Joe Soulberg, welcome to Acquiring Minds. >> Thank you very much for having me, Will. Great to be here. >> Joe, you've acquired two businesses. We're going to spend most of this conversation on the most recent, but there is much to be learned from acquisition number one as well. You yourself learned a lot from it, and then that informed how you went about acquisition number two. We'll get there. Let's begin with some background on you first, please, Joe. Yeah, absolutely. So, uh, growing up in Seattle, my dad owned a cabinet shop, so owning a small business, um, seemed like the most normal thing in the world to me from day one. Um, when I went off to school at BYU, came to ways for looking to make money. Um, kind of defaulted to what I knew. I started a marketing agency with a friend of mine. We sold oil change cards doortodoor. So, um, at first we were doing the selling and eventually we hired a team. Um, but that got me through school without any debt. Um, >> after graduating had a short, uh, W2 stint and then did sole proprietorship/independent contractor work in medical equipment sales for a bit. That lasted until I went to business school at IU. Uh, Kelly School went through the full-time MBA program with an emphasis actually in entrepreneurship. learned from uh the legendary Don Karatco there. That was great. Loved it. Um directly out of school though, I went full corporate. I joined GE in a two-year management training program. Can't get much more corporate than that. Um I then worked at GE Healthcare for another two years after the rotational program. So four years total GE. then transitioned to another corporate gig um at a company called Dover for three years. All seven years in corporate was very um functional roles. Um at Dover, however, I finally got up the courage to ask, hey, you know, I went to ask my manager one day. I remember, hey, what what do you think is my path to managing a P&L or how how soon could that happen possibly? Um and when the answer was like you know, decades, maybe never. You know, >> the answer was laughing in your face. >> Exactly. Exactly. Yeah. That was that was kind of my sign that like maybe I'm not in the right spot. Maybe I have to go. So that was like 2017, 2018. Knew absolutely nothing about buying a business at that point. But my my headsp space, I had a lot of friends who were dentists. They had gone to dental school and bought a dental practice. And so I was like, well, I went to business school. Maybe I could buy a business. Um, started searching online fairly quickly. Ran across search funds. Uh, read everything I can get my hands on, the HBR guy, the Stanford studies, all that. Actually ended up talking to um, Irv Geck on the phone, kind of the granddaddy of search again. >> Now, tell us who Irv Geck is for the uh, uninitiated. Yeah. So, this is um a long time ago, like like back in the kind of 90s, early 2000s, Irv Gbeck um sitting at Stanford um really initiated the whole model of um search fund. Uh the idea that, you know, you could you could have a a skilled individual go out and search for something to buy, but that that process could be um kind of helped along by investors essentially and and launched the first search funds, been uh super successful in that space as well as from an academic perspective, he was a professor at Stanford and so from an academic perspective laying the foundation of all of that and then in the years since has um added study upon study upon study. He's now um retired but uh there many many years of study. So Stanford has the longest list of hey here's what search funds looks like here's what has happened to search funds from a financial perspective and all that. though. >> Um, >> yes. And and he's also, I think, uh, associ, but that he was kind of, you know, part of the the center of the search fund ecosystem there at Stanford >> for years. So, he's associated with Ashuri and I think he might even be one of the investors in Ashuri and in a lot of the kind of the big names that you'll hear um out of Yeah. early search fund days. Um, you know, it's funny. Um, well, I'm I'm stealing your thunder here a little bit, Joe. You're gonna about to tell us how you called him and he picked up. You're actually not my first guest who had that experience with Irv. I think >> Mike Curry early episode, this would have been back in 2021 or early 22 that we talked. He also I think it was Irv whatever when he was researching this picked up the phone and called and got Irv and had and had this very encouraging conversation with Irv. So it so kind of um uh pretty incredible but >> that's I jumped ahead. >> No, no, you're you're good. I mean that was Yeah. So that was uh what 2018. Um and and yeah, exactly like you say, picked up the phone, great guy, more than happy to help. Again, at that moment, I really had no idea. In the years since, people being like, "What? You talked to V? That's crazy, you know." So, u very fun. I ended up visiting a few investors here in Chicago um out in the Bay Area as well. And um ultimately decided to >> do a traditional search. So, you >> do a traditional search. Yeah. Yeah. um but just decided for various reasons that that model wasn't exactly for me. Um I think retaining control and um a a large chunk of the ownership um was even despite the fact that I had to look at something that was much smaller was really where I wanted to land and so I ended up going self-funded. Um >> why why there Joe? why bigger slice of smaller pie was more appealing to you than smaller slice bigger pie. >> Yeah. So, initial search, I just felt like, okay, I'm not I'm not raising any funds. I don't want to put anybody else's dollars at risk or anything like that. I'm going to put my own dollars at risk. Um, so that was part of it. Um, I I felt confident, but at the same time, I just I just kind of didn't want to have that additional layer of of uh of worrying about somebody else's money. Um, and then also >> it was just really kind of the ownership thing. Um, I knew that, you know, you max out at about uh 25%ish of of ownership at the end of the day um with the traditional model and it just felt like that wasn't enough. The reason I was kind of risking it all to get out of corporate was to own something. And so that was that was really something I was after. >> Thank you. Carry on. >> Yeah. So really that was that was how I got into it. I mean, I reached out to a whole bunch of um brokers, started receiving sims pretty quickly, and um and became apparent that I needed to dedicate 100 kind of all of my time to searching rather than um the corporate job. And so after a challenging, crucial conversation with my wife, um uh walked away from from the corporate gig and and shortly thereafter kind of ran across um Sunny and Ash that we'll chat about. Um, and that was that was kind of the genesis of the first acquisition. >> Well, I think I might be more interested in this quote challenging conversation with your wife. >> Oh my gosh. Well, I mean, you know, uh, she she brought up so many good points, you know, that that, hey, how are you sure that you're going to find something in a time we didn't we didn't have, you know, a million bucks in the background? Plus, I needed to use some of that money to buy the business. I was self-funded, right? So, it's not like we had unlimited funds. Um, she's like, "How quickly are you going to find something? And how are you sure that what you're going to find is going to work for us? And how, you know, all of these questions of what about, you know, what what's this going to require of us?" And then I had to tell her that it was probably going to require a personal guarantee. >> That was rough, you know, and so it's like, "You mean everything is getting tossed into this one bucket?" I was like, "Yeah, pretty much." It's like, "Isn't that exactly the opposite of everything that they taught you at business school?" I was like, "Again, yeah, pretty much." You know? Uh, >> so was there something that you said that ultimately persuaded her or was was she just basically going on ultimately going on her trust and your ability to pull this off? >> She kind of was. I I think what she saw was that um that bit about hey look I'm never going to get to manage something if I stay in corporate or it's like not likely. Um and she saw how >> ultimately we're a team you know and and so she saw to her credit she just saw how kind of frustrated or sad that made me and was like well that's not going to work either. So, you know, is it is it more stable or at least has the uh mirage of being more stable? Yes. But, um is that where we're going to find happiness? Like, probably not. And so, you know, um I'm just lucky. I'm lucky to have a partner that I have, you know. >> Well, it's also um yes, great she ultimately supported you, but also great great that she stress tested you. uh you know it's it's good to have this idea this crazy notion put through the ringer and and have somebody push back on all all of your crazy notions. So um >> so yeah so good honor in both ways. >> Great. >> Sunny and Ash, you were about to tell us about business number one. >> Yeah. So the way that we uh that I that I found Sunny and Ash um it was a broker deal. Um I they uh they sent me that that sim. I saw that uh come across cuz I had reached out to about a 100 different brokers, was looking through a lot of different um sims and and investigate a lot of different businesses. This one uh the this first acquisition was primarily a financial decision. I mean it was it had to meet certain financial characteristics. Uh the owner had to be willing to the way that I knew I had to structure it, the only owner had to be willing to do some um a seller note. I was going to do the the um pretty standard SBA 7A. Um and uh so it had to be of a certain size. I wasn't >> what give us give us those criteria those more specifically. What could you afford? What were the numbers you were looking for? >> Yeah. So it had to be kind of top line between um 1 to 2 million um and then and then bottom between you know probably low end maybe 250 all the way up to maybe 4ish uh somewhere in there four or five 100,000 and um geographically I was not constrained. I happened to find something in Chicago, which is great because we love it here. But um but uh I I realized I had to kind of leave that wide open uh if I was pretty specific around the financial side. I had also left in large part the industry fairly wide open um as well. >> So on the geograph geography the geographic constraints or lack thereof. So you you were willing to move? Yeah, we would have moved. We would have moved. >> Okay. Oh, so that was Yeah. One more thing in that conversation with your wife. I'm doing this and oh, by the way, we might move to do it. >> Right. >> And interesting, too, because that's one of the reasons people often don't want to do a traditional search. >> Um, and you um they they like the geographic freedom, which usually means staying where they are, of doing a self-funded search. But in your case, actually, you that flexibility remained open to you. What I just heard you describe, by the way, um, reminds me of Sam Rosat's big three, little two. So, we think about the big three are industry, size of business, and location of business. And if you're really committed to one of those, and in your case it was size, you got to you got to be looser on the other two. So, you were committed to a certain size, so therefore you had to loosen up on industry and on geography. Um, I will say Joe though that the size your size was small. So actually >> I guess your I guess really what your size was was small. You didn't want to go too big like you wouldn't have gone you were you had the kind of opposite of what most people which is they have a floor. You kind of had a ceiling. >> I kind of ceiling. Yeah. Oh, absolutely. Yeah. Yeah. Just because I was I was resource constrained, you I mean, I just I just didn't have it to both fund living, you know, for for the time during my search and also then at the end of the search, I got to acquire this thing. I didn't bring on investors. So, uh yeah. Yeah, we were limited for sure. >> And and you weren't open or didn't know you could bring on investors for a for an SBA style deal or does this go back to the ownership thing where you really wanted 100%. No, that's a good point because I would I would have been fine, you know, settle for like 80 uh 80 or higher, even 75 or higher. Um but yeah, I don't think that I I don't think I understood that 100% at first. We did, you know, we'll get to it, but for the second exit, we did um do some investors. Um um and yeah, I just I was not aware that that was even an option. it I thought traditional or bust, you know, like that it's all gonna be me or or or not. So, um >> yeah, I just kind of didn't even look into it. >> Okay, back to Sunny and Ash, a 3D rendering business. Um tell us about it. >> Yes. So 3D rendering is uh our our you know most of our clients are like uh interior designers uh uh developers uh architects anybody that needs to show what something's going to look like but it's not built yet. So in that case even um even product folks we'll need renderings of products things like that. So it's just this photorealistic uh image of a product or a building or kind of anything um that they need to show to you know investors, a zoning committee uh you know uh owners uh in the in the case of designers that are going in to um design something. They need to show the owner what it's eventually going to look like. Uh that type of thing. So you see renderings sitting on the outside of uh like construction sites a lot. Um >> real estate really is the classic use case or or I should say develop real estate development where it's like this is what the building is going to look like >> the exterior but the interior as well and go ahead. >> Yeah. Yeah. Absolutely. Yeah. Yeah. Interior exterior. Um, you can do walkthroughs of the space, you know. Um, the idea being, hey, if we have this, you know, if we don't have to wait to to show people what it's going to look like until it's built, um, then we can pre-lease, we can, um, get the money to do the project in the first place. You know, all sorts of reasons why renderings are necessary. >> Great. Okay. So, that was the service offering. And so, give us a picture of the business itself. Yeah. So, this had been run by um uh two cousins, which is the reason for the name of the company, Sunny and Ash. I tell people it's it's not a 70s cop show. These are actual people. >> So, Sunny, Sultani, Ash Muhammad. Um, awesome guys. Still talk with them. Um, Sunny more more than Ash, but probably oh, I don't know, every couple months or so. Still talk to them. And the acquisition was like six years ago. So um so just awesome guys. Then they had done a good job setting up this business. Um Sunny Ash had founded the business. He called it studio rendering. It eventually became Sunny and Ash. Um but he called it studio rendering because he would sit in he was going to architecture school and he would sit in the architecture studio and do renderings cuz he was all his classmates were like, "You're awesome at this. Will you do mine?" and and he was starting to like collect some architecture clients and stuff like that. And so instead of instead of going to be an architect, he was like, you know what, this is my gig. And so he started that company. Uh he later brought on his cousin Sunny who has some more business experience and Sunny was able to grow it and they they really then started focusing a whole lot on um hospitality design uh which was a really successful direction for them to take the company. And so that's, you know, a few years on then that's when I um acquired it and was a large part of what the company was. >> And and so what were revenues at that point in headcount and kind of um you know be behind the curtain of the business? >> Yeah. Yeah. So I I bought that business for uh about 1.5 million. Um the structure was uh 20% uh seller note uh 10% down and then the rest on the SBA 7A. Um the revenues for the business uh the top line was about the same a little under it was uh about uh 1.3 million. Um the bottom line was about 400,000 and um the uh the headcount at that time was let's see we had eight I believe one sales guy um Ash stayed on Sunny stayed on for a transition of a couple months but then um he um rode off into the sunset uh and then Um, and then the rest were uh artists, 3D artists. >> And those 3D artists were in a studio. They were distributed around the world, virtual. What >> they were a little bit of a combination. So um so the the seven or eight that uh I I should say there were additional um freelance artists that worked over in um Sunny and Ash have a um family history. um in Bangladesh um uh they didn't ever live there but that's their their ancestry and so um so they had opened an office in Bangladesh and so they have uh there were at that time probably a dozen artists over there as well um that were helping out with some of the work and uh we did have a physical studio in Irving Park neighborhood in Chicago uh at that time um this was March 2019. >> Okay. All right. Well, as I said, we're not going to spend a ton of time on this acquisition. Um, so I just want to pluck out some key features. >> You you ran the business so March 2019. So we we know it's around the corner. >> Yes. >> Um, it did really well during COVID, right? >> Well, eventually. So, so as I mentioned it was based on or a lot of the business was hospitality design and so when co happened what happened with hospitality you know it cratered so the business absolutely cratered as well. I mean, everybody was like, you know, we were halfway through projects and they were like, "Cut it. No, never mind. Forget it." And and then and projects were just nothing dead. And so what I had to do was just go out and find, "Okay, well, what is hopping in in the middle of COVID?" And the answer was um home furnishings was going crazy because everybody was sitting at home, right? So >> um so I went to a lot of the home furnishings um outlets. I mean, just think anybody who makes uh makes furniture essentially, Wfair and all these this type of company and they all needed renderings of their stuff. So, instead of doing renderings of rooms or buildings or things like that, now I'm doing like pieces, individual pieces. You know, here's a rendering of your couch, here's a rendering of your TV, here's a rendering of this piece of, you know, this artwork or whatever. and um rugs and and any kind of home furnishings item that you can imagine. Teeny tiny dollars per item and they want like thousands of items made, right? So, it really changed the structure of the business quite a bit. Um we had a lot more people that we hired over in Bangladesh. Uh we had gone completely remote during that time of course. Um ended up getting rid of the office completely. Um and so that then took the business to yes eventually um higher than it had advant you know then you had some record-breaking uh sales but but um but yeah I was nervous for a while for quite a while. >> So so the time before you figured out the new market to serve >> co starts scary. Yeah. Did revenue kind of drop to how bad? Like at its at its lowest half. >> Wow. >> Yeah. >> Were you did you have to come out of pocket to service your SBA loan? >> So the only reason why I I didn't is because at the same time you recall everything was shut down and the government said, "Okay, this is, you know, we're we're shutting everything down." But at the same time, they gave forbearance. Um and it was it was forbearance of everything. It was it was not it was not like oh interest will continue to accumulate. It was just forbearance and and anybody with an SBA loan will recall that uh that time with happiness and glee in their hearts you know. So >> uh so yeah that saved saved the business honestly um uh that that there was that for parents. >> Yeah sure. Okay Joe. Uh so and then so you pivot the or you go after a new market for the business and what do you get revenue to revenue to kind of as it's at its peak and if you're not there now maybe maybe it's at its peak today but um give give us a picture of how how much that business has grown. >> Sure. So that one is 2 million is the is the is the peak and and about where we're still at. So it's not a not a massive growth story over the over the last few years, but um maintaining that the the good news was you get that surge of home furnishings work um and that took us up to that level. But then after that all of the hospitality came back and so you know be fantastic if it was like oh and that just you know continued the surge kind of the the wave kind of crashed on the home furnishings not completely but um it's died down you know so so almost it's sort of like leveled out uh essentially those two things and so um >> so hospitality is a great place to be in um until this like weird black swan event, you know, but I still like it. I mean, it's it's it's it's a good um it's a good place to to be. Um senior living is is an area that's maybe a little less uh you know, kind of cyclical or or or subject to kind of these downturns and stuff. So, um, doing a lot of that as well in the rendering space. Um, so, uh, yeah, that's been good. >> And you ran the business as its owner operator during this time, >> right? Right. Up until like, uh, 2023 is when I when I hired a manager for it. >> And tell us what that looked like. Why did you why did you hire a manager then? And what does your involvement look like today? Yeah, essentially I um I I wanted to start looking for another acquisition. U there were some things about that business that uh a lot that I liked but a lot that I also learned and felt like okay I would maybe do this a little bit differently um with a with a new acquisition. And so I same story as first time. It was like, hey, I know that searching for something is not really a part-time job if you want to get it done right. And so I'm going to need to offload much of this work if I can. And so I hired a a manager. She's awesome. um she is uh kind of comes with a design background and so she really knows how to speak that to the designers um in that world like much better than I did uh and um and does a great job at at all of the um client management and all that. So amazing. she is able to pull um you know my my involvement with the business now is uh about I don't know probably five hours a week something like that. >> Wow. And and how much is it earning for you? >> Oh we're at about it's about margins are fairly thin on that one. It's about 200. So 200. >> Say that again. >> Little under. >> Little under 200 to you for 5 hours of work a week and still own still own the business. >> Yes. Yes. That one is 100% owned. Right. Right. >> Okay. So it it's not it didn't make you a millionaire. >> No. >> But that's a pretty great outcome. I Well, I would say you know I mean I think most people listening want their ETA path to make them singledigit millionaires. Well, preferably doubledigit millionaires, but I think there there there's a reliable path to single digit millionaire dum and um and maybe one day if you sell this business that will be your story. But it's not yet. I hope so. >> Still though, still though, I think that it is worth celebrating whatever 180 a year for 5 hours of work a week in a business that you still are the full owner of. Do you feel similarly or not? Yeah, I absolutely do. And especially because it's allow, you know, without that I'm I'm never going to buy point B for sure. Um, so so at this point, I mean, point B is what's taking up most my time. It's what I'm most excited about and all of that, but but without Sunny and Ash, it's it's never going to happen. And so, um, yeah, I love it. I I I think you're absolutely right. I I think of it as a success story for sure. um >> enjoy the business. Eventually would like to sell it. It's probably I don't know 18 to 24 months away, something like that. Um if we can get it there. So, >> and Joe, how this superstar of a manager that you have so often >> um you know, finding that person that you can fully trust and that can really run a business for you on your behalf, >> uh is difficult. So any anything you learned from finding such a great manager in this woman? >> You know it was interesting. Um she is somebody that had consulted with me um on I mentioned she's got a background in design and so she was somebody that had helped out before. A lot of times in the rendering business you have somebody that will many times you have people that will come and say oh here's here's the entire design of the project. here's they give you everything which is exactly what you need but often times particularly with developers you get somebody that comes and says oh I I need a rendering and um you know so go ahead and do it you know and you're like well you got to give me some stuff like I need references you know and and so you have so so this was somebody that I said some on on occasion we would use her with some of the developers and say hey um if you don't have design inhouse. This person can design the spaces and is that okay? And usually they'd be like, "Yeah, please." You know, and so I would I would use her services as part of my quote, right? Um and she was just so good at that to the extent that I felt comfortable having her on client calls and like interacting 100% with the developers. And eventually it just became like, "Hey, I got an idea. Let me float something by you." you know, and she was like, "Oh my gosh, that sounds amazing. Yeah, let's do it." You know, so um yeah, that's kind of how it developed. Well, to segue us into point B, which is where we're going to spend the rest of our time together, >> let's hear more about what you learned from the experience of Sunny and Ash uh and what you I guess didn't like really uh and and what you set out to find in the next chapter of your acquisition career. >> Yeah. So the the stuff um that comes into Sunny and Nash is really 100% projectbased. It's we have one or two clients that are a retainer and we're eternally grateful for those. Um but uh but by and large it's it's all project based and I wanted to kind of turn that on its head with my next acquisition of of something that was you know more recurring. um just the tail's oldest time, right? Um it just uh is more, >> you know, for all the reasons that everybody does. It's just stability, but when you're actually running it and sitting in it, it's not theoretical anymore, you know, you you really feel it like, oh man, I wish I didn't have to chase so much, you know? So, um so was definitely looking for that. Um um and I wanted uh something in the uh advertising space um that that industry um reason for that is just that uh that was my I didn't I don't think I mentioned it but that was actually my undergrad at at BYU was I was I was an advertising guy um and had never touched it since then but but really like it uh like the space and like the space now because um digital marketing is a is an area uh that continues to be growth. It's it's you know way out of its hockey stick growth time but still um significant growth in the industry as a whole and so I think you have some strength there. Um, but also it's an area where every single business needs advertising, marketing of some kind. And so, great place to be from a B2B standpoint. Um, you can approach anybody anywhere and they'll be like, "Yeah, we need to do marketing, you know." So, um, that's that's a plus I feel like. >> What part of that of the marketing puzzle offers recurring revenue opportunities to you business buyer? Yeah. So the creative services part specifically. So thinking of you know you're generating a a brand or refurbishing an existing brand or you are creating collateral for um any business or you are generating uh the look and feel of a website or um anything design related. um all of that uh will often time, not always, but often times slide into a retainer relationship. They'll know, you know, businesses will know, hey, we just need a significant chunk of this done always and and forever. And so you'll say, well, you know, here's here's the, you know, $10,000 a month, $20,000 a month, whatever it is. Here's your retainer. And then um typically what we'll do then is hey sometimes we'll be doing more work than that for you on a monthly, sometimes less. And so we just keep a balance, right? We keep a balance and then uh quarterly or even on some businesses yearly we'll true up uh essentially and >> and send them an invoice or if they're like hopefully this isn't the case but if they are um you know, very frequently lower than their retainer, their usage of our services, then you know, we adjust the retainer or uh in rare cases like send them send them a check, you know, like, hey, you you just didn't use us much this year or whatever. Um, >> and so that's that's really kind of what that looks like. >> And so what it is is this retainer model. So say$10,000 $20,000 a month, I think you said something like that. Yeah. >> And really what that is is is um just capacity that you'll give to them to in effect do projects. So it's still project based work if not project based revenue. So it's a bunch of mini projects. They you know they they send you an email and say hey we need a you know a new piece of collateral for X event we're going to. So little projects that are covered by the retainer. And really the retainer model is probably an invention of service providers to get some sort of recurring revenue relationship with customers instead of constantly doing little little mini projects invoices flying back and forth sort of thing. Um >> and you see it of course not it's very common in in marketing. So that I think feel like that's where we hear about it the most. But legal legal firms, right, will do retainer retainers a bunch a bunch of kind of B2B services industries will will have a retainer based revenue model, right? >> Oh, exactly. Right. Yeah. Yeah. Yeah. You mentioned law firms. They they operate much the same way. For sure. For sure. And you know, there are certainly parts and pieces of what we do that are that are um you know, non-p projectbased. I'm talking about like SEO and PPC work where there is a payment from us to another vendor um uh on a monthly, you know, where we're paying Google to to to get that right and to make sure they come up in search or we're paying Meta to make sure they they come up in socials or or or YouTube or whoever. Um, and so there's that and there's kind of like a layer of of um of uh of of additional for the agency on top of kind of what you send out as well as a management fee for hey, we do your SEO and PPC. So that's just a standard per month and we don't some of these things we don't necessarily measure against the hour, stuff like that. But but those are very very productized and um very specific you know specific price levels and all that. Um whereas yeah like the majority of the work that we do is this more to your point projectbased work you know that they just have ongoing projects that they need us working on all the time. >> Jump ahead for us and and and relieve the suspense. Is the revenue quality uh what you what you hoped it would be in point B? >> It is. And the re I I think the reason for that, you know, as I was doing um the due diligence on this deal, uh there's some things that you look at um and you you like a deal or don't like a deal. Um but but weirdly, it doesn't necessarily enter into what you pay for the deal. and and by I'll I'll kind of tell you what I mean by that. So this the example that I use is something that I really liked which is um saw lots of potential to get additional share of wallet um in this deal specifically going to bring up this um this industry again that we talked about in the rendering firm but the um senior living space. Um, so lots of activity in the senior living space right now. Um, including acquisitions and um and just expansion of of existing projects, stuff like that. Um, for obvious reasons, just it's demographically driven, right? So, um, this particular space there's lots of um, well, for each community there's an owner and an operator. Um, sometimes they're the same, but often times they're different. And um some of our clients are, you know, we have some of each, some some owners, some operators that we that we work with, but we were doing um we were doing like maybe one or two communities for them. So when I say you can't use but they have many many communities. So when I say you can't use this as a basis of what you're going to pay for the business because in the past, you know, you buy a business on what what it's done in the past, this isn't, you know, you don't want to say, "Oh, well, the future is bright. You can this could be infinity business, you know, whatever." Yeah. Well, I'm not going to pay for that, you know? I mean, like, I got to go out and get it if that's what's going to happen. But >> that's the value that you're going to bring, not not the value that the seller brought. >> Exactly. Yeah. Exactly. But looking but you do want to look at that, right? You do want to say but is there what is the value I can bring? So um saw a lot of that saw where you know they were kind of they were kind of testing the waters and and having fun and dating a lot of senior living sites but none of those sites had decided to marry them yet. You know I mean like and and in the years since acquisition or 15 months since acquisition sure enough that's kind of come to fruition. and all these sites are like, "Yeah, let's uh let's go exclusive. You know, you can you can do all of our communities. You've done a great job. We're we're all full and you know, we're really happy with how this has worked out and we're renting at at rents that are higher than we've ever done. So, this is great." Um, and that makes a big difference because maybe we used to do two or three of their communities and now but their full portfolio is like 10 or 12 or more. Um, and so it can make a big difference. >> So to be clear, uh, with the dating metaphor, uh, they basically had a p a good pipeline of business already that was already in the works >> and some percentage of that business would close under your ownership. You you you you forecasted. >> Yes. Yes. That was the thinking is that they they had a decent so they had a decent known pipeline for sure of of like hey here's the stuff that's already committed. Um but yeah they also had you know you can extrapolate a little bit and say yeah but if if this goes well what else what else will happen? What else could we get? and and the answer was like chances are decent that you get quite a bit more, you know, um and and yeah, that's what's come to fruition. >> Great. Going back to the question of you wanted to be in marketing, you had actually dialed in specifically where you wanted to play, hadn't you? >> I had. >> And what And what was that? And what was your thesis there? Yeah, the thesis was um an agency with a specialty in branding and that was um really for a kind of two main reasons. One was that everything just comes off of brand. You know, you once you have a brand, then you need a website and then you need to promote that website and then you need collateral to support all of the work that you're doing with clients and on and on and on. But it all starts with brand. And so if you've got a agency that uh specializes in brand or is known as being a great branding agency, um then then that's just kind of your flywheel and everything else. You know, you you can now pitch those same clients on uh reproduction services, uh you know, printing, we'll print all your stuff for you, we'll do all your media planning and placement, etc., etc. So that was one reason. The other reason was that a branding agency really makes for a good flagship business. So the reason number one was like great for organic growth, increasing share wallet etc. The second is it's great for um the acquisition based growth. Um, so, uh, as a as a as a flagship that, uh, will lend its brand or easily that others can tuck into and sit within. >> Um, it it makes a lot of sense. Um, and I like >> So, if you're if you're a if you're a a marketing business that does, you know, social meta ad placement in Google Ads, you're not likely to go out and buy a branding agency. Nothing's impossible. But it's it's much more natural that a branding agency would tuck in the reverse. A branding agency would in fact tuck in a business like like a uh a PPC business. >> 100%. Yes. Exactly. But Joe, isn't the flaw of this vision that businesses only get branding work done once, maybe twice in their lifetimes, you know, and the the second time would be a rebranding, but that, you know, most businesses are loathed to do that because they have to chuck out so much of the branding brand equity they they've built up sort of thing. >> Yeah. And what that No, you're exactly right. and what that ends up looking like. And and yes, there are uh rebrands, you know, to your to your point, they're just so so few and far between that that you can't build it around that. But what ends up making making up for that, and I'll I'll use um that well, kind of two things. One is that I'll use an example of we have one of our clients is um Dickies the the workware. >> Sure. >> Yeah. Yeah. Um, so we ended up doing so they have a lot of different um uh products obviously as as as everybody knows and and so there's some branding associated with some new product that we had done for them. You know, they're not messing with the Dickies brand obviously, but they needed some branding for a new product, right? But what that led and so that was that was one and done to your point. I mean, it's it's like, okay, the branding's done, but what that leads to is then, oh, now we want to keep you around for we've got another new product or another. So, it's reoccurring revenue kind of because they're they're digging what you've done and they're going to bring you on for all new project business or all new products that they're launching or they, you know, they need some creative work that's maybe not u branding specific, but it's still creative work like like we recently did for them a gigantic photo shoot uh that created their lookbook for their entire new season. Um, and it's this like thick book that you can leaf through and you know, we arranged models to come to this warehouse and do fake like they work and stuff like that. You know, they actually got dirty. >> Beautiful people doing blue collar work in Dickiy's pants or whatever. >> You na you Yeah, you nailed it. Yeah. Exactly. Exactly. So, so but it's a gorgeous lookbook and and and um a whole site that we built for them around that. It's really pretty. Um and so that's that's the type of stuff that it leads to eventually is, hey, we need we need this other book that may not be a recreation or rebrand or a brand new brand, but it's not nonetheless work that they need done. >> Yeah. Yeah. Okay. And and what about in like a small business context? So Dickies is a big brand but what about some new you know some small business traditional small business are you did were were you also thinking about the that idea that you know do the brand for them and that leads to other work with respect to a small business or were were you envisioning visioning corporate clients being the target market? really we are kind of trying to focus in at this point on the on more on the corporate clients but this the way it works with small business is they absolutely may not need branding again for a minute but where where we hope they trust us is with that um SEO PPC work or um with is sometimes they do want to do media placements um even fairly large media placements. You know, I'll I'll use um one of our clients is the architecture tour that happens in Chicago. If anybody's ever been >> I love the architecture tour that happens in Chicago. The book the boat tour. >> I've taken it multiple times. >> Oh, awesome. Awesome. >> Yes. Oh, I love that. When I went to Chicago for the first time, everybody was like, "Okay, gota, you know, that's the that's the thing at the top of the list. It's like, you know, visiting the Washington Monument or something." >> Yes. for Chicago now. >> Yeah. Yeah, it really is. I mean, I still absolutely It doesn't hurt that they're a client, but I I I will absolutely recommend that to anybody. And before I, you know, I've been in Chicago since 2011, so way before I bought Point B. Loved it. And it's just such a fun way to see the city. And you learn a lot and on and on, you know, you know, because you've experienced it. >> Totally. >> So, this like the leading tour is one of our clients. Um and and they they place a lot of media because they want to be seen in you can probably guess in the airports, right? So So whenever you come to Chicago in the summer, they're not going to show up in February, you know, but in the summertime you come to Chicago, you're going to see them. It's it's Chicago's first lady and it's the Chicago Architecture Center. they partner together to create this tour and and those those uh branded spots uh show up all over the airports uh in O'Hare and Midway and we put them on out of home ads on billboards and stuff like that as well or bus stops uh around the city just anywhere that um somebody that's coming to visit the city for the first time or or whatever may be likely to see it. Um, >> and so that type of stuff is the things that hey, have we rebranded that um that architecture tour in a while? No, it's it's it's been a while since they got since they got branded, but we continue to do the media for them, which is great. >> That's great. Joe, um, tell us about point B now, the the kind of the bullet points of the business. we understand what it does but um give us the the metrics on the business. >> Yeah, absolutely. Um so the first goround u I I had a specific size that I was looking for this time. I wanted to go um a little bigger and so I used but I was familiar with the SBA model and so wanted to continue to rely on that if I could. Um uh and so I used the the max SBA loan as basically kind of a a a limiting factor of sorts. Um so that happens to be 5 million for anybody that doesn't know that. Um and uh so I knew, you know, you're looking probably for something oh between like 5 million on the low end to maybe 7 million on the high end in terms of their um sale price. Um, and so that's what I had sent and I and I knew I was looking for u an advertising agency that uh that led with brand. Um, again regionally um it wasn't a factor. I I didn't feel like I could make that a factor but you know again got lucky that the perfect target happened to be in Chicago. That's not as random as it may seem because um for anybody that doesn't know like Chicago is a gigantic agency space. There's tons of agencies in Chicago. So um Chicago, New York, it was likely that you land in one of those spaces. Um but there's tons of great agencies everywhere. Um so it was always a possibility. But um but yeah, ended up finding um point B was right in that range. So, it ended up being the the deal got done. This isn't where the broker listed it, but the deal got done at about 5 a.5 million. Um, and um I like I said, I just I I maxed out the leverage. So, the structure uh was incredibly aggressive. Um had uh 5% down, 5% seller note that the SBA allows you to use that or count that as a down. Um and so that meets the 10% down um requirement uh of the SBA and um and so that's the that's the structure we went with. >> So 90% loan. >> It is it's 90% leveraged and it's a business that has been around since 1974. business is older than I am, so not by much. Uh, but it's just it's just the rock of Jibralter. I mean, I' I've felt like it was very very solid and so felt comfortable kind of doing that. It's a lot, but felt comfortable doing that and it's it's been no problem. >> And so, let's just unpack the math a little bit more. 5.5. Um the So you brought 5% came 5% out of pocket. So that's whatever roughly 275. >> Yeah. Yeah. It ended up being 350 um is what what I brought to the deal. Um but yeah, very very close and and some of that, you know, flows through to a little bit of working capital and stuff like that. So, um, yeah, but it was Yeah. 350. Yep. >> And did the bank look at the fact that you had income from Sunny and Ash? >> They sure did. Yeah, they they wanted all of that detail. So, they got historicals for Sunny and Ash. They got um tax returns. All of the things that I would turn in, you know, that you would turn in for the for the acquisition target, they also wanted that for Sunny and Ash. Mhm. >> And when you said the broker listed not 55 was not what the broker listed it at. Is there something to be said there? >> Um I I guess just uh I'm I mean I'm not uh you know like uncovering you know some wild reveal or something. I think people know this. But um even uh even um brokers that are on the up and up. I mean they're they're a good broker. They're well known in this space especially. Um they used to be called something different. I can't even remember the name, but now they're known as goge. Um and they do a whole bunch of agency um they broker a ton of agencies. Um and >> yeah, they they listed it at 7.1 and so the delta is pretty pretty large. Um, but I offered what I felt like was I wasn't lowballing. I I just offered what I felt was like a reasonable truly reasonable offer. Um, good offer actually. I mean, I wanted to buy a good business at a good price. And um, and the owners didn't flinch at all. They they were like, "Yep, that works." You know, and we moved forward with that. So, you know, just something to be aware of is pre people that are working with brokers, even good brokers are going to the numbers. I don't know. In this case, it was it was quite high. Uh, and it may that may be how it always looks, you know. >> Well, I'm reminded of uh Johannes Hawk uh uh guest who's has this was now a couple years ago. Um, but he in his interview unpacks his search process which was very systematic. And one key thing from Johannes's approach is he and his partner didn't even they didn't even look at what a business was asking. Just didn't care what the asking price was. They would always look at they would always come up with their own price uh their own offer price and send over an IOI an indication of interest as a uh feeler to see if there's if there if there's a deal to be had. >> Smart and and so and so they didn't they just that listing price they didn't pay attention to it. They didn't let it anchor them anchor their psychology. They started from their own first principles of what they thought they could value, what justifiable value was for the business, what they could pay for the business, um, and sent that across. And, and it wasn't an exercise in lowballing either. It was a recognition that, um, you know, the list price is just, you know, you know, who knows? I guess that it was a recognition of who knows, maybe, you know, just try it and see what the seller says like you did, >> right? They were fine. They were fine with your offer. >> Yeah. >> So, that's pretty interesting. >> Yeah. But that is challenging though. Yeah. To not allow that to anchor you or not to not think that you're insulting the seller, you know? You don't want to like spook them or whatever. I loved the business, you know. >> But yeah, ultimately you have to be like, well, >> realistically, I this is kind of where it's going to be, you know. And and did you did you support your offer, Joe, with any sort of rationale? You were like, you know, yeah, you this is what I want the, you know, this is what I think the earnings, this is what the earnings are as reported. This is the multiple that I think makes sense. You know, was there anything there or was it just you gave them, you just gave them a number? >> Oh, no. 100%. We had a um we had a like a a white paper. I mean, I could dig it up in all my um acquisition docs, but it laid out like, oh, here's a here's approximately the multiple that a branding agency will sell for, here's what a digital marketing agency will sell for. Here's what a media agency will sell for. And so, this being a combination of the three um actually did a little bit of uh you know, I mean, did some did some work there to say, well, here's how much of your revenues comes from branding. here's how much comes from media, here's how much comes from reproduction work that you guys do, you know, and so really laid it out like here's what the white paper says that are the going multiples and they've looked at a number of you know quite a few acquisitions and so uh obviously the overall size of the agency makes a difference in that as well and so yeah we for those reasons here's what I think the multiple should be here's what you told me you're you know and I I pushed on some of the some of the adbacks. They had added back the entire rent. Um maybe that's that's part of it, too. Uh because they were like, "You don't have to have an office." And I was like, "Well, >> well, it's not a good look for an owner to come in day one and be like, "Sorry guys, no more office." >> Right. Right. Exactly. Exactly. So, you know, I was like, "You know what? um there's some things that need added, you know, that I'm not going to accept as an adback. And so, so we, you know, that means that, okay, here's the number you told me. Here's the number that I kind of believe, but the multiple is not getting discount. Like the multiple I'm just taking an industry standard accepted multiplic. >> Yeah. Yeah. Exactly. Exactly. >> Well, that's a great rationale. That's a that's a very robust argument that you made. Um, which is maybe why they were like, we accept. Uh, that that that's great. Um, and and by the way, what was the headcount and what were the numbers of the business? I don't think you told us revenue top and bottom line. >> Oh, no, I don't think I did. So, the the top line um it was acquired August of 2024 and um it was nine almost nine exactly 9 million exactly. It was a little higher. It was like 9.1 million is the top line. Um the the bottom line was about a million. Um so not not great in terms of uh margin um at that that particular year, but yeah, it was about a about a million. Um and then um the headcount is or or was at the time of acquisition uh we hit I think 27 at that time. Um so now um 24 to 25 will end 25. There was there's some some nice uh growth even just in the months after acquisition. the remainder of 24 closed in August, early August. Um, and then 24 to 25 now will close 25. We we think we'll hit 12 million. Uh, >> amazing. >> And then the the bottom we have we have spent a few dollars. So the bottom line is is not expanding as fast, but it's about 1.25 25 is where we'll be uh this year. >> Wow. >> IBIDA. IBIDA. >> Yeah. Yeah. Great. >> Yeah. >> And that Wait, so that's 1.25. So IBIDA has not grown along with revenue because you're reinst Yeah, we've hired a lot of people. So our headcount is is now uh we we've now we're up to 33. So, we've we've made some significant hires, including um you know, a real uh a media director um that we desperately needed. Um somebody in client services uh that we needed. So, some some fairly major um we think we're done with the top. We we may be a just a titch topheavy at this at this point, but we think we're done with the those top hires and are ready to for the additional growth go and get kind of more entry level folks, artists, um uh folks that can kind of help us do the work that we need to do. Um but we think we're in a good spot now um from a leadership perspective, which is great. >> Well, that that's great, Joe. And so the business is is what 50 years old over 50 years old. >> Yeah. >> And and those that that revenue number that you bought it at uh so about 9 million bucks. Was it doing that pretty reliably or was that the result of recent growth? >> There was some recent growth. So um that is another thing that is interesting is could the business have sold for much more than it did? I don't think so because the the lender will take the last 3 years into account and use that as a proxy for like hey this is what's likely going forward and there had been some significant growth um not as much as 24 to 25 you know we're looking at like about 25% growth um but um but like double digit growth for sure they were selling it at a great time I mean they had made the decision to So the the primary owner had essentially made the decision to sell um and it was a fantastic decision. You know, they were they were doing really well and and had their you know two 2023 was the highest revenue year that they had had. Um but like I say it was like double digit growth like kind of low double digit growth you know 10 to 12% growth the last few years. Um, but it makes a makes a difference, you know. >> Sure. >> So, so that's kind of where they they were at and why they sold when they did. >> Well, that actually probably is the sweet spot that we as buyers want. A business that you don't want to buy generally if you're going a kind of with a kind of LBO model, leverage buyout, heavily leveraged model. Uh, you don't want to buy a growthy business, one that's grown like crazy. you probably won't be able to get it financed with an SBA loan anyway, right? >> Um, but you you don't want to do that. And then you don't want a business, but you'd like to see some growth. You like maybe you don't want a completely flat business. And of course, a declining business comes with, you know, glaring risks. So, you want a business that looks like it's growing healthily, but not crazily. And that sounds like it's like what you got. >> Absolutely. I mean, I I could not have uh lined out a better target if I tried. I mean, when we when we found, you know, it it was like, "Holy cow, I can't believe it." Um, I used some some help trying to find some proprietary deals. This one ended up having been a brokered deal. Um and um and I almost just ignored everything, you know, it was like I I want this one. I want to get this done >> because yeah, from so many so many perspectives, it really lined up. I thought I could get the deal done from the debt perspective, you I mean, I had a story to tell to the bank of of like, hey, I've run this other thing that was creative services ultimately sold to a client B2B. Um, this is very similar in terms of that. You know, the other thing was not an ad agency, but um that I could tell that story and um yeah, size-wise it was just right tucked into that kind of max amount I could get out of the SBA. Um, yeah, the growth was, like you said, the the growth story was good. So, it really was amazing. The fact that it was located in Chicago is kind of a cherry on top, you know. Yeah. >> As well. But, yeah. >> Good. Good. Good for you, Joe. >> Well, telling the story to the lender um was was something that you wanted to make sure that we talked about >> and kind of selling the story or telling the story of a transferable skills. And I think that yours is obvious. I think certainly the um Sunny and Ash experience has a lot of transferability over to this. Um I assume the lender was like check that box pretty pretty readily or was there more to say there? I because you know the so often the person in your seat when talking to me has gone from white collar to buying a tow truck business and that's a way broader chasm to leap. Um, so in your case it feels like a very natural uh acquisition, but was there more to say there? You know, I mean I I think in general um they Yeah, they just want us they just want to see a story, you know, they just want to understand like this isn't completely crazy, right? Um, and so yeah, that that one that you mentioned, it becomes a lot harder to be like, "No, no, this is going to be okay." You know, I'm I'm going to be fine. I'm going to be okay running this. Um, this one also had an an aspect of it that was there were three owners uh of Point B. uh the majority owner uh was retiring. Uh and then there were two others and I the timing of this was just perfect because we kind of snuck this in before they've changed some of the rules and stuff but actually no no rule change was was forthcoming. I mean, we didn't know that it was like close, but um back in August 2024, you were allowed to uh keep an owner on as long as they retained a percentage of ownership. Didn't matter how much. They didn't have to give a personal guarantee or anything like that. And so each of the uh other two owners retained 2% uh each of the company. So they got a nice little payout for themselves, but they retained a little in order that, you know, a year on they're still a part of the business. And so that was a part of the story as well is, hey, look, I'm not buying this to jump in and just run it 100% myself. I have some capabilities and some, you know, some things that I think I can add to the business, which we can chat about if you want. But um but the the the person that I'm going to install in the as the president is actually one of the previous owners, you know, that's stuck around in the business. And I think that's helpful. I mean, that was that's huge. And it's been huge that he has stuck around. Uh he's made a gigantic difference in the year since of helping the business grow like it has. Well, let let's do turn our attention to that, Joe, because that is a really interesting feature of your story. Um, we'll probably close it out on this segment, although I have a follow-up point and question I want to make, >> but just to be clear, so there was three sellers, you said, and all three of them retained a couple points of equity. >> The only completely um completely cashed out was the majority owner. So the the guy that the reason why the business had come up for sale was the majority owner who then was acting as um the president and the creative director and all. He had he wore all sorts of hats at the agency. Um but uh but he he wanted to retire and so he he got bought out completely. So we bought out him 100% but the other two who were staying working in the agency uh retained 2% each. So, you know, uh, bought 96% of the agency rather than 100%. >> Yep. Yep. And by the way, the rule change that you're talking about means that which happened this summer of 25 >> um, means that today the owners to roll equity like that or what what an SBA jargon is a uh, I think it's just called a or was called a partial buyout. I think that's what they called it, >> right? >> Um they would have to personally guarantee the loan for I think maybe the first two years maybe. So not forever. I think I have that right. >> Um >> but you know owners just aren't going to tolerate for a couple points of equity or even for 10 or 20% equity personally guaranteeing the loan that you are the ones you know with you running the ship. So it's it's become kind of a non-starter for rolled equity in SBA acquisitions which in businesses that are trady blue collar where there's licensing involved and and often times a way of dealing with that would be that the seller has the license and stays on rolls equity and and stays on for a little bit to to be the main license holder of the business has really uh hurt the ability for for deals of of with those kinds of businesses to transact. I digress, but just for the audience's edification. >> Yeah, that's helpful. >> So, Joe, so so you're not running the business. One of these previous two sellers uh is the president and Yeah. And and what is your role and kind of say more about that whole dynamic? >> Yeah. Yeah. Yeah. You bet. He uh the the two that stayed on been both by the way fantastic to work with and the owner that completely cashed out awesome. Same deal as with Sunny still talk to him uh all the time and just a just can't say enough about what a great guy he is. Um but um the two that have stayed on the the vision is um that kind of I anticipated two reasons both related to growth that I could add to the business and I do spend most of my time in point B. Um so one was kind of some business development skills to the team. They had never really done direct outreach. all organic growth had been referrals, increasing share wallet, all that kind of stuff, rather than brand new customers with no connection to point B. Um, and that had been my past life. And so I felt like I could add some stuff there. Um, and also am I think just well positioned for obvious reasons to kind of chase uh strategic acquisitions and um, and I think there are opportunities there. So um so that was that was the thesis you know how well of a job um you know I just have to be critical of myself on the on the first point of that going out and finding new business. I would say that was would be my biggest I mean I don't want to jump ahead here or anything but that would be my biggest um risk or or kind of like um I don't I don't know frustration I guess with the business so far has been and they warned me like hey this is this is going to be a challenge you know we've tried this before um but in this business both a strength and a weakness is that it's so relationship driven you know you're you're buying, especially at the at the enterprise level or whatever, you're buying um advertising for your brand. And so, you're not going to answer an email or you're not going to be like, "Oh, this dude sent me an email. Super interesting." You know, I mean, it just is like, "No, that's not how you're going to find somebody. Um, you're going to it's it's going to be relationship driven. You're going to use somebody that you trust or that somebody that you know trusts." Um, and so do I think that there is the ability to go out and find brand brand new business that has never heard of point B before? For sure. Um, but where am I going to find that? It's probably not going to be like direct outreach type stuff. It's more going to be like conferences, podcasts. Thank you very much, Will, for having me. >> That's why you reached out. >> No, because I I love it and I've been a fan of the podcast forever. But but but it doesn't hurt. Um so so yeah, I mean I I think that's something that I've learned. I don't know hubris, pride, whatever. I had implemented these kind of direct outreach tactics in industries past, including the 3D rendering firm, right? And it's been like, oh, shut up, guy. You know, like I I'm going to be fine. It's going to work just fine. And then it's like, not so much, you know? So, um, but we're starting to get traction, a little bit of traction on on like these other ways of going and finding that stuff. I think it's I still think it's essential. You know, we've we've done really well um growing with kind of senior living and some of that um that has carried us along in 2025. Um, but will that continue to be 25% growth? I don't think so. I think we need some just go out and find some brand new and and so that's the idea that that I've spent some time in this private capital markets space and so maybe I can go out and talk to you know search fund investors anybody that has kind of portfolio of those companies or or private equity of course or family offices or whatever um it is hey you've got this whole portfolio there's certain times when you want to enter and exit that are there ways that somebody that understands that process might think about your marketing spend a little bit differently than somebody that doesn't um you know probably trying to >> provide some value there. So that's kind of the thinking going forward. >> Great Joe and and are you reporting to the president? >> Yeah, in a in a lot of ways in that capacity um for sure. Yes. Right. Is that I want to be accountable and I want somebody to hold me accountable. Um, and he's he's done an okay job at that. I mean, he's he's hesitant to to like lay it on really thick like what have you brought for me lately or something like that, you know? Um, because I'm the owner. Uh, I guess. Um, but we do we work together really well and he's he's he's done a good job. I mean, he's tried to tried to be like, "Okay, well, tell me how things are going." You know, that type of stuff. Um, and it's it's fun to work with them in that way. In other ways, a lot of the like hiring decisions and stuff like that, we just collaborate as partners and and say, "What do you think about this?" But I'm at the same time, too, I try to not I don't want to step on his toes because he's good at what he does. And so, the last thing I want to do is try to try to muck that up. So, um, >> and and do you have direct reports? Do you have >> Yeah, I do. of a chain of command. Okay. >> No, no, I I do not. Um, you know, once once we get once I feel like I can establish a sales process where it's like, okay, now there's consistently brand new leads coming in, um, then what I'll do is hire a sales team and and go from there. Um, and and I will likely manage that sales team. But um but yeah, I haven't haven't done that yet. We've focused our hiring in different areas. Um and so right now I don't don't have any direct reports. >> And so your your role is to work with the president, one of the three sellers, >> right? >> To basically um you know crack sales, repeatable sales, build a sales engine for this business. >> Exactly. and other strategic items uh including hiring and so so on. You got you guys work together on that stuff. >> Yeah, absolutely. And to be to be clear, he's left that that you know, build the sales engine really in my camp. He likes to hear about it and wants to know updates and stuff. um but left that in my camp and he's more than occupied with >> he's probably the best um clientf facing guy that I've ever known. Um he's just very very good at that. Um and so >> he's occupied with that working a lot with clients. We did I mentioned we did hire a a client-f facing individual in the in the business as well. She's also amazing. um and and so oversees her work as well as like going on still going on himself a pretty good chunk of um client visits and and uh certainly launches and things like that. Um and then uh and then just handling you know management of his direct reports are like the creative director and the um developer and yeah this client team head and the strategic head and so you know working with all those to make sure that they're they're doing what they need to in their spaces. And so Joe, uh, if you weren't working on building a sales engine and some of these strategic decisions with him, with him as president, could the business be running without you? I mean, if you wanted, could you completely kind of step to the side and only talk to him a couple hours a week sort of thing? >> Oh, yeah. Yeah. Yeah. 100%. I, you know, I'd love to say, you know, point B is depending on me. It's not. No, I I absolutely >> I think that that's actually No, I but I think that's the sign of a great acquisition, Joe. It's not I think you should be proud of the fact that it's running without you, not you. You wish that it were on your shoulders. We we don't like it being on our shoulders, right? >> It's kind of great. Yeah. Yeah. The the fact that I don't have to think to your point like there are there are no direct reports. I don't have to think about, hey, is the is the business running okay? All of that. Don't have to worry about it. I have complete faith in um in Hamish is his name. That's that's the the president. Um Carrie's my other business partner that runs the production side of things. And they they're phenomenal. And so it is incredible um that that that's how it worked out. that this one I guess I'll say that that was the other thing that was different about the two acquisitions. The first acquisition I absolutely 100% bought myself a job. Uh the second acquisition I can insert myself where I'm wanted or where I feel like I can add value. But if I didn't, it's okay. >> And that is the difference between buying small or buying larger. the difference between a 200,000 SDE business and a million-doll SDE business. Right. >> For sure. For sure. >> Yeah. >> Um we have talked we're going to start closing up here, but I do have some some couple more questions I want to get to you. >> Please. the we had talked about you your or you had feel very positively about your experience with Sunny and Ash and and um you know it was a it was uh a first acquisition and a step to what you have now done. Uh you learned a lot along the way etc. Do you feel like or would you recommend for the listener that they jump ahead of their Sunny and Ash experience and jump right into point B if they can get it? >> What an interesting question. I um because the conventional wisdom is buy as large as you can. Right. >> Yeah. Right. Right. I would say um if if you have those kind of resources then then yeah, why not? And if you have the story, then yeah, why not? Um you yeah, you should you absolutely should. Um what what I was lacking was the resources in the story. You know, if I had tried for the point B, number one, couldn't afford it. Number two, I don't know, maybe you can afford it if I go if let's say I went and raised the money. Let's say the financials, you take that off the table and I'm like, okay, I'm going to raise the money. Um, but I do have serious doubts that the bank that the lender could have gotten comfortable with that even with the other owners staying on all that kind of stuff. They still they still pressed me on that. I mean, they still wanted that story. They were like, "Hey, I had to write an entire business plan of, hey, why does this make sense? Why does this acquisition make sense? Why are you okay to be the person that that owns even if you're not deeply deeply running it? Why are you the right person to own this business? And I just didn't have the story before um Sunny and Ash or if I had tried to concoct a story, I don't know if they would have bought it. So, um, >> but but wait, Joe, I have to press on this because again, so many of my guests are making, you know, the transferring into businesses that are so so distant from where they're coming. You, let's take out Sunny and Ash. You were coming from corporate. You're a corporate guy. You've you've, you know, and I don't think it's that crazy to connect that. I think there's a lot of transferability from corporate to running a branding agency. And so I'm surprised that that you feel like you had to make such a compelling argument to your lender. Do you think it was just your lender who was particularly demanding or did you experience multiple lenders who kind of gave you the same thing or what? >> You see where I'm I'm I'm I'm slipping here. >> Yeah. Yeah. Absolutely. And that is possible. you know that it was that it was kind of a lender specific thing that this was something that they were really digging into. Um it's with them kind of maxing out the >> you know it's the highest loan that they do because it's the highest loan they can do. Um >> yeah, >> it might have had something to do with it as well, but that's >> big big purchase. Yeah. >> But they also want to get it done, you know. I mean they they want to do those deals, you know. sturdier business. It's a bigger loan, but it's a safer It's probably a safer business. >> And there may be some honestly there may be some um some just bias that I'm bringing to it because that is the that is the story that I told and that's the story that they accepted. You know how there there just certain things in life that you're like, "Boy, I'm glad I did it that way cuz it worked." you know, you're like, "Oh, I'd hate to I'd hate to go back in time and I have to do it all over again because what if I didn't do it exactly right and it didn't work, you know, or whatever." And and this is maybe I'm maybe I'm bringing some of that bias to this is like this is the way that it works. So, that's the only way it could have been done, you know, and that may or may that may not be true. I mean, it's a good point that >> like, hey, look, I did have the corporate experience. I still had all the sales experience that I had, you know, did not necessarily have the management experience of having run that >> managed an agency, you know, type of a deal, but had plenty of management experience on the sales side. So, it's an it's a really interesting question. I mean I I think for sure people uh if if you can go like if you have those elements a story of some kind and the financial wherewithal yeah like go for it go for something bigger you know >> why why not >> thank you for that Joe and so another question related to ETA broadly >> one thing that you'll hear people say who are interested in buying accounting practices or tax businesses mostly like accounting or um you know financial outsourcing is that they see it as a potential source of deal flow in the future. So these are usually people who are acquisition-minded. They want to buy they want to buy a number of businesses over the over the course of their careers. Do you think that your own client base could be a source of acquisitions for you if you wanted to buy another business some point in the next five years? I'll tell you the area that I do think um it it could is that sometimes we'll use um freelance and that uh but that absolutely could be a an acquisition pool because um you know sometimes we'll use freelance just individuals but sometimes we'll use freelance agencies and so particularly where there's uh some white space you know like hey we won't do uh like this this this uh photo shoot that we just did. Um we've got a videographer in house and he's very good. Um but the photo shoot I mean we hired we hired all of that. We hired, you know, the the models obviously, but the the photographer we hired, we had he had specific expertise in that type of photography, etc. And so, one example, you know, are we going to go out and buy a a photography studio? Not sure. But um there's plenty of examples like that that are, hey, we need some extra help on SEO PPC or we need a little bit of extra help on some of the digital marketing stuff we're doing. Maybe there's a white space. We don't really do a whole lot of like user generated content type social stuff at all. We'll play social ads and we create social ad content. Um but we don't really do the UGC. And so, um, would we go out and buy a UGC company or or and particularly if it was one that we had had experience working with, you know, yeah, maybe. Um, or buying one of these companies for their almost just for their book of business type of type of a deal, you know, that we've that we've worked with. So, I think in that way, yes, definitely. Um, because we're looking for strategics. I'm not really looking for um outside the industry necessarily. >> Okay. Okay. So, so marketing agencies are great for the acquisition-minded entrepreneur because you can um kind of vertically integrate. There's a lot of opportunities to to to vertically integrate and um and uh there's so many different types of vendors that are involved in maybe a a single marketing project that you could imagine tucking a lot of those in. >> Absolutely. But the so so noted um but the idea that your client base is going to be the source of you buying businesses and and I you know I I'm just floating it. I'm not I'm definitely it feels like the answer is a pretty easy no. >> Well, but it just but other people may have a completely different thesis than me too. you know, if like if you're if you're saying, "Hey, I want my purpose in looking at acquisitions now is different than when I acquired point B, like now it's really looking for tuckins." Whereas, um, if so, if you were somebody that was like, "No, I'm not I'm not looking for t I mean, if it if it happens to be in this space, fine. But if not, I'm totally okay with that." So if they're kind of industry agnostic or just have some other criteria that they're looking for um then that then my answer completely changes then I think yes absolutely because I do think we know >> um or can get a sense >> and we do have those close relationships with each client and can absolutely get a sense of like >> hey I see the writing on the wall I see what you're trying to do here you know even if they don't tell us explicitly it becomes pretty obvious when they're making certain changes is like you're trying to get ready for something, you know, or whatever. So, >> yeah. Yeah. >> Okay. Last thing I is is more of an observation than a question. So, one of the things that I so like about ETA is that I feel like in even in entrepreneurship broadly, you can start a business and reach the ceiling of that business and then feel stuck. And I think a lot of small business owners and entrepreneurs experience that. And so they're stuck in a in a business that's maybe just not it's pretty small. They just don't see ways to grow it. Um and unless they can find somebody to buy that business from them, that's kind of it. So they either just carry on doing that or they fold it. But if you're acquisition-minded and so so of course I'm talking about Sunny and Ash now. You're somebody who went entered that business as an acquirer. So, you're acquire acquisition-minded. You have the the uh skill set and you know the track record of doing it. If you hit a ceiling in a business that you own, you say to yourself, well, let me figure out a way to put in a manager and have this business continue to run. I don't have to sell it or shut it down or continue to run it. There's a fourth option uh continue to run it myself as owner operator. there's a fourth option which is put you know put it put it find somebody who can run this business for me and then go look for another business to acquire and I I just think and and for for everybody listening that's pro or at least regular listeners that's probably now um obvious but it is I don't think it's obvious at all to the average small business owner the average entrepreneur I think they they often feel that they're stuck in their businesses nobody's going to buy it they can't shut it down and they don't have the idea that they would just go buy a business is not on their radar cuz they're 0ero to1 types. They're not ETA types, >> right? >> And so you're just a perfect example of this. You you Sunny and Ash kind of you know um it's kind of maxed out what you thought you could do with it, right? >> And you parlayed that into your next bigger acquisition. And I I think it's um it's something I love about ETA that I I think 0ero to1 entrepreneurs it's for many of them it's not even on their radar. Um so yeah what react to that? >> I love that because I I will say that I mean that's kind of an insight that I I don't I don't know that I had even realized about myself but but but um kind of expanding that to the greater small business owner community. I just love that because yeah, we you know, you you think, oh, this this is this world is experiencing so much growth. You know, this ETA world is is from where it's been when I did the first acquisition back in 2019 to what it is now. You know, you go to the conferences and everything is much bigger and more so many more people in interested in that. But that is a key demographic that is does not either doesn't know about it or is not like dialed into it is current business owners. And why not? Why not? >> Exactly. >> Absolutely. >> Exactly. They could go out and just buy another business. You know, there's so many factors that that Yeah. It's kind of stuck. You know, you're sort of bored. You don't have the energy for it anymore. you know, why not put somebody in there that has like new higher energy that can go after it and then also like you can go get something else that's >> that's maybe going to be something that you can lend your expertise to. So, I mean, I love that. I had never thought about that before. It's amazing. That's cool. >> Yeah. Good. Well, you're you're exhibit A here, Joe. So, >> sweet. >> Yeah. Well, good stuff, sir. uh anything we didn't hit that you wanted to? you know, I mean, just the we dug into it a little bit, but just that idea of um of really trying to reach out to where I'm headed or where I where I think the opportunity lies for me to make a difference in this business is to reach out to the um kind of those with a portfolio of companies like I mentioned um and see if there's you know they want one or we could we could use our senior living model jump in on one or two of their businesses and do a good job and then hey you're doing a great job why don't you handle all of our portfolio companies or whatever. So, um, you know, >> so should people reach out to you on LinkedIn if they're interested in conversation. Email, LinkedIn, whatever. >> And what's the URL of PointB? >> PointB communications.com. >> Great. PointB of Chicago. Joe Soulberg. We'll have your We'll have both your LinkedIn and PointB's URL in the show notes for anybody who uh wants to reach out, learn more. Um, yeah. >> Perfect. Thanks. so much, Will. This has been an incredible opportunity. Uh, you know, longtime fan. So, thanks a lot. It's kind of surreal in a way to do this. So, thank you. >> Well, you earned it with two, not one, two acquisitions. So, well, thank you, sir. >> Hope you enjoyed that interview. Don't forget to subscribe to the Acquiring Minds newsletter. We send an email for every episode with an introduction to the interview, a link to the video version on YouTube, and soon key takeaways, numbers, and more essentials from the interview for those of you who don't have time to listen or watch it. Subscribe at acquiringminds.co. You'll also find all our webinars there on the website, both those we have coming up and recordings of past webinars. 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