Justin Turner welcome back to acquiring minds thanks for having me Justin you were first on the podcast in January 2022 so just over a year ago at the time you and your team at traction Capital had built a fault code of four businesses so we heard your story heard the traction story we heard about the four businesses and got into the Weeds about how you are building this hold Co I reached back out to you a couple weeks ago because traction recently added two businesses to its portfolio so a great excuse to get you back on so we're going to hear about those two Acquisitions today and how things are going at the other four businesses as well and just kind of generally how uh things are going at the holds code level so to kick us off Justin please just give us the high level kind of refresher on traction for people who might not have heard your first interview who are you who's your team and what are you building attraction yeah absolutely well thanks again for having me uh so I helped run traction Capital Partners we're an investment firm based out in Seattle Washington we started kind of looking at Acquisitions end of 2017 beginning of 2018 and closed on our first acquisition in October of 2018. uh today we have six people on the team at traction and then about two a little over 200 employees across our portfolio and for us our focus is really on companies based in the western U.S that are somewhere in the kind of one to five in ebitda range great thank you for that so where else we're going to bullet point your your four um the four businesses that we talked about in your first conversation but let's hear about these two Acquisitions that I guess happen in in quick succession um so tell us about those yeah our plan they closed two days apart our plan going in was not to have that happen um and I don't I don't recommend that but uh yeah we closed on two deals in January of 23 and the the first one we closed on is a disaster restoration business it's based in Eastern Washington and we we first started working on that transaction in June of last year we got it under Loi I believe in August so it was a more of a drawn out process than we were you know we typically like to see we'd like to be you know 90 days or less this one well exceeded that um this was an interesting deal for us for a couple reasons one you know first investment in the industry so there's a lot of work you have to do to try and get up to speed the second piece that was new for us was this was our first time investing in a business that is part of a franchise group so part of the reason it dragged was you know us getting educated and then you know negotiating through the FDD side of things with the franchisor they were they've been great they were great to work with uh but it was definitely a learning experience for us on the franchisee side of things and then the second business that we closed was we call it an add-on for our Paving business but we bought a business that was probably 50 larger than our existing company in the space we own a business called Tony Lind Paving that's a you know kind of run-of-the-mill asphalt paving business uh and then we bought a company called Ground Up road construction that does asphalt grinding and soil stabilization work they were a vendor of ours on the paving side of things and so we feel like there's a good opportunity to combine the resources of those companies kind of jointly go after work together so we've got expanded capabilities which should allow us to go after better and better projects that one was also the first one we had done that was really an off-market deal our attorneys were the law firm for ground up and the husband and wife's owners had approached our attorney and said hey we're thinking about selling our business we know you you know helped TLP through their process you know with with those buyers be uh you know a potential person we should talk to about selling our business too so it was had its ups and downs you know the a lot of people talk about finding proprietary deals and I think you know they're they're certainly out there I'm not convinced that it's an easier process for the buyer or the seller if you go that route I think intermediaries play a really valuable role in that process from whether it's educating the seller on market pricing or Market structure when it comes to like hey what is market for a specific legal issues uh and then the other piece of it is there can at times be a lot of hard conversations that you have to have as you go through the deal process and that intermediary can kind of serve as a buffer where we can have really hard conversations with the broker and then they can kind of filter that back to their client um but at the end of the day you know got got the deal closed you know I think we've still got a great relationship with the seller the the husband and wife team the wife is going to transition out pretty quickly she'd like to retire she's been the kind of lead accounting person for that business for the last 15 years uh and Scott is going to continue as you know the CEO of that business going forwards for at least a handful of years here so it was a long-winded but yeah so yeah we got two closed that's great that's great congratulations on those Justin both sound like they were um have their own challenges and on the ground up deal so I take it that you encountered all of the problems that you just listed that people encounter when buying a business without an intermediary so you had to educate them on what a fair a realistic valuation was you and had to have those hired conversations without the benefit of the intermediary kind of filtering all that through yeah you know I think the valuation side was actually pretty smooth you know they you know we we oftentimes talk about ebitda as you know oh I paid four times or three times or six times um but Eva dies I think most of the people that listen to your podcast will know is not really representative of what the business generates from a cash flow of perspective and the sellers understood that concept really quickly because they have a business that has a significant amount of capex that is required to drive the business and so you know all of our conversations early on were about coming back to a you know ebitda less capex number as the number we should focus on and then a multiple of that um so that part went you know pretty smoothly I think the challenges were you know working capital working capital targets um you know some of the the legal side of things and then you know really the diligence process itself you know we're working with directly with the sellers and they have a business to run they didn't have help you know populating a data room or getting us the data that we needed so I think it really put a stress on them just trying to get everything that we were asking for and were requiring but um yeah it took a little bit longer than we had hoped but at the end of the day I think everybody was was really happy with how the transaction ended up and you said Scott is his name is of the the husband of the husband and wife team yeah he's going to stay in the business for how long you said uh we've got a three-year employment agreement with him and then after that you know we'll reassess what he wants to do there there's a handful of things that he wants us to take off his plate which we're happy to you know hire the right people to do that um he really enjoys the business development side of things he you know less so enjoys more of the admin and operations side of things and that's something that we feel like we can step in and relieve some of that pressure off of his plate great and as I recall I mean I mean as with most hold codes to actually scale your model you need operators uh in in each of the businesses it sounds like he's going to be primarily actually focused on sales not on operations but you have somebody at the ready to go in and and be the operator for this business yeah we've been in the recruiting process for an operator that'll step in and help run you know both sides of our infrastructure business the paving and the grinding side of things um Scott will continue to be involved in that until we get that finalized but yeah the the longer term I shouldn't even see a longer term the shorter term plan is to backfill so that he can be freed up to really be the face of the business and continue to help it grow and just I don't think I've ever had a conversation with somebody who bought a vendor so when you do kind of when you acquire a vendor and do kind of a light vertical integration there um do you worry the vendor the the ground up that you're acquiring will lose business from your competitors so they're not going to like the fact that you know they're not going to want to be helping the they're competing Tony Lind asphalt pavement business um or not really not not really I I think ground up would tell you that they would prefer not to work on the projects that TLP has them work on ground up is really set up to do you know massive infrastructure projects whereas our Paving business is focused on smaller higher margin jobs so I don't I don't I don't think we're at risk there I think or we may be at risk is if we you know start hiring people away from different customers that we have but I don't think we'll lose a lot of business now that we're more vertically integrated great and then going back to the restoration one the the cleanup business the restoration cleanup business um the six months that it took to get that deal done that was because it was a franchise is that what I I'm hearing you say I mean there was a number of different things um that that led to the delay there but the franchise side you know was definitely a learning experience for us for sure and how did you all think about the risk involved in buying into a franchise Network uh it took a while for us to get comfortable with um we definitely spent time with the franchisor down in Dallas uh you know really talking about how we're different from you know what they think of when they hear private equity and you know I think that was one of the reasons why you know we were given the opportunity to buy the the franchisee he had a number of private Equity groups that were a part of the process when he was you know first had his business out to Market and I think we you know set ourselves apart because we have a long-term Focus we're not looking to you know Drive incremental profitability over a compressed time frame and then exit the business it's more about you know what is the long-term opportunity and how do we generate you know sustainable long-term cash flow growth in the business um so it it definitely wasn't because of the you know exclusively because of the franchisor side of things that it that it dragged there was a number of things that popped up but um we're we're excited to be a part of the franchise system and we think there's you know a lot of opportunity to grow within that system so it certainly has its risks but we're we're excited about it when you say opportunities to grow within the system are you eyeing kind of this how how quickly you can acquire once you're once you kind of have a toll hold toe hold within a franchise system you can um you know if there are exiting exiting owners that the integration piece is often very seamless um there's kind of a there's kind of a built-in um a built-in pool a potential potential deals out there namely the the others in the franchise network is it kind of all of that stuff or or something else and and um are you proactively pursuing that are you just kind of raising your hand and saying hey guys anybody who wants to sell we're here yeah I so I would say it's it's kind of all of those things we bought the biggest franchisee in the system um and I would say of the you know in the size deals that we look at this was probably the best kind of complete team that was in place to run a business um and we you know we partnered this gentleman's name is also Scott we we partnered with a CEO who still owns you know chunk of the business alongside of us but is extremely entrepreneurial is very driven to grow the business you know hasn't slowed down at all I mean Brad we've only owned it for not even a month but um he's got a great system and team in place to allow us to go after some of these growth Avenues um given the fact that he is their largest franchisee um you know he he he has a lot of conversations with other franchisees who are struggling or are wanting to you know achieve the growth that he's experienced in his business and even during due diligence we we knew that there was other franchisees in the system that were reaching out to him saying hey can we partner would you be willing to buy me out um and so we've already we've owned it for a month we've already submitted an ILX or you know buying another territory that's an existing business that just has been struggling um so we think there's a lot of opportunity there you know when we talk to the franchise or there was some hesitancy on their part again you know they hear private equity and they they have a vision in their mind of what that means I think what what we're trying to do on that side of things is really build the relationship there so that they're not you know threatened or anxious by what our you know strategy might be so we're keeping them in the loop on hey we're talking to you know XYZ territory um but we think there's a lot of opportunity to either buy new kind of Greenfield territories or you know help partner with struggling franchisees in the system um and really deploy the system that Scott and his team have put together to be able to drive drive business yeah I mean that um I mean I've just recently had a few a few episodes devoted to this concept of namely actually on Thursday Brian beers who has a he and his brother have acquired like 30 Midas locations and in many cases it's uh talking to sellers where the they're struggling they just haven't been very successful stores very successful locations um and so not only are the terms of the deal often very favorable seller heavy seller financing sometimes 100 seller financing but Brian's experience in the system allows him to go in and turn around pretty pretty um pretty quickly and pretty confident confident like know that he's going to be able to go around and turn go in and turn around a struggling Midas so um and and and so just getting to 36 locations I mean you can scale really quite quickly within a franchise system once you get the lay of the land yeah and again we're brand new yeah I'm not we are not experts uh we don't have the Playbook dialed in but we we are certainly seeing a lot of opportunity and we feel pretty confident that you know our team out in Spokane is going to be able to handle you know the integration and then the turnaround side of things with these territories that are you know struggling and just two more on this Justin when you're you are positioning yourself to the franchisor as a private private Equity Group that's really more permanent Equity rather than traditional private Equity um do other private Equity groups not also say oh no we hold for the long term or they they basically have to acknowledge no we are buying we do intend to buy this business to grow it as quickly as possible and then sell it because they know that the franchisors franchisor is not going to like that so I would just imagine you'd hear a lot of private Equity groups claim oh no we're in it for the long term um but maybe they can't if they're not actually in it for the long term how do you what does that look like when you're competing against other private Equity people what do they say what's their messaging yeah I mean it we haven't been you know in the room for their pitch um you know I would tell you when I worked in private Equity like you weren't coming in saying hey we're gonna you know strip out costs drive profitability and sell it but there was an understanding that hey we have a defined you know period of time where we have to deploy and then repay capital capital back to our LPS um so just by the structure of the fund you know you know that there's hey we have X number of years to deploy we have X number of years to make improvements and then we have the opportunity to give that money back to LPS um so I would say you know our approach coming in of saying hey no we we are multi-decade we're not you know three to five years resonates now again we're only you know traction's five years old so uh you know we we haven't been able to demonstrate a multi-decade hold period yet but um I think that part really resonated and you know we we try and come into the conversation you know from a from a standpoint of hey we we are not experts in your business we don't know how to run your business better than you do you know we're going to ask you a lot of questions a lot of them may be you know silly or simple or you think you're ridiculous and that's totally fine we are asking from a standpoint of wanting to understand not because we think we're smarter than you by any means um and so I think that you know I think that approach really resonated with Scott the individual that we you know partnered with on the franchise side of things for the restoration business and you know he he had grown it really quickly and he went into it when he started it with the goal of building it to be able to have something that was sellable in the future so he was very strategic in how he built his team how he built his systems and I think for him one of the biggest drivers was hey I and you know we talked about this before we started recording it can be really lonely when you're at the top of these businesses and you know you don't really feel like you have people around you who are as invested in what happens with the business going forwards and you know not having that team that you can really bounce the hard strategic questions or hey like I'm I'm weighing this decision that's gonna have a meaningful impact on the business like what do I do so he was looking for partners that that were aligned on the long-term side of things he still sees a tremendous amount of upside in the business and in the industry and he's super entrepreneurial so he's trying to figure out you know what things out of our core restoration mitigation side of things can we add to this business that help us accelerate growth um so we're we're really bullish on that one the franchise side is an interesting Dynamic but we're really bullish on the team and on Scott and I think they're going to do a great job great Justin and before we get off this um just tell us a little bit about the restoration and mitigation business because I feel like this is a um kind of a a small service a small business a service business that I a home service business that I hear about more and more and you'll you know I think there's been a a deal or two on Acquisitions Anonymous and I just I hear about these businesses don't know anything about them seem like really hard businesses but clearly there's there's demand for the service I mean there I guess there's more people with disasters happening in their basements than I realize um so yeah just kind of talk to me about what what to look for in a business like this what did you like about this um the business model and and kind of the market for these services yeah I mean I think one of the big things is uh it's truly a non-discretionary spend I don't know uh if you have a pipe that's broken in your house you're not thinking hey I need I need to remember to get something scheduled to come look at this you're not thinking like hey I've got to you know try and negotiate the best price it's I need this solved immediately um and so the non-discretionary aspect would really like um you know I think as they're you know we we live it our business is based in an area that's not you know really driven by catastrophic events I think if you look at restoration businesses that are more in the Southeast you'll find you know wild fluctuations depending on what their business model is because a lot of their work can be you know cat driven where you have massive weather related events that drive the need for this type of work um you have you know an aging housing stock and so you have lots of structural challenges with homes and buildings that um you know aren't affected necessarily weather-wise but just they're old and they break and that you know causes the need for the type of services that we provide the the piece that's you know different in the business we bought versus what you'll see from other some of the other you know franchise specific businesses in the space is we don't we don't do a vendor program so we're not aligned with insurance companies a lot of restoration businesses from the franchisor level will partner and become vendors with State Farm or Allstate or whoever it may be the desert homeowners insurance um and so our model with this business is to drive business from local relationships it's not from a national account standpoint and so our sales folks are building relationships with local property managers with local plumbing companies so that you know we're the first person that they think of when they have an issue um rather than it being driven by the insurance company saying hey you know we have a ten thousand dollar project you guys need to work on and Spokane and I guess that means you get to you get better pricing that way better margins because the insurance companies kind of really knock down your pricing if you're a vendor for an insurance company or no when you're when you're on the vendor program there's a very defined hey this is what these types of services cost um where we feel like we are able to drive better margins on work is we don't come at it from a hey here's the five things we have to do to check the box that we took care of this customer we go above board to make sure that their house or their structure is you know completely back to normal so we do a lot more testing we do a I would say a more thorough job of making sure that the property is actually livable again before we're actually done with a project okay well Justin let's move on to hearing an update on the four businesses that that you already had in the portfolio that we talked about last time we'll just quickly go through these let's do c Western first which was a distributor of supplies for fire stations correct yep yep so tell us about sea Western how is it how is it now yeah uh so that business we we sell equipment to fire departments uh everything other than fire trucks and extraction tools um and it's a business that's been around since the 70s we bought it in October of 18 uh that business when we bought it was about 15 million in Revenue it'll do probably 36 37 million in Revenue this year and you know last year was the best year they've had I think this year is on Pace to be their best year again um and you know I think it's really a credit to the team there and some of our team attraction you know when we bought that business we knew they needed systems and infrastructure to help the business scale it was you know paper everywhere in the office that was really how they manage the business and so we did a um full deployment of an Erp system we built a bunch of tools to help our sales force uh and so the system side of it is really what's allowed us to scale to the additional you know geographies that we have sales reps in now um there's a lot of changes happening in that industry there's been a lot of Acquisitions of larger distributors in the kind of first responder space so it'll be interesting to see kind of what shakes out over the next handful of years but we're we're still really excited about that business we've got an add-on that we're getting close to with that business that would give us access to be able to sell the fire trucks as well as kind of the Wildland Wildfire rigs um so we're yeah we're we're excited about that business it's been it's been awesome for us we Scott or no Steve excuse me um was one of the owners that we bought it from he's still the CEO of that business today we're actually flying down uh Wednesday down to Arizona for a board meeting for that business uh so yeah it's been it's been going well and Justin when you said it was that business was founded in the 70s yep so it's just it's it's interesting because um in our world a lot of times you hear the prescription being get rid of the paper get rid of the fax machine put in Tech and you know magically the business just grows and I feel like that's kind of conventional wisdom and then I've heard a number of guests come back and say well actually that's really oversold oftentimes you know yeah you can get some efficiencies from getting rid of the paper and putting in Tech but like maybe the efficiencies aren't so dramatic and actually maybe the changes are disruptive um or it's just not as big a deal it's not as much of a needle mover as you might think and yet I'm hearing in this business one that was 50 you know I guess it's a 50 year old business now 40-ish years when you bought it in fact that really kind of was the thing that that the battle of the bottleneck that allowed you to more than double it in five years a 40 year old business I mean this is a business that had a long time to grow got to 15 million which of course is impressive but and then but then really kind of in in just the the four year four or five years you've had it has more than doubled so um am I am I hearing you correctly that it was really it was really just kind of like putting in some tech yeah I wouldn't say it was only putting in the tech by any means um you know we were really fortunate with that business that uh you know Steve and his team really place an emphasis on the customer service side of things and really taking care of the Departments and not just being order takers but being you know available and you know being out in the Departments and helping them figure out you know what are the what is the equipment that they need or the supplies that they need to make sure that their people always come back from the fire to be able to go home with their families and so that in conjunction with you know taking the ceiling off of the business that really was their their lack of a system on the back office side of things they had orders that would fall through the crack they had a slow process to be able to actually get pricing to customers because it was really a bottleneck on Steve so we developed a bunch of pricing tools for our sales reps to help them really quickly be able to get pricing out to the customers and then we you know really streamlined the order intake process so that you know things shouldn't fall through the cracks there's there's still issues from time to time but um it's certainly not as as easy as just putting systems in that works you have to make sure that the systems actually support and drive the business not just you know system for systems sake yeah yep and that was real I mean that was really an effort that was led by Dale and Peter on my team they spent a ton of time in that business the first year and a half after we bought it to get those things in place Dale and Peter Peter Bell who I met Peterbilt in Orlando at SM bash and Dale yeah Dale Payne he's one of the guys that I started traction with great swag off-road tell us about how this business is doing yeah that business has been you know it's it it saw a huge bump from kovid um you know it grew I think 45 46 in 2020. um you know slower growth and 21 kind of flat in 22 um still a really good business for us the challenge there as it's been for yes the last couple years is on the product development and the the velocity that we're able to get new products out into the market um we've added a couple people to our team there that I think are helping to start accelerate that side of things we've got a really loyal and passionate customer base and you know thankfully we've able to we've been able to design and sell really high quality tools um so yeah we're we're excited this should be a big year for us we've got a couple you know big product launches that'll be happening later this month and next month that we think will help kind of restart the growth that we're looking for with that business Tony link Paving we we touched on it uh a bit already because it's the of course that was the vendor to ground up but um tell us a little bit about um that one and how it's doing yeah that one that one was flat last year from the year before uh you know and maybe we'll touch on some of this later that was one that really had challenges on the employee side of things and uh you know we had a lot of folks kind of early on when we owned it that were you know jumping for what they thought were greener pastures um and so there was a lot of work just trying to make sure we had the employee base that we needed to do the work that was on our schedule um I think we've solved some of those you know issues here lately we've had a lot of employees come back saying hey the grass actually wasn't greener on the other side of things um and yeah we're we're still excited about that business we think there's a really good opportunity in conjunction with ground up now to go after you know bigger projects for that business and to expand you know the customer base that we have there I I think our our challenge with that business is making sure we have the right management in place so that we can free up Tony the prior owner to you know work on only the things that he enjoys working on um and so that and so we you know reduce our dependency on him as an owner he's still a vital part of that business he still enjoys coming to work but you know he eventually wants to go spend more time on his boat spend more time hunting and so we've gotta free him up to be able to do those things yeah well let's do talk about um both hiring his replacement and just kind of the the labor challenges you saw with that business let's put a pin in that and return to it let's hear about your last portfolio business Stumptown mattress the mattress business yeah it's uh it's it's fun talking about the portfolio because most of the time it's it's been good news this has been the one that's been a a challenge for us um it's it's largely a you know consumer discretionary spend item you know a mattress is something you can say hey actually I'm good I don't need to buy one for another six months or a year um and so you know during last year we definitely saw a pullback in that business I think you know uncertainty about the economy housing you know sales slowing down um so that business was down call it you know 10 to 15 percent last year um we've added some folks to the team to you know kind of help restart some of the growth there we've we've we've made more of an emphasis on new product development and you know trying to build out some different sales strategies there to start you know offering our kind of mattress at Home Goods products to a little bit broader audience and they had historically so that one is the one that's been a challenge but um it seems like the last kind of two or three months or so it started to turn the corner of the the other direction and it's kind of an e-commerce retail hybrid right there's a there's a location in Portland and then it also sells online yeah probably 30-ish percent of our sales are online direct to Consumer and then the balance is through the brick and mortar store that we have in Portland and Justin what do you think you didn't see and when you were looking at that at that deal um and that because obviously it's been more challenging than you than you would have liked yeah I think we didn't fully I mean you hear about covid bump in profitability I don't think we fully um normalized what the impact of the covid bump to the positive was for that business um and I don't think we I don't think we saw the Slowdown on the the consumer spend side of things and maybe we should have um but you know we bought it kind of end of 21 had a great finish to 21 and then you know starting kind of beginning of Q2 and 22 is when you know we really started having some slow down there um does that scare you off now from discretionary consumer discretionary kind of permanently or no no not not permanently and I think I think a lot of that coveted bump is starting to be you know long enough in the rear view that you can see kind of what a more normal somewhat normalized earnings looks like I know we still have a lot of supply chain chain challenges and you know a lot of inflationary pressure on the costs that go into certain things um but I think we've worked through most of what you know the covet impact on some of these businesses has been okay great um well on the kind of heels of the question that I just asked you you've now done six Acquisitions a really a wide variety of of businesses um what have you learned or what have you improved about the types of businesses that you buy if anything I mean are you do you really kind of look at I assume you have size parameters but aside from that um are there certain things that you like or won't touch or you know has your has your scope become more narrow what have you learned um I wouldn't say that our scope has become more narrow we we you know we're still focused kind of Colorado and west on on the businesses that we want to look at largely so it's easy to get to the businesses so that we can spend time with the teams out there um I think the market has gotten a lot more competitive for those size deals uh you know I go to our dinner here every quarter in Seattle that is a group of folks that invest in private businesses that don't have a fund so it's a group of independent sponsors which is what we would be and you know there's 30 people just here in Seattle that all own businesses that they've bought that are in the size range or larger than the companies we're going after and Seattle is not a large investment Hub by any means so the Market's definitely getting more competitive I think you know interest rates on the buyer's side have changed our kind of valuation expectations a little bit but we haven't seen you know the cost to Capital change what owners think their businesses is worth which I can totally understand from their side of things that their business performed well in 21 and performed you know maybe a little bit better in 22. they're not going to think oh well the buyer's cost of capital is higher so that should impact the price that they're willing to pay for my business they think hey like my business is doing great why would I you know accept a discount from what somebody told me it was worth you know six months ago yeah um so we we haven't seen any any change on the pricing side of things really uh you know the cost of debt has certainly you know gone up and you know depending on your lending relationship that can you know fluctuate pretty wildly um I think for us you know we're going to try and stay in the same size range of deals for the most part we still think there's a lot of opportunity to partner with these businesses that are you know at the low end of the Middle Market and and hopefully we can come alongside and help you know build out the systems and the team that's needed to you know continue to scale those companies but I think it's going to get harder and harder to find you know deals that we think are priced appropriately just because there's going to be more and more Capital coming into the space and that is because why just a continuation of a trend that has been going on now for a while because you're not competing with Searchers like so the trend in Searchers you're not you're you're a bit above that market so you're not really competing with that new popularity I mean yes and no there certainly is Searchers that are looking at deals that are on the lower end of what we're looking at there's increasingly more and more independent sponsors that are folks that are you know coming out of a private Equity background that are saying hey I can go raise the money to go buy a three million dollar ebitda business um and there's more and more funds that are raising you know a few hundred million dollars where their focus is on partnering with independent sponsors so there's more and more capital I think as returns get driven down kind of across the market folks are going to try and find these niches that have the ability to drive higher returns and I I think that in and of itself is going to drive up pricing for a little while now will everybody be successful that's trying to you know move down Market to do these deals I don't think so because you know you're buying businesses that need a ton of help that don't have full teams and so you know it's very different from like two million business is very different than buying a 10 million dollar business like your sophistication the the team and what they're capable of doing you've got to remember that they're people and treat them like people treat them how you want to be treated and you know it's hard I think it's hard to come down market and have the same expectations that you would have for your team um yeah there's just there's not as much professionalism there's not as much sophistication so you got to roll up your sleeves and work alongside them to help develop them and that's not what everybody wants to do yeah and and that is part of your model right I mean I've heard you say that now with a couple of a couple of the deals where the CEO founder seller is still involved in the business is that is that the case in every acquisition or or is that kind of your default but then it varies at the edges yeah of our four or of our six businesses four of them still have the prior owners involved on a day-to-day basis uh in two of them we've gone through a transition there so swag uh the gentleman he bought it from is not involved on the day-to-day side of things anymore he still helps with product development um but he you know from the beginning said hey I want to be done in 12 months I want to go ride dirt bikes and hang out with my kids uh and then the prior owners on the mattress business are now out of the day-to-day as well and so we promoted a couple people from within and then we brought in uh an individual externally as well to help continue to leave that business bringing in somebody externally and I think you mentioned it was it was Tony Lind as well that you're you're looking to uh eventually um replace there we're looking to bring on kind of a director of operations that's going to oversee all of the day-to-day side of things uh we want Tony to focus on customer development customer relationship side of things those are the things he really enjoys doing in the business he doesn't particularly love being there at six in the morning every day as we're getting cruise on the road with machines so we're we've we've got a director of operations that's going to be starting here in the next couple weeks uh that we're excited about and uh Justin on the hiring piece so for both kind of higher level hires director of operations types and then also that what you experienced at Tony Lynn with with folks leaving and then I guess coming back which is great um I get those are two different very different hiring processes I assume are kind of like um pools of talent take the ladder first like the blue collar hiring uh and labor shortage that we all have heard so much about yeah where does that where are you seeing that in your own business in in Tony Lynn is that as bad is it easing because I've heard I've heard Rumblings that it's easing happy Rumblings that it's easing yeah I would say it's easing a little bit um I think it's still a challenge especially you know if you're not replacing if you're adding two um I I it still has been a challenge to find you know people that have the skill set that we need to fill these different roles um you know our restoration business hires a tremendous amount of people to come in and be technicians and it seems like there's getting to be more and more folks that are you know looking to make changes there which I think is good for our business um on the paving side it's been a challenge we're a non-union shop um and it's been a challenge to get good operators in there um but we've seen over the last you know handful of months I would say we've seen some folks coming back that left for what they thought were going to be you know better opportunities and um you know more folks saying hey I'm hearing good things about what you guys are doing I want to come you know be a part of that so uh I think it's softening a little bit it's still a challenge and I think you know on the management side you know we've got I think three or four open controller positions that we're hiring for right now it's been very hard to find uh high quality people to fill those roles for what we need Justin I don't think I asked you Revenue numbers on the two new acquisitions so tell us those and then tell us the overall portfolio where you're at um Revenue wise and then I'll close it with one last question yeah um the ground up business is a you know 13 14 million dollar a year Revenue business uh the restoration business did about 10 and a half million in Revenue last year um overall we're gonna you know we probably finished out 22 somewhere around 75 million in Revenue um and we're call it 200 or so employees across the portfolio and so to put that in perspective you you your first acquisition was in 2018 you started really looking for businesses I guess in 2017 so I guess you kind of officially started in 2017 but really your first acquisition 2018. five years later less than five years later uh you have you're at 75 million dollars in Revenue pretty spectacular how does that square with like when you were were you know modeling this and and whiteboarding it in 2017 what were your aspirations for you know your Five-Year Plan because here you are at five years are you ahead or behind I can't possibly imagine you're behind but we're compare it for us yeah I mean I don't know if I could tell you specific you know dollar amounts that we were projecting um I would say like if you told me at 29 when we started that this is what would be you know five years later I would blown out of the flown out of the water um we've got a good team attraction and that's I think what's helped us to be able to scale um it's you know I think when we were starting out for me at the time I was coming out of private equity and I was maybe naively saying hey I think I can do this on my own um so in the beginning it was just you know hey I walked away from a good paying job to try and you know build this business let's try and get a deal done so that we can start paying ourselves a little bit of money and then it was you know hey we got the first one done let's see if we can find the second one and then all of a sudden it's you know 75 80 million in Revenue um so it's it's it's been a whirlwind it's definitely been kind of more than I you know expected that it would be and were you know hopefully going to continue to to grow really fast we we want to you know continue to build this we've got a really good team I think there's a good opportunities for those folks that have a track record of being able to buy and grow businesses so we're excited about the next couple years as well we think there's going to be some good opportunities for us Justin will you be in Austin for SM bash at the end of April I will be yep great yep well I'll see you there we we met each other in person in Orlando last time well Peter I met Peter as well will he be there uh and Austin do you know that I'm not I'm not sure if he's coming this year I need to check okay okay okay cool thanks very much for coming back on Justin uh congratulations on the last five years really exciting really I'm sure um enticing to people listening as we all know hold codes are are a fantasy of many listening to this podcast and uh and you're the real deal and it's happened pretty quickly um so congratulations on that and for for being really kind of uh uh an inspiration to people well thank you for having me on I think you and I have kind of chatted offline about this but I probably hadn't you know 10x the number of people reach out to me from being on your podcast the last time versus any other thing that we've done like that so thank you for the platform that you have and giving us the opportunity to talk a little bit about our story yeah well no problem Justin thanks for coming on and that's a good reminder how can people um what's the best way to to reach you this time I suspect you'll get more Outreach than last time yeah um I'm on Twitter I'm not Super Active on Twitter I'm more of a consumer than our uh Creator on there but feel free to shoot me a DM or uh you know find us on the website shoot me an email happy to happy to be helpful where I can cool all right all that'll be in the show Nets thanks Justin cool thanks will I hope you enjoyed that interview make sure you subscribe to the acquiring minds Channel below we are now publishing twice a week so tons of new interviews and stories to come stories that will help you along your own path to acquiring a business