brandon adams thank you for joining me today on acquiring minds well thanks so much for having me you are the ceo of philadelphia dry ice company a 45 year old ice distributor i love it because it's one of those very niche businesses that many people have probably never heard of but it's just hiding in plain sight out there so we're going to hear your story of buying into this business and a little bit about the business of ice distribution itself so start us off with a quick history on you brandon uh take it take us right up to your decision to want to go out and buy a business uh sure thanks yeah from the philadelphia area um grew up here went to college here september 11th happened my senior year of high school so i was kind of always edging towards government service military service and ended up taking that route after college i enlisted when i was a senior in college actually um in the army and i spent uh six years as a reconnaissance team leader there uh which was fantastic ended up trying to consider making that a um a career and really wanted to go down that path um i had a good friend of mine who um who was from my same unit who was working for a hedge fund at the time kind of convinced me to give that a shot um i was pretty dead set on going to the army full time but he set me up with an internship at this investment fund they specialized in energy infrastructure so i think pipelines refineries storage terminals and whatnot and you know kind of fell into a really good situation there um it was a really small team um all from the same area where i grew up so we had a lot in common it was a lot it was a lot like um you know just a couple good friends sitting around um you know working hard making money playing hard um it was really collaborative it was fantastic um and um you know two analysts while i was interning there decided to leave um go on to different opportunities and so i kind of picked up where they left off i volunteered to pick up the slack a little bit and help people out with the modeling and the investment thesis and whatnot um ended up doing decently well and got offer offered a full-time job and i thought that you know i'd done the the army thing for a number of years and this might be a different adventure so i decided to take it um and it was a great experience i stayed there for 10 years uh the fund when i started uh was 30 million dollars i believe and at its peak in 2016 reached 12 billion um it receded a little bit um after 2016 but you know we did well we ended up being bought by the blackstone group um and folded into uh their credit arm gso where it still stays um today is still in their credit arm um but yeah i would say um maybe about 2015 i had a really good friend from high school don ware he was uh doing a little bit of banking in new york um but his father owned a you know a small what i thought was small but after i got into small business started to learn that it was actually fairly large it was an automation parts distributor here in the city and he started buying up some other small businesses to try to diversify their revenue stream a little bit and my friend don came home uh moved home to be president of those two businesses um and so we started meeting up um you know every month or so we'd grab a beer i'd ask him what he was up to what small business life was like and he asked me what um you know life was like in finance and uh you know the grass is always greener i thought that what he was doing sounded really really cool um you know what what did you like about it well it wasn't financed it wasn't sitting in front of like it wasn't sitting in front of a computer screen for 12 hours a day like a like a study hall now you know i'm sure that different offices and different teams have different um different dynamics but that's what uh my my uh team felt like at least um so i like the fact that you know things were things were different every day for him he was solving many different problem sets at once um kind of not the same one over and over again um you get to manage people that was something that i really missed a lot um from the army was was building strong relationships with people and building teams so that's something that he was doing a lot of that i wasn't really getting to do a whole lot of we had um you know we had a team set up where it was one portfolio manager and about five analysts and it was like that when i started and it was like that at that point it wasn't changing um so yeah i thought it was uh that was really dynamic it was kind of uh a blend of uh different skill sets that i had built up in the army and that i had built up um in the civilian world and i thought it'd be it'd be uh interesting to give it a shot so we had talked about it for a number of years about um him wanting to get some skin in the game and build some equity i think that the two businesses that he ran for his father i don't believe he had any equity in them um so he wanted to get some skin in the game and i wanted to um you know to to prove myself uh on my own as well so uh we tried to develop a thesis for a couple years um and then in early 2020 uh the thought that we had gotten to the point where we could execute and so we both pulled the plug and dove in head first into our investment partnership which is called kfor and did you always was it just assumed that you would go out and buy a business rather than starting something from scratch uh yeah so that was kind of the route that we had we had settled on uh for a number of different reasons so uh first of all we didn't have any any skill sets to build a product um sure you could make the argument maybe we had the skill set to go and build a service but really it comes down to risk mitigation and the fact that they're our thesis revolved around the fact that there are so many uh great long-standing businesses out there um that uh that are ripe for for capital and right for people like us um younger kind of uh more enthusiastic folks to take over and maybe um as the businesses that we found uh they've reached a plateau where their owners kind of got to the point where they were happy with what they were what they were doing with the business what the business was providing with them and the business had the had the foundation to do much more but they'd either capped out on their on their ability to do so or capped out on their ambition to do so um and so we thought that there were a lot of opportunities out there for us to come in and kind of pick up the torch where where they left it you know it's interesting all the different ways people get into searching for a business to buy but there there's often just a moment where you know people don't realize it's don't even think about it don't realize it's possible and and then they do um but your business partner and friend kind of having seen his his father buy a business and then by other businesses it probably felt very accessible and and familiar to him just because it you know it had been he'd been you know front row to his own father doing it for a few years so that that's a that's kind of um he he probably didn't many of us me included we learned very late in life relatively that this is possible but he'd been seeing it for years so that was probably something that just made it seem much more kind of accessible to him than into your average searcher yes exactly right and i think that um once we started reflecting on it we've been surrounded by entrepreneurs our almost entire life you know my dad was an entrepreneur he was in the service industry you know financial services as a wealth manager for a number of large companies and then you know when i was maybe in middle school he he broke off and uh founded his own practice uh my mom same thing she was a um a clothing designer and when i was young you know she had her own own company making clothes uh for um young young girls um same with uh one of our classmates at harvard dave rosner um who is somewhat of a i guess semi celebrity in the eta world he founded um a really great search fund with greg geronimous when they were hbs and so we have all these people around us who've done this before um dave has been a fantastic help uh for us and um is one of our advisors and and during the um during the search process and especially during the acquisition process when we're trying to get through um due diligence and the legal documents for this this company that we bought is is outstanding and incredibly helpful and um you know once we dove into this uh um this business once we dove into the uh this world of of search and eta everybody's been fantastically helpful and uh we're surrounded by a lot of entrepreneurs that we are entrepreneurs in our network that um you know maybe we had overlooked before yeah it's it's a it's a very collaborative space this is something that you you hear over and over and it's uh it's just it's really a gift to be in a space where where people are so eager to help so exactly the philadelphia dry ice company how did you find it um tell me about your search overall and then how you found this particular opportunity well it's fantastic um i guess i'll just tell you about the the the search process to start um yeah you know we really were old style at first we we're sending out letters we're sending emails we're making calls part part of that was um don's dad told us hey if um if someone's trying to get through to me and they want to stand out a little bit i would i would recommend that someone come see me in person um and tell me about why they want to buy my business so we did that quite a bit actually we just drove places and uh if the owner wasn't there we'd drop off a letter for him if he was we try to try to talk to him would you know would you have done a lot of pre-research on that company yeah so it started out um you know i would just google map um our geographic area so both of us live in the western suburbs of philadelphia and so we wanted to find a business that was a decent geographic fit because we both have small families and we're fairly rooted in the area having grown up here and you know having gone to high school right down the street um this is where we kind of want to be so we're very geographically focused um maybe not so much as industry focused but um so we're google mapping every industrial park within about an hour's drive hour and a half drive of where we live you know and i would just make an enormous list i would try to find out generally how large they were and i would kind of triangulate that based upon number of employees i would get revenue numbers off of manta which i learned were just incredibly off base and then you know i'd look uh i would look to see what industry they were in i would look to see who owned them i would look through the um you know this the pennsylvania department of state website for for you know business owners and and try to figure out who owned them how old they were do they have family working there um and so i made a list of i don't know close to 2 000 businesses maybe and then and then we got to work sending them emails calling them terrible terrible hit ratio on that i think um you know out of all those letters and um emails sent and whatnot we probably heard back from maybe three or four business owners wow now surprisingly one of them was a pretty good hit and we we ended up going decently far down the road with him um you know probably three or four in-person due diligence meetings figuring out what what he wanted and it just ended up not being a great fit he he was more uh looking for an infusion of capital um than he was kind of a retirement plan but um you know we've stayed in contact with him i thought he had a really interesting business um one that we we probably would have come close to maybe wanting to own i don't know if we got farther down the road if we would have pulled the trigger or not um but we've stayed in touch and um you know we're trying to harvest those relationships for further down the line if they um if they fit you know a little farther down the road so brandon why did you i mean what you just described sounds like um you know a very kind of um methodical proprietary outreach process which is pretty sophisticated for for people doing this you know outside of kind of a traditional search fund context or coming out of an mba program and so why did you choose that method and did you were you kind of against using businesses you know brokered broker deals and enlisted businesses no not at all um part of it was because of what um you know don's dad had told us about how to stand out and um how to kind of uh uh you know approach people um try to find a business that you think is a great business and and then try to dig down versus you know just trying to find what's for sale and and you know it's for sale and you don't know why it's for sale um but the other thing was we were early off early enough along in the process where we hadn't built out a full you know full list of which brokers were high quality brokers versus the ones who were just going to feed us a bunch of stuff that was going to waste our time so we had started to reach out to different brokers in the area hadn't started to see a ton of flow um and we're still working through that process but um you know don's father had found those businesses that dom was running through a broker and we we got on his list and funny enough that the ice company came through him um i think that um a lot of people have reached out since we bought the business and since um you know i've started talking about it on twitter and and the network has increased asking about the broker um landscape and i think there are a bunch of really good ones out there i think it took us a little bit of time to sift through and find out you know which ones were worth spending a lot of time with um and which ones weren't always as great about sending us businesses that either fit the criteria or you know just generally speaking were advertising businesses that looked like they would be a good fit for us um i think that's changed a little bit now that we've we've kind of uh curated that list a bit more but at the time we didn't know you know anybody from the other person and i know that dave was telling us that he had a lot of success going to networking events of attorneys and accountants who might be representing potential buyers and i'd heard that a lot of people have had success going that route unfortunately when we started our search in you know mid to late 2020 um that just kind of wasn't a possibility due to covid those types of events weren't happening um so we were resting a lot on just trying to get in front of businesses that were local and trying to get in front of those people and then harvesting and trying to curate that broker list which i think we've gotten down uh pretty decently now we found a bunch of really good ones um that we talked to pretty frequently and um yeah go ahead is there any shortcut for figuring out who the good brokers are in your in your in one's particular geography or is it just like anything else you just kind of mean you can either look for referrals and uh and and have somebody who already knows tell you but if you don't have that is it just kind of reaching out to a lot of brokers and kind of getting a feel for them having conversations and and the best ones will rise to the top yeah i think there's a lot of word of mouth and early on in our search you know i was i was new to everything i was new to this ecosystem um wasn't entirely familiar with even who to ask for who could recommend a broker so i spent a lot of time on biz by cell and trying to see who was on there trying to get on their list see what they were offering um you know we had a general you know financial and operational guideline for what we were looking for you know a lot of the companies on biz buy cell are a little smaller than what we were looking for um so it just took a while to to find them and then once we found them see okay you know what industries are these guys mostly playing in what size are they mostly playing in when we call them and interact with them you know what kind of what kind of feeling are we getting in terms of how easy they're going to be to work with um what kind of information they're going to be willing to share and how um and i think we've gotten uh we've gotten enough experience what we have a handful that we really trust and we look uh we look towards um where we can we could say it's going to be a good relationship um and we're not going to waste our time so yeah when you said you were looking at biz by selling many of the businesses there are were less smaller in enterprise value than what you were looking for what were your criteria your search criteria and how did you decide yeah we started out we started out probably a little narrower than we should have um simply because we're we're already starting with a fairly narrow geographic focus we started with a financial or ebitda range of one to five million which at the time we thought was a fairly narrow window and what i'm now you know after a little bit of experience i'm seeing is a fairly wide window um when it comes to the micro market or or the lower middle market in terms of you know what you're looking at in a one to two million dollar ebitda business versus what you're looking at in a five million dollar business uh the reason why we kind of picked that range was and it was our impression of the time that if you're playing sub five million dollars um you're generally not competing with many private equity firms i think you know covet and and the general financial landscape changed that quite a bit and it's persisted to you know even now where i think a lot of those firms are are playing even sub million dollar ebitda in some in some circumstances um but we also needed something that was large enough to support two salaries um or at least one and a half because don actually still runs um one of the other businesses for his dad um and works on the ice business um you know two or three days a week um so we needed something large enough to support two salaries um small enough that we weren't going to overpay by competing and then operationally we were looking for something that was generally within our skill set range so me with a background and you know we'll call it defense but it's not really i don't really have an experience in um you know defense business but experience in infrastructure um and then don's experience uh lies mainly in light manufacturing the two businesses that he was running so we tried to find businesses that generally fit that uh schema or one like the ice business that we found um one that's just incredibly simple um and so straightforward that you know the likelihood of failure was fairly small okay okay so this broker sends you the philadelphia dry ice company and it it fits the bill what do the numbers look like on it and what do you like about this business yeah so we'll start with the last question what we liked about it was uh like i mentioned the simplicity um very very few skus so say about 65 or 70 percent of revenue is is based on dry ice sales and then the other part of the business is the logistics is managing the trucks managing um dispatching and and delivering the ice moving it from point a to point b um that's maybe the more difficult part of the business but um honestly that's what drove us to to consider this when we think about what we want to do long-term um we kind of have the idea of you know i'm sure this this is a dime a dozen but of wanting this long-term holding company um where we assemble you know a portfolio of maybe five to ten businesses over the next 10 to 15 years very similar to the chen mark model and um this seemed like a great opportunity where if nothing else this is going to generate a lot of cash for us to go out and and purchase other businesses down the line there's very little risk of us screwing up what's already been been established and there's a decent chance that we could grow it a good amount so i think it hit all of those markers for us um as a good opportunity and and you also asked about the numbers so we bought it from a gentleman who had bought it from the original owners about four years prior so the original owners had established this company with their father back in 1975 and these are your typical uh south philadelphia irish guys they're the ones where if you think about you know a 1970s 1980s eagles game they're the ones standing on the corner you know hawking t-shirts and pretzels and ice and these guys these guys are fantastic and they are the epitome of old-time entrepreneurs um because they sold this business they made a decent amount of money on it and they went out and started more businesses um the one uh now runs his own construction company with his son um and the other um makes wine and he's uh they're just there they keep going and uh they're fantastic and they they live close by they they stop by and um you know answer any questions we have for them they're also our landlords so you know they stop by every now and then but they're incredibly helpful they're great guys um you could see why they were successful um growing this business they had gotten the the business to the point where they were doing um you know probably about 550 to 600 000 uh dollars vivada and then when the gentleman that we bought the business from took over he grew up quite a bit um i think the first year he owned it he grew ebitda to um about 700 000 the second year he hit um he hit 8.25 the third year 850 and then during covid um it was a phenomenal year i think he did roughly 2.8 million in ebitda that year driven primarily by the fact that we were all staying home uh we were all ordering our food online and having food delivered straight to our door so the demand for direct-to-consumer food logistics skyrocketed and thus the need for dry ice skyrocketed so a lot of his windfall in 2020 wasn't so much a byproduct of him winning business that was going to be staying around it was really him acting as a dry ice broker if you will and just having the name plate of the business and its history and people knowing it as an established um you know entity for selling dry ice you got a lot of inbounds of hey can you can you do 40 000 pounds here can you do 80 000 pounds there and instead of saying into his credit instead of saying hey no i can't unfortunately we're too small you know he said hey hold one let me see what i can do and he would just call people across the country trying to broker ice here and there and he did a great job and he scrambled and he he did exactly what any good entrepreneur would do and he made the best of a bad situation uh he turned it into a very good situation for himself um so he knocked it out of the park in 2020 and weighed his 8 million in ebitda yeah wow up up from what would you say 8 25 was 20 was 2019 yeah yeah um yeah and then uh so what ended up happening was he had bought the business um because he he had a i think he wanted to bridge himself to retirement a little bit he had a corporate job uh that i think he um he lost um in 2016 or so and so he had a couple years until he was set to retire he needed to bridge himself a little bit he used his savings to buy this business and then when 2020 rolled around and he hit his number and a little bit more he just wanted to be done and wanted to retire so it was a good setup for us um yeah he had uh he had not done a ton of growth or or tried to grow the business a ton he he knew what it was it was good for him he kind of tried to keep it going he was successful in a couple different realms um growing ebitda a bit and he got the um wet ice business for the stadiums and a couple other opportunities um but didn't put a whole lot of effort into marketing into sales um and so uh so he looked to sell and and we stepped in and i think it was good because he understood that 2020 was an anomaly he wasn't looking for a for a multiple of of 2.8 on the business he was very upfront about that he said i don't expect to expect that i don't even expect a multiple on a fraction of it just you know the business is what it is prior to 2020. 2020 was an anomaly so you know here are the numbers uh that i'd like you to go off of prior to 20. that's great yeah i mean because otherwise it could could have just been a non-starter it would it wouldn't have such an average year yeah you wouldn't have sold it to anybody yeah great and so what did you you like what you liked about the business obviously was how profitable it was it well it throws off cash a sizable amount of cash and that could be a great foundation for your future plans and obvi and you think it's quite kind of an evergreen business i mean refrigerating food as it's being transported isn't isn't going anywhere and a lot of the use cases that you described don't seem like they're going anywhere um what about just like growth opportunities did you did i mean what value in particular did you see being able to add to it or or was that not even necessary as long as you kind of i think as you said you don't screw it up um anything anything other than screwing it up is gravy and you don't really need to to necessarily grow it to to have it be what you want it to be that's right what attracted it what attracted us to it was really just the baseline of hey this is a really simple business that kicks off a lot of cash that could it could be a cow for us in terms of going out and fulfilling our um our mission of you know establishing a portfolio of different of different companies i think when it came to growth um you know you always hear the obvious adage of the prior owners weren't putting any effort into sales and marketing this was actually the case in in this environment um we didn't bank on being able to grow the business all that much i think in our models we we assumed gdp plus a percentage or two um fairly small amount of growth um but we saw a lot of inefficiencies in the way things were being run here you know taking paper tickets um dispatching uh drivers in a really inefficient manner just really small things here and there which would be you know great experience for us to come in and try to tackle these basic issues um and like i said if nothing else we're relying on the baseline here of don't screw it up you've got cash to go and buy other businesses and then i think in terms of growth outside of sales what we were looking at was we probably couldn't scale simply within you know reselling dry ice that's very difficult to do um without without manufacturing the ice uh which is obviously very uh capital and labor intensive um that's not completely off the table for us um but it's not uh it wasn't something that we were planning on right off the bat where we see potential growth is looking upstream or downstream of what we're doing so upstream in terms of if we look at really large dry ice distributors and manufacturers you know what else are they doing well they're doing other industrial gases they're doing welding supplies and equipment and anything that has to do with with food logistics and then when i look downstream i i think food logistics and i think healthcare logistics so are we doing anything um are we supplying um the logistics providers with any solutions for other bottlenecks they have other than you know this commodity that they include in their box so that's where we've started to spend a little bit of time exploring um but honestly no we're just attracted the fact that it's very simple setup very simple to operate it is very plug and play um i never thought that i'd own an ice business um but we've been really happy with the way it's run it's done so far and and kind of where it's going and what about other competitors or upstarts i one of my first interviews was with um somebody who had acquired a food distribution business and he said that one of the challenges in that business is that any guy with a truck can can start up tomorrow and compete with you undercut you on price and compete with you now obviously moving dry ice around is prop probably takes a little bit more than you know you gotta have some truck that offers the necessary refrigeration but i think that the fundamental point remains what are their moats in your business or is it really just your your your um clients are as sticky as your you know track record is good with that client no the moat is really your relationship with the customer and the relationship with the supplier so dry ice is scarce enough that you're you're rolling in it if you've got the equipment to make it and that equipment is extraordinarily expensive um dry ice takes up a lot of space too if you want to sell it at scale it takes up a lot of space so so does the wet ice um so you have to have the space you have to have the relationships you have to have the capacity to move it around and know what you're doing with it um so i guess no hey if i had um you know if i had a decent amount of capital and i could buy a few trucks and i could buy a decent space sure i could start selling dry ice and i could start selling the wet ice i would say separate those two markets the wet eye space is very saturated and very competitive um the dry ice space though you're going to need to be able to do it you need to be able to secure the ice to be able to do it i think if you're an upstart you're going to pay you know two or three times the amount of money that um that we pay for our ice and you're gonna have to place it um in areas that are gonna be able to uh you're gonna be able to generate a margin off of that um the types of uh people that we that we sell to you know expect um you know pretty cheap pretty cheap ice um now it spans the gamut so people who walk in off the street to buy ice from us just at our front door they pay a retail price for that but uh you know folks that we sell 20 000 pounds a week 40 000 pounds a week to you know those margins are fairly small yeah you you acquire the business and you think that it seems you know it seems like a simple business from the outside um and you know your your mandate is just don't screw it up and then you find out that in fact well why don't you explain to me why you found yourself driving a truck for the first six months yeah that was a that was definitely a failure of the due diligence process so our due diligence focused a lot on um you know making sure that they were earning the amount of money that they said they were going to earn we were really focused on the financial side just really a a derivation of our deal structure probably so we went 80 percent sba with a 10-year amortization 10 percent seller note and 10 equity the seller note was a one year standby period followed by a ten year amortization with a bullet payment at year five of the amortization so overall it would be year six um so we had worked the numbers such that there was still a decent cushion with what this business was generating that we'd be able to service the debt pay ourselves and still have a decent margin in there but you know we were primarily focused on the financial aspects of the business because we're personally guaranteeing a lot of money yeah where we probably lost sight of was what the bit what the owner was doing every day um and how that was going to affect our lives once we owned the business so you know we we did ask him we said hey like you know what do you do day to day how do you how do you run your day you know he mentioned that it was mostly um logistics and hr and and sales and you know communicating with our suppliers and securing ice it's kind of makes sense uh he was doing all that all right but he was doing it from you know the cab of his truck because he was also a full-time driver and deliver delivery guy so we get the business we were supposed to close in january and his terrible lawyer dragged it out to the end of april so that whole time that we should have been you know getting a some training and ramping up slowly but surely into the busy season we we bought it right beginning of the busy season so there was no time for sitting around the office and learning how things go we just had to go and so we showed up day one jump in the truck and you know off we go um delivering ice all day um you know showed up at 7 30 and we stopped at six so was this a shock to you was it was there kind of a moment where you were like hold on a second wait uh you're in the in the truck all day and that's what i'm going to be in the truck all day yeah i mean we knew that he was making you know he was in the truck sometime he was making some deliveries it was not uh so much known that it was it was really all day and he was he was kind of shooting from the hip um on all the other aspects of the business um you know we knew that he wasn't trying aggressively to grow it that he wasn't focused on a strategy he wasn't trying to see if there was good fit to grow downstream or upstream or or whatnot he was just managing the businesses he inherited it um but man yeah we we did not anticipate that we would be sitting in the truck and just be regular delivery guys for a while um i think um you know after a couple weeks of that uh it really started to reflect on me that this was uh a real a real gift um and then we're gonna we're gonna benefit from it um yeah in that you know all the other guys uh saw that you know we weren't afraid to do hard work um and get in there and do their jobs and oftentimes you know get up to speed on their jobs faster than they do and do their jobs better than they do you know knock out all these deliveries quicker um keep keep going and keep driving hard um so we built up a lot of credibility with the team doing that now which was a good side benefit um not that we wouldn't have shied away from doing it otherwise um but i think that they saw um how much we were willing to to grind and to be there and you know be there before they got there stay there long after they went home and uh and the other thing that we that we found out was that this business operates 24 7. um so just like any you know home service business like a plumbing business um we have on-call hours um so we were getting calls at you know eight nine o'clock ten o'clock three in the morning um and uh and we had to figure out quickly how to manage that because before the guys who started this business in 75 they would they would do everything and they would do everything themselves because they lived a block away so someone called you know some nightclub would call them at midnight for 10 bags of ice they'd go do it um so we had to quickly change that and manage customer expectations a little bit uh but yeah it was a total eye opener the first couple weeks and you know i'd i would have left to go home um and i'd be eating dinner with my family at seven o'clock or six o'clock or whatever it was and my phone would ring of somebody needing ice and i had to a couple times i had to leave you know the dinner table with my wife and my my daughter to run downtown and deliver ice and that was a i i talked to don my partner after that i said something's definitely going to change like in not just for me but for the other employees too because you know how do you put a price on having to leave the dinner table with your child um to go make sure some dingy restaurant has a couple couple bags of ice so we set some minimums on that and a lot of effort was put into kind of changing customer behavior and setting their expectations appropriately um so now we've kind of gotten them to do is if they kind of know ahead of time that their ice machine is going to go down which they normally do because these are these are restaurants that will call us every day for three months you know wanting ice after hours we said hey your ice machine is not broken fine but like we know it's broken you're not going to get it fixed for another couple months send somebody down here to pick it up you'll pay a cheaper price and it's not that much ice you can fit it in your car or ask us to deliver it during the day that's fine so a lot of expert went into that um and then a lot of effort went into kind of managing expectations for um uh for other customers too like the uh like the grocery stores and whatnot of what our minimums were were going to be going forward for that so at the very least um i could i could answer my wife when she asked me you know why i'm leaving it's it's for a good reason because it's going to be like a enormous order or something but oftentimes it's also in the middle of a really bad storm or terrible weather so it's it's kind of treacherous to be driving a truck around then also so this you know i imagine as you said it's kind of a blessing in disguise i mean not only do you build credibility with the crew with the rest of the team but you just intimately familiarize yourself with what their day-to-day looks like and what the challenge is you know you're essentially in a logistics business and and now you've done six months of the very logistic you know frontline logistics so it's probably i imagine you've had lots of insights about what the day to day is like for them and also areas for improvement um so and and i also imagine you know that there's as you pointed out there's enough cash coming out of the business that you can hire somebody into your role and and step out of the you know the cab of the truck uh here kind of at your discretion whenever you want to do that feel like you've you've learned the business enough to do that you can probably hire hire your replacement to to do the driving have you done that yet are you planning to do that we're actively working on that right now um and you're absolutely right and that kind of brings up another good issue you know we had the we had the money at the time um that we bought the business to hire another driver um and we hadn't thought about hiring a general manager because we still wanted to be deep in the weeds and learning what was going on with the business first before we handed it off to somebody but we had the money to hire another driver or even two however many we needed to to fill those tasks and yeah take up that slack but um you know as i'm sure you know and and many that your listeners listeners know the labor market over the summer was was awful um especially for you know that that kind of sliver of the market where you're paying anywhere from 15 to 30 an hour brandon you you say that you overlooked this uh fact and due diligence that that the previous owner was spending all day in the in the truck what what should somebody out there what should you have asked that you can coach other people to to ask um that you didn't just hey what do you do all day no no really what do you do all day yeah it's a great question um and it's difficult to think about how that question might be asked about any other business than ours no well i'm just trying to think about you know if i walk into to our business and i see how things are going and how how they're operating and how they're moving i don't honestly know if i would have gotten the right answer out of him any way i asked it um i could ask him yeah how many hours a day are you spending in the truck he very well may have lied to me and i wouldn't have known the difference um because i don't know how many people it takes to move as much ice as they were moving because i didn't just didn't know what i didn't know um obviously know now um i suppose i could have taken a look at like an average order ticket um and seen generally how many orders fit into a truck and how long a truck might be out but it would have been too much work to come to a very fairly inconclusive answer um yeah it's a tough call uh you you really are kind of relying on on sellers to to be honest with you um yeah i think generally just getting a good feel as to whether a seller is being honest with you about other things will tell a lot about if if that answer is truthful um you know what are his what are his business dealings like how or how do his financial reports look is he trying to spudge the numbers here or there uh if he's willing to do that in one aspect of his business he'll do it in another and how he translates that to you you know one of the other things about you in particular brandon that jumps out at me is as i thought at the top you said that you missed from your military days leading people and and and cultivating a team and it's a contrast to what a lot of my guests are just people in this space i think feel which is that you know they they look at the financial potential of small business acquisition and and their eyes go wide uh and then they get into the business and and there's all these people problems all these people issues like it doesn't you know what it looks like on the spreadsheet is not what it looks like on the ground but you it actually sounds like that's something that you not only thrive at doing but actually kind of missed and looked forward to doing again do i do i have that right and um do you think that that differentiates you yeah i love it um and so funny enough when when don and i started talking about um going forward and doing this with k4 you know he expressed to me um you know hey i've been operating these two businesses um as president for for six or seven years now um my goal with what we're doing is honestly to to step back and do more of the finance stuff and leave the operational hr stuff so i don't know if we're going to be a great fit because he was viewing me as the finance guy i said well funny enough uh i don't want to do the finance stuff anymore i really want to do uh the operational and hr stuff and and he he looked at me and he's like you know i don't know if you know what you're getting yourself into and i said no i'm perfectly clear of what i'm getting myself into um i'm i'm all for it um and he he's like okay well let's let's go ahead and do it then um and i have i've i've really enjoyed you know just it's tough when you inherit a team so you know technically you know they got fired from the last owner's business and hired by our business you know in at the same time so not everybody was a great fit um which is fine um but uh you know most of the folks here were you know were nines or at least eights if in a couple tens sprinkled in there as well um and they're you know i i really hesitate to throw out the word family but a lot of them are so one of the ladies who works as our office manager is the sister of the guys who started the business and his son or her son is one of our warehouse associates um a lot of these people live in the neighborhood right around south philly and it's a very family oriented uh environment um and there they can see through it really quickly um so yeah you come in and you demonstrate a lot of empathy you you give people you know a lot of slack to operate with at first just getting to know how they move about and and what they're all about what their goals are what their ambitions are and you just kind of tell them look i'm here to make sure that you have the right tools to execute the mission with my intent you know and they appreciate that so you know the first couple days we took a walk through and you know just met with every person said hey you know what's your goal being here and it's okay if your goal is just hey i just want a steady paycheck like that's incredibly noble and that's great and i'm i'm going to facilitate that but you know we had a couple guys who did express interest in you know not being a truck driver anymore like like hey you know i think uh it'd be cool to you know yeah maybe drive the truck but um you know maybe manage the facility or have some sort of path beyond just you know being a delivery guy and we're working towards that for and they know that we're working hard to do that for them um and so yeah you're just coming to work every day and you're showing that you're putting in you're putting in the effort to you know help them realize their their goals as well and that's something that um you know i recently did an interview with um our high schools uh newsletter um and they asked about i said hey you know your business deals a lot with legacies and you know carrying on business legacies you know what do you want your legacy to be and i'm like well i don't really care about having a legacy but you know from a business perspective i think a lot of i think leadership and business is a lot like having a coaching tree in the nfl you know the wins and losses only tell one side of the story and it's a really small side of the story but tells me more about how you ran your organization is where other people have gone and how they've succeeded and what they've told people about you and about how they you know we're helped to that position by you so you know the conclusion is if obviously you want to build a great platform but the objective in building that great platform is so that pl platform can help other people reach their reach their goals and ambitions so uh everybody here knows that that that's our intent is to you know the reason why we're working so hard and the reason why we're trying to grow the business beyond what it was before is so that it can work as a machine to help them last question for you brandon when you and sorry remind me of your partner's name mike it's done done when you and don were sketching out what you wanted to do and you came upon the the thesis of you know retiring business owners and and being a great succession plan for them and and acquiring multiple businesses over a number of years and having a portfolio of businesses how does one decide to do that a portfolio of varied assorted businesses that you know that may not be complementary at all they may be very different types of businesses versus taking those same 15 years and intellectual and financial horsepower and and and just trying to grow the one business as big as you can two very different paths but it just seems like like for example if you're looking at your second second acquisition you know a year from now and you're looking at a completely different industry then you start over you have to learn that industry and you'll get better and better at learning industries you'll be able to learn industries really quickly but still you know you're kind of there's in some sense you're starting over again versus um it would seem there'd be a compounding effect on instead having that second acquisition be within the same industry in which you already are and you already you've already invested a year and a half in capital and learned a ton and have a network etc etc so how does one decide to be an acquisition entrepreneur that buys a business and and grows within that it grows that business within that industry as long and as hard as they can versus uh building a mini berkshire hathaway yes good question and um you know the answer is probably twofold and unfortunately or fortunately you know both of the aspects of those answers are are fairly selfish um so the first part hits on kind of what you mentioned in terms of um learning new industries and that we we want the challenge we want the challenge of you know spending a couple years in one business and establishing it as a good platform and then and then trying it in in a different realm uh the second answer is probably more practical in that the whole objective for us um is is in an end state of financial one and having different businesses you know or operate in a symphony together um is more diversified and represents a better uh form of risk mitigation for us longer term okay um and so that's kind of what we set out with um i will say you know in our experience so far with this business we've we've seen some opportunities just you know tangentially to what we're what we're doing with the ice business that um fit more with um staying focused on i would say logistics generally so we've thought about hey okay with this five to ten business strategy you know is it something where we want to have the ice business and we want to have a landscaping business and we want to have a light manufacturing business um or you know what we've seen is we are building up an expertise in in this logistics and distribution business and you know one of the great opportunities we've come across is um is logistics real estate um just going from place to place seeing and knowing you know where they're building why they're building there um what they're building there how big it is you know what what assets do they have what is it facilitating um where might you be able to do that better or in us with a smaller footprint or with a bigger footprint we're starting to learn a lot about why this logistics machine operates the way it does and and where it could potentially be better um so yeah it's funny um people say um you find more business just by being in business yeah and it's certainly been true um you know just since we've owned this one you know we've been approached by vendors of ours to see if we want to buy by their business we've been approached by real estate folks to see if we'd be interested in in their spaces and owning their spaces um we've been approached by competitors to see if we want to merge with you know uh merge geographies um so a lot of different things have happened um a lot of which we didn't expect so um i wouldn't say that our overall goal of five to ten well-diversified businesses is uh not still our goal but um you know the opportunities that are in front of your face um are oftentimes the easiest ones to pursue um you know versus setting out another two year um you know one to two year uh trek to to find another business through brokers or otherwise so um so you're still open to the possibilities exactly yeah brandon this was a great conversation uh we talked about twitter what's your twitter handle and is that the place best place for people to reach out to you uh yeah so i guess um that's a great question what is my twitter handle um i believe it's brandon p adams so so brandon b r a n d d o n uh p as in paul adams adams um feel free to uh reach me there you can uh always email me brandon k4inv.com or if you're local feel free to stop into the ice shop we're down in south philadelphia at 2235 heart trans street or grab lunch with me at penrose diner anytime you want all right very good brandon thanks very much for your time today will i appreciate it thanks for asking me to come on