Private equity is pouring into construction, a generation of owners is approaching retirement, and the landscape of who owns and operates contracting businesses is changing. Chuck Fenske, Managing Director at Carleton McKenna, has a front-row seat to these shifts as the head of the firm's architecture, engineering, and construction practice. Having started his career in his family's general contracting business before moving into investment banking, Chuck brings an unusual combination of hands-on construction experience and M&A expertise. In this episode, we explore why investors are increasingly interested in construction, what makes one contractor worth substantially more than another, and how owners can prepare for a successful transition. We also discuss the different types of buyers entering the industry, from private equity and strategic acquirers to independent sponsors and long-term holding companies, and what separates those who create lasting value from those who don't. Along the way, we get into the importance of financial discipline, predictable cash flows, succession planning, and reducing dependence on the owner, as well as why the highest offer isn't always the best one.
Jason Jacobs: [00:00:00] Welcome to BuiltForward, the podcast exploring where construction is heading over the next decade, and how AI and other emerging technologies will and won't transform the industry. I'm Jason Jacobs, a longtime startup founder, investor, and the host. Let's get into it
Today's guest is Chuck Fenske, managing director at Carleton McKenna, an investment bank focused on lower middle market businesses, where Chuck leads the firm's architecture, engineering, and construction practice.
Chuck has an unusual background for an investment banker in that he started his career in construction working in his family's general contracting business before moving into accounting, valuation, and eventually M&A. With private equity increasingly interested in construction and a generation of contractor owners approaching retirement, Chuck has a front row seat to how ownership in the [00:01:00] industry is changing.
We discuss why investors are flocking to construction, what makes one contractor worth substantially more than another, how owners think about succession, and what separates buyers who create lasting value from those who don't. We also explore the growing universe of potential owners from private equity and strategic acquirers to independent sponsors and long-term holding companies, and what all this might mean for the future of the trades.
It's a great discussion, and I hope you enjoy it. Chuck, welcome to the show.
Okay, Chuck Fenske, welcome to the show
Chuck Fenske: Hey, thanks for having me
Jason Jacobs: Thanks for coming.
Um, yeah, as, as I told you when we chatted, uh, for a few minutes last week, um, you know, I'm coming in, uh, as a newcomer on a number of fronts to the construction world. Uh, and, um, and in parallel, I'm also trying to understand, um, you know, M&A and the, and succession, and what opportunities exist, et cetera.
And, um, so I have [00:02:00] gaps in my learning everywhere that I look, but a big one is, is around, um, you know, what's on the mind of buyers and what's on the mind of, of sellers. And you happen to understand, uh, both of those quite well, um, specifically in AEC. Um, so I was so grateful that you were willing to make the time to come on and, and share your knowledge with me and with listeners.
Chuck Fenske: Yeah, happy to do it
Jason Jacobs: Um, well, well for starters, Chuck, um, maybe, maybe just give kind of the 30 seconds on Carlton McKenna and what you do there, and then talk a bit about, um, uh, you know, your journey into the trade, your journey into banking and, and how those ended up, uh, joining forces
Chuck Fenske: Yeah, sure. Uh, I'm, I'm Managing Director here at Carlton McKenna, which is a, kind of a smaller investment bank, independent in Cleveland, Ohio. Um, because I think we've been around, I think we're around 17, 18 years. Um, it was founded by our-- uh, Paul Carlton, and then he joined forces with Chris McKenna, hence the name Carlton McKenna.
Um, historically, the firm has done a lot of industrial deals, um, because [00:03:00] it kind of reflects the Northeast Ohio economy. A lot of B2B services, and we kind of did deals in this space. Um, but I joined the firm about three years ago with the idea of s- building a, uh, kind of a AEC specific vertical, because I felt like the market was k- specifically in the lower middle market, was underserved.
And then, uh, in terms of my background, I have kind of an unconventional, you kind of alluded to this, uh, for investment banking. I actually started my career in construction. And, uh, so I was in college, and my father was working for a larger general contractor in the Akron area, and he left and decided to go by his own.
He called me and said, "Hey, I'm thinking of buying this company." He's like, "I'm in my 50s. It makes sense for me, but probably makes more sense for you to come here, and maybe this someday could be yours." Um, so I work... But he's had two requirements. I needed to go work someplace else, and I needed to get a gr- degree in construction management.
So I did both. I finished my degree in accounting at Ohio State, and then I went back and got a degree in construction management [00:04:00] there. Um, I worked someplace else for a few years, and then went and worked for him. I found out, I think a lot of people find when they work for family, that succession planning is always a little bit harder than you anticipated.
Um, family businesses are messy and tough. Uh, so I ended up kind of working at an accounting firm and then doing valuation work, and then from there, I went and worked at an investment bank. And what I found when, when I was there, we started getting a lot of, like, calls from wealth advisors, uh, commercial bankers, attorneys, that they were getting clients who were getting unsolicited offers from private equity, um, and did we know an- did we have anybody who had any construction experience?
Well, the firm didn't have necessarily a lot of construction experience, um, but I had a lot of practical construction experience from my time working in the industry. And so what we kind of stumbled into was being in an investment bank for the construction industry, um, because I had a really good understanding of bonding, uh, percentage complete accounting, uh, interpreting backlog and, like, the WIP.
And so [00:05:00] all those things that are kind of unique to construction, um, I just had a really good understanding of it, and I kind of-- I-- It's very rare that where a specialty contractor will call us and I have no idea what they do. Because oftentimes the case is because I was a general, um, I was actually a buyer of their services and they were-- I had them on a project.
Maybe not that specific contractor, but that trade, I'm at least familiar enough with it, and which is a good starting point.
Jason Jacobs: Uh, and, and before we get too much into, um, your work specifically, just a couple of threads from what you just said I'd love to pull on. One is, um, as an outsider coming in, uh, you know, you hear a lot about the labor shortage and the silver tsunami, um, where, uh, you know, owners and seniors full of judgment and wisdom are retiring and, um, and there's a lack of, uh, young people com- you know, it's not one-to-one coming in, uh, in terms of replacing them.
And, uh, and that combined with, um, with the increasing demand, uh, from AI and data centers and, and [00:06:00] otherwise is leading to, to real strain in the industry. Um, h- how does that map to what you're seeing out there?
Chuck Fenske: No, I think that's right. And that, that's been an issue for quite some time. Um, I was-- When I was in the industry, I was, uh, exceptionally involved in Associated Builders and Contractors, and I think at that time, so this is probably seven or eight years ago, the average age of a construction worker was like 52.
Um, so... And I even know, you know, when I worked for my father, you know, we'd have like a company-wide meeting, and we would hand out like any kind of, you know, the health benefits or, um, the retirement plans. They would immediately pull out their readers. It's not great when you have an entire workforce that is u- in unison pulling out their readers, um
Jason Jacobs: I, I feel attacked 'cause I'm 50 and I think for the first time just in the last few weeks I've noticed I might need them, so
Chuck Fenske: I, I'm, I'm, I'm, I know that I'm, I'm in my 40s and I know that that's not too far off, so, um... But yeah, it's, it's, it-- the construction industry, specifically the trades, [00:07:00] it's, it's older. Um, it's something that I think the industry's been wrestling with. Um, I would say, you know, what my, my observation, I think from what I see from my clients, because I have a, kind of a unique perspective.
My clients who are in like large metropolitan areas and in suburbs, they always have shortages or issues with labor. They always do. My s- my clients who are in more rural areas never do. And I asked one of my clients, I said, "Why?" I go, and I'm like: Well, do you... I'm just, I just kind of said and kind of checked the box: I'm assuming you're having a difficult time finding people.
He's like: No, I don't have a problem. I go: Well, how is that possible? I go: Every other contractor in North America d- c- does not have enough workers. He's like: Well, Chuck, well, think about it. He goes like: The big two occupations here is farming and construction. And he goes: Farming kids much rather be an electrical contractor, uh, than they would work on a farm.
He goes: It's much, much easier. So it's all kind of... He goes: But a kid in a suburb whose parents had office jobs, he goes: This is [00:08:00] hard work. Uh, I'm like, that's, that's a pretty good, that's a good observation, so. But like I said, I don't have any research, but anecdotally that is, that obs- it does hold up. Um, my clients in more rural areas have an easier time finding people.
Jason Jacobs: Interesting. Um, and then the other thread I wanted to pull on from what you kind of opened with is you mentioned that, um, you know, you were get- that more and more of these construction owners were getting unsolicited offers from private equity. Um, what do you think changed that led private equity to seemingly suddenly, although maybe it, uh, um, uh, you know, it's a, it's, it's like an overnight, uh, not an overnight success story, but, you know, it's like maybe it wasn't as sudden as, uh, as it seems from the outside.
But, um, yeah, why do you think private equity is paying so much more attention to the space as of late?
Chuck Fenske: Yeah. No, I think you're exactly right because I, it was, um, 15, 20 years ago, it was, it was considered, uh, you know, taboo [00:09:00] investment. Nobody wanted to touch it. It was for all the, like it's, you know, project-based, there's labor, there's, um, it's cyclical. So all the reasons that would make for kind of a, kind of a cruddy investment, it checked a lot of those boxes.
And I think what they've kind of seen is that private equity kind of thinks to themselves as thematic investors. So I think they're kind of-- they've identified a couple different trends or themes that they like. One is the AI and data centers. And so I have a friend who is a dir- I think, believe his title is like he's a principal or director of research at Blackstone.
And, you know, he goes, "Chuck, you gotta think about how we invest at Blackstone." He goes, "Think about dropping a pebble into a pond." And then he goes, "We invest in each ring." And once those deviations, standard deviations away from the original investment. So he goes, "We invest directly in AI with OpenAI." He goes, "We invest in the data centers."
He goes, "We invest in the contractors building the data centers, and then we invest in the materials that go into the da-" So he goes, "We have these themes that we [00:10:00] invest in." So I think that is one where why you're kind of seeing this kind of transition from an industrial society into an information one, and that's what the theme that they're kind of, you know, exploring.
Uh, the other is you're seeing stuff like, um, uh, restoration contractors. The theme that they're investing on there is global warming, that we are getting more storms and, and they're, uh, more profound and more, they cause more damage. And so those restoration contractors are more busy b- because of it. So they're just kind of looking for built-in tailwinds, uh, and then taking advantage of them.
And I think probably the most important thing, contractors still trade at relatively reasonable multiples in cont- in comparison to other industries, and it's highly fragmented. It has one of the highest private ownership rates of any industry. I think it's like 99.9. Like, so like it's just, it's incred- It's like, so if you're looking to roll up an industry, it's perfect
Jason Jacobs: Uh, and for, for your [00:11:00] work, do you tend to work more with the buyers or the sellers or both?
Chuck Fenske: We almost, n- not exclusively, but, but overwhelmingly we work with sellers, and our clients are, are typically the founders themselves, or they're the families of the founder, um, and they, you know, they're looking to sell. But it's usually, um, their first, uh, time having any kind of institutional money. Um, so this is the first sale of that company
Jason Jacobs: Uh-huh. And, um, so if, if I'm an owner or the f- family of an owner of, um, of one of these privately held, uh, construction contractors, um, i- uh, w- what is a trigger that would lead me to thinking about, um, selling? Like, I mean, of course succession's an obvious one, but is that the only one? Uh, you know, p- like p- percentage-wise, does there tend to be one driver?
Is it a multi- multitude of [00:12:00] factors? Like what, what do you see in the clients that you work with?
Chuck Fenske: Yeah, it's disproportionately, um, people who are looking to retire or at least create some type of long-term succession plan. Like they oftentimes, um, they may have, you know, senior management that next layer down, but they don't have anybody to sell to, and that owner's looking to have a liquidity event.
Or, you know, like I have one client right now, uh, it's, it's a, uh, it's a f- it's a family, so it's some brothers. Uh, but they're all in their 50s, but they also recognize, hey, we got some runway here, so let's take some chips off the table. Maybe we'll roll equity with a buyer, um, and then we c- we can have a second exit.
So, but it's, it's predominantly people looking to retire or exit.
Jason Jacobs: Uh-huh. And, um, in my old line of work in startup technology, uh, I mean, there was, there was a saying that, that, that great companies don't get sold, they get bought. Um, does the same apply in, uh, construction [00:13:00] or does it work differently?
Chuck Fenske: Um, yeah, I think so. I mean, s-say that again one more time. The great companies
Jason Jacobs: Uh, they, they don't get sold, they get bought. In, in other words,
Chuck Fenske: Oh, yeah,
Jason Jacobs: putting one foot in front of the other and building, right? Um, and you're approached, you have a lot more leverage than, um, you know, if you're out shopping the company
Chuck Fenske: Yeah, that, I think that's a pretty ubiquitous attribute or quality in that, you know, one of the first things we always ask prospects, it's one of our screening questions, 'cause we, we wanna take on clients that we know that we can sell or that with deals that are gonna clear the market, is, "Do you get unsolicited offers?
And if so, how many? And, um, do you have those names?" Um, 'cause a lot of times the best idea for buyers comes from our clients. Um, so yeah, that's exactly right. We're c- if we have clients who we ask, "Do you get any unsolicited offers?" And they're like, "No." And you're like, that's, that's, that's not generally a good indication.
Um, usually our clients who are [00:14:00] getting... who are great businesses, um, they're strong, they're robust, they're in a great market, they are just getting pounded with unsolicited outreach
Jason Jacobs: And, um, and for an owner that does plan to sell at some point, how long out ahead of when they int- when they want to actually sell should they start thinking about the process? And then what are the important things that they need to do when to start laying the foundation for a successful process when it's time?
Chuck Fenske: Yeah, I would say you can't start early enough, and I would-- if-- in an ideal scenario, you're basically running your business with the idea of always selling it. That's how... You should just kind of run it that way. Um, but I would say at, at the very minimum, you probably should start thinking about three to five years out.
Um, you know, you should be thinking about a succession plan. Um, do you have people, that next layer of management? Um, I always feel like a good proxy for that [00:15:00] is if I have clients who have houses in Florida and they spend a significant time there, um, that's always a good tell. Um, they, they, you know, so can they get away?
Um, the other one that I use is it's a pretty good indicator, um, can they-- how well is the business organized? Can they flip around financials fairly quickly? Um, my clients who can f- you know, produce financials within a few days after the, the quarter or the month closes, that's a wonderful indication. Um, my observation is they typically sell for a premium because it's usually an indication that they're using those as a management tool.
Um, and then the other one that I think is really important is that we're not seeing margin fade. Um, it, it's not-- I would say the, the thing that most, uh, I would say contractors are generally pretty good at this, but the ones that are, um, the, the better you are at, you know, the-- it's great, is that if we bid it at 25%, we hit 25% and better and we're [00:16:00] releasing margin as the project goes.
So the kind of that operational discipline and that you're actively managing the projects versus we build the project, we wait for all the costs to come in, cross our fingers and hope for the best.
Jason Jacobs: Uh-huh. And if, um, and if you take two different, um, contractors, uh, and, and each of them on paper is sa- I'll just make up numbers, say 30 million in top line and three million in, in EBITDA, um, uh, yet they end up trading for wildly different multiples. One, does that happen? And, and two, you know, can you predict it?
And three, what are the, what are the tells that, um, you know, that, that one might, uh, trade at a higher multiple than another, um, who, who looks the same on paper in these key metrics?
Chuck Fenske: Yeah, it's a great question. So I would say what investors or buyers are looking to do, it's a, it's a balancing act of risk and reward. So you may have a contractor who [00:17:00] does the exact same amount of EBITDA, but is a vastly different risk profile. So, you know, how do they secure, uh, their contracts? Are they negotiated?
Is there a recurring maintenance aspect to the work, um, versus lump sum bidding? So what they're really trying to do there from a risk perspective, how predictable are those cash flows? You know, how reliable is that? So they-- what they wanna be able to do is look at that backlog and go, "Ah, you have X amount of backlog.
I know this portion's recurring. I can pretty confidently say that you're gonna have this moving forward." Um, I kinda touched about the succession plan. Um, you know, the quality of how the projects are run in terms of do they have margin fade, and their ability to kind of produce operational excellence or efficiency, um, are kind of other things that they kinda look for.
So, um, you could have... They could be the exact... 'Cause companies trade within a range. I get this question a lot from my clients. "Chuck, you said that, you know, it's gonna trade between [00:18:00] four and six times." Yeah. What gets a four and what gets a six? Well, if it has a lot of recurring or kind of maintenance type of work, and those cash flows are more predictable, that's gonna be helpful.
They have a succession plan. Um, you know, they, they're-- it's just an incredibly well-run company. You know, those are all things that are helpful in terms of pushing up towards the upper end of that range.
Jason Jacobs: Uh-huh. And, um, uh, in terms of diligence, how often do you guys find that you're surprised as the process goes on in terms of what's uncovered in diligence, and how, how worthwhile is it and how much do you invest in putting yourselves in the buyer's shoes and doing that diligence upfront to, you know, to help, um, get out ahead of, of anything they might find?
Chuck Fenske: Yeah, that's, that's the job, is that we're kind of-- 'Cause we-- The way we get compensated is, you know, 98% of what we get paid comes when a, when a transaction successfully closes. So if a deal doesn't close, we really don't make any money. [00:19:00] Um, and so, you know, we're kind of picky about who we take on, and that's kind of the question.
Do we think we have to kind of put on our investor hat and say, "Hey, if we were an investor, you know, does it check enough of the boxes?" Uh, so yeah. So sometimes what we'll do is, 'cause contractors, and this is unique to the construction industry, because it's on percentage complete accounting, you get these fairly massive look-back adjustments where they're not getting-- they're not properly recognizing profit and margin within that time period.
And so we require, and specifically with our contractors, uh, clients, that they h- do a, uh, quality of earnings so that we're all in agreement and we know what the EBITDA is prior to going to market. Um, we just think it's a best practice, um, and, you know, specifically for this industry.
Jason Jacobs: Uh, another question that was on my mind is I hear these stories as I make the rounds of, uh, contractors that [00:20:00] are incredibly successful in spitting out cash, but pen and paper, right? Um, and then there's other shops that, um, uh, you know, that maybe don't look as strong in terms of the, the numbers, but have a much better handle on, uh, you know, efficient processes and data and cash management and, and stuff like that.
Um, how correlated do you find, um, is, um, you know, strong balance sheet to, uh, you know, strong operating system? And for, for the companies that have the strong balance sheet without the strong operating system, how much of a knock is that?
Chuck Fenske: Yeah, I would say there's a pretty high correlation. Companies that are fairly run, well run, um, and that they're, you know, not to be redundant, but the companies that are using those financials as kind of a management tool, uh, they're doing their monthly check-ins with their project managers about where the projects are.
Those, those, those companies trade for a premium. [00:21:00] Uh, the one that I see, and I think this is kind of, um, this is not uncommon in construction, you will have a company that is operationally excellent. They like, they are a really good mason. They're, like they do really good work. Um, but, you know, masonry is, is from a cash flow standpoint, is a really tricky business because you're having to buy all that brick or all the masonry, uh, and then you gotta kind of float it until you get paid.
Um, and that's sometimes what puts them out of business. So it's not because they can't do the work, it's just the, the operate- the, the cash flow management and the business aspect. Um, and those businesses are, um, they're, they're more challenging to sell, um, because they, you know, c- the, the quality of the work is generally considered kind of sa- table stakes
Jason Jacobs: Uh, when you think of the businesses that, um, that have tighter operating systems, have you noticed any themes? Um, i- i- 'cause I mean, the obvious place [00:22:00] you could go is, oh, like they're on top of technology, but like, is that it? Is technology not as important? Like, you know, what, what separates the firms that, um, you know, that quote unquote run well from the ones that don't?
Chuck Fenske: Yeah, they, they-- I think the ones, they're really disciplined. Um, so you know, they, they typically are, are pretty diligent about the contracts. I mean, I think the, the National Surety Association put out a list, I wanna say it was maybe 20, 30 years ago, maybe longer, about things that put contractors out of business.
The good contractors, they may not know that that list even exists, but they pretty much check the boxes that they don't do any of those things. Um, so they're really disciplined about where they go in terms of geography, you know, going to new markets. They're really diligent about who they work for and the contracts that they sign.
They're, you know, very vigilant about what the individual project costs are. Um, and so it's just being really disciplined [00:23:00] and understanding risk, um, is really what kind of delineates a good contractor from one that maybe, uh, is struggling.
Jason Jacobs: Uh, and f- um, as far as your world in this process goes, um, where does surety and, and bonding capacity fit in?
Chuck Fenske: Yeah, it's important. I would say what's interesting is, um, I think because you had a flood of private equity kind of move in to the specialty contractor space and perhaps didn't really understand bonding and surety. So they would buy these companies, and the balance sheet that they had pre-transaction looks vastly different than it did post-transaction.
And so I think a lot-- You know, I've heard stories from buyers who are like: "Oh, man, we got, we, we got a rude awakening because we couldn't get bonding because the, the balance sheet was different." So it's, it's important. I would say too, I think there are, and kudos to them, there are sureties that recognize that the landscape is changing, that consolidation is coming, uh, [00:24:00] and they recognize that it's an opportunity.
Um, by having one of these consolidators, you can kind of ride the wave with them. Um, there are others who will say: "If it's owned by private equity, we won't touch them." Um, they're still very, very hesitant, um, and leery of just the, the general concept of rolling up an industry.
Jason Jacobs: And what, what is it you think that they're afraid of?
Chuck Fenske: Just the debt. They view it as risky. Um, the personal, well, uh, the personal guarantees, 'cause private equity doesn't want to necessarily sign those. Um, you know, the surety, and I, I understand it, they, they want personal indemnifications from the owners, um, and private equity's not gonna want that. And so how do you kind of, from a risk perspective, how do you kind of bridge that gap?
Jason Jacobs: Re- when, when you work with, with clients, um, how many of them are strictly optimizing for dollars to [00:25:00] them and their families, and how many of them are, you know... Or asked a different way, how much of the focus tends to be on, um, optimizing for, for them and their families at time of transaction versus life on the other side for the firm?
And do they tend to go together, or are they at odds in the process typically?
Chuck Fenske: The-- I would say that the people who contact us, they've weighted the, the liquidity event and the valuation higher than say, you know, um, than of the other criteria. Th-that is, that is what we do. We, we are ins- financially incentivized to maximize the liquidity event for our clients. Um, and so I would say, but I would say the two things aren't mutually exclusive.
You know, we had a client in March, uh, who said, um, "I wanna make... I wanna sell the company. I wanna get a really fair, good valuation, but I don't need the last dollar." He ended up leaving, uh, [00:26:00] you know, t- you know, tens of millions of dollars on the table, um, to go with the second bidder, uh, because the-- he just felt culturally they were a better fit.
And so that's obviously an extreme example, but I would say most of my clients, it's an important consideration. Um, and what's gonna happen to the employees? What do their benefits look like? Um, you know, what is the bonus program gonna look like when they're gone? How would... You know, they oftentimes will interview, uh, whoever the buyer is.
Do they have other platforms or other companies, uh, that have been add-ons? How did it go? Um, so I think it's not binary. I mean, I think they're, they're kind of looking at it and saying, "I wanna do well, but I also wanna do right by the employees."
Jason Jacobs: Um, and you've, you've mentioned private equity a few times. Is, is that the primary buyer that you're seeing or are there other types of buyers that are showing up to the table?
Chuck Fenske: Yeah, I would say if you kind of break down the market of transactions, um, I, I wanna say PitchBook [00:27:00] has right now, I would say it's private equity makes up slightly more than half of all the transactions. I would say, you know, the transactions that we work on, they, they're an important buyer universe, or I should say important part of the buyer universe.
Um, you know, 'cause sometimes I think private equity gets a bad rap. I think so, uh, 'cause when we-- I talk with, you know, some of the buyers, I say, "You guys have a PR issue. Uh, I get that the, the emphasis is on private, but you guys gotta, you gotta tell your story." Um, 'cause our clients a lot of times still have this idea, it's like KKR in the '70s and '80s, that they're gonna strip it down and, and I think once they kind of interact with them, they're like, "Oh, these, these gu- these guys seem okay."
Um, and so they're, they're an important part, and I think they've also... The, the valuations that you've seen kinda drive up, a lot of that is because of private equity. So, um, but they, they move quick, and that's why we like them. They're a quick, efficient buyer, that they are [00:28:00] somebody at a computer right now sitting around waiting for my email, uh, to send them deals 'cause we act as kind of their business development department.
Jason Jacobs: Hmm. Um, and, uh, when you say private equity gets a, gets a bad rap, um, uh, I mean, I would imagine that private equity, like any industry, is not one size fits all. There's good actors and bad actors and, and everything in between. Um, you know, w- what, uh, um, what do you think differentiate the ones that are doing it right from the ones that maybe are doing it wrong?
And, and what does doing it wrong look like?
Chuck Fenske: Yeah, I think the ones that do it right, they're looking at it as a partnership. Um, they invest... Um, the ones that I always-- It's a, it's a pretty good tell, um, during management meetings, they will ask, um, and I will prep my clients for this question 'cause they think that they'll, like, there's somehow they're, they're, they're gonna tell on themselves.
They'll ask: What deficiencies do you have in your [00:29:00] management team or within the company, and where can we make investments to kind of improve the team or the company? Um, so, like, the, uh, the tran- the deal that we-- I referenced in March, the management team reflexively said, "We're packed to the gills. The facility's too small.
We need a new facility." I said, "Got it. We hear you. Do you have one identified?" They're like, "We do. It's, it's, it's a block away." So they're like, "Great. We'll add it to the list. What else do you need?" They're like, "Well, we could really use someone in HR." "Fantastic. When do you think we could-- What-- You know, make the pitch.
How soon do you think you need them?" So they're looking to make investments because the kind of the idea being if you cut costs, you get the benefit once. If you're adding people strategically that can increase, you know, profitability, you know, if you're growing at 6% or 7% or 8% every year, that's compounding, and so that's what they would prefer to do
Jason Jacobs: Uh, does it look different if it [00:30:00] is, um, acquiring one company versus folding it into a roll-up?
Chuck Fenske: That's true. That is gonna be a little bit different because obviously part of the thesis or the idea being when you do a, uh, a consolidation, if you have, you know, if you have two-- You don't need two HR people. Um, you don't need... So some of that back office stuff is probably gonna get consolidated. Um, and so yeah, that, that stuff does change, so that you're probably gonna get some cuts there.
Um, but like the, the rank and file, the field workers, those people will, will be there. Um, they largely probably won't even notice a difference, but some of the administrative staff might
Jason Jacobs: Do the multiples tend to look different on one path versus the other?
Chuck Fenske: Um, in terms of being an add-on or versus being an indepen-- Um, I would say the company kind of gets the m- the market value. Um, they... I would say the, the one that's doing the add-on, they can stretch a [00:31:00] little bit more. 'Cause if you think about it, we're selling the company at five or six times, and they're consolidating it into a, a larger platform.
You know, they're probably gonna end up trying to sell it someplace north of 10. And so they have that kind of natural arbitrage in between that they can kind of stretch on a half, maybe a full turn on EBITDA that maybe somebody, if we were just selling it to somebody else or if it's a s-standalone platform, they don't have that.
So it makes it a little bit difficult for them to get to the math
Jason Jacobs: And I, I made a little punch list of just other types of, um, uh, buyers that maybe sit adjacent or, or compete with private equity. Uh, one is, um, uh, you know, more permanent capital or holding companies that aren't looking to, you know, drive efficiencies and sell, but are actually looking to hold for the long term.
Another is the independent sponsors that are popping up, and lastly, this whole kind of search fund or entrepreneurship through acquisition ecosystem. Are those just little blips right now, or are any of those [00:32:00] showing up meaningfully in your world?
Chuck Fenske: They're all, they're all inc- uh, incredibly important in the buyer universe. I would say, um, but it depends on the company. Some companies, you know, you, um, they're just too large for independent sponsors. Um, you know, and that's not a good fit. And you have other deals where that's, that is the buyer. Like you're pr- you look at them and you're like, "Yeah, that's gonna be an independent sponsor and that's a great fit."
Um, you have others who are saying the, the client will say specifically, "I do not want this to be sold again," or it w- it not for many, many, many years. And there are some, you know, family offices, um, that they just hold companies. I mean, I give you the example, uh, Lithco, uh, the, the concrete contractor, they are owned by the Pritzker Family Office.
So they've, they own it. They probably will own it for a long time. Uh, it's probably a wonderful cash flow investment, um, and that's why they own it. Um, and that's... So, but they're not looking to necessarily [00:33:00] sell it again for at least for a while.
Jason Jacobs: Um, in a, in a world where the seller has options, um, I know you work primarily with the seller, but if you put on the buyer hat for a moment, um, I mean, is it typically just the best terms that, that wins the deal, or, or are there other factors that end up, um, being important? And, and what advice do you have for, um, you know, for a potential buyer in terms of giving themselves the, the best probability of success?
Chuck Fenske: Yeah. I would say valuation's obviously an important consideration. Um, it's, you know, I would say it's, you know, if you're submitting the lowest offer is probably not gonna get you to the table to make the pitch as to why you're different. I think the best one I've heard, uh, I have a friend that works in private equity, and they...
You know, what they-- Their pitch is, and they can show a track record, and they're saying, "Hey, here's our offer. It's pretty good. Um, however, here is [00:34:00] what we've done with businesses like yours in terms of growth, and then we're gonna have you roll your current, your equity in your current company into the, the platform, and then y- we're gonna probably sell this again in five or seven years, and you're gonna have another, you know, a second bite of the apple.
Um, and here's the advisory board that we've put together." And so that was a really, really compelling narrative, that it wasn't just the highest valuation, it was, "Here's our track record, here's the board we've put together, and here's how we're gonna grow your business and how it's gonna be a part of this larger platform."
It was a very, very compelling argument
Jason Jacobs: Um, have you seen, uh, um, uh, in, in terms of centralizing functions or getting access to more platform functions, um, are there functions that actually tend to be valuable to these independent companies on the other side? Or is it largely [00:35:00] just the more you leave me alone, the happier that I am?
Chuck Fenske: Yeah, in terms of the, um, the owners, like in terms of their being in, being let, kind of left a lot of independent?
Jason Jacobs: Yeah. So let's say, for example, if it's a roll-up, right? Um, uh, you know, is it, is it, you know, is, is the owner typically wanting to retain as much independence as possible on the other side, or the-- or have you seen certain elements of capabilities that live across these companies that the owner's kind of frothing at the mouth excited about?
Chuck Fenske: Yeah, it's, it depends. It's, it's owner from owner. I have some who... And I-- It doesn't typically work out well. They're like, "I just want the money, and then I want them to leave me alone." You're like, "Hmm, that's not gonna, it's not gonna work that way." Um, and, you know, if... So, you know, tho- that group, it generally is, it, that's, those owners don't typically stay along after the transaction.
It's just, it doesn't fit. The ones where I see they, they have the most success post-close is they're saying, "Hey, uh, I think we have a really nice business here. I'm gonna stay on and continue to run it for some [00:36:00] period of time. However, I would benefit from the insights and perspectives of people who are really good investors.
I would benefit from the additional capital, um, and the kind of discipline that an investor or private equity would bring. And I think we can grow this substantially more than I could independently or by myself." Those are the ones that seem to, to have the most success
Jason Jacobs: Mm-hmm. And if you take a step back and so get, get out of the kind of deal to deal world that we've been talking about and the psychology there and more just look at the bigger picture, um, do you think, for example, that these private equity buyers are in it for the long haul or, or is this a fad?
Chuck Fenske: I, I think, um, you can never quite tell, but I would say we're probably six or seven years in and they've had many successful exits. So that is a really, really good indication that you're not [00:37:00] having... If we were in year one or two or three, uh, I would say it's, it's r- it's hard to say, it's too early. But when you're starting to see that first round of exits and people are able to, you know, buy a company, roll it up, you know, consolidate all that stuff, and then sell it to the next group upmarket and ha- do really, really well, um, that's...
'Cause everybody copies them. That k- it's kind of a copycat industry. So I would say it's, it's fairly permanent. I would say, um, that this is-- I'm, from my-- selfishly, I hope this kinda continues for another 20 years. It'll get me to retirement. Um, so, 'cause it'll, it will kind of allow me to use my expertise, so
Jason Jacobs: And, um, do, do you, uh, do you agree with the assessment that I stated before that the, um, you know, that the workforce is shrinking and the demand is growing, and that the industry, through Darwinism, is gonna be forced to figure out how to, you know, do a lot more with less?[00:38:00]
Chuck Fenske: I think that it will have to be more efficient. That's been, um, there's no question about it. I think they'll have to reconsider, um, where they're pulling talent from, how, you know, you know, and how we, um, where we are kind of soliciting the, the n- the new workforce to come from. So I think all of those things, it's gonna be kind of an all of the above, um, 'cause the traditional pathways that we've had, the-- it's just not producing kids to come into trades like they used to.
Jason Jacobs: And, uh, I know this, this might be, um, you know, out- outside of the fairway of things you think about all day, so if it is, feel free to punt on the question. But, um, but do you have a point of view on what levers are the most meaningful ones to pull to drive that efficiency?
Chuck Fenske: I'm not sure about the efficiency. Um, it's, you know, I, I, I think they've done some interesting stuff with technology. You know, I think th-things, for example, although it's not necessarily new anymore, but a good example is BIM. [00:39:00] You know, that was an ef- you know, having, you know, a superintendent and your foreman and, you know, of all the trades sitting around staring at a piece of duct work in the site because it intersects with steel and waiting for an architect to come out and tell you what to do, that is not an efficient way to build a project.
Um, so I think things like that to kind of drive efficiencies. I've seen stuff in terms of like pre-fabbing to, you know, that has been helpful. So I think, you know, I've seen stuff with robots that talked about that. Um, so I think all of, all of the above to make construction more efficient, uh, is gonna be helpful.
Jason Jacobs: Uh-huh. And it, I mean, it seems like in order to drive efficiency, it's kind of a combination of people, process, workflows, technology. Um, I mean, is, is that coming up much in terms of diligence? Is that coming up much in terms of the playbook, um, post-acquisition? And, and if so, is the way that it's coming up changing as, um, [00:40:00] you know, as technology continues to evolve so quickly under our feet?
Chuck Fenske: I don't have-- I have not heard a ton of conversations about specifically using technology. I have seen conversations about streamlining accounting and some of those other back office stuffs that contractors have a tendency, that's not necessarily their strength. Um, they, they usually are outstanding at the, the business of contracting or building.
Um, you know, a little less enthusiastic about accounting and marketing and some of those other, other disciplines. So I've seen them... That's been where they've been focused in terms of driving efficiency. I have not seen it in the field. That's not to say that it hasn't happened or it's not happening or it won't happen in the future.
Jason Jacobs: Mm-hmm. Yeah, it's, it's interesting because in the Silicon Valley bubble, like, the narrative is that the world's gonna get turned upside down and, like, it's existential and, uh, you know, we're so [00:41:00] far behind. Like, you know, we're just waking up and it's already too late and, you know. Um, and then in the real world, right, um, it's like, "Huh?"
Like, that's not what I'm seeing at all, right? Um, and, uh, and that's one of the things I'm trying to sort through is, like, is Silicon Valley delusional? Is the real world delusional? Or, um, you know, or are there elements of them kind of both being right? And then to the extent that there's bridges to be built that are actually useful instead of like, uh, um, you know, in- instead of, uh, you know, shiny demo and, and deeply disappointing, right?
Um, then how do you build those bridges so that the, you know, these physical industries can gain more efficiencies in ways that actually deliver more efficiencies and don't just lead to distraction and frustration and in, and additional risk, right? Um, and I don't have answers, but those are some of the questions I'm asking as I'm kind of coming in, uh, and, um, and, and, and, and honestly trying to figure out both, right?
Because it's like the tech's moving too fast to be an expert [00:42:00] there, even if it was your full-time job to focus on it. And, um, uh, and then the trades is like, you know, if you haven't been in it for decades, like, good luck to you coming in fresh. And I'm, I'm trying to do both in parallel, which is, um, pretty daunting.
Chuck Fenske: Yeah. N- I would say that there's-- I think they both, they're both right, um, in that I think that tech is, uh, is most certainly in their assessment of the, the labor force, um, is an accurate one. Um, and that you're having a lot of people with a lot of experience ex- it's a n- it's, and it's a tough job. Like, um, and so you're having people leave the trades faster than we can replace them.
And the people... I think, like I've seen that pilots are having this, you know, the same issue. You're having a lot of older pilots exit, and then what you're backfilling them with is people without the same experience, which is, as a traveler, obviously unsettling. Um, but I, my sense is that we'll figure it out.
Um, [00:43:00] I think they're just going to have to pull from different areas in a different way. I, I do think, um, I was at an ABC conference several years ago, and one of the topics they had considered was, you know, does ABC take, uh, a position on immigration? And has the construction always been kind of the, the occupation of an immigrant?
Um, and that maybe we're continuing to try to sell this industry to kids in the suburbs who don't necessarily, you know, wanna work in it. But if you're, you know, first generation, you're coming to the United States, this looks like a wonderful opportunity. It's a great middle class job. Um, and so maybe the audience that we're, we're kinda selling to is not the right one.
Uh, my, my sense is that through technology, through pulling kids from who are maybe disillusioned with tr- uh, traditional higher ed, and then through immigration policy, that we probably address this, is my sense.[00:44:00]
Jason Jacobs: And I mean, on that topic of, you know, retiring and judgment going out the door and, and stuff, what are the roles that are most hot button roles in terms of the buyer being worried are gonna be flight risks post-transaction, and what have you seen as techniques to try to mitigate that risk, and what are the ones that work well, and what are the ones that maybe you are more allergic to or might counsel the, the seller to be more wary of?
Chuck Fenske: Yeah. It's the number one conc- I would say every buyer, um, is concerned that, um, the owner's gonna walk out and then everything's gonna kinda stop. Um, it's their number one fear that they've bought this thing and they unknowingly find... They find out after the fact that they-- the thing doesn't run without the owner.
So, you know, one of the things we kinda talk about, y- you know, when I'm kinda doing our diligence, you know, how critical is the owner to the business? And I kinda reference clients with [00:45:00] houses in Florida. Um, how are they, um... I had one client, he did a wonderful job of working. I kind of say that being a good owner is like being a good parent.
If you do it well, you kind of work yourself out of a job. Um, and he did a great job. He had delegated all of his key relationships of his clients to his, like, his two top managers. He had segregated out the different-- They were an electrical contractor, so he had his low voltage, he had security, he had fire alarm systems.
Everybody had their own kind of... And they were kind of responsible for their own clients. And he effectively, he-- I'm like: "Well, does anyone call you?" He's like: "Not really anymore." And he's like: "If they do, I just patch it to someone else." He's like, "They just..." He goes, he goes: "I'm not here." And he goes: "They-- If those guys are doing a good job, they just don't typically look for me."
So I- that's typically-- I think, um, you know, clients who, they call me and they tell me about all the stuff they do and how important they are, I'm like: "Oh, no. Um, that's not a good sign." So, uh, clients who are a little bit, [00:46:00] uh, irrelevant to the business is, is not a bad thing.
Jason Jacobs: Uh-huh. And are there, um, are there things contractually that you've seen that, um, that buyers try to do post-transaction to try to protect themselves in this way?
Chuck Fenske: Yeah, I would say th-they'll have non-competes where they have to stay on for so many years. Um, they may have to stay on in some type of chairman role or, um, they may have to stay on in terms of, you know, their workload or their responsibilities may st- change, but they're there to kind of, you know...
Th-their hand is still on the wheel. And then from a financial perspective, they may have some portion of the, uh, of the deal that's an earn-out, where the only way they get paid is long as the business continues to perform, so that there's alignment in terms of the business getting paid or the business performing and the client get- or the, the owner, uh, getting the remainder of his money
Jason Jacobs: Mm-hmm. Um, one last little question, just, just a [00:47:00] clarification. If I'm an owner, how do I know if I'm better suited to work with a banker like you or a broker, and what's the difference?
Chuck Fenske: Yeah, I would say, you know, brokers are really, really important, and I would say, but they have a tendency to work with kinda smaller deals. The way they go about, um, selling businesses is different. They... It's definitely kind of... A lot of times they'll put it on websites. Um, they're usually working with, a lot of times you'll see, like, restaurants or daycares.
You know, for those groups that have kind of a smaller business and th- you know, this is their best path to having a liquidity event. Uh, we have a tendency to kinda work with larger businesses, and our approach in how we sell business is kind of more specific or tailored to telling that company's story.
Uh, we're kinda more targeted about who we send their information out to. Um, and the other part is that, um, you know, business brokers are not licensed, investment bankers are. So, like, my colleagues and I, we have licenses. We pa- took the se- Series 79, um, and so th-that [00:48:00] allows us to do investment banking work
Jason Jacobs: Mm-hmm. Um, and the, um, you know, given how being buttoned up is favorable to the multiples, um, do the firms that are more buttoned up, do, do they tend to have a, um, strategic f-finance person either full-time or fractional or, um, uh, or, or is that something that you say, "Look, like this is a raw gem because they don't have it, so imagine once they do have it on the other side"?
Chuck Fenske: That's exactly right. I would say m-most, not... I'd say most of my clients, the owner themself does the financials and, you know, and they, they're generally pretty self-aware and they recognize, "Hey, I'm doing the best I can. This is not my area of expertise." Or they have somebody who does it, but that's, they do five other things.
Um, so it's usually from private equity's perspective, it's an opportunity, uh, in an area they, they think they can improve. Uh, and they will even ask like, "Hey, you know, how, how are the financials?" [00:49:00] So sometimes I'll tell them like, they're, they have a person, they're outstanding. Um, other times I'm like, "Yeah, they're not bad."
And sometimes I'll tell them like, "No, it's, it's a huge gap, um, and I think it's an opportunity for you guys to fill in."
Jason Jacobs: Uh, and so I think at this point in the discussion, I mean, we've covered a bunch of topics. I'll give you a choice. We could either wrap or if you think it'd be interesting, if you wanna give a case study of just kind of, you know, one process, cradle to grave, just kind of the CliffsNotes version of like the, you know, the seller motivation and how they engage and how it went down.
You can anonymize it or take out any sensitive information, um, or if you think that's a bad idea, we don't have to do it. Um,
Chuck Fenske: No, I'm happy to do it.
Jason Jacobs: Okay.
Chuck Fenske: Um, in terms of-- I'll give you-- I'm trying to think of the good one that-- I have a couple that I, um... Is there one specific in terms of like cradle to grave, you know, an attribute or a quality that, you know, they would lo- that I should pick over another or just any deal?
Jason Jacobs: Uh, I'd say any deal, although if it's a mid-sized commercial [00:50:00] contractor, then it's more aligned with the things I'm thinking about every day. But honestly, just like whatever deal you, you know, are most excited to, to walk through or you think would be most insightful works for me
Chuck Fenske: Yeah. I'll give you the one that we most recently closed, uh, that was in the built space. Um, it was a retaining wall contractor in the Carolinas. Um, and they had had-- they had tried selling a couple different times and were unsuccessful for whatever reason. But when they contacted me, you know, they introduced themselves, um, and kinda told me about the business, is that they were a retaining wall contr- um, contractor.
And then they were sending me all their information, um, and what they did disclose is I'm like, "Oh, they just... They do design work too." And so I told them I... And they were like, "Well, we're just, you know, Chuck, we're, we're a contractor." I said, "No, no, no, no." I said, "You are a design builder of retaining walls."
And they're like, "Well, what's the difference?" I said, "It's a huge difference," because I said, "You're now vertically [00:51:00] integrated." And I said, "The story is much different because how you interact with clients." I said, "A contractor just submits quotes." I go, "You guys don't do that." And they're like, "No, we get contacted and we do design the entire retaining wall system."
And I said, "Right. And then you guys give a number, and as long as it's not unreasonable, that's the number, right?" And they're like, "Yeah." I go, "Yeah, that's a very different story." So we kind of... So from the process, from the standpoint, that was I think the ma- If we had just taken them on as, and taken them to market as a retaining wall contractor, I don't...
I think we'd probably have gotten the same outcome. But I think that slight nuance in it, and we were able to tell the story about the relationships, how they really didn't bid the work, that it was more relationship driven, the repeat nature of their customers. They had really high gross margins, uh, because they, they did a good job of running the work, and a lot of the value that they brought was speed, so their clients were really, really comfortable with them.
Um, [00:52:00] and so it was, you know, they were almost kind of this integrated process as part of their clients. Um, so it was, it was a wonderful outcome. Uh, it was a great company, but I think on the first surface, I kinda looked at them like, "Ugh, I, I'm not, I'm not sure that this is..." I'm like, "We'll, we'll see." And it was even better than I initially thought.
But it was just sometimes our clients, you know, they know their business, but they don't quite know how to position it, and that's kind of the value that we bring to make sure that we get the best outcome
Jason Jacobs: and did, did that process start with an unsolicited inbound that became kind of the anchor for the process? Or, um, uh, or did it start a different way?
Chuck Fenske: Now that one was just kind of, they had gotten some unsolicited offers. We most certainly included them in the process, but the, the, the group that ended up buying them was just somebody that we had found. They had, they had owned other contracting related businesses, um, and it was a really good fit. They were, they...
I was pleased that they... We-- [00:53:00] Sometimes you tell the story and you kind of, uh, why you think it's a good investment, and sometimes the message doesn't resonate, and sometimes it does. This time it, they, you know, this buyer got it. They saw the same thing that I saw in terms of how you grow it. Um, they saw the value in terms of the, the value they had with the relationships with their clients.
Um, so they, they just... And kudos to them, um, but they, they understood it and I'm like, "They're gonna do really, really well." So
Jason Jacobs: And, um, and, um, one, one segment of buyer that we didn't, uh, talk about is the strategics. Um, is, is that not a thing or, um, or are they part of these discussions too? Like the, you know, the larger independent players
Chuck Fenske: No, they most certainly are. I would say the one thing that we always tell our clients, though, strategics are incredibly important. They make up probably, you know, roughly 40, you know, 47, 48% of the market, um, in terms of transactions. Uh, I would, I always caution my clients, they do move a little bit slower, and we do have to work a [00:54:00] little bit harder to get ahold of them, uh, because oftentimes they're, they're running a business.
Like they, um, they'll tell you like, "Hey, we're closing out the books this quarter. Uh, can we get back to you in two weeks?" Uh, or... And they're, and they're not--
Jason Jacobs: No, go ahead.
Chuck Fenske: ahead. I'm sorry.
Jason Jacobs: Oh, I was just gonna ask, is there a, is there a Florida House tell that, which is that they have a corp dev department or, um, or that they've done other h-
Chuck Fenske: Yeah. S-sometimes if you're fortunate enough, uh, they have a corporate development team, and which is I- I'm tickled pink when they do. Um, but oftentimes they don't. Their CFO runs it. Um, so they can be wonder- and we always kinda have to tell our clients, "This is the right buyer.
Uh, they're gonna give you a, probably a, you know, we think they're gonna give a really good valuation. They just have a tendency to move a little bit slower." Um, and so, and you, you oftentimes have to work a little bit harder to get ahold of them 'cause they're not sitting around waiting for my emails like other buyers.
Jason Jacobs: Mm-hmm. Um, and, uh, and, and I guess in, in closing, um, so for the owners out [00:55:00] there that are listening and maybe thinking about succession one day, um, you know, how should they reach out to you? When is the right time to reach out to you? And also, h- how do they know how to choose the right partner in a bank to work with?
Chuck Fenske: Yeah. I-- So I'll start with kind of your-- the, the last part first. I would say in terms of you, you want someone... I would say picking a banker is not all that dissimilar from picking a doctor. Uh, you want somebody who's an expert and has a specialization in the thing that, you know, in your specific industry.
Um, they kind of, they have, they have at-bats and reps. They're gonna be able to tell your story better because they understand the industry. Um, they're gonna have a better sense of what the buyer universe is, and there's a good chance if they work in that industry a lot, they might already have a, a preexisting relationship with those buyers, and they can s- kind of...
You know what I do a lot of times, I will send out and just kind of anonymize the companies like, "Hey, give me a feel for what you think. Are you-- Would you be interested in this company?" [00:56:00] Um, so it's a good way to kind of front run or soft sell the business before we even go to market. Um, and then I would say in terms of timing, you know, I, I, you know, I kind of, you know, touched on this earlier.
You really can't start earlier enou- early enough. Um, and thinking about when you wanna sell, getting it ready, um, I always say it's kind of akin to if you're selling your house, contacting a realtor to ask like, "Hey, can you... What do you think? What do I need to work on?" They might tell you like, "Hey, you need some new carpet, so a fresh coat, you know, paint on the walls.
Um, hey, you might wanna replace the deck." Um, these things are gonna have a, a disproportionate or profound impact on the purchase price, and we do, kinda do the same thing for our clients. So at least giving them a sense of like, here are the things that are gonna m- meaningful changes gonna have a profound impact on the purchase price.
Jason Jacobs: And then, um, uh, what's the best way to get in touch with you and, and, um, you know, who do you wanna [00:57:00] hear from and, and, and what's the right timing?
Chuck Fenske: Yeah. So I think our best way is, you know, uh, s- you know, our contact information's on our website, and reaching out v- via email is always a great way to do it. Um, or I th- believe our cell phone numbers are on, phone numbers are on there as well. Um, yeah, so those... Yeah, that's the best way.
Jason Jacobs: And, and what about, uh, you know, profile you wanna hear from and, and at what point in their journey?
Chuck Fenske: Yeah, I would say when you're demog- I always kind of tell people if you're demographically probably thinking about retirement, uh, if you're, you know, thinking about thinking about it, um, then that's probably a pretty good sense. I mean, I would tell you what's, you know, um, you know, if you're people who... I always kind of say you, you want to be a deal maker, not a deal taker.
And so waiting until like the company's not doing well or the client has already, like, you know, you're, you're an owner and you've had a health emergency or a health issue, those are not ideal times to sell. So if you're healthy [00:58:00] and the company's doing well, uh, and you know, you're like, "Yeah, I'm, I'm thinking about retiring," that's probably a good time to start having the conversation.
Jason Jacobs: Mm-hmm. Uh, great. Well, um, this was awesome. Uh, we covered a lot of ground. Uh, I learned a lot. Uh, is there anything I didn't ask that you wish I did, or any parting words for listeners?
Chuck Fenske: No, I, I appreciate you having me and, um, this was, this was a great experience.
Jason Jacobs: Thank you, Chuck
Chuck Fenske: Yeah. Hey, thank you
Jason Jacobs: That's it for this episode of BuiltForward. I hope you enjoyed it. If you found it useful, share it with someone building in the industry and follow the show so you don't miss what's next. Thanks for listening, and see you next week