nathan lenahan thank you for joining me today on acquiring minds excited to be here well you and a couple business partners are the new owners of bart's heating and air an hvac business in fort worth texas so we are going to hear the story today of that business that acquisition the numbers the whole deal uh and we're going to talk a little bit about the at the end about what your strategy is here because actually this business acquisition is part of a grander multi-year startup uh that you that the three of you are pursuing um so it all plays together in very interesting ways it's it's it's certainly uh the first the first plan i've heard of any of my guests like this but before we get into all of that why don't we just have a couple minutes on you nathan on your personal background so give me all the relevant personal professional history that led up to this decision by the three of you to go buy an hvac business yeah um i mean this has been a plan of many years uh getting to this point of of buying a business i think we me and my two partners we go back and forth on should we start something from scratch should we buy something back and forth back and forth but uh for me i mean i came um i went to college right when 9 11 happened joined the army uh right after that and uh and there's just no better place to kind of learn leadership and i think based on your perspective it's it can be a very entrepreneurial place where you have um you know very kind of uh intention-driven orders of like hey go take this hill and then how you take that hill is up to you and i find that i found that to be like incredibly empowering and entrepreneurial and i think that just you know helped build the spirit of what i wanted to do um i'm i love real estate so anything having to do real estate or real estate services is kind of my background so i left the army i got my bachelor's degree in facility and property management again that real estate and business kind of tent to it and uh and joined lockheed martin uh wonderful company hated it for me really poor fit uh it's basically the us government regardless what it says on the building and um and so what i did is i i actually personally uh moved to like a night shift you know so working from like i always get the numbers mixed up slightly but it's like 4 p.m until 3 a.m and then i would go work on my company during the day with uh with my my partner so we started property management company at that point um you know built it up grew considerably over the next like 12 to 18 months sold it and then uh you know i went and worked for a very large uh real estate company wework and grew incredibly um got to grow in a region from 5 million to over 200 million in just a few years and then uh you know moved to another startup and as a senior leader and then now i'm back doing my own thing again with the two of my closest friends so really excited to be here i'm a huge family guy i got four kids started way younger than i'd hoped or expected we had an oops baby at 18 and uh it's been it's it's it's been one of the best things that's ever happened to us so i'm about to hit 20 years marriage with my wife and life's pretty darn good and really excited to jump into bart's well you've you've packed in a lot in that time um so i i mean i i could drill down on to a lot of aspects of your story but um this is a business podcast so let's focus just couple follow-up questions your property management company you kind of you kind of breezed through that but you guys had started a property management company moonlighting or i guess i should say daylighting uh your property management company while you were at lockheed and you guys grew something over 18 months and sold and just give me 30 seconds on that what what kind of properties were you managing how many doors did you get to was it a good exit yeah uh started with just single family homes and you know grew up to a little over right around 150 doors by the time we we left so we knew how to grow really fast we knew how to build systems really quickly to handle the growth uh we did not bring in enough money though so that was that was probably the hardest constraint for us is like we grew faster than our capital or actually should have led us um and so uh with that we basically we got a couple even when we thought about selling we had like four or five offers played them off each other for a while and uh and it was like the most amazing tuition ever you know i made a little bit of money i say i made so much money basically on it but um you know we sold it for for a good a good profit and um and yeah that's it so made some lunch money but learned even more which was you know basically how i got to wework honestly well you know if you if you figured out growth and you figured out systems and the only thing that was missing is capital usually it's the reverse at least in silicon valley you got plenty of capital but you don't know what to what to do with it um so i guess today that would be a good problem to have lots of capital floating around and maybe that's what you're taking advantage of okay and so then you mentioned that you were at wework for part of its explosive growth say that number again from from what revenue to what um from about 5 million-ish to a little over 200 million run rate uh when i left the entire bus the entire business or your region just my region we were a multi-billion dollar company by the time i left okay and so what years were those uh end of 2016 through uh end of 2019. man you were really there when we work entered the national consciousness and peaked and then were you there during the the crash for lack of a better word that we worked crash yep i was there for through the the attempted ipo and then kind of the subsequent you know rearrangement we'll say or a reorganization a new new vision after that and uh it's an incredible experience yeah well i imagine that could be a podcast unto itself um but we'll we'll move along here okay so and throughout all of this you have the two business partners that you have now have been in your life through all of this and involved in these projects in one way or another maybe one maybe both right uh yeah i mean they they were both part of the property management company they both ended up at wework with me and and we will uh one of them full time with us now and one's helping and hopefully we'll get them you know in the future okay so bart's so why so you've started a company you've worked at a high growth startup you've worked at another company you work for the government you've been in the military why buy an hvac company why is that the next step in your career all right i mean i love um i just love home ownership and residential and just like helping people enjoy the the home life of their dreams not just the home of the dreams but i think it's really about the whole life of their dreams um and i think with uh fewer skilled trades out there it's just become an even more competitive and uh challenging business in a lot of ways it's just behind the times on on technology as well you have some some pioneers but um i love hvc specifically because it's um it's absolutely critical so and texas specifically it could be life in death during the summer and people know they have to pay for it and they're not willing to go without it you know so now you have a you know a service that you know you're gonna get paid for and people need it so i love that part i love making it easier so we're gonna try and apply some technology in there um and then there's a few things like hvc is complex but it's simple and the things the number of things that usually go wrong you know so it's usually like the same 10 or 12 things uh you know is it thermostat is it powers a capacitor is a fan motor is it freon is it a txv valve like it's the same 10 to 12 things over and over again and so i love the finite um number of things to manage you know from an inventory standpoint supply chain standpoint like all those different things and then also i'm really i love hac because of the skilled trades like plumbing electrical um etc it has the highest um percentage of subscription or recurring revenue as well so uh with annual like service plans or maintenance plans to tune up for like the you know for the summer and for the winter you know i i love the idea that recurring revenue that helps stabilize you across a very seasonal business i i didn't even i actually didn't realize that was the case in hvac and we'll come out you know uh in early spring or mid spring right before the summer hits you know make sure that you're ready to go you know it's uh condenser clothes are cleaned um you know filter changes inspection making sure everything's working like you wanted to um you know so you don't have any problems during the summer ideally you know giving any recommendations you might need uh and and so what percentage of your revenue is subscription revenue versus you know one-off uh repair yeah um very small for our business specifically um bart's i think we came in with like 70 you know service contracts when we joined and those are usually between 150 to 250 a year you know and so it's you get two visits you know for that price and then there's usually like some kind of discount like oh you get five or ten percent off of you know service up to a certain amount and you get priority booking and you try and create it like it's an actual membership that creates value for people because it creates value for us as well uh and for anyone that doesn't want to do the work themselves i actually highly recommend it um but it's not like super complicated either uh it's the one thing that i do believe we will always sell like i'm not a big salesperson i believe in recommending things that are needed but this is one thing that we will as a company continue to try and build more value on to so that it's easy to sell to anyone and it doesn't feel like a cell it's just hey this is going to make your life easier so that's really quite a pitch for hvac and we know that hvac is really a popular business for acquisition entrepreneurs it's one that's talked about a lot um kind of kind of like plumbing but i i didn't realize that it was kind of had this you know small handful of 10 or 12 things that could go wrong whereas plumbing the things that might go wrong or kind of infinite or there are many many more problems so it's more i guess much more complex business um didn't real or much more complex work that needs to be done didn't realize that did you all then when you decided to buy a business look for hvac specifically like had you decided did you have this thesis about hvac um or were you looking at all different types of home services businesses hvac came up and now now you know that it was it was a great buy but you weren't so um your criteria wasn't so tight going into this yeah i think well just for a lot of listeners out there like we've been looking for years passively you know this is not something that happened in the last six months and so our thesis our thesis has you know uh evolved over time i think where we had a very wide aperture and then we kind of narrowed it and then we opened it up a little bit more so hac certainly is number one um target and you know after that because we are geo constrained um focusing on just dfw you know that uh that made us kind of open the aperture a little bit more of like hey we'd be okay with the plumbing business electrical so like plumbing and hvac are top two but we looked at appliance companies we looked at uh multi-family kind of like uh you know turn companies that get you know new units ready for return when someone moves out like we looked at hundreds of businesses so uh but hjc was our ideal one and it worked out wonderfully great buyer um great relationship and just about as seamless as it could be i think great well i i want to hear more about that but but before that why not property management again i mean you guys have this track record you have this deep experience then at wework there's obviously there's some sort of property management involved in wework one might argue that it is a property management company so so why not uh why not property management again yeah i think um you know we had i mean we're kind of open to it i guess uh it's not not as much passion is going going after something a little more technical that requires skilled labor i think i'm fascinated with almost like this idea of how do you make the trade sexy again how do you because like you can make an incredible living i think you have uh it's underrated so like a new a new report came out recently and um skilled trades have like one of the highest uh happiness on in their profession of any profession out there you know and like i was actually really surprised by that where like 90 of skilled trades are higher are actually either satisfied or extremely satisfied with their work you know and i think having that purpose behind it is really really valuable so uh so we want to get a little more niche and our niche and uh you know jump into hvac and property managers it'll always be there if we want to go back okay and in your own experience i assume you've worked with a lot of i i know this um from a previous conversation in your tweets that you've worked with a lot of crews and managed i assume you've interacted with people in the trades for years now just curious anecdotally does what you've found in talking to people in the trades square with this report that they seem like they're content in their work yeah i think um look no one likes climbing an attics in texas in the summer you know so there's there's like the downsides of this that are very very real but when you walk away from a house like that and it was a family with young kids who had no ac and um and you came in you're like the hero i think that is incredible and if you treat i think those those employees the same way incredibly well you know volume for the skills and and everything they bring um absolutely i've seen it over and over again most of the time i see disgruntled ones are the ones who you know maybe have a little more cynical view of life anyways and yeah and then you know have been wronged or had really trouble with previous leaders or companies but i could tell you good leadership solves a lot of things a lot of things and great company cultures solve you know many of the others so those are two things that are incredibly important to us like how do we make it easy for them but at the end of the day they come away with a lot of pride of the work they do and and the people they help the so you you guys are searching passively for a few years so this acquisition was a long time incoming when you say searching passively does that mean that you had uh you know a filter set up on biz by cell to shoot you new listings and you talk to a broker or two in town what what is that what does that passive search look like in your case yeah so definitely uh definitely the filters and alerts um building relationships with brokers talking to owners you know we did uh you know some cold outreach on our own uh mostly just friends of friends you know like reaching out or we'd see you see a van drive by you talk you call in and see who you talk to see if you can get a hold of the owner uh you know and a lot of it was um but a lot of it was mostly through brokers and and just really seeing you know who we could find what we enjoyed um learning about and who we connected with and so uh brokers end up being the best source for us overall and this one i don't think we found through biz by cell i believe we found through a broker from biz by cell who we build a relationship with and this was like i don't know if there's a pocket listing but i don't know if it was uh it was fully online when we actually were introduced to it and had you in in in these years of passive searching had you gone down the path with on other deals that just hadn't come to fruition or was this really the first one that you got serious about and it also was the first one to close yeah we i mean we've made it into due diligence on a few uh we had we've made it to you know working through loans on a few but never uh i don't think let's see we've gone into exclusive exclusivity probably once or twice uh so at the end of the day i'd say we've probably been like really serious about three to five deals at most and this is the one that we took the farthest and you know actually closed so uh like loan approval everything was ready and in place and by that time we'd already talked to banks several times we had financing ready to go you know everything was kind of ready and really primed and this one that's i think that's why this one felt so right and was pretty smooth overall so tell me more about bart's then what did you like about it what if you can share numbers what how much revenue was it was it doing how many technicians and employees are there yeah sure um so bart's we love that it's in the growth corridor of dfw it's kind of hard not to be in a growth corridor dfw because it's just growing everywhere but we're on the north side of fort worth uh and it is just incredible growth uh between north fort worth and kind of oklahoma basically and and then um you know we liked that so that was a great that's a great demographic it's where you know one of our partners lives it's where the other two partners want to live so really good area there solid revenue numbers uh the the owner had optimized for uh for lower taxes and had not optimized for selling the business you know and kind of that three year time frame that you'd expect so we actually got an incredible multiple on the company because the uh you know revenue and profit was much higher than he claimed on his taxes but because of his taxes were so uh his and you know his tax statement um was so low you know we uh we got a better price on it and so i i'm that was great we ended up at a we bought it for 400k and a little over a million in revenue um which turns out was probably even high even understated at that point so we think it's truly about 1.25 1.3 million in revenue uh overall and and uh you know 20 margins net margins uh as well you know so just a strong business uh you know in in totality and i say 20 margins that's kind of after us re like pro forma ing out adding because he he used his house for like the office and things like that and that wasn't included in any of the expenses so we had to kind of go burden that the right way so we were still looking at 20 margins after we burdened it with what it actually cost to run the business great great so 20 margins on about a million dollars so 200 250 sde yep and so three of you are in the deal and you one of you is working is the gm at the business stepped into the the leadership role at barts exactly so our partner scott titan sir he uh his background is facility management property management as well and and so he stepped in as like the general manager for bart's he's running the day-to-day he is um working full-time in it so he's actually paid a salary based on that that role i am full time as well but i am you know more of the i'm helping with the growth and systems and like implementing service titan and marketing and everything like that uh we were not anticipating me joining as soon as we did uh i actually i was laid off from my uh from my previous role uh i won't say unexpectedly but uh it was sooner than i was planning on joining the business we were gonna have me join in probably a year uh full time but it's been wonderful like great great timing having a lot of fun and so that's my role and then our third person he is uh he's still working his job full time but he helps with the finance side kind of the technology side that's his background and but he's full-time in something else correct yeah okay all right and what uh what have you found in there so you closed on this in november so it's been a little over a month correct yep 45 days 45 days so what how are you feeling any skeletons it sounds like one of the things some news has been good that revenue looks like it's going to be bigger than than uh what was reported because of the uh trying to optimize the tax returns but um any other good news or bad news yeah i think um no skeletons in the closet which has been wonderful you know just the the seller's been incredible he's a high character you know kind of human being ran it with his wife done really well take care of his people uh but the the things that you'd expect you know i uh i think the uh wilson companies on twitter you know he talks about go buy a business that's like four or five hundred k and as inefficient as possible and i think that we found inefficiencies everywhere like he had just signed up for his first you know technology with housecall pro recently and he just thought that was unbelievable as far as the tech and and we found that to be you know it's not up to the standards or expectations that we want so like we're moving to to service titan but um no no skeleton i'll tell you like the worst part has literally been uh just transitioning phones like getting phones from his provider to our phone fighter provider it took us four weeks and probably about 15 to 17 hours just to get phones change over so like that was the thing that that threw us off the most but everything else has been pretty seamless you know it's funny i hear that a lot that that these kind of should be straightforward logistical changes are the ones that are the biggest headaches but the good news is like those are fixable they might be five times hairier than they should be um but they're so fixable and once you get on the other side of those like if there aren't any more systemic issues that you encounter like you should be off to the races so that's great how many how many employees are how many technicians and how many over overall employees yeah so uh he had he had uh two technicians well he had one yeah two technicians when we went under contract he lost one technician during that time uh for had some coveted you know issues or whatever and things just kind of spiraled so that person had to step away and and so we we actually made a contingent upon the close that he'd have a second employee that was back and you know second technician back in and trained and ready to go he found someone incredible um and you know like a more junior tech but just a great human being really knows what he's doing and has a great head on his shoulders so so we have two techs um we've already hired a third actually and then we've hired a csr so you know his wife was kind of like the csr customer service rep for originally um so we've hired someone to replace her and then scott is the gm kind of replacing richard richard was also a technician as well um and so he still advises us on you know like escalation points but for the most part i mean we we talk to him once or twice a week maybe and that's about it at this point so the whole business is basically reliant on two techs the the the output of two techs right right now well you said you had but you hired just hired a third we do have a third yep so getting ready and we're about to go through and have the best december they've had in the 20 years it's been in business and is that because of you have this new capacity with this third higher with this third tech new hire you know what there's all your all those emails you're sending all that growth work you're doing you're reporting well on twitter my my very very uh fisher-price first email marketing email uh i'm sorry i'm sure helped but the uh i'd love to tell you it's because we're so awesome and we're so great or anything but i think it's literally just answering the phones and being really accessible and and getting out there and like responsive wise and then being uh i think we're we're not at the top of market and we're not at the bottom market we're probably in that like 75th percentile as far as pricing so it's still very affordable and uh and we have great great reviews too for a small company so you know overall i think we're just uh we're kind of lucking out right now it's a warmer texas uh winter too well it sounds like you you have high opinions of the seller uh and his character but maybe that he wasn't as responsive as he could have been or maybe this was an example of you know you hear sweaty startup always talking about you know in-home services or or local services in general just you know be more responsive and answer the phone and you're already doing better than 95 percent of your competition is is there something to that going on here yeah i mean like they're uh they had a level of success that i think gave them a willingness to kind of be a little more crass or um with customers sometimes uh or like simple things were like oh yeah i need that information just text it to me versus just taking the time to say hey let me take that down for you and put it in our crm and we'll follow up and you know like putting more uh onus on the customer like there's just things from a customer standpoint like service standpoint and uh and like a customer experience standpoint that definitely made me cringe a little bit not because he didn't care but just because i think he you know he's busy and that's the only way he'd get it done one way or the other so that's what he did the how were you able to hire a tech uh so so quickly i mean did you just put put out put out the opening and you brought somebody in because everything that i'm hearing is um obviously we're we're living in a time of labor shortage but particularly in the skilled trades it's it's it's acute and yet here you are in month one you're you're able to uh grow your workforce by 50 with this with this third height it's always it's always easy to grow by big numbers when your base is so small but um yeah look i think uh i came from my last job i worked at real estate as well you had to be licensed and we probably in the two years i was there hired i don't know 800 people and so i just came from a recruiting machine and i think there is uh there's this huge gap between like the job postings and jobs that people put out there and like what really happens and you're how important you are to a company and so uh i tell you a little bit just trying to put out more like human you know type job descriptions and like how we're going to care for you how we're going to take care of you you know the role you get to play um we also we have we actually have three people ready to start with us um you know as soon as we say that we have the business for them uh which was really exciting this person actually ended up being one of the technicians that had worked for bart's previously so he had come back and was interested in potentially working again so you know he saw our ad when we put the stuff out and you know was excited to try and join so it happened to work out really well we needed someone that was strong on the install side and uh and and air quality that's one of our big pushes right now is trying to figure out more of like indoor quality management um indoor air quality management so he's really strong in both those and it just was a really nice match and then we have two more people that are ready to go and we're hoping higher in january as business continues to pick up so we'll see i i honestly um i believe that if you're if you have a great offering from a company standpoint like a compensation standpoint and like a culture standpoint it's actually not that hard it's not that hard to hire out there even for skilled trades uh you know it's going to take some effort and you have to do it right but if you put a pros process behind it and actually know what you're doing then i feel pretty confident that we're going to fill those roles well maybe it's kind of like what's what i was saying earlier about sweaty startup where the service provided to the end customer just isn't as sophisticated or as tight or as professional as it could be and just by doing that you're you're way ahead of the market maybe the same thing applies internally like the all the all your competitors out there who are just not servicing the customer you know as professionally as customers want are also not treating their employees as professionally as the employees want and so you just fix both the both your external facing business in your internal facing business um and you know you're you're you're better than 95 both externally and internally something like that yeah i like to think so honestly i just don't i mean i treat i treat uh recruiting just like sales yeah and so if i get a lead on the hvac side you better believe i'm calling back within a minute and uh but people think that i think there's been such a uh uh there's been so much time where companies had the advantage and they could respond a month later to uh to an application and and you know so we're striving like how do we how do we within an hour we get an application saying hey we're so excited that you applied thanks so much uh we are interested in talking to you here's here's the time frame and the process that we're looking at um will this work for you you know if it doesn't we don't waste our time and we don't waste our time and so uh that's the approach that we're taking and that would just like real uh you know like real written uh job descriptions that sounds like hey there's a human behind this isn't some professional job description that sounds like a robot wrote it it's uh like hey you're gonna be valued here and and here's how we're gonna do that we're kind of a no tech ford company and that's our little saying right now is uh we're tech first company technicians and technology and that's how we're gonna take it to our customers so that they get the best service and the best price nathan you have all this experience in real estate you self self-described as a you love real estate you built and sold a property management company worked at wework for run you've managed crews so you seem like somebody who even if you don't have hvac experience directly you're pretty well positioned to get in there and learn quickly and understand get your arms around it what if what would you say to somebody like me for example who might be looking at buying an hvac company but really doesn't have nearly the experience that you do uh how how should i feel how how learnable is this if you're really new to home services and don't really know anything about it uh i think it's very learnable uh but you have to have someone that knows far more than you and i think that's the most like if if you're gonna go buy an hvac company let's say and you don't have any experience in that you can absolutely learn but you have to have someone that you can lean on that you trust within the company and you need to do everything to keep them you know and so that goes from uh day one like how do you build that trust with them uh if you get to meet them in the actual you know acquisition process like we met the we met all the technicians before we closed you know and we interviewed them and we talked with them and we talked about retention and so uh i think as long as you're not too good to do anything you know so if you're willing to be up in that attic and you know putting that um you know that coil up on your back and getting it up into the attic after taking the stairs off and you're just you know that's what scott's done in so many ways trying to build that trust i think that's where you start you ask lots of questions you empower the people and when they say things you listen i think that's incredible and at the end of the day this is a people business this is a people business all day long and nobody cares how much you know until they know how much you care and you show you care by being with the team by listening to them by paying them what they're worth by giving them opportunities to you know be proud of the work they do and and if you can do those things then the technical knowledge will come it will absolutely come so are you expecting or is scott expecting of himself that he's going to basically learn 50 to 80 percent of what his technicians know over the next year or two 50 to 80 percent man that's a good uh maybe like probably in that ballpark i mean he could go in i would say between scott and i we could we could we could take care of like simple things like i've changed plenty of capacitors i've changed plenty of fan motors in my day um like i don't mess with freon i haven't messed with freon much um you know of course change filters i clean coils like there's lots of things that i've done um so i feel i'm i'm relatively personally like mechanically inclined like i'm not too good to do anything and scott's exactly the same way so uh but more importantly can he talk incredibly well on the phone to customers to give them confidence that is we're really um worrying about that because he's gonna be teaching a lot of our customer service reps how do they troubleshoot how do they ask questions you know how do you know that like you know most people don't like nest thermostats like on the hvac side like there's a lot of problems with them and there's a lot of challenges and this is why and um you know and when there's problems with it he knows already hey here's the three or four things you got to ask because this is the problems that happen most of the time because he's talking to the text constantly listening and talking to the customers and so uh you know at the end of the day he's gonna be the gm but he's learning everything he can right now to make sure he's knowledgeable in the whole entire business let's talk about size of the business that you acquired so um about two hundred thousand dollars in sde two to two fifty and about a million dollars in revenue uh you and you acquired it you said for four hundred thousand yep so you've probably seen on twitter this this debate that happens every now and then and i'll tweet things about it like buying small buying on the smaller side versus uh buying something quite a bit larger like you know maxing out the sba loan of buying an enterprise of five million dollars in value and i would i would call your acquisition a smaller acquisition you bought small was that a philosophical decision do you do you have thoughts about this and and now that you're in there and you're actually you're demonstrating to yourself that you can that you can actually sounds like you can grow pretty quickly i mean if you go from two to five technicians within the first 60 to 90 days that's uh that's that's pretty awesome so so any thoughts there yeah i mean philosophically it was we want bigger and we would like to max out the sba loan but the market kind of kicked our ass and this is what we could get so uh you know at the end of the day you know we we got in there and we i think we got laughed out on some of our offers if i'm honest of trying to go after some of the bigger ones because man the multiples they started using for some of them were just getting out of hand if i'm really honest uh and so we're really happy with the size of this it makes it harder to it means we're you know putting more of our own money in for growth you know for uh like we're gonna hire like a more senior kind of um csr kind of ops manager you know who can who can be on the phone more here soon and that's going to be you know that's that's going to be a little risky um because we will be able to pay for it barely but we will be called much closer to breaking even at that point until we start seeing like the summer ramp yeah you know so that comes out of the working capital that we brought into the business that's a risk that i think is going to pay incredible dividends especially as that allows us to you know install more systems and frameworks it creates more consistency and like everything else that comes with it because we do want to elevate scott in a way that he's running the business he's not in the business sure so when you say the working capital you brought that was above and beyond the 400 that you paid for the business yeah so i mean if you want numbers working out i'm happy to do that so uh so sba loan we we paid uh we paid 400 you know they usually you know want you to put in 10 so what we did is we did the acquisition loan um and and then we got a 100 000 line of credit in addition to the acquisition loan uh how that all broke down was we put in about 53k to close the deal so 53k to get you know a little over a million in revenue you know i'll take that all day long um and then we put in so 53k split between the three of us and then we each put in 70 uh we put in another yeah like 55k each um for working capital so we have 100k working capital line plus 150 165-ish um between the three of us so that's kind of where we're sitting right now as far as um you know hoping we don't have to put more money in but if we need to then it'll be in the pursuit of growth and i think we'll we'll actually be in a place to do that so uh i can tell you we're going from that one our plan is about 2.72 million for next year uh and if we get that second acquisition if we get a second acquisition then we're probably looking closer to five is the plan so uh but 2.72 that's the plan for 2022. nathan so you acquired a business doing a million dollars in revenue and you you think you'll get it to your goal is to get it to 2.72 in in the first year that's incredible and uh then you said to five maybe in year three sorry no that would be year two that would be year two of ownership if we if we do get a you know considering bart's is our kind of our our platform uh company if we do add a second company the goal would be how do we get to five million at least a five million run right uh next year but yeah we'll see how it goes i mean it's not we would love to get that second company and and start kind of adding plumbing or electrical on to this but you know we'll see how it goes there's a ton to learn and kind of uh really optimize on just the hvac side so yeah lots of work to do well even if you but this two point this 2.72 number that is without an acquisition that's just organic that's that's exactly man and you know that that's actually one of the arguments for buying small if if you are able like if you have better access to deals uh and acquisitions now that you own bart's and you're seen as legitimate and you know in the industry or maybe other people in the industry who are looking to sell here that you've acquired barts and that you know they reach out to you and they say hey by me you know this is what i this is like a pattern that i often see so that's actually an argument for buying small just get in the game because doors will open um versus you know spending another two or three years of your life looking for that four million dollar business where nothing other than your search is happening 100 i'll tell you we met with an owner of a business um in kind of the same like geographic area as us recently and we're actually just going to talk to him about some real estate he happened to own and uh and he was good friends with richard who we bought this company from and he's like hey uh you know how's it going and we're like hey how's business going what's going on he's like man it might just be a lot better if you guys just bought it from me we would love to talk to you about that you know and so that's that's how easy some of the conversations um have started now that you know we treated an owner really well uh and we've taken care of him he's made out and i mean we just made it as easy as possible for him and i think that that's starting to spread right you're just building more credibility um so we're really excited about that that opportunity as well just having credibility in the business and people are willing to talk to you and share more now that you're there yeah nathan in the last few minutes that i have you talk to me about the grand plan uh what what is this step one of what is homework all right homework is a is the grand plan of uh we believe it to be a platform to make home ownership easier so if you think about you know taking all the data that that may involve a home um and using it to basically put your home on autopilot and so an example would be like uh you've probably seen a floor plan but like what did you ever do with it maybe maybe people have taken down your your hvc equipment model numbers or serial numbers um you know maybe they've collected uh the same thing for your appliances or you've gotten window measurements for quotes and i believe that if you can bring all of those things into one place all that data like how do you create kind of a platform where you know you will could just go to your home address online and you know every time that we visit you service wise like the service gets better because now we know what hvc you have so do you want to quote on a replacement well i don't need to come out there next time i've already been there we have pictures of the data plate we know exactly what you are here's your quote in 60 seconds or less because we already have that information about you or windows if we have window measurements uh of what kind of windows you have in your house like just just just look at all the different kind of windows and we'll give you a quote on on that and then just tell us a time we'll come out and do it for you you know i think that's kind of the grand vision and so the way that works for us um why did we buy an hvac business well uh there's three pillars on on this whole point there's the data so like the data is the hardest piece it's kind of the crazy like how do you get all the data of every house in the country yeah well it's gonna take uh it's gonna take a very long time right but we believe that if you take the data and you build incredible tech on it um and then use that tech to actually go to service like we believe every time we service that we can build better data and it just it's like a flywheel that keeps building on itself so for instance my hcac team goes out to your house will and the first time all they do is they take down your filter sizes and they take down the equipment that you have so you have a four and a half ton heat pump um you know system with uh um and so now we have that information and if you ever have problems or we wanted to do a filter subscription let's say you just like hey i want my filters here every other month on the on the first of every month and i want them in my sizes and i want them to smell like cherry you know like you could you could do that right um and and i think i love that idea of automation and creating more and more value for homeowners and kind of putting that on autopilot and like that's just the beginning because if you think of all the subscriptions or kind of reminders that you can do for people of if i know you have st augustine grass in texas well i can tell you hey based on the weather now it's it's late march we're gonna send you that fertilizer that you should be applying right now uh because you have a subscription with us for you know home care or excuse me lawn care excuse me um and so that that's kind of this idea of like how you do that so hjc is our first service the second service we're actually doing is home inspections uh it's hard to think of a service that is richer in data than a home inspection where you could take all those things and get in one fell swoop and then imagine you just had that home inspection and you're going into a home that you just bought and you already have everything you need to provide to service providers or to us so that you can get quotes or we could tell you hey it's average price for your lawn care is 45 a week 150 for pool service and you could just walk in day one um with all that information because we did your inspection and gathered all that data and then applied it to our platform so that's kind of the grand vision hvac is one of the first ones so we're learning how to do like instant quotes for hvc um filter subscriptions and then we're going to play a lot with that um that service plan to try and make it more like our amazon prime so how do you as you add more services how do you make that like an amazon prime where you get all this great value if you just subscribe to to homework um so that's kind of the grand vision and nathan so so this solving this data problem you all are through your hvac and your home inspection eventual home inspection companies you're collecting the data yourselves via these client relationships that you have correct okay okay and so i you know obviously you'd be local first so it so homework would kind of its first uh market where it kind of blanketed the market and had lots of data about homeowners would be dfw and so you'd prove out the model there and and then you take it then you'd stamp them out in other cities 100 um i mean we're probably third party in most of the inspections um and share that data but you're exactly right the platform at some point we'll figure out how to make it more widespread before we can actually provide the service uh and we have lots of thoughts on that obviously but uh yeah it will be constrained by the the service part for sure because that's i think that's where the real value comes lots of people want to do like these angie lists or they just sell leads and and like you just hand it off but there is no there is no full cycle where you know someone brings the data and like confirms what happens and what's you know and then like that data informs the next time that makes it even easier and like just continues and continues so that relationship is so key very much like amazon built this platform of trust where they fulfilled everything in the beginning and then eventually after you knew amazon was a place that you could find whatever you need it's the everything store and you could trust it they'll make things right if they get it wrong then they brought in third-party sellers and third-party fulfillment and i think we think very similar of like i'd rather grow slow and only have a few offerings service-wise uh and build that platform or trust and then explode with you know lots of third-party providers and helping people you know build their own little service businesses you know through the platform and make it really easy for them that is a grand vision and the hvac acquisition you said obviously that was about starting to collect data but was is there also kind of a revenue play here that it becomes if if you get it to 2.72 or 5 million run rate it also becomes your self-funding absolutely but i think at the rate we want to grow we'll be we'll be going out this summer probably to raise funding uh a seed round for for homework overall so that's the intention but yes absolutely because i know skilled trades are profitable value driven businesses and and that will drive value for the whole company because man uh if you could sell fulfill anything in electrical plumbing and hvac then you know that's just an incredible pillar for for the company to be able to do but i'm sure you'll end up having a partner at some point down the road you know who knows how it goes but uh yeah absolutely that is that is a huge part of it it's funding us right now and it's funding us doing anything uh development-wise so yeah it's pretty exciting very interesting nathan how i found you on twitter what's your twitter handle for others to follow along yeah i'm at nate linehan uh and nate is n8 like the number eight and then lenahan l-e-n-a-h-a-n great and is that the best place for people to reach out to you yeah very active on twitter or linkedin okay all right nathan thank you very much for for the time and sharing this acquisition congratulations on that all right thanks so much