Matt Jackson welcome to acquiring minds thank you for having me on the show will appreciate it Matt you bought a roofing business Roofing is a big trade but one that hasn't gotten much attention on acquiring mines so big trade in a big State for the big trade Florida Roofing is big in Florida so we're going to hear all about that start us off though Matt with some background on you please yeah sure happy to and again thanks will for having me on the Pod I'm still a frequent listener and it was pretty helpful as I went through my transition so thank you for all you do for the community um yeah so starting on my background you know I am a typical middle class guy grew up in a very you know middle class family in the midwest um you know time came to go to college I decided to initially start school uh to become a professional pilot and you know going through that I just realized that I didn't like the macro backdrop that really indicates you know it's really that decides really how busy Pilots are right I mean it's kind of a feast or famine and you know sometimes Pilots are um you know not working and they're getting laid off um so I transferred out of that and decided to go to school for business you know I wasn't quite sure what I wanted to do in business uh took a finance course really fell in love with Finance I thought the accounting was really practical but quite boring but economics seemed um you know too theoretical so Finance kind of seemed to be the perfect um marriage between the two disciplines uh graduated right in the midst of the Great Recession in 2009 so it was really hard to get a job it's like Yay I got a degree and I can't find a job perfect so I took a job as a mortgage Banker uh did pretty well did that for about four years decided that that wasn't you know the end for me mov down to Florida let me let me let me jump in a couple quick questions you told me in the preall that your family the culture of your family growing up was um maybe anti- bus is strong but you know skeptical of business people yeah that's that's hard to overcome right when you're studying business you're going to tell your parents hey I'm going to go into the business but yeah so growing up about all I knew about business was you know business is all about greed business people are greedy you know that's that was it so I didn't have a lot of exposure to business in general right and then you know going back to that comment on the preall I think what really made me fall in love with business was I had one Professor I took an intro at a business course and through that course I really started to learn about all the different disciplines you know Marketing sales and you know advertising and Finance and Accounting and you know how it all has to come together to really have successful business so to me there's so many moving parts and I I kind of fell in love with it very quickly um what do you think what do you think your family I don't want to say got wrong uh because I'm not maybe maybe they see something I don't but um when when when you're at home and Thanksgiving now and you're trying to explain them to them hey guys business isn't all bad what how do you try to convince them of that yeah I you know I think you know my parents they always worked for big companies right so with big companies they're always kind of a you know a a a a cost of good right in the machine right so what they're seeing is oh you know benefits are this much less Etc right and you know and sitting around the table I think the way I handle that with them one is they have a different perspective now right because I did study business and tried to explain to them that you know not all businesses are are greedy and bad you know yes there's a lot of examples of certain businesses that are certainly greedy but you know business can also be used to really make change in people's lives right and that's something that um I I think they respect quite a bit all right carry on four years of and the mortgage business then what so I did my NBA um I also worked full-time for an insurance carrier as an intern while I was getting my MBA and and I was really looking I was really a product analyst helping the product managers understand different risks within their book of business uh and then that transitioned into a full-time offer there you know after about 18 months I was overseeing all of the financial planning uh for this company it was um Family conglomerate basically so they had about 10 different operating companies under their parent company so I oversaw all the budgeting forecasting U got involved in operations quite a bit and just to help them try to understand the decisions and you know the impact on on the financials um so did that for about 18 months and then was went into actual one of that one of the companies under that umbrella under the the warranty division helped with overseeing all the account management and business development for uh the warranty piece so it was a it was a good ride I think you know that was one of those it's a great company but I realized that you know the hack to doing well in the corporate life to me it seemed very simple it was work harder than anyone else take on every project and you know do a good job so that took me into my next career move which was going into Financial advising at Morgan Stanley so another great company again into Morgan Stanley as I go into their Training Division um their training program and started to I really wanted to prospect insurance companies right so I teamed up with a A Team a Graystone team out of Chicago uh and actually ended up moving to Chicago to join them full-time really helping them service their book of existing clients and um you know prospecting for for new business okay and how does keep going yeah so I'm there for five years did pretty well brought on some new clients and you know came to a point to where it's still you know when you're working for a large corporation especially a large bank that's you know subjected to SEC regulation FDIC regulation you know the list of you know exchanges and all regulation goes on and on they kind of the way they kind of manage the um really any sort of process is they they put it into a box right so I say I want to do this marketing campaign and they're saying oh well that doesn't fit into this box right so it felt like to me that there was you know I was lacking that creative drive right that I wasn't lacking the creativity but I was lacking the ability to implement for the the outlet to be creative yeah so and I think the other fascinating thing which I'm again great experience great company but through that process I really started to understand the different asset classes that are available for investors one of those being private equity and um in speaking with private Equity I I started to understand that there's really private Equity isn't targeting these small businesses right so when I started when I decided I was going to buy a business I didn't even really know ETA was a thing right like I just kind of realized through through speaking to private Equity investor that there's not a lot of these larger funds targeting these smaller companies so to me that kind of had my you know that was kind of a a headlight moment right or where the light bulb turned on rather yeah and I was like oh you know I could actually do an lbo using the SBA and create my own you know be pretty much fully invested in private Equity but I actually own all the equity like how awesome is that right and yeah so that was really the the realization I had at Morgan Stanley that then you know really started lead me down the path to trying to buy a business okay so you figure out you can do an lbo and then I assume you start you turn to Google and then this quote unquote world you know ETA you learn what ETA is and the whole kind of thing is cracked open for you the books the business school is teaching this tell tell us what happens yeah so not exactly so I you know I was I was in I think I was laying in bed one night looking at you know just doing the Mindless scrolling in Facebook and I saw an ad from airra which is um I don't really know how we would classify them but you know they are essentially um helping people that want to buy a small business they there's like a two-e um preparation course and then they also have some lending on the backside and they're really trying to help people that are interested in you know small business acquisition then provide them funding and resources and then helped them understand the modeling behind it Etc so I went in through that course I completed that either two weeks or a month and just absolutely it really reaffirmed the idea that this is the next career path for me right I just I loved doing the modeling and I love the practice practice exercises the group work etc um so that was in December of 20 one is when I took that that acquir training and you know it's like right in the middle of that I called one of my friends that I used to work with at Morgan Stanley and I was like hey you know I'm kind of tired of the whole Wall Street thing I think I'm going to buy a business and you know here's here's the here's the types of businesses I'm looking at it was in home services and it was either going to be Plumbing Electrical uh HVAC you know or Roofing quite frankly those were the four types of businesses I was looking at um and just explained to him the whole investment the and you know how we can do an lbo using the SBA and you know how we don't necessarily have to have a ton of capital to put into it um but on the back side we can you know there's there's opportunity to generate you know uh multiple Arbitrage etc etc just running him through the whole thesis and he was like yeah I'm in so that that kind of he's like yeah sure let's do it um so the more the more I started looking at the different types of businesses to buy right Plumbing HVAC electrical contractors they all kind of seemed at that point in time to already have quite a bit of private Equity interest you know trying to find these types of businesses so what does that do right more demand for these types of businesses well pushes the multiple up right so just from a math perspective right if I'm buying at a 5 6X multiple right that's giving me what a 20% you know earnings multiple if I'm buying at 5x versus if I can buy something at 2 and a half to three you know now I'm close closer to you know 35 33% so from a math perspective I liked Roofing um and I know it's like it's like the total opposite industry that acquisition entrepreneurs are try to look at because it's Project based there's not a lot of recurring Revenue um you know but I like the I liked Roofing because number one it was less expensive and number two I think because there were less people trying to get into Roofing I saw more of an opportunity to to get a head start and really buy a smaller business professionalize it and then you know hoping at some point in time private Equity will find this industry and start trying to buy stuff and buy companies in Roofing and then that'll help push my multiple up even further down the road if we decide so less it's less competitive currently from a multiple what you pay for the business perspective and less competitive from The Operators The Operators that are getting in before we get too far away from from from uh aquira Matt tell us a little bit more um I I I of course I have had guests who've done aquira um and so you hear about it in the market and they've got kind of an interesting model maybe maybe just educate people a little bit more on it um and and also specifically my understanding is that they really try to focus their cohorts on home service businesses as opposed to any type of business what can you tell us yeah I think that's correct so the you know I met with the president of aquir he was a very successful um you know um aggregator of small Home Service businesses so that is what they try to push push people towards um they don't from my understanding look at a lot of deals outside of Home Services now again this was you know two years ago so I don't want to speak too much out of context for what they're currently doing um but I found a lot of value in the cohort of just going through the practices of you know understanding you know uh uh modeling right you know this is all stuff I done already modeling but just putting it to practice in the context of buying a small business right there's Mark they they there's some material on marketing right and you know how to identify a business that isn't using um you know Google correctly or um Angie's lists you know all the different lead aggregators correctly you can you know really pretty quickly just by registering your company not even buying stuff from them but just by registering your company through all these lead aggregators how you can actually Drive traffic you know fairly quickly um you know and then they they are when I was going through the cohort they were just really starting to um take actually make investments with their with members that had went through their training um but no I I I had a great experience with Aira and you know I just I just did the cohort though and I didn't really need a lot of I didn't really need Capital you know I don't there wasn't a lot of needs that I had with them after that cohort so I decided to to to do my own thing afterwards did not not partner with acquire ownership which was an option and is something that's kind of part of their model but you opted out correct of doing that and um but to be clear you know they're very Home Services based so do you feel like it would have been valuable if you weren't what if you just weren't interested in doing a home services business would it have had the same value or is this really for just people who can imagine themselves in one of these trades businesses yeah look I think there's there's so many different um you know ETA resources out there now right I would say before you pick one right just shop you know if you're not looking at home services then there's probably you know better options out there for okay for acquisition entrepreneurs okay okay and then just one other thing you just said there um well context is that I'm hearing from recent guests Doug John's who bought a plumbing business uh John Wilson who bought and has grown a very big Home Services business that home service is extremely competitive right now and that digital marketing is actually quite sophisticated it's not this kind of Green Field fax machine industry at all that that window has long since shut um and yet it is it is kind of the reputation is still that that it that it's oldfashioned and you can come in and you know do a few things online and you're and you're generating way more traffic than than your competition um and and you and you just said that yeah that that is kind of still true do you know flip a few things do a few things right and you can start driving traffic pretty quickly which is counter what I've heard from Doug Johns and John Wilson so uh can you help me understand the yeah I think you know I that again that was going back to my understanding back in 2021 right so I'm sure that's changed we the business that we have and my experience with that is still pretty new um so I'm not buying Google AdWords I'm not advertising on Facebook I'm not you know doing any of those online Market marketing plays currently oh and the reason for that is because we have so much influx of business coming in just because of the reputation that the previous owner built of of your systens which was the company we acquired so that is definitely on the you know on the plan to to really get involved there um I think the the other important context there is Roofing is can be categorized into a home services business but we don't actually do a lot of residential work right so we are doing mostly Commercial Roofing I say 90% of our business is in commercial so you know the if if we're working on a commercial project right a lot of those buyers aren't necessarily from my experience aren't necessarily going to Google and saying hey you know find a roofer to you know R roof my five you know my five structure you know 100,000 square feet project right um so so I think that's and that's another reason why I haven't really dopen that yet it's it's I think you know in Roofing in general residential versus commercial to very different businesses um yeah you know and and and it's funny because I talked to the roofers some roofers that focus on residential and they do it very very well and they have either no interest in getting getting into commercial or they have the interest to get into commercial but they just can't right you know initially my thought process was well it would might be easier to get into residential than commercial right because there's just less overhead less Capital constraints you know Etc it's more of you know driving the traffic and then building a sales process around that residential consumer um you know to be determined I you know I it's there's there's different companies that do both very there's very few that do both residential and Commercial very well um but there's a lot that do commercial very well there's a lot that do Residential very well so okay well we're going to circle back Matt to um the of roofing businesses because I want I want to do a deep dive into Roofing generally and get a layup of land from you so we're we're going to spend time there let's Return To Your Story first um okay so you you decide you like roofing for the reasons that you've you've explained tell us about what the search to find a roofing company looks like yeah so I did zero proprietary Outreach um I I learned about it and thought about it um you know and but I was just pretty lucky because I found two you know searching so here here's here's kind of my search parameters right at this point in time we're still living in Chicago we knew we wanted to move back down to Florida and so I was pretty you know I was open to Florida I was looking we were looking at pretty much all of Florida um for for for businesses right with the thought that if we buy something big enough in Florida then we can put a journal manager in place I can go two to three times a week you know and and be back home 3 or four days out of the week right um where we live it's it's you know I I I looked at about through that process so like it in the State of Florida has it's kind of like an MLs for business listings which is really helpful um so you can go to just about every business broker's website has a link to where you can do a specific search in the State of Florida for business that businesses that are for sale so I looked at probably about 30 different Sims um you know it was just really I had about you know six or seven different conversations you know and and just the I was fascinated with how just different some of the operators that were selling really treat their customer right like I spoke to some operators that they were doing nice businesses you know two three million dollar Revenue you know 5 to 700 in in iida and their whole model was we don't really service our roofs after we're done we just put the ref on and if they have an issue then you know we they just they didn't have service Crews right in in in service teams um but yet they were still had you know still able to generate $500,000 a year even though right and I was like holy I was like oh my gosh this is this is incredible right they they don't even have a great service team they don't really care about their customer and yet they're still you know doing really really really well and um so yeah looked about 30 different Sims had about five or six different conversations I was actually just getting ready to go to Loi on another business the 30 companies the the MLS style listings in the State of Florida how how is that what is that and how is that different than bis byy cell I I so I think it's it's like um you know like real estate agents have the MLS listings right so in order to get access to that like they have to send you this link and it's this really old looking website that isn't really user friendly well I think a lot of that data is also fed that bis by cell but not all the data fed the biz by cell According to some of the Brokers I've spoken with here um so but but but there's some other centralized repository that yeah I'll send you a link to it or I'll send you the link to the one I use for the Florida for for the State of Florida and is this repository this database maintained by like the Florida Brokers Association or something I mean yeah so I believe it's it's similar to like a real estate agent right with the MLS where they upload you know the listing details into this repository and then it's available for the public to go see H interesting okay never heard of that in Florida or elsewhere so good to know and then there there are 30 Roofing businesses for sale in the State of Florida at that time there were quite a few you know and there were you know look some of them were businesses we would not have at all purchased because they were just too small some of them were just too big right but I looked at all of them um just to try to really understand the industry and the different types of businesses in the roofing space but yeah there's there were quite a few for sale I think now there's probably it seems like it and I I'm always looking right so it seems like at any given time there's about 10 to 20 for sale in Florida wow um I mean I don't know how much to read into that Florida is a big state and and as we said Roofing is big in Florida um but my first reflex might have been like huh is there a lot of churn and I mean is is this a a red ocean of an industry because they're just there's so many of these businesses for sale big well I think that there's number one it's it's a big industry you know I think that's I I read somewhere I think it's a currently about 25 half billion dollar industry Nationwide you know 6.7 is the kager on it and so it's expected to be somewhere in the I think it's like $45 billion by 2033 um in Florida I've also read that Florida in total is like8 or9 billion dollar of that which I find hard to believe because that seems just too much like seems like it's too much of a percentage of the total you know us Roofing industry to be in one state but but there's other things in ring specific to Florida that makes me think yeah that's actually somewhat plausible right so it's I mean it is it is the hurricane state after all right and there's insurance requirements we can get into all that stuff later but um yeah yeah so so my search process was really I would say pretty unrefined you know is like okay I'll go look at roofing companies from for sale that are already listen in Florida and like I said I was we were about to go to Loi on another company um we just it was just too you know too too too small for us at the end of the day and I had actually reached out to the broker that was representing youran systems um throughout that process he said oh no it's already under contract right well literally as we were getting ready to go to Loi on a smaller smaller company but you know still a pretty good company we the broke reach out to me that day right it was just very serendipitous of he was like you know that day we're getting ready to to to try to put another one under Loi he's like oh hey the deal fell through are you still interested and I was like well yeah sure you know let's set up a call so we set up a time to meet with the the owner uh of the company and just really started to understand their business and we were kind of like yeah let's let's go with it and you know went through the LOI process which took a long time um and the reason why it took so long is because the previous owner um since he' already had a deal fall through he wanted to kind of make sure that everything was outlined in this Loi right so the LOI and the APA looked very similar which I know it's not traditional but that's what he wanted to do so we accommodated him and you know really drafted a pretty um uh you know I think our Loi was about nine pages so it pretty yeah it was really long yeah and that is that is just to reiterate what you said that um that is very uncommon uh because especially more experienced people Educators in the space like a Sam Rosati would say you know get an Loi out as quickly as possible so don't make writing the LOI this overwrought process that's because it's to slow you down and you really want part of buying a business is like a numbers game and you really want to basically look for reasons to be disqualified Ying businesses um and if you if you overdo the the LOI process that can just slow you down so very different than what you guys did but sounds like you were basically forced to by what the seller wanted um great well and so so tell us more about about the business what tell us give us the bullet points on it sure so you know urethane systems been around since 1998 um founded by guy named Jeff who's still here he's been a really great partner um they really built their business specializing in a very kind of nichy segment of roofing so which is spray foam Roofing and and roof coatings um so the spray foam industry a lot of people are familiar with that when they see insulation right they see guys when suits and they're spraying you know studs between the house and the new construction house and that's an insulation product well they also make a type of foam that's specific for roofing so it's a little bit heavier um and it it's a great system it's monolithic meaning there's no seams you know everything's sprayed all in all in one one section so um you know there's not separate tie-ins it's it's it's a really great system if it's installed properly um and then there's coding so basically you you know you you build the roof deck how you know there's different ways that you can build up the substrate to what you're going to apply to sometimes you can go straight to the reof deck some s they want you to put you know a piece of den deck which is basically a coverboard um over it and you can spray to that but you know when I really what really attracted me to it was on the foam side there's not a lot of foam roofers in in Florida I think there's I I know of two other ones that are are doing foam in my direct Community I know of one in Orlando and I know of of a handful uh throughout the rest of the state so to me that seemed like a a a really great Mo to really act as a ballist for the business knowing that our goal was to grow it and that if we have the foam side and there's not a lot of competition so we have some pricing power and we have a constant flow of demand that will enable us to really build out the other uh other side of of the different roofing systems that we could that we can that we can apply so and the other side meaning conventional Roofing correct so TPO modified bitman shingles metal tile Etc right so those are the conventional roofing systems and it was just fascinating to me because we have a great team right so we have a lot of people that are certified to install these different systems we just he just never really marketed it right he just never really went after that business he was very content with the business in the size and you know he was making a nice paycheck and he could control everything and that was his business model you know he just didn't he just didn't really want to grow it um you know and which we can talk about that too and how that's kind of makes for some fun conversations in the day-to-day now since he's still here but you know you know like I said to me it was it was a very interesting business because of the the lack of competition in the foam en codings I get it and that and that that does sound enticing but when you're thinking about the risk of being kind of a spray foam shop this is kind of an alternative style of roofing I don't know I don't know what percentage of the market do do you know offand what percentage of the market I know it's I know it's small smaller single digits probably yeah probably correct yeah um so so one might get a little bit wary of kind of this this kind of specialized uh technology that may or may not grow um did did that bother you or or have you already answered it basically this was always just a Toe Hold so that you could actually grow the conventional side right it it didn't bother me one bit because you know understanding the size of the roofing industry in in Florida and the demands on roofing contractors in in Florida it it didn't scare me one bit because you know again the goal is here over the next five years is to have that to really be the smallest piece of our business right um and so my thought process was well you know it's not going to change overnight right so you know maybe 3 to 5 years that continues to dwindle but we should have plenty of Runway you know for us to execute on our other plans to really diversify the business into more conventional systems and uh when you say that the spray foam side of the business might dwindle ever so slowly is that to say that as a technology it is a little bit not growing going in the other direction if slowly it so it was and this is this is actually what pretty fascinating so you know in the State of Florida we have this insurance pool it's called citizens right so it's basically the insurer of Last Resort for Florida uh Florida Insurance property property liability assurance and what we what we're seeing really over the past 18 months has been citizens would come out and say hey you have a foam roof you you have to tear it off right so there was no guidance on what you could do and still be insured by citizens uh We've recently just got a letter from citizens basically saying you can have a foam roof that just has to meet these different guidelines right so what was happening on the foam side and this is really before a preall too we didn't have this letter when we last spoke but um you had a rooting contractor come in and you had insurance come in and they're telling this condo association hey you have to tear off the foam roof citizens doesn't want the foam roofs and the fact is that that's not true right and I don't think it was ever true but there was just never any Clarity with citizens on what exactly they're looking for um so I was at a I was at a convention uh a trade so convention just just uh last week and I was explaining to some of these insurance agents what you can do with foam roofs because they're they're more prevalent on you know multi-story condo buildings uh commercial buildings and one of the insurance agents was like oh my gosh I wish I would have met you three months ago because we just tore off for these foam roofs and it sounds like we could have probably kept them and and you know descoped the whole project because we can actually reuse that existing foam as long as it meets the wind uplift requirements and a moisture survey we can actually reuse the existing foam take about an inch off it's called scarifying it basically we take a machine that looks like a lawnmower it's got about 15 blades on it it just goes around and Spins and it it takes that first inch of foam off we respray it and now they have a new roof right according to Citizens so and and and it's it's fascinating to me because after after that one trade show now I have insurance agents you know calling me saying hey can we have a lunch can we do a lunch and lorder can we have you know can you come look at this roof can you look at that roof so you know if you would have asked me literally about three weeks ago I would have said yes that that thesis is probably true that foam is dwindling just because of a lack of education and you know not a lot of oring contractors applying it so they're incentivized to then rip everything off and put a different ring system in you know now I think it'll at least you know stay steady to where it has been well interesting position where you are in the market because you could kind of you could kind of benefit either way I mean you're HED you want you want to grow the side of the business amazing yeah it's it's awesome has been a very exciting past past few weeks for us so it's um no it's it's great it's a really great place to be in right and I think you know can other contractors install foam roofs yes but good luck getting the certifications good luck finding the you know the Staffing to do it and you know in as far as Roofing you know you can be a shingle installer with literally a truck an air compressor or a couple nail guns you know uh some tear off shovels and a dump trailer right you can successfully install a traditional roof with that little equipment on the foam side you're talking $1 $150,000 minimum investment just to get all the equipment that's needed to to actually install these uh and then by the way you have to go get certified with all the fil manufacturers which isn't exactly an easy process either right so they're it's not that they're protective but it's just when you know when they're putting ndl warranties which is no dollar limit warranties it's basically just saying that you know we the manufacturer will back our product from any separation you know from the roof that you know we the manufacturer will step in if USI ever goes out of business and you have a problem with your foam roof then they will come in and then paid to fix it right they're very um stringent with their requir ments and experience with actually being approved to apply it and citizens actually says one of their requirements is you have to be you know a a certified applicator through through the system that's going on so we have a lot of Moes around that on the foam side yeah yeah which is just it's pretty amazing we're actually positioned really really really well right now so it's it's very exciting yeah it sounds like um kind of a version of regulatory capture you're not it's not regulated but your your the vendors in through getting licensed with them is is kind of a form of Regulation where you where you've gotten your where you you know you've gotten your certificate and it's hard for everybody else to do so very interesting so tell us more about the business uh 1998 spray foam got that much how big uh terms of Revenue employees Etc yeah and uh I just want to be clear it's not we also do a lot of metal we also do a lot of TPO we also do a lot of you know a lot of other types of roofing systems it just wasn't you know wasn't a focus so when we purchased it it was right at 5 million uh in Topline Revenue you know running right at a 10% um you know evida profit margin net um you know so you can back in the numbers on that um you know and you know we we bought it right at about um 2.75 times which is pretty close to the industry average um and it was really cool the the old the the seller you know he was asking a price for it for the business like yeah we don't really want to pay that much he goes well how about I just take you know $300,000 off that price and I'll just come work with you you know as a consultant or whatever you know I'll come sell roofs and I'll walk roofs with you and you know make sure you guys you know don't mess it up for lack of better terms for three years you just pay me 100,000 per year we're like perfect right and wow you know that created other problems getting into the SBA so we had to yeah you know renegotiate certain things so so there was basically you know a form of seller financing you know that was really that kid that was really an employment contract then we couldn't execute on so then we had to you know renegotiate a bunch of things with with that to get it through the SBA but but yeah it was um well is there anything on that Matt that the audience can benefit from like if you really cuz you know I could imagine being a situation that other that listeners encounter where the seller wants to stay on longer and we all know that that SBA really doesn't like that basically what we did is we what did we do we took we we reduced the contract term to one year and then we basically made the non-compete void if we didn't renew uh the the contract up to three years and the SBA was okay with that so basically his his his his point was okay well if I'm not working for you and you're not going to pay me right for the my my seller financing right then I'm going to go start their business right or I can go start on their business and I can take all the old clients so it was just a horse trade basically right like okay we'll give you the non-compete if you know if we don't um you know renew your employment contract so it was kind of um a way to get around that but you know the FBA end up being okay with that so in other words the end of year one you'll rehire him correct you'll rehire him for year two and year three or however long I guess at that point you want to and The Leverage he has over you to ensure that in fact you do that is he's got no non-compete so he could go start a business on Day Day 366 basically right exactly and I don't like I don't think that's going to happen we have a really great relationship like Jeff's awesome you know we the way we think about business is quite different but he's you know when we have we butt head sometimes right when it comes to well we're not going to do it that way because you know that's not that doing it that way doesn't actually help us get to our goals right of growth you know so you know but he he's like I said very um he knows quite a bit he's got a lot of a lot of Industry experience and has just been a very important part of of making our transition so far a success how many employees so we are running about 25 employees between you know I have two people uh in the office full-time we have three salese and the rest is superintendent uh foremen and laborers so we have about 20 people out in the field and five people in the office okay you you've you've touched on it here and there including just a minute ago about growth and how you and Jeff see that differently and um the opportunity that you also saw I know from the preall so I'm I'm I'm teeing you up to say something you said in in the preall um that wasn't that was less about diversifying Beyond spray foam but more about also being proactive with respect to the the the property managers do you know where I'm going with this tell tell us about that yeah so that's the yeah there's so many there were so many other factors that really want that really made this business you know a really good candidate for us so so I asked him you know through a due diligence process like how many you know how many relationships with property managers you know do you have and he's like oh about a dozen right well I just did a quick look up I think on Zoom info and realize that there's about 1,800 property managers in Florida right um and I think there was 1,00 in the Tampa Bay Region or something like that right and the bottom line is is there are a ton of property managers that you know are are that we are able to grow relationships with to then get referred into these Roofing projects and you know I just asked him I was like well why why don't you have more and you know why why haven't you really tried to grow that and and again the answer is always the saying well just was kind of comfortable with with where we are um and and so that was one when we're looking at our different at different Avenues of growth right and this changes like it seems like this is always changing it's kind of a moving a moving Target but number one is relationships with with property managers right and then more recently it's relationships with property managers and insurance agents and now it's becoming relationships with property managers insurance agents and general contractors that are doing government work right for for for the federal government so there there's just so much business to be had and and to go around that you know the thought process originally was well if we're doing if we're working with about a dozen property managers now if I can just get another dozen property managers theoretically that should almost double our business right so seems like and there's okay and there's 1,800 I can go after right so if I can get 1% of those property managers to build a relationship with them then you know we should very easy business yeah right so it's like there there were just so many different Avenues to growth right and that's quite frankly being in a business own is one of the things I struggle with right it's it's like where do I focus my time today you know because yes there's property managers are great referral source but s insurance agents right and then so are gc's you know there there's just a lot of avenues to go get the work and and what's fascinating in this industry is that if you have a decent portfolio of big jobs you can leverage that and if you act professional you know to to your and clients and to your referral Partners like they will give you work they're they are are there's a lot of people starving for really good roofing contractors that aren't going to you know lie to the client or try to you know create a bigger job out of what could be a smaller job right just because they either are ignorant because they don't know what you know the underwriting guidelines of citizens are or because they're being greedy right I mean I think there's probably it's probably half and half right um so it's we've have recently within the last month really had just a ton of success in in working with these referral partners and educating them on what can actually be done with the roofing system and and so that's that's something we're definitely continuing to to build out so it sounds like Matt this is the the commercial version of or the B2B version of what you often hear in Home Services where it's like you know just call people back just answer your phone just you know and and you can get business there's that much demand out there now people will say that's it's more nuanced than that it's not not so straightforward but you do often hear basically this theme that if you provide just provide good service you're ahead of the pack and it sounds like in the commercial on the commercial side of things there's there's an element of Truth to that as well yeah I I would agree with that no 100% I think you know going back to the team we have here I have we have two full-time off people right so they are always available to to answer the phone right if my cell phone number is listed on our emergency contact number right so there is never someone that there's always someone that's going to answer answer a call right for for our clients and that goes such a long way and then we also have our service department that is also out doing repairs for these communities and a lot of times we can dispatch them within 24 to 48 hours so you know someone has a leaking roof we can get there as soon as possible POS right that puts us a step ahead of a lot of our competition and so the business had grown just no no marketing just Word of Mouth had but the salese did you hire those or did he actually have I guess you just you have salese because you need people to close the business but they might not be super outbound yeah yeah so and and by those three sales people Jeff is technically now an estimator right he has a little bit bigger role than than just sales but you know so we had one one it was really just Jeff and one other guy uh doing the sales we've recently brought in another person to to help with that so okay it's help grow but yeah that's that's definitely another focus of ours too is you know how do we yeah it's interesting because in Roofing there's kind of two different skill sets right with with sales one is actually estimating the project right going to the roof doing the drawings doing the material takeoffs right understanding the labor side of it and the other side is okay now you have to do this really technical thing now you have to go sell right so I'm kind of throwing around the idea of does it make sense to have an assistant estimator come in and really take over all that paperwork for them so that they can actually focus on the client relationship and actually you know getting to that sale so it's something that we're um so in other words the estimators currently kind of have have to have two skill sets which are very different the doing good estimate estimates which is very technical and then also being good at sales which is that's that's that's correct and so decoupling that maybe right yeah great and I don't think you said commercial versus residential so there is res you have both this business has both we do we do both you know the residential for us is mostly you know someone sees a truck it's in front of a friend or it's one of our property managers that has a friend you know it's all you know it's very it's all Word of Mouth referral driven so it's like I said it's not something we focus on because you know from my experience and I and I've heard different different ways I think it was Austin smokes if that who was on your show he was saying he was saying all about how how residential is much higher margin business and you know it seems like from my experience either we don't know how to sell residential or it's not a higher margin business right it it's just seems like it's it's a bit of a race to the bottom on on the price of shingles right so um so yeah and and and but again if there are a lot of really good companies that specialize in that residential space and then they do very well right it's just I just don't think we have the intellectual Capital to be able to do that quite yet but it is an option for us so okay Matt great this is great we we still have there's some big themes in your story that I want to hit but before we do hit those anything to say about the transition or first six months or or operations I mean I I guess do give us two or three minutes on uh you know you were you were a guy who is from from White Collar land uh from mortgages to Insurance to asset management and now you're running a small business a roofing business how how's life different yeah the transitions actually we can I can spend hours on that but I'll try to keep it brief um you know it was there there were a lot of you know my whole thing was I don't want to change too much in the first six months right because you know you have a new operator if something does go wrong you know there's kind of like there's only one there's only one variable that's been added into that company right and that's that's you as the new operator so I've been very careful working with our staff to help them understand you know the goals right of look we need to put a CRM in place right we need to um do that because you know like like literally one of the problems that our office staff was having was finding pictures of previous repairs that we've done right because they're either in emails or they're you know on one of the repair Tech's phones or those pictures don't get here so there's a lot of little operational you know headaches that are caused just by not having a good CRM in place and so I've spent a lot of time working with them not only to be very transparent with with what CR with with why we need a CRM but also help letting them pick what CRM do we think is best right so they've been involved in a lot of these decisions you know and you know my it's funny I think I think with transitioning a business and especially growth everything looks very very simple on a spreadsheet you know you actually get into the business right so so yeah it's it's we had one key employee that uh is no longer with us he just wasn't fitting into the culture that was a really hard decision to make um because this person had 30 years of technical expertise um and know really knows a lot about Roofing and yeah I think the one advice I would give to other acquisition entrepreneurs that are facing this decision of we have a key employee I know they're not the right fit for the long term but how do I survive without this person just interview other people just start interviewing people right so then now you have your pool of candidates that are lined up so if you do decide that you need to you know get rid of this person now you have another you have another Pool of people that you can just pick from and say hey here's your offer right and and I think especially not being a roofer right not being that familiar with the industry he was it felt to me he was kind of holding my decision-making process a little bit hostage right of of how do I how do I actually do this and that was just very helpful for me it was just interviewing people knowing that look there are other people with these technical skill sets out there he's not the only person that that can do what he's doing so that was made the decision quite easy after that great tip Matt and just to be clear in contrast to probably what most people do which is they torture themselves over the over the the decision to let somebody go they ultimately let somebody go and only then do they start to refill that position you're talking about flipping that order right you mentioned your partner and and how uh I either he really liked this idea or you were really convincing in selling it but it was a a brief conversation to get them on board but what more can you tell people about doing this with a partner yeah I think you know you have to have very clear and transparent goals right and you have to be aligned so you know the partner I have is he's based out of Miami so part of our whole growth plan right is opening up an office in Miami um so so the goal is at a certain point in the near future we'll open an office in Miami and then he will then run that office um you know and I think it's worked out really well for us right he you know I in my professional career I I've never considered myself the best sales closer right so he is and I think one of the best sales closers and so what he's really helpful with is is really helping understand you know what is our sales process how do we help close this and then also you know helping our our salese actually drive the conversion rates higher um you know it's gone really well I think what's what's really interesting though when when speaking of Partnerships um we also technically have a third partner so Roofing in Florida you have to have a license well I'm not a license roofer and my partner is not a license roofer so we in in speaking with our lender we're trying to figure out okay how do we actually get the SBA comfortable with us purchasing a roofing company without being licensed so he actually came up with this um process we we actually had a we brought in a 5% limited guarantor so we found another roofing contractor that was actually a friend of the seller who wasn't using his roofing license he actually came on board he owns 5% of the company and he is on the hook for 5% of their principal if we ever default on the loan at any point in time so he was that was a really interesting thing and I haven't actually heard a lot of people talk about that but apparently you can actually have a limited guarantor uh to help you know a transaction for for the SBA yeah this is something that I I need to be asking more about um and I've I've gotten a little better at it after 200 episodes so I'm glad we're talking about it it was on my list here the when you by limited guarantor it means he's just pged for his percent of the principle meaning 5% that's the what the limited means that's absolutely correct so if you're borrowing a million dollars you default you default on a million dollars he's on the hook for 50,000 you know if you you're in business for five years you pay that balance down to 500,000 they're on the hook for 25,000 yeah did he bring any Equity to this or did he kind of get 5% of the business gr no he brought zero Equity he got 5% just for being a limited guarantor it's a great deal for him yeah it's a great deal for us too right it is funny because a lot of when when I I talk to other people they talk about buying businesses you know I I all think of the questionable that's a really expensive you know piece of financing you know they got 5% of businesses for using their license and you know one you sell the business for $20 million it's going to cost you a million dollars and you know my whole thing is you know I'm not a greedy person right so it's like okay I I hope he makes $2 million right like you know it wouldn't we wouldn't have been able to get the transaction done without him um right you know and and he and he did put you know some liability up on the line so you know I I hope he does really really well and is there are there any strings like how do you what if he what if he severed his relationship with you tomorrow how does that how do you keep him involved for the duration yeah I mean we you know we that never really came up they never really asked so you know I I I don't know I mean we we don't it's not like we have any sort of operating agreements with him that basically says you know you can sell for you know X multiple of you know last three years earnings or anything like that so you know he's he's um older retired and he's just not really that concerned about it he really did it mostly as a favor to our seller to get the transaction completed and really the only requirement you have of him is that he keep his license active and that would be a pretty stringent requirement because I assume these I assume a license needs to be renewed refreshed continuing education sort of thing right well I'm actually working on getting my license now so I will be able to be licensed in June so it's really not that it's not a big concern of ours um really he just really needs to have it active for the next you know couple months then we can move the license into my name ah okay and and here's the other thing too that's kind of crazy like the the SBA didn't even require us to have uh his license attached to our business before they let us close so in his in fact they require so is they just wanted him to know that he was a part of of the you know Equity structure in the deal and they just needed a copy of his license so they funded us without even showing that the that the business is in it licensed in his name and in fact it never has been licensed in his name it's still licensed in Jeff's name who was the old seller interesting which is fascinating to me but it's like you have this requirement but they don't it's like they didn't make us you know actually prove that we were you know that that he was he was licensing your business gotcha so so so so the SBA didn't need to see or didn't check that the business licenses in this gentleman's name what they wanted to see is simply that he was on the cap table that was it yeah huh huh and do you think that that was fine with them or that that might have just been an over an oversight I I don't know I you know it's it's kind of like they they told us you know give me this information give me that I mean I'm not an expert on SBA underw writing guidelines it it could have been an oversight you know um but hey we got the deal done regardless so and if he would have done that you know if if we would have asked him to but there was just never a need to yeah right and so Matt when you get licensed and you no longer need his do you expect to try to to try to understanding that there was no there's no triggers there's actually there's no written contract between you and him but do you expect to try to buy him out because you know his 5% Equity is cheaper today than it's going to be tomorrow one would think and one would hope right as the business gross you know and I and I think about that quite often and then I always remember that we all signed a a piece of paper with the SBA saying that we will not change the ownership structure until the SBA loan is paid off right so if we have some some you know crazy growth and you know the company starts throwing off a couple million dollars here at NE you know we're able to we decide that a good use of those funds would be to prepay the our SBA loan then you know then that's presumably something we can do you know what what I've dis what I've discussed with him is you know if we ever want to buy it back we'll give you 50 Grand and he was okay with that right so we just aren't able to do that until we pay off the SBA loan so again we kind of have like understandings but there's just nothing you know nothing in writing so probably a little more Loosely uh you know it's probably structured a little more Loosely than a lot of other you know acquisition entrepreneurs would would be comfortable with but you know it's I guess the way I look at business in general is if you're doing well you know you're treating your people well and you're not being greedy and you know you're growing then there's plenty of money to go around Soh robs you used robs uh tell tell people uh give people a minute or two on how that looked in your case and and remind people what robs is please yeah so robs it's a rollover for business what's I forget the exact name rollover for business uh succession is that right or oh is that what it is okay I can't I can't I don't know I don't know I can't define the actual acronym acronym basically all the robs is is you know the the IRS allows someone to take money that's either in an IRA or a 401k and then use those funds to um purchase just a small business so we went through a company called Guidance Financial they helped us set all that up um I think the for me we didn't need to do it from a capital perspective um but understanding just on the backside if we were to ever sell the company you know the the tax um efficiency with using our robs is just it's it's something that I think every uh every acquisition and entrepreneur should should look into so and what else she can do so I transferred money from my 401k used that as part of my Equity injection into the business so you know my 401k owns 22 and a half% of the equity of the business and then I personally own another 22 and a half% um and then my partner owns um you know 45% outright and then our other uh limited guarantor owns the other 5% you know the other really cool thing about uh uh doing a robs that have it in a 401k plan is you can actually do a Roth conversion on your cost basis so you can actually you know in certain situations if you do a Roth conversion you get a huge capital gain down the road you know you're not you're not taxed on that at the time of withdrawal so from a tax efficiency perspective it makes a lot of sense to at least look into it very interesting okay so I I I still feel like I have a lot to learn here about robs because um more recently I've had guests who um did robs and then they basically I guess because they they really did want to tap the equity that was in their 401k and they then wanted to buy their their so so then they they buy the business their 401K owns a significant chunk of the business and they then scramble to buy out their 401K as quickly as possible so that the owner ship transfers back out of their 401k and they hold all of it and it's not in their 401K anymore um so they weren't doing it for any kind of tax advantage reasons but you are and so so to to benefit from that tax advantage you have to leave the 22 and a half% in your 401k indefinitely Or until excuse me until retirement right until retirement but you know you can take know but again it's like it all depends it's really a lifestyle choice right I mean if you need to spend all of the money that the business is making is support a lifestyle then then not that's obviously not going to work right but I guess my thought I'm thinking more about longer term view right is that you know if everything goes really well we have a very successful exit in you know five seven 10 years however long that is I can always I can not pay a capital gain on my exit but I can always reinvest that money through another robs into another small business you know and I think that's that's another you know again it all it all depends on on the person right but but for me especially with the Roth Roth conversion of your initial 401K funds into that robs I mean it makes a lot of sense for people that don't need to access that liquidity in a short time frame great and and so just going to repeat it in my own words so yeah if you if you don't need the cash yourself if you don't want to have your hands on that cash to do whatever you want with and you you keep the ownership in the robs you just keep the kind of it's shielded from capital gains taxes and oh by the way you you can you can use that cash for equity in another business acquisition so if you're growing your if you don't if you don't want to actually use that money to spend on yourself and on your life but instead just kind of reinvesting and building the Empire and kind of compounding the Rob having it your 401k continue its ownership uh will enable that we'll allow that and so that's fine and great even right I think and I think anyone that wants to read about this and that this potential power this I think it was Peter theel that has something like4 billion in a Roth IRA which is just insane right if you think about what the Roth IRA was initially structured to do and and it it doesn't seem like that's possible but it is so EXA exactly now audience don't quote me but I as I understand it I think that his Facebook um investment so that was how that was like his first big win I think there were a few few and you I think there were quite a few and it was something that's been built you know over time and he just does it all out of his out of his Roth IRA like he's making you know hundreds of millions of dollars hundred millions of dollars in tax yeah I'll throw a half a billion L we just pulled out of my retirement account right this is pretty impressive what he's been able to build through that structure great um okay that that was great Matt two more big questions for you um the first is your plans uh and building what what are you building here what what what do you I just heard you say five to seven years maybe buy another business so let's get into that and then and and then I want to do a deep dive on the roofing business more than we have I want to directly hear kind of a total breakdown of the whole industry so first on your your plans what what are those yeah so you know we don't have any sort of you know fiveyear time Horizon um you know we may own the company forever you know from a revenue perspective our goal is five offices uh $10 million per office in the next five years and you know the more I'm under the more I'm getting into it I really think it's it's possible that we could actually have five offices each generating $20 million per year in Revenue you know over the next maybe seven seven to nine years you know I think W it's it's just such a big industry and and the more exposure we're getting into it and the more success we're we're finding you know I I I keep like pushing those goals what I think is possible you know even further than what I thought was was prior to getting into the business um you know and and then what does that structure look like for us well it's we really want to have an office that allows us to access every part of the Florida Market um except for the Panhandle there's other reasons why we don't really see a lot of opportunity to Panhandle um mostly because labor comes in from other states that drives down prices but um you know it's really looking at you know Orlando um maybe Vero Beach Coco Beach you know somewhere on the Northern East Coast um that allows us to really service Jacksonville you know down to Vero Miami and then um you know probably Fort Meers and you know and there's there's other Port St louisy is another you know good location there's just there's so many different locations where we could have offices and we're still mapping out what exactly that looks like but you know the immediate goal for us is to open up Miami here in the very very near future um a lot of people ask S just another follow to that a lot of people ask well why not just go buy other companies right why not just go buy other businesses in these locations and and do it more quickly and you know I think the answer to that is because when you're buying a roofing company if my thought is if we can do well on the you know organic grow site here we should be able to take that model and just copy and paste it into other other places so so from a return profile I just I don't know how much extra you know value you're getting by doing it through acquisition but again it's still an option on the table for us but Matt I thought even though the seller hadn't been aggressive in marketing and sales he had built a really strong brand reputation and that's not something that you can flip a switch and have in in Miami right but the thought is is that that that's true right that that's certainly true but you know the thought is if we have an office in we still get requests to go down to Miami right he has a good reputation with his Network right but that's still relatively small so the thought is is if we can double for example in the just the one segment property managers if we can double that here in the Tampa St Pete market then why wouldn't we be able to successfully Implement that in other markets right with those referral sources so you know maybe I'll take it on the chin with that thought process but we'll maybe that'll be a conversation in a year from now right see how that's going MH well um yeah so so uh TBD and I don't mean to be skeptical I just who I'm just um trying to understand organic versus versus buying because versus inorganic acquisition because you you had planned as I recall to do inorganic acquisition that this would be your platform purchase and then you would buy boltons and buy your way to growth which of course is a The Playbook of many of my guests right but now you're thinking organic is better yeah yeah and I think it's probably a combination of two of both right if we find a good Target that's a good fit for our culture that is a good fit for us then we would certainly be willing to entertain you know entertain Acquisitions it's just um you know we're we're not we haven't come across that yet and quite frankly we haven't been looking right I mean I've had my hands full with with running the business in you know over the past six months eight months now and really you know understanding what it is and where we're where we're trying to grow it so I've been and it's interesting because I you know I speak to or I listen to your podcast and I hear a lot of your guests and just they're phenomenal growth stories you know almost in 12 to 18 months and when I was going through the process of buying a business I was like oh that's that sounds so easy right I'm I'm going to do that and then you get into it and it's like well wait let's pump the brakes a little bit right let's just focus on what we have now let's do that very well and then you know determine what that growth looks like looks like down the future so it's it's something we're still wrapping our our hands heads around quite frankly regardless of what you find um a big takeaway that people should uh have from what you said from what your kind of goals are is that this is such a big market and it it's realistic to think that a 10 or even $2 million office uh could exist in these various GEOS around Florida so do doing some quick arithmetic that's a $50 million business 50 million Revenue dollar Revenue business in five years May or you said maybe a 20 a hundred million uh business in seven or eight years so big numbers uh are possible in terms of just when you're playing in a really big market right and it's it's not only and it's not like a farfetch possibility either right I mean I I I I truly believe that if we didn't have certain capital constru around certain things around bonding specifically you know I I I really truly believe we could we could hit that $20 million you know in in just out of our office in you know 12 18 months right just through one segment of the business I mean it just really is that that big wow pretty pretty enticing Matt okay well uh perfect segue to my last question which is let's just get a primer on the roofing business we've already learned a lot but um maybe now let's kind of structure it so break down for us the roofing business obviously you got residential and commercial but give us more granularity than that yeah so you know so is everything from kind of a roofing Services right it's really you know you've got repairs and then you've got new Roofing projects um you know inside of that you've got residential repairs that could be you know something as simple as you know placing a skylight which that's actually not very simple but it could be you know they have a couple of Pop nails and you have to go you know Hammer the nails back down and seal them up um you know to to large but there's also a lot of large homes right in Florida that you know that are looking at to $250,000 roing projects on the residential side know within the commercial side you've got condos and HOAs um you know you've got new construction you've got um the flat roof you've got you know I mean just just drive down the road I mean this is something that I think people don't really put into context but I mean literally if you just drive down the road every single building has a roof right every single building right every single building has a roof right and so it on the commercial side you know there's another new so there's new construction which is a huge huge business um like like we literally don't even look at 10 bit requests that we get probably every day for new construction in Florida um and and the reason why is because we don't have the flexibility in our production teams right now to be able to meet the those new construction demands and the reason why is because projects get delayed right so you could be scheduled for okay we're going to start Roofing May 1st of 2024 well next thing you know oh we didn't pass this permit right we didn't pass this we didn't get this so now we're not ready till July so the bottom line is is in order to do that well and to have a good end product for the customer you have to have a lot of you know flexibility uh in your actual production production schedule um so that that's the new business side you've got re-roofing and new roofs which really applies to every building you know I I think in the commercial side too what's really prevalent and something I think it's really prevalent for this conversation is understanding the citizens guidelines right so again citizens a AFF an insurance pool they require every flat roof to be either re-roofed with or completely torn off every 15 years right so they have predetermined this is the life cycle of every single roof that we're going to ensure and so that drives a lot of demand in the State of Florida for new roofs um you know and then you've got federal government work you've got local government municipality work you've got I mean just the the list of commercial projects just keeps going on you know it's it feels pretty endless as we're talking about it right um yeah you know like I said you got the condo and HOAs um you know I I think the the difference really between Roofing in the commercial space right it's and this is something we're still really trying to understand is from a price perspective right there are other contractors that will do a million-- doll commercial project and they will try to make you know a 15 to 20% gross margin right on that million dollar project especially new construction right new construction gc's they are always trying to get the lowest price possible you know and most new construction they only warranty their building for a year right so they don't necessarily they don't have an incentive right to really to provide a longer warranty or to find really good contractors for them it's like just you know get the roof on get it signed off pass the inspections and you know we'll move on to the next building um so so that's kind of the way the the new construction space is set up but going back to margins in and the bigger the project so the bigger the project in the more traditional conventional roofing systems the lower the margin is going to be right from a uh the gross profit margin is because you know you're thinking about it from from when you're in my seat it's like okay would we rather make $200,000 of gross profit on a million dollar roof right and win that win that project and complete it um or would we we we not want to make that $200,000 right so they're they're on those the bigger the project gets the thinner the margins become um and and we're still trying to work through you know where are we willing to price these these larger projects you know on the home side you know we price everything at a certain profit margin and we don't we don't we don't have the the the need to you know really price it differently just because there's not a lot of competition in it so pricing power uh because you're one of the only games in town always nice and then on the so that so that's commercial on the residential side there are as I understand it kind of different types of shops door too shops y so-called stormchasers where you know they'll blow into town when you know on the heels of a hurricane coming through um I I also have the impression that that some of these residential focused roofing companies sub everything out so kind of at the top level they're just Leen or kind of just aggressive sales and marketing operations break all that down for us yeah so there's you know on the residential side yes there's a lot of there's there's retail and insurance work right so insurance work that's the stormchasers that you were you know referring to that's there is a lot of that in really Nationwide right there's a lot of storm chasing in big hail markets Colorado Texas you know Florida's bigger hurricanes um we we personally don't do any of that and you know the reason why is is just because we have a needed to you know that's something that we I think about but it you know at the end of the day it's it's like we've got so much already on our plates right that we don't really need that business and then it's also you know the culture at at at USI is people like being home right people don't really want to travel necessarily like they will right but it's like if you send me on the road every week you know I'm not I'm going to go find another job so we don't do uh a lot of stor chasing but that's definitely a a huge business in in Roofing um you know on the retail side is you know basically my roof is at the end of life right and I need to find a roofer to replace my roof um you know and and I think it's it's pretty fascinating I think the a lot of the retail channels right A lot of people are getting multiple bids from um you know different roofers right they're calling they're getting three bids you know they're going to Google what's the best roofer around me you know calling their friends who did your roof Etc in the form side it's kind of like if I can get you if I can get on your roof and get you to sign a contract it's they're getting it closed that same day right so I think it's it's much less competitive and I also think on the Storm side on the insurance work side there's actually less pricing power because the insurance company has a program called Xactimate and Xactimate is what they use to determine What's the total cost we're going to pay for this repair or reove right so there's not a lot of you know wiggle room for contractors to at least from my knowledge right you may talk to rer says what he has supplements are the best thing in the world right we've got tons of wiggle room on price I I just from my from what I understand of that space there's not a lot of wiggle room on what um what can be made for doing a roofing project on on the insurance side fantastic and you touched earlier on the fact that private Equity is very active in some of the other trades namely HVAC maybe Plumbing um and not here do you now that you're in stop you real quick there yeah yeah because I I should say that was true in 2021 right so now private Equity is starting to come into the space pretty heavily I actually just read an article I forget who publish it but talking about uh private equity and you know wanting to buy these roofing companies and now I'm getting reached out to probably you know once a week um with different private Equity firms saying hey would you like to you know have a call about selling your company company and I kind of just respond well I'm not probably not the size yet for you but you know follow up in the year you know like type thing so yeah it's it's private equity and that was part of your thesis you you thought that private Equity it it wasn't active in Roofing but may well come and sure enough it sounds like it's coming so good on you good prediction there lucky it's okay to be lucky yeah so yeah private Equity is getting into the space you know there's um you know which both is an opportunity and a threat right I mean if you've get a ton of you know Harvard and MIT grads starting to really get in the space then you know they will probably be able to figure out a lot of stuff to create competitive advantages very quickly so you know which I think is great for the industry and um you know it's going to force us all to get better so know a lot of people are anti- private equity and know they they don't honor their warranties they don't you know they're not going to treat the customer well they're going to treat their employ employes terribly and you know I I think that's true in some cases but in a lot of cases it's also not true so I I mean I welcome the private Equity investment in the industry I think it's needed I think there's more capacity that's needed in the industry so I mean like get your checkbooks open it's it's a great industry and something that John Wilson said one who I mentioned earlier who came on a couple weeks ago and did a breakdown of the trades businesses kind of the taxonomy of of them and um how they rank and what they're known for and so on one of the things that he said about Roofing which was fascinating is that to a person every owner of a roofing business that he knows has had a gun or knife pulled on them by an employee which is to say that uh you know roofers can be a little a little rough that you're inside the industry you know I was interviewing this person for repair Tech and you know spoke to him on the phone it sounded like he knew a lot about Roofing a lot about repairs different systems and then like I made him an offer and he just completely ghosted us for like three days right and I was like H that's weird you know thought we had a good thing going that I kind of thought he was going to come come be a part of the team well he shows up like 4 days later R just shows up at our office completely unannounced and he was was definitely on some sort of he just looked like he'd been on like a three-day Bender right and just didn't look very healthy and so you know what was he up what did he show up wanting a job he's like hey I want to take you up on that offer you gave me and I was like I was like dude like the first thing I need is for you to be reliable right like you can't just disappear for three days when we had all this great conversation you know and then just expect to come like walk in on anoun like yeah here's here's your job here's the company truck here's all the tools right looking disheveled like yeah you know here's $775,000 worth of equipment and well sure you can take the truck home because you're a repair Tech we may need you know there may be some nighttime calls for you you know like that's just not going to happen right so yeah I've had some pretty interesting um you know I've heard I've heard some of our guys that have been in the industry for 20 25 years have just crazy stories about crws getting in the fights and you know trying to push people off roofs like just some crazy stuff like we don't have that here like our our guys they show up on time they're sober you know they're they're pretty dedicated to their you know to the profession which is really awesome um I got lucky with most of that you know most of those people have been here through when we acquired the business um but yeah before you buy a roofing company you may want to be prepared for dealing with um you know a lot of HR issues that would not be prevalent in a lot of other Industries say to say the Le least okay so verified then uh and then last question on Roofing Matt U we hear about Florida we hear about Texas we hear about Colorado is it and in if you're not in one of those States where there's just huge demand because of weather is it still an interesting business with um I mean obviously smaller Tam but still worth going after or what do you think if you weren't in one of the hot States for rofy yeah I think look I think any business where you have a need can be a good business right like with the roof for example no one ever wakes up in the morning he like oh I'm going to buy a new roof today right like no one's ever said that and it will never happen right but if their roof's leaking the first thing they're going to do is oh my gosh my roof's leaking I'm not getting on my roof I need to call someone yeah right as opposed to like a if you're doing a kitchen remodeling company for example right or you're you know you're you're remod kitchen bathrooms whatever well a person can live in their home with an old kitchen right the insurance company says hey by the way 20 years old you have to have it replaced you know now they have to make a decision of okay do I want insurance on my house and an actual roof over my head or do I want that new kitchen right and I would I would put money on that every time they're going to say okay the roof's probably more important than you know our our new kitchen so yes it's it's non not a returning Revenue business but there there is natural demands I think that will keep the you know the um the demand there on on for projects anything I didn't ask you Matt any topic we didn't hit no I think we covered everything I mean I I appreciate all your time and I appreciate everything that that you do for the community you know I think um I I will say you know I know you advertise you know you can decide to to cut this but you know I I work with August Felker guys he's awesome his team's amazing and if you have a called August Felker and his team if you're going through a you know an acquisition you should definitely reach out to them I've had nothing but a great experience with with with that group all I appreciate you saying that Matt that's great um I I will definitely leave this in and uh and yeah and I of course I know August personally and he's been nothing but great for me to work with in a different capacity as as a sponsor but he's really great guy so that's awesome to hear and thank you for saying it Matt if people want to reach out to you uh what do you like LinkedIn email yeah just email is the best it's just Matt 2ts matat usir roofing.com and feel free to reach out you know I'm always here to help people they you know if they want to understand the limited guarantee how we did that I'm not an expert on robs I can kind of you know show them more models and you know of of of how it can make sense from a tax efficiency perspective but uh you know if if they have questions about Ralph specifically and I would say call Guidance Financial that's who we use and another great great provider um you know if they want to talk about Roofing you know always here to to talk about that as well Matt Jackson thanks very much sir thanks well having going I hope you enjoyed that 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