The Potomac Company’s Post

Transcript

We were at Seth's energy conference in Tampa and I had a couple of coffee with a guy who. Based on the back of the napkin, probably has a $20 million business. That's probably what he would sell it for today. Umm, he's got nothing else. Yeah. And he's got a mortgage on his house. Like he's literally dumped everything he has into this thing and he is all in. That thing blows up tomorrow, he's going to be in the soup line. And So what do you say to a guy like that who says well? Paul. I might be interested in selling this year. I might be interested in selling next year, I might be interested in selling five years from now. I'm not sure. I'm trying to develop a relationship with you because I want to understand what it is that I need to do, and I wanna be best positioned for one. Ultimately, pull the trigger. What do you say to a guy like that Who says Nick? I don't even know why I need to talk to you because I literally have ****. I don't have anything. You've got, you know, 100 grand in my bank account. Now I have a valuable business. Mm-hmm. But there's nothing for you to manage. Yeah, No, that's a that's a good question. But the reason they need to talk to me is because one, I can help them process that decision, right? So taking these personal factors, taking this scenario analysis and the business factors into consideration to help them process that decision because I don't know about you, but I think. A lot of folks that I've spoken to, they have information and they have ideas going and bubbling around in their head and they never put pen to paper on what that actually looks like, right? So they hear about risk, right? And they don't necessarily put down, OK, if I sell now, I can get 15 times EBITDA. But if I sell in two years and the multiples 10 times EBITDA, what does that actually, what does that actually look like, right? Like you say I'm getting 20 million now, does that mean I'm getting 10? Does that mean I'm getting 15? Right, because it's not quantitatively based. And so by making it that way, it just crystallizes what risks they're actually taking under different circumstances or scenarios. OK. And then I also asked questions to help them understand, alright, your business is X revenue right now and there's a certain certain types of skills that you had to deploy in order to get to that level and you've you've done great, you've got your business to that level. Most people don't do that, but. Are those the same skills that are going to take you to 10 million in revenue to 30 million in revenue? Because if you hold on to this business for 10 years, like you say, you're going to, you're going to need to deploy those skills. And so who are you hiring? How are you are developing yourself and your team in order to do that? And I think that point typically raises some eyebrows and opens people's eyes like, yeah, that's true. Like my current market can't absorb that type of growth. Like I can't get to that level of route. And city where I operate so I'm gonna have to open 2 new branch locations. Do I want to do that? What does that mean for the time I'm going to be able to spend with my wife and my kids if I do do that right? So just having those personal conversations I think put some specificity around it and also. Helps them understand I guess, some of the personal dynamics created there within.