Acquisitions Anonymous - #1 for business buying, selling and operating - Will we get cut by $4.4mm glass fabrication business - Acquisitions Anonymous 215

Episode Date: August 1, 2023

This week the whole crew break down a glass fabrication business and how these types of businesses differentiate themselves. Check out the listing: https://www.bizbuysell.com/Business-Opportunity/Commercial-Glass-Fabrication-and-Installation-Co/2102173/Huge thanks to this week's Sponsors.Employer Flexible will help you take action to streamline your company’s HR processes. They  are the proud provider of flexible and adaptable PEO services. If you’re a small business trying to grow, and you’re struggling with a lack of internal HR or you’re just dissatisfied with your current HR setup, consider Employer Flexible as your next vendor for HR outsourcing services.Check them out at https://www.employerflexible.com/.-------------------CloudBookkeeping offers adaptable solutions to businesses that want to focus on growth with a “client service first” approach. They offer a full suite of accounting services, including sophisticated reporting, QuickBooks software solutions, and full-service payroll options.Subscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

Welcome to another episode of Acquisitions Anonymous. I'm Heather Anderson, and today we talked about a really interesting small company. It's a commercial glass fabrication and installation company in Virginia. You're going to want to listen to what Mills has to say about it. I learned a lot about what this kind of business really does and how they differentiate. That was really cool. And at the end, we're going to talk about who should buy this kind of business. Stay tuned.

Today's sponsor is Employer Flexible. And what Employer Flexible does is really function as a fractional HR department for your company or business. I've used them numerous times and putting together my companies. I've used them when I bought companies, I've used them when I started from scratch. And basically, when you're moving quickly or when you don't want to spend the time putting together your own HR department, benefits, all that kind of stuff. And you want to get the scale of being part of a larger group, you can reach out to Employer Flexible. And what employer Flexible does is give you that buying power as if you're part of a bigger company. group and all that kind of stuff. And for me, I love working with them for numerous reasons.

One is I know the owners and a lot of the staff and they've always treated me super good. And then the second thing is I hate HR. Like I don't enjoy it at all. And this way I can know it gets done right. I get the benefits of having a big fully staffed HR department and the flexibility of having a vendor like employer flexible being there as a partner throughout my journey and making sure that everybody I work with is happy, taking care of. and we can focus on what really matters in our business, which is take care of our customers. So you can find their contact details,

locations of their various offices, as well as more details on how they will help your business by going to employerflexible.com. And again, that's employerflexible.com. And thanks to them for sponsoring today's episode. Hey, Michael, are you doing okay? Okay. For those of you listening, I just spent the past five minutes complaining

about people talking about my appearance. and Heather noticed that I went to the dermatologists yesterday, and they cut a potentially cancerous thing out of my skin. Michael has a fireworks injury on his face. It's a sun injury. Actually, my dermatologist told me, she's like, you're doing a great job wearing hats. I see how you're protecting your scalp,

and you are doing a wonderful job. So, yeah, I got that at the dermatologist yesterday. Very nice. That's like the dentist telling you you're brushing well. very good the gen x folks didn't get told you know to stay out of the sun when we were young so we didn't i don't i don't know if you look back at pictures um heather of when like you were younger and uh like when we were my wife and i were like 25 28 we'd call these vacations and i'm like we were sunburned the whole time like here's us sitting in the sun here's me like just skin like peeling off my

face and uh times have changed a lot we use baby oil at the beach that was are tanning, you know, that was crazy. Crazy. All right, well, we got a cool deal to talk about today. Marshall Glass fabrication and installation. So, pretty interesting one. You want me to read it? Yeah.

Okay. It's in Prince William County, Virginia, which I guess that's outside D.C. It's basically a D.C. suburb. Is that right? I think so. So asking price is $1.25 million. Cash flow is $400,000. And there's the link for this deal. We'll put it

in the show notes, as we always do. Gross revenue, $4.4.4 million, EBIDA, $400,000. So profiting about $400,000, revenues about $4.4.4 million, and asking three times earnings, basically. Been around since 1959. The description is a high profit glass go for sale. What's a glass go? As a typo.

Do you know what, Mills? Or is that just a typo. It's co. Glass Co. Oh, Glass Co. Okay. Well, off to a good start. It's already driving me and Heather.

crazy with typos. So, founded in the 1950s, this full service, full service, full service glass fabrication and installation company has a broad base of loyal clients. Approximately 85% of its work is commercial, curtain walls, storefront, tenant fit out. 10% is residential, sour enclosures, and 5% retail, tabletops, mirrors, etc., picked up from the company location. Its commercial work includes data centers, multifamily residential, restaurant, and other retail fit out, offices, buildings, etc.

It's a loyal GC customer base feeds at a steady stream of bid invitations of which the company only submits bids on a small percentage. The company does no marketing, relying on its reputation and existing customer base. They are in leased real estate located in Prince William County, Virginia. They don't tell us the size of the building, but they have 20 employees. Oh, here it is. It's a 16,000 square foot facility, which encompasses a showroom, multiple offices, production, and warehouse space. It's located in one of the wealthiest markets of the entire country, which has the largest data center concentration in the nation third in the world. With the U.S. government fueling spending, the market area enjoys

strong economic upturns and is relatively sheltered from downturns. This company's services are in strong demand. However, the owner treats it as a lifestyle business, enjoying a comfortable salary and not making any significant efforts to drill the company. The company's website is antiquated and unattractive and there is no marketing program at all. The company just responds to invitations to bid and communications from existing clients. New, more energetic ownership could easily leverage this company's 70-year history, an excellent track record of completed projects into a much larger and more profitable company. The owner will stay with a company for a reasonable amount of time after closing to

ensure a smooth transition and new ownership. And it is listed by Bill Blumberg of Prime Investments, who is somewhere out in the middle of that sort of prime investments. So it looks like he is a business broker. So that's what we do. What do you guys think? Mills, this is right over home play for you, right? Like, you know a lot about this?

Yeah, I've looked at a handful of these. Funny story really quick. I went on a site visit one time in Northern California. Or no, no, it was in Gardena and looked at a business that was in the same industry. They actually did like a very specific type of glass and glazing work. And it was one of the weirdest site visits I've ever been to. In the middle of the meeting with the investment banker, the investment banker starts getting texts, I think, from his family and he was having some issues, and he left in the middle of the site visit.

So then it's just me and the sellers, which is usually like a big no-no for investment bankers. And then it was very clear that, you know, we were not what they were looking for and vice versa. And so then one of the sellers leaves. And then it's just me and one of the co-founders. It was my birthday. And the guy was like, look, you're here. I might as well take you to dinner. And so I go back to my hotel.

He goes back to his house and then we meet up for dinner. And I get there and I realize I'm way underdress, but I'm early. And I go to, I go to like a burks or like, you know, Beals or like one of those kind of, you know, places. And I'm just looking for a sport coat. And all the sport coats that I find are like way too boxy. You know, I'm just like swimming in this thing. Like my, you know, the sleeves are too long. And then finally I find one that is actually like a little bit more slim thin.

I'm like, this is great. This is perfect. So pop the tag off, wear it, go to dinner. And I get home and I realize it's a women's blakester. The fabric on the inside is Pocodod. And I spent 40 bucks and I threw it away after the fact, but I at least went to dinner in style in California. The founder of the business ordered like a $350 bottle of wine for my birthday.

And I was like, dude, I'm not even, I don't even know the difference between good wine and bad wine. I hate to break it to you. That's my funny story about glass and glazing. Do you know the only other person I know of that wore a woman's suit to work, Mills? It's Michael Scott from the office. Yeah, you're a lot of stuff. I forgot about that one.

Did you guys ever see that episode for the office? He wore a women's suit for like, and by the way, they carried it on to future episodes. He kept wearing it. It fit him really well. I know the feeling. So these businesses are actually super interesting. This is a perfect case of like, why is this business so small? Why is it stayed small?

And, you know, they at least allude to it. It's largely a lifestyle business. They have a really good picture that we have up on the screen, but curtain wall is the name for the glass that goes on the outside of like skyscrapers, which you would think of as, you know, is a large commercial building. It's not structural in nature. Obviously, glass isn't. But they build the frame with structural steel. They frame up the building.

And then this is the stuff that, you know, creates the building envelope instead of brick or stucco or wood siding or whatever. whatever. It's one of the most inherently litigious industries in construction, along with roofing in a lot of ways, because you put these things up and they have to be watertight. Otherwise, the building floods. And so, you know, five, ten years later, you end up with problems if it isn't done right. It's almost all or it's at least majority new construction because people don't, you know, renovate brick buildings and turn them into, you know, curtain. One of the big ways that people differentiate in this industry is the difference between what's called unitized systems and stick-built systems. So like windows that you put in your house are unitized. The whole window and the frame and everything is already pre-assembled and you order it and you pop it in the hole that's already there. Stick-built systems, you're buying what's called aluminum extrusion. So you're buying these specific molds that the glass sits in and then they get caulked and sealed, you know, on the inside and on the outside so that it's water doesn't get in. To really grow one of these businesses, you have to have a brand around

your stick-built system. And you get speced by architects and you get written into the spec. And then all of a sudden, whoever is building it, whoever is actually doing the building, they have to use your product. That's how these companies go from, you know, in this case, $4.5 million in revenue to, you know, $40 to $80 million in revenue is you have to be written into the specs. But this is a very small one in the grand scheme of things. it's probably, it's probably small for some of these reasons. So the goal is to try to create, you know, super curtain wall TM. And then the architect who's designing the next skyscraper is comfortable with super curtain

wall. And he specs not, it must be curtain wall. It must be super curtain wall TM. And then it has to be you. And I'm sure you charge, you double the price and the margins go up, et cetera. Yeah, there's some loopholes. And there's ways people get around it where they say it can be that or equivalent. But there's ways that people try.

and differentiate, you know, on some of these things with kind of different bells and whistles and features. But for the most part, all the folks in this space are they're a manufacturer and they're an installer, which is hard, right? I mean, you have to have, they have 20 employees, you have to have people go out in the field, deal with a construction site in existing conditions that may differ from what the plan said. And some of these things are not that forgiving, right? I mean, one, you're dealing with glass, so it's inherently difficult and fragile. And then if the plans said, hey, this opening is going to be this size and you get out to the job and it's a different size, there's a very low margin, you know, margin for error. And usually what happens is the building gets built.

The plans say one thing. You go out and field verify and measure and then you order the glass because none of these people are making glass, right? They're buying it from really, really large glass manufacturers. and then they're going and installing it. But if you order the glass and it's the wrong size, you know, it's a big, it's a big, uh-oh. That's an expensive factor. So my buddy owns one of these.

And by the way, he has the best name ever to own a glass company. His last name is Sharp, which is good. But that's not as good as my dentist's last name. His last name is pain. No. Anyway, my dad calls him Dr. Painful. But he's not that painful. He's actually really good.

Anyway, so I've toured his space, and it's exactly like you're talking about Mills, and it's at a bigger scale than this. They're probably 10 times the size of this business, maybe larger. But they're getting the glass in and these, you know, the different like components in, and that comes in. And then they have a big kind of a risk moment where they have to make sure that they only get one shot to cut that glass correctly. And, you know, there's horror stories where he'll order $150,000 worth of glass.

they cut it an inch too short and like big trouble happens. Like you have a lot of one way kind of errors that can happen here. The other thing that's really interesting about this business, this one lists 20, 20 people in it. My buddy's business has a similar thing and finding the type of people who are interested and learning how to operate those glass machines, which are basically CNC machines,

computerized and all that kind of stuff, and like want to be in a hot, you know, or even an air condition, you know, sometimes air condition, like to do that kind of job, like the blue-collar labor of a business like this has become incredibly difficult to find. People don't want to do those jobs.

And you'll walk around like these types of facilities. I have another buddy that does truck add-ons, right? Like, you know, trucks come in and they put stuff on the back of the trucks. Like you walk around, everybody's like 55 or 65, like all the blue-collar people. Like they're not able to recruit young people to come and do some of these jobs.

So anyway, not saying it's an impossible thing to overcome, but that's one of the things you're buying with a business like this is, yeah, good luck finding 20 people in one of the most expensive areas of the country outside VA or in outside DC to come in and work in a business like this if you want to start one-up and compete with this guy. One thing that is nice about being in that part of the country that a lot of businesses in the construction trade really benefit from is the amount of federal funds that go towards these projects. It is a little bit of a double-edged sword because there's kind of consistent demand. But, you know, the general contractors who bid on the work usually, you know, kind of benefit from, in some cases, set aside contracts or, you know, VA-owned businesses, minority-owned, female-owned businesses.

And a lot of times they have to dictate that a certain percentage or a certain dollar amount of their subcontracts meet that standard to. In this case, they don't say anything about that. So it's probably not the case. But when you do a lot of U.S. government work, it can be very kind of steady and predict. and avoid some of the downturns that they talk about because those buildings are always getting renovated and they always are kind of on the leading edge of, hey, you know what, lead-based paint is bad. We need to abate all the lead-based paint in every federal building. Or, you know, we need to make sure that we, you know, redo all the windows to meet energy standards or, you know, redo the roof to meet energy standards. All of a sudden, you know, you're always on kind of the leading edge of that. And then commercial privately on buildings kind of follow because the building code enforcement lags on that sometimes. So, You're in a really nice kind of segment of the market being commercial. Doing this in people's houses and like doing shower doors and things like that is very,

very different. It's a totally different customer acquisition process. All right. Taking a quick pause here. I have something to tell you. This is Michael. I hate bookkeeping. I hate bookkeeping.

I hate doing HR. I hate doing all that kind of stuff. But for bookkeeping, I have found a solution. It is my friend Charlie's business called cloudbookkeeping.com. So that's cloudbookkeeping.com. They are your perfect partner if you want to get bookkeeping out of your hair and focus on making your customers happier and more successful. So please give them a call, call Charlie, cloudbookkeeping.com, tell them we sent you.

They're a great way. If you're a business buyer, if you're a business owner, you're tired of hassling with getting your bookkeeping done. He's got a whole fleet of people that are. well-trained and work for him. He's located here in St. Antonio, so I can tell you because of that, he's awesome. And they're a great partner for you to potentially call to help with all your bookkeeping needs so you can do the important stuff in your business rather than worry about getting

your books right. So give Charlie a call, cloudbookkeeping.com, and now back to the episode. I mean, Heather, as you think about, like, first of all, I'm going to ask you a specific question because we haven't allowed you to talk yet, and I'm excited to hear what you have to think about this one. But as you think about, like, I'm sure you've seen deals that look like this from people, right, who are, this seems like a perfect, like, I want to get an SBA loan. I want to go buy myself a business with durable demand type thing, or is that not the right impression by me? I mean, part of the reason I was quiet is because most of the time a lender sees something like this and we won't lend or can't lend because of the amount of project work that's involved.

So it's not that it's not a good business, but when you try to do a 10-year SBA loan, to a business that has, you know, possibly cyclicality. That would be the first thing a lender would think of with construction and new construction. And then also project lumpiness. We call it lumpiness, you know. Projects come and go and you might have a quarter or two that are really low and they might have difficulty making payments. So a lot of lenders will just steer completely clear of anything where it's construction

and heavy project work. So I don't have a lot of experience with this kind of business because of that. So is it generally true that project work is not blendable until you get really big? Generally, that is true. So that is one of the questions that is always asked, what is the revenue mix in different businesses between project and repeating, reoccurring, you know, different versions of repeat customers? If it's too heavy project, most lenders will say no, you know, because we know it's going to be lumpy and that it can evaporate very quickly. if the conditions are not good. So yeah,

project work is tough to lend on. It's tough to lend on. Maybe they've already got a bank in place that's been financing their project. Because I would think also you need a little bit of a line of credit here with a business like this. Or it gets very, very chunky, right? You've got to lay out $150,000 for the glass. And this business only has $400,000 of cash flow. You got two or three of those projects going on.

You need a line of credit. So I'd be interested to understand, you know, since 1960 they've been doing this. They've probably figured out how to finance these projects. Or maybe they find a way to get the GC to finance it, you know, pay them up front for the glass. What I've seen most often when the business is this old is that they've just accumulated enough cash to self-fund those projects because it's really difficult to get lines of credit for contractors too. same thing. The banks don't like to extend lines of credit. There's kind of a period of time. I'm trying to remember what year it was where Wells Fargo famously pulled all the lines of credit from all their contracting businesses, regardless of how healthy they were. They just pulled back on all

of them, and they all were left in various states of disarray trying to kind of regroup from that. So it's kind of common for a small contractor to have a very difficult time getting a line of credit. And so they tend to have to find other ways to finance the projects. And one of those ways is just over time accumulating cash on the balance sheet and being able to kind of live within the means of their own cash. Most of the deals I see, even outside of this industry, right now, have excess cash on the balance sheet. It's one of the things a lot of buyers don't think about. The excess cash right now is generally left over from COVID.

It's, you know, PPP forgiveness and maybe EIDL loan. and even ERC credits in some cases. So what you're seeing is balance sheets that have excess cash. And so it's allowing some of these business owners to do different things with that cash and maybe improve their margins a little bit. Buyer comes along doesn't have that excess cash is going to need lines of credit and other ways to finance. But I would guess this business is self-financing the projects rather than having a line

of credit because they're pretty small to be able to get a line of credit for this. So if you're going to borrow to buy this business, you've got to put a fine point on it, increase the size of your loan. You're going to need a higher working capital amount in your loan to fund to the balance sheet because that's probably your last chance to get credit. You're going to be able to get credit maybe if you're lucky buying this business, but after that it might be hard. So you better essentially over borrow, which makes it kind of inefficient, right?

Because now you're paying interest on balance sheet cash. It's essentially like you've fully drawn your line of credit all the time. even when you're not using it. Right. Right. And you're so right about that's your last chance to get credit. So if you buy a business and you don't have enough working capital and six months later, and believe me, I have seen this happen, you're back to the bank saying, hey, I didn't get

enough of a line of credit or I didn't have enough working capital on the balance sheet. I'm really struggling with cash. You know what the answer is going to be? It's going to be no. Because now the bank is worried that they made a bad decision and that, you know, really the reality is the bad decision was made in the beginning. not to put enough working capital in in the first place, and they should fix that decision, but that is not the way the mentality tends to work. And so if you ask for money shortly after

closing a deal, it's going to send up red flags in the bank, and they're not going to want to lend. So you've got to make sure you have enough going in. And then you also end up in this pickle where you can't borrow from any other bank because your current bank is senior, right? And they're not willing to subordinate to anybody new. And nobody new wants to come in and subordinate to all the acquisition debt. And also all of your assets, your inventory and all that stuff, is already all tied up by your SBA loan or your acquisition debt. So it can be very, very hard. And I think this is one of those key places where first time buyers get screwed and repeat buyers have a real advantage. You know, once you realize the psychology of the bank and that this

is really your last chance to get credit and you need, you're going to be in bed with this bank. So if you want credit in the future, it's going to have to be from this bank. So you should be asking this bank before you even go in on the deal with them, what's your appetite for a line of credit after the deal? Do you do lines of credit like this? Show me some other deals in which this has happened. What would be your criteria? You almost need to pre-negotiate any future debt needs that you might have for the next

several years before closing, before you get in a bed of these guys. And when you go to another bank, they always want to know, just like when you have existing investors and you go to new investors to get them. to invest in it. They want to know why do the people who know the most about this business pass already? So you know what this weird, like, you know, computer science, like this threadlock situation where because you can't get any, you can't get any more credit just because of the dynamic of the situation with

your existing bank, no other bank, every other bank's going to look at you with an eye of like, well, why am I the lucky lender now? And it creates this, like, potential really dangerous precarious system for situation for these businesses. So, yeah, if you go to a bank, you really want to have. have a good reason for them to understand why you're a good borrower and not why they should be scared of you under the circumstances. And anyway, that's my banking psychology lecture for the morning along the lines of your

comment, Bill. Yeah. And I think when it comes to lines of credit, there's not very many banks counsel their clients to do this. I certainly do, though. Do a cash forecast. Before you buy a loan, do a monthly cash forecast, not a P&L forecast. but like the actual cash position, the receivable position,

and look at what month you think you're going to have the biggest deficit. Run scenarios on growth, on no growth, take into account the seasonality. That will inform you and your bank how much working capital you need. Because a lot of times the banks just, you come in and people ask for, I need $500,000 line of credit. And the bank doesn't, says, no, you don't. You need less. And there's no, like, model to show them.

No, here's why I think I need $500,000. So that's just something that every business buyer should do is that cash forecast. I think it's also like, to me, banker quality, we've talked about this before, is like such a huge deal. Like a good banker is going to ask for that stuff. Like show us your cash flow projections for this year or next year. And, you know, a lot of times they don't. He's just like, oh, okay, what we're going to do? We're going to get this through loan committee one way or another.

But, you know, it's a good forcing function and a good test to see, oh, is this a banker actually that knows their stuff, right? And as we've talked about a lot, like, people think they're working with a bank. You're actually working with a banker. Like, that's, and if your banker leaves that bank or your banker starts acting stupid, that's who you're dealing with. It's not like Wells Fargo is going to save you. It's whoever you're dealing with at Wells Fargo that's going to save you. Yeah, your banker leaves and you get a new banker signed.

You just started over from scratch. Because the thing about this new guy or girl just showed up at this bank and they don't want the first loan they make to go bad, right? So they're like, you know, even though you're on the finish line with other banker, you're new in the job. They're not just going to take other bankers word for it on the risk. They're going to re-underwrite you from scratch because it's their ass on the line. Like you're in their book now. And they're new to their job. So it's, I mean, I've had deals. I've literally lost a deal because of this. A banker left kind of close to the finish line and the whole thing fell apart. It was brutal. Yeah. The other thing that

super fun is when bankers leave. Like, it's the most kind of cryptically weird thing, because most of them have, like, these non-solicit and non-compete things as part of it. And so, you know, you'll get, like, your banker will just, like, disappear. And you won't hear from them for, like, a year. And the reason is they were contractually prohibited from talking to you. Or you'll have some situation where, like, we had a relationship manager, a loan officer, where his agreement was like kind of nebulous in terms of what he could like talk,

but he couldn't solicit. So like we just get like these cryptic personal emails from him like, hey, I'm going on vacation forever. And it was just like, what is it? Like don't forget me, but like he wouldn't talk business. It was just like the weirdest is the weirdest thing ever. So anyway, I love the vagaries of the banking industry. Your former colleagues are super weird, Heather.

That's all I have to say about that. Oh, you don't have to tell me. I think some of it wore off on me, too, by the way. But, you know, I think what's nice is in the age of social media, you can reach out to your banker. You can find them on LinkedIn. You can find them, you know, very, very easily. But it's you, the customer, has to reach out to them. You're right.

In most cases, they are not allowed to reach out to you. But if you reach to them and say, I would still like to work with you, where are you? That's fine. Then they can continue the relationship. Well, it's good. Sounds great. So let's talk about this deal. I mean, who could do this deal?

I have a theory, but I mentioned what you guys think first. Someone in the industry, right? Like probably a good add-on. So either an add-on to existing glass and glazing business or maybe even better an add-on to someone that does a complementary part of skyscraper construction so they can now, you know, bid more of the project and capture more of the economics if they have this capability to. My other thesis, and I don't know if you guys remember the,

The poop boat episode? Did we do the poop boat episode? Yeah, yeah. Remember that guy bought, he bought the business for his kids to operate while they were in college to learn how to do business. And they were, like, riding around this lake, like, soaking, sucking poop out of people's like boat waste systems. So I think that's another place of business like this transact, right?

Like you end up with, you know, 30 to 40% of it, seller financed. You know, daddy helps somebody, you know, get started. in business. And I know this is precisely the perpetuation of classism and why white people in America have a leg up and stuff like that. But like given how difficult this business is going to be to finance for a normal buyer and also the size where it's just like too small to be like, well, if I'm going to do all this work to go buy a business like this, why wouldn't I go by when doing 15 million? Because I can still do an SBA. theoretically, it's easier for me an SBA loan there. So, you know, I think because this is number one where, as we dug into it, understand why businesses like this trade

at relatively low multiples. It's because they're hard to finance. They're hard to predict. And then this one is like super small, right? And so I think all that together means it's going to be somebody creative, maybe somebody with, you know, their competitive advantage is. Daddy has some money and go from there. So anyway, did I just get myself canceled again by saying? Yeah, maybe. You know, you know what this would be a really good add-on for? A warm farm in Northern California. This would go great. This would be your uncorrelated with your warm farm in northern California.

By the way, I think giving your kids a pile of money to buy their first business is a huge parenting mistake. I wouldn't do it. But I see people doing it all the time. That's because if your first foray into business is spending a pile of money to buy a business, whether it came from yourself or your dad, also a bad idea. Right? I mean, like, just cannonballing into business.

ownership with no prior experience is a recipe to get absolutely murdered. You know, however you end up in that situation. Oh, but wait, Bill, they're search funders and they're so smart because they went to Harvard business school and they're 27 years old and their last job was middle manager at Procter and Gamble. So they definitely know how to run a construction firm. Hey, there are a lot of those beautiful people listening to this podcast right now. Oh, hey, guys.

I'm attending them. Look, the reason I say that is, like, don't not go buy a business. folks, but like understand where you're at, right? And like, I've seen folks like that go into a small business and I was one of them and I thought I was 28 and I knew everything. And in reality, I held myself back because I didn't go and trust my management team and listen to them and be a partner with them. And instead I came in like I was, you know, the general in charge, right? And like, it was just, it was just dumb, right? And it took me years. It helped me back here. So just, you know, understand where you are. It doesn't mean you shouldn't go do this stuff. But like, don't get

yourself in trouble by being overconfident. Your, your HBS degree is great, going to have a great network for all that, but it's not going to suddenly make you have the same experience as somebody with 20 years in the seat running one of these companies. So that's why I say it. I have another confession. I go to the HBS ETA class every year. I'm invited to be on their lender panel. So I've been in the classroom for the last five years. You know, most of them don't, don't come into it so naive. Most of them really are prepared for what they need to know. And the reality is there's just certain businesses they shouldn't buy as their first business. And I think, you know, as long as they kind of stick to that, there are some that they can be successful in first time around, but

others that maybe they shouldn't buy. And that's a big part of, you know, the class. And that's a big part of, you know, the network and the things that they talk about. Sure, I'm sure there's some mistakes made. But most of them are very successful. And that's like as kind of right over home play is don't buy a construction or trades business, right? Pretty much. This is one you don't buy. Yeah. I mean, I'm reminded of, you know, so many stories from Mills.

Like, guys, I can't be on today. You know, somebody brought a gun to work. Somebody, you know, took a bunch of pills in the bathroom. Like all these things that are just not, not the business, but dealing with the business. You know, that's just hard. The P&L of some of the businesses was crazy. You know, 60 million in revenue, you know, $5 million in assets. sets and then like two million in profits.

Like I see that over and over again in some of these construction businesses. It's like, how do you transact this? And that's why they end up doing a lot of ESOPs and, you know, sell to the employees sort of thing. So they're crazy businesses. All right. All right. I stop sharing.

Anything else we want to talk about this one? It's a cool little business. I wish it was bigger. Be more fun. Yeah. Nope. I think it's interesting. It's cool to see.

All right. Let's wrap it up. That does it for another episode of Acquisition Anonymous. We will see you guys next week. And if you like this, please tell a friend. It really helps the podcast to grow. See you guys next to.

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