This is a follow up to my first announcement here: redacted After a 9-month search process, I closed on my first acquisition. I bought a residential and commercial landscaping company in Fortuna, CA — about 2.5 hours from the Oregon border. The business averages $4.5M in revenue ($4.8M in 2024, $4.3M in 2025), with SDE of roughly $1.3M in 2024 and $850K inredactedThe revenue drop came from personal challenges the owners were navigating — the expenses stayed flat, so the entire SDE decline tracked dollar-for-dollar with the revenue dip. To me, that told a clear story: the physical assets, the customer base, and the team were all still there. This was a people problem, not a business problem. I bought it for $3.5M, inclusive of $350K in working capital. I am a self-funded, solo searcher. No institutional investors, no equity partners. Just me, a lot of advisors I trust, and a conviction that this was the right next chapter. Here's what I learned. 1. Do the reps, not just the reading I started this search in earnest in late AugustredactedI had read everything I could get my hands on — the HBR Guide, Buy Then Build, A Practical Guide to Buying a Business — and compiled all of my notes into my own "Business Buying Playbook." That upfront investment was worth it. But at a certain point, more reading becomes avoidance. You have to stop learning and start doing. The thing that finally clicked for me was watching a Walker Deible video about why searches fail. His point was simple: high-volume activity and getting off the fence. IOIs out every week. Don't sit on deals. I reviewed over 150 CIMs, sent 11 IOIs, had 3 accepted IOIs that never turned into LOIs, and ultimately submitted one LOI — this deal. The reps matter. Lesson: Build your knowledge base early and deliberately, but don't let learning become a substitute for deal flow. Set a weekly cadence. Review CIMs. Get IOIs out. The skill develops through repetition, not more reading. 2. Your buy-box is a starting point, not a boundary I initially passed on this deal. It was 4 hours and 40 minutes from where I live. Too far. Not in the box. But after several accepted IOIs that didn't convert due to price, I recognized I was going to have to look at deals on the edges of my criteria. I went back through 150 CIMs I had already reviewed and gave this one a second look. I'm glad I did. Lesson: The buy-box is a useful filter, not a prison. Once you've built up enough deal volume to know why something is outside your criteria, you can make an informed call about whether to revisit it. Early in your search, be more open. Tighten later. 3. The seller relationship is the deal After I had an accepted IOI, I drove north and spent a day with the owner. We toured several job sites, walked through the shop and office, and had lunch together. I knew going in that the most important thing I needed to learn wasn't on any spreadsheet — it was whether I could trust this man. I told him directly, over lunch, that the number one reason acquisitions fail is seller dishonesty. And that I felt I could trust him. He needed to know I would be a good caretaker of the company he had spent 20 years building. I was, in a very real sense, interviewing for his job. At every point in the process — diligence, negotiation, closing — he proved himself trustworthy. You cannot diligence your way around a bad actor. But if you have the right seller, it smooths everything. And through that process, I also saw God's hand at work. What looked like a deal I had passed on became the deal I was meant to do. Turn after turn, things lined up in ways I didn't engineer. That gave me a kind of confidence you can't manufacture from a financial model. Lesson: Go meet the owner early and in person. The relationship you build in that first meeting will carry you through the hardest moments of diligence and negotiation. And pay attention to more than the business — pay attention to the person. 4. The LOI is your real negotiation I used SMB Law Group's template LOI and spent significant time getting the language right before submitting it. This proved to be one of the best decisions I made in the entire process. Issues that surfaced close to signing — terms, WC mechanics, contingencies — had already been resolved in the LOI. Those conversations, which could have been contentious and slow at the 11th hour, became simple references back to language we had already agreed to. One specific example: I knew we were entering the busy season at close. So I made sure the LOI included language for "seasonally adjusted working capital." That meant I wasn't cash-constrained right out of the gate. The $350K in working capital I negotiated into the deal reflected peak seasonal needs (~$280K), not the off-season trough (~$75K). Another example: I took a different view from the owner on two SDE addback items, which reduced my view of SDE from the advertised $920K. Rather than renegotiate price — which would have been emotionally charged and potentially deal-breaking — I asked for a little more in working capital. My QofE advisor said something I found helpful: "Your view of SDE went down, but your confidence in the business went up. That's a fair trade." Having that framing let me move on cleanly. Lesson: Spend more time on your LOI than you think you need to. Front-load the hard conversations. Every issue you leave unresolved at LOI will become a more expensive and emotionally loaded conversation later. 5. Capital structure: creativity matters, and cash is king My deal structure was: - $400K equity from a 401k ROBS plan (I used IRA Financial) - $800K seller note, split into two notes: one $400K at 5% fully amortized over 5 years, and a second $400K at 5% with a balloon at 5 years — with the intent to refinance the second note into a new 10-year term at that point - $300K in cash from the bank (Pathward, through Pioneer Capital) for CapEx investment - $250K line of credit A quick note on why I split the seller note: a seller note amortized over 5 years creates significantly higher monthly payments than a 10-year term. By splitting it in two — one fully amortized, one balloon — I got the benefit of spreading risk to the seller while managing my cash flow. The balloon note effectively becomes a 10-year instrument once I refinance it. A note on the $300K CapEx draw: this was a separate bank facility, not part of the purchase price. I specifically negotiated this as day-one access to capital for equipment investment. Landscaping businesses run on iron, and I didn't want to be in a position where I was deferring necessary equipment decisions because I was protecting cash. Keeping it separate also meant it didn't inflate the purchase price or complicate the seller note conversation. I came into this deal with a lot of liquidity on purpose. I've heard too many times that small businesses die from lack of cash, not lack of profit. I wanted the runway to make changes, invest in equipment, and navigate surprises without being forced into bad decisions. If you end up with too much cash at close, park it in the S&P for a while. But have it. Lesson: Don't just model the purchase price — model your monthly obligations and your cash position over the first 12–18 months. Optimize your structure for cash flow, not just valuation. And bring more cash than you think you need. 6. Know what you're buying into — including the regulatory complexity This business is a licensed California contractor, which added a layer of complexity most buyers don't anticipate. The California Contractors State License Board (CSLB) license doesn't transfer automatically in an asset sale. I initially structured the deal as an asset sale. I had optionality for a 338(h)(10) election — which lets you treat a stock sale as an asset sale for tax purposes — but the F-reorg route was off the table for one specific reason: an F-reorg won't work to transfer the CSLB license. That's a critical detail if you're buying a licensed California contractor. Your deal structure and your license transfer strategy have to be designed together, not in parallel silos. If an employee has been with the business for more than five years and earns at least $30K/year, they can obtain the license without testing. I had one employee who qualified on tenure but wasn't the person I wanted long-term in the RMO role. A second employee was the right long-term fit, but he hadn't yet hit the four-year threshold. So I went through the waiver process with employee one, gave him a 10% stipend, and began accruing $2,000/month to pay out upon successful license transfer to employee two. This creates a retention incentive for employee one to employee two, and employee two to me. None of this is intuitive. I would not have found the path without a specialist. To move the C-27 license, I worked with Contractor License Experts — specifically Jamie Cohen — who helped me find a path through the CSLB exam waiver program. Lesson: If you're buying a licensed trade contractor in California, engage a license specialist before you finalize your deal structure. The path exists — but it has to be engineered, and it affects your entity structure, your personnel decisions, and your closing timeline. 7. Build your team, but don't overbuild it Here's a rough picture of my closing costs: ItemCost Legal (SMB Law Group) - $37,000 Quality of Earnings - $16,000 ROBS setup (IRA Financial) - $3,500 Contractor License Experts - $2,200 Miscellaneous - $3,000 SBA Guarantee Fee - $79,000 Lender Attorney - $16,000 Closing Group - $4,000 Business Valuation (bank-ordered) - $7,000 Total: ~$167,700 One thing worth knowing: once your deal funds and the business has cash in its account, you can write yourself a check for your deal costs. Run it by your accountant, but that's money you get back on day one. I started the QofE right away and waited until I was confident there were no showstoppers before engaging legal. In hindsight, I wish I had engaged legal sooner — the negotiation ran all the way to a few days before close. Parallel-path those two workstreams. Nate at SMB Law Group was a rockstar. Lesson: Know what you can do yourself and what requires a specialist. Invest in your QofE and your legal team — don't cut corners there. But you don't need every service imaginable. Build a lean, trusted team and use them well. 8. Solo is a choice — make it intentionally I specifically did not bring on equity investors, and I'd encourage every searcher to think hard about this decision rather than defaulting to the traditional model. My reasoning: I can fire advisors. I can't fire partners. I love getting input — I take in a lot of it — but at the end of the day I want to make the call and own the consequences. I've heard too many stories about partnerships going sideways, especially when someone else's money is on the line. People get squirrely about their capital. That said, solo searching could require you to have another source of income while you search. I did consulting work — about 10 hours a week — throughout my search. It extended my runway and kept me disciplined about using my time well. Lesson: The question of investors vs. solo isn't just financial — it's about how you want to operate and who you want to be accountable to. Think it through clearly and make the choice that fits your wiring, not just the canonical model. 9. Keep a running log of your questions When you're searching, your brain doesn't stop. I'd be on a date night with my wife and suddenly think of something I needed to investigate. So I'd make a note. But I found myself asking the same questions multiple times because I hadn't tracked what I'd already answered. A simple running document — questions raised, questions answered — saves you from rework and helps you see your own progress. The search is long and lonely enough without your brain spinning on resolved issues. Lesson: One document, two columns. Question and answer. Keep it current. It'll also become a useful reference as you get into diligence. A Few Final Thoughts I came to ETA through Wharton's Executive MBA program, but I didn't take the class at the time. Years later I went back (Wharton lets alumni return for free), took the class with Bob Chalfin, started searching — then backed off to take a COO role with a classmate. After leaving that role, I did some consulting and eventually re-entered the search. What finally pushed me over the edge was a conversation with a friend, let's call him John. He had bought a fire safety company four years prior — $700K SDE, $2M revenue, 3x SDE purchase price — and just sold it. He had doubled revenue, tripled SDE, and doubled his exit multiple. He walked away up roughly $10M. That reminded me what's possible here. This path is hard. The search is lonely. The diligence is exhausting. There are moments when you wonder why you're not just taking the next W2. But if you find the right business, with the right seller, and you go in with your eyes open and your cash reserves full — the upside is real. Be trustworthy. Move fast. Have more cash than you need. And pay attention when God opens doors you didn't even knock on. Happy searching.