Don Gorley, welcome to Acquiring Minds. Hey Will, thanks for having me. Don, you acquired a business called Boston Tree Preservation. It is a business with a lot to like as a searcher, and I know that because I've already interviewed the seller, Peter Wild. So, for this acquisition, we're getting your perspective as a buyer, but we will also, in part two, have the perspective of the seller. So, it's kind of different and fun to get the full view here. But for our conversation here for the next little bit, we're just going to get your piece, Don. How about some quick background on you to start, please? I'll try to take you guys up to where I started my search. So, I was born and raised in Massachusetts, went to Northeastern to study civil engineering, and joined the Army's Reserve Officer Training Corps. Uh got my degree and commission, went into active service for the Army. About 10 of my 12 years of active service were spent assigned to units in Europe. And from there, we did our 3 years in Iraq and Afghanistan over about three different deployments. Um at some point, I had, you know, two uh two beautiful young boys growing up, and uh wanted to see them a little bit more, and decided that I was going to make a shift off active duty, and come back and use the post- post-9/11 GI Bill, and uh get an education. So, I uh I left active duty, joined the Massachusetts Army National Guard, um which I would always joke with people was a little bit like putting on a Nicorette patch when you give up smoking. Um still get to serve, but it's on a part-time basis. Um I went to Babson College, and uh got my 2-year MBA. And then, I had a friend who was over at the uh the Kennedy School of Government at Harvard getting a mid-career master's, and he had told me about it, sounded great, and I kind of missed that element of public service that, you know, at least at that point in business school, I I didn't see in my future. So, um I put in application, got in, went over there for about a a year, and uh found myself um really first time back in civilian life as an adult in the epicenter of the political cultural wars going on at the time, and said, "Hm, this is a little bit intense for me. Uh I think private sector business is is where I want to be." Um So, coming out of there, I was uh interviewing for jobs in commercial real estate, uh local in Boston. And but unfortunately, my my late father had come down with cancer and was uh helping to care for him in towards the end of his life. Um sort of truncated the professional search. I just had a few uh companies I was interested in. Um mostly focused on taking care of my old man, and a few months after uh graduation, unfortunately, he passed. Um same day that he passed, I had uh three job offers come in for uh commercial real estate positions, and turned them all down. Uh you know, a lot of things happening on the same day. I think uh realized that it really wasn't what I wanted to do, but it was uh I wanted to make sure I had a job. My father's passing kind of crystallized things. Um Took a took a little bit of time to regroup for a few weeks, happened to meet uh someone who was a search fund accelerator, uh successful uh acquirer and CEO at a Boston Chamber of Commerce mixer. And uh he told me all about uh how uh some baby boomers, some investors, and uh freshly minted MBA come together to do a deal. And I and I said, "That's for me." Um I always felt that the the problem some military officers had, at least I had, uh in a job search coming off active duty, is you walk into a room with a guy interviewing you, he's got all four people working for you, and he says, "Tell me about some time you led." And you're like, "If I answer this question honestly, I'm not going to get the job." Um So, I I think a lot of us come out with, you know, this much general management leadership experience, but this much specific functional knowledge in what it is that you did in the service, unless you were a dentist or something like that. Um And uh you're going to get hired and recruited for uh the lower of those two things, by and large. Yeah. Um Yeah. And when I when I met this uh this young guy who was a CEO working in uh industrial park outside Woburn, uh nearby where I knew the area well, I'm like, "What is a uh a a young, good-looking South American man, HBS grad, electrical engineering, working with a bunch of uh plumbers in in this industrial park outside Woburn?" And he told me his story, and and and that was it. So, um uh kind of wished I'd been paying a little bit more attention in business school, and and heard about ETA or or search. Uh but in that second, I knew what I wanted to do. Uh I took a little bit of time to get organized to do it, and then uh launched my search. And so, Don, it sounds like what really attracted you to it was the opportunity at leadership, not necessarily that you were always bound to be an entrepreneur or something like that. It was really it was really um yeah, the closest thing to to in civilian life, kind of having the leadership that you would in had in military service. Yep. Outside the military, nobody was going to give me a unit to lead. I was going to have to take it. Mhm. It's concise. And and Don, you just have to we have to circle back on when you said the interviewer asking you, "Tell me about a time that you led." And if you were actually if you were actually truthful, you wouldn't have gotten the job. What elaborate? Um well, I always uh you get recruiters that will come to schools, and they're going to be the executive vice president of some organization. Okay. And they're there looking for people and talent. You show up at these social mixers to meet these people deliberately. You meet them, they want to get you as part of the organization, but they're, to use a military analogy, they're like a four-star general. And they can they have a lot of power, but they're not the guy who's going to hire you. So, they punch you down to the three-star general, who then got a mission from his boss to find you a job. He punched you down to the two-star general. And it keeps going until you get to the guy who has a job for you. And that's where they want you for your leadership management experience, but they keep punting you down until they find something that fits your background, which is you don't have any in exactly what they do outside of your education and your degrees. Um and you find yourself down in a place where you're not going to be hired for your management leadership ability, you're going to be hired for your potential, and your ability to grow functional knowledge. And and I can't blame them. Um you know, running a business now, training people is hard to do, and I wouldn't want to take on somebody who, one, I'd have to invest a lot of effort to train, and then when I do it, his background is he's led organizations 10 times larger than the one I'm leading right now, I'd basically be hiring and creating my own competition. Mhm. Mhm. There's no incentive structure for that. Got you. Got you. Great. Excellent. Okay, so you are exposed to this idea of search, somebody who's successfully done it locally there. Uh you say this is for you. You um kind of start organizing yourself, and tell us a little bit of little bit about the search itself. Um Um once I got into it, uh I did all the stuff that a lot of uh new guys do. I I hit a conference, I get the red book, I get download the big old PDF file from Stanford. I start cracking into it, uh and I start talking to some people. Um Uh came across Jim Sharp. He gave me a little bit of his time, very generous. Uh said what a lot of the advice we all give out to guys is go talk to 20 searchers. Um So, I did all these things, and realized one of the first decisions I'd have to make is uh geographic search or nationwide search. Um I was fortunate, I had the ability to self-fund, uh and did not want to pick my children up, who were starting to get rooted now after a few years into life, because part of the things I was hoping for them to experience uh uh with me outside of active duty was to stay in one community for a period of time, and not pick up and move. So, um it seemed a little counterintuitive to then pick up and move them. Uh although I would say, in my own experience now, uh there is always a business big enough that you will pick your family up and move them for, or at least nearly always a business big enough. Um Uh and so, I probably should have considered that at the time. But uh my whole family was back this way, and I wanted to stay if I could. So, I had to decide when we're going to roll the dice, and uh fish in a smaller pond, and and hope that I'm a good fisher. So, geographically constrained, um and self-funded, you had the the that sort of good fortune or luxury to to self-fund. Did you have a sense of what your runway would be? How much how how long were you giving yourself? I I looked around and said, "$50 million fans can't be wrong." And if everyone says 24 months is about what to do, I said, "Can I do 24 months?" And the answer was yes, and uh can I put a little reserve aside in case it doesn't work out?" And I said, "Yep." So, I said that that was the deal. I had had my main parachute for 24 months, and I was going to pull the reserve if uh it didn't work at that point. Um Which sometimes I when I talk to guys about it, I say there's two ways to look at it. Uh I would say you have a plan A and a plan B and a plan C for your search, but you want to have a plan Z for when things don't go well. But you want to write that plan Z down, you want to make sure it's a really good plan, and then you want to wrap it up and put it away, and don't look at it, because you have to pretend like it doesn't exist. I mean, mentally, I think you're either there 110% or you're not there at all. I think it's too hard to do if you're not committed. Mhm. Yep. Okay. Well, in terms of um how hard it is to do, tell us what your search started looking like as you started embarked on these 24 months. Well, the first thing I did is uh I spent a little bit of time uh organizing. So, I switched branches from uh being a Corps of Engineer officers in the Reserve component to a cyber warfare officer. And uh even if you're a a part-time soldier, uh when you change your specialty, you need to go for some retraining. And so, I did that, and that bridged me a little bit of time outside of uh formal training and duty assignments to mentally prepare for the search and to educate myself. And the first thing I realized is I really should have taken that class back at Babson, which is all about buying a small business. Mhm. Um somewhat of a joke, uh but but somewhat true. I thought it was all for the wealthy South American guys whose dad owned a bank. I figured that was the class designed for them. There's a little bit of a tradition with that at at Babson. Um and but that was just me not knowing what's going on. So, I went back to the professor, and I said, "Uh Professor, I really should have taken your class. I'm sorry I didn't. Do you mind if I sit in the back? And he was very generous. He said, "Yep, you can sit in the back." He said, "Don't raise your hand if any of the paying students are raising their hand. But, if none of them are raising their hand, you can raise your hand because, you know, I'm going to get bored if no one raises their hand." So, he let me do that, and that was sort of me catching up for having not taken that class. I got a good baseline. And then, like I said, I decided on a geographic search. So, then the the next question you always hear from guys um is do you do a lot of interns that you don't spend a lot of time on, or do you get one or two interns that you really take care of? And I thought about that, and I decided that that's not the right way to go. I had tried searching a little bit while I was in the class on my own, sort of like a dry run, knowing that it wasn't going to formally start looking until after the the class was finished. I picked zip codes that I had no desire to acquire in. And looked to sort of um get over the fear of making a mistake where you do want to acquire. So, that was sort of my my training range, so to speak. And got some reps under my belt, did some IOIs, some LOIs, screwed up a lot, made a lot of mistakes with brokers on the phone. Tried to learn from them, forget the embarrassment, remember the lessons, and regroup and move forward. What were some of the mistakes you were making in those early conversations? Two weeks to get an IOI out of my inbox out of my outbox and over to them. Later in my search, I held myself to a standard of 24 hours to deliver an IOI from having something equivalent to a SIM. You know, being from Boston and being a big old Celtics fan, we got red hour back here, and there's a plaque in the Boston Garden saying if you don't shoot, you can't score. And one thing I realized, one of my earlier mistakes is just being too slow. And it it it communicates the wrong thing. For one, it it conveys rookyship. Of course, I was a rookie. But, it really conveys it to a broker. When someone's slow on an IOI, that just gives them a a bad sign. And one was not understanding brokers enough. You know, realizing that I might scan through 300 deals and only get serious about maybe 20, and then, you know, push forward 10 in the whole funnel. Well, brokers are like that, too. They've got tons of deals. And they have deals they don't think those are the five or six that are going to yield the collective 10% commissions that's going to sustain their lifestyle that year. You know, they probably have this many out there, and these are the ones they think are going to be their real goals to close that year. Well, if you're out here in this other one, they're going to they're not going to get interested in it unless it's a higher multiple. That's a higher commission. So, I realized it's not just um working with the seller. It's the the broker gets to put their foot in the scale on which deals move forward because when that deal moves forward, it drags them along with it. And out of their portfolio of potential deals, maybe the one you're interested in is not on the top of their list of what they want to see get to closing that year because they can't do them all. And there's nothing wrong with that. That's just the way the industry's set up. That's their motivation. But, I would be blind to that sometimes, and I would see a broker who's insisting on something being at it what I think is a ridiculously high multiple. And I'm sitting there thinking like, I've only been doing this for a few months, but you must be like two days old as a broker. That's obviously not the case. They are probably pretty good at valuing things. They work for big firms that have professionals with decades of experience. There's a reason why they're marking this thing at a higher price. They're not that excited about it closing. But, if they can find somebody who'll pay 7x, they'll get excited. Mhm. So, there was a little bit of naivete there. Um I also had one guy I don't really want to tell people about this too much, but he tried to sell me a dead man's business. It took a little while to figure out that the guy was not alive. It was It took multiple attempts to try to find this guy. It was very much like Weekend at Bernie's. Um And the the broker was actually trying to sell a business on behalf of estate or surviving family member, but was not He was not saying the guy was alive, but he was not able to get me to meet him. But, that was a different situation, and I always kind of laugh at that cuz I see experienced searchers, and they always seemed very direct and to the point. You know, they'd look a guy right between the eyes like, "Why do you want to sell your business?" Like, you almost seem hostile. And kind of like they've been jilted at the altar 10 times before, and you know, they just they're no BS at this point. And so, I remember the same broker reached out to me again. I said, "Okay, first thing, I want to see some proof of life on this guy before I'm going to look at your your SIM." Anyway, that was one of my rookie mistakes going in. Maybe not the best lesson, but perhaps a humorous one. And then, after I'd shaken the rust off, I turned my focus back to the the geographies that I really wanted to search in. And then, the question now became is how do you eat this elephant? Um I knew that to be successful in 24 months, I would have to dredge the bottoms of what's available much better than if I was looking nationally, where I can quickly look on the surface. I couldn't leave an eligible business unfound in the zip codes that I was searching in. Um So, I had to become the sort of worst cold caller ever, every businessman's nightmare cuz if you own a business and you're registered in the state of Massachusetts, I am calling you somehow, some way. But, I realized I couldn't do it myself. I tried to. I tried to do it mechanically, and I came back to that question of what do you do with your interns? So, you could think of my search uh as broken up in the middle by COVID cuz it was longer than normal with COVID in the middle. So, there's the intern-heavy pre-COVID search and the absence of interns post-COVID search. And that's because I had to canvas pretty much everything east of Worcester and Hartford in New England. Um And I had mechanical lists, but I realized the problem would be that once I get to know an industry, so I can recognize a good business from a bad business in that industry, I will exhaust the total count of industries, or excuse me, businesses in that industry pretty quickly. And then, I'm going to have to get smarter on another industry. And I said, "I can't do that. I've got to have a group of people getting smart on the next industry while I'm working the current one." And then, they can distill down the research to me, so I can quickly move ahead. Cuz my fear was not being able to separate the wheat from the chaff and recognize a good business that's benchmarked against you know, the average business in the industry, I might think something's great because it was great in another industry, but it's horrible. Um What I ended up doing, and this is something I key point I want to get across here is that the old dichotomy of get one or two interns and invest a lot of time in, or get a bunch and and don't invest any, I think that makes sense for most searchers. But, there's two groups of people that that doesn't make sense for. Second time around CEOs and military officers. Or people with equivalent experience somewhere else in life. Um you're probably not going to have unless perhaps you're August Falco, a second time CEO going out on a self-funded search. Obviously, you're down the learning curve there a little bit. You probably plan and organized and led teams to do these things, and you can do it again. Um The military spends a lot of money on on the people that it recruits to teach us how to do these things. And to not do that would have been searching with one hand tied behind my back, especially as a geographic searcher who had to dredge the pond very deeply, and move fast to find something in in 24 months. The question becomes is how do you manage a lot of interns? How do you manage double-digit interns? And why would interns come to you in a double-digit scenario where their individual time with you is going to be diffuse among the other interns? Right. Um So, there's probably three or four things about that. Two of them perhaps unique to me, but the rest valuable to everybody else. The first is um Not all your interns need to be undergrads. Undergrads want experience. I I went to Northeastern, it was a co-op school. You rotate around to a lot of different co-op jobs over a five-year period. You have a pretty good idea if you picked the right major before you graduate. So, I didn't want to bring an intern in and have them do the same thing for four months or six months. I also couldn't invest a lot of time in training them. So, what I did is I'd organize them into teams, and I'd have a graduate student intern lead the team. What don't graduate students get to do? Graduate students often don't get to lead anybody. So, if you take into account that I had plenty of experience training and assessing leadership, it shouldn't be too hard to organize three like-minded MBAs who are also interested in buying a business someday themselves as interns, and teach them how to lead these teams. They already knew the first or second year of business. They were already interested in search. They just needed a little bit of coaching on how to manage a team if they didn't have that experience already. So, I had grad students managing the the interns who were undergrads, and we'd rotate them around. The grad students should take stay fixed on the same responsibilities for me, and they looked at different time horizons. Businesses under consideration, IOI or LOI. Businesses that we were actively doing outbound proprietary outreach to. And then, the next industry around the corner. The grad students stay fixed on timeline horizon. The undergrads rotated around. And what that did is that gave both groups of people something they normally can't get out of an intern. Grads got to lead, undergraduates got variety to see, "Hey, do I like doing industry research? Do I like financial modeling? Do I like digging into the accounting of a business?" Um and that worked pretty well because as each group moved around, there's one person, the graduate student, who's already experienced and can train up the new group of people. So, I solved the problem of me having to constantly be a full-time trainer of interns and built a system that can sustain itself. Um people like it when you go back uh to career services and you I would say get a 10-slide deck and go pitch the career services of the universities that you want to pull interns from. Go talk to a professor who teaches a related class that your interns need to have and say, "Here's the opportunity. If you think this sounds good for your students, perhaps you could direct me towards some students who would be a good fit." Um just like I think the first part of your search is searching for your search team. Mhm. You search for your accountant. You search for your QofE provider. You search for your attorney, your interns, and your investors. Um and I think that's a a good one to do while you're kind of just working on a broker focused search perhaps in an area where you don't want to require where you can make all your embarrassing mistakes and and poor modeling decisions um without too many eyes on you. Uh at least I did. Uh it was easier for me. I felt better about making my mistakes and then I got to keep them a secret until I am here talking to you. Um Don, Don, let me stop you for a second. The interns, um now a lot of people listening to this are going to have searched or be searching and not use interns at all. Interns are very much kind of coming out of an MBA program in this very formal search process covered in the classes, covered by the book. Um interns are a key part of it, but outside of that context, people don't you know, reflexively put together an intern team. Could you have imagined doing your search without interns? Yes, but I would have uh focused it mostly on a broker basis search. I don't think uh that would be too different than what a lot of guys have done. The other one would have been blasted emails going out. Uh but I think what I would have done is generate a lot of inflow that I couldn't have managed. So, I wanted to make sure that I had the people organized to have balance between the flow of opportunities in and my ability to manage them. I made that mistake when I got started. I get a bunch of deals, but I only had time or experience to focus on one and the other ones just withered on the vine. Um having made that mistake, went back and said, "Well, why did it happen?" And I realized uh I had already learned how to do these things in the service, but I had not applied those lessons in uh civilian context and that's why I'd made the mistake. Mhm. Okay. So, tell us how the you So, you built this system in your first phase of search when you have a larger team of interns, but then phase two of your search post-COVID, you you had no interns or you dropped to two interns? What did that look like? I had um as the expression goes sometimes uh you might find uh after your proprietary search has run its first wave, you might circle the hoop as a lot of us say. Mhm. And uh deals or brokers that you'd built relationships with will will come back to you. And I had felt that enough of that had happened. Um also during the search um being a a reservist in the state guard, uh we were activated almost 100%. So, spent a long time on active duty. Uh I had a deal collapse 2 weeks before the pandemic started because its supply chain was in China. Um we had a uh an agreement on a uh a $6 million price. Uh they when the pandemic started creeping, they wanted 6 and 1/2 and I wanted 5 and 1/2 and that was $1 million between us was enough daylight to kill the deal. Probably not a bad thing that it did. Um but then right after that, uh a lot of us were called to active service. So, um my concern was when I restarted my search is the pandemic was somewhat unknown. I did not know if I would be recalled back to active service again Yeah. in my search and I didn't want to build a big team that I would abandon. Yeah. And so, I leaned on the fact that I had done a real good pass and had really good files over who were the brokers who were getting the kind of deals I'm looking for. Uh what towns tend to have um the highest return on proprietary search, what channels. And um and that worked out. Uh and I was able to go back and lean on that again. Uh but of course as as we get down to it, Boston Tree Preservation, um something as simple as when the day is over and you're scanning uh some of the low-hanging fruit that gets posted here or posted there, sometimes you come across something that turns out to be great. Um but I I would say though that I had built a system on both ends that would have led to a result. But sometimes serendipity is a part of that system. Mhm. Well, I like the the expression increasing the surface area of luck. So, just kind of a maybe a numbers game is another way of putting it, but the more you put out there more the more likely you are to to make contact with certain what looks like serendipity, but it is actually just increased your odds of of of good fortune hitting. Um okay. So, in in So, when you say circle the hoop just to be absolutely clear, that does that mean that folks, these brokers that you had developed relationships with a year or 2 years prior before COVID hit, were coming back to you or were you out reaching to them? Oh, they were coming back to you. Uh there's a little bit of both. There's a reach out and they know what I'm looking for. thing I learned early on, um but I had made the mistake before is to be crystal, crystal clear about what you're looking for. And every time a broker brings me something, reply to them and say I'm interested or I'm not and I'm not because here's my criteria again and here's where this one doesn't meet one of the ones that I can't live without. Um and to really try to be a partner with the brokers. Uh I know there's all this, you know, opinion on the the blogs about pro broker, not pro broker. I'd say don't hate the player, hate the game. Um you know, these are people trying to with their incentive system and their motivation and they're looking for people uh who can get them the commission for a good business, earn their reputation uh with somebody who's not just a tire kicker as we all know. So, I tried to support the people that I was asking to ultimately support me, which is the brokers that would bring me some deals on top of going back to old proprietary targets and reaching out to them. Particularly people who after a pandemic may be looking for an exit. Okay. Well, that that was a great breakdown of the anatomy of your two-phase search. But as we know then, so so Boston Tree Preservation comes across your desk how? Uh it comes across of all things under the deal section under the search funder uh website. And um uh it's funny. Uh I had a couple deals like this where uh the offering pops up and I it looks interesting and it's nearby. So, I'm a geographic searcher and something that was just one town over is going to catch my attention. Uh I took a look at it and I was like, "Hey, I think I know the guy who posted this. I think he was my classmate at Babson." And uh and as it was, uh I reached out to him and and we got on the phone and he told me about it and uh it all sounded fantastic. Uh but I in in a teasing way, we all knows Carlos is a is a smooth talker. Uh silver-tongued devil, but um but it but a good guy and um and so, we we talked for a little bit about the business. I was I was definitely interested. Uh everything sounded right in the table of contents and uh of course it it was close. Um now, close could be thought of for a couple reasons. Um close, yeah, sure, makes your life easier. Uh you uh everyone usually finds their job and then picks where they live so they can have a manageable commute and a lifestyle, but I was doing it the other way. I knew where I lived. I I might have to move, but I didn't want to if I didn't have to. Uh but this was, you know, 15 minutes away. But um I had other deals that were at various stages of the process, which were an hour and a half commute away uh that I was doing with one partner or another um because of the time distance factors and the size of the company. And the one thing I realized is if you want to be putting in more than 40 hours a week and you ought to be, um an hour and a half commute each way is going to really crimp your style. Yeah. Um so, you know, then you really get down to the scenario of uh you know, do you put your house up and move and and do everything that that entails uh for the job? And you know, if the business isn't big enough, the juice is probably not worth the squeeze. Um this this was a fantastic business and I was happy I found it, but um still had other uh other mechanisms in place and had other active deals that I was looking at, but this immediately uh even though it was smaller than all the other deals, uh became my priority. Well, given it's it's right next door to you. So, so proximity is is beautiful. Uh what else did you like about it? Tell us about the business. Well, uh the best part about it is we we weren't uh selling meth. I wasn't running a collections agency. Um and uh we weren't doing anything bad. It's a organic health care that focuses on uh preserving uh your landscape, particularly your trees. Um so, if if there's one thing that I would look forward in a business is a business that you feel like a good guy when you come home at the end of the day. And and this one appealed to me quite a bit. Um it was also very niche. Um I was a little confused in the beginning. I'm like, "Wait, are you a landscaping company?" He's like, "No, no, no. We're not a landscaping company. We we don't cut grass." Okay, okay, I get it. All right, you're a tree company. You cut trees. "No, no, no. We don't cut trees." Mhm. Okay, you don't cut grass, you don't cut trees. What do you do? And it's like, "Well, we're we're kind of like uh like a veterinarian for trees that makes nothing but house calls and doesn't have a veterinarian's office." So, that's pretty much exactly what the business is like. Mhm. Um and I said, "That's a business." And he's like, "Oh, yeah, it's a good business." And Carlos walked me down through the numbers. I'm like, "That is a good business. Um What about it? What What it made it a good business? The margins? It's It's a three-legged stool of of things that make me happy. The financials were all there, but operationally, it's very interesting. Um there are there are are challenges to grow the business, but they're solvable challenges. Um the value proposition, what they actually do, uh helping people preserve the quality and health of their landscape for their own enjoyment. Uh anybody who likes the great outdoors could find some satisfaction in that. Um and the other side of it is there is this new and growing e-commerce uh side to the business, digital marketing side, that was just getting started. And to me, that was great cuz the operational side lets the sort of the military officer and the engineer in me uh bring himself to bear. Um you know, maybe a little bit of who I am long before uh I finished high school uh likes the uh likes the tree health care and and organic plant health care side of it. And then, um you know, the financial and e-commerce side uh with an MBA education really uh gives you something to work with. You you feel like you can take all those classes that you learned, and you can actually take those tools and put them to use. And it's a nice balance between the three. So, it wasn't a medical device company where I'm like, I would wreck this place. This is This is not for me, and no one should sell it to me. But this one I saw and I said, yep, I can throw all myself at it and and be successful. And and the margins were good. Um you know, uh when when roughly uh a third of the sales drops to the bottom line, you've got something to work with. And it's a little bit smaller than um the average sort of uh HBS book would say is your EBITDA range. Not too much smaller, but a little bit smaller. But, you know, that's uh the template for that is a 15% EBITDA margin business. So, when you're more than double that, you can go a little lower on revenue, especially when you have a positive cash conversion cycle, as much of this industry does. A lot of landscapers take, you know, seasonal deposits. We're not landscapers, but we take upfront payments at a at a discount to the customer. And we normally have 6% of our operating cash needs within the first three or four months of the year. So, in that sense, we actually have a six-figure cash float for about half the year. Um that is an opportunity to grow. So, basically, small businesses are small for a reason. Uh there's a great reason why uh this one was at the size it was at. Um and if this thing does not grow, there is nobody to blame but myself. And sorry, did I miss what the reason was that it was that it was small? And And And make sure you tell people a little bit of the history or at least how old it was cuz it's it's a decades-old business. This business was founded in the year that I was born. Uh so, definitely more than four four decades. And it'd been around for a long time. It had done uh all sorts of tree work, everything. But the the seller, as I think who will get covered in his his interview, was a serial entrepreneur. And had invented a fantastic new way to inject um treatments and and uh medication into trees when they need it. And and just putting it into the soil or on the leaves will not be sufficient. And that has grown into a fantastic company. Uh it's it's known around the industry. It's the industry standard for injecting trees. Um and I I won't try to steal his thunder. Um it's a it's a fantastic story. This was not his greatest business success. It was his first business success. And and a fantastic legacy. But he was uh an established businessman through other activities. Um so, in that sense, um it was a side dish later in life, not the main meat on the plate. And so, it didn't receive the majority of his time. Um the other one is is he made two big investments in the company. One's material to what we're talking about here. One is he invested a lot in the vehicle fleet uh once he decided to sell. The The second is that he put in a lot of modern software systems on what had largely been a business run on uh you know, map books and and custom-made uh Microsoft Access software. And you know, imagine 20 years ago this industry. Um but he brought it up into the 21st century. But that's tough. That's tough to do uh and integrate all that stuff. That's tough for a big company. And we have some um some heavy heavy software in this company that has a lot of capability in it. And uh what it what it needed is uh somebody who would treat this as the main dish on the plate. And will dive in and basically be frustrated until you make it all work. And so, that's my first six months of ownership is that I just have the luxury of focus. I I'm not a GM trying to sell the business on behalf of the owner. I'm not the owner who is uh uh has a diverse life and a a family they wants to spend time with after many business successes. This is my main professional focus. And so, uh the the uh my different horizon and objectives that allow me to focus my time is what brings the power to synchronize what's already there so they can be as successful as the seller knew it could be when he started the ball rolling. We're and we're going to get into that a little bit more, but to to be clear, so this 40-ish-year-old business, did you say roughly what the revenue is? Can you? Yeah, it it's uh it's between two and five million. Okay. So, it's a service business uh about 40-ish years old, 40-plus, um doing between two and five million. And on the one hand, you say to yourself, why hasn't it grown? And you just explained why because Peter Wild, the founder, um was devoting his full attention to it yet another business that he'd started. Um on the other hand, you say to yourself, not only does that mean that with 110% of my attention, I can probably grow this, but the fact that the business had kind of carried on and continued to operate and and not died. In fact, I think as I understand it, it had continued to grow if kind of only incrementally, says a says a lot about the quality of the business that even without the founder's full attention, it continues to you know, carry on. Yeah, he he was lucky that he had a great strategy and uh picked a great niche, and he had great people. The employees are incredibly knowledgeable. Um they're the same level of dedication to their trade that I'm used to seeing back in the service and I know exists in many other industries. And it's it's refreshing and familiar to work with them every day. They're They're true professionals. Um and uh they have the same amount of care for trees that if you take your pet into a veterinarian's office that they have for the pets they care for. And uh that's nice to see cuz you don't have to clean up after the tree as much, and it doesn't eat nearly as much, but we we do feed it quite a bit. Um They're They're great people. So, it The obstacle that kept it from going forward was making that digital jump. Is that uh the the profitability of the business comes from a very high gross margin and a relatively light overhead. In industries like ours, many grow by investing heavily in the middle management ranks. We were middle management light. And um so, we had a couple ways we could try to grow. You could add a bunch of back office people. And And that would increase your capacity to take in more revenue. Um but the software was designed to take the place of excessive middle management that would really just be moving a lot of information around and managing data, but wouldn't be a high-level knowledge work. Um And he said, software can do this better, um and and people will be happier with their jobs uh focusing on the stuff that only they can do the best. So, uh Peter was right to install the software that would allow operations to scale where we'd be adding direct labor, but wouldn't have to add a ton of overhead to do it. It's just it's a little bit tricky. Um we brought in uh Salesforce software, which, you know, is not an industry standard for what we do. It's extremely capable, but it's like a blank canvas. It can be whatever you want it to be. That's why they're so big and they sell everywhere. But you have to customize it. It's like a white canvas. Um and so, for a small company to work with an integrator to basically custom configure uh some um very capable, but but not cheap to integrate uh software um has been a challenge. He invested heavily in it and moved the ball forward very far. Uh what it But But Don, let me understand. So, So, he invested before the sale to you in this software? Or because of what you're talking about in the present tense is if this is your project. Uh I picked the ball up, I'd say 50% 60% integrated. Okay. But it has to be 90% integrated. You have to tighten down the screws to 90% before you can step on the gas. I in and take $100,000 and put it right into marketing, hire a decent agency, and make a lot of mistakes in marketing because there really hadn't been too much before, and I could get customers coming in the door. But our ability to handle it wouldn't be there. We were perfectly set to grow at that slow, steady rate. But to take full advantage of uh the company's potential, we had to figure out a way to increase the amount of customer interaction, the throughput, uh in a way that would stay organized for the employees in the field. And if you you tried to say double revenue, you know, nice problem to have, but even trying to grow at 20% initially would uh make day-to-day very hectic. And you wouldn't want to have a hectic veterinarian's office, either. It's not good for the cats and dogs, and it wouldn't be good for the trees. So, um everything was set up. It just takes a little bit of focus to sit there and and be in the business every day and look at everything systematically. And when you make a change in one area, you have to have in mind where everything else is going to change. So, that's essentially the the first 6 months in the job was trying to answer all these questions. The great news is uh the answer is it's completely doable, and we're working on it right now. Well, and Don, so is this a case I asked this actually to Peter and and Carlos. We hear in search that digital transformation is is, you know, kind of one of the obvious playbooks, if not the most obvious playbook. Find a fax machine business, out with the fax machine, in with Salesforce. Um but at the same time, you'll have kind of I've heard just as many stories of kind of detracting from that playbook where it's like, you know, if we have some internal SaaS instead of, you know, the paper we're pushing around, yeah, we'll get some incremental efficiency there, but that's really not the bottleneck in this business. But it sounds like actually, happily, in the case of Boston Tree Preservation, it really was. That this really was a fax machine business. I know it's not actually a fax machine, there was software there, but it was old software, custom software. Um this was a business that needed that that a digital overhaul was exactly what it needed. You're you're right, and but the the caution you raise is also true. That um customers love us almost as much as they love their trees. And uh we're a high-touch company. Um you know, someone comes out to talk to us while we're there, we'll sit around, we're going to talk for 15, 20 minutes. A lot of these customers the employees have known for a decade. Um and and we're not going to sit there going, we're looking at the watch, hey, you know, uh number of service points per hour is dropping below benchmark, I got to leave. We don't do that. Um and so, as we've been looking at this for the last 6 months, one of the key discussions back at the office is how to maintain the standard of customer care that Peter put in while we eliminate things that aren't adding value to us or to the customer. So, uh and I think one of your other uh podcast guests that you had on a while ago uh goes so far as to sit down at the table uh with the customers and talk about what they're going to be doing for their landscape um and their design. Extremely high-touch for those clients. And we're trying to maintain that standard. Um the the key to the software helping, and I think where we avoid this this this problem that you raised is that we're not just adapting the software to our processes. We are in some What I'm trying to bring to the company is adapting the process in light of the capability of the software that we're using. So, originally uh back when the first aircraft carrier was built, it was designed to be a reconnaissance force for the battleships to get those planes flying far away from the battleships, find the enemy, bring the battleships in. But people quickly realized that the carrier could do a lot more, and now uh the Navy works on a carrier-centric model where the battleships protect the carrier, and the carrier with the aircraft is what fights the battles. So, we've spent the last 6 months really looking at what the software that we have can do and trying to redesign and improve our value proposition to customers in light of the capabilities of the software systems that we are integrating. That's the difference where we start with what the customer needs first, and we work back through the human and the software processes to deliver a result. And that level of integration is what helps us avoid that trade-off. Mhm. Okay. Excellent. Don, so in speaking with Peter, you you for more than 5 minutes get him to get in getting him talking about the tree business and the history of this business, you realize real quick his passion for trees and that he's really a pioneer in this space. We got that whole story in my in my interview with him, which which people will hear will will air after this conversation. And so so tell us how you felt about about that. So so being an outsider to an industry and and buying into that industry and then quickly learning that industry is a common theme in our world of search. Um but now that I've interfaced with a seller, a founder, kind of a visionary really Peter Wild strikes me as. Um it it seems like that it that might have been even more intimidating in his case cuz he's not just a tree guy, he's a guy who actually moved his industry forward. How did you um feel about that? Filling those shoes, frankly. I think in the beginning of the process, it's definitely something you're like, okay, can I do this? And I say to myself, well, first off, it's not medical devices. So, it's trees. And there's books on this, and this industry has been around for more than four decades, you know, centuries. And many people learn it all the time. And so can I. Uh but most importantly is when Peter leaves the company, who knows how to do this before I figure it out. And they had a deep bench. Now, I didn't get a chance to meet the employees before the um uh before the closing, and I met them afterwards. But having spent a lot of time with Carlos and Peter, I was able to understand their operating model, and I understood that uh you know, Peter was involved in the company, but there were definitely a lot of high-touch customer uh interactions that were going on with the existing experienced employee base. So, I knew that the cash flows I was seeing was just amongst just as much a function of the skills of the existing employees as purely Peter cuz Peter had trained them well. Yeah. Um in fact, he talked me through some of the things that he was doing sort of behind the scenes in the lead-up to a transaction to make sure that, you know, people really were uh able to operate without him fully engaged. Um but as I I'd say to the guys when I got there, I said, I can't replace Peter Wild. He's got 40 years doing this. I'm not going to try to replace him. Uh I'm going to try to be myself and come in and take what he's built and try to carry it forward. So, my strategy isn't going to be based on me having his knowledge. That would be a horrible strategy. It will take me, you know, years to develop functionally sufficient knowledge to fill his shoes. But the team has that experience collectively, and that's what you get taught as a military officer or first-time CEO is how to get the most out of the people that are there and create an environment where where the team works really well. Um you know, I'd say that one of the first things they drum into you as a as a young cadet is that there is no such thing as bad units, only bad officers. And there are no such thing as bad companies, only bad CEOs. So, when I looked around, all the talent needed was right there. I just had to lead the people to get the same job done in a slightly different way. And we've gone through the first year of that where some of the high-touch um high-knowledge demand have fallen on a couple employees a little bit heavier. I've tried to lighten their burdens in other areas. And then we have a deliberate plan going into what we call kind of winter camp as when things freeze, we don't do as much of our work. And we're going to start to cross-train people. And we have a new operating model coming out into the spring though take advantage of what I've talked about before uh enhanced uh program for our customers to give our high value that will open the doors to more growth combined with a software-backed operating model that will allow us to grow without increasing overhead. But it's a people-centric business. Cuz ultimately at the end of the day, it's this business is no better than the technicians that I train, recruit, and motivate to put in the field that help people protect the tree that they planted with their grandmother 80 years ago. And to reminds me of a question I wanted to ask. So, because it is niche, tree health, it's kind of a niche within a niche of landscaping, if you will. Um is that why the margins are so so strong, these 33% gross margins? Because because you're you maybe offering a really specialized service? Yes, we're we're much more high-touch. So, the typical way that um an a pruning company might get into this is they're going to come by and cut something that's dead off of a tree. Or they might prune it to help it grow properly. And when you put a big wound on a tree, just like you and I might need a after a bad cut might need a shot of penicillin, um the tree needs some support to heal. So, that's the acquisition model. Something's wrong with my tree, come cut something off my tree, come provide plant health care to help the tree recover. That's reactive. We do it the other way around, where we're trying to keep the tree in good health and to prevent the limbs from dying in the first place. So, uh we're the uh we're the ounce of prevention as opposed to the pound of cure. And customers feel it in their wallets. They're much better off spending money with us. So, if you're trying to think about how a customer looks at us, we're like the decision to put solar panels on your house. It's a little bit more money up front. And so we appeal to customers who can front-load the cash. But eventually, uh it breaks even, and they start to save money cuz our approach costs less in the end. And we do it without harmful pesticides and herbicides. As I understood from my conversation with Peter and Carlos, it's been a very residential-focused business, and Carlos I think was trying to to to kind of steer the business into more residential um excuse me, into into some commercial business. What are your thoughts on on that and the potential there? I think they're both right. Um Peter has a strong emphasis on residential. That had been the block and tackle bread and butter that had built this business over the years. Um people who own trees love them a lot more than people who are simply stewards of trees. Um and they will pay a higher margin for them. Um you would you would simply probably pay more for a tree in your yard than you would for one in the town common. So that dynamic exists. Uh however, Carlos is right. Uh commercial work can be very profitable. Um we've served uh the Boston Public Garden and the Boston Commons in the past. Uh we've served some university campuses and we try to deliver a a high degree of value there. In fact, they're they're very important to me as an example of what we can do on a large scale. However, the thing I have to remember is the profit that comes from that is not going to necessarily be repeat or recurring revenue. That profit is then on a line item reinvested back in the growth of the residential sector. Now the good news is the product is the same. But when it comes down to uh installing capacity, I'm not taking out truck loans for commercial work, but I will take out truck loans for residential work because that is recurring revenue and repeat revenue over the long term. So why is the commercial the commercial work not repeat or recurring? Somebody comes in, somebody leaves, you have a different guy. Uh you have people have different opinions about green or organic. Yeah. And what you really need is a it's a it's a philosophy just like um uh houses perhaps wouldn't install solar panels if they're selling every two or three years. Um so, you know, it's really comes down to uh individual customer's desire. People do business with us for a lot of reasons uh because we enhance the value of their property, uh because they don't want their kids and dogs rolling around in stuff that there's no test out there saying it's good for them. Um or they might do it on a simple value. You know, the people who shop at Whole Foods even though it's a little too expensive for them. Uh but what we try to do is although you know, some of the chemicals out there that are used in agriculture, uh people have opinions on this, but I would say that they're you know, the set the Midwest of America has has sometimes nearly fed the world and and certainly the nation. And there was a good cause to make sure that we could uh generate whatever we needed to. Um but in our home landscapes, there's never been a need to use herbicides and pesticides. It's never been necessary. Uh we can always do it better and in the long run cheaper organically. Um so and there's no risk to uh to pets and dogs. When you see that little flag in the yard saying stay off for 3 days, that's based on uh laboratory tests of a 150-lb man, not a pregnant woman, not a small child, not an elderly person. Um and so there's the debate is out there in the industry uh and in the government about whether it should be banned or not. Some municipalities such as Portland, Maine have, many Cape Cod, Massachusetts towns have tried to or successfully banned pesticides and herbicides. I try to sidestep the issue. I'm not into forcing people to do anything, but they simply don't have to. It's unnecessary. In the long run, it's cheaper. So that's the value proposition we try to put to people to, just like the name that Peter gave the company, help people preserve their landscapes for the long run. Don, let me ask you just since we're on this topic. So you had said you know, this this business has a lot of the characteristics that we we we as searchers really like. Maybe it was a little bit a little bit smaller than than ideal, but that also represented opportunity for you to come in and grow. Um but um one of the things that I'm feeling like might not be ideal as a searcher is the value prop is awesome. I find it a really neat business. That said, it feels discretionary and I think you you basically acknowledge as much by saying you target probably more you know, higher income neighborhoods, people with a little bit of disposable income to to spend on their trees. So this is a discretionary spend. Uh and in a recession, are people going to stop, you know, being proactive about the health of their trees? Is this one of the going to be the going to be one of the first line items cut from a family's budget? So all to say, do you know how this business has performed through recessions? Yeah, it's done quite well. Um the customers in this business uh value their trees and if they run into a tough time, they might take a year off, but then they come back. Mhm. Um we have occasionally lost a customer to uh a competitor and it's usually for something like the sake of simplicity. In other words, their tree company comes in and they cut something and they say, "Who does your plant health care?" And they say so-and-so and they say, "Well, we could do this and that for you and it's going to be cheaper and you only have to talk to one person, not two people." Um so you see that in the industry and that's something we're looking at going forward, but um as terms of discretionary, I'll I'll put it this way. Um there's a lot of beech trees in Eastern Massachusetts. There's disease that will kill all of them in 7 to 9 years once they get infected. Um when your tree gets this, uh you simply have a decision to make. If you do nothing, you will be paying $3 to $5,000 to have this tree taken away and you know, half a decade. Or you can spend some money with us and we can try to help preserve it until an industry cure is found, which is what's being worked on. Um it's discretionary like spending money on your roof is discretionary. But you're just kicking the can down the road. And something I found very interesting when I was doing due diligence and I think this goes to the importance of it is that according to the US real estate appraisers organization, 15 to 20% of the value of your home when you sell it is based on your landscape. And I think the simple analogy to see this is um think of two traditional Cape Cod style houses, small modest homes. One has a beautiful landscape, you've seen one. One is just grass to the fence and you've seen that, too. Would you pay 15 to 20% more? Does it sell for 15 to 20% more? It absolutely does. Mhm. So um you know, people want to live in nice places. I think the pandemic drove that home. Uh people spent more time at their home and wanted to look nice. In fact, this business saw a bump during that time. On the topic again of the value prop. So I'm I'm just kind of trying to think about the fact that I haven't heard of this type of business before. Maybe you hadn't either before you came across before Carlos came across across your radar. Um is it in terms of just kind of um demand for the core service, for the core value prop, are there Boston Tree Preservation like businesses in other cities? Is this something where you know, they're all over the place and I just haven't noticed them or is it something where where you guys are still one of the of a small handful of businesses that specialize in tree health across the entire country, actually? That was the number one due diligence question that I had and I can tell you that that searched around on the Eastern Seaboard of the US, I have found not enough to need my second hand. Uh what you will find is a lot of people who do plant health care. Some people will do organic. Most of them bundle this together with some other offering, either landscape services or pruning of trees. But we know a little bit about these industries. There are exceptions. You've interviewed some on your your show, but landscaping of course is you got a truck, you got a lawnmower, you're now a landscaper. Um it's hard to get high margins in landscaping. Uh you need a excellent management to get higher margins in landscaping if all you do is landscaping as opposed to like uh hardscape installs. Um in tree cutting, there's also competition there, too. Uh it's high cap instead of low margins, you have high margins, but you have high capital expenditures. You have these very expensive million-dollar machines and expensive insurance programs because guys climb trees with chainsaws and that costs money to insure against. And we have neither of those two things. Mhm. But Boston Tree Preservation uh as I'm sure uh Peter has told you or will tell you, um somehow came out by accident. He was focused on a very big business that was growing rapidly. And um there was the pruning side of Boston Tree Preservation uh had not had its fleet refreshed over the years. And what happens is they all more or less expire at roughly the same time. And so when you're at a certain age, you look at this thing, I presume. Uh he looks at his fleet and says, "How much money does it take to recapitalize my fleet?" And how many years will take me to get payback on that investment in in CapEx? And the answer was he is better off shutting down that revenue line and redoubling all effort into uh only plant health care, which had already gone organic at that point. Um and he had a large and established customer base. So I would say that Boston Tree Preservation uh although it doesn't sound right, um is sort of an anomaly. And if you think about it, how many guys who own um a pruning company that also does organic plant health care also happen to be visionary serial entrepreneurs that start uh you know, uh patented technology tree injection businesses that get outside investment and scale and consume most of their professional time. I could also not use my second hand to count those guys. Mhm. So um you know, it was some and then it's in the town next to me. So you can see why I was doing cheetah flips uh when I came across the business. Um and and and Peter's a great guy. Uh he has he's a a smooth talker salesman. Uh he cares a lot about the customers uh and he has forgotten more about trees than most people are going to ever know. Um but that is a little bit about why they're niche. And so the answer is uh I I to use the word about my own business, but Boston Tree Preservation in its industry is a mutation. Now, is it a Darwinian dominant mutation? Is this the way of the future? Well, I think it is. My vision for the company is that it becomes like your primary care manager. Mhm. You see the guys who cut your trees and the guys who cut your grass, they're the outsourced specialists that need to be a part of the HMO. But, you don't go to them until you come through Boston Tree Preservation. And this is where we're responding to demand from our customers who said, "Who can do our landscaping so it does not um erode what we're spending on the work you're doing?" You know, you can trim hedges the right way and you can trim the wrong way. Uh when people prune trees, uh are they doing it a way that uh supports our organic approach and the customer's philosophy for their own landscape or is it working against it? So, we have received more requests for referrals from our customers than we can even field. That's a great opportunity right there. That's the opportunity to become the primary care manager for someone's landscape, to offer that simplicity of how I lost a couple customers to other people in the past where they only have one belly button to push to take care of them and to provide that higher touch that a couple other of your guests have done where when we're really doing a lot more for that customer, we then use software to help us double down on that relationship, that eyeball-to-eyeball relationship with our customers. Don, I'm I'm probably getting a little bit ahead of where you are in the business, but the the word franchise or the idea of franchising was floated in my conversation with Peter and Carlos. Is that something where you could see a way of expanding this and and bringing this this 40 this model 40 years in the making to other markets faster? It is. It's a it's a practical growth model for somebody like myself at uh in mid-40s. Um you know, I have designs to to grow out uh this into Eastern Massachusetts and New England uh organically under one set of ownership. Um I've got a a great team and uh I think we're going to become the place where plant health care professionals want to come. All my I have about uh half a dozen fantastic professionals. My competitors have about one guy each and there's no way for them to move up. But, as we're growing, we're going to create a career path for people who have got into this and allow them to come over and really truly become professionals. Um to grow it and and to get a little bit further, uh the model Peter built is definitely scalable. Once I can sort out the software integration and develop a growth model where a return on ad spend can be correlated to uh a growth plan, then I think you will grow out to the limit of your uh geographic area and then the next geographic area is going to be an hour away or 2 hours away and franchising would become uh probably a likely growth model with us providing a lot of centralized support. Um I think that's uh a better model than some of our competitors right now who are uh side dish competitors. It's The way they compete with us is in a non-core offering on their part. Um they have these uh Star Trek Borg-like acquisition machines uh and they're in, you know, 26 states uh growing out fast and they're solving the problem of high capital expenditures and expensive uh insurance uh for what is a a dangerous profession. And uh but what they're not providing is the level of care that we provide. So, um growth by acquisition risks customer care. Um the way to standardize the quality as we grow would be a franchise model and I think Peter and Carlos are correct in that. Um but but to be successful uh for my reasons for buying the company I I think I can be successful from um in I'd say growing out probably to about 5 to 10 million in revenue. Um cuz some of my larger goals are related to helping guys like myself. Uh you know, remember the first guy I met was from the search fund accelerator. So, that was my first experience. Um and I always thought it would be a great thing if there was a search fund accelerator for military veterans. Mhm. Not because uh we don't like other people, but but we have a common uh baseline of language that speeds the learning. Um competitive strategy is competitive strategy. And when you're learning about the tactics to compete in the business world in business school, your mind goes back to what you'd already learned in the military. And ultimately, the principles are the same. The context is different. Or as uh one of my favorite uh authors said, um uh the war remains the same, only the field has changed. Mhm. Um so, that's one of my long-term goals is to grow this business to the point that I can become like the people who helped me. Um and then a franchise model would be uh congruent with that sort of a growth model where I could build a team to help that happen. So, you would actually the franchisees might be you might make it particularly hospitable to to military to vets coming in being your franchisees. So, that sort of thing. It it's fairly well known for a lot of guys coming out of the service that there a lot of military veterans are encouraged to be franchisees uh because we're very good at managing established systems. If you think about this, very few of us created our own company, created our own battalion, created our own platoon uh or or squadron or wing for the other services. Uh we moved into one that was in existence and tried to make it better while it was under our stewardship and then hopefully hand it off uh to somebody else in a good way. Um and I think that bailiwick is there. Uh we're not necessarily, at least I'm not necessarily, the guy who'll start it from scratch and I give all a guy like Peter and I give all the credit in the world to him who did it. If you think about it as a searchers, we all start from scratch, a small private equity firm. Right. following a model. We read about it in a book. Um I think franchising would be a good way, not necessarily at veterans, but uh it wouldn't be a bad place to go look for people with the skill set, but not exclusively, not at all. But, I do want to try to help guys uh who are like me, officers coming out, uh getting an MBA, this much general management leadership experience, this much specific functional knowledge and try to show them that uh one of the best ways is to go someplace where your general management experience has a a high return and that's in the small business world. And if they're looking for a reason to do it, um you know, we all know that the New York Stock Exchange is very important and when it it goes down just a little bit, the whole nation shakes. But, as you know and your guests have talked about, you know, the small businesses make up 44% of the US economy. They're the link to the middle class. Um if it was to go down uh as much as the stock market has at sometime, there'd be worse than a a recession cuz there'd be jobs lost, not just equity lost. Um so, I can think this there's not too much uh that I would like to do after uh uh professional military career than to help, you know, hold up a small amount of this uh small and medium businesses in America uh for the next generation. Mhm. People love to talk about how after World War II a lot of vets started businesses and that's very true. And the economy was growing based on uh combustion engine and later the microchip and these other technologies that were causing massive growth. Maybe we're in a little bit of a lag time now where, you know, the microchip has run its course for us and we're waiting for the next big thing to come around. And if that's the case, um then focusing on the businesses that are existing right now and preserving them as the baby boomers move into the retirement might be one of the best things you can do uh and is not incongruent with what a lot of us raised our right hand and signed up to do is, you know, to protect the protect the country and what we were allowed to grow up in for the next generation. Mhm. So, I'll start with trees and we'll see what else I can preserve. I love the broad philosophical view you're bringing to this, Don. I I Now, I want to take it from from that kind of 30,000-ft uh view uh down to the nitty-gritty of the deal. I'm also I'm also rewinding a little bit. We should have gotten to this earlier, but I got excited to talk about the business. There were a couple features of how you got the transaction actually done and across the finish line that um you called out as notable and I really agree. So, let's get to those and I'll set the stage. Peter and Carlos together had uh talked to a couple of other prospective buyers before you and none of those buyers could get the deal done and there was there seemed to be a common reason why. What was that? Um well, one of it is is that um bringing bringing Carlos in as the GM was a great move. Um one thing that would have been helpful if Peter had known that he wanted to sell the business in this manner of say 3 years ago, you know, uh the luxury of time would have been to streamline the finances of the company because as he was creating multiple companies, uh it was all privately held. All these different businesses that he was growing, creating, they were all his. It was his money and his choices and he would he was moving quick and being agile. So, when he needed money, he'd pull it from one business here, pull it from one business there. That's great as a visionary serial entrepreneur. When you're trying to do due diligence on a company to recast its earnings, that could be challenging. Um So, to say the least. You know, and we all know the answer to that. The answer is a quality of earnings report. That's simple. Uh call Elliott, boom, you're done. But, if usually you'd want to have a term sheet as a self-funded searcher before you're going to front the, you know, 8 to 16,000 dollars or 5 to 10,000 dollars for a QVE. And what had happened is the guys before couldn't get past uh the the SBA lender um term sheet, which normally isn't a hard thing to do. So, um it's kind of hard to have that talk with investors. And to go shell out four figures as a self-funded searcher on phase two of a search after a pandemic um if you can't even get the term sheet. So, what we decided to do is we said, "Well, here's the deal. The problem is risk. You're representing the business as being this good. I believe you, but that's because we've been talking and I have a relationship. I don't know if the bank's going to believe you. And and we won't be able to get the deal done without the bank. So, we need a QofE. But uh I'm not entirely certain that uh I can invest this money and it's going to lead to the term sheet. So, because I don't know what the result is. Uh they had the advantage of asymmetry of uh precise knowledge about the business. Um and I said, "Well, if you front the money for the QofE, I will promise to repay you if I acquire for that part of your deal expenses." And so, we did that. Now, of course, the question becomes, "Well, hey, who's Now it really matters who's doing the QofE because at least the first check he's getting is not going to be from me." So, we went to uh the lender and said, "Who would you trust? Who have you worked with in the past? Who do you consider being a neutral party?" And and we got a name. And um and we went to them. And in that way, uh although I wasn't writing the check, uh I knew that the person doing the QofE had a long-standing professional relationship with this bank. And and what really mattered was quality. You know, they had to do a good job and be accurate. So, that worked out. That was also a huge uh confidence-builder on for me from Peter. As if he if he's willing to front a four-figure check to stand behind his word on how good this business is, then I truly believe that this just it's going to be there when it comes out at the end. My risk was mitigated other than my time risk. Yeah. And it worked out. Um but it did two things. It it it reduced uh the the deal cost risk to me as a self-funded searcher on something I couldn't get a term sheet for. Um and it was a huge signal of seriousness and honesty from Peter. Which we were at the beginning stages of our relationship. Um and so, that to me was the decisive moment in this deal. When he said, "Yes, I'd do that." I knew we were going to get it done. And we did get the term sheet. And and do you think that that is kind of a technique that can be generalized to buyers to to say to a seller, you know, you pay for the QofE and explain kind of the the logic of kind of splitting risk together? Um I I'll reimburse you for this if the deal closes. Or or is it is it was this just so particular to kind of the the rapport the early rapport you developed with Peter and and the idiosyncrasies of this deal that you you wouldn't necessarily generalize it? I think you can generalize some of it. I'd add a twist if anyone asked for my advice on this one again. I would say you could probably split the cost of the QofE as is conventionally known to do uh EBITDA verification first, do working capital second. So, you're only fronting half of the cost of the QofE uh to get the term sheet. Um and that would have been a viable course of action. Uh but one of the major concerns we had uh was um you know, the capital expenditures. You say trees and people think million-dollar trucks. We have Ford F-450s, medium-duty trucks, relatively new, low cap ex. Um they don't do a lot of miles. Everything's really close. So, uh that gave me confidence that it would work. But I would advise somebody to try to get to EBITDA first, which I think is enough to get the term sheet. Um but I think that's a that's a way to do it. I mean, if a seller agrees to it, this is sometimes a way too for a seller to say um and I think this depended because Peter probably had a good first impression of me and and wanted to do the deal. You think about what it allows a seller to do. Well, now I got a QofE in hand. Uh I definitely know what my business is worth. And now I can go into market and auction for a higher price. But if you'd already found somebody that he wanted to preserve his legacy, then you wouldn't necessarily be motivated to do so. Um so, you know, it's not a a silver bullet, but it was definitely a way to overcome an obstacle and and keep hope alive to get to the finish line. And it worked in this situation. Don, is there anything that we haven't touched on that you wanted to make sure was talked about? Um yeah. Uh there's a you know, there's an old saying that um uh tact or uh strategy without tactics is the long road to victory. And tactics without strategy is just the noise before defeat. I think in search, um you got to get ready before you get started. And you really got to know uh almost do a postmortem before you finish. And you say, "If I get to the end of my 24-month runway, I am out of cash and I'm about to polish up my resume to use my reserve parachute of cash to survive until I can go interview for a job, you know, downtown or wherever." And you got to turn around to everybody you've been talking to saying, "Oh, I'm going to buy a business. I'm doing this." And tell them, "Nope, I didn't do it." What is the criteria of a business that if it, you know, the the search fairy popped out of the the sky and said, "This business is available to buy. Press this button and it's yours." What is that criteria? And would that criteria still be good for all those same people that you care about in your life and your your bigger goals? I think you have to be crystal clear about it. And I would say that you need to be so good at it that you're almost willing to turn over the sourcing up to the phase of an IOI out to one of your best interns. You don't even look at anything that uh somebody else with no emotion involved has used your clearly and concisely written criteria and has done an objective screening for you. Because I think if you don't do that, then you fall into the sometimes like the one-itis. I I did in the beginning. This deal's great. This is fantastic, you know. Uh this is better than all the other ones. And I'm going to pursue this one. And you're not trying to find the best deal out there because there will always be a deal that looks slightly better than the one you're looking at. Or the belief that it you might find it. You need a criteria. You, you know, you're basically trying to breach the upper class or uh into a a role in society that you do not currently exist in. And your job is to get a foothold and then work from there. So, you need to have a clear criteria on what you're looking for. And you need to acquire the first thing you can that meets that criteria. The only time you get a chance to make a decision is if you've got two businesses at the similar stage of due diligence moving into closing and you can only morally and honestly push forward with one. Or you can only afford the deal cost to push forward with one. Um and at that point, you find a buddy that you try to pass that deal off to and you go forward on the one. But that's the point where you're trying to optimize. Um and I I think to do that, you really have to um have a clear philosophy about what you want. Where you want to be in life, what your role is. And I would say to just, you know, wrap up the soliloquy here about it. You got to know what good you want to do in the world and what criteria of a business is going to enable you to do that. Um it's nice to think about the heart the cars and that the house and all that. But what good do you need to do in the world that you deserve that car? You deserve that house. You know, how have you taken care of your employees and your customers and your investors so that that is a a prudent uh fairly won reward for your efforts. And you got to go forward 100% if you're you got to make sure that your family's on board, take them to a conference, make sure people know what you're doing because it doesn't sound like a real job. Um but at the end of the day, just to wrap it up, um you got to look in the mirror and you got to forget about having anybody else's encouragement, anyone's affirmation, and anyone's support. Uh whatever you need, you need to be able to give to yourself. And if you get more than that, that's great. Um but anything less, you don't deserve to be in charge of the company. You don't deserve to sit in the big chair and make the big decisions because the people working for you need you to be that person. So, you got to become that person first. It's either 110% or you're not there at all. I think I think being crystal clear about what you're looking for and why you want to do it will allow you to do that. Well, Don, I I see why you're a guy who likes to be in positions of leadership. That was That was a stirring and motivating uh soliloquy. How can people get in touch with you, Don, if if they have questions? How do you prefer? Um probably the easiest thing is I've kept up the email address and the website for my search engine. So, uh just to separate, you know, True Preservation from everything else, it's uh Mhm. Don@mountbaricocapital.com. Or as all my friends says, the email address that is way too long. It's uh Mount Barico Capital. Uh any veterans of the 173rd Airborne in Vicenza, Italy will know about it. And it's uh a big hill that we'd run up uh almost every morning. There's eight ways to get to the top and all of them are hard. So, I thought it was an apt name for search. Uh Indeed. And I I appreciate you giving me the time. I really appreciate your time, Don. This was a great conversation. Great to hear the other side of the the other half of this story after talking to Peter and Carlos this morning. I think people really like the the entire frame. So, thank you very much, sir. Congratulations on on your successful search. All right. Thank you. I hope you enjoyed that interview. 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