In this video, Carl Allen introduces a deal review as part of his Deal Maker Protege program. He highlights the systematic approach to analyzing student-submitted deals, focusing on aspects like financial breakdowns, seller psychology, deal structure, and exit strategies. The featured deal this week is an 80-year-old glove manufacturing business that has both a rich history and unrealized potential for growth, particularly in e-commerce.

The business, based on the U.S. Eastern Seaboard, produces high-quality gloves made from animal skins, serving B2B and B2C markets. While e-commerce accounts for 33% of sales, its online presence shows strong growth potential. However, questions arise regarding the financial valuation and operational challenges, as the current owner, Gord, aims to recover his $645,000 shareholder loans while seeking a clean exit. His limited involvement and lack of marketing skills have held the business back.

Carl discusses possible deal structures, such as a five-year annuity plan to repay shareholder loans, potentially coupled with an earn-out or equity retention. He identifies the untapped potential in scaling the business through online marketing, leveraging its legacy story, and streamlining production. Concerns include the unclear financial details, low automation in manufacturing, and whether the business would need a general manager.

Several contributors on the call weigh in, debating the deal’s merits and challenges. Some highlight the branding and marketing opportunities, while others note the operational complexities and inflated valuation. The consensus leans towards this being a viable deal for someone with strong e-commerce expertise and a clear growth strategy.

Carl concludes by encouraging viewers to subscribe for more deal reviews. He emphasizes how watching these reviews helps build an understanding of key deal-making principles, including financial analysis, seller motivations, and growth opportunities.

Full Transcript:

Hi. It’s Carl Allen. In this playlist, I’m gonna be doing some deal reviews for you. So part of my deal maker protege program, we review our deal maker student deals on a weekly basis. They’re anonymized.

We put them on a Zoom call. We break the numbers down. We look at the growth opportunity, valuation, what a deal structure might look like, interpreting the seller psychology and how that maps in to a desired outcome in terms of a deal structure. We’ll then also look at what the exit options might be for you as a new business owner after you’ve grown the business and you want to go to market and liquidate the asset.

So every single week, we review a bunch of these deals. And my favorite deal of the week, we’re actually gonna showcase for you on this channel. So absolutely check these out, and don’t forget to like and share these videos, and definitely hit the subscribe button so that you’re getting these deal reviews as soon as we release them. So enjoy the video.

I will see you soon. Until then, bye for now.

So there’s the numbers. Disclaimer, yeah, it’s in place for this one as well. So let’s let’s make this a bit bigger, and let’s go through it. This is Chris’s deal.

So deal number two is a glove manufacturing business. Interesting. Gloves for every occasion, fashion, industrial work, motorcycle gloves, ranching gloves, you name it. These gloves are typically made from animal skins, just what you’d think, cow, deer, elk, that kind of thing.

So high quality gloves. The distribution, yeah, it’s business to business, wholesale and white label. They do a little bit of b to c. They do sell online from their website, but I get the feeling that that’s fairly new.

And they didn’t necessarily do a good breakdown. They said thirty three online, sixty seven wholesale white lab label, but, it was just a kind of a top level breakdown. But they are on the move in terms of ecommerce on their website. I do think it’s fairly new, and it’s now thirty three percent of their business.

Located on the US eastern seaboard, trading area is international. Business has been listed for nine months. The ask price on this deal, eight hundred k. Now property is owned by the uncle of the owner’s wife, not included in the sale.

This ownership story is is kind of interesting. This is a World War two company. It was started in nineteen forty two by the grandfather Ted. He sold it to his son Ned.

Ned, I think, sold it to his niece Gloria and her husband, Gord. By the way, this was not actually listed on the notes, so I did a little bit of sleuthing here to kind of put this together. This way, there could be some errors. I’m not sure.

Maybe Chris can fill us in. But then I’m always thinking, no. I don’t want Chris to be able to fill us in because if he knows, he should put it in the notes to begin with. So, maybe he’s, learned something subsequent to when he actually submitted it.

But that’s the storyline that I could put together on the ownership. Gord is third generation. Didn’t grow up in the business. It’s his wife’s business.

He’s better suited to sales. I don’t think he’s owned this company that long. He runs it day to day, but doesn’t come in every day. He feels like he’s the bottleneck.

This is Gord talking, husband of Gloria whose grandfather started the business. Right? So he thinks he is holding the business back. Now he’s the hundred percent owner, which I found found kind of interesting because it seems like it’s her family, but somehow or other, he seems to be the one hundred percent owner.

He’s willing to consult for a handover period to really help put a GM in place, then looking to make a clean break or clean exit. Now the motivation for selling, Gord wants to recover his investment in the business. Take a look at the shareholder loans on the liability side of the balance sheet to get a little bit of a insight what that investment was. You know, plus he’d like to get a little bit more.

Then he wants to get into sales in a completely different industry. Now legacy, not that important to Gord, which we often see when you’re the second or third owner of these businesses and especially if it’s not your family, but still unusual considering the history of the fact that this is a World War II company that’s been going for eighty years, Gord wants to move out of state. One of the things I loved about the notes that Chris put in is he said, you know, Gord’s not interested in legacy, but I am. I’m thinking, yeah, right on, Chris.

This is an eighty year old company. These are leather gloves. I mean, the ability to be able to sort of milk that online, you know, is profitable, seems like a great opportunity. You know, you can come up with a lot of things in twenty twenty two, but you can’t come up with an eighty year old glove.

So if you’ve got one, our glove company, you know, I think you really could, exploit it in a favorable way. Only five employees work in the business, one in sales and marketing. They could double in capacity pretty easily before needing more space. They have become more active marketing the business.

They’re currently sponsoring YouTubers to promote and sell the gloves. I’m thinking, YouTubers, TikTokers. That’s what you should be going for, Gord, is not the YouTubers. Go for the TikTokers.

That’s where the action is. They regularly run email campaigns, which have shown great potential, which is why the thirty three percent online, you know, seems to really be ticking up. So it’s kinda like Gord has come to this party late thinking, hey. I could be setting on a potentially, you know, little gold mine here with the legacy story that I’ve got to sell on these gloves.

But, you know, it’s just kind of too little too late he wants out. They sell to ten private label businesses. No additional explanatory information on that one. The production environment from the photos looks pretty dated.

Not that I’m an expert on glove manufacturing, but a lot of workstations, you know, handmade, didn’t see a lot of automation. Google reviews show a four point four to five ranking dozen reviews. I looked at some of the negative reviews, and they weren’t really quality of the glove.

Negative reviews, they were more like delivery of the product negative reviews. The website is updated.

It’s easy to navigate. I would say the online ecommerce section is pretty well put together. You know, you get a real good look at them. Mud Score average, I think Gord needs to get his price because he needs to get his money out.

Now, obviously, he’s gonna have to patiently wait until he gets it. One of the things that I wouldn’t mind getting Carl’s take on in this deal is whether, you know, the whole animal products side of this thing is going to be a detrimental factor when you’re talking about gloves. There are such thing as leather replacement gloves. Not everybody’s crazy about animal skins being used for human products, but I did a little bit of research because I was curious.

And apparently, because it’s a byproduct, which is mean the animal’s life is not sacrificed for the sake of making gloves, but for other reasons. And then so therefore, why not use every part of the animal? That only makes sense. There didn’t seem to be as much, bad publicity, as much intensity around gloves as there are around other animal type products.

That’s I think the exception would be something like, you know, lambskin and stuff like that. Nobody nobody likes the idea of lambs being, you know, slaughtered for the purpose of making lambskin gloves. But other than that, I didn’t see it as being a big issue. I know Carl’s got a a certain interest in taking this area, so I’d love to get his spin on whether this would or wouldn’t be a factor in terms of putting an offer in on this business.

But it’s a tiny business. It’s been sleeping for a long time. It’s eighty years old. It’s in the hands of a guy who has no real feel for this business, wants to get out.

He’s only in his forties. So this could be a good little pickup up for Chris. You know, the price seems to be right. What do you think, Carl?

Yeah. So what an interesting deal.

Yeah. I thought so.

Let me address the the kind of moral piece first before I get into the analysis.

So it it’s interesting, isn’t it, that I think, you know, there’s two types of businesses that use, you know, parts of animals for for for fashion items. You know, you’ve got this type of business which looks like, you know, they’re using animals that are slaughtered for food and then using those those skins to create gloves. It’s different to, like, you know, Canada Goose who have got into a lot of trouble recently. And I have a Canada Goose coat, by the way, which, you know, they killed the geese just for the feathers to put in the coats.

You know, not a lot of people kind of eat the geese afterwards. So I think, you know, you can tell a really cool story around this in terms of the ethical sustainability and that that honoring the animals by, you know, turning them into products. Maybe there can be some kind of support or donation from the profits to the, you know, wildlife funds or something like that. So I definitely think there’s there’s a nice story that can be spun around that.

What one of the things that always makes me ponder deals like this is, you know, this is a business that has been around since nineteen forty two. Right? And it’s only doing eight hundred thousand dollars a year. Right?

It’s like, you know, why you gotta ask the question like why is that? You know, eighty years this business has been around and it’s still is still there. You know, how many businesses survive eighty years? Not that many.

You know, one in a hundred thousand probably survive eighty years. So that’s a good thing. But, you know, why isn’t this a hundred million dollar business? You know, if you’ve been at it for eighty years and you were in the market, I you know, I just looked to the market stats.

You know, gloves, it’s a multi, multi, multi billion dollar market. I think this has been a little lifestyle business, hasn’t it?

Yep.

For a period of time, no one with any business skills has ever really owned it and looked at how to exploit it.

You know, ninety nine percent of this business should be online, not thirty percent. So for that reason, well, I think there’s a huge growth opportunity here. Two, it’s been around forever. So that tells you that, you know, it’s a sustainable business.

And three, I think there’s a powerful story that can be told around the fair, you know, that can help this grow even more. So I I really like it. Not concerned, but I just did some math. Right?

I think this guy just wants to show the loans back. That’s it. I started when I wasn’t looking at the numbers. I was looking at the notes when you said, hey.

He just wants his money back out of the business and he’s done. You know, the question I wrote on my remarkable gotta get a remarkable guys. They’re really cool.

No. I’m not an affiliate. But, in my on my remarkable, I’ve written what was his investment. And then when I looked at the balance sheet, it’s the six hundred and forty five thousand dollars that he’s put in.

So I’ve done the math. The eight hundred thousand after twenty percent tax, which I’m guessing is what he’d pay on this, is six hundred and forty five thousand dollars. Right? So he’s thinking, I’ll sell my business for eight hundred.

I’ll pay the tax, and then I’ll get my shareholder loans back. So what I would do on this deal is I do a five year annuity. I would pay the six hundred and forty five thousand dollars back over five years, and it’s gonna be tax free for him. Because if he’s put the money into the businesses alone, him getting that money back out of the business in ninety nine percent of cases will not, accrue any tax for him.

He’ll pay tax on the interest if he’s received that, but I don’t think he has. So I would try and do a deal on five years, annuity to pay back the six forty five. But then what I’d also do, if that didn’t work to sweeten it, is I put an earn out a little earn out in there, and I would show him my plan on how I was gonna blow this up and basically move the vast majority of it to kind of online. I talked about the sustainability story, all those different things.

I wouldn’t take this retail. I think it’s definitely an online business. I think, you know, you you could do deals with all the online survival companies. Yeah.

I think you’ve got really good margins. You know, seventy five percent gross margins for this type of stuff is insane.

It really is. One of the only things that would happen though, I think to reduce that margin, is it would surprise me if these guys are making all the gloves themselves. I don’t know. But are they making it themselves or do they have a third party manufacturer? No.

No. They’re making it all themselves.

Yeah. So at scale so if I wanted to ten x this business in the first year and get it from eight hundred k to, you know, at least eight million in the first year, you’re gonna have to move to third party manufacturing, which is gonna depress your margins. Right? So you might see gross margins, you know, come down, but then your operating overheads, you can sweat as you scale this.

So I can see a business where at eight to ten million, you you know, you you’re making a couple of million dollars in profit and having all the manufacturing done by somebody else. You need to look at the supply chain for the skin and all that different stuff. But, again, I think that’s just stuff you you’ve gotta figure out. So I really like it.

One of the only challenges with a deal like this is apart from the SBA, there’s no other way of funding a deal. It’s not worth doing a sale leaseback on a hundred and thirty five thousand dollars of machinery and equipment.

Probably some of it’s been there since the nineteen forties. So assume there’s no financing on that. There’s hardly any AR because it’s primarily a b to c business. I’m guessing there’s a little bit of surplus cash.

So maybe you could give him fifty k as a closing payment out of that surplus cash and then just basically pay off the shareholder loans over a five year period. If you want solar money at closing, I think the only way you could do that is to go down the SBA route, but then he’s gonna pay tax on that money. So I think the sell to him on this is, you know, don’t pay tax on the closing payment. Let me just pay you the notes back over five years.

If he wants, all that money upfront and wants to pay with the tax, then you’d have to go down the SBA route. I think this is a nice little deal for the SBA. But, you know, whether you’re doing a five million dollar deal or an eight hundred thousand dollar deal with the SBA, still takes three to four months. I personally wanna do an SBA deal on this.

I wanna keep my power to drive for other deals. So as you know, there’s a five million dollar limit. For me, I would do an annuity deal plus an earn out or maybe even give him ten percent, take back in the equity when I grew this up and sold it for ten million. That’s maybe what what I would do.

If he’s up for one of those deal structures, I’d just be a high green light for me. If you wanted to do an SBA deal, I would probably not do it. But that that’s my thoughts.

One thing I do wanna note here is, obviously, when we’re doing red light, green light deals late in the year, we get interim results. We very often extrapolate them. But it wasn’t entirely clear to me whether this was the eight month results or whether it had already been extrapolated or projected by the seller. So there’s a chance that that’s the an eight month number and not a twelve month projected number.

But if that was the case, then obviously twenty twenty two would be super mega banner year because you would increase this number by fifty percent, which is already higher at eight months than it was for the previous two years. So that’s something to factor in as well. And again, it’s just, I don’t like when brokers don’t make this clear to us. You know, we’re outside, we’re not inside of outsiders.

Tell us the damn date in terms of what you’re putting out there. You know, don’t make everything so ambiguous. You know, me ranting on the me me ranting on the brokers again. The goodwill, I mean, one of the things that we take a look at here is there’s two hundred and thirty eight k, almost two fifty in owner’s equity.

It’s an eight hundred k deal. That’s five hundred and fifty that we’re paying for the goodwill. That seems reasonable. But that’s propped up by the fact that they got four hundred and forty five k of goodwill themselves on the balance sheet.

I don’t know what transaction that’s associated with. Don’t know if that’s a good number. You know, once again, we’re getting compiled statements, so no accountant has, you know, put it to the test in terms of whether the shooter shouldn’t be impaired, whether it does really represent value or not. You know, it shouldn’t have been written off.

It very well could have been.

If that was the case, then Question, John.

Yes.

Do you think somebody’s bought this thing recently, and that’s the the goodwill is the amortized purchase price?

Yeah. I mean, to me, Ned owned this business. Right?

And, you know, he didn’t like, Gloria didn’t inherit it, so she must have bought it.

Yeah.

So Ted Ted gives it to Ned. Ned runs it for quite a few years. He wants out. Right?

He doesn’t have anybody to, you know, leave it to in terms of an inheritance. Gloria says I’m interested in it because her husband, Gord, is sure. Right? So then maybe Gord puts up some of the money, and he goes, even though it’s your family, we’re paying for this thing, you know, straight up.

So I’m gonna own a hundred percent of the shares, and that very well could be what that number is, all about.

Yeah. And so one question I would ask is when did that transaction take place?

Yeah. They didn’t know.

And then I I outright asked what they paid for it. And if they wouldn’t tell me, you could probably work it out. So so we know roughly today, he won’t take a hundred thousand for it, yet the net book value of the company is two thirty eight. So today, there’s five hundred and sixty two thousand dollars of goodwill in this deal.

And we know the amortization is normally a twenty year term, so it’s five percent per year. So if the deal was done in, say, the last five or ten years, if it’s in the last five, they probably paid the same amount for it that they’re looking to sell it for. Yeah. So what yeah.

But then it doesn’t make sense because let’s say, he’s paid eight hundred for the business. There was five six two of amortization.

Some of that’s been written off. You’d be able to see that in the income statements. In the income statements, there’ll be a line for amortization.

There was one in twenty twenty and one in twenty twenty one, but that included depreciation as well. On only a hundred and thirty six thousand dollars of equipment, you wouldn’t have between thirty and forty thousand of depreciation charges. So some of that is amortization.

So Well, it it wholly depends upon what the transaction was.

So they set up an SPV, bought the assets of the prior company. They got the bump up in the depreciable assets. Most of it was allocated to goodwill. Yeah. So they do have this goodwill taxable account that they can write off over twenty years on a tax basis if it was an asset purchase. If it wasn’t, then it’s gonna look a little bit different.

So, you know, you do need the background information on exactly how the transaction You do.

But but let let’s assume they paid something for this business.

And, you know, does he want his money back and his shareholder loans? So that that’s an interesting question then. He wants eight hundred for the business. Does that include the shareholders’ loans? Or does he want the eight hundred thousand plus the six hundred and forty five thousand dollars a shareholder loans? Well, is that a real debt? Because if it is, it’s not worth eight hundred k.

No. We make that hundred and fifty.

Yeah. We make that point every week almost on red light, green light when there’s a bunch of financial debt on the balance sheet like there is now. Is the eight hundred k the enterprise value or the value of the shares? The only person that can answer that is the seller, Gord.

What does he think that eight hundred represents? And if he thinks it represents the value of the equity, then this thing is way overvalued. Yeah. If it’s the enterprise value, it’s a little more reasonable.

Yeah. When you said in the notes, John, he just wants his money back that he’s put in to the business, in the investments in the business, is that purchase price plus the loans or just the loans? Because for the new people on the call that maybe got a bit lost in that amortization kind of conversation, think about when you buy a house. Right?

If you buy a house that’s got a mortgage on it, the equity value that let’s say you’re buying a house that’s worth eight hundred thousand dollars, and it’s got a six hundred and fifty thousand dollar mortgage on it. Then you you’re paying eight hundred thousand for the house, but the value of the equity in the house is only one fifty because the seller’s gonna take your eight hundred, pay off their mortgage, and they’re left with a hundred and fifty to then go and do whatever they wanna do with. It’s the same in a business deal. The business is five to eight hundred.

But if you’re paying for the shares, if you’re paying back the loans as well, then really the x is only valued at one fifty. So that’s the key question that you need to ask. Does he want eight hundred plus the shareholder loans or the eight hundred and he’s gonna waive the shareholder loans? Because I I just think it’s ironic that if he pays twenty percent tax on the eight hundred, it’s the exact value of his shareholder loans.

So that would be an absolutely critical piece of information before you would go and make an offer on this deal. But apart from that and I think as well just understanding what the what Gold actually does within the business and what’s it gonna cost to replace the work that he does. It doesn’t sound like he’s in there that much and the employees basically run it. So you might not need a GM.

They might be able to run it on their own. In that case, you don’t need to adjust the profit. So those are the two big financial questions I think you need to ask. And then off the back of that, this is either gonna be a really cool deal or it’s gonna be way overvalued and impossible to fund.

Let me let me ask a answer. I do like that. Yeah. I I like this deal too. Rock and Renee has a question. Newbie question is goodwill the relationship of long standing customers. I don’t know.

Do you want me to answer this, Carl, or do you wanna answer it?

Yeah.

You can answer that.

Yeah. What goodwill is in a transaction is we always, as buyers, have a an ability to either buy a company or start one up. So the whole idea is if I started the company up, I would pay x amount of dollars for the assets. I deploy those assets.

I, you know, start generating income from my business or I can buy one that’s already made. Right? But should should I pay the same amount because I’m getting the same assets after all? Well, no, I’m gonna pay more for the business that’s already there.

Why? Because they have cash flow. Hopefully, they’ve got historic cash flow that they’ve been able to generate by, you know, brand equity, you know, barriers to entry, intellectual property, all these things put together that are intangible have allowed them to, you know, generate a superior or a premium cash flow. And so I’m gonna pay for that.

I’m gonna pay extra above just what the book value of the assets are. And the difference between what I’m gonna pay and the book value of the assets is the accounting concept of goodwill. So goodwill is an accounting concept. It has to have a transaction to show up.

You don’t get goodwill on a balance sheet. Right? Coca Cola, I think, has brand equity of eighty three billion dollars Right? It’s the most valuable brand in the world, but you’re not gonna see that eighty three billion dollars item on their balance sheet anywhere.

Right? That’s the goodwill associated with their name, but it’s not there because there was no accounting transaction that happened. Goodwill only shows up on financial statements when there’s a transaction. So what to happen is this person bought the business for an excess of the fair market value of the assets.

And so then you have to asset, allocate the purchase price to all the assets that you bought. If there’s anything left over, it’s called goodwill. In this case, there was four hundred and forty five plus of goodwill. We don’t know how much more because some of it has been depreciated.

Yep. Now I don’t know. Like, you know, I gotta get I gotta get Alex Da Silva on here. Red light one hundred?

Hey, John. Sorry. It’s just for me. Right? So for somebody else, it’s probably, that is in the arena or that type of business, they might be a good business.

But I’m looking at it this way. The adjusted EBITDA is one hundred and eighty seven thousand dollars I don’t want to buy a job. I don’t want to run the business. Right.

So I will have to put a GM in there. And if I put a GM, you know, let’s say it’s eighty thousand dollars plus debt, I’m negative. If I take the best year, which is twenty twenty two, that number you you have it there, it says eight months. It’s it’s an annualized number with eight months of this year.

It may be or may not be. We don’t know.

Right. Well, that’s what it says on the on the form.

So No.

But I that’s why I explained what I explained. Usually, when I say eight months, I do annualize it. In this case, I didn’t because I thought it might have already been, but that wasn’t clear whether it had or it hadn’t. So that was exactly why I explained it that way.

Got it. Got it. I I, I’ve seen quite a few deals from brokers where they annualize the number with numbers from June, August, September.

Yeah.

You know what I’ve seen? I’ve seen hundreds of them. Yeah. Very often, you know, in fact, whether you should annualize them or not. In this case, it was not information that was available.

Yeah.

So David was information where it could have been either one of them.

David Geralts looked at this on the team call, thinks that those numbers are annualized.

Yeah. That’s what I was wondering about, David. I thought it looked like it was already annualized too.

Yeah. Yeah. That’s what I was saying. So, anyways, that was my my rationale. It’s just that twenty twenty two is it’s skewed a little bit higher, since we haven’t finished the year. But, yeah, it’s just a little a little bit of a little No. No.

That’s a good I think it’s a good take.

No. That’s that’s good.

But thanks for calling, John.

I was appreciate it. I I’m a low green light on this, and I’ll tell you why. I’m really excited about the opportunity of scaling this to the moon with my online marketing chops and the team that I’ve built. I do sense some high motivation to get out of this business.

The reason why it’s not a much high green light is there’s two big financial questions that need to be answered. Is it purchase price plus the loans? And then what is, Alex, to your point, the real normalized profit when you potentially put people back in to do that work? But I I think any sort of annuity deal on this for me, I would do it because if this guy said, yeah, I’ll I’ll take a fine re annuity on this thing plus an earn out, plus let me keep ten percent of the deal.

I would definitely buy this business.

Let’s give David Geralt on here because they handle this on their team call last night. And so, therefore, David might have a little bit more insight onto a couple couple of these questions. David, you wanna jump on here?

Yeah.

I guess the big one the big one that Carl just posed was, is the eight hundred thousand bucks what he want enterprise value or is what he thinks the value of the equity is worth?

Did that come up?

That that wasn’t really clear. We didn’t touch on that. One one of these we talked about is, Chris had commented that he was specifically looking for something that was was a would be a investor role, not not a hands on role. He’s not looking to buy a job.

So we talked a lot about this business, and and I think kind of everybody’s consensus is if you buy this at the size it’s at, you’re gonna have to jump in and get your hands dirty. You you might have to put on gloves to keep them from getting dirty, but, you know, it it’s gonna take some work. What the comment I just threw in there, I’m kind of a red light on it because of that. I think this if you put a manager in there, then it’s not worth eight hundred thousand dollars it’s not worth the debt, unless you can get that debt stretched out.

I think the debt may be what’s owed to the uncles from when they bought the business. I don’t know that it’s necessarily owed to the current owner.

So if you could stretch that out before it a little bit, get some room to come in there and ramp up the sales, then maybe it could work.

You know, use the EBITDA you’ve got right now to pay a GM to get in there and ramp it up and then start servicing that debt twelve to eighteen, twenty four months down the road. That could work.

1. Fair enough. Yeah. I mean, the thing that put me in the position of thinking it was his money is he said he did wanna get his money back, so that was what did it for me.

Let’s, let’s bring Anna on here because Anna and I think alike. I would green light this deal for sure. Anna, do you wanna unmute and give us a little bit of a take? I mean, it was a mild green light, but at least it was a green light.

I’d love to hear your take on why. You there, Anna?

Yes. I’m here.

Hey, Anna. Hi, Anna. Nice to see you.

Nice to see you. I would there is too much that’s need. I see the potential, but there’s too much needed for you to clean up the business, like David said. There is too much that’s needed to bring it to where it needs to be. And my fear is that you would get lost in the weeds just trying to grow this business, and you look up and a year has gone by because there is no management in place. I just feel like this business is a little bit inflated.

There is just too many things that there is no one except for the story.

That doesn’t sound like a green light explanation, Anna.

That sounds like a red light explanation.

That doesn’t sound like a green light explanation.

Part is the story. It’s the story. It’s the eighty year story that they have, which is great. But for you to get there to tell that story, you have to work a lot.

See, one of the things that’s too bad about this deal is I can’t tell you the name for obvious reasons, but it reminded me of the McDonald’s movie. I don’t know if you saw that or not. I thought that was a great movie. And as he was trying to swindle that business, I guess I should choose my words carefully, off the, McDonald brothers who owned it.

You know, one of the persons said, why don’t you just start up a new company, right? You know, got all these things figured out. He goes, well, he goes, I would. He said, but you know what?

That name is so perfect, McDonald’s.

I cannot use another name. And this name to me kind of almost falls in the same category. Not only is it an eighty year old company, I think it’s got a fantastic name for a legacy type business. The reason why I love this business is you put this in the hands of a marketer, you know I, yeah we still have time because we only did two deals today.

I wanna get JR on here if he’s still on the call. Right? JR is a marketer. If you take this legacy business, right, that’s just getting online, you know, it’s got a fantastic name, it’s got an eighty year history, that’s got really nice looking high quality gloves and turned it into something.

JR, are you on the call? Can you unmute yourself and give us your take on whether this is a red light or a green light deal? I haven’t even seen your scores. I have no idea.

Well, there it is.

Yeah. I I would definitely green light this deal. One of my comments was anybody with any ecommerce experience or marketing or sales background would be able to dive right into the deep end of this one without a lot of problem. I think you could drive sales within thirty days and not have a lot of the, challenges that I think have been discussed during this from management to getting more fixed operations on the back end. I think you could find supply chain with this story that could satisfy any type of growth trajectory. The thing that we talk about a lot on a lot of these calls are branding and and John, you just talked about branding.

The story, and I won’t go off on a tangent, but that’s kind of my thing. That’s kind of my shtick.

If you’ve got something that you can, coalesce around, a concept, an idea, then it makes everything else really, really easy if you know what you’re doing.

If you don’t have a message or you don’t have that thing to coalesce around, it really makes the marketing team’s job hard, and you’ve got a strain and stress to force quote unquote a bad position. This is pretty straightforward, pretty simple, and the story is awesome. So I think in the right hands, this thing could be pretty interesting. So that would be my take.

Yeah. That’s, basically where I’m coming from as well. We haven’t even got Chris on here yet. I haven’t checked to see if he’s on the call or not.

Chris, Chris Gunnels, I think is the last name. Chris, are you on the call? I didn’t check. Chris might have had something on.

Okay.

I’m here.

Can you guys hear me?

Good. Yeah. Chris, thanks for submitting the deal. Without identifying names or locations or anything like that, can you give us your sort of take in terms of what interests you about this deal?

Really, it was the backstory.

It’s been around since World War two. I really I feel like I could drive some, good marketing with that and build the business. And the the owner basically told me that he’s good at sales. He’s not good at advertising or marketing. And that and, of course, recouping his costs are one of the main reasons why he wants to sell the business. I don’t know if that’s actually true or not, but, I’ve gotta find out and dig a little deeper on his, motivation in that regard. But, yeah, his backstory the company’s backstory is the the biggest driver why I found this as an interesting deal.

Yeah. No. For sure. It’s got the backstory that we don’t see too often on red light, green light.

So I would definitely be spending more time on it. Okay, Carl. That basically wraps up deal number two. We still got a few minutes.

Yep. Should we do a vote?

Yeah. I think most people kind of voted voted, and two one seems to be the consensus. Yeah. I can’t.

That certainly was the way I’d be going. I guess some more votes coming in now. Yeah. I like I like deal two.

It’s the least Yeah.

So do I.

I’ve seen I’ve seen in a while in terms of the potential.

Cool. Alrighty. So I hope you enjoyed that deal review. Definitely subscribe to this channel. Hit also hit like and share so that you’re getting the very best content from me in real time.

Every time I wanna announce my deal of the week, I want you to see it so that you can understand it. And what’s interesting is the more of these deal reviews that you go through, you’ll start to see the patterns. You’ll start to see how seller psychology and valuation and deal structure all kind of combine. You’ll start to see common patterns when we look at the financial analysis.

You’ll start to see common patterns in kind of red flags and what the growth and exit opportunities might be if you bought a business like this and you took it forward into the marketplace. So definitely keep watching these, and I will see you soon for the next deal review. Until then, bye for now.

Hey, guys. I’m Carl Allen. I’m the founder of DealMaker World Society. I’ve done tens of billions of dollars of deals over the last thirty plus years.

If you’re new to my channel, definitely hit like and subscribe so that you can get all of my amazing Deal maker content in real time. You’re not gonna miss any of the outstanding information that I’m gonna share with you. And if there’s a question that you’ve got, if there’s something that you want to know the answer for and you want me to speak to it, definitely hit me up in the comment section, and I will record those videos for you, and I will get them on this channel as soon as possible. So love having you part of this YouTube community, and I can’t wait to serve you.

Until then, bye bye for now