Growing a Home Service Business From 0 to a $7.6M Sale in 5 Years With Teddy Slack | Ep 96

Welcome back to the show, I'm your host, Phil Risher. And on today's episode we're diving into how to build, grow and sell a multi seven figure home service business in under five years with Teddy Slack. Thanks so much for joining us today Teddy.

Yeah man, thanks Phil. I appreciate you having me on, man.

For sure. So. So Teddy has built five home service businesses to seven figures in 12 months. He's the founder and CEO of Modern Contractor and the host of the Modern Contractor TV podcast which is designed for ambitious home service business owners with real world experience building contracting businesses. Teddy focuses on actionable strategies and operations, leadership and marketing while pulling from his experience building, scaling and selling a multi seven figure home service business. We're really excited to have you on Teddy. So can you take us back? Like first off, like how did you even learn how to scale these business? How did you learn about the trades? How did you get into this stuff?

No, absolutely man. Yeah. So just kind of give you a quick history. So I grew up, my father was blue collar. He started as a landscaper, bootstrapped his way up into a environmental business. He does commercial environmental work. So he does heavy big tank work. So 20,000 gallon, 30,000 gallon tanks at DPW yards, gas stations, industrial sites, this type of stuff. So I grew up working with him as a little kid, I mean I'm talking four or five years old. My grandfather was in the topsoil business. He would deliver topsoil to houses. He had his own yard re screen topsoil. So I grew up around heavy equipment, excavators, dozers, dump trucks, that type of stuff. Out of college my father said we want an opportunity to start a residential division. We'll do residential oil tank removals and remediations. So I had no real experience. I went to school for business and marketing. But as everyone knows, you don't really learn much in school, right? I didn't learn anything that was really applicable in real world. But when I came out of college he said here's a yellow pad and a pen and a phone and a desk. Literally that's all he gave me. My father is very low tech, very old school. There was no computer, nothing. He's like, if you get the phone to ring, we will start this division. He, he didn't invest a bunch of money, just like get the phone in the ring, here's your desk, see what you could do. So this was in 2005. So at that point I started PPC campaign because he was doing yellow book advertising and stuff. And I'M like, listen, we gotta get on the computer man, we gotta get on the Internet. You know, that's where we're gonna generate some leads. And that's exactly what happened. PPC was taken off. None of the competitors at the time were doing it or very small amount of the competitors were doing it. So we scaled that to 1.3 million in top line revenue within 12 months from nothing. I mean I created the logo, I created the website, I created the brochures, the, you know, everything from scratch on that. And that was a family run business. My mother was involved in the business. She was the bookkeeper, she was the finance person in that business. So she taught me about numbers and tracking the profits and we would stash the profits away and we would buy equipment. So slowly we built that business over time. Unfortunately, a couple years later, my mother passed away of cancer. So that was a rough time for the family. Kind of drove a wedge through the, to the family and unfortunately my father and I started to, you know, really not communicate well. And you know, again, he's old school, I was new school. I had all his ideas, he had other ideas. So we wind up parting ways and you know, it's tough working for family. Right. So I went off on my own. I started my, my own residential oil tank service company, 100% on my own at that point. I had $8,000 to my name. So I had to boot trap this thing. I had to make it work with eight grand. I mean that's, and I needed hundreds of thousand dollars in heavy equipment. I needed to go out there and get the insurance. So eight grand, you know, that's hard to stretch. This is around 2009. And I did it by basically renting all the equipment. Initially I got to my first client, my first client paid me like $15,000 in it for environmental cleanup. And now I had 15 grand in the account and then slowly built it up. In the first year, I believe we did about a million and a half in revenue, top line. And we did that in first 12 months. Again, no name nothing.

Yeah, that's amazing.

Yeah, I was 28 years old and you know, the problem is when you're a young kid and you have two successes like that back to back in a short amount of time, it could get to your head, you know, and that's kind of what happened to me. And then I went in all these different directions. And over the next, I would say from basically 2011-18, like a seven year period, I started a bunch of different companies and a Bunch of different industries with other friends and people I knew that I invested in. And you know, I just went to too many different directions. You know, it's it as you know, you can't chase top line revenue. And that's what I was doing, you know.

Yeah, that's tough. So in 2018 you started another business. I think that you ended up scaling and then selling. What was that business?

Yeah, so after I went all these different directions and I learned like, hey, you got to focus, man. You got to like really kind of bring everything back to your core, which was at that time residential oil tank services. So that was my main business. So I was like, you know what, I'm just focusing, I'm hyper focusing on this business and I'm not going to do anything else. I mean I'm talking, I did, I went into the real estate, I flipped 24 homes. So I had a lot of, you know, construction experience, managing all these houses under construction and all at the same time while running my tank business. So I was like, you know what, get rid of every, all the noise and let's hyper focus on this business. And that's what we did in 18 and from 18 to 22, basically in a, you know, four year period, we scaled from 0 to 4 million at a 43% EBITDA. So we're at, we were kicking off about a million six in profit every year, which was, you know, in home services, pretty much unheard of at that, that level, you know, but it was a very niche industry. So you know, I changed a lot of the pricing around. I was doing flat rate pric and we came up with a lot of, you know, unique ways to generate high profits. And I wind up selling that business for five times multiple in 2022.

Yeah, that's the story that I really want to dive into because all those things that you just said, everyone wants that. So I want to try to unpack it a little bit. So people that listen to this show are going to be like 1 to 10 million revenue type businesses. So let's say you know, the 0 to 1 million kind of the slog the hustler mentality. But then.

Yes.

Can you tell me a little bit about like from that 1 to 4 million, like what did you have to fix in the business? What did you have to hire? What did you have to do? And also how did you maintain your profits? Maybe the first part, like how did you scale from 1 to 4 and then we could talk about the profit piece.

No, absolutely. And yeah, that's exactly it. So the first, like 15 years of my entrepreneurship career, you know, I didn't know any better. I learned from an old school father who was just hustle and grit. You show up early, you leave late, you know, and you just work harder than everybody. That's what I was taught. And, you know, listen, he gave me the best work ethic ever. That's what he gave me. But when it came to actually running a business, when I start reading books back in 2018, I start understanding how people grow companies for value purposes. So not just so much my income, it was like, all right, let's, let's tweak this thing and let's grow it. And we had the intention of selling it. So I just deep dived into every podcast, YouTube, I mean, book you could get your hands on and just read and educated myself. And once I did that, I learned that the number one driver for value is getting yourself out of the day to day. So I started to slowly get myself out of the day to day, which then opened me up for working on higher level stuff like, like really optimizing the pricing in the business, really drilling down that. Prof. Because the second biggest driver is your profits, right? The bigger your profits are, the bigger multiple is going to be. So those two things I started hyper focusing on. And then, you know, I started a YouTube channel for that business, which I would have never had the time. You know, I was the guy that was in the excavator, I was in the dump truck. I was out on the job doing the sales. I mean, I was doing a little bit of everything, just like everybody does in the beginning. And then when I started stepping back from those and I had more time to think strategically about, oh, how do I improve the profits, how do I, you know, grow this company in different ways? Think. You start thinking outside the box, different marketing campaigns you could run because you have the mental, like, mind power to now do those things as opposed to if you're out in the field, you just can't do it all, you know?

That's right. Yeah. You start to buy back your time, which allows you to free you up to do things that's more unique, more high leverage for your business. The one that a lot of people end up holding on to is sales. And I'm curious, I'm curious to hear, like, to go to 4 million, you probably couldn't be the only sales guy, but I'm sure you had some strife of building a sales team, making sure that it's good. Like, can you walk through like what that looked like? I'm guessing zero to one. Maybe you were the sales guy, but then maybe you had to build that out and like what, what did you do and how did that, how did you progress?

Yeah. So in my industry, the way I was taught, again old school, you know, the phone would ring, we'd run out to the house, meet the person on site, and we would try to sell them on a tank rule. Because that's usually the majority of the leads were coming in from room moving oil tank. But that's not really where the profit was. The profit is when the tanks would leak. And then you do a big environmental cleanup. That's where you're getting 10, 15, 20, sometimes six figures to do an environmental cleanup. So I was initially running out to every and I'm like, this is just crazy. I'm all over New Jersey. I'm running all over these houses like they're not, I'm not closing even half of these jobs. I was like, this is a waste of time. So I started, I would start looking basically like, how do I improve the sales process? So what I did was I started using Google back then and I would just pull up the house on Google Maps and I would just zoom in on the front and I would be able to tell if I could get my equipment there. Just basically access. And I would ask the customers a couple questions and then I start selling them over the phone. I would email them instantly a quote. When all my competitors, it would take two, three days because they were running the same playbook, they would run out to your house, look at it, go back to their office, put an email together. It was like archaic when I was like, I could have you an estimate in five minutes, Boom. My closing rate went through the roof. So now I'm starting to close more jobs. So yes, initially I was doing all the sales, but then as I start reading, I'm like, oh, I got to get myself out of this. How do I do this? So what I did was I broke up the services. So the oil tank removal sales were pretty basic. It was pretty, you know, you didn't need too much lingo really. And you know, you didn't need too much, you know, industry, you know, education in order to do it. So I actually trained one of my in house admin girls to take those calls. So I'm like, here you take the easy calls. If the tank leaks, then I had brought somebody in that I trained who was doing the higher level stuff, the remediation work, the investigation work, which you Know was the higher end jobs. And then I just trained her over time and eventually I got myself out of sales.

Okay. So the CSR could eventually kind of answer most of the questions and then get it to the point where you could give it to someone else to either, hey, pull this picture, if it's this, then give them this thing and basically like build an SOP process and then you, you don't necessarily have to talk with them and sell it. It's more speed than anything. And then getting the right price, that's profitable.

It sounds like, well, exactly when the other thing I changed and this is what really took us from basically 2 to 4 million in 12 months. We doubled in 12 months is because I changed the entire pricing structure of the industry. So the way it worked in the oil tank industry is, you know, the competitors you would call, you know, all the companies and you say, I want to remove my oil tank. And they say, all right, well it starts at let's say 1200 bucks. But we don't know how much the permit is. We don't know how big your tank is. We don't know what's inside your tank. We don't know if it's under concrete or if it's in the driveway or if it's hard access. So there's all these unknowns, which is legit. Right. But what I did is I went back like 100 days and I ripped every oil tech removal job we did. I looked at all the additional charges we were charging for and I came up with an average. I said, you know what, I'm just going to go at a flat rate and some jobs are going to lose money, some jobs are going to make money. But you know what, on overall basis, our closing percentage is going to go this much higher, which is then going to lead to more leaks. Because if you find, if you find more oil tanks, you pull more oil tanks, you're going to find more leaking oil tanks, which is where a lot of high profit is. And that's essentially what I did. I went to flat rate pricing, which was so simple for my, my sales, sales rep to close because it's, there was no unknowns. It was like Our price is 1400 bucks o All included and there's no unnotes. The customers like, ah, this is easy, you know, like, I'll sign right now, you know, so that's what we did. And it was easy for my sales rep, it was easy for the customers. My closing rate went through the roof and then we just took off like wildfire you know, as far as the revenue.

Yeah. What I found by interviewing home service business owners is that flat rate pricing is better for the customer, for sure. It's easier to sell, and it's way more scalable. When I was at a $3 million home service business, it was air duct cleaning. Which. Air duct cleaning. You know, it's like, oh, I got to count the number of vents that you have. And. And the owner's like, no, we just do flat rate pricing. If you got one H vac system, it's this. Two H VAC systems. Is this the type of home that you have? Is this. Then we actually built an estimate calculator. So that way it's just like you just ask a couple qualifying questions and then you give them a price estimate, and it's just. They get it instantly and they turn into a lead. It's the speed to it of what you're saying.

Yeah.

A lot of people just lose track of that, and they just make it so complicated that it slows down their sales process, which doesn't allow them to scale exactly 100.

I mean, and the other thing I did. So when your tank leaked, that's the next thing. So now here's a real big scary story. Everybody's like, oh, my tank leaks. It's all this unknowns. And again, they would say, the contractors would say, and it's the way I was taught for years. Well, we don't know how much contamination is in the ground, which is true. It's not a lie. It's like, this is unknown. It's an. It leaked. We don't know. It's been leaking for 20 years. How far did it travel, though? That's going to determine how. How much this is going to cost. It starts around eight grand. It could end at six figures. Here's the contract. Give me an open, basically open check, and let's start this project, which is super scary for a homeowner because it's like, I got to now trust you that this thing is going to start at 8 grand. And maybe you do it maybe in a day it could be a $40,000 invoice. In one day, you could run it. 40 grand. So it's very scary. So what I did is I came up with a Service. It was 600 bucks, which basically just covered my cost. And I brought a specialized piece of equipment out there. It's called the Geo probe. And it was really only used in the commercial industry, which I had experience because of my father with these. With this equipment. But no One in residential was using it. So I'm like, well I'm going to go buy one of those things. It's like 100 grand. And I'm like, I have a guy I could train to use it. And initially I was doing, I would, I would go out and I would drill down and I would determine the extent of the contamination, how deep it is, how far it traveled, and I'd go back like you were saying, with a calculator, plug in a couple of values, say hey, it's this deep, it's this wide. And then it would spit out a price and it was a flat rate remediation. Nobody in the industry was offering it. So literally everybody was like, we want to hire simple tank because you know, this is insane. Like no one else is offering this and they couldn't price shop us. So now my profit margins went through the roof because the job that I would typically maybe get what, 10, 12 grand for, I was getting 16, $18,000 for. And the customer was happy because they knew what their price is going to.

Be, you know, of course, and, and that 600, you could just tell them like, hey, if you decide to work with us, we're going to credit it back to you.

That's exactly what I did. That's exactly what I did. Yeah.

And so a lot of like people listening to this, if you have these big ticket jobs like what Teddy's talking about, do that initial thing and just tell them it's actually going to be free. Like if we end up working together, I'll just credit it back to you and you'll get this report. Either way it's valuable to you. And I'm not trying to make money out of this, I'm just trying to give you the best estimate at what we can so that you're not just a blank check.

Well, that's exactly it. And yeah, you make people trust you and then now they know it. So nice. My pitch would be like, listen, do you want to take all the risk and liability or do you want to put the risk and liability on me? That's the choice because we could go either way. And if you go open ended, you might be able to save yourself a little bit of money. But if you want insurance, basically, which wasn't insurance, I couldn't sell it, but it's like basically a guaranteed price, well then you, you're going to pay a little bit of a premium. And you know what, sometimes I would lose money. I mean I would, you know, the investigation was off and I go out there. But I did. I had stayed by my word and say, listen, I quoted you 15 grand while I'm doing it for 15. That's what the price is. And people just loved it. It was an easy sell. And profit margins went through the roof. And that's why I was at 43% even when we sold.

Yeah. So good. So how are you getting most of your leads coming in? Was it just like the basic, like Google Business profile, maybe running some ads and stuff, website, or was there anything else?

So, yeah, so initially, you know, PPC was always big forever. But yeah, it got so crazy expensive. The main driver of my leads is Google Business Profile. When you typed in oil tank removal, which was our number one keyword, the highest search keyword, you typed oil tank removal. We were literally number one. If you look at any one of those maps on, like, you know where they see the green dots. We were green dots in the entire state of New Jersey within, like 40 miles. Nobody and nobody can keep a heat with us even to this day. We've just crushed our competition. And the reason why is because we were always optimizing it. We were constantly updating it, we're constantly sending new information, and our website was constantly being updated. So that's the other thing I tell a lot of my clients when I. When I consult with them is like, listen, your website is not a brochure. It's not a one and done. You don't just build it out and forget about it. Right? Like, it's a living, breathing document, in my opinion. And you have to constantly be feeding it for. For SEO, for Google, for the algorithms to scroll your site. You want to give it fresh content almost daily, if definitely weekly. And what I did was I created a podcast for the business which in, you know, oil tank removal. Who the fuck's listening to oil tank removal podcast? But I. What I did was, it was crazy. This is like 2019. I recorded all my sales calls and I was doing the sales initiative, actually, so they were all recorded on Ringcentral. And then I would take them and I would get the permission from the clients, but then I would take out their name and their address because they would give me this information. But they were asking me a ton of questions because it was a sales call. So they were like, how much does it cost? How long does it take? What happens if it leaks? All these questions that everybody wanted answers to. And I basically put like a little intro from Fiverr on there, and then I posted it on my site, transcribed the content, pushed it onto the site for the algorithm and it was nuts because like, like every week I was putting out new content because I had, I was doing five, six, seven sales calls a day. So I had great content to just put out there. You know, it's like, dude, so good.

I remember when I was on your show and we're talking about it, you're like, dude, I was doing this back in 28. Take your sales calls, take your transcripts, transcribe them, post them on social, post them on your website, use them and stuff. I think a lot of people, they, they don't record their sales calls, which is where the gold is. And if you don't record your sales calls, one, how can you train your sales team? But then two, you don't have all this content that is gold. And it's going to yield so much credibility with, with prospective clients.

Yeah. Now forget about with AI man. You take those transcripts you throw into AI and you say, give me, give me ideas of content off of these questions that the customers are asking. It's like a gold mine of content ideas. You know what I mean? Like you say, I don't know what to record. Well, here's a way to do it. Record your sales calls. Throw it in AI get all the, you know, questions you can come up with and that's what your customers are asking. They want, want answers to those questions. They're going to your site to find answers. They don't want to call you and talk to you. They really don't. They want to get the answers on their own. Think about it. Like, I don't want to call. If I could find the answer without speaking to a human, I'd much rather do that, you know.

Yeah, I, I agree. Okay, what about retargeting, like with your stuff, Was it a one and done job or did you have like membership or service agreements?

Okay, yeah, so it was one off basically. I mean, if you dealt with an oil tank in your home, you're really only using me one time. It's like, you know, you're not, you know, unless you're buying another house in an oil tank. So yeah, it's a one and done job. Here's the thing. $3,000 average ticket. We were at a million six in profit, just churning it like crazy. So you got to think of the volume we were doing. And not only that, it was so intense to run this operation because we need, all our guys need to be specially licensed. They need to have special license to pull an oil tank or the company need to be licensed. We had to go to a specialized facility to dispose of contaminated soil. We had to have the proper licenses to get in there. I mean, it was so intense. We had to go to labs for analytical. We had to get permits and inspections. In New Jersey, there's over 500 townships. Each one has their own rules and different application. So at any given time, I had a hundred projects that were active, that were going on, that I was managing, and they all had their own different process. So you can imagine how cumbersome it was to operate this. And that's one of the reasons why I want to get out. I was like, this thing is not super scalable. You know, it's not. It's not like I can't take this to, you know, 50 million in revenue. Even if I took over all the competitors, which I did buy, three competitors over the years, you know, even if I bought them all out, I don't think I would be doing 50 million. It's just so complex. As far as I needed heavy equipment, I needed tons of heavy equipment. I needed guys who knew how to operate that heavy equipment. High insurance, high maintenance. It was insane. Every other day it was another five grand for this broke, seven grand for this transmission to, you know, it was insane to operate it. So that's one of the reasons why I want to exit that industry.

Yeah. So I want to ask you a little bit about that process, but before I want to ask you about these competitors. So was this, like, liquidation sales or how did you find these? Did you hunt them down? Did. They were like, hey, I'm going out of business. Hey, like, what was that like?

Yeah. So I put together a list of all the competitors in my area, and I started reaching out to them. And some of them I kind of knew just from whatever, you know, it was a small industry, so everybody kind of knows everybody. But, you know, we would run into each other at different conferences and, you know, so shake their hand. They have a booth. You have a booth. Go introduce yourself. So, like, you know, I start to make friends with these guys, but then I put together a list and I start mailing them, basically saying, like, hey, every once in a while, every couple months, I'd send them a mail. Hey, if you're interested in partnering or if you're ever thinking about getting out of the business, let me know. Now, at this time, I had a YouTube channel, so I was all over. I was making splashes in the industry, so people knew what I was doing. So I'm like, listen, we're really trying to grow. If you're looking to get out, just let me know. And it wasn't instant, but over time, like I would get a call six months later after I sent that letter. You know what, I got your letter six months ago. Let's talk. And then I would go sit down with these guys and I, it was, I didn't get an SBA loan. I basically was like, hey, listen, let's work it out. You really, what do you got here? You got a phone number, you got goodwill. You've been in business for 30 years. Let's work a deal. I'll pay you per lead. Essentially, like, so I structured them three different ways. I structured them, but I just very strategically, you know, I didn't come up with a lot of cash to buy these guys. You know, it was, you know, it was. I call it blue collar M A because it was. There's no, you don't need an MBA to, to figure this out. It's just, just making relationships, networking with people. And then when they're at a time and need, you know, you work a deal with where it's beneficial to everybody, you know.

And it was, yeah, so from what it sounds like, it's like you sit down with them and you say, hey, okay, you got a phone number, you got leads coming in. But you have all these headaches of once you get the leads, then you got to do all this stuff.

They don't, yeah, they don't want to deal with anymore. They were at that level either, you know, like one guy was going through a divorce. He was in the business for 35 years. He was a small operation. I mean they were like 500 grand in top line revenue. But he did no marketing. So for me, I was doing all the marketing online, all digital. He was all referral. So I'm like, boom. This is a 500 grand top line to me. Because his name and I wasn't guaranteed because, you know, it's God for something happens to him. They don't want to deal with anybody by him. So I said, listen, I'm going to pay you off the top line. At the time, our profit was about 30%. So I'm like, I'll give you 15% off the top line. I'll split the profit with you over a five year period. And whatever it is, it is if, if the phone number dies out over three years, you then you're beat. If it keeps going, you'll make a ton of money. And he stayed on it with me for five years and all he had to do is make the sale over the phone, send it to my office. We'd handle everything else. He was happy. He was so happy.

Money for him. He can sit at home.

Yeah, it was huge.

Yeah. It's almost like taking the asset that they've built and then turning them into, like. Almost like a fractional salesperson. And they just get paid commission, essentially. It's just the way that you slice it up would make sense for both parties.

Well, exactly. I mean, another guy, I had. He had bought one of my competitors. Now he was in the ICE distribution business. How do you go from the ice business into the oil tank business? I don't freaking know. But he went from ICE to buying this oil tank business. He basically ran into the ground because he was like, this is so complex. I'm dealing with all this. All these towns, and these customers are horrible. The customers don't like you in that industry. I mean, nobody wants to dig out a hundred tons of soil out of their front lawn and pay you $30,000. Nobody wants to do that. So, like, he's like, I can't deal with these people. So he called me up because he got my letter, and he's like, let's make a deal. And I was like, listen, your phone number is the only thing that's worth anything. You know, I don't want any equipment. You have decent equipment, but I'm like, I don't need your equipment. I don't need your facility. I just need your number and your website and your Google business profile. Those are the three assets I'm interested. How much do you want? I almost fell off my chair because I was like, I'm thinking, he's gonna want 100 grand, 150 grand. I was ready to pay it. I'm ready to make a deal with him, pay him over time, you know, he's like, I'll take seven grand. I was like, seven grand?

Oh, my God. He was trying to get out.

I'm like, listen, I gotta talk to my partner. I don't know. I'm like, I don't know about this. You know, I'm trying to play it off. Like, I'm not super excited. I'm like, I. We went up to his place two days later, later, met him in person. And yeah, we. We bought his business for seven grand. I still, to this day, we have his website. I redid entire. Revamped it, because they were in business from 1978, pulling oil tanks. So, you know, we were able to promote that. Like, hey, we Bought them out. We're part of Simple Tank now. And the guy was doing, like, $300,000 in revenue, so it wasn't a lot. But again, seven grand. I got 300 grand revenue. Where are you getting that return? You're not getting that on Google or anything. You know what I mean? Like, come on.

So you send these guys, let, like, that guy a letter probably, and then he's like, hey, yeah, cool. Like, let's talk.

Yep.

Wow.

Yes, exactly. Just reach out.

Yeah, I think. I think you. You know, everyone. You never know. Like, this guy's in the ice business. Then he's over here, and he's just like, I just want out of this thing. Like, just take it. Like, it's fine. It's yours, whatever.

And you never know.

Yeah.

You never know people's situations and what they're going through in life and when they want to get out or, you know, when they're just done with it.

Yeah. So. So about getting out, like, what. How did your stuff go down? Like, did someone. How did that reach out to you?

So when we. We started in 2018 with the intentions of selling the business, because, again, I was done with the industry. I went through all these other companies that I scaled, and they did good initially, but then they would fiz. I had issues. So I'm like, let's go back into this. But I'm not one. I don't want to stay in this industry. I'm like, I want to just grow it to sell it. And that's what we did. So we had the intention of selling it. So essentially, within 36 months, we were at4.4 million, top line, 1.6 million profit. And we were about to go to market, and we had interviewed. We had some bankers come. They looked at our books. They were like, whoa, your guys books are so clean. Like, we never seen anybody at this level with books like this clean. I mean, they asked me for anything they need. It was instant boom, boom, boom. I would send them anything they need. Everything was so clean. And then. So at the time, we had a junior partner. We brought a younger kid in. He was roughly about 28 years old, 29 years old, and he was like a 4% partner. So we gave some equity away to him, and he's like, well, what if I get the loan? He's like, if you're going to get a buyer, come in here. He's like, what? What if I go get the loan? I'm like, listen, if you could get an SBA loan, because it was MA. We maxed the SBA $5 million loan out. And then we had like a note in addition to that. It was 7.6 million is what we sold for. And he was able to, to get the SBA loan and he got approved for it because how, how well our books were put together and how well we were set up and we had video SOPs. I mean, it was a whole library of every process in the business. We were the number one guy on. You go on YouTube, you saw us, you go on Google. I mean, we just had it set up to where, you know, the banks loved it. They were like, yeah, we'll write this all day long. So we sold for five times multiple to him. He bought us out and he's running it today.

Wow. I think this is a very important. I did not know this. This is very important. A lot of these, A lot of business owners, they want to find these junior guys and they want to bring them in and pay them, you know, like a hundred thousand dollars. But it sounds like, you know, and then have them have upside because they're hungry for it. Right? Like they got, they get their life in front of him. And for you, you brought him in for and 4%. So how did you find this guy? And then how did you like structure this 4% deal and like get. Because it sounds like he was probably like hungry and like would go for it.

Yeah. So he was, he came through. So the guy that I told you he was going through a divorce, I bought him out. So he sold for me for five years. And then when we restructured in 2018, I. I approached him and I said, listen, do you want to come in as a partner? You've been in this industry forever. I'm like, I'm going to, going to go for a sale. I could use the help, let you run the field. I'll do all the back end stuff of marketing and sales and operations. So. So we, me and him, partners now. He had this young kid who used to work for him back in 2012 and he had some industry experience and we needed a guy in the field. So we had run. We were running four crews that were pulling tanks every day. So we needed operators that could operate heavy equipment that could drive, you know, trucks, CDL drivers. And this kid had that. So we're like, listen, let's bring him in. And he is a of part polished kid. He, you know, he could do sales, he do a little bit everything. So I'm like this, you know, we got to take care of this kid. And you Know, we, we, we were basically giving away equity to initial. Initially, I gave equity to my cousin, who was part of it. Like, that was the whole part of the deal. We're like, hey, let's bring this small team together and let's what the intentions of selling it. Everybody could get a nice check in a couple years. And that's what we did. So he got 4%. My cousin got a couple percent, which unfortunately didn't wind up working out. We had to buy him out. But before the sale. But, but yeah, this kid made out very well. He was a 4% owner. He didn't, you know, he, he got some distributions as we were building.

Yeah.

And then when, when we sold, he rolled that 4%. The SBA let him roll his 4% ownership into his down payment, which helped him, you know.

Yeah, yeah, it's great. So I think the, the lesson here is like, a lot of businesses, they try to scale themselves and they don't have people that is, that are bought in. And you never know if it's going to be an outside person or inside person. Very crazy story. I don't, I don't share this too much, but when I was at the $3 million business business, the owner wanted me to buy the company.

Okay.

He had me. I was young and hungry. I was 28, 29.

Yep.

I was like getting after it. Right. And he's like, hey, you know, I want to sell the company. Maybe you could take out, you know, go get an SBA and then buy me out and then run this thing and really scale this business from here. For me, it was, I wasn't in, I wasn't interested in the business that, that he was in Duckling. So I was like, I couldn't see this here, but I think there's a layer to getting some really good people that are young and hungry and then giving them the opportunity to potentially. Because they already operate it and run it and they already know what's going to happen. So it's like, it's a win, win for everyone.

Almost 100. And they're bought in and now they're like, they're an owner. Right. So the only thing I would do differently this time because of the experience after going through it, I actually gave out real equity. I mean, this is 4%. He was on the LLC docs. I mean, he was an owner of the business. Yeah. I would go Phantom Equity 100 after, you know, going through it because it complicates things for taxes and everything. Like, like, so I would definitely go phantom Equity, which there's guys out there that can help you do that and setting it up and you can have your attorney draw it up. It's. It's a lot easier. And then if things don't work out, like with my cousin, unfortunately, you know, I, I wouldn't have had a buy. I mean, I had a. Yeah, no, bro, I could have just been like, listen, it's not working out. You're supposed to meet these certain requirements. You're not, it's. Sorry. You lose your phantom equity. And that's kind of, you know, the benefit of having phantom versus real equity.

Exactly. So phantom is like, let's say you're going to bring someone high level on or whatever and then you say, hey, you have to hit these requirements. And if you're not an employee at the company or you don't hit these requirements, then you don't. You're eligible for this. And then you're, you're basically out. It still allows you to own ownership rights, but then if everyone participates correctly, then they can achieve it. Which, yeah, hindsight's 20 20. Even though it sounds like it was, only, you know, a couple percentage here and there. But if anything, it just causes strife between everyone because it's like uncomfortable. Especially family stuff.

Exactly. Yeah. And people change, you know, People, you know, and I couldn't believe it because I thought like, oh, give a little bit of equity away and they'll change in the way of like, hey, I'm an owner. They'll have pride of ownership now. But it went the other direction. He was like, I an owner. I don't have to come here in the morning. I don't. I'm like, I got two guys sitting here waiting for you. You're running the crew. I'm paying these two guys 45 minutes every morning to sit and wait for you. You're the, you're the main guy. Like, what are you doing? You know what I mean? Like, this is not working, bro. Like, we got to go a different direction. And you know, and he was sad because he was with me for 10 years. He was, he was my number one employee when I started my own business back in 2009. So. And that's the reason why I gave him the equity when we did this play, because I was like, listen, I want you to be able to cash out in a couple years. This is a three year plan, essentially. And the unfortunate part is he left a million dol on the table. He got a million dollars at the sale.

Wow. Wow. Yep. Well, it is what it is. So now you sold the company. You obviously, you know, you're coaching people, you're doing podcasting, but then you just started a roofing contracting business. From what you told me pre show. Can you tell me a little bit about like the goals for that? Are you, are you building it to sell it? Do you have other things that you're doing?

Yeah, so essentially I started doing some consulting after I sold the business just to keep busy. I mean, it got into day trading. I was doing that for a bit, little bit. Which is a crazy, crazy business to be in. It's. I wouldn't even call it a business. I mean, I did that for a little bit of time, but then I got into the consulting, start building out my personal brand, you know, over the last couple months here. And as I was consulting with different home service companies, I came across the roofing space. Now, I didn't unders. I didn't know anything about roofing, right. So when I started consulting about it, helping with marketing and finance and things of this nature and operations, and I. And I found out the business model, I'm like, so wait a minute, especially New Jersey, you don't need permits, you don't need an inspection. I'm like, this is marketing, sales and fulfillment. And oh, by the way, the fulfillment is subcontractors. And that's how 90% of the, the, you know, industry does it. I'm like, this is like, this is too good to be true. I'm like, I don't need specialized, like employees. I don't need guys that special licenses. I only need a home improvement. Like, this is not real. You know what I mean? That's kind of the take that I had on it. And a very good friend of mine that grew up with is in solar. He does very well here in South Jersey and he start buying roofing companies in South Jersey. And I've been, you know, consulting with him on and that's. I was like, you know what, I got to get in the space, man. This is. I have the itch to get back into it, you know, and the plan is, yeah, get into it, do the same kind of playbook, you know, I mean, go in there. I'm going to hopefully buy some competitors out, some of the smaller guys and do a little mini roll up and see where I'm at in three to five years.

Yeah, yeah, I think it's good. I know we're talking pre show a lot of cool ideas and sounds like really good opportunity in New Jersey to come in. And you Know, disrupt, disrupt the market a little bit from like old school stuff and bring in some of the new school stuff that you've been doing, which I think is really exciting. Exciting. Cool, man. Well, this has been great. So I guess you, you, you're coaching businesses. Who's who, what kind of businesses are you coaching? What kind of people?

So it's all, it's mainly home services. I say mainly because there's, there are a couple companies that I consult with that are in commercial industrial work. They do public bid work, this type of stuff, but it's mainly home services. I mean that's kind of where my expertise is with, with marketing and finance. I'm pretty, you know, I'm pretty good with operations, sales. I mean I have sales experience like even with the roofing business, like initially I'll get in there. I'm going to do the same sales for the first, let's say 12 months until I get my lead flow up and then once I get leaf flow up, I'll start recruiting same playbook I did with my last tank business. Like I was out of the day to day within the first 12 months. Nothing relied on me, you know what I mean? So I'm going to try to go for that same playbook here, get myself out of that day to day and just scale and manage and recruit and train and. Yeah, and bring, bring video content to the industry which, you know, in my space, in my little market, there's nobody doing video content. There are some guys that are doing it in the industry that are doing really great content but they're in different parts of the country, you know what I mean? So I want to bring that same playbook because I, I saw firsthand how it, you know, affected my close rate and people got to like know and trust me, it was very simple to sell those jobs because they already like consumed all my content. So, you know, I got some ideas like that to bring to the industry I'm excited about.

Yeah, awesome, man. Well, this has been great. So where should people go to get in contact with you, learn more about your, your business, what you got got going on?

Yeah. So LinkedIn, you go Teddy Slack on LinkedIn or go to YouTube. Teddy Slack, Modern Contractor TV. I have the podcast that I interview certain vendors and, and business owners that are in the home service space to help bring value to anybody who's in that space or who's looking to get into it. And I'm actually starting to document this process of scaling this roofing company from 0 to hopefully 5 million in EBITDA in, in the first three to five years. That's kind of my big hairy goal, I guess you could call it. So I'm documenting it weekly and I'm take, I'm basically just doing talking heads right now until I, I'll have a full time videographer who follow me around and I'm going to put it all out there, like what marketing campaigns I'm doing, why I chose this location, why I did, you know, brought this person on first. Like I'm basically just giving out all the sauce. So if somebody is interested in bootstrapping a business, they can learn how to do it by watching my content as well.

Yeah, I love it. I love it. You, I know you're telling me about last time we talked and I'm like, dude, like you're a man of the people. I love it.

It's like, absolutely, man. Yeah, because I was one of those guys too, you know, like, and, and now you're always looking for resources to learn from and you know, know, initially I didn't do that initially. I just was hustle and grit, head down. Like I knew my thing. I could remove an oil tank from anyone's home, but I was really good at that. But I didn't know business and I wish I, I started to consume this type of stuff early on and I would have been, I would have gotten so much further in life if I did that from day one. So I want to give that to people that are, you know, looking for that, you know, who, who, who should you follow? Who can you learn from? And you know, I don't know everything. I'm not, you know, I'm not some business genius, but I been through a lot. I have tons of experience and I think I could bring a lot of value to people that are especially just starting out out, you know.

Yeah, for sure. Well, brother, it's been good getting to know you, man. I appreciate you having me on your show and I appreciate you coming on our show and I look forward to continue the conversation maybe in like 12 months we have you back on and talk about the progress that you made and share a little bit about your business. I think it'll be cool. Cool, man.

Thanks for having me on, man. I appreciate it.

Yeah, you got it. See ya.