode of Acquisitions Anonymous, Bill and Mills get into a $6.8 million towing business deal in North Carolina. They chat about the tricky parts of buying a business with strong family ties. With $1.5 million in cash flow but an asking price that seems way too high, this episode covers the ups and downs of dealing with family drama, valuing all those trucks, and figuring out how to grow in the towing industry.Listing: Check out this deal here Thanks to this week's sponsor:Have you ever wished that your business's software better fits your needs?IvyWorks can help. They specialize in building custom solutions for SMB’s complex processes.Book a free discovery session, and we’ll make you an actionable project scope document that any software firm can execute—no strings attached.Visitivy.works to learn more.Get more deals like this every week. Subscribe to our NewsletterAre you looking to grow your business through acquisition?Viso Business Capital works with over 30 lenders to find you the best funding, faster and with less friction.Got a deal in the works? Book a free consultation to talk financing. Or just get smarter about financing at a free learning session / Q&A!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]

What I don't like is how kind of on-call and emergency-related it is because it's unpredictable. You could just have a flu bad week, bad month, where there's not a lot of incidents. And then you could have really busy months and your assets can't fluctuate that quickly to support it. But $6.3 million. Is that what they paid for them? Is that what they're appreciated value? You know, I'd have questions about the quality of my assets here. Welcome back, everybody, to another episode of Acquisitions Anonymous. I'm Mills-Snell, one of your co-host. We have an awesome deal today. Me and Bill talk about a business boom, talked about before a towing business in North Carolina and it's actually specialty

towing they have kind of bigger trucks bigger rigs they're dealing with tractor trailers that turn over on the interstate and things like that a lot of DOT work a lot of highway interstate work very differentiated they're doing about 1.5 million dollars in what they say is free cash flow on just under four million dollars in revenue 6.8 million dollar asking price we talk about some of the nuances of buying a very labor intensive business like this capex intensive business like this we get as technical as we probably ever get and talk about in return on assets for this pile of assets that they have. It's a really fascinating conversation. It's really fun. It got my creative juices flowing.

And we talk about specifics of site visits for business like this. I think you're going to enjoy the episode. Stick around for a quick word from our sponsor. Today's episode is brought to you by Ivyworks, a Boston-based software engineering firm dedicated to crafting tailored solutions for SMBs. Are you tired of off-the-shelf software that doesn't quite fit your needs? IvyWorks understands. Specializing on operations and client-facing software, they guide you from discovery to design, engineering, and beyond. With the track record including projects like AI powered drones for roof scanning and mobile apps for managing large-scale operations, IvyWorks is not your average firm. Led by founders Callan and Sam, they prioritize

transparency and personal attention, involving you in every step of the process. Act now and receive a free discovery session complete with systems, architecture design, and feasibility study. And even if you don't choose IvyWorks, you walk away with a comprehensive project scope. Don't settle for generic software solutions. Visit IvyWorks today and mention Acquisitions Anonymous for your free project discovery walkthrough. Let's build the software your business truly deserves. Another one of those days where we begin by saying, hit record, hit record, hit record. Bite your tongue and let's hit record. All right. So there's a tow truck deal today, but Mills was about to tell us a story about how when he lived in South Africa, he had a tow truck story.

So in South Africa, all the tow trucks in like Cape Town and Johannesburg, they have police scanners. And it'll be like there's an accident and they all like you'll see these tow trucks just hauling down the road like 80 miles an hour downtown through traffic. Because the first one there, I guess gets it. And it's just first come first serve. And so they just race. They literally like cause other accidents on the way to accidents to go to the trucks. And so that's the backdrop for this episode of, you know, bad dealings, so to speak. That's a brilliant business model.

Race to the accident, causing other accidents that you can then race to, and it cascades from there. There's always cars to be towed. Yeah, you're creating constant demand, double the demand. I love it. Okay, so this is a towing business today, though. And it's actually a pretty good one, I think, at least it's pretty sizable one. So if you like, I will read it to us. Yeah, go ahead.

If you're listening on audio, we have a YouTube feed and we put up all the teasers on the screen, and you can see our beautiful faces and admire Mills and Beard. So check us out on YouTube if you're listening on audio. So this is a profitable, large towing company for sale in North Carolina. So in my home state and close to Mills as well, it says since 1995, this heavy towing company has had superior customer service with competitive prices in mind serving most of North Carolina. services provided include gas, tire and fuel replacement, lockout service, jumpstarts for all makes and models of vehicles and motorcycles.

Additionally, they can provide towing and roadside service to all commercial and RV-type vehicles. That means they've got one of those big old tow trucks. They do not do any predatory towing, as every towing company says. However, they do provide breakdown or abandonment removal. This company predominantly works by request and is under-concounter. contract with several city, state, and county, fire police, and sheriff departments. Interesting. They also provide services for all state DOT vehicles of all types.

This reputation makes them the go-to service provider for removal of large assets along the I-95, I-40, and I-85 quarter, covering three states with their, I assume this is $6.325 million inventory of the highest-quality tow trucks. Their service records are impeccable with the maintenance provided by Penske Corporation. Their long-term relationship and professionalism are why they have the highest standard in professional services and also why their employees have an 18-plus year employment history. They meet and exceed all services and relationships expectations and are highly regarded. They provide excellent pay to their existing 13 employees.

And it says top line revenue is high $3 million and $1.5 million average profitability. Here is the actual financial information. it basically did 4 million in sales 3.96 million in sales and 1.5 million of cash flow. So round number. Pretty round numbers. A very precise revenue number and then a very round cash flow number makes me a little nervous. But great margins, if they're real. And they are asking $6.8 million.

So $6.8 million over 1.5. That is a four and a half times multiple. It says, yes, they will finance it. It is located in Central North Carolina, and they will consider a seller note. So it's the reason they're selling is the guy is retiring. They have 13 employees. The owner works 30 hours a week. It says their inventory value is $6.3 million.

Remember, they're only asking 6.8 for the business. That includes all the inventory, it says. Inventory. Let's be clear. Let's be clear. This is not inventory. This is trust. Yeah, this is the value of trucks.

It says they've got $10,000 a monthly rent. I guess it means they're renting their facility. It's a small building, 1,500 square feet. Oh, here's some more information. The business is situated on three separate secured lots that house 27 trucks plus the abandoned vehicles that they have towed. Competition, there are several smaller towing facilities in the area. However, there are only three of this size outside of a 20 mile radius that provide the caliber of towing to support.

the local state and federal towing requirements. It says they've got their real estate is secured real estate, which I assume is fenced and locked, which you have to have if you're towing trucks. And the seller, oh, okay, here we go. Seller will provide two weeks of training for the buyer. There is the seller's son who wishes to remain in place to provide ongoing support.

Slip that in there. You see. All right. That's all we know. Mills, what do you think? So if you're not on YouTube, I mean, these pictures on this listing are awesome. It is like 18 wheeler flipped over on the interstate.

They're having to, you know, if you've ever seen these things, they've got to flip them back over. One of the pictures is like it looks like a tractor trailer has spilled all of its contents. These guys are doing, it looks like majority heavy type work. They also, they don't say anything about it anywhere else. But in that bold part of the listing heading, it says automotive and boat business for sale. I don't know if they like copied and pasted the listing and left that in or if they also will tow boats. I don't know. But this is an interesting business.

I love that it has the state contracts, the state DOT. That is really nice. So your car breaks down on the side of the road. You don't have AAA. Somebody comes to pick you up. I've seen, you know, like they'll put a notice on the car. And I guess if it doesn't get moved within a certain amount of time, it's a liability. And so the Highway Patrol or DOT eventually says, hey, we got to get this car moved.

And it's probably not, you know, weeks and months later. They're going to tow it somewhere. The thing I like about this business is the yard, right? I think a lot of the economics in this business is tied to the storage and the fees associated with. They're not just taking this, you know, down, like off the interstate to a gas station. They're taking it to their impound lot. They're locking it up. And if you want to go get your vehicle out of there, let's say, you know, it's not abandoned.

Let's just say it's been towed. You've got to come, you know, pay them probably a significant amount of money in addition to them getting paid for the tow to release your car. Well, and I'm sure the best part is, right, that abandoned car is sitting there on the side of the road for a week or whatever. They go pick it up. The person there billing is the state of North Carolina, right? Yes. Eventually, the state of North Carolina seizes the car and sells it. And I bet that functionally pays the towing bill.

Yeah. Like they're basically, they're probably the only one taking any money out of that financial transaction. But also, if you want your car, you know, it was abandoned and then, you know,

something happened and you couldn't go get it right away. The fees that they accrue, it might be $25 a day or something like that, you know, for just storing your vehicle for you. I do think, you know, 27 tow trucks,

I think that's a pretty decent size. I don't know the full range, right, of the spectrum of possibilities, but my guess is the lowest margin, highest volume work is the AAA contracts, you know, where you have zero control and you have to consistently perform at probably near 100% accuracy with, we told you AAA, we're going to go pick somebody up and we don't do that. You lose a AAA contract probably after. a few of those. That would be high volume, low margin. You don't even get to pick the price.

AAA tells you what you're paying. The other end of the spectrum is tractor trailer flips on the side of the road and you have to get it, you know, put back up correctly and towed to a place. DOT is like, we needed you there an hour ago, you know, and we got to get this thing moved right away. And that's probably the highest margin segment of this business. I bet it's very high margin. If you're on YouTube with us, I have put up some pictures of heavy-duty tow trucks and what they have to do. I mean, imagine writing an 18-wheeler that's on the side. I mean, these things, it looks like a cross between like a fire truck and a crane. I mean, this is not the tow truck that you picture that tows a car or even a flatbed.

I mean, this is a serious piece of equipment. So I understand that, you know, if they've got 27 trucks, $6 million of CAPEX to buy those seems pretty reasonable based on what these things. are. Well, what's interesting, though, they mentioned they only have 13 full-time employees. So it makes me think that this is a hyper-specialized fleet, right? Typically, you would think, okay, if this is just run-of-the-mill towing, you have a driver and a tow truck, one-to-one ratio, you know, and every truck is on the road, maybe with a few spares. But if you have two trucks, in essence, for every one full-time employee, that tells you that a lot of this equipment is sitting, you know, 50% of the time, which means you're extracting a much higher margin because it's not on the road generating

revenue every single day, every single truck. Well, it makes me wonder, though, is that an opportunity to more heavily utilize your fixed assets? I mean, you get $6 million of fixed assets here. And at best, if all of your employees are on the road, half your fixed assets are still sitting unused. I think this business is one of those that really relies so much. on proximity. You know, you can't be an hour away and say to a municipality, hey, we really want to

work with, you know, your local PD, you know, an hour away. And we will service you. And they're going to say, first question is, where are you based out of and where's your lot? Where our customers or our, you know, our, you know, constituents are going to go to get their vehicle. And you can't say three counties away. Right. So you have to, I think, if you want to, if maybe, let's assume best case scenario, they can saturate this geography more, then absolutely you can do that. But if not, then you've got to go sync fixed cost into, you know, site, office, laydown area, equipment. You know, maybe you could disperse some of this equipment for utilization. But yeah, I think it is a little bit cap-ex intensive. It does say they have three lots. So it says,

I assume those three lots were kind of all next to each other. They could be distributed throughout the state of North Carolina. Right. Yeah. So to your point, Mills, they may have three. of the same big record truck, one on each lot. And then you've got to have employees spread out. So you probably need like a minimum. If you're going to do the state contracts, you need a minimum number of fixed assets. Do you worry about the quality of these fixed assets? I mean, I know they said Penske Corporation is doing their maintenance and their maintenance

is all fine. But $6.3 million. Is that what they paid for them? Is that what they're depreciated value? You know, I'd have questions about the quality of my assets here. I always worry about that. I mean, it's been true for me. I'm not a mechanic.

We have a full-time mechanic. But sellers, founders, are notoriously good at squeezing all the life out of their assets. And they know, you know, kind of enough to peek around the corner and go, hey, these trucks are on their last leg, but we're going to roll the dice and we're going to make sure we get a little bit of life left out of them. Or they know how to kind of rig the thing to, you know, continue running for a little bit longer. you step in, you don't have that same, you know, magic kind of, you know, ju-ju to keep everything running on time. And you can have a lot of deferred maintenance. Yep.

Yeah, which is a real problem in this industry because your assets here are your whole revenue. You know, the phone rings. I need you. This tractor trailer is flipped over on I-77. The traffic is backed up for five miles. Oh, crap. It won't start. You know, that can happen.

Yeah. That's how you lose the contract. But I do think that this is one of those things that from a competition standpoint, they allude to it. But I just don't see a ton of disruption happening here. There's not, you know, even look at AAA. If anybody was going to say, hey, we want to roll up this mom and pop industry, they would have been the ones to do it. But instead, what they've said is this is a really hard business. We would rather use a distributed network and let them deal with all the hassle.

And we just pay them, you know, we pay them, you know, a smaller margin. But I don't, I don't know any national or regional even, like super regional towing businesses like this. And also this is not, as far as I can tell me, this is not really like the, the AAA style towing. Like, this is heavy towing. And, yeah, I don't know if there is the, I don't know if AAA has a heavy towing division, you know, for truckers or I don't know if there's the equivalent of AAA

for truckers or for commercial companies that run trucks or, you know, or whatever. But I think even if there were, to your point mills, there's a reason AAA is set up as an asset light network. They don't want to come in and own all this stuff. You know, they would rather outsource all of the capax and the maintenance and the all that to the local guys. Which tells you something, though, that you can't underweight the capax, the maintenance, and the management of the local guys because clearly the AAAs have decided that's in the two hard pile. Yes, exactly. And I think for most of the heavy rolling stock, like International and Mac and Freightliner and all these folks, they have kind of some on demand.

You see them sometimes when an 18 leaers broke down on the side of the road. You know, then they've got a welder and they've got like a boom arm and they've got like a completely decked out truck that can kind of fix just about anything. But that's it. That's for breakdowns. That's not for the truck is flipped over and we need to write it and move it, you know, out of the right of way. So I think you're right. I mean, I do think there are some people who are doing probably the higher margin aspects of this, kind of the more recurring, reoccurring.

This is just incidental and it happens enough that you get these clusters. There's probably, it seems like this is in the Raleigh-Durham area. You know, there's probably a couple around Charlotte. There's a couple down here in Columbia. But there's got to be at least some kind of density to make this work. You can't just, you know, be in the middle of nowhere in doing this because there's not enough. not enough hits to drive the revenue. Well, I think what you have, though, is what seems to be driving it is the highways.

I mean, because they mentioned the highways in the listing I-95, I-40, I-85. You know, these trucks flip in the middle of nowhere, too. So when you say density, we tend to think density around a city, it's probably density around a highway corridor. Like you have to be able to. Yeah. So I like this business. I mean, to me, so it's doing, on four million.

of sales doing one and a half of cash flow, assuming we're to believe that, really good margins. The massive question, though, is the CAP-X, because they've got what's round to $6 million of inventory. So they've got 4x annual cash flow in assets, right? So your assets are yielding, another way to think about this is your assets before any maintenance are yielding 25% return every year, which is not amazing. you know, because there's going to be some maintenance. So another way to look at this business is, so let's say there's half a million bucks of at least, you know, kind of deferred capax, maintenance,

depreciation, whatever you want to call it, that, you know, of the 1.5 you make every year, you got to put half a million of it away for a rainy day to reinvest. So let's say you yield a million bucks in free cash flow. You got $6 million of assets. A way to think of, I mean, this is almost real, I think you're buying a house or a commercial building for six million bucks and the annual rent is a million bucks. You would almost think about this on a cap rate. I mean, it's like, you know, 15% or something, 15. It's high teens, which, I mean, it's not the end of the world. I mean, you're talking about this is hard work, though. This is not, you know, this is not easy street by any means. I like the fact that it is DOT, you know, it's heavily regulated. There's some barriers

entry, the asset intensity works in your favor once you own this business, and, you know, at least pay down those assets and have a decent balance sheet to support it. What I don't like is how kind of on-call and emergency-related it is because it's unpredictable. You could just have a fluke bad week, bad month, where there's not a lot of incidents. And then you could have really busy months, and your assets can't fluctuate that quickly to support it. Hi, Heather here. When I'm not breaking down deals with these guys, I'm helping people get the right SBA loans for their business acquisitions. Because when you're buying a business, the best financing isn't one size fits all. There's the best rate, fastest to close, the specific

loan structure that you need, or a little of all of those things. That's why my company, Vizo Business Capital, works with over 30 different lenders to find you the best funding in less time and with less friction so you can focus on the deal. Sign up for a free live Q&A session on SBA loans at visocap.net, then click Zoom sign up in the top right corner. That's V-I-S-O-C-A-P.net and click Zoom sign up. I like the DOT kind of right-away businesses that are a little bit more scheduled and predictable, like tree trimming, you know, or weed control. There's a business I looked at that has these crazy, like cutterheads on the front of a boom that basically, if the tree's small enough, it just like grinds the tree down to like pulp on the side of the road. And you'll see, Bill,

they've been doing it on 77 where, you know, either side of the road, that stuff has to get cut back routinely. I like that because they, it's probably more competitive, but it's scheduled. It's predictable. You can say, you know, hey, this 20 miles stretch, we're doing two weeks from now and we need to plan and prepare. Or we got a contract and we have X number of miles to do. This is just, you got to be on call. It's like the disaster business. The rest of you. You got to just have 50 people that you can call it a moment's notice in a trailer full of fans and dehumidifiers that you can go pull and have to show up within an hour. I mean, that's the nature of this business and those businesses that I think make it, you know, you got to earn more margin if that's your business model. And it seems like they are.

Well, but that's why the fans are a better business model because the fans that are cheap. You know, a fleet of fans is not very expensive. A fleet of heavy-duty truck trucks is $6 million. So the thing that bums me out about this is that the rate of return on my assets is not very high. There are real estate investments that you could yield low teens. There are other businesses that are much less operationally complex that will yield similar returns. And also, there are businesses that are equally as operation complex that will yield higher return on assets. So this is a little bit in a no man's land that I do.

don't love because of the capital intensity, but I do not think it's a bad business. Let's talk about the sun being involved, because that is a total coin toss. You could, you know, 50, 50 chance that this person is the bane of your existence. They, you know, are entitled. They want to take the business away as soon as you get involved, you know, and, you know, undercut you and undermine you all on the way. Or it could be a dream scenario where this person's like, hey, I just, I just didn't have the wherewithal to do the finance.

the office part of this, but I'm an expert when it comes to rigging. I'm 40 years old. I got a long time horizon. I just, me and dad knew that I couldn't take this thing over. And you could have a partner for life. But coin toss. Who knows? Until dad dies and the $6 million you paid for the business ends up in the sun's pocket and he pieces out to the beach. He's like, dang, you've been making this much money all along. Yeah, exactly. So I think net net, it makes me more nervous than Because, yeah, I agree, Mills, the charitable situation is maybe you just got an expert employee here. But I would much rather just have an expert employee who was not the son of the seller, right? You know, being the son of the seller increases the risk dramatically here.

So I would during diligence be asking a lot of questions around why is the son not just taking over? What is the true relationship here? All of that. You know, similarly, like I'm about to pay the money to the dad, is the money going to end up in the son's bank account in five years and then I have the problem that my key employee just had a huge windfall. Yeah, and I can't pay them enough to show up to work. Right. Exactly. So this and then of course all the emotional like I've worked for dad for so long, Mills is my new boss. You know, I perceive Mills as the guy that just pay my dad $6 million because of course he's going to know.

Oh, so Mills, this, you know, the rich, fancy guy from the big city now owns my family towing company and I resent him immediately on day one. Yeah, there's a lot of ways it could go wrong. Yeah. So that makes me nervous. I would be wondering if there was a way to do this deal without the sun remaining. I think that's so tricky. I mean, obviously, you would know in the first 30 minutes of a site visit which direction this is going to go.

I've heard instances of like family sales happening. I was not firsthand at this, but I heard it from somebody who was there. family sales situation is happening. The dad and one of the sons is present because the other son is so disruptive and the other son shows up to the meeting uninvited and just starts trying to destroy the deal like mid-negotiation. I mean, it can go really bad. We're also assuming there's only one kid. What if this kid is one of five?

And he's like, look, you know, nobody else works in the business. It's just me. I'm not going to have enough to retire off of when my mom and dad pass. You know, like, so there could be a scenario. where it could work. And insight visits, you know, in the first 30 seconds, in the first five minutes, in the first 30 minutes, you can tell so much. And I think this is probably one of those cases.

I just think, I don't know, I would probably only do it if there's a way to align really well with the sun. I think if you go in and you try to offboard the, you know, the second generation that wants to remain, it can blow up in such a big way. I don't know. That makes me worried. Yeah, kind of either way. If you keep them, it's iffy.

If you offboard them, it's iffy. Yeah. Yeah. It's hard to know without knowing the personalities involved. Especially with a business this small and with this few employees. So if it's a hundred person organization and there's a lot of mid-level management and you just have a second generation person who's like maybe mid-level, you know, head of marketing, not like head of sales or something. You could say, okay, maybe they're underperforming. and we can kind of help them get on the right path,

but they can't extract a third of the organization with two phone calls. In this case, if things don't go well with this person and they want to leave and they want to burn you on the way out, they've probably been living in the same neighborhood as most of these people, right? They've grown up in the business. They've grown up with all these people.

They have a lot more leverage than you. And if they decide to exert it against you, you're getting a short straw for sure. Yeah. Well, because you need them, right? Because they're driving the trucks and you're not rigging the overturned 18 wheeler on the side of the highway. I mean, the small defense that you have is that they can't walk out and start another business

because they don't have $6 million to buy the trucks or the DOT contracts. So in some businesses, not only you're dependent on the employees who can leave you high and dry, but they can leave you high and dry and compete with you, like in a services-based business. Luckily, this is not bad, but you are still very dependent on people who might be loyal to the sun, which is- There's a business here that I know. fairly well that um two sons took it over one of this it's a is a rigging business it's it's kind of eerily similar um it's not tow trucks but um one of the sons passed away in an accident a rigging

accident and um the business you know the key long-term employees were like it's just too difficult to stay it's too traumatic they left you have this big big big pile of assets thankfully it was not like a debt laden transaction you know where somebody's left holding the bag of of a lot of CapEx, a lot of equipment and assets that had to be funded with debt. But key employees just kind of left. There were a few that remained, but they all just went to competitors and a big national consolidator came and bought them out. And everybody's kind of like, oh, my gosh, like what a, just what a tragic situation. And that was not even, there was no ill will. It was just a tragedy. That's why I have key man insurance, right? Yeah. Yeah. Okay. So,

$1.5 million of cash flow, maybe there's some deferred maintenance. Asking price, asking price $6.8 million. What do you think? Hitting the bid, too pricey. How does this work? I think it's two times overpriced. I mean, two turns overpriced at least. I think that this is a $3 million.

And that's assuming that there's maybe some maintenance, because if their maintenance CapEx is on a contract with Penske, they're probably recording it somewhat accurately. You know, it's hitting the income statement. It's not just perpetually deferred and hidden. But I think this is, you know, three, plus or minus three million dollar enterprise value business, not 6.8. Well, but here's the problem with that. What do you think you could sell the trucks for? Just on their own, you know? Yeah, I think, I think, you know, it really gets under my skin that they're calling the trucks inventory. That just drives me nuts. But it they have that's probably cost, right?

Or it's probably replacement value. But these, these trucks, if they have 27 of them, I bet some of these things are, you know, 15 plus years old. Yeah. So I don't know that I don't know. I think that that like you said, that's a huge hurdle in instances like this because they're like, well, look, I paid all this money for these. And this is what they're worth if I tried to replace them. How could I take three or four million dollars? for this business when I got $6 million worth of trucks.

Yeah, or you could end up in a place with, you know, maybe they paid $6 million for the trucks. Maybe the trucks are worth $3 million on their own, but nobody will pay more than $3 million for the business. And so it's like this coin flip, whether you just dissolve it, you know, because you haven't really accrued much equity value beyond the value of the assets. And that kind of always arises where you have an asset heavy business, where the return on those assets is so low in the teens, you know, or the low 20s, which we described

earlier in the episode, right? Because when the return is so low, you put a, you know, a 5x, if a return on assets is 20%, you put a 5x multiple on the cash flow from the assets and boom, you're right back to the asset value. Right. So it's just, it's tough to get a transaction done in those scenarios. So I, I would sign, I mean, it's in North Carolina. So, you know, it's, it checks the box of proximity for me that's really important. I think it would be a very fascinating site visit. If you are in the market, this is a huge opportunity to learn to go and, you know, sign the NDA, ask thoughtful questions, go down the path, go to a site visit. This type of site visit is a hundred times better than, you know, going to visit a CPA firm site visit or something like that.

You are, you're in it. They have a, I promise you on premise, they have a refrigerator that is stocked full of light beer. I guarantee it. So you're telling me that these guys are probably sitting around drinking Miller Light and then they get a phone call and they run the brain. Who's most capable to drive? Oh, boy. Oh, boy. Who's most capable to drive the million dollar heavy wrecker? Yikes.

I'm telling you, I need a listener to go to a site visit on this and confirm the beer fridge. I would put money on it. I'm telling you, it exists. It's there. Somewhere there's a beer fridge with your name on it, searcher. In Raleigh, Durham. Yeah. Well, but this is a fun-side visit, too, because to your point, it's not a CPA firm.

You sit at the computer like, you're going to do a ride-along. You're going to pull an 18-wheel-air out of a ditch. You know, you're going to see how this business works. You know, this is a real everyday, everyday dirt under the fingernails business, which is pretty cool. The thing that I think would be cool about this business that we've done a little bit is they are leaving a ton of opportunity on the table by not, like, not telling the story. Like, if they have a website, it's probably very antiquated. because they're like, what does our website do?

We don't, you know, but you could take epic pictures of, of the instances that, the problems that they solve, and you could totally blow up on social media. You could put that all over your website. You could use it to recruit. That's the biggest thing. You're not going to get tons of customers that way, but you could use it to recruit top-tier talent and let your branding be magnetic in that way because these are like amazing before and afters.

These are amazing problem solvers. The guys who go out there, they have to roll in sight unseen and have to be able to solve for 100 scenarios with just what they have on one truck. It's cool. Yeah, I mean, they're practically engineers, right? They got to understand all the leverage points and how to pull an 18 wheeler up without smashing it. You know, these is technical work. And so if they have 13 employees, 27 trucks, if there is asset leverage here, recruiting could be the key, the key thing you need to grow this business. Maybe you need more employees who can do the work and you can cover a bigger area.

because that's, I think, sort of the only thing that makes this work, or this is the thing you've got to have, which you've got to have a thesis on how to get more leverage out of these assets. You've got to have a thesis on how to grow this business without buying more trucks. Because if you've got to buy more trucks, like you already have debt from buying the business, you already have the deferred cap X. There's not a ton of cash flow left over for growth cap X also. And maybe that's why this thing's been around since 1995. and is only, you know, as big as it is, four million in sales. Like, it's just hard to grow this thing if you need more and more trucks to grow. So going into this, I would have to figure out how do I get more leverage out of the trucks I've already got?

Totally agree, man. All right. Well, if you're into towing, you sign the NDN this one. We would love to hear from you. Find us on Twitter. We are ACQU Anon on Twitter. And also go check out our website. I don't know that we've ever done a towing business before.

So this will be the first one in the towing cap. category on the website, on the towing tag. But we have about 350 episodes at this point of Acquisitions Anonymous, all categorized by industry on the website. So go check it out if you're into this type of thing. Follow us on Twitter and hop on our newsletter. Also, we send one email a week. It includes all the episodes we did for the week, as well as cool stuff from the hosts, articles, fun things on the internet, tweets, et cetera, that you'll probably like if you like this pod. So thanks for tuning in. And we will see you next time. Thank you.