Ben Jasper welcome to acquiring minds appreciate grateful to be here and a longtime listener and viewer apparently I'm one of the few people that actually watches the YouTube episodes well you're one of the first so those views are are low because you're so early in the morning and we are going we are definitely going to spend some time on that that detail right well you stepped out of a successful career in finance to buy a manufacturing business that has you at work hours before the sun comes up something that you you just touched on So You traded Finance hard for a different kind of hard and I'm excited for you to tell us all about that all about this journey that you're now on start us off though Ben with some with some background on you please yeah so uh you know a little bit unique I was born in South Korea Soul um and was adopted at the age of roughly three and a half by a nice family in Kansas City so I was adopted by a nice German Caucasian couple in Kansas obviously um you know adoption kind of in the 90s was not that normal but I had a fantastic childhood growing up in in Kansas City and uh really was uh enjoyed it and then like most people I basically have spent most of my life trying to check boxes um I'm not sure if it's in imposter syndrome or whatever just trying to fit in obviously I looked a little bit different than my classmates in Kansas as you can imagine and was fortunate enough after you know studying hard in high school to to go to Brown which I know is your Alma moer as well so spent four fantastic years in Providence Rhode Island was pread like any everyone else at the beginning because you don't know what else to do and then I took a biomedical ethics course my freshman year and realized the healthcare system was pretty complex and insurance companies had way more um influence than I would have preferred and so I kind of pivoted and again lack of imagination I did econ and um did what you know I felt like everyone smart was doing again kind of in the whole checking of the boxes and um was fortunate enough to kind of start my uh career on Wall Street working as an investment banker and uh at Morgan Stanley so again kind of this theme of checking boxes do well in school go to a great College get that Wall Street job um I'm kind of checking all the boxes I should be getting happier right um so I did three two years in New York one year in San Francisco and then the next move for some people um not that there's anything WR the investment banking career I still have a lot of good friends from those times um I went to the buy side and started doing Public Market investing and effectively without needing to go into all the details um I spent almost 20 years um doing Public Market investing um a long focused Fund in San Francisco obviously 2008 happened and if you have a long bias that wasn't so much fun then came back to New York and um invested more in kind of the traditional long short um product including some stance um at say some you know multi-platform funds um you may have heard of them like Citadel ballet ay Millennium you know the who's who um which was a great experience you know you work with some of the smartest people in the world it's really hard it's not like billions um don't let Showtime fool you um it's a lot of time spent uh in front of excel models with a thousand line models trying to figure out what's Amazon going to say Thursday night you know Microsoft reported the previous week what was the Azure number and um there's a lot of real grunt work but I really enjoyed it it was really engaging um and again just kind of checking the boxes um um and was very fortunate enough to have you know had some relative success um I think for me you know being in New York City with a young family I had a three-year-old at the time um we were both working uh my wife who uh works in the city as well or we we now no longer live in New York um Co just kind of like for a lot of people kind of changed you know the perspective of things one I'd been working for 20 years in finance again checking all the boxes and then Co you know you're living in a small New York apartment you know you're hearing Sirens all day it was uh it was quite a kind of change of perspective um and so we kind of survived that you know Co actually was a pretty good year for hedge funds and then I remember kind of a year removed from um you know uh Co in New York we traveled to Florida for vacation when travel was no longer illegal um and I was in Miami with my family and at this point I was as I was a portfolio manager managing about kind of 500 million by myself and while my wife and my daughter were out on the beach I was on my laptop just trying to understand why the book was acting so strange um because obviously you know I think with Wall Street bets and stuff it's been well documented you know there's new actors in the market and it's become a little bit different so I think you know after kind of 20 years on Wall Street really enjoyed it I mean if you're competitive you want to win it's a great place to be there's some really smart people but also It's a Grind you kind of self-identify with your net worth with uh you know your P all the time there's not a whole lot of duration and I think when I was on that vacation in in Florida it was for the first time I was like okay I need to start thinking about you know the rest of my life I didn't you know I had friends that retired and they weren't particularly happy they didn't have a whole lot of purpose and I started thinking okay what do I want to be doing for the next 20 or 30 years and even though I was enjoying the work I wasn't sure I wanted to be Tethered to kind of Bloomberg and um doing what I'd done for the past 20 20 years is I kind of at this point was kind of entering a new phase of my life you know being a father um you know being a husband I just wasn't mentally present given that the job was 24/7 so I started thinking actually for a few years i' been thinking about ETA which you know now seems to be you know there's a lot of help that I didn't have even though my search kind of started um last May and of of 2022 but I effectively um left Wall Street after kind of thinking about my future you know it was a tough kind of couple years managing TMT and I decided if I wanted to do this I kind of needed to go all in and I left in kind of May of 2022 and engaged in a full-time search in the Tri Area Ben let me stop you there the other thing about in your backstory that I wanted to asked about was this theme checking boxes I guess this decision to buy a business is been stopping checking boxes for the first time in his life just so we're crystal clear right yeah I guess that's one way to put it that's not unfair that's not unfair the the plot importance of that is is is self-evident um probably for a lot of people buying a business is is really kind of this hard right turn that they take off of some track that they're on but because this you you really saw yourself as somebody who' always checked boxes give us kind of like a window into the emotional uh content of this decision was it was it yes you decided that you were this fork in the road you needed to leave Finance you new phase of life but was this difficult for you to make this decision yeah I just think you know life changes um in in the sense that your priorities change I look at I think about who I was when I was 20 very different from when I was 30 and now that I'm kind of I got you know the good old for handle even though I look like I'm nine um different priorities and so quite simply for me is I think I was trying to satisfy the ego part or maybe the insecurities of you know the impostor syndrome like listen agian growing in Kansas I fit in like a tur and punch bowl I look different than pretty much everyone else going to the grocery store with my parents there's a lot of stairs right you know you walk in Price Chopper in Kansas City and you see you know two Caucasian you know adults walking around with a 8-year-old Korean kid that is not normal that is not something you see all that often maybe even on the East Coast it's just it just begs questions right yeah and so I think I spend a lot of time just trying to fit in in a lot of respect so I'll do well in school I'll go do a good you know so it could be I I don't know like I I haven't gone to therapy this maybe this is my therapy session right now you can send me the invoice afterwards but yeah I spent a lot of time just trying to satisfy the whole ego like the arrival fallacy of like oh once I get X maybe I'll feel this and so I was fortunate enough you know I I checked a lot of boxes I was actually very fortunate you think about me growing up in orphanage Age 2 in Korea Play My Life 100 times this would be like a sub 1% outcome like this is like way on the edge of the tales of the bell curve like we're talking two three standard deviations you know so I I have a lot of gratitude but you know maybe at the same time I felt this responsibility since I was given this unbelievable opportunity adopt Ed by this Loving Family in America Living in America is a cheat good by itself I just felt the need like I got to because they didn't push me you know I wasn't like raised by Tiger parents like you know do your homework and do all this stuff they're just like be yourself like literally you know they they just thought I pushed myself too hard I I was very fortunate um to grow up with fantastic parents so I thought I think I just kind of checked all these things and the ego and stuff so even when you're in your my early 30s I was still trying to I guess prove myself and then like when I kind of hit these mil Stones I was just like I feel nothing I feel nothing and then I think what changed for me was um a couple things one 20 years in finance is exhausting and especially on the on the buy side the hedge funds like you have a good year like I I was fortunate I had years where I made Seven figures congratulations January 2nd comes you start from zero and if you have a bad six months you could lose your job the terminal value of that career path there's no real terminal value you're only as good as your last trade MH and when you're in your 20s and 30s I think you can have the endurance to do that now that I was a father there just wasn't the compounding Dynamic that you know I appreciated from public market investing right like if you just literally buy index funds and do it consistently you're you're guaranteed wealth like there's a lot of math behind it like just buy and hold like this guy Warren Buffet he's done pretty well doing that but what I what I found frustrating in the games changed a little bit was I know Amazon way better than I did you know 10 years ago my confidence in terms of my ability to make generate Alpha because of that is lower than it was 10 10 years ago so I have all this history I've met management many times but it doesn't necessarily mean my ability to make money this year I just didn't feel the compounding so I was thinking for the next 20 years I'm the clock starts over January 2nd every year I'm now a father and what I care about more was the ability to be present for my family um I was was fortunate I've had some savings and then I think for me just um the ability to compound you know what I'm good at is I can show up every day I can just really work hard that's always been my strength of showing up every day and I felt with small business maybe naively that if I can just focus and get better 1% every day anything I do the first year of a business or year two or year three those benefits should occre for the next 10 15 years unlike Market neutral you have one good year cool and then you have a bad start to the next year you have a draw down you're wondering if you're going to have to be interviewing for a job again so Ben why and why buy a business as opposed to any number of other paths that you probably could have chosen given your success to date yeah I think um a few things I mean think I think we're all colored by our own personal experience so again i' I've said obviously a lot of positive things about my parents but both my parents were self-employed my mom worked at home she was a direct marketer so she was home all the time when I was in high school school and then my dad um um you know basically he lost his corporate job um and then he bought a small business he bought uh this will date him obviously it's hard to believe this business model exists but I was actually talking to him the company that he bought still is in existence if you can believe it but he bought three or three or four 1 hour uh uh Photo Labs in the middle of Kansas in wit Kansas so he was commuting from Kansas City to witch talk kind of once twice a week so I'd kind of seen you know the ingredients of of self-employment and what I liked about it was my parents are around all the time so my daughter's five she'll be six in March and so I like the ability of I like the idea of that you know if if I have ownership of something like I can have a little bit more control of my life nothing Earth shattering but that appealed to me because I grew up around it and I never really I had no idea what how much money my parents were really making I just knew we had enough and we lived a pretty simple life you know my dad would drive a Honda Civic into the ground 200,000 miles or whatever like we just never valued stuff but we did value time together and I kind of got that from growing up around them we traveled a lot and so for me I thought you know uh buying a business was an interesting thing to pursue and as I did more work I read the I think everyone has read The Walker die bable buy then build I just couldn't believe from a public market perspective something that's considered cheap as 10 or time 10 11 times cash flow it appealed to me just based on the math and the reality of of the multiples that you could pay for it and then again you know I think when you become a father the ego goes away you know I'm I'm no longer in New York I'm living in New Jersey let's get to your search so you decide after this moment in Miami you decide uh to to move forward what does your search look like yeah my search is I was kind of looking in the tri tri state area I looked at um I looked at businesses in Kansas City as well um and I just went through Biz by cell even though I know a lot lot of people kind of poo poo that um you know I reached out to Brokers and I just kind of put my analyst hat on and I went through as many Sims as possible company information memos and I probably I left in May of 2022 and I was probably going through I don't know 5 10 a day and emailing Brokers so I just basically made it my full-time job I was like this is what I'm going to do and so and had you moved to New Jersey yet had you guys left no I had no idea what I was going to do I I I I spent time in Kansas City I met with brokers in Kansas City you know I thought maybe there'd be some more interesting opportunities in Kansas City there really wasn't I did talk to ironically a pest control company um and I decided to pass on it uh for a couple reasons um and I was you know I was I was willing to kind of start small to be honest too I know some people they go they put up the website like looking for one to two million of EIT like I was thinking again when you're invester you see so many things go wrong for public companies I was like I just want to learn how to walk versus um running so at the beginning I was like I'll just buy like a 300,000 STD business and I'll just pay all cash just because I don't I don't want to personally guarantee stuff and I can I don't have the pressure of that payments and I'll just learn a business and if I can do it I'll do it again and why did you decide against that strategy or would you have you just found a business that was bigger yeah I think ironically kind of the inverse of our friend Jesse sunquist who started out big and he end up going the franchise route you know we we'll go into the details but I I started off looking small I looked at car washes and I looked at you know Pest Control among others but the best business I found was kind of you know kind of the higher end of what people look for on the self um funded search side but I basically looked at 80 or 90 businesses no bias um again I looked at that Pest Control business and in Kansas City the reason why that ended up getting acquired by an HVAC company locally but I ended up walking away because this was in 2022 and half the business was a termite inspection business that was tied to housing and the owner kind of said like oh that piece of the business business is already down like 50% for the year you kind of let that kind of comet and then I kind of walked through the unit economics and it's pretty high margin kind of $400 um and it's tied to housing starts and this was last year may of 2022 so we can imagine what's happened since then but I was like I don't want to deal with this housing exposure kind of I I live through 0708 saw that but I I just was kind of meeting with Brokers and I I saw a lot of bad stuff tell us about the business that you that you the manufacturing business that you found and why did you like it because you had mentioned to me on the preall that actually manufacturing was something that you thought you wouldn't do yeah he My my what do you I think most of us when we think manufacturing we think cyclical and we think High cap X so with all the multiples based on E SD that's always missing the the capex piece so if you have a high let's say you have a million dollar of IA but you're spending half a million on capex that's way less interesting than a low Capital intensive you know 800,000 a year SE business and then when you take into account the cality it just was scary so this this business I remember seeing it listed on a Wednesday again this is why I think people that want to do this you have to you know kind of do it fulltime it was listed on a Wednesday at like 2: in the afternoon I went through it reached out to the broker I did a call with a broker um he agreed to do a call with me on that Friday and I wasn't excited about it at all and again this was a little bit bigger you know as I said earlier I was kind of looking to go small maybe P all cash so I wouldn't have to deal with the personal um you know the personal guarantee that the SBA requires how big was this so this company was kind of mid seven figures of Revenue 20 percentage margins so kind of you know a little under kind of a million-ish of iaso at the little bit of the higher end obviously you know you would need to fund it I mean reality is I could have wiped out most of my you know a lot of my liquidity to do it all cash but that's just not a good use of capital I don't I think anyone would would recommend that um and so I was like I'll just you know but it was interesting it seemed like you know a lot of the key words that we all want to hear like um you know 20 years old um owner retiring because I had met with a lot of owners where they had other business interest and then when I show up on a Sunday to just do a flyby by the business and I saw them working at the company be like oh that's why you have other business interest you're working on a Sunday um so it was it had you like you know retiring owner 20 year history and then you have to keep in mind because I was looking a lot of car washes and so I was looking a lot of car washes in the tri state area in the tri state area and Co New York City was literally the um epicenter of covid so when you're looking at you know 1920 and 21 numbers a lot of these car washes were you know looking to sell because the owners were so had so much PE um you know so much stress from almost going bankrupt in 2020 because the business wasn't essential for for five months so this business was just like this just fine and it was like 90% recurring and I was like okay if I'm going to personally guaranteed Debt live in the tried area like let's pray that there's not another pandemic you know only kind of a two years to remve from that I was and um I listened to your Jesse sair um if I pronounce it um uh the printing yeah printing company in New York that sounded incredibly stressful but that guy's got a great attitude he's making it work congratulations to him but I was trying to avoid that um because I was so obviously overweight that been in New York while that was going on so it was it was flat because and so stable because it produced what what did it what was again and that was another reason I wasn't particularly interested these plastic bags there's a lot of secular concerns about that as a form factor but as I did a call with the the broker on a Friday I became more interested in it because it was mostly repeat and they weren't doing any of the single use stuff none of the the single use stuff is really made out of Asia India or Korea or China and so this is pharmaceutical bags that make the API for the raw materials to make um large molecule drugs fish bags Bakery bags um bags for auto manufacturers like GM and Ford you know Nike bags um ice bags so there's really not going to be a form factor that's going to replace um plastic for that you're not going to have ice bags and you're not going to have ice and paper obviously or glass it's too heavy and the costs from a packaging perspective is only a few cents per bag and you can have branding opportunities with it so 90% repeat have some e-commerce exposure so Amazon obviously did well during that period um so I do a lot of you know Phil uh PVH or philan Houston um T-shirt bag so you know despite my concerns as everyone else it was pretty stable and it wasn't that Capital intensive to be clear when you talk about the secular concerns around the form factor you still you still talk like a a Wall Street analyst I know sorry about that guys that's all right basically what you mean is the plastic bags that we get at the grocery store are going away corre and so these were PL the plastic bags that you're producing as you just said for us uh are in different different contexts and they look like they have a long time to go they're yeah yeah the use cases of these bags I mean fish bags like what's the alternative plastic for fish bags right you know ice bags um pharmaceutical stuff I I have Factory audits where they come in and they want to look at my Pest Control records for 10 years um they walk around the plant you know everything has to be clean when I make the bags my team has to wear hair nets like the lunch lady in high school they have to wear surgical gloves we have to line the boxes uh with two layers of poly there can't be Staples on the box so there are some high barrier components of it as I dug deeper that I really liked about the business um that it was durable and you know some of the secular stuff because you know you have Amazon trying to do more paper stuff everyone's trying to do more paper like how many times have you heard people complain about I don't make straws but we all hate the paper straws that are our our children get at restaurants because we know that paper straw is going to last for like four sips right but there's obviously because I'm highlighting what we're all aware of there's this push to Glass which is probably the most recyclable um material and then um paper obviously as well because everyone's concerned about the O as they should be so I had all the same concerns but as I did more work in diligence is clear to me a lot of the use cases for these bags would never go away so it's a plastic bag manufacturer this is something where the the in the the types of Industries and clients that you're serving have I guess more stable demand although you did mention how you have some e-commerce exposure e-commerce has seen obviously saw a big a big boom and then uh it's come back down to earth uh since Co um but generally a very stable business so that opened your mind to this bu this manufacturing business and got you over kind of the not wanting to do manufacturing right you had you had talked to talked to the broker I think you said on a Wednesday and then I recall from our preall things move very quickly take us take us right so the listing I saw on a Wednesday I talked to the broker on a Friday and he sent me the this the Sim and we spent a lot of time talking about it really good broker um had done this obviously before and then we agreed that I would meet with the seller kind of early the following week and so we agreed that I would meet the owner after hours you know which was three you know 3:30 you know they have we'll talk about the start time but they they start early but they close early too and so I met with him you know spend an hour with the owner walked through you know looked at the equipment and just kind of better understood the you know spin a couple hours and as I was kind of leaving the the factory um that Wednesday afternoon I kind of just asked the broker like okay you've this has been listed for a week um you know kind of give me some um guidelines in terms of kind of what the next steps are and the response was Ben you're the third or you're the third person to meet um the owner even though it's been listed very for a very short period of time they're all basically verbally told me they're going to put in full price offers and then we have uh a gentleman who lives locally but his dad I guess is a surgeon or doctor in California who's going to fly in uh tomorrow to visit because he wants to help his son kind of get in business and we're probably going to have a four offer I was like holy crap that's uh that's a little bit faster than this guy was ready to think about so it was clear to me at that point I had I had to put in a formal Loi and when you have three full price offers you really have no choice but to match it mhm um so I kind of uh put together an Loi the the broker kind of given a template kind of more or less meeting effect you know literally meeting kind of the seller expectations and trying to explain why I felt like I was the right fit you know at that point I was also introduced to kind of the hours um you know the owner had you know he liked to get in early he also just had generally trouble sleeping so he'd get in the factory at like 3: 3:30 in the morning um which obviously isn't what people sign up for unless you're Mark Wahlberg and want to lift weights for three hours before you go about your day but um I felt like I could say pretty convincingly since I was getting into the office around 5:36 in my for the last 20 years like I could be like listen this is that's not a problem like I'm committed to kind of keeping everything the same making sure the employees are happy so I spent some more time just hopeful that I'd be the the competing bid and I put in Loi Thursday morning called the broker really just reiterated that um I'd been looking for a while reminded him kind of my personal balance sheet that I was serious um I had already kind of uh I had lawyers I had a lawyer ready I had an accountant ready like I was I'm not I wasn't messing around round the broker had already had the business prba approved which for me made me a lot more comfortable so Bank the seller had already agreed to go through the SBA process with um a bank prior so I knew that this process this is a real business um the bank had already kind of unridden it um obviously I was going to do my own kind of analysis during diligence but this this moved fast because i' had been looking for a while and a lot of businesses were kind of taking their time but this was the first time where the tax returns match the Sim um um long history seller and the and the price was reasonable it was reasonably priced kind of uh low threes um plus you know a little bit of inventory they kind of made the working capital component which I know a lot of people spend time on very simple where I'd effectively buy the inventory the work in prog progress plus um raw materials which would take the total kind of purchase price kind of the mid mid 3s so it's reasonbly priced 20e history had no real volatility through Co 90% repeat seller was retiring it checked every box pretty much versus look a lot of not so great businesses the fact that it was you were talking to an owner who was getting in there at 3: and 3:30 in the morning you were willing to do that despite the fact that this business checked all these boxes I would have thought that that would scare off almost everybody else was the expectation and and I you put yourself forward as somebody who could who could provide some continuity with that schedule but was the expectation that whoever bought this business was going to need to do that or are you just doing this because you've already trained yourself over 20 years to get into the office before the sun comes up well obviously any seller that's looking to get maximum proceeds the obvious answer is like listen I had trouble sleeping so you can change the hours um but um you can do whatever you want and so that was you know I think that was part of it but it was clear to me understanding what he was doing every day and one thing I would encourage all Searchers to do is you know spend as much time you can on the financials but also spend as much time you can interviewing the the owner and being like literally walk me through every hour of your day what does that look like and really spend time you know um understanding that and why so um you know part of this plastic bag manufacturing business is we actually make some of the film in house which in which involves buying resin so this company or the company I own now we buy rail cars of resin from Texas which can take anywhere from three weeks or six weeks to get to me um around 200,000 pounds each delivery and then these resin pellets we we actually melt um in these things and in these old machines called extruders and then the resin's melted it goes through a metal screw and then it's blown up in the air like a big tube three stories in the air and then it cools and then the team kind of cuts it into sheets and then we take that sheets those sheets of film and then we convert them into Wicked bags or ice bags or whatever so the company I acquired most companies they run 246 or 247 which they which means they have the Heats on around 300 350° 24/7 because it's obviously super inefficient to kind of get the Heats up and then shut it off and then warm it up so most companies have three shifts um throughout the day and it's you know 24/7 to be efficient part of the reason why the seller went this route was he want he didn't want to work the night shift so this company only has one shift which is one of the longer term opportunities if you know um macro improves and I feel confident about you know managing a night sh shift because that obviously has obvious um some challenges as well but um when you're only rning running one shift it takes about two to two and a half hours to turn on to warm up the extruders because the Metal's so thick you kind of just want to just slowly take up the heat so the equipment will last a lot longer this is hundreds of thousands of dollars of equipment so you just don't want to ruin it so he was getting in at like 3:30 and the Extrusion team that makes the film they get in around six so it takes like two and a half hours but to answer your question yeah I was surprised too that I had as much competition and the broker basically said like listen there's not a lot of businesses that are close that this size from a profitability perspective in the tried area where there's a lot of competition from Searchers and uh at this multiple if you know the competing bids were from Searchers um some Searchers and other people that had manufacturing backgrounds I don't know the details obviously I can't audit you know the broke the broker Could Have Lied there might have been no competing bids but I you know I don't think that was the case but it's hard to audit exactly but that was my understanding there were some Searchers I don't think private Equity is involved but some other operators that had you know more manufacturing background But ultimately I won the bid because why do you think you were you were the winner the broker um just felt that I think he saw that I had a very you know they like that I had a pretty high Tain pain tolerance from 20 years in finance and they thought that I would get along with the team quite frankly because this was unlike our friend Chad the candle man where he basically was a rogue employee for three months and was able to see everything this broker because obviously he'd probably seen some things break down during diligence I was not allowed to meet any employees throughout the entire diligence process which for some Searchers would be a non-starter but you know I wasn't able to meet them but um it was communicated to me that they thought that um the employees would really get along with me better than Maybe some of the other individuals they met um they were comfortable with my background and they felt that the the transition to kind of a weird hours would be with the ability to change of course Ben it's you can do whatever you want they felt that I would be a pretty good athlete to kind of transition into the role that the owner had been doing for 20 years yeah and when you say they perceived that you had a high pain threshold a high pain tolerance so there was an expectation and understanding on their end that this was going to be a hard business to run not really I mean it for me at the beginning it was well talk about the first two months where I was I was like oh boy yikes you know pull up pull up you know like the warning on the on the airplane um low terrain but um I mean obviously he grew up in it you know he had been doing he's been the plastic bag industry since he was 14 his dad was in the business so for him you know he was retiring he'd been doing this for like 40 plus years of course it was easy but for someone like me this was intimida it was a lot a lot to learn and we can go into like after Clos and stuff but like there's a lot to learn because because despite this kind of being almost a million cash flow business there was no management layer and by the way like it was him he owned it with his brother-in-law who was the maintenance guy and you know I you probably know this from talking to others in manufacturing but there aren't a lot of people that know how to fix really old equipment that's all custom made so that was I had to replace maintenance as well but most of my time would be spent basically running the business because the remaining nine employees are all either making you know making the film on the Extrusion side or they're using the back converters and taking that film and converting it into back so any customer emails any customer calls I was doing all of that so just you know I bought myself a job and I I think they they wanted someone that would be okay with that and these other nine employees or all of the other employees Ben they were all working as kind of on the line none of them were doing any of the management you were going to take all customer facing all management all sales all of that correct I kind of be honest I kind of like that because it means more control for me but obviously a lot for me to learn as well um because I was like this is great I'll learn how to do all this they say when you buy a business with a million dollars of SD at that level there's there's you know one of the appealing aspects of that of that kind of threshold is that there's a management layer or or likely a management layer guess not corre in your case nope nope I didn't check that box yeah all right Ben well let let's hear anything to say about the the deal process or can we hop in because I really want people to hear your story yeah the deal process I'll just say like you know when you have a broker that's a real broker this this this Philadelphia based broker um I'll just say the names I think they're fantastic Benjamin Ross the Benjamin Ross group Mike Meyer there he's he's topnotch in this Tri seat area they they sell about 90 plus% of the maybe higher I might I forgot what's formally on their website so they might be offended but um I think most Brokers only sell like less than 20% of listings actually get sold and that's true at least in the tri- state area because I see a lot of businesses on Biz by sell that I saw during my search that are still listed yeah um but they they um pre-approve everything they reject most of the business they look at they won't really do um retail at all um and they make the seller get SBA approval beforehand which is not what sellers want to do because we all know what banks do they're like this is what we're willing to lend against it so when you're assuming 10% down that's obviously going to be a natural um ceiling to kind of what is of what you're going to sell it at because you have to have a bank basically sign off on it so what I would what I would say was that um my combination of being in finance and the fact that this was a SBA preapproved deal where a bank had already underwritten the business um the LOI I think was accepted in August and this closed in um at the end of October um and and this included purchase agreement they just had to underwrite me um my resume my business plan all that kind of stuff um and then um we had a lease negotiation too so that's that's a lot of wood to chop in a pretty short period of time so it closed pretty quickly so not a whole lot of talk about there because it it was pretty fast and um but I think when you had a lot of good athletes that were responsive and focused and um we were able to kind of get to the Finish Line very very quickly great so lucky there I know that's not the case for a lot of people I mean just leaving in May and finding a business and closing in October is probably not normal so I I I I it's I have a lot of empathy for friends that are searching and been looking for a year I talk to them in different geographies um my search experience is not normal so I don't want people to think it's easy it's definitely not yeah no no you're you're definitely the the exception that proves proves the rule less than basically a six-month search very unusual um correct and I but it highlights when you have a good business that's listed by the right people and the multiples right with you know numbers that match the Sim like think about it like this deal was this deal was under Loi within like 10 business days so for those that think they can do this part-time you might be missing out unless you're looking at bis by cell on a random Tuesday and can meet the owner on a Monday or a Tuesday so you know the good ones don't last that long is what I find because there's a lot of the stuff I looked at I oh they're still they're still listed and they haven't the broker still hasn't is talking about you know 2020 um tracking for 2022 so the broker hasn't even updated the numbers yeah I see those listings well Ben the the ease of your search uh you you you then paid dearly for during the transition so so regil us with the first two months of your ownership yeah I remember we're closing and again like you have to if you do this you have to have your wife on board um or your partner or whatever um because uh she had to sign the personal guarantee as well which you know it's just emotionally just not easy to do for anyone but she was there and I remember just being at the signing it was um it was like a I think a Wednesday afternoon at like 1 everyone saying grats and I I'm smiling of course trying to put a you know positive spin on everything but all I was thinking was wow I have to wake up at 2:30 tomorrow he the owner had agreed to train me for 2 months so I was like I have to literally wake up at 2:30 it's cold New Jersey at this point we have moved to New Jersey I had to wake up at 2:30 in the cold and drive from you know basically right across the Hudson River in New Jersey all the way to my factory um in Bergen County and I was like wow okay this so Ben despite the yeah despite the fact that you thought that you had kind of as you say an athlete you were a business athlete who'd been getting up and being in the office at 5:30 when this actually really hit home it was daunting to be getting up at 2:30 and 3 okay yeah so the first like month was just I was trying to stay calm but it I it was probably one of the most stressful periods of my life because again the owner's been doing this for 45 years he thinks this is all easy so I get I get to the just to kind of give you a taste I'd get there to the factory around three he'd greet me super nice guy and then we'd spend the first like you know the two and a half hours just turning on the Heats for this equipment because obviously no one else is there good luck finding you know someone making a little bit above minimum wage to come in at 4 in the morning to turn on the Heats um and it's all Frankenstein equipment a lot of it had been retrofited stuff had been added so like half the buttons on these um machines no longer even working so this isn't like new equipment like you just bring someone in you read the blueprint warranty someone you know with the polo shirt with the customer with the company Insignia comes in and fixes it like it's a complete Frankenstein of equipment and so like between 3:30 and 6:00 every morning I was literally just watching him you know take 30 45 minute intervals to turn certain buttons turn up the Heats just a little bit and basically I was going through massive just like decision fatigue just watching him for the first two and a half hours for the first week you know first two months every single day to the point where I had to videotape him every day because he was like yeah you need to write this all down you need to do this correctly otherwise you're going to destroy all this equipment and obviously I don't want to destroy this equipment but think about it three first of all I'm waking him at three and then for the first two and a half hours I'm watching him in his own way for the last 20 years turning on this Frankenstein like equipment and it was not easy to remember all this stuff you know security codes and then you turn on this and then you open this door and then you push this red button and then on this extruder you turn the Heats on but I literally was having to learn like 150 200 you know decisions before you know 6:00 in the morning and then the team would come in we told everyone there was a change um which everyone was scared about but I I I did the whole like nothing's going to change you know um I'm going to keep everything the same I'm not going to make any big Financial or compensation decisions for 6 months but literally you know there was a little bit of shock but then after a while people realized nothing was going to changeed because you know the owner was still going to be there to kind of you know train me so it was business as usual but you know the first two months like I'm dealing with like learning it and I'd actually spend the weekends rewatching the videotape that I had taken in the morning so I could write down in Excel and Word Documents what he was doing every day and I was training myself on the weekends just watching the same video over and over again so I could learn how to do it on my own and then it got to the point where I was like you know I want to press all the buttons because I need to like get this muscle memory because I'm going to be doing this for two and a half hours every morning so that was just like turn on the equipment and then the team would come in and then around you know 8 or 9:00 a.m. the emails would come in hey owner um would love to get an updated quote on a bakery bag you know 11 by4 Wicked bag uh 6in open bottom gusset 2 mil um no print um FDA clear no blocking uh please quote um updated price and give lead time and so I've just survived just like watching like you know all this Frankenstein equipment got got turned on then the eil is coming and I see one email and I'm just like I I don't even know what's being communicated to me I don't know like you know and what you agreed with a seller for the transition of of knowledge so he's meeting you at three so he's he's obviously and he's tell he's showing you this so he's he's being helpful but what what was your kind of your expectation and understanding of how much technical knowledge there was going to there was going to be to learn and how it was going to be transferred from his brain to yours he just felt like he could train me on how to like quote price everything in two months that was basically it um and when you're going through the you know diligence process you know I should have spent more time like no no let's let's let me let me you know I couldn't go in during the day because he didn't want you know the employees to know he was selling but um I should have spent more time understanding kind of what the day-to-day was like that's why I always encourage people like literally figure out what they're doing every single day but you know what I did is just like any other student like I've done my entire life I wrote down everything so you know during this process I was creating like a 30 40 page Word document okay this is what a side gusset is this is how this is what bottom seal is this is what side seal is um when it's FDA here's we either do it in house or I buy the film from here or if it's an apparel bag it's cheaper to buy recycled film because it's less expensive because recycled material in and I buy that film from this and here's the code for that film and I email this person so I basically was an intense student for like you know two months writing down everything but it was exhausting emotionally and mentally knowing that I had a two months obviously he'd be available over email for four months after that was part of the purchase agreement but I was just freaking out that I had two months to learn how to run a business that this guy had been running for like 20 years and what was your sense of how he was reacting to you as the rookie did he think you were doing a good job was he encouraging he was encouraging um but there were moments where I'd get frustrated I was like you know you got to help me out a little bit because even like understanding how to like quote stuff from a shipping perspective because I set up all the shipping myself certain customers they want you to you know ship it the best way so I'm going to different carriers online and figuring out how to ship stuff and then others you know if you're selling backs to a big you know publicly traded company guess what their their shipping costs are pretty good so they don't want you to ship the ship the the you know th000 PB pallet and then charge them for whatever you're shipping costes they'll do it themselves so then you have what we call collect and they arrange so then you know you have to call their third party broker and set it up and give me account name and set it up and I was just so every customer had like different nuances to it and I was just nothing was all of this was in his head because obviously he had been doing this for 20 years so there were like a few times when I'd get like frustrated and he wouldn't snap but he'd be like you just got to write down everything I'm just like friend I just personally guaranteed 7 figures of debt if he could be a little bit more empathetic to what I'm trying to learn in 2 months that'd be helpful but there wasn't like any real tension Ian he's a very nice guy but I think you know you have to be careful that a lot of these owners think that a lot of this stuff is transferable just like you know when I'm talking Finance stuff I'm sure like people look at this pod podcast and be like what the what was that guy talking about but I'm so fasal with it because I've been talking about for 20 years I think you know the owner had that same Dynamic like oh this is easy like this the math is simple and he's a smart guy you know this should be pretty easy for him to learn but you know when you're basically when when did you arrive at the the the owner manual the 25 to 35 35 page document that you wrote and had him sign off on tell us what that was that was that was out of necessity because I had so many of these situations where I basically wrote down I had first of all I had like an Excel spreadsheet and Word document of that was probably you know four or five pages of just how to like turn on the uh equipment and I had him sign off on and I actually created like little check boxes so I had like a little clipboard so for the last like two weeks before you know he I was completely running the business myself I was doing this okay 3:30 I do this 4:00 I do this 4:30 I do this 5:30 I do this and he would just follow me and just be like yes that's right that's right because I the way I learn I write stuff down but I also need to kind of do things and so in the same vein when um you know emails would come in I'd be like hey let me let me let me take a cut at quoting this and so in the same vein I created an Excel model because every time he'd get an email from a customer he would old school he'd print out the email he'd take out a calculator like this this is obviously a financial calculator but he had like the really old calculators and then he'd print out the email and then just start writing down like Little Numbers okay this is the cost of the film okay good okay we'll run it like this on this machine so it'll take this many labor hours and then my overheads this with rent and stuff like that and then shipping will be this we'll go online and he it was all this chicken scratch to get to a number so I created a financial model in Excel because I'm like I I'm not going to have time to do that I want to be able to create a model where it's like okay a 10x14 wicked bag and here's the the um this is the uh this is the gauge or the thickness because everything's priced on a per pound basis in the industry oh it's printed so if I get this I send it to this printer Albany New York like here's their pricing grid and how do I think about the cost of that so I created a model because basically I was sprinting write down everything and then the last two weeks before he left I was demanding that he let me kind of take the lead on responding to all the customers and the only way I could do that for myself was I was trying to create myself little cheat codes to react faster in a lot of respects so Excel I'm good at I had to kind of look at what am I good at to create tools otherwise you know if I'm just going to watch him for two months and then he leaves I'm going to be calling him every day so I basically was like listen you got it's going to slow you up but you kind of got to let me kind of take ownership for the last two or three weeks I'm going to write down this manual and by the way I need you to read this whole manual over the course of the next week and a half and make sure I'm not forgetting anything and I I was writing down freight Dynamics for customers it was very detailed because I was like otherwise guess what buddy you're going to be getting text at 3: in the morning you're going to be text at you know 6: in the morning so I kind of got him on board that um this was something that was going to be necessary otherwise the remaining you know four months where he agreed to kind of help out I was going to be annoying him non stop because I was like I'm going to figure out how to do this I have a set period of time I wish I'd you know for you to longer this uh this business sounded so in his head yes it's key man risk but it also just sounds like I mean every day there's this kind of production process yeah I mean what were there days in in the last 40 years when he was sick and and everybody couldn't come to work or do work like it just sounds so fragile yeah nobody he knew all of the the special permutation to turn on these machines so what about the you know what about that there must have been one day in the last 40 years where he got he was called in sick yeah when he was sick you know um either his brother-in-law who was the main in Sky would um start the start the Factory for the day obviously I didn't have that um or there'd be times when he would just not have the Factory open so he might manufacturing when you high fixed costs that's death you know speed is everything in this business but you're just basically trying to outr run your fixed cost every month and so Ben the pull up the P pull up pull up pull up how bad did it get psychologically emotionally did you have is this a fetal transition where I mean were there fetal position moments I mean the reg Zeller stuff's unbelievable and what what they've done is unbelievable and obviously he hit the jackpot with finding a good partner um Josh I guess on Twitter but there was a few few days when um I called my wife on the drive to work at 3:00 in the morning but she could tell I wasn't sleeping while I was like I'm sorry I might have made a huge mistake here um not that I believe in the whole you know um sunken fallacy cost I I'm I'm very happy with the pivot I feel like this was the right thing for us as a family to kind of you know um think about the next 20 years but this is this is pretty hard I mean I basically threw away not threw away that's you know a little bit uh punitive but I basically walked away from 20 years of building a very specific skill set that was that was working for me and now I'm like basically running a small manufacturing plant where I have no background except you know a desire to kind of solve for you know different things in my life which is um more control of my life more predictable hours and ability to be more present so I definitely had a few phone calls with my wife where I was like I might have made a terrible mistake I'm sorry I love you but I I don't know if I'm if this is if I can if if this is the right decision I can do this and when did it start to kind of when did you start to turn the corner on your confidence that you could do this I think the confidence came in when um and it came actually pretty quickly because there was such a Sprint right when you have eight weeks to learn everything that's just overwhelming think about that eight weeks to learn how to to do all this stuff and obviously I've tried to give some meat in terms of the speci civity in terms of the things I was dealing with like the little details like it's like oh it was a lot to learn but it's like no this is like these are the emails I was getting this is what I was doing in the morning um I think in January when it' been two weeks removed from the owner not being there and it was business as usual and my employees you were basically saying yeah it feels normal um and customers were sending stuff and I was emailing them back with quotes and they weren't saying like what is this they're like okay what's the leite time like there wasn't you know most of my customers are in their 60s I sell mostly through Distributors so they've been selling poly for 30 years 30 40 years so if I gave them a quote that made no sense they would have called me out you know I've only been in the industry for like eight weeks so if I gave them a price that wasn't correct or way off Market you know so I guess I took some comfort that you know the business was effectively still operating kind of through January so it was very scary and I tend to catastrophize at times because I just like to Ace the exam at all time so I was learning stuff for the first time it was overwhelming but I think the first time I started Comfort was like kind of the tail end of January it was like okay rents still being paid invoices are still being paid orders are still coming in order volumes are still decent and you know talking to my a lot of employees are like yeah it's kind of business as usual it feels the same how do you feel now I feel a lot better now it's a year in I can uh you know I I've definitely changed a few things but I think for the first year I basically kept everything the same um part of it's because it's been a you know difficult macro environment so some of the Investments that I wanted to do in year one didn't just didn't feel like the right time to make those Investments because I've started to develop relationships with my vendors and my customers and they're kind of telling me like listen you can hire a sales guy but your return on that in this environment is going to be effectively zero um it's just it's not has nothing to do with anything it's just you know kind of a tough air pocket for the industry so I would not recommend doing that um so some of that stuff has been delayed but at this point you know most of my C almost all my customers are like it's it's remarkable it's like it's basically the same except that you're a little bit more responsive um because one thing that I did that was different than the previous owner I created an ability for me to remote log in so I leave here 4:00 pretty much every day we close at 3:30 Fridays we close at 2 and then I pick up my daughter from preschool every day um closer to the city around 4:30 and then if any stuff comes up you know I'll I may respond to an email when I'm you know she's doing her homework which is crazy for 5-year-olds to have homework that's another conversation but you know I'm feeding her she's taking a bath or whatever I can log on and respond to an email that the previous owner may not have gotten to till 8:00 a.m. the next day so I think people have appreciated that my skill has always been being very organized and learning how to remote log in and all that kind of stuff as an outsider seeing this you know getting through The Crucible of that knowledge transfer if you can do that which you've now done it's pretty far back it's pretty far in the rearview mirror like the opportunity here I just feel like you're going to crush it because you you're you're you're bringing if you could if you could could survive that you're bringing so much energy and um you know need to prove yourself we we we know that that's that's who Ben Jasper is yeah um and uh and and just kind of B just sophistication business- mindedness I mean this is this is a classic case of somebody who was just doing the same thing robotically for decades yeah uh and you know the new energy and new pair of eyes and hunger that you represent and level of sophistication not to not to put down the seller I'm sure he was his way one thing I would I would tell i' caution Searchers and self-funded search is yeah the the golly Geo Shucks um seller who you think you can run circles around is way better than you ever could have thought because if they've been doing elaborate on that what do you what do you mean they just they just know the nuances like I can do the superficial like pricing a bag and stuff but you know the seller can talk to a customer about the different types of film and oh this is why sometimes the color is a little bit different from the printer so don't be angry because I know you ordered a specific PMS color but the reality is you're not buying these this PMS die doesn't exist these print this printer they're actually mixing it kind of like you would get you know You' mix to get a color at a a paint store for you know painting your your your your new baby room or whatever so you're always going to have fluctuations so you know when a customer is a little bit angry that a certain color is not exactly the same he was very good explaining the process of how the printer works because I don't I don't do I do very little printing in house a lot of it's outsourced because it's really hard to justify the cost of um some of these printers um they can cost 6 million dollar and then you have to buy the dies there's a lot of environmental issues and you have to hire people um as I've kind of learned about the whole supply chain for my business as I try to think about what I want to may do in the future but I think that kind of technical understanding yeah relaxes customers a little bit because again I sell mostly through Distributors B2B they're definitely taking some margin these people are like why not go Direct and I'm like I'm happy to give them five five 10% whatever the margin is because you know what my day looks like I've kind of given you a glimpse of my day looks like I don't have the time to go around and call 25 bakeries and be like H Love This Love This sourdough bread you really should be doing the specific Wicket bag with an open bottom gusset and we can do like print on it you know I just you know you need that's basically what the Distributors provide for that margin they're basically making these calls and they just have me quote it and then I'm just processing it yeah but my point is is when they get an angry Bakery customer in New England they want an answer from me the owner what can I tell this customer so they don't want to credit like help me help me educate me on the process for why this sometimes happens so that type of nuance you're just not going to get from a 40 page owner manual I can I can quote everything but that stuff's just going to take some time but to your point yeah there's clearly other strengths that I have that hopefully will acrw and help the business be way better down the road Ben you've given us a really good glimpse of what it's like to run a small manufacturing business but I want to return to these machines these Frankenstein uh and and because there's obviously exposure there vulnerability there and it's going to be hard to to to fully overcome that because it would require I guess a wholesale you know installation of new machines which probably is on the order of hundreds of thousand if not millions of dollars I don't so so talk us through now that you're inside the business how to think about it and how how a Searcher might think about it if they're looking at a manufacturing business with kind of old delicate frankensteined absolutely Mission critical machine yeah it's it's scary and it's the St that it's that part of the business that keeps me up at night but also the part of the business that makes me feel like the Barett entry to what I'm doing is very high um most of the manufacturers everything's custom made every extruder is different every bag converting machine is different everything's custom made this isn't like buying HVAC or any kind of standardized um um you know Machinery where you can kind of have a warranty and stuff a lot of it's retrofitted or been adjusted and a lot of these uh you know machine operators are no longer in existence they're basically bankrupt um which again you can interpret that what that means for the industry but um yeah a lot of lot of parts that we buy are secondhand have been refurbished by companies that came from the manufacturers when they bank went bankrupt they created their own businesses and they just find graveyards of old machines and fix them because they have the human capital that knows to fix them and then they refurbish them and then you just retrofit and um put these parts together and so we've bought you know um temp controls on eBay you know we know which uh kind of vendors to go to to buy parts specific specifically for bag converting machines there's a few companies in the Northeast that specialize in this luckily but to your point um a lot of this is customade so you need someone who's mechanically inclined and someone that just is a problem solver and someone that knows and over time can build the network of contacts to know where to find certain things because some of the stuff has to be custom made do you have a guy that you can go to that you inherited I've gone through a few that's yeah that's probably for another podcast because that's like probably three hours right there but I'm I've been cycling through it's been hard to find um someone but um I currently have uh someone you know's he's fantastic but it's it's been really hard to find that that person but we've had I've had M you know pretty much every important machine kind of have issues but we've been been able to fix every single one so in a lot of respects I'm more much more relaxed now than I was a year ago because this was my big fear and the good news is is that with a 5,000 or 10,000 I know that's a lot of money for a lot of people um you know part fix a lot of these machines will basically operate brand new we fixed a a machine that was down for you know a few weeks and it had issues before I bought the business but we actually figured out kind of took it apart and you know put $10,000 into it and the foreman who's been there since day one said this boss this machine works better than it's ever worked in the last 20 years so it's like a building like if you maintain it and you just you know it's a lot of just stuff that's rotating it's gears and stuff there's not a lot of electrical stuff this isn't you know they're not not a lot of computer stuff so if you can kind of just take the time to figure out what exactly is issue find the right part willing to spend a little bit of money the ROI is actually very high you can spend $5 $10,000 and effectively make these machines brand new because the good news about old Machinery is it's made with a lot of heavy parts so they're well made there's not really you know plastic or hard plastic it's metal and so if you just maintain it and you just um um you know grease and consistent just like a building I don't think people buy buildings and think well I may have to replace this building and unless obviously there's some real structural issues if you maintain it these these machines should last forever which you know for for a business that's doing millions of dollars if you're spending 30 million uh not 30 million that then that'd be an interesting bankruptcy story $330,000 a year obviously they came from public markets when you're you know covering Amazon 30 million is nothing um but uh if you if you basically commit to spending $30,000 a year on parts and stuff up you know just maintaining and you have a you know maintenance guy on staff these machines should last forever and so that it's interesting so it's it's almost like assuming you can find the person the and the parts it's almost like you see them as a real strength of the business as opposed to liability again this is what freaks me out about the business too I I I wake up every day like I hope today is not the day that xy's machine goes out and we have it'll take some time but we've you know I have enough confidence team we figured out how to fix it it but at the same time it's also what keeps me what allows me to sleep at night in terms of I don't have to worry about like you know people are like oh you're used to trade internet stocks why didn't you go into e-commerce I'm like I've seen so many dead bodies in e-commerce and figuring out kind of customer acquisition costs and there's always algo changes with Amazon and Shopify and stuff I just would rather you know kind of sleep at night knowing that I have to worry about some 18-year-old that's figured out the algorithm better than me but to your point like if you were to replace we have 11 bag converters we have three extruders if you were to buy that new the replacement cost for what I have in here would probably be $4 or $5 million and then if you were to buy used equipment I don't know three four maybe three2 to3 million so let's say you have the capital and you can actually find that um the equipment good luck finding people that know how to run an extrusion machine good luck finding someone that knows how to take resin pellets melt it through the hopper through the screw and you know change the speeds to get the gauge that you want and then you know use blades to cut it and get the you know the size that you want and then you know I make bags for Nike so you know we put a resalable tape it's printed and we put resalable tape um and there's a lip on it like if you saw like how these things would do it's not the most sophisticated but it's clear you have to have been doing this for many many years to know how to put recable tape on a bag on a lip that Nike used to to ship you know Sportsman movila so the be to in for the bags that we make because I'm not making commoditized garbage liners I'm not making single use grocery bags it's really hard because not only do you need the equipment you need to have people that know how to use the equipment so in a lot of respects the part that keeps me up a night is actually one of the strengths of the business to your point because someone trying to come into this business good luck it's going to be near impossible to talk about those people and these special skills and understanding the Machinery doing these really C kind of custom back jobs the broker thought that you would get along with the team you thought one of the they perceived you as a strong buyer because you would get along with the team um how has that gone do you think that you are getting along with the team tell and and you know these are these are manufacturing blueco collar jobs and you were coming from the whitest of White Collar land uh so how has that been yeah I was nervous because obviously the seller was a as you can imagine a Caucasian man you know about to turn 60 that had been in the plastic bag manufacturing business 45 and then you look at me I mean I'm even wearing the freaking Wall Street you know bro vest today it's cold here in New go your vest baby and uh um yeah should be on CNBC talking about my latest thoughts on the Apple quarter um but uh but I was worried about it too and um um and uh it's gone really well like I have a really good team so um in terms of the transition with the employees um I don't know what normally happens with these small deals um but I had nine employees that that were here prior the two foremen um had been with the company since day one when the company was uh created in I think 2002 and every employee has stayed and we're now a year removed from closing which I don't know is normal I would guess probably not yeah but you know probably one of the strengths that I feel about the company and why I have such a high bar for anyone new that we bring in is that I'm really proud of the team I've never you know the people that say like oh people you know if you want to make a lot of money all you have to do is work hard I've never met a harder working group of individuals and you know luck plays a lot in terms of life and but these people are super ethical we all get along we're all team players we all pitch in if you know you know someone's sick other people will you know pitch in and try to help meet deadlines so it's a real team environment and I've been very fortunate because uh the team has been probably the biggest positive surprise for me in terms of interacting with them Ben one thing that you had told me in the preall was um you Tred to change the start time I think from six to five who would and and it and it was a and it didn't work out so I want you to tell that story with with the the point being this is where kind of there was a bit of a cultural difference between you and your in your team yeah I don't know if it maybe cultur I don't know we can we can people can characterize it however they want I did recommend at the beginning hey why don't you guys come in instead of the bag Department coming in at 5 because they wanted everyone wanted to work 51 hours a week because in like every state you get overtime after 40 so you get time and a half so it's they have a real incentive to do that it's like you guys come in at 600 and instead of leaving at 3:30 why don't you leave at 4:30 and so they're like okay okay we'll come in at 600 but we'll still leave at 3:30 which to me like there's no mathematical model that would say you know let's change the hours and then the person would say okay I'll make less money but you know a lot of the um individuals you know they all have young families and that's super important for them and as you can imagine the tri-state area especially in certain parts of New Jersey especially as you get closer to the George Washington Bridge traffic can be a nightmare so they're just like no we have to pick up our we have to pick up our kids that's more important than you know you know an extra hour or so so if you want to do that it's fine but we're just going we have to leave at this time so in a few ways um it did frustrate me at the beginning but now I'm used to the hour so I wouldn't change it but also at the same time it made me feel a little bit less more comfortable that the the the opportunity at the company in terms of the hours probably made my employee base stickier than let's say if I had normal hours because you know these individuals are making above minimum wage but not meaningfully above it most of them been with the company for 10 to 15 years where else are you can get 51 hours a week where you can leave at 3:30 Monday through Thursday and 2 o'clock on Friday and have weekends and two paid vacations a year again one of the talking about boundaries in my previous life the industry and my business we shut down the first week of July and the last week of December so this year will be the first time I've taken two vacations since College wow so and I get that for the rest of my life again these are like little we've talked a lot of bad things but this job really has given me boundaries I'm home every night for dinner I pick up my daughter from school every day I don't work weekends and I have two vacations where my customers leave me alone and most of the industry is shut down so I could operate that week but there's no point so that was just an interesting in terms of the values of of my employee base and I knew right then like you can't you know I was like oh I'll do like profit share and stuff they just they just care about family and being at home and you can give them like cash bonuses and stuff but it just made me think okay you know the the driving shareholder value 101 for a public company and profit sharing that's probably not going to work with these individuals because that's not as tangible as I need to be able to pick up my daughter every day at this time because my wife you know she she has to go to work at this time she might work the night shift at the hospital yeah and so I've had to learn how to navigate what's important for my employees and it's not you know the most intuitive thing because it's different for every single one but they've been fantastic I can't say enough about my employee base that has been without question the most positive surprise and I know that's not the case for most people that buy blueco collar jobs there's a lot of horror stories out there especially and I'm sure service businesses Etc people not showing up and you know maybe there's a beer can and you know in the car while they're driving with a company vehicle I've been very fortunate the team is I feel very grateful that the team is as good as they are that's awesome then well thank you for also sharing kind of all the benefits that that this path has afforded you the very benefits that you were hoping it would um but what about let's do some quick uh financial analysis back in your in your wheelhouse how is how is the math working out for just looking at this as an as an investor and looking at the you know the return on the money you put into it what's really amazing and God bless America just for the SBA I know some people have very strong anti- SBA with a PG and all that the personal guarantee but you know you buy this business at you know three three and a half times by definition you're going to get a unlever return without leverage if you paid all cash kind of 25 30% that's just the yield on the cash flow versus the multiple that you're paying and then you put on some leverage and you know the returns can be really nice I don't have a growth story of like iaad doubling which was your your podcast uh this morning that's an unbelievable story congratulations to him um I'm in a little bit more mature market and I don't see the population growth here in the tri-state area than you know parts of Florida and Texas which you know that's that's a lot of fun those are some fun stories to listen to but I would say the return profile and we didn't really talk about the cap structure but I went conservatively because you know I'm a guy that has never paid interest on a credit card I pay in full every month I really you know I don't own my home I've always rented um I just am not someone that likes debt I don't know why just who I am I guess and so obviously I kind of took an extreme with with the purchase of the business bus but I was buying you know an asset and solving for different things obviously but um I put in I put in close to 20% equity and then 67% SBA note and then the balance was some um fixed interest rate debt um from friends and family that was non- advertising with a bullet payment for 10 years um from their perspective the terms they gave me probably didn't age well because obviously there's been a few interest rate hikes since then but they were solving for they know me and they were solving for some years Yi and so you know it was like I'll get some yield that's that's fine I'm pretty high in the cap structure and obviously that's aged a little bit against them given what we've seen in um the interest environment but my cap structure wasn't you know 5% Equity 5% stand full standby so I my cap structure is pretty conservative I know Chad took it to a little bit more of an extreme than I did um obviously let me let me um just confirm when you say your friends and family were solving yield let me uh translate that for those who might basically you went to your friends and family and you said invest in me I'll give you it was a debt I'll give you this I'll pay you this interest rate which is hard let's call it 6% and they're like that's better than I'm getting exactly okay and they were investing in Ben they know Ben kicks ass so it seemed like a safe investment so basically you're just offering them you know lend me some money and I'll give you a I'll give you an interest rate better than you can find currently now things have changed but that's exactly right yeah yeah obviously yeah that's exactly right because I just wanted to remove some of the remove some of the amortization to reduce some of the you know that I'm building Equity obviously but you know it gave me a little more cushion to kind of have some more options from an investment perspective and so in terms of so what's it look like 14 months later 12 14 months ler it's not how I expected I don't think anyone models negative Revenue growth but that's effectively what's happened as a function of the industry um manufacturing has been challenged I think if you look at it's not as bad as the TL less than truckload um Trucking guys but those guys you know ABF just came in but you know SI sties those guys are I get probably you know three four sometimes six trucks a day so my a lot of my volume matches kind of what the the volume Trends you see from the publicly traded trucking companies it's not great despite the yellow bankruptcy which gave them a little bit of a lift um in the third quarter but manufacturing has been very challenged and it might just be you know the Northeast but you know I talked to to um my vendors who I buy film from like imflux which is in Canada they do about 100 million of revenues and I buy you know ice bag film among other type of film from them you know they're publicly traded I don't think they've reported the third quarter but business for them is probably down 20 or 30% um year-over-year um you know I have customers that come in and they like we're flat and that's them that's them flexing is that things are flat so I think there was a little bit of a CO lift but uh manufacturing has been challenged so business for for for my business it's probably down 10 or 15% but um I've managed working capital pretty tightly and um you know I've done some stuff on the cost side in terms of renegotiation with some key vendors but so cash flow is going to be or ebit is going to be down a little bit but some of that's just to for me just kind of um pre- buing a little bit of excess resin because I just don't like the the volatility of when the rail car um shows up it can be 3 to 6 weeks so i' I purpose I bought another I bought an extra 40 to $50,000 worth a resin this year just so I have some excess inventory in case the next rail car is late so that's in the numbers um so if you strip that out like EP despite revenues being down cash flow will be relatively flat and then when I look at my Equity investment I effectively will have made back all of my money in about 12 months which is a pretty good outcome so I basically worked for a year and now I own a business with no money in it um obviously I've kept it in there because I just want to maintain a a simple cap structure but I just want to highlight despite all the stress that I've gone through um in a more conservative cap structure because obviously I would I would have made more than 100% if ID put in less Equity um um but I'm just I just prefer this from a sleep at night perspective um and also I got lucky to close a search within six months of me starting it which is not normal um the financial Dynamics it's really hard to argue that hasn't been and I Own 100% of it um it's uh so far it's working out and now I'm I'm going to you know who knows what next year's going to be but now I'm starting to put some more I'm I'm actually talking to the team we're going to put some more money back into the Extrusion side to help make the machines more efficient because if you can have a machine go from 250 lbs an hour to 300 the payback on that will be significant it's like adding two or three more people so next year you know there'll be some more Capital Investments but now that I've kind of made my money back I'm I'm and what's been a tough macro environment who knows what next year holds um I have a little more Comfort to start you know making some of the Investments that I think the previous owner just didn't want to do because he was going to retire so financially it's it's really hard to argue um despite what's been a really tough operating environment from a Mac perspective I Ben what about adjusting to making seven figures a year in salary every year there's some years you make your base salary and you hope you don't get fired so there's a lot of volatility and then in the years that you have you have um you know really bad years some of that because a lot of the compensation in my old industry is deferred so then they claw back some of your deferred income from the previous years if your p&l isn't good so it's just listen I I wasag still the the salary that you're paying yourself is going to be a step down pretty significantly signicant not significantly okay great great and I probably shouldn't do that I probably shouldn't because it's the least tax effective because obviously you'd rather pay yourself distributions because you're not paying Medicare and Social Security on that when you're doing a you know salary but I'm just you know I just want to make sure the IRS knows that I'm doing the LLCs Corp correctly and I'm not playing any games so if they're listening I'm I'm paying myself a reasonable salary Ben at the top you said maybe it was naive to think buying a business would be better in in in in many ways than the life that you had under in finance why were you naive um I think I kind of went in you know Eyes Wide Open um but it's I I don't care how prepared you are just like I remember you know like the summer like the months before I started my first year as an investment banking Analyst at Morgan St I knew it was going to be hard but talking about working 100 hour weeks and hearing you know the the individuals that were a few classes above you tell you the horror stories and you just hear it and you're like I know it's going to be bad I'm going to be working non-stop and be on call and work on Christmas which I did a few times um experiencing it is is completely different because obviously not only is the you know you're right out of college you don't know anything and then you're having to like you can't leave until it's done and it's perfect and you don't have control of your time so that's mentally obviously taxing you just it's hard to know kind of how you're going to react so um naive might might be the wrong characterization but there's just no way that any previous experience that you've had can really prepare you because each sit each situation is going to be different because i' I've talked to people they're like maybe I should bring in a partner and I'm just like I don't know if I'd recommend that because you yourself you don't know how you're going to respond when you know an employee steals I've had that happen they're not you know that's that's that's another story but that's not none of the employees that were you know that's someone I brought in on the maintenance side but like you know how are you going to react to when that happens or your most important piece of equipment breaks or you know you have a $4,000 order with a pallet broken EST has broke the pallet and the customer wants a credit how are you going to react to that when the customer is calling you and once to demands like what what are you going to do about it you just don't know how you're going to react to that and so if you invite someone else you don't know how they're going it's just a lot another variable so there's just no way to prepare for it I think a lot of people have said the same thing but I try to provide as many antidotes and and stories which you do very well with your other interviews but there's just really no way to prepare for it even if you've heard all the stories and all the antidotes because I don't know if people really know themselves how they're going to react to these situations because I think I've generally acted better than I thought but definitely there appears I was like if you had told me this stuff would have happened there's no way I would have done this but I'm glad I've done it like I don't regret it there's not been a day that I'm like I kind of wish I had my old job because I feel like I'm going through this but again as we talked about earlier the power of compounding now that I've seen every major piece of equipment break down I've had employees steal I've had the rail car delayed so I had to I had to spend $20,000 worth a film to get into the into the warehouse immediately so I could meet deadlines because I didn't have resin to to melt to make uh um um you know uh the film so $20,000 that's a lot of money but I had to you know order it and get it immediately and you just you just just have to just show up every day and you got to be a problem solver you don't know what's going to happen so yeah naive is not naive is probably overstating it but my whole point is like you just I don't you don't know your no one really knows themsel how they're going to react because you've probably never experienced half the things that you can experience when you're W2 employee you have a lot of control but the one thing I've the one big muscle that I've had to develop is that every day I'm putting out a fire I'm a fireman effect um effectively and I've had to learn learn to um just tolerate bad things happening every day if you can't tolerate that and a lot of it's out of your control I'm not driving the s truck that took a shipment that's supposed to go to Delaware for some reason going down to Atlanta and then showing up a week later with half the pallet broken to my biggest customer that's not me but guess what the customer is calling me they're not calling Saia they're mad at me what what's the pro number why isn't this here oh we got it look at this picture like that's stressful so it's just small business is small business I mean how many antidotes have we all heard on online and these these wonderful you know interviews which is why I think everyone listens to them because each story is different and there's different antidotes but you just have to have the right mindset and accept it and be like what are you trying to solve for and for me it's very simple like I want to preserve the the you know the financial assets that I've created I want to create sustainable income for my family but at the same time like I know what I know what enough is and I don't need to make the money that I used to in the past even though over time I can once I pay off the debt I'll be making pretty good money right and then at that point the plan is for me to bring in a GM and basically run the whole business so in 10 years like I'm kind of just checking in every once in a while because I've trained that person like I was trained to basically run the business and I'm collecting set amount of income you know maybe that'll change maybe I'll want to grow bigger but I I don't need as I think people overestimate how much they need to be happy and at this point in my life when I look at the next 20 or 30 years I'm prioritizing time even though that sounds silly given how we talk about what time I wake up what I'm doing but I'm working 60 hours a week but that's way better than the 80 or 90 I was working in finance and I was spending time on Sundays because when you're walking on Wall Street it's really hard to do real work when you're seeing your p&l fluctuate minute by minute and you're having to prepare for earnings so um I'm walking 10 to 15,000 steps a day in the factory moving around I'm home 4:30 picking my daughter and and I have weekends with my family every weekend and I'm not working so for me what I'm solving for I solved for it good income predictable hours two vacations a year never done that before not since College think about that two vacations a year where I'm left alone I can really take off that's kind of a that's unbelievable um so I'm at a different point in my life and it's it's working for me despite some pretty scary moments yeah Ben if people want to reach out to you how how do you prefer they do that uh LinkedIn I'm pretty responsive on LinkedIn if you want to message me on that some people have found me a lot of my my old Finance people have reached out via that um but yeah LinkedIn is the best way to reach me I'm not really on social media so that's pretty much the only way you can find me I'm not on Facebook despite covering the stock since they went public um LinkedIn is the best way to go got it Ben Jasper what uh what a story what a what a transition um but as you said I think where you're sitting now you're you're you're sitting pretty I mean I think you're you you paid your dues and I think you know that the the coming years are going to be good ones for you I hope so I'm just focused on what I can control and trying to get the business in a better position and hopefully you know the macro environment improves but yeah I'm uh it's been uh it's been quite the ride and hopefully um all my OTS have uh helped people in their journey and stuff that they should be thinking about as they go through their search process because um there's this big commity community that probably existed a year ago but that whole search process that I described earlier I was pretty much doing it solo no one else was I wasn't on LinkedIn or Twitter really like listening to your I I I was brand new I was by myself so um hopefully people find this helpful and they can learn for my mistakes because I think some people would look at my my story and be like pass you know that's not for me that's perfectly fine so um hopefully they can learn and avoid some of the stuff that they don't like about my story but you know uh hopefully that was helpful so I appreciate it it's been your your content's been very valuable and I learned stuff even though I've gone through it I learn stuff every time I listen to one of your um interviews at at 3:00 a.m. in the morning one of the very first people looking at the YouTube video I'm usually one of the first 13 views um when it hits at uh 3:00 a.m. on the East Coast uh yeah midnight Pacific Time now whenever I I get those YouTube videos up there I think Ben's going to be watching this you know in the dead middle of the night it live yeah Chad was like you watch them I was like yeah I love watching them you know when I'm like you know I'm warming up the plant in the morning Will Smith is keeping me in is keeping me company when I'm here by myself people show up at 5:00 I'm here by myself in a dark Factory by myself I need I need company so yeah well well what to see how how you react to your own episode when it's you and me talking and you're watching Scared I know Chad was nervous but I think he was okay with how it turned out but I appreciate the time good deal me too back at you Ben thanks a lot sir okay likewise okay I hope you enjoyed that interview make 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