Acquiring Minds Comfortable Concentration for a $800k SDE Business
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Jan 15, 2026 Phil Kohler, entrepreneur and owner of Roman Enterprises, shares his journey from corporate life to acquiring an automotive paint distribution business. He discusses the importance of family support and perseverance, drawing inspiration from his grandfather's Holocaust survival. Phil delves into his strategic approach to managing supplier/customer concentration risks and the hands-on improvements he's made since taking over. He emphasizes direct sales experience as a key learning tool and offers insightful advice for aspiring business acquirers focused on distribution metrics.
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Finding Roman Despite Red Flags
- Phil discovered Roman Enterprises listed with one employee, seven customers, and a single main supplier but $800k SDE.
- He dug into tax returns and called his mentor who validated key KPIs and encouraged deeper diligence.
Inventory Turns Are The Business
- Inventory turns are critical in distribution because the business is effectively its inventory.
- Phil used a six-to-seven turns benchmark to assess operational health and cash flow viability.
Use Seller Notes And Target A Comfortable DSCR
- Use a sizable seller note to align incentives and reduce upfront cash needs.
- Aim for a comfortable DSCR so debt service is sustainable while you optimize operations.
