In this episode of the M&A Launchpad Podcast, hosts Feras Moussa and Casey Minshew welcome guest Chris Edwards, founder of Sanitas Equity and a seasoned acquisition entrepreneur. Chris walks us through the candid story of buying, scaling, and exiting a retail flooring business in Steamboat Springs, Colorado—growing revenue by 50% and doubling profits before securing a 24x return on invested capital.
The conversation dives into what it truly looks like to acquire and operate a traditional small business with SBA financing, the people challenges that come with change, and how systematization using tools like Notion helped turn chaos into a streamlined operation.
This episode offers real-world takeaways on what works—and what doesn’t—when stepping into the operator’s seat for the first time.
In this podcast episode, we discuss:
- Buying vs. Building a Small Business
- Using SBA Loans to Fund Acquisitions
- Operational Turnarounds and System Building
- Key Employee Challenges and Cultural Fit
- Knowing When to Exit a Business
You can connect with Chris here:
LinkedIn: https://www.linkedin.com/in/chris-edwards-44664052/
Twitter: https://twitter.com/toph_edwards
Email: chris@sanitasequity.com
Website: https://www.sanitasequity.com/
Additional Resources:
Sponsored by O’Connell Advisory Group – Work with a trusted Quality of Earnings and Financial Diligence partner who focuses solely on business acquisitions.
Visit: https://www.oconnelladvisorygroup.com
Access our archive of video interviews on YouTube
Join our Community at the M&A Launchpad Conference – Premier event for entrepreneurs, investors, and dealmakers in the lower-middle market.
https://www.malaunchpad.com
M&A Launchpad Hosts Contact – Casey Minshew & Feras Moussa
Email: info@equitylaunchpad.com
Looking to buy or sell a business? Connect with the team at Equity Launchpad for expert guidance and hands-on support throughout your transaction.
Visit: https://www.equity-launchpad.com
🎧 Podcast on Spotify: https://open.spotify.com/episode/2D3jCzuXd7UxObrBMFxttX?si=hlKmQ921TTqte4QP1nHqSg
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Transcript
00:00 all right on today’s episode we interviewed Chris Edwards where we talk through what it’s like to basically go
00:05 buy a very traditional vanilla kind of SBA story right he found a flooring company in Steamboat Springs bought the
00:12 company doubled the revenue right and doubled the margins actually grew the revenue sorry 50% and doubled the
00:18 profits and made a very successful exit right and what it looks like to kind of go through the process of buying a
00:24 retail business on top of that right working through some of the mechanics operationally working through some people issues and basically ultimately
00:31 finding a good success on the back end so Casey what were some of your takeaways man I always kind of like to hear the stuff that didn’t work out
00:37 right and so this isn’t just a Cinderella story right he he had a lot of challenges that he dealt with uh but
00:43 the one thing he did talk about which is probably on all of our minds is oh my goodness I have somebody that doesn’t
00:48 follow our culture very val valuable in the company and I’m scared to let him go and I think he covers this so well and
00:56 this is that lesson of entrepreneurship is that not one person should dictate the success of your business agreed and
01:01 you know the other thing too is he was kind of koi but I mean he’s a master of his business he he knew all aspects of
01:06 the business because again you don’t double revenue just kind of with a handwave right there’s a lot that goes into how do you scale a company to be
01:13 able to double revenue from the sales side to the implementation side which we didn’t even really get into what the install side look like and all the
01:19 challenges that has cuz I’d imagine that’s actually where you have even more challenges in these businesses so all around you know good story of just kind
01:25 of understanding what it’s like stepping in buying a business operating it and then making that exit
01:34 welcome to the M&A Launchpad podcast with your host Casey and Ferris with Equity Launchpad on this podcast you
01:39 will gain insights on acquiring investing in and selling profitable businesses in the lower to middle market whether you’re a business owner investor
01:45 or spying entrepreneur at Equity Launchpad we will provide you with the knowledge guidance and capital to navigate the world of mergers and
01:51 acquisitions all right guys just take one second here real quick when you’re buying a business
01:56 ensuring the financial health of the company is critical and that’s where a quality of earnings partner comes in quality of earnings gives you confidence
02:02 in the financials of the company that you’re purchasing it aims to protect your investment and ensure that you’re stepping into a profitable business on
02:09 day one patrick of Okonnell Advisory Group is your dynamic quality of earnings partner he’s here to help you
02:14 buy the right business on your timeline patrick’s entire practice is focused on business acquisitions your niche is his
02:20 niche and over the past decade Patrick’s helped more than 200 buyers like yourself successfully purchase and
02:26 operate enduring profitable businesses in fact Patrick’s helped some listeners of this show so if you’re buying looking
02:32 for help with the quality of earnings financial due diligence network capital and more head to okconelladvisor.com
02:38 or just click the link in the show notes hey Chris welcome to the show yeah guys
02:43 thanks for having me appreciate it not a problem so coming at us all the way from Steamboat Colorado so for the listeners
02:49 you want to share a little bit about yourself yeah so uh I grew up outside of Boulder
02:55 in a little town called Naiwat uh went to University of Arizona uh started my
03:00 career at a company called Zo Group which was a rollup of telecom assets so
03:06 they were kind of born of the telecom boom bus cycle um I joined them during
03:12 their uh consolidation phase where they were acquiring a ton of different um regional telecom companies did financial
03:19 planning analysis for them uh did a stand in investor relations so was part of their kind of corporate finance team
03:26 in a number of different roles for a few years got exposure into M&A and value
03:31 creation through M&A uh during that stint uh ultimately we had the largest IPO in Colorado history at the time uh
03:38 so a really awesome experience right out of college um I then moved into the
03:43 consulting world was at Slalom Consulting and Deote Consulting uh quit my job in um October of 2020 in the
03:50 middle of the pandemic to search for a small business to acquire so did a self-funded search ultimately closed on
03:57 an acquisition in February of 2021 and operated uh a flooring business in
04:03 Steamboat Springs Colorado for a little over three and a half years uh grew the revenue about 50% doubled
04:10 IBIDA and ultimately exited for about a 24x
04:15 in October of uh 24 so congratulations man yeah thank you so that’s the uh
04:23 twominut elevator pitch of who I am and my background well then I guess that’s the that’s the episode call it a wrap no
04:28 so let’s dive into that right let’s end on that one right so So it sounds like you got the exposure for M&A right
04:34 really it sounds like just from business right it wasn’t that you had you know a parent or somebody else that was really giving the exposure you saw it in the
04:40 business side you understood the financial side of it right because really for business there’s two sides to it there’s the financial and number side
04:46 of it and then there’s the operational side of it and the most successful people are people that understand both right it’s not just one or the other and
04:53 so I think you got that financial exposure from work right kind of been through obviously the IPO yourself plus
04:60 on the consulting side and then I guess that just what gave you the motivation saying “Hey it’s better for me to go off
05:05 and try to buy my own business versus continue to work as a consultant or was there some other trigger there?” Yeah
05:11 you know I think in the middle of the pandemic there I was just taking a look at my life and trying to forecast out 5
05:18 10 20 years is this something that I really want to do if I stay on this corporate track uh looked up to the you
05:24 know the senior partner above me and is this is this a track that I really want to be on and is this something that um I
05:31 would feel excited about 10 years from now or would I regret not taking a risk
05:36 so uh you know I had a nice run in corporate America i learned a lot i felt
05:41 like I was sort of um going through the motions um you know most of the time it
05:47 was great like I said I really was thankful for all the different stops I had and was every single one learned a
05:54 ton but I felt like if I didn’t take the leap and um and bet on myself that I
06:00 would regret it and ultimately I felt like it was now or never i mean I was I
06:06 was engaged um you know wanted to take the leap before I started having a family having kids it was only going to
06:12 get harder from that point on so I felt like okay I’m young got some energy uh
06:18 I’ve got a little bit of flexibility in my life where I can go and take a swing so um I quit my job you know found this
06:25 deal in Steamboat raised SBA debt you know levered it to the hilt did 10% equity 10% seller note 80% SBA debt um
06:35 closed on it and yeah you know I I think to your point I had a good sort of mix of operational experience i think my
06:42 consulting background kind of really helped me be able to analyze you know where we can uh process improve the
06:48 business my financials you know FPNA side I got really great just financial modeling skills and how to how to you
06:56 know analyze a P&L and a balance sheet and manage all that so just a lot of I think well-rounded skill set that I felt
07:02 comfortable um taking a leap you know obviously um I think I probably underestimated how hard it is to run a
07:09 small business you know it’s one thing to to be a consultant and to be you know in spreadsheets all day but to actually
07:15 be managing people who are driving trucks around and installing carpet and flooring it’s a whole different ball game so um definitely got punched in the
07:22 teeth quite a bit you know during my during my stint owning the business but you know I I also had um something I
07:29 failed to mention earlier is you know my my parents were both entrepreneurs um you know they they started businesses so
07:35 I got a little bit of exposure to the realities of entrepreneurship when I was a kid so I I don’t think I was fully
07:40 blind to it but certainly you know it’s it’s one thing to academically think
07:46 about it and analyze it and one thing to actually live it dayto-day yeah i’ll tell you I I have my son is watched me
07:53 through all my career full entrepreneur right and uh we we had a meeting probably about four years ago a company
07:60 I bought up in Oklahoma and we were sitting down with our GM and he he was like “Someone has to go in front of my
08:06 son while we were eating.” Well I got to get into a deep conversation and then we got in the car i looked at my son i said
08:11 “So what’d you learn?” He was like “I don’t want to be an entrepreneur.” You know it’s like those things like
08:17 those those and and I hope that that’s not the case for him but at the end of the day you know you get those things from your parents right you get a chance
08:23 to be around them and see those things it does help you know you call your dad and he’s like “Hey dust yourself off get back to work.” You know he’s like “You
08:29 sign the paperwork.” Punch in the guts pretty much daily you just get used to it so uh Yeah yeah i I I you know sorry
08:36 my I was going to say my my my dad you know started companies um and you know mostly they failed and so I I got a
08:43 exposure to the realities of of failure and just how painful it was so one of the reasons why I wanted to go the
08:49 acquisition route was you know you’re buying something that’s existing and clearly has traction and product market
08:54 fit so um that’s one of the reasons that attracted me to the uh the M&A space in the first place got it yeah you found it
09:01 a good time man because obviously I imagine 2020 right the the seller is probably like “Oh man i’m I’m got to
09:07 I’ve got to get out of here at least at a a reasonable price right?” And then you picked that upswing after 22 of hey
09:14 you know all of those good things i mean how how was that well that’s what I wanted to ask so I mean tell us about you know were you planning were you
09:19 looking specifically for Floring Company or just any company in Colorado and then what was the motivating factor for
09:24 seller like why were they selling and then you know what did the deal look like what how big was the company how many employees what was the IBIDA what
09:30 was the multiple that you bought it for etc yeah so I um I did a search kind of
09:37 throughout the Rocky Mountain region so Arizona New Mexico up north through Idaho Montana so I looked at a bunch of
09:43 stuff i I was not I did not set out to to acquire a flooring company um I looked at all sorts of different deals
09:49 you know I mean painting companies uh I looked at an art studio i looked at a
09:55 lot of stuff um and this one just made sense for me because one is in an
10:01 awesome spot i loved Steamboat Springs i love Steamboat Springs beautiful part of the of the world i was living in Denver
10:07 at the time so you know it’s close enough but um you know it it wasn’t like I was uprooting and moving to Arizona or
10:14 Utah or something like that so um geographically it made sense it fit the
10:20 sort of financial parameters that I had for my search so I was looking for something that was in that sort of 500k
10:27 to million dollar IBIDA SDE kind of range so it was just a little bit above
10:33 500 uh K um ultimately acquired it for about three times um the the reason the
10:40 uh seller was wanted to to get out was he was he was having pretty severe health problems um you know he’s an
10:46 older gentleman and needed to retire and the business was just beating him up too
10:52 much so he uh he had health issues and um that was sort of his main driver for
10:58 for selling um but yeah you know I I felt like this this deal fit my
11:03 parameters financially i felt like it was a business that wasn’t overly complicated or required some specific
11:10 certification like an electric electrician kind of business might have um so I felt like it was just a kind of
11:17 a sweet spot of um something I could learn wasn’t overly complicated awesome
11:23 geography uh place I would I could see myself living and uh and I also just
11:28 felt like there was a lot of tailwinds that were about to happen which I which did play out which was you know COVID
11:34 was happening people moving out of the cities they’re moving up they want to remodel their house yeah they’re moving up into the mountains everyone’s
11:40 remodeling their house they’re uh you know they’re they’re uh they’re not going to work anymore so remote work is
11:47 huge and Steamboat’s an awesome place to work remotely so a lot of great tailwinds at the same time got it so So
11:52 just to kind of maybe better recap so 1.5 million was roughly the purchase price right you said you had eight uh
12:00 80% SBA 80% SBA yep mhm okay and so then you
12:06 know basically for that last 20% you brought 10% and the seller carried 10% yeah exactly yep okay nice nice so you
12:12 know you’re 150K you brought bought the business you’re there day one what happens well before we jump there I want
12:18 to talk about due diligence because that’s that’s always like first time searcher right it’s like at least I can
12:24 tell you my story of all the things I missed you know on that that due diligence that I’m like god dang it you know um so what was your due diligence
12:31 process like never doing this before you know did you go all in QVE get all these
12:37 reports or did you kind of just back at the napkin um I I did do a QOE uh report that I
12:45 would definitely recommend doing that just having an accountant’s eyes on it analyzing their you know bank statements
12:50 ultimately the bank statements tell the truth um but yeah I mean I I I felt pretty comfortable with the financial
12:57 analysis of the business just given my FPNA background and so I was really comfortable getting their financial
13:03 statements getting their tax returns digging into the numbers i felt like I I had a pretty good handle of that i would
13:10 say you know what I missed is just um you know
13:15 is analyzing where the business gets its
13:20 revenue where the where the leads come from like is is the is the phone ringing at the shop is the phone ringing on the
13:27 owner’s cell phone you know where are these relationships um coming from so I
13:33 would say I I definitely had a little bit of a miss there um and and just and
13:38 just I think I probably was a little overconfident in my ability to to run
13:44 this business um just given that I had never ran a flooring store before i knew
13:49 nothing about flooring you know um did it have a retail store too yeah it’s a retail show uh showroom warehouse
13:56 operation and so kind of combined into one flex space um yeah I I think um due
14:03 diligence wise overall I think I did a pretty good job but definitely some misses on the probably just my ability
14:09 to actually run it what about the seller did he stay on with you for a bit he stayed on for two three months you know
14:16 eventually quick yeah he moved pretty quick you know honestly I felt like after a while I was like “All right man i think I got this.” Like just you know
14:24 go go you can you can go home early today you know it’s it’s it’s probably more uh confusion for the employees than
14:30 it’s worth you know from a leadership perspective so yeah h how many I guess the two things um how did you guys solve
14:36 networking capital and inventory right was it just you know was that easy conversation or was there complexities
14:42 there good question and how much revenue was the business doing uh so so that so
14:48 yeah I I bought about 200k of of of uh of inventory on top of the 1.5 so like
14:54 the total purchase price was 1.7 got it um so the equity that I brought to the
14:59 table is a little less than 200k um the
15:04 um sorry what was the second part of that question and then real kind of networking capital what did that look like yeah i mean so basically he took
15:13 all of his accounts receivable he took his cash um the the inventory is really the only networking capital that I
15:19 bought um that was it okay yeah there really wasn’t a networking capital conversation you had to bring cash to
15:25 closing to to for to to move the bills on yeah so make sure you pay payroll
15:30 that first week right first yeah so so yeah I brought 100k of of cash to just
15:36 park on the balance sheet just to have you know a little bit of cushion had the 200k of inventory so net like all in the
15:43 capital that we brought to the table is about 300k day one got it um the revenue
15:48 was a little over $3 million so yeah okay so so roughly you know one sixth of
15:54 kind of margins okay cool um then I guess so maybe shifting gears right so you buy the business you get in there
16:01 what were some of the mistakes and what were some of the big kind of positive impacts that you started doing right and how quickly did you start making that
16:06 because that’s really the most common thing that happens is either people make changes really quickly and then that has
16:12 its own problems or they make changes too slowly and that has its own problems and it’s kind of trying to find that balancing act right and it varies by
16:18 business yeah yeah so I think I think I did a pretty good job
16:24 of balancing that my my sort of philosophy going into it was do no harm
16:29 so I I basically just spent the first I would say three months just learning the business like getting in the weeds you
16:36 know literally writing tickets you know processing orders just learning it from a very like groundup perspective um my
16:44 consulting sort of background I think really helped me with just you know process flows and like just tell me how
16:50 someone buys a carpet job you know just going through each step of the process learning how we do it you can start to
16:56 circle okay this this sounds like this this is broken probably fix it here fix it here um so I’d say three months
17:02 didn’t really do much after that um started making some pretty significant improvements on the technology stack
17:09 that we were using so you know when I walked into the the store day one it was just papers flying all over the place
17:16 it’s kind of like your your typical stereotypical SMB that’s running on a fax machine and
17:22 paper right so um we had to I had to pretty quickly tame that beast because
17:28 there’s just no way that I could operate that a business like that it’s just too chaotic so we installed a system called
17:34 Notion to kind of help you know just be a sort of a basic CRM tool basic
17:39 purchasing operations tool um internal documentation tool i’m surprised you
17:44 chose Notion because that’s not really tailored for for the vertical right notion’s really putty that you have to
17:50 mold yourself right yeah exactly but but it was putty that like it’s so moldable that I liked it like just given my
17:56 background I did Salesforce.com projects um in my consulting days so just having
18:02 that sort of CRM and system yeah you had a little bit of technical background to understand yeah exactly so I had like a technical background where I could like
18:08 mold this into what I needed it to be at the time the problem with Salesforce is you need a developer to do the molding
18:13 whereas notion it’s you know you don’t have to be a developer it’s more of a strategist the thing about the CRM though also early in your your journey
18:19 it helps you know everything about the company from super nuts when you build that out like you now know everything
18:26 exactly that’s pretty that’s a good it’s a good start right in the company is to make that that change right because it
18:31 also takes a lot of time yeah no exactly i mean you know it I I could spin it up
18:36 pretty quickly it was so user friendly it’s just easy to train people and then you know like I would say there was some
18:42 cultural push back to it everyone’s like “Oh I don’t like this i don’t want to learn it.” And you know there were some people that were kind of heming and
18:47 hawing about it but um overall like once I built it out and showed them how how
18:53 I’m thinking about it and how it could be useful for everybody how keep us keep us more organized and communicate better internally people saw the value and it
19:00 was a huge huge um improvement over flipping through you know stacks of
19:05 paper and file cabinets and stuff like that trying to figure out whether a purchase order was actually ordered and
19:10 so efficiency gains insane and that’s that’s probably why you saw your your massive growth not only that but so like
19:17 holy crap we are so much more efficient exactly yeah i mean you know we’re spending I I did other things like
19:24 pretty quickly you know within a few months I brought on a an offshore resource to help me just manage the rote
19:30 day-to-day tasks of ordering product you know we had like our sales associates in the showroom sitting on hold for 20
19:38 minutes just trying to order a trim piece for you know flooring you know and that’s just a bad use of their time they
19:44 could be doing that you know they could be following up with the customer and closing a lead and you know doing things
19:49 that are revenue producing and just you know administrative things like that pretty quickly
19:55 you know moved it into this notion system got offshore resources to help me manage it better and just just with
20:02 those two things alone I mean that those were really big and process improvements yeah and and not to go on a tangent but you should definitely check out the I
20:09 forget what Google called it they did a demo last week at Google IO but essentially it’s kind of what their
20:14 future assistant said they want to try to get it to do and it’s very much getting close to being able to do things
20:19 like go call this number order this trim piece let me know once it’s done and it’ll sit there it’ll wait it’ll do the
20:24 whole shebang and you know it’ll pipe you in if there’s a problem or it’s done but it’s actually pretty cool where some of that tooling is getting there for for
20:31 some of those kinds of tasks right um yeah i mean and this this was pre AI you
20:38 know so like 2021 2022 this is before like chat GBT changed the world but uh
20:43 yeah I mean just those things alone like were were a really big uh change for the business so kind of going into because
20:50 ultimately you know you end up selling the business so in that time you come in you lay a foundation would you say that
20:56 that that new foundation with CRM 18 months 12 months is that really where you were kind of laying the foundation
21:04 yeah I would say you know 12 months of you know um you know process improvement
21:10 work during that time there was some you know and this is kind of the the ugly
21:16 part of the good bad and the ugly you know there’s there was some turnover with uh you know key employees guys that
21:22 I kind of like were really important uh key players in the business when I was doing due diligence you know some kind
21:29 of things blew up with uh some key employees and in a small town and uh in
21:34 a small business like that that’s pretty disruptive um so you know had some turnover with employees which we had to
21:40 navigate um so you know during that time during the sort of transition phase a
21:45 lot of new technology changes a lot of turnover with the staff but ultimately all good stuff that led to you know a
21:52 stronger company a stronger foundation um something that was more uh robust
21:58 than it was before less reliant on key people um you know focused on sort of
22:03 lead generation efforts and you know honestly just basic things like um getting getting more Google reviews from
22:10 customers you know figuring out how to to better serve customers so that we are reliably getting fivestar reviews um so
22:17 client delivery experience got a lot better lead generation lead um conversion processes got a lot better so
22:25 just a little bit of everything um throughout the sort of transition phase through the first two is just chipping
22:32 away at making the business overall more robust and more able to um you know be a
22:37 be a real business not just uh a business that’s relying on two key employees got it so then I guess you
22:44 know and that’s the thing right early on you someone leaves and you freak out and then you realize man it’s actually great
22:51 that they did that because it forced you to actually go solve the problem versus just continue to lean on the pain that was already there right right um it’s
22:58 painful it’s Yeah it’s painful it’s just it’s like wow especially when you rely
23:03 and you depend on somebody you know and then they don’t they don’t like change which is your number one killer right it’s change they’re like hey I’m done i
23:10 couldn’t imagine in a small town it’s not like you could just go get a recruiter and start recruiting we’re in Houston so it’s like finding people’s
23:16 little easier you You probably had to like start somebody from the ground up get them up yeah no exactly i mean you
23:22 know I made a lot of mistakes along the way you know I like like you said you know I you know fire you know firing
23:29 this guy that ultimately didn’t work out um it was really it was scary you know he had a lot of leverage in the business
23:35 he had a lot of existing accounts that really liked him a lot of people came to the store just because they liked him so
23:40 this guy had a lot of you know political capital and um and leverage in the business so it was scary to move on from
23:47 him but ultimately was the best thing that could have happened you know we less relying on a toxic relationship uh
23:54 build better systems and processes to you know fill in the uh the void that he
23:59 left behind um you know I hired a guy I actually recruited him from from Texas
24:04 and uh you know he ended up it ended up being a really bad decision and culture
24:10 fit so you know I swung for the fences for some white knight that’s going to come in and you know grow the business
24:17 and send us to the moon and that ended up just totally falling on its face and was was an absolute disaster so a lot of
24:24 hiring like bad hiring choices that I made uh namely that one but uh you know
24:30 through it all we continue to grow continue to do well serve customers you know like you can make you must have had
24:36 a good product you guys must have done that part yeah i mean were you more retail focused or cons or or enterprise
24:42 more retail yeah so you know we had you know we’re again we’re a small it’s a small town you have to have a good good
24:49 word of mouth and reputation uh otherwise you’re going to it’s not going to work um a little moed right i mean
24:54 there’s not a lot of others of what you were doing yeah i mean know there’s limited competition you know a lot of
24:59 the contractors in town aren’t necessarily the most sophisticated guys in the world um but yeah I mean we we
25:05 did a good job for our customers and I think ultimately that’s kind of what um what carried us through everything well
25:10 before you jump on I just want to say like so for our listeners right this is very important um and Ferris and I just
25:16 literally had this conversation two weeks ago it’s like you cannot be scared to let go of people because they if they
25:22 are not a fit the best thing you can do is move them along for both of you right it’s not anything personal and I think
25:28 that was a big thing you just kind of said right there right i mean we had a very very important person on our team
25:33 that we recently lost and for like three days I was like “Oh my god this is going
25:39 to be awful right?” But it’s actually ended up being the best thing that could have happened because there wasn’t a cultural fit where we were going and
25:45 where he wanted to go it just didn’t fit but I mean I was literally like “Oh my god.” And I’ve been through this three
25:51 times right and I’m And now we have a much much better option too we open the door and so it’s kind of like that thing where we had the White Knight show up
25:57 the White Knight well we feel so far it feels that way uh but it’s you know it’s kind of like what my wife says okay let’s clean out the house is get rid of
26:04 everything that’s just there and guess what next year it’ll all be back it’s like it just opens up but it’s different
26:09 stuff and it’s opening tell me what day you guys are cleaning up and I’ll be there you know later that evening we went down to our new company we’re doing
26:15 a big cleanup and so we pick up Casey’s 52 inch TV cuz he wants to upgrade to the 56 in and you know I go for No it’s
26:22 a good point Kristen so I kind of want to let you just mention that because that was a big thing for us and and for
26:27 the listeners that are listening it’s like what are those key takeaways i’ll tell you right now it’s like you know the company should be you know it’s an
26:34 organism and you want to have people inside of that organism that help the company grow but if someone’s not a part
26:39 of the culture you’ve got to you got to move them on even if it feels like you’re going to lose it’s critical i
26:45 mean just to add on to what you’re saying I you know it was one of those things that was just nagging at me for for months i mean really probably a year
26:53 of just like I I honestly it was it was a bad toxic working relationship and I just felt like I can’t get rid of him
26:59 you know he’s he’s too key to the to the company and exactly the the situation with the the person we’re talking about
27:05 same thing so yeah and and and it sucks and you feel like you’re beholden to this guy and like you know you’re
27:11 working for him more than the other way around it’s not good so my my advice to your listeners out there is you know
27:17 when these nagging um situations are happening and you know in your gut what you need to do and um my recommendation
27:25 is do it do it sooner and like the more the longer you wait the more it’s going to fester and the worse it’s going to be
27:32 for your company so uh can’t can’t agree with you enough i’ll give you one more
27:37 example of of like another way I’ve heard it said which actually I really like which is if you were to you know in your situation if you were to create a
27:43 brand new flooring company from scratch right you talked about you’re doing everything is that the person that you would call for that position if the
27:49 answer is no then you probably don’t have the right person to begin with right so you know internalize that and make the decisions um but maybe moving
27:56 along so you know ultimately 3 years later right you know where did you grow the company to and at what point in time
28:02 did you decide you know what I want to make an exit here right and you know did you do anything to sharp preparing for that
28:08 you know ultimately we we grew it to a little over 4 and a.5 million um so kind of on a revenue wise of revenue yeah so
28:15 we we grew to four and a half million of revenue we grew it to um excuse me uh
28:20 1.1 million of SDE so you know double a big jump man yeah double doubled
28:26 profitability um because you you increased and I just want to say you increased revenue by a million but your
28:31 efficiency gain was doubled increase revenue 30% but increased margins 100%
28:37 right yeah well it’s more like Yeah about 50% increase profit 100% sorry we’re about We were about uh Yeah we’re
28:44 about 3 million so we grew to four and a half so it’s 50% increase and then yeah doubled estimated so um yeah so I mean
28:53 you know yeah revenue we grew I think you know pretty well i think we could have done a lot better looking back on
28:58 it but yeah to your point really what I think we did a great job at is just improving efficiency and making the
29:04 business a lot more profitable um so doubling SDE was awesome um you know
29:10 ultimately I felt like I wanted to
29:15 um I wanted to really grow a business that is scalable to you know
29:22 theoretically multiple locations and grow past what we were doing um you know
29:28 I felt like we we had kind of tapped um tapped out the market that we were in
29:33 in Steamboat you know there’s only about 10,000 people there um so it’s a small market and if I was going to go open up
29:39 a new showroom or or store I felt like it wasn’t the brand or the sort of
29:46 business model that I wanted to ride so I kind of came to a crossroads like okay do I keep this do I install a GM you
29:54 know and kind of go focus elsewhere and I came to the conclusion that I would
29:60 rather monetize it and move on to a new project so you know it was a pretty
30:08 pretty quick decision after the holidays in 2024 my wife and I kind of got together and we we decided that this is
30:14 what we wanted to do um we were just having our second kid felt like we wanted to move back to the front range
30:20 of Colorado outside of Boulder um and ultimately we felt like it’s best for us
30:25 to monetize this we had grown it we had done a good job we we felt like we could get a good exit for it and uh take the
30:32 proceeds of that roll it into the next project wipe our hands clean of it so we’re not being distracted by it and
30:38 move on to the next chapter of life and what was the time frame when you made that to you actually closed how how long
30:44 did that take we probably decided we wanted to sell it like I say April 24 it ultimately closed
30:52 uh beginning of October so it was a pretty quick process it was about be like five months hire a broker or did
30:58 you do it all yourself yep we hired uh we hired a broker from Transworld um and
31:04 actually the same broker that we that I used or that was on the uh when I when I bought the Yeah that’s good because that
31:11 guy will be uh your broker for life right he’ll bring you stuff in the future always make sure to take care of on both sides of it exactly and so
31:18 ultimately what was the exit we exited for about 4 million
31:24 so yeah we uh ultimately ended up being about a 24x uh multiple on invested
31:29 capital um that’s the beauty of leverage right so yeah after Yeah obviously leverage is a huge part of that but um
31:36 but you also even to arbitrage right so you went from a 3x to a 4x right you see
31:41 that’s the beauty there um and that’s because you enhanced your even to above a million and that’s that ma that’s that
31:48 magic that allowed you to get that trade which is great man yeah exactly yeah you know we we pulled a lot of cash out of
31:53 the business we got a little you know we had that multiple expansion so yeah I mean ultimately it was a it was a really
32:00 great um you know exit and uh and chapter for my family and how did the
32:06 employees take it were they like a we’re going through another sale or was it a very did you do it differently did you kind of walk the guys i mean because
32:13 you went through that experience were you How did you handle it yeah I tried to make it as smooth as possible for the
32:20 for the buyers you know wanted to make it as positive as possible there was a little bit of turnover day one um some
32:26 pe one person in particular didn’t react super well to it um but everyone else stayed um you know the I think the
32:34 culture and the team um handled it pretty well um obviously there there’s
32:39 that’s a shakeup and that’s a kind of a scary thing for everybody involved but overall I think uh the transition period
32:46 was was smooth and um I I wanted to make sure that I was handing over the business in as good a shape as possible
32:53 got it and I’m guessing uh you didn’t tell the employees till it was already said and done yeah okay all right all
32:59 right so in wrapping up before we go to our rocket round tell us what you’re doing right now because you said you’re doing you’re building your own company
33:05 from scratch and there’s always that theory buy then build or start a one zero to one or one to two so what where
33:10 you’re obviously at zero to one right now yeah I know i I kind of I kind of uh
33:15 feel like I would like to on this next this next um swing
33:22 start something from the get-go that I feel is a really great infrastructure for growth so um I I would rather at
33:29 this point in my life um start something build it what I believe to be correctly
33:36 and hopefully it grows and it uh is kind of that model where it can be scalable
33:42 to multiple locations so that’s what I’m doing right now um I felt like uh the
33:47 buying than growing was awesome but I sort of felt like I would be better
33:53 served long term to build something the way that I wanted to be built um grow it slowly not have the leverage over my
33:60 head and you know debt payments and all that kind of stuff which uh can be a little bit scary it’s super scary
34:06 especially when that interest rate goes from because you bought in 22 so your interest rate went from 6 and a4 to 11
34:13 was that about right i bought at 21 and like I mean my SBA loan was amazing it was like you know 5% you know and it was
34:21 just like the timing was incredible now it’s nine you know whatever so it’s you know it’s it’s a lot scarier now like to
34:28 to buy and lever up a business with that huge interest rate so I feel like my timing was incredible with the with
34:34 interest rates being zero um in 21 so yeah um with that you know I’ve got a
34:41 little bit of capital i’ve got a little bit of runway i’m a little bit I’ve got some money where I can you know support my family during this building process
34:47 and you know build it slowly build it right less leverage and uh hopefully it it pans out the way I’d like exciting
34:53 man do you want to share what space it’s in or still waiting to kind of announce it flooring yeah so stay still in the
34:58 flooring space all right cool so you became an expert now you got an idea you got a concept yeah I got a concept got
35:04 sort of the model that that I like and uh yeah I want to keep compounding in flooring i I think it’s a good industry
35:10 good business and um yeah I think there’s there’s a lot of opportunity in the flooring space it’s super fragmented
35:16 a lot of fragmented you know yeah a lot of uh you know sort of legacy sort of mom and pop shops out there so there’s a
35:22 lot to like about the industry and I have a friend who’s focused on the the distribution side on the East Coast and he’s done well just picking up some of
35:27 these mom and pops and just really scaling out the distribution side and his biggest problem is finding the actual installers on the back end side
35:34 right because a lot of times people want to buy in bulk but they also want to line up the installer and so but I mean it’s it’s he’s done very well in that
35:40 space awesome yeah well hopefully I’m success story as well amazing story so
35:46 we’re going to jump right now into our rocket round this is where we ask our guests three questions to learn more about them so Chris real quick what do
35:52 you like to do in your free time i like to snowboard like to play tennis
35:58 um hang out with my I’ve got two daughters so hang out with my my daughters and my wife um but yeah kind
36:04 of right now living the steamboat life skiing snowboarding uh playing tennis and weightlifting so I’ve I’ve got a
36:11 pretty boring life right now with being a being a dad of two young girls but that’s that’s pretty much all I Boring is good boring is good you know good for
36:18 you i was up in your neck of the woods in January and I was there during that Arctic freeze and so it was a very cold couple days of snowboarding yep there
36:25 you go yep all right uh next question most memorable moment in your business journey
36:31 i would say firing that key employee and uh you know staring staring down the barrel a little bit so yeah that that’s
36:37 definitely the most memorable that’s no fun yeah yeah all right and then what is your favorite tool or resource
36:44 i got to say Notion i’m a huge Notion fanboy um so much so much you can use
36:49 it’s uh it’s just an awesome tool if you’re creative with it you can do so many things with it so from a software
36:54 perspective definitely Notion yeah I know i listened to the this weekend startup podcast right with Jason Alcanis
37:00 and you know notion is one of the sponsors and you know he does the whole pitch for it and I went and played with it a little bit but it just it yeah I
37:07 mean it’s I’m I’m surprised to hear that you built a CRM through it so I’m actually Did you maybe on that tangent
37:12 did you build out billing and emailing capabilities through notion as well
37:18 uh well no we we haven’t so like billing we did that separately but like it’s my it’s kind of like the data hub it’s
37:24 where a lot of automations can take place so yeah there’s a ton you can do with it and I’m asking because I just don’t even know if it’s supported so if
37:30 he did I was like “Okay that’s actually really cool.” Yeah we can take it offline i can nerd out with Notion with you cool all right well Chris thank you
37:37 very much how can people get a hold of you uh yeah you can uh reach out to me on Twitter my handle is to Edwards
37:45 TH_Edwards or you can email me chrisenquity.com
37:51 sit t-quity.com perfect all right we’ll put that in the show notes well Chris great meeting you
37:57 having you here on the show uh hopefully get to meet in person at one of our conferences that we’re throwing we’d love to have you come out and really
38:03 thanks for spending some time with us yeah that’d be great we’d love to love to meet you guys in person and thanks for November 1st you’re here at 1 we
38:09 locked out the date so it’s brand new announcement all right I’ll be there chicago all right sounds good all right
38:14 thank you very much Chris appreciate it all right thanks Casey thanks Chris thank you for listening to the M&A Launchpad podcast if you’ve enjoyed
38:20 today’s podcast and would like to support us please leave us a rating and a review after you listen if you’re looking for guidance on your next
38:26 business acquisition or sale capital to support your next business transaction or to invest in a private equity
38:32 opportunity visit equityaunchpad.com to learn more and to connect with our team if you know of an individual who would
38:38 be a great guest for the show head over to equityaunchpad.com/nominate
38:43 where you’ll have the chance to refer yourself or someone else to be a guest on our show i’m Casey Mchu and I look
38:48 forward to talking with you next week
