Mark soj bami welcome to acquiring minds thank you happy to be here Mark you and a couple Partners acquired a first business in 2021 that has gone well and you're now on the hunt for a second apparently getting pretty close uh and your goal here is to build a long-term hold code the three of you so we're going to hear about the story of the first acquisition toward that vision and really kind of how the three of you are working toward this Vision start us off please with some background on you mark yeah happy to do that so um I guess I I'll go way back so I was born in a small country in East Africa called Burundi lived there for about three weeks uh didn't live there for very long uh our family then moved to Belgium actually and lived in Belgium for two years after that I we moved to Calgary I was young Calgary Canada I was young when we moved here just 3 years old and um and yeah my you know my parents are were entrepreneurs it's funny it's something that I just didn't realize until later in life that yeah my parents are entrepreneurs as well too and so it's just kind of something that was kind of always stuck in my mind my my dad had a an engineering Consulting business my mom owned a restaurant and funny enough she even had her own cooking show back in Bundy as well too and so the these things were just kind of all kind of ingrained in my mind without kind of through osmosis without actually really knowing about it until I just realized it a lot later but anyways Mark is is are your parents being entrepreneurs is that because of their personalities or is this kind of a classic immigrant story where the easiest way or not the the most direct way to put food on the table for people who are coming from outside a country is to spin up their own business sort of story you know I think it was uh probably a combination of both I think one was they both had a unique skill set that they knew could be utilized um and and really push forward and and I think I remember talking to my dad a few times when I was when I was a teenager and he'd say he talked about how he likes having Freedom over his schedule you know he was although he was busy with his business you know he showed up to all my basketball games uh even when they're out of town and I think he liked having that flexibility in his schedule and also the ability to to not have to commute every day as well too I think he enjoyed that kind of flexibility and so I think part of it is personality um that's just kind of who they are um and then and and in some cases also necessity you know necessity is a mother of invention as well too like you mentioned and so I think there is a an aspect of that as well too yeah yeah fascinating great thank you carry on yeah and so so yes so I kind of went through uh High School University uh I went into University um I did at a university in Calgary called Mount R Mount Royal University and um and in University I actually tried to start two businesses one of those businesses was a tech business called student hire it was this online platform that connected postsecondary students to people in the community who needed onetime mod jobs done um did that um great learning experience and everything but the reality is that we didn't we the business kind of failed in terms of what we had hoped it would become um after that Marketplace business Mark those are ambitious U you know cold start problem spinning up both sides of a Marketplace you you chose a big a big hairy uh business model for that one yeah and we were naive we were certain that we were going to take over the world and be the next uh the next Amazon as everybody is when they first start their their startup especially in University but uh we were far from that to say the least um and so yeah so that was a good that was a good learning experience and then after that I actually started another business while still in University with my wife where we made these healthc conscious snack bars that helped um mothers replenish the nutrients they lose while breastfeeding and um and so we we ran along with that business you know did some Pitch competitions won some money and everything and then similar story um it was a good experience but we just didn't kind of get over that that that bump that we that most entrepreneurs eventually hope to get over and so during that experience I learned a couple things about myself one of the things that I learned is that one um starting a business from scratch is mighty hard um you know it's hard to find product Market fit it's hard to find something that just really gels within the market perfectly and so that was one thing that I realized and then the other thing I realized is that I just love business like both of those businesses were completely different businesses uh but and my passion wasn't necessarily the product of what I was selling but it was just business itself and so I can relate yeah and so and then I learned that I was an entrepreneur that I wanted to be an entrepreneur so I was kind of in this awkward place where I knew I wanted to be an entrepreneur but I knew I didn't really want to start from something from scratch and so I was kind of in this little bit of a limbo and so after I graduated University I actually just decided just to kind of spend some time in and went into Tech sales actually software sales uh worked at a few companies while I was working at these companies I remember uh I went to a panel discussion actually at this business event and in this panel discussion there's this fellow um who who was talking and he talked about the idea of buying businesses instead of starting them from scratch and that just kind of piqued my interest started kind of digging more into that I found out that some somebody that I actually knew one of my peers was actually doing this and they had actually successfully bought four or five businesses went deeper into that and then I kind of quickly realized you know what this is kind of something that is intriguing to me and I think that this is where I want to be um these business already have product Market fit despite having in some cases despite having very poor operations and everything they're still able to sell I figured you know what I think this is kind of the place that I want to be and that's kind of what started that Journey on that front there so it was a panel and so this wasn't you being exposed to Eta or search uh these terms that of course we use in our now that you're in the world you use uh but this was really more of kind of a local small business panel get together and you just hear about a guy who's his own path has been buying businesses and you said that that's that was your kind of rabbit hole moment that's right yeah and this was probably at a time before you know this entrepreneurship through acquisition this is this is catching a lot of momentum right now right to today but this was before the I've heard any of these words were kind of buzzwords on LinkedIn and all these things right and so and this guy ended up doing really well I think a few years ago he sold his book of business for hundred million do to a public company and so oh um so you know got get him on the Pod here yeah yeah he's he's he'd be a great guy to have on the Pod um and what year so what year are we talking and so this was happening so I heard I I would have heard that panel discussion in 2018 or so 2018 yeah okay okay so you you're you're bought into to the concept what are next steps yeah so was bought into into the concept I started kind of doing some talking to people um one day I was just walking downtown I I came across one of my friends who was doing who's working downtown as well too in Calgary and we we met up and funny enough we we had we set up a time to meet up for coffee and we we both had the exact same idea of wanting to acquire businesses and so that was my one of my my first partners and then we brought and then we started talking about this that partner uh he's a lawyer and so my business my background is in sales and Business Development so we figured you know let's kind of round out our team and and find somebody who's uh who's got a little bit more finance and and accounting background and so we found our other partner who background is in finance and so the three of us uh we actually originally started with five of us actually and then two of guys ended up um kind of moving on um doing other things in life doing other things with their with their careers and so it was just the three of us and so yeah the three of us there was one one partner who was uh a tax lawyer the other partner was a finance background and myself my background is in sales and business development and what we did is we just would meet regularly we'd meet you know weekly to talk about ideas that we' H we have almost kind of like a mastermind group acquisition ideas exactly acquisition ideas yeah so we were almost like a mastermind group just talking about these things we would go through deals together we went through several deals together you know we looked at a reg a registry um um or I guess a DMV uh a DMV office kind of that that'd be the equivalent to in Canada to um yeah so we looked at acquiring one of those um you know we looked at wait but I'm I'm still not understanding because DMV here is is a public service it's not a business so so what is it in Canada's case yeah so in Canada that that is a a business where you know you you have one of those offices where you're able to get you know give out um driver's license you know those run as private businesses here in Canada and stuff like that so yeah how how counterintuitive you guys are the more you know a little bit more socialist leaning uh than down here and yet in this case we've got it flipped our our DMVs are and in fact our DMVs are notoriously they're the they're the picture of bureaucratic misfunction dysfunction so anyway yeah it's funny that yeah it's funny and so so yeah so that that that's one of the things that was kind of yeah that was kind of intriguing and so so we looked at one of those businesses we looked at a um you know a rock climbing business we looked at so many different things and so we we started getting reps and stuff like that together kind of going through these deals until we finally came across um our the act the one that we ended up acquiring and and Mark you characterize this master this as a mastermind but you guys have already agreed that you will partner on whatever acquisition you do okay that's right yeah and the and the third guy in this partnership the um the with the finance chops is this somebody you kind of found and recruited or was this a friend in your in your friend Network already yeah I knew him well he uh he married my sister and so he was my brother-in-law that was easy didn't have to throw a rock very far to find that one that's right um and your um second partner the who you bumped into on the street and was also thinking about buying business as well what a coincidence just curious where did he get the concept you know that's um that's a good I I think we had a similar peer actually that peer that I mentioned to earlier who had acquired several businesses uh he um we both that's right we both knew the same guy as well too that guy is single-handedly inspiring every Alberton entrepreneur to go out and buy businesses that's that's right probably yeah I wouldn't be surprised okay so the three of you are doing this and what is the expectation of when you find a business that the three of you agree is should be the target what is the expectation in terms of capital in terms of who's going to run it Etc what's the structure of this first acquisition going to be yeah yeah and so the the the structure of the so so the the plan was we we were going to build a portfolio of small businesses we wanted to own several small business and so the plan was we would buy one uh one one of us would quit our day jobs go run that business grow that business use that business to Le leverage that first business to acquire the next one and then the next person who quit their job leverage both both of those business and then go by the next one subsequently each quit our jobs put a GM into each of these businesses eventually and then just kind of rinse and repeat that model until we grew the portfolio to a place that we felt that we wanted to to grow it to essentially and so that was the that that was the that was the the that plan in terms of our expectations of what would happen in terms of you know capital capital all these things you know from my perspective to be honest I I was quite naive I was kind of uh building the plane as I was flying it right I I probably fell into the Trap of all the people saying like you could buy a business with no money down all of these things right you know in some cases that is true but that is a very very rare occurrence and from from and so that's not the norm that is the that's the the exception um and so I think as we it wasn't until we actually had a real deal on the table and went through the through the um through the through the process of actually talking to the banks that's one thing actually started to come real to me see like okay this is what how much money we need to put down and and that's kind of the the reality hit of the size of businesses that we should be able to to go after after talking to some banks and realizing okay maybe we shouldn't be chasing after a $10 million business because we're you know relatively still early on in our careers as well too right at when we made our first acquisition I was 26 years old um and so still still building up some still building up some reserves and some funds and stuff as well too and so that that that I think that's kind of some of the things that kind of helped me determine the the um expectations of how much cash we're able to put down at the end of the day and therefore size of business as well you kind of bumped up against some constraints and so then what did those constraints end up being what did after you kind of went through that education and realization process what did you guys decide you could afford yeah I think we we we decided we could probably for a business in the smaller end of the market probably one between um you know in the range of uh in terms of Enterprise Value probably in the range of you know you know 800,000 on the lower end to maybe like 1.5 million on the higher end or so um and so for for that first acquisition that's kind of the range that we kind of settled in of with the money that we had saved that's probably the range we could probably comfortably sit in at this point right now okay and so let's back out some numbers from that 800 to 1.5 million in Revenue let's call that or an Enterprise Value in value of the Enterprise Value yeah enter value yeah Enterprise Val um therefore let let's make it an even million easy math are you guys 33 33 33 Partners that's right yeah okay so a million dollars in Enterprise Value you're going to finance how much of that given that there's no SBA in Canada what what did you what was your expectation of what would be financeable there yeah so we knew that there would be a sellers note uh invol involved in the component as well too and so our thoughts were between uh we we could probably comfortably you know uh bring up you know interupting 15 to 20% uh of our own equity and then probably get as much of a of a seller's note as we possibly could and then the rest from a bank that's right and the rest from uh that's right from the bank yeah okay so if you if you were going toing 15% uh of equity to the table of a million doll Enterprise Value business that's 150 Grand so 50 from from each of you plus transaction costs roughly yeah yeah more more or less that's right yeah okay okay great um and going back to this point of the kind of sequencing here you you the three of you buy a first business and one of you goes into quits their job goes into that business as operator and then second business second guy goes third business third guy goes uh does I just feel like the first person to quit their job and go in as operator is taking a little bit more professional risk with this project I mean they're the kind of the first ones to step off the ledge uh because they're not only putting in capital as you all are but they're also you know stepping off of their current career path um and they're just going to deal with the difficulty of like a transition and as everybody listening to this podcast knows it's a it's quite a roller coaster typically um so how did you how are you thinking about compensating operator number one uh if at all was it just that they were going to get salary like any operator would or was there something was there some extra uh juice in the deal for them whoever was going to be the operator number one and acquisition number one yeah good question so we we paid them a real salary out of the business and and a bonus but based off of um based off of uh performance and so the the plan was that W with his with his salary and bonus he should be able to come similar to kind of what he was already getting paid uh to to to to begin with with that being said the the our first partner who quit his job he was in finance he was a little bit older than us and so he was already in his career a little bit longer than we were and and and consequently had build up more assets you know uh had you know had a home and stuff and so when it came to signing our personal guarantees he had more on the line than than than the than myself and the other partner just because he had more assets than we did and so he felt more comfortable being the one stepping into the business because he said hey look if I if I have the most at risk I'd rather be the one driving the car here for the first business so that I have a little bit more control of what's going on and so um we always jokingly say you know the reason why he went in is because he hated his job most out of out of all three of us uh but but I think when we we roll it back I think there's those components they probably played a role in it and also um and also I think it was just a good fit um just with his skill set with the business uh stuff that he had done in the past I think it was just a good also just a good natural cultural fit as well too for him to step into that role great and then and then for when acquisition number two happens between the two remaining guys were you and your and the the lawyer the attorney partner who are both still in their jobs who will go into business number two or will it depend you'll basically depends on the target depends on life circumstances Etc it's already been decided admittedly I'm probably more keen to get into the next business um I'm kind of and so to to at this stage I think we're we're probably looking for more businesses that are more suited to my to my skill set right now and so as we're looking for businesses uh I think we've already made the decision that I'll probably step in just because I feel like I'm a little bit more um keen and ready to kind of jump into that operational um business owner role at this point of my career so return now to the search you're looking at stuff you're you're interacting with broker networking with Brokers there in Calgary did I hear that right that's that's right um and uh and so you look at a lot of different types of listings and then you see the business that you now tell us about it what did you see what did you like yeah so so what we yeah so the business we found through a broker um you know it's I I always say there's a little bit of an advant um I guess if you have a sales and Business Development background I think it gives you a little bit of advantage in searching for businesses because it is a sales effort you're prospecting you're knocking doors all these things right and so the the broker jokingly said to me to us after we acquired that first business that you know I was just the loudest I was the most annoying one and so so when that business came up he I I got the call and so I guess the squeaky squeaky wheel gets the gets the grease right which by by the way for a salesperson that's the highest compliment exactly to be the most annoying guy that's right that's right making sure you're always top of mine and so and so that process so so yeah so we we I remember um I I was networking with a lot of Brokers I was you know top made sure that I was all top of mind for these brokers and so this deal came along and uh and we got the first call from this broker um he he he knew the size of deals that he knew the size of deal that we would I should say admittedly this broker did a pretty good job at understanding who we were and the size of deal that we can actually um execute on and so when this deal came through he knew that this was one that we at at the very least we could execute on and and not leave him out to dry um come come um come close time sure and so and so yeah so once we once we found that once we saw that business he sent us the Sim um we went through it it was intriguing enough for us uh we met with the owner had a first meeting with the owner uh the owner seemed to like us which was a plus and uh and we liked her as well too and um and so and so that and and that that that point we just kind of went through the process and submitted our Loi and Loi was accepted then we went into do diligence from there so so what is the business yeah so the business is called abl Imaging and it's a large format print and sign shop um it's the the business has been around for 40 plus years uh it's been around since 1978 so this been around for a very long time and it kind of fit all the things we were looking for in a business um such yeah so those things were their longevity so the business been around for a long time uh the owner was on holidays three months ahead of the year uh which was which was intriguing um I in the printing I guess to give you a little bit of context in the print space margins are are typically quite low but the thing that we really liked about a liene is that they had kind of set themselves up as a more of kind of a premier player in the space and so if you have something that's kind of weird or out of the ordinary you typically went to a Imaging to do that and so because of that their a Imaging is able to kind of play at a little at a higher place in in terms of margins and so that that was something that we really liked as well too and so the projects that they were working on were really cool intriguing unique projects as well too and then and then another great thing was that the staff the the average there's about nine employees that came into the business the average tenure of the staff was about 10 years and so it was it was there was a long history of of people working at this business which was a huge sign of confidence for us because if these people are willing to stay this business for this long there must be there must be something good that's happening there as well too and so um so yeah so basically just to sum that up the margins were good it wasn't too owner dependent they had a good reputation in the market the margin yeah I mentioned the margins part already yeah and so so those were kind of the the the things that that we and also the longevity sorry the longevity they have pass the test of time as well and in terms of this owner who took three months off out of the year off uh what was it going to look like for one of the three of you or as it turned out to be the finance guy in your Trio um stepping in was she the was she the GM and he was going to replace her or was there actually something of a management layer already a GM that was not her or what yeah so she was she she would be the GM in that situation she was handling payrolls she was handling um she she she had a book of B book of clients that she would handle as well too and so the our our my partner who Ste into the business was very much stepping into a GM role and when you say large format printing and signs we all know what signs are but large format printing may be less familiar everybody what exactly does that mean please yeah for sure a large format so basic basically uh a lot of posters you'll probably see in in your restaurant uh wall deal as well too so yeah wall deal uh posters you'll probably see um installation like Signs in front of a in front of a store uh we you know we'll do backlit signs as well too um we we can do car car c deal window vinyls um all that kind of stuff um will kind of fall within our and so we don't do like business cards or stuff little things like that but um we'll do more of the the bigger stuff there and then we'll also do the installation as well too of those of those things and so not only will we print them but we'll go out and install these things and so to give you an example of of one of our some of our clients uh our the our bigger clients are home builders and home builders will typically you know when they build a new community they'll have a sales Center and in that sales Center they'll have all these Graphics about you know who we are what it's like living in this community all of these things all these typically we'll print the majority of the things for these home builders to make their home sales centers look nice and appealing as well too Mark I gotta ask it's a Project based business obviously so so we and I'd love to hear your thoughts on that I suspect the answer is is what it is um but also I just heard you say that in fact where one of your own Target markets or one of Al's Target markets here is new home construction also notoriously cyclical so so those if I'm if I'm picking at uh weaknesses in the business those are the two that jump out how did you guys wrap your heads around that yeah that that that's a really good question so um the project base Bas I'll answer I'll answer the project side of things first and so what we did is we we looked at the Historical of clients and how often they came back year after year and so we were able to see sure it is Project based uh however we've got enough history to show that you know this home builder has spent x amount of money with this company over the last three to four years and so that's one thing that helped us kind of come comfortable with and then the other thing was that we we took a bet on Calgary the city that we live in we took a bet that we believe that the city is going to keep growing and we believe that there's going to be an influx of population and and I think that was backed by a lot of things that we had that we had kind of um Pro that we have kind of thought of in the past I guess to give you some context in Canada I think in Canada um the real estate market in places like Vancouver and Toronto is so high it people are paying um unrealistic prices for homes and so it's it's uh taking a lot of people out of the market and so a lot of people from these places are naturally moving to Calgary because that's where they can actually afford a place to live and so we were taking a bed on that that over the next 15 20 many years um the home building was going to continue to grow in Calgary and so we are comfortable with taking that bet on this business and so with every with every investment opportunity there's some risk that was the risk we were taking basically on this one fantastic well Calgary 2 is for those less familiar with Canadian geography Calgary is kind of the energy center or capital of the country right that's right yeah you got it yeah so so that's kind of The Big Industry one or one of the big Industries in Calgary and it's also kind of a western town it's it's it's it's Canada's kind of cow town if you will yeah home of the Calgary Stampede right it's a it's yeah big Cowboy Outdoor Show and so you got it exactly yeah yeah yeah so the Texas of Canada probably don't want to associate that but I'm sure I'm not the first person to say it that way yeah yeah great um interesting about signs because signs correlate directly with health of small business small businesses opening need new signs existing small businesses need to refresh their signs so I feel like it's probably very tightly correlated with with the population growth of a market maybe I'm overstating it maybe basically every small business is tightly correlated with with a growing a growing population but it feels like signs are um you know maybe more daily I don't know and you make an interesting point because one of the things I actually failed to mention earlier is that one of the things because we bought our business in 2021 and so that was very much in the heat of covid um and so and so one of the things that we I we looked at a lot of businesses who were just decimated during covid you know obviously a Imaging took a little bit of a dip uh during covid but we did they did they still did well because one people needed to have signs PR for you know direction or you know stay six feet away from each other all of these things right uh so all these things and so that that was kind of a thing that helped us see okay this business you know no business is 100% Recession Proof I I'd say but this business had some nice barriers that were Recession Proof as well um that you know at the end of the day signs are going to be around for a long time um and you know that's something that's not going to be disappearing within a few within a few years if there's um if there's a you know if if like you said if there's a new business going up they need a sign it's just the way it is and so that was something that kind of gave us some comfort in that in the business we bought as well too great and some numbers around the business yeah in terms of uh like enter Enterprise Value and everything Enterprise Value and revenue and SD if you could share the big three yeah so I'll give you kind of General range and everything if that works for you and so you know Enterprise Value we're just kind of like shy of the the a million dollars or so so just kind of in that range that I mentioned earlier of kind of where we would we thought would be uh in terms of Revenue uh it was kind of in the the the high Millions the high one Millions if that makes sense between like 1.5 to to 1.9 in that range or so and and in terms of SD I guess the way we we did this when we did based off of iida and so you know the iida range would range any anywhere between 15 to uh yeah anywhere between 15 to 19% eadar so okay and now let's hear so so you decide to proceed and your third partner is ready to hop into this business let's hear a little bit about how you structure the the deal so no SBA loan in Canada and uh so many of my guests are Americans so we talk a lot about the SBA loan here always good to get the perspective of somebody who didn't use an SBA loan so let's let's hear that please mark how did it look to get this business financed yeah this business acquisition financed and so one of the things we did is we actually worked with a with a I guess a broker and so the broker took our deal out to a bunch of different banks um here in Canada and and this broker came back and said hey here are X Y and Z Banks uh and here are all their terms and so for us when we went through that for our first acquisition we it it was an it was an overwhelming process and so having a broker to kind of help us through that process and help almost take care of the whole banking process was was uh was really nice and helped us able to focus on the due diligence of the business instead of having to go back and force with the bank and so that was one thing that helped us uh a lot and if if if I always suggest to people if if you if you can make it happen having a broker for that first deal for the financing makes a big difference I think uh on that front now in terms call out your who you used yeah yeah his name is Steve Brown and uh TGC capital and so he he he's a great guy guy here in Calgary um really good guy I highly recommended he he was uh really able and he was a guy who had worked in banking for many many many years and so he knew the language he knew what that needed to be seen and and what needed to be said and so it was it was a it was a really good match there great and so so yeah so Steve Brown helped us with uh with with with with that process now in terms of the way we structured the deal um the bank basically wanted to have ensured that there's 25% down and and 25% down they were able to that was basically a combination of our own personal capital and a combination of the sellers note and so um initially the broker suggested maybe having you know a 10 to 15% sellers note but what we ended up doing is we actually negotiated a lower purchase price uh with a lower sellers note at the end of the day and so there was a smaller sellers Noe so the sellers note uh you know initially the broker suggested 10 to 15% we actually brought it down to about 5% sellers Noe but that enabled us to take the purchase price down by $50,000 or so and so that was uh that was that was reasonable enough for us to do that going back to this theme Mark for my uh non-american listeners or my American listeners as well where this thing of the SBA and there's this very formulaic way we do this down here in the states um and we we always have the impression that without the SBA doing business Acquisitions small business Acquisitions would be um more difficult more expensive uh what did the terms look like was it hard for your for your broker Steve Brown to find uh deals like or or did You' the fact that there's no SBA up in Canada no big deal like yeah because because the structure sure sure sounds similar to what we would get down here with an SBA loan anyway yeah you know it's funny I I I often tell people that I was I was shocked at how I always thought that when it came to buying a business the the financing part would be the hardest part um it it wasn't um I was surprised at how willing Banks were to to to loan and so when Steve Brown came back to us he probably had five opportunities from different Banks um yeah five opportunities from different banks and so I think part of the reason was that this business was a 40-year-old business there's a lot of history with this business as well too and you know it was it seemed hard to mess this one up I guess at the end of the day and so I think that long history made it made a big difference uh of for for for the banks on this one and the banks were coming back to you with what what is that what what was the what was the math 15 from you five from the seller and ultimately so so 80 70 to 80% that's right yeah 78 80% um loan that's right yeah around there about 75% about yeah and what o amortised over how long the one we got was advertised over seven years seven years okay so not as good as an SBA Loans 10 years but not not terribly dissimilar really yeah yeah you know I think right now most of the I guess in Canada we have like the our big five banks that the main National Banks and everything you know right now they're kind of mainly playing in the fiveyear amortisation range today um we have a bank called the BDC which is the Business Development Bank of Canada which is a bank that's mandated by the government which helps and their mandate is basic basically to enhance entrepreneurial activity in the country and so they're not necessarily like a Traditional Bank uh where you can actually you know have a checking account with them but basically with them they have more flexibility in their terms maybe maybe they'll provide a more a longer amortisation period they can give you some flexibility in terms of you know maybe only doing interest only payments for a period of time um things like that just because their mandate is to really push the entrepreneurial Endeavors in the country however you know they're more expensive you're paying a higher interest rate for that money at the end of the day and so if you want the if you want the cheapest money for acquiring a business you go to the main guys you know R there the bank we use was TD Bank uh you know TD RBC Bank um things like Banks like that uh they'll they'll give you the best interest rates uh however um they're going to be the more they'll be less they'll be less risky a lot less risk adverse in the deals that they look at essentially at the end of the day so so the their bar for getting a loan from them will be higher they'll be more risk averse and if you are able to get a loan from them their amortization schedule is going to be tighter it's five years that's right yeah yeah a five maybe you'll get lucky to get to six or seven years but most likely is 5 years at the time that we loaned our money there was a little bit more flexibility at that that range is because interest rates were super low uh during the pandemic and everything and so we're and so I think there was more flexibility on that range but they've kind of tightened things up now again okay well that that is clearly a big difference a 5year am versus a 10-year am so so in that sense we the SBA loan um is quite um still quite attractive by comparison um but uh you're probably my fourth guest in in a year uh Canadian guest in a year mark uh and all of whom seem to have really no trouble getting a small business acquisition loan from one of the big five there in Canada although I don't I don't recall call if all the amortization schedules were basically Five Years on all these loans um so I should be asking that great okay well let's anything to say about the actual consummating the acquisition doing the deal or can we move into how it's gone and what operations have been like yeah I will say you know one of the things that's interesting is that when you when you focus one of the things I learned is that when you are going through an acquisition especially your first acquisition uh I think you you get so caught up as the end goal being closing the deal uh but closing the deal is not the end goal the end goal is running and executing a successful business and so I think a lot of our efforts were spent on closing the deal and I wish we would have actually spend more effort on planning what life would look like afterwards having um you know maybe a marketing plan all these things thinking a little bit more proactively about that instead of just closing the deal but it's just so hard to do because it's your first deal and it's so consuming and it takes up so much of your energy and then once you close the deal you're like oh I've closed the deal but there's so much more after that luckily things ended up things have been going really well for us but but I think that's just an important note to to mention as you're buying as your people are going through the acquisition what was the give us an example or two of oversight here or where you made an oversight and kind of you wish you'd plan something you said marketing but can you can give us a specific example yeah I think I think specifically would be because after after we had the business after we require the business there was a transition period with the owner right I wish we would have planned out that transition period with the owner a little bit more to be able to uh extract not just we obviously extracted as much information as possible from her in terms of you know the day-to-day how to run the business who are the clients and everything but I wish we would have been able to actually had a little bit more of a strategic planning session with her was like hey if you were 20 years younger how would you grow this business uh into the next 20 years of of of of of owning that business and and it's really nice having that owner there uh at the beginning you know our transition period and we'll probably get into this in just a second but our transition period with the owner that she stayed on full-time for three months I guess what we agreed upon on papers that she stayed on three full-time for three months part-time for three months and then we had her available for consulting services for 18 months after that but you know she uh she stayed on maybe full-time for two months part-time for a month and a half and not not BEC just because you know we were able to pick up the day-to- DAT pretty quickly and stuff but I wish we would have been able to kind of been more proactive and deliberate in planning a strategic plan moving forward with her and and extracting some of her insight as to what we could do moving forward on that front Okay okay so really kind of yeah because an owner going to have probably the best insight into what what the needle movers would be uh or or the Strategic direction of the business should be if they were basically not retiring and selling it to you like um so it's yeah it's a great that's a great question yeah what would you you know 20 years younger what would you where would you be taking this business right okay you buy the business in goes partner number three your Finance guy uh was it name I should be uh yeah sorry Cody Cody yeah in goes Cody uh How does it go what do you guys find what does Cody find you know it it was quite nice the business was uh we were very fortunate the business was advertised as you know everything that was advertise about the business was was pretty true for the most part and so we find we find that there's employees who know what they're doing um and so and so things contined to kind of smooth we're fortunate that the that the owner the owner really worked well with us in transitioning to the business transitioning the business she didn't sell the business during a dead period there was still a lot of Revenue coming in it was in a slow time of year and so it still a lot of Revenue coming in after we closed the deal she actually helped us close a pretty big deal afterwards and so that helped us quite a bit in terms of the revenue and our cash flow and working capital early on with the business and so and so it was it was quite nice and so our our plan from day one was always to kind of do very minimal for the first six months to a year of the business just you know the reason we bought this business is because it's worked well for the last 40 years and before we go in and change things dramatically we just want to make sure we understand how every moving piece Works before we do any changes uh admittedly we actually went in and made a change to like the accounting system probably like few weeks after owning the business mainly because the accounting system was an archaic system that we know was you built in the 1980s and the one guy who knew how to service it was a guy who was like 80 years old and we figured what happens if this guy disappears yeah and so so we just updated the accounting system to QuickBooks Online right and so so that that was the only main change we made early on but but other than that we kind of kept things pretty pretty much the same for the first year or so for the first year or so what month did you buy it September 2021 September 2021 okay so we're coming up on three years here yeah okay and so after um not making changes for the first year other than putting in QuickBooks you did you have made changes because as I recall from our preall you you push Revenue like 30% yeah that that's true and so we actually were able to grow iida actually 30% yeah in the in the first year and I think there's a few things that push that that that that helped with that one there was there was a good there's a good windfall of business coming in already from the pre some some of the work that had been done from the previous owner so again the previous owner left things off in a great in a great situation for us and so there's there's part of that but also just updating from the archaic accounting system to QuickBooks suddenly gave us a lot more visibility into our into our margins and so you know Cody being the finance Wiz that he is uh you know was able to kind of see okay here are the margins here are the this is where this is the minimum that we can kind of bid bid on for jobs and stuff like that and so now that we have visibility visibility into our margins we're able to have more flexibility and how we price things as well too um I wouldn't say flexibility we have more insight on how to price things properly and and and make things um make things better on that front and so that first year was a very very strong year growing even about 30% and uh yeah it was and so presumably it we mean raising prices in certain certain categories yeah raising prices but also on the other side of things not going below um you know certain deals that that are where we just lose money on we now see that and say like hey you know what it's just not worth our time if we're GNA lose money on this on this deal wow and so that visibility thanks to QuickBooks helped you push ebit daa 30 30 30% higher yeah it played it definitely played a role uh and I think this is one of the this is one of the great things about these small businesses that you that have been around for a long time is that it doesn't take all that much to really move to move the needle forward uh like like I mentioned these businesses already have product Market fit and in some cases some of these businesses are are selling really well are doing really great sales despite not having great operations despite not having great systems in place despite not having great software in place and so just little things like that you know just things that are off the shelf it didn't require us to come up with this uh with this brand new Innovative idea that's going to be ridden by the Harvard Business review and and they're going to build a case study over it we just simply took something that was off the shelf implemented it and it it and it was a real needle mover at the end of the day yeah I'm just I'm I'm I'm reviewing here what you said margins were before kind of 15 to 19% call it 177% so 30% better means those go to what is that another five five points of IA so you basically get from 17 to 22 now it's a 22% IA business roughly yeah yeah yeah that's right yeah I think you said there was a third thing that that that got you your lift on on EA it was the pipeline that she' left for you it was the visibility and new pricing that that enabled and was is there a third thing uh I think uh I'm trying to recall yeah I I think those those are the main ones that we we kind of usually point back to so yeah okay okay great and how did your how did Cody find being an operator this is this is not only kind of just doing a first acquisition and and seeing if um you know somebody you can buy and successfully execute a transaction and a transition but also kind of this is the first test case of this larger Vision that you guys have where you buy a business collectively and one of you goes in and starts operating how did it did it seem like it was working at least with this single data point yeah yeah you know I I I would say so we're three years into it and I I usually tell people the business is doing what we thought it would do and and and it's really good I think part of the the reason why that it worked out well is because one there was a good transition period as well too with with the previous owner it wasn't too long it wasn't too short um we we try to build comfort from day one to saying like Hey Nobody's getting fired right uh as well too and so I think that was something that that that made a uh that that was important to to to set to set and still and right from the GetGo and just to kind of give people that piece and also Cody is um you know Co Cody is a very um person you know mellow personality um and so he's he's even Keel and so even during a pretty high motion time during after a transition I think Cody's been able to really stay even Keel throughout that whole process and uh and and provide a level of of calmness um and and and of Peace in the organization as well too great Mark well congratulations to you guys um but this is old news this was three years ago so how has the plan evolved you you I teased at the beginning that you're now looking in a second deal how did you decide the time was right to go out and do deal number two yeah you know admittedly I I think I I mentioned earlier that I was a little bit naive I thought after making our first deal after a year it's like okay we're gonna we're have we're ready to go make our next deal and stuff like that I think part of it was what made us ready is that we were at a point where we've kind of could deploy more Capital at it as well too just through saving some of our own money as well to having more equity in the business so meaning having pay down more debt uh of the business and so being able to to use that business a little bit more in terms of a a personal guarantee right instead of using our own personal assets as well too and and and yeah and so and to be honest I think a lot of I would guess a lot of ambitious entrepreneurs are similar that were or impatient in terms of acquisition sure it's been three year almost three years and I in a perfect world I would have loved to have an acquisition sooner but in the grant scheme of thing three years isn't too too long to make the next acquisition right and so so I think it it just kind of came to a good time myself personally I just kind of got to a point where you know I you know Tech sales is a great career uh you you know it's a it's a good path you yeah you can you can make good money you can you can have some flexibility around your schedule and everything as well too but I just kind of got to a point where it's like you know what I'm I'm kind of ready to to actually go pedal to the medal on this and so um actually so in February of this year I actually I actually personally went full-time into searching for a new uh a new acquisition and so I went full-time and searching for a new acquisition but also uh doing some side work to help with um with the with the print shop just you know helping some some of the sales efforts on that front and and so yeah so that's kind of been my effort over the last several months here um just going full-time on that as well great so you've you've now stepped out of you've stepped out of your job your right your day job to be clear okay um so it was kind of a combination of you being ready to fully go in change your professional trajectory and get into operating a small business it was the fact that you guys wanted to um build up your Capital base after deploying Capital into the first year deal so so saving more personal funds for your second deal and also harvesting some of the I assume harvesting some of the profits coming out of the print shop uh right now we've just kind of focused all on paying off the debt and so so Mo most of those profits are just kind of going off to to to pay that debt off so so the capital that you've been building up has basically been all three of your just kind of personal savings that's right more personal savings to now to put to deploy into deal number two and then say more about the personal guarantee bit so so deal number one that loan was personally guaranteed by the three of you loan number two for a business for second acquisition will not be well there a portion of it will still be personal guaranteed however we now have this asset of a this business that we've bought as an asset uh and so instead of personal guaranteeing our homes we can throw in that business as a as as part of that personal guarantee sure it's still a risky a risky thing but it's um I don't know for me just uh it makes me feel a little bit more comfortable to personal guarantee that rather than personal guaranteeing my home I guess great and uh your third partner's name the attorney yeah his name is Mike Mike and so do you think that when so the hopefully sooner than later although I mean you're you're looking pretty closely at a deal right now Mark as you told me offline uh you'll you'll get in there and you'll become the the second Domino to fall and then Mike what do you think the plan is either his personal plan or the three of you Collective plan for for getting him into a business yeah you know that's kind of the plan we set out from the beginning and so that's the hope as well too with that being said we're not naive you know life changes something could happen um somebody goes into a different direction and you know if that if that's the case we want to be flexible with those kind of things but as of now that's the plan that you know we'll we'll eventually all kind of quit our jobs in to uh step out of that as well too but it could be another few years before Mike does that that's right yeah okay and so you're also not at the point yet where the piece of the plan is each of these businesses you've acquired three they're stable each of you has run one of the three businesses and so you start stepping out and hiring operators not there yet uh not quite yeah not quite there yet on a eventually we're hoping that we we we've we've got we've got goals and plans in place to hopefully get um to to get there at a but that's that's the plan yeah can you share anything about I think you can't share anything about the deal you're looking at but about what kind of this full-time search that you've engaged in how it's what it's been like what you're looking for how it might be different this time around yeah it's kind of interesting you know now that I've kind of gone fulltime on it there's a a lot of different things that I've been able to do one is uh be more public about it on LinkedIn um you know you don't want where I found you yeah that's right and so yeah the fact that I'm able to be more public you know before I was hesitant to be public about it just because I worried about you know what your employer might think right uh as well and so so now being able to be more public about it that's one thing uh another thing that that I found a big difference between the first time the first search in that and this search is um you're able to the the being able to say that you've already made one acquisition goes a long ways uh for Brokers and for people as well too just because um a broker's biggest nightmare is that somebody's not going to be able to close a deal uh at the at the 11th hour and so the fact that you can you've already proven that you can close a deal and and you can get it across the finish line goes a long ways and so interestingly enough the second deal that we're looking at right now that you that you that you alluded to the broker came to us first um he we were his first call and um and we're and which puts us in a great situation because I've been in situations where we we put in an offer on business and there's six offers on the table and it's the worst place to be uh when there's six offers on the table just because somebody ends up overpaying for the business but now that we're in a situation where we can actually you know be the only ones at the table um and and be yeah it's just a lot more comforting you're not always second guessing your your your situation you feel like you can actually put in a real offer for the business instead of thinking of I'm putting an offer to try to beat the next guy I'm putting an offer for this business and the and the metrics are about this business instead of the metrics being to beat the next guy who's out the table as well too which is which is a great place to be well it it's such an important point it's it's one of many reasons why the theme comes up again and again of the power of getting in the game so many reasons to do that um among them the way the world perceives you once you're in the game and own your own business own a small business are are part of the local Fabric and to your point most importantly have done a deal have demonstrated that you can close on a business and and operate it now for three years successfully uh the way the business community and business brokers perceive you changes a lot uh in their opinion of you and their idea of your certainty to close goes way way up so a great illustration of that point Mark anything that I didn't well actually I want to ask this now to start closing us out Mark the Grand Vision here I feel like may maybe as you said you're impatient you would have loved you know everything to happen all at once it's taking a little bit of time but other than that is the vision as intact as when you kicked off this adventure I think so yeah you know I think when we started we we talked about you know by 2030 being able to have you know um 10 businesses under our belt I don't know if you know we'll get I I think 10 business is probably not the right number to to shot for maybe a neida number a neida number would be probably a better one to to shoot for at this point I think that's something that I've kind of changed over time and so you know uh 2030 so that's six years six years more like five and a half years from now you know if we we could have be in a situation where you know we can be you know at U you know $35 million of eidar so and then over the next 10 years so next 15 years or so after yeah so 15 years you know maybe we're at a 10 million EA range or so and and and and I think that's that's a good place to be you know like I said we want to hold on to these businesses for the long term we we don't really care if these businesses are Misfits if they're all individual businesses in their own individual industry because our plan is to hold on to these things we're not looking to to have a a massive liquidity event at the end of the day we just think cash flow just having that cash flow in regularly is is is key for us at the end of the day sure well preaching to the choir on that one Martin and do you think that your Acquisitions will remain focused on the Calgary Market you know to be honest in a perfect Ro I'd love to come buy more businesses in the US uh I find that multiples are a lot more reasonable in the US than they are in some of the some of the Canadian markets with that being said um I I think if we get to a scale where we're able to grow bigger acquire larger business that have more GM that have stronger GMS in uh yeah that have GM strong GMS in place I think we'd be open to move uh looking at places Beyond just Calgary as of now I think we we need to start in Calgary I think one of the things that that I've learned that it's key I know youve H you've had a lot of guests on your show who talk about you know you got to buy big business to make it worth your your while and stuff like that I think the the thing is you just got to get in the game as soon as possible like you mentioned even if it's a small business and that and and the the eighth wonder of the world of compound interests right um as that goes that that gets you to those bigger businesses especially if you know I was in my you know mid 20s when I bought that business if I would have waited until I was in my late 30s or early 40s where I've built up a lot more capital I probably think I'd probably be farther behind uh there uh if I had bought a$1 million eBid business in my late 30s than I did find you know a smaller business in my in my mid 20s I think I'd be I think I'm still going to be farther ahead when I get when I'm at 40 years old well speaking of of raw numbers and economics here Mark you're talk to us how you feel about partnering in a three-way partnership that was I guess initially a five-way partnership so obviously with every partnership there is the benefit that you lean on each other that there's more brains more brain power aggregate brain power to solve problems uh Etc um somebody picks one guy's down the other picks picks them up and vice versa uh that said you're also your your slice of the pie is is a third rather than the whole pie um I guess I don't want to give you a softball and be like how do you feel about that because you'll say you feel great but I do want to ask how did you think of let me ask it this way do you feel like three is good number as opposed to doing this with just a single partner like just going out a pair a pair of people doing this or taking the other extreme looking back at what if you had done this with five people how do you feel about the number of of Partners in a partnership like this yeah um I think no more than three um I think four or five gets really messy in my opinion um I think I think I prefer an odd number uh to be honest just because there's no 5050 scenarios yeah there's no 5050 scenarios right and so I I so I do prefer odd numbers uh I guess to to to your point of you know of going at it alone versus versus um versus yeah going at it Al loone versus a another situation I think with the finances that I with the money that I had saved I could have you know bought a much smaller business but that very much would have been a job um I don't think there would be I I I wouldn't be a buying a business with um a strong employee base and stuff like that as well too I think it'd be there'd be a very different demographic of businesses we're looking at and also I think one of my mentors has told me several times he said if you want to go fast go alone if you want to go far go together and so I want to go far um and and so and so I think going together with with with our team enables us to go far and and you know you know I know enough about Finance to to be dangerous but when it comes to you know doing a deep deep you know um analysis I fall short of that front at that end there and so having people to to to pick up that side of things you know gives me more comfort as well too uh going into going to an opportunity um and so yeah so that's um it's a little bit of a long-winded answer there no it's great great markk anything I didn't ask you any themes we didn't hit that you wanted the audience to hear no I think uh I think you covered I think you covered it all here today and so uh yeah I really appreciate it was great Mark if people want to reach out to you um probably Canadians who are trying to figure out how to put a deal together uh in a non SBA environment although doesn't sound like that's actually that hard after now speaking to four Canadians uh in recent months how can they reach out yeah so LinkedIn is great uh Mark M RC uh my last name is a mouthful I'm sure it'll be in the in the in the meeting notes there and so you can look me up on LinkedIn I'm quite responsive on LinkedIn you can also send me an email um at markmc oano doca oano aux n.ca uh but yeah I'm I'm I I really like I love this community and so I am responsive and so if you do reach out to me I I I'll do my best to to try to respond back as well great Mark well we appreciate that and aano of course is the name of the hco I guess that's right you got it yeah great great mark soami thank you very much for coming on congratulations on um first acquisition of a long-term holdco plan here being in the bag three years ago now and a second looking like it could happen sometime maybe this calendar year we'll see you'll let us know uh and be fun to watch your progress wonderful thanks for having me will appreciate it I hope you enjoy that interview make sure you subscribe to the acquiring minds Channel below we are now publishing twice a week so tons of new interviews and stories to come stories that will help you along your own path to acquiring a business