Right. I’m currently working with the bank and the seller to see why it has negative cash flow. Is it an operation issue? Or straight up trouble collecting from clients.

I don’t know what a typical AR value is that’s normal for a roofing company to carry.

Do you have any good ideas for how to structure the sales people compensation?

Thank you!

Yes that’s one reason i like this business. It has tenured employees already.

What do you mean the bottleneck is the employees? Are you saying that’s where it’s at in general?

You are correct. Definitely some cash flow problems. I really want to understand why that is. And see if there is a way to help that.

It can’t be really good or really bad. I’m trying to do as much investigating as possible. I know the owner has a small role in day to day operations. But you’re right. 1mm basically is getting me the reviews, reputation, trucks and employees.

Background flipping homes and in engineering.

I am doing sba + down payment right now. I want to also request seller financing.

Not entirely sure on leads. I’ll have to do some digging in due diligence period

Copy. Yeah I’m not assuming I’m getting the all the AR at all. That’s a big question I need answered

Approximate numbers.

6m revenue 3m cogs 1.6m Op expenses 1.5m in AR

The valuation of the business has definitely brought to questioning since it’s marking a cash loss this year. I actually like the idea of the seller having some skin in the game as well. I think he is open to doing that. Maybe 100-200K in seller financing.

From the AR account, 900K is in the 1-30 days old. The rest is 30+. I agree, I cant value the entire AR dollar for dollar.

Right, I don’t know how much (if any) op expenses I can trim while it still running. I don’t know if they are wasting money on anything yet. I plan on getting a detailed picture of each expense. I know the bulk of it is wages (135k), and marketing (50K).

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Thats also a good question, if it’s showing negative EBITDA, how can value be determined? They are still generating $6m in 2023.

I’m definitely not expecting to be able to trim all expenses. Just lean them out. About $135k is in wages and 45k for marketing per month. I’ve reviewed some leaner construction companies that are getting by with not too many op expenses. I will be reviewing each expense and consider if necessary or not.

That’s a great idea about calling them a few times as a potential client. I’ll try that after thanks giving.

Such good nuggets of advice you gave me. Which sound like great ideas to implement.

These next few weeks I’m going to learn about how exactly they are generating leads, and what software they are using for CRM. Do you have any that you used that you like?

I’d love to find only one software that can do all aspects of operations for a roofing business.

Here are few reasons why I liked this brand I’m planning on purchasing. Established in the area, many word of mouth sales tenured employees, and already established relationship with subcontractors.

The google reviews are more to get the clients to trust the company. There are a lot of construction scams in the area, so I want to leverage the reviews as much as possible.

I do see valid points in your advice which I’m going to consider. We just entered due diligence so definitely have some time.