Dominic blue welcome to acquiring minds hey well thanks for having me Dominic when we connected for the preall you were very recently in the seat of your newly acquired business just over a month at that time as I recall you also had a one-month old so you were doing the two babies at once thing guess you still are we want to hear all about that Dominic start us off with some background on you please yeah absolutely absolutely so uh my background I spent uh early part of my career I spent 11 years in the United States Marine Corps U you know the typical Marine Corps Journey moved around lived in a lot of States lived in a lot of countries um transitioned out towards the end of 2020 um and actually transitioned into Tech uh spent some time at you know some some CRM companies um you know took a stab at my own startup uh subsequently shut that down um you know wasn't really passionate about the problem I was solving and then uh actually came across uh acquiring minds uh you know last year in January uh discovered the whole ETA process so very much like every other Searcher I went out and read the two the two gospels you know buy then build by Walker D and you know uh hbr guides to how to buy a small business and then I launched uh what is uh my holding company noer group uh and then began my search last year um and then I can go into you know the search and bring us up to that if you'd like but yeah that's my backg we're we're definitely we're going to get there Dominic but um couple follow-up questions you were an entrepreneurial kid as I recall that's right that's right um yeah uh so yeah I I think I think the the typical cliche story if you will uh of having my own lawn care business and uh wholesaling candy uh you know in between classes when I was in high school um so I always always was captivated by entrepreneurship also I guess as as um as I should mention my grandmother you know she was a bit entrepreneurial herself she had a couple side hustles from her you know day job and and I got to watch how she operated you know doing those two things in parallel while somehow managing to get me to all of my sporting events as a kid um and so I think that Hustle culture if you will was kind of ingrained in me in a very you know young age Grandma hustle culture that's a new one um so even though you had a good decade in the service the idea that you go into your into business for yourself was predestined or may maybe maybe not so much but it sounds like it was pretty it you it was a easy guess that that would happen and it sounds like you started something right when you got out so it to tell us a little bit about that you said you worked for a couple CRM companies but also did something entrepreneurial in Tech can you tell us about that yeah absolutely absolutely so um you know just as a context my wife uh is from Australia she's a registered uh certified nurse and midwife um and she was actually a traveling Midwife so you know they would go from location to location for a certain period of time um and when she moved here to the United States naturally she gravitated towards that industry and we found um a pretty interesting problem with traveling medical professionals who were doing extended period stays uh in locations and they weren't happy necessarily with the services they were receiving from say Airbnb or or extended stay hotels um whether it was they wanted to bring a whole family and a dog or multiple cars or you know whatever the specific problem was so I kind of I kind of set out to build a platform that could really address that niche market there outside of Airbnb there was only one specific um technology company if you will that that uh was servicing that industry um I very quickly realized that being one engineer and one business developer uh as a as a single person is very difficult when you're trying to reach feature parody uh to compete against uh very very deeply rooted competitors um and I just could not see myself doing that for the next 10 years um I mean as you know coming from a tech background you know you kind of have to look at it in a 10-year Horizon um and so that that really I I knew at that point um especially having a wife thinking about starting a family um having a cash flowing asset made more sense to me um and so I decided to step away from the the you know risk that is a technology startup um and then subsequently found myself you know in ET and thank you for that Dominic but wasn't there also a perod where you were kind of building um MVPs for tech companies you kind of like kind of an MVP agency using no code tools was that was that something else you did for a while that's right that's right yeah um yeah I failed to mention that one so I ran that one for about a year it was a technology enabled consulting firm we were building as you said uh minimum viable products for non-technical Founders uh so it went out um hired an engineering team uh did some business development landed some clients uh and then we we set out to kind of do the full life cycle of product development uh you know kind of integrating with their go to market strategies um and so we we had some success there um at that point um I didn't really enjoy the I I don't want to say that I didn't enjoy the work because I did um I just I don't think I was passionate about the idea of being a consultant pretty much cuz that's ultimately what I was um um you know so uh ultimately again you know shut that down and that actually happened before the tech startup so I took a stab at the Consulting uh took a stab at the tech startup marked those two off the list and then you know yeah it kept going well I may want to return to your experience doing that Consulting just because it was you just got to see a lot of cases up close and personal of people or companies startups trying to put something out into the market um so might might be an interesting contrast with with ETA yeah so after your your diance in in techland you hear about ETA catch the bug tell us what your search looks like or what your parameters were if any yeah absolutely so you know um after reading you know the typical gospels as I mentioned earlier um you know I I built uh what I feel like it was a rudimentary uh you know investment thesis um the the three standard categories of of location you know deal size and Industry um so for me I was I was geographically constrained to Southern California um so so that was the location I was looking for Home Services businesses um and I was looking for deal sizes anywhere between 3650 in SD um so so that was really what my search was um starting out I found a you know a lot of um a lot of landscaping companies um you know a lot of uh key man style HVAC businesses um and uh ultimately you know I the company that I did end up U having an offer accepted on uh was the air duct cleaning company which we can get into here in a second um but the primary reason I I chose that company outside of the numbers was because it did have a strong management team in place and to be clear on your criteria location Southern California deal size or or financial size of business 300 650 650 in s right and then industry and you you mentioned kind of Home Services but was that one of your Criterion or was that just what you were finding in that range no I started out with with Home Services as the industry that I was interested in um and I guess like a little on the philosophy I didn't want belabor the point but a little on the philosophy there was obviously coming from a tech background most of us naturally gravitate towards Tech because that's what we're comfortable with um but as we all know the multiples are exceedingly high in those Industries um and because I was investing off of my own balance sheet I wanted to find something that was in a more stable Market as opposed to something that was high growth High exit um and and kind of build my portfolio from there um so you know you hear you hear quite a bit of some of the the Giants in the industry talking about earning their right to take a risk and and I kind of I kind of adopted that myself um you know by saying I'm going to go build a portfolio and then I'll go out and maybe buy something that's more high-risk like technology companies well it's funny Dominic or maybe not so funny and in predictable that your and my interest both was coming from kind of Tech backgrounds we both were at least initially drawn to buying something SAS thing or a micro SAS or an e-commerce or whatever something digital um and then and then decided against it uh great and you mentioned your own balance sheet so say more about that no investors in other words and and even if you'd found an opport like you didn't want to look for a bigger business that even if you couldn't afford yourself you would go raise money to buy you didn't want to do that that's right that's absolutely right yeah I mean you know I had some uh some small family family investment if you will um but you know preponderance of the of the capital injection did come from my own balance sheet um you know the again the thought process there was um you know I I don't come from a pedigree of investment banking or Wall Street or you know working at PE backed companies um so I felt that I needed to go earn earn those credentials uh kind of on the the um you know on the streets of Hard Knock if you will um so so that when I do go present myself to investors that I can come from a place of credibility and and off of a built reputation of having done it myself it's interesting I feel like that makes a lot of sense I don't and and so I'm I'm just wondering why I haven't heard people um articulate that very often if ever so you're going to buy your first business basically totally yourself maybe with a little friends and family Capital get the experience you're not you're not anti- raising capital from investors it's just you feel like as a rookie doing this essentially you'd rather wait until you got you got a track record to to do so which again makes perfect sense I just feel like um I haven't heard of that much but um but I like it great okay so so by the way so 300 to 650 SD so that's going to be a a business that's anywhere from what 800 a million up to two million in Enterprise Value that's right that's right and you were expecting to put down 10% call it of of those numbers so either anywhere from 100 to 200 250,000 that's right air duct cleaning so tell us about the business that you found yeah absolutely so um yeah so we it's a it's a San Diego based air duct cleaning company um it had 20 employees at the time of acquisition um it had a management layer you know a GM um warehouse manager office manager um and I mean that was the core core management team if you will um you know it was 99% uh residential um so I think maybe a handful of um commercial commercial cust customers over the you know the time of its Inception back in 2016 um you know it did right at 2 million in Revenue in 2023 um and you know it was operating uh it was operating it based on the numbers that I saw you know at at 60 plus perc uh gross margins uh which was really interesting um you know and and I bought it right over a 2.5 multiple um so yeah so so it was really interesting yeah and what were net margins are set another way what was the SD yeah so SD came in right around uh 4450 um so so yeah it was um you know it was decent typical 20 perish margins right that's net margins yeah that's right and you had said so those 20 employees are those true full-time employees that's right 20 20 fulltime employees um there was uh approximately 12 technicians so you know Twan Crews going out and and conducting the work and then a handful of office staff who are um you know business developers office admin um you know account managers those types of office type roles how old was the business um so it's right at 8 years uh it was founded in 2016 and so you said one of the things that really Drew you to it was this a management layer that's right that's so and and so say more about that you just mentioned the office staff what did what were what was this management layer yeah so I mean between the the core three if you will the general manager um you know the office manager and the warehouse manager warehouse manager handles anything inventory Warehouse related tools equipment and fleet vehicles um then office manager handles all all things office so inbound outbound calls accounts receivable if there were any I mean there was practically none when I bought the company um it was all cood when I bought the company so um and then you know handling just office management uh general office management duties and then the general manager also acted as uh the sales manager so he was kind of our um our top closer if you will um so we would we would send him to maybe large jobs if if there was uh you know a larger home or a more complex job that we were doing an estimate on um so but but he handled overarching you know the the general management Duty so um the the managers reported to him um and uh he he while in absence of the owner he would handle you know um basic accounting those types of things as well and speaking of in absence of the owner so how involved was the owner could the owner step out completely and the GM kept things going or was the owner pretty act pretty active pretty involved yeah really really good question and this was actually where I drew the Insight of the capability of the management team um you know talking to the owner he uh he was from another country um and he traveled uh between seven to nine months out of the year so I mean he was his home country yeah whether it was his home country seeing his family in a different state um was just always always traveling um and so the general manager in again in his absence was running the business um and so that told me at least to some extent that the management team was capable enough to run this company um on their own um you know with with a little bit of guidance uh you know remotely um so so that was a strong indicator of something that I could work with if you would yeah and that GM represents some key person risk obviously correct but compared to like some of the other Home Services businesses that you'd looked at which were three and four and five person teams it's much less key person risk than those really small teams where you lose somebody and there goes 25% of your Revenue sort of thing exactly that's right that's right and I mean you know when you think about it from the context of the structure of the teams that we had um would it have been a gut punch to lose the GM on day one assuming you know which was an assumption that I made that he was going to leave um it would have been a gut punch but at the end of the day we still had two managers who handled two very critical functions of the business and we had uh other salesmen who um or or I should say sales technicians who were still in the field who were still capable and who were still delivering on a consistent basis so while it would have been a gut punch the company wouldn't have crumbled had he left whereas you know on the other end of that Spectrum for say a four-person company where the owner is the project manager the estimator the install manager the service manager you know if that one person leaves there's there's many hats that you have to fill on day one yeah yeah yeah yeah exactly great Dominic well yeah it is sounding pretty good and you said the revenue was cood what what what what does that mean for people oh yes uh cash on delivery so you know uh at time of service when we when we complete our service uh the customers would pay us right there so whether it's cash Checker card um so which just means that we we don't have accounts receivable we're not waiting you know 30 60 days for our customers to pay us um you know post job completion right which you know we we often like B2B businesses versus consumer facing businesses for a lot of reasons that the audience will be familiar with but here is one of the things that consumer business or consumer businesses can be nice that you get paid immediately you don't have to wait 60 days to get paid right exactly exactly yes all right um anything more to tell us about the business before we we hear about the deal itself um Dominic tell us what air duct cleaning I mean it it speaks for itself what it is but tell us more about the need for this service you know this is something I'm not sure I you know kind of a one of these I'm not sure I realize it existed sort of things tell us about air duct cleaning yeah absolutely and I'll tie it to a piece of my background that I didn't really mention so when I was in the military uh one of my jobs as as a um as a military officer was uh chemical defense so really teaching military members how to operate in contaminated environments where there's contaminates in the air um you can kind of automatically see how that kind of overlays with air ducks M El um so you know coming to this business air ducts are they are the distribution system that pushes your air throughout your home um and you know over time whether you live near a construction zone or or what what have you those air ducts can either a be uh contaminated with with dust and debris or you can have rodents and pest infiltrate them you know if you have a say a hole in your duct you know the air duct piping itself hoses itself um so you you think all of those contaminants you're potentially breathing in um I think air duct cleaning definitely became more popular because of covid um for obvious reasons everybody's thinking about air quality and uh you know um whether in the home or out in public um and so we started to see a rise in popularity for these companies um and you know when we talk about the need really and this can kind of go into some of the takeaways that we can talk about a little bit later but um my perception is there are a lot of individuals who have allergy issues um there are a lot of issues with you know say you live in a city like LA or San Diego there's a lot of smog you think about the air quality uh outside and the air quality in the home um and I'm actually a direct person like I experienced this directly growing up I lived one mile uh from a paper mill and so a lot of people in my area developed uh lung respiratory related issues because of the air quality um so when you're thinking about the the purification the cleanliness of the air that's coming into your home um all of that stems from your air duct Now isn't this what what I'm told I need to clean my my um HVAC filters you know once a quarter isn't that taking care of this isn't that what those filters are there to do that's a great question that's a great question so you know filters are one piece it's not to say that what you're saying isn't correct but filters are one piece of the whole component right so if you think of from from HVAC condenser unit um and evaporator unit and blower motor that's pushing that air all the way out to the registers which are the vent looking things on your wall um to the filters that sit there there's there's multiple pieces of this um it's just like drinking from um you know if if you look at any filter for a water bottle does it catch all the contaminants well not necessarily you know um so so it's a holistic approach to air quality as opposed to just saying it's one piece of the component that I just need to replace and then that kind of takes care of everything and then how do you and and the questions I'm asking here are kind of like the the sales objections that that you know the consumer might might ask on a sales absolutely what about this this air filter that sits in the corner of my room that I bought for a hundred bucks on Amazon doesn't that do the trick obviously that's just one room so maybe that's the answer um that's a you mean like the Standalone units yeah yeah the ones that you plug in and sit on the they just are like a look like a dehumidifier or something over in the corner right right right that's a really interesting question and I don't know that I've ever heard that um but I I would say you know regarding that you think about point of right so you have you have a say a filtration system a standalone filtration system in the corner of the room well do you sit near that filtration system all day do you sleep near it all day I mean you know so again you're thinking about holistically at least for us we think about the house holistically not just one particular room or one particular piece of of uh you know the HVAC system um so so yeah I I would say does it help absolutely right otherwise they wouldn't be on the market but uh if you're thinking again in holistic terms you know there are other things to consider for sure yeah thank you for that Dominic and then just on it kind of related to me me poking at this um and and the re part of the reason for my poking is because I'm I'm I'm I'm foreshadowing what will come which has been one of the challenges in your business is is the um quality of Revenue here um and just to to kind of foreshadow a little bit more on the spectrum of um um need versus want you know some Home Services we think about in terms of like kneading like correct Plumbing where you know your toilet's clogged that's right you know that can be very appealing those businesses because the consumer needs them whereas maybe landscaping or something is is less of a need and more of a want this feels like it's more that end of the spectrum where would you place it on the spectrum of need versus want for the consumer no I agree I I think well I I I think in the typical Consulting terms you would say it depends right um so if if I am let's say I am a potential customer who has respiratory issues um I probably think about air quality more than the average person does right right um you know um so for me it may be more of a need like I actually need to worry about the the quality of the air in my house on a consistent basis um whereas if I'm say you know a middle-aged healthy individual who's never had any health defects or health issues or or any of that that um those types of things then maybe it is more of a want because again maybe you're just kind of you're going above and beyond on your your Healthy Habits in your house right so so it kind of depends and depending on who you are as an individual um is where you fall in that spectrum and kind of looking at our customer archetypes a lot of the customers that we do have are the individuals who have health like respiratory related issues or maybe they're elderly um those types of individuals because they're the ones who are more conscious of uh of what's actually being you know absorbed in their body great and you'd said that the revenue mix was I think you said 99% residential yes and and I would I would think that there would be that there that this the need for this service or the desire for this service would be just as strong in commercial land as in residential land yes um so why is that true and if so why was so little of the business Commercial yeah that's great and I I suppose we're a bit we're foreshadowing a bit to how I've pivoted the business since uh since acquisition which we can get into later um but but I wholeheartedly agree I think just the previous owner um was very interested in the cood model you know the I don't have to chase down large B2B customers to to get paid um I I I have coined it in at least internally to our team as fast money um you know he liked the previous owner liked fast money which is okay right that's that's one way of doing business um and and so he only focused on residential customers um which to your point there are um just as many uh commercial commercial type of customers who are also concerned about this potentially more so uh when you think about large commercial property uh multif family Property Owners uh and managers and operators um so so that is and I don't want to get into it just now but but we can get into it later um that is where we're pivoting um is to focus on stuff like that yeah great well we'll put a pin in it for the moment we're definitely going to return to it thank you for giving us the kind of the overview of the business now so tell us what the terms of the deal were you said two and a half X yep that's right so what was the what was the um project cost the the price of the business and how did you structure the deal yeah yeah great uh so total project cost was just over 1.6 um you know obviously 10% down we ended up going through uh we ended up funding with live o um U which there's a fun story there we we almost lost the deal with a with a different bank because there was some issues that uh on the on the seller side that we had to resolve three days before closing uh which I'm happy to tell you about that story if you'd like but um but yeah from a deal structure 10% down so you know 90% debt financing um and um yeah I mean we again we I think it came out to be like one 2.6 as a multiple um over a 10 10year standard 7A SBA loan and that seems like a pretty good multiple why do you think that you got a lowish multiple that's a really good question and I think it ties to uh and we talked about this a little bit on the on the um preall but to me it ties to uh the demand generation demand capture um of you know categories of of the business right so when you think about HVAC and plumbing they're absolutely needed if if it's summertime in you know Cal a California Valley resident home um HVAC is going to be a priority um if you have a Plumbing Leak that's going to be a priority but for air duct cleaning um I I venture to say 99% of people did not think about the quality of air in their home until Co happened yeah yeah so so there wasn't this Monumental mindset shift until this pandemic that took place which again was only you know four years ago when it started so we're just now getting to this point where more people are asking more questions about this right and uh we're we're in the early days of research being done by allergists and you know medical professionals who are trying to evaluate uh some of these different types of environments that people are living in um so because of that I think you know the if trying to go for a higher multiple actually wouldn't made sense um at least that's my perception from say the cell side um um but that that's yeah that's kind of my hypothesis on that and the point about air duct cleaning becoming much more mainstream in the wake of covid while that you know in theory is good for the business you also worry that it's a business a service that's going to also suffer from kind of covid demand collapse like we saw in e-commerce or something all this pulling back where where where Co is out of sight out of mind after a few years that's right um did yeah so did you think that what that the demand for air duck cleaning was had grown a lot and it might recede a little bit but there was going to be a new normal that was higher than pre-co you weren't worried it was going to recede all the way back to pre-co times pre-co levels that's right yeah I I I mean My Philosophy on the air duct cleaning industry is it's definitely um a great complimentary service I mean if you see some of the large agac contractors out there they typically offer it as an ancillary service on top of everything else they do um for me uh I used it and I heard I I've heard this uh said on your podcast before where they talk about backing into an industry so to speak yeah um HVAC was the industry that I was backing into and I knew I knew coming into this company specifically at the very least I'm getting a strong management team that I can then build you know infrastructure under right which is exactly what we're doing I mean you know and we haven't got into deal number two yet but that's exactly what we did you know we went from being just a pure air duct cleaning company to now a full site HVAC company that also does air du cleaning um so we've actually made that that's right yeah so you've done it that's cool yeah you're I think you're the fir you're the first guest um that that I can recall who's who's who's really executed this strategy who really set their mind to doing it and then did it and by the way and not very long it's been less than four months that you've had the business um but yeah it was John Wilson maybe others but John Wilson I recall saying you know home services are really brutal like if you want to go out and buy an HVAC business today good luck to you um but but yeah backing in you know try to get a tow hold in an adjacent industry and you can then use that Toe Hold to to work your way into HVAC delivering of HVAC Services which is which is what you did very cool and so was that part of your whole thesis around this deal or did that quickly become your strategy only a but only after you got in the seat no that was the intention from the start um it it I knew I mean I should say from the start from the moment I found the air duct cleaning business and the offer was accepted um the moment I started executing on this deal um I knew that taking it and pivoting it to an an HVAC company uh with the vision of it becoming um a mechanical contracting company if you will you know fire protection Electrical Plumbing HVAC um you know the the the I I should say the the most seamless way to do that was start out this way back in and then just this is where as we all say there's always luck involved um just so happened we had the second deal that came up that was a really good fit that was right here in Orange County um and it was a perfect tuck in for us to then expand across San Diego and Orange County um so so that's HVAC with h so so you bought an HV business I did and I'm happy to go into that if you if you um if you're interested yeah we we we will um but not just yet but um Dominic I'm just wondering while the strategy is is really cool and and exciting that you're doing it it also is like a big it's one of these where it's like one of these strategies where a lot of things have to align for that right strategy to actually come to fruition so if I'm you I'm thinking you know I'm going to try to make this basically have this business that I'm acquiring be a to hold and then I move into HVAC but because so many things have to align to to have that come to fruition I need the business to be viable just if it only stays a duct cleaning business because I there's something I can't see about moving a hfac or whatever was that your Calculus like could it have could it have stood on its own as it was just a a duct cleaning business from from now until forever I mean absolutely and and you mentioned there earlier you know uh with with another gentleman that you spoke with who also has an air duct cleaning company um I think organic growth in this market is quite difficult um especially if you're looking to scale and go from say 2 million in Revenue to 5 million in Revenue that's a very large jump for an air duct cleaning company um but I do think it's something that could sustain um with with single digigit uh growth margins uh pretty consistently if you if you wanted to keep it that way um and and as you mentioned obious there was a lot that needed to line up so when I was doing my initial due diligence on the on the business um I I factored in a 9 to 10% Delta in in you know Revenue reduction just just to just to make sure from a from a you know um a financial scenario that it would still survive if if I took ownership and then we saw that dip um which you know everything checked out so I think had had I not gotten lucky and found deal number to when I did um we could still absolutely operate just as a pure air duct cleaning company um I just wouldn't have been able to take some of the the major uh steps and risks if you will doing some of the things we're currently doing um I would have had to I hate saying this but I would have had to kind of just ride out status quo until you know that opportunity presented itself okay well very interesting and and we're going to deep dive on that in a minute but before we get too far away from your deal sounds like there was an interesting story to tell about about what was it there was some paperwork issues some with your seller and then you you went with bank a and then ultimately had to go with Live Oak so what was that story that's right that's right so so um admittedly I still till this day don't fully understand what happened um and it's because you know everything was going well with with uh the first bank again we were between three and five days of closing so you know again they always say it's going to happen in the 11th Hour when it happens right um and sure enough uh there was there was something quirky with the tax reporting um the the previous owner changed uh he changed addresses he moved the business and apparently um there was a single document that he didn't submit uh when he filed as an escorp um ultimately that paperwork did get submitted but um the bank didn't want to fund the loan because even though they could see that he paid his taxes it wasn't processed the way that it was supposed to is at least is my understanding so we had all the evidence that everything checked out but they just weren't comfortable moving forward which wasn't necessarily the issue what became the issue was uh they first told me we weren't going to close and then they completely ghosted me like no response to emails no response to phone calls the only reason I knew that they were kind of dragging their feet is because I had a good relationship with the the um you know the BDO the business development officer who I originally started working with and he was doing you know he was trying to work on his end to figure out what was going on but they just started dragging their feet and as we all know time kills all deals and you know thankfully we had we had done some you know preliminary relationship building with with live o and they were already familiar with the deal and so I just switched banks and pulled out from the first bank because I didn't again I didn't know what they were going to do if they were going to close it if they were going to you know help us out in any way nobody would respond to my emails fin fin I just pulled the plug moved away from the M moved over to live o and then we were done in four weeks um so we had an amazing experience with live o wow all right Lisa and team um the and and is the by the way did did bank number one ever unghost and and and email you and say oh sorry or anything or it's still been silence um the only reason I have heard from them is because um I requested the um I always call it earnest money but the initial uh the initial good faith payment that was made to the bank I wanted to pull that back and because they weren't responding to me I had to not threaten but I had to tell them that I was going to escalate it as necessary if they weren't going to respond and then they responded but after that one response no nothing and did you got money back I did thankfully I did how much was that uh it wasn't I mean it was I don't know it was less than $10,000 um so it significant I mean that's not nothing yeah and then you know interesting on live o um because I mean obviously they have a very very strong reputation in our world um but they're also known uh for being conservative um and you know and that's a Strate you you know Banks fall anywhere on a spectrum of conservative to less conservative um and it's just kind of a strategy based on their what they underwrite and um and live O is a little bit on the conservative side I would have thought that something that is so closely tied to its performance jumped during covid like air duct cleaning might not be something that they were that that that would pass their you know threshold do you did they have anything to say about that curious no that's a really good point and I mean I from a from a historical standpoint there was consistent you know 20 plus percent year-over-year growth for the company yeah so I mean it had strong performance where I mean I suppose if there was you know say a little bit of growth and then maybe a plateau or a dip they would have I I I could see them being much more conservative on the deal but I I just think from a numbers perspective they were really happy with the deal they were really decided to do to to do this deal um so you know and especially after building a relationship with them and explaining what my strategy was and um I ended up doing my second deal with almost the same exact closing team um there was like one the closer was different because the closer I used before changed uh positions within the company but um so they knew what I was doing they knew I had the second deal lined up which they also like that deal I think they could just see holistically what was happening and they were pretty happy with that and then before we leave this all together your deal is the takeaway then Dominic to basically keep another bank or two in the back burner just in case what's the lesson here yeah that's a that's a great question and I think you know coming from the Marine Corps we had a saying it it it doesn't count until it's on paper right so until the deal is funded it it doesn't count and I'm not saying you know shop around your deal cuz there's definitely something to be said about the the relationship building that happens between you and the banker that you're working with uh but but I am saying that when you start getting those signals um you know we all can feel it when we're not getting the right signals um and and I would say just from a resiliency perspective you should always consider having Bank two or three lined up um you know to to ensure your deal doesn't fall through so there's a sweet spot in terms of how having Bank two two three or four lined up where you've established a relationship and maybe that's more than just a single call maybe that's a few calls but not so much that you're leading these banks on and wasting their time absolutely but enough so that if you come knocking because deal bank number one ghosts you you can you got already got some momentum and everybody's got some comfort with each other sort of thing so a sweet spot of of not wasting their time but enough that they know you yeah absolutely perfect way to say it y um okay great and so when did you close what date uh so we closed on the 18th of January funded on the 19th which was a Friday and then first day of operations was the 21st which was that following Monday Jan 21 and when was your child born yeah so um so little wolf was born February 3rd um so in very short order I did have two babies Little Wolf is that a nickname or is that actual name wolf yeah his his name is Wolf kakoa blue wow wolf kakoa blue yeah that's beautiful thanks unusual well I'm I'm in the middle of uh the naming process with my wife and I'll tell you it's not going well it's defin an adventure that's for sure yeah okay um anything to other than it must have been crazy and a lot of anxiety and stress on your shoulders the obvious anything to say about that doing both these things at once um I would so I guess and we didn't really talk about this a whole lot but you know I originally set out I was I am one of those typical okay now I found ETA now I found holding companies now I'm going to go build a holding Company by buying my first company um I was one of those very ambitious uh individuals who who got a little you know ahead of myself um and so when I set out I kind of set out with the mentality that I was going to place an operator to who would run the company right as the CEO um and and in fact you introduced me to to John Mahoney who had a similar thesis of you know placing veterans in in uh leadership roles in companies um and and and and so I executed on that plan um so for the first uh roughly first 6 to8 weeks um I was there in a supervisory strategic capacity um where you know I was still handling accounting I was still doing oversight of practically um all of the strategy and execution of strategy that was taking place um but I wasn't necessarily physically in the office every day um and my operator was so you know when I went off to we had our baby um at the time I wasn't too terribly stressed and concerned um however that didn't necessarily play out the way I wanted to ultimately uh we had to you know um exit the the operator and I went back down into the business um and you know I I've been there ever since kind of uh building out the management team and things like that but um yeah I mean I would say from from anyone listening who is thinking about having a family and also subsequently buying a business um definitely take stock in your partner's ability to handle that stress with you um because ultimately even if you try to protect your your family from it you're that stress is that burden of stress is shared amongst everybody in the household um and you know that you have to be very aware of what your partner is willing to to take on in those moments and I have to you know definitely give my wife a shout out here she she I mean even being pregnant she you know stuck with me through it you know through the ups and downs and she was completely supportive throughout the whole thing and honestly I wouldn't have been able to do it had she not been so supported so so definitely a shout out for her and so Dominic you feel like in your role as the one in the partnership buying the business and about to go on this professional Adventure that you did prepare her for what this was going to look like so so she wasn't taken by surprise as to how crazy it was going to be 100% And and I if if I had to succinctly say like call it something it's it's expectation management yeah right uh so very early on in the journey in fact when I discovered ETA to begin with she was there with me every step of the way as I was reading the books I was like teaching her about the things I was learning um uh you know she just so happens she's interested in real estate investing um she's building uh building a little real estate portfolio and um so the the concept of investing in cash flowing assets was not foreign to her and so when we started talking economics of you know wealth building as it relates to going out and buying uh small businesses she really got behind the idea that you know this is something that is going to be beneficial for our family in the long run so um it's almost that delayed gratification of comfort if you will knowing that in 5 to 10 years the family is going to be in a much better financial position than it is today um yeah and so yeah I think bringing her along that Journey from day one really set us up for success in terms of all the the challenges that were presented throughout the process great Dominic great and so but much more to ask about the operator yes idea here so first this operator that you hired the idea was that they were going to be um above the GM or they were going to replace above the GM okay so truly if you will a CEO hard to call it that in a very small business but so they they were going to be because you basically the management layer that you've already explained to us was already in theory keeping the trains running on time so somebody above that would be mostly doing strategic stuff right so that that's right so I I think a good example of this is you you see Sig uh you know the search Investment Group uh one of their Pathways if you will is providing substantial Equity to to an operator that's coming in to operate one of their businesses with little to no money down um and when I when I saw that with Sig I actually really appreciated that idea of providing somebody an opportunity a lifechanging opportunity um if they're willing to roll up their sleeves and and kind of get in the trenches so to speak um and so you know I I went out I you know um found uh a person another military veteran as a matter of fact um and you know that that was the ne that was the relationship that we had it was you're going to have a vesting schedule over the life of of the 10year loan um you know kind of aligning their incentives with with the company and my own incentives um and you know they would end up with a substantial stake in the company um you know kind of a Sweat Equity if you will yeah can you share what that stake would have been yeah absolutely and and you know it's really surprising to a lot of people but I was I was willing to um uh allocate 40% of the company to them over that 10year period Well that is a lot for sure I have the same reaction but it's also over 10 years so it vests at 4% a year um yeah so we we had it I mean the the the vesting schedule was the percentages were slightly different depending on at what point it was that the vesting was was taking place but you could say yeah on average you know 4% a year yeah there were Cliffs sort of right yeah that's right and how did you arrive at that number looking at what search funds uh you know what what operators end up with coming out of a search fund looking at what Sig is doing I think Sig is a phenomenal Benchmark for this uh just looking at their various Pathways and other various structures that you see out there where people are investing in Searchers um granted the my operator we didn't call him a Searcher but for all intents and purposes you know he kind of was a Searcher right because he ended up operating the business but but anyway um you know so looking at all of those and understanding that like for a search for for a deal where uh you're raising a search fund and you really end up with say 10 to 20% of the company over over the lifetime of that company um I felt uh that 40% was a substantial stake but it wasn't a majority stakeholder if you will right um and that was really critical for my long-term Vision because uh as as we build out the the noer group portfolio um it was very very critical that noer group maintained majority uh majority ownership of all of the assets and would this person H how much um involvement would you have let's say this person had worked out how much involvement would you then have had in the business yeah that's great I mean you know I think in the early days of course when you're trying to get get a pulse you know for for the fluctuations in the business model you're trying to identify initial um you know process Improvement um initiative and things of that nature I was definitely going to have my hand in the cookie jar a lot more um but but the anticipation was that would reduce over time right um it kind of goes back to maybe a Marine Corps thing of inspect what you expect um and through a phased approach of of you know delegating and building confidence in that operator um you know uh presumably at some point it would have been I would have been completely hands off um yeah yeah but and and I guess it it it it's really important to say My Philosophy was I'm not going out and hiring a um you know say a a a previous operator of a peack company or someone from Investment Banking or even an NBA graduate um I'm I was going out and hiring somebody who like me kind of grew up in life's trenches um and is looking for an opportunity to change the trajectory of their family um and and admittedly you know and I've said this to a couple folks who I was trying to recruit like you absolutely don't need to like come work for a company like mine you could go out and raise a $20 million search fund by yourself just because of your pedigree right and I'm very very aware that there's certain levels to this game right and so just trying to respect that fact you know I was kind of lowering the ladder giving people opportunity to kind of climb up if you will Dominic when you say life's trenches maybe you didn't give me as much background as much of your background as I would have liked what what was your background like and and what kind of similar background were you were you looking for in this operator can you be more explicit about what you're kind of hinting at yeah yeah absolutely and and you're right I I actually don't speak on my background all that much but but um you know a really good friend of mine who who um I actually work with his name is John Stefan he's a he talks to me about sharing this story quite often because it is really important and I'm glad you're kind of pulling this out because I don't I don't speak on it very much but you know from a from an ethnic background I am I am of mixed race I am Native American Scottish and German um you know I have if I don't know if you can tell because of the California Sun but tan skin green eyes so I look a little bit exotic if you will but I grew up in a I grew up in a small town in North Carolina and and when you grow up in a small town in the 90s in North Carolina um you know especially where I grew up you were one of three ethnic backgrounds or or races if you will you were white Black Or Hispanic I was none of those things um and so when you don't fit into a category um you don't necessarily fit into those uh those groups when you're growing up so I experienced uh really interesting um uh racial event from both sides you know uh you know and so um that kind of I mean the Silver Lining to that was it it created this very diverse world view that I have um but but really you know that happened throughout my life growing up um all the way up until me joining the military um which has its own level of challenges right um but but yeah I mean that really defined my idea of inclusivity of giving people a chance regardless of their race Creed or color you know those things really actually mean something to me they're not just statements on paper um and so when I when I was looking out to to find people who uh could go and run these companies I like finding the the Diamonds in the Rough if you will the individuals who although life may have knocked them down they're still not giving up they're still giving their you know their best effort every single day with a smile on their face um that's really like the the attitude that I look for um and you know thankfully I have it in my GM I mean he's a great example of that um but but I also look for that in in operators who potentially are going to be CEOs that was great Dominic well I'm glad I asked that was awesome and the um but I I wasn't sure I got you mentioned there are levels to this game you're aware of that and and that somebody with pedigree could raise 20 million to do their own search fund so are you were you trying to recruit such a person and you needed to give them more Equity or or that person who could go do the 20 million fund let them do that you're trying to give somebody a leg up who couldn't otherwise would have a hard time getting even on the first or second rung I just say I didn't I missed I think I missed it yeah no and it's it's a great point of clarification the you know and it's the ladder of what you're saying right so I mean we we all understand that if you graduate from Harvard Business School and you are McKenzie Alum and then you decide to go out and buy a business chances are you're not buying a business unless you just have a unique perspective and opinion you're not going out and buying a business with 300 to 650 SD right you're you're probably looking for a deal that's larger and if you're looking for a deal that's larger if you're not investing off your own balance sheet presumably you're going to go raise an investment fund right well we aren't buying businesses that large not yet right our first deals are very very small um and we're looking to go from one we're looking to go from Seven figures to eight figures we're not looking to start out closer in that you know lower Middle Market PE um playground if you will um and so again the the archetype of the individual that is looking for those deals aren't looking to come work for a small shop like us right and I I respect that and I understand that so when I say there's s to this um those types the McKenzie grads like they're going to go do their own thing they don't need to come seiz an opportunity from a guy like me because the opportunity is already presenting itself for them right so the individuals that are coming to maybe work uh work with me and the team um those individuals maybe they don't have an NBA maybe they are um you know they're just now transitioning out of the military and they're not you know say Special Operations or Military Officers those types of people have very specific resource groups who are trying to help them um you know I'm looking at the uh the the middleof the row uh enlisted uh service member who maybe has an undergraduate degree maybe they don't even have that and I'm trying to evaluate them for their attitude and potential not necessarily for their pedre great Dominic you you this is great this vision is very very clear that that you have in it I think it's um a wonderful opportunity that you're that you're offering to people now I appreciate it thank you yeah for sure now unfortunately on the heels of of that optimistic note I need to ask why it didn't work out with this first operator first operator yeah yeah absolutely and and you know and admittedly um he's out there in the world um he actually decided to uh stay in the military um for a little bit more time um because we I caught him as he was transitioning out so he actually reversed course and stayed back in um which is great for him and his family is phenomenal I think the reality is this is where the pedigree means something right it's you you have seen large deals you understand the dynamic nature of business right when when you don't have that pedigree you don't have that I think exposure is probably a better word for it when you don't have that exposure to that world it can be stifling um and and you can find yourself like a deer in headlights and that was just the reality on the ground was you know for anybody that's operated a small business for any number of days right it only takes days for you to realize this um there are a multitude of decisions that you have to make on you know every single day every single minute of the day and if you're the if you're like the top of the pyramid so to speak if you're the operator or the CEO of that company every decision that you make could potentially either drive it in the right direction or the wrong direction and for somebody who's who has not been exposed to that level of responsibility that can uh that can be a shock and I think ultimately that's what happened here it was it wasn't that the that the individual was not intelligent or not not capable or didn't have empathy um it was just the sheer amount of dynamic activity that was happening daily um and then you add on top of that you're you're partnered with somebody who's running at a million miles an hour trying to close a second deal now we're doing a real life merger right a merger in and of itself is something that a lot of people don't experience yeah especially especially at this you know going back to my phrase at this level of the game you know so um so I think all of that Dynamic nature was just a lot to handle and it got to a point to where it was affecting his mental health and again for me you know and my team would would vouch for this you know understanding their well-being and their mental health is very important to me um because you know I look at the employee holistically right who you are at work is dependent on who you are at home and vice versa so um for him you know he has he had a few kids um he there was a lot of of stuff that he was handling on the personal side and what we were doing at uh you know at the office was really really Weighing on him in a negative way and so finally I just made the the Judgment call to say like listen you know this probably isn't a good fit right now um you know let's reattach this later on ultimately again he stayed in the military so I suppose that won't happen but I I did open it up to him and say like let's let's reapo this in the future when you're in a better space but right now what I don't want to see is I don't want to see you mentally break uh because of the dynamic nature of what you're experiencing so it sounds well I guess it's hard to tease out but it sounds like what I was going to say is it sounds like it was basically too much responsibility for somebody who never had that level of responsibility before or that sort of role um but who knows maybe it was never going to be the right fit I guess you just don't you just don't know yeah and and I sorry just to add to that you're absolutely right if if I if I had to say it succinctly it's those two things that you just said um it was too much responsibility and it wasn't the right fit for for that individual I think I actually think he would make a rockstar GM or a rockstar coo um but but being the CEO and and kind of thinking strategically and all those things that wasn't a good fit for him yeah yeah and Dominic when it's clearly not working out with him you said he was there for about six or eight weeks that's right that's right and so your child was born call it two weeks after you bought the business less than two weeks after you bought the business so therefore you know six or eight weeks into the business that your child is whatever that is four to six weeks old and this stuff is this isn't working the plan isn't working the the the your operator isn't working out how are you dealing with that the you know just the moment moment to moment of kind of probably having to be back stopped for him but then also the prospect that it's just not going to work out and you're gonna have to get in there yeah you know um and I've heard the uh the fetal position phrase yeah a few times and I was actually not that I'm excited to share that but but like it it was it is in some cynical way I suppose very humorous that I was going to be able to share that I also had one of those moments and and you're absolutely right I mean you know I had a wife who was recovering from a pregnant from a birth you know I had a newborn baby son I and then I had this scenario where um you know I had to come face to face with a very tough decision and I knew that the decision itself was tough but what was going to follow was was just as tough or or more because I had to I mean what was required was I needed to go in I needed to UNT Ang the yarn so to speak and I needed to get it reorganized um and again going back to my wife I can't say enough uh I can't give her enough praise but you know she saw it she she would come in the office and I'm laying on my floor staring at the ceiling like oh what what what am I going to do I mean I know what I need to do but you know it isn't what I want to do necessarily right now like and you know I just remember her saying like listen you know there there's a phrase that I say a lot um uh it's you know whatever it takes and I just remember her saying you know something to the effect of listen you got to do whatever it takes but the business can't fail and I said I know but you know I have obligations here and um she was like take care of the business right and so I mean I rolled up my sleeves and you you know in short order you know we got everything we got the ship wred so to speak um and yeah I mean again because of her support and that gentle nudge um you know it kind of empowered me to go do the thing I knew I needed to do anyway um yeah so yeah um yeah well we were we were kind of yeah being light-hearted about the fial position moment but that sounds like it really was I mean you were you were literally on the ground uh so that's sounds like it was deeply a deeply unpleasant pivotal uh moment here it was it was and and admittedly you know it it wasn't necessarily because of the hard work that was to come uh I've never backed down from hard work and that will never scare me but it was just the reality of I I personally want to be present for my child and for my wife who is healing and I am you know it it's that that moment where you have to look in the mirror and say you did this like it was your decision to go buy a business knowing you were gonna have a child so um you know it was one of those very hard pills to swallow that um I I just had to accept responsibility for the decisions I made um and thankfully my wife was very graceful about it the for lack of a better word failure or the fact that this operator this particular operator didn't work out does that the original Vision still hold or has it did it cause you to go back to the drawing board on the entire on the entire vision of how you'd put in an operator give him 40% over 10 years etc etc that's a great question and we we went back to the drawing board um admittedly U my uh my my right-hand man I mentioned him earlier John Stefan you know we um we we went back to the drawing board and the the reason I mention him is because he he's a 27-year uh Marine Corps veteran himself so he he has a lot of experience in understanding the various archetypes that you see uh at the different levels in the military um he's worked at every single level of the military that you could possibly work at so um really we were building this thesis together um and so when all of this took place him and I went back and we said you know okay maybe it's not necessarily that the thesis itself is wrong it's just maybe it's not a right the right time because we don't have have the what what I realize is is we don't have the um the time frame to allow a inexperienced operator to come in and kind of learn on the job yeah right again this kind of goes back to the exposure that someone with that type of pedigree already comes with they already have the toolbox and the Frameworks and the connections and the and the mentors to help them through a lot of those problems but for the for the individuals that we were looking at they don't necessarily come with those things um so they don't have a mentor they can call to and say hey have I know you've seen this problem 500 times like how did you handle it they don't have any of those thing those resources so we were the One-Stop shop for all of that which kind of defeats the purpose of what we were trying to do so um so yeah we we put a pause on it um we're currently re-evaluating what that looks like um and maybe maybe we'll relaunch it once we have a few more companies under the portfolio um but but for now yeah there there there's a pause on it and that pause means that Dominic is is the CEO that's right for for all intents and purposes um yeah I I I very um affectionately tell the team that I do not take a a title in the company um you know and but you're right you're right I am the CEO I'm setting strategic Direction um you know I'm I'm providing account oversight um again because of the GM um and what what we're doing uh he runs day-to-day operations um but but again yeah I I am the CEO and are you so you're full-time in the business maybe not there physically work from home where you can but you're full-time working in at on the business yeah I I would say if I had to categorize it um I'm definitely working on the business I'm not in the business so my my work schedule actually is built around uh around the baby right now um so you know whether that's it's like late at night or in the evenings um so it's it's kind of sporadic so I I don't know that I would say it's um a specific time frame throughout the week and the money that's coming out of the business for you Dominic so rough math the sde half the SD goes to your SBA loan leave it so leaving you with uh what was it 200ish call it and so you're able to pay yourself some significant chunk of that and then I assume 10 20 30% of that goes back into the business is that kind of the picture of the finances yeah I mean uh for the most part but right now um and and I didn't mention this earlier but I'm I'm actually I still have a W2 um so um I don't take a salary yeah there's a curveball there's a curveball yeah try to keep everybody on their toes um yeah so uh again that you know and and I suppose if you look at everything I said it kind of alludes to this but this is why I don't operate day-to-day this is why I'm not in the business dayto day uh and this is why it was so critical for me to not operate day-to-day um and so with that in mind U my thought process was again going back to my whole reason for investing off my own balance sheet I'm doing this on my own so the longer I could kind of do things in parallel the longer I don't need to take a salary um it was actually one of the major selling points for for the bank was you know Dominic doesn't need a salary because you know he he pays himself so that is what is fueling all of this growth that we're doing because I don't I don't see any of that Dominic I feel like I would have had a whole different um Direction here but not not really Let's uh but we we need to we need to get at this a little bit Yeah okay um but but but but before I leave the operator bit the 40% number yes do you feel like do you still feel like that's the right number assuming you find somebody that works out that's a really good question um I don't know that I would go back and do it the same way I think the the terms of the agreement would will definitely be different um and admittedly I don't know that I would land on the 40% yeah okay I I don't I don't know what that number would be um but I don't know that it would be the 40% it would I would have to have a um I think it would actually have to be more based on the individual um because before I kind of just made this blanket thesis like this is what we're going to do um but Having learned the lesson that I learned you know when I look out across the industry at the big players you know like Sig Sig's always a great example of this you know they're they have the infrastructure to offer a substantial amount of equity but unless I go out and raise a fund um I don't know that I'll ever be in that position to do that right um now that I'm actually looking at it um with a few months of experience not to say that that's a lot but yeah okay well and so what is the the big Vision here if you're at your W2 is it always to be growing something on the side or is it eventually you go become the CEO of the hold code the full-time CEO of the whole 100% that's the vision um yeah this is admittedly it was uh it was very much a health care thing um I didn't want to make a disruption in the health care just because of the pregnancy of the baby and continuity of care for the baby um that that was very important for obvious reasons so um but yeah the the the full vision is um is to be the full-time CEO of the holdco um with operators that are that are operating the company um you know of tying it back to what we were just talking about you know a part of the new thesis is grow from within um you know that's that's something that we pull from the military a lot of I mean every leader in the in in the you know at least in the Marine Corps is is internal right you know all of all of the leadership grows from within so kind of pulling plucking that mentality out and saying well if we're going to have an operator of a business um let it let's try to find Talent inside of the the company or let's bring in somebody um you know and Chen Mark's actually a really good example of this they have their General VP program where you you kind of come in and you work a few years in in different leadership roles and you kind of build that relationship over time and then you go off and become an operator of a business right well Dominic I'm I'm keeping my eye on time and we're getting to our time so I want to start closing out but um we do have to talk about your second acquisition and and kind of the revenue quality that you found when you got in there but one more thing just on the W2 going back to live o now and you know their reputation were they did you have to convince them that staying in the W2 didn't represent a big risk um I mean there's always uh some explanation that's required but just the nature of the work that I do um you know I'm fully remote you know it it doesn't pose an issue because I can do that work from anywhere um so so I think I think with that in mind like it made it it made more sense I mean if I had a if I had a position where you know I had to go into a specific office and I was only allowed to work from that office that would have been a different conversation yeah going back all the way back now to the nature of the business air duct cleaning the kind of very discretionary nature of it although demand is stronger than it's ever been Thanks to co um it's still quite discretionary and um demand generation you found to be difficult so talk to us now on the other side of the transaction about what kind of the quality of Revenue is in this business and yeah kind of what you found um for for the air duck cleaning or for the second for the second no for the air duck cleaning yeah yeah so you know and and I talk about it in the context of good customer versus bad customer right and this ties into the demand generation demand capture um philosophy um you know when we when for instance when you have an inbound call um specifically from somebody who does have like a say a respiratory illness of some sort um or maybe they're elderly or or something of that nature um the demand generation or yeah the demand generation is already there so the only thing we have to do is capture that demand yeah right so typically what we see is um pretty consistently uh those our sales numbers as it relates to those types of customers are are exponentially higher like on the order of two or three uh on average per sale your ability to convert those types of calls three times as high as the other type right not just that but also the average ticket ticket um price um for those are are two to three times higher as well um and so so you know the the other side of this coin is you know the demand generation when we're doing cold calls um you know and in those conversations you have to simultaneously generate the demand through the sales uh process and then capture the demand by booking an appointment so that we can actually uh you know go conduct an estimate or or whatever you know um go to on-site for that job right so that is a very difficult process and and what I've seen very consistently is greater than 90% of the time when we have an issue in terms of clo conversion rates it's generated from those types of calls right so from a strategic standpoint what what I have begun the I mean I've begun a very long journey of this but we are shifting to um things like digital marketing brand awareness uh we're kicking off a complete Rebrand for the company um we are obviously rolling this into the HVAC Suite of services uh we're doing everything we can to build the credibility of the service that we provide um there's also some very special projects that I'm working on that that tie to this um but so iice it to say that there are parts of of the commercial and industrial industry where um focusing on air quality is actually regulation based right so so there is automatically demand in that market and because we have the infrastructure of understanding air distribution and understanding um you know air duct systems installation and repair so on and so forth um I'm pivoting us to that regulation driven U type of of customer again because the demand generation already exists we just have to capture it um and that's not to say that we won't offer the services to residential customers that always will be present um but but from a from a technical capability standpoint I'm building us into a company that's focusing uh a little more strongly on that B2B type customer and Dominic when you got into the business did you find I mean were the numbers as presented the historical numbers as presented were they basically accurate directionally accurate um I suppose we could do a whole podcast on that experience alone no the easy answer is no um and the 20% year-over-year stuff no uh I mean now the 20% year-over-year was factually accurate uh the growth I mean they started out with one truck and then they grew from there so the growth was accurate um okay it was just the and again this is an opinion from a take it from as an opinion from an engineer who is naught a Salesman right um the the ethical practices of the sales process was questionable right so there was um occurrences now again this is like um you know I heard it from somebody who heard it from somebody so the accuracy of this you know there I'm sure there's a a a Delta there but um you know the it it was moments like selling things that don't necessarily need to be sold I think we've all experienced that where you have you know a Salesman come into your house for whatever type of Home Project it is and you thought it was one price you end up with some other price that is exceedingly higher than what you anticipated we see that a lot when you take the car to the to the mechanic right like you go you go in for o oil change and next and you know you're replacing the transmission so it's like uh it's moments like that where I personally felt like it was unethical so on day one I kind of I so I could sleep better at night I just like exed all of all of the questionable um potentially questionable practices that we had um and we went to a very um minimalist sell what is required do not do anything that is questionable or unethical um you know I think for at the end of the day I can I can live with us making less money if I know we're truly actually taking care of our customers and we're not just trying to take advantage of our customers yeah well what kind of reduction in Revenue did that decision represent yeah that's great I mean you know there there and there's so many variables to this it's hard to like put my finger on which one of these many decisions is what drove down uh the the revenue but you know for that first 6 to eight weeks where we had the operator there was a consistent decline in Revenue but then uh in April we actually had the the greatest um you know the greatest Revenue throughout the uh you know the course of ownership which has only been four months but still um so I think it was there was an adjustment period which is pretty typical um and then as the team got more confident with and more empowered to do the right thing and to take care of the customer and focus on customer value as opposed to just the closing sale um you know we we saw we saw uh an exponential increase um after that well and I imagine there's a seasonal aspect to this business too this in the spring is when people start sneezing because of allergies that's right that's right yeah so um really April May is I mean California is kind of weird because it's kind of always yeah it's always spring so so but we we have seen that um at least in April May there's an up Tick it it'll continue to kind of go up and then starting in like October it'll start to Plateau out um but then ironically um in November December we we've seen I've seen historically uh that there is also a slight uptick and it's because people start using heaters right and so again you're still using the the distribution system so um people see you know start using their heaters and it kind of is the same process as you would see in Spring like um so yeah yeah say uh California is kind of interesting in that that record and Dominic the kind of what you found once you got in the seat do you feel like there were things you would have done differently in diligence did you under diligence some things or is just or no you okay tell us more please 100% yeah um you know the big takeaways for me was I didn't do a q ofv um I'm almost embarrassed to say that like knowing that this is going to go out into the internet but uh but the reality is I didn't do a qov um you know which would have answered a lot of the the Deltas that I experienced in real time uh for the revenue um and not to say that that would have swayed me one way or the other but I think it would have managed my expectations a little bit better um and then the other one and this is really the kicker for me is it's a kicker specifically because my first job in the military was I was a mechanic I worked on trucks I was a diesel mechanic um I didn't actually go inspect the quality of the vehicles um now being a truck-based business you would think logically I would do that for whatever reason I went and looked at the vehicles I did like an internal inection of the vehicles but I didn't go drive them like test drive them or or look at maintenance records um not that there was any but um you know I didn't do those very specific things and so another one of the big challenges that we faced in the first six to eight weeks uh which we're just now coming out of is I replaced 40% of my fleet in the first three months um you know due to transmission loss and uh a myriad of other mechanical failures on these trucks um so so yeah that that is I would say for anybody who's listening who's going to buy a truck-based business you think Lawn Care Plumbing HVAC so on and so forth um doing diligence if you're not a mechanic yourself bringing a mechanic to to evaluate the health of those trucks so that you can better manage your expectations on vehicle replacement those big capex projects um like vehicle replacement uh I think that's critical absolutely yeah for sure you know but and Dominic to just to back to the SD I'm hearing you know this was a business without tons of sste kind kind of lowish not terribly low but lowish sste you hired your operator which that expense came and went but for six eight weeks that was a big expense it was 40% of the fleet needs to be replaced yep the revenues going down it just it feels like there's not enough money in the kitty here to make it all go now you you have your W2 thankfully so you don't have to worry about paying yourself but but even even considering that did things get tight I mean is my nain math here making sense it is 100% making sense and it is one of the one of the reasons why I found myself on the floor yeah um yeah I mean the reality is this it's you know um could I have instead of replacing a vehicle spent a couple thousand doar to fix a vehicle to keep it on the road yes but I was making bets that if I could create more continuity of operations by having healthier trucks on the road then we wouldn't see large fluctuations in our Revenue right because for every one truck that goes down there goes a percentage of your Revenue right um if you're running say four to five Crews per day which is which is right where we're at um so so for me a lot of this was making big bets very early um and and the mindset was make the big bets while you can because if you lose now and you learn when it comes time for you to take a salary or or whatever the case is you will have already learned and fixed those things while you kind of have that that Financial cushion right yeah um it would have been a completely different story had I said oh you know my family's livelihood is based on this business yeah um you know I don't I mean I wouldn't even have bought this business if that was the case um admittedly um just because of the narrow you know the the the the small you know the small margins that we're working with well that that's a that's a powerful comment that really this whole project is contingent on the fact that you had this W2 as a cushion um because it does yeah it does feel feel like things got get are getting financially tight in the business and also this concept of big bets I mean as I think about it you do seem like a guy who who makes moves here Dominic you you you bought you bought a business with the baby coming and then you make you're making these big strategic moves once you're in the business you know replacing the fleet or 40% of the fleet but also pushing into commercial uh hiring an operator and than the acquisition which we haven't even talked about so so maybe so let's close with a question about the acquisition but just before you get there um maybe we've both already said enough on the topic but am I am I right that it feels like you're really like you're the opposite of the guy who hangs back for six months during the transition to just take notes and learn that's right you're moving really fast making big changes yeah and you know and I have to say that you know uh um it's fantastic book Dan krans writes uh talks about winning moves um but Dan himself talks a lot about that very specific period where you're you're in observation mode and he actually his maybe it's a contrarian point and and maybe it's very different because he comes from PE and not so much like small business like we do but his thought process is those are the critical moments that you need to take big bets to build momentum for your company um and so when for me I'm not necessarily the type of person as you can tell who sits on his Laurels when things aren't going the direction that you know I expect them to or want them to or whatever the case is uh I'm very quick to to get in and start making decisions and you know walking through the scientific method of testing hypothesis collecting data validate all those things um and so when for each one of these different experiments if you will um I had a decision to make it was either I make it now and learn and then recover or I let this drag out and potentially don't have the breathing room to make a a big bet that might actually put the company in in a better position right so um so it was very deliberate that I said because of the position that I'm in and personally I'm going to just take those big bets now so we can learn those lessons and so we can just move on um as as opposed to easing into it observing for the 90-day period like everybody says and then kind of starting your process Improvement projects after that um you know and I was very honest with the team I said listen we're going to start running and I'm only going to speed up we'll slow down eventually um but for now I need everybody to put their running shoes on because it's it's it's time to move um and I explained the why behind it especially as we started this which this takes us into the last thing the the acquisition um but but you know uh My Philosophy is um is and maybe I take this from Tech always innovate always innovate um or else or else you'll die that's it and how did how did the team respond when you said put your running shoes on um um you know I'm very proud to say that they responded like Champs um you know it was funny because on day one one of the employees said you know the the only thing I don't like is change and we like I honest yeah and I was like well I can respect that but I'm here to I want to manage your expectations that I'm not going to be the type of person that you get along with if that's the case because change is inevitable and we have to embrace it as a company as people I mean human evolution is an example of that so change is necessary for us to continue going down the road of success um and so you have to embrace that and and I told the management team like listen Maybe not everybody's going to be here in six months uh or some of these people aren't going to be here in six months because they're not going to be comfortable with this but we need to focus on having the right people on the bus so that when we get to our destination you know we're successful um that's what it takes is having the right people on the bus so the mindset was if people want to leave I respect that wholeheartedly I will help them go find somewhere else to go but this is the direction we're going the decision's been made it's just now it's just up to everybody if if they're going to make the decision to get on that that ride and and ride it with us or you know they're going to get off um that that's yeah so um but but for a vast majority of the team they Rose to they they Rose to the occasion and they're still rising to the occasion uh Dominic what was the book that you referred to who the winning moves winning moves winning moves fantastic book all right Dominic close us out with um a little bit about this acquisition the second acquisition yeah yeah and I think this one's uh short and sweet um small deal total project cost was 600,000 it was a four-person team it actually did have the key man um key Man issue of the owner was also the lead hbac manager if you will and the install manager and the estimator and all the things um he ran the back office and everything but the beauty of of executing the strategy the way we did um is we had the infrastructure in place for us to be able to tuck in a small company like that um and so um yeah so a little bit about the numbers again total project cost was 600 we did the same s uh SBA 7A loan 10% down for this deal um you know gross profit margins were right at 54% um sde was right at 270 a year um and annual revenue was a little a little under 850,000 um for this deal um the makeup of the customer base was 70% residential 30% uh commercial um and those commercial customers had had been with the previous owner for over 10 years um was long tenure this company was started in 1993 um so so this individual has been doing this for forever and so this move gets you in the HVAC game you are now in the HVAC business that's right that's right so we we are a full Suite residential and Commercial HVAC installation repair and service company uh we also do air ducts and furnaces and and the like um we this also took us into the Orange County Market um so this exposed us to a whole new set of customers um um and so we we actually run two sites right now we have what I call our headquarters down in San Diego and then we have the site up here that it's just a small unit with uh with some equipment and our trucks uh that the Orange County team runs out of uh every day um so yeah and do you I'm curious do you now lead with like when you kind of when the company self-identifies does it lead with HVAC or does it lead with airduct because HVAC of course is where the growth is going to be but air duct cleaning is still the the more than you know the majority of the of the revenue of the business and the history of the business it was it was the platform and the HVAC has been bolted on yeah um so how do you how do you kind of position it in your own minds yeah so we and this is actually very recent uh over the last month we have repositioned ourselves as a residential commercial HVAC contract Contracting Company um who who also does air duct cleaning um so so I've I've kind of flipped it even though the revenue doesn't necessarily match um the story um but I flipped it because of the type of customers that we' started working with um and and people will see this on social media to come out there's some very large customers that that we're working with in the co commercial space that we've landed over the last 30 days um that is going to take us into commercial HVAC um installation and maintenance um and so air duct cleaning again is an an is not an ancillary service but it's an additional service that we can provide to these larger customers as well um and again this goes back to the philosophy of and I think if you talk to any air duct cleaning uh business owner they'll probably talk about this to some extent um It's The credibility of an eight of an air duct cleaning company right so when you're an HVAC company that does air duct cleaning The credibility is already established um people trust HVAC companies but when you're a air duct cleaning company because people don't truly understand it sometimes you're viewed as a scam um so so you know in the community community leadership is a big thing for me in the community um you know it was very important for me to be able to have our team be proud of saying who they work for and and us to be able to talk to our customers about all the services that we do um and and I think it's Landing quite well with our customers um we're seeing we're seeing really good relationship building happening out in the community so the there's more Prestige for lack of better word around HVAC as a category than air duct cleaning yeah in the consumer's mind it it the air duct feels maybe a little sketchy HVAC feels solid Dependable robust not weird exactly yeah and I think it comes down to visualization like it's easy to go outside and see your unit yeah right it's there but it's hard for for someone to tell you hey there's like this piping in your wall and it doesn't leak water right because you can see water it deals with air which you can't see and I'm we're going to make that air higher quality like that that sounds very magical right so when when you say that to people there's a lot of skepticism around it and and so yeah to your point I think HVAC it it comes with the industry itself comes with its own uh its own legacy and its own Prestige that kind of erases that problem out of uh out of the customer's psyche fascinating well Dominic I do want I have one more um kind of meta question for you so you are in a W2 and you bought a business on the side and it seems and and have had real challenges yeah real challenges but see you seem to be making it work and indeed you've done a second acquisition you've made all these big strategic moves so you seem to be making it work now I like to caution people dissuade the fantasy that some people might have that they can buy a business on the side while they you know aren't the full-time owner operator um and so so you're you know you are a counter example of that somebody who's making it work but I'm also but I but I'm I'm not that doesn't mean that I lack confidence in my assertion that people should probably expect to be full-time owner operators in the business they buy but so but just address that H how how do you think people should interpret your story that they should INSP aspire to do what you're doing or do you actually share my kind of my kind of advice that people should basically expect to be owner operators and not have a do this only on the side yeah that's it's a it's a great I'm actually glad you ask this question I think the the phrase goes something like this uh necessity is the mother of invention mhm right um now had I had again I I'll go back to my background had I had the the pedigree um had I had the network um the the um credibility you know I wouldn't do things the way I do things now because admittedly I think we can all say we all have the same amount of time in the day you know um and I choose to spend a lot if not most of the available time I have um that is considered free although I don't consider it free um and invest that into building this company right so to your question specifically would I recommend people do it absolutely not you know if if you and and that's just me being transparent right like if you have the if you have the resources both fiat currency and time if you have both of those resources at your disposal and you have the ability in your life wherever your life journey is um to go do that full-time I wholeheartedly say go do that full-time you know take that step go work in your business roll up your sleeves go on rides with your crew do all the things um for an individual like me who I'm building my own credit ability I I did not take on investment dollars um I had a new baby on the way um so I needed to maintain continuity of care for my wife and child like all of those things I mean that's circumstantial right so but I will caveat that with you can't Al you can't allow your life to stop you from progress you you have to continue progressing and growing and achieving the goals that you want um that doesn't mean it won't be hard for you you know depending on your situation but you can't let it stop you that's great Dominic well I feel like you could get questions from all manner of people people who are in their W2 wondering about doing this people who are looking at HVAC people who are looking at air duck cleaning uh former you know vets I mean you you you touch on a lot of different uh types of people here Dominic really cool how can all these people reach out to you or how do you prefer that they do yeah yeah uh LinkedIn is kind of my go-to uh admittedly I'm not great at at Twitter or X um you can reach me at at Twitter as well um I presume I can give you the the handle um we can add that in the show notes but yeah um we'll do that yeah they can find me on LinkedIn as well those are those are my number to Great well there aren't I don't think there are other Dominic Blues out there it's a it's a great name an unusual name so also easy to search for you um all right well what a what a fascinating what a fascinating story and uh curveball I kind of liked that you gave me a curveball in there keep me on my toes so but it it sure enriched the conversation so um thank you sir for coming on and sharing so transparently thank you so much for having me will I really appreciate the time I hope you enjoy that interview make sure you subscribe to the acquiring minds Channel below we are now publishing twice AEK week so tons of new interviews and stories to come stories that will help you along your own path to acquiring a business