Chandra Ral welcome to acquiring minds will thank you for having me Chandra you and your business partner are building a hold Co not at least initially with some Grand strategy in your case one acquisition led to another but here you sit multiple Acquisitions later with what is essentially a hold Co so before we get into your background Chandra let's just G give people a picture of what the hold code looks like today so current and then we'll and then we'll work uh we'll go all the way back to the beginning and work forwards yeah so today within our organization we we describe them as divisions so we have three main divisions our electric uh construction company or electric Construction Division um then we have Underground Construction which does uh construction of fiber networks and then we have fiber splicing which is very synergistic to that business and it just splices uh f together once it's in the ground so basically passing light through uh making sure the data can pass things along those lines so a little bit more of a technical skill set okay um so we've got those three divisions they're made up of multiple Acquisitions how many Acquisitions today so we have done uh so what is in that hold Co is four total Acquisitions we've done five uh actually no five in that hold Co uh we've done six we spun one business off and can you give us a picture of of Revenue and projected EA for the year yeah so we should hit uh on the low-end $12 million uh somewhere uh around the 3 million of iida okay now let's rewind start us wherever you think is relevant to how this uh Adventure started unfolding yeah so you know I uh I'll start back went to B school I graduated in 2012 uh before I knew what eta was I actually didn't know this space at all um went to go work for a big tech company worked for Oracle uh and then a friend of mine was building a small SAS business he was my fraternity brother well I don't think I'll get any return on this investment but he's asked me for some some investment to get his thing off the ground we'll just go comes to you know about a year in he can't live off these dollars he's asked for a buyout and his buyout is pretty nominal it was just uh you know the amount of credit card debt that he had so I said all right well there's enough cash flow from this business I'll just do some 0% APR uh uh credit card transfers I'll take over your debt and then I'll just service the debt with cash flow from the business and there it ISO exactly and this was this was 2014 and you know I I and what how big was this business or how I should say how small was this business it was I want to say we reached about 50k in revenue and here's per year or in total uh per year and here's the thing if I had known then what I know now I think I'd be retired uh because that SAS business had so much potential I just didn't know what I was doing uh what was it what was it so it was inventory management a company called in tracker and we plugged into platforms like square and we would say hey here's an add-on to your uh point of sale system so you can track inventory we had a lot of coffee shops who say okay I need to track my cups Lids uh you know what are the beans that go into this Etc and I think the platform itself was it was really solid and I look at some of the inventory applications that are available today I was like this is this is not as good as what we had in 2014 really and they're charging a crazy amount so we were we were charging user somewhere between1 and $100 a month when we should have been much higher on the scale and like I said if uh if I had more Cloud background at that point I think that that I'd be retired you said you worked at Oracle Chandra were you technical at all or was that in a business capacity no I was more on the the sales Consulting side so I'd go into you know a customer or a prospective customer look at their business challenges and say hey here's how some of the software can solve these challenges yeah it was perfect because I got to see a lot of the business challenges present a solution but had uh very little to do with implementation so I was like here's the solution all right good good luck set set every sales guy ever exactly make the sale and and move on it's it's everybody else's problem to to figure figure out yeah yeah and then uh so so from there I just let in tracker chug along it paid off its debt it paid me well and I looked at this and I thought well I don't really want to manage tickets I'm just gonna I'm just going to let this thing go I think I sold the customer list for a few pennies here and there and that was it and and chra it was making 150 Grand a year with almost all of that was profit if you weren't reinvesting any of it or really yeah I was I was just you wanted to let go of that yeah I was I was foolish well there wasn't also a choir.com at the time where you could have where there was an active Marketplace people who would have and I didn't know what I had right um I just thought is like you know what I paid for a bunch of vacations I had a great time and I outperformed the S&P 500 this is easy this is what I've got to do I just have to buy businesses um and that was the how the thought process got going and was it really like okay so if I can buy this little oneman SAS business I can probably buy a 10-person you know traditional business was that kind of the quickly connect those dots sort of thing I I think so and I kept it as open as possible it was more just I want to buy cash flow I just want to buy you know sde at that at that time right yeah um and that was that was the approach and the other reason why I let it shut down is I I started at a a startup myself uh so I started working on the Consulting side of a startup uh Koopa software it took a lot more of my time in the early days and I was like you know I don't want to balance both I just started a relationship with my wife and I was like you know traveling a lot more I think I should should try to have balance in my life yeah um so that was the other other reason yeah well cognitive load yeah you know I I I get it like and there was some there was some overlapping product functionality and I was feeling a little bit guilty about well I've got this other thing on the side does something that Koopa is also trying to develop granted it's a very small niche of inventory management it just didn't feel right to to do both at the same time and so what year is this this now this was 2015 okay 2015 and Koopa I actually didn't know Koopa but it it was a screaming success and is a big company tell people what Koopa is who who are ignorant like me yeah so Koopa is business spend management so basically what Salesforce did for CRM Koopa did for spend management so think about your non-payroll dollars as a business they would come in and say hey use this platform because of such high uh adoption rates uh were able to save just a ton of money so customers were saving somewhere in that six to n% of their spend because historically they were unmanaged dollars now they're going against contract getting on a PO Etc so it was uh the the ROI for this product was was really quick um and and this was a full startup start from Scrat VC style startup yeah I think when I joined I was I mean not the super early stages but uh in the 200 uh of employee cter under 200 um and when I left we were at 3,000 yeah so uh and it had gone public right so you were there for an IPO yep so I left Oracle Went to went to Koopa and a lot of my comp was just the shares and I'm super lucky and thankful that uh that that was the case so that was you did this was a a story of working in a startup that goes public you have Equity you do well this is a meaningful this is a meaningful financial event for you yep it was it was definitely great okay I I may have skipped ahead a little bit because it's while you're at Koopa that Colin comes along catch us back up oh yeah so Colin is my business partner Colin and I have known each other for uh you know since I'll say the 20072 2008 time frame that's when we met we actually met through mu Thai so both of us were training mu Thai at the time and I always like to say that the bonds of friendship are formed when you hit each other in the head a little bit uh and so we have that solid friendship we have the solid trust and so we just started kicking things around hey maybe we should invest in a startup maybe we should buy a a small business together and we've had these conversations going on for for years um at that time Colin was in a uh pretty success UC F uh family business so they were doing uh low voltage work for Hospital networks um things like that so that that that family business was doing just under $30 million of Revenue a year and so it was it was pretty successful and I think there were some some family politics and things like that that he wanted to step away from so he and I got together and said well let's just let's look for something on bis Buy sell let's look for something that uh has really good return for you know what we buy it for and that's where we came across our first electrical contractor and so Colin's notion of buying in business that was your influence because you had had this kind of SAS Adventure so you started you shared your enthusiasm with this wealth building approach with him he was into it he'd come from small business kind of a big small business um cool okay all right so you turn your attention to bis buy sell and find what this is a a company gopher electrical construction uh and based out of Minnesota at the time I was living in Chicago Colin was based in Minnesota and it just made sense for him to take over uh operations if we were able to close the close the deal so we went through this process of and I'm I'm doing air quotes here for the people listening due diligence uh because we we didn't do any due diligence we didn't know we looked at a QuickBooks file uh and that was that was our due diligence so uh you know I kind of joke about stumbling forward and this is one of the things we we made a ton of mistakes in our Acquisitions but uh you know we well our job here today Chandra is to share with everybody all the mistakes you've made so that they can stumble a little less clumsily forward exactly because we we didn't we didn't know about the community that exists today uh we didn't have any of these other resources we were just guessing uh and and what year are we in now so we completed that acquisition in January of 2018 so we go through this process it's a small electrical contracting uh shop it's got seven employees eight employees uh the seller said that he was really sick of dealing with uh HR sick of dealing with people he was one of the guys who just did everything himself and was kind of a a grumpy person uh he wanted to squeeze everything he could out of the business it was just his his you know his life source so he sold the business to us for $500,000 it you know on the pnls it was showing you know pretty wide ranges across years but on average uh it was somewhere in that 350 of of sde so we thought this is not this is not going to be a bad return we'll just do this all seller debt so we came to the table with about $180,000 as a down payment the remaining was seller financing um and the terms I believe were it was a fiveyear term a five-year term on uh 10 year am now that's a great deal yeah we thought so too so but just to be clear if in if in fact it was 350 SD we're going to hear how accurate that number was but if it was averaging 350 SD and you bought it for 500 you paid what is that one one one and a half times yeah uh and or less and um heavy seller financing yeah so so what is that yeah basically 50% seller financing yeah it was it was great what could go wrong what could go wrong so our our first year I mean leading up to us we thought it was going to be a screaming success our first year we posted a L of $300,000 300 yeah and I think I think one of the things we learned is one this is different than you know the service businesses that you know a lot of people talk about this was electrical construction so this is Hotel builds it's new uh uh multifam construction things along those lines so there's not only uh you know different points of the project that we've got to notice when we enter and buy the business but also so there's a heavy float there is a lot of working capital that is required in this in this business because yeah our contracts might say net 30 days or net 60 days but really it is hey when your contractor gets paid wait 10 days then you get paid so you're doing the work for 30 days you submit billing once then from there the contractor the GC is going to submit for billing once they get paid which is which is usually 30 to 60 days later then they'll pay you so you're looking at really like net 90 is your uh is your payment term so we were not only posting a loss because of where we took projects over but also our working capital requirements were were significantly higher than what we thought they were going to be and so what did you do wrong what what for the audience should if they see a deal like this how should they did you basically need $300,000 in working capital just to be sitting in the sitting in the bank account or what how would you approach it differently today so so I think there there are a couple of things there is a there is a it's really easy to get stuck in the uh analysis phase right and just not make a decision so both to a fault both Colin and myself we will just jump in heads first we'll just say you know what we will figure it out we'll just buy this and we'll we're going to make some changes now that got us to where we are today but we have the lumps to to kind of show for it so I would say we would still I think we would still go in and buy this business we'd still go in and and uh try to do as much as we can but we were given an education on well what is the difference in working capital from service work versus construction what does it really mean for payment terms and when you're looking at you know is it your working capital is it just your receivables uh minus your your payables or you know whatever calculation that you want to use no it's it's going to be a little bit more of a in-depth look at things so today I think we're at a foundation where we can go in and we can buy uh different businesses and not have so much strain on us from a working capital standpoint just because we've got the other businesses chugging along uh but I do think that often times it is a topic we just say hey we've got this we've got our analysis from the balance sheet and income statement let's move on uh I think it it takes a little bit more care so if it's the first one pay a little bit more attention to it well I actually just Tuesday did a webinar on working capital with Sam rosadi and and so it was I mean the whole thing was about this very topic so understanding I understand you know that basically you guys kind of under diligen uh the business and and or air quotes diligence the business uh and where you really got burned was lack of working capital uh and then today you just have much more working capital flowing through the entire hold Co so you have a lot of buffer there but what I'm curious is like I um if you can distill in into one or two tips what you did wrong specifically in that case so if I found that business today on on bis byell and I don't have the benefit of a big hold Co or whatever hold Co behind me um what what what would I how would I buy this basically $300,000 uh larger Enterprise Value so that there's that that amount of working capital in the business yeah or I mean it's working capital and also where the projects are that you're taking over we made a foolish assumption that you know a lot of these projects are basically linear so hey you're doing the work you're getting paid uh you know the profit that you get in each stage of the pro uh in in the process is going to be similar not not correct at all right so a lot of the profit for a project in electrical construction is done in the first 50% it's called roughing the the part that actually is either a cost or you break even maybe a smidge of profit is the finishing side we took over larger scale projects at that finishing uh side so what we learned was we've got to really pay attention to the ongoing projects where they are what theyve buildt for so in this game you can also forward bill which is what we learned about too so the seller had forward build collect collected a lot of uh uh income from work that you know as we were taking over as we were learning about the business doing work basically for free so we came to learn that after the fact Chandra this actually for such a small business the working capital problems that you're experiencing feels like it could have and should have been fatal really it it was close uh it was very now you're still you're still working at your W2 so you don't need to take anything out of the business Colin is operating the business and are you expecting to pay Colin yeah so Colin was taking a a nominal salary uh I think he was taking something like 75k a year I was also taking a small salary I think I was taking 25k a year just to you know for for time uh because we were always on the phone we were kind of brainstorming things like that but the there were times when we were calling each other are we going to be able to make payroll are we going to be able to do this the concerns were very real and because I'm I'm putting myself back in that mindset it seems years ago but uh or very long time ago because was years ago it it was one of those fetal moments that you've talked about right we were we were really scared about it you were so okay and I guess the fetal position moments are eased a little bit when you're working with a partner yes sharing the stress load is is huge uh so what we had done is we had cuz you know I was still working at Koopa you know the like I said the sherff that I had were great but it was still imaginary dollars they were investing or the share price wasn't very high you know I just got lucky in in 2021 but the the access to Capital was still limited um so what we did is we went to Lending Club and took out some personal loans for working capital and then we met a banker who said well why don't you take a an Express loan out for the SBA uh and so instead of using $880,000 of working cap Capital we used $350,000 of working capital and even then as we were uh taking on bigger projects trying to grow we still had working capital constraints so you did need to then inject money or working capital into the business you did it with an SBA Express loan 350 the 80 that you mentioned that would have that was what you were looking at from Lending Club yeah we did that uh initially we thought that's all we're going to need we're just going to need about $80,000 we're very wrong and and then so you get 80 plus 350 yep uh and okay and so that so then what happens what happens from there I mean did that do the trick and you claw out of it no we were still on the downward slope so I remember so I got married at the end of 2018 and we had eaten through a lot of that Capital already and we were still waiting for GCS to pay us I think they were on we had one that was over 120 days and that was that was a big check that we waiting for we can't make payroll this week so both of us liquidated what we could threw some money in the business so we can make payroll for the next week um so this was September of 2018 the Friday that I'm going to fly out to to Virginia to go get married uh cuz that was where I was uh where we were getting married deposited money into the account thought well I'll pay the wedding vendors uh a little bit late hopefully we'll get paid uh paid back and uh and go from there so it was when I say it's held together by uh duct tape and Sho string that's that's kind of what it was and when you say liquidated you and Colin liquidated what your savings we had we had savings any any stock that we could sell so I didn't have a ton of money at that time it was I think I had I threw in $25,000 he threw in an additional I think it was $15,000 we kind of worried that this thing was going to collapse wow and so you guys really put I mean you had some paper money paper wealth yeah from your Koopa stock so you weren't really facing Financial insolvency personal financial insolvency every piece of every dollar you kind of had immediate access to you you put in at this point correct and Colin as well yep wow okay and having already done the $80,000 line of credit with Lending Tree Lending Club and 350 SP okay so all right car on you know I I get married nervous back and open the mailbox and there was there was a there was a check there and I think we we breathed a sigh of relief so we took the money we we put in back we paid down our SBA line a little bit and then that's when we started to gain some traction and and start moving forward that's when the dollar started to come in um but yeah it was it was definitely a scary scary time uh to to say the least and I kind of gloss over it sometimes because like I said it feels so long ago but talking about it now it's man the anxiety that we felt was was I'd say something we hadn't felt before something I hadn't felt before the tell us what happened year two so so once you kind of things start gaining a little bit of momentum so year improve rapidly or what yes so year year one we had like I said a net loss of about $300,000 year two starting new projects carry things forward I think we had a profit of uh just about $400,000 so we net total in the black which was fantastic and as we closed out year two we thought well let's let's do this again let's buy another electrical contractor we're getting momentum so in January of 2020 we found uh Miller Electric uh which was for sale and we we went through and we purchased Miller Electric and we rebranded basically our gopher electric brand and everything under one Miller Electrical uh company let me before we get into the Miller acquisition let me just close out this the uncomfortable chapter here oh yeah two questions first so you said you were net profit of $400,000 year two so did that mean you paid down all of your you paid yourselves back and then paid down all of your lines of credit or those lines of credit just you know you are fluctuating to this day using kind of so we paid ourselves back but uh I think when I talk about profit I talk about it from an AC cruel standpoint yeah um but y this is I think in construction it's just so heavy on I mean we call it the float but uh just so heavy on working capital that it takes a very long time to to just operate on your profits so H help me then understand when the ostensibly the Enterprise Value is $500,000 when you bought this business but given the the the working capital lines of credit infusions that you had to put in your own money but then you paid yourselves back uh what does that do to the actual Enterprise Value is it you know I'm getting a little loss in the numbers was it still basically 500 you just needed to get some temporary debt to get you through or was no it's really more like it was an $800,000 acquisition uh you know I'd say we we pumped a lot into that into that business so I'd say our our actual buy prices you're right probably closer to 880 uh when we think about total dollars that we committed either via debt or personal loans or you know what have you so absolutely okay okay um 880 kind of re real Enterprise Value or acquisition price and that's Enterprise Value is probably a lot lower it was just our our fantastic ability to buy buy high right right I think that's what they tell you to do right just buy High yeah there you go uh and then that SD number the 350 average sste number did that shake out to be about right I mean you had 400y year 2 you had negative 300 year 1 so my math is that's 50,000 SD average of SE a year yeah I I uh we always joke that hey hey mistakes were made uh but uh I I think that as we learn and you know the theme I think of this is going to be we are not good at due diligence but uh uh the I think the SD numbers were there was a lot of fluff um okay and we just we took it at face value okay anything to say about the fact the the relationship between you and Colin not sure the Rel ship but I what I really mean is um it's always a very interesting topic to people about how there can be an operator in the business if the buyer is maybe not the operator you guys are slightly different because Colin's their partner so it's not like he's a hired operator right um but anything to talk about uh in that time that you're basically working full-time and colins doing this uh is in the business um yeah anything more to say about that first two years on that point I think the the benefit is that we have different skill sets so Colin having had that experience in his family business uh he had a lot more construction background uh than I did I mean I I kind of joke that I don't know which end of the hammer to use I was a you know a software guy so he had the skill set he kind of knew this area and you know I kind of had a little bit of the the finance side a little bit more sales uh background so it it really was a good combination for both of us and because we known each other for so long there is an inherent trust uh along with you know just the ability to share stress I think if either one of us had gone in it alone uh we either would have aged much worse than we did or uh we we wouldn't have been able to to to stand the pressure so it was very helpful great and are you guys 50/50 can you share what you are there 5050 okay okay and and by the way so is the plan at this point that you're going to that you Chandra are eventually going to come join at the time gopher or no yes so the the long-term Vision was that it would be both of us uh running these these companies it was just the initial start of hey this can support one person it's a smaller acquisition uh you first right Colin first because he's got like I said the background yeah he also wanted to exit the family business uh a little bit quicker uh so it just made a lot of sense yeah um and so Al so then already you're thinking hold C maybe you didn't use that word but you are thinking that this is going to be something that you both devote your entire time to you're not going to have other jobs and you're going to buy more you've already come to that conclusion early on even though the first year right and uh I I kind of uh think about it like well was there a strategy or did we just stumble forward um um I think I think that we were both really excited about working together and we just didn't have an idea of when it would be that hey the businesses we acquire can can support both of us but was part of the plan okay okay the other thing I want to call out Chandra as you said kind of a theme Here is um well I think you maybe you said the theme is that you guys don't do due diligence well but it's the it's the same theme it's a related theme to you kind of dive in yes and I'm I'm reminded of M my interview with mik o kravi who bought a an epoxy um like garage floor ceiling coding business right and a towing business kind of in Rapid succession um without doing exhaustive due diligence himself and his point was like My Philosophy is I I jump in head first I just air on the side of action and that serves me pretty well but it also means that there's going to be costs along the way I'm going to get I'm going to get burned more than somebody else doing this who's more careful and that's just the that's that cost benefit is is one I'm willing to go with I'm willing to get burned sometimes in the interest of moving much faster and not suffering analysis paralysis which I thought was a a pretty intriguing philosophy it sounds like yours is exactly the same thing absolutely and yeah I know as we go through this we we'll talk more about mistakes we made right or the lumps that we took from jumping in head first uh but it like I said it got us to where we are today and there are so many reasons not to do a deal you can come up with any number of them no deal is perfect so it's easy to get stuck in that well I don't want to take this risk I don't want to expose myself to to the potential downside we just jump in head first then you don't then you never buy anything right y okay thank you tell us about acquisition number two Miller which has become the namesake of the company so this one it a birkar halfway uh so the the big red M um yeah I see nice so Miller Miller Electric I think was just a fantastic acquisition in that it came with a lot more systems and infrastructure so still doing uh electrical construction but also had some service component so we you know we were able to to uh steady some of the uh working capital requirements which was fantastic payment terms of you know5 days or less versus you know net 90s um and we did get additional support staff uh who are with us today um so that was a fantastic acquisition uh but like anything we did make some mistakes and one of the the challenges or one of the mistakes that we made was we said well the seller from the first business he was working for us he was the master electrician we thought let's let's partner with him let's lock up master electrician's license and we'll will all be 33% ownership and we'll make him put the the down payment or portion of the down payment in for for this uh Miller acquisition and I will say 33% so you were you were that I mean he was becoming a co-equal partner with you guys mistakes were made uh and uh I I I I joke about it we we'll we'll talk a little bit more about some of those some of the Challen that that brought up but uh at the time we were thinking well these these Master electricians licenses are somewhat difficult to to have let's lock it up and make sure that we can we can focus on growth and and keep moving forward uh but I think vetting vetting Partners is just a so hugely important not only just from who they are but if they're a cultural fit for how you want to manage the business well I would have thought though but at this point you he was a known entity you'd already gone through a transaction with him been on the other side of the negotiating table from him then been on the same side of the table as he continued working for you in acquisition number one so you'd think that you would have kind of implicitly diligen him by this point yeah but but there were surprises yeah I think that some of the things that we saw as you know maybe quirks just working with with people uh you know it's the uh we we put it off as hey he's just an old school construction guy these are this is how they were they were they were made back then right um and unfortunately these small little quirks were were more character flaws than we uh we realized at the time and are these flaws around Integrity yes so we we came to find this out you know years later but uh Chandra actually let's let me pause you on that because that they're going to spend some time there but just before um we get there can you tell us some numbers uh about the Miller acquisition how big the business was than what the acquisition looked like yeah so very similar to gopher uh so that was a $600,000 Buy price it was uh just under 300,000 in uh SD uh and then at that time we were looking at well there are some things that we wouldn't count as adbs things like that so I think we settled at 250 uh was the was the real SD number but what we really liked about the business was the structure and the support staff it seems like you're getting a good deal yes uh or atast and that was a good deal yes okay and it was a good deal where the first one wasn't because it was actually much healthier sturdier Business Without these horrible working capital constraints and concerns sure yep and there were some there were still some working capital constraints but not nearly what we faced in acquisition number one these are small businesses that you bought both acquisition number one and two chandro so so the first one you know three-ish SD this one 3ish SD maybe 250 after you yep consider the adbs so those are much smaller than the conventional wisdom would tell you to buy and for two the two of you so the the scde numbers are kind of have if you kind of consider what you both need to um take from the business right the what was your thinking about size there it sounds like despite the fetal moment of gopher the fetal moments of gopher you Chuck that up to working capital not being too small a business because when you went back out you bought a similarly sized business so what were you thinking size-wise so our our initial thought was well we've got gopher kind of rolling so uh we're not going to face that immediate uh or the uh the as steep A J curve uh with this one because we've got the the Gopher uh receivables we've got you know a lot of this base formed so we thought we're not going to feel the same kind of pain with Miller as we felt with the first acquisition and that was the thought process of it will go after another small business we see that it's got some really long-term employees uh all of the the employees at that time with the exception of one uh who uh who were field staff were Journeymen which at that time and still to this day Journeymen are like uh they're like unicorns they're really hard to hard to find um what's a journeyman Shandra so a journeyman electrician is somebody who's gone through uh the the I think it's a four-year apprenticeship they can actually run electrical construction jobs they can uh uh there's there's specific ratios that you have to have of journeyman to apprentices on uh a job site things along those lines so it's it's the experience and the ability to pass a pretty extensive uh state exam uh to to be certified to be a journeyman so it's it's a difficult process and I think the pass rate in Minnesota is actually lower than the bar so saying so you just saw a lot of you were saying the value that you saw in Miller despite the fact that the SD number and overall Revenue number was quite low yes and we thought you know we've got we've got a good sales uh funnel what we can do is we can start to bring down the the actual cost on jobs by pairing these Journeymen with some experienced apprentices so the apprentices are going to make a little bit less money so we can start to average down the cost uh we can make this slightly more profitable uh that was at least the thought process so how does that go so tell tell us a little bit about the the transition and how it goes in year one and two and then of course return us to what happens with seller of business number one the go for seller yeah so you know the first few months as we brought in this uh this new partner you know things are things are going along the transition is going going all right but within I'll say within six or seven months we lost three key team members from Miller so we lost three Journeymen and and how how many had you had how many employees had Miller had so we had seven field staff uh and then one one office support wow so you lost three and those seven were Journeymen and apprentices uh yeah well they were all journeyman so that was that was the attractive uh attractiveness of the uh the business oh sorry I did I missed that they were all Journeymen okay so you lose half of effectively half of them three of the seven and you know it was that the the person we brought on uh to be an equal partner he was butting heads with a lot of the a lot of the guys um just like I said from a cultural standpoint he just wasn't uh wasn't there um you know if I can if I can curse I mean I think nobody really wants to work for an right yeah and especially in a in a tri where the demand is so high to go somewhere else and be treated the right way which is you know what Colin and I really want to do we we want to build an organization that is culture first we want people to really enjoy where they work and this this person was just kind of the the antithesis to that yeah and we we saw that pop up more and more uh which was uh disappointing now that you're basically have bought two businesses two electrical contractors you have uh you can compare and contrast them including culturally y so he had been the founder owner and seller of business number one gopher so did you then see that that the the culture at gopher was not great because as you looked at Miller and you saw his influence on Miller it was kind of starting to bring the culture down yeah it it it was it was pretty clear I think that we wanted to take him away from any any HR type of type of role or any type of management of team members the problem is he also had the master electrician's license so he had to go out on job sites he had to interact with field staff so it was hard to keep him siloed what he was good at was the sales side and he was good at you know some administrative tasks uh or at least that's what we thought well as you start to see cracks uh here are you also concerned about the equity that you've given to him he has not only operational power within the business but he's actually got he's on the cap table Yeah Yeah so it it was a concern we were hoping that and this is this is hope hope isn't a strategy right but we're hoping that we can bring him along and start to start to change his behavior how he uh was interacting with team members or at least Silo him uh we were not successful add on top of that so this we completed that acquisition in January of 2020 in May of 2020 we completed two additional Acquisitions which were underground construction and fiber splicing and those are the two businesses that I started running so it was not only that he was interacting with the staff and we're getting more complaints we're also overloaded with work from hey we've got a transition fully transition the electrical company we've got to fully transition the underground construction and fiber splicing businesses as well so it was a it was a lot at the same time he's no longer at the business so how did you extricate yourself from this so you know Colin and I we were looking at hey maybe we should buy businesses out side of this partnership so we were looking at you know a manufacturing company and this is early 2022 uh and at the same time he comes and says look I I'd like a buy out we thought hey the stars are aligning this is fantastic uh and we we go through we negotiate a Buy price we say all right there's a lot of debt on these businesses we're we're going to we're gonna offer you I think we offered him $650,000 is what we settled on to get his third of the the businesses uh that we had Acquired and just have him leave that's you know at the time we're think this is this is a great deal we're we're getting a lot but what we didn't know is all the things that he was doing in the background uh stealing from the businesses so on and so forth okay well I want to hear about that but um when you say you're getting a great deal so and you paid him $650,000 for 33 33% of the business so you basically valued your businesses at this point at $2 million yep Equity value yep Equity value and you thought that that was a good deal for you yes because basically an undervalue it it was I I think I think if we looked at what the growth rate was for you know the company that companies that we had just bought um the underground construction company and the fiber splicing company I think we purchased those well um and we had a lot of work in pipeline I I think if those were all taken into account we'd say yeah there was there was a discount but because he wanted to move fast we also wanted to move fast thought this this made a ton of sense and and so so sorry the the fiber laying business the or the underground um what construction business as you called it acquisition three and then the fiber splicing business acquisition 4 by the way were did they come as a pair together they were the same seller they had different cap tables um and they were structured a little bit differently but yeah they were the same we're going to get to those in just a sec but you bought those as part of the partnership with with the Gopher seller yes okay yeah so you had all this so you really wanted to get him out before those things started taking off or whatever was going to happen there so but just to be clear on the $650,000 that you paid him you had given him the 33% of the business just in exchange for continuing on and the having the master license he hadn't had to buy in any Equity so he he put the he put a portion of the down payment down for to buy Miller Electric so oh that's right so the structure of that deal was it was you know I think it was $600,000 we uh did that through I think it was 20% down and then Traditional Bank debt um and then during that process of the Miller acquisition Miller Electric acquisition we also refinanced his seller note to say okay well we'll just have the businesses pay the bank um so we didn't have a seller note with him anymore he got paid out uh which in retrospect was also uh foolish so he so he turned what into 650 so so we had paid him out all of the seller debt that we had from go for electric uh at the close of the Miller acquisition and also made him a 33% partner to lock up his electrical license uh and he came to the table I think with $90,000 so wow wow yeah okay well to add insult to injury tell us what you then learned also about about his uh misbegotten gains as he had been running things uh and and I think one of I'll say this so Colin and I are are trusting to a fault right were I think still still okay I don't I don't want to look at the world neither one of us wants to look at the world with so much cynicism and you know so much doubt with people that that we become the the the grumpy people or the the the folks that never trust anyone I know I'm going to get burned I know this is going to be a a fact of life but I choose to live life thinking that hey the people I interact with are going to be genuine I know it's not true but I'd rather make the Assumption first and be proven wrong um so with uh with this gentleman he what would he was doing was he was basically building things for himself and hiding those construction costs in Project costs that uh that go for and Miller were were completing so an example he built himself a pool and when he built himself a pool there's cement cost there's construction costs well he hid that cement cost under a mil under a Miller Electric job that had cement cost using the same vendor right using the same POS uh so when we're doing job costing we're like oh this came in a lot higher you know uh and then his explanation is oh well we we needed more more cement or we needed more of this so wow he was just yeah andz I mean this is embezzlement basically y he built himself a barn uh you know uh this is uh uh you know or a man cave or whatever it is uh and everything from Lumber and this is you know we started looking back at the transactions this is when all building materials are super expensive and just pulling just pulling funds out of the business which uh was disappointing you when I hear stories like this I'm I'm doubly a gast I'm a gast at the moral failing uh of this individual but I'm also a gas at the at the their hutzpah to think that they're not going to get caught yeah like this isn't you know a giant business where $50,000 here or there as a rounding error like you you know these are the these additional costs you you immediately notice you Chandra immediately notice like why is cement so much more expensive this time just um and you're you know you're basically intimately partnered with him uh it just blows my mind that he think he'd get away with it basically yeah and I I think the benefit here is that we didn't do $650,000 up front we did we did do a large portion so we did $450,000 financed by our bank and then we did a seller note uh for $200,000 and we had that seller note kick in I I want to say eight months later so we had a standby period and that standby period when he was out of the business allowed us to to dig in and see what was actually going on here and that's when we discovered so we held back the seller note um and we're not we're not going to pay on that but we've we you know we're given this idea by our bank and our our attorney say look you don't have to to pay him after you found the fraud um because we're still finding fraud here in there so it's still now 2024 uh end of 23 so as we closed out the the 23 books went back and had our accounting firm uh looking at 22 as part of uh you know as we're going through an acquisition process uh that that didn't happen uh that should have happened uh this this week um but we found some some additional transactions there as well Chandra you you had said on our preall how much this really bothers you this guy the emotions of of being kind of robbed Blind by your business partner no less right uh so this is a different type of um unpleasant emotion than a fetal position where you're worried about making payroll this is the emotion the negative emotion that can happen in small business where there's just more theft that occurs I think right I think it's fair to say um I think John Wilson who I who I recently had on the podcast who has a plumbing business in uh the akan Ohio and Cleveland area big one um we were talking about the path of buying a small business and he and he says he says is one of the things that people considering this path uh should also consider is like are you prepared to be stolen from like I'm stolen from every day and now I didn't get him to elaborate on that I don't know if he meant by customers or employees or what but you just have the impression that there's that there's a lot of there's there's a lot more theft here than there would be in Corporate America so take respond to all of that please yeah so I I would say that the first few months after we found the theft I was I was really emotional about I was really really upset and you know talking with our uh our corporate attorney talking with uh well we had to get a new corporate attorney because there were some conflicts of interest so we couldn't couldn't use the same same group so we we have uh another corporate Council that we're using and wanting to to say hey let's let's go after him with everything let's let's use you know we know that he we we also found out he cheats on his taxes like all right well let's let's make the the tips to the IRS let's you know just a lot of anger because yeah there was there was just trust there right and when you trust somebody and they betray that trust you're gonna have a very significant emotional response yeah and what I found is that emotional response was only a net negative to me and it was uh you know a negative a negative to to people around me nobody lives in a vacuum right as you you you kind of wear this stuff on your sleeve other people see it other people know that hey this is something you're struggling with but it also is in every interaction that you have so I'm gr so this was permeating your mood oh absolutely you you this anger was following you around like a cloud over a rainy Cloud over your head everywhere for weeks and months yeah i' I'd like to think I can compartmentalize but I can't uh and so I mean my wife would would be like you know hey you're you're pretty grumpy all the time what's what's going on you're uh you know I was more frustrated with you know even hanging out with my my son who is uh you know a toddler who's toddler now and you know all of those things just just make for a negative experience so I I had to to reflect back and think is hanging on to this worth it is it and it's it's just not so that was the uh a little bit of the wisdom I I came to well easier said than done though Chandra I mean I feel like I've heard that it's like what is it the um yeah anger or resentment like it's um basically what you said it's really the cost is to you not the person who's the subject of your anger resentment so just kind of put down the burden but like easier said than done and I imagine right so so I'm not sure the wisdom is so much that which we all already know the wisdom is how how did you let it go I think you have to look at the impacts to people around you and if I am making uh you know an impact uh that is to the negative on the people I love most because I'm grumpy the time or because I'm carrying this additional anger for somebody who doesn't matter they just don't matter in in my life then you know i' I've got to do the work internally to say hey let it go yeah let it go well good for you Chandra for for letting I still struggle with it don't don't get me wrong I'm not uh fully Zen yet but it's a it it's progress well I bet it's it's something of a muscle you know you got to you got to kind of exercise that muscle to keep keep it keep it strong right keep the the anger at Bay sort of thing um and also good on you for in your partner for kind of philosophically committing yourselves to not being becoming um losing you know misanthropic losing faith in all all humanity and uh just being distrustful in all directions that you you really have kind of a commit a philosophical commitment to continuing to you know give people the benefit of the doubt trusting first um trust but verify I assume I assume you've probably come gotten a little bit tighter around verification um but that you don't want to just become this jaded Grump right right y sort of thing and it's I mean that was not the last time we've been burned and uh you know even the I think back to the most recent times we've been burned I know it's not going to be the last uh but like I said you could either look at the world world as hey a lot of people are out to get you you've got to protect everything you have uh and you know go at it with that type of cynicism or you cannot and yeah I choose to look at a much more positive view of the world just before we close out this chapter of your story um just watching the time but what do you think is the takeaway from this terrible experience with seller of business number one was it that you didn't verify you should have been um tighter there or I think we've already covered that maybe you were a little too generous in bringing him into the partnership you offered him too much for too little the master license basically what what would you have done differently what did you learn other than to put down your anger from this experience well I think I think I learned the value of a seller note at you know initially when uh going through these Acquisitions you know the I would say well the seller note just acts as it's almost like equity for the bank so uh we'll we'll just keep a seller note on um so we had a seller note with our underground construction company we had a seller note with the fiber splicing company along with the the Miller Electric acquisition we had a small seller note there which I just I just didn't really put much towards the the phrase have skin in the game uh but seeing how this paid off of having a hold back having that seller note to say hey look you thought you were getting all this you're not you already got paid fine we're we're going to separate is a huge lesson and yeah we were able to use that tool in another scenario as well so the value of a seller note as um not giving too much of too much cash away so that if there's some uncomfortable position you can it's not in that money doesn't have to be clawed back it's in your hands before being given over and you just don't give it over right trying trying to get back what you've already given is so much harder looking at our time and still got a few important things to get to so you've done as you said uh a total of five Acquisitions we're not going to have time to do all of them sure uh but I I do want to hear about I want to hear briefly about very briefly about all of them actually um but we're not going to Deep dive into all of them but before we move away from your first two the electrical contractors go for in Miller Miller which is now again the the brand of the hco tell us a little bit about the electrical business um we hear a lot about HVAC we hear a lot about Plumbing uh a lot of Plumbing businesses offer HVAC and vice versa um electrical is enormous but it it it it's somehow a little bit to the side from those the those two other giant trades what can you Ed edate people about this industry business to look for so I I would say this it's a little bit different because we are so heavy in construction versus service work so we are trying to Pivot into a little bit more of electrical service working with property management companies working with uh you know maybe HOAs things along those lines to where we get you know a normal volume of calls to have an electrician go out and and take a look at some some simple problems maybe it's an outlet or or what have you uh or smaller jobs that being said I think I think this space very similar to HVAC very similar to Plumbing is going to get the same kind of attention uh in in the next couple of years but once again with a focus on service rather than construction but any notion as to why it hasn't happened yet I think the the licensing requirements at least in the state of Minnesota are really really high so to to be a journeyman to have that service work component you have to send a journeyman out to to do the work right uh so if I have an outlet out at my house and I've got to get a you know I've got to call electrical service company to do it it's a journeyman coming out to to fix it and the cost for uh you know that journeyman you know call it $125 an hour plus your travel time I mean the margins just aren't as high as with HVAC or Plumbing things along those lines that's my guess uh but wait wait sorry so for you the owner the margins on your labor are lower thinner because they're so much more expensive and you you don't feel that you can pass on that cost to the consumer right to to maintain margin like say you wanted 20 25% margin you don't feel like interesting and I mean like I said I think this is a new world for us as an organization too so there there are likely other electric service companies that have figured this out uh so we're we're really dipping our toe of the water from these big you know two three million builds that last a year or eight months to hey I've got my neighbor who's got uh a GFI or uh you know somebody needs a new panel something like that so it's maybe just my experience versus industry as a whole by the way I I meant to mention this earlier the one of the reasons that we like service instead of construction one of the the I think the most commonly held reason that service is better than construction is because the revenue collection the revenue generation is smoother it's not as cyclical it's not subject to economic Trends so construction surges when the economy is good construction gets hammered when the economy pulls back so very cyclical um but also this working capital thing yes I I I I'm surprise has taken this long for it to to crystallize for me that um the way construction jobs are paid is terrible the terms are basically terrible it's it's 60 and 90 days before you get get paid for for work um so we don't like that either mental note or note for the audience and myself great okay um thank you for that the let so let's quickly hear about the underground construction fiber laying and fiber fiber splicing this pair of businesses what are these all about yeah so we we bought this in we closed May of 2020 so right as the world has shut down uh from from co uh we bought this um underground construction company we thought well we'll just continue to Branch out from electrical our electrical service uh uh Construction Company essentially had some underground component we thought well we'll go out and just buy this and the multiple seemed fantastic that I think the total purchase price for both businesses was $2.1 Million um and on what G give us picture of Revenue s employees Etc uh so Revenue at the time was say 1.3 $1.4 million um and for the underground construction side about2 to $300,000 for fiber splicing um and the SD total for each was about $400,000 so that's a 5x multiple but it was all asset based so we ended up buying I think it was about $1.8 million of equipment so we looked at this and said well this is uh first the seller was selling because they had recently had a heart attack and could not continue to operate the business so they had one year where they were basically saying all right I'm going to operate this from my couch normally they're out in the field doing every single thing so the numbers had taken a little bit of a downturn I think historically they were looking at uh you know close to a million dollars of of sde uh granted that's got a lot of fluff but the year that we bought it the previous year rather had right around that 400,000 so we were taking a risk seeing well the company is in a downward trajectory but we think we could fix and a lot of hard assets they came along a lot correct so we saw the risk as fairly minimal because if this thing didn't work uh and we were doing conventional debt with uh uh a 10% seller note um and some some down payment from us we thought well we just sell all the equipment and take off the the uh the existing debt yeah we'd be out our Equity great and has that proven to be a pretty good thesis yeah I mean that that business well the business is doing great right U but just was your analysis pretty on point there yeah of okay yep we're going to hear about how the business is done too because that's been a lot of the the growth of the overall hold Co has come from from the from the laying the underground construction right yeah so we we'll get to that in just a sec but um conventional debt so this is I meant to ask earlier when I heard you say that so it sounds like you're using have you used SBA at all Noba not not outside of that initial uh Express line uh and we ended up refinancing that to a conventional line after our uh acquisition of Miller Electric so everything we have is conventional debt so what's the deal there why not SBA so we were looking at it from the terms the kind of ease to operate um so when you're operating uh asset heavy business with the SBA it can sometimes be a challenge so looking at all of the things that you've got to go through from hey I've got a maybe I've got to sell a truck well that means you've got to go get permission to to sell the truck or you want to buy a new asset you've got to go through the process of getting permission and there are significantly more Hoops to jump through to get the SBA loan uh you know when I when I went through the process of doing conventional yeah I was still arduous it was still uh a challenge but I would liken the SBA process as more of a financial rectal exam uh than than anything else so okay like anyone I I avoided it but what do you mean you have to get permission to buy another truck so the way our Banker explained it to us is before we could buy additional assets or sell existing assets we'd have to submit in writing our use case uh and get approval I haven't heard that oh all right well maybe that was just one particular Bank okay uh but so had you taken an SBA loan to buy a business one of your businesses yep to to buy or sell a significant like a capital expenditure you were going to have to get approval to do that right and and this is only these are things that I've learned somewhat recently so we were looking at the SBA to complete an acquisition that was you know uh that ultimately fell apart it was supposed to close this week but we were looking to utilize the SBA uh for for this acquisition just as part of an expansion loan um but these were some of the terms that we were talking through and thinking back I'm like man I'm really happy we didn't do that for our initial Acquisitions yeah I'll have to look around and see if that is indeed yeah it could be that these are requirements maybe not not from the SBA but rather from the bank that we were looking at yep yeah so Chandra so you bought Miller the Electrical Company January 2020 five months later you buy five four months later you buy uh the two under the fiber splicing in the fiber laying businesses Acquisitions three and four right so that's a busy year for you this is 2020 covid the now what is your participation in the businesses have you gone full-time yet yandra or is it Colin doing the 100% him operationally at this point so it was uh uh at this time it was Colin and then the business partner that we' brought in they were managing the electrical side I still had my W2 but I had taken over management of the underground construction company and the uh uh fiber splicing business um so I would be driving to job sites uh understanding the business and then hopping back in the truck to do a Consulting call for my for my corporate job um so it was it was a little bit of a challenge uh just putting in a lot of time a lot of effort to to go through that and I think it's not that I had to do it there was a little bit of greed from my perspective I still had shares that were vesting um and uh since you know this was Co era and I was in Consulting everything was a Zoom call so I didn't have to hop on a flight to go anywhere it just made it a lot easier to juggle both um and if any of uh my colleagues from from Koopa listen to this I was still killing it I was still focused on that job but at the same time learning and trying to to better understand underground construction and fiber splicing and on the geography point because Koopa you'd been in Chicago y these two businesses under construction fiber splicing are in Minnesota yes so I I had moved back to Minnesota after I got married in the end of 2018 oh at the end of 2018 so you've been working remotely for Koopa anyway yeah pre-co yep pre-co though I was I was traveling a lot I was living that you were back and forth from Chicago a lot I was living that consultant lifestyle of flying to a different city and you know having a couple of flights uh a week uh at the minimum okay and so give us a little bit about about these the business of underground construction and fiber splicing what can we learn about these businesses are they attractive businesses for listeners to go look for uh I I would think so um just don't do it in the state of Minnesota because I'm really on the hunt for more um but uh so so essentially what what we're seeing is a massive investment from the federal level from the state level and the local level to increase uh you know Broadband access for you know different communities uh this business was focused on Rural uh fiber development we've gone to expand a you building out full tier 2 tier three cities so that all of those residents have access to high-speed internet uh so we're working with local and Rural isps to build out their Network um I'd like to say it was very strategic that we did this but uh it was it was a lot of luck because in 2020 these companies were still making these Investments and then in 20202 uh you the the infrastructure bill passed and the uh I think it was in 21 there was uh the American Rescue Bill there were a number of different bills that were passed that just report gasoline on this uh this infrastructure uh build play so we're seeing a lot of that flow through today and so what has so this you bought again May 2020 underground construction and and and by the way the underground construction and the fiber splicing I assume there's a lot of overlap there that those two businesses feed each other so should I talk about them collectively or should I talk we could talk about them collectively I'd say Underground Construction feeds uh the the splicing side so once the fiber is in the ground we then send uh a a technician who is uh you know got that side of the contract to go in splice the fiber together test it make sure light data can pass through uh and then ultimately have the ability to have customers sign up and uh have that connectivity and the reason this isn't a single business in a single service where you where you dig and then lay the pipe and then have the technician come and make sure the data is passing through correctly is because those are just two very different skill sets so digging and laying pipe is construction as you keep referring to it whereas fiber fiber splicing is very kind of technical basally yeah okay and that's how they were structured when we acquired it and we kept it kind of the same and we see that in Industry a lot as well that usually they're they're separate entities uh usually and the construction is so much bigger because because it does it does nonfiber constru Underground Construction as well why wouldn't or or it's just more the the job size is a lot the ticket size basically is yeah bigger it's it's the ladder and uh you know I was focused on building you know I I I really focused energy on growing the underground construction side now I'm I'm really focused on growing the the splicing side as well to match so it's kind of the prioritization okay uhhuh and so what R what does revenue look like for that pair of businesses today almost four years later sure so this year we'll be uh just shy of $7 million in revenue on construction and uh about one and a quarter million for fiber splicing the benefit here is that the ibida impact for fiber in is actually really huge so we're going to see Close to You 40% iida on that you know one and a qu million oh fantastic so a business that was doing you said 1.3 plus call it two 250 so about a million and a half bucks when you bought it these these pair of businesses a million and a half bucks are now going to be doing uh north of 8 8 million uh and the SD you said 40% 1.25 is 24 about $500,000 plus and then how are your margins on the Underground Construction the underground construction side is is really good as well um especially because what we're doing is we're doing City builds that are really close to our headquarters so we don't have to have the additional cost that other construction companies have to have like hotel costs for uh team members per Dum things along the those lines uh excessive fuel costs so our margins are a little bit better right now uh but I I believe we're going to probably be just shy of of $2 million uh of of iida on our Underground Construction side wow so collectively together the pair is about $2.5 million uh earning about $2.5 million up from call it 400 s so that's six times six 6X growth in four years awesome yeah well congratulations thank you I I'm I'm really happy with that team they they've done an absolute absolutely fantastic job and this um this buildout so in the 49 states that are not Minnesota there you think that similar projects are happening and and similar kind of infrastructure dollars are flowing yes and and and but you had said that the businesses was focused on Rural buildout but then you now just said that in fact you were doing a lot of Municipal projects oh I guess you said it was it was rural but also second and third tier cities as well so okay uh initially when we bought the business they were focused primarily just on the the rural side we've we've taken it and had uh not just the rural side but expanded into more full City builds which has you know slightly different components we have to have our team members trained a little bit more because they're interacting with uh uh homeowners a lot more so so if you've got a A team out in the rural areas and they're putting in a ton of fiber but they're along you know just a highway or a County Road and there's Farmland to the other side they're really not interacting with a ton of folks but on the city Side uh there's just a an up level or an up skill in terms of professionalism in terms of appearance things along those lines to give homeowners uh a little bit more Comfort okay and uh so you still working at C I am not okay so when did you go fulltime so I left in May of 2021 uh so my first son was born in March of 2021 and uh you know I I thought you know I'll just carry on as much as I can and I found myself while doing both missing out on some of the important things for his development for him just you know the the enjoyable Parts about being a dad for the first time so uh I decided to leave Koopa and focus on this full-time and just be more present with my family good for you and has that has your family felt the benefits of that uh I'd like to think so I hope they'd say the same uh my now three-year-old is very rambunctious and I've got a seven-month-old now as well so if we do a follow-up call in a few months or a year or so you'll look at me and tell me I've aged like a wartime President coming out with a lot a lot more gray than you went in we're gonna have to wrap up here Chandra sure but there was another acquisition why don't you just give us a couple minutes on that sure um because you acquired and then divested yourself of it but give us the the very abbreviated version of that just so we can get a sense of what it looks like when a hold Co buys a business that It ultimately decides it doesn't want to devote itself to yeah so we were we were thinking that we were this mini private Equity Firm and we could utilize the resources of the existing businesses to buy and diversify into other areas and so we bought a manufacturing company this manufacturing company was one that uh manufactured trailers equipment trailers um and because we're in the construction space because we saw there was a shortage of these thought hey this makes a ton of sense we found one that uh was about two hours away the location from our existing businesses so it was a separate location uh the the purchase price was $1.85 Million included $1 million of real estate $850,000 was the operating entity uh we did this mostly with a conventional loan and a seller note uh I think we put down 10% uh Equity from ourselves I believe the total thinking the total seller note was about $250,000 um so we we were operating this business for a total of 18 months um we were really sold on this because the owner said hey you know I've had a lot of success with this business in a very short amount of time I have lung cancer I'm dying I want to to spend more time with my family and being the bleeding hearts that we are we thought well this is a good business yeah this guy's a micromanager he's kind of a jerk to work for but we could fix it you know it's our own hubris well we could fix anything um and so we bought this business came to find out that the numbers that he provided were not correct because we we sped through this in terms of due diligence we thought this guy was dying uh in very short order so we come to find out that all the financials were incorrect he was looking at showing deposits as actual recognized Revenue so there were no costs against this this is a business showing 30% iida uh which we thought was hey this is great we still have enough room to uh put in a manager and we'll we'll be fine uh so the business immediately is losing losing a ton of money uh we're spending parts of our time there while still spending time at our construction business which is doing well um and because this is the same time where we bought out our existing partner there are some things that he did on that side that were presenting some challenges with the electrical business so it seemed like there were just a lot of things going on at the same time and the way we put it is we basically Comm completed two Acquisitions at the same time both of which were a little bit on fire so we spent a lot of time fixing the manufacturing company so we cleaned up the real estate made sure this was a you know basically a healthy place to to work and we came to the conclusion of look we have so much growth opportunity on the construction side we have these huge citybuild contracts coming up to uh on the Underground Construction side on the fiber side getting electrical back on its feet it just does not make sense to try and continue manage something that is $2 to $300,000 of SD we fixed it the real estate appreciated we sold that uh sold that business in September of 23 and because we had a seller note we renegotiated that seller note down uh because of some of the fraud that that seller had and ultimately saved about $150,000 on that on that uh seller note and so there was fraud financial fraud and he never had cancer to begin with correct he did not have cancer wow yeah what bad luck you have with sellers although Chandra I'm also just wondering if you're you know your aforementioned philosophy of just diving in and knowing that you'll get burned sometimes is maybe a little a little too loose yeah no I I I do think that in this in this world of ETA you're you're going to get kicked in the teeth yes I could have uh uh I think we could have done a better job avoiding some of those kicks but I still I still don't want to approach the world with that level of cynicism if somebody says hey look I've I've got hardship you know if it's a team member an employee I've got a lot of hardship coming up can you help me the answer from us as an ownership team as an executive team is almost always going to be yes we will help you uh that's just who who we are uh um and are we going to get burned yes I I think I had a team member from that Manufacturing Company he approached us he was very upset his truck had been been repossessed can can you help me I I don't know what to do so yeah we we paid to get his truck out of uh the the tow yard and and all these things he said yes I'm gonna pay you back I promise I I don't think we've seen a dime of that yet I think that was 35 $500 but it it's just something that we we're going to continue to do because I I I think that's just who we are but yeah don't buy businesses from guys who uh fake cancer that's a that's a good lesson and also have a have a really good seller note right right um okay Chandra the so ultimately you sold that business it sounds like mostly kind of as a capital allocation decision or in an energy and attention allocation decision yeah energy and Al energy decision is probably the the best way to yeah to phrase it yeah okay and then so when you and I talked in January you were looking at this sixth acquisition that was really going to be a needle mover you've already teased that unhappily last week it fell apart yep um I hate to I hate to uh roll around in your pain here Chandra but broken deals is such a part of this world yes uh it may benefit the audience to hear from somebody who is very fresh in a very disappointing broken dealing with a very disappointing broken deal what can you tell us so this business was another underground construction company uh doing the same work that we do today so uh putting fiber in uh in the ground there was Zero customer overlap they were larger in terms of Revenue uh in terms of assets but their eidel is a lot lower uh because of how they bid projects we thought there was an immediate opportunity to have some some gain um just because they were they were working with customers who would pay the lowest but had very little admin burden uh they just made billing easy well we have a team member that could just take on billing that' be great um so we'd been working on this for the last six months because of how the last Acquisitions have gone we were a little bit more thorough uh and this would have been our you know largest acquis position uh to date just in terms of of Revenue the the company was doing about $10 million of Revenue um they also shared our same accounting partner so we use bwk up here in in Minnesota so very reputable uh accounting firm and we were going through all the right steps used uh you know a deal attorney that was that's known to get deals done uh more than anything else and getting closer to the Finish Line the weather is starting to improve here in Minnesota I think that the the greed glands turned on and they thought what a lot of blue collar owners think which is well I could just work more I could just continue to work and so they called the deal off about a week and a half before the the close which was disappointing and your so to be clear your senses they called the deal off simply because hey I'd rather just keep this business because they're starting to see money come in for because it's high Seasons about to hit yes and what did you say their greed glands turned on I I've not heard that one yeah and you know I so so do you think is this the sort of thing where they it'll Circle back around if you if you hang around the hoop this deal will come back to you in the winter uh when when their greed glands are are deactivated again I think so I I have no doubt that they CU they really wanted to close in December uh and for us it doesn't really make sense to buy a seasonal business in December and carry 3 months of uh you know there's some support staff still on there is uh equipment maintenance that needs to be done Etc it just it for us the perfect time to to close is April May when things are really going for them it's 12:31 and they kept pushing for that I have no doubt they'll come back to us in October and say hey do you want to do you want to keep going on this deal we'll see if I'm still as emotional as I am today because my response today probably is a Flatout no but I know that I'm still uh emotional about it Chandra put down your anger man I'll try yeah it's wor to live by well we're we're rooting for you that would be a big needle mover in the business business let's and so by the way we we it's been a minute since we talked about the electrical businesses how are they doing now five and four and six years later respectively I think of the two yeah they're they're doing well I think this year we're slotted to to see a little bit of growth again uh because of what the you know the the other owner had done it took a little bit to get it right you know uh back on the right path uh so what is this almost two years later it's now on the right path we're going to start seeing growth again uh so that part is is doing well I'm happy where we are there I guess let's close out with just big picture here first I'll ask what is your plan for the next call it 10 years what has the vision evolved um or become more maybe uh concrete about about a number goal or some other kind of quantifiable goal how do you guys think about that these days yeah so we're we're actually going through a an EOS implementation and we just uh we just had to kind of do a deep dive and answer some of these questions but our I would say our beehag our our audacious goal is hundred million in Revenue um it's you know nine times where we are today uh which is is a big goal right so uh that goal is going to be accomplished by both acquisition as well as growth internally uh or organically and do you think it'll come from rolling up is is the strategy now to roll up underground construction or is it to look at that plus in adjacent things to that further build out uh Miller Electric with other electrical contractors or what yeah so the strategy for acquisition is both it's it's looking at fiber splicing companies because the margin is so good same thing with underground construction just because we we have a good path for growth in those businesses and we understand them really well and then if we can find uh an electric com electric uh uh Service Company for sale then we' we'd want to go after that so that's the those are the three areas where we really want to try and acquire not necessarily electrical construction fantastic and as you reflect back on what you've built and maybe listening to people out maybe talking now to people out there who kind of aspire to build what you built anything that we haven't already talked about that you would advise them we've talked about the importance of seller notes about this spectrum of uh diligence and action and in where each each person's kind of kind of kind of find their own um place on that Spectrum uh yours tends to be more toward action than diligence um so we've been hitting on a lot of these themes any other themes that that we should that you want to be communicating to folks I think I think sharing the sharing the stress load is is a very big big thing very big component so whether it's a partner or if you have an operations manager or even you know just people around you who will help you share that load is going to be really important uh you know I had Colin we you know we're now basically neighbors so we talk every day well whether it's at the office the drive to the office the drive home from the office uh you know things things along those lines so just having additional support to deal with the stress that comes along with business ownership is huge yeah great point to end on Chandra if people want to reach out what is your preferred method yeah so uh shoot me an email Chandra Miller MN .c uh or send me a a message on LinkedIn uh I've got a number of folks that I try to help out and share the lessons that I've painfully had to learn uh and just taken some some uh advisory roles with other uh other groups in the ATA space Oh great okay also I've been calling you Chandra this whole time and you just called yourself Chandra yeah either either way I I go by both uh and also got a little bit a cold so hopefully uh Sinners aren too annoyed with uh my nasly voice all right Chandra great story congratulations on what you and uh what you and Colin have built and yeah we look forward to hearing uh an update from you in the years ahead well cheers my friend thank you for everything you do I hope you enjoyed that interview make sure you subscribe to the acquiring minds Channel below we are now publishing twice a week so tons of new interviews and stories to come stories that will help you along your own path to acquiring a business