john hubbard thank you for joining me today on acquiring minds yeah no problem glad to be here john you're my first guest who is a former policeman former military is pretty common as you know in the world of small business acquisition and you're that as well but former police is a new one for me so we are going to want to hear about that but to set the stage you acquired a trailer manufacturer last year just over a year ago february 2021 expressed trailers uh in florida and so that's the story that we're going to dive into today so start us off john with some background what was your military experience and then what did you do when you left the military right out of the military yeah so i spent 13 years in the military the army uh got out as a senior enlisted guy back in 2016 uh industry paratrooper for six years and spent my last seven years as a special operations medic just kind of bouncing around various commands i was a pretty sweet gig got out and uh really went into law enforcement as kind of a what i felt like a natural gradual neck death was kind of always something that was back in my mind planning on doing post military and then i think i just got too old and waited too long to chase that dream so it didn't last very long a little under two years as a cop okay and so it wasn't for you you found uh yeah i had my first kid about a year into it um i was a 34 year old rookie in an academy with a bunch of 22 year olds so a hairier area of town than i thought it was going to be so car chase just jumping over fences pulling guns fighting guys i had my first kid and just realized everything i just survived for 13 years overseas now for me to get hurt in my own backyard in texas would be kind of ridiculous so i hung up the guns for good and got a real job for the first time in my life so you were looking for the more cushy donut eating version of police work not that not the one where you're actually beating up bad guys yeah you know actually i wanted the bad guy one uh my last couple years in the military was all staff time so i was dying to get back out in the field and then my old body remembered what being in the field was like okay well so you decide that law enforcement's not for you as i recall from our pre-call uh some of your former military buddies had bought businesses so so you were aware of this concept right so so tell me about that and what did you do after hanging up the guns yeah and you know in their defense they were trying to get me to go straight from the military to grad school into this acquisition space um seem boring to me like who wants to run a plumbing company or like a screen printing company um doubted guys would even give me money to buy a company so we'll get into that later but went into law enforcement left that uh was a home builder for a couple months you know randomly i did some construction growing up uh reached back out to those same buddies that kind of asking for career advice and decided i was going to give this a go and delve into a full force and kind of my mentality was if these guys can do it so can i and so you immediately started looking for a business or you got a job in the meantime i enrolled in grad school at smu to get my mba i did the executive program though so a couple nights a week and weekends and then i did a like a micro search in the dallas fort worth area of a company kind of the size i figured i wanted to buy and basically with cold calling and you know convinced them to hire me on with no experience it was an exterior home remodeling company doors and windows uh i whistled my way in there and kind of ran their operations uh you know gm light mode and ran this guy's business for him and got the confidence that yeah this i could run a business of this size so i did that the entire time i was in grad school ran a small business and got my mba and you dropped out there for just a second john so while you uh worked for that company but you had you said that it was a search that resulted in you working at that company so was the idea that you'd work there and then maybe acquire it no my idea was you know let me find a business kind of economic parameter wise that would be the size i'm looking for revenue wise head count geographic spread of their business so a small family held business working just there i think at the time doing you know 10 million in revenue um not to buy the business ever just to go and get the physical experience of running the day-to-day of a small company of that size so i applied to several and finally one took hold and i worked there the whole time i was in grad school so you you had kind of this a little bit of a longer term plan to search you were like i'm going to get my mba by by night and get some operations experience in a si in a in a company of similar size that i'll go looking for and do this for two-ish years and then go out and look for that company a business to buy of the size that i've i've just now gotten all this experience in okay and this was all this was all in dallas fort worth the dallas fort worth area okay and so while you were at the the business that that you were working in to get this experience you found that in in fact you felt quite comfortable that you'd be able to do this that that running a business like that your own business that you would acquire was something you were capable of kind of talk to me about um what you learned in the experience working at this company yeah absolutely and honestly probably within the first 30 days i was coming home and telling my wife okay i could run this company tomorrow like it's this is this is fairly simple and you know for the military guys listening the first time you go to staff as a junior officer and senior enlisted guy you know all these things you thought were super complicated fancy military stuff you really see behind the curtain and you're okay this is pretty simple what we're doing at all levels here it's the same way with the business i felt like so with probably a month i said okay payroll workers comp claims finding new warehouse space negotiating leases hiring firing this is all just you know platoon level military you know operations you would carry out if you were just a platoon sergeant uh let alone a small business owner so uh and really at that point i was kind of kicking myself for having a role in this mba program because i was thinking man i'm ready to search now i can do this but you know now i'm six months into an mba program i might as well finish it so if anything i think the nba slowed down my entire search process you know one of the things that um people from outside the small business world and who don't have military experience find challenging when they buy buy a small business is is the people aspect specifically the hiring firing it might not be the mechanics of the business or the processes those those are like you said pretty easy to wrap their your head around but if you've never been a leader never been a boss never been a manager even in some cases um it's it's that people picture that can be challenging doesn't sound like that was for you at all because you you as many of many veterans will will say just get tons of that leadership experience in in the military is that is that correct yeah absolutely especially coming from special operations community you know as soon as i took over our mentality of work was if we don't think they're worth you know x amount of dollars per hour if you think that's too high for these applicants coming in then just don't hire them like we're gonna have a very set standard if you don't meet it without yelling and screaming you just tell guys you have them at the standard you know you're no longer employed here and let the new guys when they come on pay fewer guys better money so that the human religious piece of it was easy because i kind of grew up in that community in the military and it doesn't have to be you know demeaning or life ruining because you're firing people you can casually in a conversation just say this is the standard you haven't met it you know thanks for playing we'll see you see you next time so you basically set a higher standard pay a little bit more and just lay out what the expectations are very clearly and make it kind of binary you either meet these expectations or you don't um and if you don't thanks for thanks for playing as you said and if you do you know you're you're part of the family you're earning more here than you will one of the competitors and i'm not gonna be breathing down your neck uh to to micromanage you is that kind of the philosophy yeah absolutely and you know my workforce is hourly blue collar employees so it's different if you're hiring a sales manager you know or a marketing guy obviously but yeah we uh i think you'll hear a common theme from a lot of veteran guys that did search funding is you know you have a company and then you try to morph it into your tribe like we're used to in the military so getting uniforms and stuff in place was a big o for us and you know that first week probationary period we're trying a new guy out they don't get a uniform if they make the cuts on friday then they get their cap and hoodie and t-shirt and you know they've kind of been accepted into the express family um and then the only way that works is treat the guys that do hire you do hire you know incredibly well like adults like they're part of the team um you know treat them uh treat them like soldiers they'll have soldiers treat them like soldiers they'll act like soldiers great well this is fascinating but we're getting a little bit ahead of ourselves in the story so we're still in um we're still in dallas fort worth and you're after 30 days you're comfortable that you can do this but you do see out your your mba program and you so so take us up to when you actually kick off your search what did that look like and um you're not you're not in texas anymore so how'd you end up in florida start you know take me through the search itself yeah well uh kovid hit so our mba program went completely remote which allowed me to start searching um sooner than i had anticipated so i'm not wasting time sitting in traffic going to downtown dallas a couple nights a week so i was working full-time last october of 2020 uh working full-time going to school and then searching doing those three uh in preparation of the december 2020 graduation so i started my search in august 2020 and we closed on a company february of 2021 so it all happened pretty quick i kind of forced it all to happen very quickly and before you answer what you mean by that how did you the mechanics of your search like how did you learn to search it is kind of a skill and there are you know best practices how how did you go about that i kept it as simple as possible mainly because i'm just not very smart and i'm lazy uh bit by cell once i've met a couple brokers through biz by cell in the tampa area you know it also helps immensely that i knew the one specific like county within the u.s i was willing to buy a business in so with that as a search parameter you know within two weeks of calling business by sell ads i knew the majority of the broker network in the tampa bay area which guys were full of it which guys were great which guys represented businesses that ready to close you know um so proprietary data scraping manually from biz by cell and then you know once you make that relationship with three or four brokers they just start feeding me deals um but again that's easy to say when you're only looking in like three zip codes so yeah and so tell tell people why you wanted to go to tampa or you knew that you were gonna end up in tampa uh yeah we you know the first time in our life we could just pick anywhere on a map and say let's move there uh between the military and law enforcement told where you're gonna live we were both military brats my wife and i growing up so you know at the age of like 36 we finally get to pick the city we want to move to all right my wife's family's from florida about an hour from tampa i was stationed here uh for a couple years broken up um when i was in the military and loved the weather loved the beach no state tax bunch of benefits so this is where we decided to call home big enough city to have you know sports teams and entertainment what not cool so you're on biz by cell just with you know one filter set tampa and and you're you're looking at the listings that you're asking for more information on the listings that interest you uh and get to know the brokers the did you find it hard to be taken seriously by the brokers this is something that that early that novice searchers often find is that uh brokers kind of give them the cold shoulder because they're not treated they're treated as tire kickers and not serious buyers which many of them are you though were not you were serious yeah so one of the things you know what i'm telling this kind of story is i i will ask the dumbest questions i will go into things with an irrational sense of self confidence and figure it out along the way which i feel like expedites everything if you just ask the dumb questions up front so i was calling brokers and they were asking for you know well can i see your pfs and i'm like you know maybe once you tell me what that stands for personal financial statement and you should probably know that so this probably isn't a good fit and i mean some of the phone calls are that painful but i'd write it down that means this okay cool now i know um and i just you know do that for three hours a day while i was supposed to be doing my day job at work and just learned a lot that way and uh you can get a letter of confidence from an sva lender you can get letters of support from some of your investors if you identified them and i just backed my way into those solutions just by asking good for you i love that it's so counter to to how most people live in including me i'll i i'll be the first to admit um uh uh one thing i i skipped over that i want to make sure we touch on you had said in our pre-call that a number of your military buddies that you knew that had bought companies did a traditional the traditional search funds and you decided against that you you made a very deliberate decision not to go that route talk to me about that yeah with the two you know the two main reasons one is i wanted autonomy you know i wanted control this was a lifestyle decision for me not necessarily an economic decision you know i would have chosen this even if i made half the money i would have made at you know jp morgan goldman sachs or something post nba so the the lifestyle and the freedom to be the boss at work was more important to me which i knew i wouldn't get as you know 15 owner of my company if i went traditional um and then as super hyper focused as i was geographically i mean if i was a traditional investor i wouldn't invest in myself if i'm only looking at businesses in you know a 10 mile circle so kind of force splash chosen speaking of your ps your personal financial statement and investors share what you can about what your financial picture was and um kind of what size of business you were looking for and were you going to need investors to to buy a business of that size yeah yeah absolutely so i was a uh just left the police department working for pennies at this company that i convinced to let me you know run their operations for a meager wage um and pull life before that as an enlisted guy in the military so i had you know i had dig for money it was let's assume i could put zero dollars into this because i just spent 150 dollars forming my llc um and let's see if i can still make it happen so it was full-on in need of investors while simultaneously i wanted to maintain the overwhelming majority of the company so i wasn't asking for a lot very attractive uh investee candidate here man and i only want to search in you know one city in the entire us but as as i know it turns out that that you were swatting away investors so okay so but wait what was the size of business you were looking for if you basically had no money how are you going to decide what size of business to go after well the sba put a cap at 5 million so i knew i was going to stand your that for purchase price um and then you know i feel like once you dipped into the 750 ebitda se range you got away from a lot of the traditional searchers family pe funds you know the institutional money if you will because now it gets you down to the threshold and well if i have to pay enough or you know gm to operate this company it's not turning much of a profit so that was kind of the size i looked for in that i also wanted one that was kind of on autopilot so something doing 750 sd where the owner wasn't actually involved in the day-to-day so again i'm adding these uniform parameters to my own search um yeah and about yeah you know 400 fce was the smallest i was looking at something you could grow but not something where i'm answering phones and doing the accounting and quoting the jobs and all that yeah man you you uh you're not lacking for confidence the unicorn looking for this unicorn deal uh and totally transparent about the fact that you uh don't have the money and it's got to be in tampa among other things all right so but you do find uh you do find a deal you like on biz by sell um actually had you found other deals before express trailers that that that got went down the went down the path at all toward acquisition yeah so i had i think i submitted three lois before express um they were all accepted in various stages of due diligence we backed out some are just misrepresented by the seller you know i'm out of the office every day by noon and then you come to find out they're out of the office every day at noon because they go and quote all the jobs and they work until eight o'clock at night so you know yeah yeah um and then others just fell up lenders didn't like a couple of them too small you know key employee held too much power um so then we settled on extreme experts actually wasn't on business by still it was an off-market deal that uh sam one of the local investors i went with in tampa knew through a friend of a friend who went to high school who worked for pe firm you know that type of deal and this is sam sam rosati who people on smb twitter and in the searcher world will will recognize sam's name and how did you get in touch with sam uh you know again me being too dumb not to know any better i went on searchfunder.com you could probably go on there and still find my post and just said like hey basically here's my background here's where i'm looking at my business here's the size of the business i need investors you know hit me up swipe right and as it turned out you got a lot of of people swiping right you got a lot of inbound from that one post on search finder right tell me tell me what the response was like yeah i mean i probably got 50 emails in the first two days from guys like hey we like investors hey i'm in the tampa area you know i couldn't even get to some of them i was some of them were just got blown off and forgotten about because my search was so small i had no sort of crm you know deal flow thing set up for businesses let alone investors because at most i was looking at three or four businesses at a time so i had no preparations for keeping all these investors straight um and i kind of pared it down from a list to you know three guys pretty soon and then uh ended up going with samus with main investor after one phone call so sam razady saw your post on search thunder responded um and he was one of a handful of phone calls you had and and you decided to go with them you liked them yeah absolutely kind of a thing after our initial phone call we were pretty much said that we were going to work together it's just let's meet next time you're down here looking at a business you think the magic to your search fund or post was the fact that you're ex-military so a lot of that that just has kind of like a certain sparkle to investors and searchers yeah one hundred percent um isn't either my profile picture but i'm assuming it was that and it's actually funny because that's uh something we struggle with coming out of the military is you don't want you know one hand you're glad this is programmed in the other hand you're like i don't want you to hire me or invest in me just because i'm a veteran you know i would like to stand on my merits um but then you know you do the research into the historical return on investment for veterans searchers more specifically like special operations better researchers and it helps you swallow a little better that this reputation exists for a reason and it's not charity so um my advice to fellow and just like lean on that leverage that you know it's not a handout you earned it so right they're just these are investors who are just looking at a track record of people like you and seems to check out and so it's a it's just one data point they're using but a strong one the um the the deal flow that you're seeing or the the listings on biz by cell i'm just curious so tampa let's call it a medium-sized city uh like how many deals are coming on biz by sell in that kind of 400 to 800 sde range per month is it yeah a lot or a little i really don't know yeah more more than i would have thought considering you know how i say the tampa bay area of tampa clearwater saint pete within a 30 minute little window um yeah but you know more than i would expect and it came up more frequently than i thought and i think a lot of them were actually getting snapped up by you know local family pe funds um so you know a lot of obviously hot garbage on business by sales the same ad that's been on there for a year and just keeps getting refreshed but you know there were several and i think i could think of two or three other people you know know loosely through search funding that fall businesses in florida from this by cell so and so sam the this deal express trailers sam sends to you so privately um because you guys have basically you've agreed that he's going to be your investor um and you know this this uh line that you said about yourself earlier that you don't want to work very hard i mean i i i say that delicately but i think that you'll you'll just be like yeah pretty much i'm i'm naturally lazy uh did you communicate this to sam and the other investors that you talked to yeah you know obviously sam hears all these and he laughs in hindsight i didn't advertise myself as lazy but i definitely advertised it is you know i was honored out of you know basic training in the military but only after i found out that the honor grad doesn't have to margin the formation in july in georgia and you get to like sit up front with the vips so that was my entire motivation to become honor grad was so i would not have to stand on the hot sun so it's it's super effectiveness driven by extreme laziness so as long as i pitch it that way it works out for everybody in the end you know that that actually is really effective my my education is in computer science and you'll hear a lot of the very best programmers say i'm lazy but that this makes me a great programmer because i'm always looking for the shortcut i'm always looking for the most efficient way to get something most efficient effective way to get something done and this makes me really effective at what i do as a programmer so it kind of reminds me of that absolutely okay so you see express trailers can you can you tell us um the financials uh so the size of the business the revenue the number of employees and so what the business looked like and then as well uh what your deal looked like if you if you tell us about express first yeah so express uh doing about five million in revenue that it picked up pretty significantly over the last two or three years from around a three million dollar a year revenue to five and a half um two owners have known it for the last 30 years that they had been absentee for 10 years and three years respectively so it really was kind of on autopilot with staff in place 35ish employees in a given day and it's just you know from raw deal to rolling off the the lot manufacturing of enclosed trailers mostly for other companies commercial accounts and so you have i think you guys um manufacture three different sizes of trailer do i have that right um no we so i actually changed the name of the company a couple months in from express trailers to express custom trailers and depending on when this airs i hope people don't go to the website until after we roll out our new website next month but it uh yeah we hyper customize trailers for other very specific industries um the champions go buy off a lot and do yourself so we'll help them design a trailer for a large company and then maybe make them 100 a year of their model trailer and so can you give us two or three like use cases or types of clients that you have just so we can just add a little bit more color to to your business yeah um so very simple trailer in massive quantities uh brightview landscaping they're the largest landscaping company in america oh yeah we manufacture their traders some other companies uh permaliner it's like an underground pipe repair company they sell we sell them our customized trailer they put even more custom equipment and sell it as a franchise um you know military stuff they've done in the past we'll make command centers for a sheriff's department or the fbi or something so anything like i said from a landscape a trailer to a 50-foot gooseneck trailer that's used as a swat headquarters and is this a competitive world of custom trailer manufacturing no so trailer is extremely and i actually passed on the deal the first time ham sent it to me i was coming from texas which is like you know the mecca of trailer making there's so many manufacturers in texas good ones had some buddies i knew that had family that were kind of in the leadership levels of these companies and it's very cut throughout race to the bottom type thing but not for this you know that's for trailers you can go buy a dealer for this like super customized commercial account stuff it's really regionalized and like we're the one for southeast united states and is there i imagine there's maybe some nice recurring characteristics to this so you you you design a trailer for your customer and then they're coming back to you every year for another hundred an order of another hundred something like that is that is what is the recurring nature of the business if any look like yeah so uh when i bought it it was a 50 50 split of commercial accounts really and then like dealership work still so kind of living in both worlds and not doing the best at either one of them um so i cut off all the dealer work you know within the first month i had 15 dealers in the state of florida i went and fired them all and john what do you mean by what do you mean by the dealer network like what were these dealers elaborate on what that looked like yeah making a stock type trailer if you will and then selling you know 100 of them a year to a particular dealer and then they sell them to customers come in like a car a lot oh this is an express trailer is not what express did anymore in the business just hadn't caught up to it so it's not what express did anymore but you had these relationships in place it sounds like a bold decision to go and fire all 15 dealers which you i think you just said has represented half the business so um yeah talk to me about yeah basically talk to me about your transition so when you acquire the business you go in day one you know talk to me about the first 30 days and and then and then get into this this particular decision and when that happened and how you had the confidence or whatever to to do it yeah well the day-to-day uh didn't change for the employees because the two vps that were running the company or the absentee owners were still running the company so i was you know an absentee owner in person if you will i threw a standing desk in between their two desks and said i'll be here most of the time um so from day one i got to just work on the company you know on the business not in it like everyone says so just just buy a thousand spreadsheets and cost analysis and stuff uh you know because you have to sell these dealer trailers at a wholesale price for a dealer model to work um you know we're losing money on every trailer that sells to a dealer and making great money on all the business account trailers so it was as easy as well let's just stop doing what we're losing money on and do more of what we're making money on and that's you know that's what we did to simplify a decision down to that barney level that's all it came down to you were literally losing money on every trailer that you sold through these dealer networks and now does that not make you the the two people running the business what were their titles uh so at the time president and general manager they're now both vice presidents um no uh didn't make me leery only because through due diligence we learned that you know the previous owner still controlled everything and they were trying their hardest to get out of the dealer model for probably the last three years but the owner didn't want to rock the boat he was ready to sell uh probably one of the most stubborn human beings you would ever meet so they begrudgingly kind of did it um and the crazy part of the business was still super profitable and making money and it's i'm glad you didn't change it because i would have paid twice as much for the company yeah totally so and did you had you uncovered this fact about the business that half of it was money was losing money or half of you know it's one of two business lines or losing money during your due diligence no and it's funny because the reason we are able to buy it the pe firm that was looking at the deal backed out at the 11th hour because you know they said i just can't tell what they're making money on and what they're losing money on and you know my dumb infantryman take on it was well there's making money sound so if i can find out the latter you know this is only going to get better i always wonder about absentee businesses where there are there's management in place and you know it's like why wouldn't one of those managers have acquired the business now maybe they're maybe they're just maybe less entrepreneurial maybe they don't have the financial means to do it but you didn't have financial means either and you made it happen um and you know you imagine that they already feel a lot of ownership in the business they know everything about it they've been running it so they just seem like the best possible candidates to buy the business maybe yeah i just always wonder about that maybe they don't realize they can maybe they don't even know the business is for sale but um so if you could address that go for it but but a follow-on to that is like when you come in as the new guy are they welcoming you are they like oh you got you know i should be owning this business like what what's the dynamic there um so actually one of the vice presidents who kind of runs the day-to-day office managerial side of the house is the son of one of the previous owners oh um and then the other vice president was their first hire so he's been there 27 years but between the two you know the one that's been there 27 years his only dream is just let me make trailers give me the supplies i need to make trailers and i don't care about what they cost you know no interest in the business side just you give me guys the material and let me do my thing which i love okay um the previous owner's son combination of you know not wanting to get tied down to the family business for another 20 years um not knowing how large of a business you can buy with how little money utilizing the sba um yeah and then just you know buying physically buying a company from a former a family member you know like i could ruin father-son relationship pretty quick um but you know coming in day one you know besides just being very self-deprecating and you know it helps i know nothing about making trailers because i can't get in the way and having all these new ideas to kind of drive the company forward and just letting them do all the things they've wanted to do for the last three or four years they're happy re-energized you know ready to go so the way you've kind of positioned yourself is um because it's kind of like you'd there's always this question of credibility a new you know a searcher comes in buys a business that they might not know anything about and they probably have some insecurity it's like is anybody do i have any credibility here i'm buying this business that i kind of know nothing about uh and you didn't make any bones about that you didn't try to pretend you knew i mean you were very transparent i know nothing about trailers but you did say i guess i'm business oriented and i want to grow this thing and that's where i'm going to invest my energy and that seems like that compensated or more i mean it sounds like they were very receptive to that um compensated for your lack of knowing anything about trailer manufacturing is fair is that is that right yeah i mean absolutely yeah and the way i framed it too is you know i own the company you guys run it you guys have been running you're going to keep running it and it was a lot of easy wins up front because i just said what do you guys need whatever you always wanted to do how much money do you need to do these things like tell me what's your plans and you know they came up with 95 percent of the stuff they've done uh i my analogy i use is you know i i took over like a a battalion command of rock stars that have been held back by leadership so it's easy to be a standout commander when all you do is say okay you tell me what you need i'll give it to you and i'll protect you from everybody outside the company focus on you know you look down i'll look outside and you guys rock and roll i'd rather you know i told them they wanna i wanna pull you guys back instead of pushing you forward every day so i'll let you guys know when you need to reign it in and so far they haven't crossed any boundaries so it sounds like a dream did you do did you diligence the management team like did you have a did you realize they were all stars when you bought the business yeah so uh we did and you know we wouldn't have bought the company if both of them hadn't stayed and that's really hard to enforce obviously so it's a big leap of faith at the end and we weren't allowed to meet one of them until the day before closing uh the guy that had been there for damn near 30 years but they both wanted to remain on at least fill me out um so it also helped that you know pretty much everyone was underpaid at the company so there was enough money there to come in the first six months give everybody pretty significant wages wage increases to bring them up to what they probably should have been at for the last five years so just a bunch of t-ball easy win set up for me all around the company i just got to smack for a home run within the first 90 days yeah man you you really are making this seem easy were there any was there any bad news were there any big challenges when you got in there like to give us some some negative stuff here um yeah so this is why i almost hate doing the podcast but it sets like unrealistic expectations up for searchers but no like kobit they were able to stay open we kept employees um we still everything prices went up probably 30 across the board for all of our inputs steel aluminum tires we raised prices the same amount and customers haven't batted an eye we are you know basically our production for this year is already full we're taking orders for next year customers don't care um it's we don't have a sales team they never have no advertising the phone rings then some company says i like what you guys do i saw you at a trade show can you build me 50 trailers next year and we kind of say i guess i mean we'll fit you in so um it's it's been you know most people would say i'm waiting under their shoe to drop but you know the way i take this this is easy man why isn't everybody doing that yeah um you know i i wouldn't want to touch manufacturing myself but people people ask me in my own search like what kind of what kind of business would you want to buy will and i always say well it often it often is determined by who i spoke with most recently because i'm you know the stories are so cool i mean this is such a perfect example it's like now i want to go out and buy you know a trailer manufacturer given given the experience you're having um but you actually you too had not wanted to buy into manufacturing uh because generally manufacturing doesn't have a great profile um along for for searchers but you did anyway because you liked this deal when you learned about it but what what have you found now owning a manufacturing company about like what any kind of in retrospect any thoughts on buying a manufacturing company or something you might advise advise searchers uh on this question yeah so the biggest thing i learned if you're looking at the smaller deal size in these companies below a million and even that are labeled or listed as manufacturing is at that size probably half of them that say that are actually fabrication so you think manufacturing and the reason you don't want it is because you have these big giant pieces of equipment that are three hundred thousand dollars to do you know press widget y and then widget x and if it goes down well you know that capex set aside you need just to keep those machines up when we manufacture trailers and our most expensive piece of equipment is probably a you know four thousand dollar bandsaw to cut steel it's handheld welders handheld saws it's an assembly line if you will but guys working with the tool in their hand so it's manufacturing but really like mass fabrication so the capex is you know our two vps take-home trucks was honestly our biggest capex expense to keep track of um so and i saw several businesses like that during my search down here that were manufacturing businesses it's really like 10 guys with a bunch of welding and plasma torches in their hands so i definitely wouldn't shy away from it i would look into the company especially if it's at that price range it's not going to be some giant manufacturing behemoth and then we buy in enough bulk obviously to still be able to get steel and aluminum and you know the inputs that scare people off from a manufacturing company so it needs to be small enough to be affordable but large enough to where they start putting the screws down because the supply chain customers are not supplying and we're closer to the top of that list because we ordered by the truckload and not by the crate yeah so it's a balancing act there but it's definitely doable and there's pretty good margins in the right manufacturing space in small business this distinction between fabrication and manufacturing is that uh a john hubbard distinction or is that one that um that people in the in the world of manufacturing adhere to and like that that's a pretty well that's like an industry different like um definition yeah i know so i think i would definitely be a john hybridism um if you just said that but then if you explain what you meant i think people in the small business manufacturing would say oh yeah you're right you know i get what you're saying because i have highly skilled you know 22 an hour guys manufacturing a trailer versus someone that might have a manufacturing business with a hundred eight dollar an hour employees that press the same stamping machine all day long we're both manufacturing but you know they're not fabricators my guys are so so that's the difference and it's a great you know buried entry for me and what i do because your labor your workers your employees are more specialized more um yeah technical yep skilled yep cool um john we're bumping up here on time um still got a lot to i'd like to ask you but um what tell me the so you cut off the dealer relationships um and so this big decision tell me what this did and and so what what the business looks like today versus when you bought it a year in change ago yeah i mean staying tried and true to my no dumb questions the worst they can say is no mentality i said cool we just took you know half of our production board for the year i just dry erased when i fired all these dealers so we need to refill it call every business account we have and ask if they want more and you know 50 of them said yeah one customer you know went up five times their normal annual orders you know from like 30 of these to 150 of them just because we said we have the capacity do you want them oh yeah by the way we're raising prices 35 but if you lock them all in for a year we'll give you you know a discount so we've kind of switched to a stocking program thing i give these guys discounts but they give me their production orders in september of the year prior so the goal by next year is to have our entire 2023 board full before the year starts and we almost have you know 2022 full right now and we just hit april so the goal is to be nothing 100 commercial recurring accounts um their trailers come off the lot turnkey they have to worry about nothing we can deliver it straight to their end user customer if they want um so it's great fire and forget business and just doing that you know these trailers go from a negative profit margin to around a 40 45 margin for trailer uh we have less guys we in q1 of this year we have less employees made less product bought less inventory so our cost of goods was lower and made money and we'll just keep doing that yeah as long as we can ah i love it i love when when one tweak i mean it was it was more than a tweak it was a big change to the business but where one decision can just just dramatically change the trajectory of a business or take it take it up to the next level like this it's great so so what was revenue um when you acquired it and annual revenue and what will annual revenue be for 2022 yeah so we required it uh when we acquired it sorry they had just done 4.9 we had 5.6 last year um we'll probably for this year not do it much higher than that probably right around six but i'm at six almost double even them just because it's a you know i tell you know dan my my vp all the time like i don't care about revenue at all i care about the margins given the gross margin give me the net margin if we can make you know two million dollars a year but do two million in ebitda that's a better year than doing growing to 12 million in revenue and still only doing 750 ebitda so we'll continue to grow slowly um just with our kind of soft orders and run rate we're at now i mean we're going to accidentally probably turn this thing into a 12 million dollar revenue company about 2024 just by increasing increasing our margins and you know almost firing customers to keep the customers we want yeah um because we set our margin this is what we're gonna make and that's how we dictate the price of the trailer and they just say hey we don't do any market analysis check our predators because we really don't have any john i gotta i gotta let you go on that on that note unfortunately um but two questions uh first is just any thing you'd advise other searchers out there you're you're so um you're so humble yeah you know what you are you're you're humble but extremely confident you're like don't work very hard you know not not a genius but uh i can do anything so that's pretty an interesting combination go ahead hey i told my wife i said you give me the ceo yup at pepsi give me 90 days to figure it out i'm sure i can run past you like but that's how i you know that's how i got my wife is irrational self-confidence so it works um but in that vein like just ask i you know i go to these conferences and stuff still for searchers and potential searchers and stuff and people leave not knowing so much more than they could have just because they're afraid to look dumb yeah you know i'll plop down and have a beard be bragging about my little two million dollar you know trailer company and walk away and someone's like oh you know that is that you know they sold their business for 250 million and now they're an investor and it's like okay cool you know i had a terrible shirt on like we're all just normal dudes just ask questions and you know and now from asking all these stupid questions for the last four years people call me twice a week now and searches are asking me questions you know so you go from the guy they're laughing at the guy they're asking advice from um and you just have to not care i just really don't care cool well that sounds like not searcher specific advice but just good life advice uh john how can people get in touch with you if they uh if they if they want to be the third or fourth call of the week asking asking you questions you can bluecorecapital.com i kept that up i really only made it as my search fund vehicle um and left it up afterwards just so people can get in touch with me and eventually one day i will use it for like my portfolio of the seven companies i own but uh yeah bluecorecapital.com or john bluecourt capital and like i said i answer anybody i talk to anybody people call me and ask me because i'm so open like what was your credit score when you applied your spa loan like do you smoke like i'm taking a life insurance exam that's required by my lender and i smoke marijuana like what do you think you live in florida right so um there's no questions off limits i'll answer them all cool well audience listening to this take take john up on that as you can tell over and over again from this interview he is indeed a very open guy really fun to talk to somebody so open john thanks a lot for your time yeah absolutely man