Acquisitions Anonymous - #1 for business buying, selling and operating - Would You Buy This $600K Traffic Safety Business?

Episode Date: October 6, 2026

Quiet Light Brokerage specializes in helping entrepreneurs buy and sell businesses with experienced operators as brokers. They offer a free valuation clarity call to help owners understand what their business is worth and how to increase its value before selling. Learn more at https://quietlight.com/Mercury - Thanks to Mercury for partnering with me! Mercury gives founders powerful banking, cards, and financial tools built to help businesses operate smarter. Learn more and get started at https://mercury.com/ FRANZY - Thinking about buying a franchise instead of an independent business? FRANZY is a free platform built for acquisition-minded entrepreneurs who want to explore franchise ownership without broker bias. FRANZY matches you with franchise opportunities based on your capital, goals, and lifestyle—and includes free coaching from experienced franchise operators. If you're exploring ETA but want a structured, system-driven alternative, check out https://www.franzy.com/ In this episode the hosts talk about a $600K Texas traffic safety manufacturer with $1.1M+ in inventory and equipment included—but government contracts, women-owned business certifications, and the likely need for a stock purchase make this deceptively cheap deal much more complicated.Business Listing – https://www.bizbuysell.com/business-opportunity/manufacturer-of-traffic-safety-warning-systems/2532320/Welcome to Acquisitions Anonymous – the #1 podcast for small business M&A. Every week, we break down businesses for sale and talk about buying, operating, and growing them.Looking to build a professional website in minutes? Try Wix: https://wix.pxf.io/c/6898629/3115214/25616?trafcat=templateHubSpot is the backbone for how businesses scale without chaos. Try them out here: https://go.try-hubspot.com/OeG9VrSubscribe for more episodes: https://www.youtube.com/@AcquisitionsAnonymousPodcast?sub_confirmation=1Subscribe to our Newsletter: https://www.acquanon.com/newsletterThis week, the Acquisitions Anonymous crew looks at a nearly 60-year-old traffic safety warning systems manufacturer in Harrison County, Texas. The company generates roughly $1.8M in annual revenue and $238K in cash flow, with an asking price of just $600K. Even more surprising: the deal reportedly includes approximately $891K of inventory and $238K of furniture, fixtures, and equipment, while $650K of real estate is available separately.So why is a business with more than $1.1M of inventory and equipment being offered for only $600K? The hosts dig into whether that inventory is actually salable, why a company with dealers across the country remains below $2M in revenue, and how government contracting changes the acquisition equation. The company appears to benefit from women-owned and disadvantaged-business certifications that may be important to winning municipal, state, and federal contracts.That creates the biggest wrinkle in the deal: the right buyer may need to preserve those certifications and existing government approvals, potentially requiring a stock purchase rather than a cleaner asset acquisition. The hosts debate inherited liabilities, product-liability exposure, government-contract compliance, seller indemnification, and whether the upside is large enough to justify the operational complexity. For the right buyer—particularly someone local who can preserve the company's procurement advantages—this could be a fascinating acquisition.Key Highlights:- $600K asking price on approximately $1.8M of revenue and $238K of cash flow, plus roughly $891K of inventory and $238K of FF&E included.- The biggest diligence question is whether the enormous inventory balance is truly salable—or partly years of slow-moving and obsolete stock.- Women-owned and disadvantaged-business certifications may be a major competitive advantage for winning government procurement contracts.- Preserving certifications and municipal/government approvals could push a buyer toward a stock purchase, creating much greater diligence and liability exposure.- Despite nearly 60 years in business and a dealer network spanning much of the country, the company remains below $2M in revenue—raising questions about its historical growth and future ceiling.Subscribe to  weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking hereDo 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]

Hello, everyone. Welcome back to Acquisitions Anonymous. This is the internet's number one podcast on buying, selling, and operating small businesses. And this is a cool episode because just this morning, we crossed two and a half million downloads for Acquisitions Anonymous. So we're celebrating that today on the app. Thank you to all of you who have joined and listened over the past several years and made this podcast such a success. Today we have a cool deal. It is a manufacturer of traffic safety systems. So think kind of those flashing signs that say pedestrians are present, school zone, slow down, you're driving too fast, et cetera, and they sell entirely through government contracts. There are some interesting wrinkles that come with that. We talk about that on the pod, about how you would have to transact this business.

It kind of narrows who the right buyer is, but we talk a little bit about gotchas when you're buying businesses that sell into governments. But it is a really cool business, and we concluded that if we kind of met the Venn diagram of possible buyers, we would be interested. So this is a cool one. Thank you for listening. Please enjoy this

episode of Acquisitions Anonymous. We'll set Acquisitions Anonymous. Hello, another episode of Acquisitions Anonymous. We don't have 100% beers anymore. And thumbs downing on just the plus inventory. Hey, everyone, it's Bill. And I want to talk to you about Quiet Light brokerage. I was so psyched when Quiet Light agreed to sponsor the podcast because I am a customer.

I have used Quiet Light to sell three businesses. And if I were selling an e-commerce or a SaaS business, I really would not consider anyone else. Like I said, I went back to them three times. I work with three different brokers at Quietlight. Had a great experience all three times. Even on one occasion, they found a buyer for a business that I just didn't know it was even going to be possible to sell. So they have pulled rabbits out of their hats several times for me. They've been in the e-commerce and SaaS business brokering game a very, very long time. They really know what they're doing. They have great reach with both buyers and sellers. And the other thing I really love about Quietlight is all

the brokers there are former operators. So you can't just show up and go, hey, I'm a lifetime business broker. I want to work at Quietlight. You have to be a former operator. So they all know what it's like to be in the operator chair. So if you go to Quietlight.com, they have free business valuation calls, which they'll do with you. No obligation. Just tell you what they think about your business, what they think it would be worth. And then what you might need to do to kind of get it ready for market. Those guys over there are great, great SOPs, great systems. I just felt like I was really in really good hands all three times with QuietLight. So if you're interested in selling your business, especially in e-commerce or SaaS, hop on over to QuietLight.com, fill out their onboarding

form for a free valuation call, and you can tell them Bill or Acquisitions Anonymous sent you. Friday Acquisitions Anonymous, and today is a special one. I'm going to chew our own horn a little bit. We just got the email literally five minutes before we hopped on to record that Acquisitions Anonymous has crossed 2.5 million downloads. So, this podcast has been listened to 2.5 million times, which is absolutely wild to me. So Mills and Heather, thank you for doing it with me. Nick, thank you for sponsoring the pod, for being a friend of the pod. And Gurley's not here to celebrate with us, but also thank you to you. Our listeners, I know there's not 2.5 million of you, but some of you,

thanks to my mom, who probably is a million of those downloads, and everybody else who's listened to the pod, we appreciate you. Thanks for being with us for a couple of years, several years and 2.5 million downloads of AA. It's been pretty cool here. So the next 2.5. And I think the best way to celebrate is by recording another deal. Just keep on doing what we're doing, put one foot in front of another. We've also got Nick Acres with us today. Nick, thanks for being with us, man. I love it when we have another operator on the pod to review a deal. Can you tell people just a little bit about your background, why you're thinking about small business deals all the time? Sure. So I bought this company three and a half years.

years ago, Enzo Technologies, and we do IT services for other small and medium-sized businesses. We've had a lot of good success recently in the ETA community where we're helping folks out on IT due diligence. It's an area where I think people don't necessarily think about as they're getting a deal done. So we've been helping a lot of folks out. It's been good. Awesome. I love it when we have a sponsor who is also legit, who actually really did it and did ETA. So this one, this deal. is, I can't take credit for finding it. I think Girdley Claw found it for us. But this is a cool

one. Let me pull it up. Join us on YouTube, if you're on an audio-only channel with us. If you go on YouTube, you can follow along with the listings, you can see our beautiful faces. I even shave today. So come join us on YouTube if you want. We also, I think, published video on Spotify and the other platforms too. This episode is brought to you by Mercury. Banking loved by over 300,000 entrepreneurs. If you watch my

videos before, you know how much I love partnering with Mercury. I've been using them across my businesses for years, so whenever they launch something new, I pay attention. And this one is pretty exciting. It's called Mercury Books and its accounting software built directly into your Mercury account. As a business owner, one of the most frustrating things about bookkeeping is that you're always looking backwards. By the time everything is categorized and reconciled, you're looking at what happened weeks ago. Mercury Books changes all that. Transactions can be automatically categorized and reconcile as they happen, and you can pull an up-to-date P&L cash flow statement, our balance sheet, and a click. So instead of waiting to understand your business,

you can see where it stands today. Check out Mercury Books to learn more. Mercury is a thin tech company, not an FDIC insured bank, and banking services provided through Choice Financial Group and Column NA members FDIC. This is a manufacturer of traffic safety warning systems in Harrison County, Texas. It has gross revenue of $1.8 million and cash flow of $238,000. The asking price is $600,000, so two and a half times, more or less. The real estate, it's sitting on real estate of 650K that is not included in the asking price, and has been around since 1968. So definitely Lindy.

Been around for a long time. Hopefully it will be around for another 60 years. It says it is a profitable niche manufacturer of traffic safety warning systems with nearly 60 years of operating history. The company manufactures a broad range of traffic warning products, including programmable warning systems, pedestrian safety solutions, and solar-powered traffic warning equipment. Products are offered in both solar-powered and AC-powered configs and are sold through municipalities, state transportation agencies, contractors, dealers, and distributors throughout North America. The company has become a recognized manufacturer of traffic safety warning systems. the business manufactures tests and supports its products. Thousands of systems have been installed throughout the USA,

serving municipality, school, state transportation agencies, contractors, military installations, and other public sector customers. Their niche, they operate in a specialized niche of the traffic safety equipment industry, and competitive advantages include decades of experience, proprietary product designs, longstanding agency approvals, established customer relationships, a loyal distributor network, repeat customers and customizable traffic warning solutions. It has a reputation for quality,

liability, and technical support. The company is positioned to expand on several fronts. Federal and state infrastructure funding continues to drive demand for school zone and pedestrian safety upgrades, supporting organic growth in the core lines, and they want to expand the dealer and distributor network to broaden reach,

while remote monitoring and recurring service offerings could open new streams of recurring revenue. Additional transportation safety applications, along with military and government opportunities represent untapped markets. Continued investment in school and pedestrian safety, plus connected infrastructure and smart city initiatives keep the company aligned with long-term demand. For a strategic buyer, cross-selling into an existing customer base offers immediate upside.

This is in Harrison County, Texas, as I mentioned. I need to drop a few interesting financial tidbits here at the end. The seller is offering $90,000 of seller financing. $90,000 against, I guess, an asking price is $600K, so not that significant, at a 9% interest over a five-year term. And this is the reason Mills was peaked by this deal. The asking price of this deal is $600,000. The inventory is $891,000. And the furniture fixtures and equipment are $238,000, both included in the asking price.

Because there's $1.1 million worth of stuff, the business generates $238,000, and they're only asking $600. What? Does this not pencil or is, like, is there something wrong here? Is this possibly correct? I feel like it's incorrect. It's represented by a guy named Jeff Peterson, who's a trans world advisor. And they are, you know, a franchise of business brokers. But, you know, they usually, this is like in their size range of whatever.

I typically see them list. And it doesn't seem like, you know, it's a mistake like this is a $50 million enterprise value business and like the brokers maybe not right sides to it. So I don't know. Very easily could be some kind of like typo or something is not exactly accurate, but I'm very curious. I looked up this guy, Jeff Peterson. His tagline is that he's the hardest working broker in East Texas.

His picture looks like he could be the president of the United States. he's wearing a jacket and tie and red tie and wearing what looks like an American flag pin and you know looking very solemnly into the camera he also seems like a smart dude he ran a consulting firm he runs marathons like he's not a Johnny come lately to this at all so I got to assume that Jeff knows what he's doing and also these numbers are very precise like the cash flow number is down to the dollar the inventory is down to the dollar the FF&E is down to the dollar I don't think they've overlooked that there's a lot of hard assets here when they price the business at 600 K. Can we go back to what is it that they make?

Because in the beginning, I wasn't sure. And towards the end, I thought, oh, is this the light system when you push a button and you go through a crosswalk where the lights light up in the crosswalk so that the drivers can see you? Is that what they make? Or is there something more to it than that? Or is it even that? Yeah, I was similarly confused and just thinking about the. the signs I see driving around my town, I wonder if it's those crosswalk signs or, you know, the signs where you can put the custom message on it and change it, like slow down or construction,

road closed coming up, that type of stuff. So this, it says it's via traffic safety warning systems. And I can't tell if it's warning the cars that pedestrians are present or it's warning the pedestrians that cars are coming, you know, like around a blind curve or something. I was sort of picturing like, because it talks about school zones and crosswalks, I'm kind of picturing like, you know, the signs that say pedestrian crossing, but they have LEDs around them and they flash, like when someone's in the part, and you know, you press a button and that flashes.

I don't necessarily think that this is like embedded in the concrete, like big iron, $100,000 system. Just given the size of this business, I don't think they're selling like four systems a year. I think they're selling a little bit more smaller ticket stuff, retrofit stuff. This is why knowing that would help a lot with figuring out whether this inventory amount is right. You know, how heavy, you know, what is it that they're building exactly that gets you to $891,000 of inventory when I think, did they say the revenue is a million six? So that's- million eight, yep.

Million eight. Okay, so that's like half, you know, it takes six months for this inventory to turn roughly, I guess, maybe longer. But that's, I guess. No, much longer because if revenue is one eight, inventory is not a cost. So like, you know, their cost, this is over a year of inventory, for sure. Over a year of inventory. So that's when I start to say, is this inventory correct?

This business has been around a long time. Might have changed hands at some point, but it's been around a long time. and that's where you tend to get small businesses who have pretty bad accounting systems on their inventory and the number itself is suspect just because of that. And then you realize that it's over a year of turn and makes you think maybe you're not really getting a $891,000 worth of saleable inventory.

So I've seen it the other way too, though, Heather, where all the problems that you describe exist and that leads to them just carrying way more inventory than they think they should, because they can't really tell what they have, and the owner is not approving every PO, and before you know it, they got a warehouse full stuff. Which is a great, I'm glad you brought that up,

because we see a lot of deals where the seller is saying exactly that. There's excess inventory here. There's more than I really need. You're getting this kind of bonus excess inventory, and sometimes the sellers want you to pay extra for it. But here they're not saying that. So they're saying, we're throwing it all in, you're getting it. So you diligence this and realize they do have more inventory than they need,

and you can go a long time without maybe having to buy as much, you're going to improve your margin, at least short term, and maybe you're getting a better deal than you think, if there's truly excess inventory that is saleable. It's a hard thing to go figure out, and we certainly don't know at this stage, but it might be. I mean, that is saleable is the key phrase, right? Yes.

For me, that's my whole diligence is I want to look at every line item of this inventory, and we're lumping it. we're going, there's over a year of inventory. I guarantee you what you're going to find is some stuff has eight years of inventory. Some stuff has one month of inventory. Right. Right. And I'm suspicious, like typically, let's say they had an even, you know, everything had 50 weeks of inventory or 60 or 70 weeks, right? In that scenario, typically a seller with a competent broker, which I think is what you have here, would ask to be, you kind of fold that into the purchase price. Right? Because that's going to be a boon.

to you buyer because let's say the right amount of inventory is half a year and this business has a year of inventory. In a year, you're just going to put that six months inventory in your pocket in cash, right? So usually you have to pay for that. The fact that this broker seems competent and they're not asking you to pay for it makes me think a lot of that inventory. If I had a bet, I think that inventory is real and I think a huge portion of it is not sell. Yeah. Yep. I did Google around a little bit, and this is a findable company. You can figure out exactly who they are.

And it's exactly what you think, Bill. It is not like the massive thing that goes over the interstate that is like, you know, changing letters and like a huge, you know, 20 foot by 60 foot LED board or something. It is a flashing sign in multiple different configurations, like mounted to a telephone pole that says, you know, school zone 25 miles per hour, but it's programmable in the sense that it only is set to flash at certain times of the day. It's those kind of. What's interesting on their website and is maybe not all that surprising is it's a certified

female own business. Oh, really important. They've been around for 60 years. It lines up perfectly. It's definitely the company. But they've got like a bunch of like, you know, credentials at the bottom of their website about being, you know, they have GSA contracts, which is federal government, E-D-W-OSB, which is like a certified economically, disadvantaged women-owned business. Or a W-BE, these are all like certifications on their website, W-B-E-W-B-E women business enterprise, SBA, W-W-O-S-B, woman-owned small business. They really need to standardize on an acronym here. All means the same. All means the same, but yeah.

The reason that matters, right, is because for federal and state and municipal purchasing, there's incentives for those procurement offices to allocate dollars towards set aside contracts or disadvantaged business owners, which is a little bit the wrong connotation, right, when we're talking about like a female-owned business. But that's the language that they use.

And they say if you're a minority-owned business, if you're a service-disabled veteran-owned business, if you're a female-owned business, if you come from like an economically disadvantaged background, all those things kind of go into these credentials. And it gives you some preferential treatment in the allocation of procurement dollars. What's really interesting about that is the SBA is overhauling their, what they call their 8A certification process. process to emphasize disadvantaged over just the status of being a woman or being a veteran or whatever it may be. So that one, you've got to check out whether this business could continue to get those certifications if you were the owner. Obviously, the owner needs to be a woman, though. The buyer needs to be a woman. Well, and there's all kinds of implications. I mean, that's that, like if you're not and you just say, oh, maybe that doesn't matter, I'm not going to pay

attention to it, you could go back to your recurring customers and say, hey, I'm ready, you know, for the next order and they all of a sudden, you know, the dynamics have shifted. The other big thing is asset versus stock purchase in a business like this. The certification, you know, has to do with both the individual owner, but also the EIN number associated with this business that's claiming these. And so, you know, if you were coming in thinking, hey, I'm going to do an asset purchase, you're up for a root awakening. You probably need to do a stock purchase in order to migrate all of this somewhat seamlessly. Well, just even the approvals at the municipal level that they're talking about probably drives you towards having to do a stock sale. So that's

another challenge for this one. I think when you have to do a stock sale on something like this, I would also worry a little bit about product liability, you know, long-term product liability, because this isn't, you know, it's traffic, safety, something happens. There's lawsuits that go everywhere, and this company can easily... The sign failed to flash, kid got killed. Yep. Oh, boy. Yeah, and you have to do a stock sale, so now you have to worry about long-term product liability.

Okay. So that, I mean, that's the thing that's so tough, right, about these women, minority, veteran, like, anytime you use your status, and it can be, by the way, a great way to build a business. I know several veterans who have built monster businesses in relatively commodity categories and they just win the bids because they fulfill the quota, right? I think we did a business on this pod a long time ago that was a multimillion dollar EBITDA business selling office supplies, like commodity paper and pens and staples and stuff to the federal government and their entire competitive advantage with that was female owned. And when you think about it

from the purchasing, the procurement side, you go, look, I got to buy millions of dollars worth of pens and paper. It's all the freaking same pens and paper. If I can buy it from the one that satisfies my quota, great. Like I can start filling that quota bucket without having to think too hard about it. So it's very much a way to win in government contracting and commodity categories. And I'm not saying this is totally a commodity category, but I mean, if you were to go on Alibaba, I think you would find a lot of light up traffic signs. It's interesting, too, that they don't install them, right? They're making them and then handing them to somebody else to install. Yes, they are. And they're making it in Texas, I think, which probably gives them a made in the USA, which is probably somewhat unique here.

And that obviously transfers because you continue making it in Texas. But you need that EIN, you need that entity, and you better be a woman. And I don't even know if it works if you're a different minority. Like, let's say you're a veteran or you're an ethnic minority, I still don't think that works because you may be winning these contracts on the female bucket. And suddenly you're in a different bucket and you lose the contract. One of the biggest risks in entrepreneurship through acquisition is buying a business with fragile systems. Unclear demand are a single owner who holds all the knowledge. Franchising approaches that problem differently. You are buying into an established brand with documented systems, unit level data, and repeatable operating playbooks. The heart part is knowing which franchises are actually worth evaluating.

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That's F-R-A-N-Z-Y.com. And thanks to them for sponsoring today's episode. I lived in this world for a couple of years in a career where we were service disabled, veteran owned, and we only chased contracts with the feds that were set aside for that specific category. So these municipalities, they probably likely have different set-asides for different certifications. I mean, this seems like the trick to this whole deal here. Yeah. In South Carolina, inmates inside the Department of Corrections,

make a lot of our license plates and traffic signs. And they have like little mini factories, you know, inside some of the work prisons, you know, where these things are made. So I think that this like looked too good to be true on the surface. And then like we're not even really peeking by a curtain, but we're just getting a little bit of intel. But I think this is probably like a smart approach for this seller.

They're pricing with the broker's help. they're pricing this company at a realistic valuation. It's probably less than the sum of its parts because the sum of its parts isn't market value, you know, in a real sense. And so it's almost like how people will list a home like, you know, below market value to start a bidding more and hopefully end up where they want to be. In this case, it's almost like the broker saying, hey, we acknowledge that there's some difficulty here.

The one thing I would say is that like go ahead and at least allude to the fact that there is some DBE status so that you self-select. Otherwise, you're like, you're getting hundreds and hundreds of inquiries as a broker. Just save yourself and tell everybody, yeah, hey, actually, you're not, you know, you don't have the qualifications. But I think this is transactable given their realistic expectations. You just got to find the person who is already in East Texas, who is a female, who, you know, is ready to take on this type of risk. And I think being there is really important. I bet you're going to the school board meeting, you know,

and talking about pedestrian safety and school loans. Yeah. The other concern on the, if you have to do a stock purchase, is if you've dealt with any of these sites of contracts, particularly on the Fed side, there's all types of, you know, call it regulations that you have to comply with, just for a lack of better time. That's not the right term. The acronym is FAR, F-A-R and D-FARs. And so, you know, picking up the liability that they were not compliant with all of those over 60 years.

Holy smokes. That would scare me away. Yeah. There's a lot of women's searchers. I mean, you have to do with stock sale. You can do it with indemnities. So you can say, you know, seller indemnifies buyer against anything like that. You know, a kid died last, you know, before the transaction.

And you got to cover that. that's nice to write in a contract, right? That's entirely different than Kit dies. You get sued. There's a million dollar judgment, right? Seller is gone, man. I mean, they, you know, they've moved to a different state. They stop answering your emails that, you know, they're not answering your calls.

You have them dead to write on the contract, but you got to collect now. You could burn hundreds of thousands of dollars in lawyer fees, just adjudicating that your claim is valid, adjudicating that they owe you, getting an order for collection, and trying to chase it down. So, like, that is the huge problem. Like, you cannot hand wave, oh, it's stock sale, oh, just get indemnification for all that from seller. The practicality of collecting on that if the shit hits the fan is very real. Especially relative to the magnitude, right? Because what you typically do is you say, hey, we're going to have, you know, reps and warranties,

we're going to have indemnifications, we're going to have all these things. And maybe we leave some money in escrow, you know, on a large middle market deal. You have money that's in escrow, depending on the risk of the deal for several years sometimes. I mean, I know people who had five-year, you know, escrow clauses that burned off sequentially. In this case, you can't escrow enough money. The purchase price is so small relative to the magnitude of a potential claim. But, we may be making a big deal out of nothing because they're manufacturing the product and they probably have some product defect insurance that's out there. But once they're handing these to somebody else to install, I don't know.

I think it probably becomes somebody else's problem largely. Now, lawsuits are crazy and they'll throw the kitchen sink at you. And every single person who, like even the freight forwarder who moved this thing from point A to point B probably gets thrown into it. But I think that you at least have a little bit of separation and buffer because somebody else is installing. And it might be a DOT employee, you know. That's an interesting point. I was just thinking about the little town where I live. And when I see them replacing the signs, it's the city, there's a city truck there and city employers, employees that are, you know, putting in the new stop sign, whatever it is.

Yeah. So I want to, you've got to, if you're going to do a stock purchase, right, you're going to inherit all of the. contracts, which is a feature, right? That's the point. But also, you're going to inherit all the contracts. So you've got the diligence all the contracts. And if those contracts, for example, don't protect you from traffic sign was installed the wrong way, liability stops with the installer. You have a lot of liability. So that's the reason buyers love asset deals, because it really shrinks the radius of diligence. There's just so much that you don't, question you just don't have to ask, which decreases the lift, decreases the lawyer cost,

decreases the things you might find that blow up the deal, et cetera. You know, stock purchases are just harder to get over the finish line because more eyes have to be dotted and more T's have to be crossed, more rocks have to be picked up without finding squirming things underneath. Especially because in an asset purchase, you're saying, look, what are the included assets, what are the excluded assets, what are the included liabilities? and the excluded liabilities are almost infinite, right? All you're saying is, hey, I'm willing to pick up the lease that you have on the copier,

you know, or, you know, the forklift lease or something like that. But everything else that's out there, known or unknown, stays with that old in it. In the stock purchase, it's reversed, and you're basically saying, I'm signing up for, you know, a potentially unlimited amount of skeletons in the closet. I don't like that phrase, Mills, unlimited skeletons of the closet. We're getting ready for Halloween. that the thing that makes this non-transactable, the fact that it's got to be a stock purchase and it's you could have killed a kid and not known it? I really don't think so. I mean, I think this is

still, I think this is still a doable deal for the right person who can migrate this over. You've got to kind of draw a line, right, somewhere on that long tail of potential liabilities and saying like, okay, I can't protect myself. I can't indemnify, you know, for everything possible, but like get comfortable enough. I'd be willing to bet this business has been around for 60 years. They've navigated that before, right? They've figured it out. At some point along the way, what's the limit of their, you know, of their liability if one

of these things isn't working exactly correct or if there's a catastrophic accident? Yeah, you would think over 60 years of history that this has come up for this business. Dig in and see what happened. I'm just, the bigger picture to me that's really difficult is this is, this business, you know, 60 years running, still not over $2 million in revenue. What's like the long-term narrative around this? Have they, at one point were they doing 50 million in sales? And then they said, you know what?

We want to shrink operations. We want to make it more manageable. We just want to sell in our immediate vicinity because this has got to be a very, very, very small fish in the, you know, in the whole realm and see of these things getting made. I mean, surely there's hundreds of millions of dollars, you know, of total sales available on an annual basis across the country. Who is capturing that? Who is the 800-pound gorilla? Why is this company not growing their market share or why did the 800-pound gorilla come take their market share? There's got to be some story there that I think would be more super. Yeah, I was actually

Googling that question while we've been talking. And the 800-pound gorilla, is Siemens. And then there's other companies that we would recognize similar size. And it says that where a company like this differentiates itself is,

you know, Siemens is doing, you know, high volume of the exact same thing over and over and over. And they're not going to take their time to go make the custom thing for the little

municipality. And that's where companies like this fit in because they will do the custom job and turn it around quickly. Yeah. I mean, I think they're probably just staying in their niche, staying in East Texas, wherever they are.

And I, to your point about 60 years, it's very easy just gloss over you, okay, this old business. Is this business being run by an 80-year-old woman? A 90-year-old woman? Probably second generation, but you don't think you wonder. Right. So it's probably either transacted or passed at least once, right? So I'd be even more interested if it has transacted once, right?

Because then you can dig into how did that transfer? how do you transfer your contracts, et cetera. It's clearly not being run by a 90-year-old woman, right? So I want to know who's owned it before and kind of the whole history of the business. Their website is actually like way better than what you would expect. And it does look like they have at least they have a spot on their website about finding dealers, find a dealer in Canada, find a dealer in the USA, find a dealer in the Caribbean. and then there's a whole tech support section as well because obviously if you bought one of these things

and you're in Alabama or something like that and you're going to install it, you may go, hey, I want to make sure I get the wiring correct, right? You know, which like I need a diagram, you know, wiring diagram for this or something like that. It's an interesting business. It is very interesting. I mean, it's if you fit the buyer profile, I mean, it's got to be a woman. You got to be in East Texas. If you fit the buyer profile, this is very, I mean, and the inventory checks out.

The other thing I was going to say by the inventory is even if it's not unsaleable, it could be raw materials because they're manufacturing. So they could have just bought a lot of LED tape or something. So you might eventually consume it. You just want to understand kind of what the pipeline looks like to turn that inventory into cash over time. There's also a other potential angle here that you could investigate to buy. this. If you are a guy and you want to buy this business, you can spin up a new entity and your wife can control 51% of it. You got to be married for that, obviously, and she sort of owns you if you ever end up

not married. But a way I have seen this done is buyer's wife buys it. You know, they're one entity, obviously, they're one balance sheet. They're married. But wife needs to be the controlling owner, the signatory, all that stuff. And then behind the scenes, husband is doing everything. That's something that commonly happens. Yeah, I found their website. I mean, they have dealers listed in, it looks like, almost every state. I think there's something here.

Actually, the fact that they've got dealers lifting in every state makes me more nervous because then it makes me go, why is it not bigger? Yeah. You know, but maybe that means they got distribution and they just don't have a sales motion in all the different territories. is. And if you maybe run some ads or start making some calls, you could make some hat. So the owner, I did find the owner. She has been there for it looks like about 20 years. And she seems pretty young, like I would say 30s, 40s. So I'm thinking, you know, it could be second

generation. Yeah. So it could be second generation. Mom started this business. I've run it for five years and I'm over it, time to sell it. Which can be a great situation for a buyer to roll into. All the time, businesses fail to make the jump to the second generation. The kid raises their hand and says, I don't want to do it, and then mom or dad sells it. In this case, I think you've probably got, it's sort of nice, you've already made the transition. Now, Gen 2 has changed their mind. There's definitely competition.

I mean, you know, there's a lot of different companies that do school zone flashers and, you know, traffic solutions for highways and municipalities. So I think the differentiation is key here. And it may be the differentiation is the DBE status. And the other part of differentiation is maybe the customization and the kind of small kind of niche orders that they're getting. Which I think brings it back to the. whole game here is the contracts, right? In the relationships and the woman-owned status. So there's just no getting around that, and there's probably no getting around stock purchase either. Did you see in her about her section led full P&L oversight of more than $3 million?

No, I didn't see that. So that gets back to her. I wonder if there is a mistake in this listing. Well, it could be the $3 million could be a historical number. You know, maybe it's declined. Yeah, a few years ago. Yeah. Well, interesting. All right. What do you guys think? None of us are women. But imagine you were for a moment. Identify as such for a moment. Do you like it? I mean, would you be interested? Maybe. I would want to see the next level of detail. My issue with this is that like it's very, very far away from me geographically. And it's like probably got a couple strikes against it. I think I'm so geographically bent. If this exact same, thing was in my backyard, I'd be super interested. And there's probably, you know, some more incentive to work through some of the obstacles. But I'm kind of out just because of where it is.

Sure. Well, that's reasonable. But if you live in East Texas. Yeah. Or, or again, if this was in my backyard, absolutely. Like, I would totally pursue it and figure out, is there some way to navigate? I have a friend who owns a large general contractor. And he got a parking lot striping business and put it in his wife's name and they get, you know, set aside contracts all the time to, you know, restripe parking lots and roads and things like that. Not at a massive scale, but like it's a nice little nichey thing. Yeah. I would wonder, it's just not that big. Like all the numbers pencil, I would love it if it was three times the size. Yeah. Because, you know, you buy this business, any business, any operating business, I don't care how great it is, takes up

brand space. And this has got manufacturing and five employees and like, something's got to happen every day. This isn't mailbox money. You know, you're running this. And so you are going, I mean, Nick is sitting in the chair right now as an ETA entrepreneur. Like some days great and you don't think about it. Some days you think about it a lot and in the middle of the night, whether you want to or not. So that's the thing. Like you're selling a slice of your life here for $238,000 of EBITDA of flow. And I would need to be convinced that I can make that 500 or 800. I need a pretty clear line to that. Otherwise, I don't know that I'm willing to sell a slice of my life for a business that can never be bigger than 240K. That's my only drawback here. Nick, one of my favorite,

it's related to this, but one of my favorite managed IT service providers that I've ever seen, their niche was that they had like pretty much focused on classified and like top secret credentials so they could do managed IT work for entities that had privileged information. And it was another weird one where it was like you got to do a stock purchase. Like you've got to check a bunch of boxes and you have, you as the qualifier have to get, you know, those same like clearances. But, you know, it's a world you're in and it made me think about the connecting the dots on these. but great, really great business, really hard to sell.

Yeah, you see folks that have a lot of success in my industry, oftentimes we'll specialize on something like that, or they only do dentists, or they only do car dealerships, whatever it is. That seems to be a good path of success. Yeah, well, I can join us. This was a good one. Yeah, thanks for being here, Nick.

Where can people find you if they want to learn more about having you manage the IT for their business? Yeah, sure. Our website is Inzo Technologies.com with an eye. I-N-Z-O, and you can certainly find me on LinkedIn really easy. Nick Acres in St. Louis should be pretty easy to find. All right, and you probably heard an ad for it cut in earlier in the episode also. So if you're an ETA guy or girl, Nick gets you, he can help you with the IT on the business you just bought.

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