gu Fano welcome to acquiring minds thanks for having me will good to be here gu you know I'm enthusiastic about your particular business it it's not your typical Searcher Target Searcher business it seems differentiated in its own Market I mean and it could actually serve some acquiring minds listeners people who might buy a service Services franchise business so I'm looking forward to a very interesting conversation with you gar let's get started with a little bit of background on you please sure so um started most of my career in Consulting focused on customer service and sales worked at some of the larger Consulting organizations out there um and got to do some very cool projects in what is traditionally called Call Center or Outsourcing space and uh for about five years had been doing a search before I found top dog um and uh got to work on some very cool projects but knew for a long time that I did not want to head down the long-term sort of Consulting partner route and found search as a really interesting way to explore uh exit strategies from Consulting so you now had you considered entrepreneurship not not ETA necessarily but just entrepreneurship broadly as an exit from corporate life or put another way if you hadn't discovered ETA would you have ended up just in corporate life for the duration I had uh explored some more traditional like zero to one entrepreneurship ideas um none of them ultimately panned out there was also a strong belief in my family that to leave anything whether it was a a career or a job or a musical instrument whatever it was in my childhood you had to uh already have the next thing lined up and be ready to go and that was sort of a a big hurdle for zero to1 entrepreneur ERS ship uh so I did have some some small ideas that generated Revenue but were never uh and actually were profitable but never anything meaningful um and uh so I probably would have stayed a more traditional course and I think search was very attractive because um I think as probably most of the folks listening know you get to step into a business that's already operating has a customer base has a proven Market fit and that was a lot more appealing to me yeah I guess it was your family that your family's influence that led your search to be five years did I hear you were not you are not going to leave that job until you found a business to buy no full-time searching for you thank you very much yeah which hopefully is helpful to some of the other folks out there because I think it I think it is an interesting option I I learned some stuff doing a fiveyear search um for the vast majority of the search I was focused on I think what were more traditional Searcher type businesses and and industries But ultimately found a business that was you know very much aligned with my background and experience which I think what made you know once I found Top Dog it was very easy to move forward but doing a part-time search with a full-time job it was uh there was a lot of Peaks and valleys where maybe you have a lull in your your your work traditional career and you can ramp up search um but but that definitely extended the time period a lot but I think that's okay but but wait let me understand so do you think that it took 5 years and I I don't mean to sound like I'm overly critical of that people's are on their own paths but um do you think it took five years because work your W2 was was intervening or because you just didn't find the right business until year five and put another way do you think if you had gone on full-time search you would um have bought a business sooner or no because it took finding time dog which came on the market when it did it would have been five years anyway to actually pull the um I think had I been doing a full-time search I would have found something sooner um and would have been more uh you know more easily able to jump into an industry that wasn't aligned with my background um I had a couple Lois in probably looked at about 125 companies but you know I think that I think that a lot of Searchers need to do a very realistic gut check on how comfortable and how ready they are going to be to jump in and if you're not doing a full-time search uh you know I just don't feel like my uh ability to research and understand in industry was as comprehensive by doing it part-time and so looking back my advice to myself would have been to focus on the industry and space that I was in rather than looking outside of it okay interesting so some of these 125 I assume many of them you looked at and rote off because they weren't quality businesses this is a numbers game as we know but it sounds like some of them you wrote off because they weren't the right industry you just couldn't get comfortable with you as CEO owner do I hear that right yeah that that's correct I mean I did get to the point of putting in uh I put in three Lois during my search and so for two of those uh you know I I felt pretty good about the industry I felt pretty good about the company um ultimately those did not go forward but I think like I think that it actually would have been pretty difficult to get myself comfortable to sign an an APA even after an Loi like uh you know and I think that's probably why a lot of Brokers and and sellers are cautious about uh Lois too great G so and give us a sense of time frame or where you were in your career either by how old you are or or otherwise how many years out of college were you sure I was i' had been working in customer sales and service for about 15 years uh so I felt like I had pretty good background in sort of contact operations and where are you based Boulder Colorado okay and were you doing your search from from Boulder is this is this where you're from uh I'm I I I didn't grow up here originally I grew up in New York area but I was basing my search in Colorado and Boulder had initially started a lot wider and even looked at uh businesses outside of the state or parts of the state that might be a a three four hour drive and after going through some early discussions with those types of companies I I really knew knew that I was going to have to hone the search in around that the Boulder area so um I really wanted something that would be basically within a 30 minute drive well that narrows things down considerably now Boulder 30 minute drive Boulder is more than 30 minutes from Denver right just over 30 minutes so that means you didn't even include metro Denver or metro Denver yes but Denver proper no the I could include basically north of Denver but not South uh Denver and uh and think south of Denver is probably where there are a lot more companies and businesses but I just I knew we weren't going to leave Boulder my my wife and my family were pretty embedded here for the our friends the culture the lifestyle and um and uh so just after trying to look at a company that was up on what we call the the Western Slope sort of probably about an hour west of Steamboat Springs and thinking it was a pretty good company being very interested in it but just you know struggling to find the time to go meet the seller or go to look at their business I just knew it was going to have to be really really close and I think that I think that people need to be very realistic with what that extra time commitment means like if it's a hour and a half drive or an hour drive are you GNA really be able to do all that due diligence that you want to do in the purchase process and things like that so really started to hone in great and anything more to say about your search if were like in terms of your deal flow where was that coming from and and anything else to give us yeah I went through I think probably about every process out there I'm sure there's many more processes now but the the classic big three uh proprietary uh broker Leed and then ultimately just looking at bis by sell um so started with proprietary researching an industry finding Target companies um and maybe we'll get to this at some point but actually did make an acquisition in that area that's that's kind of unique uh and and not a full-time job as well um but then transition more to broker Le and did not find a lot of momentum with that and then ultimately just because I enjoyed the process so much and the action just sort of looked at bis byell for probably the last two years of my search um anded you enjoyed looking at bis by cell yeah yeah I I'm not on social media and that was sort of my my replacement for social media and would look at companies uh use that as a way to build an idea or a thesis find other similar companies uh use the Sims as a way to learn about them then do some of my own research and uh you know that's something I I still do occasionally just because I I thoroughly enjoy it and looking at the businesses and thinking about what makes them good or or not good yeah totally good good for yay for bis by cell uh exactly despite despite its reputation it's such a it's such a wonderful uh place to educate yourself and wet your appetite and get excited okay anything else to say about your search before we launch into the company that you found and bought I think that the do you want to touch on the the company that I did buy through a proprietary search or thank you for the thank you for the reminder there G um Rocky Mountain Huts I do want to get to that but I want to get it to it at the end because it's kind of to the side it's super interesting so we're teasing the audience here it's super interesting but I don't want to spend the 15 minutes on it now and have it interrupt the flow of the of the top dog story so we'll get to it at the end perfect so tell so anything any other than Rocky Mountain Huts anything else other than hearing about Top Dog okay so you find Top Dog on bis byell I found Top Dog on bis by cell yep and tell us about it um so top dog is a outsourced Sales and Service Company um we have about 45 employees and we help small medium businesses increase their revenue by implementing a pretty sophisticated sales operation process to convert their leads into customers um when I bought it we had about hundred small businesses around the country that were working with and it really just provides them consistent predictable Revenue every month they know if they put X number of leads in the top of the funnel we'll deliver whyde new customers for them and uh it's it's a 15-year-old company uh and it's managed nearly a Million BC leads for its clients over those 15 years and I think it's a it's it's something that's tremendously needed in small uh local small medium local businesses around the country uh it's a revenue operations process that really is only available to I think some of the most sophisticated sales organizations and we can effectively bring that process and implement it in small medium businesses effectively which is really really powerful that's really get into really what this business is and does so it's for a consumer service I can either lead you or you can you can tell us so it's for a particular franchise you know give I think you know all the questions I'm going to ask so give us very specifically exactly what you guys do and who who your your customer is yeah so every day Top Dog sells about $100,000 of dog training $100,000 of dog training okay that's amazing so yeah today we have about 120 clients around the United States and Canada that are all uh operating small local dog training businesses and every day their leads come to Top Dog we put those leads into a Salesforce CRM and manage those leads with a sophisticated telepan and Omni Channel technology platform to you know educate and convert those leads into customers for our clients and it's for these 120 clients at a particular franchise they're all in one franchise um and yes although we do have a new client in a new franchise uh uh who was a former GL guest of your podcast too yes yes um well and we'll get to that the potential of this business but when you bought it and as it kind of as it exists mostly to to date y there is a single franchise that provides dog training to Consumers to owners of dogs a you know the the franchisee in Maine gets leads coming into their website every day from all kinds of sources probably mostly digital mostly PPC and then you guys those leads funnel into your Salesforce in your team then works that lead down the funnel and closes and closes the closes the lead and then that um that customer who is interested in dog training becomes a a customer of the franchisee and you get paid exactly yeah and what it is is that there's this special sauce I mean you guys know how to sell dog training you know and not only dog training but this particular franchise franchise or dog training so you guys are super dialed into how to you know th this and so this franchise maybe goe can jump in and maybe help out there's really two sort of key components to what makes this model work really really effectively in terms of like top dog's capabilities the first is top dog is really really good at sales and very good at B Toc sales for other companies and what I've learned over my first 18 months here at top dog is that this model actually works very well outside of our core you know offering for dog training yes it's it's very effective because we do know this this client's business very well we understand their processes but we have a couple use cases where we've applied it outside of that and the same flow and structure that sells BC Dog Training Services very very well is also very good in other spaces that we've proven out over the the past year as well so there's a sales methodology that's very very effective for B Toc sales the the second part is that and this is probably something I I would could have learned more about in my due diligence process but um the technology that enables this process is really really important um when you're sales volume is this high and you're getting you know 7,000 leads every 30 days like this has to be automated and leverage technology and so it would also not be possible without the very unique way that top dog has a technology environment built to support that and that environment was fortunately built by the seller in a way that also lets Top Dog accommodate other lines of businesses very effectively so you could kind of you can Flex pretty easily you could plug plug in new franchises either within this network or even try other Home other services BDC Services you're now doing ex and kind of scale I mean you've got scalability built in yep okay exactly and so I guess um I guess the opport here that the that the founder saw and that took advantage of and you're now taking advantage of is that you're providing more sophisticated sales than a small business owner can themselves so so in some ways it's a lot like it's on theme with so much of what we talk about in ETA where the sellers the original owners of these businesses that we buy aren't you know don't have maybe the sophistication often in Tech we talk about it they don't necessarily have the tech sophistication but it probably applies to maybe many categories of their businesses um and sales sales being no exception what's interesting is that I don't feel like it's come up much I don't feel like the topic of sales you know good work somebody down the funnel quota oriented sales is something that's talked about a ton maybe I'm I've just been negligent but talked about a ton in in ETA and search um versus like you know working in SAS or something people are talking about sales all the time I mean there's there's whole podcast devoted to just sales in just different different Industries and categories so how do you respond to that yeah I think that I mean I come from more large sales deals having worked at Consulting companies as well as in the an outsourcer and as well as a technology sales in the call center space so I'm very used to that sort of extremely sophisticated pipeline management process and and um what I think is you're completely right that that often does not extend down into smaller businesses but you know this matters so much for small businesses when you might be an individual operator you need to uh be able to predict your Revenue that's that's your livelihood and when you're also a smaller shop like a small business then if you're out delivering Services you may not be paying as much attention to sales and occasionally we would see this in Consulting where you're delivering a lot of projects and as a result your sales pipeline starts to decline and so then you you know have sort of a a period where there's not active billable work and you have to go sell a whole bunch and then you get a whole bunch of projects that drop and now you're too busy and so effectively what we're doing is helping small businesses manage that workload and make it more consistent like if you put 100 leads in every month you know exactly what you're going to get out of it and you're going to keep your workload much more consistent make your Revenue more predictable which I think is really really important and often not available great well that that was well put and and I want to I want to spend more time on this G but I don't want to get too far away from your story so we're going to return to okay unpacking Top Dog and kind of the value prop and how to think about all that um and what we can learn about small business sales too from from that uh in a few minutes so so let's go back to the business um you gave us some of the bullet points can you tell us what the terms of the deal were and and what um Revenue in SD or margins look like yeah it was a the the deal structure was pretty classic like 801010 ultimately ended up at close at 8055 so 5% with the seller note um it was below the typical Searcher Target size and I think that that's what you know helped me find it um I think both Searchers are looking for something at with a floor of about 750 to a mill million on the SD and this was below that but had been growing really rapidly so the terms of the deal was uh about a 3X multiple on the onee uh SD which I think is interesting I actually you I and our preall were talking about this so I went back and looked at what would the multiple have been on sort of this three-year and it would have been more like a 5x um but uh and maybe we'll get into this a little bit more but I think one of the things that was unique is um and and maybe this is just my lack of knowledge about the SBA but um we were closing on the business in October 2022 and we basically had line of sight into all of 2022 numbers but the deal was based on the 2021 uh financials and so there was a tremendous amount of growth already built into the business and so that's why I felt comfortable using a a one-year uh uh uh SD number for multiple you had negotiated the sale price earlier in 2022 based on 2021s numbers one year just one year as opposed to taking a blended average of the previous three years exactly that might be that might make somebody nervous because the mo the most recent year is often the strongest year if it's a business that's growing um so so you know you're you're not you're not kind of looking you're looking at a tighter snapshot of time of the businesses history which can be riskier however the deal didn't close until October 2022 by which time you had seen nine months of 2022 performance and the business had kept growing and yet it wasn't being retr you were still you were still looking at the the sale price that You' negotiated earlier that year so um so that gave you the comfort of just looking just basically trading on 202's numbers um and also it you know if you if you kind of consider a multiple of what 2022 numbers were looking like they were going to be you basically had a you paid a a lower multiple um exactly so basically on the the day I closed we had visibility into all but about six weeks of 2022 is revenue and so if you use that as the multiple it was below a 2X multiple below a 2X multiple why was the business all of a sudden growing so much if it was 15 years old answer that and then the obvious followup is did you know was that a cause for concern yeah well I think the it didn't take much industry research to understand why the company was growing uh there were a lot of pandemic puppies and with the primary clients being dog trainers um you know it was the services were tremendously in demand so uh the business grew significantly uh during the pandemic okay but but when you looked at the trajectory it it was the business had a steady growth rate then sort of really significantly spiked during the pandemic and then returned to the previous growth rate so we weren't seeing these uh declines or or like a big correction it was just you know the pandemic just took the entire growth curve and shifted it up really really quickly so and that's that's a key point in a key sort of gamble if you will that you made that this that this 2021 and 2022 to growth was going to be the new normal as opposed to returning down so any number of people who bought e-commerce businesses made the same Gamble and were burned because the numbers did did decline back to pre-pandemic levels and so they bought these businesses at very rich valuations yours didn't I wonder why yours didn't I guess because when you buy a dog that's not then you need it's a much bigger purchase and then you and then but You' you'd still think that okay there was this explosion of buying puppies during the during the pandemic and then there would be the need therefore the KnockOn need for dog training but as people and so there would be this swell of of demand for dog training services but that it would recede because the acquisition of pets dogs would also reced so why wouldn't it follow that come back down are a couple of other macro trends that are happening in the pet industry but more and more as pets are viewed as uh members of your family rather than a pet uh spending is increasing and much less discretionary uh and so because of that I think that you know we've continued to grow although this year we're starting to see things likely uh you know flat line or just or or not necessarily Flatline but the growth rate is definitely declining from from last year um I think another part of this is you got to go back and look at what top dog's business is we're supporting other small businesses and this isn't just like a hobby for our our clients this is their livelihood and so they are very committed to this working because this is how they push food on their table and so this that that's the sort of business system and the way we work together is very codependent and um so if a business is one of our clients is struggling we talk to them about their their marketing what types of lead sources are converting well what we can do together to to help them and so you know because each one of my clients is very committed to keeping their business running um and continue growing then I I think it's it's it's actually uh the system sort of supports itself pretty well um when you looked at this business and looked at the kind of sales methodology at the time were you also making a bet on on being able to expand this into other services or is that just was that more more of a nice to have rather than a part of your core plan I think I think two things the first is that I I I definitely saw the opportunity to expand this outside of dog training and the core franchise that they Top Dog operates with today um company I just come from was tasus which was a incredibly large outsourcer just went public uh while I was there so just back in 2021 I think um and so I knew the process and how to help grow an Outsourcing company and so felt very confident and and still feel confident that top dogs uh use case supplies to many other businesses out there but I think it this goes back to the what the beauty of search is is that you know we don't I don't have a growth mandate like a public company um and you know I know some types of Searchers do have a growth mandate and and I'm lucky I don't have one of those and so even if top dog does not expand Beyond current franchise still a very healthy and and great business I think you know the the primary advantage to expanding beyond the current franchise is just more economic resilience for types of Industries or markets getting headwinds or Tailwinds but I do think um I think that the the market we're in the pet area has a massive Tailwind um and so so I think that that's also something for Searchers to look for yeah it's such a strong point about um self-funded search not having a growth mandate um as long as you don't screw it up and you kind of chug along at uh at at rates of inflation or GDP growth uh you'll be it's it's G to be an amazing investment exactly uh it's great um okay so more but a little bit more on the deal and on your diligence the the the growth of this business as I recall you'd said that in fact some lenders did did disqualify the business for that reason their their concern that we articulated earlier um that that concern was was a material concern for in underwriting for some of these Banks you talk to there I had you know during my search I had worked with a couple bankers and just sort of built a relationship and I think this is something that I didn't completely understand at the time but probably should have spent a lot more time developing Rel ships with some of the banks out there and ultimately the one that I had been in discussions with for a while said that they weren't going to fund it um and uh and so the broker uh there this was a it was posted on bis byell by a Transworld and so the broker there knew of another SBA lender that he thought would like the deal and made an introduction there and that worked out that worked out really well so uh cross First Bank uh funded it cross first yep I think the lesson for me and and I'm sure there are people who know a lot more about this than I do but that there are some SBA banks are doing cash flow lending some are doing more asset-based lending and so I just needed to find a cash flow lender because top dog's asset was this sales process and this technology environment rather than like trucks and equipment that might be uh other lenders would like to have those sort of assets backing the loan but I I thought okay so noted that you want to find an SBA lender that is Cash flow-based lending as opposed to asset based lending which by the way asset based lending was the traditional way that loans were made for small businesses and that lending on cash flow is a relatively more recent uh possibility but um still many many banks are just kind kind of had that conventional orientation the collateral they see is the assets in the business so many of the businesses we buy or Services don't have a lot of assets okay however I thought but I thought what about the growthin I thought you had also said that how growthy the business been was was actually a penalty in the eyes of of some banks you talk to it probably was but I I actually know like for some of the folks that said no to lending I didn't get detailed reasons or maybe at the time was just so uh you know running around trying to find a lender that didn't pause at that moment to to ask for more details there uh but but yeah I didn't I didn't get an explanation as to why but I'm sure it had to do with some of that that grow okay and and so and then the other takeaway then gu is you wished you had basically talked to a number of lenders you'd chopped around your deal early and often rather than kind of have going all in with somebody and then finding yourself rejected by them having scamble it was a pretty quick sale process though I think I found out about the you know I found Top Dog in probably uh June uh maybe July and had an offer in about 45 days from the LOI to get the asset purchase agreement in place and then we closed 30 days later so it was pretty fast so I think like if you're going to move forward with the deal that quickly having more uh different types of lenders set up and ready to go might be helpful so you're not scrambling around like I had no opportunities to shop around for rates like I've heard some folks on your podcast say I've got a I got a fixed rate and things like that that sounds amazing especially in what's happening right now but there is no moment to pause to try and look for that it was just like take the first thing that was available interesting well and that reminds me something from our preall guard that you felt like your deal team broadly maybe you just meant lenders but did you mean also other aspects of your deal team that you kind of didn't have all your ducks in a row once things started moving quickly I mean five years of kind of nothing happening and then all of a sudden it's moving quick tell us about how how that felt and what you could have done different I think at at the time it didn't feel as as crazy as it probably seems looking back on it now but definitely should have had more of my deal team in the process in place for that I think also maybe to be a little bit fair to me is that this deal caught me off guard I was not looking for a call center or looking for something in my in area of expertise this was the only deal I looked at that was a outsourced sales organization or a call center and so probably wasn't as like mentally lined up for that to be happening but I would really recommend folks in this process to have a more of a deal team together know what they're going to be wanting to diligence for that industry and and be you know have that outline rather than put in the LOI and then go write that outline okay I think that there were a couple areas that I mean I got tremendous I think a lot of folks on the podcast say that they got lucky too and I definitely got lucky in that there weren't hidden landmines in here that that were that that that I didn't find that you know I've been very fortunate in that way yeah well and given that this was in an industry that you knew so well did I assume that meant your diligence was really on point compared to if I had bought this business it's interesting I was expecting you to ask a question like this I'd say yes and no um I think that a lot of the Consulting like yes I have a framework for looking at call center sales and service purp operations and I know and I and I applied that same framework that I used on you know massive projects for Fortune t companies but I think what you know and and what you miss in some of that process is uh really digging and getting into the Weeds on on what's going on in a small business and so a call center diligence process even if you're you've been in Consulting for 10 years in that space it's not going to help you it's not going to give you everything that you need to understand a small business and all the aspects of that so I definitely could have rolled up my sleeves more and gotten into more of the technology like I think I mentioned this earlier like I missed how important the technology was for Top Dog I thought it was more like hey we've got uh client contracts we've got a good sales process um but the technology is incredibly important and that actually does impact some of the uh way that you purchase a company and has tax implications of how much of the company is valued at Goodwill versus um and you know I think an asset or let an accountant really uh uh correct me on that one but I probably should have allocated a lot more of the business purchase to the technology environment which which would have been advantageous for me in terms of taxes and the process too ah interesting okay understanding that neither of us are accountants but um but there would have been there would have been some some some nice tax advantages to saying that you know from the from the purchase price a lot of this is is is in this technology rather than being a lot of it Goodwill exactly yep yeah while maybe you wish you had wished you had done that differently discovering that there actually is a lot of kind of um technical value here is a happy Discovery right because that's a Moote that's not that's not something that can be easily competed away um and I guess that primarily uh right absolutely absolutely um I mean I think again uh definitely happy Discovery it's a tremendous moat for us in our business we've got about like I said nearly a million uh contacts in our database and probably about three million dogs and've got a so we have probably one of the most sophisticated databases in the world on uh dog behavioral problems yeah and um um you know I think that you know it would be a very fun project for like a analytically minded MBA student or or any student to go through that and figure out some very fun Trends um yeah but I I think that you know an important part of this is that you know there are a lot of things that maybe you could have done differently but also when you find a good business you want to move quickly and so I think that there's this interesting balance like I said hey this was a fast deal this moved quickly I wish I could have done some of these things better but at the same time every time you delay buying a good business you're pushing off the opportunity to start repaying that SBA loan and so like while I wish some things had taken more time and had been able to do them more thoroughly I'm also really really happy that it moved quickly and that was something that the the seller mentioned a couple times in the deal as there were negotiation points or things like that the seller would say well you know I'll just take it off the market and I'll post it again on January 1st and you know I'll sell it for way more money cuz it'll be based on the 2022 number so your call um and I think she she was right in many ways like uh I think she could have done that um so when you do have a good deal I think you gotta sort of trust your gut and and move forward on that interesting and there as I recall there it was actually a competitive process you weren't the only one in the running it was a competitive process so or or at least I was told it was a competitive process and so I heard that there were at least two or three other offers that were put in so from my initial Loi they came back and said hey we've got some other offers you're not the highest offer but we we really like you um or if you're interested in you know being in the running please make us another offer and so I did and I uh I brought up the purchase price I think it was honestly less than 1% maybe I increased it 1% so very very marginally and uh they accepted that which so I so it wasn't clear to me if it was truly a competitive process or or not because I I didn't really sweeten the deal that much what what was the just curious about your negotiation psychology there like 1% is is not much it's almost it's yeah it's almost kind of like a it's almost a little bit like a like I'm I'm not actually increasing from my purchase price here but if you're telling me to I'll I'll dot your eye and cross your teeth yeah I it kind of felt like that like you I was very confident given my background that they wanted me to take over this business this was you KN you knew they wanted you yeah I felt very good about that and so wanted you know out of respect for being a competitive process and wanting everybody to feel like they got a win I made a higher offer um and but but I felt pretty strongly that they would still pick me even if I wasn't the highest because of my background this was not a it had been around for 15 years but it was started uh by a gal who was about my age and um and she was uh you know so this was not some multi-generational you know business that she was trying to protect but she did care a lot about the employees we had a lot of long- tenured employees and so I knew that you know having the business being run by somebody who understood this industry in this space was very important to her to help you know protect those employees and so uh I think that that's ultimately why I was piix but also it's interesting that this was a seller that was of a a similar age to me and she just she knew she had a uh you she explained it a couple times to me she said when she was a lot younger she read a paper and it said you know your your your happiness sort of Peaks out around $60,000 of income a year and uh so she knew that that was her goal she added a little bit to it and once she knew she could provide that for herself she wanted to sort of retire and so she's financially independent ire early uh believer and and she executed on that plan pretty well so uh very excited for her too fascinating first fire seller uh exactly Okay g just to round out well let let me get a couple whatever you can share on numbers and then I have one final but important question on the acquisition the diligence so you had said that it uh is below the kind of 750 SD that many self-funded searchers stri for did you tell us um what Revenue was can you share what Revenue was at the business yeah Revenue uh the financials of the business was purchased on the revenue was around $2 million and then since then it's grown at about a 30% kager wow and and that $2 million-ish was for the 2021 numbers correct yep so as we were going back to our previous topic so by October 2022 when you were closing it it was it was 30% or 20 27% bigger I mean it was about to be 30% bigger yep we had about a $3 million number in 2022 on the day I closed oh well that sounds more like a 50% kager well I I I was giving you a multiple like a two-year compounded annual growth rate yes but it was it was it was all very good positive story and that that was some of the the stuff that got me comfortable on you know buying a high growth business and valuing it on a more recent multiple or more recent year of performance and you know I've talked with some friends in private Equity about this and they're like they thought it was crazy buying on a on a backward looking Financial number they're like we usually have to look forward and buy based off of the projected numbers in in private equity and here in small business you've got to buy it off of something that was like nine months ago yeah yeah lucky us well they're not taking personal guarantees so true that's true um and how are the margins in this business so I'll give you sort of a range here of how to think about this traditionally in Outsourcing and especially in with a us-based Outsourcing what which is what top talk is all of our employees and labor pools in the US margins are usually very very thin and so like having just come from that industry uh typically the way those companies have higher margins is by using offshore labor like in the the Philippines and there's much higher margins on that labor relative to the United States so Top Dog sort of splits the difference because we also have a technology solution and Technology typically has much higher margins and so this landed kind of in in the Middle With You Know tight margins on the labor component of the business but you know higher margins on the technology component that sort of balances out in the middle okay but it's probably uh the margins are probably thinner than maybe what we're used to hearing from my guests where High Teens 20 is maybe kind of yep the median if you will okay yeah I think that's a fair fair look at it okay well I'm I'm actually going to return to that because your business model being so performance-based is um this plays into that but last diligence question uh 45 minutes into our interview the there is um would we call it customer concentration yes I guess it would be customer con sort of Quasi customer concentration so you know I don't want to belabor this I think it's obvious to everybody you got one your expertise is is in this one service offering and with this one so you've got all these relationships with all these franchises in one franchise Network um seems like if the franchise somehow turned all their franchises against you or there's pen stroke risk where maybe they create a new rule rule I don't know if franchise ORS can do that create a new rule that there there can no longer be Top Dog offering services or no Outsource sale whatever you know my point is there's a lot of risk concentration here how did you think about that um you're you're asking a really good question will and this was something I thought a lot about early on in the process and I think um and just to be clear so top dog has you know when I purchased it about those 100 contracts those were all individual contracts with each business owner yeah just all of those businesses happened to be part of the same franchise and there was not and there still is not a MSA or Master Services agreement with that that franchiser so that definitely it was a little bit uncomfortable and also in the diligence process the seller would not let me talk to any clients which I thought was kind of unusual having seen some eminent deals in the Outsource space but you know this was me trying to reor orient myself to small business um the way I got comfortable with this is that uh you know um a couple points the first is that every new franchise in the system for the prior 12 months and since I've purchased it has signed up with Top Dog uh which I think is pretty incredible so as the franchise Grows All the franchisees have to go through a training program this is pretty common for I think all franchises and 100% of the new territories or or or folks that buy and take over a territory have become Top Dog clients we even have some groups of clients that as they help onboard other folks into the franchise ecosystem they sign sort of other contracts and in those contracts the requirement is that they use Top Dog and that's that's not a contract with the master franchiser but I think that that that really sort of hits home the value proposition that we we provide um and and it's it's so so it's still a little bit uncomfortable I'll be honest uh but things have been improving significantly over the past six months I think that early on there was a tense relationship and in top dog's history there's a pretty tense relationship with the uh Master franchise and oh that has been getting better and better and better although there were some some pretty exciting and interesting moments early on and you know wow my tenure yeah I'm putting it in sort of fun ways like and and and you know here here's one of the examples of that is um early on I got an email from the master franchiser and that he said you know hey I I want to see all this data for my franchisees and I looked at this and it was it was really kind of uh I think a pivotal moment where you know actually started realizing like this is what it means to run a company and not be a W2 is like you look at this and you know that the easy thing to do is to answer this question like just give the guy what he wants build a better relationship something that you know is desperately needed yet at the same time that ask is puts you in complete conflict with all of your contracts this you know my contracts I have to protect my clients data and so this is one of those first like I think like real real leadership moments and I think you're going to have many of these as you step into this kind of World um where you you have to make a decision and you have to be ready to rely on sort of your values and and you know a lot of the the work that you've put in to identify who you are and what you stand for and and I knew I could would be able to sleep better at night if I just responded to this question gave the data I also knew that you know most of my clients wouldn't mind but some of them probably really really really would and regardless the way I looked at it is in my cont cont S I have to protect that data and so you know that became the the choice for me and that that led to some of those fetal position moments early on as that relationship got very very tense because I wasn't willing to share data and breach my contracts with all of my individual clients which when you say it like that it makes total sense like of course you wouldn't breach your contracts but um but it was a tricky position because like you said this person has potentially a lot of influence on on how I'm able to repay that note yeah it it it it's it's one of those you know yeah I think you you chose you chose well G um and and and probably it seems like the obvious path in retrospect but and that when you're first confronted with it It's Tricky the it sure seems awful presumptuous of this franchise order to be like hey I I'll take that data now thanks sort of thing yeah I think uh there yes and no um in I think most franchise contra s and what he's told me is that he has the right to inspect all of his franchisees businesses and so he's told me that that's baked into his agreement with all of his franchisors and um and and so I've offered and outlined a process that I'm willing to take with him where we put together a master Services agreement and then um and then go through the right steps where I get data authorizations so that I can share data with him and you know basically put that decision on to each of my clients and there are many many reasons why that should move forward just because like I said I have tremendous data on lead flow what sources are converting better than others you know what markets might need help and how regions are performing relative to others so I'm sitting on this Trove of data that would tremendously empower the organization as a whole to make decisions about you know marketing products service offerings and things like that and you know today we're able to give that to individual clients um you know either because we notice something might be an opportunity for them like for example leads are significantly declining so we can give a client a call let them know that their leads are declining and you know talk them through you know what some strategies might be to to help work through that so in much more than just a sales organization we're also essentially providing you know go to market advice for a lot of our clients too yeah looking at how top dogs methodology could could penetrate other markets and you could take this model to other markets um is not only an offensive strategy of yours but it's also a a defensive strategy it helps diversify away the risk of being two having this platform risk if you will um being all wrapped up with one franchise or so you've got double incentive there to make that happen so a couple of things before we return to the business the business model the value prop one thing that you said in our preall which I found really interesting is that this W top dog was a great business to buy not a great business to build from scratch I think in fact we might have talked about that in the context of like could the franchisor or somebody just just do what top dog's doing and and get all the franchises to come over to them um and so you you had said that this would be a really hard business to to build from scratch and so it's it's interesting just in the context of your story relationship with a franchise order but also Testament to Eta overall yep please um top so I don't think we've touched on sort of top dog's economic model which is I think really important to help answer that question will so the way our uh contracts work with our clients is that we are effectively commission based and so we only charge when we produce revenue for our clients and in fact we only invoice them until after they have collected the revenue from their clients and so it's a very uh outcome based contract model and that does a couple really amazing things in terms of aligning incentives like we are not it's not good business for us to you know sell clients that don't really want the service or don't really need it because they ultimately might not show up for the the lesson or the appointment they might cancel and because we have this outcome based model that actually doesn't create any revenue for us either and so we've tremendously aligned incentives which our with our clients which um is is really really powerful but then on the flip side that makes it also incredibly hard to start a business like this because you have to be so convinced in your ability to sell these services and deliver value um and that's very um the word choice there as I'm tying in makes it sound kind of like a a jab at Outsourcing which is not intended but it's very uncomfortable for many outsourcers to be so heavily committed to delivering value in that way what they're used to is economic models where um it's X dollar per hour that's provided executing a certain task and so for our clients um that would actually probably be really scary it' be like hey every month you got to pay X dollars regardless of how much Top Dog sells that would be really uncomfortable for them because they're small business operators and so Top Dog operating at a a small scale is just is is not a good business there's you know not enough room when it's that small for things like you know investing in our teammates providing 401ks uh providing the management overhead to make sure that we're executing the processes well and when we're not coaching our teammates to do that so um at a small scale this would be incredibly hard to build and um we have seen a few folks try um in this specific space but and but often our clients back they go test it out for a couple months and then they come back to Top Dog because our services are better well this point about so you're basically paid for performance as you said and I it it this was one of the things that so intrigued me about your model because you're delivering you're delivering business and in some ways that's that's my that is my business model uh I mean the Publishers that's often the business model of Publishers who have sponsors they need to deliver to their sponsors um an Roi on what the sponsors pay them for the sponsorship and you'll often see and I've I've run businesses that are publishing related for years and you'll all I'll to to to date and then throughout my career have often bit approached by wouldbe sponsors saying hey how about you run my ad for free and then I'll pay you a cut you know you basically pay pay for performance and um have you said yes to any of those I I have so you know as with as with all things it's depending on your own your strength of your own position um but but rarely do I have I said yes and and once I'm and I wouldn't and for example with acquiring minds I would not say yes now um and um so anyway but it's just far less appealing for obvious reasons I'm absorbing all of that risk that I'm going to get paid based on the performance of of the sponsor and how how good the sponsor is it I mean some of that risk should be on me because I should be delivering them to the Right audience and and so on that will actually has the potential to convert but so much of of the funnel is in their hands how well they convert how much they follow up Etc the service that they deliver and so I'm absorbing I'm taking all of that risk onto my plate right so very unappealing and you could actually you could actually just talk about the entire kind of digital marketing um industry so there you know there's digital marketing agencies are a dime a dozen and they Pro they probably are pay for performance um digital marketing agencies but generally they're not generally I don't their models are you know percentage of spend it's like whatever you're spending in Google PPC they're going to take 10% of that or 20% of that don't quote me I don't know what that what it is but they're definitely not just gonna they're not going to most of them are not like I'll only get paid if I actually deliver you paying customers you are absorbing all the risk and this is just very as I see it as I understand it from my own career that's very rare this is very rare yes um but again I think this is goes back to you having that industry experience before stepping into a company like this made me very comfortable with it um when I worked in the Outsourcing space my first year there one of the goals was for the company to have I think you know five outcome based contracts like what Top Dog does and they weren't able to achieve that and uh I think a lot of organizations are trying to move towards or Outsource organizations are trying to move towards outcome based contracts because uh broadly in Outsourcing there is tremendous pressure on margins it's very competitive and you know often the deals that win in those processes are the deals that are the lowest cost and so by having an outcome based model we actually get to shift away from from these conversations about like how do we make it cheaper it's how do we help you make more money how do we increase your revenue and and then also because top dog has outcome based contracts but we also got to that because we H own the technology that's also very uncommon for outsourcing organizations typically if if you're providing outsourced services for another organization they actually give you the technology that you're supposed to use to execute those processes and sometimes they even give you the computer um and then and and and then the other thing is because we're doing sales and not just like customer service and password resets we are a revenue generator versus a cost center and and by being good at sales and owning the technology we're able to implement improvements in that process that deliver value for our clients so one of the examples of this is historically we used uh leads from or our clients use leads from Thumbtack which is yeah maybe people familiar with it it's a way to get uh generally Home Services uh to come to your house and you pay per lead the conversion rate on those leads was terrible it was about 2% and generally those leads cost around say 40 bucks you know I don't have the numbers exactly in front of me but for many of our clients that were using it their customer acquisition cost was about $750 which is just way too high um and because we own the technology in the sales process we took a look at these and you know essentially it was a hypothesis like thump tac's a big company there must be better conversion rates from this lead source so what's what's happening wrong here and we took a look at that and it was really speed to lead so we built a new technology integration to uh automatically process those leads into Salesforce we built a different contact followup essentially a different sales structure for those leads and we got the conversion rate up to 14% so basically 7 Xing the conversion rate on that lead Source bringing the customer acquisition cost down to like1 $150 that was incredible value ad for our clients now we've unlocked this whole another lead source for them at a reasonable price point to help them diversify from uh you know Google AdWords and being their primary lead sources and SEO just giving another attractive lead source is uh really powerful so when you're in and outcome based contract and you own the technology you have the ability to go make decisions like this and go try things out and test them out and see if they work and then deploy them to your clients and then it creates value for everyone so yes this is a incredibly risky relative to getting paid I don't know $45 per per hour of seat time you're providing for an outsourced agent but if you're getting paid $45 an hour for seat time you're never going to go and build this new process to create value like that for your clients or you wouldn't be incentivized to do it maybe maybe you still would it makes a lot of sense G as I and as I hear you talk I I I am thinking so much about digital marketing agencies again because a lot of the work that you just descri I mean I I where you where where Top Dog and quote sales begins and digital marketing ends like that's a that's a that's a blurry line I guess and because we're basically this is all about the funnel you know and and the funnel sales is is one part of the funnel and marketing is is the higher up that funnel but it's all the same funnel it's working customers down the funnel and so to to really get a funnel working magically you got to optimize the whole thing and so you got you at Top Dog will always be kind of pulled higher and higher up the funnel to optim Forever optimize more higher and higher up the funnel which soon you're going to be up there higher in the funnel which is digital marketing and so so what I wonder is where I'm going with this is I wonder if I was wrong when I said that that digital marketing agencies don't offer this model maybe they maybe they do but if they don't and I was right like why why I guess forget call center land which you've explained why they don't do outcome based um outcome based models but like why don't digital marketing agencies do this we're a Google PPC shop and we'll only be paid when you actually we deliver you actual customers um why wouldn't the arguments there be the same ones as for Top Dog and know whereas you know it's like we're going to yeah put the money into Google PPC and choose the terms and stuff but we're also going to like help dial in your marketing stack your Tech stack so that the lead flows well and that the structure is right and we're gonna um build your basically help build your funnel sorry long- winded long-winded question here G but I'm just trying to understand why part of the reason I was so int intrigued by your business is because it makes so much sense and yet I feel like I haven't encountered it and I've been in been in and around digital marketing and digital marketing is not new it's 20 years old now so why don't we see more of this model think you have a there there's a couple questions in there why why don't we see more of this model help me out and me express myself here please I I think there's two things there you're saying you have a question about digital marketing and and actually my answer there is stay tuned we are we are not a marketing company today um we are not actually actively trying to tackle that area especially for our current clients because there are some good vendors in place already providing that service but we are talking with digital agencies about how we would create a combined offering and so instead of I think what you said is true that digital agencies it's typically there's they you pay for ad spend and then you pay a percentage on top of that and so we're actually looking at how do we bring that together with top dog with our sales process with our technology we could very effectively optimize across your marketing stack and Lead sources um and so I think that at some point there will be a really interesting offering there in terms of why is no one else doing this um or or why haven't you encountered a business like top dog before to answer that question I I think that the main answer is that a business like top dog doesn't really work subscale it it has to be working across a a reasonably sized similar client pool and uh to make it effective um and and this just gets down to sort of like basic call center economics and and how that works but if if you only have one or two people working in a day like when someone calls in on the phone it's probably not going to get answered it's going to ring a really long time there's going to be Highway times you're not going to be getting back to customers quickly which ultimately is going to impact your conversion rates um and so to get to the appropriate scale is very very difficult and and very very expensive to provide the level of service that we provide um and so you might flip that back on me and say well G your your whole growth the or one of your growth thesis for top dog is that you'll be able to apply this to other Industries and other spaces and the answer is I still think that we can but we're going to be investing in those areas especially upfront and I think as a as a Searcher without a you know some crazy growth mandate you know those are decisions that we can make and what we've learned over the past uh you know year and a half or what I've learned is to be very careful about some of those decisions and because we are going to be investing up front make sure we're placing bets in the right spot so have you tried other Industries and it and it it proved that the model doesn't it's not as extensible maybe as it seems uh what I would say is yes we have tried in other Industries pretty much within three months after I got here one of our clients referred us to uh a med spa franchise that needed help with their customer service and so we started providing sales Services there and what we proved was that the sales model actually worked really really well um we happened to have some teammates that had experience in in Med spas and uh we were able to sail very effectively our conversion rates were really good price points were really good we were able to use our sales flow to effectively educate and communicate to customers um about the services that they would be getting and you know we had fantastic feedback where it did not work was that we essentially overran the operations of the the medspot like they could not hire enough people to give availability for us to continue booking services and so worked too well don't tell me it worked too well gu is what you're telling me I had a crazy call with um yeah I feel like you don't believe me will uh but yes it worked too well there's a every week we'd have a call with their marketing team and they would tell us what they were going to be promoting for the next month and and we challenged like why are you promoting this service he said oh it's a great product Market fit it makes a ton of sense but we said you only have four spots available next month and like we were going to sell them at full price and now you've cut them by 50% they're like what do you mean we only can sell four of those next month we said well you don't have anyone working next month at that particular location So within 30 minutes I was on a call with their CEO and CFO and because we get so into a client's business because that's we have to the CEO and CFO were asking me like Hey how do we not have availability next month like who's working at this location and I'm pulling data from their data sources and telling them well like you know I think it was like nine of the 25 days you're paying for somebody to come in and turn on the lights but there's no one there that can produce revenue and you know pretty quickly after that they were super appreciative of that call it helped them identify a bunch of challenges in their business but you know we knew that that we weren't going to be able to work together much longer and at some point that may work when they are sort of more operationally sound um but at that time it wasn't going to be working well and that was the moment that I learned I wanted to Target Searchers for top dog because um I want I want my clients to have a personal guarantee and if I'm able to drive them more Revenue I want them to be very committed to working incredibly hard to being able to deliver the operations for that business to make that all work because if we're going to have an outcome based model and I'm bringing a best-in-class sales organization I need to have a best-in-class operational team too one of the themes that's come up gu recently uh in a number of conversations is how difficult Home Services uh has has become so it was very hot for Searchers um still is but it's it's actually a very very competitive market particularly in the large trades a lot of PE money a lot of real marketing sophistication the the John Wilson interview that aired on Thursday we we talked about that a lot um are those you know some big HVAC rollup where there's private Equity money behind it and real marketing sophistication is an organization like that using Outsource sales I mean are how unique in the world of B Toc Services is top dog that's not a softball I I want to honest question honest question without an answer hly yeah I I think it's pretty unique having been in this industry before or spent my whole career in this space I haven't seen much like this I like if you've you mentioned John Wilson and HVAC rollups um I I think that if you've listened to his pod then you you know that they use some outsourced like more answering Services he's also mentioned that they've tried Outsource centers I think it's really hard to get right um and so I think that this is unique and um I think HVAC actually does have a particular challenge that we have not spent the time to get our hands around at Top Dog yet but it is on our road map and list there's two things that I think make HVAC um and plumbing and electrical interesting is that dispatch is really has a lot to do with their revenue Center and uh you have to be very tightly integrated with who's working that day who's available what's the expected price points per job um the other thing is because service Titan has sort of taken over that space service Titan does have a call center uh solution and um we do have teed up some projects likely in Q4 this year where we're going to be spending time with some of these types of organizations on service Titan and really learn how service Titan works from some of our initial work and and sort of Exploration with HVAC companies my hypothesis is that service Titan is not an effective sales and call center solution and so I don't know for for any of the zero to one entrepreneurs out there I think a call center layer uh a sales component that might be really interesting but again I'll know more after I'm able to dig into service Titan more okay and and then what about the average sale average order what's the average order value I guess that's e-commerce e-commerce speak but or or lifetime value maybe in the case of dog training does does top dog only make sense in a in a market where they you know the average uh lifetime value is what is it in dog training hundreds of dollars maybe thousands yeah it's in the it's in the thousands of dollars um we're testing out now with one of the guests on your on your podcast and it's not based on you know it's it's a much more recurring Revenue business versus a big payment upfront like our clients in dog training and uh but it's also an easier sale so I think it it it it has to be balanced versus the relative difficulty the conversion rate the quality of the leads um relative to the the dollar amount if you're going to do sort of this outcome based model um so it definitely still works but but the the numbers and the financials might might change a little bit and you said you want to be working or you you kind of identified Searchers as good candidates to to work with Doc top dog because they're incentivized because they have personal guarantees they got it all on the line what about scale of a new customer so with the existing with your existing customers you're already in this franchise Network so tacking on another one you don't have to learn a new industry or anything I mean they just plug right in if you get a new franchisee from this from the existing you're operating in however say I'm a say I'm a Searcher and I bought um some other business completely outside your franchise Network completely outside dog training how much scale would I have to have for it to make sense for you to invest in learning my industry and working with me probably a lot um yes and no uh I think sorry to give you sort of the classing it classic it depend answer but you know we're right now working with one new client in a new franchise and it's not going to be operating at scale for Top Dog this year and that's okay um we're learning the processes with this this this franchise uh and I think you know we'll prove the model this year and then next year we'll be able to sign on some more franchises from that particular group and so very willing to make investments uh to build those capabilities improve their value because I think that's when you're in an outcome based model that's super important for everyone to see the results and make sure that it's good and so this is a nice way to sort of dip your toe in the water but that being said like would we go do a a one-off plumbing company or something like that let's say we had all the service Titan stuff figured out I think the answer is maybe because there's also the possibility that we could group similar plumbing companies in different geographic regions or something I just I just pick Plumbing as an example um and so as long as we're able to pull some of these together uh to serve them uh effectively because essentially what I want to make sure is that I've got enough scale to answer the phone and follow the sales process and the way that delivers the you know high lead conversion for you um and so if I can find ways to do that then I'm very comfortable moving forward franchises are an easy way for us to do that because the sales process the offering the services are going to be so similar and so that does let us scale very easily and they all talk to each other I mean it's so powerful you kick butt for One customer and that customer goes and tells all of the all of uh his or her buddies throughout the network I mean it sounds like that's exactly what happened in in your existing Network yeah and the so the objective for this franchise that we're we're working with right now is to get him on the leaderboard so most franchises either monthly or weekly send out leaderboards of you know who signed up the most new clients who has the most XYZ and so you know our goal is very clear to get our client on the leader board so people call him and say hey what are you doing that's different this year this looks pretty pretty interesting G you know th this seems to be so power powerful really um that you I just got to wonder if your current business model is the best way to unlock value for top dog for you as its owner you know does it make does it make more sense rather than being the outsourced sales solution to all these individual ual business does it make sense for you to go out and buy some franchiser or something and and and just you know and and part of the value ad that you'd offered all your franchisees is this model and then you collect more of the economics or or or or or just buy tons of marketing digital marketing agencies do kind of a marketing agency rollup and own you know the top of the funnel and then offer offer more of a of a funnel I I don't know I'm just spitballing here yeah but like this is so valuable somehow keeping the economics for yourself rather than giving them not giving them away but rather than selling them you somehow bake them into an or a larger organization that you also own yeah that that thought has absolutely crossed my mind and and it appeals to the part of me that that loves evaluating businesses because I see a lot of opportunities that way but I think that the the fastest way to create value as an organization for top dog is to continue to grow in this space organically um and so that is definitely where I'm I'm focused for the foreseeable future um again there isn't like I don't have some massive growth mandate and I think that that's really puts me in a powerful position to take time pick very carefully the targets that we're going to start to work with and prove whether or not we can you know create as much value for new client types like we have for the Core Business um if that starts to work then it's going to be hard for me not to consider exploring you know buying into a franchise or something like that um but definitely staying laser focused on Top Dog and growing this capability because I think it's something that small businesses around the US tremendously need it will benefit from I think that that's that's the fastest even though there's not a goal to be fast that is the fastest way to create a lot of value for Searchers small businesses and communities G you've talked a lot about the tech and and how that's kind of one of your kind of part of the secret sauce or Special Sauce but what about the actual people who are going to be doing the selling what does your employee base look like are these all master sales people I mean how yeah what does that look like how do you train them up how do you this Playbook that you developed for Med Spa and that you're now doing for another acquiring mind guest and are envisioning doing for other Industries like is it g that writes The Playbook or do you have master salese in the organization who you who you guys collaborate to write the just give us a picture of of the actual the human capital at Top Dog because that's that's obviously as important as the tech if not more so it's it's it's huge um and I I should have hit on this sooner because it's tremendously important um top dog I think because it grew so slowly over time does have a very like this is all this is not some Outsource person that we hire to come in and consult with us on how to sell it is Top Dog sales methodology and it's been developed over 15 years and a million leads of testing and um well I think that the original seller and founder like I don't I don't think it was like as data driven test but she had so many repetitions of this like she was originally on the phones doing sales and so she developed a process that works incredibly well and Incredibly powerfully and so that is a a top dog capability and it works across multiple Industries now how do we train folks on this we're not hiring super seasoned sales folks and maybe to clarify we're we're generally looking for people with with one to three years of sales experience occasionally we'll hire somebody that has five years of experience but we often find that we have to retrain on on bad habits there um and so we have a 90-day training program that's pretty intensive and we're handing over this sales methodology to our teammates to uh help them provide value to our clients through sales I think what what what I really hope for our teammates is that this might be a stepping stone to a larger career in sales because having been in Consulting sales technology sales Outsource sales I think that's a a really fun and exciting career path for folks to transition from doing this B Toc sales strategy at Top Dog and you know maybe at some point in their career they can be doing you know larger B2B deals and things like that and so I do look at this as a a great step for our teammates on a career path although you know when I came to the company we had one person who'd been there basically since the beginning uh so had been 10 plus years at the company another person seven plus years another five and so there are very long tenured Folks at Top Dog as well and I think that's because it's a work from home company and that gives people a lot of flexibility and and so there's also a lot of value for our employees in that as well and when you say one to three years of sales experience so I I I'm I'm getting um less comfortable using the the the distinction white collar or blue collar for a variety of reasons but um for lack of a better framework are so so they're they're obviously people who are not working with their hands so if that's your definition of blue collar they're not blue collar but they're also but it sounds like one to three years of experience they're not super experienced professionals you've already said that they're not you know 20y year sales veterans either so so what does the kind of the profile of of a top dog hire look like yeah give us more color other than just the one to three years thing so I I would say maybe do like a couple different personas but generally across the board everyone loves animals um that that's sort of a requirement there's a lot of dog puns you've used a couple but that's definitely important to fit in here uh then we have a handful of folks that are sort of newly minted College grads uh we also and so they sort of come to this as their first job sometimes and uh we're putting them and training them up on sales which I think is actually great like if I had gotten this level of sales training early on in my career I think I could have done some pretty amazing things in in sales instead of sort of like backdooring through Consulting and being a a practitioner in Consulting and then learning how to do sales as you rise through the ranks um another profile is uh folks that you know maybe this this might be their sort of third career path this is you know they've done a handful of other things throughout their life and um and they've chosen this because it gives them the flexibility to work from home spend time with their grandkids and not have to commute to a job or maybe relocate to where their family is um since we're operating in in about uh 20 States so we have employees all over the United States and so we let people move so you have you have people who are in their early 20s up into their I guess 50s and 60s yes we do yep all selling great great really neat perhaps one of the reasons that outsourc sales to the extent that it exists doesn't do well is because it's it's too outsourced too arms length the outsourc sales provider provider doesn't really become doesn't have a strategic voice within the bus within the business they're serving so they have some script and they just go through the script and it doesn't work very well you uh actually influence and affect the pricing the listed pricing of your clients at the franchise talk more about that we do um we make recommendations to our clients about pricing um I mean sometimes it's us reaching out to them sometimes it's them reaching out to us but we often look at you know how far out their booked so essentially what's their forward-looking you know utilization or their forecast and make recommendations to change the price to help them balance what they're trying to achieve so some of our clients prefer to be booked out for many many weeks because they find a lot of comfort in seeing that their schedule's full so they have a lot of confidence in the revenue that's coming in and there are other folks that like to have higher price points and may not be booked out as far and honestly that's an individual decision for each of those business owners but you know while we're looking at their their leads their quotes their conversion rate we can also make a lot of recommendations to them about what's working what's not working and what changes we might make such as their their pricing to help them achieve the outcomes that they're looking for so this is definitely a lot more than just a sales service um there's a lot that happens in terms of recommendations in the business and you know even things like you know we might have a client that calls us and says hey I want to change my schedule I don't want to work these days and I want to work these days and we can sort of talk them through what that will look like because we're the ones communicating with a lot of their customers and so we know certain days will book better than other days and so we can say Hey you know we're happy to make this change for you but you're probably going to lose X lessons y Revenue because of that you know is that really what you want to do or you know if you adjust your schedule this way we probably will you know maintain your current you know business uh operation level and so we coach people and we we help them make these decisions and we have a tremendous amount of data across all of our clients to you know not just tell them what we think and feel but to show them aggregated data and what the implications could be for their specific business so that's that's really powerful yeah and like how about another example say a new FR franchisee who wants to work with Top Dog calls and and you look at you Google them or youever you see what their profile is online and they got terrible reviews you know they got two stars out of five or something you know I assume you check things like that and so other glaringly obvious things they're doing wrong are these things you weigh in on or or what again going to like how strategic you become as their coach yeah um I mean that specific example hasn't come up because either you're a new you're brand new and so you have Z zero Google reviews or you're purchasing another territory and trust me we don't have anyone with two star reviews that would be pretty devastating I think in the current market um but like if you are a new franchisee we can make a recommendation on what price you should be at because we might see people in similar markets and so we can kind of guide you on that we can also give you recommendations about availability what types of payment models to take um just tons of advice on essentially everything on the sales aspect and the Market fit we're not making recommendations on like the the service and like how our clients train and things like that but everything about how that's priced how that goes to Market uh and the payment options those are things that we we give a lot of coaching around GTH I could keep going all day about top dog I mean I just think it's a really fascinating business with a ton of potential so um but I'm going to have to control myself here and we're going to have to move on but before and and I want to make sure we have time for your Rocky Mountain Huts story so we're gonna um close with that but just before we move off um Top Dog Al together G give us one more sense of the numbers here how many leads a day and um give us a sense of the funnel you shared the funnel with me this many leads come in this many convert can you do that for us yeah in um the the general numbers are that for every 100 leads we give about 65 quotes and then of those depending on the price point in the market we're converting generally about 30 to 40% of those into bookings we've learned as we've explored in some other Industries this is very dependent on the industry so that's that's sort of a a broad range and so there can can be some ways that that shifts but every 30 days top dog is getting somewhere between six to 8,000 leads that you know my team and our team is is working on behalf of our clients and so 65% quote and then 40 of 65% is whatever that is 25 25% ises that sound right so so 20 25% booking rate from those leads very roughly very very roughly and then you know what clients see typically see that you know maybe in the franchise system and then haven't been using Top Dog and when they come onto Top Dog typically their conversion rate doubles so that 25% % you know would have been half if they had been taking their own calls and then we often increase their prices by about 20% and they see that I mean that's not just increasing prices to give you guys negotiating room they actually see more Revenue per customer yep great thanks for that g okay well fascinating really really neat business um uh so we'll leave it there let's close with uh Rocky Mountain Huts this is another acquisition that you did give us give us this story of buying a a very unusual business and a very unusual search please this was uh so this was a process of um much more of a passion project I'll be honest uh yeah and in Colorado we love Backcountry skiing there's a a Hut system that you can go and rent these properties that are typically somewhere between 10 and 12,000 ft and you in the winter you Snowshoe or ski tour into them and use that as sort of a base camp for for skiing in the winter um just sort of noticed that uh they are completely booked so essentially 100% uh occupa occupancy rate in the winter time and so realize that there might be something more to this and also just happen to love these uh my wife and I got engaged at one we I was skied out of one yesterday and I'm going to one next weekend so uh they're a ton of fun and a really unique experience and sort of after learning about proprietary search deployed those tactics to see if any of these might be for sale in Colorado and so essentially would uh pull up a too map of a valley in a basin see if it looked like there was good skiing in there and if I felt like it would be good skiing and was relatively accessible from a metropolitan area would look to see if there was any private property then pull up a satellite image and see if there was a cabin there and find out who owned it and write them a letter and see if they wanted to to sell it and uh after about a year and a half finally got a hit and uh purchased uh one of these properties in I think it was 2021 yeah um and okay okay hold on here we go so first of all is this is this a business acquisition or a real estate more of a real estate acquisition I mean I understand There's real estate the real estate is the business but what how what's the framework to think about it it's a little bit of both it's not a traditional real estate acquisition because because you can't get a traditional home loan for them generally like it is so hard to get to this property that I you can't get an appraiser to drive to the property if you have a problem like you if something big goes wrong there if a big piece of equipment breaks there like the road is so rough it probably requires a helicopter to get the equipment there so the property we bought sits at uh just below 12,000 ft underneath the Continental Divide and which also is a problem to get a helicopter up to 12,000 feet too so uh but the the road is tremendously rough there are cars that get completely wrecked on it um and so you need a you either need to be a really good driver or have a very customized vehicle to get it to it and the idea in fact with these Huts the people who are going to be using them are skiing in and skiing out anyway people aren't driving users of them the end users not driving in correct yeah so the primary use cases in the winter and the after we bought it um we did one Facebook post it was the most I'm not on social media I go on like once a year to let people know that the Hut's open for the next winter and it was a post that got more feedback and responses than anything I've ever put on social media and within 72 hours every night at the hut was booked for the next winter um which was just wild so that was tremendous validation that we were doing something that people wanted um and I think you know I think there was a good takeaway from from this that I think is helpful for a lot of Searchers because this this had of a triple win outcome which I think is something a lot of folks should be looking for when they're trying to do this um The Hut makes money it makes some money it doesn't make it doesn't make anywhere near enough money to live on but but it it doesn't cost us money um we love going up there and we love getting to use it ourselves and it's something that gives us a ton of pleasure and and joy to get to go skiing up there as we were this past weekend then the third thing is like it's NE like our community wants this and appreciates this and so there's three wins out of this and I think even if it didn't make money and we got those other two or even one of those it would still be really valuable for us so I think as people go on these searches making sure you've got a lot of win scenarios because I think strange things can happen um and so as long as you have multiple outcomes where you feel like you're winning and you're making the right decision then this is a really good thing to go and do and I think to tie that back into um you know Top Dog and search that this is a big lifestyle shift for for everyone like you are going to be working harder than you ever have before but it's not going to feel like work and and so just make sure you've got a lot of win outcomes regardless of how things go for you you've had a variety of guest will some that have done extremely well some that are struggling but I think like what I've learned from going through this process is that even if Top Dog weren't to if if it hadn't have worked out like there's no way I would do anything else with my career like this is what I will continue to do because it is so much fun and to you know impact your clients to change the lives of your teammates um and to get to lead a company is is such a unique experience that even if something were to go south at Top Dog I will have already won like this was totally worth it and and now like having gone through this search process I have no fear about career in the future and uh like I will do this again um if if I have to get another job ever which I I hope I don't um and so I think that that's also a really cool thing for folks to think about make sure you've got multiple win outcomes and uh I think search is a really great way to do that and but just double clicking on the last thing you said like you will do this again even if top dog had a horrible outcome and you had to go back and get a job you've built a skill get a job I'll go buy another company yeah yeah you've built the skill to to buy a company you've now run a small business and you love it so much that you just see that there's a this this is the path even if it's not Top Dog forever and ever exactly I mean just to be super clear like the plan is Top Dog forever like I have no intentions of of selling or anything like that but um but definitely embedding myself into the search Community which which also is I think you know as maybe many Searchers do they want to give back so we've started to kind of create a community here in the Front Range of Colorado as well around this I started a a small group and we combined with another meetup group and now on the uh first Wednesday of every month we have like 50 Searchers show up for a happy hour and so the community is really growing and building in in this area which is also really really fun well I I feel like I I know a bunch of these Colorado folks I mean I got you Adam Markley Matt Barnes Shawn Moore probably forgetting but it and Shannon now is going to be teaching at at Boulders business school at Colorado's business school yep we should definitely plug this we got good news actually 15 minutes before we started recording I got an email from Shannon that uh we're getting some more Mo me momentum about teaching uh and bringing an ETA course to University of Colorado Boulder so that's definitely something we've been working on I did my MBA there and and excited to bring that they've got a very strong Entre R preneurship program and so hopefully we can uh teach this at at CU too so I think um you know this has been a ETA has been a transformative experience for me and so really trying to you know be a good Steward of top dog and for all of our clients but also uh share this with with other folks and and and help build a community around it here in Colorado which I think has been a little bit of a open space for for a bit but that's that's closing rapidly as you mentioned there's a tremendous amount of Searchers here um so looking at ways to provide more on-ramps into search for those folks looking at ways to potentially get them Capital if they need it and then also we're looking at creating more of a an owner group to help coach and Mentor folks that have completed an acquisition because I think we didn't get to touch on some of this stuff but you know once you're sitting in the owner's seat you have a whole unique set of challenges and having a peer group and uh that you can go to for advice and and finding resources is incredibly valuable more to talk about gu but I got to let you go this has been great uh what's the best way for people to reach you uh email gar topdogs salescenter tocom or LinkedIn G Fano what a neat business what a great story ski Huts everybody oh no sorry that's not the takeaway uh well you can book it at rockymountain hut.com rockymountain huts.org cool all right G well thank you very much this has been a fantastic call um really eager to see what you do with Top Dog such a neat business thanks for your time and your transparency thank you will appreciate 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