mike loftis thank you for joining me today on acquiring minds thanks for having me on will really appreciate it you are the owner of a commercial landscaping business in orange county southern california and your path is a little bit different than that of a typical acquiring minds guest because you discovered acquisition later after you'd already founded your business so you are actually the founder of your business but once you learned about acquisition as a path for growth there was no going back and now you like me are an evangelist of acquisition you've made three of them to grow your firm um so a big enthusiast uh so we're gonna hear that whole story and we're to talk about the business of landscaping you're actually my fourth guest who is in that business adrian pinto mike bodkin the chen mark family all people involved in landscaping and when we first connected i actually said mike i'd love to have you on but let's push it out a little bit because i just don't want to overdo it on the landscaping but then you were such a fun conversation i was like forget it let's get you on sooner um so i'm looking forward to this um yeah let's uh let's kick it off with your you know quick bio on you and tell us how you got into the the business of landscaping and we'll take it from there sure uh first i'll be thankful that you can group me in with these three other monster awesome uh awesome people um but uh so i guess a little background on me i went to smu in dallas uh actually on a football scholarship um got my finance degree uh came back to california um and i had no idea what i wanted to do i just couldn't be in an office so i was thinking about what i like i'm like two things i like is plants and i like working outside i like i just like being outside so my dad's did real estate development and he was like hey well you know commercial landscapers you know they they do really well and that's outside all the time and you know that's about plants so i'm like okay well i don't know anything about it so let me go give it a try so i worked at a major uh landscape business here one biggest ones and that's at that time before they sold for about almost two years um driving a crew of guys uh learning the business the real nuts and bolts of the business uh on the on the ground level and i actually never even went to like any management levels um i just was like i'm out of here i got to do my own thing so i went and got truck equipment started just banged on everyone's door i was doing any job i could get my hands on uh to be honest uh first few years um and then it kind of started to get some steam built up i built it up to a little over a million dollars organically without any acquisition and i kind of randomly thought about like hey well maybe i could buy one of these companies and you know that's a that would be a way to grow and then i just kind of dove into this world that you know all of us on here talk about all the time and uh learned a lot cool well let me let me dig into a couple of the details on your founding story so when you were knocking on doors you were doing the landscaping work you were you were your own crew yeah i was the head of the crew it was kind of like one guy turned into two guys and then i kind of stepped away a little bit hired a few more guys stepped away more um and at a certain point i was not doing any of the work anymore and that was probably in in that third year i had stopped like you know bringing plants to jobs and like actually having any like touch on the business physically and i was more of a bidding and uh managing crews and kind of managing customers so in three um so it was not quick but well in three years time three years did i get that right that you went from zero to a million dollar business that you're managing and not you're working on the business not in the business as much that that seems like not that long i mean it's it's that's pretty productive three years i held ass man i i think there was two years in there i didn't take a saturday off but you know i loved it i was just like look at my friends are going to you know lake havasu and arizona and they're like hey man like come out i'm like no i'm going to make 700 tomorrow you guys don't get it like i need to make this 700 because i need to save for this next truck and i was just scrappy i was just really scrappy i bought my trucks on craigslist i was you know trying to pick up guys for these kind of jobs and we're working saturdays and just any way to put the pieces together um just to kind of get to the next step and the beginning was get the next truck and then after i made my acquisition it was like okay i gotta save the money for my next acquisition so kind of change the mindset but same scrappiness yeah i guess and it's primarily residential in these early days or a mix early days was a mix of commercial and residential um i'd say it was probably like 60 40 residential in the beginning um but i kind of took that money i was making in that and was getting out of the residential game and getting more into commercial um as time went on and when you got to a million bucks after those three years what what do you think your earnings were approximately um well i wasn't paying myself but i was effectively the manager um i'd say on a million i was doing uh i was knocking on 200 grand something like that um you know very similar to if you look at a lot of businesses in this industry that are for sale when you see like an owner operator kind of guy running it um you know so i think hovering around 200 you know actually before we get into how you discovered acquisition and then how all that unfolded let's actually to your point the point you just made let's dig into this a little bit what you hear over and over and over about um really fragmented businesses like landscaping is that the founder owner can't you know they can't get beyond a ceiling and that ceiling actually usually sits around a million bucks they can't figure out how to get to the next level um and so you got to that level and then your way out or way to crack through that ceiling was to start acquiring but do you have any thoughts on that like is it could you have grown past a million bucks to two and three million like without acquiring and and and or also do you have any thoughts on like if i'm an acquisition entrepreneur looking at all these million dollar landscaping businesses for sale where the owner hasn't figured out how to get bigger what is my opportunity as the entrepreneur to buy those businesses or should i not because they're they're just too small and you really want to buy a business that's already gotten larger than that just talk to me about all that um so i definitely think there's some shelves i guess for a better term um along that journey from you know zero employees to 54 now so there's a there's some different shelves there for sure um i guess it depends on what your strengths are well uh my strengths are not organizational i don't like computer busy work um i have no my i have no problem going and doing a bid i don't want to type it i'm a horrible typer i i'm slow um that's not it's just not how my those are not my strengths so the quickest i could get office manager the better i mean once i have an office manager i had so much more time and that time allowed me to grow the business so i paid for it you know it wasn't cheap but it i was a lot more organized and i could grow because i had that extra time and brain power just to go for it um i guess if i got any advice for somebody looking at these yeah it's definitely doable uh you know those owners do have a lot more figured out than people want to give them credit for um as far as you know the way the routes are set up you know the people that he has working there uh you know some of the trucks the equipment all that is um the goodwill that's they always say call that goodwill and they're in the routes and stuff there is definitely value there and you know i don't think that that should be like overshadowed um by an app or something like that um in the beginning stages you know when you get bigger there's different things you got to install um but there's definitely some uh ways that you can get better i mean all three acquisitions i did none of them had a website so let's start with that will i mean they're small but great business they made money no website and the guy would be like yeah i call everybody back you know every few days or so i'm just like wow like you email your input you mail your invoices like so you know get online quickbooks like you know um call people back the same day that they call you you know i always sell this to guys that are younger listen you're you know you're a wizard on your phone you know how to text every bat everybody back be on instagram all this stuff that same energy you put that into contacting your customers on your phone um and that's a you know advantage that a younger person will have over maybe someone that's older that doesn't want to mess with their phone or isn't good at responding and stuff so your lack of experience can sometimes get you know it can be supplemented by you know uh the fact you can communicate and just you know i don't know the answer yet but i'm gonna get on i'll be over there tomorrow and we'll we'll talk about it or like we'll eat i'll i'll change your invoice real quick on my phone and then i'll send it back to you right now and they'll be like oh wow like normally it would take a week for me to get you know something mailed to me right um so those are definitely advantages you know younger guys can have when they jump into a business that's around that million dollar range in revenue at least so now talk to me about your you're learning about acquisition so the way you characterize it was like it kind of occurred to you huh maybe i can buy one of these businesses now i've gotten you know i've got got some serious experience under my belt um so tell me how all that unfolded and then tell me a little bit about that first acquisition sure um i looked at a few of them um and you know for different reasons i didn't like them one was i didn't like it because the guy only had construction work and i wanted reoccurring revenue and i wanted to buy a business with a route with um you know buildings that they're sending a bill to every month not just bid or construction where you have to keep winning it there's nothing wrong with bidwar construction but it's something you got to go if you're not selling you're not making money whereas with the maintenance you can kind of maintain and have a cash flow that's pretty steady um so those for one or two of them i didn't do those because of that and then i looked at one that i really liked um but the guy didn't he thought i was too young uh he told me that to my face i'm like okay how old were you using and how old are you now i was on the first one that was i was like 26 27 okay yeah 27 30 and 31 now so cool um and then the last one i was sitting down with me it was me and another guy and the other guy owned like a um like a tire shop like but he was older and he wanted to go with the tire shop guy and i was like okay well i guess you know moffitt wasn't good enough or you're going with him and then i remember i was with my brother we're actually in hawaii together and i'm sitting on the beach i get the call from the broker i'm like why is this guy calling me hey the other guy dropped out like you still want it i'm like absolutely like i'll be back tuesday or whatever like and we're in the office next week and we kind of nailed down the details and um i was wiring money you know 30 days later so and can you can you remember any of the financial details of the business or in the transaction and how many employees and what you like so much about this one i mean was it mostly maintenance work yeah it was almost all maintenance work um i liked that it was all commercial i guess over in california at least commercial buildings are the least amount of headache in my opinion of all the building maintenance that you can do you know they they're running a no bs business in their 5 million dollar building they have no time to worry about you or or like if you're doing what you're supposed to be doing they're not going to call you they're not going to complain uh and you can just get in there do your work and send them a bill and you know they pay a bill like it's electricity or the water bill and that's just doing the basics show up mow the lawn keep everything clean and if they do have a problem just be on it but the details of the business so all three of them uh the revenues were between 500 and 800 a year okay and that range uh the first one i think was close to 600 a year um and he was like hey i'm making you know 150 grand all the ad backs seem pretty legitimate you know okay this is my personal car you know this is the gas i used um you know we put our grocery bill through there just you know the normal stuff that you see on there and i didn't have a problem with those um and you know i literally all the money i had scraped together for the previous few years that was extra i was gonna wire pretty much without like i had my working capital for everything and this nugget um and it was nerve-wracking to be honest you never you know you don't do it till you do it and i remember walking out of the bank after award the money just like oh my god like you know i just wired you know i forget what it was 150 grand or something and i'm like i don't have like a house to look at after you know like i feel like if you like paid someone you know what i mean it's not there's less it's less tangible it's just um you know you're you're buying it cash flow and once you understand buying a cash flow like truly understand that and the value it's less scary um definitely after the first one it's a lot scared a lot less scary yeah but uh yeah i wired the money and i just i just told myself i was like you know i will not mess this up for a lack of not trying and not going for it so and i just jumped in and you know made relationships with the you know eight guys or whatever that he had and uh and those i think six of the eight still work for me so uh it's kind of cool to and i think like 80 percent of the accounts or something like that i still have so and this so this would have been about four years ago for yeah foreign change and uh mike just stepping back a little bit again so when you it occurred to you this idea of acquisition was it because just kind of like oh that might be interesting or was it like oh man like it's taken me three years to get to a million bucks to get to two million bucks it's gonna take another three year like what was it was it impatience or was it just kind of like oh interesting idea or uh or what yeah like why in that moment yeah you decide to go looking to buy a business a little bit of impatience um and definitely part of it was just curiosity you know like going and checking out these businesses is um exhilarating for me i love it even if it's one that i don't end up buying i think it's an experience and i learn something every single seller i meet and broker i'm learning something and i take that with me on the other meetings um so i guess curiosity and also impatience i'm you know um not overachiever but i just really like pushing the envelope i really like going forward and just being like what's the worst that can happen you know like i i believe in what i'm doing and i'm gonna go for it cool cool so you complete this first acquisition what was the integration like that's always so this guy had this computer from like 1993 i think and that's how they were sending they're putting invoices together by like 15 minute increments and just like it was way too much going on for what really was happening so they were like trying to teach me how to do this in my mind i'm like i'm not doing any of that like i'm gonna use my online quickbooks and you know these customers they're like well they're used to getting it mail a lot of stuff i'm like well they're gonna get used to an email because i'm not doing that i'm not gonna mail out you know 60 pieces of mail every month and you know wait for the checks like that so um i that was that was the opportunity that was one of the opportunities in the business is to come in right and improve things yeah and um also you know having you know there's a few things you know i i learned that you need gas cards this guy wasn't using gas cards you got to track the trucks another thing i learned the hard way um emailing invoices is an easy one to do um letting clients be able to text you on your work phone is another one uh this guy had like a literally a flip phone and no website and he ran the whole business so i'm like okay i think i can do a little better than this guy and um you know he might have had maybe some knowledge of being an industry a long time but he didn't get with the times kind of deal so that was definitely uh it wasn't as big a deal as i thought i thought these people were like oh my god a new landscaper like i'm gonna go get quotes for new people but honestly no one cared i'm like hey i sent a little like a letter email out to everybody like hey i'm the new owner i bought this blah blah blah landscape um here's my new contact information if you need me you want to meet with me great and maybe a third of them even wanted to meet or cared like i just started sending bills and kept the guys and you know eventually i met more of the clients but i guess you care a lot more about it because you just bought it right like you just invested in it so it's like really important and to them it's like yeah we send you 562 a month like whatever you know um so i think the did you change the name um i did yeah so what i end up doing is all these are asset sales so uh i don't want over here workers comp as you know is a big deal um so i don't want to take any of those liabilities so basically everyone was fired on a friday in effect and then hired on a monday uh transfer all the truck titles um and just give them a new pl box and say hey you know all these guys are now hired at my company and um you just send the bill 30 days after that and start going great so how how how long after this acquisition closes do you feel like you got your arms around it you've integrated things you've improved the business and and you're like wow i i guess i i guess i kind of know what i'm doing here let me go out and look for a second acquisition um the first 30 days um you know you're still pretty you know like hey am i doing this right like you know am i operating the right way am i changing the right enough stuff i think a lot of people talk about that on there is like how quick do you change things or how fast or what exactly you change or you know all that stuff so i kind of figured that out on the fly um and i'd say after i figured out that um i was worrying more than i needed to um and you know you take care of the main things you're gonna be fine you know make sure like try to make sure all the guys stay try to make sure that um you know if clients need to hold you you get a hold of them um send the bills on time you know look really basic low-level stuff um and i think after the third month i was like okay no one has left all the guys are here like you know it's all good like that you know i can if i can do the first three months i can definitely finish out the year the same way um and i think i was i always looked at them ever since after that three months i haven't stopped looking at deals or meeting guys that have businesses and sit you know saying like hey when you do want to sell i'd love to talk to you and uh you know i think one of them actually was i uh i haven't actually told anybody this so i was like okay there's biz by cell right and so all it is broker saying i you know i got uh business for sale so i decided to um make my own post on biz by cell and say that i'm looking for a commercial landscape company to buy if you're a broker please call me kind of like just literally one of those and i had a guy who was selling a property management company for a family and one of the sons owned a landscape company and they were selling that at the same time and the guy was more of a higher level broker like he wouldn't normally post anything on business myself or anything and he actually found me on there and he didn't want he's like once we met one time he's like you're going to be the buyer this is you know we this is a fair price i'm you know i got bigger fish to fry over here trying to sell this big you know proper management company and you know you're just a little piece of this and you know this is easy you know done and i was like wow like i actually posted that thing on there and it actually worked um wow yeah i'm a genius i mean it was like wow and my brother was laughing he's like he's like he's like you're not getting any hits i'm like i think i'm gonna get somebody like i don't know i just had this feeling oh and wait mike but how yeah can you i've never posted anything on this by cell but i assume that the only thing that you can post is a for sale business so like when you're filling out the fields like all of it is oriented toward a broker listing a business for sale so how did you shoehorn you know the opposite you know that you're basically a buyer into the fields that they wanted you to fill out i i just kind of filled out the best i could and then i just in the description was like just talking about like what i'm looking for you know the sizes and kind of the income and all that kind of stuff and my thinking was like if you're a broker and you know normally they would just post it but also if you're if you google like landscape business selling landscape business or something like that like this myself is going to be one of the top ones coming up um so i i don't know how he just i think he just did a google search found it he's like hey well this guy let me give him a call and i talked to him for 30 minutes and he's like you're a perfect candidate let's meet next week i got all the numbers you know the guy you know i'm selling this property management company in 45 days and this is selling so like that's a he's like he i grind him like 50 grand the price and he's like that's fine let's do it and i was like okay well good thing i've been saving my money because i was i was on i thought i was gonna do one you know every 18 months or like you know in your mind you make up like when you're into the next one um which i'm sure uh like john wilson has said to himself and then like you know and mike too actually i've heard him talk about this like yeah like we'll do the next one at this time and then like the deal comes through like oh that's like a year early or you know um so you never know when these are gonna pop up i think that's i think i think that's just the the function of like you get in the business and opportunities just present themselves this is another theme that i hear over and over and over again it's like it's hard to find that first business and people you know the search process takes forever it feels like and then all of a sudden you're in the business in the industry word gets out in your little geography or in your industry that you just bought a business and all of a sudden you get all this inbound yeah and it's just like wow and this is easy all of a sudden and there's so many like unconventional cool ways that these guys are fine people and email blasts and just like all these different like you know looking at the contractor websites and like scraping the data and you know just like so many cool ways i hear people finding these offices off market deals mine just happened to be you know putting you know showing up and posting something where people normally wouldn't post it i guess um i don't know that that would work again but it worked once so that's enough for me yeah no that that's super cool that's a great little hack and you know i'm also surprised that this by cell led it through because i assume there is and maybe i'm wrong but i would have assumed that there's a human that looks at every listing that goes on biz by cell and so if they saw something like that that was so unconventional or not the way using biz by cell not the way that they attended that they would have been like sorry no maybe i mean it was years ago so i maybe bismuth cells really got a lot more juice now and they really scrape through and like delete people off but i think it was just like if you pay the fee like they just kind of put it up there like as long as it's not you know something weird so i yeah i don't know that it would work again but uh yeah it worked once so that was acquisition number two okay number two and then and so in these acquisitions aside from this clever thing that you did on posting yourself invis myself where you mostly just looking at biz by seller were you also were you starting to do any of your own like talking to brokers are there are there bro actually are there brokers who specialize in landscaping companies it's such a fragmented industry i could imagine that big not necessarily no i mean these guys are selling all kinds of stuff you know ice cream shops and just every single you know they're just taking what they can get in and they sell them i'm sure like over the years they've sold lansing companies you know um but i wouldn't say that there's brokers that just do landscaping or like route oriented stuff yeah okay so you acquire and then just tell us real quick on your third acquisition how big was that if there's a story there um the third one i it was a little far it was like an hour from me um but the guy had um the assets were really good compared to what the price he wanted so the risk was lower and it was also commercial so that kind of outweighed the distance from me problem um and it was within my range you know a few hundred grand and i i just jumped on it i felt like i my risk my downside was really low because i'm like okay worst case i lose half the customers and i got you know 120 grand worth of assets that are i know the street value of this stuff and i did the i calculated back of a napkin hey this truck this much this moe or this like i know i wouldn't if i lost i wouldn't lose a lot if that makes sense yeah um and i knew i already had office staff so i'd have to send bills out um they had kind of an account manager kind of guy there which i ended up retaining which was huge um and one little hack for that one um that i did was that main guy in the beginning was kind of you know had um thinking about leaving he didn't know and in my mind i'm like you're this is an hour away from me i need you like so i overpaid him you know i gave him like a six dollar increase i'm like you're not going anywhere in my mind i'm like down the road if it doesn't work well i'll figure it out then but i can't afford for like this this manager kind of guy to leave at least in the first you know year or so so i end up giving him like golden handcuffs and it's worked great and you end up you know you develop that relationship in that time and let him get to know you as a person and then also as a boss and he ended up liking it and um he still works for me so so you started and you had about a million bucks in revenue that you'd grown organically and then you acquired i think you said the businesses all range from 500 to 800 in revenue so let's say you've added on what another million and a half 2 million um yeah it's closer to two okay two million bucks uh so it is the business now at about three million then so i've grown another million bucks organically um so we're we're pretty close we're at about 4 million bucks a year and the organic stuff was off of uh accounts that i had bought so they had like oh we have another building you want to do it like so you kind of got that and then also off of my uh just kind of doing like very basic networking like oh like you know i know this girl who went to my friend's high school that i met at like a bar we were just talking and she's like oh i do property management i'm like oh like sweet like she's like you want to bid like four buildings i'm like hell yeah i do so you kind of just like or you meet this guy or um you go i did a guy's house one time over here he's like oh i have like four like three buildings do you want to do those two like yeah so you kind of just pee you know you longer you're in it you kind of like just kind of get stuff um and then you also get you know when you buy a route of buildings sometimes this building's like hey you know it's time to rip all the landscaping out and get everything brand new which is just dollar signs you know um so you could go and have a building that only pays you like 800 bucks a month but you know the owner hits you up or the property manager hey we're going to do it all we're going to do everything so you go get a 80 000 construction project off of that little you know 7 800 bucks a month kind of client so the more buckets you have the more different clients you have the more chances that you can get that extra few hundred grand in uh revenue on the constructions yeah yeah um because they're not because they don't bid it out you know they're like oh you're my landscaper so you're gonna do the project in life great sweet and in a building that would do like rip out their landscaping and kind of start fresh how often do they do that like once every decade like if you amortize that big seventy thousand dollar spend over years would it be what would it come out to is it you know seventy five depends who you ask spencer you ask i mean you know i have a building in la that they switched uh they got a new tenant a big tenant it's actually these guys that uh spun off from spacex they're literally building rockets or they're building like yeah rockets in this big building and the owner of the building was a maintenance customer of mine and he calls me aside and we meet out there and he's like whatever these rocket ship guys want you're doing it like this is like i'm spending a lot of time she's like asks elon getz yeah and i'm like uh okay and you know we end up doing you know 150 grand at one building and i was like you know yeah maybe you'll get those all the time but you land one on you know a building or a business that you bought you know that it just kind of ripples out like you know i have probably like 230 buildings that we do every month now so i'm just waiting for one like i have i likely got one other one um where it's actually a fortune 50 company and they have like their budget increased and the guy's like hey we want to take all the grass out in the property i'm like okay well that's like 700 grand so it's like you could hit it's like you know you're playing like the the slots like you just need that one to hit and you're like okay well i'm already sitting at the table playing slots so you know you get one and uh it really makes the whole picture look a lot better yeah so well mike now so you're somebody who started a business and organically clawed your way to a million bucks on your own before you discovered acquisition and now you've acquired three businesses more than doubling your revenue talk to me about how you feel about acquisition compare acquisition through growth versus that first million bucks that you where you grew organically um organic is very difficult it's gonna test you it's not sexy it's not perfect it's um arduous um and you know i i don't know that i would do it again you know i i if i was you know going to go in a different industry or whatever i would definitely buy first and then build i'd build i'd buy one big one and then bolt on from there to be honest uh if i had to do it again but i did have a good operational background walking in but i didn't have the m a experience um like a lot of these guys do but if i was a young guy like coming out of college i would do i would be like you know mike snell i'd co-work at an mma shop some probably a small one and just go do deals watch deals happen watch watch the interactions watch how people negotiate you know understand how the attorneys fit in you know just there's so much learning there that i just did by doing it it'd be cheap learning to have somebody go pay you you know 100 000 or whatever at a job you know that's doing deals just to learn how deal flow works and and how that process transpires because that really would help i it would have been really helpful to have that to go in to start doing acquisition but i kind of learned that by um trial and error i mean just just learning yeah so although i i will say mike that like when i ask the my guests who are former pe people and have transaction experience they'll say that like yeah the m a stuff yeah it's it's technical a technical advantage that i had yeah it helps um i you know i know what a deal looks like i've done i've seen much bigger deals occur in private equity maybe many of them um but they'll say well first of all that in this smb market it's very very different so yes i you know the out the the broad outlines i understand a lot better than somebody who's never done anything in a transaction but still there's a lot of learning that i do because it's because the nature of these deals is so different but uh the bigger thing i was going to say is that they say you know they'll say the m a piece yeah it's important or whatever but it's you know the operational stuff i i feel like is actually more valuable because you can learn the mna stuff you know 10 hours with youtube and you know you can learn a lot maybe maybe that's that's an exaggeration um and you're only going to do one deal well you'll start maybe if you're if you're successful you might do another and another um but you know you really for that first business you're just going to do the one deal and then it's all going to become how well you operate and many of these former pe folks don't have operational experience and they're really intimidated by that they've never managed anybody they've never run a car and stuff like that so they'll they feel the opposite that you do they wish they had the operational jobs they overvalue the operational stuff and undervalue their m a experience and you're so maybe the grass is always yeah i mean if you're a young guy too listening i mean another thing you could do is um you know out of college do two years m a and then go to an industry that you're you've done a lot of research on that you really like that you're like okay i'm gonna buy one in here you don't say anything but you go to a big company that does that and you just work there you're gonna take a haircut on what you're making absolutely you're going to get paid crap but you're going to get you're going to learn how to manage people um and you know you this is a this is a journey you use this probably like work a few years m a maybe a few years managing at a company an industry that you want to get into and then make an acquisition and i think you'd be pretty as prepared as you possibly could be to jump into that industry especially for like a landscaping one um so well now now we'll talk to the people uh like me for example who um you know the opportunity to go work for an mma firm or a pe firm or or a business that's rolling up landscaping companies is gone so they're looking at buying a business and they're hearing about landscaping landscaping landscaping all the time they have neither transaction experience nor landscaping experience what would you tell somebody who's completely green about buying a landscaping um i would say it's it's about effort um you know it's you have to have a you know you have to hit a certain low bar of you know uh you know putting things together like basic smarts i'd say but after that it's it's about effort and want and just going for it like just jumping in and and also when you're doing your negotiation to buy wherever you're going to buy really get to know the seller and make sure that the seller is a good guy who's interested in probably helping you to that next step and i've spoken to a few guys that have done it and different stuff like plumbing and different stuff and they the ones that have done well they've developed a great relationship with the seller um and also you know ask for a little bit longer of a training period you know sometimes they always put on that biz by cell like you know two months or two weeks or whatever um try to you know say hey give me two months include in the sale or whatever and then i'll pay you as a consultant for you know six to six months to a year um just to kind of get me get me going um and that is invaluable okay you you got to do it if you're green you have to do it um and in the beginning do it his way you might in your brain be like i this is you know why it does this way why do it this way just accept how he's doing it because he's hitting the cash flow you're buying you're you know you're you like what he's selling so he must be doing some stuff right um so you just jump in you listen i got you get on his hip and you just listen and you just shut up i mean that's the best way i can put it is listen shut up and work hard and you'll be surprised what you pick up in six months to a year with that guy kind of uh next to you so that's part of the you know when you when you're buying the business you know you got to make sure he's like oh moving to idaho tomorrow like ah well you know that is not really what i'm looking for because i need someone to help me for this first you know beginning period um so that'd be my suggestion for someone that's green is find you know the seller uh molding with the seller is a big deal and then also just keeping him uh you know on board and maybe a more advisorial role in the beginning is a big deal and what would you say about um about commercial landscaping and the appeal of it would you would you tell somebody who's looking at you know all sorts of different industries to to become an acquisition entrepreneur yeah commercial landscaping is a great opportunity come over come into this get into this or would you say you know you got to be like me you got to love being out in the sun you got to love working with plants like you really got to love the business to to be successful in this business what would you what would you tell somebody is it is it uh good for anybody or is it only good for like a certain type of person who loves this stuff anyway i think that um if you're driven and you really want to get after it and really have your own thing uh you'll make a you'll you'll fall in love with it along the way once you once you start things start working um i think one thing that isn't talked about a lot um for landscaping is how close to the knife's edge most your employees are you know saying that hey you know we'll get you your checks tomorrow even though they thought they're getting him today that's like a death sentence like there's certain things you just can't mess with these guys are on the knife edge they have no savings nothing so you know when you tell the guy you look in the eye and you say hey you're checking me on friday i don't care if you gotta pawn your car you better get the money there um because that speaks volumes and then that consistency is going to build up trust um so i guess that's one thing that's maybe a lot of guys that are looking at buying a business aren't really um but not as close to because they don't in their network how many people do you know that are like literally nice edge not like oh well after paying my car payments i got some money or in my you know apartment like i'm talking about like down to 100 bucks like they just don't have that much money um and understanding that and you know they're providing for their families man they got three kids they got a wife and you just got to take it serious uh i don't think it's pressure i think it's just responsibility so you got to take it seriously and uh do what you say you're going to do because these guys if once you break the trust it's over like it's just it'll go badly for you um so that i guess that's my my take on it it's great um so it's not not doable it's just is different um especially if you're in like the most these guys are looking at this stuff have a college degree of some stripe you know they've kind of uh aspired to be on a certain level in the wrong in the latter and you know we're talking about the first rung here almost everyone that works these businesses um is is levels below you uh in in socioeconomic you know standing so you not saying you have to go to their level but you need to you know be understanding of where the where they are um because that's that's your lifeblood man without my employees i am in a world of hurt so um i guess that's my my take on that yeah that's great advice one of the two other themes that you hear about landscaping over and over one we've already touched on that you want a business that has as much recurring which would be called maintenance revenue in landscaping is possible so you don't have to go out there and keep selling and selling and selling and in fact your sba sba lender might not finance a business that doesn't have a certain threshold of of um maintenance business then the other that we always hear about of course is better to get commercial landscaping clients and residential uh i you concur right big time now what about yeah that's a no-brainer yeah what about um size so you said uh earlier like if you were you know you'd probably buy something bigger if you were just starting out so if you're so for the audience who have you know they're not starting with a smaller landscaping business or any landscaping operational experience and let's say you know they're able to buy a three or four million dollar business um is that the size you'd recognize recommend what would you recommend i maybe this is not the take that most people say i would buy one that's they're selling it for about a million bucks um and that's i know it sounds small to everyone that a lot of people that listen to this stuff or that other guys that buy them um just because you know it's a lot of debt and you know people don't talk about the horror stories as much on twitter like you know a lot of these a lot of people that you know go on this podcast are on that that twitter game and it is you're putting your your balls on the line man and you want to make sure that you know you get a good multiple that you like the seller and all this stuff um but if you do find the right one that's three million bucks and you don't have lots of losings like i will i don't i don't have a house that i got to put on or you know i'm just like hey this is my chance i'm going to go for it then by all means you know but i'd say you want to be like million to 3 million probably somewhere in there and you can get a pretty damn good business with some good staff that's really going to help you learn things that you uh you know maybe you wouldn't have before you walk in so one of the other things i think that is appealing about acquiring a landscaping business is that as i understand it there there's a handful of big national acquirers right so if you if you so yeah if you grow your landscaping business um there are some obvious exit opportunities what do you know about that and can you share with the audience sure um there is a lot of money going into this a lot and with certain thresholds you start getting people calling you i mean i i'm surprised i've had a handful of guys call me um a few bigger operators with you know a few hundred people that are like hey mike you know i've asked around about your business i know kind of what your guys are doing how big how big you are and if you're in the business as if i told you how many people work for me they back into the numbers pretty quick um and they kind of know okay well he's got 50 guys does about this much makes about this much uh you know i i'd be willing to pay this much so they kind of back of the napkin can tell you um what they pay for it i thought if you guys like hey mike like you know you want to cash out or you you know i had one guy who was trying to put like buy five companies at one time trying to buy mine and i was like you know what i appreciate the offer but you know i i want to be the guy that has 500 people you know i want to do the chen mark deal maybe not do all the other businesses that they have but more less less hold come or roll up i guess um but that's that's today you know we're in 2022 you know you you asked me in a few years it might be a different answer um but so i guess that it's a lot there's a lot of money out there chasing stuff especially when you hit that seven figure ebitda i mean that that's when you start getting some really good uh really good looks and so spell that out for me so at four milli if you don't want to share your exact ebitda today but let's just start here so at four million bucks uh a landscaping company doing four million dollars much of which is recurring maintenance revenue what would your ebitda look like and then let's say 5 million and 10 million what is your ubido look like um so with the right staff in place right you're not hanging on by your fingernails working 70 hours a week um like right now we're in that six to 700 range but a caveat to that is i work 20 to 25 hours a week well done because that's the right stuff i put the right staff in i want to get bigger so i have i have some runway when i do you know bring it buy a big one i've been really i've been actually have one i might buy that might double everything so i might be jumping right back in and doing my 50 hours a week or whatever um but you know in my mind you have to you know begin with an end of mind that's something my dad's always said since i was a kid um where do you want to do with this do you want to just keep it at you know this certain size then you know you don't need the staff like do it all yourself and you know make make more money and just you know have a lifestyle business but in my mind i want to have pieces set up and and in the right place for you know when i met a hundred people 150 200 you know and going up to that you know 10 million bucks 15 20. um so that's my approach i don't know it's everyone thinks about it differently uh i also like you know the quality of life things big for me you know i'm in southern california i like going to the beach i like taking naps now that stuff's valuable to me i i'm say it's it sounds dumb but it's true like i like you know having a lunch and taking a nap and then getting back into my work um so and and some people might not value that maybe they want every single dollar and they don't care so um yeah i like taking my mom to lunch and not rushing out of there and just enjoying the time and um enjoying the you know i've risked a lot you know and now it's now it's coming to kind of fruition and you got to enjoy it you know i think yeah i i totally agree with all of that but i'm i'm just smirking because you you sound like a a middle-aged guy who's 50 and he's like well now i'm going to relax a little bit but you're 31 dude yeah it's not really the relaxing it's more the runway like i want to have runway to when i do pull the big sba i still haven't done it and pull the big sba trigger and go for it that you know i don't have chaos you know what i already have is pretty set up and good to go that i can really focus on the new acquisition and making sure that things really go along smoothly and that i have the right staff and that you know by buying this other business i don't disrupt my business i already have um so that's been kind of important and i know that now i'm only working this much i'm probably it's going to fluctuate up and then probably down again it's going to kind of be an ongoing change because i'm going to continue to buy these and and get bigger so and so to be clear you you said you haven't done an sba loan so those three acquisitions the financing was some other configuration other than sba okay and they were small so you know it's really not even on sba radar i think i mean if you found the right blender you probably could pull it off um but i you know i use a few different types of financing to get the deal done um and you know these guys are retiring they want to be done and there's just not a lot of people buying these small ones um so it ended up working for me you know and but also that there's a big downside but a lot of people talk about here for buying small stuff um but i have the operational knowledge so i didn't have a problem with you know oh well there's only like seven guys like who's sending the bills who knows i already have all that so it's kind of it's easy to bolt on little ones if you already have a system um so it wasn't a problem for me but i could see if you were green it wouldn't be as good for you so and what are the typical multiples for a million dollar uh for a million dollar landscaping business i mean this is your typical or is it is it less two and a half to three all right you know like any other yeah most most stuff um and and mike so like if you were able to get to 10 million dollars in revenue is that um what are you at then a million million and a half ebitda yeah it's somewhere in that range it depends on kind of how much construction you're doing if you're a little heavier on construction you can definitely get up to one five um but that is gonna take more staff more touch it's gonna take more touch from you to make sure you get to that million and a half um if you're heavy maintenance i mean there's a way that you can be you know million million to and you know not be working as much to be quite honest and have less less people to oversee so um it's all about kind of how heavy you are in construction or maintenance kind of like which pedal is you know closer to the floor um so it's somewhere in that range at 10 million bucks and that's you know obviously when you're paying everything above board you're doing everything correctly um and uh you have the right staff in place so and and when you're at that range you said you're that range of ebitda you said that multiples start to get really interesting from the bigger acquires what sort of what sort of multiples have you heard about for an even landscaping business i've heard four to six it just kind of depends on the interest in um geographically where you are is also important in my mind um because there's just you know in certain areas san francisco um you know parts of florida here texas like there's just more interest because there's just more money around and there's other big companies in the area and the more big companies in your area i think the better your multiple's gonna get because it's not like you have a you don't have a bidding war per se but it's very attractive um as a bolt-on for someone that's huge like you become the bolt-on right yeah but if you're in a more isolated market i think it's going to be harder to get a higher multiple but that's just my take on it just kind of reading reading the the market so and we're about a time mike but just talk to me a little bit about the seasonality of landscaping and how that varies from geography to geography we talked about a little bit you're year round but if you're in the midwest for example you're not going to be year-round so talk to me how that factors in sure and uh you know all my guys that are you know midwest and you know northeast already know this but um you know with my business i have i've been working 365 with the same guys i lay anybody off we don't have a down season we i keep everybody going the whole time um which makes it really easy to not have a bunch of turnover um and maybe not lose good people over a season um so it's one less thing you got to worry about i guess with warmer climates is you know okay like spring's coming like we got to hire more people again um so i guess it's less work when you have the same people consistently throughout the year um but that's just from you know me talking to guys that are doing in those areas and there's challenges of like you know fluctuating 40 people to 20 to 35 to you know it's kind of a you know higher higher let people go higher you know it's kind of a cyclical deal which frankly i just don't have to deal with so it makes the business a little bit easier i think great mike we discovered each other on twitter as i have with many of my guests what's your twitter handle my twitter handle is sign the fronts and that's just a uh homage to my dad it's some that he always says with his business that he always has to sign the fronts of checks when he's paying people and he's not signing up for the yeah he's not signing up for the back so it's just i was thinking about twitter handle i'm like i'll just make fun of my dad just messing around so it's yeah sign the fonts is my twitter at sign the fronts and is that the best way for people to get in touch with you or is there is there another way that is the only spot i um this is the only social media that i've really i appreciate i think really brings a lot of value i think linkedin is pretty crap i think everything else is you know instagrams for showing off facebook's for our parents you know and i think twitter is cool because you can really get into a niche you know if you were talking about self storage you can talk all you got you know you can follow 400 guys that only talk about storage um and there's so much learning on there i and e-commerce i mean there's all kinds of little just slices um that you can really you know get out of you know i don't want like i don't want to see political stuff i don't want to see you know the gossip call i don't want to see news i don't do any of that i just want to help want to learn and i want to see what people are talking about and you know how they're doing things how they approach it and i've learned a ton i've only been on there maybe like four months but it's it's pretty cool this also see other people doing it and uh because sometimes it does feel like you're kind of on an island doing your own thing but when you're on there you can kind of see like oh that's cool like he made acquisition or uh this is how they structure the deal or this is the sba lender they use um all that is i think great to to kind of stay on and and keep learning you know absolutely and feel less lonely because it can certainly loneliness is one of the complaints about this path for sure yeah well mike thanks for coming on and sharing about your your story and your business and every all of your hard-won knowledge and landscaping this has been great hey man thanks for having me on it's been great