red seller welcome to acquiring minds hey will thanks for having me buddy reg a lot of listeners will recognize your name and may even already know your story but for people who don't I'm going to call out three things that I think you're most associated with foundries so you have acquired multiple multiple foundries and you're building a roll-up in one of the world's oldest manufacturing businesses the fetal position we'll get into that but for now I'll just say that as successful as you've been buying small businesses you're vocal about people not taking this path lightly and then lastly your partnership with Josh Schultz who's kind of the operating genius at Kane cast your company so we're going to get into each of those and more but for those who don't know you at all reg how about starting us off with some background please sure so my simple background electrical engineering undergrad went through four Fortune 500 companies everything from engineering to product management to General management including Stinson M A and corporate strategy along the way after about 17 years just decided I was absolutely sick and tired of making font changes on Powerpoints and sitting through pointless meeting after meeting and not actually adding value at least what the value I saw was so decided to jump out on my own part of the idea of jumping out of my own was that the last four plus years of my working career and corporate was as a general manager and we had production kind of all over the world but a couple of places that we'd read short brought back you know near shore back uh from overseas we were very successful at and from a dollar and Cent standpoint on paper it didn't look great per unit but if you looked at our overall profitability growth Etc our ability to put product on the Shelf have quick turns do any type of flexible manufacturing Etc was actually driving substantially higher growth and profit percentages than than any of my peers certainly and as the industry as a whole so you know with that was really my thesis if you will using current Searcher terms which I had no idea what any of that stuff was back then was that I really wanted to do small us-based manufacturing so ran into a really really terrible boss August 2016 came home told my wife I was uh done time to figure it out whatever she wanted to do and I'd help her figure out her career because I was going to go either buy something start something go to work in private Equity or something as a CEO type of a role but whatever it was I was done with that so kind of my quick version um and so you liked so your thesis what quote unquote was near Shoring um us-based manufacturing uh but from those options that you just said either starting something or buying something or being a CEO for a PE fund how did you decide on the path that you did take which was buying a small business so let's say two things that was easy to eliminate going to work for somebody else again I'm sure it would have been better especially based on some of my friends that have gone and done this since then in my wife who's currently doing it um that would have been substantially better because I would have been able to make a lot more decisions Drive the organization how I saw fit Etc but it just didn't make as much sense to me as being able to not have a boss period other than going to write a check and getting money from the bank and then on the other side of it I'm not a startup guy I'm not an idea guy really like I can take something that exists to go from you know I always joke a lot of people take something from zero to one startups you know I kind of one to three and then the big strategy to get from three to ten or to a hundred and then you mentioned Josh already you know Josh is the guy that took our business the operational side of it you know to go to from three to ten and ten to a hundred that's much better what he fit but you know in order to do that there's just very few ways you can go buy higher Etc and operator of Josh's caliber early on so you have to do the operating which I we can get into later I think is absolutely imperative for somebody that is starting out to actually go and operate the the business in their in their industry for a while but yeah for me it just was I would rather cut a check go get some money from the bank and own 100 percent no did I have any idea what that took no I had absolutely none so I chose that path search no I I literally ate wasn't even 18 months ago I bet I was explaining it to somebody what I did and they said oh you were a self-funded Searcher I was like I was a what like I don't know what that means I cut a check they gave me money and I bought a business they're like yeah that's something they explained to me self-funded search and search funds and the Harvard or Stanford guides and whatnot and like I knew none of that no clue my experience was thankfully um who the business that I bought from they happened to list with a broker and that brokers I guess agency if you will the the parent company they had this thing that said oh we do pre-approvals through this guy over here John thwing was his name he's now moved but um John was like a savior for mine and he pretty much told me listen I can handle this you don't have to worry about it you just go figure out the business I'll figure out all this back-end stuff you looked at my resume my financials whatever he's like yeah don't worry about it I can solve this piece of it you just make sure it's the right business to buy and I'm going to take care of all this SBA stuff and that's always my running joke because I didn't even know how to spell SBA much less what it meant or how it worked but you know in the process walked in in September for the first time ever into a Foundry which I do not recommend to anybody else but you know if you've run a lot of businesses it's kind of a widget doesn't really matter but yeah I walked in for the first time in September and uh you know kind of a snowball turned into an avalanche in January 31st I owned a business and reg for those who might not know and I believe there are some because I wasn't confident that I knew what is a Foundry nobody knows that that's easy so this is this is a world that literally existed they first know of it for sure about 6 000 years ago and all that it is is melting metal and pouring it into a form and then that form after the metal cools you get a finished product after you have to do some additional finishing and whatnot but yeah it's it's that simple it is we take liquid metal and we either pour it into a sand casting what they call it you know a mold that is the it's like a negative shape but what it is or it can be steel it can be all kinds of stuff in our case we are mainly aluminum non-ferrous is the technical term for it meaning we have brass bronze and zinc as well but if you just think of it as aluminum for easy reference for most folks yeah and we just pour liquid aluminum into a form we let it cool for anywhere from 15 to 30 minutes break the sand away and cut it off and you have a product and and the way this typically works is you are being contracted by a manufacturer yep who is a you are in manufacturing but the official manufacturer the one who's delivering the product to Market says I need you know a thousand pieces of metal that do this yep and so so talk to us a little bit about um give us a couple example products sure um you might your end product and then also about the business model yeah a little bit about the business model well the business model is a mess that's a whole other story but no simple products for people I mean the common thing that everybody would see stuff that holds up railroad crossing signs or traffic lights or if you go to a playground ever in your life there are these huge horses if you look at my Twitter feed there's been a few people that have gone and seen it we had some installations at uh at Rock Center last year and earlier we've had them they're all over playgrounds today it'd be a big horse with a spring at the bottom you'd Rock back and forth on them we're the only domestic manufacturer that yeah things like golf ball washers and anything imaginable people don't realize castings are in like 70 of everything you see around you you just have no idea of it but it's a kind of the most critical infrastructure piece that exists in our country but we just to your point contract manufacturer for somebody else so it we don't sell direct to a consumer we don't sell direct to you know a third-party business we sell to someone who comes to us and then they in turn sell to whomever it might be you know we have very little product that goes direct to a consumer direct to an end user business Etc yeah and so the business is a let's say the the manufacturer or the or the end manufacturer of the um hobby horse I don't know I don't know what you call that particular playground toy toy or ride comes comes to you and says we need this spring and they give you specs and then you cut a mold and then figure out the metal and then pour the metal and deliver them a thousand of these Springs yeah the the the joy is we actually put the horse on top of the spring we don't build the spring that's a different company that would bend to Spring but yeah so we make the actual horse that goes on top of it but yeah conceptually that's exactly what it would be and that's part of our game right they would go to this company to get the spring and this company to get the plate that would Anchor It To The Ground in a different company to get all the screws that would be able to you know actually Mount that into the cement that would go into the ground and ultimately we are the ones that are providing just the horse in this so that company comes to us and says hey we've got an order for 10 of these and can you make those in as fast a period as possible typically is how that works because everything is uh done that way but no it's so we get everything from we've got some customers they give us forecasts for the next 12 12 months we have other customers that come to us in a last minute Panic saying I got this order and it's holding up a 10 million dollar order and this is ten thousand dollars worth can you get this to us in six days and everything in between fascinating okay well let's Return To Your Story reg so you were drawn to manufacturing but this Foundry foundries are a niche Within an enormous category of manufacturing sure did you have a thesis about foundries in particular or was that just kind of the the nearest business at hand that was for sale that you liked yeah no it was it I'll be the the easy one is I've never stepped foot in a Foundry before as I mentioned before but right in in what it amounted to was I I kind of alluded to I'd run so many different businesses quite literally everything from solar and wind to thermostats and electrical distribution panels that hold your Breakers in your house so for me I'd been in so many different businesses I'd seen so many different things the widget didn't necessarily matter I knew I'd have to jump in I knew we'd have to learn and we have to figure it out but at the end of it it didn't necessarily matter how I made the widget because I knew that 90 plus percent of that was all going to be the same so it happened to be and I was looking Nationwide it didn't matter and my wife and I had been all over the country for our jobs before and ultimately the intention was that we were in Minneapolis just for a short kind of uh let's say development assignment for her I guess because I decided I was going to leave no matter what and then I decided that randomly when this Foundry came up for sale 20 minutes from where we lived that I walked through decided this is really great fundamentals and bought it now the key to that when I say I decided that it was great fundamentals I was warned by at least 10 people Foundry experts tried and true 10 20 30 50 years of experience and foundries that told me absolutely in no way shape or form do not buy a Foundry this is a terrible idea these are bad bad places to be you could not make a worse mistake buying this you're gonna lose your money hate your job hate your life Etc and everybody told me and I listened to everything they said the stove was hot and I said eh I know more than they do I'm gonna go buy a Foundry reg let's get into that why what were the reasons they pointed out that it's such a terrible business and then why how did you overcome those in your own mind yeah so overcoming my own mind and then overcoming in reality are two very different things but the simple answer is that so let's start with the things that people commonly think of especially in the search world as what you don't want to buy heavy capex not really reoccurring Revenue um a lot of working capital required obscene key man risk you know really the stuff that they say don't do this type of thing probably had I actually done a search fund people would have told me I was insane and they never would have backed me to go buy this um but for me I looked at it as so not just those elements but you know the other big part of it was that a lot of this had gone over the last 30 years had gone overseas you know so in our last 50 years in this country 80 percent of foundries have gone out of business so I was already playing in a very tiny pond I expected a lot more but the demographics of the industry were that the last time people really came into the industry in droves was 30 plus years ago so at that time you know early 60s maybe late 50s in age was where people really expected that were those were kind of the young side of the generation of people that were in foundries for the most part so you know if you kind of look at the key man risk you look at the capital expenditures you look at all those things I looked at it as okay but if I do solve those which I thought I could and I'll tell you kind of how I thought I could then I'm going to build a giant moat that nobody else is going to be able to get over and also I know that I'm going to be protected from private Equity or any of these other folks like if I could build it big enough an individual wouldn't be able to come compete with me by buying a small Foundry and a private Equity Firm which I dealt with a lot in Corporate America or certainly a corporation they weren't going to want these facilities right I mean when I was there we shed every asset we code off our books throughout Corporate America right we would have sold and leased back the real estate we would have tried to find third parties to do it Etc so all these things in my mind made sense and then the biggest one the key man risk was I just assume okay these guys don't really want to quit they don't have anything else to do when I talked with the the key people that were running our shops they said yeah it might be done in one two three five years it really depends on how long my body holds up you know it's a hard job these are you know in August on our poor decks it can be 130 degrees you know these guys are moving around 50 60 100 pounds for a 10 hour shift this is by no means easy work and their bodies just physically break down and so my mind was okay but if I can build this up enough in the next you know year build enough profits I can just pay those folks to stay I can let those key people continue on and their job will only be for the next six months 12 months 24 months whatever to create to train the people that I have but then also to start to create knowledge bases uh start to create training programs Etc then on the same thing once I get that I'd have the key personnel now I could have an advantage over my competition I'll take that start to buy any type of the equipment that I need that other folks wouldn't be able to buy because I had these key people and then I just further and further continue to create modes and now you know seven years later we're so far ahead of all other small foundries in the country I'm not saying we're Untouchable but I don't know who would ever go do it I mean it would take you 20 million dollars probably to catch us and you're probably going to return a pittance on that and you're not going to be able to operate them the day you buy them like it just it just doesn't make sense right I mean it it's and then also also I should say one thing I got very lucky and that covet accelerated a ton of this um I thought this was going to take seven years or ten years and then you know three years ago covet hit and it went overnight completely uh stratospheric I mean it was because of the supply chain issues and everyone was looking for local manufacturing local meaning domestic manufacturing correct reg going back to the first acquisition give us a sense of the size of it I was about 2.7 million in sales roughly um probably half a million dollars roughly in ebitda or sde technically and is 7 million a how big a Foundry is that is that too tiny medium large 2.7 million and that's 2.7 million yeah um it is of a small Foundry so Founders kind of break up in a really let's say it's a it's a medium-sized small Foundry so Foundry you'll see them as small as million million and a half in sales small foundries you see as large as they get to like four or five million then you tend to see a massive Gap at least you did pre-cove and now things have changed because of some commodity price issues between like five and ten million maybe 15 million is no man's land uh if you're familiar with the rule of three that is the ditch um in a pure strategy standpoint and then over 10 or 15 million in sales you start to see some really big foundries again um and then over 100 million you know that's where you get the few foundries that would serve automotives or Aerospace or something like that so very small casts in a few years yeah exactly but well still that's the great part about it though we still will compete in that small Foundry space that is our business model is that we are not chasing after I never see like I have a really good friend CEO of a much larger Foundry I've not one time seen them in a competitive bid situation we don't have the same customers we don't think about the same customers because we make very small runs from a quantity standpoint compared with what they do so yeah I mean we can mimic what they do but we compete on a totally different part of the market reg your your first acquisition so now let's let's bring in the infamous fetal position you have you have you you warn people well I'll I'll let you tell it what am I referring to here yeah it is let me back this up a little bit this comes from my advice that I try and give to everybody which is you need to find a peer group now I didn't have a peer group until many months in uh like a year plus in technically um to having this and what I found myself in is about six months in we had a the business that we bought was going down between five and ten percent a year before we bought it nothing really specific that was negative it's just they weren't chasing after new business so if a customer decided to go to a new model they wouldn't even go bid on the new model for instance right so it was just attrition anyway I'd also said hey need to understand maintenance very dirty environment foundries and I was told yep we shut down for maintenance twice a year well that was supposed to be the first week in July we got really busy I screwed up I'll talk about that in a second so here comes August 2017 and I had a problem where we had a key product we had to get out the door and this machine broke down and went in there talked to the third party who was coming in to help us fix it and he said well best case right now we can replace it it's like 26 28 thousand dollars I was like I don't understand like this was all done all the maintenance what's happening in my head I'm thinking oh my gosh during the Fourth of July shutdown period that we were supposed to have I told customers I drug all this work and had to pay overtime into June then my July was virtually you know non-existent it was essentially completely dead so I probably cost us 75 or a hundred thousand dollars just between those two months and now there's twenty six thousand dollar fix and I started talking more and I was like if we did the maintenance why is this happening and they said what do you mean like yeah I heard we shut down twice a year like we didn't do it this year because we were so busy but like we haven't done that in a lot of years and I was like what do you mean we haven't done that in a lot of years like yeah we've just stopped doing kind of that General main overhaul maintenance on these machines and all I could think of at that time was oh my God the business is still dropping five or ten percent I'm not getting traction with customers yet I don't have any new customers now I've got this 26 000 fix I'm going to write that check out I'm gonna be twenty six thousand dollar poorer and then I thought oh my God all these other things and by the way if that 26 000 fix didn't work which the guy wasn't sure if it would or not it was going to be like a hundred fifty thousand dollar bill that I was gonna have to pay I didn't know if I could get the money for it I didn't I assume no bank would ever lend me money against that piece of equipment I now since no that's totally false but that's a different story um but yeah and I just got in my head and I went home that night and I just could not stop catastrophizing everything it was like oh what did I do I should have just stayed in my W-2 job it was a guarantee it would have been easy you know I I might have hated it but I had plenty of money now I'm gonna go bankrupt my friends are gonna make fun of me or my old co-workers and like everything it was just pure catastrophe in my head uh and then fast forward about 3 A.M that morning and I found myself literally just like laying on the bathroom floor like just every negative thought imaginable going through my mind assuming that we were going to go bankrupt and then I just wasted millions of dollars of my wife and I's hard-earned money and it was all gone um so yeah it was uh I always joke about the fetal position and then so I finally started talking about this because there's a few folks this is two years ago now probably and they started talking about it and I'm like oh this is easy no big deal leave your W-2 sign a PG and go in a business and I was finally like okay we're gonna actually talk about at least what I went through because I have a bad feeling that someone else might have gone through it and other people should know this and I started talking to people about it and everybody goes through it there's nobody I know that hasn't I mean granted it might be a little worse a little better but anything imaginable it's just one of those things where you don't know what you're doing you're gonna screw stuff up like that checkbook at least at the beginning feels like your money I knew that it wasn't I knew from Corporate America things break you you know you pay money here you do that but it's just part even in the the p l I knew there was money in there for repairs and maintenance that were occurring like this wasn't out of the ordinary this just happens but again until you see the Cycles up and down and normally then so I keep telling people after like 18 months some people it's a little more some people it's a little less but it's somewhere around there that magically just starts to go away you just get used to it and again you and I talked about this a little bit I can't tell you why I don't know how much of that is you become a better owner you start to know the market and the business and the industry so you kind of understand the ups and downs I don't know how much of that is your risk tolerance just drastically increases and so it doesn't bother you you know and then again I tell the last part of the story is fast forward to two years ago it was right before we hired Josh right when my old president quit we had a question and we had like I can't even remember the number now it was like 200 some thousand dollars and someone asked me like or maybe it's 300 000 I don't even know um my office manager accountant was like hey we have this bill that we paid for like you literally like authorized wrote out the check and I couldn't remember what it was and so you know five or six years later like I was couldn't barely function thinking of thirty thousand dollars you know and now it's a 10x number five years later and I didn't even know what it was for and it's insane to me to think don't get me wrong like the idea that you can rent out a 300 000 check and have no idea like that's a that would be like the nicest house in my small town in Wisconsin I grew up in would probably be about 300 000 so or at the time when I grew up at least you know and so I don't it's just something that you have to get through and you have to understand that it's coming and it's not going to be easy but once you get through it it just becomes a lot a lot easier um and it still comes once in a while again we've got plenty of money in the bank and we know our plan we know we're gonna grow I'm sure we'll talk about getting to 100 million in Sales Plus like that's right in front of us but it doesn't mean that randomly all of a sudden I'll get some minor uh you know ping of anxiety and stress but at the same time it it goes away relatively quickly now and it comes maybe a few times a year not like once a day or every other day like it did at the beginning so this moment of Terror that you had turned out to be fine well did it well actually I I know it turned out to be fine because of where you are today but what did happen with that machine and that fix and the fact that the maintenance schedule had not been adhered to like yeah what was the end of that particular Story I mean honestly it's just like you find out in every small business now it turned out totally fine you know I paid the 26 they dropped the the piece in place they need to be changed out the head of the the the vmc and um all was fine it has still literally run to this day what was that six six and a half years later no problem whatsoever uh and then we started doing preventative maintenance again and so that was good to learn that you have to learn those things at some point in time and maybe that's part of the reason why it hasn't broke down but ultimately it just became one of the normal kind of standard operating days now I don't even think about what it would be or how it would be any different again that's like a random Tuesday I we have things that break down probably weekly in one of our different shops but I think part of it is you have to take it and learn from it and then that's just what you Bank you understand hey sometimes things break you're gonna have to pay that and then ultimately the big thing you have to learn is that your checkbook is no longer your personal money and what the business needs to spend money on it's not as if yeah technically I suppose I own a hundred percent that I was twenty six thousand dollars poorer that day but then also that machine is probably produced a million dollars worth of profit in the last six years too so you know you spend money to make money it's kind of the old adage but you eventually have to break yourself and this is where I got in where I started this on having a peer group had I had the peer group that would have been going through that multiple other my friends who had bought businesses right around that time randomly two of them are now really good friends with that had bought before me had experienced things exactly like this and they're like yeah we did the same thing we could have told you that's fine no big deal six months nine months and now would I still been worried yeah for sure but at least I'd have known more of it but and that's part of what I'm trying to do on Twitter as well I don't I'm not getting any value per se like monetary value out of Twitter I don't ever expect to I hope not to but I do want people to know that things like this occur and it's going to happen prepare for it to happen it doesn't mean that it's not still gonna suck for the first 18 months or whatever it is but I think it's a lot easier to know that we all go through it and especially if you can go find a peer group to talk through it people that are like it and then mentors that are five years and 20 years in front of you it just becomes a lot easier you realize it's not you're not alone and ultimately and you mentioned this before if this is what you're built for you'll get through it right and I think the big thing is the difference is there's a lot of folks when things started to go bad early during covid or even during the bank run this is just we're recording this right after svb you know the bank run went bad or the economy starts to turn South and you see people curl up in the corner it's really easy to run a business you know when it's been a great market for the last 15 years for me I called Josh on Friday and I was like excited out of my skin about what might be happening in the world because yeah could it suction or like the economy is going to go bad that's there's going to be some elements that are bad but that's when we operate like that's our favorite time like that you know it's it's the time when you actually go make hay right as they say uh it's it's the time when you know the best operators come out you get excited about that you get through it you figure it out and then you go make great businesses and so that's I think the big difference where you know just like that day like it was terrible at 3am but at 6 a.m I was back in the shop and you know I just said yes I'd called the guy and said hey make sure you get here this morning replace this piece of equipment and then we started talking the other and like okay hey what are the things we need to do we need to start doing maintenance so that first weekend we did maintenance on all the machines the preventative maintenance that we should have done we went through and we checked out everything else we replaced things that were broken so that wasn't going to hurt production going forward and then I started telling that story to customers of hey we're doing all these things you're not going to see downtime where you have more capabilities we have excess capacity we're investing in this place we want new business and then everything kind of turned around you know it wasn't quite right then but it was at least a story for me to go start to talk to customers about and as any sales person will ever tell you you just need something to go talk to a customer about it doesn't matter what it is just need an excuse and once that excuse happens then you can go figure out how to solve something and then you go sell more product and then fast forward literally 12 months practically from that day I replaced two other pieces of Machinery in that facility um and in refinance because we double profits over the next 12 months so it's really about getting up and you know we always talk about some people talk about yeah it's just like chewing glass uh mine is sort of a you know small business you just have to learn to like getting punched in the face and coming back for more and so is this like should it serve as a filter for people of like who should do this and who shouldn't I I guess it's kind of like if you hear that story and you're like man I I would not have been able to scrape myself off the floor then you know that it's not for you sort of thing um I get I guess what the takeaway like what's the takeaway if not if I've already bought my business and I know they're going to be hard times but if I'm contemplating doing this yeah what is what exactly is the takeaway that I just need to be really prepared for some pretty hard moments but that I'm likely to survive yeah I think that's the easy takeaway I'll separate this into what to be prepared for versus what that should do for people thinking about it one 100 you should know what's coming and I again I spent 17 years in corporate I'd seen all the ins and outs I'd literally run everything from a startup um inside of a corporate machine doing a couple million dollars a year in sales all the way to like a 400 million dollar Division and everything in between thousands and thousands of employees I knew what it took I saw everything but it's just different when it's your money and there's a new guy um I can't think of his name on Twitter right now but he had done a traditional search and now has just purchased his own he's in Arizona I believe I'm not mistaken yeah I saw that threat great threat but yeah and so he'll tell you the same thing like it's still different because other people's money you know OPM when it's your money and your uh your personal guarantee just know it's going to be different and I think that what that should filter out and this is why I'm very vocal about this I do not want people and this scares me to death right now because I know how terrible some of those times are your first 18 months to go through I don't want people to hear my story or to see you know there's a lot of us in that holdco group uh there's kind of a dozen of us that are floating around there's a lot of other people as well that are you know make it look easier simple or successful or whatever it might be it takes a lot to get here I mean I've been grinding away for seven plus years um and I want people to say oh my job sucks I hate my boss whatever I'm just gonna quit and go buy a small business that's a terrible reason to do it and I can tell you for me it it almost hurt like every single day I spent in corporate like it was just sucking the soul out of me like it was physically difficult for me to do and I'm not talking like the Sunday scaries that everybody talks about I'm not talking about like hating your job I'm trying to just like I could not fathom not going to do my own thing like one more day and so every time because you'll also go through this most likely if people go through due diligence there'll be multiple things that make you pause you'll be concerned about something or you know some bad part of a deal will come up and I've seen so many people Searchers and otherwise they will find any excuse to talk themselves out of a deal and I was completely other way which probably shouldn't have been I was finding any way imaginable to talk myself into the deal just because I would much rather have gone down swinging my own like taking my own shot then continuing to work for somebody else I just I couldn't find them anymore I'm like ah can I make that work yeah I'll make a plan contingency plans this that the other now granted I was totally wrong about those but still figured it out but yeah I think that's what it has to be you just have to like know it and then again there's a ton of jobs in small business or medium-sized business or family-owned businesses right it doesn't necessarily have to be that you need to be the owner it doesn't need to be like there's a ton of great jobs I mean we'll talk about Josh I mean Josh is an absolute rock star I mean I'm happy that he's my business partner it's amazing to me he doesn't have to own it to have what he believes to be a great job and probably a great career and something that's going to make him multi-generational Rich um and there's other roles you don't have to be in the role that I took right so that's what I think I want people to understand uh is really really think hard about it and if you do but then on the other side of that if people do know they want to do this I will do anything imaginable to help people to be successful especially if you want to be in manufacturing you can call me all hours of the day or night like uh I'll help no matter what I'll figure it out like it I I love it I really want people to succeed I just don't want to steer people into this because suddenly you know this is the new uh untapped asset class and suddenly this is going to make you rich and it's easy and they just back a Brinks truck up every other week to your house that was great Rich thanks for that I um just to put a point on it multiple of my guests have referred to this fetal position moment um so it it certainly traveled well that concept and and also you you seem to have predicted something um that really does happen to so many people and also with with the second half of that prediction which is they they seem to get through it um so not neither of us are here telling you oh you'll just get through it it'll be fine you you gotta figure out how to make it fine and you know there are bad stories out there too so yeah um this isn't the a unicorns thing but um yeah but maybe it's not quite maybe it's not quite as bad as you think in the moment it's not absolutely not and again like it is what happened then I wouldn't even think about now and we have way bigger problems that happen weekly in our facilities one I don't even know about it Josh Shields me from that anyway but two you just figured out how to get through it um but I'm really happy though that I'm going to be known uh as The Foundry guy in the fetal position guy that'll be great that's uh it's gonna be a heck nice and fatal a good good good Legacy for me I have to add a third F to my uh I I was trying to do that ahead of our ahead of our interview here uh just to make it just to round it out perfectly I couldn't come up with one so if you do let me know we'll make it the title yeah I get it all right reg let's let's get back to your story a little bit so um first of all to jump to the end how many foundries have you acquired now we are in the process of choiring number seven for foundries like we will have it I don't know how fast this will come out but it's coming within the next month of recording okay yeah it could be I mean this will come out in about within three to four weeks so it could happen right around then perfect well let's just hear the quick story this is what I want to do is um hear the evolution of you buying this first business to then doing your second business and like I and when it was that your now Vision which is doing this big roll up to 100 million dollars when that started taking shape because to be clear when you bought that first business um yes you thought you were going to improve x y and z build this moat and and emerge on the other side with this you know really healthy strong business Foundry that your competition couldn't touch however you did not you were you were not thinking that you'd become this hold Co of foundries on on a path to 100 million right so so take us from your that that first notion of what you do to how did it evolve to what you're doing now um and if maybe your second or third acquisition was part of that tell tell those stories in brief as well yeah so I haven't talked much about this um for me and I've certainly talked about this part of it I think it is absolutely imperative for someone that is coming in as a small business owner to buy and run your own shop for 18 months 24 months whatever there's a few reasons why I think that's obscenely important one you want to be able to call BS on customers employees vendors Etc and if you don't actually sit there and operate the business day to day you'll never be able to do that it's been what I always refer to in corporate as being an empty suit so being in there not only will you have the knowledge of your industry but then you'll also learn what it takes to go operate on a day-to-day basis and then going forward you'll always be able to go back in if something happens like when my president left I could jump back in immediately and go run we didn't miss a beat we actually improved drastically very quickly not just by adding Josh but also by me coming in there and realizing like oh we've been screwing this up for I don't know how long I gotta fix this really fast um and then the other part of that is that you get used to those ups and downs you see them and you can always help your employees knowing that they're going to have these struggles you can my favorite way of teaching people is to give them the autonomy to be their sounding board and then to starve the system as I like to call it of resources so make them go have creativity to solve it make them come to you with Solutions if they see a problem don't answer the problem for them make sure that you're telling them or asking them I should say um hey how are you going to solve it have you thought about this have you thought about whatever like just constantly teaching people and if you've never done that you've never operated for that 18 to 24 months you can never get there so with that my story is you know my first one I ran fully day today for 18 months um was in the weeds mainly didn't I mean I wasn't in like the actual making of a mold per se I did that a little bit but it wasn't like I was actually on the shop floor day today but I was in there talking to customers driving business that was ultimately my main goal and from that standpoint learned a lot but then after the 18 months realized that we had some real fundamental issues with our business even though we'd almost doubled profits in the first 18 months of the business we still had some things were drastically holding us back that we knew we weren't going to be able to get over as long as we didn't Own It control it Etc so we started looking around so after 18 months I just started talking to people realizing hey there's three or four things that we really need to do uh started pricing out new equipment started figuring how we were going to do that and the easy one the biggest one that I had was it was about a million dollars to buy a new piece of equipment and have it installed for this one specific piece that we needed and the other one was about a half a million dollars to buy the equipment and have it installed now both of these we didn't have the knowledge to run that equipment so not only would we have had a million and a half dollars worth of equipment installed we also would have had to hire people and then immediately we're gonna have to start paying the bank back so we would have had to go figure out you know how to get customers really fast now I'll come back to why this is a nightmare that a lot of companies get into kind of a death spiral when you start to do that so instead of doing that I said well that doesn't make any sense to me I can't figure out how to pay the bills with that and I started looking at other Acquisitions then and happened to stumble across a business that was doing very poorly and we're talking less than two million dollars in sales and less than two hundred thousand dollars in sde um you know by the time the owners were taking money out of there there was no money left over nothing had been done no upgrades to equipment no maintenance no hiring no anything um well fast forward you know so I found that about about two years in almost exactly um one of my buddies randomly referred me to it came through a kind of a broker not really and started kicking the tires on that in the end of that story is I ended up paying 256 000 for that business with both of the pieces of equipment that I needed it would have cost me a million and a half dollars but I also got the 1.8 million dollars in sales and almost two hundred thousand dollars so worst case um it was close to I mean 226 000 I just wrote out a check for it but the thing was almost cash flowing and by the time we picked it up moved it uh increased price and started putting our own customers through that that business made a half a million dollars the first year that we bought it so that was a tuck in that we literally purchased um combined operations with our first one that we bought and as soon as I saw that it was just like the light came on instantly um it is mounted to like wait a second I started talking to our customers a little more like oh we love that you're investing we love that you're growing that really gives us a sense of um you know positivity and and confidence that you're going to do the right thing and so we want to start to give you more business and then just kept growing on it and they're like hey have you ever thought about buying something over here and over there and they started talking to me about other things and so it just suddenly realized as I talk to customers the big customers wouldn't give me their business because they needed to have multiple locations to de-risk having they didn't want to put all their eggs in one basket and the small customers wanted to come see us and from that I realized well we'll make this simple I'm just gonna go start buying these things they want to be able to drive in one day I'm going to buy them like every 500 Miles because you figure in order and what they wanted to do with my small customers is they wanted to wake up in the morning get their kids to school drive in come wash their product get made shake hands go have lunch drive back home and be home in time for dinner or they wanted to be able to have us be able to make a product and deliver within one day so that was just suddenly became our thesis for why and then again like I said on the other side the the large corporate customers you know 90 of their volume is overseas their last 10 percent now because we have multiple facilities if one burns down they know we can just pick it up and ship it somewhere else and we can build it somewhere else in the country one of our facilities now I can get both sides of our customers um and that's literally how we started off and running and so so you you sort of perceived a gap in the market where you wanted you wanted to be able to provide the volume and the scale of a larger Foundry yeah but also have this kind of like localized small town Foundry option for the smaller your smaller end customers who would literally want to visit The Foundry and get beers with it with the managers yeah yeah so the actually being able to heat with the with the equipment of the larger foundries came a little bit later it was just the Insight that I could solve a customer Problem by buying more of these and every time I bought them the cash flow was paying for it so I've been talking about this a lot on Twitter lately people talk about how I rolled up in my mind every time we bought this I would think of except for the first one I've never taken more than the IRS mandated minimum 120 000 a year out of my foundries just continue to roll that forward um and obviously you get perks and benefits out of there some other stuff but that's notwithstanding but every time we go buy another one we then break it up and so anytime I go buy the next Foundry I think I'm gonna break that up into a third or third a third so a third is going to go pay for the loans a third is going to go to equipment upgrades and a third is gonna go pay for the next c-suite executive so every time I bought these I haven't taken more money personally out of it I've rolled this back in and continued to compound and so I was solving a customer problem in that the local customer so now I could get local small customers all across the country I could get the largest corporate customers all across the country even though they didn't care where it was made so local customers cared where I was the large customers cared that I had multiple and then what I realized as we started to grow this now you know I was paying the nut and the other two-thirds of the business I was investing in people and equipment and that's what suddenly built that moat in my head the next one of now I'm going to be so far ahead our company is going to be so far ahead of where everybody else is because now we can invest in the latest and greatest we can we can have equipment on site which we're actually putting in one should be here by the end of the year will be the only Foundry in the country with this capability Bar None there's one other that is available to the public there's one other place that we know of that is a captive Foundry meaning that they build product for the boeings or whomever of the world that that they own um we're the only one and so now what happens is we've got kind of centers of excellence if you want to think of it that way in that so these Coes one of our facilities will be the high volume shop another of our facilities will be the place that does really big product another be the place that we do brass bronze zinc another one will be you know the permanent mold like there's all different ways that we can do this stuff and now we can figure out how we you know we can have everything that a large Foundry has we just happen to be distributed you know in of ultimately it'll be 10 11 12 different locations across the country but each one of those are able to deliver value that nobody else is able to in the country and reg why do you think it is that no one else had perceived this opportunity whenever I see somebody grab a good opportunity that that's always my question it's like why did nobody else see this there are literally hundreds of other Foundry owner managers around the country you're talking to all of them or you're at least stalking all of them to figuring out who you want to buy next pretty much of those 500 people out there and now probably many of them are retirement age and they just don't feel like it but but why didn't they realize somebody realized to do this you know 15 years ago when they were 45 and still we're kind of hungry yeah so I alluded to this a little bit in what happens is they got bigger but they did it in one location right and so our unlock has been the ability to manage these facilities remotely but if you think about it you know a lot of these foundries started and so trying to give you quick history how most of The Foundry industry in the U.S kind of built up was in the 40s a lot of the the people came back from the war so grandpa or great grandpa started The Foundry in the 40s when they came back and every city would have one or two of these little thousand two thousand you know cinder block building foundries and then they continue to grow and certain of them got massive you know they're 100 000 500 000 square foot foundries well other others of them just stayed the same size and what would happen and then you saw a lot of this hit where some of these more successful foundries started having to compete with a lot of their bigger customers going to China and so they would install automated equipment or whatever else it might be it's going to end what that automated equipment would do is create a massive financial burden on them again this is what I mentioned before I buy equipment and that cash flow helps you know the the equipment's already there it pays for it right as long as I buy right I'm paying for that I'm not all of a sudden adding two million dollars or two and a half million dollars was going to cost me you know 400 500 000 a year for a seven year note to go pay for I'm able to go take that and build this on top of it and then the real big unlock is that we can manage like I mentioned remotely so these folks continue to get bigger but as soon as you get bigger then you have to chase higher and higher volumes the higher and higher volume you chase the lower and lower margin you get we're the other way we continue to focus on the small lower run higher margin Etc type customers and products that they want built then when Josh came in you know he was really the one that figured out okay we need to go make this from we have one really well run Foundry that was the first one that we built bought grew Etc I mean that one is 5X larger 4X larger than it was when we initially bought it and then the other ones that are in the system you know as we grow through those these are now being run like that so he's creating the Playbook of how we can remotely manage these we don't need general managers anymore we don't need all the back office people that are supporting them anymore on site we've got a holding company level team that is able to do all the engineering the planning uh you know apar payroll all of that gets pulled off and then then what's locally on site is simply a plant managers whose job is to make it you know essentially keep employees healthy and safe build a quality product deliver that quality product on time so that sounds really really simple but if you actually go look at all the systems processes Etc that Josh has built it is light years ahead of even the largest foundries I've ever been in in my life and it's and that's what it really allows us to do it so even if someone would have thought of it I don't know how they would have pulled it off because as we went through it that was my big thing is I need to go find an operations person someone that was an absolute rock star like Josh to pull this off I admittedly probably couldn't have done it and if I could have done it I would have hated every minute of it but I think that's the big difference and so I don't think it really crosses people's minds I think it's been done multiple times it's just so small even micro private Equity wouldn't want to go roll this up it's too small for them now it's plenty big now there's people beating down our door every day that want to go buy us because we're an untapped asset class because we can go make million or two million dollar shops into 10 million dollar shops in the way that we do it but you know that's just not reality unless you've got the systems and the processes and the knowledge base and all this backed up reg I wanted to so on the complexity and all the systems that you said Josh has put into place and how under the hood there's a lot of complexity to enable this centralized uh management of these remote all these remote foundries can you talk a little bit more about like what some of those systems look like I assume a lot of it is software and documented processes I know you have this this Wiki um and so just kind of give us add a little bit more color there and then specifically on the software I know no code has been something that Josh has taken a lot of advantage of give us an example or two of something he's built with no code that's really been an unlock yeah you're going to be way outside of my knowledge base here so this is not my expertise uh I'll hit on some highlights but and I won't be able to give you deep deep specifics you're gonna have to have Josh on for that but um so simple answer is yeah you're 100 right but it's bringing in all the latest and greatest tools you know it's bringing in automated payroll AP AR that type of stuff and then also on the other side you know that that's the simple ones and I think a lot of people have started doing those those are easy and then it's also building offshore teams right so we have teams in Mexico and teams in the Philippines that help with this and then on the other side of that you know now the actual tools there's things you know Confluence click up we use acumenica for Erp all these pieces tie together there's numerous things in airtable that connect and then what happens is ultimately um I think it's fathom that actually outputs everything so as long as when he creates these processes with the team now it becomes really easy for us to enable making this work so you know it can go from the the software and the systems the data that comes in out of our operating systems will get fed into the tool the tool will say hey something is off it'll automatically flag so that our director of operations gets to talk or knows to talk with the the plant manager the plant manager will be alerted before the next shift starts it says Hey something went wrong we don't know what went wrong but go investigate figure this out and then as that kind of propagates through you know so there's a lot of tools that exist in there some of that's learning automated learning you get more and more data that things get better and better on the other side of it as we make those simpler and simpler same thing follow the steps things like getting credit cards in getting bank statements in whatever it might be making sure that's all in in the first two three four days after the month close and then as long as that's done it's a couple hours of work for them maybe a half a day of work they press a button and our books are closed so for us everything goes really really fast and really really simple and then as soon as the books are quote unquote closed we can instantly send out whatever information we need so it goes all the way from the very beginning on day-to-day operating metrics and what's going on so that we have visibility to make sure that it works all the way through to the far side of once we see monthly data we get that on not we can get monthly data in real time so they're looking at it much closer but financials ultimately most of them don't matter as long as you're doing the right things operating Financial should take care of themselves or very close to it so really then we get to see and then at every separate level of the organization you know what I see it gets automated kicked out to me is completely different than what a plant manager sees so while that's customized it says hey here's the Josh knows here's the three numbers I care about that's all I see I don't see anything else and we only see exceptions the plant managers might see 30 different things that matter that they care about but totally different and so all of that we've just simplified what used to take days and days and days of work now become uh just simplistically like whatever they need to work on uh you know however they're working through that so that's just everything is just simplified and and again we titled this before um Josh and I's perspective on everything we build we want to be able to 10x and on the other side of it as we look at anything that we're going to do it is going to be automate delegate or eliminate like that's our our Mantra of of tasks and what we need to do so if we are going to keep it so either we're going to automate it or delegate it or maybe both then it's going to be something that needs to grow 10x we don't want to build something now and then have it be something that we're fixing again next month or six months or even 18 months so you know that whole system you know when you put this information in everything is built such that we don't solve a problem twice we'll spend the time up front to solve a problem once and not have to do it again and especially it you're gonna watch Josh and I go spin in circles and go absolutely crazy um you see it you let us have a problem that comes up two or three times in a row that we're still doing the same thing for and we didn't spend the extra two hours so instead we're spending you know three hours of time rather than just doing it right the first time and and making sure that it never comes up again and again it makes it for a lot harder up front but it makes it for a lot easier down the road reg and so the all of these um kind of data flows and this kind of no code stack that is gluing everything together is that all actually built by Josh or is it kind of directed by him and there are more than just Josh actually literally you know doing the air table code to make it happen yeah a mainly Josh uh certainly he's trying to build and build more resources inside the organization and hire more resources to help but at this time you know mainly the way that Josh and I think about it is his role coming in as as president and CEO and he's quickly within the next few months you're going to be giving up that coo role and title and handing that off as he moves on to the next major thing the idea was the first 18 to 24 months that he was here he was going to dive in and kind of Deep dive on each piece so it started with operations and then it was customer service and then and currently we're ending its finance and all the implementation of our Erp and so the next thing that he's going into is marketing and sales and the same thing he's done and all the rest of the part of the organization he's gonna go do that and then after he figures out because he's done all of this stuff in his past with the the family business that they bought and then the other places that he's worked so he knows what he's doing he's just never had kind of the free range to go build everything that he wants uh in anything that he wants I guess in some regard and do it however he wants to do it um so he's building this and he's going to jump in and build it and then we hire somebody so you know like I said we're going to be in the next month or so we'll be taking this on this new acquisition at that point in time you know his role is going to be to integrate make sure all that is done he's going to build a processor on what it takes to integrate there's some folks like Everest Brady who just started for us that is going to be helping him immensely to uh to document and onboard people and make that work and then his next robe is with marketing and sales um no document figure out how we're going to do that and then we'll hire a chief commercial officer as part of you know this uh this latest acquisition so you know again that whole thing we buy something you know we kind of split it up into to upgrades of uh equipment upgrades of people you know the other two-thirds of the money roughly then we should be all good to go um and so with that I think that's uh you know something that'll just be simple in their regard and making sure that you know we continue to build and grow and I think over time we'll see a lot more people like that coming into the organization partly just I think our Our Brands per se the Josh and I are building we're starting to attract a lot of people that want to come and work for Kane cast and build this and especially you know people know that Kane cast is the first roll-up we're doing but they'll be numerous other Roll-Ups and small manufacturing as we go forward with our systems and processes that we can drop in so I think people are starting to realize are starting to be interested in coming and and working with us especially Josh as he uh as he tears this thing up and reg how many people are you at the hold code level today ooh so we have shared services that's I think four or five and then um CTO soon to be CEO or currently director of Ops and Josh and myself so four plus shared services wow okay not a lot of people no anyone who hears that will be uh in knowing roughly our size we'll be shocked to know that we do not have a CFO or controller that is a probably the most shocking thing for most people when we start to talk about it is that we don't have a head of HR and we don't have a head of Finance in any really way shape or form is that because you haven't gotten around to it or is there some philosophical reasons I mean there's HR somewhat we want to go build that out and really own it and we haven't found the right person yet potentially we've got some ideas on what we want to do with it but right now it's not something that we're seeing a payback on it and from a finance perspective it's much more philosophical in that um we think we can build a system and we haven't found other people whether it be fractional whether it be full-time when we get the pairing of what we need in manufacturing and how we want to run this it's just we're not sure that someone like that exists yet and we think we can do this in a much better way and every time we talk with people they continue to tell us that we're idiots and we don't know what we're doing so just one more thing we're gonna go do it our way reg what what where's your Revenue today if you could and then we've now we've now teased this hundred million dollar number a couple of times yeah talk to me about how this path before you to 100 million is at this point feels pretty straightforward and inevitable yeah so we'll do I think in the next 12 months we'll do somewhere around 30 million um and that ballpark probably a little more and then the thing with the rest of these pieces um the reason why I think we can grow is that we've established so we took our one facility from under three to over ten uh we have that Playbook we know we're gonna go buy I again I've talked to over 600 Foundry owners across the country um we currently have about 35 that are on my list of folks that I know that I'm gonna buy or want to buy potentially depending on what they want to do I don't need to go buy all 35 um you know I need to get another 10 or 15 probably and so it's just a Playbook where we know that we've got the bank financing so our guys uh it's Security Bank Kevin and Andy do a great job for us and they've supported us now we started doing business we're going to redo our entire debt stack with them as we speak when we do this latest acquisition they're willing to go support us across the country with you know pretty close to mid-market type terms as we get closer to it and we continue to grow as people know once you get over 5 million in ebitda Bankers come out of the woodwork but you know the the game is once we handle that it's just we know what we're gonna go buy I throw it over the wall to Josh Josh knows the Playbook to go take those things to over 10 million so math is pretty simple you have 10 locations you do over 10 million in each it's over 100 million dollars so I mean 100 million is we kind of use it as a it's just it's just that kind of 10 by 10 thing I actually think it's probably going to be more but now it's we've now built it and I am unbelievable I I thought it was going to be a real struggle before Josh came on board and the way that we're doing it now that we've kind of Josh and I have figured out how we like to work and how we're going to do it where he's able to isolate meat so that I can really go focus on doing acquisitions it really should just be something I don't want to say it's paint by numbers it's never going to be that easy but it's a Playbook that we have we have to just go execute we just have to go find the right people the right businesses the right time whatever it might be and that's really the extent to what we need to worry about so again I'm never going to say it's ever going to be easy but you know I think people can infer pretty good idea of what that's worth and I think when people hear that we're gonna go do this three four more times there is something in my head and I really want to see someone become a unicorn out of the small business space and uh I'm willing to race anybody to it so it'll be a fun time I don't know I I won't be by the way I won't be sitting in that chair it won't be me just to be very very clear uh I will be long long away will have hired people that are way better and smarter than I am um that's going to be running the place by then I I do not want to be one of these people that are working late into their 60s and 70s I want to be uh just advising and helping and doing whatever I can um and I have a fundamental belief it's not that I don't love this job it's going to be the worst thing in the world to give up is going to do deals but that doesn't make a good company you know it doesn't make a robust company it doesn't make a valuable company when myself or anybody else in the organization is imperative so you know something that very very soon this will be the last deal I have to do this will be the last deal I Do by myself from every deal here forward um buy three more deals from now I will no longer be doing the deals day to day my how we always train people is that the person who owns the process puts a rough process down now or at least I'm gonna have enough process in Josh's World he'll have a perfect process but I'm terrible at documenting stuff I don't know barely how I do it so the next time we do a deal I'll have somebody with me and they'll just document everything we do they're just going to witness observe take notes do whatever they need to do and then the second deal after that they'll be Manning parts of it and we'll work through what their notes are and how they handle it and I'll be coaching and then the third deal they're going to be leading with me mainly kind of observing and then by the fourth deal it should be theirs and and then at that point you will do what that's when you that's when you step out I think that's because I have to say reg I mean spending your time shopping for deals sounds like a pretty fun way to I don't know that'll be spend your days yeah exactly no that's what I'm saying but yeah it'll be so I'll give up um I'll probably give up The Foundry side of it and I'm gonna go figure out the next manufacturing uh thing that's when you do that yeah right by then uh Josh is going to have a little more work to do he's not gonna be able to come with me quite that fast but quickly thereafter then uh you know it'll be the next thing and then Josh is going to have to find his replacement and other people are gonna have to step up and some of our folks with the whole coal level are probably gonna have to come with us and they'll have to find their Replacements and so we've got a lot of work to do in the next uh three four five years reg I want to wrap up with two big questions um to do that but first an observation the the I feel like there's this pattern um that I don't know if it's explicit or it's just the way you guys have evolved where you learn how to do something the higher ups you whatever or Josh learned how to do something maybe do it a couple of times then immediately start it's just like what you just described with the m a process then immediately start documenting it and trying to you know push it down in the organization so and bring up somebody behind you to do it and if you kind of keep that going in perpetuity it's kind of like there's always you you're always avoiding key man risk or that too much of the organization's intelligence and quotes um is locked in one person's brain yep yeah so 2023 for us is the year the people and Josh and I started talking about I have a fundamental belief that every single person in our organization needs to have if they get hit by a bus we need to have someone that can step in essentially immediately right within three months at the absolute most that they can step in and they can do the job and then there has to be a second person behind that person who can within one to two years be able to step in and do that job and so that is key I explain that to every one of our people that come in every one of our Executives everybody in plant manager and I say Hey listen if you want to we're growing we're gonna have a lot of opportunities but if you don't train somebody to be your current replacement and someone that can be who your second in replacement is within a very short period of time you're not getting promoted it's not happening so that really forces that on them but yeah it is very very explicit and it's something that I fundamentally have believed in I mean that's a corporate thing that I picked up in some regard but but that's also like yeah I was just gonna ask is this from you or is this something that is a best practice in Corporate America that's definitely I mean that one aware of yeah that that's that's a corporate structure you have to do you know you do reviews on a on an annual basis of saying every single per I used to have to go review every single person in my organization myself included my boss and their bosses had to do all the same thing of saying okay you know eliminate key man risk you know what do you say if you leave or whatever who's gonna do your job immediately and if it's not that person because they decide to leave also you better have a second person being developed as well so it constantly forces you and then also it really builds that aspect of our organization where people aren't trying to hoard information and when we find people that do horde information we'll have those conversations with them and if they continue that they will not be in our Organization for long it's just not Josh and I just fundamentally disagree with it we share openly we believe that everybody has a role on the team everybody you know we we talk about it it's a you know baseball team or whatever everybody's got a position on the field to play and they have to do that but you have to be able to freely share with anybody else that they can come in kind of that understudy perspective but also anybody across the organization does it and we've had a few people that haven't been that way and they're no longer with us and it's just uh they just can't do that it's too small of an organization to not do that um but then well you have the fact that you you brought that with you from corporate I guess that explains also why you were pretty comfortable with key man risk going back to your very first acquisition and why all these people are telling you not to buy foundries because you you'd already seen many times how to eliminate key man risk You Like You Knew What playbook to throw at Key Management yeah and I think it's and it's just the mentality as long as you give people a reason why to do it you know I think a lot of people won't do it because they're concerned for their jobs but if you explain to them hey this is going to help you this is going to enable you to do the next job bigger better things you know more efficient use of your time resources expertise I think it starts in how you frame it and then you've got to continue to push it you know if you've got someone that comes in and someone's prepared and you've told them what it takes to get to the next role and then you hire someone in over the top of them without letting them know why yeah then you're going to immediately eliminate all loyalty and understanding of that but if you continue to do what you say you're going to do and people see it especially the other way if people see that they got passed by because they didn't do it then you know it's a very powerful culture change and motivator for folks in your organization yeah yeah no it it really does lay down a good culture where there's this sense that everybody is kind of on moving up or at least should be I mean they're always constantly training for their replacement and there's this kind of sense of momentum and everybody's kind of yeah a trajectory that every design we try and use human nature to our advantage whenever we can we try and help ourselves we don't try and fight ourselves when we don't have to reg the uh let's just talk about in a kind of um abstract way you're Josh who's come up time and again and and you and you mentioned a lot on Twitter and in all of your interviews he's obviously integral to the organization sounds like he was maybe the biggest unlock of all couple of you know your insights about what what you could do here was was a big one but bringing on Josh I've heard you refer to now multiple times um other than the fact that you have in Josh this amazing Visionary operator guy uh and so I guess lucky you is there something that people listening can learn from um your finding and putting in Josh or the stars align and it's just it was just like a happy accident and you're and you know you're luckier for it yeah so I I think people get lucky but I think you have to put yourself in the position to get lucky I would say there's a little bit of arrogance in me that would say the vast majority of people that would want to hire ajosh not specifically Josh I don't think they have companies that are big enough complex enough moving forward enough Etc that would keep someone like that interested but I also think the biggest thing for on my side is that I believe in giving people full autonomy and that's how this whole story with Josh came about you know we were the only two mainly talking on Twitter about manufacturing you know I'd kind of seen his background I understood it seemed like a really good fit but then also he was talking about how he was not interested in working for someone else didn't want to do any more Consulting roles Etc and that's when he and I started talking and you know we just mentioned hey this is the situation here's what it is I'm like hey I just want to at least reach out I get it you don't want to do this here's the current situation here's what I'm thinking of doing and we hit it off right away I mean it literally was it started with how we wanted to schedule the meeting where I reached out to him on a DM and uh he wrote back and said hey yeah I've seen you on Twitter meant to catch up with you uh I don't really like meetings so I'm just gonna I'll just send you a text message uh next week on roughly when and if you're not available or if you're available great we'll talk if you're not available great no big deal we'll just ping back and he's like and after like a week if it doesn't work out then you know this is uh we'll just schedule an actual meeting and so both of us hate meetings and I was like oh this is amazing like I this is fantastic like Ping me I I hate being in lockdown even uh you know sit down through whatever meetings they might be and I mean that whereas I haven't had I don't think a formal meeting yet this year I'm not positive in our company we've actually had a formal meeting that I'm involved in those guys have as operations but I don't Josh and I just ping each other and talk whenever need to um but yeah so we just started talking about it and you know a lot of people are like oh you're lucky to find Josh and I was like well part of it was that I you know I listened to what he really wanted like I talked to him about it like he really wanted the autonomy to go run the day-to-day in the quick version of the story was he said hey you know I don't you know I love what you're saying this might be interesting he's like how about this what about if I give you 18 months I'll set this all up figure out how to like create a CEO role I'll do all the operations I'll do all the playbooks and then you can just hand this over to a director of Ops who will become your CEO or you can hire somebody or whatever and then for that 18 months I'm putting in then the last six months you teach me how to buy a business and you know we kind of talked through it I was like I thought you just said you didn't want to buy a business so you didn't he's like I don't but you know no one will let you run operations the way that I want to run operations like I have ways and he's like people say they will give you it but then when it comes down to it the owner the boss the whatever they'll always have their peace on that and and so we went back and forth and I was like bro so you're telling me like you literally want me to teach you to help you to buy a business as opposed just because you don't want to be able to run something I'm like I have a way better idea like calm run all the day-to-day at Kane cast I won't even talk to you if you don't want like 100 you bro like no problem and so yeah we just chatted about a little more and we worked through it because we had like very clear lines of delineation like I do this you do that like you shade like you protect me from the day to day that's 100 years you run that however you want like granted yeah like I still have to hold him accountable like ultimately like his job he has to make operations better this year he has to get the Erp done he's got to integrate Beamer um and he's got to integrate beam resistant by the way the name of our it's just the code name for our company and the acquisition and he's got to go figure out how he grows the people part of the organization and the marketing and sales like that's what he has to go do like okay but we talk about it all the time but ultimately it's his decision and that's what I think the big difference is is if you're going to hire really great people you have to give them pure autonomy you have to help them you have to coach them you have to teach them what they don't know sure like I can help him understand foundries he didn't even know what a Foundry barely was when he got in here so we walked through that but at the same time you know everything about operations he's a much better operator than I am but I think that's the part and then you have to be honest with yourself that you're gonna actually go do it like I know 100 we're making a decision right now with our CTO and Josh and they're doing some things I'm trying to help out but ultimately it's going to be their decision they're going to screw up they are going to cost me a hundred thousand dollars I guarantee it it's going to happen but you know what I've done mistakes before I won't let them make major mistakes but it's their decision they're going to tell me I'll tell them they're going to decide that I'm wrong they're right they'll do it they'll find out they're wrong they're going to cost 100 Grand it is what it is but that's fine that's a learning experience that's tuition that's what you need to be able to go do and again if I'm continuing there if I'm continuing to crutch I will always be the crutch I will never be able to go buy so I'm gonna go buy this next Foundry that's gonna make us millions of dollars a year or I could go focus on this hundred thousand dollar mistake great I'll take the you know the 95 payback is much better going to do my job while they go figure out how do they do their job and that's really hard to do I mean that's hard for managers to do in corporate it's really hard when it's your own money but to me so you know this is why I bristle a little bit at being lucky I don't you're sure it's it's fortuitous that Josh and I met for sure but at the same time it's how you set it up and so anybody can go find that it's about the right cultural fit it's about having the respect for each other it's about making sure that you understand what your job is going to be and what their job is going to be and that you're there to help you're a sounding board or whatever but at the same time you know you're there to celebrate the wins and and ultimately it's their decision and it's their job and you know I tell them like I'll give you 100 of time it doesn't matter who it is and this is what I push down on Josh too with his team got to give 100 autonomy which is sometimes hard for him because he likes doing everything um but then you gotta hold them accountable and you know those are lessons those are tuitions and if they screw up once and you teach them and then they screw up again and that's a major problem if they screw up a third time probably gonna be a pip and they're probably not going to be here any longer or for much longer right it's just you know it has to be a high performance organization that everybody's accountable to everybody else but we can't be doing each other's jobs for each other and at the same time you know we can't be holding ourselves back and that's why I always talk about having the person behind you that can take over immediately and another person that can take over in a year or two and and then that's all the same thing because everybody has to continue to lever up you can't you know more than 10x a business you know these these foundries I mean they have grown two three four percent at best a year for the last few years you know over you know you said 80 went out so we're bucking every Trend imaginable two of 10x plus this business and ultimately right we're going to be 50x or you know 60x or whatever it is in in 10 years total you can't be stagnant and you can't do things the way they used to be done and you can't do other people's jobs we're just too lean and too much work to do to get that done so the big problem is just you know you have to be able to to give that up and have honest conversations about it regs last question for you so you just have discovered this amazing opportunity and foundries to roll them up and prove them um and you see that this Playbook that you've developed can be dropped into other niches within Manufacturing um I'm just wondering for the audience who for people who are listening who might not be interested or know anything about manufacturing I wonder do you see uh do you see what you've done here opportunities to do the same in non-manufacturing spaces or was there something was there something inherent to manufacturing that that made what you're doing possible yeah so the simple answer is I think there's a lot of other you already alluded to it there's a lot of other manufacturing spaces that can have exactly what we've done rolled up that's part of why Josh and I mentioned the other day we're going to start doing this we'll put some investments in companies and we'll add Josh's systems and we'll add Josh and I as kind of mentors Board of advisors whatever so that we can get upside as we build these things and ultimately enable manufacturing across the country but this is 100 doable you know guys like Rich Jordan are literally doing this right now um Plumbing HVAC there's many other places you can go do this and I think you can do this without having massive private equities certainly you can do this with private you know the way private Equity is doing it put a GM in place put all the systems and whatever in place with larger companies but I think you can do it on a lot smaller scale you know again Josh had the unlock to go figure this out to make this work ultimately like of how we're going to continue to scale this everywhere but at the same time I don't think that this is unique to what we're doing I think it just requires breaking every Rule and doing it your own way you know this is one of my I talk a lot on Twitter about first principles I think there's way too many times that people just follow the herd and they see something and they do it and we are exactly the opposite like uh you know our CTO we just hired it was funny he met with a vendor with one of our plant managers the other day and they said well this is you know as you get bigger and do it this is the way you're going to do it and he literally told the vendor well I'm really happy you told me that because now I'm definitely going to do it a different way because if uh if it's common knowledge that you do it this way I'm certain we're going to find a better way to do it and I love that it like that is the attitude exactly that I want it's the same thing we talked about with the finance people right like is you have to figure what really matters like don't go do what everybody else has done don't go figure out how you're gonna handle something Reading A playbook like do all those things read all those things talk to all those people but then really think through yourself what really needs to happen and then go do that that that's the only way this has happened it do I think a Foundry is special compared to anything else no I just think we happen to be in foundries first we can go do this in just about anything imaginable um you know you just I I wonder what the the characteristics are that would be similar and totally non-manufacturing Industries is it I mean lack of scale the kind of the classic fragmentation Boomer businesses lack of scale key man risk um what I wonder maybe that's it no I think yeah I mean that lack of scale is really the big one yeah I mean I think that it's it's that fragmented piece and then it's can you go and so I was just I was talking with uh with girdley's hold code group that he put together the other day and we talk about this uh Michael and I joke he's very much a decentralized model and uh as am I technically but I I still want to debate him a little bit uh because we run that centralized Playbook and again we will once we get to be a true holding company above our roll up you know we'll have a holding company of Roll-Ups essentially we're going to have everything decentralized the way it's going to look there but if you think about it we're centralizing eventually inside of a decentralizing so if you can figure out a way that you can rip out again you have to figure out how you get your key people to be able to operate and you normally do that you have to put blinders on them to handle something that's really simple and as they get more trained they get more education they get more knowledge Etc they get better at their job then you can give them more and more responsibilities and autonomy but again our plant managers we go buy from an owner that's really a GM that does everything and we strip out 80 percent of their duties and that's the person that we leave it's much easier to hire that person it's much cheaper to hire that person now we can train and grow and do whatever with we want those folks but that's because we have a lot of centralized services so some combination of you know that centralized service and the other pieces that we have of really having good people that want to come here that want to grow we incentivize them to do it you know in that fragmentation I mean it it's funny when I see and I talk to people and I'll some Searchers or people looking to buy business and they'll talk themselves out of the business that I look at and I was like yeah I might go buy that later because I could take what you guys are saying no to right now and I could tear that place up like but again like that's part of it you just gotta see like oh this book told me not to take key man risk or customer concentration or this or that I'm like well go think through it yourself if you can solve that then don't worry about it like great get a discounted price go roll that up and go find 10 more of those and do it again like but again it it has to be first principles and it has to be understanding what you're going to do and how you're going to do it reg actually I have one more question I want to sneak in here just about manufacturing um uh what would you say to Searchers looking at manufacturing understanding that that's an incredibly broad category um but I haven't had that many people on who have bought manufacturing businesses and many of them have been more kind of fabrication and not pure manufacturing right so I don't know is there anything that you could say like if somebody's interested in manufacturing broadly something you might say to that Searcher um no you know it scares a lot of people off you just have to know what it's going to be about like working capital you just have to know and if you've read shoe dog for instance it's like my perfect example of a guy you know Phil Knight had a bad his company over and over and over again because working capital was trying to kill his growth it's the same thing you have to understand maintenance capex and how big it is and as long as you can understand that depreciation is a real expense per se in the way that they write those off in businesses and you figure out what you're going to spend on equipment and maintenance and on the other side you understand what it takes to grow you know working capital environment it's just like any other widget now the one thing I'll say if you're coming you know from an Excel uh world where you're just pounding away in a keyboard and you think that manufacturing is easy good luck um it's gonna be very different but I've known people that have done it it's just about the right mentality go jump in get your hands dirty you can figure it out um we need a lot more of it and again manufacturing tends to be very much no one's looking for manufacturing actively there are some but yeah it's not 80 or 90 of people you know not everybody can go buy a service business not everybody can just do Services I mean I'm happy if you do because it leaves more room for myself but that's a whole other story um this is not it's just a widget though it's not it's not scary it's not a big deal or it's not any scarier than anything else I mean you're still gonna have a personal guarantee you're still gonna have to figure it out and there's enough folks that like myself that have done it that we can help you through the little pieces of it and now it's becoming known you're seeing it being written about a lot of reshoring and how this is going to be critical for our country how the government's going to be investing in these Supply chains and fixing them and everything's going to be more local it did and do you think that this is a real Tailwind for onshoring for us-based manufacturing yeah we're hearing about it will it really happen uh I mean with automation we can be very competitive on price um I think there's a few pieces where there's there's a reason to have manufacturing everywhere we the pendulum swung way too far thinking that everything could be built low cost overseas now we're also seeing some of those things catch up you know you're you know wages are 5 or 10x more than they were when we started moving things overseas 30 years ago um you know they're constantly chasing low cost China's not low cost anymore Vietnam's low cost and all Africa is low cost I mean it would always be lower cost sure but it's a heck of a lot harder to get a casting out of Africa into the US than it is anywhere else and then you're also going to have to figure out how to build the infrastructure and get it all down there and there's a lot of other problems that you're going to have so is it yeah but there's a reason to build stuff here there's a and there's a desire to build stuff here um so I think there's certainly a market I think there's certainly a Tailwind is it going to be a hundred percent move back of course not that'd be stupid there's no reason for that to come back but is there a reason for 10 20 30 when there's two percent today yeah absolutely um you know we get calls we deal with this I did a restoring article three years ago I think it was before Josh was maybe it was two years ago two or three years ago before Josh was even at the company talking about how many people we'd talk to about bringing stuff back from China and now it's insane during covid I mean it's daily weekly we get ping like hey we need to move this back we want to move this back like Josh probably just got done with another a meeting right now I started like an hour and a half ago with a company that is moving their entire supply chain back um I've got another customer who literally said if you go buy an entire Foundry and spin it up I will fill it 100 with my products um wow so yeah that's you're talking 30 or Fitness probably seven to ten million dollars in sales to bring back um just with that one customer so yeah it's definitely there you have to figure it out you have to have the reputation you figure out how to do it you have to solve you know the machines and the the key people key personnel and set a risk um but it's absolutely doable and I will happily go argue with all the the Searchers that tell me actually I don't want to argue with them I don't want them to uh suddenly change their teaching in their mbas that they should stay away from this space it's nice yeah be careful about winning that argument yeah as many people that want to come in I'm happy to help we need we're not going to be able to do it all there's a lot a lot of it available so you've said you've said that you want to help Searchers who are looking at manufacturing what's the best way to reach out to you DMS and I'm dead well you're better off probably tagging me on Twitter than dming me on Twitter my DMs are an absolute disaster but uh yeah uh at reg Zeller on Twitter we tell them what we're doing building in public making a fool of myself most of the time because I'll tweet about as my losses just as much as my wins but normally whatever randomly pops in my head or when I'm having a conversation like if someone reaches out and wants to have a conversation with me and I'll talk to them about it I will anonymize it but that will end up on the Twitter sphere like hey think about it this way like most of them are either in stuff that I remember or stuff where people are like hey don't do this and I was like oh by the way I'm definitely going to Tweet about this but they won't know it's you and then once in a while they'll jump in like my uh replies and be like hey bro I'm like I told you this happened and you didn't have to call yourself fine like but you can't do that that's terrible that's a bad idea and everybody else needs to know that's a bad idea so again just trying to help I'm like ah if I can share my losses publicly you can share your losses anonymously it'll be all right it's fun well reg you were one of the very very first people that I followed on Twitter when I was first taking an interest in this space it's taken me a while to get you on but um I've been watching and learning from you from afar for a long time so thrilled to finally get you in the seat here it's been amazing sorry I won't meet you uh in person at SM bash but I'm sure there will be other opportunities hold kill conference buddy that's uh that's what I'm built for yeah we're uh that's their space so it'll be all good we'll give a little plug that's the that's Kelsey's conference this year October yeah John Wilson September in October I think it's September this year yeah November October ah it's in there sometime okay yeah I mean but that's the place that's where I mean it's it's great it you know it that came up some of the SM besties conversations that the two of us or the three of us had and the two of them went and did so it's fine uh a great place for us to go a lot of people to figure out if you wanna if you have one after you're done with this if you have one and you want to go figure out how to have multiples or if you have multiples and figure out how you want to do more it's a great group um but that you know same thing girdley's got that same thing on there it's a lot of places people are talking about doing like one business multiple businesses and it's absolutely incredible for none of this existed seven years ago I mean it was yeah no it's an absolutely I can't imagine again I would have screwed a bunch of stuff up anyway because people would have told me and I still would have touched the hot stove but again it was uh at least it's there and people can help and ask for help and so you're telling all the Searchers out there that they got it easy now that there's all this stuff out there compared to you know what 2017 it's Hey listen there's the information is there let's put it that way yeah now whether it's easy or not is a whole other ball game uh but there's a lot more research but it is at least it is remarkable like and I've said this to guests who who bought whatever 10 years ago or so like this is very hard today um but I can only imagine how much harder it was when there wasn't the pods in the books and and the SMB Twitter just completely figuring it out alone well we screwed up a lot more at least I did yeah other people didn't but yeah good although there was less competition so there was also there's also that yeah it's uh yeah well we can get into there's uh there's a philosophical debate probably but generally speaking if you're built for this competition isn't that hard at the bottom of the market um that's the nice part but you know gotta take care of customers and take care of your employees and a lot of things just fall into place and then you learn more and then you grow a little bit it doesn't mean that you're buying today thinking about uh you know three million dollar business like I was and you have to worry about a hundred there's a lot of steps in between three and a hundred that you don't have to worry about uh yet so you left you'll have plenty of stuff to do for a while I promise that's right well let's leave it there reg thank you very much for coming on sir thank you I appreciate all your stuff in the show notes all right until next time great thanks I hope you enjoyed that interview make sure you subscribe to the acquiring minds Channel below we are now publishing twice a week so tons of new interviews and stories to come stories that will help you along your own path to acquiring a business