David page welcome to acquiring minds hello good to see you I've been working on you for a year David so this is a minor Victory to have you here sitting in front of me thank you for coming on well it's a pleasure to be here we met at the ETA Meetup in San Francisco last I guess November December you are Bay Area base as I was up until just a few months ago and you acquired and owned a business called post and trellis it's a wines and Vines business as you called it you bought it in 2011 and it's now a much larger operation than it was back then so I'm eager to share this uh really interesting business story with the audience please start us off David with a little personal history how did you originally come to the U.S sure well um uh yeah it is an interesting story because I guess I started out in England and I managed to get myself to a good University where I had a lot of choice what I could do um and uh you know that point when you're leaving University there's lots of branches right out in front of you and you're trying to figure out which one to crawl along um and there were several on that kind of tree of of kind of options that just did not appeal um most of them were around kind of Finance What's called the city of London I just didn't didn't dig the whole kind of pinstripe formality um it seemed like a a very very stayed version of a kind of a very very private school and a snobby place it just it just didn't gel with me at all so um I had grown up with my father running a small business at home um and so lunch times when I was around were were kind of discussing little facets of his business um and the world so yeah I felt more affinity for Commerce more fancy for business um and decided to kind of ignore the the professions as they were called um after University and kind of and head leftwards um yeah and that made for a really really fascinating kind of first 10 years of a career I started off working um within the software industry um and specifically sales um the reason being that I wanted to earn as much money as possible and it was a very well paid um kind of Junior position but also because I wanted to learn more and more about other businesses I was aware that I had seen the world kind of through the very narrow lens of my father's operation and by being a software sales guy I basically got to go in to hundreds and hundreds if not thousands of companies and say okay how do you do business how do you acquire customers what do you do with the customers how do you service the customers how do you operate how do you distribute whatever the model was in all different sectors and just talk to them about their business and see how I could help we had just a little software utility solution that could help various businesses in various ways and so it was it was a really good exploration in business it also became a fantastic passport because it offered me the opportunity to get on a plane to San Francisco they um they wanted someone to set up their American operation and age 27 28 I managed to convince them that was me um probably through the paucity of other good options but um yeah it got me on a plane they in fact wanted to set up in LA and I knew from um from talking about I just didn't want to live in LA but San Francisco sounded cool um and so yeah I managed to twist their arms I know that decision yeah exactly um all serious technology companies have a have a basin in Silicon Valley and surely that's where we should be and so they bought that they bought me and they sent us off um and there was a few of us who came over to set up um kind of old Brits who uh who had a had a really fun adventure but after a few more years of that I suddenly looked around having great fun had five different jobs in two different countries but suddenly I've been at this one company for 10 years and it's time to do something else so um so yeah I uh went off and actually went traveling around the world for a year it's something that English people do a fair bit they take a little uh a little sabbatical pack a backpack they do it before or right after University though don't they yeah so there's a gap year which I did too but um those folks that have done a gap year tend to kind of try and repeat at some point in their lives because it's such fun and such a it's a great great thing to do um yeah so yeah I got on the road again came back and at that point I'd basically packed everything I owned up into a trunk of a of a kind of a of an old car and a goat Barn south of San Jose um so that it wouldn't uh it wouldn't disappear but the idea was I can come back from my ear off and live anywhere I want in the world do whatever I want um I was 30 somethingish but an unmarried no kids um so yeah I had that that wonderful dose of freedom but decided on on completion of that trip that I actually wanted to come back to the Bay Area that was my kind of heart and home by now um and that it was a great place to uh to kind of pursue a profession um I think there's a lot of uh I loved loved England it's a great place um I love going back but I don't want to live there again um and I adore America um I think there's some serious iniquities and uh and kind of issues with American society but um overall um it's a great place to to kind of make a career and make a life and and provide for a family so so yeah I decided to come back and um did one more startup uh for a year or two until we pivoted to Agriculture and then suddenly I realized I had absolutely nothing in common with a corn farmer in Iowa um so exit stage left from the the startup and and by that time I still had some savings I've always been a saver not a Spender um when I was working within kind of the software world I guess I had like 50 60 guys working for me who all outspent me um they were all kind of driving fancy cars and living the good life and I was living a good life too but I just wasn't a spender so I I'd steadily been saving away knowing I guess that not only did I want to pay for future trips um but also perhaps pay for a you know a future business venture so at that point I started looking for for businesses to buy that would have been about 2010 um let me jump in with a couple of questions here David so um first of all quick aside on the Bay Area uh having lived there myself and been drawn there myself it is a special place despite the well-publicized problems and um it does have a a certain magnetic pull I love that you took a gap year and saw many places around the world and and still felt like it it deserved your uh your residence it's I think that's quite a quite a statement um this startup that you came back and did were you one of the co-founders or were you in sales sales operation at that at that time no it was uh one of the senior management team that was only I don't know 30 or 40 of us by the time I I left um it subsequently got bought by um Monsanto uh of all people um but um yeah at the time there wasn't uh there wasn't that many of us and I was the VP sales and you know running a small team as we were trying to figure out which Market to operate in um and which markets we could uh we could kind of make Headway and we just didn't really know which which areas to kind of to direct ourselves at so anyway yeah it was uh it was a a good choice and a kind of a good uh a good business but it didn't work out personally um okay as you know you're you're kind of edging toward your entrepreneurial Journey um you are somebody who's attracted to business I mean you made that very clear your father ran a business and you're in San Francisco and you're working in Tech so did you ever did you ever entertain any ideas start from scratch ideas Tech related ideas oh really I think by then I'd I'd scratched that itch and had enough um I'd I think software for me was a was a way to learn about the world rather than a kind of an end in itself um and um I think another software company um I did interview it a few but none of them none of them pulled at me at all um and then yeah when I started looking at companies for sale um and I knew that that companies kind of were bought and sold remember that you know the ETA world was was much much kind of thinner and less kind of professional and much less well resourced than it is now there was no such funder Network there was no acquiry Minds podcast so I was standing in the dark a little bit um but I did know one little Jewel and that was that companies sold um not just because I'd seen a couple of bigger companies that I'd worked for sold but also um I'd seen my father have a have a go at buying a very very small company um and that kind of triggered a just a memory in me our future memory and me um that this was something that was possible to do so yeah I literally got on the internet and found bismo Biz buy sell or you know whatever they were called in those days is Gen by not gov something I don't know there were some really weird sites but they were um yeah they were out there selling businesses and started looking at what was interesting and and because I had a uh a relatively good breadth of commercial experience and a decent amount of kind of actual management and personal sales experience I kind of backed myself to to be able to pull it off um and to be able to step into a world where because I knew it wasn't going to be as we said software so whichever company I bought I was not going to be the expert on day one I was gonna need to listen hard and work harder um and so yeah I found myself looking at all sorts of weird wonderful companies I think one that came up when we met was the circus um well I mean well David let's put a pin in there because I want to hear um there was a number of weird and wonderful companies um but tell us what was the business that your dad had so he basically was a effectively a kind of a what you would call now a kind of a 1099 employee so he was a an international operator for French wine companies so um he became the UK limited or UK LLC um and and kind of ran their International operations for a bunch of small to medium-sized wineries to enable them to approach kind of export markets essentially um and did you see him as then self-employed I mean my impression was that he was had his own business yeah I mean he was it was essentially his own marketing business but he was also essentially kind of like a an employee but he wasn't running the wineries um he wasn't um actually running that the core businesses that he was representing um he was running their representation in other markets so um but it still meant that you know he had to file accounts he had to figure out which clients he wanted to get after he had to you know get out and make his way in the world so he had to be proactive and and that was at least a informative yeah sure well um it reminds me of how you felt like just getting out into the world was a little bit more um what Drew you versus going to what did you say the city of London is that yeah the title for the High Finance World in London yeah that's right yeah it's the same was what we call Wall Street essentially um so yeah it it definitely resonated more and David the your decision now to buy a business and you're you're in your mid-30s um as you pointed out in 2011 2010 2011 search you know capital S search is um I don't know if that term was even around then it was certainly a very immature space of course as we all know people have been buying and selling businesses for a long time you had that inkling which is what turned you on to it but there wasn't this well-trodden path still not very well trodden but certainly more than it was 10 years ago 12 years ago um how did when you told other people in your world that you are going to do this how did they react and just personally and emotionally was this was this like a big decision you're making it seem rather um graceful and frictionless but but you know just it's it's a giant decision and as we'll find out it it was it was a huge pivot in your life yeah so um I'm sure it was stressful I definitely got some interesting feedback from folks um I have a very good friend who works as a senior manager within Facebook or now meta and he just couldn't believe it he was like well but why would you do that you know that you could earn x hundred thousand you know doing what you've done before um what's the advantage um so it's interesting talking to him now 10 years later um but I was also being kind of besieged to kind of go to the east coast and that was really the thing that I didn't want to do before I went traveling went so like you know come and uh come and kind of run the coming to run the company out of Boston no thanks I I I I moved out of a cold country I now love living in a normal State and I don't want to be somewhere where it can snow in April or May um although all love and affection for boss on the side it's just not what somewhere I want to live personally so yeah there was there was definitely people cautioning me against it and there was definitely uh can I pull this off uh kind of question mark in my head um but at the same time I had just kind of almost made the decision inevitable by um ripping up a career and going traveling for a year and then kind of even though I'd come back and then work for another startup um I hadn't pursued I hadn't kind of you know lined up the next job and marched into it and in fact I had to pop back to the to the UK for four or five months to nurse my dad so um there was there was some natural breaks there that that kind of were pushing me as well um and also I was encouraged by what I saw um there were definitely some sensible businesses out there and and you know in the days of of kind of you know two and three multiples for um for kind of really pretty decent sized certainly a decent sized business to a solo operator um it seemed I could make more money and have more fun and I was really looking for income interest and Independence those are my kind of three watch words um and and yeah it was a bit kind of over Queen the way that they all started at I but it really kind of boiled down it's like it could need to provide for myself um but I also want to have some interest I want to do something interesting I don't want to just kind of keep um farming money in um and uh and and not really enjoying myself um and then the independence part of it was I didn't really feel much Independence whenever I was working for another company even um what's that saying in the in the Star Wars movie there's always a bigger fish and there there is you know that you're always working for there's another boss and then another boss and then there's the owner and so on and so forth and um and even though I was getting to reasonably senior levels of small companies I I just never felt like I was I was kind of really running my own show um it was great to work as a team but I've I've really enjoyed doing my own thing so I could I could feel that and see it yeah well those three interest um income interdependence interest income and Independence income is the one I was missing yeah well you know interestingly I think that not interestingly I think those are the three um characteristics that are probably common to to most entrepreneurial Ventures um you know those are those are big so and I I would concur with those I love how neat and quaint that is the three eyes you you may have just uh trademarked something that I'm gonna use and reuse um okay so you turn online you see you're making us all Envy with these these multiples that you're talking about back in 2010 um and you see some as you said respectable businesses uh or some respectably sized businesses now now now tell us about some of these businesses you didn't buy a circus yeah so we first off there was uh there was this kind of sea of companies kind of coming my way and I haven't had to narrow my search and and I had to kind of stop and really sit down and think okay what was it that I was looking for um and so I started to try and narrow down uh as much as possible without narrowing down the sector um which is how most of the the searches were kind of defined by going down for you know for size and operations and ownership and so on so forth um and yeah I I mean I think I did three or four Lois one um uh guitar bass bass guitar kind of accessories company uh one window screens um kind of online custom sized window screens replacement window screens company one Tutoring company one medical staffing company um and each time I kind of I pulled back for a subsequently kind of good reason but I learned an awful lot in doing that although what was safe and what was not and where the gotchas were and where the skeletons might be and how to analyze sde properly um and um actually one of the key lessons came which worked out really well for the wines and Vines company I remember speaking to my software company CEO the time that that he was kind of in acquisition talks and he said it's amazing this big company comes in and they don't want to see the P L's and the balance sheets and all the stuff we create they just want to see the bank statements and I was like kind of again logged uh logged a memory of me and and so I would do the same thing as I would get into into this diligence process and as quickly as possible so I just need to see the bank statements hands I haven't heard that yet yeah it just cuts through the crap basically um you're just seeing kind of whether this these cash flows are real or not um and are there positive cash flows um and so yeah I um I I walked away from a couple of companies where there was just you know there was it looked really good on a p l um but didn't look so good uh from from another lens um so anyways I started to kind of teach myself as to you know what might be good and what might not be um whilst also kind of still having a bit of a wild hair at my ass to do something kind of fun and wacky so um you know oh customize Windows screens may not sound that wacky but um it did involve getting on the plane to see a company in in Texas that kind of were doing just that and I'd never even been to Dallas and and all of those people that in that company just looked at me like I was a complete alien but I'm I'm used to looking like the alien in America and particularly in in certain parts of America I'm kind of typically greeted like that as we mentioned with the corn farmers in Iowa so um so yeah um the adventures were were kind of were varied but but you know I I was quite happy to kind of look at some crazy stuff um the circus one popped up because um well I just saw it I thought well that's a that's perhaps not such a bad business but let's see uh you know what's the harm in in kind of faxing an NDA because there's you know again old school stuff like every NDA oh my God yeah it was one of the biggest bits of friction to the whole process um so anyway that's the the uh the Indiana back comes this business and and actually the circus was kind of sensible it was basically a rip-off for or kind of uh Second City Cirque Soleil um so if Suk Soleil was showing up in San Francisco they were in Sacramento or if if they were in Sacramento they were in you know in Reading up the road they were basically kind of doing the cities that Cirque Soleil didn't get to and they were using a lot of the same stuff uh the same Talent basically oh um and the same even kind of choreographies um and uh and they had an awful name but um it seemed to me with a bit of branding a bit of better marketing kind of uh and a decently paid choreographer and and designer and uh maybe I could kind of turn this into something that I'd actually want to go see um and it also scratched that traveling itch right um yeah this is a horrendously organized company I mean they they had run the whole company on credit cards so asking for bank statements was was kind of oh it was fraught um but the um yeah they did have a tour booked to to Brazil and to Argentina and Australia I was like okay this this sounds like fun well the ports of call that you had been at in your in your Gap year you were going to get to return to you know and again at that stage I was not married didn't have a kid um and this just sounded like a shitload of fun so I was all about it for a while until well I'm sure I'm sure there are a lot of people who who maybe not very seriously but have had sort of the fantasy of running away with the circus right anybody who hasn't had that fantasy probably thinks that sounds so strange but I totally understand you know the romance of something like that so what what's better than running away with the circus than just buying the thing and being the guy who owns it right I guess it was a late bloomer most kids kind of dream of running away to Circus age seven I was just doing at age 35s yeah yeah so I decided to uh to give that one a Miss but you know carry on looking and um you know there was plenty of other interesting companies that that didn't get to uh Loi stage um Chocolate Company tell us about the dating the dating businesses early early online games that was another formula a lesbian dating company and to me that looked like a great business right they built a machine which you know uh attracts members uh they've now got um not only the machine that operates the site but effectively the kind of the membership and and the kind of the marketing operations set up and they get revenues every single month um like clockwork on the first day of the month bang hits the bank account um and having worked for a software company I was pretty aware of that um that Advantage right software companies have very very strong finances there's a reason that the multiples have Gone Bananas in the last few years um it's just that the the finances are great so so yeah there's a lesbian dating site it's like okay well it's like a software company there's the recurring revenues um trouble was it was a lesbian dating site and I couldn't exactly be the kind of you know the the front of house the face yeah um I have someone somewhere in the world to apologize for though because when I was trying to test the site out um I I uploaded a dear friend of mine this lady who lives in Spain um I uploaded her photo to the site um and just kind of tested out what's it like um we got a date which we had to decline um so yeah did you decline or ghost early ghosting early lesbian ghosting I'm pretty sure I declined and ran screaming and at that point realized what what the hell am I doing um so yeah there was that and then there was also the the Pharma dating site um which subsequently turned into a pretty decent business um yeah they uh you well you said you said that it showed back up in what was it in the Super Bowl it was kind of like a reason what appeared to be a rinky dink very Niche dating site and then that's right yeah so I I looked at I looked it up and I said okay imagine I'm a farmer in Iowa and I want a date you know where's my nearest date on there and it said you know 150 miles away I know those guys are prepared to kind of travel some distances but that seemed just non-functional and and kind of really just not a good plan so um so yeah I I just missed it and walked away but I did enjoy learning a little bit about the business they had a great line which was because city Folk just don't get it and that was literally the strap line with an advertising because if you're a farmer and you're you know trying to date someone in the city they say oh you know let's go for coffee at nine o'clock at night like the farmer says I'm in bed by then because I'm up at four on the combine harvester or whatever um so yeah they there's this kind of farmers dating Farmers which makes great sense yeah yeah something like five seven I don't know how many years later I'm I'm watching San Francisco 49ers in a bar on some playoff game and up Pops this advert because city Folk just don't get it I'm like okay great someone marched in where I I feared to train and they made a success of it so yeah I guess 150 mile dating distances wasn't a problem after all right yeah or maybe they're down to 15 now but yeah yeah it was it was fun fun to see but yeah so I moved on from dating businesses but and I was just looking everywhere for a oh God I don't even remember how long it was but it was maybe a year of searching um it was fascinating and fun but um it was starting to get a bit frustrating towards the end of it um and maybe that's the first time that I actually really felt kind of some doubt it's like you know am I am I going to be able to kind of find something that kind of fits my search or wherever am I just wasting a year of my life um again I had saved the money so uh and I wasn't spending it quickly so it wasn't kind of dwindling fast but it I definitely remember thinking that you know that was the kind of the tough end of the search David can I ask you what your financial picture looked like and tie that into the fact that you you were not intending to do an SBA loan uh yeah I mean without getting into the the specifics I I saved a good wedge from from being in a reasonably highly paid software um sales person then exec for a while so um so yeah and I'd spent some traveling I spent some made some more coming back um but you know I I had hundreds of thousands of dollars to my name kind of um I think close to close to seven figures and um or around that Mark and and therefore you know I I was looking at businesses that involved loans and also businesses that could be bought just beneath it so so you were entertaining an SBA like you would have done the SBA okay yeah I I jumped ahead I know you ultimately didn't so I assumed that you never were intending it but you were open to it and and also just to uh again kind of like um explore a little bit where your head is at so the model of financing you know buying something for 10 or 20 down financing the rest and paying for it out of the profits of the business this kind of lbo model um was something that you understood at the outset or you learned and were pleasantly surprised by or like what was your sophistication about what the structure of your deal might look like well I had a a widely kind of set search both for kind of companies um around the kind of the basically half million and up I think was was around where it was at um in terms of her purchase price um but yeah the the structure was um rather the sophistication you asked about was was kind of rising but not um not there initially um I I was kind of backing my gut rather than going in there with a kind of a a preset criteria oh okay okay but at some point you do learn about the SBA loan and or or seller financing so you know that financing May well be part of what you yeah okay I mean I knew about getting bank loans on you about getting Equity investors um I just I didn't know that much about the SBA to start with but you know you speak to one broker you learn that quite quickly yeah sure great okay Carry On so so we're at the we're at the tail end of a year you're starting to get a little bit concerned a little bit frustrated yeah at this time I had a uh an Loi um I think I'd just been accepted for a medical staffing company um and um the three three months previously I had been to seeing it been to see a wines and Vines company um and kind of found off should we say a hole in the numbers um where the the bank statements just didn't didn't tally with kind of the the P L numbers um and so I I said to the owner of that company whatever I like your business but um it's it's massively overpriced um and just for your interest this is what I think it's worth um and thank you very much for spending some time with me um but I'm gonna you know pursue my search elsewhere um and so fast forward three months um the the broker came back to me and said look I don't know what you're doing but you know the owner wants to talk to you again and talk to you about your your kind of revised level of kind of valuation um and so at that point we you know reactivated conversations and and going back to the point about interest um being part of the search running a wines and Vines company sounded a bit more fun than the medical staffing so I I just asked those guys to bear with me um and whilst I kind of went into deep due diligence on the on on the wines and Vines company and I've been interested in it at first partly because as I mentioned that had been in in the wine business um but it was I think it was more just kind of academic interest than the actual interest at first it's like well you know what's a guy like me going to be doing with a winery there's an old saying in the wine business that if you want to make a small fortune you start with the large one um and that I gather it's it's it's studied in some business schools as the worst business model ever invented sure so and with that just behind restaurants you know and the classic in the classic vanity business right the rich guy or gal buys a restaurant or a winery and then you know starts with a starts with a large fortune and ends with a small one totally I mean I think it might be even worse than restaurants because um it's so Capital time and labor intensive um and uh particularly within Capital not just because of kind of land and Equipment but also because it takes several years to either grow vines or take the vines of the fruit that you've grown um and then release it onto onto a market and then it's also an ultra competitive basically low margin market so um heap of money up front very little money out the back perfect recipe for disaster um but it's also it also had my interest um and so yeah when I I first looked at it it it it was surprisingly good business it was a winery with a Vineyard management attached kind of Vineyard measurement business attached to it so there's a small kind of sideline where they went um they weren't buying fruit and they weren't growing their own fruit they were basically farming small Estates in the Hills above Silicon Valley and letting those people become kind of wine Growers and make wine for them but also take the Surplus wine they didn't need and and you know pushing it out through their own Winery so anyway it was a it was marketed as a as a as a winery but I really saw a Vineyard management company um and as a again as a essentially as a software company that has a company with very heavily recurring revenues um where I can predict this amount of Revenue I can predict this amount of of business and also I think this is a growing market right there's there's not at the time there was only 20 Vineyards under management 25 maybe um and I could see um you know up in the hills above Silicon Valley there's a lot of very very fancy Estates um a lot of you know beautiful beautiful properties where you know two swimming pools and a guest house later what else are you going to do with that kind of spare acre in the corner how are you going to keep investing in your home and property um so it seemed to be a good business that the vineyard management side of it residential Vineyard management um it sounds a little weird it sounds a little idiosyncratic right residential Vineyards but within this kind of weird world that I live in in Silicon Valley it kind of makes sense because there's a a lot of money here um a lot of there's a lot of depth and breadth of of wealth um so I think it's an an unusual business and a very unusual location I'm not sure it would work in any other City uh in America maybe someone will prove me wrong but um but yeah so I I saw this Vineyard management business David can I pause you there for a sec of course so just to be completely explicit with the audience this is essentially wealthy people who want for kind of whatever hobby or interest or investing in their property or vanity have a set up you know wine vines on their own property to you know kind of you know be able to be producing grapes for wine and and so you're managing those so these are private little you know on these uh States private residences these are not these are not commercial wineries these are residential hobby kind of hype I hate that kind of diminishes it they're kind of like hobby uh Vines right precisely yeah yeah it's this is uh entirely residential private owners of private Estates some serious serious properties and some serious people um who have done very well in the world and and Have Not only property in in one of the most expensive parts of the world but also have enough property to consider putting a Vineyard on on a part of it um making my my eyes water at the at the thought of how much some of these how much one of these people have and and so they and so you um you had said that there's kind of there were kind of two businesses there the The Vineyard management is what turns you on but there was also a proper Winery do you remember kind of the split of those two businesses was it like yeah do you remember was the vineyard management something that you know that the previous owner had and didn't realize how attractive it was it was just a little part of the business you anticipated growing that a ton or you know what was that I remember the splits of Revenue I would guess it was maybe kind of 60 Winery 40 Vines um but um you know the winery wasn't very big either the guy had done a great job of getting it started but basically kind of run out of legs and inspiration um and uh he was he was pulling his hair out there's just there's a lot to do a winery is a complicated business to run so um so yeah he he knew that was that the good part of his business financially um no he had started off and started that business deliberately and a very cleverly kind of made sense of of a kind of a very tricky wine market by putting a Vineyard Vineyard management operation alongside it or inside it so yeah he it was a it was an unusual business right it's like yeah my own Winery what do I want to be having a winery for isn't this like even more bananas and then the kind of the friends that we referred to previously are kind of cautioning in my ear well you know it sounds fun get me some wine but what how are you doing yeah yeah so and then other friends who were absolutely a commercial or uncommercial they said ah Jaco that sounds so much fun you know of course what you should totally do that that sounds completely you um you know I was getting all sorts of kind of Wild and Woolly advice but it was basically me that had to sign the check um and then you know um step in there on day one and try and figure out what the hell to do next um so I've signed a few big checks in in life you we all do you know your first house or whatever else um but that that was a that was a it's a tricky one to uh to get to the point of comfort um but ultimately I didn't um and yeah there was quite a few surprises when I walked through the door I'm sure that's not an uncommon thing for your listeners um yeah there was there was a a lot of uh you know the old principle is caveat mtor right but where buy everywhere sure and in due diligence you're expected to to find all of the all of the kind of all of the mines in the field um But ultimately within the minds caught you that you didn't that you didn't find it in your diligence I think I want to get into too much detail um on that could be you know unkind to the the prior owner but there were some surprises some significant surprises within due diligence you're verifying verifying verifying but you're still ultimately relying on on what someone's telling you um and their version of of uh of their business and they're trying to sell so yeah day one the due diligence process continued um in a big way trying to figure out you know where stuff was and how stuff was being done and and the reality of certain situations so um so yeah it was uh it was a an ongoing Voyage of Discovery and not least because even though my dad had worked four wine companies I had no idea what I was doing absolutely no idea um I had had never delivered wine through the back door of a supermarket which I was soon doing I had never um been the Harvest intern for the winemaker which I was soon doing and it's basically me a winemaker and a Vineyard guy that was it and so I was the delivery driver the kind of the uh yeah the kind of the Harvest hand that just basically everything kind of year one um and um and and so learn the business um David let me let me a couple of questions here so um so you you you had just going back to the transaction really quickly you had pointed out to him hey you know these numbers don't add up this is really what it's worth he comes back to you says okay let's talk um I assume you acquire for something closer to what you said the valuation was um and you did not Finance it you did at least not with an SBA loan was there seller financing at all or was it just tell me essentially a 100 kind of cash purchase I left him a small percentage of the business and which was my way of of trying to uh ensure his uh his kind of fidelity and cooperation foreign the it and so the business was literally three people large it fell that way I think actually that was remembering it there was two people on the video operation there was the winemaker that was myself and that was cool so actually it was an office manager um and and then there was you know other other folks that kind of worked for the company including the um the lady who was the wine broker um so yeah I mean it was essentially it was a kind of an upper six figure deal um but it was a still a pretty raw company it had kind of proven its market and proven its kind of um its operations it proven its ability to make a profit or be a small one um but it was still very very nascent um in its market and operations and how old was it uh not entirely sure that's that was one of my first questions but um but yeah it seemed like it's first for the year so probably eight years old um uh even though it had a different date above the um above the door okay and just looking back I mean you you were self-educating this whole time we've already talked about how you know a lot of the Searcher best practices were probably not established or at least certainly not well publicized at the time and one of those things that you hear constantly today is about you know buying above a certain size business um you know and kind of The Sweet Spot is 600 to 800 000 sde which of course is hard to find but uh great if you can get it this business was uh I assume quite a bit less than that no management layer I mean we you're you're if you're the one doing the driving the delivery truck clearly so um did that you know you were I guess you were signing up for that you saw what that was going to be like do you think in retrospect that you took a like a much bigger gamble than you realized you were taking at the time or you know kind of would you would you do it over again I guess just kind of like weigh in on the size of business but to me it didn't feel like that much of a risk because of the recurring revenues because of the market opportunity for the vineyard management at least um because of the kind of the fact that the wine at least was well received and clearly the winemaker knew what he was doing um and also because I wasn't taking on any debt um so yeah I was throwing down up a lot of money um but uh you know a lot of folks are kind of cautioned against buying a job um don't buy exactly less than 500k exactly you're just buying yourself a job like well of course you're buying yourself a job you're buying yourself a job at any scale in this idea of a kind of a completely kind of you know uh arms length or kind of armchair business um where you're not heavily involved um that's that's fine way way further up the kind of the the value chain you know 50 mil plus but below that um even if it's a PE by a nurse and they're making sure someone is is heavily involved um so yeah I was buying myself a job um for a few hundred thousand um that's worth of kind of profit and um it was uh it was a a lot of headaches but that was just just what I wanted right I wanted to kind of get in there and get inside the muck and bullets as we call it England and uh um and figure out how to how to grow this thing and how to how to make it you know more successful and more fun yeah I love that it's so gritty and entrepreneurial uh and I think just kind of oriented for toward in the same way that my personality is um but you're you know vice president buddy at uh at meta uh or wherever he was at the time uh probably was just feeling like you know the fact that you were going to be not only buying a business how crazy but you know driving the delivery truck uh I mean what it just gets crazier and Crazier by the by the moment David yeah I mean just to be clear that wasn't even a delivery truck right um I I was basically shoving wine in my uh in my trunk and and running it around the place so right um even better okay yeah carry on so yeah it was fun we were I learned a lot I started to try and learn as much as possible particularly about Vineyard management and started to assemble a good team um but yeah first I couldn't afford a Vineyard manager no way I mean and I could it just kind of destroyed my margin so um I started getting more Vineyards uh under management and started learning what I was doing but but basically I was kind of doing the the classical adage of fake it till you make it being out there and telling people that I had a great team and I did um but I'm one under very little actual supervisional Direction um and uh and getting commencing them to let me manage their Vineyard or install a new vineyard for them um and so once that started to kind of reach a little bit more uh sufficient size hide the first Vineyard manager or promoted the first Vineyard manager um and then a few years later kind of had an excellent one but basically in all kind of all of the different business lines because within the winery there's an events business there's a direct to Consumer business there's a wholesale business there's a Vineyard construction business there's a Vineyard management business there's five different kind of business lines um and it's been quite hard to keep it that focused frankly because um there's always someone in your ear telling you that you know you really ought to do this and you really ought to do that and why don't you spend a lot of money um setting up a tasting room or in another city or in a touristic area or you can kind of you can go bust very quickly kind of without focus and in any business but particularly um within again within wine so um so yeah we uh we tried really hard to get excellent people in place um and to focus on um not just the right kind of business opportunities and projects um to kind of evolve how we did things but also um to really make sure that we had very very very happy customers and very very happy employees and with those two things kind of combined with the focus I don't think you can go too far along um and um yeah I look at the business now and it's now five times the size it has a really excellent management team um a really good events person a really good Vineyard person an excellent winemaker um and a really good operations person and and I'm proud of of where we come from and where we've got to even though there's plenty kind of ahead um but I think one of the things I'm most proud of actually is is some of the testimonials on the on the vineyard management website um where I just see people saying hey you know you're you're your crews are always really happy and and you know they come to a Vineyard and they're laughing and chatting and joking um and they do a killer job um and you guys really really really know what you're doing and you provide a great service and thank you and and that's kind of how I hope all of our customers feel um they certainly seem to when we ask them and so so yeah we're um we're now kind of on a uh on a different level than we were then but you know this is 10 years later um and uh there's a few few hard battles and a few misses and a few mistakes uh certainly a few mistakes um but but we're definitely making Headway did well David everybody would love to own a small business where the customers are thrilled and and even better the employees are are thrilled and happy and fulfilled and always smiling uh but easier said than done what what what's the secret there well with the employees um there's so many folks I mean It's Tricky right because I've basically decided that I don't want to be an employee anymore um and part of the reason for that is I think employees are always valued just up to the to the amount of money that would stop them from leaving if they're valued um so you know you don't Pace you don't pay someone what they're they're absolutely definitely inherently Worth to your business so much as kind of like how much they could either be replaced for or kind of like kept in place for and I it it's sad but it's true right across the world so um the um the you know what I can't play I can't pay our employees absolutely everything that I would love to pay them but I do pay them well um and um I learned from a very good um kind of senior manager what kind of CEO within the software World um it's one guy that I work for kind of on and off but but fairly consistently for kind of for 10 years in multiple countries and he was really really good at uh at communicating people about what they needed to do in order to earn more for him um and it was all always about more responsibility um and more kind of recognition and reward for results and so if you can put more results together and you can take on more responsibility I will pay you more and so I try and communicate that to to my team be they Vineyard workers or you know the head of Vineyard management or you know people in between or in other functions like you know I I can't pay you the kind of the earth here we work for a winery um we don't work for a hedge fund um but uh his will it pay you I believe it's good do you believe it's good great we're on the same page here's how we go forward and if you take on more responsibilities and you take on uh more um facets of the business and and kind of help me Focus where I want to be spending my time um then then I will pay him um and so it's yeah it's treating people with kind of openness and respect and paying them as much as as you can um that doesn't sound very controversial or insightful perhaps but it's just yeah it's this kind of decency towards them and then also just making it fun right I mean how many bosses have you had that have been zero fun you know they can suck the air out of a room um at a hundred Paces it just Beggars belief that they are in charge of people there's just nobody enjoys working for them right there's and then there's the other category of folks who like it actually make things fun you know they've got a good wet or a charm or something about them that makes them somewhat engaging um now is that is that just your personality David are you doing things like you know the weekly pool party not literally you know is it is it planning activities or is it just bringing a good attitude and and being a you know a halfway interesting person yeah I'm not saying I'm entirely in the second Camp I'm sure I can suck the area of a room as well you know particularly a fart if it's another Vineyard meeting at 6 30 in the morning when they stop but um well when we all start so yeah the um yeah I think it's it's it's treating people with kind of compassion with kindness and a and a bit of humor um and getting them on board with what you're trying to do um now I've gone from a world where it used to be PowerPoints to clients and PowerPoints to kind of you know to employees and lots of you know webinars and seminars and then and I haven't seen a PowerPoint um I certainly haven't created a PowerPoint for for 10 years um and we don't have meetings we kind of like talk to each other when we see each other um um you know the winery is actually kind of quite a communal place and there's a bar and it kind of it it leads to folks relaxing a little bit so maybe I'm I'm assisted by that but I feel like you you can make it endlessly formal um and endlessly anal um or you can make it really kind of just a little bit more compelling a little bit more human um and if you're organized enough and that's rather than being some kind of you know a Charming kind of entrepreneur can kind of you know be a Pied Piper and lead people on some merry dots and just organized guy you know incessantly kind of like long to-do lists and those lists include kind of you know what what I'm trying to do with with people um where I'm where I'm trying to get their business or their their kind of function um so yeah by by being um somewhat ruthlessly organized um and and just trying to kind of be decent um I think I think we have a good and happy team um David I have to I have to I ask not to take away from not to take any credit away from you but um does it help being in the booze business one thing that really helps be in Boots business is that um no one is pissed off all right so anybody who walks through the doors and immediately their best selves within software if you know some piece of software doesn't work or it's too expensive or something yeah there's a lot of kind of crabby behavior and that that kind of there isn't much of that um but yeah having having plenty of wine helps in in other ways it's a good way to kind of you know to to thank and and child people for sure but um but yeah I the most wine I drink these days um other than kind of just for my own enjoyment is it 6 30 in the morning so that's when The Vineyard Crews start okay that's when that's when they prefer to get the kind of the jump on the day and that's where they they kind of when we all meet up um and that's when the wine makers tend to shove wine in my face for taste it because it's before coffee um and it's before breakfast and it's with the palette clean so to speak um and so so yeah I am I'm not getting soaked at 6 30 in the morning but um but yeah I quite regularly have a glass of wine maybe a little bust well here I am smiling you're you're just listening about listening to it so I I can imagine that your your employees are smiling a lot yeah we have a good time yeah you have a good time and they're good people and if there's some there's some bad apple we we get when we ask them to leave um we've had plenty of bad apples that just didn't fit didn't gel and piss people off like okay see ya yeah yeah well David I want to turn to a slightly less um less levity here and back back to the numbers uh in those early early days because I I just it's it's important for people to um have specifics to think about these deals and these acquisitions do you remember what your own take home your own sde was that first year in the business I mean were you taking a significant pay cut from your software I assume you were because you were earning very well in in software land but were you at least making six figures in day one in the business first year I was really just investing and kind of patching up problems and putting more work into Capital into it than I thought um I'd originally planned to and it was six months more than a year because I ended up buying it Midsummer um so yeah kind of the rest of that six months was not a profitable time and it was quite a scary time um as I again learned some things and kind of you know figured out the wrinkles and and you know some of the heightened levels of seasonality within the business so on and so forth um but then the the First full year uh things things weren't very well um and I don't want to get into um SD specifics um but um I didn't earn as much as I as I had in software but I also had you know plenty of money to kind of pay myself and and go out to eat so uh so yeah it was fine fine from kind of six months onwards and for how long was it that you were wearing all the hats not not necessarily you know speaking Beyond kind of the the crisis time but like you I assume you were still kind of like you know doing everything for even Beyond when it when you kind of like acclimated to the kind of Crisis and seasonality how long did that last well the first hire was probably first significant higher was six to nine months after purchase so I um the previous owner um had managed something like 20 events throughout the year at the winery and it seemed obvious that there was a possibility to do more events we're not in a kind of a touristic area we're not in a kind of a streetfall area so we wanted to focus uh our wineries opening and kind of public face on venue rental rather than people just wandering in for a for a wine tasting and maybe buying a bottle of wine we were much more interested in having the place full of 150 200 people um all having a great time and uh and drinking plenty of wine so anyway so we want to do more events um and there'd only been 20 the previous year so I started looking to it and started to realize also that the predominant folk booking events are women um and um I just felt that maybe the kind of the the person to really kind of Kick this on wasn't um a middle-aged English dude again so um so yeah I uh I found an event director um and she agreed that there was a potential here and but there was also it was very raw and there was very few systems and certainly no Sops and and you know she had to kind of figure out a lot um but she did a cracking job um and within two or three years we were up to having you know 100 plus events and it's since grown from there so um so yeah that was kind of the first person I chose to hire and kind of first person I chose to invest in to replace myself and and then each year without it being kind of so rigidly um scheduled like that I was finding the money to invest in another person and another and another kind of uh um another evolution of how we did things and to get things off my plate um I think one good principle for CEOs or you know business um kind of departmental managers or business owners whoever one good principal in general is try and kind of try and almost make yourself redundant like trying to stop doing the kind of the day-to-day stuff and find some other way for that day-to-day stuff to get done um the adage of you know work on the business not in the businesses um is really true for us all um and so yeah I I've managed to kind of through focusing on that principle steadily kind of evolved the business and involved the team and and so grow the company and you're now um quite free and and to the point where you're gonna you're searching again which we're gonna close with here in a second but still a couple more questions you had touched on how much growth there'd been so when you bought the business it was you and three or four other people now it's um you said a team of what 15 or 20 is that what you said yeah I think that the best answer is we're basically five times larger um in almost every respect in terms of um scale of operations and revenue of operations and profit of operations and and so on and so forth where we we basically um got to the point now where um we are um yeah kind of away from the early days and then and and to the point where um businesses somewhat successful um that's always a relative term but it's doing okay um and I can now decide do I want to keep investing my time and capital in the business or do I want to maybe put some eggs in some other baskets um there are definitely things I could invest in to kind of to secure the next stages of growth for the winery but also for for the vineyard management operation um the the the thing that's good about the business now is that 60 of its revenue is recurring and 20 of it is repeat um so recurring from The Vineyard management repeat from people who continue to buy our wines and stock their shelves with it um and then 20 is um is kind of the event stuff which is not repeat but also you know um reasonably reliable because there's enough businesses locally that you know want somewhere interesting to hold their their events and enough people who want somewhere to party so um he's pretty steady um and I could therefore kind of keep pushing myself and kind of and and those lines of business those different kind of revenue streams um up and up and up or I could say okay well you know what else is there to the left and right um I can spend five days a week it's been 50 days if there were 50 days in a week I'm sure I could spend 50 days at the winery but I also feel like I could compress it down to to two and maybe even one with a different higher um and and so yeah I've been looking around for for what might be next and just going back to revenues I don't know how public you can be about it but is it fair to say that the business was you know a million dollars in Revenue give or take back then and so now you're looking at more like a five million dollar business yeah again I'm not into sharing specifics but excuse me um but yeah we've uh we we are definitely kind of five times that the size on on on revenues um and uh and on profits um yeah and and hopefully on on you know the kind of the Enterprise Value as well um although that depends on multiples and some people say that uh Winery multiples are inflated um not just inflated but but high like you see some businesses you know changing hands for for five plus um um but also there's not that many wineries Winery transactions that don't involve real estate and unless all those transactions are kind of difficult to kind of measure up against um I don't own any real estate I don't own any Vineyards I don't own the winery I'm a tenant so um so yeah we're uh we're doing fine and it's been great to see that that growth but uh um I uh I feel like there's another trick or two of me yet so we'll see well let's let's close with that elaborate a little bit more so you're um at least on your LinkedIn your self-described Searcher now so I assume you're you're someone actively looking around and this time around will you um will you buy yourself a job well you you made a good point that like of course whatever you know anytime somebody buys a business they're likely buying themselves 40 hours of work a week if not more so yes you're buying yourself and you know something that's going to fill your time but um I guess what I'm really asking is size of business will you now that you've got a little bit of capital A little bit of experience do you think you'll go for something significantly bigger this time around or does it depend or what are you thinking yes my search has definitely like evolved or set up um on the basis of of ideally looking for for 500 plus SD um I don't really want to be um stretching myself and putting kind of personal guarantees together for for loans that are kind of you know for businesses that are maybe worth you know more than the two three million level that just you know that there's a there's a limit to kind of my comfort and kind of ability to cross support kind of those levels of debt so um so yeah I I'm looking for kind of a bolt-on um I think that Bolton um would be ideally of that size but also it just depends on the business again right so if I can find a really sensible business that's smaller than that that I feel like I can grow to in there and enjoy doing it then I'd be more than happy to um you know I there's definitely a risk reward trade-off right um there's a lot of folks that say Well it has to be a certain size in order to be you know to significantly change things like yeah well it depends you know hey whose money you're using and and be what you're trying to achieve so um I I think I'm realistic about the fact that be it a small medium or large business within that kind of you know um sub 5 million category um it's uh it's it's always going to be a lot of work it's um but um if I was putting you know the top end of that on the table um I would probably be wanting to spend 80 hours a week making damn sure it worked out um and at the lower end of the table I can kind of you know I can I can take a bit less uh um less kind of intensity uh to a kind of a lower value company and when you say bolt-on does that does that mean it's going to become part of post and trellis or could it be something completely unrelated yeah I mean I'm looking one of the main things I'm looking for is a maintenance company um and there's lots of different forms of Maintenance um but I feel like within the vineyard management business I've really figured out how to not perfect way to but ways to run a field service operations a cruise of people out there servicing and maintaining something yeah um and so in that sense it would be a kind of a a bolt-on um but they would be separate entities and and separate teams and separate everything um but that's one part of of my search and we'll see see what I find it might end up being a a circus or a chocolate company we don't know although I'm not sure my wife would uh would agree with the circus one so much that he will I love it well David what what a uh what an adventure uh this last 10 or 13 years have been for you and uh exactly I think yeah it was just really really inspiring really um you know you put the fun back in business um and really cool to hear that your employees seem to agree and you know it just I think a lot of people out there will be uh envious of um just the the popping bottles that is your that is your life I I I know that's a little probably a little too Rosy but it sure seems fun so anyway thanks thanks a lot sir for coming on and sharing and let me know when you make that second acquisition and and we'll have you back sounds good well it's been really fun talking to you as always I wish you well and hope you're settling in on the East Coast there thanks a lot thanks a lot David till next time cheers I hope you enjoyed that conversation with David page make sure you subscribe to the channel here once sometimes twice per week I'm releasing new interviews with people who have bought businesses so lots more great stories to come stories that can help you on your path to acquire a business