1) A business that makes 100 with 1 in asset is better than the one making 100 with 10 in asset. 2) If you are buying a SBA size business, then assets intensity is not important except to make buyer comfortable with PG. 3) Over the years, of the manufacturing businesses I have sold, the ones with no, or extremely low, assets have been ultra successful. 4) Once, I was representing a buyer looking for a printing company. He called me about one with the latest equipment and highly profitable. He said it was so clean that you could comb your hair by looking at the floor. He loved it. Price was reasonable. I told him to run. Thank fully he listened. 5 years later that business declared bankruptcy and closed doors. Why did I advise so? 5) Once, I was representing a business in corrugated box manufacturing. Profitability was way above norm. High cash flow. Absolute old equipment. Actually, the company never bought a single new machine. A PE buyer asked me why was the company making money? I did not know the answer b/c I am not industry expert. He did research and told me the reason for high profitability with shitty assets. I learned. It is the business model.

Yes—my background is operating asset-heavy businesses, most recently leading a turnaround as a GM/VP in automotive/auction operations with significant equipment and infrastructure. I’m now focused on acquiring and scaling lower middle-market businesses in similar categories (services, equipment-heavy, recurring revenue).