Andrew Harbin, thank you for joining me today on Acquiring Minds. Thanks for having me. Andrew, you acquired an awning business in July of last year, 2021. So, you've been in the seat now for about a year. Then, you made another acquisition more recently of a franchise in the fencing business. So, we want to hear your story about acquisition entrepreneurship, how and why you decided to buy an awning business, and then why you decided to buy another business, and this time a franchise rather than an independent business, um and hear all about the contrasts there. But, start us off with some history on you, Andrew. What it what and what it was that led you to want to go out and buy a business. Okay. So, I went to school for engineering. I worked at GE in operations management roles for a little over 10 years. Um and towards the end of that career, I kind of stumbled upon the uh the kind of now famous uh thread from Brandon Loughridge on uh you know, entrepreneurship through acquisition how it's a great way to build wealth. Um and it kind of just got me thinking. I never really thought about that. I always thought of entrepreneurship as like inventing stuff or, you know, starting something from scratch, not taking something over. Um and I felt with my operations background that I would be a good candidate to step into something that was already, you know, operating well and uh and take it over and and, you know, try to grow it and optimize from there. So, um spent a few months kind of just kicking tires, reaching out to brokers, learning about the process, reading the HBR book, you know, doing stuff like that. And uh eventually found one that I was pretty interested in. Um you know, learned a lot in a month of trying to figure out how to even go about doing an LOI and all that kind of stuff. And uh and submit an LOI, I thought I was definitely going to get it and, you know, broker ghosted me for a couple weeks and came back said, "Yeah, we went with someone else." Um but going through that made me realize like that was what I really wanted to do and that's when I buckled down and really started to learn about it, joined SearchFunder, you know, consuming stuff really around the clock when I wasn't working. And uh really got into search heavily in that like kind of December, January of '20 into '21. Um searched for a few months, ended up finding this awning business uh and and liked a lot about it. And uh that was the one I ended up going with. And where are you living during all of this? So, I was in Texas at the time. We uh we'd moved to Texas for work. Um we're there for about 4 years. My wife's from Pittsburgh, I'm from Detroit. Uh we had two kids down in Texas and we're looking for a way to to get back closer to home um and you know, I was trying to decided to try to swing both at the same time. So, buy a business and move at the same time, uh which was challenging. I probably would have done it differently if I was doing it over again, but um but it worked out. And you home her home or your home? Michigan or ended up in Pittsburgh. So, yeah, I I looked and I was looking in both places, Detroit and Pittsburgh, and Pittsburgh ended up being the one that that we found the the business that fit the best and was closest and and all that kind of stuff. Okay. So, you were prepared to move to either either location. Mhm. And this uh going back to what your initial inspiration, this this thread from um Brandon Loughridge, I probably have seen it. So, um this is this is a um there are a number of threads out out there about kind of buying a business that uh have gotten a lot of traction and and a lot of attention. Um I guess this is this is a true classic and changed the trajectory of your life. So, I'll make sure to dig it up and link to it. Um but it was a good one, huh? Yeah. Yeah, it was good and it's funny looking at you know, it sounds easy in the thread and I thought it was going to be easy and it's a lot harder and I think you know, all the new threads kind of they're the same, right? They make they dumb it down, make it easy to consume and and then you figure out that it's a lot harder than it sounds, but um but yeah, it's a good way to get people exposed to, you know, this side of the world. And what what is it about these threads that they oversell? What what's what is what is so much harder than um than sold? I wouldn't say and I wouldn't necessarily say it's like overselling. It's just like, you know, when you think about, hey, I'm going to go buy a business and get a loan to do it, right? I think at least I thought of it more like buying a house, right? Like where that can be challenging, too, but you go, you make an offer and then if the offer's accepted, you just close and buy the house, right? You don't go through these purchase agreement, you know, all these lawyer stuff. Um so, that was I think the more challenging part and then also, you know, the listings aren't as clean as as a house, right? The you know, you get a lot of garbage listings, brokers don't call you back, you know, there's a lot of challenges. Sure. Interesting that actually having gone through one of these broken deals um yourself, that that actually made you you were like it was after that frankly negative experience that you were like, no, I I'm doubling down on this. I want this. So so even though it was kind of a negative outcome, it it you felt really that much more drawn to the possibility? Yeah, I think it was like the effort that went into learning how to even like put some of this stuff together and then just, you know, getting my my wife and I actually sat and talked about it at that point. Before it was just me kind of like kicking tires and us randomly talking about it as like a, you know, an idea and it became more real when I was talking about, okay, we're going to go take a I think this was like a $3 million loan and you know, we're going to go do all this stuff and agreed that yeah, we're willing to do it when I submitted the offer and then, you know, didn't go through, but we had, you know, spent a lot of time thinking and talking about it and so then had decided that that was going to be the best thing for us. Sure. Yeah. It had gotten real even if it didn't happen. Like it's psychologically and logistically prepared for it actually becoming real. Um, and can you tell us what that business was? Just high level. Yeah, it was like a you know, kind of your classic like CNC machining type business where they do um, you know, they did a lot of work for automotive suppliers. So, um, mostly short runs, prototype stuff. Uh, not necessarily, you know, big production runs, but very, you know, high velocity, right? And you know, if they need they need a tool, let's say, turn around in a couple weeks, they did stuff like that. Mhm. So, good for your particular skill set. Yeah, it was really great for my background. I really liked that one. But Okay. So, the awning business shows up after this first disappointment. And uh, did you say where you found it? Was that through BizBuySell or broker or what? Yeah, it was a BizBuySell. This one was for sale by owner. Um, very vaguely written up in the description. I think it was written up as like a light manufacturing something or another. Um, with you know, it said like fabrication in there. So, I don't know what I was picturing when I reached out about it, but um, when I ended up talking to the owner on the phone, it was awnings and and my in-laws that live in Pittsburgh had awnings on their home and I used to help my father-in-law take his up and down um, in the spring and fall and and just hearing about this business like, well, I I can see why people would pay someone to do that cuz it's not a uh, an enjoyable thing to do. So, that's where I got the Even though your father-in-law actually didn't pay somebody to do it. He did it himself. Right. Yeah, he had small ones though, too. And uh, so, yeah. Um, but it ended up being a good business, pretty profitable, you know, very niche, um, and something I hadn't really thought of service businesses when I first started searching and then as I got more um, kind of acclimated in the SMB world and you know, following guys like John Wilson, and you know, some of these guys uh that you know, you could see the benefits of having a service business. So, this was a good mix of had some service, but was still kind of like a manufacturing operations business, too. Mhm. Mhm. And okay, and it was so it was for sale by owner, so you just filled out the form on BizBuySell, and and and it and it went from there. Um did Yeah. I I think you might be the first kind of for sale by owner um guest that I've had. Um how did that go? Did you have to do a lot, you know, cuz a lot of the the work that brokers do is, you know, setting expectations and all of that. Um did this owner have realistic expect- expectations at the get-go, or what was that like? Yeah, I mean, it wasn't it was hard to get to the first LOI, and the first LOI ended up having its own issues, and we had to retrade after that, too. So, there was it was challenging. I had to kind of walk through how we do evaluations or whatever. I think I I you know, people talk about it a lot, how many times deal deals die, but I think I walked away from this at least twice during like the LOI phase, because we were too far apart on value. Um so, yeah, I mean, that was challenging, you know, later in the process, you know, not having uh someone that's, you know, plugged into doing deals um on the seller side involved, you know, not knowing what the market terms were for the purchase agreement. So, there was definitely challenges to working without a broker. I know brokers get a bad rep sometimes, but uh there were definitely times I wish there was a professional in the room at at certain points. It's to kind of like explain to the seller the way the world works. Right. Yeah. Yeah. And okay, and so, um can you give us any of the numbers around the business? Yeah, I give like broad numbers. Um it was doing It did about in 2020 did about a million in revenue. Um it was marketed as a little over 300k in SDE. That ended up having a PPP loan kind of hidden in it. So, it was closer to like 250. Um I was looking kind of like minimum 300. So, when it like dropped down to that level, it was hard to like not hard, but it I had to wrap my head around it. Um there were a lot of things I liked about the business at that point. So, I was able to move forward, but if I had just, you know, seen it listed as that, I might not have. Um so, So, yeah, that's So, and then I I got it for about three times SDE, so in the 750 range. Um and uh and yeah, then it's it's grown since then. We're doing we In my first year, we did 1.6 million. Um so, it's been steadily growing at like 25 to 30%. Uh I don't think we'll see that level of growth next year, but I think we'll kind of settle in or at somewhere around the two to two and a half of you know, down the road. Okay. Well, this is this is very intriguing, Andrew. Um because you you kind of had the the the best outcome of quote buying small, which is like Mhm. it it fair under your ownership, it very quickly jumped to a business doing SDEs of like, you know, what you might have what otherwise might be the ideal window and all you had to do is, you know, and then you know, and so you get all the benefit of that. You didn't need You didn't have to kind of find that. Um Right. But let me just make sure I heard the numbers correctly. So, it was doing a million in revenue when you bought it and a year later did 1.6 or two years later did 1.6? Two years. So, like the 2020 was basically the financials I bought it off of. Last year, it did 1.3. This year, it did 1.6. Awesome. Okay. Um yeah. Yeah, so 30 growing at 30%ish. That's that's great. And how old was the business? It actually So, the name the Venango Awning has been around since 1946. Can you Can you say that again slower? Venango? Venango Awning has been around since 1946. It used to be well north of Pittsburgh. In the '90s, it moved, you know, a little closer to Pittsburgh, and then the previous owner to me only had it for about 5 years, um, and he had kind of grown it from It was I would say a very lifestyle business before he took it over, and you know, it still kind of was. But, for a lot I would say a long time, it was more in like the 400k revenue range, and then he grew it over a 5-year period up to about a million. Um, and then, you know, we're still growing now. Yeah. Did that give you So, I like I would be concerned a business if for in founded in 1946 only got to, you know, 400k uh, in revenue after whatever that is, you know, 60 years or 70 70 years. 70 years, I guess, up to whatever call 2016. Um, Yeah. and uh, so that Now, you might have already answered that by maybe that that that those owners over those years just weren't super hungry about growing the business, and so maybe that can explain that away. Um, but then the fact that you had this intermediate owner, the one that you bought it from, um, who I who was probably more of an entrepreneur cuz they acquired the business with presumably kind of a growth mentality. Um, and so, you know, one of the one of the one of the appealing things about buying kind of kind of a an old-fashioned service business is that you can come in and do all the things to make it grow that the previous owner wasn't, it sounds like. But, if I'm buying it from somebody who's had it for 5 years who themselves are kind of entrepreneurial or have an investor mindset growth mindset, um, they probably will have, you know, plucked a lot of that low-hanging fruit. So, th- um, talk me through your thinking on on all of that. Okay. So, start with a little bit about the like how the awning business works. So, especially residential awning business, you need you sell the awnings, let's say, in the spring, and you have a group or you know, a group of service customers that you take down their awnings in the fall, you store them in the winter, you put them back up in the spring. So, the the owner previous to the last owner, when they took down their awnings in the fall, he went to Florida in December, came back in March, and you know, they started putting up awnings again. They weren't out trying to gain new customers, right? They would, you know, sell whatever amount they needed to sell to hit the I don't know, whatever, let's say 100k SDE that year, and you know, that was it. Um so, this owner kind of took them out of that. We started doing more of like the winter type We do like winter enclosures and things like that. Um taking on new customers, like a lot of other awning businesses still will not take on new service customers at this point. Uh a few few awning businesses went under in the you know, during COVID. And so, a lot of my And And me, too, right? I ran out of space last year. Um so, a lot of people are turning, you know, there's more demand right now for service than there are companies. So, that is where you know, it's grown, and uh and then where it can continue to grow is is we're still very small on the commercial side. Um and you know, we're probably 10 to 20% commercial customers. And I think if I grew it to 25% and did more, you know, metal and aluminum awnings, that's probably where the future growth is, not necessarily residential. Canvas is probably somewhat, you know, sat You're not going to grow significantly in the future. Okay. Okay. Great. And did you all of this kind of gross growth thesis stuff that you're explaining to me now, did you have all of that from before Did you Was that part of your your thinking going into the acquisition, or is this only with the benefit of hindsight? There's some certainly some benefit of hindsight, for sure. Um I thought that I'd, you know, step in and be able to grow commercial. I think that's been harder than I, you know, thought it might be. I think uh a lot of those commercial projects, you know, construction type stuff is very relationship-based. They use their same supplier they've using for a long time. So, getting your foot in the door on some of those big you know, my average ticket's like five grand, you know, getting your foot in the door on some of these $50,000 projects is not easy. Yeah. Um, so still trying to find my way on that. Um, and then, you know, just the growth has been residential growth has been a lot of just marketing, you know, Facebook, Google, increasing ad spend and then stuff like that. And you say you don't think there's going to be a lot of future growth in the residential side, and yet you you have grown very nicely on on your core residential business in the last year or two. Um, is that just because of the, you know, kind of post-COVID tailwinds that you think will kind of run out? I I'd be why why do you think that there's not a lot of continued residential growth ahead? one is, you know, things have kind of consolidated around handful of businesses in the Pittsburgh area, so you know, the companies that went under are are gone now. And I think the, you know, who knows, there might be another company that goes under or just closes up cuz they want to, and then that throws another thousand service customers out the door and they're looking for space. But I think a lot of the people that needed service found someone in the last 2 years, and there's not going to be as much, you know, I don't we did plus 30% service customers last year. I don't think we'll see growth like that again. I hope not. I can't take it. You can't take it. So. So so so basically one of your competitors goes out of business, the remaining players, including yourself, really feel it. There's this this great kind of like land grab for a year, customer grab for a year, and then things settle down again. So, unless that happens again, things are kind of settled out. Right. And I've only been here for a couple years, so that, you know, it could be that it continues to grow like crazy. It's just that and I don't know where they would come from at this point. Yeah. Yeah. Okay. And Andrew, you you've been touching on it, but kind of break down the awning business for us, or the residential awning business where where you play. Um you know, how much how much revenue is from breakdown where the all the revenue comes from. Is this sounds like it's kind of recurring recurring-ish? Um yeah, so let's talk talk talk talk us through kind of how the revenue works first and then we'll get into like do you have to make this stuff and so on. So, revenue first. So, a quarter of our revenue is just service. So, um very heavily in October and April we you know, we take down the awnings. We get half of the service revenue when we take them down. We get half of it when we put them back up. And that's you know, grown to 3 to 400,000 a year in just you know, going out taking awnings down, storing them, putting them back up in the spring. Um half is probably you know, I'd say residential canvas is what I'd call it. So, um that's a mixture between of those service customers, you know, and another nice thing about that is it's this is like the reoccurring side where of my thousand service customers, a hundred of them, you know, every 10 years or so, so a hundred of them are going to get they're going to recover their current awning. So, um you know, I don't have to go build frames or anything. I just go make the canvas recover them. So, that's a a good chunk of that um residential canvas business. And then another part of it is just you know, people call and they want an awning at their house. We go make a new awning um in the spring and summer. And then like 25% ish is you know, either commercial awnings or and or aluminum awnings. So, aluminum awnings we've done that's where a lot of the growth has been since I took over. We started doing insulated aluminum awnings and it kind of looks like a fixed roof. It has a built-in gutter system. Um similar to like what a patio enclosures uh company does but without the enclosure piece. So, just kind of the roof um and you know, but it's not a fixed roof that goes into roof joists. It's It's a connects like an awning. Okay. Okay. Well, I encourage people to search some of these vocabulary words on on Google Images if you don't know if you if you're having a hard time picturing it as I am. Um okay. And great. And then in terms of the kind of the the manufacturing Well, you said in terms of the service um installing and taking down the awnings, you had just that little bit of experience doing that uh via your father-in-law. Um but that was just one awning and one type of awning. And so have you had to become an expert in um awning service? Yeah, I mean kind of, right? More of the customer service side, I think. Um you know, I you hire the guys, you get them trained, they go do the work. Um the customer service side is hard, right? When you're servicing a thousand people in a five-week window. Um you know, they get a lot of phone calls, whether you know, when are you coming, you know, they they left this screw loose, they left a tool there, you know, that So dealing with that was challenging in the spring. I didn't realize, you know, I kind of prepared for hiring all the guys, getting all the trucks ready, getting all the material. Um wasn't prepared for like the wave of phone calls that were going to come in, you know, when it's easy to say on Twitter to just answer the phone. It's crazy how hard it can be when you run a super seasonal business like that where you do so much work in that little period of time, you're touching that many people. Um What And so that was the And answer that that was dig into that. What is hard about that other than just the hours of manning the phone? Is it just like you have to keep track of so many details across a thousand clients or customers or what? Yeah, there's that, right? Like everybody that calls in, you've got to get, you know, if you need to return, you've got to get that printed out and send the crew back at some point. And then um and it's hard when you've got the crews all planned, you know, you spend all winter planning out very efficient routes. And then when you have to go back, you know, trying to figure out, "Okay, when can we go back to this area?" So, that's hard. And then, yeah, manning the phones is hard because it's such a wave for such a short period of time, right? Like, I almost need like five people answering the phone um in April, and but only have one or two people's worth of work for the rest of the year. Um so, that's hard, too. And I had brought on like a outsourced admin to just answer the phone, but they don't know you know people are talking about their awnings. They get front They used to talking to so-and-so in the office that they've been talking to for 10 years. They get frustrated that they call and they get someone, and then they call in again, and they get someone else. And um so, that I think didn't go as well as I thought it would. Um so, that I got to find something else to do in the next next spring. Yeah. Yeah. And And so, where there was no employee left over from the previous um the previous owner who did that? Or was it Was the previous owner I did have I had I had an employee um that person quit uh like the last day of March, so right as we were getting busy. Um so, I brought someone over to help me from like the shop, someone that I'd kind of cross-trained over the winter. Um and that it worked It was okay. It just like I said, it was it was crazy, and uh that phone just rang like you know, you can't even believe how how often it rang. One One person can't answer the phone all day. Um yeah, it's challenging. And so, what are you going to do next year? Or I guess I I should say it I do have two uh fall's not as bad just cuz you're more taking them down. Um and so, like people just see their awnings out there, and they're happy, right? Whereas in the spring, you know, you leave something a little loose, or the awning looks dirtier than they remember, or you know, whatever. Um there's people It's still busier in the fall, but it's not quite as busy with the complaints about random stuff. Mhm. Um so, next year, I do have two admins now. One, you know, partially or mostly supports the fence business. So, you know, they'll plug in and then I I won't go anywhere in April. Um I won't do anything new in April. Uh last year I decided to start a fence fence franchise in April. I won't do anything like that again. Um so, I I'll plug in and help and and yeah, we'll and then we'll just have better communication out front to like with the um they have now like automated text message and stuff when we're coming and and things like that. Mhm. Mhm. Okay. Um and tell me about the employees at the at the business or or or contractors or just the yeah, the human situation there. Yeah, so I have about 20 employees. Um I just in June promoted someone to be like a service manager. So, um I was up until then I was the one scheduling what the guys do each day. So, now I've been able to step out of like being that end of the business. Um so, I have a service manager. I have a shop manager. So, an employee that um he manages the four or so, you know, fluctuates people in the sole room. Um and then I have two admins that support kind of both businesses. And then on the fence side right now I have one crew that works for me. Um I have a salesperson for each business. And and then I I'm working on bringing on some subcontractors for the fence business to kind of be able to lever up as we need to. So, all of the people that you just that you just recited are full-time people. You I conspicuously absent from that was your crews. So, you don't you don't So, what how does that play in? Oh, sorry. So, the service manager, there's right now at this time of year I have like five to six people that work under him. Mhm. And then fall will probably I probably hire two more, and then in the spring I need like 10 or so people putting up awnings. Mhm. Mhm. Okay. And how does I don't think you said at the outset what margins were in the business when you acquired it, and then how do they looks under your ownership? Margins are So, it was yeah, it was 25% like SDE, I'd say. I'd say it's even a little bit north of that. I think the owner had some expensive hobbies that he ran through the business. Mhm. Um and we've stayed about steady, maybe slight a slight dip as you know, as I've I've paid more now to people, right? Wages have really increased. Um we've tried to increase prices with it, but it's hard to match it step for step. Yeah. Um so, we're still in like the 25% I'd say net range on the on the awning business. And fence is a little less. Fence is partially because, you know, on the awnings you're actually making the awning, you get to kind of get the labor advantage on that. Whereas, fence I just buy material and install it. It's hard, you know, you're mostly competing with people that all buy the same or similar material at same or similar cost. Okay. Okay. We're going to get into the fencing business here in a minute. The um so, despite your um well, how would you say that your year year in the seat has been? How do you feel about this the awning business now on it generally and this whole life path you've chosen? I feel really good. I think it's gone about as well as I could have imagined. Um I've done some of the things I wanted to do, right? The previous owner was very very very involved in details. I wanted to make sure to get out of some of those details, grow the grow the team, let them make their mistakes. Um I you know, knew I was going to do that before I came in, and I did that, and we you know, we failed at some stuff, but for you know, a year later, right? I feel a lot better about where the team is. Mhm. Uh there's still a lot of work to do, but um, but yeah, overall I feel really good about our where we're at. Certainly have no interest in going back to corporate and uh, just happy to, you know, kind of keep growing what we're doing. Given your your um, what you were educated in, was which it was engineering of what kind? Mechanical engineering. Mechanical mechanical engineering. Do you do you rely on any of that at all or or could anybody kind of come into an awning business and and with some work learn it? Yeah, you don't have to be an engineering expert. I mean, there's like I'm better probably at reading maybe like the construction drawings when I'm trying to bid a commercial job than, you know, somebody that has never looked at a blueprint or drawing before, but it's not rocket science. Uh, I'm not using calculus ever. Um, it's, you know, it's a hard business, but it's not a technically hard business. Mhm. Uh, and the things, you know, you're you're you're happy about your decision, the things that that you liked about this business, were you right about them? Yeah, for the most part. Um, you know, the the cat it's a good cash flow. They take we take deposits before we do um, before we do the work, right? So, I my deposits cover the material costs. I'm not it's not a challenging business to manage from a cash flow standpoint. Mhm. Um, working with residential customers has been more challenging than I thought it would. Um, it helps with the customer concentration piece, but uh, it's definitely a different life than I lived before where um, I don't know if I said it, but my previous role we built locomotives and we sold them to the, you know, major railroads in the US, right? So, I had like four or five customers um, that they can be hard on you, too, but you build those relationships where it it's harder when you're dealing with over a thousand customers each year. Yeah. Um, so. And consumers are generally a pain. Yeah, they can be. Yeah. All right. You know, I can I can be. I know I can be, so I know others can be, too. Right. Um and let's just before we hear about the fencing business, um let's just hear a little bit about your SDE thoughts. Um cuz you kind of as I said, you kind of bought small. Mhm. I just had another interview with somebody who started out their search looking for 500, 600, 700 SDE and the months and months went by and they eventually lowered it and they kind of swung in the opposite direction. They they looked at 100 and 200,000 SDE, like quite small. Yeah. Um and we're and and after looking at a business or two there, they were like, "No, this is too small opportunity even if I can grow it. Like the opportunity cost is just too high." Um but did settle in around kind of 300 SDE um and are looking at deals of that size, which is still smaller than, you know, some of the conventional wisdom would say you should be looking. So, um I I don't know if you have anything to add there. Um was there something about your I guess one of the things that you really hope for if you're going to buy small is that you can grow it pretty quickly. I mean, what happened to you? You grew it from, you know, 300 or a little bit lower, actually, 250 SDE up to whatever my math whatever, you know, 25% of 1.6 is is what is that you know, 400 Yeah, 400 SDE in in a couple of years. Um so, I guess what you really look for is is some opportunity to to grow a small business quickly. I don't know. Any any any thoughts on any of this? Yeah, I just say like there's a lot of opportunity you know, there's a lot of businesses are small because the owners decided to like stay at that, you know, 750 range. Like they didn't want to try to hire, buy, you know, there there's cost in the growing though, too, right? You have to buy new trucks, buy new equipment, blah blah blah blah blah. Um but yeah, I mean, I think if you're going to go the self-funded route and want to try to take it down yourself, you kind of have to unless you're independently wealthy. You kind of have to aim in that area. And then if you want to, you know, if those don't feel good to you and you want to go up upmarket, you just have to be comfortable with talking through investors and and understanding what that's going to look like and I think it's worked out well, right? I think the 3 to 400k SDE is is fine even if you don't like You don't have to be rich Jordan and and double it in year one, right? I think, you know, you can feed your family off of 300 to 400 SDE. That's for sure. Well, and just the other point about like your point about if you want to if you want to buy a larger company, you need to work with investors. In his case, it wasn't the financial piece that was the stopper. I don't I don't actually don't know if he has investors or not, but it was just that there's so many fewer of those opportunities. I mean, there's just fewer companies that are doing 700,000 SDE. So, for him it was just a question of deal flow. He just like just to find more deals, he had to lower the bar down to 4 300. I was similar, right? I started out thinking I wanted, you know, let's six same range. But, it was yeah, there are less deals in that range and probably even harder that I found, right? I was maybe impatient, maybe it would have got better over time. But, like getting brokers to get back to me and and believe that I could go take down 700, 800, you know, thousand. There's just a lot more friction at that higher level when, you know, they just didn't trust it in me or whatever, right? So, you try to build that brand and and I think, you know, probably spend a few months talking to the same brokers over and over again and if you're especially if it's regionally based like I was. Then they probably like, okay, like he's serious. But, it you know, it's hard to like harder to get to that point as opposed to one that's going more of like, you know, a million total value. Um, you know, people you know, you show people what you have in your bank account or whatever. They're like, "Okay, he can do this himself if he wants to." Um with with this being all that. So, I think that was a challenge, too, is just like I think I was just impatient. I was like and go you know, reading I think it was like Nick Hashka at the time was putting a lot of stuff out on that. Um and it was you know, that's what I I was like, "Okay, yeah, like I can drift down." And and also right around the same time I think Mike Botkin was talking about like he had just closed a deal as I was searching. And you know, just hearing like what his career background was like. I was like, "Well, I'm I'm too good, you know." It was easy then to be more humble on, "Okay, I can drift down, too, if he can do it after he did this big role that he was doing." I can do. Yeah, great. That's great. Yeah, both of those guys talked about both of those things on the pod earlier earlier Acquiring Minds guests. Very cool. Um Okay, Andrew, you have uh we've been talking around the fact that seasonality is a is a key feature of your business um and it's one of the things not to like about your business. Um and one of the ways So, so I want you to just kind of talk to that point directly. Um you know, the the hiring piece of course is going to be the big thing there. But talk to that point directly and then how acquiring a second business that kind of is countercyclical on in terms of the season where when it's active um was your solution to this pain point. Yeah, so for the service piece, um during those really four total months of the year uh when I'm doing you know, actively doing service of both takedown and put up, I need almost two times as many crews as I need during the rest of the year. So, um you know, right now heading into next spring, I'll need five to six crews during put up and then I only need two to three during like the summer season of when we're just putting up, you know, new awnings. So, what other people in my industry that, you know, do this type of service have done have either I most of them just stay at a level of, let's say, 500 or so customers, maybe 700. Um and, you know, won't if they take on new ones, they shed other ones that that are further from their, you know, central location. Um and then there's really only one competitor in my region that that has grown like significantly beyond that and they use temps in both the spring and fall, right? So, they they hire either through a temp agency or or through normal channels and then when spring, you know, come Memorial Day, they lay off like half their service workforce. Um didn't really like either one of those options, so uh what I looked at doing, you know, this spring was, okay, what are maybe some labor-intensive industries that are super busy during the summer? Um you know, I knew I knew it was going to be hard to figure out something that was going to be for summer and winter busy. Um so, I just focused on summer. And kind of honed in on fencing being one of the um labor-intensive but has a decent moat, right? There's other labor-intensive ones like like land like landscaping um that I I don't like businesses that a high school kid can just like go start doing tomorrow with you know, very little friction. Yeah. Um so, I thought this one still had some investment needed to start up. You know, there's it's more competitive than like awnings, right? There's only a handful of awning companies and there's a lot of companies that are willing to go put up fences. Mhm. But um but that's was the kind of the solution was to go, okay, let's let's see about doing a fence business. Um and, you know, thought about starting one, thought about buying one and ended up going with franchising cuz it uh to me it seemed like the best option. Yeah, go ahead. Andrew, let me pause you there cuz I want to cuz we're going to we're going to get into then deeply. Um but um, on your the thing about what you the two solutions that you said your competitors take and do, they basically like keep their, you know, get rid of customers if if they take on new customers to to kind of keep an equilibrium amount of customers that, you know, so they that they don't have to they reduce their staffing problem that way. Or option two is the temp option. Why didn't you like the temp option? It's just like like you go through all this what you know, especially the for me in my first year, right? I go through all all this effort to hire all these people and I feel like I had a and I did have a very good crew. Um, and then just to turn around and lay them all off two months later. I just I I don't cuz then you know, COVID hits or something and the government's giving away free money and then, you know, how you going to get people to walk in the door for 15 bucks an hour for two months of work. Um, so it was more of like to have a steady staff and, you know, not be doing that turn every year. Um, which you're still going to deal with turn, but hopefully not, you know, quite as bad. Yeah. Yeah. Okay. Um, and then okay. And great. Then so you were looking for a business where you could basically have you know, basically W-2 folks, bring them in as as proper full-time employees, train them on awnings and then retain their, you know, their skills year in and year out or as long as they'll stick around. Um, and then also train them on another skill, namely in this case putting up fences. Same thing, you train them you only have to train them once other than just the natural turn of the of the business. Um, and ideally you were looking for something where the it would be summer and winter um, to fill cuz those are your slow times, but winter was going to be hard cuz there's just not a lot of stuff, I guess, in in that in this world that all that happens in the winter. So just fill the summer and then you got three seasons filled for your crews and that's enough to justify W-2ing kind kind your in your crews. You find and so you so fencing is really active in the summer. Um that was great. Um and then okay. So great. So that brings us up to to why so you thought about starting one from scratch, you thought about buying one, you thought about and then doing a franchise. So walk us through um your analysis of the all those options. Yes, so starting was going to be hard for me because, you know, very busy with the awning business. Um I'd almost have to hire someone to then go start it, which maybe I could have tried to do. Uh that just seemed like something I wasn't going to be able to to pull off. Um buying I still had some scars from buying the, you know, the the awning business as far as like the process of it. It took a very long time. Uh the negotiation, the lawyers, right? I wasn't didn't wasn't really interested in going through that again yet. Um and I, you know, didn't think I would want to do franchises, right? I I think I I don't know had a bad thought about what how franchises work. And that went to SMASH in February. I met some people that have been really successful doing franchises. Um and so I think coming out of that I had opened my mind to it. Um I kind of decided I was going to spend a few weeks looking and if I found something that really was interesting, then I was I would just do it. And if not, then, you know, wait till next year and deal with, you know, potentially laying people off or whatever I was going to figure out in the summer. Um and ended up coming across this, you know, Big Jerry's Fencing franchise. Uh really liked the terms compared to some of the other non-fencing franchises that I looked at. Um and uh then met with them. They really liked, you know, the idea of what I was going to be doing, that I was kind of already engaged in the community and and had a good path to labor. Um and then I really liked what they brought to the table as far as just some of the the processes, right? I think the big one ended up being um the supplier relationships, I think would be is a would be a very challenging part of getting into something like the fence industry um cuz if you're not getting really good uh you know, wholesale deals on your material, then it's going to be hard to compete. And some of the bigger suppliers, I don't think would have talked to me had I not had that relationship. Um Yeah. That's huge. So, there's that and then like the CRM that's already there, the contract, you know, some of like the little detail type stuff that it's hard to find time to do that, you know, they kind of have full-time people always improving and always working on it. Um and it's you see, you know, stuff that I've tried and am actively working on for the awning business. It's nice to have that, you know, someone else just working on that for the fence business. Yeah. Yeah. Um the other thing about doing a franchise is that like your deal flow or deal potential would have been minuscule. I mean, you basically had would have had to find some you know, fencing business that is either for sale or I guess you probably would have done a lot of cold outreach and you know, found, you know, the you know, the potential people to talk to, potential businesses to buy in Pittsburgh doing fencing. I don't know, what? 10, 20, maybe? Um so, pretty small pool. Yeah, what's interesting is I did find one cuz I did I looked a little bit. I talked to the you know, the lawyer that that's that I worked with on my deal that's, you know, in Pittsburgh and she knew of one that um was in the area that was thinking about selling and what, you know, talked to the guy. She really liked him, really liked the location of the business and and the type of business they were doing. It was more like ornamental, not uh not just like um you know, I do vinyl, wood, all all that kind of stuff and this was like more iron. And uh but you know, we did go through the NDA and and we're like negotiating the NDA and he did he wouldn't he wouldn't show me anything cuz I I didn't want I didn't like a couple lines in the NDA and I was like, you know what? I don't want to go through this again right now of it arguing with the seller about something like that. So, I kind of stopped looking at that point. This interesting Andrew because you go through that first acquisition attempt. Uh which fails and sounds kind of painful. And yet, you know, you you you you it it leaves you feeling like no, but I do want to do this path. Then, you go through an acquisition that is successful. Things are seem to be going pretty pretty well. Um but, the acquisition process, I guess, was was painful enough for you that you're like, "No, I really you're you're really turned off from having to to do it again." Um although certainly from talking to so many people, I I understand deals are deals are um fun in theory, but actual like painful and the back and forth is just can be painful and long. So, I get it. Right. Yeah. Um okay. So, so you choose to go the franchise route and the cons of doing a franchise, you had said you like so many were kind of um closed to doing it until you you met some some really successful folks at SM Bash in Orlando where you and I also met in person for the first time. Um those cons are the usual, I assume. Tell me what those cons were and then tell me how um you've gotten over them or how or how have they actually Are they legitimate cons and you just kind of have to like, you know, deal with it, suck it up, and move on? Yeah, I mean, there's some cons, right? They like a pro is that it's less capital, you know, you're not taking out a loan. The There's no kind of PG that's going to ruin me on this fence thing. Um you know, the con being also that payment never goes away, right? You don't pay off your royalty and it stopped paying it, right? You always pay royalties. Um so, that's something that I think is hard like looking at it at first and then you just have to kind of understand what What are you getting out of that royalty? Um and I feel comfortable that what I'm getting is, you know, valuable for for what I'm paying as far as like I said earlier how they have people working on stuff. They have people always updating the contract form, you know, stuff like that. Um So, I I think that's something that you have to get and I and I think there when they they have to with their franchise disclosure say what it could cost to to start a franchise and then people look at that, let's say $150,000 to start a fence or cleaning or whatever business. They're like, "Oh, yeah, right. Yeah, I can start for $0 tomorrow with a vacuum cleaner." Um but, you know, that's what they put in there, you know, it's up to you in in most case or in some cases it's up to you of how you're going to spend that money or how much you're going to spend. Um you know, I think on mine I forget what the total it said, but one of the line items was like a brand new you know, F-450 or whatever, you know, big truck, right? $80,000 truck. Well, you don't have to go buy an $80,000 truck to start a fence business. Um so, I think some people get scared or or get turned off by some of the the documentation, but it's required that they put that documentation in there so that they're not misleading people into thinking, "Oh, it's only going to cost five grand." when really it ends up costing 80 grand or what whatever it ends up being. Interesting. Okay, so I haven't ever looked at such a document, but basically there's like a a number, a top line number that's like this is what it's going to cost to do this and then they itemize that. And they have to be conservative about that meaning like show all the possible expenses. But, if you really if you really scrutinize it, some of those things are more discretionary and you might not have to actually do. Especially if you already have some of the stuff in place cuz you have an existing business. Right. So, for me, you know, I had to pay the franchise fee. Um which, you know, that you get some training out of that. You probably don't get much out of your just your franchise fee. That's kind of just your, you know, buy-in. Um but, then you then you can either feel in the good or not good about whether your royalties are going to good stuff. And then yeah, there's usually a range on okay, this is what the total's going to cost and then you have to look into that and say, okay, do I actually have to buy all this stuff? And if you're starting from scratch, then yeah, you probably do. Um and like you said, in my case I didn't, right? I I didn't need a new building, I didn't need brand new trucks and and some stuff like that. And what about you know, for some people in the franchise, there's there's a bit of a vanity thing, which is like they you know, they want to have their own brand, um their own feeling of independence. Any thoughts on that or you is that not a big deal? Uh you know, I I guess it's maybe easier for me cuz I already have that in the other business. Right. Um so no, it it for me it made a lot of sense to plug into this one cuz it it takes a lot of the effort out of, you know, some of the things of running a business that they just have people to go do and I just go sell and put up fences and uh so yeah, I I don't feel that. Um and like I said, there's a lot of like there's a lot of people that especially people that have gotten into owning multiple franchises that have done really well that I I think they probably feel just fine about it being in someone else's name. Totally. I mean that's actually the that's that's the quote from a couple of my guests that I've interviewed and haven't aired their aired their interviews yet. Um who have acquired franchises and it's basically like you know, if I'm if I'm bringing home X dollars a year, I can I can get over the fact that it's not you know, it's not my name on the brand. It's so lucrative. Um Andrew, when did you when did you sign on the dotted line with the franchise? What month was that? It was I want to say mid early April cuz then I went down for training in like late April um and then we started advertising and like selling in like mid-May. And mid-May. So you were really trying to hit it for this summer. Trying to get this whole Yep. Yep. And and have you did you? Has it solved the problem? Yeah, uh June was like crazy. Um like I don't know it's almost growing too fast. I got nervous. Uh but it yeah, we're just kind of settling into um I'd say about 50k revenue per month this year. And then we still you know pretty limited on reviews for our area yet cuz it's a brand new franchise to our area. Um and I just leased the new building. So like it didn't have a location either. It's like a service location type thing. So I think as you know we get into next year we have some more reviews and an actual service location. Um I think that can grow towards a million in revenue business. Um In the second year? No. Third year? That would be a great year. Um yeah, I think it would like I would say probably a year from now it'll probably be like on that you know monthly you know path and then yeah, probably the third year. Um I think it could get there. That's remarkable. And and and and you're already on a run rate for $600,000 a year. At 50 at 50 grand a month is $600,000 a year. A little less cuz it'll be you know same thing there's some seasonality to it. So it's probably like a I'd say about a half million in the first year-ish. Wow. That's that's really um that's really fast growth. So uh you know your case is is is unusual cuz you're you're you know you're you're plugging your your seasonal gaps in with this business. So it's a little different. But do you now that you have insight into both very independent service businesses and and franchise service businesses for somebody out there who doesn't have any businesses and is considering their first acquisition, do you have any um does your taste lean one way or the other in terms of what what you'd recommend for them? Um I you know the awning business is certainly higher margin. It's harder it's a harder business in that everything's very custom. Uh you know we go out I would say we're still at over 10% of our you know new awnings that go out have to come back to make some little adjustment cuz it didn't quite fit right. Um so that's challenging. Uh fence and I would say franchise in general is going to be a there's less friction on that path, right? Like you know, once you get through maybe you negotiate the uh disclosure um agreement that you sign uh a little bit, but you know, it's not going to be a bloodbath like uh like what I went through in in my acquisition. Um so I I think there can be you know, there's pros and cons to both. Um I probably wouldn't do another franchise just cuz a lot of them have you know, they say somewhere in there that you're not supposed to associate other brands with their brand, you know, that that kind of thing. So it's it's like hard to grow like a family of businesses with you know, too many franchises. And I think John Wilson has hit on that before that he looked at doing one, but you know, it integrating it in with what he was doing didn't make sense. Um so I think it's good. It's just you know, if you're doing doing it, you probably want to plan on growing like that franchise, you know, geographically as opposed to what I'm doing and growing you know, in Pittsburgh location with like you know, maybe other businesses that are somewhat related. Yeah. Yeah. And and your franchise what was it called Big Jerry's Fencing? Big Jerry's Fencing, yeah. Yeah. Um they were fine with the fact that the crew that you'd use for your Big your Big Jerry's business is also active in this other business. Yeah, like that you know, they have to like wear the Big Jerry's shirts and like the trucks have to have the the Big Jerry's you know, stuff on them when they're doing that work. But yeah, that um there's certainly nothing in there that said I can't Well, cuz a lot of you know, fencing you know, those type business a lot of them use subcontractors pretty significantly um to do the work. So, I'm one of the I'd say the few franchises that has W-2 employees doing the work. Oh, so that was probably actually they probably really like that. Mhm. Yeah. Um and what would you tell people about seasonality? I mean, um you've you've gone to this kind of elaborate these elaborate lengths to solve that problem in your business, although it seems like you've solved it pretty artfully. Um but what you know, would you would you tell somebody out there to run kicking and screaming screaming from seasonal businesses or no, it's just it's just going to be a big factor and it's something you're going to have to either deal with or address creatively? Yeah, I think you got you know, you got to understand what the cash flow looks like if you're going to have a seasonal business. Um I burned a lot of cash in December, January uh you know, last year getting ready to grow and you know, getting ready for the spring and and paying out tennis year bonuses and stuff like that. Um so, you have you know, you have to understand that, don't run out of money. And then, you know, there's good and bad about seasonal businesses like I was saying earlier, I'm not you know, moving forward, I'm not going anywhere in March, April, May, like uh that's going to be locked in and I'm going to be working long days. Um you know, no matter how many people I hire in the business, I'm going to be plugged in that business helping cuz I just know how crazy it is in those few months. Yeah. But, you know, in the summer and you know, especially the winter, right? I have a lot more flexibility now to take my kids places, you know, spend more time at home where you know, my corporate job it was just you know, 50 hours a week every week unless I was on vacation. Yeah. Um so, there's goods and bads about seasonal businesses. If if you're willing to just buckle down and and work really hard when it it is crazy, then you you don't feel bad enjoying the months where it's not as crazy. Yeah, I I I guess another way of thinking or kind of saying that is like it's really intense in high season, but then the the good news is that during the off-season, it's actually light work is quite light. So then, you know, it's you may be you dip down to even like below normal working hours. Yeah, and it feels like that, right? Especially, you know, maybe I'm I'm not working like so much less, but it feels like so much less cuz I was working so hard in the spring. So, um so yeah, like if I feel, you know, if I want to go golfing on a Friday, I don't feel bad about it at this time of year when we're not quite as crazy. Just a couple other questions for you, Andrew. So, and just learning about the fencing business a little bit, you've already told us some things. Um so, fencing, I guess, is also then seasonal seasonal. It's very high, you know, big in the big in the summer. Um is is is it a is it a business you had said that like, you know, access to materials is a big bottleneck or like competitive differentiator in in in a fencing business. Um if if somebody's out there considering buying a fencing business, what any any other tips you might share with them? Um I mean, I don't understand the labor piece, right? Like even mine, it's been more challenging to just shift, you know, people in in the fences, right? It's there's there's definitely some nuance to doing fences. Um So yeah, that's that's probably the biggest piece is is understand what the labor looks like and don't probably don't buy a one crew fence business that has labor that's been around for 20 years cuz if they leave, the you know, what are you going to do? Um So yeah, making sure that you're buying something that that there's enough staying power that, you know, if if a crew leaves or a crew lead, you know, someone like that leaves you, you're that you're able to keep operating. Um So. You had said when you you acquired the franchise that they um in late April brought you down for for training. Um how long was that training to to give us a sense of like for to basically cuz that's a a good proxy for what it would take to train somebody new on building fences. Yeah, I mean I got So my that training was like me and and my sales rep doing like office type training and then I I also brought down a crew of my guys for 2 weeks to do training. Now I was lucky in that one of the guys working for me in the awning business had had experience not like working for a fence business but in construction and had done fences and pretty like good with his hands type person. So he's my crew lead for like the W-2 guys. And cuz 2 weeks probably not enough time for you know someone who's never done stuff like that before to really learn how to do fences. So I learned a little bit that the hard way. So but there you know it took a couple months but they're starting to you know kind of getting a rhythm here of of doing the fences and then I'm working on onboarding a couple of subcontractors too just cuz I have three like W-2 employees that are doing it but I don't have anybody yet that's ready to be like a crew lead train other people. So that's a challenge is like you know when you're trying to grow if you can't split off you know you know I can't just add people at this point because I don't have anyone I don't have enough people to train them. Mhm. Yeah. Yeah. Andrew you said that you know you you never see yourself going back to to corporate life. But just to put a point on that so how as a last question how do you feel overall about this path and what what might you tell to other people considering it? Yeah I mean I feel great about it. You know there's certainly it's a different type of stress. Like my last job had times where it was pretty stressful too but when it's your you know checkbook on the line and all and all that type of stuff that's that's a different stress so you got to be ready for that. If you don't have a worse stress you're saying? It's a Yeah. It's different and it's probably I'd say it's worse right? Like It was very early in my career the last time I felt like as stressed as I did this last spring. Um So, yeah, it it it's a high stress and people on Twitter have talked about it, too. There's the mental health side of of doing this that you have to be prepared for if you haven't been like super super stressed before and and don't know how you're going to handle it. Uh you just want to think about that. Um And the stress is coming from the anxiety of failure and the fact that you have a personal guarantee or just like I've So, I know people have said that. Um I think we, you know, maybe I was lucky in that I stepped into a business that was growing to the point where like the financials had were never the or have not been in a significant issue. It's more been just like the you know, so so many things to deal with like especially in the spring and when that person quit and I you know, I'm doing job I've never done before and I'm trying to learn her job, you know, like it was just not enough hours in the day is what it seemed like. Not necessarily that we were going to completely face plant. It was just like, you know, working so much and trying to understand what we were doing. Yeah. Yeah. Yeah. Um I think I think I interrupted you, Andrew. I think you were saying on the you were saying more beyond just the stress. So, this path. Yeah, so it you know, this the stress is a challenge and um and I don't know like the it's lonely. Other people have said that, too, right? Like before in my, you know, mid-level management job, we had there was a row of us that were all similar in age and we talked, you know, went out to lunch every day, talked to each other all the time. You know, there's that's gone in this world, right? Like, you know, these you're friendly with your employees and stuff, but they're probably not your like friends or you might think they are, but they're probably not. Um so, that can be that's hard, too, right? You know, that's something that is hard to get used to and then uh, ideally, if you're going down this path, you've had roles where you've managed people before because coming into like the stress of running a business and learning how to manage people, I think would be very hard. But, I do know there's people on you know, that I've heard on your show and other stuff that have done it and then, you know, are doing really well, but I I think that would be hard. Mhm. Mhm. Yeah. And where do you see, um, like, the future? Like, 5 10 years from now? Or have you grown these two businesses a ton? Or have you acquired other small businesses? Or what now that you now that you have some experience under your belt, what what what are you what are the possibilities look for look like for your career? Yeah, I think you know, I I said uh, or I set out my goal that I to do be doing businesses that were doing 5 million in revenue in 5 years. Um, I think you know, we're on that path. Uh, I think that means not like a ton more acquisitions to get there, probably like one. Um, and that's probably not something unless, you know, opportunity really comes knocking, but probably not something I'll do in the next 9 months, but, you know, coming in the next fall, start looking at at adding on. Right now, it's probably, you know, getting the awning business on to like a smooth, uh, you know, medium growth path, not the 30% that we're at right now. And then, kind of get the fence business into really having good rhythms and processes. Mhm. And what I'm sorry, what was this $5 million goal? Can you elaborate on that? I just I don't know. I might have plucked it out of the air, but uh, I wanted I'd like to be doing 5 million in revenue between the businesses or, you know, in the 800 to 1.2 million EBITDA, uh, 5 years after my first acquisition, so 4 years from now, basically. Yeah. Well, that would be a pretty great outcome. Yeah. Good deal, Andrew. Uh, how can people get in touch with you if they have a questions? Uh they can So, I'm not super active on Twitter, but I you know, I I'm I'm on there a lot. I don't post a lot. Um so, if you DM me on Twitter, I'll respond. Uh and that that's how I talked to I'd say several people that are considering going down this path and want to talk through what it's like and you know, those kind of things. Um so, that's probably the best way to reach me and then exchange info at that point. Okay. Andrew, thanks very much for coming on. This is really really interesting and uh I look forward to watching you achieve your uh million-dollar EBITDA goal in the next few years. Uh thank you.