Monty Markham welcome to acquiring minds thanks will it's great to be here I feel like it's the Dittos of every week now well Monty you acquired an established franchise business in fact two of them two territories of the same franchise system but from different owners came up for sale at the same time they were contiguous territories so it seemed like a great opportunity and may yet turn out to be but it is not gone according to plan to say the least and we are going to hear today how this path is not for the faint of heart but first Bonnie please start us off with some background who are you and how did you decide to buy business who am I that's a tough existential question but um you know I guess first and foremost I am Virginia Tech hoping and a mechanical engineering degree from Virginia Tech and also got an MBA from duke so a big fan of what is now the ACC although we'll see what the uh the money lines change from that um I got about 25 years of mostly corporate related experience I started off with IBM and Research Triangle Park I live in Royal Durham area of North Carolina um it's a big blue for about eight years and started to get a little itchy of doing something more bigger faster um so then I got the edge to uh try a little bit of a startup back in the summer of 2008 and some people might remember that that turned out to be a really bad year to do startup activities and so after a couple of months that didn't work out and then I got a job into a niche consulting firm that I was with for almost close to 15 years and taking a couple years off um that did predominantly Facilities Management Outsourcing so maybe negotiating large Outsourcing agreements with large Enterprise providers with large colonies around the world um it did take a break from that um when my son was on the wink um at the time with my ex-wife um because of the travel and it was traveling about 75 percent and worked locally here for a few years with someone who knew from IBM um and then as that path decided to go in the direction I just wasn't happy with in supply chain and then the workforce of working with Asia I got back into Consulting about 2013 and uh stayed with that until really this year um and looking at that back uh I mean I was a road warrior for a long time and realized I was missing a lot of time with my kids um they're 10 and 12 now and so I missed a lot of formative years traveling a lot to make ends meet and it was a job I was good at it was a really good group of people that are still up and running and connected with them um but you know once covet hit um you know I looked at my diamond status on Delta and realized that it did burn it outright and that one day it was gonna go away and when you go from doing over a hundred thousand miles a year to ground stop it changes some things and most notably as whole and home permanently in this kind of little office I have here which on my wife now tells me she's going to decorate if I ever do any more of these um but it was a bit it was a big change to be around your kids a lot more I was um dating someone seriously um and then we actually just got married back in October of 2022. uh but it was a moment where hey I had a really cool little condo on downtown Duro renovated Mani tobacco manufacturing warehouse and walked everywhere and on the road um curve it hits and like everyone else with a coping story things change and then you know having the family time and it was like Hey time to grow up and get a real house so we did that and moved to the suburbs uh a little over two years ago um and then as you know things started progressing last year um you know I saw that the road was going to start coming back I mean it's just the nature of being in Niche management consulting you got to be there with companies and um yeah I started thinking is this really what I want to do I'm almost 50 now and you know I started having those real deep questions of where do I want to get into this um and I actually been listening to a lot of Bigger Pockets and other podcasts last year trying to do a little soul searching and ironically it was on a Bigger Pockets podcast right around Memorial day last year that Cody Sanchez was on you know had hers feel about you know buying businesses I was like you know what I actually thought about doing that back before my son was born I had looked at a few little businesses um thought about it yeah I was a lot younger then a lot less mature a lot less World Experience um you know and then when I find out that we're going to have a baby um that took a pause for obvious reasons um so is that c got planted um it ripened a lot faster this time and it was actually June 1st and I met with my first broker to start exploring the ideas and hey you know I'm gonna go buy something I don't know what it is um but I want to make it go for it I you know I want to take a risk I'm old enough now that I got some reserves in case something happens um you know I got a good support system at home um stable or structured so we're gonna go for it and um they thought that was actually one year ago yesterday so that's it's almost that we're talking now um that I had that first lunch meeting with a broker yeah the curious how if you were listening to Bigger Pockets and for those in the audience who don't know Bigger Pockets is is a series of um it's a media company that produces all sorts of content including lots and lots of podcasts about real estate investing so it's for the real estate investing path to Independence and wealth um if you were listening to Bigger Pockets why did why were you and then heard Cody Sanchez why were you attracted to buying a business rather than I guess what you thought you were going to do which is investing in real estate cash flow yeah you start looking at that and it takes a long time to progress up to have real cash flow in terms of Real Estate um and so as I started looking on that one of the paths that I thought about going down was you know my wife's trying to roll house into a short-term rental um so we've been she's been managing on that world um and you know that could have been a path and part of my Consulting was exposed to corporate wall estate is what the facilities we can choose aspect of it operationally um but then you start to you know really look what is it going to take to actually start generating the income that you would need to ultimately displace a W-2 and it takes a long time in real estate and I don't have that much time on my side relatively speaking and so I was like Hey then buying the business turned back up because of the economics of how things work with the multiples and the potential cash flows and all the tax benefits and um and all you know all of those types of things and it's something that I really wanted to do I had lots of little imprises when I was growing up as a kid um you know something I knew I wanted to do really young but I took a very risk-averse career pass for better for Works going into corporate and Consulting um so something is like you know I want to give it a go I know I won't regret having done it um but I don't want to get to a point in my life and be like I really wish I did that and it's really too late now and so that kind of self-reflection level and have a lot of kind of like just mindset thinking got into it was like yeah I'm gonna go do this I'm going to connect to do it and we'll listen to a lot of the um you know the Kool-Aid or the other you know things that come up only 10 of the people that actually pursue close on the deal first deal is your hardest um I was like I'm gonna get through it and you know because I'm you know generally speaking a pretty strong-willed individual um and I like to drive things and so I was like I'm gonna figure out how to get this done by the end of the year that was my goal one year ago um and I got pretty close I got pretty close so so let's let's hear so you meet with a broker on June 1st and then what are the next six months look like give us a picture of your search well first I find out that um that business brokers don't work like commercial or uh uh more like real estate brokers either residential commercial where they get paid commissioned out of the transaction it doesn't work that way um really the broker is almost always on the sales side unless you want it as a buyer pay for that I mean I wasn't ready for that yet so um I spent a couple months doing just basic networking of kind of just getting educated on the process the financial legal accountants and um started looking at you know some basic deal flow off Brokers and off this I sell like most people um I found one really early on that I was interested in and kept in touch with them for a couple of months and actually got pretty serious where I had three allies on a small technical maintenance company that is an area that are really interested from my Consulting background um worked with a lot of Life Sciences unfortunately those three owners in a C Corp structure couldn't get aligned to really make a transaction happen along with some other material Adverse Events and you know that those three Lois never went anywhere other than a lot of conversation at the time but I was still looking at multiple things I worked with a franchise consultant and looked at some more of what they were calling the less active because the term semi-passive is a little passe but we did look at some different franchise models um but you know to start up for one of those really was it was interesting for me just because of the capital requirements and the protracted time to cash flow um and as time went on um did some due diligence on a few firms but then as the this laboratory services technical maintenance company um was clearly not going to happen in the late October early December to you for a a this franchise resale was presented to me from a franchise consultant um and it checked all the buy boxes it was um the things that a lot of your listeners or guests you know talk about it is recurring maintenance Revenue it is a niche um basically a niche janitorial business to categorize it um it's all B2B um it's it's environmentally friendly it has safety bolt fits it has lots of good characteristics that you can really promote responsibly well because they're actually true and so looking at all those things is like huh that sounds kind of cool um and then you know layering into that this whole notion of where people are looking at the franchise scaling inspector that will unlock multiple franchises you know from what research I had done finding two contiguous you know next door neighbor franchise territories that are performing in a network where no one else is interested in them is very rare especially where it's in the location that I live in like I'm dead middle I'm dead middle in my in my span and so I was like huh that that seems really interesting um a little smaller than what I was originally looking for and we can get into the uh the risk of small but it made enough sense that I papered it and you know it took me from the time I found out about it until I had my Loi about three weeks Monty what were what were some of your financial parameters like what was the target sde it wanted to Target at least 400k should just have enough cushioning for Debt Service and you know to you know get close to where I was at a W-2 um so that was you know looking in the four to six range as you uh many of you uh already talked about that's kind of the initial sweet spot I put a lot of self-funded independent people in my position generally kind of look at um those are really hard to find you know the the lab services one I had was dead on it was a 400 sde um you know it was fairly priced I thought um you know given the asset costs and the customers that they already had that weren't checked in maintenance and recurring um so this one is a little smaller um when I combine them together um but it it still hit those primary boxes that you know I have an engineering to create an MBA so there is this risk of analysis paralysis that I can get into um I was like I'm not going to do that like it checks all these things off well enough it makes sense to go forward because it's it's in a location that I wanted I didn't want to move anywhere um you know co-parenting with um cussing a relationship with my kids so that's off the table um you know I'm later in stage of career compared to a lot of people so the idea of moving is totally off um so it just made sense you know looking at all the things that I would want to get out of something that even though smaller was the website oddly and and we're going to get into it because we we haven't told people exactly what it is but first so interesting that you got the deal from this franchise consultant you were working with um one of the things that has been talked about by my guest who bought established franchise businesses as you did is that it can sometimes be um if you if you want to do if it's an older established franchise I think yours isn't isn't maybe that old but if it's an older established franchise A or B there's looks like there could be a great roll-up opportunity it can be hard to break into the franchise the the existing owners sell to each other um so so finding an established franchise business uh of a brand you might want to work with can be can be difficult so I wonder if working with franchise Consultants could be a a workaround there do you think that that can be extrapolated from your experience with this consultant you worked with yeah he was great um I mean I still talk with him he checks in with me um super high integrity pretty and honest and well connected across the region happily would recommend them to anyone because I do think you know from a buyer's perspective it's a resource that that there's some Financial arrangement with the brand or whomever that doesn't affect the buyer to use and so they're very upfront about that insurance parent so it's almost it's a no cost obligation to work with them um yeah it's a very structured process in going from a disk profile terms of behaviors and interests and personality types all the way through when you like to do what do you hate in order to present Brands and this most franchise Consultants they generally work with the smaller mid-tier Brands um you know this particular brand wasn't one he had worked with before because it just had come up on his resale radar and so you know he's very transparent with me he's like I've never worked with him I don't know much I'll find out you know as much information as I can but you know you told me you wanted something that's already existing rather than start um yeah most of the Consultants tend to work with startup or you know initial franchise territories because those brands are trying to build out rather than recinals and so there's a little bit outside of his wheelhouse indifferent but and he's still great to work with fee from my perspective yeah and thank you for that clarification at the end there the thing about franchise Consultants is that the way they position themselves is that they're recruiting you to do a new territory or a new location of a franchise so that's why I was interested that he brought you actual resale opportunity all right Monty so tell us what filter is directly filter is a Services brand and the short story is between deep fryers um cleaning deep fryers cleaning deep fryers it's a niche that most people say I never even knew that existed and I didn't know it existed either with like many others um you know the brand started in uh England um back in the 90s actually so as a franchise it's been around since I believe around 18 to 788 so it's got you know 25 plus years um it is it is National across the US um I believe the the network has done something along the order of 100 million dollars total Aggregate and revenue um and like any other brand they're looking at 5x out of the next five years uh and essentially what it is is there's some specialized equipment that filter has an intellectual property license to that is part of the royalty structure um so we have these machines that will go into commercial kitchens and first perform a micro filtration which the analogy is like dialysis for cooking oil so these machines will take in hot 350 degree cooking oil out of deep fryers and filter them down to two microns to pick out all the particulates in any other matter in the oil which extends the life of cooking oil which has several benefits to the to what to the kitchens one is it extends the life of cooking oil which is becoming relatively expensive commodity um it also filters it down at a level that even takes out things like um where you know again going back to the dialysis analogy a human red blood cell is eight microns gluten is something 15 to 20 microns and this equipment will cake it down to two microns so all that's done under heat and pressure again with proprietary technology so that that's part of the services while that filtration is happening we use specialized commercial vacuum cleaners to suck out all the sludge in the really gross parts of the deep fryers and then you know use some environmentally friendly um organic biodegradable detergents basically or degrees years to to wipe out the walls of the friar so again it takes out all the the sludge that it'll start to build up and make food taste bad so especially for kitchens that have a higher quality of their fried food that um you know they want to keep at a standard it it really provides the quality benefit and other areas um the waste oil is initiated with a lot of kitchens and part of their service is we take away the waste oil in our bands um and in several of the areas that we work with they don't even have the waste bends out back anymore they've gotten rid of them because they attract rodeos they attract Vernon they stain they look terrible and so a lot of our um a lot of our customers as I got into this had gotten rid of those all together so the key part of our service is also extracting um we're taking away the waste oil and then helping to replace it um so when you see that it's also interesting that you know we have special PPP you know 450 degree safety rated gloves and aprons and all these preventatives measures to make sure it's dumped safely because you are working with hot oil but the key attendant of the of the service is basically managing actively managing deep fryer will get something I've never heard of you know the 3.2 October last year until it was presented to me for for people who don't have back in the kitchen experience as I did not the value proposition is very strong why is this so appealing to a kitchen why doesn't because historically doesn't just somebody on the on the kitchen staff just clean the deep fryer yeah yeah that's the worst job in the kitchen um it is so tell us about a job that people you know the the low hanging for the low person on the totem pole would have to do is go clean the fryers because they have to drop out the oil and sometimes they would fill it up in buckets and find a place to go and dump it and get out all the sludge they don't have the equipment they would do it every two weeks and stuff would build up um and when I talk about sludge it's like you know the thick flour like chicken tenders and all that just drains out to the bottom so you know there it's just it's dirty work it is dirty um and there's also a safety component and one of the things that I can pretty proud of in looking back is you know out of all of this you know close to 100 customers we've lost one um since the transition and that one was a reduction of their the key budget reduction for a corporate account that was working in the scroll system um so much so that they also cut kitchen staff which in the restaurant industry is unheard of to cut kitchen staff and then unfortunately two weeks after they cut our service one of their older Cooks was turning their friars and taking the hot oil down a step and got badly burned second degree burns on his arm because he didn't have the proper PPE you know and you see hearing about that I mean it's just like uh but at the same time the the value proposition is we do it faster safely we do it more environmentally friendly and we are responsible in how we handle all the materials and it's almost kind of fun when I've gone along to the kitchen with some of the guys and like hey the filter guys here like they're excited because they know they don't have to do that and so even from some of the accounts you know a good great example is um we recently started working with Whole Foods here and the team lead at the Whole Foods in our local store said I don't even care about the cost savings the fact that my people don't have to do this anymore is a win and hands down um and oh by the way they are saving a lot of money by extending the life of their oil because they're going through it so quickly so it's a it's a pretty clear value proposition um that I thought stood for itself and then you know from uh the acquisition standpoint I joke a lot but it's probably not so much as a joke as the competition is really self-performance there is no direct competitor that provides the same search there are some technologies that will do fresh oil um uh fresh oil tanks in and waste oil out but they also don't provide the cleaning service as well which you know really is important especially to get into something that's heavier use using kitchens I always wonder Monty when I hear about something that just seems to make so much sense but isn't yet mainstream especially if it's been around for a while this business this filter has been around for 25 years as you said why do you think it isn't the standard for kitchens and people are still kind of learning about it and Whole Foods your local Whole Foods just is hiring you now yeah I I don't I think it's as you know it's probably been a very small Runway up in terms of the brand growth um that you know I think it's a this is a long way of saying I don't have the great answer but I think it's you know as the marketing gets out there the word gets out um I don't I don't think there's just as much otherwise of it yet but I do get the impression that it's changing um you know especially as you start to see some of the factors that are going into you know what we're providing uh you know every time I describe it to someone that's a chef or works in the kitchen work oh my God that's fantastic I love that idea um so it's pretty rare that we get um Gina with the highest million terms of not having an interest in it um but it is something I I just don't think the word has gotten out that far yet but I do feel like it's getting ready to change yeah yeah really really interesting I I mean that's I mean when you first told me about it I was like well that and that even without restaurant experience myself like I could the value prop is is screaming so that's that's really neat yeah and let's get just get a little bit more of a picture of the business so roughly what it what do you charge customers so I guess it's monthly you you go up by what twice a month once or once a week and then what does that cost it varies um we we actually correlate the service costs with the price of fresh oil just because that becomes part of the cost savings metric um but if you go into a kitchen you know you could say roughly yeah a standard kitchen could be you know 80 to 100 per service charge you know four two simple fryers um there's a visit per visit right and sometimes we visit some once a week sometimes twice a week um the biggest the biggest one that we personally serve is one of the local hospitals here where we're in there every day because they're cooking from 5 a.m until 11 p.m and so they're burning it through so rapidly that you know we filter one day change the next day filter on Wednesdays change on Thursdays and it's just a cycle um and it's also one where they don't have a place to put their waste away so they really do rely on us to to come in and make sure they're taken care of um so the the frequency is really dependent on what the customer needs and um the majority of them are at least once a week um and we have probably about a third of our customer base doing two times a week so we're and that's actually what works out best for a lot of higher volumes is we do the micro filtration once um and then we do the fresh oil you know change out the second time that week and in many cases um these kitchens have worked with us to to design their menus around when we're changing out their oil so really if they're going to have a sticky product yeah super sticky right so if they're going to have a heavy Fried Chicken day um they often will want their oil changed out the next day or um you know we had a North University of North Carolina had a big event where they were bringing in everyone to do their football PC like we want to change out everything because this is a Premiere event and we want to have everything part so we go in there and even though the oil probably didn't need to be changed they said we want it changed out because we want it perfect um so you know in many cases will responded to bands as much as we can um but a lot of it is we get on a regular schedule with with a lot of these clients and they they definitely expect it I mean they they do their just in time while ordering in line with when we have our service times even though we're not under contract um it's all a handshake in terms of the timing but you know their oil comes the day before we're pulling up so it's it's it's a pretty sticky Factor uh yeah I've seen at least so hard and and what does it look like uh you've got this this proprietary machine device uh in the back of a van and it's one driver with his van and the device in the van is that what it looks like and so he's a driver and anybody's also the guy actually doing the doing the servicing machine yep the technician yeah okay so the technicians work generally independently um you know they also have waste oil tanks in the Vans and then they have a rant that has you know a hand truck cart with a back Jeep cleaner that's designed to suck out to spend it this kind of material and just to get just to give a picture of the potential of this business you'd mentioned to me the guy who's up here up my way in DC the franchisee who's grown quite large give us a picture of of his business so we can kind of imagine what the what the potential is I mean he's in the DC area so if he's serving yeah the Verizon Center FedEx Field uh Georgetown all of the universities in that area a lot of real high big volume um stands yeah I think he's he's probably got about a dozen technicians and he's got I don't know eight eight or so box trucks um I can read and remember the volume before we still goes through in terms of this question but I mean he's you know I I you know I don't know his exact numbers but it's a pretty large operation relatively speaking within Network I'm showing to go visit him um on the field trip probably about two months a day sometime in early April just to get see the operation um you know see how he's put his things together and see how he's developed some of his own efficiencies in terms of scaling out he's also been doing I think nine or ten years as well um so a lot of experience but you know that's also kind of one of the good markers when you do get into a network people are really willing to do that okay come see my shot um he spent probably about two and a half three hours with my wife and I just showing us around saying what he's been doing and he's you know clearly far more advanced um than where we are now but it at least it gives you a Target it gives you exactly what it could look like into the future and suddenly I came back to some ideas and pictures things that I want to start working on um well Monty you're making this seem like a dream business um and we we know that that's not where this is headed before we start getting into where dream crashes with reality can you tell us a little bit more about the the actual two businesses you bought any numbers around them just as as many bullet points as you can is you know combined together is about a million dollars of you know total you know combined singles priorities there's about a three multiple uh which is you know slightly higher than a lot of the multiples you hear before um but I also could justify the multiple because um 90 8 99 of the revenue I did that math the other day so yeah B2B recurring Services Revenue with large well-known names you get others there's you know that that says a lot like that that justifies the big next multiple um you know so then dd20 on our revenue and it takes half of our clients to hit 80 of the revenue so there's also a good distribution around the client base of Revenue as well which is again a good risk mitigation there's some concentration points for sure um but it does have at least a distribution so it's a little bit higher multiple but I thought I thought it made sense um and then you know looking ahead strategically you know the role concept of the strategy is you know put these together and develop further that multiple should only be able to to increase as you scale it out have a much broader territory uh sure that that you know I'm barely one percent penetrated I believe it and the levels that we have oh your one percent uh penetrated in your existing territories leaving aside acquiring other territories yeah yeah fantastic yeah and when you said one million dollars Monty that was your purchase price or that was the the aggregate sales across the two businesses purchase price yeah okay and and what can you give us a sense of what sales is across one or uh both together or individually the businesses combined it's it's combined runway on everything's roughly around 800. just kind of quickly on how this happened the both owners just wanted to sell coincidentally and both owners got put in touch with your franchise consultant and did they expect to be sold as a package or it was just all coincidence and it just worked out that way yeah mostly coincidence um they actually didn't know the franchise Consultants I think they gone through a franchise slippers or you know something else that was brand sponsored and it was also in Bismarck to sell I believe uh you know it's only me through the franchise consultant theories resale channel on reality City knew each other one had been one had these territory for about 17 years the other um started his about six or seven years ago um so they they you know they knew each other but they operate quite differently which you know people want to find out um in space about how the different operations were worked on um but it was I don't think there was anything on their part looking at it together I mean I did make my hello eyes contingent on having them for us at the time but you know to me I saw the Synergy play um being very important um especially given just what I'd been educated on with franchise and the territories like having the adjacency is really valuable especially as you start building up and then um hopefully soon this year we'll start getting on some resiliency but um you know it's when when one little hiccup goes off that we can get into that's it's still small it's still small well right right and and I guess because even collectively or as a package it was still a little bit on the low end of SCE you were looking for so one of them by itself would not have definitely would have been outside your range and was what were they was one significantly bigger than the other were they about the same size in terms of Revenue and just overall operation yeah one one was probably about 40 or 50 more than the other in terms of Revenue so you close you said it's been about four months so you close in February January 18th so that's like that's close to my end of the year Target yeah yes congratulations yeah and it was the second round of yellow eyes open company so um yeah yeah no set setting a six month I'm gonna buy a business in six months that was already a pretty aggressive timeline and the fact that you got within 18 days of it is is um deserves congratulations so tell us uh take us take us wherever you want to start us wherever you want to what what happens in the first couple of weeks when does it become clear that this might be more challenging than you thought well the first two days were were citized the first two days so day three it hits the fan yeah the third day is one on one of pieces of equipment goes down um and you know these things are these machines are working with hot oil which you know can will start to degrade internal plumbing and Mechanicals and electrical issues and so you start out with leaks and issues so I was out of the owner's garage working on it for the for days three and four um you know until we could get it back up and running an operational and um you know it became real clear to me when one of these things goes down without having any backup or resiliency it's a big impact um again going back to a lot of these a lot of these uh customers or clients that we have really expect us to be there and take care of them and when one of pieces of equipment goes up we can't and it it hurts I mean it's just it's a lot to us um because there's no easy solution people have to start jumping through hoops just to keep the basic things going um so you know I had a couple of initial equipment issues you know things kind of stabilized you know throughout January okay you can start to take a breath um so when how many machines did you buy how many machines do you have operating five okay so one goes down you're down 20 of your service capacity okay they'll continue and then when the second one goes down you're down 40 yeah and um um you know probably you know getting into March is when you have one employee that just you know was I could tell was gonna be a little bit more of a challenge um the others have been fantastic people um you know the one of them you know I I knew he had some challenges and you know some of it was not his fault he was in a car wreck last year that you know he got injured pretty badly on his hand and so that was causing him and he was getting um so you know trying to work through that was a little bit difficult um I did have someone that I wanted to elevate to be an operations manager who was working regular route so just trying to hire to find someone you know six weeks into it it's really difficult to know exactly what you want to do to hire but you know you need to do it um so as we got into marching it's trying to look for ways to hire people along with trying to get ahead of some of the maintenance issues all the stuff because it you know bands break down some of the things have close to 300 000 miles on them um but probably when when you know I first reached out to you back in March when I was in one of many fetal position moments was when you know one of the relatively new vantages blew up um and totally went out and you know Not only was that huge financial unexpected cost um you know then I had counts down so lost Revenue um people jumping through loops and trying to just keep things going was just difficult on everyone coupled with all the other stuff I was dealing with um and it just was I mean that's where we get into that it was hard it was like a different level of hard that it's really hard to articulate how hard it is because so many things are outside of any control that could you could even um you could even imagine and you know just as we were doing our audio check starting out the number of times I've heard people say wow I've never seen that before never heard that before like how is that possible and you know it's just you know I'm starting to Side Up difficult timing difficult luck um you know the other part that you know go ahead and say for you is the day we close is also the day that my father's cancer got um pretty serious looking um and I had some visions of working and building it out and doing some of the mechanical things with him because he's real Handy he's he's still with us now but it's it's um it's it's really challenging myself and the family because we're really Klumps and so you know I was on his hospital bed while he was getting ready to do chemotherapy win the Vantage and and then had a sales call plan the hourly and we still made the sales call and we actually won that account and we serviced them this morning um so I mean these good things happen but it's been cross-threaded and woven with just some really heavy stuff um when these things break down and employee turnover um then in April you know one of one of the guys um he's a half gang vet and he got hit by an LED um and he said look I got some sciatica and he just saw that baby my wife wants me to you know take a pause but I'm giving you 12 weeks notice uh you know I was like first panic I was like wait did you say weeks he's like yeah weeks and we'll hold you to it and so he literally gave me 12 weeks notice he's like I want to do whatever he needs for 12 weeks and then I'm taking a break and you know probably not coming back um then you know the last couple weeks I've tried to make it so that she does want to come back and even told me last week he's like man you're making this so hard for me to stay away I think I might come back um after I took this month off so you know so we're working through that but you know it takes time to train up and do people doing this um first and foremost you got to have the safety training of how the equipment works and um making sure that they can go in they know the protocols and handling it safely and then the other biggest challenge we have is just getting into places so every single kitchen is different access is different some is real simple of just walking right in others you have to go through corporate security bio Hazard safety check I mean it's it's amazing on the levels of of challenge just to get into places and then for new people to learn a route to be able to get into these places takes a lot of time so you know you won't just hire someone and have them ready to go um in a week um you know it usually takes a couple of weeks although you know we got one really good one we hired three weeks ago and yeah within the first week he was ready to go on his own and he's been he's been doing great he's even gotten unsolicited emails from clients and what a great job he's fantastic yeah it's easy to complain but you know in the restaurant world industry you don't give me your biggest compliment is no complaints you know because you're around people doing Food Services people real quick to play and are the people that you hire for the for the technician roles from food service or can they be from anywhere what are their qualifications need to look like they can be from anywhere I mean qualification is you know show up do a good job be safe you know be responsible I mean it's you know it is a blue collar it's and I equate it more to a niche janitorial job um but it's also helpful to have some um I guess some technical skills or troubleshooting skills um for sure um probably one of our longest serving uh technicians I think has been doing this for seven years so in this type of a space and you know one doing seven years that my Hops and manager has been doing about six years you know that's a long time you know for this type of work in my view and I think you know part of it is because they actually like the work they like the people um there's a lot of independent autonomy that you know when you're in the blue collar area you don't get you know we're not breathing down their shoulders and you know micro morning Jane whatsoever um you know once people demonstrate that they're honest ethical and can do a good job just go let them do their jobs and I've found that you know that's actually going on refreshing things um compared to dealing with you know corporate Consulting where you know the politics are just can get atrocious it was like it's been nice not having to deal with you know those kind of politics um um so you know it's a job you got to have some strength because like they equipment can be heavy um you got to be able to lift so low it's 75 pounds yeah it's physically isn't it physically a little bit uh taxing yeah yeah it's yeah okay so Monty I am hearing in the tone of your voice resiliency the word that I that I've heard you say and and even kind of a good natured uh you know uh Reflections on all of this but in our previous two conversations you know I might have been literally catching you mid-feetal position but but the tone was decidedly different so square that Circle for me so yeah I mean I'll go back March and April late late February March April were probably the most stressful times I've ever had I mean it was it was you know all of these hiccups going on with the business uh equated to like air traffic control like when a plane has an issue all the flights the rest of the day are screwed up so then people start complaining um and you can't just fix it immediately and especially when a van blows up um you know I was down you know about a third of our service capacity for almost five weeks um so that was super just stress and then trying to put another together and get everything done um it it was just a level of ridiculous stress that um you know I look back and it's like yeah that that really was awful people are saying you'll get through this you'll get through this and you know I had many many times especially back in you know the March time for in April of like what a mistake I made and the other thing I mean you know I alluded to it earlier but the stuff with my father sent me really hard um and and when you have that much of your reserves just drain to the there's nothing left like there's just nothing left and you're doing you know like many people 12 16 hours a day um while trying to co-parent kids while you know realizing you know the reality of his situation specially after his clinical trial got canceled you know the week before the being blew up um all that was hitting me and it was just it was excessive um you know I I had many many balling moments with my wife of like what did I do with like you know like anything else with what I've done this now knowing that I was gonna have to be dealing with all these other things well probably not um but you know back in you know November December everything was looking really good with us yeah yeah I felt good and when you ask yourself that question now would you do it over again is it a different answer or do you still feel like yeah no I would not do it ever again you know something I still would want to have done but I probably would have deferred like knowing where I am now my personal life um you know I I want to wait it because you know I'm gonna spend the next two weeks with them um I'm not going to work on the business um you know I'm gonna do a little bit but I'm not going to work on it I'm not going to do a lot of strategic things I'm just gonna wait um and you know just decided that's that's fine like you know it doesn't have to be you know rolling it up to you know double triple revenues in nine months and all these kind of great headlines just I'm not going to do that because I want to take my time elsewhere okay I think it's more important um and so I guess you know the maturation time perhaps in the last two months is we've we've talked a couple of times is you know the acceptance of what that reality looks like for us um you know and just you know really learning to let go of some of the things that you can't control and you know do your best around them um and be very fortunate I call them St John our operations I mean he is the most the most wonderful people I've ever had the pleasure working with I mean he's just a GM of a human being and he's really been holding so much together um and he's very empathetic because of challenges that he has all known that are very similar um with our situation and he's just doing such an amazing job um I just adore him and his work ethic and we're at the end that guys too and in particular has really helped through but um you know talking with some other people as you um introduced me to and has been helpful but um you know also getting out of the constant constant equipment issues like we finally got our first week this first is our first week without an equipment issue a major um I had a minor but you know every single week almost every day I was dealing with an equipment issue and it was you know it was so frustrating because you know you can't do diligence um you know and I had some misunderstandings or you know we weren't cleared about what the brand inspections were with respect to some you know started going off and you know you just can't control it and it's just it was so um yeah stressful doesn't even hold a candle to it like it was just so hard and just crushing of like I got nothing left to give and like all these people are constantly texting me things and calling with problems you know it's just like you almost got to like a PTSD to wear like a text message along with golfing with my phone like you know what like that's not the reaction you want to have when someone calls it's like you know when one of the employees calls it's like what's the problem now like it's you know and it's not the right mindset you wouldn't be in but when it's four o'clock in the morning or two o'clock in the morning and they're calling you you know that's not good news um um did I even had one yesterday at four o'clock phone call because one of the locks at our warehouse got messed up from someone else you know it's just like you know it's tough to get past all those things and you know part of that I'll just go back and equate it it's difficult timing um you know it's some difficult luck I don't think anyone has been um the underhanded or anything or like yeah you know malicious in any way shape or form um you know maybe trying to put the two together at the same time you know some people are actually well it took a lot well I like to do hard games but I didn't think it was going to be that hard to put something that I thought was working so long together we're all just blazingly um blazingly hard to make operational changes to it much less um improvements when stuff's just not working and your cost of reactive mode in the sheet like I had a sheet being reactive it's just 180 outside of my personality I want to have a planned and strategy and working towards it and you know I was the dork in high school that you know college that you know I was done big projects two days before because I wanted to be lazy the day before it was due instead of the the guy procrastinating and pulling me out later that's just my personality so having to react to things just it wasn't it just it hurt um and so now you got around a week where it hasn't heard the nature of hard this is something this is a theme that's come up I remember um first with John Schuler who bought a appliance repair business and he came back on the podcast and it was his update episode probably back in February and he was talking about like fine now but okay yeah yeah and I think you may have reached out to John it was a hot and it was a hard year and we talked about you know he talked about like you know I had heard small business was hard but I didn't really understand what that meant and it reminds me of like what you're saying right now it's like hard to Art difficult to articulate this this type of heart yeah um you're a guy who has been successful in his career and is hard working and and clearly it takes whatever it is you're applying yourself to seriously why is the nature of these challenges so different than any other challenges that you've experienced in your professional life so far if you can or if you can try to RTA I'm basically pressing you to try to articulate it all right um I think a lot of it is the extent that you have zero bloody control like you you can't there's no control over it when when some of these things happen is you got no control um and so this feeling of like you're spiraling because things are breaking that shouldn't be breaking but you have no control to get ahead of them to prevent them from breaking and then when they do break then there's this Downstream of consequences that is just painful and you know then it's just like the basic worries of like well what if I lose the biggest Revenue customer well what if you know one of these you know critical guys just decides to leave like I don't have a backup form and you know it's it's like ah what do we do like you know I I can't just jump in and replace someone that you know I haven't even seen all the stops they go to yet and you know it's just there's a little bit of that Terror that that's in there on top of you know I just took this big risk you know about you know all these pigments and you know all these other things that are lingering over and you know I haven't made anything to rotate in any any salad or anything out of it just yet and um oh by the way my wife got laid off um in in March and that was our health insurance plan and so you know that was also a backup option in case something wasn't working out well that eviscerated um so we're looking at like okay what do we really do how this is a different kind of hard like so I think it's the hardware you know when you're in the kind of corporating or more white collar you know the hard frankly is much more like politics and and you know kind of annoying things like that but like the consequences aren't as dramatic you know the potential consequences of this lower Stakes yeah I mean you're now you're dealing with like you know you're you're responsible for employees and their livelihoods with this equipment when the equipment goes down you know these are hourly people like they don't have you know a lot of reserves and they're kind of living on Check to Check and you feel responsible for that but you can't do anything like you're this sense of like this almost helplessness of like when all this stuff was breaking I I just can't I can't fix it quickly and you know when you're in an environment where you're able to fix things quickly especially like in my background I was you know Niche expertise management Consultants because I already knew the ants that when clients will have issues is like well we've seen this before and you know here's three things you do with it I'd recommend this one like you know it's like it was almost like a rogue motion which was part of the reasons why I thought it'd be good for a different challenge but it's it's this level of hard because the solutions are there but the time and the impact and the ability to make those Solutions happen isn't ready are they available you don't have these you know unlimited resources you know you know I don't have you know 100 000 that I can just go write a check and buy a new man and have it up and running the next day like that's not necessarily available and but that's what it might need to take well we've got to go down a path and figure all that out and you know that's what I'm looking at now is like how am I going to find it's a neutral and how am I going to make it responsible within the cash flow and everything else and oh by the way we want to offer benefits to the employees which is you know not common in this area but I think it's the right thing to do we've already started a 401K plan um to where um you can get some good feedback on that but at the heart is it it's it the reason why it's such a long answer and it's so hard to articulate it's because it's so hard like it's and it's the emotional reserves that when you get down to a point of just like I feel like I've been beat up so much like there's nothing left like you can keep kicking but I mean you know there's nothing left to bleed out um you know so looking back at it was just miserable and you know it it took a lot of uh family intervention to help me like start to elevate back up and like see the big picture we'll talk to others and like kind of go through it and you know the number of times I heard people say it'll get better it'll get better it's like no it doesn't feel any better um and then you get your first breath which maybe is serendipitous today that you know I had a week without equipment and she used to record on a Friday afternoon um oh okay it is getting a little bit better like okay we got a good Tech start and nothing broke this week and John we're constant will remind me he's like today's a good day I was like what he's a some group today is a new day like so then you know this reframing of celebrating those wins that you would just completely look past in kind of like a you know again a corporate life of you know what a good day looks like you know a good day is when like nothing breaks down and it just goes smoothly like I haven't seen that since day two yeah yeah they got two of them this week well um glad that we're talking today then Monty one of the other one of the other things that you'd said to me was um that nothing has ever made you feel so not yourself like yeah you don't feel like yourself or when you were having the fetal position moments you really didn't feel like yourself what what did you mean by that you know I mean I was a basically at home I was a train wreck I mean I'll admit it I mean it was I I and I'm still not that fun to be around right now it's still a lot been working on I mean I've been working a lot you know again mindset shifting but you know I wasn't having fun um I wasn't like just doing like the joy things in life you know because um you know the business was so hard the transition was so hard things were breaking I mean I'm you know frankly worried about my family uh for for valid reason and like that's a drain and when those reserves go down and you're just you realize you're just pushing but you're not going anywhere and you're not having a good time either like it's like I'm I kind of tend to think of myself as more positive than um you know you know happy go lucky and like fun um but I wasn't having any fun I mean it was just no fun at all like I didn't have the capacity for like front and joy um you know and it was rough and it's like this isn't how I want to be like I didn't get into this to let this have a life I got into it to live a little bit of a different life I didn't expect to like you know just watch the mailbox and flex checks every day and and that's it but I did expect that I was going to be able to do some other things um you know I didn't get to exercise very regularly so that has a mental physical um you know I found that I was you know hardly eating and lost 15 pounds in three months and you know you know four of them I probably could have used to lose after the holidays but you know the other thing did it um you know put four of them back on in the last month but um because I started exercising again but you know you get out of like the things that are like you know healthy lifestyle options of regular exercise and eating well and frequently and you know you just you kind of feel like this is an obvious state of uh like and then you know again it turns I turn the iPhone off intentionally but it's like as soon as a collet come through I mean I could feel my stress level rise up because no phone call was good news yeah and and it's just like that's not the way that's that's not who I am like usually you would expect like hey someone's reached out to me if I want to take this phone call now it's like what now and I mean I was I was you know I could feel myself losing patience um yeah or really putting good effort into you know shifting away from that um but that's what I meant by not feeling myself I was like who am I you know that sort of looks in the mirror but hey Bill what are you doing like um and you can't you can't just hit the pause button another thing that we talked about a little bit Monty was um you know what people in your network were telling you is like it'll get better and in fact I have heard from some people that part of what does make it hard is that you're feeling for the first time a lot of these crises and later I think it was reg Zeller later you you learn or you build a thicker skin not to say that you know if you're you're feeling the pain now that there's weakness there but you just later realize that that you can just roll with punches more easily because you've felt that many more punches and so I asked you if on the same point of like oh it'll get better which sounds a little you know dismissive like maybe it won't get better but is there some redeeming uh value to all of this hardship in that you're building a muscle so that when you're sitting atop your two filter territories next year uh you are just better equipped to deal with these problems like you're building muscle building skill your answer was no but answer it for me again I think a little bit and it just depends on what the issue is like you know when something big blows up you know that that's never going to feel good um but you know if a van were to blow up and I had a backup and I had a backup plan that I could easily snap into because I've already done a strategy to think it through which is up in my head I just haven't had time to do it um I feel a whole lot better but you know it's not that you want to just keep taking it um and I think also you know I guess equate it back is it's not the taking the punches it's it's having gone through the experience of understanding what the negative consequence of those events happening are and so once that happens and you can see like the relative the relative scale or spectrum of like you know this happens is it going to be a huge negative impact or not that big video like yeah that guy complains all the time he's not gonna fight versus like oh if that were to happen now I'm in real trouble yeah and that's that that's probably a better way I would look at it is not the thicker skin but it's the understanding of what's gonna happen you know the if then else um if this happens then this is what the impact or consequence or you know the loss or the whatever that outcome is going to look like until you know you're gonna think the worst and that's probably what makes it so hard is the anxiety of not knowing how bad is this gonna get and you know so I'd look at a little bit more that way I mean I'm sure like you know once you get beat up enough and then you don't need it you can take it a little bit easier but I think it's also you know that it's not going to be that bad whatever the the negative impact is I think that's probably just a little bit on the on the Tactical so what did you do when your van blew up and you didn't have you know a hundred thousand dollars liquid to just stroke a check and buy a new one and then and then what did you do and then John came over and we were looking at this Monitor and we rebuilt the schedule and then he started he started just okay here's what we're gonna do and he started just handling like he started taking over we compressed the routes we re you know shifted a few things around between 10 and one other and he just he just started plowing through it and I was like you know I was like I can't ask you to do this he's like this is what I do like that's his that's his answer and he just he just kept it together um and you know it was to a point where you know he'd worked a couple like 25 hour dates and he's like that's just what I'm that's what we have to do it's like I can't ask you to do any more you know I got to a long flight I was like no you can't you can't go out again right now like go sleep like um I mean that was that was really what held it together was was with St John um because you know he had enough experience to know where all the ins and outs were to be able to go and do it like you know two months into it I mean I know how to do the job but you know first I don't want to spend my time in the van going around cleaning dryers that's not what I wanted to get into this for but second like I didn't know how to get into many of these places and you know then it becomes another risk of them like well how much do I want to tell people that I don't know how to get in there and then have them think like hey you don't care about them as a customer or you know again you start spiraling in this what if what if what if and that's really what makes it hard is because you don't know you don't know that one little innocuous thing that you might say or do that then has huge financial or otherwise ramifications happening and that's that's the hard part um and so you know the van blew up it was out for three and a half weeks and John double duty and then you know at the same time was also try to train up new people willfully did not work out but back then it's so I mean he carried a big big load that I just I can't express how much I appreciate him him doing that and he's still doing it now um because you seem like somebody who would Express that uh directly to your employee but uh if you haven't or you feel like you haven't done it adequately enough make sure you make sure you play this for him hello I already I told him about it a couple hours ago good good uh Marty I want to close out with revisiting just the concept of buying small so we we you know when we were talking about the transaction you we talked a lot about that what your sde range was this was a little bit smaller but there there seemed to be all these uh appealing things to it which which to this opportunity which I totally agree with um but one of the things that is said about buying small buying a business that doesn't have a lot of sde is your one crisis away from real Christ it like collapse um and and you and you hit crisis after crisis after crisis um and if there had just been an extra hundred grand lying around you might have been able to neutralize these problems by just throwing money at them but there wasn't there wasn't that extra oxygen how do you think about buying small do you do you still think that like it it can be worth the risk and sometimes people just have to do it or would you say to people don't do it no matter what don't do it how how do you respond yeah my advice especially for first timers and buying small is really understand what the operational things are like the business is doing and know that you're gonna have to do some of that like you're gonna have to learn it just work with employees or you're gonna have to learn it because something's gonna happen um I think that's one of the biggest risks of small is because you don't have a team you don't have a management player you don't have you know equipment or resources to be able to have resiliency and backups so if something does happen you know you pull out the spare like it's like driving without a spare tire and getting the flat now what do you do exactly well I got that film called full day in the morning you know it took six hours to get sorted out and you know all these impacts um so that's probably one of the key things is you know buying small can be okay um but think thinking that you're going to be able to work on the business when you buy a small from the very beginning you know it was probably ignite you know and when I bought it John was already targeted to be the ops manager I took him to Florida with the training um I was one hire away from having him as an office manager instead you know I had to hire three people to replace you know people that are leaving on top of the equipment breaking down that set me back from getting you know another van sorted up so you know I think that's just that that's what the risk is is you're going to be into the weeds far more than you think you might want to if you have any intention of not being in the weeds and you know working on the business you're going to be at I mean you're going to be in it um you know I was jumping on the van slinging grease with everyone else and you know that's not how I wanted to spend my days because I'm you know I'm not practicing as much as the guys do and I did every day either um not that I was doing again on safely but I'm you know not as efficient and you know it's it's then you're like why am I spending my time on this I'm not doing anything strategic so that's where you can get into some real you know just frustration you know every day that I was on the band it's like I'm really frustrated because this is not how I wanted to be spending time um so I think that's you know that what I would advise people do is you know really spend some time with whatever that it is um and envision yourself doing that and then if you're one or two employees half your staff leaves you're doing it um yeah so it's still a risk and that's that's where that balance comes in is you know when you go big you know you got more financial concerns you got to take on more investors and all that other challenge um you know so I didn't do that um but then by going small you know you are one key person away from you know a real problem like you know everyone wants to get into an organization where everyone is replaceable we're nowhere close to that yeah no one's replaceable so I treat them like gold I mean I treat them I try to treat everyone as as well as I can um so I it's working so far yeah yeah no that that's really clarifying Monty it's I think that's really good that's a really good kind of um litmus test it's like if you're going to buy small you have to be willing to to do the delivery of the service that the business offers its customers because you may in fact have to do it I would even go one step further I said you should expect to do it and that's even that's even a little further mind shift like I did not expect to have to do it I expected knew how to do it but I didn't expect that I was going to need to do it because someone called out sick and you know equipment broke down and you know key customer calls me on a Saturday afternoon and driving back from visiting my parents and like hey you know our oil didn't get changed out I was like oh yeah he forgot he was silk that and missed it and I didn't know he didn't go back you know because I was dealing with my family stuff so Saturday night I'm in a dining hall myself until you know one o'clock in the morning on my Saturday night doing the work like that was like yeah oh stats also back in March that was much fun anything else Monty that we haven't uh touched on uh that you would that you would want to share with everybody I think there is Merit to the whole strategy and the roll up um and all that I think you know looking back my naivete or whatever you want to call it or yeah I don't know um it was the expecting the extent of things that can go wrong and then like the what are you gonna do about it I don't know there is a way to do diligence now well especially on the small stuff but you know I was probably emotionally unprepared for for some of this especially given you know my family situation um with having those reserves so I I will kind of on the closing side it's like you know my wife is just the most wonderful person ever like she's been a rock for me um and actually looking back when she got laid off it was it was a crisis then it turned into an asset because she started helping me with with all of this and we got to spend time working together and that was really nice and now she's you know looking to get back into W-2 land next month um but making sure you also have a significant support system that understands what you're doing and is willing to to put up with the garbage because you're going to be angry frustrated worn out short-tempered like all that negativity it's expected to come up don't don't think that it's not going to and I didn't expect it to come up at that level of magnitude and that caught me off guard um and so I've been doing a lot of work to try and like you know reduce the stress and reduce all this um and it's still not there I mean I'm still freshly pretty quickly because I don't have the Reserves left and so like building up you know you can't even build up a stock pump so those kind of reserves um but you can build up stockpile you know your network and your team with people that can't help you through that and don't just leave it to one spouse or one person right because they're gonna get burned out of you being burned out so you're trying to spread the negativity wealth or the challenge you want to call it yeah you know it's just as important to spreading out the positive wealth um but I think having having that resiliency of of people around you that are you know willing to help especially on a small like you know I think it'd be different if you're going you know you're big and you know you just bought a what was the last episode I listened to the the three million dollar roofing business with a whole bunch of yeah people in Boston smoke yeah just listen to that you know when you got that much you can hire out he's still doing 17 hours a week for a few months but a day right but um you know that's probably the biggest one to have is you know expecting some of these things happening and making sure that at least you have a a support system or or something to get through it and I got a little bit blindsided yeah well and and just to tack on to that not just um kind of expecting the worst or being prepared for the worst and looking around you to make sure you have a support system maybe giving a heads up to these these people in your orbit that hey guys this could be really really hard I listen to this podcast where there's all these horror stories and I might be about to be one of them so um you know give me some uh give me a Long Leash I might be needing to to lean on you here for the next few months kind of give them a heads up of what's huge it's not even just a little heads up I mean not looking back I should have had like a real sit down and almost like a almost like formal plan of like I had no idea it was going to be that tough with all those issues culminating between you know cancer and breakdowns and people out and bull um but you know I did do a lot of check-ins and um you know I hope I did it well she still likes me um so you know I think it's even more of a heads up I think it's probably really having some thoughtful conversations knowing what I know now and listen into some of these and talking with others I didn't have any of my family do that I mean they they they trustable and so they went with it um but I wish I'd done that that's a great piece of advice to end on Monty Markham uh if people want to get in touch what's your preferred preferred way to be so I don't do the Twitter probably not going to do the Twitter um so I'm on LinkedIn and um you can put my email on the show notes I'm one of those types I I'd like to talk with people um but I'd like to do it when I could schedule the time um so that I can be fully present and not distracted so I prefer to like set up an email call and happy to take them and happy to tell others you know here's what I think on stuff um you know I actually want to deal with these deals I don't want to operate um into the future I think one of the questions you asked me would you do it again I was like yeah I'll do it but I don't want to operate I want to put the deal together the team but I do not want to be on the operational side I'm too old at this point more now um yeah email email for a phone call be happy to well Monty I know you said like yeah I don't want to just keep taking it but from where I'm sitting you know if you can pull through this and get some breathing room and get a little a little extra Capital coming in so you can work on the business and upgrade I guess John promote John into operations manager you will have learned this business so intimately so well and and you know you know shepherded it through three and four crises uh and the fact that you like doing deals you will be in a phenomenal position to then do territory three and four and five so I um yeah I I see you know getting through this really really hard thing but then I see um a lot of potential in the future and and I love the business model too so yeah see the model is great pretty neat the model looks big yeah awesome all right sir money thank you very much for coming on sharing with us have a good weekend you too bye I hope you enjoyed that interview make sure you subscribe to the acquiring minds Channel below we are now publishing twice a week so tons of new interviews and stories to come stories that will help you along your own path to acquiring a business