Couple Acquires Company 6 Months Into Kyle's Program

So tell me a little bit what you bought and where it is.

We bought a plumbing company that has actually been around since 1929. Whenever we first bought it, we didn't think it had been around that long. And we actually, we knew it had the current. The guys we bought it from, two brothers for officially formed an LLC in 2006, but their father had started the business in 1949, believe in 1949. And. And at the Christmas dinner this past December, we invited the former owners, of course, and their parents to the Christmas dinner. And we met their father, who said they started at 1929, and there were some periods of time that it was not operational. But it had been in their family through their father and grandfather from that long. So we're just delighted to carry on that tradition. And there are still some family members working and the business with the last name. And one of the brothers who we bought it from, his son's graduating high school this year, and he wants to come straight to working with us as an apprentice. And so we're delighted about that. But we live in Metairie, Louisiana, which is right next to New Orleans. And our business that we bought is In Lake Charles, Louisiana, 200 miles to the west.

Very cool, very good. And why plumbing? What was the.

So a plumbing company. We weren't necessarily specifically looking for plumbing. We were looking at home services. However, plumbing wound up being a really good fit for us because my father's a master plumber. And when you buy some of these trades, you've got to have the necessary licensing for that. And my father did. So we gave him a small equity position in the company. And also he consults with us as well to help us grow the company. Much better than having to do that with somebody else who we don't know. So everything came together. We would have bought an H Vac company or a landscaping company or something like that, but that was the best option for us. And so that's how we got into it. And it's been great.

Tell me about your search. What was the search like? Who was doing the looking, who was doing. How did you break that?

It was probably me.

More.

He helped when he could, but he still has his corporate America job. And so it was more me. And I was pretty dedicated and focused on. I would put two hours a day, seven days a week. It didn't matter what day it was, holiday or whatever. Generally it was 10am to noon. I would sit down and I'd be on biz by sell bizquest, the brokers Websites like Sunbelt, Trans World, those sort of things. And it was just a diligent everyday thing and I made it a. I absolutely made it a priority to call a new broker once a week, someone I had never spoken with anywhere in the country just to speak to them and to as they say, get those reps in. Of talking to the brokers and explaining who we are, what we are, what we're doing, what we're looking for that really made me comfortable talking to brokers and explaining, explaining exactly what we're doing and why. And then I also, I traveled and met with a few brokers face to face and took them to lunch or breakfast or something and actually popped in on some brokers in the Gulf coast and the ones who weren't answering my phone calls or emails, I, I traveled a couple of times, two or three times and went and popped in and introduced myself. So it was just a diligent every day, every week, sticking with it, looking up, making those connections with the brokers.

She was very regimented and she set goals and she had a goal to be under LOI by a certain date and we were. And she completely threw herself into it, embraced the process and did all the things that are necessary, listened to what we were told, went through everything that needed to be gone through and that's what happened. In fact ironically our first of conference was in Scottsdale and that's where we saw this company on Biz by Sell and it was interesting and then that started the process there and within. Correct me if I'm wrong, within 3 months of joining we were under an LOI correct.

We joined the EWC mid April, Scottsdale was mid May, this was last year and I request the day we saw it on Biz by Sell I requested the NDA that day as we're sitting in the session, actually had my laptop up working and. And the broker sent me the SIM that evening. We reviewed it that night actually before we went to dinner that night with everyone in Scottsdale. We ran upstairs and looked at the P Ls quickly and the SIM and everything and sent an entrance to the broker, we would like more information and by the next day he had sent us three years of tax returns, the full P and ls, I mean all the information. And we took about two weeks to talk to several people. Of course we got on all the calls, we were religiously on all the weekly calls and talk to as many people as possible. And within two weeks of Scottsdale we submitted the LOI approximately, something like that. And we Met with the sellers on a. We drove over to Lake Charles and spent the night, met with the sellers in the morning. And that was a Wednesday. And when we finished meeting. No, actually was in the afternoon because when we finished the meeting, the first meeting with the sellers, it was actually Wednesday evening, and Kyle's call had already started. So when we got in the car to head back home, we opened the laptop and said, hey, y', all, we just finished the first seller meeting and we wanted to tell you all about it. So. So we did.

She was. I had the money map in the car.

Oh, yeah, yeah.

Going through everything with Kyle and the group. It was. It was awesome.

Yeah.

So we're in the car driving and went through it and it was funny because, you know, we kind of said, kyle, if all this breaks out, does this fit what you're looking for? He said, yes. And then we put the pedal to the metal.

Yeah. Did they we submit? I had the loi drafted before we met with them because I. We knew it was a good fit for it. It just. It worked. It was right. We had the LOI drafted and after we got on calls call on Wednesday night, we went home that night, completed the loi, emailed it to the broker, and he said. He responded the next morning and said, thanks so much for this. We appreciate it. I'm gonna. The sellers really enjoyed meeting you two. He said, we're gonna talk about this. And then he calls me back the next day. It would have been the following day, Friday morning. They had asked 1.7 for the business. And we doing the money Math. We offered 1.5. And he called back and he said, they're just going to be really firm on that 1.7. And we said, well, that's, you know, I've said I'd already sent him the money math, the PDF of the money math, the broker. And I said, that's what we're going to be able to pay. You know, unless you want to do some extensive amount of seller financing or we want to get creative with it, this is where we're going to have to be with debt service. He said, okay, let's let. Let me ponder it. And he had appreciated the money math PDF I sent him, really did. I found that brokers do. And Monday morning they accepted our loi.

You know, it's interesting too, is because of this group, all that was possible because the training from Kyle and the capable folks he has with him, you know, in addition, you know, as we continue to work through this and negotiate, we're Also because, you know, we talk about operating capital and all the necessary things that have to go on with that, we were able to negotiate an additional $94,000 in operating capital after that. So we actually got the company for about 1.4 when you factor that in. And so. And that's also because of the training here and Kyle beating the drum about you have to have money in the coffers. So it's just, it's just everything we've learned, we were able to apply and it works.

And not only that would have given you a little, slightly better deal that could have ruined your first, your first 30 days, your first 60, your first Miami transition. I had you, Matt, you would. Who would have known that?

Absolutely.

Well, best case scenario, we would have had to find. We would have had to get that extra money somehow in the loan from the bank, which we'd have been paying interest on that best case scenario. Worst case scenario. Yes, sir, you're exactly right. Because that's the most difficult part when you're going. When you buy a business. What we've learned, and I think Kyle describes it as a J curve at first because you don't have any receivables because they're keeping the receivables if you haven't negotiated that way.

Cash free, debt free money.

Yeah, Cash free, debt free is what they're going to tell you in transactions of this size. So the money is gushing out without any money coming in. And so it's really important to have enough of an operating fund to get through that first several months.

And that's what you're in right now. So 10 months ago you joined you. And then within a, what, solid two months you had an LOI.

Yeah, it's closed mid October. October 17th.

Yeah.

So three months ago. Right. Of like almost four now. So you're. That's your credit 90 day. What was that 90 day like walking into this company about?

Well, that's a, that's a great point. Because if we were just talking about that, Kyle talks about how we, we run in 90 day sprints.

Yeah.

So if you think about it, in, in Arizona, we actually made our initial contact with these folks. Well, three months later in Dallas. Right. We're in the heat of the, of the lending process, the SBA 7A loan process, which is something we try to help a lot of folks with here because there's a lot of things you need to know about that program. So we were in the heat of that battle, you know, and then three months later. Right. We're in Vegas and we had just closed and now here we are three months later and now we're working through the business and doing what we need to do to automate it. And that's the thing a lot with home services, they don't, they're, they're archaic in some respects and they don't have the necessary automation. So now here we are three months later working that through and getting it where it needs to go. So it's interesting that literally 90 day sprints have taken us through each phase of this.

And tomorrow with the 90 days. Yeah, about 85. About 85. 90 days almost up.

It's great.

That's like, it's almost like, you know what he was telling you.

He's almost like he knows what he's talking about.

Yeah. We did not have much access at all prior to closing. The broker was just very protective and the sellers were very protective because supposedly they had had a buyer back out or it not fault this financing didn't work or I don't know exactly what the story was. So the broker was very protective of the sellers and the sellers were very protective of the business and their comp. Their employees. So we were, we did not walk well. We walked the after hours. We went before we closed on, on like a Wednesday. We walked it after hours on Tuesday, the night before. Walk the property. We had been by there before, but not in the business.

So that was, that part was a little bit scary.

It was terrifying.

We didn't know. And the next business we buy, we're going to really fight for more access. But that part, you don't know your employees. And that was one of the biggest fears we had. We're going to come in and people are going to quit and then we, we're going to have all these problems. And that's another thing. When we kind of talk to people about it, you have these nightmare scenarios and it didn't happen because we were going to treat everybody right. We kept the owner, you know, one.

Of the two owners, one of the.

Two owners right in, in the, in the fold for four months so that we have a smooth transition and it's worked out quite well.

But we did have a lot of knowledge on paper of the business. So we, we asked a lot of questions. Of course there were always. Could have been more questions with. Could have asked. But we asked a lot of questions like we wanted to know what financing were they using, QuickBooks or you know, anything. What were they using? Found that out and we got a good kind of Broader picture of some things like that going on. How are they. What are they using for payroll? You know, who's the. And they were handwriting checks for payroll because I knew I'd had. I think it was John Murphy. I think. I think John Murphy was a the. He said. I said, what would you say the top five things I need to look out for right after we close? He said, well, payroll's number one. And I said, that's correct. So we had that already ready to go with adp and that was good. But it was a. Since they really had no systems in place and we're not doing anything, it really was kind of like starting fresh in a lot of ways. I mean, they were handwriting their timesheets and so I got them to use something else. They were handwriting time checks. I started with ADP immediately. They were with an old, antiquated, more than 10 year old QuickBooks desktop version. And I immediately said, nope, we're using quickbooks online.

The challenge now is in this phase is, you know, there is always resistance to change. And one thing Krista and I have always been good about, I guess because of our backgrounds, is we've always embraced change. It doesn't necessarily mean it's fun, but you embrace it. And so we're having to change that culture within the organization. Hey guys, you're gonna have to have these iPads out on the road and here's why and here's how it's gonna benefit you and here's how it's gonna benefit the company. And you know, and so that. Those are the challenges that we're going through now. But. And to Kristen's point, we had a business plan in place before we even closed on the. On the business because we did so much research and we actually sent that information to Kyle because we wanted his feedback and he's been wonderful, by the way, checking in on us and all of that. So it just, it's. I'm sure it could have been a more smooth process, but I don't have any complaints.

Well, you wrap up the introduction process, putting some processes systems in place. What's. What's the next is also.

We have just now finally become live on service titan, the CRM system that handles invoicing and timekeeping and scheduling, dispatching so much of the office it. It handles. We tried to be live with that within a month of closing on the business, but serviceitan is going through some growing pains themselves. We've had some delays on that. So we've just two weeks ago, just two weeks ago gone live on Service Titan. So that's kind of our next big 90 day sprint, I guess, is the getting Service Titan up live. The guys have gone through all their training. They've been great about it. They have, you can tell they're scared of it and they're, they're terrified of something. It's so new, so different, but they're trying and so they have a really good attitude about it and they, they want to make us happy and they don't want to disappoint us. And so they. That's going to probably be the hardest thing I would say in this 90 day period is getting that going smooth. I actually spent half of yesterday on Zoom with Service site and, and QuickBooks getting those integrated. So we're in that process now.

But right, it's, you know, right now, so we're really just focusing on making sure the blocking and tackling is happening correctly. So as we, as we, as we integrate this technology, you know, we've got to get all those wrinkles out. There's so many things we want to do. There's so many things we know we have to do. Some other things that we have done though, we've, we've revamp the website. When we actually had a workshop in Wisconsin, David Kozlarik was part of, he was wonderful because he looked at the existing website and he had so many suggestions. So we took his suggestions. We totally revamped the website. We still have things to do, but we totally revamped the website. We've got a new logo.

We took extensive notes from Dave because in Wisconsin he pulled our website up and funded the whole group and made all the critiques. And we told him, like, this is not us. We did not make this. We have made no changes yet. But be brutal, be brutal. And he was. And so Ron took extensive notes while I listened and we gave those extensive notes to the people who helped us edit the website and do the logo. And they implemented all of it and it looks great, it's a lot better.

And that type of thing is gold. You know, that's something. If you're not part of this group, you just don't have that kind of access. So, you know, we're able to take those things and move the ball forward. So once we get through this integration of Service Titan, then we can start, you know, we need to make some capital improvements. The trucks are getting old, so we got to figure that out. Then we have to get enough of them so we can justify doing a wrap and having the Trucks wrapped properly. So we've got rolling billboards around town. You know, we got to. We got to do SEO. There's a lot of things we have to go through, and we want to do it all today, but we know we can't.

That's right. Well, it's kind of being. These are nots. I mean, if there's somebody new coming to this or not, there's so much Kyle locks on through. What's your advice to someone if this was their first or not? How should they process this?

Learn what the buy box means and why it is what it is. Talk to as many people as you can about that, about why it's set up the way it is, why it's important to stay within that and don't waste your time on things that are far outside of it. And you can learn a lot of these other things after, but because I think it'll save people some time. We've seen some people go off on some tangents and waste some time over and over on things that are just so far outside. Buy box, buy boxes, your bible. Stay there. It's the gospel.

Also immerse yourself in the process. Yes, get on all the calls.

Every call. Get on every call.

Matter if you've got a deal or not, because other people do and you're listening and you're listening to the various callers, whether it's Jake or Michelle or Kyle or whoever it is, break those deals down and talk about why this is good, why this is not good. Sometimes something may fit the buy box, but it's not necessarily right. You know, he puts those guardrails out there so we don't screw up. So immerse yourself in the process. Get on all the calls, go through all the information and really learn the language. And then do all the things that Kristen did with brokers and everything, and it will happen. It's a numbers game.

Those calls are why I was comfortable calling brokers and talking to brokers. And those calls are why I knew what to say and what to ask, what to listen for, what to be curious about. But when you're here, take advantage of the people like us who've been here a little while, certainly the people who've been here longer and done more. Take advantage to walk up to people, meet them, shake their hand. Where you're from, what you're doing, what you're looking for, what your background is. Because all of us here, who in our position, who now we've done it, we're happy to help. We want to Help. And so you're not going to upset anybody by just walk up to someone, even if they're in a conversation, it's okay. Say, I apologize. I'd like to meet you. I'm new here. We welcome that.

This is the most cultural collaborative group I've ever been a part of. It's really unbelievable. People go out of their way to help. And it's great because now we've been around a little bit and we've done this and people are coming up to us and wanting to talk to us and ask us, and we're happy to. You know, rising tide lifts all boats and. And so we're just. We're blessed to be here and affiliated with ewc.

But anything you said, a cry of Kyle's the canner.

Kyle, thank you so much. We love you like family. We appreciate you. We appreciate your guidance. We appreciate you encouraging us along the way. We couldn't have done it without you and this amazing group you've created here.

Kyle, you've changed our lives. You're enabling us to make our family's lives better. The people you don't even know whose lives you're touching that are in our lives. And it's because of all this that you put together and all the things that you do and the selfless nature of who you are. And I can't. I can't thank you enough. And. And it's been a wonderful journey and we're looking forward to continuing this journey with you for years to come.

Yes.

We're doing breakouts. It's funny because we've got so much more to talk about.

Yeah.

Each 90 day sprint because of what we're going through. And so, you know.

Yeah. In the Ambassador breakouts and what was it? Vegas.

Yeah.

I lose track of where we.

That was SBA 7.

It was all SBA because we just.

We. We knew it and we. We still know it, but that was top of mind.

We were less than a month from closing on it when we were in Vegas, and so that was all we were thinking about.

Most people are going to have to use SBA 7A. And there were things that we weren't aware of and nuances, and we want to make sure we get that information out. And, you know, now it's. Now it's. It's more the. The acquisition and then the transition, the operational aspects now, you know, so. And we're. This isn't our last one.

Oh, no.