Trevor Spencer

@blueprintsmb22 This, too, shall end.

Small business ownership today. Find out one of our new hires (a 30 year old man) can’t count. Literally. We learn this after asking him to put together a few pallets of orders for GM and Ford this morning and nothing makes sense. Other new hire who was supposed to show up yesterday doesn’t, but shows up today and says this will be a temporary gig so he can make enough money to pay his daughter’s fall tuition for college. He never mentioned this during the interview. An existing employee leaves mid day without explanation. Customer complains about some film being too firm (huh?). Another customer calls asking for an update for an existing order from January only to realize he never sent me the order and the customer needs it in 2 weeks. Now it’s a rush order when I have a 5 week backlog. Good luck to him. Accounts receivables balance ballooning as customers paying later and later as macro worsening. Film vendor complains if business doesn’t pick up he’s going to fire more pple after big layoffs last year. For the first time in the company’s 50 year history he worries he might need to shut it down. We are behind on so many orders I tell the team we have to work this weekend. All except one agree to come in at 5am tomorrow. I’ll have to leave around 6-7am to drive to Princeton tomorrow to meet up with @OneManLBO for breakfast while he’s on the east coast for Princeton reunions. Hope the team can shut down tomorrow without creating any fire hazards (last time they left machines and hot irons on all weekend in a factory filled with cardboard and paper). I’ll be back to start up at 5am on Sunday. The team and I will have to work Sunday and Monday as well to ship orders first thing next week including a massive order for a pharma company in Australia. Talk to another manufacturing biz owner on my drive home from the factory who tells me how one of his big customers went bankrupt last year which reminds me never to complain about being busy. It’s almost 8pm est on a Friday night and just finished dinner w the wife and daughter knowing I’m up at 3am tomorrow to drive to the factory to start up the equipment, make sure the team knows what has to ship early next week and that I have an hour drive to Princeton at 6-7am tomorrow. I’ve never felt like my current path is less scalable 😂 but always grateful to have orders.

@GabrielJClark Congrats! Hope the puking is done for.

We’ve officially closed on the sale of our home. How it started How it ended

@PEoperator They would all do well to spend a few years in an ops role in the LMM rather than spend the same amount of time on an MBA.

Beware the private equity bro who thinks they understand a business they've never worked inside. Some do, but it is impossible that they all do. Just think about it. There are too many patagonia vests who have never seen the inside of an operating company. Again, some of them will be genuinely thoughtful and genuinely try understand the business. They are still learning. But do you really think the UVA grad who did investment banking in Richmond and is 3 yrs into his PE career knows the auto parts industry? No. He just knows generic ideas that apply to any business. Sometimes that's helpful - fresh eyes, new concepts for a sleep business (why I love the LMM, btw). But too many never directly engage the business to really understand it. They run spreadsheets, they repeat what they heard their MD say, and respond to emails 24/7. Be wary of these vested bros.

@BoilerPlateCPA GAAP accrual is a giant PITA, but it makes your books actually useful beyond just for your tax return.

Most owners can't tell you their real gross margin within 10 points. Cash-basis inventory is why. One month looks like a 45% GM, the next looks like 28% You can't price intelligently When a buyer normalizes the inventory accounting, your EBITDA swings $200K and the whole valuation moves with it Mildly annoying in a normal month but catastrophic during a sale process.

@GrantHensel How many did you end up investing in? We ended up closing in late November. While we weren’t a fit for you (thank you for meeting me at your house so shortly after you moved in!) on this deal, hopefully on future ones.

We've reviewed 250+ small business acquisition deals over the last year. The trend we see: MANY first-time buyers don't realize *Cash is King* 👑 Cash is also Queen. And Prince, Princess, Prime Minister, President, etc. You can make returns look spectacular in Excel by: - Using more debt and less equity - Putting only a little bit of cash on the balance sheet at close - Assuming you'll use a line of credit for normal operating liquidity Excel never captures the sleepless nights, wondering if you'll make payroll. Or the growth opportunities you can't pursue because debt service is strangling you, and you have no buffer. Even from a purely mathematical standpoint, undercapitalizing a business decreases expected returns in the real world. Why? Your cash buffer dictates how large an unexpected disruption your business can absorb. Small buffer? That means a small shock could kill you. Buying a small business, paying off the debt, and growing even a little bit produces a fantastic outcome for everyone. But to get there, you have to survive. Not putting more cash on the balance sheet at close (for example) is a wildly asymmetric bet, and not in your favor: - If everything goes perfectly, you'll have a slightly higher return (low upside) - If anything bad happens, you significantly increase your risk of bankruptcy (high downside) Give your future self the gift of a well-capitalized business at close. I am extremely passionate about this, so hit me with counter-arguments if you think I'm wrong :)

@GabrielJClark Damn bro. God has a sense of humor, I guess.

And the Grande Finale: The wife goes down on moving day.

@Back40Ventures @SteveWiesnerSMB Peace is priceless

@SteveWiesnerSMB Couldn’t agree more. Our sale didn’t make us “post economic” but the nest egg it gave me reduced my stress levels to the point it will add years to my life!

Financially, if you get the chance to sell, far more often than not you should. We all read about the hero who turns down a billion and goes public for $50 bn. We rarely pay attention to the stories below. I hope the HVAC crowd's listening.

@HockJohannes Terrifying. It’s bad enough to convince sellers while cash for working capital stays in the business.

With the new cumulative $10mm 7a and 504 loan cap, it’s only a matter of time until we see the first purchase price + equipment value listing. I want $5mm for my $1mm EBITDA heavy excavation business PLUS $5mm for my equipment. And some course buyer will try to pay $10mm for a business making 0 cash flow. You thought sellers wanting get paid for inventory on top was outrageous, better get ready.

@SteffMcKeeFan @tom_sietsema It’s denial.

@TSpencer260 @tom_sietsema 💯 it’s odd that most people have not realized this yet

The flip side of this is that buyers transacting today are pricing businesses on the current cost structure. If that structure improves materially over the next few years, the acquirer captures it - not the seller. That's not a new dynamic. But the magnitude of the potential shift is probably larger right now than it's been in a while.

@tom_sietsema I’m trying to buy hand over fist.

@TSpencer260 Good time to move quickly.

@SBA_Matthias You can just do things. Under-appreciated

One of the biggest advances of being an SMB owner is that you can move with the speed larger companies simply cannot If you find something that works, double down on it. Use speed as your competitive advantage.

Mother of God.

@SMB_Attorney @elonmusk @AnthropicAI @SpaceX Too soon Eric. Too soon

@elonmusk @AnthropicAI @SpaceX Sounds profitable. You should convert to a non profit first to shield the gains

As the recently expanded partnership with @AnthropicAI demonstrates, @SpaceX is offering AI compute as a service at significant scale. We are in discussions with other companies to do the same. Over time, especially with orbital data centers, we expect to serve AI at extremely high scale.

@GrantHensel Plenty of reason to be optimistic about manufacturing. People are starting to catch on. It’s the reason I made it my focus over the last couple years.

🚨 Breaking: SBA Doubles Cumulative 7(a) and 504 Loan Limit to $10 Million Effective starting July 4th, 2026. SBA 7(a) loans are used for business acquisitions, while 504 loans can be used for the real estate the business operates from. (Or other fixed assets) This is big news for the Entrepreneurship Through Acquisition world, enabling searchers to buy larger businesses where real estate or other major fixed assets are a meaningful component of the purchase price. From the SBA's press release: "The SBA announced a new rule that will allow eligible borrowers to combine their 7(a) and 504 loans for up to $10 million in SBA-backed financing, increasing the cumulative loan limit from its current $5 million and expanding the capital available to small businesses across all industries."

This is rapidly becoming the greatest product demo since Steve Jobs’ “one more thing”. Congratulations folks, you have just exited the smartphone era. Welcome to the robot era. May you live in interesting times.

@SBA_Matthias Just build automations that drop into the team’s existing workflows. Simply things that save time and are quick wins. Show people what’s possible, get buy-in, then start stitching more and more automation together. Don’t use a AI model when deterministic solutions will do.

One of the challenging things with AI from the perspective of an SMB owner is keeping up with all of the apps and which ones are the best ones to learn and lean into: Claude Chat GPT Grok Last year it seemed like Open AI / Chat GPT were the “leading horse in the race” from a user standpoint and earlier this year it seems like Claude has lapped them at least in the business / enterprise space There’s so much benefit that I can see of successfully integrating AI and its technologies into our business but it’s hard to determine which one is the one to focus on or if you focus on multiple and using different ones for different things Second order effect is the time it takes to learn these, use them properly and then getting organizational buy-in How are different business owners thinking about this? Do you ride the train with one of the apps or use different ones for different things?

@HandEManAI @thsottiaux 💯

Glad to hear it’s not just my skill issue! I set off what should have been a 10 hour job last night. I woke up to a failed clean up on the first batch of agents. Very disappointing. The main chat was active but it wouldn’t do any work until it could clear up the hung agents, which it was unable to do.

For those of you living inside the codex app, what should we prioritize among features, reliability or performance?

@HandEManAI @thsottiaux I’m running into this right now. Main chat is done, but multiple background tasks just hanging.

@thsottiaux I've had intermittent problems with subagent cleanup. Codex will hang trying to clean them up and won't progress with a task. This is very frustrating because it will render useless what is typically a very large task. I've included a bug description from Codex in the reply.

High agency mentality must come from within. Learned helplessness, victim mentality, et al is poison. Perhaps there isn’t one correct answer of what “to do”, but high agency can be developed just by avoiding things antithetical to it.