Speaker: 00:00:00

If you don't have a system that you run

like I'm talking

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traits like plumbing and infection,

you don't have to be running.

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You go to school by somebody.

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You're trusting that

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that company had a good system

and they weren't necessarily doing well.

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You're

probably not going to necessarily do so.

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Welcome to the before you buy

or Sell a business podcast

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where we help buyers and sellers

learn more about the acquisition process,

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discuss recent transactions, and stay up

to date on the latest news in the market.

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Here is your host, Jarrett Johnson.

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Hey, everybody.

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All right,

before we get into the next episode,

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I've had a lot of people reach out to me

recently requesting to sponsor

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the show and I have decided

to go ahead and open that up.

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So if that's you and you're interested,

please shoot me an email at Jared,

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which is Jared at Jared W johnson.com.

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And I'll get you some information

over on how you can do that.

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All right.

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Today I got Mark and Spencer Saturday

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I know one of the major

things was asking you

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how to say your name properly

because everybody says Satori.

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Right.

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So, I try to get that right, because,

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a lot of people say Jerry or Gerald,

and I'm like, no, it's Jared.

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So, especially as a kid,

my name was a little difficult to,

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get people to say properly.

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And then Mark, your last name is easy.

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So we we don't have to worry too,

too much about that.

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Right. But,

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so I think the biggest reason

I'm excited to have you on is

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you're one of the first people

we've talked to

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that are doing what a lot of people

are trying to do, which is kind of roll up

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Hvac and plumbing.

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So I know we'll definitely dive into that.

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Maybe we could start with Mark.

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we could talk about your background,

like where you grew up.

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Did you go to college, all that fun stuff.

First?

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Yeah.

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I've, grown up in around the Omaha,

Nebraska area, town called Valley.

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And then I'm just burnt out.

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Foreign, which is part of a lot right

next to Valley.

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Now, I've been in the

world, since the late 80s.

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I've been doing this a long time.

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started first company at 20, for 20 years

this year.

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So, Yeah, things.

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I did go to college.

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I was an industrial engineering major.

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And then I got the opportunity.

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My wife had the opportunity

to take over a restaurant, and I'm

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in my early 20s, and I thought

that was the greatest thing in the world.

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But I learned two things from that one.

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I never want a restaurant ever again.

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But two,

I really like being self-employed. So,

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after that, then I got a new track,

put in my time to get my license,

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and then I went out on my own.

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So cool.

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Yeah, we get a lot of people,

I want to buy a restaurant. Why?

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Well, it sounds fun.

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No, no, it's

not the right reason for it. Yeah.

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So no, no. So.

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All right, Spencer, what about you?

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Yeah, I, I'm from the Omaha area as well.

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graduated from North South High School and

then went to the University of Nebraska.

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I got a business administration degree.

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so I am a Husker.

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and then

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after that, I did a few different things.

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I was selling real estate or selling

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real estate and insurance

at the same time for a while.

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box of real estate properties, residential

that I was managing and renting out.

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and then I started flipping houses,

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up to the beginning of 2020,

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when I sold my last flip project,

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and got into the, the Hvac world.

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So cool.

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Well, yeah.

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So it's always interesting to see kind of

how people got into what they're doing.

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And I know the, the way that you

to kind of started

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working together is very interesting.

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So maybe you guys can talk about that.

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Mark was actually looking

to buy another Hvac company

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while running the Omaha, Nebraska

Apex Services.

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And the biggest problem from the bank is,

well, how are you going to manage that?

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Wherever

he was looking, right in Florida or

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on the other side of Nebraska or whatever,

how are you going to manage that?

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And your one in Omaha, Nebraska,

if you just live in Omaha?

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So his way to get over

that hurdle was listed

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company in Omaha for sale

and go buy a bigger company in Florida.

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and so

that's where the opportunity came for me.

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I was looking at a construction company

from the same broker,

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that he used to list it.

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I passed on that construction company

and they said, well, it's not construction

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per se that you were looking for,

but it's in the same realm.

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financials are really strong.

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They brought that opportunity

in front of me.

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yeah. Put the offer in.

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I think Mark actually

had better offers on the table.

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Unless he lied to me all these years.

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But, my intention was to keep

the employees on,

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and run the business as it was

in, as it was a family business

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that was obviously really important,

for Mark to,

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make sure his family members

still had jobs at the end of the sale.

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So that being my attention, I bought it,

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kept all the employees that were on staff.

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and then Mark went down and bought, Graham

Heating and Air in the Tampa Bay area.

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All right.

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And then, Mark,

how did you end up partnering together?

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How did that happen?

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So it was, part of the contract was

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I was to to be there for him for a year.

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So we set up monthly meetings.

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And so we were, come in.

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And so the first thing was, you know,

you have that transition period.

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So I remember we we did the closing

and I, we walked into the office

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and I told him, I'm like, dude,

I only work like five hours a week.

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And he goes, and no one ever believes me

when I say that.

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I'm like, I and I'm here longer for

you are our offer

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person would be freaking out

if I'm here more than that.

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Last time, I said.

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But anyway, we walked into the office

and and I hand him this manual.

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I said, here's the manual to the business.

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So I went through the manual with them

and I don't know how long that was.

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Yeah, I, I had planned for a whole day.

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It was Sunday.

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I mean, I was like

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I told my wife, like, I don't know

if maybe I'll be back around five.

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Could be later, I don't know.

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I got here at nine.

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I think he left at 930

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and hands this book and he's like,

you good.

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We go through the book and he's like,

you know, we got the manager in place.

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He's going to follow this.

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as long as you keep following this,

you'll keep having the same success.

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Okay.

So I don't know what else to tell you.

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what questions do you have?

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I had, I don't know, like ten minutes

worth of questions.

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And at 930, he's out the door.

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then he came back, I don't know,

maybe an hour later to introduce me

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to the manager that was running

the operation at the time.

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And then the manager was his brother

in law. So,

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you know, he was contractually obligated

to not share that he was selling it.

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So it was a big shock to his brother

in law that he was selling it.

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after market walked out,

he was like, man, I,

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I really just need

a little time to process.

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I'm really.

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Christ, I don't know what to think,

but I can tell you, we're

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gonna we're going to do better this year

than we ever have.

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I can't believe he did this to me.

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And he was right, though.

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I mean, we actually did break the fracture

that year, so,

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Yeah, looking back on it,

it was the most motivating thing for

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the manager was getting back in.

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It's like,

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you know.

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So then we had other works.

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Yeah.

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And the week of meeting

for we'd meet once a month and stuff.

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And so, taken over Graham and stuff,

and then we're talking and I'm like,

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yeah, I want to buy more locations

because you see how the process is, too.

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Spencer

didn't know anything about these things,

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but he comes in and he just runs it and

it's like, you have to plug and play, man.

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You put this in

and we run it and you'll do well.

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So we,

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we were talking and he's like, well,

I want to grow and I want to grow.

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Well, we were we realized his strengths

and my strengths are two different things.

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They're two different things.

But we fit well together.

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And, as I told him, the best thing is

we were not lifelong friends,

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so I'm not letting him get away

with anything.

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He's not letting me get away

with anything.

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And partnerships can be very difficult.

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I've seen many, many fail.

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And so I'm like,

so what's the thing here, guys?

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So the reason.

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So I laid out the case. So we were like,

well, let's grow together.

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Like, okay, let's, let's do this.

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And so we laid it out the pros and cons

and what we're worried about,

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we ran it by our wives

because your wives have to agree. Right.

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That's number one rule.

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So, they were they were on board with it.

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So then we just started.

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All right,

we got this plug and play system.

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We just go in

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and we know when we walked in,

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we bought we

we know what we're looking for companies.

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And then we buy them and

and we'll double them in the first year.

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And then we'll double them again

the second year. That's our history.

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Like by year two

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we're doing quadruple what they were doing

the first the year before we took over.

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So see that's a great story.

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I knew it would it would be great.

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it's often times that it's funny

because I feel like most of the time

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when we're work on a deal,

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by the time we're done,

the buyer and seller, like,

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want nothing to do with each other.

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even if they've got some kind

of consulting agreement, they're like,

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yeah, we met twice.

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And then, you know, they were mad

that I changed, you know, X, Y, and Z.

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And I was mad that, you know, they

I had to make the changes

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because they didn't know

what they were doing.

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And it's like this,

you know, head butting.

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And so I always thought it was funny

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when the, the first time

Spencer called me and goes, yeah, so we,

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we want to buy some more stuff and,

but I'm partnering with this guy Mark. And

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so let me explain to you.

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He was the seller.

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I was like, well,

I hope you don't have a non-compete.

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You guys are working together.

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And, you said,

no, no, no, he's awesome like this.

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It's been perfect.

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And I'm like, okay, well,

I mean, it makes sense.

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You got somebody with experience like,

let's figure this out. So.

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Yeah.

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And thing I was told no. Right.

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No, you can't do that cuz

you live in Oman.

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You can't own property and businesses

in other parts of the country doing this.

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That's my process. Doesn't matter.

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I don't have to be there.

I didn't tell you.

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I know how it works, but I'm here.

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I bet they hear that

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every single person they talk to

and they don't know me, right?

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And they so like, okay.

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And then, yeah.

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And then and the thing with the owners,

like, we, we take over companies now,

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we don't really want them in there.

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We're like, just help us get everything

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transferred over

and then we'll see you later, man.

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Like you were just their pain in the butt.

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Yeah. It's like a five hour process.

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We transfer all the utilities

and all that stuff.

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After closing and.

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All right, well, four.

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And a half hours longer

than your interaction was.

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But you're right. You know.

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That's right.

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And I and I appreciate you

bringing up the,

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the thing about the partnership stuff,

because I do feel like

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that is one of the biggest challenges

that we see

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when people do partner with each other

because it's a total gamble.

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Right?

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I mean, I've,

I've said it many times, like,

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would you have married

somebody that you met after, you know,

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maybe 30, 60, 90 days

that you really haven't spent time with?

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If you did marry him, like,

is it going to work out?

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And so that's what I kind of caution

people on when they're deciding

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to form a partnership.

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Now, you brought up a very good point

that you both

247

00:10:55,250 --> 00:10:59,000

bring different skill sets to the table,

and I think that's the key.

248

00:10:59,208 --> 00:11:02,208

And I mean, obviously we see that's

the key in a relationship, right too.

249

00:11:02,208 --> 00:11:06,375

I mean, we've we've all see our friends

that are exactly the same as their spouse.

250

00:11:06,375 --> 00:11:08,541

And we can't understand why

every time we go to dinner,

251

00:11:08,541 --> 00:11:10,125

they leave yelling at each other. Right.

252

00:11:10,125 --> 00:11:14,333

But then the ones that are different

and bring different things

253

00:11:14,333 --> 00:11:17,958

to the table, it ends up working out,

you know, and I I've heard it many times.

254

00:11:17,958 --> 00:11:22,500

Somebody says, if you don't ever say no,

there's to each other.

255

00:11:22,500 --> 00:11:24,500

There's

no reason to have a partnership. Right.

256

00:11:24,500 --> 00:11:26,375

You're just one in the same.

It doesn't make sense.

257

00:11:26,375 --> 00:11:29,375

So yeah. Seems to make sense though.

258

00:11:29,666 --> 00:11:30,291

Cool.

259

00:11:30,291 --> 00:11:33,291

And then okay,

so then you decided to partner together.

260

00:11:33,791 --> 00:11:37,958

And the first time

that you went out looking,

261

00:11:38,583 --> 00:11:42,625

and you had found some, I think that's

when when we met each other.

262

00:11:43,750 --> 00:11:45,625

how many,

263

00:11:45,625 --> 00:11:47,250

did you buy at that time?

264

00:11:47,250 --> 00:11:52,333

Yeah, we partnered right at the beginning

of 2020 to January 1st of 2022,

265

00:11:52,916 --> 00:11:56,833

with the goal of we were going to buy

one company a year for ten years.

266

00:11:56,833 --> 00:11:59,458

That was our goal.

267

00:11:59,458 --> 00:12:02,458

we failed in 2022 to close on anything.

268

00:12:03,000 --> 00:12:06,750

but we had obviously met you,

and I think it was June of 2022.

269

00:12:07,041 --> 00:12:09,000

We put an offer in on.

270

00:12:09,000 --> 00:12:12,291

We had put an offer on two companies

that got accepted.

271

00:12:12,291 --> 00:12:16,208

That was actually I think

that was the third and fourth company.

272

00:12:16,208 --> 00:12:18,833

We put offers in on,

273

00:12:18,833 --> 00:12:22,250

that were accepted,

but the others went nowhere.

274

00:12:23,250 --> 00:12:26,250

the sellers backed out of the deal,

275

00:12:27,208 --> 00:12:30,000

and, you know,

they're contractually obligated.

276

00:12:30,000 --> 00:12:34,166

We could have forced the hand and said,

no, we're moving forward with this with,

277

00:12:34,708 --> 00:12:38,083

you don't want to take over a business

under those circumstances.

278

00:12:38,166 --> 00:12:42,000

So, yeah, when we

we went under contract with these two,

279

00:12:42,000 --> 00:12:45,750

assuming something's going to happen,

one of them is going to fall through,

280

00:12:46,791 --> 00:12:49,458

one's in Kissimmee, one's in Port Richey.

281

00:12:49,458 --> 00:12:52,708

And would be a really difficult thing

to close on both of them at the same time.

282

00:12:53,458 --> 00:12:58,041

of course we contacted you right around

that same time that we went under contract

283

00:12:58,041 --> 00:13:02,666

with them, and it,

we were supposed to close in 90 days.

284

00:13:03,000 --> 00:13:05,125

There was,

285

00:13:05,125 --> 00:13:08,125

a lot of slowdown from the sellers side.

286

00:13:08,166 --> 00:13:11,958

so we look for businesses

that are underperforming,

287

00:13:12,541 --> 00:13:16,375

and maybe not ran,

at their optimal performance

288

00:13:16,833 --> 00:13:20,458

so we can fix them and, and get that added

equity growth out of it.

289

00:13:21,083 --> 00:13:24,083

but with that comes

with those struggles on

290

00:13:24,208 --> 00:13:27,083

business owners

that aren't on top of things.

291

00:13:27,083 --> 00:13:30,208

so getting information

out of them is quite a struggle.

292

00:13:30,208 --> 00:13:31,791

Sometimes.

293

00:13:31,791 --> 00:13:32,250

deal.

294

00:13:32,250 --> 00:13:35,041

Yeah. That

that really delayed us in getting close.

295

00:13:35,041 --> 00:13:39,833

So it was January of 2023 when we actually

I think it's the 13th of January,

296

00:13:40,000 --> 00:13:40,583

you know, in three.

297

00:13:40,583 --> 00:13:42,916

We actually closed on those two.

298

00:13:42,916 --> 00:13:43,375

Yeah.

299

00:13:43,375 --> 00:13:46,333

I mean, not all of them had do a manual

and have a brother in law with

300

00:13:46,333 --> 00:13:47,500

a chip on his shoulder. So

301

00:13:49,333 --> 00:13:52,333

it's exactly right. The,

302

00:13:52,875 --> 00:13:55,958

the, the funny part is that Brother

Law moved from the small location

303

00:13:55,958 --> 00:14:00,708

down to Tampa to run that one quite well,

and he's never leaving it.

304

00:14:00,708 --> 00:14:03,291

That's good for him. Yeah.

305

00:14:03,291 --> 00:14:04,041

That's great.

306

00:14:04,041 --> 00:14:07,791

So, when you bought those two,

where they similar size

307

00:14:07,791 --> 00:14:11,291

was one larger than the other,

do you remember what you paid for them?

308

00:14:11,291 --> 00:14:12,500

What you put down.

309

00:14:12,500 --> 00:14:15,750

For Richie,

I think, was doing about 1.2 million.

310

00:14:16,583 --> 00:14:19,583

I think we paid

a little over a million for it.

311

00:14:19,958 --> 00:14:23,083

and then the one in Kissimmee was doing

312

00:14:23,541 --> 00:14:26,666

they had a track record

of doing 750 to 800.

313

00:14:26,666 --> 00:14:31,541

But the most recent year, I think in 2022,

they only did like 500.

314

00:14:31,541 --> 00:14:34,041

Yeah. But they were going down.

315

00:14:34,041 --> 00:14:36,750

but yeah, they,

they were definitely on a downward

316

00:14:36,750 --> 00:14:40,500

trajectory when we bought that was 300.

317

00:14:40,791 --> 00:14:43,750

Yeah. that we paid for that one.

318

00:14:43,750 --> 00:14:45,708

You got to love the SBA in there.

319

00:14:45,708 --> 00:14:47,250

Hey, if you're going to buy a business

320

00:14:47,250 --> 00:14:50,958

just like your business, we're going to

fund the whole thing for you.

321

00:14:52,250 --> 00:14:55,250

so with that, and then,

322

00:14:55,500 --> 00:14:58,708

we worked in the, working capital.

323

00:14:59,041 --> 00:15:03,791

So I think technically we financed 107%

324

00:15:03,791 --> 00:15:07,541

of the purchase price,

and got that 7% back.

325

00:15:07,541 --> 00:15:10,541

I most deals don't work out that way, but,

326

00:15:11,208 --> 00:15:14,208

it was nice.

327

00:15:14,500 --> 00:15:16,041

yeah, I think it,

328

00:15:16,041 --> 00:15:19,958

at the end of the day, like,

not everybody fits that criteria, right.

329

00:15:19,958 --> 00:15:21,750

Or that mold,

330

00:15:21,750 --> 00:15:25,458

our our bank at first and I, we're

our credit manager is awesome.

331

00:15:25,458 --> 00:15:28,250

He he understands

kind of what you're doing

332

00:15:28,250 --> 00:15:30,125

because he has a background in that.

333

00:15:30,125 --> 00:15:32,500

And, you know, the

334

00:15:32,500 --> 00:15:35,375

I think the, the big thing

that everybody tried to get into

335

00:15:35,375 --> 00:15:39,291

in the last 4 or 5 years was like,

I'm going to go roll up, you know, home

336

00:15:39,291 --> 00:15:42,958

service businesses, you know, a guy in a

truck is usually what, what they call a

337

00:15:43,125 --> 00:15:46,750

we're happy to to make that happen

if you have the right people.

338

00:15:46,958 --> 00:15:50,791

So with both of you,

with your skill set already having,

339

00:15:51,833 --> 00:15:54,458

you know, an established locations and,

340

00:15:54,458 --> 00:15:57,458

you know, being able to kind of prove

that, that, you know, what you're doing

341

00:15:57,458 --> 00:15:59,291

makes it a lot easier

to make that decision.

342

00:15:59,291 --> 00:16:02,541

So, yeah,

so we close on that one and, and January.

343

00:16:02,541 --> 00:16:05,458

And then how did that go

when you took over those two.

344

00:16:05,458 --> 00:16:09,583

What what was kind of the

the process I guess, and how it went with.

345

00:16:09,583 --> 00:16:12,125

So the more we do this, the better off

we get.

346

00:16:12,125 --> 00:16:12,791

Better we go.

347

00:16:12,791 --> 00:16:16,541

So when what I went down to Graham,

I went down to the to go over

348

00:16:16,541 --> 00:16:18,291

Graham and I roll up my manual.

349

00:16:18,291 --> 00:16:19,791

I'm like,

this is the way things need to run.

350

00:16:19,791 --> 00:16:22,000

I'm going to train you. I'm

going to train you and train you.

351

00:16:22,000 --> 00:16:25,416

But this is a 30 a company

that had employees that have been there

352

00:16:25,416 --> 00:16:26,875

20, 30 years as technicians.

353

00:16:26,875 --> 00:16:29,458

And so setting their mind

where they're going to do things

354

00:16:29,458 --> 00:16:32,458

and they would learn

and we run with chose to exhaustion.

355

00:16:33,041 --> 00:16:35,000

finally it was just a change up.

356

00:16:35,000 --> 00:16:38,750

So we we figured we we found a way to

determine if someone was going to change.

357

00:16:38,750 --> 00:16:41,708

So then we took these two over

and we just had meetings with them,

358

00:16:41,708 --> 00:16:43,166

you know,

just like you do when you take over.

359

00:16:43,166 --> 00:16:46,208

And we said, this is the here's

what we here's how we do business.

360

00:16:46,833 --> 00:16:50,833

And the problem with all these companies

is when we know when we're buying it,

361

00:16:51,416 --> 00:16:55,750

the, the, the employees run the business,

not the owner to the beat up there.

362

00:16:55,750 --> 00:16:56,791

We're down there.

363

00:16:56,791 --> 00:16:59,583

Everyone thinks that the trades are great,

but the owner gets beat up

364

00:16:59,583 --> 00:17:01,666

because he doesn't know how to run

a business. He doesn't.

365

00:17:01,666 --> 00:17:04,583

So he was a technician

at one time, doesn't know profit,

366

00:17:04,583 --> 00:17:07,375

and he doesn't understand overhead.

And they don't price accordingly.

367

00:17:07,375 --> 00:17:09,458

And they don't understand

that vessels are going to happen.

368

00:17:09,458 --> 00:17:11,541

So they get beat up

and these employees lead the way.

369

00:17:11,541 --> 00:17:14,333

Like I'm not coming into work today, okay.

370

00:17:14,333 --> 00:17:15,208

That's okay with them.

371

00:17:15,208 --> 00:17:17,500

With that, so we can work that way.

372

00:17:17,500 --> 00:17:18,041

So we go in there,

373

00:17:18,041 --> 00:17:21,041

we lay out exactly what's going to happen

and remember the one place.

374

00:17:21,500 --> 00:17:23,625

So if we're going to call it

10:00 on a Saturday

375

00:17:23,625 --> 00:17:25,500

and I don't want to run it,

you're going to make run it.

376

00:17:25,500 --> 00:17:27,958

And so we sure

are are you don't have a job.

377

00:17:29,500 --> 00:17:30,458

Well he didn't stick around.

378

00:17:30,458 --> 00:17:33,458

But then he's

calling about two weeks later when he got

379

00:17:34,041 --> 00:17:35,208

there.

380

00:17:35,208 --> 00:17:37,666

We go in and we're okay with that

because we have a great process.

381

00:17:37,666 --> 00:17:39,750

We put ads up,

we get plenty of applicants.

382

00:17:39,750 --> 00:17:41,291

We have a great training program.

383

00:17:41,291 --> 00:17:44,291

We train our guys, our managers,

we train them well.

384

00:17:44,333 --> 00:17:47,333

And so we know going in

we're going to make some changes.

385

00:17:47,583 --> 00:17:51,000

very I would say, the admin

is the most important person to keep.

386

00:17:51,000 --> 00:17:54,000

There's no doubt, because they know

all the information about the business.

387

00:17:54,583 --> 00:17:55,166

Yeah.

388

00:17:55,166 --> 00:17:57,833

We, we promoted from within.

389

00:17:57,833 --> 00:17:59,250

So that made a huge difference.

390

00:17:59,250 --> 00:18:03,958

When we bought both of them,

the owner was managing the day to day.

391

00:18:04,750 --> 00:18:09,083

so when the owner steps out,

we had those positions fill,

392

00:18:09,833 --> 00:18:12,833

so we promoted two guys

that were currently working,

393

00:18:13,166 --> 00:18:15,916

from our Clearwater location,

394

00:18:15,916 --> 00:18:18,250

to those management positions.

395

00:18:18,250 --> 00:18:23,125

So having somebody that already knows your

process and your systems and, and you,

396

00:18:24,166 --> 00:18:26,125

makes it a much easier transition

397

00:18:26,125 --> 00:18:29,250

to implement your process at that.

398

00:18:30,000 --> 00:18:31,666

You know, it's slow.

399

00:18:31,666 --> 00:18:33,166

Yeah. That's that's great.

400

00:18:33,166 --> 00:18:38,750

so looking back at the the first kind of

acquisition you did together of those two,

401

00:18:39,041 --> 00:18:43,458

is there anything that, you felt like

you could have done different?

402

00:18:44,000 --> 00:18:47,000

if if somebody was saying,

hey, what's the best piece of advice

403

00:18:47,166 --> 00:18:51,000

that you could give

that you learned during that transaction?

404

00:18:51,250 --> 00:18:53,958

Is there something there

that you could share with us.

405

00:18:53,958 --> 00:18:56,250

If they don't have a good system already?

406

00:18:56,250 --> 00:19:00,208

If you don't have a system

that you run like I'm talking traits

407

00:19:00,208 --> 00:19:04,166

like plumbing and electrical, you don't

have to be running you school by somebody.

408

00:19:04,583 --> 00:19:05,416

You're trusting that

409

00:19:05,416 --> 00:19:09,208

that company had a good system

and they weren't necessarily doing well.

410

00:19:09,208 --> 00:19:11,458

You're

probably not going to necessarily do so.

411

00:19:11,458 --> 00:19:14,750

So it's hard for me to say that because I

already had a learning have a system.

412

00:19:15,083 --> 00:19:18,375

So we were talking that

the biggest thing I just learned is don't

413

00:19:18,791 --> 00:19:21,541

know, based on if you hear this,

but don't count on your employees thing

414

00:19:21,541 --> 00:19:24,541

because it's a different system,

even though they make more money,

415

00:19:24,583 --> 00:19:27,291

like we've laid it out like we.

416

00:19:27,291 --> 00:19:30,541

Yeah, well, it's that one that would be

my advice is like,

417

00:19:30,583 --> 00:19:33,750

you don't have a system to go buy

new plumbing or something.

418

00:19:35,458 --> 00:19:38,458

unless that company is thriving,

419

00:19:38,458 --> 00:19:40,708

don't buy it because you're going

to have the same problems, either

420

00:19:40,708 --> 00:19:43,666

because you don't have a system

or if you don't know how to get a system.

421

00:19:43,666 --> 00:19:44,666

That's great advice.

422

00:19:44,666 --> 00:19:49,875

And, you know, as, as banks

and as us doing this for a very long time

423

00:19:49,875 --> 00:19:54,166

and doing so many transactions, we

we kind of look at it very realistically

424

00:19:54,166 --> 00:19:59,416

and what we want to hear or want to

see is not typically what does happen.

425

00:19:59,416 --> 00:20:02,125

And we we understand that. And so,

426

00:20:02,125 --> 00:20:07,000

that is why we lean heavily on, on you

as the person borrowing the money

427

00:20:07,000 --> 00:20:11,458

because your experience and,

you know, your business acumen

428

00:20:11,458 --> 00:20:14,750

really comes into play

when you have issues like, and employees

429

00:20:14,750 --> 00:20:18,625

leaving and,

you know, I, I've seen it myself where

430

00:20:18,625 --> 00:20:21,833

sometimes you have some turnover

and it's probably a good thing.

431

00:20:22,666 --> 00:20:25,375

at the end of the day, those people

probably weren't the right fit.

432

00:20:26,375 --> 00:20:29,250

if you've got somebody

else that's willing to listen, that's

433

00:20:29,250 --> 00:20:33,083

shape of all moldable

that you can kind of fit into your system,

434

00:20:33,083 --> 00:20:37,250

which clearly works,

then you're not too beat up about it.

435

00:20:37,250 --> 00:20:40,833

So it ends up

it ends up working out so well.

436

00:20:41,333 --> 00:20:44,791

One of the biggest things I have learned,

which was really eye

437

00:20:44,791 --> 00:20:48,000

opening for me, was when I bought apex.

438

00:20:48,000 --> 00:20:51,125

Everybody stayed, it was a great team.

439

00:20:51,125 --> 00:20:54,833

So going in with that expectation

for the future,

440

00:20:55,166 --> 00:20:58,166

you know,

when we first closed on these two,

441

00:20:58,666 --> 00:21:01,250

I assume we'd be able to win the

442

00:21:01,250 --> 00:21:04,250

all the employees over.

443

00:21:04,375 --> 00:21:07,375

I didn't, realize

444

00:21:07,375 --> 00:21:10,458

it was foreign to me

that some people are not willing,

445

00:21:10,583 --> 00:21:14,625

even though we pay significantly better

than what they were making, they weren't

446

00:21:14,625 --> 00:21:21,458

willing to step up to the our expectations

of employees to make that better pay.

447

00:21:21,750 --> 00:21:26,125

So they they were willing to sacrifice,

not getting paid as well

448

00:21:26,708 --> 00:21:29,916

for that responsibility,

not having to take on.

449

00:21:31,458 --> 00:21:32,333

That's interesting.

450

00:21:32,333 --> 00:21:32,666

Yeah.

451

00:21:32,666 --> 00:21:38,000

So I guess you can't, completely motivate

people that aren't motivating themselves.

452

00:21:38,000 --> 00:21:40,500

I guess. So, right?

453

00:21:40,500 --> 00:21:41,958

Yeah. Makes sense.

454

00:21:41,958 --> 00:21:45,291

all right, so then you got those ones

under your belt.

455

00:21:45,750 --> 00:21:48,750

How long was it

before you called me again?

456

00:21:49,916 --> 00:21:52,916

well, in the middle of that.

457

00:21:52,958 --> 00:21:56,750

So before we called you again later

that year, 2023,

458

00:21:57,458 --> 00:22:00,625

we bought one in Clearwater.

459

00:22:01,500 --> 00:22:05,958

that, is, is a small transaction

to a smaller deal.

460

00:22:07,166 --> 00:22:08,833

we bought,

461

00:22:08,833 --> 00:22:11,250

I don't know,

we make that same purchase again.

462

00:22:11,250 --> 00:22:12,291

Yeah, we'll answer that one.

463

00:22:12,291 --> 00:22:12,666

I wouldn't

464

00:22:12,666 --> 00:22:16,333

I wouldn't make that think we're just

because you didn't have server software.

465

00:22:17,333 --> 00:22:18,000

okay.

466

00:22:18,000 --> 00:22:21,041

So the the cost

to get all of those customer

467

00:22:21,041 --> 00:22:24,583

files

entered into the system was significant.

468

00:22:24,958 --> 00:22:29,166

You know, we got five vehicles with that,

probably around $100,000 value.

469

00:22:29,250 --> 00:22:29,833

Yeah.

470

00:22:29,833 --> 00:22:34,166

We still have his admin

person still, works for us.

471

00:22:36,083 --> 00:22:37,833

he had

472

00:22:37,833 --> 00:22:41,166

a long history of success,

but he definitely gave up.

473

00:22:41,541 --> 00:22:44,083

Completely gave up.

474

00:22:44,083 --> 00:22:49,250

so getting a lot of benefit from

that, has been difficult.

475

00:22:49,791 --> 00:22:52,791

So I don't know if I'd make that exact

same purchasing

476

00:22:53,125 --> 00:22:57,625

or we paid for that purchase if we paid

for that versus if it was so much work.

477

00:22:57,625 --> 00:23:01,375

And just not having service software

is a big one anymore going forward.

478

00:23:01,375 --> 00:23:03,208

We know you don't serve software.

479

00:23:03,208 --> 00:23:05,333

3.1 first and final.

480

00:23:05,333 --> 00:23:11,000

If you're considering selling a business

and especially a service business

481

00:23:11,333 --> 00:23:14,666

and you're not on service

software, you highly consider

482

00:23:15,875 --> 00:23:17,375

good. Get into it.

483

00:23:17,375 --> 00:23:21,000

Get your stuff set up on it because

it makes that transition so much easier.

484

00:23:22,208 --> 00:23:26,083

and I wouldn't be interested in buying it

if you're not offering software.

485

00:23:26,208 --> 00:23:27,375

Yeah.

486

00:23:27,375 --> 00:23:28,416

Yeah, that makes sense.

487

00:23:28,416 --> 00:23:31,708

And then we went to,

and we were saying that was evil.

488

00:23:31,708 --> 00:23:34,583

Okay. Did we give you six months

before we told you again?

489

00:23:34,583 --> 00:23:36,208

I don't remember, and I think so.

490

00:23:36,208 --> 00:23:39,041

I called you in June 2023 and, well.

491

00:23:39,041 --> 00:23:42,416

To be fair, you tried to cheat on me

and go with another lender first.

492

00:23:42,541 --> 00:23:43,875

But, you're,

493

00:23:45,166 --> 00:23:47,458

But that's okay, I get it.

494

00:23:47,458 --> 00:23:50,833

I think it was funny because I think

I heard from somebody else that that you

495

00:23:51,000 --> 00:23:55,625

that you called me and you said, hey,

I know it's it hasn't been very long.

496

00:23:56,458 --> 00:23:57,833

can we talk it?

497

00:23:57,833 --> 00:24:00,125

sure. Let's let's hear it.

498

00:24:00,125 --> 00:24:02,458

and we do get those requests,

499

00:24:02,458 --> 00:24:05,583

you know, fairly often and sometimes.

500

00:24:05,791 --> 00:24:09,833

And every, every lender is going to have,

like a kind of quote unquote rule

501

00:24:10,125 --> 00:24:13,791

with it or,

most of them will have a line in the sand.

502

00:24:13,791 --> 00:24:17,083

You need to operate for 24 months before

we'll give you an opportunity.

503

00:24:17,333 --> 00:24:19,791

And it's it's

kind of silly to act that way.

504

00:24:19,791 --> 00:24:23,333

I feel, with us,

we we've always tried to say,

505

00:24:23,666 --> 00:24:26,666

let's look at every single transaction

individually

506

00:24:27,000 --> 00:24:31,000

through its own lens and see,

can we get this to make sense?

507

00:24:31,000 --> 00:24:32,250

And it's to work.

508

00:24:32,250 --> 00:24:33,958

And there's a lot of lenders

509

00:24:33,958 --> 00:24:38,083

that are just like, nope,

our rule is 24 months and call me then.

510

00:24:38,083 --> 00:24:40,666

And sometimes

it doesn't make sense to do that.

511

00:24:40,666 --> 00:24:44,416

So I think once we we started talking

and you kind of said this is what

512

00:24:44,416 --> 00:24:45,333

I'm looking to do.

513

00:24:46,458 --> 00:24:49,416

I'm kind of like, oh, okay, let me,

let me see what we could do

514

00:24:49,416 --> 00:24:52,416

because I feel like

we just stop talking to each other.

515

00:24:52,583 --> 00:24:55,583

Let's start again,

you know? So. Yeah. Yeah.

516

00:24:55,708 --> 00:24:58,708

So that was me

after we did that first one, we're like,

517

00:24:58,708 --> 00:25:01,583

we're never buying two companies

at the same time again.

518

00:25:01,583 --> 00:25:03,500

I'm never doing that.

519

00:25:03,500 --> 00:25:05,750

And so what we did,

we went about three of the same.

520

00:25:05,750 --> 00:25:06,583

Yeah exactly.

521

00:25:06,583 --> 00:25:08,750

What's better than two is three. You know.

522

00:25:08,750 --> 00:25:10,875

It's yes.

523

00:25:10,875 --> 00:25:12,375

Yes. We had three of those.

524

00:25:12,375 --> 00:25:14,041

And then maybe just give us like

525

00:25:14,041 --> 00:25:17,541

some quick context on where they were

located, the size of them.

526

00:25:18,083 --> 00:25:20,166

you know what you liked about them.

527

00:25:20,166 --> 00:25:24,083

Now they're all in,

the south west area of Florida.

528

00:25:24,666 --> 00:25:27,791

so Fort Myers, they're office locations.

529

00:25:27,791 --> 00:25:29,458

Where is Fort Myers?

530

00:25:29,458 --> 00:25:32,333

Northport and Englewood?

531

00:25:33,833 --> 00:25:36,291

so, they're all within

532

00:25:36,291 --> 00:25:39,291

30 minutes or so of each other.

533

00:25:40,125 --> 00:25:41,125

you know, it's all man.

534

00:25:41,125 --> 00:25:42,958

It's our intention in the beginning

535

00:25:42,958 --> 00:25:46,291

was maybe to have two offices,

but currently they're all managed by one.

536

00:25:46,916 --> 00:25:49,916

got into a very, very good job.

537

00:25:50,500 --> 00:25:52,875

so the whole goal was to buy these

538

00:25:52,875 --> 00:25:55,875

three group, group

it together a little bit,

539

00:25:57,375 --> 00:26:01,416

and have a larger operation

540

00:26:01,416 --> 00:26:04,416

out of the three different companies.

541

00:26:04,458 --> 00:26:07,250

and so far, it has gone very well.

542

00:26:07,250 --> 00:26:08,041

Yeah.

543

00:26:08,041 --> 00:26:10,666

This crushing, I would say like, so

544

00:26:10,666 --> 00:26:14,083

I think combined, they're around 2 million

and take out some of their stupid stuff.

545

00:26:14,083 --> 00:26:16,208

They did, I call stupid stuff.

546

00:26:16,208 --> 00:26:19,916

We can do refrigeration commercial work

or do you do building stuff?

547

00:26:20,333 --> 00:26:23,583

So they're probably probably combined

doing two manufacturing

548

00:26:23,583 --> 00:26:24,833

of that stupid stuff.

549

00:26:24,833 --> 00:26:27,833

And man,

he's probably on pace to do 4 million.

550

00:26:27,833 --> 00:26:31,791

So he was

we were just shy of 400,000 bucks. One.

551

00:26:32,375 --> 00:26:34,750

Yeah. With those locations. So

552

00:26:35,833 --> 00:26:36,083

yeah.

553

00:26:36,083 --> 00:26:37,000

Group them together.

554

00:26:37,000 --> 00:26:40,375

Just creating

one larger operation in that area.

555

00:26:40,375 --> 00:26:44,750

And we lowered the overhead

significantly between the three of them

556

00:26:44,750 --> 00:26:47,750

by just not having as much office space,

557

00:26:48,125 --> 00:26:50,875

not needing as many admin people.

558

00:26:50,875 --> 00:26:53,875

just less Metal City doing that. So

559

00:26:55,166 --> 00:26:57,958

yes, them and I would say the thing

we learned off

560

00:26:57,958 --> 00:27:00,958

that one is the

why the admin is so important.

561

00:27:01,125 --> 00:27:05,250

Everyone thinks it's the owners

attacking the installers to us, the admin

562

00:27:05,250 --> 00:27:08,833

is the most important person person

in that company that we need to retain

563

00:27:09,250 --> 00:27:11,916

because they know all their history,

they know everything.

564

00:27:11,916 --> 00:27:15,791

And when the customer when they call in,

oh yeah, we dealt with them 18 months ago

565

00:27:16,083 --> 00:27:18,500

or whatever or they know history of calls.

566

00:27:18,500 --> 00:27:20,041

That route is very helpful.

567

00:27:20,041 --> 00:27:23,458

So because we kept one of the admin,

568

00:27:23,541 --> 00:27:26,541

two of the admin of the three

companies, correct.

569

00:27:27,000 --> 00:27:30,125

And you know, that

third company has issues kind of really

570

00:27:30,166 --> 00:27:31,916

we have to really dig to find the answers.

571

00:27:31,916 --> 00:27:33,875

So that's some great advice.

572

00:27:33,875 --> 00:27:36,500

I don't I don't think I've ever

had someone tell me that.

573

00:27:36,500 --> 00:27:39,625

And it it's probably

a little bit industry specific, but

574

00:27:40,041 --> 00:27:43,458

I think that's, that's some great pieces

that we can pull out of that.

575

00:27:44,500 --> 00:27:47,708

definitely something I will start to,

talk to buyers

576

00:27:47,708 --> 00:27:51,500

about and kind of say, hey, you know,

are you keeping that person around?

577

00:27:51,500 --> 00:27:52,958

What's your plan for it?

578

00:27:52,958 --> 00:27:54,916

You know, there's two guys out there

that are killing it.

579

00:27:54,916 --> 00:27:56,375

They told me, this is what you have to do.

580

00:27:56,375 --> 00:27:58,291

So I trust them, right.

581

00:27:58,291 --> 00:28:01,583

And they usually have a very good feel

for the requirements.

582

00:28:01,916 --> 00:28:06,666

Florida is crazy on how many jurisdictions

and where you pull permits.

583

00:28:06,666 --> 00:28:07,958

Then,

584

00:28:07,958 --> 00:28:11,416

they usually always know

all that information already.

585

00:28:11,666 --> 00:28:14,458

So they are very key

in making sure you're set up

586

00:28:14,458 --> 00:28:17,916

in all the tiny jurisdictions

and all the little areas,

587

00:28:18,541 --> 00:28:21,458

they pulled all the permits

for these places.

588

00:28:21,458 --> 00:28:26,166

So they have a really good grasp on

not just the customer base,

589

00:28:26,166 --> 00:28:30,041

but the local ordinances

required to, you know,

590

00:28:31,000 --> 00:28:31,333

call.

591

00:28:31,333 --> 00:28:35,666

So I think total

then does that bring you to eight total

592

00:28:35,666 --> 00:28:38,666

if you, if you take all of them.

593

00:28:38,666 --> 00:28:40,958

If that's the, you know,

594

00:28:40,958 --> 00:28:45,416

And now are you rebranding them all as one

brand, are you leaving them separate.

595

00:28:45,416 --> 00:28:48,000

How are you handling that?

596

00:28:48,000 --> 00:28:51,000

so our Omaha, Nebraska location we've left

597

00:28:51,000 --> 00:28:53,750

as a service is not the original

598

00:28:53,750 --> 00:28:56,750

one we bought in.

599

00:28:56,875 --> 00:28:58,708

in the Tampa Bay area.

600

00:28:58,708 --> 00:29:02,125

And Clearwater area

is brand heating and air.

601

00:29:03,166 --> 00:29:06,500

we have rebranded all of the ones

602

00:29:06,500 --> 00:29:10,958

that we bought in 2023, to operate

under that brand heating and air.

603

00:29:11,333 --> 00:29:12,458

Okay.

604

00:29:12,458 --> 00:29:14,750

most of them,

605

00:29:14,750 --> 00:29:17,750

a couple of the companies

were starting to have,

606

00:29:18,583 --> 00:29:21,583

get a bad reputation online.

607

00:29:21,750 --> 00:29:25,875

not that they had a bad reputation,

but if you don't focus on, like,

608

00:29:25,875 --> 00:29:30,750

your Google reviews, then all you end up

with is the negative Google reviews.

609

00:29:31,041 --> 00:29:34,583

So then, you know, if you have 15 reviews

and you have four of them

610

00:29:34,583 --> 00:29:36,041

that were the one started,

611

00:29:36,041 --> 00:29:39,041

that's a tough thing

to overcome in a short period of time.

612

00:29:39,250 --> 00:29:42,166

So we found that it's just easier to group

613

00:29:42,166 --> 00:29:45,541

it under our so when we're found online

614

00:29:46,583 --> 00:29:49,291

rather than online marketing,

615

00:29:49,291 --> 00:29:54,083

you have a

ha having a for hire is a lot different

616

00:29:54,083 --> 00:29:57,666

than having something below

for for your online presence.

617

00:29:58,375 --> 00:30:01,583

Yeah, I would say myself that that's

kind of some of the first things I do.

618

00:30:01,583 --> 00:30:03,666

If I'm looking for some kind of service,

619

00:30:03,666 --> 00:30:06,208

I'll go to the Google reviews

and read them.

620

00:30:06,208 --> 00:30:08,375

I always switch it

to like the latest ones,

621

00:30:08,375 --> 00:30:12,083

because sometimes I feel like they're

maybe the first ones that pop up

622

00:30:12,083 --> 00:30:17,000

may have been from 2 or 3 years ago,

and you know, if the latest ones are a lot

623

00:30:17,000 --> 00:30:21,125

better than maybe they had bad management

or maybe even got acquired or something.

624

00:30:21,125 --> 00:30:24,416

But yeah, I think a lot of people

don't necessarily focus on

625

00:30:24,416 --> 00:30:28,166

that and realize that the day and age

that we're in, you can review

626

00:30:28,166 --> 00:30:31,791

almost everything you buy

or every service that you, you use.

627

00:30:31,791 --> 00:30:34,458

And so it really makes sense

to pay attention to that stuff.

628

00:30:34,458 --> 00:30:36,375

So it's probably

a little bit of a learning curve.

629

00:30:36,375 --> 00:30:39,000

And it's probably difficult

when you have so many different locations

630

00:30:39,000 --> 00:30:42,333

trying to group them all together

and see what's going on with it. So

631

00:30:43,333 --> 00:30:45,000

all right, so you've got all those now.

632

00:30:45,000 --> 00:30:50,416

So maybe just give us a little bit

of context on how you manage all of those.

633

00:30:50,416 --> 00:30:54,208

You kind of mentioned a little bit

of having a manager helps with it.

634

00:30:54,208 --> 00:30:59,125

But I know, being so popular

of trying to kind of roll up

635

00:30:59,125 --> 00:31:02,541

or take on a certain market

or demographic,

636

00:31:03,416 --> 00:31:06,375

and then certain locations,

637

00:31:06,375 --> 00:31:10,500

the biggest struggle that oftentimes

people have, or even the banks have,

638

00:31:10,500 --> 00:31:13,416

and wrapping their mind around it is like,

how are you going to manage that?

639

00:31:13,416 --> 00:31:16,541

How are you going to be able

to kind of control all of that?

640

00:31:16,541 --> 00:31:19,291

So maybe you could talk about that

a little bit about that.

641

00:31:19,291 --> 00:31:24,000

We are a franchise,

but when we're recruiting managers,

642

00:31:24,208 --> 00:31:27,458

we it's it's similar

to opening a franchise.

643

00:31:27,458 --> 00:31:30,291

So, we have the playbook.

644

00:31:30,291 --> 00:31:34,375

This is what it takes

to run this operation successfully.

645

00:31:35,500 --> 00:31:39,416

we so we train that manager on our plate.

646

00:31:40,291 --> 00:31:44,416

Every one of our manager brings

their personality to their location.

647

00:31:45,708 --> 00:31:49,041

but our goal is to get them

to just follow the playbook.

648

00:31:49,958 --> 00:31:51,291

and then they can put there.

649

00:31:51,291 --> 00:31:52,083

As long as they are

650

00:31:52,083 --> 00:31:55,833

following our main guidelines,

they can put their flavor into it.

651

00:31:56,250 --> 00:31:57,750

And they have a lot of control.

652

00:31:57,750 --> 00:32:01,416

So we hire guys with management

experience or,

653

00:32:01,458 --> 00:32:05,166

or experience with us

that we've promoted to a manager spot.

654

00:32:05,916 --> 00:32:08,333

so we give them the power

to control their team.

655

00:32:08,333 --> 00:32:12,416

Our philosophy on it

is I'm going to hold you to the standard.

656

00:32:12,833 --> 00:32:15,958

It's up to you to choose the guys

that are going to help you achieve that.

657

00:32:17,041 --> 00:32:20,041

so they have a lot of that,

658

00:32:20,458 --> 00:32:23,666

that control

in how they achieve their goals.

659

00:32:24,583 --> 00:32:27,416

obviously they start follow our processes.

660

00:32:27,416 --> 00:32:30,416

but the people they put on

their team is up to them

661

00:32:30,666 --> 00:32:33,041

how long they keep coaching them.

662

00:32:33,041 --> 00:32:35,291

If it's not working,

we leave it up to them.

663

00:32:36,625 --> 00:32:37,416

so that

664

00:32:37,416 --> 00:32:40,583

can be a

trust, I guess, is what I'm trying to say.

665

00:32:41,000 --> 00:32:44,000

That is the best way to, put it.

666

00:32:44,375 --> 00:32:47,375

you got to be able to trust your manager.

667

00:32:47,625 --> 00:32:49,666

and with that comes being able to verify.

668

00:32:49,666 --> 00:32:53,458

So making sure

that we're getting our spreadsheets daily

669

00:32:53,458 --> 00:32:56,875

that have our KPIs

so we can make those adjustments

670

00:32:56,875 --> 00:33:00,291

on the fly and not waiting,

you know, until the 10th of the next month

671

00:33:00,291 --> 00:33:04,541

when our PNL comes out and saying,

oh, you lost money last month.

672

00:33:05,250 --> 00:33:09,000

so we get those daily reports for you,

those reports with the manager,

673

00:33:10,291 --> 00:33:11,625

to get. Hey.

674

00:33:11,625 --> 00:33:14,500

Okay, so you're a little bit off

on your payroll percentages.

675

00:33:14,500 --> 00:33:16,208

What's your goal? What happened?

676

00:33:16,208 --> 00:33:17,833

How are you going to fix it?

677

00:33:17,833 --> 00:33:19,333

and then we can give our input on.

678

00:33:19,333 --> 00:33:22,291

Okay, well,

you know, that plan should work.

679

00:33:22,291 --> 00:33:24,291

We've seen people try that plan.

680

00:33:24,291 --> 00:33:26,166

Maybe we should

look at these other options.

681

00:33:27,500 --> 00:33:28,458

but empowering

682

00:33:28,458 --> 00:33:32,166

them to lead their team

makes a huge difference, for sure.

683

00:33:32,458 --> 00:33:35,666

And, Mark, is it

the kind of the same playbook

684

00:33:35,666 --> 00:33:39,625

that you handed Spencer and said, bye,

I'm going to go play golf?

685

00:33:40,500 --> 00:33:42,000

Yeah. Is that.

686

00:33:42,000 --> 00:33:44,666

And so as we're growing the thing right

now, it's like,

687

00:33:44,666 --> 00:33:46,250

how do we manage all these locations?

688

00:33:46,250 --> 00:33:50,125

And so we're learning

as we're throwing as we hit walls

689

00:33:50,125 --> 00:33:52,000

and all these things,

we learn about that stuff.

690

00:33:52,000 --> 00:33:52,791

We want to keep growing

691

00:33:52,791 --> 00:33:55,041

because this is a great journey

that we're on, like we always do.

692

00:33:55,041 --> 00:33:56,458

So people were two guys with the dream.

693

00:33:56,458 --> 00:33:59,458

We're not we don't have

billions of dollars behind us.

694

00:33:59,458 --> 00:34:01,958

We just have the two guys, the dream,

and we got a great process.

695

00:34:01,958 --> 00:34:04,958

So, you know, like

we've had to add the HR person,

696

00:34:05,000 --> 00:34:08,000

which, is new

and we've added an accountant and then,

697

00:34:08,541 --> 00:34:10,916

we just recently hired

an operations person

698

00:34:10,916 --> 00:34:14,458

who will kind of take

some of that managing operations off,

699

00:34:14,583 --> 00:34:17,875

so we can continue focusing on new

projects going forward. New,

700

00:34:18,958 --> 00:34:19,916

growth,

701

00:34:19,916 --> 00:34:23,333

like we're adding plumbing

and adding those things.

702

00:34:23,333 --> 00:34:27,500

So, yeah, as we're growing,

we're adding the city in the pieces

703

00:34:27,500 --> 00:34:29,875

so we can

we're not the reason we're slowing down.

704

00:34:29,875 --> 00:34:31,500

That's maybe.

705

00:34:31,500 --> 00:34:33,166

Yeah, that

that's a great way to look at it.

706

00:34:33,166 --> 00:34:35,458

So that would kind of

lead me to my next question.

707

00:34:35,458 --> 00:34:36,916

You kind of hinted at already

a little bit.

708

00:34:36,916 --> 00:34:39,125

But what what's next.

709

00:34:39,125 --> 00:34:41,666

Well, we,

710

00:34:41,666 --> 00:34:43,083

the only thing that's consistent

711

00:34:43,083 --> 00:34:46,083

is change for us. So,

712

00:34:46,583 --> 00:34:49,833

we just opened, a Lakeland office.

713

00:34:50,583 --> 00:34:52,791

this last week, actually.

714

00:34:52,791 --> 00:34:55,791

so technically,

we hired guys about a month ago.

715

00:34:55,791 --> 00:34:57,291

You know, we've been training.

716

00:34:57,291 --> 00:34:59,666

Their first calls were Tuesday.

717

00:34:59,666 --> 00:35:03,625

so two days ago were our first calls

in the Lakeland, Florida area.

718

00:35:04,791 --> 00:35:07,791

and then we also started plumbing.

719

00:35:08,416 --> 00:35:12,625

so that started on the 5th

or the 16th of May.

720

00:35:13,208 --> 00:35:14,500

we started plumbing.

721

00:35:14,500 --> 00:35:17,500

Teamed up with a local plumber in Omaha.

722

00:35:17,708 --> 00:35:20,708

it's been he's been in plumbing

for a very long time.

723

00:35:20,875 --> 00:35:23,875

but he was always focused

on the new construction commercial side.

724

00:35:24,291 --> 00:35:28,625

He decided he wanted to get away from that

and go into the residential side.

725

00:35:29,291 --> 00:35:31,541

so we were actually working with him.

726

00:35:31,541 --> 00:35:33,833

It's, an old friend of Mark's,

727

00:35:35,000 --> 00:35:35,625

and just

728

00:35:35,625 --> 00:35:38,625

helping coach him through that transition.

729

00:35:39,375 --> 00:35:41,958

and you know that,

730

00:35:41,958 --> 00:35:46,125

going from the commercial new construction

to the residential

731

00:35:46,666 --> 00:35:51,166

when you don't have any customers,

on the residential side

732

00:35:51,166 --> 00:35:55,875

or very few residential customers

have was quite the struggle for him.

733

00:35:56,583 --> 00:36:00,333

so and working with him

and trying to get him over that hump,

734

00:36:01,541 --> 00:36:05,875

we all kind of came to the realization,

you know, we partner up here

735

00:36:05,875 --> 00:36:09,250

on plumbing in Omaha, we can work together

736

00:36:09,250 --> 00:36:12,291

to iron out our processes and systems.

737

00:36:12,750 --> 00:36:15,708

Then once we have that done,

we can implement

738

00:36:15,708 --> 00:36:18,708

plumbing in our Florida market.

739

00:36:18,708 --> 00:36:23,000

as we and we have over

120,000 customers in Florida.

740

00:36:23,750 --> 00:36:24,625

in our database.

741

00:36:24,625 --> 00:36:27,625

So once we get the processes down,

742

00:36:27,625 --> 00:36:31,791

it should be fairly easy,

just like we do on the back side,

743

00:36:31,791 --> 00:36:34,916

just a plug and play

to our current operations in Florida.

744

00:36:35,250 --> 00:36:37,833

We predict that within two years.

745

00:36:37,833 --> 00:36:41,250

And even if we don't over on the back

side, we'll probably close to double

746

00:36:41,500 --> 00:36:44,666

total revenue

by just adding plumbing to each location.

747

00:36:45,250 --> 00:36:45,958

Yeah. That's great.

748

00:36:45,958 --> 00:36:49,000

So then is

is that kind of the ultimate plan is

749

00:36:49,000 --> 00:36:52,500

to get all of those

kind of built up on the plumbing side.

750

00:36:52,500 --> 00:36:56,208

So you've got it down

and then continue to grow from there.

751

00:36:56,208 --> 00:36:59,708

Are you wanting to sell at that point?

752

00:36:59,708 --> 00:37:02,708

What what's

kind of the next steps from there?

753

00:37:02,958 --> 00:37:04,541

I don't know, enjoy the journey.

754

00:37:04,541 --> 00:37:09,375

Like so recently Logan Lakeland didn't

find really any good business to sell.

755

00:37:09,416 --> 00:37:09,750

Right.

756

00:37:09,750 --> 00:37:12,916

You know, there isn't that you know,

let's just open it and scratch.

757

00:37:13,416 --> 00:37:18,125

So we've done it and they've been booking

4 or 5 calls a day like us for calls.

758

00:37:18,416 --> 00:37:21,791

And we're like, our goal was to do

6.7 a day in the first year.

759

00:37:21,791 --> 00:37:24,083

Well, if we did that the first week,

just imagine.

760

00:37:24,083 --> 00:37:27,083

But anyway, so that's a

that's kind of a tough thing.

761

00:37:27,500 --> 00:37:30,833

but it's working

and we'll, we'll see how it goes.

762

00:37:31,291 --> 00:37:33,416

And then, no, I don't know, selling.

763

00:37:33,416 --> 00:37:35,083

I mean, you know, we've been approached,

764

00:37:35,083 --> 00:37:38,083

we've talked to these private

equity groups and we get more.

765

00:37:38,125 --> 00:37:40,583

We always pick their brain

where they probably pick cars

766

00:37:40,583 --> 00:37:41,250

because we want to know.

767

00:37:41,250 --> 00:37:42,958

That's how we came up

with the operation. Correct.

768

00:37:42,958 --> 00:37:45,583

And we're like, yeah, man, that's probably

hold us back.

769

00:37:45,583 --> 00:37:47,166

Let's talk about an operations record.

770

00:37:47,166 --> 00:37:49,041

So we we detailed out what it needs.

771

00:37:49,041 --> 00:37:51,000

And then we thought about, okay,

772

00:37:52,416 --> 00:37:53,750

what do we know that would fit this.

773

00:37:53,750 --> 00:37:56,000

So we knew one of the someone we knew

I say

774

00:37:56,000 --> 00:37:57,625

we literally just hired him this morning.

775

00:37:57,625 --> 00:38:00,916

So, just we just hired him

this morning, so,

776

00:38:01,500 --> 00:38:05,125

he'll start in a month, and then he's

going to take care of these operations

777

00:38:05,125 --> 00:38:07,250

where all those men

who call him instead of us.

778

00:38:07,250 --> 00:38:09,166

So we're not dealing

with problems of today.

779

00:38:09,166 --> 00:38:13,250

We still people who forward,

but we don't have plans going now.

780

00:38:13,250 --> 00:38:15,708

We do not have a plan of selling.

781

00:38:15,708 --> 00:38:18,416

that said, we are of the mindset

782

00:38:18,416 --> 00:38:21,416

that it is an asset.

783

00:38:21,541 --> 00:38:23,166

so it's the right price, is there?

784

00:38:23,166 --> 00:38:26,166

I mean, right, we would discuss it.

785

00:38:27,250 --> 00:38:29,791

the hard part of that is,

786

00:38:29,791 --> 00:38:35,666

I mean, in 2022,

we did a combine was a 4.34 million,

787

00:38:36,666 --> 00:38:37,541

I think it was.

788

00:38:37,541 --> 00:38:39,208

Yeah. Somewhere around there. Yeah.

789

00:38:39,208 --> 00:38:39,958

whatever.

790

00:38:39,958 --> 00:38:45,208

and then in 2023,

we did a, a some eight, seven.

791

00:38:45,416 --> 00:38:49,375

And right now

we're on pace to do 17 this year.

792

00:38:49,708 --> 00:38:55,666

So to put a value on that,

even if it's a difficult thing

793

00:38:55,666 --> 00:38:57,625

because they're going to look at well

what did you do last year.

794

00:38:57,625 --> 00:38:59,875

Oh well

795

00:38:59,875 --> 00:39:02,125

I mean we've already done more.

796

00:39:02,125 --> 00:39:06,333

Yeah we've you know we're in the 6

or 6 million range right now.

797

00:39:06,333 --> 00:39:08,458

Yeah. That's great.

798

00:39:08,458 --> 00:39:12,416

So it's yeah it's a tough thing

to put a value on it.

799

00:39:12,958 --> 00:39:15,500

for a buyer for sure.

800

00:39:15,500 --> 00:39:18,500

It's a tough thing, for us to try to say,

801

00:39:18,750 --> 00:39:22,250

to devalue it, to say, well, okay,

that's what we did last year, but

802

00:39:22,291 --> 00:39:25,916

look what we're doing right now and

we know what we're going to do next year.

803

00:39:26,250 --> 00:39:29,375

So I, I don't see the point selling.

804

00:39:29,375 --> 00:39:32,208

Really. Yeah. Well, and if it's.

805

00:39:32,208 --> 00:39:35,916

If it's working,

I mean if you're in you're continually

806

00:39:35,916 --> 00:39:40,875

just kind of refining it a little bit here

and there and it's not killing you.

807

00:39:42,000 --> 00:39:42,875

why sell.

808

00:39:42,875 --> 00:39:45,000

You know, I mean, I think it makes sense.

809

00:39:45,000 --> 00:39:49,041

And people kind of, I feel like

a lot of people, especially more lately.

810

00:39:49,041 --> 00:39:52,041

We were talking about this,

a couple of days ago.

811

00:39:52,333 --> 00:39:55,500

A lot of people

look at it as, I'm going to roll up,

812

00:39:55,583 --> 00:39:59,458

you know, seven, eight, nine,

ten of these operators for one year,

813

00:39:59,458 --> 00:40:02,458

then sell it, and then people get in there

and they do it

814

00:40:02,458 --> 00:40:04,541

and they go, you know,

this is actually kind of fun.

815

00:40:04,541 --> 00:40:05,541

I kind of enjoy it.

816

00:40:05,541 --> 00:40:10,500

Or they say, I'm doing really well

and I'm not working 75 hours a week.

817

00:40:10,833 --> 00:40:13,833

Like, why, why would I turn this off?

818

00:40:13,833 --> 00:40:16,916

You know, and then they end up saying, I'm

throwing that out the window,

819

00:40:16,916 --> 00:40:19,791

I'm going to actually run this.

So I get it.

820

00:40:19,791 --> 00:40:20,333

Makes sense.

821

00:40:20,333 --> 00:40:23,583

So, seems like you're kind of

at that point, which is which is great.

822

00:40:25,166 --> 00:40:25,416

yeah.

823

00:40:25,416 --> 00:40:27,416

If you can get into the $30 million

824

00:40:27,416 --> 00:40:31,250

revenue range just by adding the plumbing,

I mean, that's that's big.

825

00:40:31,250 --> 00:40:33,166

So that's real big money.

826

00:40:33,166 --> 00:40:35,125

So that's awesome.

827

00:40:35,125 --> 00:40:35,458

Yeah.

828

00:40:35,458 --> 00:40:38,458

And it's good to see that it is doable.

829

00:40:38,750 --> 00:40:41,000

I think a lot of people,

830

00:40:41,000 --> 00:40:44,458

are, are a little intimidated

by trying to figure out how to do it.

831

00:40:45,750 --> 00:40:46,833

I do think,

832

00:40:46,833 --> 00:40:50,125

there's a lot of people that try to do it,

but they don't have the same skill set.

833

00:40:50,625 --> 00:40:54,291

and, you know, you figured out a process

which is extremely important.

834

00:40:55,250 --> 00:40:59,000

so if anybody can kind of

take something out of this, it's

835

00:40:59,166 --> 00:41:03,916

create a process that clearly works

and then just continue to

836

00:41:03,916 --> 00:41:07,291

to implement that at each location

and maybe refine it here

837

00:41:07,291 --> 00:41:08,666

and there a little bit if you need to.

838

00:41:08,666 --> 00:41:11,666

So yeah, glad it's working.

839

00:41:11,666 --> 00:41:13,375

Of course you're. Happy with it. Yeah.

840

00:41:13,375 --> 00:41:16,083

We can't stress like we're talking about

like I couldn't

841

00:41:16,083 --> 00:41:19,250

individually go on this on my own

and he could do it on his own.

842

00:41:19,625 --> 00:41:20,458

It's a board of us.

843

00:41:20,458 --> 00:41:23,583

And I was like, yeah, we were both

in the same boat, in the same mud.

844

00:41:24,291 --> 00:41:25,500

And we could have done.

845

00:41:25,500 --> 00:41:28,500

We wouldn't be where we're at today

because there's a lot of a lot of pain

846

00:41:28,500 --> 00:41:30,083

with it. Like, those walls are real.

847

00:41:30,083 --> 00:41:31,500

People talk about walls.

848

00:41:31,500 --> 00:41:34,000

They're real because you need capital

to get through that wall.

849

00:41:34,000 --> 00:41:35,125

And yeah.

850

00:41:35,125 --> 00:41:39,083

So yeah, and time and time again,

it is a lot to try to

851

00:41:39,416 --> 00:41:42,625

to bust through those,

those business walls.

852

00:41:43,166 --> 00:41:45,708

We definitely felt it

at the beginning of this year

853

00:41:45,708 --> 00:41:48,708

as we were really pushing

through that 15 million.

854

00:41:48,750 --> 00:41:53,125

And I mean, it

it was a lot of time, a lot of stress.

855

00:41:53,791 --> 00:41:55,750

but all three, it's lonely at the top.

856

00:41:55,750 --> 00:41:56,333

Right?

857

00:41:56,333 --> 00:41:59,083

So having that other person there with you

858

00:41:59,083 --> 00:42:02,208

to push through those things is not a lot.

859

00:42:02,375 --> 00:42:02,666

You know?

860

00:42:03,833 --> 00:42:06,625

Well, it sounds like you've

just been an overachiever all together.

861

00:42:06,625 --> 00:42:10,916

You wanted to do ten or, sorry,

one a year for ten years.

862

00:42:10,916 --> 00:42:14,166

And you said,

I will just hit fastball. So.

863

00:42:14,541 --> 00:42:17,083

And then you've been you've done

great. Yeah.

864

00:42:17,083 --> 00:42:19,750

So you continue to be an overachiever.

865

00:42:19,750 --> 00:42:20,541

Either that or you

866

00:42:20,541 --> 00:42:24,333

just set really low goals for yourself

so you can just make yourself

867

00:42:24,333 --> 00:42:25,291

feel really good jumping.

868

00:42:25,291 --> 00:42:28,291

Off nice exercise, you know.

869

00:42:28,583 --> 00:42:30,250

Yeah,

I don't I. Don't think that's the case.

870

00:42:30,250 --> 00:42:32,166

But yeah, you guys are doing great.

871

00:42:32,166 --> 00:42:35,458

So, you know, there's a lot of knowledge,

a lot of, information

872

00:42:35,541 --> 00:42:37,375

really appreciate it.

873

00:42:37,375 --> 00:42:39,750

so at the end, I was asked two questions.

874

00:42:39,750 --> 00:42:41,750

so maybe Mark will start with you.

875

00:42:41,750 --> 00:42:44,750

do you have a mentor,

or have you ever had a mentor?

876

00:42:45,250 --> 00:42:46,791

yeah, I see mentors on these guys.

877

00:42:46,791 --> 00:42:48,708

I don't say will be on for,

878

00:42:50,125 --> 00:42:50,458

He's really.

879

00:42:50,458 --> 00:42:53,458

He really

changed my mind to get on the field.

880

00:42:54,416 --> 00:42:57,041

and then he's the same person.

881

00:42:57,041 --> 00:42:58,375

Oh, I didn't know the second one yet.

882

00:42:58,375 --> 00:43:00,208

Yeah. Okay, we'll get to that. What?

883

00:43:00,208 --> 00:43:00,416

Right.

884

00:43:00,416 --> 00:43:03,416

Spencer, what about you with a mentor?

885

00:43:03,500 --> 00:43:06,291

well, not as much now as maybe

886

00:43:06,291 --> 00:43:09,875

wasn't 2020 when he handed me

this book and said, good luck.

887

00:43:10,791 --> 00:43:14,333

but really, Mark, you was a great mentor.

888

00:43:15,000 --> 00:43:17,666

like I say, my background in real estate.

889

00:43:17,666 --> 00:43:20,416

So transitioning over to,

890

00:43:20,416 --> 00:43:24,416

you know, I was only feeding myself to now

I have six employees,

891

00:43:25,375 --> 00:43:28,791

and I'm running this company

in a H-back world.

892

00:43:28,791 --> 00:43:30,791

I'm unfamiliar with.

893

00:43:30,791 --> 00:43:34,875

Mark answered the phone pretty much

every time I called or call me right back.

894

00:43:36,333 --> 00:43:37,208

and that made.

895

00:43:37,208 --> 00:43:40,458

Yeah, made a world of difference

in the success that I experienced.

896

00:43:40,458 --> 00:43:44,291

That especially that first year,

running the business by myself.

897

00:43:44,625 --> 00:43:46,625

So that's awesome. Yeah.

898

00:43:46,625 --> 00:43:49,166

So and then second question,

we'll we'll come back to you, Mark.

899

00:43:50,125 --> 00:43:52,333

you know,

you guys have obviously been successful.

900

00:43:52,333 --> 00:43:55,333

what what motivates you?

901

00:43:55,333 --> 00:43:56,958

I think just the journey,

902

00:43:56,958 --> 00:43:59,750

like we said, we also

903

00:43:59,750 --> 00:44:03,250

we have goals, but it's just getting it's

just went through everything.

904

00:44:03,250 --> 00:44:05,666

I just, I just enjoy the journey.

905

00:44:05,666 --> 00:44:09,375

Like, it's like you always look back on

things and you're like, you remember that?

906

00:44:09,791 --> 00:44:12,791

Just I don't even

the manager are ruin the blown up.

907

00:44:12,916 --> 00:44:14,791

You know your goal was to do this.

908

00:44:14,791 --> 00:44:16,291

But man, look at what you've done.

909

00:44:16,291 --> 00:44:18,083

And remember this kind of this happened

910

00:44:18,083 --> 00:44:20,125

in the time that this happened

good and bad.

911

00:44:20,125 --> 00:44:23,125

I just enjoy the journey. That's great.

912

00:44:23,208 --> 00:44:25,583

You know, he's

not just looking off into space.

913

00:44:25,583 --> 00:44:27,333

Yeah. We here. Oh, no.

914

00:44:27,333 --> 00:44:30,833

I figured you know, he's not just. No no

915

00:44:32,083 --> 00:44:34,166

no no.

916

00:44:34,166 --> 00:44:37,208

I need to get I need to get a, goal board

in my office.

917

00:44:37,208 --> 00:44:37,791

Probably.

918

00:44:37,791 --> 00:44:41,166

But, they're usually up in my head

somewhere, so.

919

00:44:41,583 --> 00:44:43,500

And then what about you, Spencer?

920

00:44:43,500 --> 00:44:44,583

That's the same thing.

921

00:44:44,583 --> 00:44:47,333

I mean, I feel like we really made

a huge difference

922

00:44:47,333 --> 00:44:50,333

in every market that we go into.

923

00:44:50,666 --> 00:44:54,166

It's funny, the like Mark said,

it really is a journey.

924

00:44:54,833 --> 00:44:57,833

when we first started any market, it is.

925

00:44:57,875 --> 00:45:00,208

It's difficult

to find guys with experience.

926

00:45:00,208 --> 00:45:01,583

We have a great training program.

927

00:45:01,583 --> 00:45:04,041

We hire a lot of guys without experience.

928

00:45:04,041 --> 00:45:07,583

but then after we've been in the market

for even just six months,

929

00:45:08,458 --> 00:45:11,333

we get people that just walk in and apply,

930

00:45:11,333 --> 00:45:15,750

they've heard about what we're doing,

where they've heard about how we pay.

931

00:45:15,750 --> 00:45:16,875

I mean, all these

932

00:45:16,875 --> 00:45:20,000

all these bad guys talk to each other

every time they're in a supply house.

933

00:45:20,333 --> 00:45:23,000

And, you know, they're griping about this

and griping about that.

934

00:45:23,000 --> 00:45:27,416

And I'm sure our employees have their fair

share of gripes like anybody else.

935

00:45:28,916 --> 00:45:30,916

but I think that's a big part of it

936

00:45:30,916 --> 00:45:35,041

is we're really we change the industry

in every market that we go into.

937

00:45:35,041 --> 00:45:39,333

And having people that seek us out

to come work for us.

938

00:45:39,666 --> 00:45:42,500

It's, it's a big deal to me. Yeah. So.

939

00:45:42,500 --> 00:45:46,833

Yeah, that's a

that's a great way to, kind of quantify

940

00:45:46,833 --> 00:45:49,625

how you're doing is

if people are starting to call you

941

00:45:49,625 --> 00:45:53,041

because you hear a lot of people

where they struggle to, to find good help.

942

00:45:53,041 --> 00:45:54,958

So that's awesome. So.

943

00:45:54,958 --> 00:45:59,250

Well, yeah, I mean, this was, jam packed,

and we'll have to do it again sometime.

944

00:45:59,625 --> 00:46:02,625

when you decide to buy

five more next week.

945

00:46:03,416 --> 00:46:05,875

well, I did call you last week.

946

00:46:05,875 --> 00:46:08,083

Yeah.

947

00:46:08,083 --> 00:46:08,541

You did?

948

00:46:08,541 --> 00:46:10,916

Yeah. It's, Hello. Right.

949

00:46:10,916 --> 00:46:14,125

Right down a goal and then blow it

out of the water like you usually do.

950

00:46:14,125 --> 00:46:17,000

So that'll be great.

But I really appreciate your time.

951

00:46:17,000 --> 00:46:20,000

I know, I know,

you've got a lot going on and stuff, and,

952

00:46:20,458 --> 00:46:23,458

the listeners will definitely be happy to,

953

00:46:23,541 --> 00:46:26,375

to hear about how this is going,

because, this is a lot

954

00:46:26,375 --> 00:46:27,416

of what people are trying to do.

955

00:46:27,416 --> 00:46:29,916

So I really appreciate you guys

jumping on here.

956

00:46:29,916 --> 00:46:31,625

Absolutely. No.

957

00:46:31,625 --> 00:46:35,000

Anything really, because you

you are a big part of that tyranny.

958

00:46:35,708 --> 00:46:39,458

and getting these deals

financed is not a it's not an easy thing.

959

00:46:40,125 --> 00:46:43,625

so we definitely appreciate

everything you've also done in helping us

960

00:46:43,625 --> 00:46:44,666

achieve our goals.

961

00:46:44,666 --> 00:46:47,291

Yep. Cool I appreciate that. Awesome.

962

00:46:47,291 --> 00:46:49,708

Well, sure. We'll talk again soon.

963

00:46:49,708 --> 00:46:52,166

All right. Thanks, guys.

964

00:46:52,166 --> 00:46:53,375

Thank you for listening.

965

00:46:53,375 --> 00:46:56,375

We hope you found this podcast

informative and helpful.

966

00:46:56,500 --> 00:46:59,541

Please don't forget to subscribe

on your favorite podcast player

967

00:46:59,875 --> 00:47:03,750

for more information or if you'd like

to discuss the transaction, please go to

968

00:47:05,125 --> 00:47:06,916

Jarrett johnson.com.