In this issue:
Aaron Provencal bought the restoration company he joined as employee #1, then sold it after fielding 18 offers
One move to steal: the 30/60/90 expectation sheet
Deal Watch: A closer look at when buying a business really means buying yourself a job
2 rooms worth being in as a business owner
A note from Delia
Thousands of Sacramento-area business owners are approaching retirement. When no local buyer is ready to step in, many of those businesses never sell. They simply close.
I saw this happen recently when a longtime owner became seriously ill. His family had to shut down the business quickly. I was tied up at the time and did not even get the chance to speak with his wife before the doors closed. A business that had operated for more than 20 years disappeared within weeks.
This newsletter is meant to support both sides of that transition: helping local owners build stronger businesses today and helping local people prepare to buy them when the owner is ready to move on.
Here is the goal: Every two weeks, I sit down with a Sacramento-area owner and ask the questions most interviews skip. What did it really cost to build the business? What nearly took it down? I then pull out the useful lessons, evaluate one real local deal, and share the rooms worth walking into.
The Sit-Down: Aaron Provencal
Aaron's first business was selling boxed candy at school, sourced through his dad's vending machine supplier. It worked until he got caught. Then, at 15, he was pulling hoses for a carpet cleaner, turning over UC Davis apartments every summer. At 17, still in high school, he went full-time for a small carpet cleaning company. In 1993, he became employee #1 of what grew into a disaster restoration business.
Fourteen years later, he bought it.
Here's the part most people don't believe: you don't need millions to buy a company. Aaron had $75,000, his half of the proceeds from a house he'd bought for $130k and sold for $350k. He put in $50,000. His business partner put in $50,000. An SBA loan covered $500,000. That was the whole deal.
It wasn't smooth. The recession hit, and Aaron and his partner stopped taking paychecks so the employees never missed one. He almost lost his house. He also burned real money on a franchise called 1-800-BOARDUP, betting that fire departments would send referrals. In his market, they never did. The fee and the marketing spend went to zero.
Then came the ending most owners dream about. A buyer from back east invited him to lunch and never mentioned buying anything. He just built the relationship, for two years. When Aaron and his partner were ready, they hired a business broker and got about 18 offers, many from private equity. They didn't take the highest one. They took the buyer they trusted, who promised to keep 100% of their 100+ employees and improve their benefits. Every one of those jobs stayed.
That's what a good handoff looks like, and it's half of what this newsletter exists for.
Today Aaron runs OsteoStrong, a bone-density and balance franchise in Rancho Cordova (his wife runs the day-to-day, and more local locations are coming soon). He also flips distressed houses and helps small businesses cut medical insurance costs.
What Aaron actually did:
He traded margin for consistency. The industry split into companies that fight insurance carriers and companies that work with them. Aaron became a preferred vendor for the carriers: thinner margins, steady work, a team that always had jobs. Ask yourself who already has your customers, and what you'd trade for steady work from them.
He let his veterans hire. Interviews happened in front of a panel of 5 or 6 long-tenured employees. Everyone asked questions, compared notes afterward, and voted on the offer. The people who'd have to work with the hire made the call. He had a handful of employees stay 15+ years.
He made firing clean with 30/60/90 sheets. Every role had written expectations for day 30, 60, and 90. Hit them or don't. If someone missed the marks, the exit conversation was already written.
He paid for outside eyes. Six or seven business consultants over the years, including to referee the hard seasons of his 50/50 partnership ("it's like being married to somebody"). His take: expensive, and worth it every time.
Want the medical insurance program he mentioned (40 to 60% savings for businesses under 50 employees)? His links are here: allmylinks.com/aaronpro
One Move: write the 30/60/90 sheet
Steal Aaron's hiring tool, if you don’t have a similar system in place: before your next hire starts (or for the newest person on your team right now), write one page: what does done-well look like at day 30, day 60, day 90?
Real outputs: "Handles closing alone by day 60" beats "shows initiative."
Hand it to them on day one. Put the three review dates on your calendar. Now a bad hire costs you 90 days instead of two years, and a good hire knows exactly how to win. This takes under an hour.
🔍 Deal Watch:
There's a watch and jewelry repair shop for sale in Roseville right now, on a main commercial corridor. This is the type of listing that often attracts a first-time buyer because it seems lower-risk (it doesn’t have a $1 million price tag).
Here's what the listing shows: $140k in revenue, $67k in SDE (seller's discretionary earnings, the owner's real take-home), asking $235k. It also highlights low rent, strong reviews, and a loyal customer base that the seller estimates is 65% repeat business. The headline calls it “turnkey.”
Then you read one line further, and the deal changes.
Staff: one part-time employee
Training offered: none
Reason for selling: retirement
The owner is also the watchmaker.
That $67,000 is not profit produced by a business that can run without the owner. Much of it is compensation for repairing watches by hand, and the person doing that work is leaving.
Unless you can perform the repairs yourself, you would be buying a storefront and a customer list without anyone qualified to sit at the bench.
This is the type of listing that works great for an experienced jeweler or watchmaker; it could be an opportunity to acquire an established customer base, strong reviews, and an affordable lease. The listing also points to possible growth through mail-in repairs, e-commerce, and corporate accounts. The buyer fit is extremely narrow, though.
Having completed several business acquisitions, I see the $235,000 asking price as aggressive, although the seller may have built in room for negotiation. At that price, a buyer would pay roughly 3.5 times SDE for a business that depends heavily on the owner’s specialized labor (I would not pay more than 2x on it, unless there’s a good reason for it).
A deal like this may make more sense with substantial seller financing, a lower purchase price, and enough transition support to protect the customer relationships.
The lesson that matters beyond this listing
When SDE is largely the owner’s wage, ask this first:
Can I do the work, or can I hire someone qualified at a cost I can verify?
Then calculate what remains after paying that person. That number is much closer to the true profit of the business.
One thing about me: I work the buyer's side of deals like this, and I'm paid by buyers, never sellers. If you're serious about owning a business in the 916 area, reply to this email. I'll help you find one and screen it before you spend a dollar.
AI Corner
Aaron mentioned his process for hiring great people: a hiring panel. However, not everyone has the ability to use a hiring panel to evaluate candidates.
This is where AI can help a small business owner. One interviewer reads 2 or 3 things about a candidate (the words, the tone, maybe body language). Six interviewers comparing notes notice a LOT more. AI tools can read a transcript across dozens of dimensions at once (or from the perspective of 6 different people) and better evaluate the candidate.
If you don't have six veteran employees to put in a room, borrow the idea.
Record your next candidate interview (ask permission), get the transcript, and give it to Claude or ChatGPT with this: "Act as a hiring panel of five: an operations manager, a skeptic, a culture read, a skills assessor, and the candidate's future teammate. Each panelist gives their honest read and one follow-up question for a second interview."
You'll still make the call yourself. You'll just make it with 20 eyes instead of 2.
Rooms Worth Being In
1 Million Cups Sacramento
Why go: two local founders present, the room gives real feedback. A super useful free hour in Sacramento entrepreneurship, every single week.
When: Wednesdays · 8:30 AM · Free
Where: rotating venues - Wed, Jul. 22, 8:30 – 10 AM, Roseville Venture Lab in Roseville
Small Business Certification & SMUD Workshop (Sacramento Valley SBDC)
Why go: free help getting certified as a California Small Business, which unlocks state contracts most owners never bid on.
Where: Sacramento Valley SBDC, 1792 Tribute Rd, Sacramento 95815
When: Monday, Aug 3 · 1:00 PM · Free
Before you go
Every issue features one Sacramento-area owner. If that's you, or someone whose story you want told, reply to this email. That's how the next Sit-Down gets picked.
Two more doors, both open:
Own a business and starting to wonder what's next for it? Reply. It stays between us.
Want to buy one someday? Reply with the word BUYER, and I'll point you at the next step.
And if this was useful, forward it to one owner who'd like it.
See you in two weeks.
Delia