How An Air Force Vet Bought A $3.7M Construction Company w/ $485k In Take-Home Profit (Within 11 Months)

Summary

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Episode Summary:

Podcast: Action Academy | Millionaire Mentorship For Your Life & Business
Host: Brian Luebben
Episode: How An Air Force Vet Bought A $3.7M Construction Company w/ $485k In Take-Home Profit (Within 11 Months)
Date: December 23, 2025
Guest: Matt (Air Force Veteran, Business Acquirer)

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Overview

This powerful episode spotlights the journey of Matt, a recent Action Academy member and Air Force veteran who, within 11 months of leaving active duty and joining the community, acquired a $3.7 million specialty construction company. His story demonstrates the achievable path from W2 employment to business ownership, emphasizing the importance of clarity, perseverance, and taking strategic action—even as a busy parent and spouse. The episode dives into the specifics of Matt's acquisition process: from buy-box creation, deal sourcing, funding, and due diligence, all the way to negotiating creative financing.

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Key Discussion Points & Insights

1. Matt’s Background & Setting the Goal

• Military Transition – Matt had recently separated from active duty Air Force and entered the corporate world but found himself seeking something more fulfilling ([01:21]).
• Discovery of Business Acquisition – Found inspiration in the Action Academy community and set an ambitious goal: acquire a business in 12 months ([02:10]).
• Mindset on Goal Setting
  • Brian: “If you got so bogged down in the very beginning, I think that you probably would have logic’d yourself and thought yourself out of it… sometimes ignorance is bliss.” ([02:56])
  • Matt: “Once you start something and then you start uncovering the things you were ignorant to… it’s almost like: I’ve already come this far, I can overcome this.” ([03:30])

2. Deal Sourcing & Buy-Box Development

• Initial Approach – Spent significant time on BizBuySell, evolving from a narrow industry focus to a wider one based on financial goals and lifestyle ([05:43], [07:55]).
• Critical Buy-Box Criteria – Looking for a business that:
  • Would replace W2 income (mid-100k range)
  • Came with systems, processes, and strong management in place
  • Provided family flexibility and time freedom
• Common Pitfall – Warns against buying too small (“buying yourself another job”) and stresses importance of clarity around life goals before deal hunting ([09:21], [11:11]).
  • Matt: “You have to remember what [your goals] are so when those things inevitably come along, you don’t let them pull you off your goal.” ([11:11])

3. The Acquisition Journey

• Deal Specifics
  • Found a specialty construction business with $3.8M revenue, projected to grow to $4.7-$4.8M ([05:43]).
  • SDE (take-home profit): $485k, aligning perfectly with Matt’s buy-box.
  • Strong management in place: GM (25 years at the company) and Assistant GM (18 years) handling daily operations ([05:43]).
• Diligence & Negotiation
  • Deep analysis: Looked at over 250 deals, dedicated ~20 hours/week on top of W2 and family ([13:43]).
  • Importance of interviewing key employees before closing (“I would not have done the deal if I could not talk to them” – [24:59]).
• Memorable Moments
  • Brian: “Between 9 to 5 is where you make a living, and between 5 to 9 is where you make a life. And Tony Robbins said that. I really agree with it...” ([15:31])
  • Matt: “My advice… take an internal audit… If your goal is ultimately to build a better life for yourself and your family… you will be able to find the time. There’s only 24 hours in a day. But you’ll always find the time to do something you really want to do.” ([17:04])

4. Deal Structuring, Funding & Creative Financing

• Purchase Structure
  • Purchased via a stock (membership interest) sale instead of a traditional asset sale – primarily to preserve valuable existing contracts ([19:45], [23:16]).
  • Retained all business assets and liabilities to ensure seamless transition.
• Funding
  • Secured private debt financing from a small, trusted group (past business contacts), avoiding SBA ($0 equity handed out, 10-year note with favorable interest and interest-only payments at outset) ([26:54], [30:31]).
  • Matt: “I gave up no equity… Got generally pretty favorable terms on a hundred percent debt…” ([26:54])
• Seller Holdback
  • Structured a 6-month holdback on part of the purchase price to protect against undisclosed liabilities ([28:13]).
  • Negotiation: Seller wanted full payout at close; Matt pushed for a holdback, settling on incremental payments over 6 months ([29:15]).

5. Lessons, Risks, and Actionable Advice

• Evaluate Key Risks
  • Key man risk, key employee risk, and the need to meet pivotal staff before closing ([25:22]).
• Networking for Capital
  • Matt: “If this is my buy box, can I count on y’all to at least have a very interested conversation…?” ([32:19])
  • Brian: “Luck is the dust that’s kicked up from action. … If you hadn’t talked about it, if you hadn’t been in the room, they wouldn’t have known.” ([33:41])
  • Emphasis on sharing your goals and inviting collaboration: “Squeaky wheel gets the grease…” ([34:35])
• Mindset for Success
  • Clarity upfront on what you want from ownership is key to resisting distractions.
  • Support system: Action Academy helps by surrounding you with high-performing, like-minded peers ([36:54]).
• What’s Next for Matt
  • Full transition out of the W2 into focusing on growing the construction business.
  • Confident outlook, crediting employees and future growth pipeline ([35:18]).

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Notable Quotes & Memorable Moments

• Brian Luebben ([02:56]):
  “When it comes to setting your big goals and your big visions, it’s… to focus on the where instead of the how.”
• Matt ([03:30]):
  “You start taking the first step towards a goal… once you start something and then you start uncovering the things you were ignorant to… ‘I’ve already come this far, I can overcome this.’”
• Matt ([05:43]):
  “The big thing for me… was they have the systems, the processes, the people in place to really run the day to day… That was something I was looking towards really—an opportunity where I didn’t need to jump into the fire… I could really take time to learn and understand what is happening in the business while also being able to make strategic and larger decisions.”
• Brian ([15:31]):
  “Between 9 to 5 is where you make a living, and between 5 to 9 is where you make a life. Tony Robbins said that.”
• Matt ([17:04]):
  “You’ll always find the time to do something you really want to do.”
• Matt ([24:59]):
  “I would not have done the deal if I could not talk to [the key employees]… Without knowing that they were on board… the risk would have been way too high for me.”
• Brian ([33:41]):
  “Luck is the dust that’s kicked up from action… If you hadn’t talked about it, they wouldn’t have known.”
• Matt ([34:35]):
  “There are so many people out there… that want to help, that want to be a part… but they’ll never know how they can help you if you don’t tell them.”
• Matt ([36:54]):
  “When you’re surrounded by like-minded individuals, then your reality can change… there’s just something to be said about having conversations on a daily and weekly basis with individuals who are doing the things you want to be doing.”

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Timestamps for Important Segments

• 01:21: Matt’s transition from Air Force to business and setting his goal
• 05:43: The business details, why he chose this particular company
• 09:21: His financial/numerical buy box requirements
• 11:11: Value of clarity on vision before jumping into acquisitions
• 13:43: Deal sourcing grind—250+ deals, 20 hours/week on top of job+family
• 17:04: Prioritization, family time, and the “I don’t have time” excuse
• 19:45: Negotiation details, importance of owner/employee interviews
• 23:16: Asset vs. stock sale—advantages and risks
• 26:54: Creative financing—private debt, 0% equity, interest-only start
• 28:13: Structure of seller holdback for risk management
• 32:19: How Matt “found” his investors—power of networking
• 33:41: “Luck is the dust that’s kicked up from action.”
• 35:18: What’s next for Matt and outlook on the business transition
• 36:54: Final advice for listeners on joining Action Academy
• 37:57: How to connect with Matt

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Final Thoughts & Takeaways

• Action Over Analysis: Set your vision, then move. Don’t let a lack of experience or over-analysis paralyze you.
• Clarity is Power: Know what success looks like for you and let that shape every major decision.
• Network Out Loud: Opportunities and capital often come from sharing your journey and aspirations; don’t keep goals to yourself.
• Process, Not Heroics: Buy something good and make it great, rather than trying to turn around a failing business from scratch.
• Family & Freedom First: Build a business to serve your lifestyle, not one that takes it over.

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For contact, Matt can be reached via email (details in episode links) due to minimal social media presence.

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This episode is an inspiring, actionable resource for anyone ready to transition from employment to entrepreneurship, especially families and high-performers with limited time. Matt’s journey from zero to $485k profit in under a year proves the power of commitment, mentorship, and clear vision.

Transcript

[A]

What's up, guys? I'm gonna give you exactly what you came for. Today's episode isn't an investor with 30 years of experience. It's not a multi billionaire. It's an Action Academy member that bought a $3.7 million business with $485,000 of take home annual profit, with a wife, young children, just left active duty Air Force 11 months ago when he joined Action Academy, recording his side of the podcast episode on his cell phone in his truck because his family was too loud. So, guys, if you want straight up, straight down business talking American Hustle, today's show is for you. We talk about how he found the deal, how he funded the deal, how he negotiated the deal, how he closed the deal, and how he and his family are now going to be financially free within a year. And once again, you don't need to do millions of dollars of paid ads for your business. If you could just straight up share what your people are doing. And this is what our Action Academy members are doing. So if you want to be the next success story like Matt on today's podcast episode, go in the show description, click the link, book a 15 minute free coaching call with us or you can to actionacademy.com now let's give you all the answers that you could ever need for free. How's that for a pitch? Let's rock. Matt, welcome to the Action Academy podcast, buddy. Let's rock. Showtime. What happened for us to be on the podcast here today?

[B]

Yeah, yeah. So it's a wild journey, at least from my perspective. About 11 months ago, I decided I was going to join Action Academy. I had recently separated from active duty Air Force and got into the civilian corporate world, if you will, and working a job and decided that I was just looking for something a little bit more and came across small business acquisition. And immediately it clicked in my mind that's what I wanted to do and started seeking out resources and mentors and things like that and came across your podcast, listened to way more of it than I'm willing to admit out loud in a short amount of time and decided that this was a group I had to be a part of. Joined action academy 11 months ago with the goal of acquiring a business within 12 months. So I cut it close but ultimately hit the mark.

[A]

Dude, when you were setting that initial goal, I'm assuming that you set that goal like at the very beginning, before you really knew, maybe necessarily about the underwriting, about what it actually took to pull this off. And I'm curious what was your thought process and how did it feel when you were setting that goal?

[B]

It was. Yeah, it was. I, I thought it was crazy at first, to be honest with you. Conceptually by a business, it sounds relatively simple, but like you're alluding to, I, I didn't know what I didn't know and the intricacies of it all are just insane and, but so much fun, at least in my perspective, to go and work through. And I thought I was just setting a stretch goal, something that probably wouldn't happen, but happy to, happy to be able to reach it here today.

[A]

Isn't it funny how that's why I love doing these episodes more than any other episode? Because when it comes to setting your big goals and your big visions, it's to focus on the where instead of the how. Because if you got so bogged down in the very beginning, I think that you probably would have logic to yourself and thought yourself out of it and been like, you know what? And this is going to be more of a stretch goal, maybe a two year goal, maybe a three year goal. It's, you would have known like everything that it took. So it's like a little bit of ignorance is bliss. I feel like when it comes to setting these up, would you agree with that or anything you would add to that?

[B]

Yeah, I 100% agree. And I think for me, you start taking the first step towards a goal and maybe the first step's easy, maybe it's not, but once you start something and then you start uncovering the, the things that you were ignorant to initially, it's almost a mindset, at least for me, of I've already come this far, I can overcome this, I've already come this far, I can handle that. And I think that mentality just allows you to keep taking one step further until you get where you want to go.

[A]

I compare it a lot to hiking a mountain. So like I did one 14er in Colorado. They have these things called the 14ers and it's 14,000ft to the peak. And I remember I'm not a big hiker and so we just started at 5 o' clock in the morning and I started with a group of people at a mastermind event that I was at and, and I didn't realize it was going to be like eight hours to the summit and eight hours back. So it was like a 16 hour day. And I didn't know like what the checkpoints were. And then you have these things called false summits when you're climbing and you're like oh, I'm here. And you're like no dude, it's not, you're not here. Like I said an loi the loi got accepted. I'm here. No dude, like you got a long way to go brother to get to the peak and then you get to the peak and you're like wow, very cool. And then you turn around, you're like trying to go back down, start again new mountain. And so at that point I'm curious what are you doing to celebrate?

[B]

Yeah, I. It's crazy. We have, my wife and I have a young daughter and we don't get a lot of time to ourselves. I think for now we're just going to go try and get a nice dinner to ourselves and then here in the next few months try and get out and take a trip somewhere and just be compressed for a week or so.

[A]

I'll give the same advice that I give to you that I'll give to everyone and, and that is try to find a way to get a 10 day something in there or do something that is out of the ordinary because you are only going to get more busy in business ownership until you like figure out the systems and processes and then you can be able to coast. But it's always a really big deal. If I could go back I would have celebrated so much more when I got my first thing, when I did my first thing. That's advice. I keep trying to drill into you guys heads until you listen. But dude, even at dinner is something man. I'm so freaking proud of you. So let's walk through the deal itself. What was the deal and how did this come about?

[B]

Yeah, so I, I found the deal on by sell. I was one of the many who just spend way too much time on the website looking through deals and combing through stuff that meets your buy box. And I came across this opportunity, it's specialty construction. Specifically down in like the civil construction industry they had done it was about three, three and a half, $3.8 million in top line in 23 and then in 24 they were on pace to do about four, 4.7, 4.8. So a pretty significant increase. The SDE numbers look great. For my buy box it was about $485,000 which was right in the wheelhouse what I was looking for. And the big thing for me that made it very attractive was they have the systems, the processes, the people in place to really run the day to day. There's a GM and, and I'll call her an assistant GM or an office manager and they're both amazing people. And the GM has been with the company since its inception over 25 years ago and the assistant GM has been there for 18 years and they pretty much handled the day to day and are the absolute heart and soul of the business. And that was something I was looking towards really an opportunity where I didn't need to jump into the fire and try and make day to day decisions to keep revenue flowing in. I could really take time to learn and understand what is happening in the business while also being able to make strategic and larger decisions to help grow and scale.

[A]

Yeah. And that comes alongside the 4.7 million in top line. If you're doing almost 5 million in top line, you've got a pretty established team with some management structure in and some systems and processes in place. So walk us through when you were beginning your initial business buying journey here 11 months ago through Action Academy is like how did you set up that initial buy box? How did you determine what you wanted and what you didn't want and how did that shift and pivot as you went on along your journey? Because a lot of people make the mistake of actually buying a business that's too small and they accidentally end up buying themselves a job and because the larger price point scares them away to a degree.

[B]

Yeah. And I too fell victim to that trap. I looked into a couple of deals that I just, I shouldn't have and lessons learned for me, Brian, I honestly think it was trying to remember what my, my ultimate goals for business acquisition was. And that is to to build something down the road that I don't necessarily need to be there 24, 7 and to make those impactful decisions on a day to day basis to ultimately buy back some of my time. I'm huge on family and family comes first. And anything I can do to provide my family with a lifestyle where I can be there when I want to be there. We can take a trip when we want to take a trip, but the business can continue to run and grow is what I was looking for. And the first step in that is I was looking for a business that could ultimately replace my W2 income. So when I was creating my buy box, that was the financial aspect of it. And then built my price point off of that and looking at industry multiples. And then again, I probably started off my search too narrow. I wanted to look at very specific industries. I wanted to look at H Vac, I wanted to look at name and industry. I probably went through a phase where, like, I'm just going to look at this for a few weeks. And I personally think that was the wrong net to cast. When I decided to cast a wider net and just look at opportunities that met my buy box without specifying the industry, I was having much better success and finding interesting deals.

[A]

That's very interesting. So you were very clear about the SDE that you needed. So what were you making in your W2? Was that the. Was that in civilian life or was that with the active duty?

[B]

Yeah. Yeah. So I had. I have about 18 months from when I separated from active duty that I had gotten a corporate job, the standard W2 corporate job, and I was making right in the middle of the $100,000 range.

[A]

Yeah. Cool. So then you're like, okay, I need something that's enough for me to be able to replace that in one deal, be able to support my family. And you said you have a young child as well, correct?

[B]

Yep. Yeah. And again, everything about this decision was based around my family and how it would support them. So, yeah, you hit the nail on the head. I had to have a deal that would at least replace what I was making through W2.

[A]

A big thing that I want to ask your opinion on, because I say it a lot, but I feel like the message may be driven home a little bit more from hearing it from you having just gone through the process. But when people join Action Academy, or when people join any coaching program or anything, they want to come out the gate, they're like, I don't care about pausing to set the vision. I don't care about establishing a where or a why and getting clarity. I just want to jump into acquisition. I want to start underwriting deals. I want to start building my buy box and talking to brokers. And I tell them, I'm like, the best way to speed up, the fastest way to speed up, is to slow down in the beginning and get clear about what we're optimizing for. Can you give some advice about the importance of that? Because you're speaking right now as somebody that was dialed in on the life that you wanted to live and the. And what success looked like for you before you even started this. And I feel like that's really what helped you say yes and say no to things. Can you talk about the importance of kind of slowing down in the beginning before you speed up?

[B]

Definitely. And yeah, agreed. I, again, I think you, you nailed it. My. My military experience, I got to work with some pretty incredible people and some of the top tier guys in that world. And they never go out on a mission without having what does mission success look like. And a lot of the times there's maps and there's routes and navigation has to be laid out and there's contingencies. Right. But you know where you have to be in order for the mission to be successful and you know what that task is going to be. And just having that background, I thought it was extremely important to set out and say, anytime you go out on an adventure, I'll call it like this. There's going to be things that want to pull you left and right and you have to be able to reference back to originally what defines success for me. And you avoid the. The shiny object syndrome, as it's called a lot. And I looked at smaller deals and I had to sit back or had to have somebody tell me, that doesn't meet your SDE goal, Matt. That doesn't. You're gonna be working crazy hours and doesn't achieve your getting your time back, Matt. Yeah, I think the most important thing is to always. Before you set out on something like this, maybe it's one, two or three parameters, whatever that may be, you have to remember what they are so when those things inevitably come along, you don't let them pull you off your goal.

[A]

Yeah. So, dude, I think it's the most important thing because the worst thing, the worst outcome that I would wish on anybody or that I wouldn't wish on anybody is that they go and do what they think that they want to do, which is they buy a business and now all of a sudden they buy another job to where? Now, congratulations. You went from working 40 hours a week in your corporate job. Now you're working 100 hours a week in this hellhole of a dumpster fire business that you thought you were going to be the savior of. You know, and, and people think about it like real estate a lot. And that's why I repeated on the podcast all the time. They think it's going to be like that flip house. And they're like, oh, I'm a great gc. I'm going to come in and I'm going to make this thing pretty. I'm going to put some paint on it. It's going to be beautiful. Don't be the savior. Buy something that's already good and make it wonderful. Don't buy something that's crappy and make it good. So let's go through the. The journey. So you find it on biz by selling, which the joke is that's where Deals go to die. So I'm curious. Apparently there are deals because Carly and Alex also were able to find theirs off the Biz by Sell as well. Can you walk through the process of what was required? Like how many deals do you think you went through? Ballpark? Like what was your weekly cadence, going through listings to be able to finally find this one and then what stood out about you and walk through that broker conversation?

[B]

Yeah, definitely. Yeah. Look, I looked into other deal finding sources, but Biz by Sell was the most readily accessible and constantly being updated. And so that's what was interesting to me. And frankly I didn't know any better. But yeah, I probably looked at. I probably looked at well over 250deals. And that's not just clicking on the link and looking at it for 10 seconds and going on. It's really diving in and doing some higher level analyzation, if you will. I would spend, I'd say at least 20 hours a week on this search while working at W2. And I think that was one of the more challenging things, to be honest with you, Brian. It was I'd go wake up in the morning, spend as much time as I could with my daughter before I went to work and then I'd go work, come back and be a husband, be a father, be present for them. And then when my daughter would go to sleep, I'd pull the computer right back out and it was back. Trying to attack this goal and looking at deals, sourcing through deals, reaching out to brokers, et cetera. So after a while back in the fall, I had come across this deal and I was actually a little bit further down the line on a different opportunity that ended up not playing out. And so I had reached out initially, spoke with the broker a little bit and put this one on the side because I had was making progress elsewhere and even pitched it to the pod. Hey, when you guys should go chase this. And ended up that not working out and we come full circle and I come back to the opportunity and I think one of the important things to know for folks out there who are getting started or if you've been in it for a while, you already know it, there are good brokers and there are bad brokers and you will be able to identify them pretty quick. And I was fortunate enough that the broker on this deal was great, very responsive, great to work with, not very pushy or salesy or anything like that. And it made the process a lot smoother.

[A]

Yeah, and a good rule of thumb for being able to identify brokers that's just like something that people can do today. An action item is you can literally just go look in your local market through the listings and you can just filter out. You can even export it as a sheet, and you can just filter out who has the most active listings. Pretty decent way to be able to determine who's a good broker, because it's very much so the 80, 20 rule. Like 20% of the brokers are going to have 80% of the listings, and you'll just see them pop up again and again. Can you go through. I want to highlight something that you just said right there really quickly because you were like, hey, on top of my W2, I was putting in 20 hours a week. So I was put in 60 hours a week. While I'm still being a father, while I'm still being a husband, I had my life and I had my priorities in order, and I still did what was required to pull this off for me and my family. So it's just like between 9 to 5 is where you make a living, and between 5 to 9 is where you make a life. And Tony Robbins said that. I really agree with it, and that's what I did as well when I started my journey. And then when you get out, you have this, like, time velocity that you're able to tap into to where now it's your time is fully your own. And now it's off to the races. What advice would you give to the most common excuse that we hear on the podcast from people that call in and they're interviewing or applying for Action Academy? They say, I don't have time. I don't see how I'm going to find time for this. I'm really busy. I've got a kid or I've got multiple kids. I've got a marriage, I've got a business, or I've got a job that I'm doing. I don't. I can't find time for this. What do you say to that person?

[B]

Yeah, first I want to say, I get it right. Like, it's tough, but I'm big on opportunity cost and prioritization. And for me, my time is always prioritized based on what I value in life. And then I break down to opportunity cost. What am I sacrificing? If I sit on the couch and watch Netflix for an hour, what could I be doing with that hour? Could I be working out? Could I be working on a business plan, et cetera? So I think my advice to that person would be to just Take an internal audit, look at the minutes and the hours you spend on a day to day basis and really try and dissect. Do I really need to be scrolling on my phone? Do I really need to do X or Y? And if your goal is ultimately to build a better life for yourself and your family in five, 10 years, whatever your timeline or whatever your goals may be, you will be able to find the time. There's not, there's only 24 hours in a day. And it's, it can be a real struggle, but you'll always find the time to do something you really want to do.

[A]

Man, when I started this business, it was just me doing everything. And looking back, I'm like, I can't believe that I did that. Now that I've got the team that we have today, the team, it's like Lynn, Brandon, Mason and all of them. And in the Aces, Jordan, Carly, Alex, like everyone, it takes a team. And man, I still remember back when I like was starting this, it was a hundred hours a week, like thousand percent, thousand percent. Like I'm still working today, even with the team, I still work between, good gosh, like maybe eight to eight. So I'm probably still working 12 hour days. And then I'll work, I take one day off on the weekends, I'll take like a Saturday or a Sunday off. But I'm just obsessed with it. So I'm working on that right now. That's something I'm doing in 2025 is I'm trying to bring my work week down to maybe like a four day week myself just because I'm so obsessed with it to allow for the rest of life. But yeah, that's why people, that's why I enjoy hearing your perspective on this. Because some people have the idea where they listen to the podcast and they're like, oh, Brian's single, no kids, no wife right now. Okay, cool. Sounds, sounds good. Must be nice. Not for me though. And, but most of the majority of Action Academy is just like you. Like one young kid, two young kids, they've got activities, they've got sports, and they're still doing this. So let's progress through the deal itself. So walk us through the deal cycle. So you reach out to the broker and you get the financials, you do the underwriting. Walk us through that first offer that is submitted in the negotiation process. Because you negotiated this thing pretty intricately to come up with a 2.68 multiple that you buy at a 485,000 SDE, which for people that are brand new to this. That means just take home profit for the purchase price that you came up with. So how do we go from loi to negotiations?

[B]

Yeah, I wish there was a secret formula, but I think it was just the right place at the right time. To be honest with you. I like I said, working with the broker, he was great to work with. And we made it clear we were going to be extremely transparent with each other through the whole process. And the seller, fortunately, was of the same mindset. And I looked into the deal and they had a couple other folks look at the deal before me and ultimately just didn't determine that they were the right fit. But yeah, so yeah, I'll go back. I'm sorry. So I got the financials and did the underwriting and at first glance I thought, wow, this is this one of those. That's too good to be true compared to what I've been seeing and. But definitely worth a second look and a deeper dive. And was able to get a bunch of questions answered by the broker and had the first seller call. And talking with the seller, it was pretty clear that the assumptions that I was making based off the information that I had gotten thus far was true. And those were all good things. I could tell that the owner, who lives or lived multiple hours away from the business and had not been personally physically at the business in months, was pretty much semi absentee, if not absentee, which was appealing to me because that means if I can find a way to secure those individuals who are making the business function at the success that it is, then I've got a real opportunity. And yet the deal kept progressing. They kept checking boxes and there were some conversations that were had on things I had questions on or wasn't necessarily comfortable with. But we get to the point of me wanting to submit an loi and the last box was I needed to talk to those individuals, specifically the two, I'll call them, key employees who were pivotal to the business's success. And I had a great call with them. The seller was great about facilitating it and I had a great call. It was over an hour. And we just talked about what they saw, what were their roles and responsibilities, what were they looking for in the next owner of the business and where did they see the growth of the business, the trajectory, what was the culture, et cetera. Right. And everything they said, we just gelled. And it just, it felt like it was the right spot to be. So then we get to the loi and I initially created the loi and sent it off to him and thought that I would be way off from where they were at my purchase price and some of the terms. But they came back. And as with anything, there was a little bit of give and a little bit of take. But ultimately we settled on doing a stock sale or a membership interest purchase agreement because it was an llc. But that's a little bit of a unique twist that you don't see too often in the business acquisition world. But that was a huge piece for me because acquiring the membership interest of the business allowed me to not have to go back through and reestablish contracts that we already had existing, which was. We can dive into that too. That was a pretty important part of this deal for me. But we have existing contracts with larger contractors and with the state and counties, et cetera, that if we had to create a new llc, they essentially would have been broken and would have had to try and reestablish, which I did not want to deal with.

[A]

Okay, cool. So as you were talking, you were saying, like, stock sale, which I'm not even myself entirely familiar with. I'm entire. I'm familiar with the generalities of it. But can you go a little bit more in depth about the stock sale? So it makes sense what you're saying when it comes to the government contracts, especially like big contracts, you're saying that you basically bought out the LLC that they were running instead of doing a, like a transfer agreement and like a purchase agreement, like a PSA from one LLC to your LLC that you create to buy instead, you basically just bought the LLC itself.

[B]

Yeah, it's the asset versus stock sale. The really, the biggest thing is I am, I'm buying the balance sheet in a stock sale. Right. I take all assets and all liabilities. That is the downside risk of the business as it is. And so the employment identification number, tax id. Right. None of that changes. You're essentially just moving in. And to anybody on the outside, the business change of ownership is transparent. Whereas a standard agreement, you buy an LLC through an asset sale, they zero everything out, and then the LLC essentially dies and you have created a new LLC like you're talking about, and everything rolls into that. So I wanted it to be as seamless as possible. So I essentially just bought the membership stock of the LLC itself.

[A]

Yeah. Okay, that. Cool. That makes sense. Was this something that you proposed or is this something that they brought to the table?

[B]

It was a 50 50, to be honest with you. You know, we had started on an asset sale and then the conversation quickly went to stock sale. And we started talking about the pros and cons and what they were looking for, what I was looking for. And we just said a stock sale seems to make more sense. So let's go with that. I think it was a mu mutual agreement and tax benefit wise, it benefited the seller. So they were happy to do it. And yeah, yeah, I'd say that it was like 50. 50.

[A]

Yeah. Cool. I think a cool point was that you were able to speak with these key employees because a lot of the times when an owner has something up for sale, they are not wanting to advertise it to their team to spook them or to avoid spooking them at least. And so I also want to say that was a very cool little perk that you got to actually speak with the key team members. Is there anything that you want to say about that process?

[B]

Yes, that I was very grateful that they would let me do that. And to be honest with you, I would not have done the deal if I could not talk to them how important and crucial they are to the day to day. But without knowing that they were on board for what we decided should be next for the business, the deal with the risk would have been way too high for me.

[A]

Thousand percent. And for people listening, there's a few different risks that are taken into account when you're valuing a business. So first is key man risk. So that is how active is the owner of the business. So when a lot of these deals, especially smaller deals that we see in Action Academy is people are saying, oh, the owner's taking his foot off the gas, which is why revenue and profits declining, which means it's a job. And so that's key man risk. So with you saying the send me absentee owner, I'm like, okay, cool. So it's not relying on somebody's name or face or likeness. It's not a one man show. So the owners are removed. Good, that's step one check mark on that box and then the next one is a key employee risk. And there's always going to be some degree of key employee risk. There's not a world where it's just like, oh, this is a perfect process that's done by anybody with the pulse. That's a perfect world that you can think of. But there's always going to be some key employee risk. And I think that you mitigated that really well by getting in with them, being able to have a conversation with them. And if you're not able to have a conversation with them and you're in this position, you can be able to find some ways like adjacently around that to get a little bit of dirt. I think a good way is making sure that they're not. A good way to avoid risk would be to make sure that they're not related. That's a good one. Or that they're not like a cousin or something. That's another good one of the owner. So I think you did it really well, man. This is. You just cleaned up. You did this thing really tight. Can you walk us through how you funded it and how you negotiated the structure? Was there any creative or was this straight sba?

[B]

No, it was creative. I was very fortunate in that I had through some previous investment work and some other networking opportunities, been able to find small group of folks who were interested in doing private lending on deals and was able to be able to source private capital. So avoided the sba, which was nice. I still had to put in my own equity into the business, but got generally pretty favorable terms on a hundred percent debt and that I gave up no equity. So. So really fortunate to be able to source that. And again, that was the right place, right time. Just happened to be talking about it when these guys that I had worked with previously were like, that's something we're interested in looking into. It worked out that way. But yeah, we did a six month holdback structure on the total closing price. So we paid a majority of it up front at closing and then have essentially split up the remaining amount and a three month payment and a six month payment. And we went that way just because especially with the stock filled, there are potential liabilities that could come up and you want to be covered to be able to say if $100,000 liability comes up in month five, I can hold that money back per our agreement until we determine what. What's going on. Ideally, the holdback structure is, is longer, but you don't always get everything that you want in a negotiation. I'm happy to have some structure there.

[A]

So basically you'll own it free and clear within six months, Is that correct?

[B]

Yes. Yep.

[A]

Okay. And then can you explain again your reasoning of doing that? I understand what you're saying there, but for people listening that are maybe familiar with traditional terms that maybe use an sbe. So sba. So for somebody that's brand new to the show, sba, small administration like this is normally you buy a business, SBA funds it. It's like a Fannie Freddie like mortgage program. But for business buying, you put 10% down, they'll finance it over five years, 10 years, 15 years. And you, you'll have a debt service which will yield one of the most important metrics in business buying, which is the DSCR debt service coverage ratio. But for this, you don't even really have debt, you're just buying the thing outright across six months. So can you walk us through how that kind of went into negotiations? Because when it comes to seller financing, a lot of will try to stretch it out as long as possible. So you're saying it was because it was the stock sale that you guys wanted to do this a little bit more upfront from a liability perspective? Correct?

[B]

It was. The seller wanted all of the money at closing as they should. And we had initially proposed, I think it was a 12 or an 18 month holdback structure where we will give you a good amount of the money at close, but we're going to hold back the rest and give you, to give it to you an incremental payment over that time period. And again, it's defensive posture for me as the buyer because I'm purchasing all assets, but I'm purchasing all liabilities. And if there was a tax liability that occurred while the previous owner was still in the seat, but it didn't pop its head up until after close, I'm now protected because in the agreement I can hold back money for that situation. And so I don't eat $100,000 tax liability because the owner has already received all their money. And that's again, it's a bigger problem when you're doing a stock sale, not so much an asset sale because in the asset sale the liability would terminate with the LLC that was now closed. So you're protected from it in that regard.

[A]

Cool. Are you comfortable sharing what the prefs were on the debt that you raised for the private capital? What are the terms, what's the length, all that stuff?

[B]

Yeah, I'll go to some extent, but not too far. Yeah, I got a 10 year note and an interest rate that it's pretty favorable compared to like the standard, whatever the SBA is at now. 10 or 11, I'm not sure, but it's not too far off of that. I was able to get a period of interest only payments just to get me off my feet and get started while I'm learning and figuring out how this business is running. So that was nice. But yeah, it was, it was the perfect situation for what I needed and very fortunate that I was able to secure that.

[A]

Yeah. So I think that's a Perfect example of you might as well ask, right?

[B]

Yes, Yep.

[A]

Might as well ask. Because, for instance, as like I. I buy businesses within Action Academy and my split is normally going to have like, equity involved. I'll cover the SBA, but normally I'll put the 10% down. And I'm wanting an equity kicker. So a pretty traditional way would be 10% down, 15 equity. So there's a 5% kicker in there. Plus you can negotiate whatever you want to do with debt versus equity, but at the end of the day, whatever works. If somebody wants something else and if someone wants to be completely passive, if somebody wants to be a little bit more active, there's another deal I'm doing where it's more closer to 20% equity and I'm more of a growth partner that's helping with marketing. Like, this truly is the Wild West. You can come up with whatever terms that you want. And there's a lot of people that want to invest in small businesses. And so I think that it was. Can you hit a little bit about maybe your conversations prior? Because I think that's important because a lot of people aren't doing these deals because they're like, I don't know where I'm going to find capital. I don't know where I'm going to find capital. So can you walk us through that process of just saying, hey, I'm doing this. If you're interested in the future, this is going to come up?

[B]

Yeah, definitely. And I was actually, I was in a room of, I think it was like four or five individuals who all I had crossed paths with on a. I had done a little bit of work with a, like a very smaller private, private equity real estate development group. I'd done some work for them and was in a room with those folks and had told him that I was really looking into business acquisition and telling the items I was looking for in a business why I was wanting to do it, the parameters of my search. And again, just right place, right time. One of the, one of the guys jumped in and said, hey, I'm interested in that. I'd be interested in providing you the capital that you need if you need it. And I did. And we had just a deeper conversation. Ended up being two or three of the guys hung back and we just dove into it and really I tried to show them I knew what I was talking about, but understanding that they knew that I didn't exactly know what I was talking about because I'd never done it before, and I think they appreciated that Honesty. But my goal, leaving that. That conversation was, if this is my buy box, can I count on y' all to at least have a very interested conversation with me when I find something that meets it? And I, again, fortunate enough to get that opportunity? And so I knew when I was looking at opportunities, what my debt would generally look like and what that structure would be, which made analyzing deals a little bit less unknown in regards to what is my DSCR going to be, etc.

[A]

Yeah. Oh, my God. Matt is such a lucky guy. Matt's so lucky. All this luck place for time. And if anybody's thinking that right now, I would say that one of my favorite quotes is, luck is the dust that's kicked up from action. So you kept getting shots on goal. You kept talking about it. You kept. If you hadn't have talked about it, if you hadn't have been in the room and just said, hey, this is what I'm doing, they wouldn't have known. And there's no way that you would have gotten capital because you're not talking about it. And I think it's so crazy how people are saying, ah, I don't know where to find. I'm not submitting, Lois, because I don't know where to find capital. I'm like, I don't even know what you're doing. When people are like, I want to hold these goals to my chest. I'm like, why would you hold the goals to your chest? When I can count a hundred times on hands how many times that I've needed something or someone and I shared it publicly, and then they came out of the woodwork. It's. It's crazy. What are your thoughts on that?

[B]

Yeah, I. I agree. Squeaky wheel gets the grease is a phrase that's thrown around there a lot. But there are so many people out there, like you already alluded to, that want to help, that want to be a part. And they see. They see you as an individual and what they think you're capable of, but they'll never know how they can help you or what value they can provide if you don't tell them what you're looking for, what value you can give to them. And so I. I encourage folks all the time, be out there, talk to folks, get out there and just let it be known. Because when you put stuff out there, things usually tend to come back.

[A]

Yeah, always. So, Matt, what's next? What's in the future for you after closing? Are you out? Are you doing this full time? What's. What's next in the cards for you over the next year.

[B]

Yeah, this is definitely going to become my full time job career choice, if you will. Currently still in the W2 and I have some items that I'd like to patch up there and leave them on a good note and transition out of that and then focus entirely on this business. And one thing I what I really do appreciate is again, I've got those, my two key employees that I know I can rely on. But we've got a really healthy pipeline of work coming in over the next couple of years that we already have awarded and so I know I can rely on that as revenue coming in as much as you can rely on an awarded contract. But I think that'll give me the opportunity to maybe take a step back and focus on learning and really look at strategically what can we do to grow and scale. But this is definitely going to become my baby and I look forward to putting everything I've got into it.

[A]

Man, that's freaking awesome. And it's, I've got a decade long goal, like by the time I'm 40, I want to help a million people leave jobs, go from employee to entrepreneur. And man, thank you for being one of the million here, man. I'm honored to serve you, honored to know you, so excited for you on your journey and excited to be able to build Action Academy now to the point where we can help you navigate those skill issues and hiring issues. That's the next chapter of AAC 4.0 that we were talking about. In closing, if somebody's listening to this podcast, which you said before, like you've listened to this podcast a lot and then you finally decided to bite and take action on it? And here we are 11 months later. What's some advice that you can give to somebody that's maybe still listening now and they're on the fence about booking that call to even check out Action Academy, what would you tell them?

[B]

Yeah, I think do it right. Just book the call and have the conversation. I, I've always been of the opinion that when you're surrounded by like minded individuals, then your reality can change and everybody in Action Academy is hungry. Everybody wants to get after it. And there's just something to be said about having conversations on a daily and weekly basis with individuals who are doing the things you want to be doing or who are in the exact same position that you're in and fighting the same fight. It makes it that much easier to continue taking those steps towards your goals when you're getting down or you're starting to question where you're at, and I think there's strength in numbers, and they let Accident Academy be your numbers.

[A]

Dude. Crushed it, man. You did. This was amazing. This is probably the best podcast that you could do from a fricking truck, from a car in a parking lot. This is the best one, dude. You absolutely ripped it. If people want. If you want. If people want to reach out to you for help, advice, if they want to partner with you, if they want to help you with the business, where can they find you? Where can. How can they reach you?

[B]

Yeah, I'm terrible about social media, so I'll have to give you my email, Brian, and we can put it in the link below. And I think that's probably the best way. I have a Facebook and that's it. But before I just. Brian, I want to say thanks. Thanks for putting together Action Academy. Thanks for putting this community together and pouring yourself into it. I have seen it time and time again and week in and week out. Everybody that's having success in there and a community that you created. So we. We appreciate what you're doing.

[A]

Means a lot, man. Yeah, it's. It's fun now to begin to see the scale of it and the trajectory of everybody that's doing it, because it's a lot of work and it's a lot of stuff, but it's just. Dude, I'm telling you, you'll see it now. Like, you saw it when you were active duty because you were working with teams a lot, but as soon as you start seeing your people win, it's just addicting. And it's like the money, I. I call it economic exhaust. And closing here, it's like the way to win life, I think, is not to chase the money as, like, the fuel, but rather as the exhaust. I call it economic exhaust. Build the vehicle where you have a freaking blast, running it and working on it and tinkering on it, and then the byproduct is the economics. And it's fun, dude. It's a bunch of fun. Everyone's making a bunch of money, and it's cool. I'm excited to have you in our stats for 2025, the acquisition stats, man. So thank you so much for being you, dude. Thank you for being an awesome member of the community. And also, just you give more than you take. Everyone loves you and appreciate you taking the time today.

[B]

No, thanks, Brian. I appreciate it.

[A]

All right, guys, it's been Brian and Matt with the Action Academy podcast signing off.

[B]

I. I don't know.