Buying a Big $7m Trade School | Bob Boniface and Tyrel Sulzer Interview

Tyrell Soler Bob bonfice welcome to acquiring minds thanks for having us will thanks will the two of you partnered to do a traditional search fund and acquired transe which is a CDL school so people wanting to become truck drivers school bus drivers other operators of large Vehicles need to get their license and you Trans Tech you all are a school that trains them so we're going to touch on a lot of themes today Trucking trade schools partnering to do a search uh and a lot more let's start though with some background on each of you Tyrell will you go first please yeah sounds good thanks for having me will uh I'm a Canadian so I was born and raised in in British Columbia uh we do wood you know mining and oil up there so I ended up going to engineering school at University of British Columbia uh worked for an Exon Mobile subsidiary called Imperial oil up there uh and I worked kind of fly in fly out of Northern Canada living in can and and working with mining Crews to build large mining infrastructure uh for the oil sands uh after that I went to business school spent two years there uh I I looked into doing the investment banking thing I had a friend who went to Goldman ahead of me uh tried that out and turned 180 degrees and went right back and uh as I was trying to figure out what to do next I interned uh with a Searcher who acquired a traffic control business in Atlanta and uh I caught the search bug uh and so from there we'll get into it later but met up with Bob and and decide to to run a traditional search great and why did you run from Investment Banking what didn't you like about it you know I felt like I kind of missed the the mark in my lifetime to do that uh you know kind of Lifestyle I I had a fiance we were planning to have a family soon and the uh the late nights uh you know got to me coming from the mining world you know it just it frustrated me that I had to be up at 9:00 and then up till 2:00 am. 3:00 a.m. uh you know doing the banking stuff I was like just just put me on night shift you know I can do this if I can just get some sleep um so but great learning experience like love the the people that were there I think it was the right firm it just wasn't right for me uh in my late 20s gotcha so naturally you chose the much easier path of getting into small business Bob your turn yeah so uh I'm from Detroit originally um come from an automotive family um my dad's a car designer at General Motors kind of grew up loving cars and you know seeing myself working in the industry after college I uh went to end up working at General Motors where in manufacturing Finance helping to kind of design and run the the budgets for the North America uh manufacturing operations at GM which is great uh you know it kind of got that exposure to operations and how to set up a plant and and make it more efficient and and you know work with Hands-On with a product which I I thought was really cool um as a carnut and someone who you know likes to see kind of something tangible to to work on um I went to Business School uh with the goal of eventually going back into the Auto industry you know possibly at at CH Motors um but pretty early on I kind of discovered this search fun path and as someone who always kind of had this entrepreneurial itch in the back of my uh my back of my mind but never never really had the great idea that I would say hey this is worth you know foregoing a couple years of income and possibly you know going for broke here I thought it'd be really interesting to pursue something like a search fund uh given kind of the the one shot coming out of business school um at business school I I spent the summer interning for a family friend's Automotive supplier so it was a automotive forging company stamping steel parts in a hot dirty sweaty warehouse and uh I fell in love with it I I I saw that the same skills that I kind of learned at GM um were easily applicable to small businesses and the same challenges that big companies were solving and that I I felt like I liked working on there you can work on in a small business except that the difference is that the rewards of that end up going in a greater share to your pocket versus you know some big company that that you're working for um so that was kind of what what kicked me off on this path well I I also recall from a preall I think uh Bob you saying that a lot of the kind of corporate bre back best practices can be applied into small businesses and you know you can get a lot of wins there um just by kind of bringing that that corporate knowledge down a little bit great guys and so you meet at business school and uh and you kind of have both kind of figured out that search is something for you how do you meet how do you decide that this is a project you want to take on together yeah so Bob and I met in the kind of early days of business school but never really you know our friend groups overlap but didn't really talk that much and and there's a you know a class on search when you kind of discover becoming kind of search Curious or thinking about the the uh that world of search and so um as we were trying to figure that out we were exchanging notes on investors you know kind of who we talk to other Searchers you know kind of how it would look and and so I think kind of during that timeline you know both listening to each other in class and then swapping notes on on actually going for it we you know kind of ended up converging uh in in a partnership model uh afterwards that is a big decision um partnering in any kind of multi-year Life project is is a big decision uh but oftentimes the two people already know each other so you guys kind of decided to partner before knowing each other very well talk to me about how that looked and how you kind of how you did that in a way that you felt like you were sufficiently diligen in each other yeah I I I I think it was interesting because we kind of approached it from this uh this point of saying okay regardless of whether we partner or not you know we're both going down this search fund route so you know I I think it gave us a little bit of optionality up front to say you know if if this doesn't work out the the worst at least in the early stages we're just trading notes you know we're talking about who have you talked to in the investor Community what kind of businesses would you like and it would just you know help kind of strengthen our knowledge about search funds um you know know but I I think once we decided to formally start you know investigating this thing we we kind of approached it from two different angles one was kind of the academic angle which I think I'll let Tyrell talk about a little more because he kind of designed that process but I think um a lot of it was just um learning kind of what what are what are deal breakers for you you know what kind of business are you looking to acquire from like a uh like a very tactical standpoint like would you be comfortable running a a software business that sold into the blueco collar space you know we kind of both knew that want to do blue collar but that means a lot of different things to to two different guys like if Tyrell wants to do an oil and gas uh business coming from his his background there but I want to do Automotive you know if the business is in selling uh oil and gas supply stuff in lck Texas it's going to be much easier sell for Tyrell than for me who's going to learn a new industry and move to a new spot um so I I think getting into okay what what are the universe of businesses that we like to acquire um but also doing some just casual social engage so you know going out to dinner meeting tyrell's then fiance now wife Julia um we uh we also took a a ski trip you know so the these are you know these are things that maybe um seem kind of uh maybe silly and small but I think it was really important to understand okay what what's tyrrell's sense of humor like how does he kind of view small business is this like a get-rich quick scheme to him because I I knowing uh have done having done a little bit of homework at that point I know that this is like a hard path this is something that you know takes a long time like you said well it's a it's a multi-year commitment and so you don't want to sign up with someone who views this as like a bang we're just going to be successful day one and you know uh this is going to be a long grind um and I I think it was useful that uh and helpful that we had kind of had that relationship where we knew that we could hang out socially be serious together work on kind of uh challenging problems we also did a couple school projects together that that would help kind of test that relationship in a small way um but knowing that Looking Back Now as a as having acquired we've moved twice together in in a year and a half um I've I've lived with him and his wife for four months uh when we first bought the business so um these are things I I don't think you could uh do unless you have at that base level like a really good you know enjoying hanging out with this person yeah yeah well of course Bob everything you just described uh there's a word for that dating and I know the joke you know tells itself and that you guys have jokingly referred to it that way as well but it it the process is similar I mean it's undeniable it's un it's it's unavoidable to come to that conclusion and then why did you guys independently just the concept of having a partner because some people don't even consider having a partner so aside from you choosing each other being open to the very concept of it what did you see as the benefits uh of not going not going down this path alone yeah I I think you know in school we had heard from a number of Searchers I you know I think the the part that's hardest is you know when the deal breaks when the company's not making money and you're by yourself there's this intense sense of loneliness and that that kind of came out all the time as being the hardest part uh and then when you listen to the partner Searchers you know they were able to kind of articulate that they were able to get through that kind of low Point um so I think there's there's a bit of emotional risk mitigation in going for a partnership and then similarly some of the best outcomes we had heard of were actually you know partnered searches um part of that I think is you know we we hear all the time like working in the business versus on the business I think when there's two people you're able to divvy up some of the in the business tasks and get to that onto the business uh faster so I I felt like it was 1 plus 1 equals 3 a little bit uh with with the search so it wasn't mandatory for me to go do it but it was certainly worth considering uh you know from an emotional standpoint and a financial return standpoint what about you Bob yeah I think I Echo everything Tyrell said but I think I think also just from an academic standpoint you look at the some of the data that we were seeing and it was it was clear that partnered searches acquire more often they typically have a a better result in terms of uh you know money over invested Capital uh from a return standpoint um and I think it would just be a lot more fun you know I I I I thought going into this um the idea of searching for a business for up to two years by yourself um with no one to talk to other than maybe your your parents and your investors um sounded like a pretty lonely p ma um I I think doing the math on okay if we split the returns I can still feel very comfortable with with the return that we can get here um I I just thought everything kind of pointed towards towards a partnership um I also knowing that um having just seen other entrepreneurial uh Ventures not outside of the search World kind of in cases in Business School uh the people that have gone by themselves uh like Tyrell said when things don't go right it is just an intense period of kind of loneliness and kind of mourning the Lost deal or something like that um and I think having someone to you know hey let's go get a beer or something like that when when when a deal breaks would be a lot uh more um satisfaction than you know rotting it out by yourself sure well you guys are are selling it pretty well here um you you Bob you just mentioned the economics doing a partnered search means you split the economics you guys did a traditional search fund we're going to get to that in a second why you chose to go that path but just to it out there these are these are kind of industry standard numbers I'm just going to share with the audience that um if you do a traditional search Fund in Solo traditional search fund your Equity ends up being 25% assuming you hit all of the performance thresholds you'll have 25% of the business ownership if you do a partnered search you'll have collectively 30% um which means each of you have 15 so so the kind of economic decision you're you're making is do I want to own 25% of a business by myself or 15% of a business with a partner and then you say to yourself well you know with a partner I'm more likely to be successful to find a business and then in that business to be more successful my downside is is mitigated at least you hope you feel um and then the the kind of intangible Bob you said that it's more fun to do it so that's that that's kind of the the attaching some numbers to the calc which I think is important um aside from having to split uh split the money split the pot are there any other downsides I mean I I guess that the the partnership implodes that's the obvious one but anything more specific or is that really it's just the partnership might not work out that's the big kind of big downside I guess yeah I I I and I think but going into kind of what what does it look like when a partnership you know implodes or something like that I think there's there's Partnerships early on that can you know reach inevitably you're going to have disagreements on on the path forward and I think how you resolve those you know just like any other relationship is going to determine that so I think if if you're unable in a partnership to get over those kind of things I think it can really paralyze a search and a business um if you've got kind of you know misalignment and goals like Bob talked about at the beginning that could prevent you from finding a business that could have you you know pass on really good opportunities as well so one plus one could equal three but it could also equal zero pretty quickly yeah and I would say also that um we we talked to a lot of our our friends that you know search for longer than than we did admittedly we we we found a business pretty quickly so you know our our partnership in the search phase wasn't strained in a way that it could have been if if say it lingered on into late in the second year where you know there kind of is that urgency to find something or else you're going to kind of walk away with with without a business um but we we talked to um some of our colleagues who are still searching and you know when you have to do that pivot away from kind of okay what is our strategy we're going more broad-based on a search versus kind of this very focused thing that we started with or you know hey the that magical unicorn Healthcare business that we were seeking out doesn't seem to exist at the price that we want to pay for it um we need to kind of broaden the aperture here um yeah I I think having that discussion uh if you're doing the search by yourself obviously you can just change tact but when there's a second person you have to get uh kind of Buy in from I can imagine that that could be kind of stressful um I think that the thing that always helps in and we remind them is hey the ultimate goal here is to buy a great business and and run it and be successful so um you know don't let that uh kind of the tactics on how you get there uh Cloud that that ultimate goal and I think you know what we what we always have done and we did our search and we do it now in the operating phase is you try things you know you try things uh you try one partner's way and then the other partner's way um go really hard at that for maybe a month or two and if it's not working then you can pivot somebody touched on the fact that there was Tyrell your your kind of contribution to the to the dating period was actually really kind of codifying some of the characteristics measuring stuff making this a quantifiable like a Quantified exercise um talk to us about that yeah it comes from my engineering background it's funny when you look at it you know I built a spreadsheet and a checklist and and all these things uh to kind of diligence it out and I think one of the benefits you know we call it like dating but you know if you show up to a date with a with a spread sheet ready to go your your date's probably going to walk away whereas you know at least in a Business Partnership you can actually be very upfront about that and say well hey here's kind of like some criteria that we should we should talk about um so I think you can be a little bit more objective as well so um that's what I did I built a checklist I sat down with Bob and and we went through it we don't have to go through line by line because this is this is a 50 line or more spreadsheet literally I'm looking at it in front of me yeah 50 60 so we're not going to go through line by line obviously but you could bucket the parameters into three different buckets um can you share what those were yeah and so uh in the the checklist and I thought about the my answer a little more I think like you know the the goals in financial alignment is like really important uh up front like what do you want to get out of this right if this goes sideways are you going to be really upset um you know what's your minimum like walkway number when are like what's the biggest upside here are we aligned in that what type of business all those sorts of goals that's one bucket second bucket I put in there was kind of a skills assessment uh and that's like rank yourself like what do you think you're good at and and where where are we going to play when we acquire one of these things CU it's going to take a lot of different skills um that's important for two reasons one you know you can kind of allocate where you are but also where you need help and I think Bob and I both didn't come from an investing background so when we get into why we chose traditional that kind of like pointed us towards that model hey we need to get a deal done so skills goals uh and the third one I I think is uh is kind of that that fit Bob talked about uh as well that's that kind of like do I like this person do do we get along uh as well um like yeah side plus is the spouse as well so you you notice on that checklist I had some questions for kind of you know Julia that we had to go you know go out and grab dinner all together and and see if we could you know make sure my my fiance didn't hate Bob or something like that or vice ver comes and lives with us how will you feel about it right right yeah right yeah yeah great well that was great Tyrell and and just going back up to the goals one in particular yeah uh you know the the value of this exercise is not just you know ling a methodology to whether or not you and Bob are compatible but it also forces you to think through these questions on your own which you you might not have you know it's probably healthy to go into any big project like a search kind of knowing your own goal or you know what your number is or what your you know where you're trying to go or you know Etc so so thinking through it's a it's kind of a doubly beneficial exercise for that reason um the other thing I'd say just about you know it's easy to tease about like you know bringing a spreadsheet to this exercise but like you know in HR hiring is getting kind of much more scientific and there's all kinds of like measurement models and and personality tests that are industry standard um these days and it's not unlike something like that I mean you know where where you're kind of trying to to tease out what this person you know kind of all the par the parameters that you just described Tyrell so HR managers are are not shy about using kind of systems uh so no reason that um couple of Searchers would be either great well um just so it's not all roses guys tell tell the people where uh your partnership has has not been perfect just give us a taste of of you know the behind the scenes on on days when the partnership doesn't feel like you're just besties I would say um you know during the search phase one one period where it was uh I would say not strained but but where we were under intense PR pressure was you know when we were looking to acquire trte you know we we found the company uh and went under Loi uh for trte you know four months in um and it it was our our the the furthest we had been on a deal um we were under a time pressure to try and get this thing done uh in a in a quick manner so that we could kind of enter the industry kind of meet our uh our own kind of timeline meet the sellers timeline um and we had questions around you know okay do we have all the information that we we need to feel comfortable comfortable about this you know are we foro other opportunities uh and kind of a push and pull on that and and like tyell mentioned neither of us had come from uh banking or private Equity or investing background before um and so you know as you're uh answering these questions for your investors who are you know intentionally prodding you and forcing you to defend your decision to invest in the company it instills you know some self-doubt that manifests where you and your partner are going to have those same types of arguments or or discussions like internally you know nothing obviously that that uh stopped us from from buying the company but I think th those periods where you're you're forced to say Hey you know how confident are we in this business how confident are we in our ability to run this business I think those are very healthy and it's um I I can I think that was probably the most intense uh it was just a very busy couple months still and by the way when you guys were looking at acquiring transc or making the decision to do it was one of you more enthusiastic than the other and was that Delta big I think it moved In Waves you know I think what was what was funny is I think we played that uh in different roles cuz I I think you know if I remember like Bob was like really into the CDL training space early on and I was like okay this is interesting this is cool you know and at some point the deal kind of like switched where it was like I was really bullish on it I was convincing Bob like come on like let's go do this thing um you know and I think we we kind of ebbed and flowed and did that maybe a couple times uh over it and I think yeah B Bob hit the nail on the head of like it's those moments where you have to like kind of you resolve the issue and I I remember like we sat down and was like look you have a veto like either of us have a veto I'm not doing this if you don't want to do this kind of thing and giving that kind of assurance of like I'm not I'm going to drag you on this adventure just because I believe it so if I'm I'm missing something here you pull the rip we're out um and so anyways I think it ebbed and flow I don't know Bob if that kind of yeah I I I agree I think it was it was one of those things very early on we love the industry and we we love the space but then it's it's always like well is this the right is this the right horse to to bet on is is is this something that you know that we think that we can do um just because it's we we're early you know like like we we did have kind of a two-ear timeline and we're four or five months into this thing have we had enough reps are we the the right right person to buy this company um you know I think all kind of normal fears to to have going into a deal as kind of a young person who's about to take over a big business yeah yep you know it's a good point about the finding a deal early especially doing a traditional search fund where you have this two years number in your head you're just kind of your your psychology is anchored to two years and so if you're way far you're really far away from that two years you're only a few months in it's almost like yeah like you said Bob is like you just have this like I I feel like we're too early even if you found the right business it's it's kind of a dangerous um psychological trap I mean you could have walked from a great opportunity just because you felt like shouldn't we be closer to two years before we actually do do the thing pull the trigger great I just mention also it's funny because we had weed CDL training very early on in the space we kind of entered the the thesis thinking training and a blue collar you know a plumbing schools elect electrician training we' heard that that's a great model but when we stumbled on CDL training like two months in we had trte on our board in like July when we started in June so so it was not even like four months in it was like two months in we when we had found this company it took us another couple months to getting contact with them but it was yeah the fact that it was early I think that was definitely something that that weighed on our ability to say you know and fairly judge the company guys just to finish off the kind of context of your search before we we um move forward so why did you choose traditional we haven't even talked about that some of the reasons to do a traditional search fund are kind of the support of your investors and the support of the whole kind of ecosystem there so kind of the desire for more support doing this for the first time is a common thing that you'll hear traditional Searchers say um but part of that box is now checked by doing a partnered search you have each other you have support in each other so maybe it it it minimizes the need for that support um a little bit you still decided to do a traditional search Talk us through that please yeah I think the easier answer is man I was broke after NBA school you know okayy enough bills to pay that's needed an income U but I think the second part too is like traditional is actually a really good solution to some of the like Financial like it's kind of split right down the middle right it makes the All Those Questions very easy of like what are we you know we're each going to make the same I think when you go self-funded um in that route and you're supporting your own income gets a lot harder in month 18 when you're going hey you know I've I've got a wife I've got kids or something you know like how are we going to split this who's going to eat the this broken deal fee uh you know are we splitting that right down the middle I think that gets a lot more difficult whereas when you raise a fund it's like you know not to say it's house money but you don't have to you know tit fortat who's paying for diligence fees when when the deal breaks yeah Bob do you want to add anything to that or that pretty much yeah I I I think you know like Tyrell said I had literally handfuls of dollars in my bank account when I graduated business school but uh you know I think also I I would say harping back on that point that neither of us came from investing um you know we had uh investor groups who were you know really eager about working with us who had done this hundreds of times combined between them you know people who had walked the path in like by themselves investors who had done search funds and operated and now are investors um to try and put a number on that uh that uh experience I think would be kind of foolish because um it similar to you know why did you choose to partner why did you choose to go with investors all these things I saw and I think we saw as strengthening our ability to get to find a good company and get the deal done uh which is ultimately the end end game because you try and preserve all the economics you want uh upfront by going by yourself and doing a self-funded search I personally didn't feel like that uh my percent chance likelihood of acquiring a good company with that kind of setup behind me you know was I didn't think the was was high enough for me to take that that chance and now that you're in it and you're operating the business you found quired the business you're operating it is there anything about the traditional search fund model uh that you is different than you expected anything that you've learned now that you're further into the path yeah I I think you know the the traditional model um you know it lends itself to this like find a good company and and platform business right you got to buy a bigger little bit of bigger company you got to grow it a little faster FAS um you know it's a little further out before you're in distribution land where you're sitting on a million dollars of EA and and you're content with that so I think there is a little bit more pressure obviously from the investor base uh and a little bit more control on their side um where I think that's super helpful is like as a first-time CEO like to have someone who's you know built it three four times come through and sit on your board has been you know huge and and it kind of also settles maybe some debate between us of like hey what do we do next to have a experienced investor come in and be like hey do this um where you know where it can be frustrating is I think obviously you have disagreements with with your board and you have to be able to present your case but I think that's a skill you're going to have to learn over the course of your time in business it's not always going to be just solo entrepreneur if you grow a company to you know aund Million result inevitably you're going to have other stakeholders come in and uh you're going to have to manage those yeah that's a great Point yeah I I would add to that I would say um you know as search funds kind of grow in popularity and more people people enter the space on the entrepreneurial or on the entrepreneur side who are looking for you know investors to partner with um I I think there are going to be um you know you have to do your homework on on who the people are and how much value they're really going to provide um because uh similarly like like you mentioned on the Counterpoint of maybe doing a self-funded search um you know you're giving up a lot in terms of economics for someone to write write a check and a lot of people can write a check um and so you want to you want to partner with people that uh not only GNA be able to fund you and but also provide a lot of that advice you know and kind of view search funds and acquiring a small business and running a small business the same ways as you do because if someone approaches this from like a private Equity angle and says um you know this person is no different than just like a Hired Gun CEO or something like that and similarly should be given a a smaller piece of the equity uh you know I I think that's kind of uh it definitely it does not lend well to to the Searcher having a healthy relationship with with that investor um and I think there are a lot of really great investors out there who are um the right type of of people to partner with and I think Tyrell and I did a good job of of finding those um investors and and partnering with them and and we just give us a little bit more on that Bob what how did you guys what would you tell people out there about investor selection I think uh what we did really well was um because we were looking to buy a bluecollar business uh we uh in intensely kind of quizzed our investors and kind of flipped the script on them like talk about some of the blueco collar businesses that you've you've uh um you know invested in uh a lot of in investors have kind of cut their teeth I think on a lot of the the SAS software Healthcare businesses over the last decade or so um Tyrell and I knew we weren't going to buy one of those um so you know if if that's something you're looking to do like you're probably not the right investor for us um we also ask some questions around you know talk about the deals that you didn't invest in uh you know uh the last five deals that you didn't invest in why didn't you do it um and and you know you can kind of tease out some of those reasons um you know and say hey can I see the investor doing this to me um is this something that would you know a year and a half in and I find a pretty good business here that I think we can make work um and checks a lot of boxes for me personally but that investor doesn't feel um like like it's a a good fit for their portfolio do I really want to be kind of beholden to that or or do I want to kind of set the groundwork at the beginning to be successful yeah and and I think you know a lot of reasons why Searchers don't end up acquiring a business isn't because they didn't find a good one I think it's because they built a cap table that wouldn't work together to actually like close on it on the on the traditional side uh similar to sell funded Searchers un being a not being able to like Finance it with SBA you know so like design with the end in mind I think rather than the prestige or the the AUM of whatever investor you have you know like um I know investors get mad kind of when you when Searchers interview them but I think a really helpful question ask is tell me about a deal you invested in that was borderline um like more likely than not I'm going to find a business with two of three magic qualities uh you know recurring Revenue low customer concentration low capex or low cyclicality kind of being those magic three like chances are I'm going to find one that's got two and I'm going to have to build the third into my business like tell me about one of those um and I think as the the space gets more saturated with investors you don't have to be a good investor to invest in a business with all three those deals will get done you know 10 days out of 10 it's more likely that you're going to have to pull together a cap table around a business that's got two of three so tell me about a time you did that um I think that's a good question those are great guys those were those are really helpful okay well let's talk about your interest in blueco collar businesses why were you so focused on that category I think what's underrated uh about blue collar businesses is a lot of them haven't experienced the efficiency gains the last 20 years or productivity gains um that come to all these SAS models popping up by that I mean you know our our company for example was doing payroll on paper still well there's off-the-shelf SAS products to help kind of add to those sorts of things but but they have a great core product they don't have to redesign you know it's it's essential and they've got great people around them so we saw it as really underutilized where I think there's this fear um of Searchers who usually come from the white collar world uh and they they fear that these employees will reject them and Hate and and move on but we kind of came from companies that had a bluecollar background so we didn't quite have that fear but we knew there was still this big upside of bringing a little technology into it uh to succeed in the marketplace yeah to put a finer point I guess on that that payroll example because I think it's I think it's a good one um because you might say oh well these NB just bought business and then they put a payroll in and they they mission accomplished but what that really does that allows us to do is not only does it free up more time for a bookkeeper to work on you know hey let's improve the cash conversion cycle let Let's uh go after some of these uh you know efficiencies on the on the cost side uh by being able to put in a non-paper payroll system uh leveraging kind of the skills that Tyrone and I got from our our previous experience that says okay hey actually we're we're spending too much on on this site our hours per per student is you know 20% higher here versus this other site so let's reconfigure the team reconfigure the operating model at that site and all of those gains go to the bottom line but that's something that you don't have any visibility into if you just are doing everything on paper um so that that switch over isn't just like a CO cosmetic change it is um pure productivity that you that you can inject into the business uh it allows you to have better managerial oversight into a business that you know is is spending a lot of money on on people but figuring out okay how can we get everyone kind of up to that best practice site that we already have in our organization and those productivity gains uh like payroll and stuff like that generally don't piss off your core group of employees in the same sense like by that I mean you know you're not coming in and telling them hey here's how you train truck driers is better you know and I think a lot of people think of that with blue collar it's actually a lot of the Gams are on the back end of the system where the employees are already frustrated that's like why can't I get my past up same day why can't I just open an app and get my past up um and so like you there there is a little bit of like coaching the administration through change management but I think you get to keep your core employees you know happier not kind of me messing up the Special Sauce there that's a great Point Tyrell that like when you think about change because we talk about change management how difficult it is how delicate it is when to do it Etc but this distinction between kind of front of the house and back of the house where um the front of the house stuff is like where you're you're getting in there and trying to change the actual service that's being delivered and how much touchier that probably is and how much less equipped you probably are to be doing that anyway whereas back of the house stuff is kind of the taste like chicken sort of thing where it's like you know every business has a payroll system or not and and implementing that is probably going to be a gain um that can be achieved and and yeah and it and it's decoupled from what's going on in in the service delivery which is really where people are going to be territorial um maybe that's naive maybe the book The bookkeeper is also territorial about how he or she does payroll but um uh anyway uh and and so but by the way on on the question of my one of my favorite questions about the this culture difference between white collar and blue collar I mean you guys yes you have have worked in Blue Collar uh businesses but you know come on you're a couple of Harvard Harvard mbas rolling into into this business um how did that go yeah I think well you know it's still always going to be a struggle you're always going to be kind of the boss you're always going to be that um but I think one thing I like to remind people about bluecar businesses is that the you know everyone's afraid of oh it's all these employee issues and I'm I'm going to have to deal with you know uh all all these different abuses that I wouldn't in White Collar but I like to remind people the measure of success is a lot more objective in the blue collar World by that I mean you know it's how many jobs did you get done did you show up on work do you have a good attitude you know the the ways that you can kind of like quantify an employes Effectiveness um I I think is very clear and and I think that makes it easier to make decisions uh as a manager um by this I mean you know in the white collar world if someone shows up you know 10 15 minutes late every day but does a really good job uh you know it's actually really really hard decision to you know let them go or make changes or something like that the blue well if they're showing up 15 minutes late to a job every single time whether that's HVAC or class or something like that well it it's a pretty objective decision as to what needs to happen or or coaching moment so um I like to tell people like don't worry about that stuff and if you think that any of the like you know uh abuses aren't prominent in the white colar world I think you just don't know the employee universe that well either well I I had it pointed out recently also that we that we overstate the difference between in um I think this is related to your point Tyrell the fragility of a business with 500 SD versus 1.5 million versus 3 million this person uh had been in businesses of all those sizes and it's like the idea that you get to one and a half million or three million in iida and it's a Well functioning machine is completely naive like the dysfunction exists at that level too but you know believe me so um maybe it's kind of also related to just like thinking that you know this one category business Blue Collar businesses things are crazy but in White Collar businesses everything is just you know like a finally tuned machine also naive Bob I think you it looks like you wanted to add something I I I would just say also you know I think tyrell's point on on kind of the objective measure of success is great but I also think that there's a serious level of um respect present I think in Blue Collar businesses you know I I think in a white collar business um you know it is kind of hard to measure who's just kind of showing up and and um you know who's actually putting in a a lot of you know hard effort here I think with our Blue Collar businesses uh what what we found is especially the employees that are long tenured here the reason they're doing this job is because they really care about it you know uh we uh we we work with instructors who have been here for 25 years um and I think um that that shows I think a different level of commitment um showing up to teach people how to drive a truck every day maybe even so than than someone who says you know I'm uh I've been at the same uh you know accounting firm for for 25 years or or something like that um especially when the these guys uh who are uh truck driver trainers they've got a really strong alternative of going out on the road and and earning more money driving driving a truck uh but but these the they've chosen to to stay at trch for a reason um and I think that's something I think that can't be discounted there's lots of different types of bluecollar businesses of course and you had decided that a men in trucks business um was was what you were targeting of course instead you bought a business that puts men in trucks uh but but I guess that that is to say like manufacturing wasn't necessarily um on your list it was more kind of like you know field crew type type businesses what what was that um interest about well we like the Ring of it when we pitched it to investors because it usually meant like some sort of B2B Services business uh you know somebody going around route density problems like things that lend well in the search Universe um we obviously expanded that I think we know Bob did a whole kind of Automotive manufacturing look like supplier look as well I did some oil and gas stuff too um so we we didn't totally stick to that uh as well but we we did end up buying a company that puts men in trucks you did also develop a thesis so you were you were really kind of as traditional Searchers tend to do more I think than self funded Searchers really kind of going down rabbit holes and exploring Industries making arguments to yourselves and then presenting them to investors and you developed a thesis around CDLs and training talk talk us through that yeah so so I I I I think how we stumbled upon CDL training was very early on we we spent uh some days talking to people that were in the The Freight business you know I think early on in your search you look at a lot of really bad deals and I I would say a lot of the trucking companies that we saw early on could be Quantified as bad deals um you know very cyclical High capex uh you know seem to be trading at a high Watermark given kind of the supply chain crisis over the last couple years um so talking to some of those businesses um we realized okay these probably aren't the ones for us but we always like to ask uh owners you know what's the what's the hardest part of your job you know what's the what's the thing that um you you just can't seem to solve because I think that would point us at you know is there an opportunity to improve the business um you know what what what's the next five years going to look like for this business and at this point everyone was saying uh you know last summer um we can't find any drivers and so we're like oh that's interesting um you know uh we we kind of looked into the space and said okay well who trains truck drivers um is it community colleges is it you know uh Teamsters are there private businesses that do this thing um pretty quickly we discovered okay there's this network of very small fragmented um uh you know oneop operations that do truck driver training so if you're in De Mo Iowa uh de Mo Iowa you might have uh the local truck driver training school um but there were also these schools who had kind of seem to a some kind of escape velocity where if 90% of the schools that train truck drivers are just kind of one shop operations there are you know a handful of these schools that have you know three five maybe 10 plus sites um and so we we talk to some of those uh owners as well and what we discovered was you know economically they're they're great you know it's a it's a uh instruction or it's an education business so um you know it's got really strong gross margins and I I think um you know a lot of operating leverage in the business that is that is nice so if you can increase enrollment a lot of that falls to the bottom line um but you know behind that what you see is uh this Mega Trend that over the next decade or so uh we're going to have you know a million truck drivers lead the industry uh the American Trucking Association forecasts that there's going to be a 500,000 uh driver shortage uh in the in the next 10 years um and so you say well okay well that sounds like a a bad to be in in instruction uh you know they they can't find people to to fill these jobs we kind of looked at it the other way we said hey all these jobs need to be filled um there is uh a lot of reshoring going on uh as kind of trade uh patterns change uh we were looking at at the southeast being kind of a beneficiary of a lot of these these uh restoring efforts you know more manufacturing more warehouses you just have to drive up I 85 you see all these battery plants that are being uh developed um those are all all jobs that require require truck drivers um and uh you know to put a put a cap on that college is getting really expensive and college doesn't really have the the payback that that it used to especially for marginal students I say marginal students maybe the think of the the bottom 20% of a of a local College the kids that are going there and they might you know take six years or you know go for a couple years drop out and they've got a huge student loan bill that is not a uh the the college promise that is that is being sold in high schools and I think that that message that is kind of out of the bottle on that and it's getting back to people and saying hey I need to look at a path that doesn't require college um you know on the high end that could be like boot camps and and you know uh but I but I think we we saw that trade schools uh fill a really big need there um so you know the combination of okay hey truckers are are kind of uh you know going to be in short supply over the next decade or so uh we think that's going to cause wages to go up so what does that do it increases the value of an education and it lends more people say hey um you know that that trucking job that may be paid 45 Grand a couple years ago well if they can't find people now it's paying 75 $80,000 and I'm getting a signing bonus and as a someone who maybe has a high school diploma that's a really attractive thing and you know we we wanted to be the the per uh the school that provided that I know add on We we played up the uh like the counter cyclicality of vocational training like you know if you look at the macro conditions and you go wow we're headed for recession or or something you know these signs are in the water um you know vocational training is is kind of the place I think Millennials will snap to when it actually comes time to you know put food on the table you know when you're when when there's no more jobs where you can ride a slide down at the Twitter HQ you know you might have to drive a truck to make ends meet or something like that so we think it's it's pretty recession resistant um and we've noticed that too as kind of Labor Market uh has loosened up a little bit we get more phone calls well guys so it's this is fast fasinating cuz you're you're really hitting upon a seismic potentially seismic change in in the workforce in a cultural change not to not to belabor this but as we all know college became something that everybody needs to do over the last I don't know generation or two and now we're realizing first of all that there's a shortage of people to do the trades in in blueco collar work and second of all that that was probably wrong-headed to begin with not everybody needs to go to a four-year College uh if for no other reason than the rois even there um but many other reasons as well um but to see that pendulum swing back that's a big bet I mean you to Tob TBD I mean we're all talking about that but that is a big bet and it's not one that you're going to see unfold you know from now to 2028 like this is going to take a generation to work itself through if indeed it does even work itself through so you know and you guys are probably on a little bit of a tighter timeline than that can can you can you respond I mean are trade schools really going to be the thing in 2027 I mean it will it move that quickly do you really think you depends on the macro environment on how quick it moves I think that's the easy handwave there but I I think we've already seen it in the marketplace where you know our phone started ringing off the hook when UPS raised uh truck driver wages and they had a big headline that said you know top pay like 160 Grand 170 grand um so I think you know the underpinnings are already happening in that space I think you know the biggest question we got is what do you think about autonomous trucks and and Bob and I you know think that's still a ways out that's not a you know a 2027 uh kind of like solution now there's no drivers in the cabs and and we see as this really essential piece you know like why why is the price of milk going up you know it's all well also we're paying truck drivers more you know because there's a shortage so um we saw it as this essential piece you just can't replace overnight either and I I would say you know to that as well um it is a big bet but you in the interim we have companies beating down our door for for drivers you know so so we can we can wait for the the market of of people to say hey this is a great opportunity but uh on the flip side you know I think one thing that Tyrell and I have really focused on on this year and I think we've done a pretty decent job at it is um answering those companies calls where we say Hey you know we need a 100 drivers this year um and we have a ton of people who are reaching out to us about applying for a you know a big grocery chain or a big you know uh Warehouse housing operation or something like that and we got to get them CDLs or you know I've got a bunch of guys who work in a warehouse who don't have their CDL and I can't find anybody who does have one because that change maybe hasn't happened yet in the in the wider Market at the very least will you just train all of my guys for me and for us as the CDL school that's still that that's even better in some ways um you know we think about our our school and some sometimes as a uh as like a Matchmaker you've got uh people who have this aspiration uh to to you know upskill make more money in their life find a great job on the other side and you got companies who want to find that Talent um you know just like Hospital Systems have that that desire to find great nurses um just like you know uh software companies have a real desire to find great software Engineers the same thing exists for for trucking companies and maybe even more so um you know they are desperate to find safe professionally trained drivers um because they are just they are so important this is where where I asked that obnoxiously smart sounding question you know are CDL schools really just you know are they are they uh recruiting agencies masquerading as educational school you know you know you're not you're not in the the education business you're actually in the recruiting agency business um is but is there is there some truth to that that really it's kind of I mean you just said you're kind of a Matchmaker which is what recruiting agencies also do um how do you respond I I think some companies uh do do that um you know I I I think Trans Tech we can be if if you're if you're a student who wants it all you want the the training you want us to find a job for you you want us to then check on you in six months and find you another job because you don't like the job that we put you in the first time we can do that you know so so I think we can do that really well I I think uh maybe the the the better read into to it is we give students who don't have a lot of options or people who are making not that much money who have never really had a a really good path we give them a path you know we we we give them the the training that says we're going to put you into a really big industry that has a lot of different ways to you know to play in it um and you know like the CDL training is just kind of that that gateway to to getting there um you know if you're a guy who has a high school diploma and making $25,000 a year Lo working at a local construction job you know we can get you a CDL and you making $65 $770,000 right out of school and then in 2 years you can be making $120,000 working at Amazon or Walmart or you know UPS um so you know I I think we can we can do the the recruiting and the Staffing part of it um but I think what our students come to us for is that that Independence and those options and to be clear just about CDLs so is it um because it's all manner so you mentioned Amazon so so you know we're in UPS we have Amazon and and and UPS trucks driving all over our neighborhoods of course those aren't big 18 wheelers those are much smaller trucks so is there just kind of a a blanket CDL or are there different types of CDLs and so so is it always necessarily about driving like a big rig 18wheeler is that the same training as somebody driving a school bus same training as somebody driving a brown UPS truck or how does that break out real quick yeah so the the class system is based on on weight and the basically the layout of the vehicle so Class A is those tractor trailers so that's kind of your your maximum amount of training basically every state in the United States it's going to take you 160 hours to do that is the state minimum uh though some programs will run even longer so uh that's kind of your your tractor trailer that's what everyone thinks about with with uh you know truck drivers of which Amazon has a whole Fleet of those and so does UPS the last mile delivery trucks it depends on the weight uh and so big box trucks like the maximum size U-Haul you have if you loaded that full of lead uh would actually fall into what's called Class B uh and so that's your your weight of an attached vehicle so garbage trucks fall into this uh you know passenger buses fall into this uh category other things like that most of those delivery trucks you see like the Amazon uh trucks without kind of the the driver side door for them to jump out those aren't uh commercial vehicles and so they they don't fall into a or b uh but there is a ton of vehicles that fall into the b class as we're we're discovering as we get more into the business um the other interesting piece is the What's called the passenger endorsement so in those in those cases where you have more than 16 passengers you need to have trained on a vehicle like that and why that why that's important is because there's so many school buses out there coach buses all those sorts of things and it means that those Class A drivers that train on a tractor trailer can't go do that job unless they train on on a passenger vehicle so it kind of it's this it's this problem that exists that you know perpetuates the school bus driver shortage and all this other thing uh so and Class B I'll mentioned kind of varies state to state whereas Class A is hey four weeks no problem North Carolina it's four weeks Class B uh anyways which is kind of crazy other states it's it's only two weeks um so it depends state to state what class looks like okay well so we're talking about all these kind of different Ty types of um ways that somebody might use a CDL and and I think Bob you mentioned like when you were talking to other business owners about you know and kind of men in trucks businesses they were all complaining that they couldn't find people with CDLs and yet it does feel very tied explicitly to the trucking industry like big rigs 18 wheelers so so so does that actually comprise kind of most of the most of your customers are people trying to become big rig truck drivers I mean how how how coupled to the big rig Trucking industry is your business so I I I think a lot of the students that approach us that are kind of paying their own way um want to become a truck driver you know our prototypical student and I say most I would say 75 80% of them probably want to drive a a big rig most of them uh prototypical students would say my dad was a truck driver my uncle was I had a brother came to trte and he's having a good time out on the road he's making good money so that's why I wanted to um a lot of the reason for that is the the pay is better the optionality is better um it's not just kind of that over the road where people are away for a couple weeks you know you could get into a company that has kind of a dedicated route and you might just be driving from Charlotte up to Richmond and back every day and you know you make $110,000 a year and you got your own truck and you never have to sleep in a in a rest stop and I think that and that's a pretty good option for them um I would say the the rest of of our students you know want to work for the Charlotte area transit system cats you know they want to they want to drive a they want to drive a bus potentially they might want to drive a you know a a dump truck um there there's a lot of dump there's some dump trucks that require a Class A um if you're working at like a mine or something like that you know they they look at those jobs like kind of in the hills in North Carolina and and there's a lot of those out there but I I I think a lot of the employers that we see um uh sponsoring drivers to us kind of fall outside of that uh that 18-wheeler uh in you know industry they're they're not the big you know uh Long Haul truckers these are companies that are tree removal uh uh companies they are um you know uh I would say like School Bus uh districts you know they run they run transit systems they they they run kind of uh waste hauling things things like that where where it requires a class B or maybe a Class A uh if you're like utility company and Hauling and and have a trailer behind you so there there's a a big you know addressable Market out there beside kind of the the the classic 18-wheeler Market the the reason why 18 wheelers uh in kind of long haul is such a nice Market to serve into as a training provider though is these companies hire 10,000 drivers a year there's like 100% turnover in their in their driver pools so they're always hiring there's always a need to fill drivers there so students see that and they they see a a pretty attainable path for them go ahead Tyrell sorry yeah to add on what Bob was saying I think employers are recognizing too having kind of more versatility between your employees is better so we get a call from you know a lot of Public Works departments who are like hey I've only got one commercial driver and when he's sick our crew's down you know no one can go unclog the street Trin so why don't we train his helper and also get him the CDL Amazon's model is also kind of like that where you know a lot of their warehouse kind of switchers can also do a short haul uh as well so I think there's a lot of value the companies can get for having non you know full-time drivers still be licensed part of the reason I'm digging so deep into this guys is because I just I I got off our preall and I just loved I loved the business promptly went to to Google Maps and search for you know CDL license schools training schools around my area and just like you said up here up here in Northern Virginia DC area there's tons and they all appear to be very kind of small not tons but there's a lot um and they appear to be kind of very small mom and pop operations so I'm here I'm you know I'm sitting here stroking my chin um and uh and so one of the things you just said Tyrell is like you know getting you you now both touched on the fact that you serve end end customers who are people who Aspire typically aspire to be a Long Haul truck driver and then you serve businesses who are getting their employees skilled skilled up what's the split what's the split first just really quick really briefly it it depends last year I would have told you you know 40 60 for business to Consumer and that that rides a lot on the Freight Market this year I I think Bob you know correct me if I'm wrong it's probably like 8020 it's tough sometimes to discern what's actually a business because you might have a cash pay come in but it's really an employer that has two employees we would still consider that like a an individual versus a you know here's a contract 50 driver kind of thing great thank you and then I'm I'm just curious about the opportunity in the in the fragmentation and how so many of these operations are are Mom and Pop around the country so now talking to myself and talking to other Searchers out there who might be who might be intrigued by this industry as well when a a business a corporation needs to skill up a bunch of a bunch of employees um with CDLs his I assume that you have a competitive advantage in being more of a professional operation that they'll want to work with a trte rather than you know Bob's CDL parking lot um what is that is that true I mean what are historically are the are big corporations really working with really kind kind of kind of these tiny Mom and Pops to get their people skilled up no I would say they typically don't um if you think about the the big companies the ones that you you would know the names of of these companies they look at trch and they say this is a operation that has eight branches around the state they can touch uh you know everyone in the state that wants to become a truck driver uh is should be within an hour drive of the trans deck Branch um and and also kind of that professionalization you know our sites are they're bigger they're cleaner we've got more instructors we've got more third party CDL testers than than anybody else in the state um so if you're a business and you're looking to kind of do that end to- end service you don't want to uh know uh or you don't want to have to know that the local CDL operation well they only start a class every you know month or every two months or something like that because they only got two instructors trans de we've got you know 40 instructors we start a class every Monday you know we can slip seat the guys in there we've got an online uh uh CDL training program that we've we've uh that we've got so we can kind of work with the employers and we've got a great recruiting and sales staff that helps meet the the flexible needs of those employers that can't afford to lose 15 guys all at once to get their CDL but they want to get all of them trained so how do I schedule those in if you're a community college if you're a small operation it might take you a couple months to get them all in if they can even manage that for us we can get those guys kind of knocked out in a way that works with the employer schedule as well yeah so so a lot of competitive differentiation for you guys comes from your size and scale I want to keep um hammering on kind of the industry overall and also talk more about just trade schools broadly but we haven't talked about transe directly yet so so let's do that um the you you had it on your whiteboard and then you actually and then you actually got your hands on it so tell us the story there and then tell us about the business more bullet points about the business particularly numbers you know Revenue numbers and employee numbers if you could yeah so we we ran a bunch of proprietary Outreach kind of Bob you know asked the question of these Freight folks we start looking into schools we do some you know Googling we build a list um and so that kind of led us in the direction of transc and a couple other schools so it was on our board we wrote it down we reached out to them and they just ghosted us you know and uh we were like hey you know what whatever this happens 200 times a week uh with with our proprietary system but uh turns out they were preparing for a sale so it ended up being a a broker deal um and so I was on Intero one day and I saw it pop up it was you know top deal there I clicked it I sent it to Bob I said do you think this is what I think it is and he said yeah and we got got the Sim worked out with the broker and then kind of you know the rest is history great and was the seller surprised to see you again after after have you had some interaction with them then they ghosted you and then you popped up again the moment the Sim hit the market I don't know if they remembered us maybe maybe we hit junk mail maybe we hit something I they weren't like hey you know we remember you uh we got to know them kind of more over the deal process but yeah we probably are in a deleted recycled bin email somewhere oh so when they when you say they ghosted you you never got a reply you had never had any interaction with them at all okay gotcha um okay and so you give us again please a picture of the business you've already said I guess 40 instructors locations all over North Carolina but give us some more bullet points again please yeah so uh the business is about seven million in top when we acquired there was about 7 million in topl line um about one and a half in uh in iida and we acquire it for about fiveish uh times e the business also in terms of like like growth of last couple years um you know 15 to 30% uh annual topl line growth over the last couple years um a lot of that a lot of that through kind of new site expansion a lot of that through um new customers that they they've brought on and just some of kind of the macro growth I think um what we've seen even in in our tenure running the business is um it's pretty easy to to talk to more people in North Carolina uh from a marketing standpoint um you know investing in that has a a really nice uh payback what do you mean talking to more people in North Carolina just increasing the marketing increasing the marketing increasing the marketing channels um so you know working with businesses to to find uh their employees but really directly just saying hey we've got a new branch this side start investing in radio investing in digital marketing things like that really easy for us I think to turn that knob um and cover a lot more opportunity so even beyond that 15 to 20% growth rate that you saw over the last couple years um you know you can think that it's a really nice direct payback when you invest in marketing you see lead flow kind of uh jump up with that so the Tam's even kind of bigger in the state than I think we thought when we when we acquired the business well I but I do have to push on the the historic growth growth over the last couple of years because of course Trucking benefited enormously from Co so those growth numbers in your own mind you know are going to probably cut if you did nothing if you did if you didn't amp up your own marketing um those numbers would probably recede some no I mean and and by the way the trucking industry the headlines today for the trucking industry are not great um so so for this exact moment in time it seems to be suffering now we as you said it's a very cyclical market so address all of that please yeah I think you know back to the comment of finding investors that are willing to invest in a business that has kind of two three magic qualities I think that's something you we address every day is yeah the cyclicality the Freight Market is something trte needs to move away from long term you know we we need to be able to serve those customers when times are good but I think if we hang our hat on it uh you know that that's going to pose trouble for the business so I think our Focus has been well you know let's focus on some of these noncyclical CDL uh uh requirements like School Bus operators and you know waste collectors and those sorts of things uh as well so you're absolutely right will you know part of that growth is spurred on when you know Sun's shining you're making hay but uh we want the we want to make sure the sun's always shining not just uh when there's a supply chain disruption and so that that sounds like it would be a pretty big strategic move as new owners would be to diversify where who you're training away from over Reliance on the trucking industry well the federal government's also helped us out a little bit with some regulation uh too so like it's not you know starting from square one in in 2022 the federal government introduced some legislation that made it harder for employers to train their own employees especially in that class B market um so I think there are you know there is a a lake of employers right now that are saying well how the heck do I run a training program do I even want to run a training program now that I've got these extra compliance requirements so uh you know one thing that excites us about the business is potentially moving into the kind that compliance management space or being that you know white label solution for for a company um that wants to train drivers that would that would kind of fill out that that three of three uh we're looking for in a business and Trans in terms of employees Bob I think you'd mentioned 40 teachers instructors and then I assume you've got 10 or 15 in kind of back office how many employees are there at the business yeah I think we have 68 employees actually so so we're we're a little bit more I think on the back office than um than the number you quoted but a lot of that comes from you know we' we've got recruiters that are are staff kind of for every branch um knowing the local market um and so that that's a you know I think we at seven now um and then then also you've got kind of the compliance safety operations management that take up you know there's a couple more heads there um and I think that's something that uh you know trans de I think does really well and is a differentiator versus some of the smaller ones uh you know when you look into uh the the local CDL training spaces um those names change a lot because there are a lot of schools that you know don't run things by the book and I think that's one of our competitive advantages is that we're able to say hey we're providing a like certified audited you know DMV compliant we've got a great relationship with the DMV uh training regiment um a lot of schools kind of cut corners and I I think that's why employers kind of shy away from them some in some cases because they know if they're going to transc they're getting all their hours they're you know going through the ringer you know they're they're they're going to have a really robust training progam program that you might not get at at a smaller School Bob what did you mean seven recruiters recruiters are salese bringing in okay that's right sales people yeah so not getting not getting them placed not like placement people at local businesses right yeah so I should probably distinguish from our conversation earlier around recruiting but um yeah so these are our sales staff so you talked about kind of um you know pivoting the the business or kind of a strategic change away from relying on corporate business uh you know from the the big carriers who like you mentioned are kind of uh cyclical um with what we saw with our recruiters was hey we've got so much inbound demand from people that are individuals looking to sign up but it it takes there's a little bit of sales process there you know doing discovery on on you know what are they looking to accomplish like do they have the money now are they looking to get it matched up with an employer are they looking to get their class A versus Class B when we started we had two recruiters um and they were kind of Fielding all of the inquiries across the entire State and as you can imagine you know hundreds uh you know th a couple thousand over the course of a year um and you can't really build that relationship in the same way that you could if you had a bigger sales Stam and so what we've done is we said okay as we turn up the dial on marketing to talk to more people on the you know cash pay side these individual students we got to have more recruiters we got to have more sales staff to to have those conversations and actually sign them up you know these are they are salesp people you know they're they're they're commission-based um but you know it it's they're they're really selling an aspirational product here and then they need to understand kind of the person's uh individual circumstances and Coach them in making a big life decision so but that's that's who our our recruiters are and I think anyone who's you kind of enrolled in in post-secondary vocational training like there's so many barriers to actually just showing up to school you know I remember just like trying to figure out where to pay my tuition was just a pain you know and so I think that's what we call them recruiters cuz there is sales element but there's also an element of removing these barriers other schools will call them admission staff too of understanding okay well you know how much do you have to put down towards it is there you know how can we get you into school how do you know is it your schedule that prevents you from coming in like how do we set up a plan for you to get here and get your CDL um and so I think that that's an added benefit rather than just you know a used car salesman slap in the top of a roof it's it's someone who's there to help you kind of navigate your way to get to to training reminds me in SAS world the the concept of customer success you know it was always it was always called customer service but then this notion of customer success came along which was like Customer Service Plus where you're really going to you're really going to help your customer be successful with the Tool uh and kind of really hold their hand and and and guide them into it um it sounds like kind of a similar thing for your Recruiters on this point about um this being a big decision this is also a big investment it's thousands can you can you share what your list price is for for for your for your various options yeah so we are uh $4,500 for a class A and we're $3,500 for a class B 3500 and 4500 so we'll just call we'll average those call it $4,000 for um people at you know the socioeconomic end of the spectrum that are not NBAs let's just say um and and indeed like you guys said this is aspirational for many folks I mean they're they're looking at this precisely because they don't feel like they're earning very much money they're not earning very much money and they want to earn more $4,000 is a lot to anybody um but probably or certainly more so for people at at this end of the spectrum uh and it's not a recurring business so you couple you couple non-recurring and you know a big spend for people who don't have a lot of discretionary income that's challenging I'm just talking my it's very clear why the the recruiter why you've gone from two to seven recruiters let's say no but but how do you deal with that challenge that's probably I I not probably I know from our preall that's kind of one of the kind of the key maybe not weaknesses but challenges in the business so how are you guys thinking through that yeah there there is some federal support and so that is a help for for folks that that can't meet it but I'll be I think it's the biggest missed opportunity in legislation in the United States right now um by that I mean the payback period is so quick when you think about uh you know State funding for 4-year degree programs and kind of what the income yield and like tax yield is um you know Bob and I have done the math for the state of North Carol carolinaa it's like a 1.6e payback uh which is certainly not the case uh when it comes to post-secondary education so um that component we you know we love to kind of Lobby drive more for that uh on our side opening up financing options uh is something that that we we've been working through too it's a tough end of the market to service default rates are higher so companies you want to charge higher interest rates so you know our careful decision-making is how do we you know come up with a package or some options that students aren't being you know induced into some predatory lending environment so we're really working to you know find a partner that can set that up um the Third Way is kind of playing Matchmaker like Bob said there are companies that will pay for your tuition for you to come through school albe it it comes with a you know a service requirement uh you know either kind of one to twoe service requirement typically those jobs are over the road so those admissions folks will walk through kind of those steps along with cash pay you know we we like to say hey look if you're doing this for your freedom for your Independence the best thing you can do is put cash down uh because it means you don't have to navigate the the Myriad of qualific for government funding it doesn't mean you have to sign away 2 years to go over the road if those are your only options then go do them you know uh but but otherwise pay cash but the two-year over the road commitment thing sounds like a good deal in that you're also getting a guaranteed job absolutely yeah so so that doesn't sound like a con that sounds like a pro you know I I I think I guess it depends if you want to be in over the road maybe you're getting a CDL for a different type of job if you don't want to be a Long Haul truck trucker then that's not appealing you know we we try we try to our students on this it it is a um you know it's it's a pretty good option for your first role um you know I think it is harder to be get hired as an inexperienced driver um there are Insurance challenges if you're a you know small to mediumsized company that you know might preclude them from hiring people with less than six months of experience you know what we tell our students is that the first job out of school is not your Forever job you know you're not uh you're not marrying the job here what you're doing is you're getting paid while you're doing it you know between $60 and $70,000 typically um you're getting that really valuable experience you know how to really you know how to do your electronic logs how to back up to a gate you know what what it's like actually working for one these big companies how to be places on time uh that you can take those skills get some of your tuition paid back because all the companies that we work with that we place students into offer tuition reimbursement so they're they're paying you back you know $200 a month towards your your the cost of your tuition after 6 months a year when you feel like hey you know I'm tired of kind of being over the road maybe being being gone for an entire week at a time or you know I've got another option what we found is that uh truck drivers are kind of a flighty bunch they're or I should say they're very opportunistic when when new opportunities come along um so they're not afraid to to jump to the the next um uh spot that they'll pay them a little bit better give them a little bit better work life balance which you know we we tell students that that's that's always an option um so I think that's what still makes it very attractive circling back to kind of your thesis or or what you observed in the market of CD training was that uh highly fragmented but that there were a couple of big players so you saw that there was um there was a couple of examples of there was the potential to get big because others had done that before you if if just a small handful trte is already probably you'd call it a mediumsized player like it's much bigger it's big in North Carolina it's bigger than all the the Mom and Pops is just not yet a national player um did it grow through an acquisition or did it grow organically how did it get to its unusual size yeah or organically and you know a lot of hard work I I think from the you know the the team uh before us as well in the sense I think you know Charlotte's a great Market first of all uh for for truck drivers it's this great intersection of kind of you know I 85 I77 and the Atlanta to DC kind of you know route so I think naturally that's a really good home base um their second Branch was up in the in the Hickory area which was kind of the former Furniture cap Capital still makes ton of furniture but they had a lot of displaced workers I think in the early 2000s and U you know truck driving is a great alternative to that uh coming out of you know manufacturing base so that was kind of like the next location they opened so for the most part it's all it's been organic and then you know kind of added Asheville added some of the Community College Partnerships as well and and so that kind of grew some of their their branch and and geography um you know I think in the past they tried kind of South Carolina but the the benefit of staying in one state is you work with one regulator one one DMV um so I I think that was why you know towards the the tail end of their career our sellers had said hey like let's let's make this easy and just stick in North Carolina is part of your eventual eventual growth plan to expand to other states yeah uh I think we still have some white space in North Carolina First that we'd like to tackle um but certainly I think the southeast like Bob mentioned you know has a lot of regional kind of tail winds to it uh and so certainly South Carolina Virginia you know Georgia those those would be great places for us to expand and what are the Tailwinds for Southeast why it's just because kind of the macroeconomy down here is just kind of surging yeah I think Bob touched on a lot of the reshoring and Manufacturing like it's coming into South Carolina you know they're building cars in South Carolina battery plants North Carolina uh it's it's got a great population uh I think it's attractive to those companies these are genu genuinely non-union labor forces um so when they're relocating they're they're coming down to to this area um I think Al you know in the Southeast there is kind of a view towards vocational training and truck driver training um that's maybe a bit more familiar uh to other folks than than other parts of the country um so I think it it benefits from that uh as well it's also you know GDP wise it's it's probably the fastest growing quadrant uh in the United States great guys um well we're wrapping up here but there's still some questions I want to get to but before we get off of Trans Tech so it was 7 million Top Line about a million and a half heit that is a little bit smaller for a traditional search when you're a partnered Trad traditional search does that mean you look even bigger is that would that be kind of the logic typically yep okay okay so it's a small one for on two fronts then a smaller one than you were probably targeting um but you just answer I assume is you just liked it enough that you were willing to make an exception yeah yeah I I I think looking at the looking at the growth trajectory looking at at kind of the the macro thesis behind it um you know and all all all the things that you mentioned and kind of the fragmentation side what we saw was transex is a business that trains you know in in 2022 2,000 drivers it's the biggest player in the state of North Carolina you look at the United States uh there's something like 600,000 CDLs that are issued per year uh with the the largest CDL trainer in in the country training about you know depending on the year between 15 and maybe 25,000 of those so there's a lot of of opportunity to go out there and uh consolidate either through you know organic expansion it's not that uh expensive for us to open a new Branch given kind of what we what we have in our back off staff to support that or to to acquire you know like to acquire some of those small mediumsized ones um but the the thing is uh you know it gives us kind of that that optionality to to grow in both of those ways you know Tyrone mentioned that it is nice to work with one state regulator but all the rules uh in terms of CDL training they rhyme uh because it's a it's kind of a feder ferally regulated space and so you guys acquired in 2020 this year january23 January this year okay well here comes here comes one year Ann and have you um just quickly give us a picture on Revenue growth not growth J curve what's what what are things looking like almost a year into this project I I would say we we saw a pullback in the corporate market like as you described uh you know is a little bit more um it's not a great time for for the uh the corporate carriers um and that that kind of manifest itself in in less training support uh on the uh individual side you know we kind of continue that that growth path um you know I think by investing in more recruiting staff investing in more marketing um you know we we've kind of continued that tra trajectory um in addition we we've opened a new Branch this year and moved our headquarters kind of from the Hickory Market which is about an hour north of Charlotte um to Gastonia which is about 30 minutes uh uh to the west of Charlotte kind of into new manufacturing warehousing space there's a couple million square feet of logistic space right around our building um so you know I think that pretends itself really well for a really strong 2024 well it's one of these where you know if you guys can Soldier through this this really inhospitable Trucking Market you know you'll it's kind of a bit of a stress test for year one in the business I I would imagine but uh as I said ahead of our call today I was doing some Googling and and people are talking about the trucking industry is not being in a good place now and of course you know even the lay person probably saw yellow which is one of the big names in trucking completely shudder I don't know this summer um which was I don't know how many thousands of truckers but um but so you are feeling it uh but it's not catastrophic that's right yeah and like you like you said you know if if we can survive this which we will um you know we we can survive anything um but it also it it forces you to to pull forward plans on on growing the business that uh you would have said oh well on the first first year we can kind of rest in our Laurels and you know and you know clip our coupon and and make plans for for next year it's like no this year we got we got to grow we got to uh you know we got to invest in the team we got to rethink things we got to shift away from being too dependent on the cyclical parts of the business and invest in the in these parts of the business that have this huge Tam that hasn't been been touched yet great well it's also like it's probably uncomfortable and maybe even scary at times as it is it's like you know the these times of of of weaknesses Industries are also times where if you if you if you have the resources in the stomach you can really pull ahead because you can you can kind of start gobbling up market share where where weaker players are getting out shuttering whatever having a harder time guys I want to ask you um about so I want to zoom out now as we close just to two three still got three topics to go here um and are all kind of like um higher level topics the first is um just TR the trucking industry not what we've I've already been you know beating on here for so long but you just the trucking businesses like routes so so you see these FedEx routes Amazon routes you see other I guess Long Haul style trucking businesses on bis Buell a lot it seems like these businesses really transact a lot and that there are a lot of them um and you talked about at the top how you looked at some of those didn't like them give give us just you know 90 seconds on should should Searchers pretty much stay away from those businesses uh what to look for if or or or not but you know what to look for yeah I I think you it's tough cuz you know we're like wow these businesses are zero of three magic qualities you know they're high capex they're cyclical they're non-recurring Revenue in most cases so you know our investors go woo stay away you know um but that's not to say you you you can't carve out a niche like I think at one point we looked at like milk delivery or like milk haulers basically the tanker trucks that go and pick up milk from farms we talked to the biggest uh you know transporter in a certain State I can't mention but uh that's a great business because that's you know that's recurring he didn't have churn in his drivers churn so to speak milk FS but but there there are niches that I think are really good in that market I think stericycle obviously gobbled that up in in the medical uh disposal field as well so that's not to say they they all can't be I think dry van like spot Market companies absolutely stay away uh you know stay a mile away pitfalls there I think is the asset base it's really hard to tell you know the quality of the assets that are underlying it you can hire him you staff to go out there but also remember that these are bouncing around the country all the time there's not a yard where they're all sitting at one point where you have one person go check them out you can do the VIN numbers and stuff like that but you know past I want to say the the warranty piece of the trucks like it's totally dependent on the maintenance program that the uh the company's running so there's a lot of risk in those businesses and and I think we we were smart to stay far away from them great thanks for that tyell that was perfect and then the other big question I wanted to ask you is so so we talked about what you this sustained and probably growing demand for uh CDLs because you know you know the need for everybody to go get a four-year traditional college degree kind of receding uh the the shortage of um the the shortage of truckers causing prices to go up and and the a cultural shift that these are are jobs that are going to be appealing to people who might have otherwise you know gone gone and gotten a fouryear um but and but you guys landed on CDL training but there's all kinds of other trade schools like you know Plumbing trade schools and HVAC trade schools I mean just go through the trades and those uh trades don't have the cyclicality of trucking or some or some of the other things that you're you know the industries that you're really kind of pretty attached to do so what did you look at other trade school trade education in in industries that have flatter and less cyclical um you know sales pattern we we did um and I think what we saw there like you said they if you found a private school that that did you know uh Plumbing uh training and things like that yeah I think it' I think it' be a great uh investment All Things Considered um what's different about um you know Plumbing HVAC um uh line or like linesmen things like that uh the these are trades that in some cases are done a lot of the times by the employers it's kind of an apprenticeship model you know you don't have say the the same volume I think that you do with with with with truck drivers um the the the challenge also is that you're competing with the community college system in a lot of cases we do compete with the community college system a little bit um our our program I think is more tailored to kind of the students actual goals and desires of four-week courses and things like that most Community College systems set up their CDL training to be 12 weeks 18 weeks to comply with kind of federal requirements in order you know without into all of it that's how they get their money is by having a longer program Plumbing has to be a longer program electrician training has to be a longer program auto mechanics things like that are these are longer programs and so the community college system can run at a loss you know uh State uh regulat state legislators are happy to keep funneling money in into the community college system despite the fact that you know uh they they might not have the best customer experience I think and I think that's a lot of the reason why um you know truck driver training is has also moved kind of towards the private model um but you know I I think that's what we saw in some of these other trades was Heavy Community College influence and also kind of employers that that have taken on a lot of the training uh inhouse and maybe just train one to two guys and make a one to twoe training investment in them still great business though I'd encourage Searchers to go look at the vocational training you know space as well it's all those macro Trends but we we certainly love CDL for for the reasons Bob mentioned great thank you for that guys Tyrell you mentioned at the top that you're Canadian talk to my talk to my Canadian listeners uh what what should they know about being a Canadian Searcher buyer operator of businesses I I kind of don't even know what to ask so maybe you can fill in the blanks for me well it's a lot harder to win over uh owners in the Southeast you know talking hockey that's uh that's for sure you got you got to pick up some football lingo luckily Bob carried me through those those discussions uh as as well but um you know part of the the traditional route is it is a great path for for a visa to uh the MBA system is really good at that you know the extension visas you're able to get to go work while you search uh is helpful so I didn't have any problem I also Married An American during the process uh for a lot of other great reasons but uh you know one one advantage to that is is work visa as well Canada's got uh you know a good reputation of being a friendly neighbor so it wasn't a hindrance uh in any way I don't think uh unless you know Bob and the sellers were laughing behind my back about my my accent sometimes that'll come out and and hear an A or an about or something but yeah probably what of a lot a lot of Canadian Searchers that have reached out to me are curious to know is about searching in Canada which you didn't do um or the legalities of if they want to search in the States but are currently in Canada and your answer to them was in your case you just had kind of this Visa path ahead of you CU you were already in school and then you could do the extension Visa so if they're not plugged into an NBA program or or or business school students right now they don't I mean your experience isn't going to apply I would add to that yeah I would add the advice like look the the US immigration system is extremely complex like it's a very hard thing to read about online like I would recommend if you're like look at deals in the United States add to your diligence item list like the the immigration pathway and hire an adviser the same way you would you know a QV provider uh to to give you kind of a quick look a quick take to develop a Visa path because certainly there are Canadians that have searched out of Canada and acquired a US business and there are certain Visa Pathways available to you based on your own you know situation um and then you know conversely I think there's also a ton of opportunity in Canada I think Canada's unders searched um and I hate to say this to an American audience but I think there's a lot of Canadians that don't want to sell to Americans uh and they kind of want to keep that homegrown feel so I think there's an advantage for Canadians searching in Canada um that maybe doesn't reverse the same way uh you know cross border yeah fascinating great right anything that we didn't touch on guys that that you wanted to make sure we talked about every guest says this I would thank you as well for kind of building the community of search and and I think it's something Bob and I it's a career path we're committed to for the long term because we really believe in the space like I you know this is this is what capitalism's good at you know is like how do you take something valuable and you preserve that value uh over over generations and I think I encourage everybody that's you know kind of fearful looking over the edge of the cliff going hey is this right for me like I think get into it you'll figure it out you know and you'll have some maybe fetal position moments but um certainly consider partnership and certainly like diligence your partner a little bit it's it's worth it um and I wouldn't be here if it wasn't for Bob and I I hope he would say the same I would yeah yeah no I think I think the people that that are listening to the show obviously they're already drinking a little bit of the Kool-Aid uh but but I think um you know it really is it is worth the you know the the grind to to find a great business it's it's is worth the effort to find a great partner um and then the effort that you put into the business all these things that you think can be true um you know if if you just kind of push on that that door and and and and through that uncertainty you know you you it's worth it good great guys well I love your business if it if it weren't already clear um Tyrell can people reach out to you for your spreadsheet yeah absolutely hit me up on on LinkedIn uh as well that's probably easiest way to find me happy to share that I'll probably dck some stuff about my personal life but yeah certainly give you the temple I want to see all the scores you gave Bob yeah perfect Bob is LinkedIn how do you prefer people get in touch with you if they have a question yeah L LinkedIn is is is best yeah it's uh b o n f a CE bonface bonfice Bona great and if there's any Searchers will that that it doesn't work out come get your CDL with transe as well that's always an option for you so trans.net is is a great place to come to always selling man you know the American you've become Americanized Tyrell always be selling there you go always be closing sorry all right guys Tyrell Bob thank you for the time what a great interview awesome thanks will thanks will 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