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 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 uh 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 law fridge on you know entrepreneurship through acquisition how is 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 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 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 month of trying to figure out how to even go about doing an Loi and all that kind of stuff and uh in submitted 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 search funder you know consuming stuff really Around the Clock when I wasn't working and really got into search heavily in that like kind of December January of 20 into 21 searched for a few months ended up finding this awning business and liked a lot about it and 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 were there for about four 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 decide it 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 we ended up in Pittsburgh so yeah 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 all that kind of stuff okay so you were prepared to move to either location and this uh going back to what your initial inspiration this this thread from um Brandon lawfridge 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 getting a lot of attention um I guess this is this is a true classic and change the trajectory of your life so yeah 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 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 but yeah it's a good way to get people exposed to you know the 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 it and I wouldn't necessarily say it's like overselling it's just like you know when you think about hey I'm gonna 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 really that can be challenging too but you go you make an offer and then if the offer is 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 you 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 get in 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 gonna go take a I think this was like a three million dollar loan and you know we're gonna 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 right 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 you know they need they need a tool let's say turn around in a couple weeks they did stuff like that 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 Biz by cell or brokered or what yeah it was a Biz by cell 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 when I ended up talking to the owner on the phone it was awnings and in 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 could see why people would pay someone to do that because it's not an enjoyable thing to do so that's right 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 and okay and so it was for sale by owner so you just filled out the form on Biz by cell 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 because a lot of the the work that Brokers do is you know setting expectations and all of that um did this owner have realistic 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 in the first Loi ended up having its own issues and we had to retrade after that too so there was it was challenging and I kind of walked through how we do valuations or whatever I think I I you know people talk about 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's 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 certain points it's too 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 and 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 I had to wrap my head around it yeah there are a lot of things I liked about the business at that point so I was able to move forward but if I 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 SD 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 and so it's been steadily growing at like 25 to 30 percent 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 you know down the road okay well this is this is very intriguing Andrew um because you you kind of had the the best outcome of quote buying small which is like it it fair under your ownership it very quickly jumped to a business doing sdes of like you know what you might what otherwise might be the ideal window and all you had to do is you know and you know and so you get all the benefit of that you didn't have to kind of find that um but right but let me just make sure I heard the numbers correctly so it was doing a million in Revenue when you bought it in a year later it did 1.6 or two years later did 1.6 two years so like the 2020 was basically the financial I bought it off of last year it did one three this year it did one six awesome okay um yeah yeah so 30 growing at 30 percent ish that's that's great and how old was the business it actually so the name the Venango awning has been around since 1940. 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 five 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 I would say a long time it was more in like the 400k revenue range and then he grew it over a five-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 for in founded in 1946 only got to you know 400k uh in Revenue after whatever that is you know 60 years or 70 years 70 years I guessed up to whatever call 2016. um yeah and uh so that now you might have already answered that by maybe 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 have this intermediate owner the one that you bought it from um who I who was probably more of an entrepreneur because 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 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 five 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 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 know you sell the awnings let's say in the spring and you have a group or a 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 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 SD that year and you know that was it um so this owner kind of took him 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 a few few owning businesses went under in the you know during covid and so a lot of my in me too right I ran out of space last year so a lot of people are turning you know there's more in demand right now for service than there are companies so that is where you know it's grown and 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 it 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 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 a lot of those commercial projects you know construction type stuff is very relationship based they use their same supplier they've been using for a long time so getting your foot in the door on some of those big you know my average tickets like five grand you know getting your foot in the door on some of these fifty thousand dollar 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 spending and stuff like that I think there's going to be a lot of future growth in the residential side and yet you've you have grown very nicely on on your core residential business in the last year or two um is that just because of you know kind of post covet Tailwinds that you think will kind of run out um why do you think that there's not a lot of yeah I think the big one is you know things have kind of Consolidated around a handful of businesses in the Pittsburgh area so you know the companies that went under are gone now and I think the you know who knows there might be another company that goes under or just closes up because 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 two 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 okay 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 your customer grab for a year and then things settle down again so unless that happens again things are kind of settled out right yeah 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 it it I don't know where they would come from at this point yeah yeah okay you've been um touching on it but kind of break down the awning business for us or the residential awning business where you play um you know how much how much revenue is from a breakdown where all the revenue comes from is this it sounds like it's kind of recurring recurring-ish um yeah so let's 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 yeah so a quarter of our revenue is just service so um very heavily in October and April we you know 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 ground to three to four hundred thousand a year and just you know going out taking downings 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 that's a mixture between of those service customers you know another nice thing about that is it's this is like the reoccurring side where of my thousand service customers 100 of them you know every 10 years or so so 100 of them are going to get they're going to recover their current awnings 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 good chunk of that residential canvas business and then another part of it is just you know people call in they want an awning at their house we go make a new awning in the spring and summer and then like 25 ish is you know either a commercial awnings or and or aluminum awning so um 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 Choice it's it's 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'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 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 right have you had to become an expert in awning service yeah I mean kind of right more 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 like 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 left this screw loose they left the tool there you know 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 and 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 and Andrew let's 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 plan you know you spend all winter planning out very efficient routes and then when you have to go back you know try and 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 to 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 from they're 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 gotta find something else to do in the next next spring yeah yeah and and so we're there was no employee left over from the previous um the previous owner who did that or was it was the previous I had an employee um that person quit 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 were it was okay it just like I said it was crazy and uh that phone just ran like you know you can't even believe how often it rained what 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 do have I should say I do have two uh Fall's not as bad just because you're more taking them down um and so like people just see their awnings not 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 are it's still busier in the fall but it's not quite as busy with the complaints about random stuff 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 last year decided to start a fence franchise in April I wouldn't do anything like that again um so I'll plug in and help and and yeah we'll and then we'll just have better communication out front too like with the um they have now like automated text message and stuff when we're coming and things like that 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 yes 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 into 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 cell 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 sales person for each business and and then 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 yeah right conspicuously absent from that was your cruise so you don't you don't so 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 and then fall will probably probably hire two more and then in the spring I need like 10 or so people putting up awnings 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's 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 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 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 fences partially because you know in the awnings you're actually making the awning you get to kind of get the labor advantage on that whereas the 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 the same or similar costs 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 your year in this seat has been how do you feel about this the awning business now on 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 I've done some of the things I wanted to do right the previous owner is 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 there's still a lot of work to do but um but yeah overall I feel really good about about 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're educated in was which it was engineering of what kind mechanical engineering um do you rely on any of that at all 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 I'm not using calculus ever um it's you know it's a hard business but it's not a technically hard business uh and the things you know 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 my deposits cover the material costs I'm not it's not a challenging business to manage from a cash flow standpoint 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's harder when you're dealing with over a thousand customers each year yeah and consumers are generally a pain yeah they can be yeah I mean you know I can't I can't be I know I can't be so I know others right um and let's just uh before we hear about the fencing business is um let's just hear a little bit about your sde thoughts um because you kind of as I said you kind of bought small 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 looked it up 100 and 200 000 sde like quite small um and and after looking at a business or two there they were like no this is too small opportunity even if I could grow it like the opportunity cost is just too high um right 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 SD and 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 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 they're there's cost in the growing though too right you have to buy new trucks buy a new equip blah blah blah um but yeah I mean I think if you're gonna go the self-funded route and want to try to take it down yourself you kind of have to unless you're independently wealthy um 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 up Market you just have to be comfortable with talking through investors and understanding what that's going to look like and um I think it's worked out well right I think the three to 400k sde is is fine even if you don't like you don't have to be rich Jordan 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 um 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 um was the stopper uh 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 SCE yeah um 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 four or three hundred I was similar right I I started out thinking I wanted you know let's see same range um 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 getting Brokers to get back to me and believe that I could go take down uh 700 800 you know a thousand there's just a lot more friction at that higher level when you know they just didn't trust that 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 um then they're probably like okay like he's serious but 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 could do this himself if he wants to um with this people and all that so I think that was a challenge too it's just like I think I was just impatient I was like and go you know reading I think it was like Nick cashback at the time was putting a lot of stuff out on that um and it was you know that's when 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 the deal as I was searching and you know just hearing like what his career background was like I was like well 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 this big role that he was doing yeah yeah right that's great yeah both of those guys talked about both of those things on the Pod early early acquiring minds guess 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 I want you to just kind of talk to to that point directly you know 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 counter cyclical 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 poor total months of the year uh when I'm doing you know actively doing service of both take down 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 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 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 a news gonna 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 don't like businesses that a high school kid can just like go start doing tomorrow with you know very little friction 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 offenses but um but that was the kind of the solution was to go okay let's let's see if I do a defense business um and you know thought about starting one thought about buying one and ended up going with franchising because it uh to me it seemed like the best option yeah go ahead Andrew let me pause you there because I wanna because we're gonna we're gonna get into that pretty deeply um but um on your the thing about what you the two solutions that you said your competitors take to 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 or you know especially for me in my first year right I go through all this effort to hire all these people and I felt 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 and just I don't because then you know the covet hits or something and the government's giving away free money and then you know how how are you gonna get people to walk in the door for 15 bucks an hour for two months of work um so yeah it was more of like to have a steady staff and you know not be doing that churn every year um which you're still going to deal with churn 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 churn of the of the business um and ideally you were looking for something where the it would be summer and winter um to fill it because those are your slow times but winter was going to be hard because there's just not a lot of stuff I guess in that in this world at all that happens in the winter so just fill the summer and then you got three seasons filled for your cruise and that's enough to justify w2ing kind of you're into all 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 out 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 all those options yeah 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 pull off um buying I still had some scars from buying the you know the awning business as far as like the process of it it took a very long time uh the negotiation the lawyers right up 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 think I I don't know had a bad thought about what how franchises work and that I went to SM bash in February met some people that have been really successful doing franchises um and so I think coming out of that it 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 I'd 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 gonna figure out in the summer 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 and 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 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 because 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 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 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 somebody in 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 because I did I looked a little bit I talked to 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 talk to the guy actually really liked them 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 that kind of stuff and this was like more iron and uh but you know we did go to the NDA and and we're like negotiating the NDA and he did he wouldn't he wouldn't show me anything because I I didn't want I didn't like a couple of lines in the NDA and I was like you know what I don't want to go through this again right now of or you know the seller about something like that so I kind of stopped looking at that point it's 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 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 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 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 or 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 there 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 stop 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 um 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 think that's something that you have to get and I think there when 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 you know I you know I get started for zero dollars 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 gonna 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 is 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 eighty thousand dollar defense business um so I think some people get scared or get turned off by 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 whatever it ends up being interesting okay so I haven't ever looked at such a document but basically there's like 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 this stuff in place because 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 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 is 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 didn't need a new building I didn't need brand new trucks and stuff 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 and a feeling of Independence um any thoughts on that are you is that not a big deal uh you know I I guess it's maybe easier for me because I already have that in the other business right um right so no it it for me it made a lot of sense to plug into this one because 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 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 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've 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 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 may early April because then I went down for training in like late April um and then we started advertising and like selling in like mid-may in mid-may so you were really trying to hit it for this summer trying to get this whole yeah yep and and have you did you has it solved the problem yeah uh June was like crazy um like it was 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 yes there's a brand new franchise to our area um and I just leased a 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 a natural service location um I think that can grow towards a million in Revenue business in the second year no in the third year that would be a great year um yeah I think like I would say probably a year from now it'll probably be like on that you know monthly 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 50 Grand a month is six hundred thousand a little less because 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 unusual because 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 into 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 if 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 because it didn't quite fit right um so that's challenging uh the fence and I would say franchise in general is gonna be a they're less friction on that path right like you know once you get through maybe you negotiate the disclosure um agreement that you signed uh a little bit but you know it's not going to be a bloodbath like uh like what I went through in my acquisition um so I think there can be you know there's pros and cons to both um I probably wouldn't do another franchise just because 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 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 it you know it integrating it into what 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 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 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 shirts and like the trucks have to have 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 ca well because 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 them I'd take a few franchises that has W-2 employees doing the work no so that was actually they probably really like that yeah um and what would you tell people about the 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 harmfully 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 gonna have to either deal with or address creatively yeah I think 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 paying out and your 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 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 a business I'm going to be plugged into that business healthy because I just know how crazy it is in those few months yeah but you know in the summer and especially the winter right I have a lot more flexibility now to take my kids places you know and 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 you're willing to just buckle down and work really hard when it it is crazy then you don't feel bad enjoying the months where it's not as crazy yeah I I guess another way of thinking or kind of saying that is like it's really intense in High season but then the good news is that during the off season it's actually light work is quite light so then you know it's you maybe you dip down to even like below normal working hours yeah and it feels like that right especially you know maybe I'm not working like so much less but it feels like so much less because I'm 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 seasonable seasonal it's very high you know big and big in the summer um 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 a fencing business um 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 defenses right it's there's there's definitely some Nuance 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 uh that has labor that's been around for 20 years because if they leave the you know what are you gonna do um so yeah making sure that you're buying something that that there's enough staying power that you know 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 give us a sense of like for to basically because that's 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 my sales rep um doing like office type training and then I I also brought down a crew of my guys for two 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 done fences and uh pretty like good with his hands type person um so he's my crew lead for like the W-2 guys and uh because two weeks is probably not enough time for you know someone who's never done stuff like that before to really learn how to do fences um so I learned a little bit that the hard way uh so but there you know it took a couple months but they're starting to you know kind of get in a rhythm here of doing the fences and then I'm working on onboarding a couple of subcontractors to um just because 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 to train other people um so that's a challenge is like you know when you're trying to grow if you can't split off 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 yeah yeah Andrew you said um that you know you never see yourself going back to corporate life um but uh just to put a point on that so how as the last question how do you feel uh overall about this path and what what might you tell to other people considering it yeah I mean I feel great about it um 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 that type of stuff that's that's a different stress so um you gotta be ready for that uh if you don't it's the worst stress you're saying it's a yeah uh 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's a high strength 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 don't know how you're gonna handle it uh you just want to think about that um and the stress is coming from the anxiety of failure and the fact you have a personal guarantee or just like I just so I heard people said that deal with 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 and whenever 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 you know I'm doing a 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 yeah um not necessarily that we were going to completely face plan is just like you know working so much and trying to understand what we're doing yeah yeah yeah um I think I think I interrupted you Andrew I think you were saying on the you're saying more Beyond just the stress so this path yeah so you know 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 have there's 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 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 they are doing really well but I I think that would be hard yeah and where do you see um like the future like five ten 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 are what are the possibilities look for look like for your career yeah I think you know I I said uh or I set off my goal that I to do be doing businesses that were doing five million in Revenue in five years um I think you know we're on that path 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 nine months but you know coming into next fall start looking at adding on right now it's probably you know getting the awning business onto 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 and processes and I'm sorry what was this five million dollar goal can you elaborate on that I just I don't know I might have plucked it out of there 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 five years after my first acquisition so four 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 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 in 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 million dollars in ebitda goal in the next few years yeah thank you