Fraser Voll, thank you for joining me today on Acquiring Minds. Hey, thank you, Will. It's a pleasure to be here. Fraser, you acquired a business that has many of the ideal characteristics sought after by self-funded searchers. It's a commercial cleaning business, so it has recurring revenue, B2B recurring revenue. It was doing high six figures in EBITDA, so sizable. And it's a leader in its local market. So, we are eager, Fraser, to learn how you found and acquired such a great business. Start us off with a little background on you and what led you to want to buy a business in the first place. Yeah, of course. Thanks, Will. Uh so, a bit about me. Uh I'm I was born and raised about an hour west of Toronto, Canada. So, I grew up there, uh went to school there as well. And when I first started my career, I worked at EY in the public accounting practice. So, I was doing that for several years, became a licensed accountant. And I really found a passion and a desire to work in mergers and acquisitions. I found the ultimate business business transitions, the kind of the unpredictability of the nature of the work, the the complexities that can happen in a lot of the human and emotional elements to be very uh something I really wanted to learn more about. So, I did that for a couple years at EY and I specialized in their corporate finance and business valuations group. So, some of the deals they could range from $10 million in enterprise value to $500 million in enterprise value. So, you'd see a broad broad spectrum of businesses, maybe more on the the pen and paper side or or less sophistication and less call it corporate developments or finance structures to really high-performing businesses in a variety of industries and verticals. So, I looked a lot at software and technology. I looked a lot at the energy as well. Um And so, it was really there where I I'd say I owned my skills of learning more about business fundamentals, what drives value, what when you're looking at it from an external party, what people want to see and what people don't want to see. So, I'd say I learned a lot from there and a lot of the the discipline that I have today. So, I I owe a lot of credit there. Um From there, I worked at Constellation Software. So, Constellation Software is one of the largest software acquirers in the world. They have a a unique strategy. They're a buy and hold acquirer. So, I think today they're probably six to 650 companies they've acquired in a in a 30-year span and have never sold. So, I worked there on the corporate development team doing uh deal sourcing to execution. And from there as well, it's really private equity but in a different mindset. Uh I learned a lot as well. Um especially in the software space, what to look for and what not. A lot of the intangibles as well, of how to build relationships with people, how to find that common ground with business owners who may or may not want to sell and having those conversations with someone when they look at me, maybe they see someone a a generation younger and so how finding a way for them to open up kind of sharing their lives, sharing personal stories, what goes well in their businesses and what doesn't. So, uh from there, I really learned the the intangibles, the the human elements of building conversations, building rapport with with strangers, with people uh who don't know you. And so, I did that for about a year and then moved over to a lower middle market M&A firm Mhm. called Portage. And from there, I really wanted to specialize in working with small business owners in traditional economy. So, I'd worked a lot in in software previously. And I thought software was my passion for a while but ultimately realized it it just wasn't and I I think it's um I wanted to learn a bit more about businesses that are that fly under the radar. Mhm. Um you know, whether it's a home renovation business or a local grocer or in my case, a commercial cleaning business. So, yeah, that's kind of the the bit of the background about me. Okay. Uh well, I want to get into some of your time at Constellation but I think we'll we'll return to that. I have a a bunch of questions. SaaS is a obviously a very hot area and looks and you were working at the kind of for Constellation, for those who don't know, or is could really consider the the gold standard acquirer of SaaS businesses. Um So, it's pretty cool that you you worked there for a year. Returning to your story, we'll we'll we'll get back to that stuff. So, you you end up at the lower middle market M&A firm and find yourself drawn more to traditional under the radar businesses rather than, you know, sexy SaaS. And so so, take us from, you know, you you working at this firm to actually making the decision that you wanted to do your own deal, buy a business and become an operator rather than continuing to work as an M&A, you know, an M&A professional. Yeah, I I would say it was the decision to wanting to own a business wasn't something um was something that took years for me. I would say in the last couple of roles I had, I always felt like a square peg going into a round hole. I was enjoying the people, there was lots of good things and lots of positivity but uh for some reason and I it took me a while to pinpoint what it was that I just didn't feel like I belonged. And not in a bad way, people didn't welcome me but just that my my kind of spirit and passion lay somewhere else. So, when I was at Portage, I was really working with small business owners who wanted to sell in in Ontario. And I really saw where I could add value. I think that's where I ultimately got to in my in my career transition. Seeing that there's a lot of businesses that don't have processes, don't have formalization, don't have policies and having worked at large companies and very disciplined, whether it's investors or advisers prior to, I learned a lot that I didn't always value that I had that skill set until I went to work with small business owners to who didn't know about those things. They're really good operationally focused, they're really good with their clients but maybe the the financial understandings, the the drivers of value, the some of the some more processes just didn't occur to them. Mhm. And so, it it I would say it took me about probably three years to get to where I where I am in that emotional self-discovery journey before before I was working on a sell-side mandate. So, when I was at the sell-side firm, uh the lower middle market firm, I was working on the client that I ultimately acquired, Regional Janitorial. And so, a bit about that story, I was working with the owner, built a very good relationship over a past couple of months and was starting to market the opportunity and it was kind of that intersection of opportunity and what I had been looking for without realizing it was to find a way to create my own value, my own personal value and putting a a stamp and complementing a lot of the things that I I'd thought about over the years and a lot of things I'd learned. So, you're at Portage. And Port- to be clear, Portage is kind of a boutique investment bank. So, they're finding businesses and and that sellers who want to sell their businesses and and finding the buyers out there and then handling the transaction. So, essentially business brokers but maybe at some something of a higher level and really managing the whole the whole transaction process. Is that an accurate Is that accurate? Yeah, correct. They're they're really they're really good at finding opportunities and and finding owners who are willing and have reasonable reasonable expectations and doing a lot of that work. And then they have a formalized process to bring the opportunities to market and find the buyers. Mhm. And so, you start working with RJS, the business we now know that you personally acquired but you were working as an employee at the time of Portage. And you I believe you this was day one on the job, you were assigned to the RJS account. Correct? It Yeah, it was uh it was coincidental, it it was fate, it was a lot of things happened. So, my very first day was November 1st, 2021 and that was the very first day I met the we did onboarding for the seller um of Regional. And so, that always stuck with me throughout the whole process, you know, was this meant to be? And uh ultimately, the the answer is yes but um having having had that opportunity from day one, it really just felt like a couple of years work felt validated in meeting the seller. Mhm. And at this point in November, you were already starting to get the itch to do something entrepreneurial. This feeling of uh square peg round hole you had already kind of surfaced in your mind and you you knew that maybe you were looking for a different career path at this point. Yeah, I did. I I certainly when I was looking in changing careers, going into or staying into professional services felt like the easiest route throughout my whole career because it's what I started and it's what I knew. I didn't have the operational skill set. And so, it it was that it was that perfect opportunity of the size, the fit, um timing that that really aligned with me. And so, I took it. I had been thinking about buying a business but it was really without the resources, without people who I at the time I I didn't know anyone who had ever done that. So, I said a lot of that self-doubt, saying, "How could I do this?" Uh at the time I was 29. How could I buy businesses? It's pretty crazy. People work their whole careers and you know, I should just kind of wait my time and and climb up the corporate ladder, but you know, the the more and more I got down this journey, I was spending I was realizing I was spending time after work, on weekends, talking to my wife constantly saying, you know, "What if we did this?" And Mhm. I was doing deal modeling. I was talking I was spending a lot of time outside of work. And I think I told you over the past, you know, over a couple months I probably had 100 to 150 different conversations with people. Uh whether they're private equity, whether they're individuals who bought their own businesses and really learned uh learned the skills, but also gained that confidence and that self-belief that this is something I could do. Mhm. And when you were working at Portage and and before, were and you were seeing buyers acquire acquire businesses, were they not {quote} and {unquote} searchers? I mean, were were you not being exposed to young, ambitious, entrepreneurial people like, you know, that were kind of like you, that were actually doing this? I was. I would say I because I didn't have a a personal connection or personal relationship, it felt that um they were different. There was something they had that you didn't. that they were special, they were creative, they were passionate, they had all these intangibles that I didn't have. Mhm. Mhm. And the um yeah. And and then once you started talking to people, you realized that actually you do you do have the stuff. And when I I believe you told me in the pre-call that there was also kind of through this this burgeoning interest of yours or ambition of yours, you learned about search, you know, capital S search. Um tell me about learning about that and then how you ultimately had these dozens and dozens of conversations with other searchers around North America. Yeah, so it was probably around that time in November when got introduced to another a couple and my wife and the other wife were friends and I met her husband and very intelligent guy, his name's Jeff. And so, he he started telling me that his passion was to buy business in a couple years. And he had he had a a game plan. He was thinking, "Okay, what do what do the next two or three years of my career look like?" Or maybe longer. And so, I had never had that kind of foresight. I think I was playing a little more day-to-day, you know, what is what is passionate or what's driving my passion today. So, finding somebody who had thought about this and he was thinking about all of the realities, you know, this is what it can mean for my family or this these are some of the implications or some of the considerations. And Um it was from from there that Jeff introduced me to a couple of other individuals. And then I would say every time I met somebody, they introduced me to two or three other people. And it's kind of just pulling that thread to say, "Wow, there's a lot of people who are thinking similarly, whether they're the same age or same life cycle." And so, um that conversation I just kept pulling and pulling away at it to really I didn't know anything at first. And then all of a sudden you have a couple questions. And then you have more. And you realize uh you don't know what you don't know. And then you have all these conversations and you start learning a ton. And you really the the more I talked to people, the more questions I had. And it's just kind of this thirst that couldn't be quenched until I got to a point where it almost felt like I had to know it all, which is not you you're never going to know it all, but I felt like if I really want to do this, I have to know everything that I can possibly do to make sure this is the most informed decision for me and my family. Mhm. And by the way, Jeff, this person that the friend of your wife, the husband of your wife's friend, has he bought a business yet? No, he's um he he's not in that in that stage yet. I know he definitely wants to. Um I would say he's in a very good career position right now. And so, he was also I think the one who introduced me to your show, interestingly enough. So, Oh, great. What's up, Jeff? Yeah. I think he'll enjoy the show, too. But uh I I know he has he has the passion, he has the desire, the skill set. I think it's just got to align with his his career timing and family timing. Sure. Sure. Well, I have to say, Fraser, that that kind of that sequence of events that you went through, selfishly I'm really pleased to hear because I part of the Acquiring Minds mission is to kind of show other people that this is possible. Because when you first have the inkling or hear about buying a business, I think most people, including me, back, you know, two years ago, thought it was just something for rich people or, you know, super sophisticated, experienced people. Uh and, you know, and and it's not. It's it's for people Everybody has to do it a first time. And those people who do it a first time don't all necessarily come from investment banking or private equity. In fact, those former private equity investment banking folks are a, you know, a tiny minority. There are a lot of them. They're visible, but they're they're not necessarily the norm. It's just a lot of I think actually a lot of people um are similar to you in that they just never quite felt at home in a W-2. I know it's not a W-2 in Canada. But um I think you know what I mean. You know, in a in a 9:00 to 5:00 employee capacity and wanted to do something entrepreneurial. And and um this path ended up being that, but it just doesn't get the visibility that traditional that what we now would call traditional entrepreneurship, starting something from scratch does or tech startups or whatever. So, um Acquiring Minds and other podcasts are here to to to to uh shed light on this path. And so, I'm glad that um you know, kind of the your path followed what I envision. And I hope many uh listeners of Acquiring Minds go down as well. So, off my off my soapbox. But No, I I was going I was going to say that it definitely has like you've had a a variety of guests, whether they've invested $10,000 and bought one business and that's turned into a couple or been very successful and or people who are later in their careers and had a million dollars to put in a down payment. And kind of seeing that that broad spectrum of um you know, kind of my my whole career and and maybe also the educational piece. You you're learned to define and maybe this is my own bias, but I was learned to define success as one path as being a leader in a large firm, whether it's a partner or corporate director of some sort. And realizing um and and just kind of realizing what is success to you and what's your passion and what's going to keep you inspired every day. And am I right in assuming that when you said you felt like the um square peg round hole, that it was essentially you kind of felt like an entrepreneur and not a corporate ladder guy? Is that essentially what it was? Yeah, I didn't identify with being an entrepreneur because like you said, it was that's for that's for really creative, intelligent individuals who have this brilliant idea they're going to bring to market. And I never I never had any of those ideas. So, I didn't I'd say I just identified as somebody who was trying to think differently and and challenge myself differently. Um Mhm. Which is ultimately that's where I am. Awesome, man. You know, hearing you talk about I mean, how much you educated yourself and were just devouring information and and talking to as many people as you can as you could, it's awesome. Uh I do want to ask though that you you in your capacity at Portage actually had all of this experience that many searchers don't, which is that you were seeing on the inside of a lot of lower middle market small business transactions. So, in some ways you you had this like extremely valuable, extremely relevant experience that many other folks listening to Acquiring Minds do not. Is there anything that you like any takeaway or two you recall from that time, from your stint at Portage, that you learned in that role that, you know, that would be to the benefit of of listeners? Mhm. That's a that's a really good question. I would It's sometimes I almost take my my experience for granted is the honest. I would think I learned a lot. Um that there's I think what I had learned ultimately from Portage is that there's no one career path for all. When I was at larger firms, a lot of people have the same background and the same expertise. And they start in the same path. Whereas when I met Portage, people had come from different backgrounds, different sizes of firms. And ultimately, it was a it's a very successful firm. But people didn't have to have this identical background. Mhm. Mhm. And just to give us a sense of size, how many deals would Portage do a a year? Uh they do about 10 to 12 a year. Oh, 10 to 12. Okay. And if it's not searchers uh acquisition entrepreneurs buying on the buy side, who who who is buying these lower lower middle market businesses? Who are the other other buying sets of people? Is it private equity or is it, you know, larger companies buying up smaller companies or what? It's a handful. I'd say it's maybe some family offices. A a combination combination of family offices, smaller private equity firms. Mhm. Maybe not necessarily ones that raise a a large fund, but uh kind of a collection of individuals who raise deal by deal, possibly. And then also other business owners who are either looking to diversify their own business or just very entrepreneurial in their own passion. I think we saw a couple of people who had immigrated to Canada, whether they had started with rental income properties and then use that money to to buy a to buy a a salon or um kind of a different people from different walks of life, especially in the lower middle market. I think as you get up upstream, you you probably find people of a more common background. Mhm. Mhm. And were many of the businesses being sold essentially retiring boomers? Yes, most of them. Yeah. Okay. And was the opportunity in many of them this kind of pen and paper fax machine business that were just begging for kind of a a tech overhaul and more more marketing sort of thing? Was that Is that pattern as common as we all kind of think it is? It definitely was common among the the clientele we had and also the and and just what you see like the the wear and tear of being an entrepreneur founder takes and you it start to whether you lose the joy but you also lose the passion to to reinvent the business or or kind of take new risks and take new opportunities. Mhm. Fascinating. All right. Well, Fraser, let's get into the deal itself. So, you're at Portage. You meet Arge, the owner of RJS, day one. Uh but you don't on day two then offer to buy his business. There's some There's some decision-making that goes on. You see other businesses. You continue to your own on your own personal time explore search. So, connect the dots from when you actually, you know, are, you know, day one and and are exposed to RJS to actually making this big decision to to go after it yourself personally. Yeah, it it took a couple months to to get there. I mean, up and down I was working also on other client other engagements and the other factor in the background, which was a large large decision or large um family change. So, I have I had the time my daughter was 2 years old and she was a year and a half, sorry, and my wife was pregnant and she was due in April. So, kind of she was due April 2022 and so it felt um it the the timing never felt perfect and I I know it never does, but having having a young child at the time and number two on the way soon to and I had just started a new job. So, to say, "Hey, I just started. I should also make another career change and we should add another family and we're going to add a uh my son to the family. So, it was kind of there was the a lot of the education piece was a huge part and just learning and feeling that confident and that self-belief. And the other piece was really understanding how it will impact my family um good, bad, or or the otherwise and so really realizing that my this is where my passion lie and I wasn't finding the joy in my day-to-day, which it's unfortunate, but the the truth is it it negatively affects your family when you're unhappy. It affects your spouse and your kids and just kind of your ability to to show up every day affects the quality of your work when you're at work when you're not when you're not enjoying what you're doing. So, it was kind of that that gradual day over day of feeling these same feelings that really compounded, but I think going from kind of November 1st to when I acquired it was it was that learning. It was that education. It was talking to people who had done it and realizing that you know, I I might not be the the most perfect buyer. I've I still have a ton to learn. I this is my first time doing it, but I got to a point where I believe that I was going to be the best buyer, better than anyone else because I had the passion to do this more passion than anyone else. Mhm. Mhm. And so that that's ultimately why I resigned to then put an offer in to to buy Regional and and there was Fraser, explain to us what the the obvious conflict here that that this presented. So, how how how how did you dance through that delicately? Yeah, I had a lot of and I I think the the owner and and founder of Portage, Jim, a lot because he had a lot of open conversations with me and it was something I was nervous to bring up maybe a month into the role of, "Hey, I think I want to buy our client." because that has huge implications on the firm. He just took a chance. He hired me. They were training me uh in their processes and their ways to then say, "Hey, I think I want to buy your client and leave your firm." So, there was this So, having these tough conversations you know, with myself within myself introspectively, with my wife, with my family, and then also with um with with Jim was it was a challenge. I just felt like every day I was having hard conversations, but it felt that they had to happen because um I just wasn't comfortable. I wasn't I wasn't happy day-to-day if I didn't try. So, I ultimately said, "If I don't try, I will never know." And maybe this isn't the best time with young kids in a in a career change, but if I don't do it now, I I probably never will and that kind of thinking about being the lack of enjoyment or lack of happiness and joy in my day-to-day and just regardless of any other impact, it just would really affect my family, which is not where I wanted to to be. So, I would say I had I had several conversations with Jim over the period of time of just he was obviously a business owner to say, "Hey, what are some considerations if it was almost a brainstorming exercise at first. If you were going to buy this business, what would you do?" And kind of having kind of picking his brain about that. What kind of buyer do you think would be best to run this business? And so, we had a lot of those conversations even within our team. And I I took that a lot. I took that away because these are talented individuals and so with experience in the lower middle market and so bringing in that experience of well as well to say, "If I wanted to get to this place, these are the steps I'm going to have to take. Let's have some more conversations and um Jim and I I'd say we had a kind of a a frequent cadence of, "Is this still something you're interested in? If not, that's okay." and you might There will certainly we're going to bring in other clients and if that's kind of the the way you want to go, I I fully support you. So, I do really appreciate that he was he was very supportive. He didn't shut down the idea and he said, "We got to the point in April. If this is something you really want and we're testing the market now, you know, there's the like you said, the obvious conflict of interest. You you'll have to resign. Everything was on good terms and kind of like we talked before on the pre-call, you know, resign with one hand, offer in the other hand." Yeah. And even if you did that and even with the blessing of Jim, everybody's copacetic, you still don't know that you're going to get the business just cuz you just cuz you offer it. As as we all know, deals fall apart uh brutally and frequently. Uh so, you could resign, offer, and then and then, you know, that your chance of of um of actually closing, let's call it arbitrarily, was only 50%. I was uh I was scared. I There There's no way about it. I I was scared that if I resign a, you know, um even though I'm leaving on good terms, I'm kind of they're not going to want me back if this deal falls apart. Um and if whether it's on me or whether it's on the client, I just had a lot of those fears and I also, like you said, was was fearful for one reason or another that this deal wouldn't close what matter whether it was the bank wouldn't approve me or things fell through on my end or the seller decided to to walk away and I had those conversations with with Jim and he he assured me to the best of his ability, but he can't guarantee that things are going to go perfectly. Um Sure. But I think there's also that belief in that they all they onboard clients who are truly ready to sell. It's not that It's not that "We'll sell if we get the valuation we want. It's we're ready to sell and let's find the valuation that that it that is fair for everybody." So, knowing they've done that work on the onboarding of clients and setting that expectations gave me some comfort, but then there was also comfort that for some reason or another on my end, I couldn't close the deal and I'd be left without a job. Yeah. Yep. Uh and you also had the benefit of I mean, you'd been presumably seeing into RJS for a couple of months because they'd been this client of Portage. So, you already really knew a lot about the business. So, a lot of that, you know, that risk of, you know, maybe this is a bad business it had probably been mitigated away cuz you you knew the business pretty well at that point. And I believe you told me in your pre-call that you'd also started developing a rapport with the seller. You knew you personally knew the seller or get was getting to know the seller over these three and four months. Was Do I have that right? Yeah, you do. So, we the the seller and I were probably talking once a week, twice a week at times and then maybe it was every other week just kind of depending on the timing. So, I was building up the marketing materials. And while I was building up the marketing materials for Portage, I was building up my own investment memo and business strategy in it. I kind of I became comfortable in that if I if I don't quit my job and resign and pursue this opportunity, at least I've had this thought exercise of of putting together a business plan of talking with different people of that network. So, I got to you just kind of felt comfortable that if this doesn't go the way I wanted it to, at least I've really thought about what is going to bring me happiness and it's kind of just refining what I what it is I do want in my day-to-day life. You know, I've heard people say similar things about going through their first LOI that and the deal ultimately falls apart, they still look back at it as a is it is it extremely valuable exercise cuz they did the business planning, they did the you know, the life planning and really asking themselves and or their partner like is this really what we're you know, we want to do and you know, they they arrive at the answer of yes, but it's just such a valuable exercise. So as disappointing as it might have been to lose that deal, they look back at it being like well, it was still a very very worthwhile exercise. So Cool. Now all right. So you you you you decide to go after it. Give us some some details on RJS and it it's regional janitorial services is the is what RJS stands for? Yep. I I typically just call it regional. Or just regional? Regional for short. So yeah, so it's uh it's a commercial cleaning business in Niagara, Ontario. So it's about 2 hours southwest of Toronto. It's a Niagara as a whole for for background is about 500,000 people. It's a very spread out uh region geographically and not the most dense. So Regional as a whole was founded by the seller's father in 1971. And he started it as a means to provide for his family, not necessarily I'm going to start a business, more so if I take on these clients and I think he was a barber at the time and I think he was also cleaning at nights to really bring in and do everything he could for his family. So That's kind of A side hustle as we'd now call it. Yeah. I think it's it's a bit of a different story. He was an immigrant and so that's what you hear a lot about the the immigrant life. I fully appreciate working day and night to provide a good life for his family. So I love that. Where was he from? He he's he's Italian. Okay. And so he founded the business and his son and wife had worked in the business forever picking up odd jobs, kind of doing everything they could. So the seller had started in the business I think around 15. He he'd go to school. Him and his mom at night would would clean one building. I think his dad and other people would clean a different building and it just started to grow organically from there. Um the seller's father passed away in early 2000s at which point the the seller took over and he he's a he's a really lovely man. He's a great individual. I think he and he he does he he identifies as as a cleaner by by trade. He doesn't necessarily identify as a business owner and so I think over time the the kind of day-to-day stress whether he was working he was working a lot at the very beginning but towards the last couple of years he was probably only working 3 4 5 hours a week. So a lot of people will have the mindset well, why didn't he just keep doing it if it was you know, running very profitably, but it's that piece that you can't measure the the stress of owning the business, the responsibility of making sure people are taken care of and so that had that had just took its course and kind of worn worn its way out of his time and so he he really wanted to make sure as he called it his father's business was going to go into the right hands. Um So that's that's kind of a bit of the timeline. So Regional today is we're about 50 employees. Uh we do about 2 million in revenue and we're kind of in that sweet spot of EBITDA 6 to 800,000 and this is all in all in Canadian terms. Mhm. And so the business had been growing organically prior to COVID about 8 to 10% a year. Whether it was taking on whether their clients were expanding for example if a client expands their footprint geographically, they they build a new warehouse, they build a new facility, there's just more cleaning to be done. Mhm. Or they took on a new client that just came word of mouth. So they really the business operates today or it did at that point in a small a small city, a small town about 50,000 people and so people would say, "Hey, Will, who do you who do you use as your cleaner?" Okay, well, we use Regional. You should give them a call and that that kind of just snowballed time and time again and so the business doesn't had never had done any marketing, doesn't have a website, nothing is very sophisticated about the business and I mean that in a really a really genuine and positive ways that they got to this point doing everything on trust, handshakes, strong relationships with their team and their clients and uh delivering good service and so learning about this journey for the last four five months when I was at Portage and working with the seller gave me a lot more Excuse me. More comfort than I would have if I was just blankly looking at a a SIM or an an info deck. So understanding how passionate they were about their clients and their people and how they took care of them and what they would do for them and going above and beyond what a typical employer does in this space, I I became very passionate about it and people are were what I'm most passionate about. That's great. And what a awesome story history to this business. 50 employees, are those are those full-time employees, contractors? I so that the hours vary. I would say they are full-time, but the hours a week might vary between 25 to 44 hours. Okay. So this is people's primary employment. Given their family circumstances, they might not be able to take on more hours or there might just not be enough hours available at the current moment. So that's kind of where the the talent lies. Okay. And the can you tell us about the deal structure? Yeah. Yeah, of course. So ultimately paid about three times EBITDA. So because the business had a large spike in revenue and in EBITDA during 2020 and 2021, I wanted to structure in a way that mitigated that downside risk. So paid about two times EBITDA upfront with one times on an earnout. We tied the earnout to gross profit and the reason I tied it to to gross profit is that a business like this is really revenue and payroll and so payroll falls in the cost of sales and which leads to your gross profit. Mhm. There historically their gross profit and EBITDA were almost the same because there was no overhead, there was very minimal fixed cost, there's no office, there's no website, there's no marketing. Um Not but they might they must be leasing some space. Do they have some I mean, you know, dispatch point or something where they keep the mops? No, so the everything all the equipment is stored at the client's site. So they have it either whether they need a an auto scrubber or larger units whether it's a full-time carpet cleaner or whatever the the equipment is, our clients make room for it on site and then they'll and then we'll store in a janitor's closet the the cleaning supplies and the products. So it's really on Regional but my general manager to make sure our clients are fully stocked with the supplies they need. So our team will and this is kind of goes to the pen and paper nature of the business. Our team will will text or call and say, "Hey, we're going to run out of paper towel, we're going to run out of toilet paper. Can we order more?" And my general manager or my supervisor, they'll drive all around town. They'll spend one day a week doing deliveries. Uh we're still working on refining that process it, but that's kind of where it's going. Fraser, let's get just talk a little bit more about the the acquisition price. So you bought it for 3X EBITDA which for a business of this size is a is a really a really strong multiple for you know, 6 to 800 in in in EBITDA. That's kind of like really what the you know, as I said at the top, self-funded searcher sweet spot. You really want to find one of those is that can be very difficult. And when you do, you know, I think a lot of people would be comfortable paying a multiple much higher than three. But as you said, the risk factor here was the spike in COVID. So historically like how big a spike was that? So before 2020, so 2 million it's doing $2 million now. Before 2020, what was it doing? Uh about 1.2. So say let's say for general the business doubled in the last the business doubled from 2019 to 2020 and it still grew from 20 it still grew at double digits from 2020 to 2021. And so I started to get more comfortable that there was a a sustainability. It wasn't just 1 month or or 1 year. Right. But there is that downside risk. Everyone's thinking once the pandemic going to end, are we going to change our cleaning protocols? Are we going to are we going to close our offices and everyone's going to work remote? So we're having a lot of those conversations, but a lot of our clients who are about And so going back to the deal structure, the reason being people wouldn't pay necessarily more for this business is there's also customer concentration. So there was two clients who represented combined about half of the business and so one they're both very large employers, they're reputable, they're brand names in the geo the geography that we play in. So I had I started to get more comfortable that they're not going to change their protocols and their um cleaning needs and demands, but it's it's it's inherently a risk if for some reason you lose one of those clients, what happens to the business? So one of them one of them is under contract a 5-year contract which signed actually just before the deal closed. So that gave me some more comfort. The second client isn't under contract but in the last 50 years they've had two cleaners. Um and we've been cleaning them for about 10 years now. And so the the previous cleaning company that was in there, they had retired and ultimately went to the the seller of Regional and said, "Hey, do you want to bid on this work? Do you want to do it?" And that's kind of how it went. They understanding that relationship of the customer concentration, they don't frequently go out to tender or they don't go out ever go out to tender. They they don't haggle on price. They're they're very reasonable to work with. Gave me more comfort when when if I had just taken a spreadsheet approach you say customer concentration you shouldn't pay more than X times or you shouldn't even buy this business is some of the conversations I had with different different people who were lending their advice. Yeah. Yeah, sure. Well, I was going to say so that that does that does make sense to kind of dampen the multiple a little bit. But on the on the other side, the fact that you kind of just said in passing that you have a supervisor, a regional manager. I mean this and and you had said earlier that the the owner was really only working 3 to 5 hours a week. He was carrying a lot of the burden of the business which is is why he wanted to sell. He just wanted to you know the kind of cognitive load off of his brain. But point is he still had he put put in place a systems and and employees a management layer effectively where he could not do much every week. Um so making the business that much more more valuable. So yeah, a lot to like about it but also recognizing that that customer concentration and the recent almost doubling of the business since COVID represent represent some of those risks. Before we move off the deal structure, let's just let me just make sure we have dug into understanding the earn out as well as we can. So a third was an earn out. Uh how does that work? How long was the earn out and I mean can you get get into even some of the the arithmetic on that? Just um Yeah. I think a lot of SBA buyers don't have earn outs cuz I don't think you can have a traditional earn out with an SBA loan. So it's not something I've covered a lot here on the pod. So if you'd indulge me. Yeah, of course. Earn earn outs are one of those pieces where you can structure a hundred different ways and you can have people who who really agree or really disagree with the the approach you've taken. A lot of people will want an earn out to be tied to EBITDA. The one challenge is in you kind of whether you go through this legally or practicality is what should be included in the EBITDA, what isn't. Uh what are reasonable expenses that the business can incur and what isn't or and what is. So I I I didn't want to have those conversations. I didn't want to be haggling over whether I hired a marketing firm and spent $20,000 on marketing. Should that be included or should it not because it marketing was never part of uh pre-acquisition EBITDA. Yeah. So I the practicality in me said, "Let's tie to gross profit." And that the reason being is gross profit captures probably about 95% of of EBITDA. So it's really it covers effectively but it's really revenue minus payroll. Mhm. Yeah. And so I did a two-year earn out. People would argue you could do shorter, you could do longer. And so the payout occurs dollar for dollar above a certain gross profit target. So once you hit say X in gross profit every dollar of gross profit above gets paid out at a one to one ratio. Um and it's capped every it's capped for the two years. Mhm. And so if let's say worst case scenario the business, you know, goes back down to 1.5 million in revenue. Then are do you feel did you model out such that your earn out fully protected you? Pretty much? Mhm. It's a good question. I don't know if there's any way to to fully protect me. I think that's part of the the risk I assumed and and the belief. Yeah. Um I'm trying to think do There's probably no perfect scenario where perfectly plays out. And the reason being if revenue drops off too far, I'm actually more worried I'm less worried about the earn out and more worried about servicing my debt or making sure I keep my covenants on side or uh that I can still initiate my growth plan as I'd like to. Yeah. Yeah, great point. Right. Okay. Well, let's let's move on a little Well, actually now that you So you you closed in August. Uh so tell us just it's only been then two and a half months really. Uh so but tell us how how it's going before we move on to some other topics. All in all like I've done things I would do differently. I've done things that I feel proud of. Uh my day to day I feel much more joy. I feel that the lively and passionate about what I'm doing. Um I think I think it's ultimately what I feel most about. Financially the business is performing well. We're taking on more work. I've kind of I'm finding a way to unlock some of the individuals and or creating a a process and systems to to free up their time so that they can do more work or or find new work. And so I've for my general manager who really runs the business, I've put in together whether it's he has a retention plan in place for the next couple of years as part of the deal structure but also finding a way to tie his bonus to performance. Historically his bonus was very discretionary and very ad hoc. So now I'm saying, you know, putting a lot more accountability on my team to if we want to get to where we want to get to, everybody wins. It's not just me as this this owner in the ivory tower. It's really we're all going to play a part and benefit emotionally, intrinsically and financially. So that's that's been one part. The other part has been we're going to slowly split our business into two service lines. So one being Regional Janitorial, the other being Regional Maintenance. And the maintenance aspect is something I'm able to leverage because of the talent I have. So my for for background my general manager has worked in construction for about 20 years. He's he's a jack-of-all-trades. He's very handy. He's very good with people. Um he's super hungry to grow the business. He is really unique. I could have never imagined but he thinks in a in the best way possible that the business is is his own. And so he takes a lot of that emotional burden and responsibility. And so it's not something I have to coach him through or I have to put the most structured incentive plan together. It's really he knows what he wants to do and and I just have to give him the tools and the the time to do so. So within this time frame in the last two months, the business prior to acquisition only had this general manager. There was no other management team actually. And so since then I've promoted two individuals to supervisor roles so that my general manager can be free to take on more of a sales role. So that's part of what I've been doing. The other part is trying to connect with my my employees and create a lot of team cohesion. And the one challenging in in this a business like this is because we don't have the Well, you said it. We don't have a dispatch area. We don't have an office. A lot of people work in their own clients in their own buildings and they don't interact with the other the other team. It's really they're working in a silo. They know the general manager. They know the supervisor but they don't know anybody else in the in the business. So I'm really trying to for me what a lot of my passion is in team culture and team environment. So trying to bring that into this which is a it's a bit of a challenge not having that common space. So we're going to have for example a team meeting or a town hall in a couple weeks time which is it seems very simple but it's something unheard of for for these individuals. A lot of people were worried when I said, "Hey, we're going to have a team meeting or a town hall. I'd like to introduce myself and just kind of go from there." People were worried like you know, did something bad happen? Did um you know, we've never had a meeting like this before. So you you kind of bump up into some of those conversations which is which is nice to see because it also helps me learn a lot about what's going well and what can we improve just on the the day-to-day side? Other than other than compensation, how can people enjoy their jobs more? Mhm. And so this this town hall is is coming up. You haven't yet had it. No, haven't yet had it. It's it's taken some time to to organize. Personally for me I've had to get kind of my handle on the business and my footing. And so I didn't want to come into having having a town hall being very unorganized or I also want to show some progress. So for example, I've bought state like top line new vacuums and new equipment across all facilities. So I wanted to make sure that that had come into place. And so I want people to to see and feel the changes and not be worried about their jobs or um something bad happening with the business. Sure. Sure. And so in terms of who you've actually met or at least communicated with directly, the general manager, your two supervisors that who you promoted from within. And anybody else? I assume I assume not. I assume many of the the 40 or 50 others you haven't yet met with and you'll do that you'll you'll meet them all for the first time at the town hall. I I I don't know the exact number but I believe I've met about half. So we have a lot of we have a lot of cleaners who do day shifts, and so I've been able to meet the cleaners that do day shifts and drive to those client sites and also it's a chance to meet the client, but then also chance to meet my my team and for them to to see me and just know that I'm going to be a very active owner. This is This is you know, I I don't I put in my life savings. I put in my life work to get to this point. Like I'm very passionate and I want to make sure uh I'm helping everybody. Um So, I've been fortunate enough about half the people uh haven't been able to meet a lot of my night time cleaners given family circumstances with two young kids. Yeah. Yep. And the two big clients that that represented the 50% customer concentration, I assume you've met with those. And if not, you better get out there and and meet them, Fraser. Yeah, you know How did those meetings go? Really well. I the I'm very lucky. My my general manager framed it. He prefaced it in in a very good way to these clients, and he has a great relationship with these these clients, and I think for the last one or two years, these these two large clients actually hadn't seen the owner. You know, maybe maybe one or two times, but in the last two years they really hadn't. They've been doing all of the relationship management with the general manager, and so he was he was kind enough to talk me up and said Fraser's going to be a very active owner. He's buying new equipment for the team. He's really trying to take the business to that next level, and so the the clients have been very receptive. They I was worried they didn't want to meet me or they might judge me based on my age or I kind of had this preconceived notion of of how it might go wrong, but it's been very receptive, and I think the the other reason is they've seen the they've seen the enjoyment level in my general manager just tick up four or five notches. They've seen how passionate he is. And every time they used to had asked him to say, "Hey, can you take on this extra bit of work?" He might not have had the the bandwidth or the the capacity because he was running so much of the day-to-day, and now he he doesn't say no. He says, "Yeah, we'll we'll take care of that." So, I think the clients are they love him. It's not that they love me. It's like they they love him, and by association, they feel positive about me. He sounds like a sounds like a a great asset to the business, the general manager. The and Fraser, before we kind of move off of of this business, tell us what your I guess you've told us a little bit already, but tell us what some of the opportunities you see for growth are. Not necessarily the new processes and and kind of the operational low-hanging fruit, but but you know, bigger bigger picture 2 3 5-year vision for the business. Yeah. So, really I want The long-term vision is to be a more fullsome facility service provider. I want I want people to know Regional as a brand, and within that we can we'll have sub brands. So, Regional Janitorial, Regional Maintenance, Regional Exterior Services, and that'll be painting or landscaping or snow removal. So, the the the long-term vision is to be this one-stop relationship for our clients that they know they they can contact Regional, and they have these different service lines, and they they will take care of it. A lot of the friction from a client's perspective is is coordinating with contractors. They have 10 different lists of different people who do one small section of building maintenance, and it's it's very time-consuming. It's very challenging, and it's not Some of our clients, they don't have people who are at full-time dedicated to this. So, they're they might be an office manager who's responsible for for managing the office, but taking care of the facility takes up a lot of their time. So, how can we find a way to really address our clients' needs and problems in a much better way? That's the long-term vision. The way we're getting there in short is very simple, but I've hired a marketing marketing agency. So, we're going to build a website. We're implementing a CRM. Everything Everything's been been stored on on paper, and we don't always We don't do a great job of following up with our clients. Uh knowing if they we've done a great job or if there's a better way we can serve them or is there more they're looking for. So, I think a lot of the the low-hanging fruit in the short term is is listening to our clients. What is it they want? What could we do better? And starting to signal that anytime they have additional work, we will find a way to do it. And we will find a way to service it. So, that's kind of the the short term, and then the long term is looking for whether we build out these service lines internally and hiring the right skill set and building the right functionality or we acquire other businesses in these streams. So, we're also looking at damage restoration services. We're looking at landscaping right now for the uh for the upcoming spring and summer. We're looking at building out our maintenance package package. And that really The reason maintenance is the is the first low-hanging fruit is a lot of our clients, they won't get repairs done to their buildings unless it exceeds exceeds X thousands of dollars in repairs, and at which point they can go to a general contractor. So, now they can say, "Hey, we have broken drywall. We have missing tiles. We we're missing a section of our fence over here or we have giant potholes in our in our sidewalks, and so my general manager and my supervisors have construction backgrounds that they can bring on the right crews to do that work. So, traditionally your your clients would need for all of these repairs to kind of accumulate over time so that the cost reached a certain threshold that would make it worth the GC's while to come in and fix everything, but you guys will allow them to just kind of do kind of punch list style. Just if there's small stuff all over the place, now Regional can handle that. Ex- exactly. And that that's kind of where we're you know, we're we're starting small and to say we can do a $1,000 job. We could do a $2,000 job or or a couple hundred because if I can build out the the infrastructure on the on the team side, it'll free up people's capacities to take on these works, and over time, I believe that these jobs will scale in that they'll be fully supported and fully sustainable. Yeah. Great. The your switch from somebody, you know, sitting mostly behind a screen while I assume you're still sitting behind a screen a lot of the day, but doing client work, being employed to now an operator, uh is it what you expected? How's it How How does it feel? It It feels great. It I'm trying to think if it's what I expected. I almost didn't have an expectation because I was trying I was working so hard to just get to this point that I wasn't necessarily thinking about what it might be like when I do acquire the business. So, I would say just based on my own personal constraints, I was thinking so much about, "Okay, I got to do all of these things to get to close." And when I hit close, it's kind of wasn't a now what. I had a plan, but I didn't have an expectation of what my day-to-day would look like. So, but I would say I spend about three days on the road meeting in person with my general manager, meeting with clients, meeting with our supplier. I and I I I really enjoy that. Maybe that some of that work could be done behind a screen or through phone calls, but I just enjoyed the human element of getting to chat with people, and I think because I've spent a lot of time meeting in person, I'm hearing a lot more candid conversations. I'm learning a lot of things that people might not share or just think to share, and just kind of the those organic conversations really happen. And then, the other two days are spent more on process improvement. Mhm. Let's hear a little bit about the commercial cleaning janitorial business, Fraser, because this is one that searchers are drawn to for for reasons that I stated at the top, B2B recurring revenue, namely. One of the one of the criticisms of janitorial commercial cleaning businesses is that there are the the margins are razor thin. But they don't appear to be in your case. 700 What do you say? 6 to 800,000 in EBITDA on $2 million in revenue is more like a 30 to 40% margin. Those are great margins. Much better than Much better than, you know, your standard 20 that you see in a lot of service businesses, let alone the 3 to 5% margins I've heard about in janitorial. How are you getting those margins? It It probably goes twofold, and what I would say about Regional is prior to acquisition, the business is at full capacity just in terms of in terms of team, in terms of margin. I think had I not bought the business over a period of time, it would just be very tough to sustain those levels of margins without reinvestment into into marketing, into hiring, into into building more infrastructure. Um the business was very fortunate to to have some nice tailwinds with COVID and and different cleaning services that came with that, but um within the commercial cleaning space or at least in Canada, in Ontario, there's really two ways you can acquire clients. And And one is private clients, whether they're commercial offices or factories, warehouses, you name it, and they're looking for a service provider. They can go with anybody. They don't have necessarily strict procurement policies. They have to They might go out and get bids for their own background, but they don't have to have these disciplined structures. And they'll do some their own website, their own market research to to find people. And they'll also look to who do they trust or who have they heard a referral about. So, that's that's one part. And then the other part is on public bids and public tenders. So, that could be for municipalities, for uh higher education facilities. And so, on the public tenders, that's where you see the margins to be very thin because they'll have evaluation criteria, which are largely price dependent. They'll look at your experience, your qualifications, and your background. But sometimes 70 80% of the of the weighting of is just based on your bid. And so, that's where you see the margins to be very tight on that public space. Um it it's good in one aspect because you can get these very large contracts you might not otherwise have or be able to. But the the downfall is the the margins very tight and very thin. And I think the unfortunate reality is the quality of service The And that's not necessarily where we plan, but the quality of service of the of those buildings isn't where it needs to be. So, in the last couple of months, myself and my general manager, we've looked at a couple public tenders and we've done our own walk-throughs. But when you go through the facilities, carpets aren't clean, door handles aren't wiped, windows are dirty. And that's that's the unfortunate nature of going for a public bid at the lowest price is that these companies are pri- are forced to cut corners. Yeah, we're forced to cut corners. Whereas, we really like to uh have this extra level of care in our clients. So, you whether it's my general manager or my supervisors, we'll go out. Okay, well, whether sometimes whether carpet cleaning is or isn't included in our contract, we'll go ahead and do it. Maybe we have the idle capacity. Maybe we maybe we've had some challenges the last couple of weeks uh on a talent side. So, we say, "Okay, you know, we'll do the carpet cleaning for you free of charge." And that that's a couple grand. Maybe that's a month or two of billing for some of these clients. Or we'll do window washing. Um we'll take care of some services and not necessarily charge a price for everything because that's that's the quality we like to bring. And so, when we bring that quality, we don't we have less conversations on price hagling. Yeah. Yeah. So, so it it sounds kind of essentially that you're positioned as a premium a premium provider. So, you charge more than you would you know, you charge the municipalities or these public tenders that your competitors are are bidding for. So, you basically are charging higher prices, but you're also delivering uh a much higher level of service. Um is what it kind of what it comes down to. And therefore, your margin you enjoy better margins accordingly. Yep. And with that comes higher heightened expectations from our clients. So, that's that's where a lot of that burden uh or responsibility is falling on me and making sure that the quality is there, our our team have the right equipment. The I Prior to owning a janitorial business, I I thought a vacuum was a vacuum. But that's not the case. There's a lot of specialty. There's a lot of high-performing equipment. There's ways to do it better. And there's better um kind of better processes. For example, wiping wiping glass. If you use a disinfectant on the glass, it's going to smear it and smudge it. So, there's a lot There's There's more nuanced implications and things I'm constantly learning about that go into the day-to-day making sure the quality is there. And on the labor question of commercial cleaning, so what I would guess is that it's it's not the highest skilled um labor pool. Which means that particularly in this climate is you know, at least here in the States, I assume it's similar in Canada, that's that's a very challenging place to play. Uh finding people, redu- you know, keeping turnover down uh is just probably always hard in this business, but but acutely so now. Could comment on that. How How How does retention look uh among your the folks who work at Regional? And kind of how how how Yeah, how do you how do you keep people in Yeah, talk to that, please. Yeah, that's Historically, the the turnover has been very low. I'd say the average employee has been here for about 3 to 3 and 1/2 years, which is very high for this industry. And part of that goes to that level of care from the general manager and the supervisors. And so, it it hasn't necessarily been the biggest challenge, but it will be a big challenge as we start to grow and expand. The the real focus on for me is how do we A A I want to start paying I want to look upstream at in building out better compensation plans, um provide providing benefits for employees. There's a lot of things that fall on to me that I that I can do and I'm actively looking at because I recognize that uh just on the human element, people are trying to support their families, their kids. Um It's it's it's things are very challenging in certain for certain individuals. So, that's that's where I'm kind of taking that that emotional responsibility. The other piece is building out a team culture. I genuinely believe from my own experiences, places where I like to work, it it a lot of it mattered less about the work I was doing, but more about feeling heard, respected, and recognized, and enjoying the people I work with made a bigger difference than my specific day-to-day job or tasks. So, trying to implement that into into my team and my workforce and uh part of that also goes to visibility. If I So, now that I've promoted two supervisors within, more people can feel heard and listened to among our team. And there's more visibility. You know, I want I'm putting the onus on my general manager and my supervisors to spend more time at our clients and more time connecting with our employees because historically, it's a very if you if you do nighttime cleaning, it is very invisible work. The only time you The only time you hear something is if there was an issue the next morning. Yeah. I want I really want to change that narrative with my team because even when I got in and said, "Hey, I really want to meet some people." They were almost worried that they had done something wrong because they were going to meet the new owner. So, I want them to know that I'm I'm here to support them and I want to create this environment and culture of giving good feedback, not just the the constructive feedback. Yeah. Yeah. Well, if if your base is 3 and 1/2 years of turnover, um even with all these ways that it could be improved, that that sounds extremely strong. So, uh that's that's just really promising for the future. If you can get that to to 4 and 5 years, I mean, that'll be that'll be really incredible for your cleaners. I want to I Fraser, I want to spend just a couple minutes circling back to the SaaS stuff before we close out uh cuz there were some topics there I think that'll be interesting to people whether or not they're interested in SaaS specifically. Um but do tell me first on the question of SaaS specifically, you thought it was your passion and then decided it wasn't and you liked and you ended up being drawn to overlooked sweaty businesses for lack of a for lack of a better term. What uh what did Why? Why did Why that trend Why that um loss of interest in SaaS? Uh probably a couple elements. One, I was trying to envision myself like could I be running a a technology company? And I understand there's a lot more of the you know, being in that CEO suite for for some of those SaaS businesses is a lot more of the product that the people management, but and less so on the product side. But I felt that I I didn't understand I just had a lack of understanding in a product road map. A lot of the the technical aspects, I would say deterred me and and didn't draw my attention. I think the other piece is that with often overlooked businesses, uh I almost felt like this this passion because maybe they were there's a different education standards or different quality of pay that I could implement and my whole philosophy personally has been you know, if I get to a level not if I get to a level of success, but how do I bring people you know, improve their standards and quality of life as the business grows. And I thought I had more of an impact on a business like commercial cleaning versus in a technology business where a lot typically workforce is well paid and and more educated. I wanted to look somewhere else that just on a human element, people are living more paid to paycheck to paycheck. Things have a bigger implication on them. And so, that's kind of without realizing it prior to buying Regional, that's that's what I feel really passionate about. That's so cool. I mean, you really you really learned that impact on your employees was turned out to be to to be really important to you. And it seemed like you could move the needle on impact with employees for folks who are not, you know, earning cushy professional salaries as programmers. Very interesting. Exactly. You had also said it that at Constellation, you learned a lot about deal sourcing and cold outreach. Any any tricks of the trade that you could uh that you could share with us about how to approach a a website owner or a SaaS owner or any commerce store owner uh to en- engage them in a conversation about selling their business, especially since they have really obvious places to go sell their businesses now, MicroAcquire for example, and everybody wants a SaaS business. So, so they are notoriously um kind of feel like the belle of the ball, and and uh you know, they feel like if they want to sell their business, it they just snap their fingers and can and get a great great and and get a great multiple, too. So, what any any tricks of the trade there? Hm. So, when I was doing a lot of a lot of cold outreach, uh obviously people people say no. They open your email, but they don't follow up, or you have one good conversation and you don't It's really hard to hear back from them again. A lot of that just kind of goes to perseverance, determine determine nature to not let that conversation die. You I mean, recognizing you can only do so much without annoying somebody, but it's really that that perseverance, and I I had this go go go-getter attitude that I will talk to anybody about anything, and I will I will find I just really had this belief that I will find a way it is part of it, and accepting that sometimes people don't want to talk to me, but how can I on a human element, how can I find a way of just opening opening the door to a different conversation? So, um and I think that applies to probably searchers, whether they're going to proprietary outreach or uh through brokers, but business owners are humans, and that's what I really started to enjoy and enjoy the conversation is I started talking I would almost never talk about selling your business. I would just talk about that kind of building that rapport at the beginning, that day-to-day, what are challenges, what are things you like, um I've never been in your shoes as somebody who's trying to source a deal. I've never been an owner of a SaaS-based businesses. I've never I've never been where you are, so having that empathy Not to say empathy, but that that understanding that I don't know any better um than the owners, and really real really being able to be humbled by the learning and the constant education. Mhm. And you you had also mentioned what to look for and and what to avoid in SaaS businesses in particular. It Do you remember some of those uh some of those features that you could share with the audience? Yeah, when I when I was at Constellation, they did a really good job of building out a template of the revenue streams of their targets or other businesses. So, Mhm. Trying to remember, they have a They typically break it out into four revenue streams, recurring, hardware, professional services, and other. So, they do a really good job at valuing the different revenue streams differently. So, recurring revenue gets valued more more highly than hardware or professional services, and so understanding the revenue mix was a big piece. And if it's recurring, how often is recurring, what aspect of it of the contract is recurring, um and sometimes professional services can be recurring without realizing it. There might be a long-term contract in place of X hundred hours of deliverables a year of maintenance or ongoing customer support. And then hardware gets valued less because A, the margins on hardware are typically less sometimes, depending on the software. You might give up the hardware for free. Yeah. Uh so that they use your software. So, if you if you valued it just on gross revenue, you're going to give this hardware revenue the same multiple, the same value as recurring, when in fact it's not. It It might be It could even be a loss the losing on a product. So, Yeah. separating out into those revenue streams and understanding the also understanding the customer mix regardless of SaaS or not is very important. I want to pivot now just quickly to uh being a searcher in Canada. For I I know there are actually a bunch of Canadian listeners. They They write me and and tell me that they'd like to hear uh more stories from with from Canadian acquisition entrepreneurs, uh and that generally I you know, the it's just not as mature search there. So, so folks feel even more lonesome as searchers than than their American counterparts, and and their American counterparts are also constantly saying how lonely search is. Um so, even worse uh north of the border. What would you tell folks out there, Canadian searchers? Any any just kind of you know, blank canvas here to say what you say what you want to your countrymen and women. Oh, that's a that's a lot of pressure now. Yeah, yeah. And to your point, I I do you know, having never searched in the US, but I do think the Canadian market is less developed. There's less of There's less of less resources, whether it's access to capital, entrepreneurs who have done it, um education. We don't have MBA programs that that talk about search, for example. So, I think there's there's kind of a a different a few different factors. It's almost like in Canada, I identified not quite as a searcher, because people didn't know what that was. I identified as someone passionate about small businesses. In a in a weird way of of phrasing it, but the the terminology of search in in small-scale deals, so you know, like regional, it it doesn't make sense. It It may It may It doesn't also resonate with some brokers or advisors. They might not be as familiar with that term. So, I think as you get, you know, to to 10 50 million-dollar deals, it it's a bit different, but I would say to people who who want to do it, there if you really want to do it, there are a ton of people you can talk to, Canadian or American or international. There's a similar to me, if you want to find it, there are people who have done it, and there are people who have done it many more times than I have, and they're many more times successful, and there's also a lot of networks. There's There's one lawyer, um Mario Negro, who's who's well-known in the search community. I mean, he has his own podcast and talks a lot about it, but there are there are a lot of people if you're if you open your eyes to to searching in Canada, there's a lot of people you can talk to. And so, for me, I did a lot of cold outreach on LinkedIn to people who who had done it or were business owners. Maybe they didn't Maybe they didn't do search, or maybe also they were mid-career 40-year individuals who had bought a business just because maybe they bought their family business, they sold it, and now they're going to buy their second business and and run it. So, I think if you talk to people from different walks of life at different stages, you're going to learn something from everyone. Mhm. And when talking to Americans, how different is the experience and and the the mechanics of search in Canada versus America? The the glaring difference is that there's no SBA loan in Canada. Um so, that one, but anything else? When I talked to searchers in the US, I felt like the dumbest person in the room. They were super sophisticated. They had very savvy deal models. They They knew the financial metrics, they knew the deal model, the the levers, all of those things to a degree I still don't know. Um attributed to the great education, great learning, whether it's formal or access to to some of those networks and communities. What I What I would say is that having that technical knowledge or that financial engineering knowledge is super important, but at the end of the day, you are buying a business from somebody who doesn't necessarily care about your metrics. They care about what is this going to do for my life and for my family. So, I think when you boil it down to understanding what drives human element, what makes people passionate, um whether it's for example to retiring owner, they're probably thinking about their kids' education, maybe they're thinking about buying a cottage or taking their spouse and their families and extended families on large trips or having more time for for certain hobbies and activities. So, when you when you start to really realize Canada or the US that when people are ready to sell, they really most people, I believe, want They want two things. They want the right fit, and they want the right valuation. So, sometimes and that that's always a challenge, but finding finding that common element of how can I how can I help this owner achieve their own personal goals? It's It's been a theme of this of this whole conversation, or I should say of your of your approach, Fraser, and what you what you've learned from being an employee to now to to a a buyer to now an operator, just the the human element of all of this, from the deal sourcing to being a boss, to being a manager. Um so, and and that is not only a theme in your story, but a theme across Acquiring Minds, that really this all of business is is about people, not to sound trite, but um but it is, and it's easy to get sucked into the spreadsheets and lose sight of that fact. So, bears repeating. Yep. Uh you So, you've done it. You also that second addition to your family came along. I think I I I I heard him in the background there before we hit record. Yep. So, how how how you feeling about things personally, and and how does your wife feel about it, and how is it is it um meshing with having an expanded family. Uh it's it's hard. The And nonetheless, I would say having So, this is my second child. Having two kids is much harder than running a business. Um There there's just there's there's so much ongoing with with with with with with with with with two young ones. So, um I would say the meshing is is part of that philosophy and my own lifestyle is that I wanted to buy a business so that uh so that I could achieve the things that I wanted to achieve, but also so that I could find a career that fit into my lifestyle. So, I do family first. Sometimes work has to compress in a day. Maybe I have to cancel a meeting because my daughter's sick or my son needs me. Um but then that means I'll work later into the evening and I I feel really comfortable with that because I have only the pressure of myself and and my employees, but really only that that pressure, which I put a lot on myself to to deliver results, but I don't have this I can be with my daughter, but I have to be back at 10:00 a.m. because if I don't work from 10:00 to 4:00, I didn't work today. So, really being able to adjust uh adjusting expectations, I I guess it is probably a better way of phrasing it. It's setting and being flexible, especially around family. Like what is it that I want? Do I want to be working 60 hours a week and see my kids just on the weekends or do I want to see my kids first and then work around them? So, that's That's the the second approach is what I've taken. Be How do I be there for my family and my wife? And then uh how do I achieve my career goals after that? Mhm. And with the acquisition of this business, did you replace the salary that you had had at Portage or at any of your previous roles or whatever, you know, salary level you would have otherwise been at had you not bought a business? Yes. Yeah, I I did replace it. It was um it's almost on paper I got a raise, but at the same time I had to take out uh a home equity line of credit to to buy the business. So, kind of my my day-to-day my take-home pay hasn't really changed, um but on paper it looks like it has changed. Okay. And actually, before I let you go, Fraser, we didn't hit that and I really wanted to because you had been transparent with me during the pre-call and this will interest people. The tell the the structure of the loan from the um you know, how much how much did you bring to the table? How much did you borrow and and from whom? Just break that break that out for us if you would. And then and then we'll close it up. Yeah. Uh I had to raise about 500,000 and the rest being uh a debt from a from a tier one bank. So, I brought a I'm about 65 70% equity owner. So, I brought that capital. Um for me that came from personal savings and home equity line of credit. So, that's kind of where I say my take-home pay hasn't changed, although um my my gross salary has. And then uh I really brought along friends who I thought A, who believed in me and trusted me. And and B, who were passionate about small businesses. So, I was able to find that nice mix of a lot of friends I'd met in my in my undergraduate that were very successful in their own careers. And and going with that. And so, for me, at first I thought I wanted more institutional professional money, but I realized that if I wanted to have a family first and work second, that that I didn't feel and maybe that's not the case, but I didn't feel that that would be possible. So, I said, "Okay, I'll bring more to the table. And I'll I'll touch base with more of my friends in my professional network who A have never had the exposure of being able to invest in a small business and uh kind of that bringing that quality of life up for myself, but everyone who's invested it in me as well. Great. Well, let's let's call it there, Fraser. Thank you very much for coming on. Huge congratulations for what seems just like a phenomenal already a really solid phenomenal business, but one where it just seems like when you were talking about your vision, there's just so much more potential there. Um so, an exciting 5 years ahead. And um maybe we'll sort circle back in 2023 to see see how much of that vision has has become reality. Uh but in the meantime, yeah, very real congratulations. Awesome acquisition. Awesome um swing that you've taken there in your life, both personal and professional. Thanks. Well, I appreciate it and I know I mentioned this on the pre-call, but your podcast and listen to owners that you've had on the show really just helped spur that that interest. So, I appreciate what you're doing for the community. Thank you. Thank I appreciate that, Fraser. I'm I'm so glad you were listening and that it actually seems to have really made an impact in your life. That's that's awesome to hear. All right, sir. Until next time. Thank you very much. Take care.