Roughly one year ago, I negotiated a sweat-equity deal where I became the minority owner and second-in-command of a small commercial safety products company currently earning ~$600,000 of revenue and ~$200,000 of SDE. Zero money down, one-year performance incentives to roll additional discounted equity (non-cash transfer). It was a lower-risk opportunity (no PG, but lower upside) while pursuing my MBA and it allowed me to get into the seat as soon as possible. Some of these learnings may be due to my SMB naivety and how niche this company is. My background includes the military and strategy consulting, so my expectations may have been elevated. I hope this provides value. Execution is even harder than I thought. o I was still earning my MBA when we started together and was eager to flex my learnings, sit on my high horse and say, "let's try x, y, and z" (think Porters Five Forces, value-based pricing, harvard case studies). We have a vendor of a major revenue item. The products are best-in-class, but the customer service is awful. Their deliveries are late and often missing product. I want to fire them. But what do you do when there is no viable replacement? Not as easy as in the classroom. You deal with it, and it results in more work for you babysitting (and paying) them to do your job and theirs. Concentration is the norm at this size. o We signed multiple partnership agreements and sales agreements with individual salespeople and companies. The economics made sense and the synergies were present. We went on numerous out-of-state sales calls excited for our future success. Guess how much revenue we generated? Zero. The agreements looked so good in my excel, but things go wrong more than they go right. One company experienced significant cash flow issues and fired the entire sales team, and we discovered a salesman was scared to pick up the phone. o How do you increase prices of code-driven products where everyone competes on price and the market hasn’t seen a price increase since 2021? You don’t. You are forced to do something harder that hopefully moves the needle (didn't Codie Sanchez say price increases were easy??). Everything takes so much longer than you think, and not everyone is as hungry as you o Whether it’s creating new marketing materials, customer outreach, partnership meetings - my experience and expectation was a turnaround of 24 hours or less. I thought these people wanted to grow their business as much as I wanted to. Not likely, think days to weeks for email replies, call backs, or future meetings. How do you learn and iterate based on market feedback? The “white space” to work on other things while you wait can drive you crazy. o We met with an EU manufacturer and created a business plan to develop a new market together. They proceeded to ignore us for a month then left for a 3-week vacation. Then they said to reach out next year. How do you forecast growth when something like that occurs? It becomes a probability of the next meeting occurring rather than estimated product volume. Trust but verify; challenge the owner’s assumptions o Bear with my short story to illustrate the point. The owner and I were discussing the process of entering a new market. The most direct path required interactions with local fire marshals. He shared previous negative experiences and expressed disinterest when he last approached them. So, we decided against that path and went another direction (which was unsuccessful – remember execution). Four months later, we revisited the process and arrived back at the fire marshal problem. I asked, “when was the last time you spoke with them?” The answer, 8 years ago. You are kidding, right? o Second, and more embarrassingly, we leaned into a new market for a number of months, under the assumption that a certain code required our products. We made contact lists, developed copy, sell sheets, scripts, launched google ads, made numerous calls and email campaigns. It turned out, after the owner had spent 15 years thinking the code was on our side and just hadn’t had the time to chase the demand, it wasn’t. This is entirely my fault, but when an owner is the clear expert in a space, has been profitable for 15 years, and I have never read a state code in my life, why would I not trust his word? It’s not all bleak. We have grown the business and are confident in its direction. I hope this helps fellow searchers and reminds you these small businesses really are a black box. Reach out if you’d like to chat. I know I have much left to learn and any feedback is appreciated.