Key Points From the Interview
yler Deike realized in his twenties that the corporate world wasn’t for him.
It was 2018 and he was in that world, but looking forward recognized that it wouldn’t give him the life he wanted.
“After a while working in corporate America, you look at where you’re going, and getting promoted and things like that, and you’re like, ‘Ya know this isn’t going to fulfill me for the rest of my life.’”
Fortunately Tyler had entrepreneurial experience going back to his teenage years.
His dad bought him and his brother a mower, and took them around their local neighborhoods in Lake Crystal, Minnesota, to knock on doors and pass out flyers.
“When you got three kids and a wife and a house, you can’t be like, ‘Oh, I’m not gonna have a paycheck for the next six months to a year.’”
Over a decade later, that lawn care business still existed, now doing a cool half million in annual revenue with a dozen employees.
And running it was just a side hustle for Tyler.
So he knew he had the chops to run a business.
But he didn’t want to start from scratch.
“When you got three kids and a wife and a house, you can’t be like, ‘Oh, I’m not gonna have a paycheck for the next six months to a year.’”
He needed a business that already generated revenue.
From Services to Manufacturing
Tyler didn’t want to do a service business again, with its low margins and high overhead.
“You can’t go from $100,000 to ten million dollars with a lawn care company — you’re going to have way more moving parts.”
Manufacturing businesses, on the other hand, are scalable.
He also wanted a local business.
So he decided to start reaching out to owners of local manufacturers to see if they were interested in selling.
Thinking the owners wouldn't take kindly to getting that question from a fresh-faced 30-year-old, he hired a broker to be his intermediary.
That process didn’t turn up much, but his broker had recently listed a fiberglass manufacturing business called Blackhawk Fiberwerx.
It was about 45 minutes away, in rural St. James, Minnesota.
You Never Know What You Might Find
Tyler initially dismissed Blackhawk Fiberwerx.
Forty-five minutes was a long commute.
And when he pulled up the company’s website, it hadn’t been touched since the 90s.
But “it started to click” that that might signal opportunity.
One Saturday, he decided to drive over to St. James just to take a look.
"So one day I just went there and when I walked in the door I could just see there was opportunity flowing out of the place.”
“I always have the philosophy of, give something a chance, you never know what you might find.”
That open-mindedness paid off.
"When I walked in the door I could just see there was opportunity flowing out of the place.”
Not only could he immediately see inefficiencies in the manufacturing operation, he realized that the owner, Paul, was just dialing it in.
Paul was in his 80s and had had multiple companies, all of which he’d exited except for this one. He was running Blackhawk for fun.
Still, it was generating around $100k in profit on $500k in annual revenue.
And it was available for an attractive price.
Cross Your Fingers and Dive In
The business was selling for the combined value of its fixtures and equipment, building, and 3 acres of land.
That meant that the clients, contracts, revenue, employees, brand, and other goodwill were gravy.
If the business collapsed after Tyler bought it, he could liquidate the assets and still walk away whole. (Hypothetically.)
This was a very large margin of safety.
That certainly helped Tyler get comfortable with the unknowns, which were many.
The owner Paul hadn’t sold his other businesses to outside buyers, so he was a little cagey and insecure about sharing the details of his business.
And he wasn’t exactly running a tight ship; documentation was thin.
“Some of it was unknown, and I just had to have a little faith — cross your fingers and dive in,” said Tyler.
And that's what he did.
Terms of the Deal
Initially he tried to go the SBA loan route.
But because an equipment dealer used to operate on the property, the SBA was going to require soil testing — costly and slow.
So instead he turned to a small regional bank for a loan to buy the fixtures and equipment.
For the building and property, he took a loan from the seller.
That loan had high interest, so after a year of proving his competence as the new owner of Blackhawk, he got a second loan for the building and property from the same bank, and paid off the seller note.
Slammed on Day One
Tyler closed on the business in June 2018.
On the first day as new owner of Blackhawk Fiberwerx, there was good news and bad news.
The good news: the company had a giant order for 400 pieces.
The bad news: the company had a giant order for 400 pieces.
Most Blackhawk clients buy 1 or 2 pieces, so this new order could bury the business.
Tyler quickly learned that the previous owner had been so overwhelmed that he simply stopped returning calls.
Tyler had to wade through the 15 unanswered voicemail messages and clear out the backlog of small jobs so that he could focus 110% on fulfillment of the 400 pieces.
In short order, he staffed up from 3 people to 10, and employees were having to show up at 4am to crank out the fiberglass pieces.
Was It Worth It
Tyler survived that trial by fire, and three years later Blackhawk Fiberwerx operations are streamlined and profits are up.
In addition to fast-tracking Tyler into the role of business owner, acquiring Blackhawk opened a lot of doors.
“I think it’s fun. Honestly, I get bored real quick, that’s why I’m on to the next thing already. I’m always looking for another one.”
He’s since started a trailer and equipment dealership.
And he's looking for another acquisition.
“I have deals come across all the time. I flew to a couple different places looking at different fiberglass companies. I thought, ‘Well why don’t we just buy a product that somebody else makes, and then just ship the tooling up and we’ll do it.’”
None of those have worked out yet, but there’s no rush.
“I think it’s fun. Honestly, I get bored real quick, that’s why I’m on to the next thing already. I’m always looking for another one.”
