Sean Allard welcome to acquiring minds well thank you so much for having me it's uh it's an opera it's a great opportunity I'm I'm really excited to be here and I've been listening to this podcast for quite some time now so it's it's a pleasure to be here well that's that's awesome Sean uh thanks for saying so it couldn't have been that long that you were listening because as as I understand from our pre-call it was as recently as February of this year that you hadn't yet discovered entrepreneurship through acquisition in March you discover it and by August so just a month ago you bought your first business only a very few of my guests have moved that fast that decisively from discovering ETA to actually closing on a business so we're going to hear about it all but let's start with some backstory on you please Sean what was life looking like before your discovery of acquisition entrepreneurship in March yeah so like you said things started for me back in February but up until that point or still to this point I've been in Dental Consulting for the last four-ish years graduated ASU in 2019 and been in Arizona working uh remotely in the Consulting space since then and like you mentioned back in February I really started venturing out into a little bit more into the the entrepreneurial space and decided I either wanted to start something from scratch that that really was my only idea of of being an entrepreneur at that point um like you said I didn't really have any idea that this opportunity or these opportunities existed for for myself so back in February uh really discovered this whole world and uh yeah like like you said we're here now we're here now if from what I recall you had dabbled in a lot when you wanted to be an entrepreneur you had an entrepreneurial itch and you kind of dabbled in a lot of things that were zero zero to one for lack of a better word give us just a picture of that because I think that's going to be a theme we return to later yeah so over the last two years I would say so yeah I would say around two years I I dabbled in a few things both in the online and uh you know service space uh in-person service space everything from rental cars to digital design to Consulting myself um on on different service businesses uh and I just realized over time that I wasn't the best at going from zero to one I would have these great ideas and over the first you know few weeks I'd be super excited about it I'd get maybe a little bit of traction specifically in the rental car space uh you know it got good traction early on and after things sort of died down or that initial excitement died down in the first couple weeks and and it wasn't moving in the direction that I sort of wanted it to I tended to either call it quits completely or just move my attention somewhere else to the next shiny thing to the next idea I had so I realized over a two-year span that all the projects I was working on uh you know one maybe I wasn't passionate about them but I I realized that just wasn't that zero to one type of of person and so that's when I started looking into the opportunity of buying a business but I wasn't familiar with that process whatsoever and I didn't like I said I didn't really realize that was was an option yeah uh but yeah cool and you you're this entrepreneurial issue had where did that come from all together was it just like you you're a few years into your working life post graduating from college and and realizing that you don't want to work from for somebody else or were you kind of a lemonade stand type kid who was destined to be an entrepreneur or what yeah I would say it was destined but I always had that itch early on uh like I said I I always did various projects I always had that that initial energy to go out and start something from scratch so you know even early on uh reselling things online uh doing various projects for um you know for for friends and and family in in college and such but in the yeah so I that that niche has always sort of a hustler it's sort of always been there and then in yeah it's it's always been there how do you discover buying a business as you said you're like so many of us to the extent that you were aware of it at all you just assumed it was something that kind of rich people did or private Equity do duh people do or you know company a buys Company B but the idea that a loan entrepreneur acquisition entrepreneur might go out there and buy a business was pretty foreign to you how do you discover what do you discover so in February I really sat down um it was actually a family conversation uh which is funny we we were you know having a good dinner as a family and we were just talking shop about a variety of different projects we were all working on and uh and and so I you know sort of brought up the idea of potentially buying a business uh and and that really sparked the initial push to to go out and start investigating the opportunity and doing some research and I initially came across it on Twitter and like many like many of the the folks you have on on the podcast so initially found that this was an option on Twitter uh quickly bought by then build they read that book in I think two days and this yeah this whole world opened up to me very quickly and I I really just doubled down from there yeah well welcome to the club now just curious when you mention this at your family dinner are your family members like dude what are you talking about or do they is it well received or what because so many of my of us in this world because we're so immersed in it we forget that the idea that somebody would go out and buy a business uh we forget our own uh ignorance of of that possibility and so we we forget that it sounds like this completely alien uh concept to to people that you might mention it to in passing so how did your your family react to this crazy notion by Sean yeah um so I've like I said I've always had those those crazy ideas so I've always presented those to my family so I didn't I I don't think it was a surprise that I was venturing into something uh you know crazy again but we were all on the same page that we didn't we just didn't think it was possible uh for for us uh and so yeah I don't think it was foreign or they didn't think it was a crazy idea they just didn't they their question was can you actually do that like do do you have the money to do so do you have how do you actually go about this process was really the only question that was presented to me or or that we sort of hashed out was you know if if this is the the route you'd like to go how how can you even do that is is really just what came up I don't think it was ever a a question whether or not they believed in it uh they just thought whether or not you you know how do you actually go about the process yeah and you were like funny you should mention it at which point you flash Walker dibble's book yeah yeah there's a whole book here's what I learned in in two days and uh I I hope you can trust that you have the knowledge after these last two days of my education so uh now differentiate uh for us between your enthusiasm around this entrepreneurial project of buying a business versus the previous two years of uh projects that you've done that had had fizzled or you had been frustrated by them and they hadn't really materialized I approached it like I approached all of the other projects in the first month or two by really giving it all my energy outside of my nine to five so before you know before and after work that's that's essentially all I did and and I relate back to any other project because I I approached it the same way in outside of my day-to-day I usually had one or two things I would give all my attention to uh and then like I said it it fizzled out over time but this one sort of naturally stuck I think the one the case studies uh that that this is possible and two the early sort of momentum I had gave me that feedback uh that that this could be something that would work for me I I simply put so I approached it very similarly but that that early feedback and and it just sort of stuck uh it it became more enjoyable than the other projects it didn't feel like a hustle or a grind to me it was going through that early Outreach and and those early conversations to actually learn about how to you know even review a SIM for example were were exciting like those things those things were really fun to me so uh yeah early excitement case studies and and just the the early feedback loop that I was receiving from it was was kind of pulling me in or drawing me in a little bit more well it it feels like see how this lands that you were feeling you were feeling more progress you you felt like there was yeah a progress toward your goal here whereas the other projects either be a flurry of activities you got something going maybe a little bit of traction and then you'd hit a point where there felt like there was no progress anymore and and that kind of was a turn off whereas this one happily there they're just kind of continued to ever be incremental progress yeah is that right yeah exactly and I think the more I I go back to to outreach because the more Outreach I did the more conversations I had the more Sims I was able to review the more opportunities seemed to be coming my way so it was it was simply more reps more reward so I the more time I put in the more the more opportunities like I said were coming my way so in previous projects that that sort of immediate response or progress uh doesn't always land uh no matter how many reps you put in and the case studies that you're referring to what what case studies where are you seeing these yeah so places like Twitter search funder other online communities uh I got connected early on with a few people locally in Arizona that I had conversations with we sat down two or three times uh through the early month or two of this Pro of this journey for me and yeah the the the case studies were on a variety of platforms you know anything from online to to some local communities that that we had here in Arizona so I I jumped right into to those communities and started setting meetings and conversations up uh to kind of solidify the the fact that I was on on the right path uh by uh by hearing more and more successful stories and which made you feel like this is real this is a path this is something people for me have done and done so and done successfully right right great well I was asking that one somewhat selfishly because I feel like acquiring minds essentially is a podcast about a case study so I wanted to I wanted to get inside the head of an early listener yeah and I you know I should mention that obviously uh podcasts have been a huge one Especially Yours uh you know 99 of my time you know in the early stages of this was it was was listening to how others went through this process and how they how they identify opportunities how they review opportunities and in that early those early case studies definitely came from from this podcast so you know I I owe you a lot uh for for how fast I moved on this uh because what the knowledge I was able to to take in in you know 60 days is is pretty pretty remarkable well that's fantastic Sean and thank you uh for that compliment I I didn't mean to I wasn't fishing for a company definitely deserve it but my apologies for not mentioning it no no no no I but I I do think just early on in in deciding to do this podcast and in my own entrepreneurial journey I I just seeing I was just addicted to the stories of others uh who had had success I mean I just couldn't get enough of listening to people's entrepreneurial stories not necessarily an acquisition entrepreneurship just in kind of zero to one entrepreneurship right um but um it just it's a format that I'm a big big believer in so it was nice to hear it's nice to hear it validated by you um Okay so segwaying now into your search so we're in March you're you've you've had a couple of in-person meetings with local Searchers in Arizona uh and you've already started talking about your Outreach a little bit but give us a picture of what your process looked like yeah so I kept it really simple and you know I I targeted three different Arenas really the only three Arenas you can uh one being off Market uh broker Outreach and then online listings so I did all three simultaneously I didn't have any fancy setups or anything of that nature I didn't have an industry Focus so I tried to get in contact with as many Brokers as possible and get as many opportunities my way early on so that I could get a little bit more focused as fast as possible because being in Consulting I mean obviously I was specific in dentistry but outside of that space I wasn't familiar with you know any particular industry I had not worked in an industry long enough for me to feel comfortable and go out and buy that specific business right so I my my search was very broad uh to begin with it wasn't even geographically bound to to Arizona I left things wide open so my my Approach was reach the masses of Brokers and search as many listings in your purchase price as possible uh and and go from there so as as I reviewed more deals and got more specific uh obviously I started with Brokers went to or started with Brokers and online listings and then went over to to off Market when I got more excited about certain opportunities uh and started venturing into Arizona specifically and but to begin with it was it was a flood of of making as many contacts and connections as possible and over time over I would say I I say time but over the the first few weeks I would say I I moved quickly in trying to get a little bit more specific on an industry and when you say off Market you I don't I don't think you mean proprietary Outreach or do you or do you mean you're talking to Brokers oh okay and so what kind of what how were you doing proprietary Outreach so that was locally in Arizona I would go directly to a business that I was familiar with that I could see myself purchasing one example was a high-end Luxury Auto Shop uh very random business but I had been familiar with them for the past four or five years and I knew they were doing well uh I know the owner had other Ventures he was working on so uh I actually went went to a few of their events and connected with the seller we had a few conversations and uh sat down about potentially buying that business and I approached it the same way with others I I approached very similar businesses in the auto space specifically uh just because that's that's an industry I I could see myself venturing in too early on uh what I also didn't understand the financials very well uh so we can touch on that but uh and what do you and what what do you mean Sean whether they were making a lot more money than an SBA loan could handle they were bigger businesses than an SBA loan could handle not as no I would say the opposite uh not making much money at all oh uh and the day-to-day business is is very stressful at the scale that I was able to purchase at so you know sellers very very involved sellers typically a mechanic of some sort or a specialist or or uh yeah and and and so not having that experience quickly moved me away from from that space But Somewhere over the 2.5 to 3 million dollar Mark they do make money but where I was willing and able to purchase it didn't make sense financially but anyways the the seller direct to seller approach uh was was limited it happened three or four maybe five times maximum uh before I just kept getting better opportunities uh from Brokers and I doubled down on that side of things uh after yeah after a few direct to seller deals just didn't pan out the way I expected them to uh or the financials I I didn't understand the financials as much as as I I felt I needed to so that having that broker early on helped with my lack of knowledge in certain areas I sort of had that support system versus trying to you know you you are sort of the broker in in a directory seller relationship so having having a uh having a partner in a way helped helped early on in the form of a broker exactly yeah and so when you say the opportunities just started kind of getting better and better not the proprietary opportunities but the ones coming to you I think from Brokers yeah was that because you had been successfully kind of cultivating relationships with Brokers and they they started to send you stuff that wasn't already listed online sort of thing a mix I mean I would I wouldn't say I was getting anything proprietary or anything that you know I I wasn't getting first looks on on many deals but uh just the the sheer volume of deals that were coming my way from the number of conversations I was having in the in the first few weeks provided those those early opportunities and the the more and more touch points I had with these Brokers the more comfortable they felt in sending me those those better opportunities and so early on right you you do have to develop that uh that relationship with many Brokers but it really just came down to the amount of conversations I I was having that that led to to those early on opportunities and Sean you're uh you're younger than the average Searcher you're 26 right I am yeah yeah so four years out of school and we know that Searchers types of people listening to this podcast are often often have a hard time getting the ear of a broker Brokers are famously try to filter out Tire kickers and so on so you know there's a lot of talk around how to how to cultivate relationships with Brokers so that they don't think that you're just going to be another tire kicker or other wise a Time waster for them and this is this is where age would work against you uh because if you're somebody who's 45 the broker says to themselves why this person probably has you know first of all they have experience or you know they got 28 years of experience on you at least and they probably have a little Capital so did you find that you had to overcome age it uh I'm sure they didn't tell you to your face but did you did you sense that that was a uh was playing a role in your conversations I would say 50 50. half half the conversations I had were you know there was skepticism in in my ability to get a deal done there was skepticism with my Approach uh because I didn't know exactly what I wanted right a lot of the other conversations were uh you know we're around you know just generally sending me deals and and taking up a broker's time just to review deals isn't uh you know it doesn't lend well so yeah I would say half the time I I had a good response uh but I my my frequent follow-up and my frequent uh yeah I would say my frequent follow-up is is what sort of set me apart from from many of the you know other Searchers maybe that they had encountered and so we I I kept in touch with you know the hundred or so Brokers I had on a weekly basis so if I wasn't getting deals from them I was still reaching out uh even though they had maybe not felt comfortable in those early on in those conversations early on I you know I made it known that I was very serious just by consistently touching base with them uh saying hey you know got anything on your desk today got anything I can review uh yeah and just being top of mind for them uh versus you know just reaching out and waiting for them to send me something I just I I really pushed hard on every contact I I had made and made sure that any opportunity that fell in my scope was was being set my way no matter what it was and that I would be extremely responsive I would ask questions about the specific deal if I had any so I I no matter if the deal was strong or not I was always in contact with them well that's great Sean and and I'm not sure anything that you said there isn't something that the audience hasn't already heard we we know cultivating relationships with Brokers um being responsive being proactive uh being communicative giving them feedback uh and just doing everything you can in your community communication style to demonstrate that you're serious is kind of the name of the game but I think still even people who are guests on the Pod and who have bought a business Maybe you know maybe don't do that as well as they could and it sounds like you did that really really well so um Kudos and probably a big part of the reason why you got something under contract so quickly so uh let's oh before before you tell us about the business that you bought what were your parameters yeah what your size wise and otherwise so anything between 1 and 1.5 million I was hoping to fall in the two to 350 sde range uh I know that's a little bit of a range but I was comfortable with that number uh and and yeah so that that was my initial criteria uh no specific industry uh my parameters were wide open uh geographically like I said but uh 1.5 1 to 1.5 and 2 to 350ish in sde so let's let's double click on that sde number Sean as you know from listening to the Pod and and reading the literature and following SMB Twitter that is would be considered buying small why why were you comfortable or why did you decide on that as your range so I didn't Venture into all of the other ETA models initially I thought that if you were going to buy a business uh obviously I I understood that you can bring on partners and things of that nature but the traditional route uh traditional search route or you know bringing on investors and raising capital and such um was something I was open to but given that I had a mix of personal and family Capital that I could bring into a deal uh I felt a little bit more comfortable putting the putting the business on my back and taking full responsibility of it and two I hit like like my last two years uh I I felt that I wanted to see how well I could do something on my own before I raise any sort of capital uh bring on other partners and and I wanted to feel confident in the in in my abilities to you know run and manage a business uh but yeah it was more around wanting to own a hundred percent of this business and feel confident in my abilities to do so uh early on and and I didn't necessarily need to hit a certain income uh to be okay jumping into uh into the ETA space um you know I I was okay I I went into this being okay making the exact same if not a little bit less than I was in my day-to-day uh role as a consultant so well let me follow that up with a few observations first you know we we I think that you're just a great Counterpoint because when this buy small don't buy small the right threshold is X I ask about it a lot it's I I think it's a very important consideration but um as with all things I don't think that there is a is a single prescription that is the right answer and that it's gonna and and that there's you know that we need to be dogmatic about this um you are a 26 year old Bachelor I assume uh and you know have very different uh financial responsibilities versus a 45 year old uh woman with three kids uh and so you you know the the salary that you need to replace the mouths that you have to feed etc etc the mortgage that you may or may not have et cetera et cetera changes the profile of what you you know what you need to buy for yourself so uh so I don't mean to suggest at all that what you did that your kind of smaller size was imprudent it's but it is it is different because because I think that your profile is a little different you're a little younger than my typical guest right this is great um Sean and and so if you would and so just to be absolutely clear um you your range of 200 to 350 you kind of arrived at that number by backing into what you could afford and what you could afford you decided with your own personal Capital Savings was basically a million to a million and a half and so what does that mean well typically if they traded three or four x that meat that's going to end up being 2 to 350 sde sort of thing exactly yep and and that would cover the salary your own personal salary requirements can I ask two even more personal financial questions can you can you I think I we can napkin math this but your the cash that you had available to spend uh so is it is the math basically 10 of a million to 1.5 somewhere in that range yep right around 150 was was my Mental Cap you know could go up to maybe 175 but I was comfortable going up to 150. great and what size salary did you need to replace uh I was comfortable replacing 100 Grand I was making about one to 110 uh you know in my in my day-to-day so I was I was comfortable making just that and uh you know we'll go into debt service and things of that nature but uh you know we'll I'll end up making a little bit less than that but I again that's that's something I was comfortable with so buying a smaller uh you know there are downsides to that financially but you know to to own to own my own thing was the goal and if that meant I had to take a pay cut or make virtually the same with 10 times the stress or uh yeah 10 times the stress then yeah I was I was willing to go that route sure seems like a good trade to me I mean if you're gonna build a an ice cream Empire man uh you know taking a little bit of hit on your salary seems like a good trade yeah and yes I did say ice cream Empire I don't think we have uh shared with the audience what you bought so there's a little teaser all right so so tell us how you found the business that you did yeah so connected with a broker uh this is probably the the one I had had been connecting with the most uh he was sending me deals every you know couple a week at this point so we were we were just having a conversation about a few deals that we were reviewing together two or three Deals uh at this point and I wasn't super excited about those and and he had just connected with a seller uh via call in the last two weeks or so and and this seller wasn't necessarily ready to sell he he was he was eager to see if there was a possibility for it he had started over the last couple months he had he had been you know connecting with him with the broker to see if there was a possibility of putting of putting the business up for sale so they were in very very early talks to list the business but it wasn't on the market or anything and so like I said I wasn't really excited about the two or three that we were currently reviewing he had quickly mentioned on a call hey I just spoke to a seller uh would you would you wanna hear more about this business I know you're not super interested in the food and beverage space uh which I wasn't that was actually one of the only uh criteria that I that I wasn't willing to or one of the only Industries I wasn't willing to venture in uh more so because of the horror stories I've I've heard uh you know whether it's podcasts uh or you know any of the the spaces I was I was researching in but uh yeah I I quickly reviewed it and actually got excited about it uh not only on the financial side of it but the the brand itself excited me the most and and so yeah connected with the seller and the you know in the next 48 hours ish and we went from there and so tell us all about it the business so the business is a two location ice cream shop in Arizona everything is made and distributed in Arizona so like I said two shops the business is doing one point three we're going to do close to 1.4 by the end of this year and sde is falling right around 275. uh I.E wow that's the exact midpoint of your range yeah so perf yeah exactly so falls falls right around 275. and uh yeah very simple business uh two location ice cream shop you can you know you can assume there there's not a ton of complexity there but uh 20 person team have about 10 at each location Management in place at each location extremely helpful seller was only really putting in about 10 to 15 real hours in the business at this point he had been working on this project for close to six years now he found a hint he did yes sole owner of the business and so like I said he was only working about 10 to 15 real hours in the business and that was you know everything from flavor creation to sometimes jumping into the shop and hanging out with employees and you know spending some time with the team now tell us a little bit more about the product of this ice cream shop these ice cream shops the two shops because I think my my first reaction was it seems like it would be brutally competitive because I mean you've got the the Giants the household names Ben and Jerry's Baskin Robbins but then I I mean you do see lots of also independent ice cream shops but they they it seems like the sort of business that would be that would be hard to have a moat around that would be really tight margins because it's going to be in a high rent area typically a lot of foot traffic their you know labor is going to be hard you're going to be hiring you know I mean not necessarily just high school kids but I remember that was like a favorite place for people in my high school to work was you know scooping ice cream sort of thing right so so what uh what did you see and then you you all already had this bias against food and beverage you told yourself that this was the industry that one of the few Industries you would not go into so what overcame all of that and you also said that it wasn't just the financials that you liked there was more there that you like something special there tell us more about it yeah so two things quickly stood out one is the product itself wasn't just ice cream so although we do have Scoops right just like any other ice cream business the core product was what we call a dough melt essentially a donut sandwich filled with ice cream and that core product is the differentiator in you know in this space for us uh you know like I said we we do serve everything uh else but that that is what was the biggest pull for customers and the quality of the product as I dug more into the logistics in the back end of the business uh was extremely impressive this everything was handmade uh everything is delivered first thing every single morning seven days a week uh nothing uh you know was shy of of quality and and so from a branding perspective and a quality of product perspective this sort of over over the last five years it sort of built its local moat in its ability to serve customers extremely fast and deliver a consistently quality um product uh yeah so that that's really what what pulled me in more than the Financial upside of the business obviously margins were sitting around 25 to 30 percent uh which is significantly higher than uh you know the average in in the food and beverage space ice cream is a little bit more higher margin typically but um not usually in in the 25 to 30 percent range and uh yeah I I I saw the I saw the Loyalty that customers had locally in Arizona and that more than anything else was the the initial pull for me and when you say loyalty how are you gauging loyalty reviews online reviews or what yeah so return customer rate and reviews were the two initial markers I was looking at uh it is actually the highest rated ice cream shop in the country our Phoenix location is wow and by by what's what do you mean by what standard by sheer number and at being at a 4.9 so we have close to 2 000 reviews at our Phoenix shop Google reviews Google reviews yeah sorry wow yeah so highest in the country uh from what I've seen don't hold me to that but I I actually do think that that number is is true and uh yeah so Google reviews and return customer rate is you know 85 90 at this point uh and the yeah and was the seller doing something Savvy or kind of digital marketing forward to accumulate so many reviews uh was he proactive about that or was it just people taking their own initiative to leave happy positive reviews yeah that's what that's what was very impressive about this there was no digital marketing spend or attention there was no review funnel if you will yeah after a customer uh you know came into the shops uh everything was completely organic so his core Focus his only focus was on the product and customer service so those two things uh drove that that number of reviews uh and and the volume at which customers you know returned to see us uh but yeah you know I think that's that's the one of the most impressive pieces of this is that when you focus on the product itself you can in a way not focus on the other things that you typically you know hear as being the most important drivers of of growth and you you tend to to have a better result when that that quality of product is is the main focus yeah well certainly there's a cliche about product people now I'm coming kind of from a tech background right but I think it probably is is true among any kind of product person where they are craftspeople they just they just the the quality of the product you know realizing manifesting their vision is is an art to them and is something they're deeply and personally invested in and all the other stuff the marketing the sales the asking for reviews is is icky and beneath them or are they just or maybe I'm being too judgmental maybe they just don't enjoy it they'd just rather be thinking about their product and so they neglect that stuff for lack of a better word I'm reminded of a uh my first million uh recent episode where um Sean Puri talks about like buying digital businesses like a SAS product an existing SAS product or something and he's like you know one of the key things I look for is that programmer product person who just cared about you know it was all product product product but never touched Facebook marketing or Google ads or optimize their landing page just like all of that stuff it was they were just about product because then you know that's where I that's the value that I can add exactly and and there's and there's just if they if the product has been refined and perfected with care and love uh and it just hasn't hasn't been properly marketed of course there's in theory a huge unlock that's to be had there exactly so I don't know if I'm over applying an analogies from from Tech products to this but it sure feels analogous yeah no absolutely and and just to touch on that it that's that's the beauty of being able to buy something at this stage and with so much upside you know there if I were to start this from scratch my core Focus for five or six years would obviously need to be the product and now I get to come into this business at a point where it like you said it has untapped potential with the the product being refined the logistics on the back end being perfected and now I can come in and and double down on the things that were lacking and will now you know unleash a whole another Beast if you will and Unleash the Beast John yeah in uh in Arizona so well so let's talk about this Beast you there were two things that you said you liked about it when I want to ask about both of them the first is the upside so what what it what do you perceive as the potential upside here the potential opportunity obviously when you when you look at retail or food and beverage the the typical blueprint to growth is more simply more locations uh we're optimizing the current locations you have so I think it's a mix of both right now we're in it we're in a good place with the two shops we after about two and a half years at each shop you you tend to find your core customer in that City or in that market and Logistics start ironing themselves out Things become a lot simpler and there's not a lot of day-to-day that goes on in those shops so we're at a good place with the two shops we have now so my my true Focus over the next six months is opening one to two more shops I ideally want to to have two uh in that six month period but uh my my blueprints to you know over the next 12 months is to replicate what we have logistically in the two shops uh in Arizona do two more in Arizona and then potentially venture out into the surrounding states and then obviously doubling doubling down on marketing uh and getting this this product uh you know in the eyes and ears of uh of as many people as possible right now it's it's grown purely on Word of Mouth which is fantastic so we'll continue to to push forward that but if we can add that wing of uh you know of external marketing to this that's uh that's what's going to set the next two shops up for success and that but that's near term the Home Run Grand Slam case here is that you've got some franchisable concept or maybe not franchisable maybe you own all the stores but something that could go National I mean in your fantasies that's there's the potential for that here right that is that is the five to seven year goal I would prefer to keep everything in-house so I you know I look to you know I looked at in and out and Dutch Bros and things of uh you know in organizations of of that nature as as inspiration for for what I would like to to build over the next few years but there are there are a ton of opportunities or a ton of different ways we could approach growth uh obviously franchising being a very popular option uh to be completely honest with you I haven't put that five to seven year blueprint in place I have a high level you know mental frame for what I'd like it to look like uh from a pure location standpoint but ideally everything is in-house and we just continue to scale locations um while focusing on keeping the the quality of the product uh consistent throughout the country um and potentially venturing out into retail and um you know in events and catering and other opportunities like that I'm just I'm laughing because you're just saying all the all of the things about being involved in food and beverage that probably would have sent you to the hills screaming uh just three months ago uh yeah but and now they seem like great opportunities yeah it's ought to be in an industry that I initially wrote off uh and seeing how exciting it is uh on the back end but you know all the horror stories you typically hear uh are sort of true in a way now that you pulled the curtain back what are what are those horror stories Sean a typical Horror Story would just be around staff and managing you know managing a large team uh and the logistics of food and beverage are typically a nightmare if you manage them yourself and and you're not making everything uh yeah yeah so I would say around team in in logistics uh and they they are complex you know especially in the ice cream business you're dealing with a younger team so a lot of emotions and and you know going from zero to 20 team members is is a you know as a challenge but just like any other business that has its challenges they're just they're just different uh in every business simply but right it's uh it's team and Logistics versus operations and sales yeah so yeah and speaking of these operational logistical challenges or or people challenges are you now full time in the business what what yeah what does that look like yeah so still working my day-to-day uh still have your W-2 I still have my W-2 and and I would say there's I I am working full-time in the business but it is early on and and late at night and and obviously on the weekends so my goal over the next three to four months is to slowly transition into into novel full time but the Focus right now is to you know keep keep the business at at a place or not really cause any turmoil in the business and position myself uh financially uh so that when I do Transition I'm prepared uh you know personally and in that nothing has significantly changed in the business early on from my you know pure lack of knowledge around the food and beverage space so I I sort of want to test the waters and see if things break in the first 90 days uh before I make that full jump I typically this is kind of counter my typical Behavior Uh because I I tend to jump full speed into things and uh get very you know narrow focused so I'm trying to be a little bit more cognizant of the fact that things there are risks involved in this and so to have that cushion initially and then to transition uh into the business full-time over the next you know 90 days is uh is something I'm I'm a little bit more comfortable with good yeah that's that's sounds prudent saving some capital on your own personal for your own personal bankroll and then and also in the meantime kind of putting put I assume putting whatever money cash flow is coming out of the business back into it exactly Shoring up your own bank account and the business's bank account before you dive in exactly taking no Capital out of the business right now solely living on my W-2 and investing you know every dollar back into the business to to make sure that one things run smoothly and we have some capital for growth when I do go full time lingering on the seller here given what you said about the potential here and I mean it just seems like a really attractive business and he's the founder why did he want to sell two things one he had a young you know daughter uh recently so hurry had a daughter recently and and so he after about five years of being in this business uh you know in in the first three being very very involved the team was very small up until about two and a half three years ago um he it got to a point where he wanted to spend more time with family and then two like I realized I wasn't the best at going from zero to one he realized he wasn't the best at going one from one to two he was the zero to one guy he liked the initial few years of building a brand bringing up to a certain point and sort of riding the wave uh and and not necessarily feeling the the urge to grow uh so he knew it had legs and he and he knew the business had you know so much potential uh but he didn't feel he had the energy the time or the willpower to take it to the next level and felt like it was the right time to put it in the hands of somebody who was willing to to bring it to that next level also for the sake of of the team both managers are you know very invested in the brand as well and they've been with the company for three years now each and uh you know they're they're also wanting to take things to the next level and they want to be there um along the way and and so the the cool cool realization that he had is is that he Not only was he not benefiting the brand he wasn't benefiting the team and the management that was in place uh by not growing the business given their want and and desire to to do so yeah yeah he recognized that he was holding them back holding their ambition career Ambitions back a little bit exactly and he was young he was young too he was so obviously had a daughter so he's not retiring in age yeah he was how old yeah mid-30s uh 36. and I I let it slip what were what did you buy the business for what what did the deal terms look like yeah so I bought the business for 1.25 uh he initially listed it at around 1.4 uh sde like I said it was about 275 um and I put a 90 SBA loan on it so I put 10 down my 10 injection sat around 125. the 275 sde to 1.25 purchase price that's a pretty a pretty full multiple that's about a 4X yep and you got comfortable with that obviously it was I wouldn't say I was comfortable with it um there was definitely some uh some skepticism in whether or not I was making the right decision at buying an ice cream business at 4X but with I I again I think my urge and and desire to get a deal done uh was was outweighing the potential I guess downside of overpaying for an ice cream business um I relied heavy on heavily on what he had built and and my you know this this is going to sound ridiculous but my gut I you know gave me a sense that I was making the right decision based on brand and what this business was spitting out and the potential it had even though I may be overpaying it overpaying for the business initially uh you know the the return in five seven ten years would uh would sort of outweigh that initial sort of quote-unquote downside if you will Sean you've now referred to the brand it's called novel by the way for anyone who wants to to Google it novel in Phoenix and you've referred to the brand a number of times you are a self-described brand freak brand is not is not something that we talk about a lot because often a kind of a blue collar Services business might you know brand might not be the the most important aspect of that business but in a consumer facing business with a consumer consumable product you know ice cream shop brands are you know Ben and Jerry's is one of the probably top 100 or 200 brands in in the state in America right so anyway talk to us more about the strength of this brand and why that appealed to you so much so when you look at the ice cream business most brands are you know very very traditional they've you know they've they're Legacy Brands they've been around for you know 50 plus years and so from a branding standpoint I I am just typically very attracted to yeah to to those household names whether that's a cpg brand uh a retail space or retail shop uh clothing whatever whatever it may be um I I tend to be attracted to a brand that knows itself very well and knows its customer and uh you know has been very consistent uh over over a long period of time and so I felt like this this brand if you will novel knew its customer and had developed a sort of cult-like following uh locally and so the the more I visited the shop the more I talked to team members and things of that nature I realized how uh you know how well known it had become and so that's sort of the leg I was standing on is you know given that it's so well known locally how how can we continue to bring that same sort of energy or that same sort of um you know following or that attractiveness to other markets but yeah from from a branding standpoint there there aren't a lot of local small businesses that have that are that have built a a brand if you will they they are known as that local shop or that Mom and Pop uh you know ice cream shop or coffee shop but they haven't really built a you know a a national brand if you will the and and so is it one of these things where everybody in Phoenix knows novel or knows the dough melt or not everybody just those who have discovered it like how well known is it to the the man or woman on the Street in Phoenix yeah I mean from the conversations that I've had um whether it's simply by wearing a t-shirt or um you know talking to folks about kind of prying at what folks uh you know like to to have for dessert locally right whether it's just a general question I have or uh wanting to learn more about their uh where they where they shop uh it is it is extremely well known in Arizona but the surprising thing is how many of our daily customers have never heard of us uh or are coming to visit us for the first time uh based on you know again Word of Mouth being told uh that that they should come see us but it is a very well-known brand in in Arizona there are a handful of states that know about novel as well so we've been reached out to a handful of times already since I've taken over about coming into uh you know different markets and whether or not we are franchising or really yeah so you know even within that's exciting yeah yeah it's it's a it's a great sign but uh yeah the the brand is known I wouldn't say it's a you know National by any means but from uh from a local perspective I think we we've done a really good job in Arizona as being that staple uh dessert spot uh you know for for this market so very well known but it's very surprising to me uh at you know at the scale that we're operating how many people have never heard of us one of the things that you'd commented to me Sean about your criteria for business to buy is that something that you did want as opposed to something that you were filtering out was to wanted to buy something that you were excited about calculation being if I'm gonna step out of my W-2 which may be stimulating or you enjoy enough but let's let's you're not probably passionate about it and if I just step into something buy a business where I'm similarly kind of meh about it I don't want to do that I want to be excited about this this business that I'm going to buy um let's call it X Factor and that's not that is that is kind of talked about in our world but maybe not as much as it should be we often say things like you got to imagine yourself in the seat you got to imagine what it's gonna the day-to-day is going to be like in this business and you know can you imagine yourself doing the work and so on um so so maybe that's another kind of flavor of this same question but elaborate on how you were thinking about this topic of of your interest and passion for the thing you bought yeah that's exactly you're exactly right I mean my my idea uh was you know why why would I leave something stable and you know fairly enjoyable you know there I don't dislike my W-2 by any means I actually enjoy the work we do and it's it's fairly rewarding and and so you know I'm not in a position where I necessarily need to jump ship and so if I were to move in this direction or if I were to take the risk uh you know of a personal guarantee and things of that nature I want to jump into a business that I actually enjoy at you know let's say fifty percent of the time at least you know most businesses day to day like we all know are are not extremely exciting but for the most part I I I wanted to wanted to make sure that I I was willing to put 10 20 30 years or you know build this brand for the remainder of my life if you know realistically and yeah so so I I think that was one criteria and one one major criteria mentally was am I going to get it am I excited about this business am I willing to put the time necessary to bring this to the next level um or is this you know just another you know quote-unquote boring business uh that I'm not necessarily going to wake up and get fired about fired up about um so you know although it may not look financially rewarding on paper I think the yeah the the excitement of a brand uh like novel or you know the the ice cream business uh if that's what uh if you like ice cream enough I guess right you know I I would I was hoping that this would yeah this would would get me out of bed uh in the morning right and not not be another job um that I have to you know just put put the time in uh and see grow I can actually yeah I can actually get excited about what we're building uh yeah and and see you know sort of yeah yeah I can get excited yeah well I mean it's it's a it's a it's a great product I mean who doesn't like ice cream it's a fun product it's a pleasure product it's a kid a product that that kids love a family product but also adults I mean it's just it's it it's just got such a universal appeal and it it's it's a great frankly a lot of my guests joke about how you know the boring business they bought while we all in this ecosystem get excited about these businesses you know the second they tell people what they do at a cocktail party you know the person's person turns to the next person to ask you know to Total disinterest right but if you own an ice cream shop and one that's well known in your city you know that that's probably pretty interesting to people and pretty fun to talk about the stability of those boring businesses is absolutely um you know that absolutely appealing there's there's no doubt that that was the direction I wanted to go but once I once I saw uh what the the other opportunities out there uh in more you know unique Industries or unique opportunities uh my mind started to go in that direction versus yeah the the sort of boring yeah sort of boring businesses well in the way that happened it actually reminds me of a point that AJ wasserstein made on the episode I aired Thursday about how if you are an acquisition entrepreneur and you want to get into franchising so you want to buy a portfolio of stores in a franchise brand with a goal of then accumulating more over time and building a big portfolio how do you evaluate what brand to buy into what system franchise system to join and he had this great framework where so so it was like a list of 10 questions but there there was kind of this process Underneath It All where you should you should hide from yourself the franchise brand or even the category and then just and then just evaluate the business against these kind of nine or ten criteria and only at the and then and and so come to a conclusion about does it meet all of these criteria in the way that you want to want it to and then only at the end of that process unmask what the category or the brand actually is that you've been objectively uh analyzing the idea being that we bring so much bias to Brands and to um Industries like you did with food and beverage that sometimes the they might actually be great opportunities and opportunities that you uh would would benefit would be a great fit for you personally not just all the financial characteristics but others as well and so it's sometimes kind of hiding hiding what the the business is or the industry that it operates in from yourself in analyzing it in a very objective kind of clinical way first to you may find that there's an amazing opportunity there and then when you unmask it to yourself you're like oh this oh who knew that an ice cream shop actually checked all these boxes that's exactly so anyway exactly yeah well and and part of it is also just the willingness to remain open-minded so whether or not you do this formal process that I just described about the the masking and the unmasking just staying open as you I think were when you had already said to yourself no food and beverage but this broker that you developed a relationship with said well I got this I might have this ice cream shop business and you were you know open-minded enough to say well I'll take a look at it even though it you know it's in food and beverage which I said I wouldn't get into so I think that's also a good quality to cultivate yeah that's a key point is staying open-minded in this process I think things take a lot longer because you know that there is a lot of upside to being very specific and focused on what you're looking to buy but you can also miss out on some some pretty you know amazing opportunities so that that is what I would say open the this world up to me so quickly is that I you know I was willing to review just about anything uh one because I just wanted to get more reps and I didn't I I didn't have that Financial um or business background uh you know prior so I I wanted to better understand many many Industries and see what the back end of these of these companies look like so I could identify things that I may not have even recognized was a part of being in these businesses whether that's manufacturing you know or retail or whatever it may be so yeah keep keeping it keeping an open mind was a big factor in my you know search to close speed a couple more questions for you Sean then we'll wrap I want to return now to expansion and just the the math of it if you're already getting inbound from people interested in franchising this concept uh I think people listening to this might uh when they hear the economics uh might reach out to you yeah so you want to open two more locations in the near term are you going to finance those or I mean how much does it cost to open a location I guess is the question yeah so I would like to given that I have a you know a pretty hefty loan on this business and it's only been a month I would like to not put more debt on this business uh unless I really really have to and that we may hit a number uh you know in the next two to three years where I I will need to pull some uh or put some debt on the business if if we're growing rapidly but for now the footprint of these build outs and of these stores is small enough to where we can basically bootstrap all of our all of our stores over the next two to three years so each store costs around 25 to 35 Grand to open if we sit in that five to seven hundred square foot range if we go up to a thousand obviously you're you know you're sort of almost doubling that but we operate out of five to seven hundred square feet in both of our current locations and we want to keep that blueprint going forward so both shops both shops that we have in place now cost around that ballpark to open and uh we can open a shop in 60 to 90 days if we identify the right spot so it's just a matter of having that that initial cash and you know replicating what we currently have in in the two shops so we would like to keep everything uh you know in-house we don't want to bring on more debt at this time okay but let let's just unpack the economics here because I I think that their I was I was chewing on this before our conversation here Shawna I think that they're quite compelling yeah I don't have any experience in in retail so maybe this is not unusual but just kind of first principles looking at looking at kind of return on invested Capital so you said it costs 25 to 35 to open a new location let's be very conservative and say it's an even 50. so super conservative costs 50 000 to open a new location okay and you you're doing 1.2 million across your two existing locations so let's say each location basically does 600. 600 in Revenue 600 in sales a year and the margins are 25 to 30 percent so let's say again being conservative 25 so 25 of 600 is a hundred and fifty thousand dollars in profit cash flow from a single location so a fifty thousand dollar investment in a new location in theory if it performs like your other two locations to will generate a hundred and fifty thousand dollars in the first year in cash so that's a yeah that's a what that's a 300 return uh unlevered unlevered return exactly exactly I mean that's that sounds pretty good to me again I I might be I'm naive here so I might be overlooking some really obvious stuff but wow in the first year you're not going to make 150. it's going to to take about eight to ten months to really really see the momentum that you're currently seeing in these two shops okay maybe shorter now that we've you know have some credibility and and people know of us but you know our second shot took probably six to eight months to to really get going so I would expect in year two to make you know 150 on that investment first year you know let's say 90 to 100 so you know still fantastic still yeah but uh yeah there's there's a little bit of a ramp up time and and you know operating at a five to seven hundred square feet definitely helps us everything is Windows service um nobody comes into the shops so everything oh wow oh these are really yeah these are really small then these are really small and and so the build out is is insignificant is an insignificant cost uh to to the whole operation and we haven't touched on rent or anything of that nature which is which is a big piece of of most retail uh or food and beverage locations yeah and you know we'll take our Phoenix shop for example we're paying about 500 bucks a month and in rent which is half of a day in sales and yeah it's not 45 of it of a Friday night for us so you know we we don't have that stress or that you know that that hand around our neck with uh with rent and I wonder why other ice cream shops haven't followed a similar format where they just they don't offer a place for the customer they just offer Window Service because that sure seems like a great rent hack yeah I mean it's basically a stationary food truck exactly and that's a good question I I actually I don't know the answer to that I yeah I would advise anybody getting into the dessert space whether it's Donuts whether it's even coffee uh you know to to test this model and and and see if it is effective for you because you know the operations are are much simpler uh you know having having a very small footprint we don't have a lot of complexity in the shops things move really really fast we could see hundreds of customers per night we do on a Friday and Saturday night we can and we're doing three or four sometimes 500 bucks an hour uh by you know you know by operating out of these small spaces so in yeah I I don't know why nobody has has really tried this model uh food trucks do really really well if they have a great product and and you know they obviously operate out of you know probably no more than 100 square feet but I I just think it's it's untraditional most don't think it's possible they think it's too small to operate uh out of it's too you know it's too crammed yeah it's it's hard to say why but it would be interesting to see more people test this model and see if they can you know put up the same numbers well you'll be testing it here yourself yeah and in the coming months with the patients three and four anything I didn't ask you Sean that you want to make sure is set I don't think so but one thing I I always like to you know come back to is that this process doesn't have to take a long time if you know we we already touched on being open-minded with this but I don't think this process needs to take as much time as it tends to take for most um obviously I took a different route here buying an extremely small business I will you know make around 100 Grand so it's not as appealing to most but the opportunity for you to own your own business is there if you're willing to kind of eat some dirt for 12 to 24 months uh on a business with with some potential so you know if if you really just double down and and keep an open mind to you know maybe going into an industry that you're not familiar with that you don't feel comfortable with uh you know or or already wrote off like I did at the food and beverage space you know you could you could find something pretty special it certainly sounds like you have Sean and neat a really neat business and it seems like this upside uh could be something spectacular uh I I like that you're more cautious in your optimism than I am um I'm talking about stamping out as many as you can but I you're you're oh that's the goal don't get me wrong I okay yeah I don't want to open as many as we possibly can but uh yeah one one step at a time it's it's funny I'll hit on that really quick but as uh you know when you when you initially jump into a business this is one realization um that I've had in the last couple weeks is I I like to throw things at the wall Very quickly and see if they work see if you know things break and how we can improve that so um you know given my last four years in the Consulting space that's how we've operated uh you know we have a meeting one day and we try it the next day and if it breaks we don't do it again the in the third day so things just move at a pace that you know many aren't comfortable or used to and so I took that into into this business and I quickly got a realization from you know younger employees and and you know just from other mentors and such that probably not the best idea to come into a you know well-functioning business and try to start throwing things at the wall and and you know yeah I I would say not scaring the team in a way but you know kind of making the team a little uneasy about what's going on they're already a bit uneasy about the transition and now you're you know trying to try to change all the all of these things but that's my go-to in in most cases so I got a reality check and you know already already had some some good conversations about slowing down a bit and taking care of what's working taking care of the core team in the first 30 to 60 days and then and then starting to focus on how can we improve current operations versus coming in day one and saying you know these are the 20 things we need to fix tomorrow at such an important point you said 30 waiting 30 to 60 days and I I'm countering with maybe more like three to six months probably a lot longer but again given my impatience yeah I you know I I realistically will will hold off for you know a few more months on on really making major changes in the shops if they if they really need that but uh yeah it's it's humbling to be slowed down a little bit yeah well I think one way to get comfortable with that is that let's not forget that buying a business is this incredible shortcut so just by buying the business you've you know you've bought the founders you know product you know the Blood Sweat and Tears he poured into coming up with this product in the six years of you know building a name for it and getting people in the neighborhood to know it and developing this loyal customer base and the 2000 reviews on on Google reviews all of that in one Fell Swoop so if you take a breather for you know three to six months as you know during your transition to learn the business uh you're hardly you're hardly behind it's just you're still way way way ahead of things such which of course which of course is the whole Magic of of ETA yeah such a good point and you know many of us probably are in the camp of wanting to move as fast as possible that's that's just a very you know a a typical mindset or behavior of uh of of our space and so it's humbling that I have to be okay with moving a little bit slower in you know maybe even 12 months right um yeah we don't know but and being okay or actually realizing that the business is not suffering because you're not moving forward as fast as you feel like you should be uh and you know the beauty of buying as you mentioned is that if you if you don't do anything to this business right now and you just maintain it for six months it's going to ride here you're here yeah you're still going to do well uh but yeah it's it's a totally different you know mindset from from zero to one to one to two right well push on how can how do you like people to reach out if they have questions for you um yeah good wow good question um I would say Twitter is probably the the best place shoot me DM uh you can email me you can yeah I would say those are probably the best two places uh month search funder I'm on a variety of different communities um yeah I host some events in Arizona too so if you're local reach out to me I'll always uh send you that information but yeah Twitter and email and I can drop both of those uh over to you yep we'll have those in the notes appreciate that Sean Allard thanks for coming on congrats on a really neat acquisition uh it will definitely have you back and hear how things are here from now I appreciate this thank you so much will thanks Sean 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