Colin King welcome to acquiring minds thanks for having me Colin you and a partner are building a hold Co it is a fascinating collection of businesses and you're actually at a bit of a fork in the road in terms of where to place your next bets we'll get to that later you also recently made another as I said fascinating acquisition we'll we'll hear about that but first Colin why don't you give us a picture of the hold Co today and then we'll start back at the beginning and work forward what is the current state of Circle City capital group yeah yeah uh so let's see Circle City capital group is a collection of what I'll call Four operating groups and each operating group is itself a collection of a couple of different brands rolled up into you know one industry vertical so we've got four businesses that we run today one is americanmade apparel and soft lines one is a Decor distributor another is a monor education supp company and then last a Financial Training and education company so those are the four groups that we're in today it's a 50-50 partnership with my business partner and it's just shy of 30 million in run rate Revenue can you tease your latest acquisition or not yet yeah yeah yeah I'm happy to so our our latest acquisition is uh within that that uh americanmade apparel and soft lines business so that business itself is uh two denim Brands one flannel brand and now a teddy bear brand so americanmade teddy bears we've got a teddy bear factory up in uh Burlington Vermont area it's about 10 million in Revenue just closed on it last week so it's it's tucked within that that singular operating group of companies so interesting a teddy bear manufacturer teddy bear actually North America's largest teddy bear manufacturer yeah really okay yeah so so a teddy bear business a appar that's part of the apparel group so Den Denim and apparel Brands Decor home decor and and I think and I think business Decor distrib distributor yep a montauri supplies distributor yep and a a financial training business which is essentially an online kind of kind of an online course business online course in keynote presentations yeah in Keo presentation eclectic uh would maybe be a a better word than fascinating both I guess they're very clear that it was it was created without without intention at the outset right it's a it's a very opportunistic collection of companies well let that opportunistic collection that is um says something about your philosophy here so we're going to we're going to spend time on how you choose to make the Acquisitions and where to double down and so on so we'll get there all right Colin that was awesome let's now start way back how did this happen how did this come to be right uh okay so so 30 second overview on me and my professional background uh I spent 2 years in public accounting spent six years working at a hedge fund on the buy side one year as CFO at a private Equity Firm here in the Indianapolis area and then the last six years I've been acquiring these companies with my business partner so how did that all come to be uh we actually joke when someone asked this question you know how did you guys meet and how did this all come to be you know we look at each other and say okay who's going to have to tell story this time we actually met on Craigslist so our thesis independently of each other was that Craigslist was this great place to to pick up potential you know acquisition ideas right if you're a business owner you don't know what to do with your company yeah Craigslist might be the first place you go to list your company and see if people are interested so Joe had a had a posting up there saying hey I'm I'm I'm in Indianapolis and I'm looking to buy a company and I thought it was pretty well written reached out and we hit it off started chatting every day talking about deals and ideas and what we wanted to do uh and that's actually how we originally met and so it was just a a snowballed relationship from there so he put out a post on craigsl saying I'm looking to buy your business so he was fishing for business yeah yeah basically caught you caught at ad and caught you instead which of course probably was the most fruitful thing he could have gotten and and you're both in Indianapolis Circle City for those who don't know is Nick name of Indianapolis right yep yep um and got to talking and in there and one thing led to another okay and by the way did he ever find businesses on Craigslist so we actually made our first acquisition off of Craigslist so in 2018 we bought a little Trucking Company delivering Automotive Parts in the middle of the night uh we spent about $75,000 to buy it it was a $250,000 Revenue company um just a guy who had a couple of routes in drivers and some Colin let me stop you because I want to I want to spend a little more time on that story yeah so you guys meet decide to partner and your background your um education was in accounting accounting yep yeah yeah and then had had accounting CFA CFO roles yeah yeah so basic progression of accounting and finance yeah great and Joe's background Joe had a completely different background and you he used to work at Google so he would travel to foreign countries and standup support offices to support local sales teams engineering teams Etc um all over the world and then he'd come back to to the US and you know get deployed and go do it again so he's got a very different more operational mindset than than I do and so we had a totally different worldview when it came to looking at companies which made for a great partnership and we had had very complimentary skill sets great yeah okay you were also on Craigslist looking to looking for businesses for sale yeah yeah so that you know independent of each other we thought hey okay this is a place to hunt for potential deals right I mean you're just getting started you don't you know this was this was maybe before the the whole Searcher thing was as popular as it is today bis by cell was a place and we looked there and and you know we started talking to and meeting local Brokers just in different areas of the country got a few that we actually like quite a bit um but it was just another place to go hunt for for deals what year was this this was 2017 2018 that we were we were looking at stuff and what was your independently what were your Visions to just buy a business as a side hustle to eventually build a holdco didn't know what were the V what was the vision I don't I don't think it started out as as this intentional we're going to build this this large conglomerate you know I think we we toyed with that idea and said yeah you know in a future State that'd be nice right the the buffet approach you've got a diverse portfolio if one you've got multiple horses in the race right if one is down 40% then won't take the mothership down right um but at the time we both had a small amount of personal money so we knew we were going to be using SBA financing to to do something so it was really just a hey let's find something to get started that is going to be big enough to a pay for the two of us B service the debt and C generate some cash above and beyond that that we could you know maybe keep doing some things so I don't think it ever started with this grandiose image okay okay but you were aware of I mean you were admirers of Buffett so the idea that you could assemble a portfolio of businesses was certainly on the radar even if it w wasn't an explicit Mission at this point to totally so Joe Joe's background was maybe more entrepreneurial you know he was involved in the startup scene and and working out in California was more exposed to those those types of uh those types of businesses uh his family also has a couple of small business owners so that's just a world he grew up in for me working in the public markets you know my thought was man if I can identify a good company in the public markets maybe I can take some of those same thoughts into the private markets right and and this idea of oh stocks are trading at you know 10 to 20 times earnings while I can go buy a private company for two or three you know was pretty attractive although that is kind of a red herring ah say say more about that why is I mean I guess I'm a little bit cynical about the industry now right because you look at it and and you'll get you you maybe get a broker who throws a deal to you and says oh okay it's $100,000 of cash flow right and that's always an optimistic look at it you know you come into these situations and and you've got to take a haircut when you're thinking about 90% confidence interval what of what a business is actually generating right there may be uh you know people that have been underpaid for years or this that or the other that are deferred you know capex Investments or other things that the business businesses needed for a long time and just you know it's gotten by without it so in almost every situation we've walked into you know the the the advertised earnings are almost always higher than what they they wind up being on day one sure meaning the effective multiple of course is high and and then at the same time this idea of oh I can buy a company at 3x cash flow and you know I don't have to be involved in it right I mean is just it's just a almost a complete joke right just the level of things that come up even today at the size that we're at you know there's a ton of of of issues that surface up to us as as the owners right uh so it's not like we're shielded from this stuff and yeah we've got a management team in place in a lot of these businesses and we can step away for periods of time but but uh you know nobody's thinking about things the way that you do when you've got your own money and debt on the line sure yeah on the other hand Colin despite your uh jaded eye when looking at listings now you have in what 6 years time built a $30 million hold Co so let's let's also recognize that uh not as easy as the napkin math suggests but still pretty amazing uh what the path here yeah yeah I yeah I need to need to have more of an optimistic eye when thinking about what we already built yeah yeah you have so many Acquisitions under your belt we're obviously not going to hear the story of all of them or even probably half of them um but let's do here uh the quick versions of a few of your very first Acquisitions starting with this small modest as you put it trucking business what tell us where you found you and Joe found this business and why you decided to to to run after it yeah we we bought this trucking company in 2018 off of Craigslist right so that's where where we found it a just the business owner himself was was listing it for sale uh was a collection of I don't know six trucks uh just box trucks right 26ft box trucks or or shorter think like a like a little U-Haul uh and it was a routes business so they would you know go to this distribution center gather up automotive parts and then run out and deliver them at night uh we looked at it and said hey we're buying 250k of annual revenue and a contract right so we had a contract with a customer to work these routes and it was a business that came with some assets so we thought about it and said hey we've got drivers in place we've got assets and we got a contract it's a business that's been around for a long time and and what do we have to lose right because the investment was so small uh in terms of total dollars outlaid so $75,000 was the Enterprise $75,000 was the total transaction price so we just paid for that you know just with personal money we each went 5050 on it so what is that 37 a5k uh did that deal and then the first night you know two drivers don't show up it's like okay well here we go Joe and I are hopping in trucks and running out making Automotive Part deliveries in the middle of the night Colin what when you say delivering in the middle of the night Automotive Parts be more specific where where delivering to where who who's the end deliver so so think about it is if you're going to the shop to get your car fixed and they say oh yeah we don't have that part in but we'll have it tomorrow usually there's someone like us in the middle of the night who is loading up a series of parts right they could be Mufflers to engines to to whatever right and we're loading them into a box truck from a distribution center and we're driving to let's say from Indianapolis to Toledo Ohio and back and along the way we're going to stop at 15 to 20 auto dealers right or service centers or whatever and drop off the one to two to five parts that they need that night right so it's just like a like a plain and simple route based distribution business delivering parts to local auto dealers or service centers great how and how old was the business you said it had been around for a while about 10 years and how many drivers or employees and were there any employees that were not drivers so everybody was a contractor when we when we came into the business there were five drivers five routes so you know one route went to Cincinnati and back one to Toledo and back Etc uh so we had five drivers in place uh you know no management team and no first layer of Defense if you will and was the owner one of the drivers he was was technically the First on call right same situation so my thought was it's a business where it grinds you pretty hard right if someone doesn't show up and you're Dy it I mean it wears on you to have to to go and deliver parts from call it midnight to 11:00 a.m. every night um so the owner was very burnt out in in doing that right so someone didn't show up he had to do it and uh you know putting a backup driver system in place or hiring a manager is just something eats into your cash flow 100% right so if he was making X on the business there was really no incentive for him to say I want to go hire a a backup driver to sit idle in case I need him so um yeah he was the guy who would hop in the truck if someone didn't show up just like we did when we took over just like you did on day one yeah and Colin how much how much SD was it generating if any uh cuz you have said that whatever business you acquired was going to need to support the both of you not just one but two people right so this was a $50,000 earnings business or so on day one um so we came into it saying hey we're not both going to be full-time on this right so so Joe had a couple of little Consulting Arrangements that he was doing with local startups uh I was still working with the L guys at the time uh and just had this as sort of a side project for a year so ultimately this was a a side hustle right to get things to get things off the ground so the idea was kind of just to do a deal get in the game learn because for even for 50 Grand split two ways $25,000 a person that's almost so little it it just purely financially now it almost doesn't justify doing it for sure and in hindsight I think that's the lesson you learn right and and coming into it with your first deal you know just like a lot of other folks out there think I you know I I thought hey we can we can get this thing to run on its own right we got drivers in place you know there should be ways to we can we can manage this business without having to be active in it on a daily basis so that just turned out to be flat out wrong and something that's pretty hard to evaluate in a due diligence period so Colin is the Takeaway on that business that basically you realized that it was going to require a ton more volume ton more Revenue to have enough room for you guys to step out of the business so so there's a business model there but it's you know maybe doing 10 times the was yeah so I think the one of the main takeaways was that critical mass concept right which I think we're both huge Believers in is that you need some scale to wear fewer hats and and be able to step back into the role that you ultimately want to play in a business so critical mass is a very real Concept in small business and then two I think it just was a business model that we were not interested in right because it was never going to be a company that would would operate during the day right so you're always going to get phone calls with some emergency that pops up in the middle of the night and and it just gave you some time to reflect on the actual business model that you want to operate right so there's zero flexibility in it right you can't be geographically far away have a driver not show up and then be able to like step in and and fix that problem right so that led us to steering toward hey how can we build something that's maybe more of a remote-based company in the future great okay uh but you hold on to the business or you exit it now at this point yeah we've exited it as of 2019 okay so you held it for a year yep and did you buy do your second acquisition before you exited or after uh let's see I think we we closed on that and then rolled the proceeds of from that into a string of deals that we did in the back half of 2019 so call it October time frame we bought re businesses within maybe a 5 week span of time okay but the trucking business as you call it that or the distribution the automotive parts distribution business yeah that was what did you sell it for you bought it for 75 with cash I want to say I want to say we sold it for about 150k with with all the assets and everything included um so you know on the surface it sounds like a decent return but when you when you factor in the the return on time time and you know all the things you have to do in it yeah absolutely not a slam dunk in my opinion okay but enough Capital to then make three Acquisitions rapidly so tell us about acquisition number two totally so acquisition number two was the first in the string of Decor distribution companies we we we now own uh this was actually a little Amazon business that imported uh bamboo vases and sold them on Amazon and then to certain like business customers so think about a hotel or a restaurant that wants to outfit their store or location with a whole bunch of Aces and and dried flowers and dried branches that go inside of it so uh that was the first acquisition and that was followed up shortly with the first in our apparel um businesses which was all American clothing a online retailer of uh blue jeans t-shirts and some other americanmade apparel items so those two came in the fall of 2019 and really was our first foray into e-commerce as a business model and how did you so give us some numbers around first the decor business yep so the decor business was doing about 1.2 million in Revenue uh it was based out of San Jose California we got it from a broker email list and it was marketed as a turnaround opportunity right so they were asking for I can't remember maybe 150k I think we paid 120 for it uh so it was a very low multiple of Revenue but the business was advertised as is breaking even right so they were self- warehousing self-fulfilling out of a out of a warehouse in San Jose California so they had very high rent uh very high staff costs and very high shipping costs so when we took that over we looked at it and said man if we just pick this thing up put it on a truck and sent it to a 3pl we could maybe recreate the recreate the earnings of the business uh a to a variable cost model and then B you know walk away from a $300,000 a year Warehouse expense out in s Jose California so that's what we did we bought it we went out there we loaded up I don't know I want to say about five truckloads worth of stuff worth of inventory and moved it to a 3pl here in Indianapolis so that was the that was the the the general profile of that company I think it turned out to be about $100,000 earnings business at the end of the day when we were all said and done with it um and let's see on the apparel business and how how did you finance it if you only had $150,000 in cash and it sounds like this business was selling for $150,000 yeah so we gave her uh I want to say about a third of the price UPF front and then the remainder of it paid out over two years so total cash outlay um initially was about 40K and we just paid for that with cash no SBA financing no debt financing whatsoever okay and is what you liked about the business given that it was a turnaround so therefore not high quality as it stood maybe the answer is that you saw how it could become a high quality business but why did you buy this business if you'd already you'd already come out of a business that was really challenging and here you are buying for your second business a turn around what's up with that so so yeah it was a business that had been around for about 12 years uh it operated online which is attractive right and we knew that we that the 3pl model existed and that we wouldn't have to staff or run a warehouse and ship product uh so when we got the financials for the business and looked at the last you know three or four years and saw two or three line items really jump out one in Personnel payroll costs and the other in you know warehousing you rents utilities all the things that go into to having a warehouse and just did the math on man if okay we went talked to two three PLS here in Indianapolis before we bought it said you here's some sample data uh here's about how many pieces of items we would be bringing over and storage space we would need and said let's just recreate the economics of this using a 3pl and that math pencil out to work pretty well so maybe it was a little bit of a leap of faith but but we looked at it and said man we can walk away from $600,000 a year in expenses and shift it to this $450,000 expense over here and not only were did that kind of play in give you enough confidence to buy this turnaround I guess it also gave you enough confidence that hey let's let's also buy another business because this is all going to just work out but in fact it has worked out so we're going to hear but before you tell us about acquisition number three H have you at this point gone full-time in in your budding hold Co we had not I guess at the at the conclusion of that third deal so let's call this October of 2019 that's when we said okay great we've got enough assets here that we're both going to be full-time on this thing so I guess the conclusion of that third deal is really when that when that happened okay okay great so tell us now about this third deal yeah well so so let me come back to to All American clothing so we we bought that again in October of 2019 uh it was a a contract app Peril manufacturing retailed online on our website all the sales were on this one website allamerican cl.com it was about a 2 million Revenue company and we paid somewhere between 750 to 800k I can't remember where the working capital actually shook out um so it was it was a good price and it was another company that had been around for 20 years so we liked the stability it the last six years that we looked at had flat revenue and flat earnings which we really liked so uh again a big part of our thesis is finding companies that have been around for a long time you've got stable customers stable products hopefully stable cash flow and and this one showed that and we really like that on top of a low purchase price so when we bought it uh we said okay great this is our our jumping off point we were buying I want to say about 250 to 300K of SD at the time is what it was advertised at so that plus the decor business that we had bought and moved to Indianapolis said okay now we've got enough of a base here that we can really build off of because that uh All-American clothing business we financed just using a traditional SBA loan so 10 down 90 borrowed that was the that was the model for that acquisition and okay so at this point with those two businesses your what is your SD what are you able to pay yourself yeah so we were we were at about 350 before Debt Service um you're testing my memory on what the death service was at the moment maybe it was 50k 60k so we had enough that sorry why so why so little I I I always would yeah back of the back of the envelope would be kind of half halfish of your sste what what sorry what did you buy the businesses for we bought that one for 750 and the other one had no so I don't know call it 700k yeah I I guess I guess maybe it was maybe it was maybe you're right maybe it was closer to 10K a month in in uh in total p&i on that one so yeah maybe maybe it was about half of that so let's say that was 250 less 125 we're at 125 plus 100K of SD from our Decor business so we're at 200k so I don't know our initial starting salaries were like $50,000 a pach a piece which which was considerably lower than we were making coming into this thing but he said okay great now we got this thing we're covering our debt we're paying ourselves something maybe we got a little bit extra we still had some personal money set aside that we could you know maybe do something extra with so that's where that's where we were starting and just on what you were paying yourself coling because a lot of people will well first of all how old are you at this point in story at that point in time let's see that's 2018 I was born in 1987 so 31 yeah okay well paying yourself 50 Grand a year isn't going to last very long and and for a lot of listeners it's not going to it's not going to be possible for any at all so you're you're doing a little bit of um Ramen profitability here on your on your your and of course nothing nothing at all wrong with that that's how many how many things get get going but I'm just wondering was the idea could you sustain that for a while or was this just you're holding your breath for a year and you needed to get to 150,000 of take home each ASAP sort of thing yeah so so it was twofold one one um I'm fortunate that I have a spouse who who's you know a higher earner right so I had some support at home to say I can make this work for a period of time you know not forever but a period of time so I probably had 12 months a Runway at that lower level of earnings uh to get my house in order right and so the play was we do this we're going to jump in with both feet we need to find something else to add to the mix to get to that point where we're actually generating some real income and can can step change that earnings so great yeah great yeah okay helpful thank you yep yep you were gonna say something yeah know I just was trying to formulate my thoughts on that at this point and you know it's uh I my original plan was to as long as possible try and side hustle right so own some businesses on the side that I can contribute part-time uh attention to while maintaining a W2 job and let the get to a point where okay now I can jump in with both feet it didn't work out quite that way and in hindsight I think that would have been really challenging to do for a long period of time um like really challenging so you know now I think as I look back on it I would almost rather jump in with both feet faster and say I'm going to find something or two things that are big enough to allow me to do that at a quicker pace and and you know I'm not opposed because I guess I've got some experience in doing it now to just saying instead of one really large deal find two mediumsized deals that will get you there just as fast right so I think that's where I would where I would shake out on that that thought now well interesting we're going to return to this theme but in some ways this this trying to figure out where to put your attention either in your W2 and and then having kind of this nent hold CO as side a side hustle or going all in on the hold Co um that resource allocation question is one you still struggle with because as we get to in a holdco you're you're similarly having to decide where to give your attention in capital um kind of all the time on kind of on an ongoing basis so this is um when you got a lot of irons in the fire you you're always wondering which iron you should be giving attention um which is um a challenge but not necessarily a negative it's just part of the Beast nature of the Beast and you know I think uh like a lot of other people out there well you know maybe the Searcher crowd is looking for something that's a little larger right at the outset but you know the first deal we did was small because that's the that those were the financial resources we had to start so we started small and then you know each deal we did got a little bit bigger and a little bit bigger and now now we're at the point where they're they're quite a bit bigger than than the first few and you know I think Buffett had the same same situation when he was starting right you know the first thing you buy is always going to be smaller than than the last thing you buy over a 5 to 10 year period so now now we're at that crossroads of okay the stuff we did six years ago do with that yeah yeah yeah you mean the stuff that you did six years ago still in the portfolio correct what do you do with these businesses do you keep or shed yeah before we get too far away from the trucking business your your foray into this world how many times did you guys find yourself s in the car in the middle of the night driving to Toledo uh let's see Joe probably every night for three months maybe wow and yeah yeah uh probably so Joe had a long stint of it Joe had a long stint of it I'd say at least 3 months total of of trucking experience that he got for me it was probably I don't know two dozen times uh and then a couple of them we did together right we just said hey let's just take that plunge together right and and form a bond and nothing uh nothing brings two guys together more than like hey it's 4:00 in the morning and nobody's out in the road and you're you know delivering parts to random auto dealer downtown Cincinnati uh yeah so that's where we kind of hashed out some plans right yeah yeah yeah I bet those you know 10 years from now those those nights in the cab of a truck at 400 a.m. coming in Cincinnati will be kind of the stuff of company lore holdco lore if if it isn't already all right so then you had said that you did three Acquisitions in Rapid succession so that would be acquisition in the hco of two three and four you've told us two and three what is acquisition number four that was a book bookkeeping firm so a bookkeeping firm based in Raleigh North Carolina uh was a remote business at the time uh we paid about 1X sales for it it was a $500,000 deal and we used SBA financing to do it so we came up with 50k to put down uh borrowed the remainder and it was a cash flowing company right out of the gate probably about 200k of of S d sde uh right when we bought it and it was a business that we said okay again it's been around for a long time uh they've got monthly recurring Revenue no working capital needs which was really nice and we're going to need to do this for our own companies anyway so we figured it would be a nice uh compliment to the portfolio to say great we can do the service for other people and do the service for our own companies and you know now we've got start to a shared services platform so to speak yeah yeah okay you know one of the other things that that strikes me here is you clearly are doing an analysis before each of these Acquisitions but maybe not the exhaustive analysis of the Searcher crowd do you agree with that or or is it are you just kind of giving me an abbreviated version in the interest of time it's it's a little bit of both it's a little bit of both but I do agree that that I think for us you know some people come at it and say I've got a checklist of 100 things that I want to want to see before I'll do a deal and I think most people would try to get to 90 before they pull the trigger on a deal and Joe and I may try we may try to get to 60 right so let's identify the the three most important things that are going to work for us or not work for us and find those as fast as humanly possible and not sweat some of the other things either because we've got confidence that we can backfill whatever that problem is or it just may not be as big of a problem given our dedic to making it work so to speak so I guess it's partly giving you the abbreviated version but also partly yeah I think we just you know we looked at it as as something to say we don't need to have every item on the checklist for it to work so long as it carries what what we intend to get out of it when we buy it right yeah yeah I love that and and I also love it that you were able to continue with that approach even though your first acquisition I would say it was not a failure you sold the business you sold it a profit it didn't fail but it was brutal 3 months 3 months midnight driving for Joe and 24 times for you so it was a very difficult experience where you bought a business you were like oh crap what did we just get ourselves into and even though that was your your experience it didn't scare you so much that you became Ultra conservative and in subsequent Acquisitions to totally but but at the other end of the spectrum with that deal one thing that we learned was it was a business model problem the actual Financial profile of it worked phenomenally well right so we we had trucks yes and we had to replace maybe two or three trucks along the way and we had a good strategy for doing that but it was a business that paid US Weekly all our cash came in weekly all our cash went out weekly and we had no working capital needs and so the the actual finances of that business were phenomenal right I mean it was a cash flowing company and yeah we we we had to jump in and and do a lot more work than we we really would have liked to and or sorry did the type of work we would not have liked to do more often but the actual Financial profile of that business was great it just was the business model that didn't work for us and what we were trying to build it was not conducive to to uh scaling and building a hold Co you know this thing that you had to be paying attention to in a time of the day that you did not want to be paying attention to a business being operated right so I think that was that was a big lesson for us right is is okay we've got some confidence in the numbers in our ability to look at the numbers going into it uh and now we need to pay more attention to to the business model yeah and so then there you are three more Acquisitions later so a total of four and those three later Acquisitions are all acquisitions that are basically location independent correct correct to e-commerce kind of dtoc e-commerce businesses yep and then the and then the other one a a virtual I assume book you said based in North Carolina but I essenti I assume it was essentially kind of a virtual bookkeeping they had a cluster of employees in Raleigh and then a cluster of employees in Indianapolis oh yeah oh they had folks in Indianapolis already yeah which was an an appeal when we were looking at it yeah oh sure yeah yeah great Colin okay so you close out 2019 just before Co hits with what what what what did the hold Co kind of distill it for us what did it look like then gosh let's see uh yeah so it was three companies then right one de Core Business All-American clothing and then the virtual bookkeeping company all in that was about three and a half million of run rate Revenue at that point in time three and a half million right but not still not very much SD I mean this is still in the time frame you're paying yourselves 50 Grand a piece correct with Debt Service right yep two two two notes decent Siz notes okay pick us up from there then what yep so then Co happened uh so we got to the first quarter of 2020 and and Co came and and fortunately very very fortunate I mean there's there's absolutely some luck at play here uh e-commerce was a was a serious beneficiary of that so allamerican was experiencing just phenomenal Revenue growth at that point in time um and part of our business was inventory Centric but part of our business was also uh reselling other companies products and Drop Shipping some other Company products and and that allowed us to move pretty quickly so we weren't beholden to hey we've got to go build a ton of inventory and then at the same time it's all americanmade stuff so we didn't have we didn't have some of the supply chain issues that other companies faced and bringing stuff in from overseas these were all you know us factories that were were making our product so that business uh essentially doubled overnight so from 2019s run rate revenue of call it 2 million it went to 4 million in 2020 which provided a ton of earnings for us to redeploy into some other things so 2020 came uh All-American turned into a crown jewel right turned into a crown jewel uh we reinvested in a couple of other deals in 2020 uh let's see one Decor business uh which was silk flower Depot um two more uh virtual accounting firms so we kind of packaged those together within that one brand to make it a little bit bigger um and that's where we finished 2020 so it was a year of covid helping out on the e-commerce side the other businesses did fine just didn't didn't see the explosive growth that allamerican had the um clothing manufacturing the sorry what's it called allamerican appar that one was is yeah All-American clothing all- American clothing right I was thinking American Apparel All-American clothing so we haven't talked about like the operations of these businesses other than that they are are location independent what does the leadership look like are you guys how in the business are you guys how much do you need to understand and know know and learn about Manufacturing ET like how's it how's the learning curve through all this yeah so so let's see at the time uh we didn't have a formal structure in how we were going to run these things it was just you know Joe and I kind of sitting in that GM seat with with maybe one person inside of each company being the quote unquote leader of that business right call him a GM call him whatever you want to not necessarily CEO caliber person um but we had a leader person in each business uh so our Decor company had a guy who was very good with Amazon and could manage that and you know reorder inventory and make sure Amazon was functioning properly and that's really all that business needed at the time because that's really all it was was just this little Amazon sales company uh All-American clothing when we first acquired it had I don't know three and a half employees who were doing a combination of order processing uh they had a little Warehouse that they were fulfilling some product out of in uh in the Dayton Ohio area and and then it was Joe and I and and that company was pretty well functioning on own without us interfering with it quite a bit um so it it it was more or less self-sufficient in without like the the plan for growth right so if we wanted to do more you know we were going to be the ones who needed to do that and then the accounting business had a team of you know call it knowledge professionals right I mean these are people who are who are educated and they know what they're doing and and very self-sufficient in managing their book of clients and then we had one person who was sort of the the GM leader to paral that group and we worked closely with that person and each of them to make sure everything was happening the way it needed to now that doesn't mean that we weren't jumping in and putting out fires and doing things on a daily basis but we had someone who was keeping the trains on schedule so that we could come in and and add whatever else needed to be added to that business yep yeah yeah you know it it strikes me that the transition of a virtual business or call it location independent business virtual business e-commerce business the the transition in these businesses is far less disruptive or or even visible to the employees than in say like a blue collar uh physical traditional business where there's often a day one speech where a buyer goes in and says hello to the team and it's very there's very there's very kind of hand toand combat if you will person to person interaction whereas from the from the perspective let's say of of one of the bookkeepers in the bookkeeping business your coming in as new owners was probably all but seamless to them yeah I mean really those those people I mean much like in any acquisition they care about hey how's this going to change my my life right is my comp going to continue are my benefits going to continue is my work going to change um they care about those things but you're right the the physical business has a very different look and feel and and we've gone through that now just in this acquisition we closed last week the Vermont teddy bear company and uh when we bought the ver flannel company which had a big production in brick and mortar presence up in Vermont so uh we're starting to see that now as we've scaled that uh American made apparel business yeah and uh one more thing before we move into the flannel business the All-American clothing business that you bought M it was not manufacturing its own clothes then correct yeah so it didn't have any in-house manufacturing these were all products that were uh designed designed and created by the company so they were you know quote unquote proprietary products but contract manufactured just through factories in the US who did cut and sew interesting so a way the way a business looks like that looks is that you can have a team of designers who are designing the apparel and yeah just the designers and then and then there's actually manufacturing facilities that that fulfill the these designs not unlike what we hear about you know uh Nvidia who designs the chips but they don't actually the chips that's that's right yeah that's right so for for that business you know the founder and the founder son created those designs and created those products when they started the company in 2002 and one of the things that we liked about it we weren't necessarily looking to get into into fashion or apparel or anything uh but it was a business that had very stable skews from year to year so it didn't require we call it no fashion right no fashion apparel so these are things that don't need to get redesigned or recreated uh very often now that doesn't mean that we haven't learned that the companies have benefited from merchandising as we've gotten larger right and we actually have the ability to invest in a team who knows how to do those sorts of things but out of the gate it was a nice little business that that had SKS that were well performing from year to year to year yeah and may maybe just giving a little more color on like the nature of the of of the the vibe of the of the store would explain why it didn't need to be keeping up with fashion yeah it is a what I'll call a No Frills maybe dad genan or workware type company so these are thick very blue collar jeans that trades people would wear or construction workers or what have you um so I definitely wouldn't consider it a high fashion High Trend type of product that we were getting into it was more of a rugged workware type type customer demographic and it also has like a a a h of kind of politics to it or kind of nationalism kind of right leaning Vibe you know we we we've tried to stay out of that Joe and I are maybe the two least political people that I know but but you keep getting drawn into it you can't help it when you're in that usamade space so we've tried to avoid um taking a side on any of that even though there may be a revenue opportunity if we if we were to take aide um so we we've we've tried to steer clear of that but yeah it's uh it's a space that you get drawn into it mhm okay all right so Co is happening things are surging tell us about the flannel business yeah so the flannel business came along uh it was a it was a company that so let me back up Joe as as someone who was just very in love with the All-American brand and the growth that we were experiencing um he's just a very social person and likes connecting with other business owners and he had been out talking to other people in the USA ma space um thinking hey this might be an area for POS potential acquisition targets and how do we carry more product to keep the growth going as our customer base was exploding so Joe was constantly adding new suppliers into the mix and he came across Vermont flannel as a potential supplier uh reached out to them and said hey I you know I want to carry your product uh will you wholesale to me and they said absolutely not we don't wholesale um so you know one thing led to another and Joe's just keeping keeping conversation going with these with these different business owners uh and then one day asked them you know hey what's your what's your succession plan for the business and you know they didn't have any kids that were interested in running the company uh said hey why don't you come out to Vermont and and let's just get together so we went and took a trip to to go visit them talk about their business and their plans and what they were trying to do and I think they viewed us as as you know just two Midwestern guys building a company and and had the energy and enthusiasm to take their business to maybe a national scale so that's what they were looking to get out of it and uh and you know we we crafted a deal that they could roll some equity and participate in that um and and would give us operating control to fold it in with all American clothing and then really try and grow it from there so it was a substantial acquisition for us it was about 7 a. half million in Revenue at the time we bought it uh All-American clothing was just shy of five million in Revenue at that point in time so All-American went from 2 million in 2019 4 million in 2020 to 5 million in 2021 uh which is when we started that conversation with the Vermont flannel folks so we looked at it and said man we're we're you know creating this 12 a half million Revenue company uh at that point in time and you know now we've got some real scale here to play with so that was the context to that of that business can you tell us about the terms of the more specifically about the terms of buying Vermont flannel you mentioned the RO Equity but can you can you go into it more detail because it sounds like they liked you because you had already demonstrated some competence you had this growing hold Co you had another apparel business but it sounds like the Vermont flannel business might have been sort of an appealing Target for somebody listening to this like if they find a business like that yeah it was It was kind of of that size I assume a$ 7.5 million um $7.5 million apparel businesses the margins are what 15% yeah probably 10 to 15% yeah okay yeah so so uh let's see we we paid uh about 5 and a half million for that business in total including the seller rollover uh equity and we looked at it and they you know a big part of their their want right so in this two-way conversation of talking to a seller I think a big part of it is is you know understanding what the key is key variable is to them and for them it was hey we want to retain a piece of this while you guys are are you know doing the heavy lifting of trying to build it and turn it into a national brand so with that rollover Equity we knew that theba wasn't going to be a route that we could go at the time that that those rules around getting SBA financing uh with some rollover Equity wasn't a thing so we you know we courted just conventional Banks and said okay we're going to put these two companies together this is pro fora what it would look like you know what sort of senior loan can we get you know how much Equity would we need to bring um and what you know what else could we do could we do seller financing seller debt that kind of thing and so we just had to create the capital structure um from there based on what we could we could reasonably get from a senior lender so we took it to a couple different banks and said what can we get they gave us some term sheets and then from there we started to backfill okay great let's go do a friends and family round right all those people who who were you know following us from the couple years prior said okay yeah you know i' I'd write a check to that um so we did a small round uh I think we raised maybe 1.3 million from friends and family um Mark and Linda the owners of Vermont flannel they rolled their 19% Equity into the combined company uh and then they gave us some seller financing and so that's how we packaged that whole thing so we just we just kind of created it from scratch and said how do we creatively solve for you know the the equity that we didn't have at the time and the inability to go get SBA financing for it so so it was 1.3 from friends and family MH uh 19% rolled from the existing owners Y and then seller financing and conventional financing correct so four four pieces on the so so pretty messy capital structure yeah yeah and we still have that in place today so that was all rolled into that Consolidated USA Brand's view so what we did is we created a new entity we dropped our All-American business into it that new entity is called USA Brands and it's basically a parent company with our all of our apparel businesses within it and and they contributed Vermont flannel into that and in exchange we gave them Equity of that combined USA Brands so you know they got a piece of our business and then we got their business too this was a husband wife team uh in their 70s looking to retire uh so they were done right they were they were ready to retire and saying hey you know you guys are young and you have energy and and you'll go do it and you'll do all this you know hard work you know managing the retail footprint and managing the online store I mean that's really what what appealed to them is we had an entirely online business their online portion of their business was growing but still pretty small and they said man these guys they could take that same Playbook to our Ecommerce platform and and really get it growing so I think that was something they were were looking at when when we were talking to them great yeah and indeed that has come to pass and this is this now is the jewel in the crown correct yeah absolutely so USA Brands is the the large holding in our portfolio it's at this point probably 15 times larger than the next largest company terms of Revenue uh within USA Brands yeah Vermont flannel is the the the Crown Jewel the the growth engine the business that may have National appeal National Retail footprint National e-commerce presence yes um All-American clothing has more of a lowend uh value end consumer uh demographic right and I think that customer benefited a ton during covid from stimulus and and you know other benefits and and in sense been pretty tough right in lapping all of that so allamerican went from two to four to five back to four and now it's just essentially holding water at that 4 million Revenue Mark while Vermont flannel continues to grow I know about 20% a year Colin I'm just watching the time and we you have other interesting businesses to tell us about so what I want to do is rather than um get too much into the weeds too much detail on them just quickly tell us about monor the course the course digital content business called profit Mastery and then the teddy bear acquisition if you can give us abbreviated versions of those stories and then I want to just kind of zoom out and ask some theme based Phil questions yeah that's good and it's it's it's funny because as I thought about this I'm like man it's so hard to just drill down into the specifics of each of these because we've done 14 Deals since since 2018 um so the monory business was 100% opportunistic uh was a broker deal we got an email from from a uh from a broker saying hey I've got this business down in in uh Fort Meers Florida it's a monory business that's been around for a long time we looked at it and said man this is a really interesting Niche uh they had at the time maybe 250,000 of inventory they were asking I don't know 120k for it um with about 500,000 of of annual sales so we looked at it and said okay well we could just do the same thing we did with our our uh green floral crafts Decor deal and just pick it up put it on a truck and move it out of their warehouse and and just run it through a 3pl and okay we're going to buy it at less than inventory and you know it may just be like a last puff kind of cigar butt bet um but uh at the time we bought it Joe had a connection from college who was a monor school principal in the Cincinnati area which I guess is a big uh monor community and she was interested in doing her own thing starting her own company and wanted to get involved so we told her about this deal and said hey you know are you interested in coming to run it and she was and so now she's the the person who runs that company and and she's really a gem I mean she's she's great she knows the industry uh she loves the business she's very passionate about it uh she's just a good leader right having led a an actual monory school to be someone who can lead a monory driven uh Product Company with an e-commerce and and distribution aspect to it so she's leading that company and we've hung on to it even though it's pretty small um it's it's just a great little business it didn't require any debt because the ask was low and yeah it's still sits in the portfolio today at about 350k of sales 350k of sales it was 500 sales initially so it's actually declined a bit yep Co yeah yeah yeah yeah okay um and it it was it was 500 in sales it was about 250 in in inventory and they were asking 1225 for the whole thing and you paid in cash yeah yeah yeah I think we paid for it in maybe three installments right so we gave them uh maybe a third of it up front and then two3 spread out over 18 months or something like that okay yeah okay great yeah so that's my story uh let's see uh what else you said you said the teddy bear one and profit Mastery so profit Mastery was was recent it was in October of 2023 that we bought that company we uh in 2020 because we had an Ohio uh legal entity uh for our All-American clothing that's where the company was based and we we kept it in Ohio uh we were offered this profit training program for free through the local sbdc and uh the sbdc gave us access to this we we we took it we watched it we said no this is kind of interesting and said man we you know we could probably do a lot with it right it's a was an e-commerce company uh training based so there's no working capital no inventory we just reached out to the owner and said hey what's your succession plan look like and he got back in touch with us and we chatted off and on for I guess three years uh he told us a bit about the company it was a much larger business than we thought um and said hey I'm looking for someone to pass the Baton and so again it was mostly an opportunistic deal but what we liked about it is unlike our our uh retail businesses that needed a lot of inventory we could grow this without a ton of capital investment and the one thing it was lacking was uh some DTC Ecom attention right so can we do paid ads a new website you know a new LMS platform to actually like try and grow the online portion of the business uh because he had built it through distribution through the state Business Development Centers through banks through CPA firms through franchisors and arguably that's the harder path to go so if we could add this one other aspect to it you know maybe we could significantly add the earnings and it was about a 750k to $1 million business uh Topline pretty consistently for the last six years which is which is pretty great for a business that's that's you know you know close to 100% gross margin business uh because you know make something once sell it over and over again so yeah that's that it again it was just an opportunistic deal but we thought we had a skill set that could add some value to it and the employees were there employees to this business or was it just the seller there were two employees who who remain with the company uh the seller uh we actually did the SBA we did an SBA loan for it and we did an SBA with the rollover so the seller rolled some Equity as part of that SBA loan so he owns 5% of the company today uh and he's active so he's he's uh he said hey I don't want to manage the day-to-day I don't want to think about the numbers and the finances but I'm still interested in doing keynote presentations and I'm interested in doing business development so he talks to some clients and he does presentations and you know I think just focusing on that one aspect of the business has been reinvigorating to them yeah yeah well yeah and the fact that business development I mean hard hard to find good salespeople so if he's kind of able to that's what interests him and it's his product the product that he built from from nothing great it's a 40y old company so he's you know he's got some name recognition in the space yeah and and does are these channels these distribution channels is it Ohio specific or is it no that was just one one sbdc that he's worked with so we've got contracts with I don't know five or six uh different states in their local sbdc chapters and early signs are what is your thesis coming to pass that that you can drive good volume through PPC to this or what I think it's I think it's working I think it's working so far honestly we're pretty early in the it needed a new website it needed a new tech platform so there were some things that we needed to do on the back end before we could say yeah let's go throw some ads at this uh because it wasn't in a shape to to take that but the distribution channel has hung in there quite well right so the thought was and with all of our deals has been you know let's find a company that's that's that's been around for a long time and doing well on its own and if we can add one or two things to it right whether that's sales or marketing or advertising or technology then you know we can capture that upside to ourselves um so this is again that hey yeah the core business is is performing nicely and if we can add those things over time then then we should do okay with it fantastic and then to close this out just on the story and and understanding what the portfolio consist tell us about this teddy bear business yeah the teddy bear business so we got a call in December of last year December of 2023 from a company that we had done a product collaboration with uh earlier in the year so this is a teddy bear company we did um you know we outfitted them with some of our flannel and put them in our stores did kind of like a shop and Shop experience at some of our Vermont flannel locations so they called us in December and said hey you know the parent company is in distress it was a house of brands with a about 60 million in revenue and they called us and said hey are you interested in in taking a look at any or all of our of Our Brands in the portfolio and we said yeah and so we took a look and you know they had this this Niche teddy bear business that was steadily growing had good margins and it's it's manufactured here in the US so it was again pretty insulated from covid supply chain impact like their other brands had seen and it fit nicely to the theme of this usamade business that we were cobbling together so it didn't necessarily fit in the The Apparel theme but you know I guess we're we're still kind of redefining the category right maybe it's it's usamade soft goods or usam consumer products or something but yeah uh it was a nice complimentary brand and and just an attractive tuck in to what we were already doing so it was about 10 million in Revenue yeah it was sizable yeah I mean it it didn't double the size of the business overnight but but you know adding 10 million of Revenue to a 15 million Revenue company um was was pretty gamechanging so we just closed on that that last week uh congratulations thank you thank you took us a couple months to line up the financing um we did not go the SBA route uh for that deal and it is part of USA Brands so it'll share you know management team and resources and all that uh and now it's a I don't know 150 person organization and just a totally different set of challenges than you know what we faced back when we were Trucking with five truckers and me and Joe so yeah yeah can you share what the terms of the $10 million of the acquisition looked like with the yeah it was financing and deal it was a was a $25 million deal uh with all assets and inventory included and just all cash all cash yeah so sorry we financed it but we there was no seller seller Equity or seller debt or anything like that so uh we borrowed we B we did a kind of a 10 down 90 borrowed situation despite not using the SBA we had a local bank who worked with us to help craft that uh so Joe and I kicked in the 10% Equity borrowed the remainder U and it was a $2 and half million do purchase price yeah I would say that that is is maybe less then if the business had not been you know tucked inside of this otherwise distressed brand facing some of the challenges that it had uh I I think they might have gotten a little bit more for that had they had time to shop it adequately yeah yeah well good for you yeah we'll see we'll see all right Colin well that that brings us up to the present I guess I have a a bunch of themes I want to hit on here and questions I want to ask but maybe I'll put it to you first are there any big picture takeaways that that you yourself have from your story and and for the listener who maybe hasn't made acquisition number one yet yeah uh a whole bunch a whole bunch uh I think Partnerships have been helpful right I think I've got a really really great business partner and I know for certain that I would not be here without the the support and extra effort gotten from him at the same time I think that that can be challenging right to find the right fit I I think I'm forunate in having found Joe and just our philosophy is the same and our our level of effort and attention to the business is the same but that's been a tremendous tremendous help it makes it harder to to write support two people but at the same time you can move a lot faster uh critical mass is so so real right it's so real and uh you know I don't know I I I haven't really looked at or found a million dooll ibit business until just just recently actually right so this is the first time we've gotten into that million dooll eitaa territory for a single business so I can't really app to what that that looks like throughout all the deals that I've done but I guess I'm more inclined to just get started and get going with maybe two smaller things that combine turn into something larger to to to get you off the ground instead of saying I'm going to hold out and find the perfect business that checks all the boxes and fits the size criteria that that I'm looking for so uh you know I guess I'm more predisposed to just taking action and getting it going assuming it fits the you know four or five high level criteria that you have to have to get the ball rolling so um I think those have been the big takeaways and I guess the last one the last one is the importance of working capital right so we making flannel is a highly seasonal business uh and we burn cash from call it January to August of every year and then make all of our earnings in the September to December time frame and if you want to grow which the brand has been growing I mean it requires a lot of cash to to build inventory and pay your suppliers and all that uh and and it's hard to predict that so having enough Capital lined up to make sure that you can can fund working capital so inventory AR AP those sorts of things um man that's been a that's been a lesson right that's been a big lesson in a growth business y yeah great and so one thing I want to ask you about Colin is is how you find managers or already have managers and how you think about that because you have a number of businesses now and they all are have people keeping the trains running on time as you put it although you are of course giving a lot of attention to each of your businesses and are there as a back stop and are making strategic decisions um have you learned anything about where to find managers how to find managers any any takeaways there uh because to really do a hold Co and to scale something that is you got to have it that perhaps is the bottleneck because listening to you it doesn't feel like deal flow is much of a bottleneck all this stuff is just coming to you inbound now not all this stuff I mean it's it's not like you're just batting away amazing deals but but still you guys haven't really actively been going out stuff has been coming to you and guest after guest will say that once you're in the game tend to find you versus when you're a Searcher it's so the opposite still finding the right people so therefore if deal flow isn't the constraint finding somebody to operate these businesses that you come across is so any thoughts there yeah absolutely we've been fortunate to have a decent personal network of of people that have you know that we've known throughout our career through college whatever that have been interested in the field or interested in in being part of small business and so we've recruited a handful of folks that way um probably five or six if memory serves uh and then in a couple of instances we've used that same thought process for for doing a deal right so so starting with the person as opposed to starting with the deal right so like in the instance of our monor business um you know we kind of had that that happen all simultaneously to say oh great we know this person who's interested in in running a business right and being involved in SMB and they're also a specialist in this field that we're currently looking at a deal right so leading with the person and then finding the business to fit around them as opposed to the other way around the generic hiring you know putting an ad out there and saying oh I'm you know I'm looking for XYZ has actually been pretty tough for us so we've leaned into our own personal Network and then networks of other people that we've met along the way so Joe and I have a handful of mentors now and say okay hey you know we really need a person who knows uh retail right or merchandising or Ecom or what have you and then leading with that has been way way more fruitful because you've got someone who's who's vouching for the the the quality of a person that they're sending to you right so we've had more success with that than we have through generic hiring but I I will say I mean it's still a challenge for us I wouldn't say that we're we're perfect and that it's been it's been easy we're a straight line path we still deal with Personnel problems on a daily basis but um at the at the high level we do have we do have a good crew turning our attention to the portfolio to the makeup of this portfolio first how about pros and cons of a hold Co structure where you've got multiple as I said earlier very eclectic businesses not a lot of overlap frankly none really in the four in the four um what's your word the four operating groups yeah operating groups thank you yeah yeah yeah it's uh the context switching is is just a nightmare I mean it's it's it's awful and to come into it saying oh I'm going to spend you know one day thinking about this business and the next day that business that just doesn't happen and it can't happen right I mean things pop up all the time that you're getting pulled into so losing focus is is real and you know the cynic and me still says hey I can't just go park someone in a company and then never pay attention to it and it's going to work out okay like I just don't think that that exists so yeah I think we're at this point now where we have this really great usamade themed Mission driven business at scale right it's a called it 25 million run rate revenue and then the next largest company is right around 2 million in Revenue so for us you know any rational person will look at it and say yeah you should just dump that and like go focus on that one big thing and and we got here opportunistically so we didn't set out to to do this we're just now facing that dilemma with like a real tangible situation here right um so the context switching is is is the biggest challenge right you can't you can't think about everything all days yeah sure and anything positive about it yeah I mean absolutely you've got income streams that are not correlated to each other right so our our flannel business is seasonal in the in the winter and fall uh monor is the opposite and and Decor is the opposite so yeah we've got some seasonal cash flow balances that are nice and we've got different business models so our Decor business is mostly drop Shi so it doesn't require a lot of inventory the flannel business is highly inventory Centric so we're building a ton of inventory uh profit Mastery is a business that doesn't require uh really any capital in it right it's a product that's already been made it's all IP uh so the business model differences have been have been wonderful and we're now looking at it saying well man if we could build up that that asset light business that would be a really nice complement to holding USA brand because if we just kept that one apparel company we might need a lot more Capital to try and grow it from 25 million to 50 million you know yeah great and on the point therefore about about contact switching and that being a challenge and the relative size here uh I mean as you just said it's like you've got this one business that's a lot smaller The Profit Mastery a lot smaller but highly profitable then you've got the apparel business which is a lot larger but to really get to the next level will require a lot of investment presumably so how are you thinking so so it's not as easy as the person who would just say oh just shed the small stuff and give all of your attention to the big stuff although Colin there there's such a difference between the sizes of those businesses it kind of does feel easy like you like maybe you should of course you'll sacrifice the diversification that you like so much that you so much but it does feel like maybe I mean the apparel business is so much bigger no did disabuse me why haven't you guys shed everything to just go in go all in on apparel well so so one thing the apparel just last week turned into that that significant step change right so it was a bigger company but but really we're very fresh into that uh two um I think we're going to need to raise some capital in that USA business that USA made business and so we may come and do an equity offering and pay down some debt and then have the cash that we need to grow that and so retaining those other pieces in the meantime would be a nice benefit during that period right until we have that all done um yeah next we have people in those businesses that we care about right so like these are friends that we've hired to come run these things and we don't want to just say hey you know we're going to sell the company and you're out or or you know maybe we we offer the business to them if they're interested in it but you know there becomes a personal personal situation there with with the people involved um and then last you know I I I I don't also want to Discount the idea that you there is probably an acquisition out there that could make those larger and and more justifiable from a Time standpoint and if we could get them to a point where each company has a CEO and that CEO seat and you know we're kind of acting as a board of directors to oversee that person that is a model that could be done I mean there are Decor bus we've looked at other ones we just haven't pulled the trigger on some of them but there are other P based companies there's other monor or education related companies and there's other Decor companies that are out there so it could be a get bigger problem as opposed to just shed them and focus on one problem and and I think maybe a slightly subtle point that you touched on there is the people who are running each of your businesses the GMS are not CEOs and kind of the distinction there would be a CEO is going to be somebody who growth oriented and who's really going to be driving the business so that all of the and is strategic strategically oriented so all of the strategy isn't at the holdco level IE you and Joe yeah but to justify a CEO you need a much you need these little businesses to be much larger so so there's this again this question of size where a smaller business you can't afford a true CEO but if you could acquire your way into a larger profit Mastery becomes larger monor School becomes larger and there are million dollar two3 million doll businesses then then you can have a CEO and the CEO absorbs some of the Strategic burden that is currently on your shoulders yeah yeah yeah that's that that has been a thought process and we like to call it you know who's the person who's waking up every day thinking about where the next dollar of Revenue is going to come from yeah and and at that smaller end of the spectrum you don't get that all that often uh not always but but mostly whereas you know if you own a company you're thinking about it 247 right you may not actually be working uh 247 but you're thinking about it almost 24/7 so yeah I mean that's again it comes back to that critical mass and the critical mass has worked for us at the USA Brands level and that doesn't mean that it couldn't work in these other ones it's just a you know we would have to make that an intentional effort at this point yeah yeah Ecom and digital so we all know the benefits of Ecom and it's it's been a it's been a a through line here of your story uh you learn that you didn't want to be driving uh in the middle of the night for 11 hours and and tied to you know various routes near your home so location Independence you know the business not needing sort of no physical constraints in the business etc etc um but we did see and and you've already said that one of your businesses tracked this a rise and then a decline of e-commerce uh from the the the covid surge and then pullback what would you tell people about e-commerce today maybe maybe kind of what is the e-commerce D Toc yeah world and Industry and business look like today spring 2024 I uh I think Ecom is really tough and and really tough and we I wouldn't call us necessarily experts in Ecom I think we have bought companies and taken them from maybe a DG grade up to a b but we're not the guys who are so good at Ecom that we're you know we're a players and we're really optimizing for Perfection so ecom's really tough and that's why we've we've liked some of these other business models that are more uh B2B distribution oriented or even the physical brick-and-mortar retail stores that we Now operate um are are good counters to that that Ecom so I think of it as having a a you know you've got a diversified portfolio of companies but you also have Diversified revenue streams within each of them and I think that that's important to us so one other thing real quick is I I didn't I don't know that actually touched on our our original acquisition criteria which we we Ecom or digital is I guess is a component of that so really when we're looking at a company you know our our boxes that we're trying to check are one a company that's been around for a long time right 10 20 30 40 years or more uh ideally a company that has spent zero or close to zero on marketing or advertising so like no PPC spend no digital digital ads no nothing uh and then three hopefully they don't have any technology in place right so maybe they're doing like you know they're banking at their local bank and they don't have online banking set up uh or you know they're not using any kind of uh software tools to manage inventory planning or marketing or whatever uh so those are those are really the three criteria that we look for to say hey company's been around for a long time we could trust the products customers and cash flows uh they' haven't done any marketing efforts so so okay if we can invest in that layer it on we'll get some upside hopefully three we can put some technology in place and we're not afraid to do some heavy lifting I guess the fourth thing would be pay a fair price for it so that's what we're looking for in every deal well Colin not to take away from your success but those criteria are not unusual criteria th those are kind of a lot of those would be on most Searchers buy box so um interesting I I I'm I'm I guess I'm kind of trying to tease out what differentiates you from other guests and I think if I had to pick something it's this bias for Action that we've already touched on uh your your willingness to just get get your hands dirty real dirty I mean everybody listening to this is somebody who's prepared to get their hands dirty generally um but you guys are you know prepared to drive to you know drive to Delo and back every night for six months or whatever it was yeah yeah um and I think we physically moved uh let's see I think four warehouses now like right Joe and I have gone ordered full truck loads and just loaded trucks up and moved and closed down a warehouse so we've reinvented a couple of businesses along the way yeah yeah yeah and to close out the for somebody aspiring to build a holdco um kind of integrate what you might tell them with this bias for Action I think I think another thing about bias for Action is not just waiting for the perfect business of a certain size with you know you said you know the the 100% perfect business Searchers are looking at least you know 90% perfect you guys are willing to settle for 60% perfect so there's the the bias for Action is just getting in the game by being willing to deal with more unper than everybody else um but there's also the not over strategizing a grand multiple-year plan and kind of the knock on one of the knocks on the the trendiness of hold Co is that a lot of people are ing out their hold code before they they' bought their first business so it's kind of there's also kind of like a don't overthink something when you haven't don't over think a five or 10 year strategy when you haven't even taken step one yeah what more might you say to somebody but they aspire to it they like the they they they're sitting here listening to Colin King and think it's really awesome what he's build they're aspiring to that what would you tell that person yeah and you know one of the I think you you alluded to it earlier you know once you're in the game the deals really do start coming your way especially if make an effort to get to know customers and suppliers so really finding a space where you know there's there's the possibility for another deal in that industry right I mean maybe the monor is so Niche that it'd be really hard to find another deal in that space maybe not I don't know um but if you know that you're playing in a space that you'll find something else along the way you're better off getting started now and getting to know the business and talking to suppliers and talking to customers because it's it's likely that you'll find another deal in that internally and then again that bias for Action just you know you've got to start just making inroads toward it as opposed to mapping it out and saying I'm going to find this right because you don't know that it's going to come your way so it does get easier to do add-ons once you're already in the game with something um so I just I I think about that right if I were to add to a new industry then I would want it to be something that I know I'm likely to find something else that I can add to the mix or something complimentary to it and and what about the lesson the big lesson that you guys learned from your first acquisition the trucking Automotive Parts distribution business that the flavor the nature I should say the nature of that business was one that just did wasn't going to work for you driving in the middle of the night um is there H how can the audience LeapFrog your pain there is it just you did you didn't you didn't really did you and Joe not not um kind of push yourselves enough to really imagine what what running this business would look like was it that yeah I think about it is is you know there's a business model and there's a profit model right the profit model is the financial profile of the company how the company makes money the unit economics all that stuff which is which is pretty easy to understand and a lot of people probably get that then there's the business model which to me is the the logistics the meat and potatoes of how it all happens right hey we're going to plan to make something we're going to make it we're going to Market it we're going to sell it we're going to collect cash whatever right there's a lot of other things that happen in between that but the actual steps that the the function that take place to make that happen right like oh I'm going have to go visit a factory and like convince them to go make 10,000 pairs of pants or whatever um that stuff I've got more of an appreciation for now than I did back then I just thought oh yeah the numbers pencil out right we can't lose on this deal great let's do it and then the first night you know you've got two people that don't show up and you're you know you're sitting in a truck for 12 hours um so I you know I think about the business model almost as much as I think about the The Profit model of of a business today right who's going to do what yeah yeah exactly and and this would be the part where we advise the audience to to the extent that they can go to the business visit the business do a ride along you know if it's kind of a bluecollar field business do a ride along I mean really get as close to the operations of the business as as you can to understand what your future day-to-day will be yeah it's that game of you know playing 20 questions right you know how do you do that how do you who does that right when do they do that and and we've got we've got a this flaw of just thinking there's an easy button for a lot of stff just go hire someone on upw work to do that or or whatever um and that doesn't always work so really understanding how the meat gets made or the sausage KS made whatever U yeah I I think that's important I think that's really important and if it's not something you're willing to do right I I think that's what it comes out to is you understand how it happens and if you're not willing to do one of those functions let's say it's 11 functions to make a business work and you're not willing to do one of those man you probably shouldn't do that deal Colin is there anything that we didn't get to any topic that we didn't uh touch on that you really wanted to make a point to I don't think so other than I you know I think we we we floated all around but we came back to the to the big picture which is great um I would be curious to hear uh well I don't know if you have thoughts on our situation and which path sounds like it's the obvious no-brainer to you but I'd be curious to hear other people's takes on that I don't know if any of the any of the listeners have an opinion uh to sort of crowdsource where we go next because we've talked about hey do we raise money at the at the holdco level say we're going to go do more right make those other smaller Holdings bigger uh we've talked about shedding them and just doing the USA Brands thing uh or there's an entirely different path that we're not that we're not considering um so you know I think we're at that crossroads now just through opportunistic you know uh uh deals that we've done over the years and and we're trying to chart chart the course on where we go next so I don't know seeking feedback so to speak yeah okay well what what how can people reach you with said feedback with that feedback probably email would be the best way to get in touch with me and it's Colin Circle City capitalgroup.com and it's just c n well Colin you you you expressed interest so so I'll give it to you I think I've already hinted my instincts are it feels like in the there's a lot of inorganic opportunity in the apparel World it in the apparel business so you could find a lot of opportunities to grow that business continue growing into into really some pretty big numbers the monu business and the I don't even really know the silk flowers business so I'm just going to put that one to the side because we didn't to spend a lot of time on it the monor business in the in the course and digital content profit Mastery business it doesn't seem like those businesses have as many nearly as many inorganic opportunities where you could where you could go out with you know six months and and find a bunch of businesses to add on to the in those in those groups and make those sizable enough that you then H hire CEOs that then that they can kind of become more autonomous even growing on their own because you've got a CEO who thinks strategically in each of them so it seems like a lot of effort a lot of T lost time uh and and likely not even going to get there it should small market so it sounds inory good that you could just just grow them to the next level then hire CEOs to put those in and then those businesses run themselves but also we know that those businesses just probably aren't going to run themselves I mean that yeah I mean Maybe not maybe if you find the right CEO they'll as you said go to bed and wake up thinking about how to grow revenue and they'll just do that for you but they're going to consume your attention no matter what so it just feels like um it so yeah so I feel like you could you could really move the needle much more quickly and you've got this track record now You' bought two sizable businesses in in apparel or or soft what do you call it soft goods apparel and soft goods yeah yeah yeah um you can also just start to really build a narrative around your hold code that we are an apparel in soft goods brand house I think I heard you use that phrase earlier now recogniz so so that seems like the easier and faster moving path to build to to build revenue and build size if that's what you're prioritizing recognizing of course that you're very drawn to diversification which is sound uh and that you would be sacrificing some diversification here so uh I acknowledge that that would be that that's to me the the big counterargument to my my uh suggestion yeah yeah no I think that's I think that's absolutely Fair commentary yeah anything that I'm not getting about your situation in that analysis curious no I I think you're right I think when I look out on the horizon there's probably a sizable Decor deal that we could do that would would fit nicely with that and maybe even something that has a brick and mortar presence to it whatever um so I think that's an area that that probably has some add-on to it uh but you're right I think the monor might be a great little niche business but it might just be that just that right a very very Niche business yeah and what about profit Mastery profit Mastery seems to me to have more or organic opportunity than inorganic and we've accomplished most of our growth inorganically than you know I think we're more in the hey let's try and keep it in the 5 to 10% organic growth mindset and and not try to blow it out of the water um so profit Mastery to me seems like it has this nice organic piece that we haven't scratched the surface yet uh but I'm curious to see if we can do that because you know our our our consumer businesses are you know they're always going to be a 10 to 15% margin business where an IP driven business could be 50 or 60% at the end of the day which is which is nice you don't need to get to 20 million in revenue for it to be a meaningful contributor you know yeah exactly well and the other thing about profit Mastery is you can especially now that you've redone the website or kind of like laid the foundation you can pretty quickly start to test your thesis about organic growth I mean maybe not so easily but basically crudely pour some money into PPC and see if it works So within a couple of months you can really have a sense of if that if that thesis will bear absolutely absolutely so that business really needs a digital marketer who can who can do that sort of testing and experimenting for sure well and that's another great point is you could get a really sharp digital marker in there marketer in there and not have to have a CEO correct not have to hire a CEO but just a sharp a sharp digital marketer who will live and breathe the the funnel there exactly to to truly kind of move the needle or see if the needle is movable I should say yep yep well audience let Colin know what you think this will be fun he he we're crowdsourcing what this guy should do with his hold Co There He Go so we'll see Colin um all right sir you've given us your contact information you've given the audience uh the homework what else are we are we good or was there anything more to say here I I think we're good I think we're good I think uh I I mean I guess I if I could leave one overarching takeaway is that at the same time you know holding something like this is is not easy uh but if you just start taking steps toward it it really isn't that hard I mean there are tons of good deals out there tons and tons of good deals and sometimes you just need to take that first step and get going wow I love that you closed on that point it's not as hard as it seems and get in the game yeah good good good good uh kicking kicking the behind everybody Colin King thank you sir really appreciate it thanks will appreciate it 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