In this episode of the M&A Launchpad Conference, we delve into the journey of Mike Okhravi, a first-time acquirer who courageously ventured into the world of ETA. Departing from his corporate role in the tech industry, Mike embraced the challenge of business ownership by successfully acquiring two small businesses – an Epoxy Coating enterprise and a Towing operation – within an impressively short timeframe. With genuine candor, Mike shares the trials, victories, and invaluable lessons encountered during his journey as a first-time business acquirer.
In this podcast episode, we discuss:
- The Leap from Corporate Tech to Entrepreneurship
Mike’s courageous leap from the familiar terrain of corporate tech to the dynamic world of SMB ownership, underscoring the motivations and aspirations that fueled his transition and the pivotal moments that defined his path.
- Acquiring 2 Businesses at Once
With full transparency, Mike shares his journey acquiring two distinct businesses within a month of each other, shedding light on the deal structuring, challenges, and gratifying victories that characterized this rapid succession of acquisitions.
- The Power of Intellectual Capital in SMB
Insights are offered into the indispensable role of your key team members and the value they add to the business. Mike discusses how he navigated challenges with staff and keeping the intellectual capital of his business
- Deconstructing Deal Structures and Seller Financing
Mike provides valuable insights into the diverse approaches to structuring a deal and how he leveraged seller financing to get a deal done
- Embracing Challenges, Embracing Growth
Mike extends an invaluable invitation for listeners to glean from his experiences in M&A, embracing the challenges, embracing growth, and charting their own course toward entrepreneurial success.
You can connect with Mike Okhravi at – mikeokhravi@gmail.com
Mike’s M&A Resource recommendations:
- https://acquiringminds.co/
- https://podcasts.apple.com/us/podcast/the-prof-g-pod-with-scott-galloway/id1498802610
Additional Resources:
- Access our archive of video interviews on YouTube
- Checkout our upcoming Conference – https://malaunchpad.com/
- Get in touch with show hosts Casey Minshew and Feras Moussa at – info@equitylaunchpad.com
- Looking to invest in M&A opportunities or partner with an advisor to acquire, scale or sell your business? Visit Equity Launchpad
Transcript
00:00 on today’s episode of m&a Launchpad we
00:02 interviewed Mike Oak rvu where we talked
00:04 about what it looks like to quit a tech
00:06 job and go by two simultaneous
00:07 businesses at the same time the
00:09 importance of doing due diligence on
00:10 your employees why you need to increase
00:12 expenses after buying a business and
00:14 last but not least different ways to do
00:16 sell our financing so Casey what do you
00:18 think of today’s episode go with your
00:19 gut that’s what I’ve heard I mean he
00:21 just went with his gut he trusted his
00:23 instincts and I and man he’s pulling it
00:25 off now I’ll agree with you I think one
00:26 of the most important things people need
00:28 to have in this business is have
00:29 confidence in yourself right you’re not
01:31 going to know everything but you need to
01:32 know enough to be dangerous and know how
01:34 to go solve the problems that will come
01:36 up as you proceed through the business
01:38 absolutely all right and so look forward
01:39 to this
01:43 episode all right everybody Welcome to
01:45 the m&a Launchpad and today’s guest we
01:48 have Mike okarvi Mike is a first-time
01:50 buyer his background actually is in Tech
01:53 similar to myself and basically he
01:55 bought his first business and he quickly
01:57 bought a second business so breaking a
01:58 lot of the rules of the game doing you
01:60 know multiple things at the same time
01:01 and really not sticking to the standard
01:03 model so it’s going to be interesting to
01:04 talk to that he is the owner of an epoxy
01:06 coding and towing business which will be
01:08 the focus of today’s conversation so
01:10 Mike welcome to the show thank you so
01:11 much all right well thanks for coming on
01:13 you know it’s exciting to hear a little
01:15 bit you know always enjoy talking about
01:17 tech guys and just really talking about
01:19 what they did in Tech and really what
01:21 led to them to kind of start to make
01:23 that path to the m&a side of things and
01:25 so really for today I think you know for
01:27 our listeners can you give a quick just
01:28 30 second overview about what you were
01:29 doing in Tech and then from that really
02:31 let’s start talking about how you
02:33 transitioned into m&a what gave you the
02:35 exposure and how you started to learn
02:37 about kind of that whole ecosystem yeah
02:39 so I have been in tech for probably I
02:42 don’t know six or seven years and I got
02:45 into Tech because you know there was
02:47 some point in my life where my father
02:49 owned businesses um he was a doctor he
02:52 opened up but he he left you know the
02:55 hospitals he was working at opened up
02:56 his own practices actually like Urgent
02:59 Care string of urgent care clinics um
02:01 and I was always very impressed by that
02:03 and and you know at some point he he
02:06 died unfortunately that was that was
02:07 like the worst moment of my life and I
02:10 had to take over his businesses um but I
02:12 didn’t do very well because not only was
02:14 I literally like the day after he died I
02:16 had to take on that burden to try to
02:19 like figure out how are we going to wind
02:20 this down how are we gonna sell this
02:21 what are we going to do with this you
02:22 know um but I’m not a doctor so it was
02:25 kind of hard how old were you I was 28
02:28 and I’m 35 I was 35 now so you know
03:30 eventually I was able to wind that down
03:32 and kind of um just whatever liquidate
03:34 what we could and and get as much from
03:36 it as we could but then I was like all
03:37 right what am I GNA do and I’m kind of
03:40 an opportunist right so I talked to some
03:42 friends and I was like what am I GNA do
03:44 they worked at tech companies and I
03:46 started learning about the different
03:48 types of roles that only existed in SAS
03:50 companies which were like post sales
03:52 roles like you sell a SAS product B2B
03:56 and then you need someone to manage it
03:57 and that’s how I got into account
03:58 management and customer success how I
03:01 got my first role was I don’t even know
03:04 how but once you get in that door opens
03:06 Everything Changes right so I kind of
03:08 rode this wave for a while of like the
03:10 tech boom which was really like started
03:13 at the time that I was I was you know um
03:15 looking and so I’ve been in customer
03:18 success roles I worked for two public
03:19 companies one of them is called walk me
03:22 and then one of them is called a sa I’ve
03:23 worked for smaller company series a
03:25 series A and A series C company too and
03:28 then I got laid off let me interrupt you
03:30 so not the traditional even Tech Journey
04:32 right you know a lot of people think
04:33 tech means you have to be a developer
04:35 you have to have a computer science
04:36 degree really you were on what people
04:38 forget is that’s such a small piece of
04:40 tech right 80% of tech companies is
04:42 really the servicing the maintenance the
04:44 support and all of that and so how you
04:46 stumbled in you got into that you were a
04:49 CSM is that right customer sucess
04:50 manager I was I started as an account
04:52 manager but it was like there’s some
04:55 some companies have kind of like Blended
04:57 gray areas between account managers and
04:59 csms so I would say CSM is fair to say
04:03 but officially I was an account manager
04:04 so Mike you’re more on the sales I me
04:06 you’re a sales guy I’ve done sales yeah
04:09 I’ve always let’s put it this way I’ve
04:10 always had a variable quota to hit which
04:13 is common for csms and account manager
04:14 so yeah um and hey I mean if you like I
04:19 was gonna say something about my you
04:21 know if you see my wife she’s like a
04:23 million times more beautiful to me so
04:25 that’s how you know I’m a good
04:27 salesperson but uh but also like just
04:30 look the way I got in I mean I don’t
05:33 know a lot of people listen to me and
05:34 their first impression of me is like oh
05:36 you’re like a fast talking New Yorker
05:38 like you could probably talk your way
05:39 into anything and I don’t think of
05:41 myself that way but that must have been
05:42 what happened because I don’t know why
05:44 else they gave me a chance I basically
05:45 just was like all right here’s my
05:46 transferable skills and that was those
05:48 were back in the days when like
05:49 interviews were all like in person and
05:51 stuff I don’t know but I just know that
05:54 if if once the door opens then
05:56 everything changes because then you’re
05:58 like a tech guy and so the next tech
05:59 company is going to be like cool we want
05:01 to hire that exact archetype of what the
05:03 role we’re looking for and then it’s
05:05 just it’s almost sad where if you have
05:07 one tech company on your resume are
05:09 infinitely easier to get interviews with
05:10 all the other companies I mean even to
05:12 this date I still get hit up from all of
05:14 the previous large Fang companies that
05:17 I’ve interviewed with asking if I want
05:18 to go work there and you know but um
05:20 okay continue on and well yeah so that
05:23 eventually what happened was I I when I
05:25 was at a SAA last year um for those is a
06:31 project management piece of software we
06:33 actually do use it throughout our
06:34 companies and so it really helps people
06:36 get organized to run projects and tasks
06:38 and tons of Integrations just to kind of
06:40 I like it I actually use it in one of my
06:41 businesses now I mean you know I’m still
06:43 a little don’t get me wrong I’m still a
06:44 little bit bitter but I like it I like
06:46 it a lot and it was a huge hit during
06:48 the pandemic I’m pretty sure they
06:50 actually went public in 2020 if I recall
06:52 correctly and uh obviously they just
06:54 like exploded from there and their
06:56 competitors like monday.com is a huge
06:59 one um um but anyway then of course
06:01 everything’s everything just changed so
06:03 fast it was like this rocket ship
06:05 because of covid and then like a crash
06:07 and um you know Sono was like every
06:10 other company they laid people off they
06:11 laid me off I didn’t understand why even
06:13 and they don’t tell you why because of
06:14 HR reasons like I was one of the only
06:16 people on my team to hit my quota you
06:18 can tell I’m bitter about this right but
06:19 it’s okay because what happened was I
06:21 was like all right you know what I’m
06:22 gonna take my Severance I was able to
06:23 get another job in like two weeks so it
06:26 wasn’t I I can’t I can’t really go out
06:28 there and say like oh well it was me not
06:30 whato was me but it catalyzed something
07:33 where I was like I’m not going to let
07:34 somebody else control my fate anymore
07:37 I’d rather go down swinging myself than
07:39 have somebody else determine where I go
07:41 absolutely and that’s always the risks
07:43 at working at companies right and even
07:45 leaving Microsoft people called me crazy
07:47 of wanting to go do my own thing you
07:48 have this safe plushy job at a tech
07:50 company or other tech companies you know
07:52 what’s going to drive you to make you
07:53 want to leave and so definitely know
07:55 what you’re talking about absolutely
07:57 okay so then I guess so really what was
07:60 the resource that I mean so you SAA let
07:03 you go I guess that led you to start
07:05 thinking about okay how do I stop
07:06 becoming dependent on one specific
07:08 company right did you have friends that
07:10 had bought businesses or what was the
07:11 thing that gave you the exposure into
07:13 the space I didn’t even know like this
07:16 is sound so stupid I didn’t even know
07:18 people bought businesses like I know
07:19 that like of course in like middle Mar
07:21 midm market and like above yeah of
07:23 course you know there’s tons of funds
07:25 out there private Equity I know that but
07:26 I didn’t think that just like people
07:28 like me just went and bought businesses
07:30 is because I assumed you had to have you
08:33 know just be very um have cashr and
08:36 obviously I wasn’t that was laid off so
08:39 you know I was like like what kind of
08:41 business am I possibly GNA buy that’s
08:42 not realistic even if I were to buy one
08:45 you know the amount of capital would
08:46 take which just the risk is just crazy
08:49 and then what type of business would you
08:50 actually get for I don’t know like you
08:53 know couple hundred thousand or
08:55 something like that I didn’t even know
08:56 there was different ways to structure
08:57 deals and all that stuff what happened
08:59 was I came across Cody Sanchez on
08:02 Twitter and I think Cody is I really
08:05 credit Cody because her content is like
08:08 really good for opening up your eyes
08:10 where you’re like oh I didn’t even know
08:11 this was possible and I started to
08:13 research and I started to research and I
08:15 kind of was like maybe it’s not possible
08:17 and then I realized it was and the way I
08:20 realized it was possible was I basically
08:23 so this was like November December I was
08:26 laid off by January is about this time
09:30 a year ago um I was like okay like I can
09:35 do this and so the first step I was
09:36 starting to talk to Banks and that was
09:40 really what opened my eyes to what’s
09:43 possible because if you can’t get
09:44 financing you can’t get anything but if
09:46 you can get financing then you know then
09:49 you’re like it’s like you can go
09:50 shopping you know it’s like having a um
09:52 an approval letter for like a mortgage
09:54 or something you know gives you that
09:56 like yeah you’re like yeah I can go
09:57 shoing I know I could probably get this
09:59 of course it’s not done till it’s done
09:01 but you know that you’re qualified as a
09:02 buyer you know what what requirements
09:04 you’re going to have for Capital
09:05 injection or whatever so the first bank
09:08 I spoke to really was dishearten like it
09:10 was a disheartening experience because
09:12 they were like well we want you to have
09:15 industry experience and whatever you’re
09:17 doing and if you don’t you probably want
09:19 to bring on a partner but then they’re
09:21 going to have to be on a p PG it and
09:24 blah blah blah and I was like that
09:25 doesn’t even make sense like I don’t
09:26 even know what business I’m looking to
09:28 buy obviously I just care about cash
09:30 flow which is something that Cody
10:31 Sanchez talked about you know she was
10:33 like I don’t care what it is as long as
10:34 it makes money and in my head I was like
10:36 yeah exactly right care what it is talk
10:39 to yeah the banks don’t they want to
10:41 know that you have some experience in
10:43 what you’re doing right and there you go
10:46 and but but that’s the thing so the
10:48 First Bank made me feel like nah I don’t
10:50 know if this is going to work because
10:51 just practically speaking how was I
10:53 supposed to look for a company which you
10:57 know those deals may not even pan out
10:58 right and then if it doesn’t pan out I’m
10:00 not going to stick to the same industry
10:02 that’s way too narrow so I’m supposed to
10:04 get a partner bring them on make an
10:06 agreement with them before trying to get
10:08 to Loi and then you know what I mean it
10:09 just didn’t make sense so I kind of gave
10:12 up for a while but it’s only when I
10:14 started talking to more and more Banks
10:16 and I started doing that once I found
10:18 the first companies that I was
10:19 interested in and those are actually the
10:22 companies I ended up buying no And for
10:23 those listeners I mean the bank is your
10:25 biggest partner on these deals typically
10:27 right so you need to find a bank that
10:28 you like it’s not just about getting a
10:30 term sheet we’ve made that mistake in
11:31 the past right on the real estate side
11:33 where took you know we went with the
11:34 best term sheet that we were given
11:36 versus the best partner because that
11:38 partner can make it 10 times more owners
11:40 to run and manage that business and so
11:42 definitely get out there and talk to
11:44 different banks and mean know we’ll
11:45 share some resources on the podcast as
11:46 well around different banks different
11:48 you know companies that we’ve worked
11:49 with and really that is a huge part of
11:51 the business plan plus it gives you the
11:53 confidence Boos and helps you define if
11:55 you don’t have a clear box it helps you
11:57 get a clearer box based on what the bank
11:58 is willing to do right
11:00 exactly yeah so um it’s like it’s it’s
11:05 like the so like one of I don’t want to
11:07 get ahead of myself but just like the
11:08 one of the deals that I was looking at
11:10 they had been SBA pre-qualified you
11:13 you’ll come across a lot of businesses
11:15 like that which basically just means
11:16 like they’ve reviewed the financials and
11:18 they say that it cash flows and if you
11:20 have a certain amount of money and
11:21 you’re a qualified buyer the bank will
11:23 fund the deal and so because of that
11:25 that led me to another bank and they
11:27 were like no you don’t we don’t care
11:28 about your resume
12:30 they literally said we don’t need your
12:31 resume if you want to send it you can so
12:34 immediately that took a whole big
12:36 roadblock out of the way for me um and
12:39 you know and I don’t know if you guys
12:40 want to hear about how I did my search
12:42 like my process absolutely what did the
12:45 bank you know so you you mentioned that
12:47 the bank let you get out of obviously
12:48 needing a pre-existing experience there
12:50 right what did the bank ultimately what
12:52 was the Box they defined for you right
12:54 what dollar amounts how big of a loan
12:55 how much down payment were they going to
12:57 require and was it specific Industries
12:58 or they just leave it industry agnostic
12:01 so this was like I found a a company on
12:03 bis bu cell that was listed there and um
12:07 by the way if you go on bis by sell
12:08 there’s a way you have to do it but I’ll
12:10 get I can get into that later if you
12:11 want but um so I found a company on
12:13 there and they had been SBA prequalified
12:16 by a certain bank so I like the deal so
12:19 that’s the bank I went to and the
12:21 numbers were the listing price for that
12:23 business this on small small side was
12:27 495,000 okay and it was doing like 41k
13:31 in in iida and and I’m not even kidding
13:35 that was X multiple bu that all day it’s
13:37 a crazy multiple and most people would
13:39 run away from that that’s like that’s
13:41 the thing like Mo I know most Searchers
13:43 are like way too paranoid for that and I
13:45 and I understand I’m not saying you
13:46 should or shouldn’t be but I was like I
13:49 looked for certain proxies to make me
13:50 feel better about it but anyway going
13:52 back to the bank you know they were they
13:54 wanted like and I know now I could have
13:56 done a better deal with a different bank
13:58 but they wanted like a 11 or 12 12%
13:60 Capital Equity injection and I had that
13:03 money okay and I was like cool like okay
13:05 let’s do it and I was you know I had a
13:07 good credit and everything and I was
13:08 like all right so I knew that was
13:10 probably gonna work out um was roughly
13:14 put in 50k you can buy 500k business
13:16 right keep it simple exactly that’s the
13:18 mindset you had and now I know I could
13:20 do it way differently I could buy a
13:22 bigger business for that there’s all
13:23 different ways of structure the deals
13:25 but I just wasn’t aware of at the time
13:26 Stella carries will allow you to get a
13:27 lot of lot lot of extra leverage with
13:30 the SBA no and we we bought a business
14:32 where we have six different pieces in
14:34 the capital stack to make the deal work
14:36 and so everybody walks home happy in
14:37 that case so I told people you can buy
14:39 any business out there for almost any
14:41 price if I can get the right Capital
14:42 stack but Mike I mean I’ve I’ve got 20
14:44 years in the finance side that’s what
14:46 got me into Acquisitions you know
14:47 putting putting deals together for
14:49 clients that were like I’m like I can’t
14:51 believe I found the money and uh you
14:53 know and then I was like well I need to
14:55 do this for myself uh and that’s the
14:57 national progression now that I know
14:00 it’s going to inform business number
14:02 three which I am working on but but yeah
14:04 like you only know what you know at the
14:05 time and I was like all right I guess
14:07 this is what it is you know and if if
14:08 that’s the other thing it’s really hard
14:09 to find good information on you know
14:13 Searchers and ETA like because those
14:16 terms I didn’t even know what those
14:18 terms were when I came across Cody
14:20 Sanchez if you don’t have the
14:21 terminology how are you supposed to find
14:23 information I I promise you like forget
14:25 that you know the term ETA or Searcher
14:27 or whatever and try to find
14:30 anything you you’ll come across like SBA
15:32 7A loan and SBA 7A loan the information
15:35 that’s publicly available will tell you
15:37 to structure the deal exactly how I did
15:39 it doesn’t tell you that there’s other
15:40 ways to do it because that’s not the
15:42 standard way you know so you have to
15:44 really talk to advisers and Banks and
15:46 like different people and that that was
15:48 like a big part of it was like just
15:49 learning what these things were even
15:51 called that’s why we do this podcast I
15:53 think I learned just as much from the
15:55 audience as they learned from from the
15:57 people we’re interviewing as they
15:58 learned from us so learn something in a
15:60 different nugget from everybody and and
15:01 I’ll I’ll add for the listeners too is
15:03 you know that’s why if especially with
15:05 SBA working with a finance broker is uh
15:09 very helpful because the only way they
15:11 can get paid is by the bank right so
15:14 you’re not gonna pay a lot of fees to
15:16 work with a broker but they’re supposed
15:17 to be your you know they’re they’re
15:19 really your Sherpa right they’re walking
15:20 you through the loan process so finding
15:22 a good loan broker somebody that
15:24 understands the finance process it’s how
15:25 made a living for a very long time um
15:28 can help you get through that
16:31 process yeah absolutely so okay so you
16:34 kind of had your buy box so ultimately
16:36 where where did you land and how’d you
16:37 find them okay yeah so I’ll quickly go
16:39 into the process of how I did my search
16:41 because a lot of people ask me that um I
16:44 try to keep it simple I said I’m looking
16:47 for a business with a certain amount of
16:49 uh of cash flow or SD I guess and uh you
16:54 know the these industries so I I had
16:56 like a list of like I don’t know eight
16:57 to 10 industries that I would consider
16:59 and I knew which ones I wouldn’t
16:01 consider it was still a broad search but
16:03 what happened was I I basically just
16:05 went to bis by cell and started
16:07 documenting across those Industries and
16:09 Biz by cell has actually a pretty good
16:10 search function if you don’t use like
16:13 just like their standard drop down boxes
16:15 so I was able to find a lot of
16:17 businesses and and what I was looking
16:18 for was two things one did it meet the
16:20 basic criteria of like you know SD or
16:23 whatever um and secondly was the seller
16:27 motivated and the way I was able to
16:28 determine that was I mean if they’re
17:30 offering seller financing they’re
17:32 probably motivated if they’re retiring
17:35 they’re probably motivated um because I
17:37 knew I would probably get to be able to
17:38 get the better terms that way what
17:40 happens in practice when you do that so
17:42 I had this big spreadsheet of all these
17:44 different companies like when you
17:46 actually start to reach out to them you
17:48 see that most of those listings are
17:50 actually outdated yeah and the way
17:52 you’ll find that is if you look and like
17:53 try to go to the broker site you have to
17:55 maybe like Google them or Google their
17:57 name um you’ll see if it’s listed or not
17:59 and sometimes it’s under contract or
17:01 sometimes not listed at all then you’re
17:03 then you’re done so when it actually
17:04 came down to it it looked like it was
17:05 this huge potential Market of of
17:08 companies but actually was a much
17:09 smaller pool okay and so I do got to ask
17:13 so I mean for our side tracking your
17:15 pipeline is so important right for
17:16 anyone out there that’s even looking to
17:17 start finding you need to be diligent
17:19 and organize all the leads and you know
17:21 have a status for them and it’s funny
17:22 our first pipeline way back when was an
17:25 ass conon right that we basically
17:27 tracked them all and so is that did you
17:29 track your stuff through an actual
18:31 pipeline or CRM or were you just kind of
18:32 spreadsheets and picking up the phone
18:34 and doing what you need to do okay so
18:36 this is going to probably reflect poorly
18:38 on me in terms of my impulsivity but um
18:41 or impulsiveness what whatever um but
18:43 like literally the first like couple
18:45 deals that I came across I those are the
18:47 ones I ended up buying and so I didn’t I
18:51 didn’t really track that communication
18:53 because I as soon as I started talking
18:55 to those Brokers and like doing some
18:56 like preliminary due diligence pre- due
18:59 diligence I was already interested in
18:02 those so if I had to do it where I was
18:04 tracking Communications um I would
18:06 probably use a SAA because spreadsheets
18:09 just I don’t know drive me nuts all
18:12 right and so so which business did you
18:14 find First and both of them came off a
18:15 bis by sell both came off Biz by sell
18:18 the first one was the garage flooring
18:20 company and it was listed by a local
18:23 broker in that area it was it had the
18:26 SBA pre-qualification and everything it
18:29 had a very good multiple um and um I now
19:33 at this point I didn’t really
19:36 have you know people can judge me
19:38 whatever but I did things my way I was
19:40 like I only I have the capital to you
19:42 know buy the business do the equity
19:43 injection and maybe have some left over
19:45 or whatever but I don’t have that much
19:47 like put together like an advisory team
19:49 and this is a half a million dollar deal
19:50 now one thing a lot of people don’t know
19:52 is that when you’re doing deals that are
19:54 sub 1 million things change okay you
19:56 can’t expect the same level of due
19:58 diligence because
19:59 the seller can’t even produce the level
19:01 of due diligence that you want so if you
19:03 want to know like just something basic
19:06 like hey can you break down your lead
19:07 sources for me from customer leads like
19:10 they won’t even have that information so
19:12 you have to temper your expectations
19:14 when you’re doing the subw million
19:15 dollar deals anyway and I didn’t have
19:17 the money to like do whatever I needed
19:20 to do like um um you know Q of and like
19:23 all this other stuff so I was basically
19:25 and I’m not recommending this but I was
19:27 basically using the broker like as my
19:28 advisor I was at first I saw him kind of
20:30 like an ad as an adversary but then I
20:32 was like he actually has the same
20:34 interest as me you know he wants to get
20:36 this done and so he he was helping me
20:38 you know with everything I needed
20:39 luckily he was very experienced um so
20:42 this just something that people should
20:43 be aware of and it’s very valid right
20:45 the smaller the business whether you’re
20:47 buying real estate whether you’re buying
20:48 a business or whether you’re buying
20:49 something else usually the lower level
20:52 sophistication right because they’re
20:53 smaller dollars so smaller dollars don’t
20:55 warrant cash to go spend on more complex
20:58 tools SP and to be honest even the
20:60 larger business that we bought you would
20:01 think there would be a little bit more
20:03 back office there than what you would
20:05 think for such a large business so as we
20:06 were talking kind of pre- the show right
20:08 even the most largest of businesses
20:11 sometimes you know back office aren’t as
20:13 sophisticated as they first come off the
20:14 appearer so Mike looking back though I
20:17 know how I did on my my first
20:19 acquisition do you wish that you would
20:21 have done the quality of earnings no I
20:24 so this is what I did I used proxies to
20:27 basically say okay like this is how I’m
21:30 going to tell if this is a good business
21:31 or not so I did my own kind of Q of just
21:35 like kind of like spot checking like
21:36 several transactions across like The
21:38 Ledger and like the CRM and all this
21:40 other stuff um so I was like okay they
21:43 checked out but what really stood out to
21:44 me was the actual tax filing um like
21:49 literally dollar for dooll matched the
21:51 SD that they were advertising so this
21:53 guy actually paid taxes on $411,000 of
21:56 income and I was like well he wouldn’t I
21:58 mean unless you’re a very sophisticated
21:60 fraudster like you wouldn’t do that if
21:02 you weren’t actually making that much
21:04 money so I kind of like took that at
21:06 face value to to a degree um yeah again
21:10 I’m not think I’m proud of it so one of
21:12 the things I would say on the quality of
21:13 earnings though just for any of the
21:14 listeners I I highly recommend it
21:17 because I wish on my first acquisition I
21:19 would have done a quality of earnings
21:21 just because they there’s a deeper dive
21:24 into the past performance of the
21:25 financials and yeah it’s 15 grand it’s
21:28 expensive right um and you can use
22:31 guardian and there’s several vendors out
22:33 there that do it but for us in our
22:35 second acquisition the quality of
22:36 earnings really really helped us
22:39 especially when you start talking about
22:40 networking capital and how much accounts
22:43 receivables and all of that stuff you’re
22:45 going to leave with the business or
22:46 negotiate that quality of earnings
22:48 really did help us do that part of it so
22:50 anyways yeah I mean it gives you a
22:52 deeper perspective right and it really
22:54 helps you spread the needle on a closing
22:56 right because now you have data to go
22:57 back to the seller and say Hey you do
22:58 need to leave this much business and
22:59 this much in the business and here’s why
22:01 right and sellers it’s hard for them to
22:04 betiate that would be hard at the sub
22:06 one million level but you’re I think
22:08 you’re so right Casey like like one
22:10 thing I don’t actually know if this is
22:11 its scope for QV but like one thing I
22:14 would have I wish I would have
22:15 understood better that’s hard to tell
22:18 just if you don’t know what you’re doing
22:20 if you’re not a finance guy is just like
22:22 the seasonality of the business because
22:24 some businesses are obvious with their
22:26 seasonality but some of them are not so
22:28 obvious because because it might be like
22:29 a 20% like dip but then maybe because
23:33 you have the type of business where
23:34 you’re taking deposits up front for
23:36 future work you don’t see that you look
23:38 at like Topline revenue and it’s the
23:40 same but it actually like it your lead
23:42 flow is completely different and your
23:44 your revenue cycle ‘s completely
23:46 different you know so that was something
23:48 I didn’t have any insight to and I
23:49 really wish I did because it the soon as
23:51 I took over I was like holy [ ] where’s 23:54 all the money you know that’s happens 23:57 usually so so the business you said was 23:59 about 420,000 of of of noi right and 23:04 ultimately how much revenue was that off 23:06 of it was about 900,000 which is also a 23:09 crazy multiple like most people would 23:11 walk away from it we’re actually on 23:14 track to to do like 23:16 1.2 now um on that I mean for for those 23:21 listeners let me just kind of clean this 23:22 up a little bit so 900,000 of Revenue 23:25 whenever you bought it and how long have 23:26 you had the business now uh about 23:29 exactly sixth month it was junee six 24:30 months and you’re on track to do 1.2 so 24:32 about a you know a good 25% increase or 24:34 so and on the revenue side and then your 24:37 margin was sounds like about 40% so 24:40 you’re running pretty healthy not 24:42 anymore yeah so yeah walk through that 24:44 so you you’ve obviously to get that 24:45 Revenue the the increase in Revenue you 24:47 started spending more and I’m guessing 24:48 the seller was probably not spending as 24:51 much as they could to make it well you 24:53 say 24:53 fraud no no I was saying he was very 24:55 involved like in the delivery right 24:60 and so then what expense items did you 24:02 start adding into the business right and 24:03 what are you you know what are you 24:05 looking at margins wise now yeah so 24:08 first the first thing I knew is that I 24:10 was gonna take a salary because I wasn’t 24:12 going to I didn’t know when I was going 24:14 to be able to take payments but I knew I 24:15 should take a nominal salary I me I take 24:17 48,000 it’s not whatever like and if I 24:20 had to I would just take it off if we 24:21 were not cash flowing so I knew I 420k 24:24 number of noi was not including seller 24:27 salary I think was just reporting as 24:30 like pass through income like I think 25:31 that’s what he was doing yeah um so a 25:35 couple things a couple things I knew and 25:37 a couple things I didn’t know that came 25:38 to pass that cost me more money so one I 25:40 knew I was going to really ramp up our 25:42 marketing efforts because you know like 25:45 most people want to buy a business we’re 25:46 Tech guys that’s easy for us if you’re 25:48 doing like anything digital marketing or 25:50 whatever like I knew how to and 25:51 especially in local markets it’s like 25:54 the bar is so low you can really like 25:57 dominate a local market um going back to 25:00 and this just really quickly one one 25:02 aside going back to like some of the 25:04 proxies I used to kind of determine if 25:05 the business was good or not they had 25:08 and they still have um like 200 festar 25:12 Google reviews with nothing under five 25:14 stars and I was like that’s really hard 25:15 to fake like people putting up pictures 25:17 of their garage floors and stuff like 25:19 this is there’s a business here like 25:21 there’s no doubt it has to be but anyway 25:23 so I knew I was going to ramp up our 25:24 marketing effort so the first thing I 25:26 did was I changed our domain name I got 25:27 a new website stuff that people don’t 25:29 like to do um or a lot of people are 26:31 like no no no don’t change anything for 26:32 like six months and on my head I’m like 26:35 why though I know this needs to be Chang 26:37 I’m going to change it so that probably 26:38 layered on maybe like just for the 20 26:42 maybe I don’t know five grand to six 26:44 grand a month um just for that stuff so 26:46 I knew that was going to come out I also 26:48 knew that I was GNA have to hire someone 26:50 to replace the work that the owner had 26:52 been doing so I knew I was going to 26:53 bring on I actually hired someone before 26:56 closing and you know basically I wanted 26:60 to have someone there that I knew 26:02 wouldn’t leave that would that you know 26:04 because like I didn’t really get to Due 26:06 dilcy employees and people how many 26:08 employes were there that there were I 26:11 think there were like four um at the 26:13 time um including the owner so most I 26:17 don’t know if this is just small deals 26:19 but most sellers are very paranoid about 26:23 having you Doe D due diligence on the 26:25 employees they’re like don’t talk to my 26:26 employees and I’m like yeah but that’s a 26:28 huge risk 26:29 huge risk in hindsight like the guy the 27:32 main guy who was doing all the 27:34 installations like he was first of all 27:36 he was paid very very very well but he 27:38 had actually started his own company 27:41 like doing this on the side on the 27:43 weekends and I was like what in the same 27:45 business same industry yeah and I was 27:47 like and he wasn’t even there the F oh 27:49 my God it’s crazy he wasn’t even there 27:50 he was on vacation the first week I took 27:52 over so I couldn’t even talk to him so I 27:54 found this out from like the other 27:55 installer that he works with and I was 27:57 like holy [ ] like this is a and he
27:60 they don’t think it’s a big deal to me
27:01 it’s like the Cardinal saying of like
27:03 being an employee but to them they’re
27:04 like yeah it’s fine I do it on the side
27:06 you make money I make money it’s all
27:07 good I’m like no you you know and I came
27:10 anyway I came to find out that he was
27:12 actually like promoting himself to our
27:14 customers giving his own business cards
27:15 out and stuff so huge risks there that
27:18 that definitely I would you have to
27:21 insist on a key employee due diligence
27:23 it’s just not non-negotiable there’s too
27:25 much risk because if he would have said
27:26 you know what I’ve been starting my own
27:28 thing for a while now and now that
27:30 you’re here I feel like it’s a good time
28:31 for me to just walk out that would have
28:33 sunken us like that that could have
28:36 happened in an all Another Universe um
28:39 I’m sorry I know I got off track you
28:40 want me to go back into the expenses I
28:42 was layering on uhuh well no I now I
28:45 have a question about the employee go
28:46 ahead go
28:47 ahead go ahead go ahead no so did you
28:50 fire
28:51 him I eventually he left on his own um I
28:56 couldn’t fire him for a while because I
28:58 couldn’t find a suitable replacement
28:60 which is crazy you know and some people
28:02 would say well why don’t you just get
28:04 your hands dirty and go in there and do
28:05 it because it takes a long time and
28:07 that’s not where my time’s best spent
28:09 especially when I have two businesses so
28:11 um that was really tough and and we’ll
28:13 move to the second business here in a
28:15 second but the where’s your time spent
28:18 right now on that first business is it
28:19 purely on the digital marketing side and
28:21 you know kind of the the delivery side
28:23 is pretty much doing its thing and
28:25 you’re just really out there kind of
28:26 sourcing on the lead side back to
28:29 a lot of it goes to lead sourcing uh I’m
29:31 so sorry if you hear my child in the
29:33 background by the way I had a baby and
29:35 it December so on top of everything else
29:37 that wow everything’s hit you at one
29:40 time man I know but it’s like I feel
29:42 like you’re like I feel like you’re like
29:43 this Casey like you know from what you
29:44 told me before we started recording like
29:47 you know I feel like you just have to
29:49 trust that you’re going to figure it out
29:50 like that’s like what it all comes down
29:51 to like I can’t know everything that’s
29:53 going to happen I don’t have a crystal
29:54 ball but I know myself well enough to
29:56 know that like I’m GNA figure out a
29:58 solution whatever it is even if that
29:01 means pivoting even if that means you
29:03 know selling the business to an employee
29:05 and having them sell their financing it
29:06 to them or whatever or you know starting
29:08 a new line of business or getting a job
29:10 if I had to right what’s the point of
29:12 all those years I have in Tech if I
29:13 can’t go get a job and so adding a baby
29:16 to that it just I just like would I
29:19 recommend it I don’t know probably not
29:21 but I know I’m going to figure it out
29:22 you know what I mean that’s what it
29:24 takes it’s that entrepreneur man
29:27 that’s so before we on the second
29:29 business last question have have you
30:30 been happy with that
30:32 acquisition I am happy with it it it
30:35 does cash flow well you asked me about
30:37 current margins current margins are
30:39 probably now more like um probably more
30:41 like
30:42 25% I would say um and some of the other
30:46 costs that ended up happening is that we
30:47 have a sales guy I have him do all the
30:50 sales now whereas the owner before was
30:53 was like taking some of them himself I
30:55 don’t want to do them like I don’t want
30:56 to go on like I want him to handle
30:58 everything so that’s another probably
30:59 like 50 or 60 grand um and uh and hiring
30:03 someone else that’s been it and then
30:05 also I think the other thing is like if
30:06 you’re going to get into a business that
30:08 does any kind of specialized work you
30:12 really really need to make sure there’s
30:14 a there’s people there that can train
30:15 the next person and bring someone on
30:17 because I lost so much money like that’s
30:20 why I’m not impressed with my Revenue
30:21 numbers because yeah revenu is growing
30:23 because I’m a good marketer I guess but
30:25 like I lost so much money from po
30:28 quality of work or having to go back and
31:30 fix things there extra materials and
31:33 stuff and like you know it just like it
31:35 just that just sinks you like money is
31:37 Like Oxygen to your business especially
31:39 when you buy it so stumble forward and
31:40 School of Hard not is the best school of
31:42 all so definitely the name of the game
31:44 and when you’re doing consumer based
31:46 work it’s like they have all the power
31:49 so keep that in mind this is audience
31:51 and so for those here’s my question so
31:53 the Google reviews are they staying
31:55 strong oh yeah yeah but they are staying
31:59 strong but if one of it just takes one
31:03 and then you start to erode Equity um
31:05 sorry brand Equity value you know
31:07 absolutely but I mean hey you’re doing
31:09 all the things people tell you not to do
31:10 right don’t go for a business that does
31:12 basically non-recurring Revenue right
31:14 your yours is just fixed Project based
31:16 business right smaller business so you
31:18 have very few employees and very few
31:21 tribal knowledge right so one person
31:22 leaves you have a big gap and ultimately
31:25 you know you step in right you kind of
31:28 have confidence yourself and you just
31:30 roll forward right and again that’s what
32:31 I tell people there’s not a right and
32:33 wrong way to do things right it’s about
32:35 doing it your way and then ultimately
32:37 figuring out how do you move forward and
32:39 continue to build kind of that vision
32:41 and just having the confidence of that
32:42 you either know how to figure it out or
32:43 you know someone that knows how to
32:45 figure it out and so yeah what I like
32:47 mik is your vision on you know having
32:48 more than one company right that’s
32:51 that’s that was your mindset going into
32:53 this I’m not just buying one company I’m
32:55 gonna buy multiple companies and so that
32:57 allows you to go hey I learned from
32:59 number one and now I’m gonna go to
32:01 number two now yours is different though
32:03 you didn’t really have a lot of time to
32:05 learn from number one because you jumped
32:07 in right behind that with number two so
32:09 talk to us about that move crazy like I
32:13 had to I mean think just think about it
32:15 from like a logistical standpoint if
32:17 you’re doing two Acquisitions you have
32:19 to time them so that there’s no overlap
32:22 between the the um transition periods
32:25 right like I can’t like you know have
32:27 one one transition Period start while
32:29 the other one’s still going because that
33:30 transition period is like gold you’ll
33:32 never get it back seller’s gone you know
33:35 what I mean and I I didn’t have they
33:36 weren’t very long transition period it
33:38 was three weeks for the garage flooring
33:40 company one of those weeks was taken up
33:42 by the fact that the key guy was on
33:43 vacation so the seller was like taking
33:46 his role for a week so a whole week was
33:48 gone and so like you know that even that
33:51 part’s like crazy like trying to manage
33:52 that and then you’re worried if one guy
33:55 finds out about the other company or One
33:57 Bank finds out about about the other
33:58 company are they still going to want to
33:59 go through with it it’s like there’s a
33:01 lot there’s a lot of stuff there to
33:02 manage but basically the other company I
33:05 had come across during my search was a
33:07 towing company and this towing company
33:09 was very interesting it was about it was
33:11 only about like 700,000 in revenue or
33:13 that’s what they said 7 I don’t they
33:15 don’t even know okay
33:17 like that it was like that like and um
33:20 maybe 300K and in sde and I was like hm
33:25 okay talk to the broker and the broker’s
33:27 like look be honest with you on paper it
34:31 doesn’t look like this company makes a
34:32 lot of money but in reality it does it’s
34:35 just that it may not all be I don’t know
34:39 maybe it’s not all reported or maybe the
34:40 guy’s doing creative counting who knows
34:43 but something that like would make it
34:44 impossible for you to go to the bank and
34:45 get like an SBA loan nonetheless I tried
34:48 to do that and that took three and a
34:50 half months so like around the same time
34:54 around around April I was like started
34:56 the process and I went into um Loi and
34:59 and um for the towing business and and
34:02 then by mid
34:03 July the after you know that point the
34:06 deal should have been closed by a bank
34:09 um they
34:11 basically they were like oh we got a new
34:13 head of underwriting and he doesn’t want
34:14 to touch this deal sorry so the deal was
34:18 it was 700k Revenue about 300K SD um I
34:23 was buying it for
34:24 550 and the seller was going to um
34:28 Finance I think 150k of it was 150k he
35:32 was going to finance with their assets
35:34 like I tell with the toing company had
35:35 trucks yeah exactly there were and
35:38 that’s one of the things that I’ve
35:40 basically looked at this and like listen
35:42 most Searchers and Banks would run
35:45 they’d be like whoa not clean books like
35:48 I don’t want to touch that what else are
35:49 they hiding but like I looked a little
35:51 bit deeper and I said okay here’s a
35:53 seller who was a little bit paranoid a
35:55 little bit like Off the Grid kind of guy
35:58 you know like like never made his
35:01 company to be sellable you know just
35:04 wanted to whatever run it or whatever
35:06 until he didn’t want to run it anymore
35:08 and if I just buy this and clean it up
35:11 the multiples on towing companies are
35:12 very high usually like 5x if I just buy
35:15 it and clean it up and do nothing else
35:17 already I’m unlocking a lot of value
35:19 there so I had to look at a different
35:22 different way I said to myself okay
35:25 there’s those assets that you said the
35:27 equipment the equipment value Val is
35:28 about 250k at least so already 250k of
36:32 this is going to be covered by that no
36:34 matter what like I could sell those
36:36 trucks today for that much um
36:39 and you know like I knew that he had
36:42 contracts that were you couldn’t really
36:45 fake contracts with roadside assistance
36:47 companies like Geico All State big
36:50 insurance companies like that and also
36:51 the police um local police departments
36:54 so you know the police departments say
36:56 hey there’s an accident come and pick up
36:57 this this car or something you know and
36:60 I knew he had those so I was
36:02 like as long as those contracts stay in
36:05 place and they’re
36:06 transferable like we have something here
36:08 I don’t know I I I I kind of again took
36:11 a bit of a dive yeah went with your gut
36:13 yep huh yeah so what end what happened
36:17 was basically after the bank said no I
36:20 was like [ __ ] I don’t know what to do I
36:22 said listen Mr seller I can go back to
36:24 like another bank or something but it’s
36:26 gonna take another three months or so
36:27 like what do you want to do and he just
36:29 wanted out he want I don’t know why but
37:31 some life reason he just wanted out and
37:34 so I was like I told the broker I said
37:36 look I’m gonna put together the best
37:38 offer I can without using a bank and it
37:41 ended up being like I put 100,000 down
37:44 the rest is finance to me which the
37:46 seller again this this yeah the seller
37:48 finance made me feel really good about
37:50 it because I’m like he wouldn’t do that
37:52 otherwise like why would he do that you
37:54 know so some people do maybe but I I was
37:56 like there’s no way so he’s going to
37:58 Finance 83% of the company to me there’s
37:01 no way that it’s not it’s it’s
37:03 fraudulent or something it would just
37:04 make no sense for him you know and worst
37:06 case I’m out $100,000 which is a lot but
37:09 it’s not like I’m not going to go into
37:11 bankruptcy over that so I was kind of
37:13 reason that way to assess the risk and
37:16 like you said Casey it was a hedge
37:18 against the risk of just having one
37:19 company it was two bites of the Apple so
37:21 I really wanted it and especially if you
37:23 had the $250,000 of hard assets right I
37:26 mean the numbers start to make sense
37:28 from your side of thing and so what what
37:30 did he Finance it at what
38:32 rate okay so this is where I really
38:35 screwed up because I had all the
38:37 leverage and I just I don’t know what it
38:40 was but I this is I I’m so ashamed to
38:43 say this but I’m gonna say it I must
38:44 have felt like man I’m getting such a
38:47 good deal here that this guy has to
38:48 finance this to me that I’m just gonna
38:50 I’m gonna try to make him feel a little
38:51 bit better about it so I did very
38:53 aggressive repayment terms at four years
38:56 at 8% okay which which has really really
38:00 narrowed our cash flow okay because I’m
38:02 basically repaying like you know 11
38:05 Grand a month so that’s a lot you know
38:08 what I mean and uh we’re doing it but
38:10 damn but it’s a great company I had to
38:13 do renegotiate always know you can go
38:16 back and renegotiate pay him a year
38:17 maybe I will and then go back and tell
38:19 them hey man economy blah blah blah
38:22 renegotiate I think I have to because
38:24 it’s not that it’s not that the business
38:27 is able to support it but it’s just
38:29 like it’s like what’s the I don’t know
39:31 it just doesn’t give you the cushion so
39:33 here’s another thing that I I want
39:36 people to know about buying a business
39:37 without a bank you it doesn’t matter
39:40 that that business so okay the towing
39:42 company did a stock sale not an asset
39:45 sale because all the contracts and stuff
39:48 I didn’t want to have to go to the
39:50 police department and say hey look I’m
39:51 the same company but really it’s a
39:53 different company you know if they said
39:55 no sorry you’re not the same company
39:57 like you’re LLC it’s a different company
39:59 then what then the whole all the values
39:01 eroded so we did a stock sale and the
39:03 reason why that’s important is because
39:05 even if you do a stock
39:07 sale you don’t get the benefit from any
39:10 banks so you want to go get a line of
39:12 credit or something you don’t have it
39:14 you can’t get it you need at least three
39:17 or four months of of you know banking
39:20 statements and stuff like that just to
39:21 get a line of credit from like you know
39:23 one of those like tech companies like on
39:25 deck or something like that so that’s
39:27 really four months is conservative
39:28 usually it’s like a year so yeah so
40:31 that’s like like think about it I put
40:33 all my money into just making the deal
40:35 work I had very little left just for
40:38 like you know operations and stuff and
40:40 working capital and that’s where we
40:42 started okay that was not a good idea on
40:44 my part but luckily the business was
40:46 from day one was just bringing in cash
40:48 and stuff so like I was like okay like
40:52 like it ended up working out but you
40:53 have to be aware of that because SBA
40:55 Loans will give you the working capital
40:57 loan line of credit but like you know
40:59 doing a Sal financing you have to
40:01 negotiate that into the deal somehow oh
40:03 and that’s where I mean structuring
40:05 those is always so critical even having
40:06 like noi triggers where if it the
40:08 company’s making this much then I’ll pay
40:10 you more but if it’s making less
40:11 positive cash then I’ll pay you less and
40:13 there’s a lot of ways to do that we
40:14 could do a whole podcast on that but uh
40:16 before we run out of time I guess two
40:18 quick questions are you H first are you
40:20 happy with that acquisition kind of
40:22 given where you are now you’ve gone
40:23 through you you you have a good pulse on
40:25 the business how do you feel about it I
40:27 love Towing honestly it’s the greatest
40:30 thing if you could find a towing company
41:31 where the deal pencils and the math
41:33 Works you’re going to just love it
41:35 because you just get demand all the time
41:39 like I don’t have to go generate demand
41:41 I just have to manage it that’s it every
41:44 day we get tons of calls from GEICO and
41:47 all state and all those other places um
41:49 um even like cash calls which would be
41:51 like you calling for a toe and then plus
41:53 the police calls and it is fantastic
41:56 it’s also not a super specialized skill
41:59 to tow like yeah it is like you have to
41:01 learn but it’s not like I couldn’t bring
41:03 someone in who’s reasonably physically
41:06 fit and teach them how to tow cars of
41:07 course you could that’s completely
41:10 different from garage flooring so I
41:12 would say Towing love it garage flooring
41:16 I’m happy that I have it because I’m
41:17 learning but it helped what it really
41:20 helped me learn was what not to buy in
41:22 the
41:23 future outbound leads right it is very
41:26 different world between those two so you
41:29 know that process that you’re going
42:31 through is all about that learning curve
42:33 right and so there’s not a school for
42:35 this you know we we some many of us
42:37 didn’t have you know all of the skill
42:40 sets and the ne and all the things you
42:41 need to be this considered super
42:43 successful acquisition entrepreneur but
42:46 you got to go through the motion and for
42:47 those that are listening that haven’t
42:49 gotone off the couch they haven’t closed
42:51 the deal you know Mike’s a perfect
42:53 example of somebody that just went out
42:55 and did it and is learning while he goes
42:59 and I’m telling you it may not be your
42:60 first business it may not be your second
42:02 business but I am sure that we will
42:04 touch Bas in the next time and you’re
42:05 gonna say hey I’ve got my third business
42:07 I know that’s the question before we
42:08 wrap up I mean you know what’s next for
42:10 you are you just gonna kind of hunker
42:12 down where you are and just get these
42:13 things a little bit more cash flowing or
42:15 you already out there hunting for the
42:17 third I am definitely working on getting
42:19 them more cash flowing like I’m already
42:20 about to open up another yard for the
42:22 towing company I even launched a new
42:24 brand for it that’s separate that’s just
42:26 like to to have like festar Google
42:29 reviews you know none of like the
42:30 inpound stuff where people leave you one
43:31 star reviews all the time um and with
43:34 the with the garage flooring I want to
43:35 I’m expanding into uh the Tampa area um
43:38 and I’m actually I’ve actually changed
43:41 the model to be pretty much all
43:44 subcontractors so we’re just like a
43:46 sales and marketing company which is
43:47 good because I know how to do that but
43:49 the other Roofing a lot of the roofing
43:50 businesses are that
43:51 exact totally changed and you know what
43:54 it I just want to say this because I
43:55 think a lot of people look at Roofing
43:56 and stuff it totally changes the dynamic
43:59 when you become the customer so you
43:01 become the subcontractor’s customer and
43:03 now you don’t pay them until they’ve
43:05 done it the right way whereas if you’re
43:07 doing the the delivery the customer
43:09 doesn’t pay you until you’ve done it the
43:10 right way and you see know what I mean
43:12 so I love the dynamic anyway but um the
43:15 next one I know that it’s going to be
43:17 something not super consumer facing
43:20 where someone’s going to be like oh my
43:22 God there’s like a little like divot
43:24 here like what is that and I’m like yeah
43:26 it’s your concrete floor it’s what it
43:27 looked like before we coated it you know
43:29 like that kind of stuff where you can’t
44:31 make them happy but if but at the same
44:33 time you can’t win by by not making them
44:35 happy so those things would be like and
44:38 I’m just speaking out loud I haven’t
44:39 found anything yet like this but like um
44:41 septic tank cleaning stuff like that
44:43 they was going to be like oh my God you
44:44 clean my septic tank poorly they’re only
44:47 going to care about if you showed up on
44:48 time you know U I’m looking Dirty Jobs
44:51 yeah there you go land clearing
44:53 demolition um even things that are like
44:56 super Niche like uh like fuel hauling
44:58 really interests me um the the that kind
44:02 of stuff like I want something where
44:03 it’s like where the something where like
44:07 the equipment cost is so high that that
44:09 by itself is like a barrier to entry
44:11 barrier to entries are awesome and that
44:12 was really one of the things that was
44:14 the most attractive about the chrome
44:15 plating business we bought I mean it’s
44:16 there’s a lot of Machinery there and
44:18 there’s Fair few guys that are going to
44:19 go in that space yeah and I was going to
44:21 say you know one last thing before we
44:23 wrap right Houston is the mecca of
44:25 towing companies and so you should
44:26 definitely come check us out here and go
44:28 find one here hang like that yeah that
45:30 makes sense I love it so that said let’s
45:32 move on to our rocket round so you know
45:34 for those listeners right we do three
45:36 questions to every guest the same three
45:38 questions so first question what do you
45:40 like to do in your free time so I have a
45:42 baby which you might hear I don’t know I
45:44 hear it um I honestly it’s crazy because
45:47 I didn’t even want I this is gonna sound
45:49 mess up I didn’t really want to be a dad
45:50 I was like I’m not ready I’m buying
45:52 these businesses but now that it
45:54 happened I just want to be with them all
45:55 the time I love hanging out with with
45:57 them so I know it makes me a little bit
45:59 boring but if my baby wasn’t here I
45:01 would definitely be um like a top golf
45:05 or anywhere where I can drink and play
45:06 at the same time right so that’s my
45:08 thing you’re gonna be that Dad that
45:10 tosses the kid in the towing truck next
45:11 to him and teaches him how to go get the
45:13 job oh yeah oh hell yeah yeah
45:16 absolutely so what’s your most memorable
45:19 moment in your
45:21 business I think the most memorable
45:23 moment uh was when I was
45:29 I was able to actually take out money
46:31 from the business like aside from my
46:33 salary and I was like wow we have like a
46:35 surplus of cash here like I could I yeah
46:40 and I was like okay like here’s 20 it
46:42 happens it’s working yeah like you know
46:45 like look the business are never going
46:47 to cash flow how you think they’re going
46:48 to cash flow when you buy them like I
46:49 don’t know I don’t see how that there’s
46:50 just so many things you don’t know about
46:52 until you get there but like that was a
46:54 huge thing where I was like yes like
46:56 something above and beyond you know is
46:58 working here awesome and last but not
46:01 least favorite podcast or resource to
46:03 kind of help you in the journey so I do
46:05 like podcasts like this um there’s
46:08 another one that I listen to called um
46:10 acquiring minds um which is cool I was
46:12 on there I really like the Prof G
46:14 podcast with Scott
46:16 Galloway I feel like Scott Galloway just
46:18 really talks to like Tech guys like he
46:20 really resonates with like the younger
46:22 kind of tech guys but he’s he’s very
46:25 smart he always gets you thinking and he
46:27 has so much much great commentary on
46:28 like not just business stuff but also
47:30 like just kind of like um social and
47:32 World commentary too so I really like
47:34 Scott Galloway awesome thank you very
47:37 much so I guess that’s that said last
47:40 question before we wrap up how can
47:41 people get a hold of you so I’m on
47:44 Twitter um it’s Mike the Lumix um it
47:47 looks like an anonymous account but it’s
47:49 actually me you can also email me at
47:51 Michael cravy
47:53 gmail.com uh you can find me on LinkedIn
47:55 so yeah the Lum me
47:58 honestly I swear to God it was like I
47:00 was like I don’t know if I was I don’t
47:02 know what I was doing but it was like a
47:04 an online Persona I was going to make to
47:06 like do podcasts but like be able to
47:07 like speak freely without being worried
47:09 about like my tech company’s like I
47:12 don’t know like firing me for saying
47:14 something like Politically Incorrect or
47:16 something I don’t even know and I just
47:17 stuck with it I’m like you know maybe I
47:19 am a lumic sometimes so anyway so Mike
47:22 I’m super impressed man with your story
47:24 what you were able to pull off and what
47:25 you’re you’re continuing to do it sounds
47:27 like man you’re going to be one of those
47:29 guys that’ll figure out whatever it
48:30 takes to get to the to make the company
48:32 profitable make it work and get to your
48:34 third company thank you so much I’m
48:36 trying man but you know what like I will
48:38 also resign myself that whatever happens
48:40 happens like I’m gonna do my best but
48:42 that’s all I can do and attitude is what
48:44 makes it great absolutely no definitely
48:46 look forward to hearing more on your
48:47 journey up to come so congratul on the
48:49 success and definitely look forward to
48:50 speaking with you soon congrats on the
48:52 day all right y’all take care thanks the
48:54 GD Mike thank you for listening to the
48:56 m&a Launchpad podcast if you’ve enjoyed
48:58 today’s podcast and would like to
48:59 support us please leave us a rating and
48:01 a review after you listen I’m Casey menu
48:03 and I look forward to talking with you
48:04 next
48:07 week
