Jordan Evans welcome to acquiring minds good to be here well Jordan you're in the language business you bought a small language business doing about $700,000 in Revenue a few years ago today you are at $12 million in Revenue so we are going to hear that story and get a tour of the language business start us off please with some background on you Jordan sure we could take that a lot of directions um the quick background that's would be interesting for your listeners is uh knew I wanted to be an entrepreneur and do something for myself didn't know how to get there I did those personality tests growing up and uh recommended being an executive a CEO U you know entrepreneur uh but how do you go from a traditional path of school and then Workforce to being a CEO uh I stumbled into acquisition and I'm grateful for that I did startups uh after leaving college so software companies Venture funded uh five or six of them a few of them I started u most of them we ran out of money we had to shut down um one of them was a success uh booking.com bought us and did a stent for a large company uh but what's interesting for for the group here is I went and earned my stripes uh on many failed projects first uh and then also worked for somebody else had a W2 job optimizing for sure getting paid but also I want to be learning skills that I can use one day so stayed on the sales and marketing side of the business uh and picked up books and podcasts like yours along the way on everything else operations customer service um the financial component yeah so I would like to ask a quick followup question or two first booking.com acquired I guess your most successful startup that's travel related you're in the language business now is there any connection here just in terms of your personal taste or coin is that coincidence so my actually commonality with the company that I own and run now is it's actually a family business so Mom started language Network as a Spanish interpreter in the 1980s so I'm fortunate in the fact that I had um an awareness of this industry all the while um no intent to join the family business or or run it at one point I wanted to find my own path but it was around 2016 thereabouts that you it made sense to bring what I've learned uh at software startups into a Professional Services uh firm like language Network that was family run and turn it into a professionally run you know growth engine not just a lifestyle mom and pop if you would business so my connection is familial to this amazing industry that's language services and ironically enough it's the biggest little industry that nobody's ever heard of it's everywhere but nowhere uh anytime two people need to communicate into two languages so there there was a short stin in college where I was did a spot training to be an interpreter an interpreter someone that does spoken word uh so versus translation which is written word and I quickly realized I was not cut out for that it's a very specific skill set you have to have very high Mastery of both languages and uh you know I respect the profession we work with thousands of interpreters today but I did a very short stint uh testing it out in in college as a gig um so that's my background overlay with languages um then I worked for booking.com which does have that International component it's a Dutch company um they say the only thing that comes out of Europe is regulation uh but you know booking bucks the trend uh it was actually a online startup right for hospitality and it's a very fantastic company uh and they inspired me in how they did uh how they operated at scale globally they had offices in market across the globe and I've I've taken quite a few cultural lessons and operational lessons from that state booking that we've recreated or and are recreating language Network which I can kind of layer in as we have our discussion today yeah yeah I'll make sure that um I want to hear that that was great Jordan so you're in Tech but there's been this Mom and Pop business in your life literally and figuratively because your father was in the business as well so Mom and Pop y mom and pop now there there's a bit of in probably all business probably you know if you're in finance but certainly if you're in in Silicon Valley or in Tech and startups to look down your nose or or think that that anything other than kind of the you know the big leagues of startup is is small ball how did you decide that you were going to get into what probably felt a little sleepy and uninteresting compared to the sexy Dynamic world of startups that you've been in I'm using that tone mockingly intentionally yeah I mean it definitely was sexy at that time too just being irreverent there's a bunch of money pouring into startups you the promise of going to you know multi-million dollar many multi-million dollar valuation um with the startup route U versus this unsexy service business that are all around us um I tripped and fell into I wish I had a better transition Story the transition story is this I I was a mercenary at an early stage startup as skill jar name names why not it's fun co co and I didn't Jive well um firsttime CEO uh pre-1 million ARR like we're just figuring stuff out and I had nine months in she didn't have enough faith in me and let's say I was a stretch VP at that time for her and and for my career there's lessons I learned now but um she she fired my ass I don't know if I could say that on here but that was that was the kick I needed to say okay I'm ready you somebody else doesn't think I'm ready to be VP of their thing but I'm I'm ready to do my own thing and I'm grateful for that so grateful for that moment of somebody saying you're failing or I think you're failing and kicking you out the door I wasn't I back on it I talked to a therapist we're all good um but no it's important to look back on those moments and I'm so that that was the fork in the road and um I decided to to walk it um so what do we do next you started diving into books um and you stumbled upon buying buying a business and I knew my parents were burnt out uh the business had stalled they were churning some big accounts and nobody take over the company uh this was kind of serendipitous timing uh so I'm I'm fortunate for that too two things went really well and somebody said no to me and and then somebody said yes to me and I had to figure it out um and were your parents expecting to want to exit then or be or did you get in there kind of as a consultant or was and then it evolved into you buying the business or was it always kind of the goal spoken or unspoken that you would take it over great yeah no not a nepo baby uh it was never unspoken that I would jump in this thing would be given to you um in fact I paid 3x too much uh for this company knowing what I know now I I sleep like a baby because it's family and that that's why I tell myself I'm I'm just taking care of people I love um and yeah we structure in a way where nobody feels put out that we're able to do what we need to do I got in the game um but no I had to figure it out to answer your original question is I didn't know how I was going to do this I I I knew I wanted to buy the company i' had no idea um so I started talking to uh attorneys CPAs there there very few books on it I think I found the eight the Harvard Business Review Book and that was I'm so grateful for for those guys uh Royce uov and I'm forgetting the other guy's name Rick I don't know his last name I just know him as Rick and Roy yeah Rick and Royce your your audience has read it multiple times I'm sure it's on everyone's bookshelf yeah um but yeah it was a combo of of putting it together and realizing I want to grow this thing I I think this is the right opportunity for me to bring the startup mindset pair it with the unsexy services business and use that discipline of growth of pushing the envelope um you know startup World 100 200% growth year-over-year versus service business I had to learn very quick that that type of growth is not sustainable that you need to have Ops so it's a leveling up you don't want to denigrate quality in in the deliver side so you can only grow so fast in a services company and uh that's what I had to learn but I saw a path to grow something and benefit the parents and get in the game entrepreneurially well in from you start it working with the language business in 2016 it's not until 2018 that you buy it what are th what are those what's happening in those two years and then let's hear about the deal that you structured with your parents sure uh so 2016 was more of a figured out year um I was Consulting with them while exploring what I wanted to do and by Consulting it's like they didn't know what how to grow the thing I was implementing CRM sales process not with the intent at that time to buy it they just I'm I'm free and I've got a skill set I can help you guys with once I started Consulting with them in 2016 I started to see really like they need to be done uh they were going to just run it until they were burnt out or tired and no path to selling and no idea in their mind so this was totally self-generated and self-discovered um that's why I say I fell into it it was just walking walking walking and finally this makes sense why don't I buy buy this company from you guys um and when it's family there's usually generational like this is how we've done it versus this is how I think we can do it you got fresh ideas and that's a tough one to navigate so the easiest thing to do is figure out get them out take care of them and and plow forward and be able to make the change with no resistance so um 2016 was just Consulting I don't even know if I was charging them anything maybe little something it was like fun employment for a while you're reading those books what do I want to do next entrepreneurial wise uh the benefit of this was I got to know the industry really well um how they run things what system they use what are the profit margins uh who the best customers are what what are some of the trends to feel really comfortable to get to a place to say I I could make this thing better with my skill set yeah so that's an important lesson maybe not everyone has a family that has a business that they could buy but uh the getting involved and going deeper somehow on a specific industry you're excited about to really validate is this a a match for you um because that it truly was a match for me yeah and and there are like you say that that might uh that might take a number of different shapes maybe it's just somebody who's working at the business and they want to buy the business they're working in or they take an oce to acquire into an industry and somehow they they intern or get work get a job for six months or a year or 18 months in the business but uh such an advantage to of course risk of doing something like that is you get into the industry and find that oh this isn't for me and then you feel like you've kind of wasted your time um but but hopefully you like the industry and then when it's time to do your deal you've already got a year or two of experience in that industry very powerful yes yes 100% so the the Gap in between 2016 2018 that's how long it took even though there were two parties that knew each other and had trust to negotiate and structure this thing and it was really going slow measuring two times three times forecasting what their retirement looks like forecasting what the cash flow of the company is going to be uh and it it was frustratingly slow um and then there's family Dynamics too of I'm one of five siblings and um I have a sister who's involved she'd been there for 10 years so I needed to negotiate what her role looks like and wasn't going to buy the business unless she was included and I actually have the five siblings she's the only one I would do this with so it still is true family um second genen she's more back office and loves that and is great at it somebody I can totally trust but I'm the front person CEO grow the thing Vision let's go uh so it's a good match um Jord when you're negotiating with your parents is it more of just everybody's got their cards on the table and let's figure this out or is it is there actual negotiation where some you're keeping some some of your hand close to your chest you know they're going to hear this maybe so you can't answer but it's got to be so delicate because uh I mean I guess it get comes down to the nature of the relationship one has with one's parents but yeah um I mean in negoti in a negotiation we all expect that there's a little bit of um you know what's the word I don't want to say dishonesty I don't want to say cunning but we all understand that get the best deal you can yeah yeah yeah and um ethical deception let's say yeah um and uh maybe that's or certainly that's complicated when it's with your family anyway so you understand the spirit of my question what did that feel like yeah negotiation I look back and I don't see much negotiation I see it more as trying to pencil out terms that work for everybody and getting feedback it was very open and this is you know not a prescriptive process everyone's got different family Dynamics and they're probably more dysfunctional families than than not out there yeah uh I think every family has a version so I won't say I have a perfect family but just navigating all those is what took a while um and the benefit was I saw Council of like here's the outside third party attorney here's a CPA and using data and and spreadsheets right to get on the same page fortunately though this they didn't see a path and I was the one that they trusted so that was huge and and that's part of why I think I negotiated a bad deal if we are using this term negotiate like gosh how do you negotiate with your own you know family um so I cut him a sweet deal I'm I'm happy to do it and also um it got me in the game which was key and maybe there's something here for your audience is I did a really small deal I did a messy deal because it was family gosh and I overpaid all of that being said it's been like magic is the quote you pulled uh I got jumped into the game I got you know chips on the board and I'm going deep in one industry um so that's my reflection on it that's great Jordan um can you can you put some meat on those bones and terms of what the deal actually looked like this this sweet deal that you gave Mom and Dad it was a $700,000 revenue business um tell us what you can about how one buys a business like that sure uh so uh $700,000 business uh way too small I would go bigger next time um you I took massive pay cut and lifestyle and it was stressful uh to be able to make this happen was able to to get creative and do seller carry with some um equity and so no third- party financing um so that makes it nice for two parties that trust each other um I I did have a valuation put on it and then even even people try to talk sense into me I kind of had this magic number of they got to be over a million dollars um and that was me looking at the retirement what what it's going to cost uh and so the beautiful thing of overpaying is that and you got a seller note is a couple of things like you can always renegotiate terms so pandemic happens I can call them up and say we're going to put a pause make sure we can navigate this or we're gonna reduce it so we had those discussions and I think that's the beauty of seller notes you can do whatever you want on them and have whatever Clauses um yeah it it wouldn't have been bankable to pay the price um that we so it was over a million bucks yes a $700,000 revenue business how many employees were in the business was it the three of them mom dad and sisters four people and there were two of them so half two of them yeah yeah so SD on that is what 150 uh 180 plus or minus mhm yeah y um and just on your point about seller notes the great thing about seller notes is that you can what did you mean you can do like once the seller notes are agreed here's here's you can't renegotiate them if your seller doesn't dance so is it mean does that mean this it's good when it's your parents because your parents everybody's kind of trying to make this work well we could talk about some more deals because we've done royalty agreements and other um seller notes as a part of all of our deals um the SBA fantastic program in the United States has made us all lazy and in fact you know it's it's bloated the multiples and the price that people will pay uh everywhere else in the world they don't have these government guaranteed loans it's amazing but also at the same time there's cons to it so forgetting the SBA 7A program exists there's so many things that you don't have to color in the the lines to go through underwriting through A bank's scrutiny you can do what makes sense for the both parties uh and map it to their tax strategy so we want to keep you under a certain uh income per year to keep you in a certain tax bracket and that's fantastic because that means we spread it out over more years so it's uh less burdensome on me the borrower on the company um so we got nice coverage uh you can put Clauses in your seller note that have offset and protection if the business doesn't perform at a certain level whatever you want um that makes uh drisking the deal you know so I and also it's a great mechanism to bridge a gap if there is a price Gap I'd rather pay more to the seller than to a thirdparty bank um and so interest right on this note is a good way uh I think as a mechanism of negotiation or Goodwill U so yeah sell sell or notes baby it's it's it's a great way to go Jordan how many more businesses have you acquired to get to the 12 million you're at uh We've I would have liked to have done more at this point but we've bolted on three additional uh entities okay okay just to set the stage um and we'll and we'll probably spend time on at least one of those well I just want to highlight what you just said because it was something that came up in our conversation in the preall and it was really um striking to hear you say it be and that is that the SBA which we celebrate as America the SBA loan product which we celebrate As Americans in some ways has blinded us to the many infinite numbers of other ways that deals can get done and that blindness means that maybe we're a little less creative or a little less Scrappy in our deal making than than we should be and indeed than most people around the world are forced to be and in and so therefore it might mean despite the fact that we always assume it's the best thing going we're not structuring the very best deal for ourselves possible because we just default to the SBA and you're a great person to speak to this because you are both American but also have more of a global perspective because the language business is international and you see lots of different deals happening outside the states and how those are done so um I think I just I wanted to highlight that now because I assume it'll come up as a theme again but if not if you want to add anything to that um but really really um strong point I think from you yeah and I will add too that there are a lot more businesses out there that are not down the-middle bankable deals that you know small medium-sized businesses Main Street businesses uh folks that are running the Mom and Pops you they're running a bunch of stuff through there um and sometimes you profit show zero and you got to do these addb backs to get to whatever they say is there and um you Banks Banks going to say no we need three years to believe anything or you need to spend a lot of money to do a quality of earnings uh but the deal's too small to really justify spending that money on it so uh seller finance allows to do these deals and structure in a way um or der risked and you can do a deal um and if you're doing roll up and in that in my industry I picked one lane there's a lot of shiny objects out there but you go deep uh you understand what levers you can pull and I think that's really important too is you pair an industry and operating knowledge with creativity on how to get a deal done and it comes down to people right I'm I'm going a little off the the financing script because seller notes are so important is are you bankable with the seller uh and so if you're a known operator in an industry you got some brand and credibility there some cache for people to say yeah I will I'll be the bank in this deal um so it goes hand inand um being a known entity being trustworthy the whole process to be able to make these deals happen is a people game it's 50% people game 50% numbers and spreadsheets and attorneys and all of that and and so to jump ahead again so you make a point of being out there in your industry being being visible panels conferences what have you and also not just being you know Jordan the guy who's doing that but but also your brand and where your focus is in this industry because this industry has its own sub niches and so what your sub Niche is so people know Jordan Evans is the guy who's doing this and buying this type of business and he's the operator of this type of language business and all of that has m&a subsequent m&a value because you seem like a really strong buyer and somebody that uh a seller might be that much more comfortable doing a seller note type deal with 100% And and that's I love rollups specifically I hate the hold Co I I feel like it's a big you know ADHD you know mini Burkshire strategy I know it's in Vogue but uh at least you get an edge in this strategy and it compounds and that's exactly what we're talking about you can have a brand you can be a known entity uh and you can be um you know a big fish in a smaller Pond I'm I'm anti- PE I'm not you know the suit that's going to spreadsheet everything out and buy your company and gut it for maximum return or require you to be an operator and um get an earnout I uh I'm not you know I I could stand out like this guy knows is one of us uh he gets in and and works with with with us on the same level I mean he's operating different scal so I enjoy that about it and it's a very sincere process when you do in Industry roll up going deep go going to all the industry events speaking about what you're doing uh yeah because it's hard we just talked about it going from zero to one he spend so much energy so once you got momentum just keeping it on totally yeah no it makes a lot of sense um although on the point about private Equity usually roll up in private Equity are you know two two words in the same sentence so so if there if if you self-define is somebody doing a rollup I imagine private Equity is going to play roll in there somewhere maybe as an acquirer Maybe not maybe you're going to sell to a strategic who's already in the business let's put a pin in that we can return to it later sure let's get let's get back to the the chronology here you're so you bought the business tell us what it was tell us a little bit about what it's like become what it was like becoming owner and kind of take us up to then your decision to do your first acquisition as new owner so I guess your second acquisition okay for context this was a micro acquisition where you got to roll up your sleeve so my experience is around uh there's no management there's very little systems to scale I mean you have grandos plans to grow the thing but like you got to do Staples runs to literally buy more Staples right it's like small business ownership uh we had an office we had people coming into office we had a server on site uh so and were mom and dad leaving the business immediately yes I I mapped a plan I backfilled them um so hired a outsourced accounting firm to do all of our books and actually get them tight and clean and uh be able to retire you know Dad who handled all of that uh then I hired overseas for project management um to help Mom move out the area that she was in and then I took over you know the Strategic Vision all the sales and marketing all the problems the the contracts um evaluating our system so it truly blocking and tackling nothing sexy about it um picking a payroll solution going from paper on premise to Cloud Solutions and migrating data and just gives me a headache thinking about all the stuff the work that was required but it was fun and exciting at that time because this is my thing like I'm I'm doing this people are benefiting from it I'm going to benefit from it um I think it seems great because you you're just you just it must feel like sure it's not fun to shop around for payroll providing Solutions maybe but but you're just it's the sense of value that you're adding to this Enterprise must just be strong it's like I'm making this very inefficient business much more efficient and that's got to feel good so anyway yeah I I wouldn't do it at stage like it's not that I'm super old but it just I've been there done that so I'd rather like bring somebody younger along to go handle that okay gotcha gotcha um but I worked a lot I worked a lot um yeah I didn't track hours but it I was all in uh there was no other option and um and Jordan to be clear let's get a sense of how many people are were in the business with your parents and then are now in the business as you take over who are actually delivering the service of what the business delivers which you should probably tell us what that is given that there are niches within the language world what what what do what did you guys do you guys provider at that time sure so we were four people 700,000 in Revenue uh several hundred uh uh linguists so interpreters translators that are contractors so extended part of the team but not on Direct payroll not under direct management and now we are 42 people and I want to say 3,000 something linguists uh and were globally distributed the services we provide are in 200 plus languages and it covers the gamut from spoken word so picture in ER hospital that requires somebody to speak Vietnamese think we can do that by putting somebody on site in the operating room or whatever um the intake uh we can do it uh telephonically or video like this like Riverside teleah Health style so that's a big segment about a third of our business's Health Care um fantastic segment it's growing you know language access in our country is uh a civil right uh and it's a part of the Affordable Care Act so it's not just a nice to have it's a a mandated um service to provide another third is government Jordan let me just understand so I'm a non-english-speaking Vietnamese person I arrive in the emergency room there's a effectively a a FaceTime call that can occur via that you guys manage and and it's basically the per the person behind the desk the and then the person on the phone who's the vi the tra The Interpreter and then the patient and they're all kind of speaking there with somebody's holding the phone sort of thing yeah P picture us if it was tella Health we' just have a third person in this room another you have zoom call style and that's the interpreter and we just like we are and they're interpreting and it's consecutive uh and it works like magic uh and then over the phone would just be speaker phone um and uh it can be done it's um anywhere there's internet connectivity really it's you browser agnostic and it's not proprietary um actually softwares become utility uh maybe 10 years ago you I was all in on the software startups that you could have a competitive Edge but we're in a no code low code era and then the world's been sassified so every industry has their own like workflow Erp style tool so just find something that that works and is good enough and lease it rather than build it focus on your customers especially in a service you we're Tech enabled Service uh company uh the other parts of our business government so that's a third so State local Federal Federal U so think election material you in California I think there's 19 threshold languages um So based on the census how many people speak this language in this County and then that requires certain documents to be in that language available um any any state run like during covid emergency notifications real time Twitter translation website uh and then the other segment is international business so it's almost a third to third to third marketing and training material so you're you're going to Market and you've got training manuals online content or you've got um you customer support materials uh and you need to do it in 19 markets 19 languages uh and where your your language operation Department really so we embed our people and and we manage you anytime you're shipping content we're part of that that planning and Consulting what platforms do you need so you could take this business any direction on any specific one of those services or verticals uh through acquisition it's allowed us to have that nice diversification of third to third to Third and the segments we offer interpretation translation localization those are my o oversimplification um and it's a global industry as as you said earlier uh there's thousands of language companies like us that it's a few people low barrier to entry and they can cover a language cover a geographic area and similar to other service businesses like a guy in a truck that's a plumber right just starting out lowber to entry yeah well and I want to spend some more time on what the industry looks like Jordan that was a great um taste the but let me understand how your business operates so you said it was the four of the four of your parents two other people and hundreds of contractors now you're 42 and thousands of contractors so are all of the people who actually do the interpreting or translating or localization always contractors and so the people that you employ W2 style are administrative in back office and other functions is that how it is pretty much that's correct uh so the administrative project management operations technical integration account management you HR billing all that um is under the 42 but the actual Specialists the linguists um which is a it's a white collar industry White Collar Services you've got the most brilliant people um uh let me give you an example um somebody who is a surgeon or a doctor in Iran and immigrated the US can't be a doctor here you know they're not credential they don't they don't have the right um they it just doesn't translate so yeah what they're able to do is take their deep um skill in language and subject matter and become an interpreter and be a fantastic Health Care interpreter for farsy um and and have a job and be gainfully employed so it's it's truly an amazing industry the most interesting people um and it moves with immigration and it moves with globalization and do you service any businesses any clients that are not in the US yes so you do okay so you're you'll be you'll be doing the translation or interpretation or localization work between two entities or two languages that are not even touching the US going through the US um so the customer I mean our Nexus our headquarters is a US company uh and we have customers outside the US uh that we might have a direct relationship with so we it ends up making it back domestic uh but our team is global and we've got customers globally as well uh North America and Europe are the two biggest markets uh you think of modern economies a lot of immigration um a lot of Manufacturers and we export you know technology all over the world so that's it yeah we could stay focused in the US but actually we're uh Europe is also where we exist and are eager to do our version of a rollup uh in Europe so hopefully we'll do it an interview down the road and we've got more Lessons Learned From doing Bolton outside of the US well speaking of which then returning to the story so you do all the things there in your first chapter as as new owner the CRM and the buying paper clips and the um payroll shopping payroll service uh shopping you get that stabilized uh when do you when and why do you decide okay I'm GNA buy another one uh another business in this space when does the rollup Vision crystallize okay yeah you keep pulling me back to the the memories I'm trying to forget of all the those hours like picking out paper clips uh yeah doing mailers the old school is New School delivering Donuts or tamales or whatever to our best clients and getting in the car and and just being a road warrior and doubling the business organically that's um it was along that Journey that I said I'm open to acquisition this was a great way to get in the game so it was only a few months into negotiating language Network I started looking I hadn't even closed yet um knowing that it would probably take time and knowing this is just a all bonus round I'll get to learn see other people's p&l what are they doing what type of customers they have it's all under NDA and I wouldn't be able to compete against them but uh it it was a free education even though it required my time you that was I was spread thin uh but I started looking pretty quickly uh I want to say even in 2017 uh of En closed in 2019 on another acquisition so a year and a month or or so after closing language Network we acquired another entity so and that was because you were just kind of shopping around worst case scenario you learn by looking under the hood at somebody else's business and you see one that you're like wow this is I you can I can do this I can buy this this makes sense to actually pursue yeah the the best word for it is Serendipity and being open uh and just seeing what's out there and it's it's a worthy you I'm long on this industry um so let's talk to all the Brokers anytime something pops up let's request information let's run some models or scenarios how could this work um and it was along that that time while I was driving you know Donuts to clients I forgot to mention the largest customer that was 20 something per of that 700,000 you know out of the blue after 10 15 years says hey we're going to another vendor and you guys are going to go to zero and I didn't know that going in to the deal that there was that level of concentration it was hidden they it was an insurance company and we had a bunch of law firms and so we were billing uh ultimately insurance company but through the law firm and so once the insurance company said we're leaving yeah so went all the other law firms so I was pounding the payment hard to replace that Revenue in the first 12 months so it it was realizing yeah we can we can hit the ground running I only have so many hours in the day let's let's definitely grow organically but acquisition is going to push us faster further uh and come from software world I just wasn't ready to accept that I'm going to be driving Donuts around and then hire somebody else that's going to do that and that's how we're going to grow and scale this thing it's not not what I signed up for but let's linger though on the donuts for a second you you clawed back the revenue that you lost from the insurance company and then did I hear that you doubled organically correct correct so you went from 700 down to 550 call it when you lost the insurance company and and back up to 14 1.4 yes in a year that's right delivering Donuts yeah I mean was it metaphorically metaphorically yeah it was it was it was I'm saying that that's really that's really just just pounding the B and and so therefore a lot of the clients were local a lot of your CL that's where you were scaring up business yeah that's another good angle so this is a geographic you where where do you have traction what's the lwh hanging fruit it's sell more to the customers you got and sell more to customers that look exactly like your existing customers and so that's where we picked up that Revenue prices had not been adjusted in in years so that was a nice little lever to pull it doesn't get us double overnight but it moves the needle you a couple a percentage points and um just got to work geographically it's you got a traction point if you're a service business too like let's say Home Services is really popular right I've got this area I can service I've got people and resources here so let's really focus on who can buy from us so that's what I did and from the buy side it it gives you a nice story too the the perspective clients you can tell a nice story I work with so and so you two towns over you know it's interesting that point Jordan because I feel like I think you've touched on it I'm not sure you've said it explicitly but this is a bigger business industry than we all than our intuition would tell us bigger than the music industry I think you're fond of saying that's correct bigger bigger than the music industry and given that you basically found another $800,000 let's call it of Revenue locally going Tak it from s Dro to 550 back up to 15 1.4 so sorry another $700,000 of Revenue um locally you know so so it you could have a basically you can have a language business it's a million dollar language business just serving you're in Santa Barbara just serving the kind of the Santa Barbara Market call it roughly right right am I am I I'm kind of trying to do one of these Tri triangulating the size of the business like you can have a million dooll language business that just serves a local market and of course you know yeah so it's I think that's what's shocking about these small businesses you don't realize the the the size or scale that they're capable of doing just locally um and we're talking greater La here like Orange County I don't know if you're familiar Southern California okay a little bit in the Bay Area but yeah you could be a very very large company I would even argue a 100 million and just be in California uh really one of the largest uh guys is out of Monteray um language line and and I think they do 800 million uh but it's Global it's not just here in California yeah yeah wow so I mean it's population it's the demand and the resources so you look at any major Metro in the US I there's a nice siiz market for language services but greater La has got I think they say the population LA county is bigger than 40 States so it's kind of unfair it's like its own little country yeah yeah and it's really diverse so the need for that kind of on the ground translation stuff is is high we've gotten through the organic growth locally even though you were like you know kind of software guy you need to see you know exponential everything it's actually really impressive you must have at some point been been pretty psyched that you were able to double your parents business that had been around for decades in a year or so of hard work even if that work was unglamorous is pounding the pavement to you know donuts and tamales yeah pretty awesome sure yeah I mean looking back yes okay but with anything in life you don't stop to celebrate the wins enough um yeah I was having fun don't get me wrong but it it was it was work it was pushing the ball down the field um I wouldn't be doing it if I wasn't having fun um but at this point I was kind of committed and so there was that pushing me too so maybe I was trying to outrun uh you know failure just as much as I was being pulled towards success um so I had to push and pole uh in my story and um yeah that's that's when we were able to double again with this acquisition I mentioned overnight and that was like I think you said crystallizing when did this rollup start to crystallize once we did that one it was a a light bulb of wow that was a lot of work uh but it sure beats uh trying to grow it organically because you get the Fulfillment side and it's a creative cash flow wise and we and that one we used a 7A and so that opened my eyes to that facility um and we expanded into another state Washington State so West Coast so I could pop up there which I was you twice a month on Miss integrate manage the team get people bought in um and that's really when it crystallized like okay we're going to commit to this uh we're not just going to be two shops we're going to keep adding in companies as our growth strategy great let's um let's just um debrief that so you said it you doubled the business again so I assume now we're talking about doubling from a place of a million and a half bucks so this would not this business was roughly a million and a half bucks in Revenue that's right that's right so it say it takes you to around three million in revenue and you use the SBA loan this time around uh can you share what the structure of that looked like was it your traditional what for us in this world traditional kind of 10 1080 or some 15570 or something like that sure so the 7A program was actually a fallback I was negotiating this deal from a full seller finance you know we bring some equity and seller carries paper and we were at a place where they were ready to go sign off I think three years was the max I could push them and I I looked at the the coverage ratio on that and thought gosh could I do it yes uh worst case scenario I got to pull into you know our Core Business if if any lose a customer or I mismanage it so there some cushion but this 10-year amortization schedule from the bank sounds a lot better you know there's a lot more margin for error even though I'm going to pay more for that that money uh and so I went the insurance route and I'm glad I did because it it opened me up to 7A program um what did we do I think we did 10% we did 90 uh perc uh Bank 10% our own equity and then we did something little on traditional we did a working capital seller note so they they left x amount of dollars in ah don't get me started on working capital and getting owners to realize that it's the the air in the tires the the oil and and the the blood in the body the we've got all our favorite metaphors yes yes it's a battery it's the fuel I the car needs to run off the lot right um so that was that was what we could negotiate and you paid back over a period of years and that had offset Clauses in it too so I felt really good about I could take this risk of buying a company in another state um and I've got protection I've got you time and cushion with this loan I've got the seller note with offsets which on all these deals there's always been something that pops up um and it's common taxes retirement plans um misrepresentations on you know some sort of contract or client margins or suppliers so uh it's nice to be able to have recourse and uh a method to just solve any issues that pop up well say say more there Jordan I I I we might not be tracking perfectly so why is the seller note is the mechanism to to to get in the game cover cover cover you for all these unforeseen but it it's unpredictable what the thing will be but it's predictable that there will be a thing 100% so so say say give us more um give us really in the weeds of what that would look like please 100% more specificity would be we bought an entity versus an asset purchase so stock purchase why uh for customer friction and continuity uh we work with government healthc care a lot of these contracts are non-assignable that would create unnecessary scrutiny from really big clients and we don't want to have to go through that exercise that there's more risk than reward going that route and then it makes it easy too to set up shop in a new state it's already registered um and uh so there's you're assuming an entity and there could be lawsuits or stuff that pops out from the before you owned it with the right attorney you can mitigate all these risks of what's going to pop out when you own it it's a very nice delineating date you know close date certain things are your liability you go forward these are my liability seller note so that's all good and great seller note actually gives you a a method to enact if there's something that has a material fee you don't have to sue them to write them a check you can offset it um so that's always a fantastic not that we want to offset anything uh but it gives you that insurance it's essentially an insurance policy and it's important they have skin in the game um in a service business too this is not like a software subscription your Revenue that's contracted it's uh reoccurring not recurring uh so it it it gives you that that cushion um yeah and I think I named the hot spots that usually pop up the yeah small business not doing the retirement 401K contributions correctly employee issues um you know tax issues stuff like that great and you know just one thing if in case it's not already abundantly clear for people if there's this if there's this percentage of the deal that is that is like an insurance policy like you said it's meant to not go to the seller if if it needs to if there's some unforeseen cost that pops up later um always better for that to be in your hands not theirs so you don't want to pay somebody and then have to claw it back you know you always want to be in possession so a seller notes great because that money is in your hands and you're dribbling it out assuming nothing nothing's going wrong as opposed to having to claw you know giving it all to them and then clawing it back if there's something the problem just a that's just kind of negotiation 101 but it's uh it's an important and it's a good part to say out loud explicitly yeah yeah another thing I I want to double click on there Jordan is um bear with me little SEC circuitous but Adam Markley who whose episode will be coming up here he came from the world of um he came from the kind of the UK buying businesses and so there's no SBA and and there's kind of a lot of you know try to get no money down 100% seller finance that kind of thing which um you know we is very hard to pull off and so on but but he made the point that even if you can get such a deal like 100% seller finance or a lot of seller financing and so you know you the buyer don't have to bring much to the table that he made the point like that that's kind of celebrated as little money as you can put into the deal um is good and he's like but actually those sell if even if you can do that which ostensibly seems like a win in fact those seller notes are pretty tight like you just said maybe three years maybe five years yeah so the debt payments are super onerous so don't it's it's an oversimplification and naive to think that it's all about how little you can bring to the deal the amortization time is a huge component here there's a big difference between alone again forgive me if I'm saing the Audi saving saing the obvious audience there's a big difference between a three-year amortization schedule and a 10-year amortization schedule in the in the burden that puts on the business um and sellers aren't generally going to want to wait 10 years for their money uh so so while a lot of seller note feels good actually it can be pretty burdensome and expensive on the business which is actually a great benefit of the SBA which you've already said I'm now just saying explicitly is that long 10year amortization schedule is is great and and rare for the party across the table from you to give to give you 100% right and great that helps everyone sleep better at night we like shock absorbers on that car to go over any bumps because they're gonna happen Okay so at this point you do you do acquisition um number two and then it crystallizes and you're like this is this is what we're going to do do you um you said something about integration so the Washington based business did what what does integration look like in a white collar business or at least in your businesses is there a big effort to integrate or can they stay pretty independent or what well integration can mean many different things so we'll Define it for our our purposes uh the vision is language Network you truly is a language Network where we've added good fit companies and teams uh and clients into the family and uh commercially we we keep the brand uh but it's a sub brand to language Network um so it's it's not a revolution it's an evolution in all of our marketing and contracts uh we evaluate where is it best renewed at you which which entity uh with the team uh we don't underwrite aing people uh we don't do turnarounds that we've got have not gotten to that place it it needs to be a creative uh there's no reason to take on a burning building dumpster fire um and that's key when you're self-funding a rollup and not having PE is cash flow makes the merry wheel go around what is the logistics of integration do you guys do you get them everybody on the same CRM do you or or not sure so let's just split it there's back office integration and front office integration back office customers don't touch it it's accounting HR uh internal systems um and those are I think easier and better to prioritize and you the internal stuff um depending on like team and Trust like the first 90 days definitely on the accounting systems like prioritizing getting into one system um all the bank accounts consolidating on one payroll uh getting under one benefits plan you don't have to do that but uh it's it makes things easier to consolidate so those are easy the frontend stuff like websites um workflow management systems uh portals stuff that customers touched stuff that vendors touch you know the third parties that that stuff takes a lot more time and you really don't touch at least in our experience maybe till 9 months at that point you know the team they know you you've built some level of uh Mutual understanding and vision for the future uh it's always amazing will like I wish people were light switches but they're knobs they can turn up you know heat they can turn down cold let's just say that's the trust barometer love did you come up with that I don't know I didn't come with anything I probably somebody SM I've never heard that I love it light switches yeah you can just turn them on and productive right not machines here I wish you the on and off switch and then it just m Works magically you if your computer's giving you issues just turn it off and on yeah yeah reset yeah geez uh but yeah it takes time uh so that's why the integration is usually slower and um if it's a creative right like we don't have to move fast like if anything moving fast means we're going to mess something up there's something this whole thing's working right now as is so uh do the people um build the trust know where things are and then have a thoughtful plan of what systems and when you're going to map and God I hate it it's up there with death divorce yeah and software migration it's in the same painful bucket of life you're retooling getting people on board training the cost so um it seems like this is not something that I've heard of or asked about but it seems like if you're doing enough acquisition activity that and it really is kind of becomes a core function of the business that you could have a devoted person to just be constantly tasked with the Perpetual project management of all the stuff that you just listed yeah yeah exactly maybe that's who you are for the moment yeah especially on these first deals looking back in his that's me I'm the guy and uh fortunately like I come across like pretty easy going and in a white collar space like Fast talking shoot from the hip type you know acquisition acquisition guy who bought the company like sent in some red flags for people um so the the FaceTime the breaking Brad with the team asking them questions actually this is a fun story um you think this stuff is is implied so this is why I'm saying explicitly just like you're talking about the 7A and the the 10e am versus three-year is we skip over we look at the spreadsheets and our ideas of what we can do to the company and we forget that we're just we're buying a bucket of people and problems and um like good one yeah know what you're buying and uh do yourself a favor you know um don't don't poke a bearer that you got in your bucket that's going to give you problems so uh that's important you you spend that time with the people and um fortunately St gosh I don't know there's a lot of stories I've okay okay but I will say there's some people just the operation that we are I'm really proud of the team and not only as a cash flow been a creative and adding new great customers and expanding our pool of language resources but but the people in a service business you're only as good as the people and they have that um tribal knowledge and intimate knowledge that you don't want people leaving that's people equal Revenue equals cash flow um so customers want to know they can still call and get John or yeah Julie or whoever on the phone so so important not to skip over the that people keeping them there and yeah knowing where the the strengths weaknesses are well Jordan um I want to kind of accelerate through the kind of the end of the story or take us up to the present and then ask you just more about the industry and some kind of higher level questions before we do either of those two things please define a creative this is a word that comes up uh in our world and it's a finance word so it's it's not one that everyone's going to know what is a creative Revenue good question and I've learned to love this word first I heard it too I think it was a VP of sales when I was in software world and we're talking about adding sales reps that was how you scale the revenue is more more heads equal more Revenue um and so every sales rep you know adds more Revenue so every deal needs to add more than it takes and so a creative in my in my sens is uh net net it's positive we're we're adding momentum we're adding cash flow to the bottom line uh that we're not taking a hit that we don't have any period of negative cash flow where we got to go backwards to go forwards uh that that truly the first month after acquiring our cash flows increased so that that's a creative uh it keeps us in the game and so that's why I've learned a love it at first I thought I'm never going to use that word but uh it's a good one add it to your vocabulary I will audience will hear me dropping it in there um all right the okay so you did did second acquisition quickly just take us through Acquisitions three and four and whatever other key plot points there are between where we are in the story and today okay sure so doing deal one deal two crystallize this roll up uh still Focus so let's let's look at this from uh how do we manage this so we stayed focused on the west coast the US uh for me flying back and forth for people and everything so kept focusing on where we are um as far as like our footprint and ease of assimilation integration ongoing management um so we were crystallizing things at this point so I I stayed focused I talked to the Brokers we did previous deals on uh I targeted and talked at industry events in our uh language industry about what we did you know just being a known figure and I'd like to do one to two Acquisitions per year if it doesn't come it doesn't come and I think that also helps is I don't have a mandate I not desperate to do something that's not a good fit uh so the focus really helped us staying like Geographic time zone focused uh found the next deal through a broker and thank God for Brokers there's a lot of bad ones but when they're good they're good they they run um interference they help get a deal done and they take a lot of the emotional burden which it's a roller coaster for somebody selling their company um what else did I learn you got to kiss a lot of frogs so you in that time probably talked to 40 plus other companies and evaluated you know a packet of information from them and had meetings with them wait Jordan so there were 40 other language businesses just in the West CO Western us that were coming up for sale in what a 2-year time frame I mean once again I'm I'm making a point about how surprising the size of the industry is yeah okay so good good point of clarification it expanded in the US not just in the west coast okay but it was still part of the education I was like I'm open to it but I'm not seriously considering it's got to be something slap me in the face we should stret and figure out how to make this happen so not just west coast but definitely all us at VAR sizes and stages some of them self um sourced others uh through a broker and then every industry usually has like a consultant or a few like known mini celebs or entities and even if they're not a broker referral fees and they're usually tapped in of people that are talking about retirement so that's a good way to Source um so it's through those three channels that we had good deal flow while managing what we already bought and keeping that going now I I have a hunch so correct me that this industry is ripe for what you're doing um well and we might say this about a lot of Industries where basically the older the the core pattern that we all here first as our first thing into this B into this world the older generation retiring the new generation having an opportunity to buy these businesses um and that in fact for a lot of these businesses there are no good buyers and you know we might have said that about HVAC and and plumbing a few years ago um but now that industry at least is is really hot and it's kind of the standin for like this whole concept of buying a blueco collar business anyway I still would in that it holds here that there's probably a lot of people like your like your a lot of businesses like of the same size as your parents business that is um not big enough to be interesting to a big buyer to the extent that they're even are big buyers or even to an acquisition entrepreneur you you reflecting back wouldn't buy that business today or you wouldn't Advocate somebody buy a business of that size um but once you got the platform which you've now become you can Bol those go on all day long and because there aren't other buyers drive a pretty hard bargain that's my hunch respond to all that please sure so I mean the fundamental platform that you said um I feel like we're still making that platform at our size you know 42 people 12 million there's still things that you haven't killed us like integration wise that you just run in parallel um so sure a little extra complexity but uh doesn't affect our work doesn't affect our margin it just you know internally it's a little bit of inconvenience for reporting I got to pull from two systems um so I think we're still we're finally at a size and scale where we're like awkward puberty phase you know we got braces and like acne and one arm is bigger than the other just being stretched right like you you're not big enough to have full executive team but now we do have heads of certain services that through acquisition we've been able to create budget and and hire the right folks so I can keep moving up my role and be a true CEO there's still stuff I do that I probably shouldn't do um and so in this journey I've had to keep changing my role every you know few quarters every you know year I need to be doing something different one thing that's been constant is I'm I'm the deal guy I'm always in the m&a I sure feel like that's a skill that adds the most value to company that I need to be involved in um that and bringing the right people on board um have been really important to our success um people that are excitable that are committed that right culturally um so you asked a big question and I I jumped on the platform bit but yeah uh the the language industry and the private equity and the right that's the opportunity yeah definitely so talk to us about private Equity AC other acquisition activity but also your own the opportunity here that there's probably a lot of mom in pops and not a lot of buyers because Searchers at least um haven't come into this space that I can tell uh that that I've heard of although you are my second interview actually somebody who who's rolling up language businesses the other being Cedric sigua from early days 2021 I think I interviewed him yeah but obviously this is not an industry that it's like you know everybody is talking about on search funer yeah actually there's a few folks and I get emails now more and more from Searchers that you it's on people's radar um oh and uh gosh there were some guys that you did this at a bigger scale they buy they bought morning inside I think it was around 40 million Revenue two Searchers number of years ago I forget their names um I'm not aware yeah they they're two co-ceos and they they bought the company did boltons and then sold the private equity and then private Equity is very active in our space but they do bigger deals it's high highly fragmented super fragmented industry so that's the right U material for a rollup uh the top 20 companies right there's a billion dollar year Revenue company trans perfect uh you the top 20 makes up like 15% of the total Market wow uh and so and then the next 100 maybe it's like 20% and so it's super fragmented yeah and then the other component is we have ai and Tech and there's like fear uncertainty and doubt of what's this Market going to look like in five to 10 years how much is Tech how much is existing services so it's it's at an inflection point um and there's a lot of folks that are retiring as you mentioned like been doing it 20 30 years uh but it's going to need to be reinvented and a lot of the companies shouldn't be bought they should just you go by the wayside and a company that's that because without because they you you why can't those businesses be repurposed in the way you you repurposed your parents business I mean the juice has got to be worth the squeeze uh just most of the companies yeah too small for somebody to spend their life force yeah changing it and most of the people that work there are not their employees they don't want to take that risk um and they're not capable of buying the company and the sellers this and pops are not creative enough to figure out an exit strategy MH um so yeah the Lion's Tail this industry these companies are under 2 million Revenue like even more under 1 million and those are for our purposes a why bother from an acquisition standpoint it's really hard um who says this there's deals that are small and hairy um that you should just avoid then there's just small deals you won't make money on them there's big deals that are well optimized and like sound look good and sexy but you're going to pay a premium and chances are you're going to mess it up and realize the value and then there's the big hairy deals these sizes are relative right but the big hairy deals are the ones where there's opportunity Brad Jacobs got guy a lot smarter than both of us yeah uh he said this and I agree my experience has been I see more and more now as we grow that fit that smaller hairy it's just not worth the squeeze but Jordan why is is in this business you know some businesses there's the the you know particularly White Collar businesses like The Client List kind of is the business um yes and it's but and it's also worth something so a chuck and a Truck plumber if I'm a plumbing business with a platform buying the Chuck in the truck and he's going to retire really doesn't make sense maybe he's got a phone number or a website or Google reviews um you know he got a bunch of Google reviews that are positive and that might be worth something but he doesn't have ongoing relationships in your business even if it's not recurring it's reoccurring enough that this Client List got to be worth something so why couldn't you um why wouldn't that be viable something that you'd want to buy you know half a million bucks of Revenue um but you're getting but you can just tack that on because now the clients come to you you you hope yeah it becomes um how good at integrating and acquiring you want to get you you really need a mini team to do that lift um you you still there's going to be a lot of integration there I guess what I was trying to see is is there a way to just buy client lists without all of the integration work and and it sounds like the answer is not really that's right a lot of the contracts are non assignable um so it's not so easy to just um Port over you're an unknown entity so it's small and hairy um so better for them just to diminish and then call those customers and set up your relationship directly yeah U and that's the exercise at this point doing a rollup is how much would it cost me to buy and get these organically uh the cost to acquire a customer and this contract and how much time versus me buying it and buying the team that can service it that's always the the calculation that you run um and in our industry there they're not big buyers are already being serviced by somebody else so organic you have to displace somebody you know the the ER example and downtown LA they already working with somebody uh they've had these needs for a long time so the best thing you can do organically is get on their short list and start picking up some of the scraps hopefully build the relationship and expand so while the market is growing as a whole the big accounts that are being serviced by others and these small um operators Mom and Pops have a lot of customer concentration it's very common that they get a couple of big contracts and that's 80% of Revenue and so that's really what you're buying so if they go under or they choose a shut it you you go in that direct so it's my industry is sounds sexy and fun but it it is work and I will also say there's a lot of professional technical scientific White Collar Services Industries that are untapped undiscovered uh that I think are fantastic for a rollup um if you think of can you name names gosh um what comes to mind um like healthcare industry there's a bunch of niches um like scribing believe it or not like people think AI is going to take that all over but medical scribing you you're kind of like a specialty staffer it helps the doctors move faster and build more to insurance and they get all their chart notes you hip a compliant into the system for lies hospitals you need somebody on site in their system not remote um so I've seen some really interesting businesses uh that are doing healthc care Niche Staffing that you could buy in a new geography and maybe centralize some of the admin um what else environmental like testing or Consulting that is repeating you stuff for compliance yes especially in these highly regulated States um where the demand never goes away and but you're like so obscure that you're not competing against everyone else to buy an HVAC plumbing company I had a guest who bought um a an environmental compliance I mean just like you said consult business uh in California of course um well I want to and I wanted to actually dwell on this point about white collar because it is it does feel like acquisition entrepreneurship is just your search is just taken over with blue I mean it's almost synonymous with blue collar it's like the the the the trend is buying blueco collar businesses and and certainly that would be the trend that would jump out at somebody looking at the archive of acquiring minds but it doesn't have to there's probably just more bluecollar businesses out there but it's also probably just a bit of a just a bit of a a momentum effect a trend effect and it's what people's attention is being called to because other people are doing and it just kind of perpetuates itself yeah but um but yeah I think that the white collar businesses you know present a really interesting opportunity especially because any regular listener will have heard me ask countless times BR that cultural Gap but for going white collar to Blue Collar and how much friction there can be there and and the the learning curve and the everybody getting used to each other sort of thing yeah you don't experience that in by in doing a white collar rollup fair right yeah it's different types of of problems and uh I prefer my people problems than a blue collar one um you're just thinking of uh aggression or like background check not showing up for work like right addiction to substances you that type of stuff um but there's still money in that and but as an operator I prefer the white collar and then it lends itself really well to remote work uh yes so if this is part of our Playbook and I should have added this earlier in is as we bought more businesses we got you codified our our operating Playbook and that is to add net new seats or backfill seats uh with hiring globally and that's just an amazing um cheat code or there's not a cheat code it's just a way to upskill and uplevel your staff while cutting your labor expense drastically uh and so about half of our team is global outside of the United States uh nothing wrong with hiring domestically but for the value on the spend I'm long Global Talent especially in any service business so we got we actually spun off a company called hire globo that was our internal recruiting department and we just had enough people asking can you help us hire like you did in Argentina um or Mexico or Brazil uh and so we launched a separate entity hire globo and they that's what they do they find us the best people and it's been fantastic for cash flow the point about the virtual nature of White Collar businesses or that they lend themselves to to Virtual work uh remote remote work I should say um the other you know benefit of that is that in some ways this may not apply perfectly to your business but your potential customers are Global too so you can sell across the world so all of a sudden your Market is way bigger than the plumbing HVAC guys whose Market is just the size of their local geography sounds good on the other hand of course the your competition is now also the entire world so it's like yeah so Ecom you know you stand up in Ecom business and it's like oh awesome I can sell my widget around the entire world the entire world's my market well you're also now competing with every you know Chinese Factory as well so so it it cuts both ways uh I think we've given people a picture of the industry but let me just make sure we've rounded out so um and I guess this would be another time to contrast with blue collar so blue collar we say you know 20% margins I think net margins are kind of normal maybe maybe a maybe a little bit above average but High Teens and if you're doing into the 20s those are pretty good margins and if you're doing low teens 10 that's a pretty uncomfortable uh business although of course there are plenty of businesses that operate 10% margins and they're Giant businesses um can you bro can you generalize or maybe just share what the margins are of your business yeah the blue collar one strikes me as high of 20% but I guess if you're the only guy to do like pest control or like emergency remediation and a flood in a residential home you can charge whatever you want so there's pockets of unusually high profit depending on the situation the compet ition how you operate in our industry I've seen stuff from 5% up to 30% net margin uh what we target is around 15% uh in growth mode uh with the actual push Target like 20% um why well there's little pockets where people put it in cruise control like I've got these couple contracts and I'm just going to um set up our systems and not invest in anything and it's just going to milk you know cash flow and that's what's deceptive about buying them is you really have to Norm normalize the situation of this person just found a nice little pocket in the market and good on them for milking the you 25% net they've been getting over these years uh but most people would not be able to operate that you can't scale that so uh I think 15% is a nice aggressive of Target as we try and grow 20 25% organically year-over year so we're spending money on our own sales and marketing um you know lumpy making investments in it making forward strategic hires I've got managers now so we've got more Opex um so yeah there's actually a book Greg Greg Crabtree have you heard of the S simple numbers big profits no uh highly recommend that was an early pickup as I was trying to figure out being a business owner uh there were a couple of books uh traction EOS was one the onepage marketing plan and then I'm a fan of taking a wheel that already works and slapping it on uh and then simple numbers by Greg Crabtree and just talking about operating margins and uh all the key yeah uh metrics to track so he he has a theory like 15% is gravy you know 10% is break even in today's world most businesses well-run should be around 15% is his um his point that um interesting with with true competition if you're truly investing in the business and you're operating it right and and he since came out with 2.0 of this book and I think he's added more specificity on industry how how to interpret that based on industry or you just how are you operating it to grow an exit or to just milk profits yeah highly recommend the book though um and that's been really a North star for us on the the financials well good to hear another perspective on margins I I may be off um where he says it's 15% and I think it's 20% I may I may need to revisit that um I just and I you know I'm I'm I'm getting that 20% number just because I feel like it's what comes up time and again with my um with my guests um back to your industry back to the language Services industry so I think we've got a picture of Revenue here a highly reocurring so high quality Revenue not the highest quality because it's often not contractual but just a a sustained Perpetual need so as long as you're delivering good service you can count on a lot of repeat business and indeed kind of indefinitely there's going to just be a a regular and ongoing indefinite NeverEnding need sort of thing yes that's right yeah the demand is not shrinking um it but it may be shifting as I alluded to earlier with AI on some of these service lines that uh how much in our workflow needs to be changed how much do we need to disrupt ourselves how much is going to be language as a feature and maybe I'm going too far into my industry yeah no I that that was going to be my final question and so let let me just let me just get out of my system and then then carry on with your answer sure so when people look at businesses to buy or in Industries to buy into and are seeking enduring profitability you know some of the the the the kind of three big disruptors that we always hear about is it China proof is it Amazon proof and is it AI proof and of course the AI proof one is is more poignant than ever um especially it would seem in an industry like this which is all about the generation of content in understanding language I mean this is where we've seen the explosion of AI is all around language generation and understanding um so there's there's the obvious AI uh question this this industry seems very vulnerable to that but of course crisis is opportunity so what do you what do you say I say the the landscape looks different you know 40,000 feet versus on the ground and so depending on what industry you're in or you're wanting to be in like being able to be at 40,000 and kind of get a lay of the China AI or Amazon whatever and then dive deep uh and really you know test those assumptions uh so in our space on the ground it looks different it looks like uh certain industries certain use cases that before needed professional support or human mind may be just okay with a first pass at machine or AI or or uh the next iteration on that pyramid uh you moving up the pyramid is there's some variation where it's uh machine plus human to get to the Quality the level acceptability and then at the top we got this great thing called regulation in the space that like creates these pockets of um I don't know we have the fax machine for crying out loud right like healthcare uh is one that is a slow adopter so looking at what services are most likely early on to be disrupted um do you do you service that how can you move up your pyramid uh fortunately for us we operate in place where it's life or death death or liability like lawsuit uh risk and we've even seen amendments to contracts you certifying that no AI has been used um so my my take is 5 10 years is going to be a wild ride I I hope that it is what uh was it um CEO of alphabet said he thinks this could be as profound or more profound aand than than fire um so we'll see heard that yeah it's it's quite interesting um a lot of AI is us-based and there's a lot more online content that's fed it in English so you know the training models these large language models need data and there's just more of a library in English so that will be an interesting one uh we've had machine translation for many many decades we just didn't call it AI uh and we've used it for efficiency uh but it's been an adoption thing I don't trust that um I I want a human to tell me this is good so I'm I'm excited to reinvent it I think we got the right team and the right attitude we're not afraid of it but there's a lot of folks in an industry you might find an opportunity once you get on the ground that the gray hairs you I shouldn't say that offensively meaning the mom and pops are the people that are ready to do something else with their life they don't want to reinvent themselves yeah in this new era and so there's this is a really interesting time if if you see an opportunity in a Services business to adopt AI for the new services or improve the work flow it could be quite interesting yeah well so it seems like what you're saying is that this industry is likely to be disrupted but not in the sense that it's going not in the sense that it's going away travel agents disappeared when when online booking came around but it's likely to be reinvented or added to or change and so anybody considering this industry um should not think that they're getting into a sleepy insulated industry where they can just keep kind of printing printing money out of the business they're going right it's not going to be they they're going to need to be um in an Adaptive frame of mind which is not is not a bad thing I mean that can be really exciting to somebody it kind of maybe Blends acquisition entrepreneurship with kind of tech forward much more Tech forward than just putting in a CRM but truly Tech forward kind of being at the cusp of change in an industry could be really exciting for a certain person like you um the other thing I'd say is I I heard a good analogy for about just I mean they AI so many people pontificating about AI but this one um was good I thought and applies in this situation where when spreadsheets came around it was like okay um accountants I guess we won't have any need for accountants anymore of course what happened was that accountants were just the ones to adopt uh spreadsheets and maybe there are maybe there were less accountants on the other side of that I don't know but um certainly accountants haven't gone away they just became the most able users of the spreadsheet so it and it accelerated the what they offered people still go to their account it's not like it's not like people are going to do their own translation work they're still going to want translation services to do it for them so it just may be that a lot of the work is you guys do is being done by Ai and maybe the industry contracts in a way but it's not like the TR the language Services industry goes away um that's right because no one's going to you know the people at the hospital are not going to want to be gen you know print you know printing out 19 different versions of their whatever signage in different languages they're still going to Outsource that in one way or another that's right and and depending on what Market you're choosing ours is growing too so the pi is getting bigger so it's not like it's a fixed entity that now is taking up more of it the whole Pi is growing too and so for me that's an acceptable risk yeah um because the Market's growing more contents being created yeah we're experimenting with it so I think it'll be what you discussed that will probably be power users of it and figure out ways uh to be more efficient and uh yeah it's it's um it's an area that it's not a core competency of what somebody else is doing their dayto day just like bookkeeping or CPA you go to the expert Jordan if somebody were interested in buying a business in the language Services world and you um said that the business that you bought from your parents at 700,000 was too small what what is a good size to start with if I can press you on that like what's too small for somebody to consider put it in terms of sde yeah it is of course it's going to depend on a lot of things well how about this how about I anchor to this what we often hear in our world is that buying below 750 or even a million dollars of SD ideally you buy something at 750 maybe even a million dollars of SD um do you feel like that is a good rule of thumb here or or too big or what let's let's make some assumptions um yeah you can buy smaller if you're gonna go uh bolt-on or you have a path to growth that is not going to stay small um and if maybe you're acquiring and it's small and it's highly reoccurring and low maintenance and just you're picking up a little hobby cash flow thing then that would be acceptable too I'm thinking of like you know Niche widgets for certain websites or you know you know a calendar app you know does one thing and there's um but if you're going like service business like I've done that we're talking about um and you're not willing to take a pay cut uh and put in some Sweat Equity to really scale it up I'd say probably 200 250 on the lowest uh depending on what your stomach is for risk and your lifestyle okay and how important it is for you to get in the game um okay it's worked out for me because I knew how to grow it and I committed to um and we had enough margins and re repeating customers that uh I could do that at that one 180 number that we talked about and you were so drisk because you knew the industry and you knew the business so well um you couple years peering inside it yeah you trusted your sellers that's right that's right so those are all the key relative you know caveats there's so 250 plus um but do your own due diligence on it and and feel good about the risk it's it's a lot easier to get in the game at that level um there's more of them out there sure and less competition so if you can find a way to be Scrappy and make it work and it's a good way to get started um and then the SBA like you're you go bigger you you're going to overpay maybe that's okay for your first deal and you amortize over 10 years and where's your life going to be in 10 years so maybe that's acceptable but um prices are higher uh because of the money that's guaranteed they're willing to lend it to you so I think you can do smaller deals if you structure them right too there's enough you got to have more seller note you got to have offset Clauses and protection um so I think that those are the other caveats we didn't cover if you're going smaller yeah they need be structured right der risked right Jordan last question so you're at 12 million today what do you have a goal of Revenue or of exit or of growing forever or paint a picture of what you you're working toward if if you even know are you just just optionality bigger the better gives you options yeah so the the Serendipity I apply to like acquisition let's not try and force anything but how we operate is quite contrary we've gone full-fledged you the EOS model which has been great for integration and scale have a common you know way we work um so what is it we got a 10-year Target of of 40 million in Gross Vue you Global team um in order to get there I think we said that this last year so it's nine years out um so we're going to continue on the acquisition train uh in order to get there we can't just get there through organic and um let's see I'm having fun so if at any point that Vision needs to be recast and I'm not the right guy to operate it or I'm burnt out then I want to honor that and let the business go where it needs to go or with who it needs to go but right now having too much fun and I just I don't you need an operator in a service business you got to have somebody that's wearing the jersey and going out on the field uh you can't just run it from a a spreadsheet so yeah that that's where we're going global company um hopefully soon we'll have a couple done in Europe uh and those are are core commercial bases and we'll continue to hire in Latin America and Spain to amazing talent pools uh for the dollar or for the Euro if you will unless it just in case it's not totally clear this has been a good thing this has been a good journey uh it's I I'm so grateful I'm having a lot of fun uh I fell into my little corner of the pool and I'm you know building my sand castle mixing analogies here if feels like play uh it's it's really fun I feel challenged by it and I get to go on this journey with other people uh what do mom and dad say about what you built I mean it's at a scale and size they never would have dreamed of I think they're really proud uh so that's really fun we did a company offsite in Mexico this last year we flew everyone out to Cancun you rented out a little Boutique property worked together for a week um and that's been like also magic for our team and morale because we all work for remote and they just they they were just amazed it just from four people to a global team of 42 spending time in Mexico working together it's just another level yeah so it's so great wow yeah now the team's saying when when's the next one and it's like well we got to hit these numbers before we can even talk about that yeah yeah yeah be careful of uh expectations yeah manage them well maybe you should have worked up to Cancun that first that first meeting maybe in uh somewhere less glamorous no that's great really cool Jordan well if uh people want to reach out do you have a preferred platform or mode of communication you know LinkedIn is getting a lot of um flak but that I my my inbox is open I'm not getting spammed so much that I ignore it completely it's professional enough or you can find me on X uh and just my name Jordan Jordan Evans Jordan P Evans uh happy to chat it's been a transformational journey going back to your question of buying businesses you changed the trajectory financially and opportunity wise for my family and I I hope for all the people we employ too but uh it's a great path great point to end on Jordan Evans thanks for coming on hey thanks will it's been a pleasure I hope you enjy enjoy that interview make sure you subscribe to the acquiring minds Channel below we are now publishing twice a week so tons of new interviews and stories to come stories that will help you along your own path to acquiring a business