John Schuler welcome back to acquiring minds thanks so much will so glad to be here John your original episode aired in January 2022 so just over a year ago you had closed on your business the previous October so October 2021 and we were talking then she'd only been in the seat a couple of months it has been 14 ish months now and you're older and wiser and in a position to reflect back on some of those ideas and Impressions that you had shared with us the first time around so we're eager to hear some of these reflections but first things first John please just give us a quick refresher on the business that you bought sure so I bought a an appliance repair company um in I would call a mid-size city in South Carolina where we had seven technicians um three office staff and a part-timer plus the owner who left left the business when when he sold and so we just focus on residential appliance repair excellent and give us a sense of like size of Revenue ballpark if you could yeah they were doing about 1.2 million it had increased by 15 um every year for three years prior so it appeared to be growing at a pretty steady clip um and was somewhere between 200 and 250 sde depending on how you count it and you had moved from Virginia you'd move your whole family to kind of settle down where you where you ultimately bought there was a lot of uprooting your family to do this and also but kind of you wanted to lay Roots down in in the city where you ultimately settled right that was kind of the personal backstory yes and my wife and I are actually both from here and had moved away five years prior so this was for us it was coming back home back to our parents and our kids grandparents a lot of friends we had so it was great to relay a lot of those roots um but it was you know disruptive as any move with with kids can be yeah for sure great John well just give us the headline 14 months into this how do you feel I feel great a simple question right yeah it's easy it's easy I feel great today right now at this moment I've learned to to ride the roller coaster um I mean hourly ups and downs some days but um I've been I think the the best way to describe is the the feeling is that I have paid a great deal of tuition to this point um and have learned enough that I I actually feel really good right now like we've we can see the light at the end of the tunnel um and and so I'm really excited about the future of this company and we're and feel like we're kind of on that threshold of being um where where I'd really like to be excellent well that's that's certainly positive you refer to a roller coaster ride so it's there's been some down been some down moments some some white knuckled moments um has it been dark at times yes um yeah so when when we talked for our for an interview uh last year I think that was about halfway through you know what I kind of now think of as a honeymoon period um where I came in on day one I explained that I wanted to keep everything the way it was that I you know bought what I thought was just a really great company and I wanted it to continue being that way um nobody quit on day one we kind of made it through that first week of jitters and then I think there was just a couple months where we were all kind of holding our breath and waiting and seeing um and uh through you know various things that were um primarily mostly out of my hands uh we we ended up losing uh almost all of our volume for really big customer that paid us really well and that was essentially wiped away 20 of our Revenue overnight so that created a ton of problems having to take on more work that was less profitable technicians commissions weren't as as high as they had gotten used to um you know were harder to cover overhead and all that and so that kind of was the a big the end of the honeymoon period which began the period of um kind of uh falling off in a lot of ways is that the effects of that big loss rippled through um the the process and the personnel and then we've been slowly building back up um since that and so you know that's why I say right now I feel really good um but it's it's been a a real process a lot of the you know stuff you see on Twitter in particular from um I think uh red Zeller has the best one about being in the fetal position in your bathroom at 2 A.M um I haven't gone fetal but I've I've shed tears it's been pretty dark at times and you don't see the the end in those days but um yeah where where we are you know a year removed from that now we're we're feeling a lot better wow John that's that's powerful um and and to just add a little bit of color to this particular detail of your journey in the appliance repair business you can get customers just calling you direct from the Internet or whatever or you can also get customers from the appliance companies them so the manufacturer who feeds you leads or feeds you more than leads custom true customers I guess and was one of those relationships that went went away correct yeah so there's there's manufacturers there's also home warranty companies um and we contract with a good many of those when I bought the business I was really excited about the high percentage of the revenue that came from these companies because they just send you work orders and you don't have to advertise and that's great um what I did not realize was that you have administrative expenses associated with communication back and forth accounts receivable they don't pay you right away and then uh they the the more business you do with them the more the bigger of a DOT you get on their radar and the more likely they are to go find another low-cost provider in your area and cut your volume um so there's a lot of risk there there's a lot of benefits as well so I don't I'm not targeting going to a hundred percent you know cash on delivery Cod jobs um but I've I have swayed much more so towards a healthier mix which may be anywhere from 50 50 to more much more Cod than warranty um so we're definitely at a healthier place now and targeting that healthier mix but um those those warranty manufacturer contracts can can be uh you know a double-edged sword yeah yeah and so is this one of those where a year later as painful as it was your you know your foundation is stronger now because you have kind of your sources of revenue are sturdier and more profitable than they were a year ago yeah well I think I mentioned at some point um this past year that you know if I had some things to do over again one is that I would focus on de-risking right from the beginning um I was I was really excited about having processes in place about um working myself out of the day-to-day as quickly as possible and building for a you know long-term future and what I think I should have been focused on was recognizing that with only a handful of technicians any one of them leaving is a huge hit to your bottom line or your top line and that is you know the same on the jobs coming in side of things any any major customer that stops giving you the volume they always have is a big risk and so um de-risking those things by um learning how to hire and train better doing better job of marketing getting all that stuff in place earlier that's the you know I would say the core of your business is something I I definitely would have done better um and sooner do you feel like you're the founded the revenue is kind of more robust the foundation of the business more robust yeah you didn't choose you didn't choose for it to go this way but maybe ultimately it's for the healthier right yeah so I guess I kind of got on that train to say So eventually we figured a lot of that out so right now I'm far more confident that I can find and hire and train technicians um in a shorter amount of time um our Revenue mix is a lot healthier and I'm still working on that it's it's so tough to to just learn all that from scratch but um but it's better than it was and so we've really done a lot for those two primary categories but then so many other pieces of our business that I probably shouldn't have focused on right away but at some point you do need to do so a lot of operational improvements and just the small things like which you know which Tech products are you using um and what are your what what Sops are you going to take time to write down and refine we've improved so much of that that it's just it's a far simpler easier business to run now than it was when I first came on well I just you you've just now kind of touched on it but I I want to bring it up explicitly you tweeted you know what would you have done differently somebody asked you what would you have done differently right during the transition and you just put it so well you said you I would have focused Less on how do I get upside and more on how do I prev prevent downside and in all of my interviews I don't think anyone has ever kind of said that as concisely it it's you know people are so focused on change and Improvement and growth which is great we all are but you know part of what makes this such a compelling path is you know you're buying a Golden Goose and you know your job is to protect the Golden Goose for your first job should be to do that and maybe people don't don't they're in their instinct is not to do that so um so maybe can can you elaborate even though you've really kind of you've already said it but maybe just emphasize that point sure so and it can be a very nuanced discussion I mean you know upside downside those can be terms that are super nebulous and and mean different things to every person in our case when I look at our mix of Revenue recognizing that I didn't run an analysis to see which of our customers uh were more profitable than others until we lost our major customer so once I did that I realized very many of these contracts we had in place were at rates that lost money on every job and that's too late to find out you know that's a that's a downside risk is that if you have a large customer and they leave you you need to do that analysis for what happens and it's not just a simple spreadsheet okay we're going to reduce this by 30 across the board um your overhead doesn't go down you know I think that's fairly simple but what the mix that you're left with needs to be analyzed and seen if you can do that um uh or remain profitable and then the the solution to that should have been recognizing these unprofitable customers and how to either make them profitable or how to get off of doing jobs for them so that we're not um we're freed up to do higher Revenue things or higher profitability things um on the other side with the technicians uh I would have spent more time building deeper relationships with them I was I think I I certainly tried to do that I did spend time with them I wasn't you know oblivious or ignoring or anything like that but recognizing that oftentimes their perception of their value is more important than what their actual value is so um I've I felt like we were providing a huge value as a company but I didn't always do a good job of helping them understand and see what they had in our company and so it made it easy for them to hear uh you know different number not even necessarily hire just a different number at a different company and look at switching when I felt like they really genuinely would have been better off staying with us so I would have spent a lot more time doing that and instead of thinking about how can we um uh grow more so that I can hire more technicians and hopefully I can just spend just enough time on these existing technicians to make sure they don't leave and and in the end if I had been focused on that downside of what happens if they leave I think it would have led to me spending a lot more time and effort um ensuring that you know they they felt successful and happy at our company and and so when you when you talk about wishing that you would have spent more time and attention on the existing technicians or all your employees is that specifically kind of just positive reinforcement or because because one of the things that you often hear is like acquisition entrepreneurs when they buy the business they should really trust that the existing team knows what they're doing and and get out of their way what is the the good attention that you should have been giving them more of versus the getting in their way attention that you were probably right not to do that's a great question I think I think the good intention for me is more positive and affirmative words um I tend to to forget about that too easily yeah and then the the Practical side as well of when you know they had a complaint about the um breaks in their van or not having a tool they needed it was easy for that to get pushed to the bottom of my to-do list and I think that just showed them that that's where they were they were at the bottom of the list and that certainly didn't mean that I certainly didn't want that I didn't think that way um but looking back it's it's a lot easier to see now yeah you've gotta show very visibly um that they're at the top of the list yeah that's great what what a powerful lesson to have learned and John I just want to ask because so often in this world people are buying businesses that they don't frankly know much about the trade or anything about the trade itself um I don't think that you knew much about appliances or how to repair them when you bought your business but you have learned you had to learn quick how to hire in train texts how to just give that I know this is that's probably a very long answer to this question but try to give it a condensed version of like how do you learn how to do that when you when you yourself don't even know the trade is it just building processes within the organization where the senior guys and gals are some part of their day is available to train the new guys and gals what what is that what is that Playbook yeah I'll caveat by saying I haven't figured it out yet um but I have made some big strides from where I started and I don't think that not knowing the trade should stop somebody from acquiring a company I just think that's a risk to understand and if every single one of your technicians leaves on day one there's not a whole lot of ways around the fact that that's a pretty bad outcome um what we have done is I have been I checked the technicians in every morning so I've got um my eyeballs on every single job that we do and with the small size of the company that's possible it's not possible in a bigger company um so I have learned to pick up on patterns where there's a lack of knowledge for a particular Appliance types or something like that or how to deal with this particular customer situation and can provide a little bit of coaching on the customer service side I can provide some resources for them to go to on the technical side but for the most part it's about um focusing on or finding that the training and helping the technicians to find it themselves so in so many cases it's just it's not that anybody that does Plumbing or electrical or HVAC or appliance repair it's not that they can't be really good at it it's that they don't know where to go to look or they're in too much of a rush to do it um or nobody's ever suggested they take a couple days off the road and go to a training course so just pushing them towards those things and making the time in our schedule and making sure that their commission isn't going to take a big hit when they get training and take you know take time off the road for something like that is is the way that I'm tackling that so that we're and I'm really even not trying to get one senior Tech that all the other guys come to I'm trying to um Elevate you know every single person with to utilize their own resources and to learn to raise their hand when they don't know something and and to learn how to do it for the next time so it's a slow process it's probably not the best I'd love to hear what other folks are doing that's that's way better than that but that's that's kind of how I'm approaching it that's great John the um now one of the things that you thought seemed like a strong point of this business when you bought it was that the seller owner was only there a couple hours in the morning I think you said he was out by like 9 30 every day he had other business interests I believe I don't think he was on the golf course I think he was doing other stuff as I recall um so it wasn't that you wanted to stop working at 9 30 but you just thought that it that that suggested there was a lot of slack for you to you know not have to go in there and just be right up to your eyeballs in operations all day long because the previous owner had not been what I'm hearing from you though now is that that you you really have been very deeply involved in the operations you were forced to because this event happened but maybe but maybe you would have had to be more involved in the operations anyway even even if that hadn't happened and you said yourself like when you initially got there you were really eager to work yourself out of the day-to-day so and and yet you know you got your eyeballs in every job as you just said so so where are you what did you learn what was the truth of this actual business and where are you in that progression yeah this is kind of a multi-faceted answer probably I would say that what I found was the there there really wasn't a ton of Need for me in the day-to-day so the the check-in process from start to finish is less than an hour um and then we have a tremendous office manager that is quite capable of handling very many things but kind of similar um to the the term code debt that I I really love there was a lot of kind of operational debt to the company so yes the owner hadn't really reviewed any contracts that the company had signed for the last year or so but that meant there were a lot of bad contracts and that meant that I had somebody call us and say our contract with you and we didn't even have a copy of it and so it there were that's probably one of the simpler examples but just unraveling all of the organizational debt and the I mean simple stuff like 25 different email addresses that were all used for different purposes over the last 12 years and Phantom Google business profile listings and just things like that that just take forever and then and so that's kind of one facet of it was was that operational debt that I that I've been trying to work our way out of and another facet is the previous owner was a technician when he began so what was easy for him to just see and know by feel was impossible for me to understand and so I had to do a lot of learning I I still don't know how to fix an appliance but I'm a little better at understanding where we are in different jobs and understanding which technicians are performing better than others in more than just a number sense so I had to learn a lot about that and then the last thing was that I I think the the company didn't have any sort of Direction no no future goals or plans other than just we kind of will try hard and hope we grow some and when we get busy maybe it's time to hire a technician um so I I came in and and um just personally I don't operate very well in a system like that so I've I've had to build I've been using kind of the entrepreneurial operating system from traction and I call it EOS light for our company because we don't really fit the mold of that but we we are using that kind of meeting Cadence and planning uh framework to ask ourselves where we want to be at the end of the year and at the end of three in ten years and then work towards the major Milestones to get there and all of that is new the the process and the goals and the working on things other than just getting the jobs done every day so it's been it hasn't been that I have jumped in I have started answering phones like the previous owner didn't I have been an extra set of hands on some jobs but for the most part it hasn't been that I have been that I've jumped into the day-to-day of fixing appliances so much as the there's just been a lot to work through with the company to kind of keep it as a growing going concern and to grow it into a more sustainable company if hypothetically you didn't want to grow it you weren't you didn't have big Ambitions for the company and you invested a year year and a half even of just the transition truly you know working out the transition and kind of cleaning up the messy bits of the business do you think after all that would kind of like settle out that you actually probably could just work a couple hours a day a few hours a day and the thing would in a business would carry carry forward not grow necessarily but be okay just curious hypothetically think I think so and and I've had that thought earlier in the year when I felt like we were getting to a really good point I have that thought every now and again could I just step back if this is running well and we could keep it that way and I think I think the answer is yes but I think it would be periods where stepping back would just cause a little bit more debt to accrue in our operations would cause things to get a little bit more stale um there's just some some functions like finance and marketing that are on my shoulders I haven't asked anybody else to do much of anything with those and so I think if I kind of strip myself down to just those functions um we could probably do okay certainly wouldn't wouldn't grow interesting okay John you you did a Twitter Fred about um kind of the this is hard theme that we hear from small business buyers um and you were kind of like it's a cliche to say that this is hard I want to talk about how I have found this to be uh do you I have it in front of me here but I want to just ask you do you remember there were six things in particular you listed do any of those like immediately come to the top of your mind as as you know I guess what would be the hardest if it's what comes to mind first yeah I I think the number seven there is that I'm a complainer sometimes and I like to get online and complain so um that's uh I'm not that way in person all the time but I think what started that whole thread in my mind was how many times I've heard people say about small business that it's hard it's tough it's difficult you know it's it's not easy and every time I heard that before I got into it I just I thought well yeah that's that's fun I love a challenge I love those kinds of things and what I didn't fully appreciate was just how specific that word hard is it's it's not like you come home in the end of the day and you're physically tired um but mentally you're the same way you are as when you don't have you know the the future of a company on your back and I wanted to kind of get the point across that when when you hear somebody say something is hard that's that's an abbreviation it's a summarization of 10 or 20 or 100 very specific circumstances where you don't know how that's going to turn out so I may say you know dealing with an employee who isn't motivated to do the work is hard and that's true but the very specific part of it is that I don't know exactly how to say things to them I know it's affecting other members of the team but I'm not sure what I should say to those members of the team I know that it can't stay this way but I'm not sure how long it should stay this way or what my duty is to attempt to motivate before we you know head to the Improvement plan and eventually the firing stage or something like that so it's it's a very specific hard yeah and I don't think that's captured well when we use words like hard or difficult or whatever and I don't think that there's any way to capture any of that really well it was just something that was really on my heart that day um and then I don't know if this was a part of that one or a part of a different one but I think the other part that um that that I really remember thinking a lot about was the ability to make decisions under uh a different kind of pressure than you've ever been before with um you know the pressure of the the fear of embarrassment is a big one for me um which is you know funny that I'm getting on here telling everybody about it but uh I think it's it's helpful in a lot of ways but just the idea that you know it's easy to see a bunch of people doing a bunch of really successful things and just feel like I would go bankrupt 10 times over if I didn't ever have to tell anybody about it but the fact that people you know people would know that about me is is like a worse fear in my mind um and it and it just makes it hard to to make good decisions to make good long-term future oriented decisions that are that are for the best and and rather it it makes it really easy to make the short-term decisions to kind of um you know uh curl up and and defend the the little you've got left um to the detriment of of the the overall goal because it makes you kind of more risk-averse or because you just you feel like you need to demonstrate these little mini wins so that your audience quote unquote um sees that you're you know you're being successful yeah I I mean for me it's it's yeah that that I've got to protect this little bit so it doesn't go away that risk averse the the your sense of the risk grows and grows um and then feeling like I would for me I I would feel like an imposter to share little wins along the way without also sharing the other losses and so it can breed this sense of kind of Disconnect from the world that you see that seems to be happy and doing well and you start to feel like I can relate less and less and less um and it's it's just easy to get yourself into this bad cycle that just spirals downward um so unfortunately you know to be fair I've had tons and tons of support um from family friends and um people in our company and everywhere in between and so um you know I'm I have not had to deal with any of the worst uh you know effects of any of this kind of stuff um in terms of the extremes but it it was just as I was writing that it was just something I that I thought like you don't you don't recognize if you've never been in this situation with this kind of pressure um how how much it affects your your mindset and your thinking yeah that's so good and and the other thing that you were just talking about John the the it's hard thing I think that's really because I agree I mean I I I think it's a really subtle um but powerful distinction like what flavor of hard it is I'm kind of as as you spoke I was I was like you know running a marathon is hard um you know that that upper level class you took in college is hard but it there were parameters to that to that like there was a beginning a middle and an end there was a clear like end point or goal like you knew you were it was going to be difficult like work to get there but so the distinction I guess is like like you said I think you said like there's a lack of certainty um you're just it's it's hard and like uh maybe this won't work out hard like this really and it's also not it's also not like a marathon like you choose to run like if you fail at doing the marathon nothing bad really happens other than your pride if you fail that class in college nothing bad really happens other than your pride although hopefully you don't need it for your your requirements for your major but but whereas this is like the stakes are extremely high so there's also that level the the differentiator so anyway that's exactly right without those boundaries the the negative results can be way worse than any other type of hard and so it's it's not like running a marathon where I know if I just do the training I can do it or if I've got a ton of work on my plate even if I just stay up all night I can do it yeah it's I might stay up all night and fail and just be exhausted and failed the next day yeah yeah yeah it's like it's like a lot of things in life like you kind of feel like if you just brute force it you know you can do it um but but in this case Brute Force isn't the answer um you can't brute force your way through like an employee who's causing all kinds of problems there's no Brute Force answer to that it's yeah it's um great it's great it's great great um point that you made there John okay um we are pushing up on time so I wanna but I still have a couple things I want to ask you um this this thread you did close or maybe it was an answer to somebody's somebody who asked you a question on the thread and I quote I strongly believe I acquired the best business available at the best terms available at the right time for me and my family best business ever no way going to be a great investment eventually absolutely care to elaborate on that thought or does it speak for itself I I still agree with that and I I had all those qualifiers in there uh timing for my family you know the best available um but that that's life and I'm I'm still extremely happy to be in the spot I'm in you know I always uh or at least often you know kind of sign off on my tweets with um this is fun and it it still is I still you know in spite of all the kind of difficulty in darkness that um that I seem to some for whatever reason feel is is helpful to others in some ways um I I still can't imagine myself doing anything else I still look 10 years in the future and I've got ambitious goals and where I want to be where I want this company to be and I'm not the least bit worried about whether we're gonna make that happen or not um but that's where I am now um I wouldn't have said I was there six or eight months ago um but absolutely I think this is going to be a great investment and that that I'm really happy to be doing exactly what I'm doing that's powerful John I mean that's powerful if you feel this this that level of confidence about five ten years from now um after a really hard year I mean I think that that really kind of says it all um and I actually I noticed just to close this out here John I noticed that in your Twitter Twitter bio you say I bought a business uh plans to prepare business always searching for the next is that does that mean like literally you'd be you'd be in a position now to to do a bolt-on a second acquisition or or what it does um I we did uh what I would term a technically a bolt-on a couple months ago uh where uh it was more of an aqua higher we got two technicians in the deal um and that's been just phenomenal because of the two technicians that we got and and the timing of the way that worked out um I don't know there's been a ton of value in that business itself but it also came with that you know commensurate price and so that was I'm happy that we did that but um I'm certainly looking at uh more deals locally or you know regionally and would love to be able to do that and you know I if there was a business that came up 600 miles away tomorrow probably wouldn't be able to make that work but um but that is uh Acquisitions are part of our uh strategy and so I'm ready to to get on that today with any any uh I'll look at any deal that comes across the desk for sure John I have one more question for you just back into the weeds a little bit you know my impression I think from probably our first interview was that there's not a lot of competition in town um you have I think like a kind of a big competitor um was there any sort of sense of vulnerability I mean I guess there was poaching of your of your text but I was gonna say was there any vulnerability to your business that you that a there was a new buyer you and B that this buyer was not from the industry it was kind of complete Outsider to the trade did that how did that play out with respect to your competition your competitor honestly I don't really know okay I I didn't I I haven't seen anything visible that I would consider any sort of like direct attacks or anything like that um I think just the way it is in in our particular Market there's not a lot of need for that um there's uh it certainly tough to to grow um but I don't think that either me or I assume my my larger competitor is looking at the other one saying their customers are the ones that I need so the it I I don't I I was concerned um at the beginning that there may be something that they could do but I haven't seen that I guess um I won't share but I could think of a couple ways that you could make it painful on a person due to the industry um but I I don't know that I I I don't recall experiencing those so I'm I'm grateful for that we got a good break on that I guess John is there anything that I didn't ask you that you want to share with with people you know one thing that I've been pretty bad at sharing is even even going through these tough times there have been so many bright spots I mean I I call it a roller coaster every day my wife asked me how the day was when I get home and almost every day you know typical small business roller coaster today and I think I've been a little remiss in sharing some of those those High moments um there's just great uh people in our company that go above and beyond for each other and for customers um there's been times where we've uh been able to accomplish way more than I thought would be possible in a given day or week or something like that there have been some big wins where we've implemented a new strategy and it's worked there have been just really sweet moments with employees and uh even even customers on occasion that are going through something in their life and we're able to to be exactly what they need in that moment and so and then there's even these these uh glimpses of of business success if you will that um that we're seeing or or a a really bad thing I'm worried about that doesn't end up happening or we're able to prevent it so there's just it's a roller coaster that has these lows for sure um it just got hides too and it is just incredible um just to get to experience and be a part of that and and in some ways have that pride of of knowing that um you know you're instrumental in something really good happening in a person's life um so I don't do a good enough job sharing those little things that um that I come across every day but they're certainly there and it's it's like I said this is fun this is exactly where I want to be and it's for all the for all those reasons well that's a beautiful note to end on John thank you for saying that and I do just want uh you to know lest you feel that your you know your Twitter feed is like super negative or something that's not my impression of it and you know you're you're the this is fun guy after all I mean that's your that's your trademark so uh just keep putting that in there and no matter what you say in between we'll still get the impression that you know you're you're having a good time good good I appreciate that will um John so how do you prefer I'll I'll have links to all your stuff in the show notes but any any preference in terms of how people reach out yeah um on Twitter at fundof1 with the number one um is probably the best way DMS are open I do love uh connecting with people and and um having conversations and um love to love to help out any way I can and um provide any uh experience or realness or whatever it is that anybody's looking for help with great all right John thank you very much for coming back on thanks so much for having me well this has been fun I hope you enjoyed that interview make sure you subscribe to the acquiring minds Channel below we are now publishing twice a week so tons of new interviews and stories to come stories that will help you along your own path to acquiring a business