Colin Gates welcome to acquiring minds thank you nice to be here Colin in our preall you made a great case for how remarkable an opportunity SBA financed entrepreneurship through acquisition is that an often young often unproven person with some hustle can go by an existing business and get 70 to 90% of the purchase price with a loan so I'm going to have you jam on that observation a bit later but first let's get some background on you please yeah so um I guess we'll start from the real beginning I'm from upstate New York originally grew up there small town called uh Watkins Glenn um my family were farmers um so as of function of that my dad's an entrepreneur um so I grew up in that lifestyle saw him get the 3:00 a.m. calls about the broken stuff saw him managing the capital for payroll all the expenses that come from that saw the challenges you know I come from I mean we're a commodity business so the Cycles are extremely volatile um but yeah so I always loved that I always worked on the farm um knew it was not necessarily all I knew I always love farming I wanted to do that but it's just not a viable path for anyone to start their own business so I and that was never lost on me it was you know so naturally went to college from there um studied agriculture at first and then during my sophomore year I switched over to finance just saw that you know that was the best the best place to learn about business and simultaneously acquire Capital to actually run one or acquire one someday so so you already knew you were going to buy a business halfway through undergrad I've always known I wanted to to own a business I always knew that I wasn't that's always what I was into you know I was I've always been furiously competitive like I was the kid that cried if I lost Borg games and threw an absolute temper tantrum you know what I mean I always loved like you don't seem like it Colin I gotta say you seem pretty chill yeah I it takes a lot to like move me now but it still happens occasionally you know what I mean like I mean yeah I'm just I'm the competition's always been just like that that's why a big part of actually I think I love business so much like and owning business it's like I'm just I can't stand to lose like I I love like winning and the only way to like get that fire in the real world is through owning your own business like Bas I I played basketball you know it's just I mean a small town right but like I was just always crazily competitive about that but like my basketball career was limited I'm not very tall um and obviously and Colin why but why buy a business rather than start one especially in undergrad where people that age are going to really much more focused on you know new ideas and and they that that's really when people kind of think about starting a business and they're not going to be as exposed to to buying a business really underexposed to buying businesses at that age I mean I'm not opposed to starting a business like and I mean this will tie into the personal guarantee thing later like my views on that but um I think it's a good option I think it's a great option but like there's OB if you have the capital which luckily I was able to acquire that by like the time I was I bought a business nine months ago or so you're you're taking a shortcut right and you know you're trading off your capital for that but you know you don't have to the the first this is a common threat on Twitter 0 to 1 million is the hardest there there's no question that's the hardest so you have to basically build the airplane while you're flying it you know you have to find contracts or you have to find work while also finding employees while also doing the work yourself while so doing the you're you're wearing every single hat there's no way around it and I'm not the guy that is like going to be like the only way to buy a business as if you're working on the business not in the business but you're just going to get where you want to go a lot faster if you can acquire through the SBA for 90% leverage 70% leverage whatever it is someone's life's work where they've basically done all the leg work for you and then you can build off of that so yeah that was a no-brainer for me and also my buddy did it three months before me and he was kind of proof of concept and but that was much later that wasn't you know halfway through undergrad yeah yeah no but I I mean I knew I knew an undergrad like I I didn't necessarily know I was going to be like on Twitter um discovering like search or ETA I still don't even know those ter like when I bought the business like I just called it guy who wants to buy a business you know I like business I like to compete I want to make money this is what I'm going to do right like that there was no like guidelines besides that well I as I as I often say when I meet people who found out about search excuse me they didn't really find out about search they just kind of indigenous to their own their own Vision decided that they wanted to buy a business before they knew what eta or search was I always find that those are fun um people because it's that much further off the beaten path for them than it is for people who maybe learned about it in business school or on Twitter podcasts YouTube whatever carry on so you you leave undergrad with a degree in finance yeah then I go to work uh for a private Equity company out of Boston doing agricultural investing that was right at my wheelhouse I was grew up in agriculture so um knew about it and it was just a natural fit for me but you know I never enjoyed that I knew I never enjoyed it from the first day I started I'm not a guy that likes to sit in an office and play with a play with Excel all day but I mean I was capable of doing it you know and it was the highest value used of my time in terms of acquiring the capital you need to start like I mean I've always been like this is the benefit of growing up like with your dad being an entrepreneur is like I knew the amount of money it like even if you had 20 grand saved up 100 Grand saved up like that's like Pocket Change in terms of like the working capital you need to run any business pretty much unless they like unless they have great cash flow terms so like I knew I needed to get a base setup you know I'd always been I ran cattle in like high school and stuff that was like I'd been making money I ran a firewood business you know like but I knew those things weren't like viable long-term paths you know to to running business but IE I everything I was doing I'm I'm not like a compulsive saver now or like trying to like skip coffee to like fund my like bank account but like back then before I acquired a business you know and had good discretionary income everything I was doing was to try and boost my savings boost my net worth you know because I knew I needed that to be clear it was to build a b a a enough cash to buy a business or for that deposit that you were going to need or or because you P this thing about you perceived in small business you were going to need just working capital to just be some liquidity at all times uh me and my buddy talk about this too you don't understand working capital until you run a business like if you've just done an Excel model like you do like you cannot like every all these models even if it's a monthly model you cannot understand that you can be extremely profitable and have like $200 in the bank with 250,000 of AR and just crushed it you know what I mean but like no none of what I did was like I just had a goal like I knew I wanted to own a business and I like it's pretty much common sense you need a lot of capital to do that you know so everything I did was I never even focused on buying the business like I knew I just needed cash to get there you know what I mean so keep going then with how you accumulated more because you did have a bit of a windfall that fin finally got you there I shouldn't say finally you were still very young but carry on I had a few I mean I had a windfall but like I mean I I I'd always worked like that was a huge benefit too of growing like I I'll never like deny it like I had huge advantages from my family like like I was able to work from the day I was pretty much born you know what I mean and like my parents were willing to compensate for me it wasn't unpaid family labor you know so but again I mean I wasn't making anything crazy but like I've always if I wanted to go put 60 hours in in a week at 18 bucks an hour when I was 15 like that was available to me so you know I came out of high school and I had savings like I I don't know maybe 50 to 100 grand or something like that like which is not an insignificant sum for a young kid but no the richest 18-year-old ever other than celebrities yeah I mean I was doing pretty I mean I worked a lot like I worked yeah yeah I don't mean to keep acting like you this money fell into your pocket it's I mean you you sounds like you I mean but it like it's available to everybody if you want to get ahead you can like I'll never like that that's there um but yeah then I went to college like I paid for half my tuition like that kind of dented my capital A Fairly significant amount obviously you know um worked in the Summers worked during the years but I left College not too I I mean I had some debt um from that but I was also able to like maintain liquidity I borrowed instead of using all my cash to like fund my education but I wasn't too significantly impacted like I said I paid for half um but anyway I mean I graduated I maybe had I was probably down to like I don't know 40 50k whatever like pretty insignificant in the grand scheme of things and then you know Co like my first job like it was a high-paying job I was around 100k this that's pretty good at the time for a recent grad you know what I mean and then covid basically hits because I graduated in 2019 so I only worked in office for um six eight months or something like that and then Co hits I'm getting paid the same amount pretty much but I move home you know so your biggest expense when you move to these cities for these jobs as rent so I'm basically just start hoarding all of that on top of what I was ex saving so I was able to start saving like I don't know 50s like pretty much all of that because like it's also Co you can't do anything right so there's nothing to spend your money on yeah so so I got pretty quickly back up to like within a year or two 100 150 and then like I worked for four years out of college so I was pretty much of my own cash like I don't know 100 200 and I was investing that like so I was back home so I was work I was still doing like raising cattle at my farm work at my farm you know on the side you know so I probably that worth around I don't know 100 200 something like that and off numbers but then you know me and my family get an argument about like I don't know me not being the best with the covid precautions so I end up moving down to Florida where my budd's at you know how perfect for a guy who doesn't like his Co precautions he moves to Red Florida of course yeah exactly and I mean it was I always mess me and my dad are really good friends we disagreed on that but like we we never stopped talking like I talk to him every day pretty much I still talk to him every day um well my buddy was in Naples which is like the reddest of red of Florida so it was wide open and you know I've got some money and I'm like well I'm going to use it um so I bought a place down there and I thought it was a good investment like I thought it was like okay and you know nine months later like I actually went back to my farm during during the summer because Florida's not that much fun during the summer um and then I come back down like the following winter uh I'm still working remote like still Co time you know and I I was working I'd been promoted to an associate and stuff so was making good money still saving a good amount of money you know and this realtor who like lived in my building told me he's like oh yeah you could probably get like four 400 plus for this condo I bought it for 220 nine months ago and I'm like good enough for me and like uh so I was like yeah Market it I had had an offer that day over ask so sold it for like 420 or something so 200k profit in nine months in nine months that was the the the aforementioned windfall yeah that's that one you don't deserve as much credit for but still I mean you bought the condo so yeah yeah I mean no I don't deserve a credit right like I mean I believed in nles but like anybody like doubling real estate 91 like that's that's not standard right and I mean there's people that do it um but yeah so I mean after that I mean you can do the math on my liquidity like it was higher So like um but yeah so after that tell us what you think your net worth was going into your search because that'll be something that the audience can compare their own net worth to and even if it's yours is going to be higher which it is still an anchor probably like 400k um 400k in cash after taxes after your after your it it was in nine months that would have been you would have been taxed income income tax on that real estate Pro those profits not capital gains yeah but then I was able to buy this business so like the and I was able to use that depreciation from that and I'd had some like U some stock losses like maybe 40 50k of stock losses like I got I didn't just let that cash sit I've never been able to let cash sit so I put that I had like I'd had like 40 50k of like stock losses so I was able to Shield a good amount of it you know what I mean okay and I still had the farm business and that's fairly tax protected uh in come so I was able to like I don't know buy some depreciating assets uh pretty good um and shield myself from that but I had to pay taxes I had to pay like 40K of taxes or something like that I think it was but still I mean I I was still working saving money I I worked in private Equity right you know what I mean like it's not a a low paying job for the most part um so so this whole time from going back up to Upstate New York to your family's home the farm then down to Naples the entire time you're maintaining your W2 in in private Equity okay yeah then what you sell the condo yeah then I met a girl in Michigan um so I'd sold the condo I was heading back home you know and I started dating I kind of was dating her I was kind of traveling back and forth between there and Michigan and uh yeah and then we moved in together um I got a I bought a place in Michigan um I'm probably glazing over some of the details but that's kind of how it worked at a high level and I was still working at the private Equity shop hating my life didn't I didn't enjoy private Equity at all I did it exclusively for the money um and it happened to be in agriculture which helped but still I didn't enjoy it and my buddy throughout this period had kind of had a falling out with his family he was working on a big he was part of a big dairy up in Michigan um sold out and well it didn't sell out he got kicked out but um he he went down to Florida like literally like probably the fastest search and acquisition ever within like three months he closed on a landscaping business business with like 900k SD I think it was at the time I think he got in the weed a little lower than that after the fact but you know took a huge risk and it panned out because he was able to grow it a lot too like a like 300% um so well to date he's grown at 300% at the time he'd grown it but not anything to that extent and uh but yeah so basically he' just done the proof of concept on what I'd known I'd wanted to do for a while like I wasn't as like now I sound super confident about doing this I always knew I want to have a business but I was not as like crazy about buying a small business particularly like you don't hear of many success stories like in the news about that or any like you don't hear downside stories either really but you don't you just don't hear about it much um you had you clearly hadn't discovered acquiring minds yet SL acquiring minds didn't even exist but now the stories are are plentiful if you go looking for them what year is this now 2021 yeah 2021 2022 probably and and so you still haven't been you still are not aware to your to your point you just made you're still not aware of quot quote search you just know that you've had this vision for yourself in the back of your mind forever and then here this buddy goes off and does it super quick and crushes it uh proba proba when he had done that because I actually sent him Biz by cell like he was like what because he knew he had to get out like basically and he's like what should I do he's like he was like looking at jobs and like there was nothing he was like going to make even remotely the same compensation he was and he was like he he's all he's the same he's not really cut out to to be an employee I guess um and and intellectually he's got the horsepower to to not be as well so um but he did it yeah but I I so I sent him Biz by sell and I was actually I was kind of turned on to search because I I'm I've always been a Twitter Twitter user like for a long time and uh Matias your sponsor got introduced to my algorithm somehow um I don't know how but the Twitter Gods Smiled On Me Maas is active on social that's how yeah for sure very active on social yeah and and he was obviously posting like I don't know the the the he was basically posting like a 25y old guy buys business 5% down pretty much I'm like what that's crazy and uh but basically I was plugged into his that algorithm and and then it spiraled now I was into real estate Twitter like the algorithm took it from there pretty much and yeah so then after that my buddy bought the business and I was like well I'm sitting here hating my life you know in private Equity like uh time to or get off the pot for lack of a better term you know and I was You' go there that phrase yeah I I literally talked to my dad you know what I mean I was like I've said this for a while I want to buy business like my buddy just did it um and I've got the capital I've got the capital to do it and I'm like I'm just like an idiot if I don't at this point you know what I mean cuz I'm never going to do it like if I don't do it now and he's like yeah you're right you are an idiot if you don't do it so I he was for the most part supportive um and so obviously then having been a small business owner his whole career he was also despite the ups and downs of this life he was supportive of you having this life as well he thought it was a good life a good career yeah I mean he's he's reaped the benefits um I mean he's not like uh Bill Gates my last name's Gates I'm making alluding to that but but he's done well right and uh he he works a lot right he but like that's not like we we all know that and I mean now the big thing is like work life balance like in Search and like I don't know that was never that never bothered me like yeah I never particularly cared about having a job not having a job you know it was it was always just do it and like you can you can I mean you can build the life you want you can't build the life you want through you can through W2 but not as easily right yep Colin give me a little bit on your experience in private equity and how much you you disliked it first of all was it giving you an education that you could apply to search there are a lot of people who do search Who come out of private Equity because there's enough overlap there it's like oh huh I could do what we do in this private Equity shop as an individual on my own was there any linkage like that in your own mind I mean I don't regret my time there I learned a lot and I like the people um for the most part um but was there like an epiphany where I'm sitting on one side of the table and and the entrepreneur sitting on the other side of the table and he gets a massive windfall no I was doing Farmland Acquisitions so there was I mean a lot of the farmers that are wealthy are their generational wealth pretty much you know they they very rarely do see one generation go from like zero to 50 million or something like that it's you can't start a a farm like the cash flows not there unless your family's been in it for a while or you're backed by a p fund and that just doesn't it's very rare that that happens but um I yeah I mean obviously like there there's F fundamental skills you learn right like accounting um binance like you need those to some extent but I mean most of my skill set I think applicable particularly to the business I bought is like I grew up on a farm I I do to some extent have a bluish collar background my passions are bluish collar right like I would never be buying an accounting business I think I'd rather be a W2 employee than do that like I don't know it's the most popular business to buy out there Colin yeah I guess maybe I don't know but like I mean I think it's recurring Revenue blah blah blah like I don't know HVAC pretty much you got you got to like it and and this is business buyer fit and so it's good that you knew where what kind of business that you wanted which perfect segue let's get into your search you you had said to me in the preall that you actually were drawn and you kind of just said it you were drawn to construction e sorts of businesses um because of your kind of as you said bluish collar background I guess so tell us what your search looked like yeah my search was like nothing like some of these guys there was no building a landing page like buil scraping the internet for Brokers like man I literally just got on Biz Buy sell I contacted maybe like five places I I sent one Loi first Loi I got I closed on the business you know like it just it worked out perfectly like that um but yeah so I got in touch with this company off bisb hell and uh it just it literally one thing led to the other like I mean I got in like it was commercial construction I knew I wanted commercial construction I didn't want to be residential I I don't know why I knew that but I did pretty much and uh like I don't know so so this checked that box like for some reason I just knew I wanted commercial construction I knew I want a construction like that was fairly obvious like it it tied to my background it was like it was real like it was Blue Collar it was it was tangible I did not want to do anything that was like not like that basically um what about you see like a pretty strategic guy col what about the the obvious reason not to do construction which is that it is the epitome of project revenue and cyclical Revenue cyclical project Revenue uh which can be uh unhappy Vin diagram there so so address that yeah I mean it's not recurring but I mean the sun rising every day is pretty recurring and UV damage on the side of buildings is is recurring in constant you know like siding decay is recurring in constant you know like I don't know even recurring Revenue I I think it's BS for the most part like I mean it's nice but like your Revenue can take a hit even if it's recurring like yeah you've got a contract that helps but if somebody doesn't like your service and doesn't want to pay you they can get out of that you know and sure what and what about any any concern about the cyclicality of it meaning when the economy is going well construction is hot and then construction is the first thing to get hurt when an economy get start starts going south no I don't have analysis Paralysis on really anything like I mean there's a lot of people that are successful in every single business you know like it it comes down to you pretty much like I mean do am I going to go buy a horse and buggy manufacturer no probably not but you know for the most part like you just have to like I'm not a spendaholic right you know like I know there's going to be a downturn at some point I'm not trying to predict a recession or anything that's not my business you know like what do I I just live within my means like I i' go out and i' try and sell as many jobs as possible um and but I did think about it I guess um not to contradict myself the painting is like ass at light for the most part like I'm not I'm not holding a huge I'm holding a huge SBA note um you know what I mean but you're not like it's not capex heavy that capex never really scared me I grew up on a farm like a chopper is 800,000 Bucks new you know what I mean so again this looked like a dream compared to that like but Project based Revenue I mean everything's a project to some extent right like I well Colin and so tell us more about the business tell us some numbers and exactly what it did please yeah so they uh Top Line was 1.8 to2 million before I bought it SD was 300 to 400 those are round numbers um yeah we're a commercial painting company we specialize in HOAs for the most part that's probably 90% of our Revenue but we can do pretty much anything we could do Residential um well we don't do sand blasting or anything like that so but for the most part we can we can paint 90% of things that are being painted um but yeah so our specialty HOAs which that's actually in terms of painting that's the most noncyclical you can get cuz those HOA does and the property managers they don't want to deviate from the plan CU When You deviate from the plan like you're communicating to so many people and you long story short is like you want to the keep the boat moving forward in HOA planning so yeah um but I mean there'll be an impact what was your what was the purchase price and in um well actually first how old was the business and how many employees the business was was like 30 years old roughly um great probably like 8 10 employees and then they subcontracted full-time to two or three other companies um so if everything was W2 the amount of work they're doing would probably be like 20 employees um but I mean the subs were kind of like a shock absorber for demand essentially um I'm trying to get rid of them I don't I don't like subcontracting like that you have no quality over or control over quality um and I would just prefer to build a team but uh yeah so well the seasonality which we'll get to and and then what was the purchase price yeah the purchase price was like 1.05 million uh I did 5% down 5% um seller finance or 10% seller financed so I did the full standby so I think I put in like 64,000 was my down payment it was like nothing nothing crazy at all um I'm a liquidity that left you really liquid you personally not really like i' uh like I was Liquid I'm um I maybe had like 150,000 or so of remaining liquidity like which is like it is liquid but like it's and this this business could consume that easily in working capital you know if you float it depends how fast you want to grow right like I mean this year like we we're moving like speeding bullet through our work pretty much you know but to do that I I hired like eight people you know so my payroll went from eight grand a week to like 20 plus Grand a week you know yeah um so and if I'm floating for $50,000 jobs at a time you know I'm on net 30 which is fairly quick but you know if the job takes three weeks and then you're still out 30 days you're like 45 to 60 days depending so I mean 150 Grand like it gets cons it gets burned quick even if you're profitable right but um okay yeah so I don't know so I mean they were 300 to 400k roughly was their SD um and they were pretty Sol they were actually fairly tight um there was a actually a lot of upside into that but like for example an administrative assistant that was getting 50k um with no computer right like so she was out the same week I took over pretty much uh so that boost margins but we talked about the valuation a little bit like I I undervalued this seller's time like that was a huge mistake on my part probably but we also undervalued meaning underestimated how many hours a week they were there yeah how well how how productive they were every hour and more productive than you could be as a new owner no I'm sign I I think I'm more productive than they are like uh through my use of technology which I mean I'm not a genius with technology I just I'm openminded to it yeah so um but they uh but they were working a lot I mean a lot of it was duplicative behavior that could have been like reduced by technology but they still were working a lot and they still do work a lot they actually still work for me but obviously like that should have been deducted from the valuation so but on the flip side right like I had no clue the quality of clients I have like I already have Revenue contracted for next year like through like the condos are it's a good place to be if you've got a good reputation and they have a good reputation like I've constantly heard from the clients like that they're very ethical like the people I bought from the business that their quality is super consistent so it's tough to put a price on that you know I may have overpaid purely from a financial standpoint but it I'm not I didn't buy a bees nus basically you know of issues well and and you paid if if you said your SD was three to four 00 call it 350 you paid about 3x which is already you it's not like you paid a ridiculous multiple you paid actually pretty conservative multiple May and and maybe you should have paid even a little bit less but it's not like the ticket price seems unreasonable it it wasn't unreasonable but uh and and tell us more about the the value of the business you were just starting to the quality of the reputation these contracts and so maybe have you said everything there is to say there or is there more I mean they're not technically contracts like they're not multi-year right but like I have a shoe in you know what I mean and and I'm not getting bid on every job right like that in construction you can't make money in construction if if every you're getting bid down to Zero by General Contractors like I'm not saying there's not money in general contractor work at all but like they the the obvious game is to reduce your margin right not theirs like you're splitting you're splitting the margin with them at at best case you know whereas where when you go direct to the consumer whether that's through residential or to property managers you're you're getting all that margin you know and we target 40 to 50% gross margins you know so it's pretty healthy as long as you're diluting your overhead effectively um whereas if you're going through GC I don't I don't think I could generate much more than a 20% gross margin and that after overheads considered that doesn't leave much meat on the bone really for me so I mean looking at that three to4 million paint compan is probably the same as an eight8 to10 million paint company as long as if if you're working directly for the customer versus working through General Contractors so the benefit of general contractors is there's a lot of work there so if you're trying to grow your company which is actually kind of what I'm doing like you need a certain amount of throughput to justify your overhead and keep your people busy so sometimes as filler work that could potentially be a good option to have I haven't I haven't done it yet but it's something I'd consider even though the margins are not attractive what about your crew the the painters themselves you had said there was value there yeah uh say more yeah I mean painters are are known throughout the blueco collar world as like unique characters I guess like uh I I will say Colin just I don't doubt that but I feel like John Wilson who was telling telling me telling us about roofing companies said that about roofers roofers are PA who hasn't aired yet was saying the same about his welders so I feel like you know maybe every every trade has its has its reputation go ahead I'd probably I'd probably give the roofers credit like they're probably they're that's a there's some charact there's a lot of interesting uh people in that that trade um but but yeah I mean it's blue collar right we got on my family's Farm too you know you get some characters right but uh so but like skill so what are painters known for what would say more about this quote quote quote unquote characters just heavy drinking uh Pradas like I don't know their skills like anybody can paint but like can anyone like people that can paint well and kind of do everything is they're in short supply you know like you can't just like that's what like that's probably the biggest challenge to growth right like I mean you might be able to go sell 10 10 million at work but you need some like skilled applicators of like the coding like you know what I mean like it it can go south in a hurry if you have people that don't know what they're doing like out there you know through complaints they that could overwhelm you through like product failure like you need skilled painters and like trying to find them you're working around some serious personalities but I got a few that like add personalities that are really like solid guys um some of them are Pradas but again they're good and then somewhere let go and replaced so I don't know I I never found that too much of a challenge to be honest like I I expected that I didn't expect to come in and then be happy that a 27y old guy with no painting experience was going to be their boss but I worked with them for a little bit before I took over so I think that helped mitigate it and again I'm not afraid to go out and work for a bit just cuz I read a thread on Twitter that you're supposed to work on the business not in the business you know say say more about that what do you mean you went out and worked some or you're not scared to go out and work some what did you do exactly like a month before a month before Clos I I just worked in the business like I worked as a painter like they didn't they didn't tell them anything I just went there every day moved ladders painted you know bought a brush just did what we did pretty much really yeah even after I still worked a little bit just to keep things smooth with the guys make sure they were happy um make sure they were prod and your idea for doing this a month before it Clos was what to meet them or to learn to yeah what exactly I could guess three or four reasons you do it just learn the business you know like I think you know see see what's efficient what's not efficient see how they would like try and pull the wool over my eyes because they'll do that if they can you know what I mean um should this take two hours or should this take 10 hours you know you got to have idea of that and like if you're buying a big enough business like yeah the GM could probably do that but this wasn't a big enough business so I just thought that was really valuable and I'd already actually quit my job um because I had anticipated closing and closing was delayed so I was like yeah I'm going to come out and work otherwise like we're going to terminate the agreement you know so I I negot and how did the guys feel when when they realized that their new boss had been in their midst one guy had an issue but other than that everyone was like okay sounds good they all tried asking for raises few of them got it you know they tried to shake me down but uh that's that's what happen what that one guy say and I'm pushing on this because anybody else who's listening who might want to try something like this I'm sure it would feel a bit like a Minefield to do this so how did you deal with it when one of the mines went off yeah he I mean he was yelling a little bit but like it wasn't like too bad like maybe swearing saying I don't know enough but I just kind of said listen like I'm I'll learn he was he was mad just CU you don't have painting experience that you're buying the business I I I meant specifically the fact that you've been working with them and they didn't know and then he was mad he was mad about that too but like I mean he's he's he's just emotional he still works here he's he's one of my best guys he's just like I said they're characters like they're emotional like but they heal you know and right like nothing changed for him once I think he knew that like he was good you know um we went to direct deposit which was like I don't know there's a bunch of small things that like actually made his life better you know what I mean like I'm better like again he he knew knew how to he's he's not young but he's like 40 so he knows how to use like technology like he was over he was sick of all the paper stuff too so like there was a lot of benefits like this year I just got them health insurance like he never had that before so I think he started uh seeing the benefits pretty quickly plus the old owner stayed on so he really his life just got better if anything no well I wanna I want to uh double click on that here in a minute um all the all the kind of quote little things that you've done small things that you've done and how they've added up but um just one more thing on the multiple and what you paid not because you know you you so over paid but you said in the preall that yeah you maybe overpaid a little bit but you're totally fine with it yeah um like not a big deal don't sweat getting a perfect purchase price say more about that I mean I was actually listening to your guy like you interviewed joean something he owned a Project based turf company and he was like the in Texas with the turf business y he he was like I mean the cash flows are a huge part part of this business right so if you delay your search like a year like I mean you're effectively paying a higher multiple you know what I mean so y it's a great point I mean again like I was I overpaid right like in in absolute sense of like overvaluing or undervaluing their contribution to the business of like their time but again like I started 2024 with some signed contracts you know which is huge in the painting business right like and then I was able to let go of the administrative assistant that didn't have a computer like obviously that wasn't going to work in a Technology based system that we were going to um and it's nothing even crazy like you know like it's literally just I I don't I I'm paperless essentially um but yeah know that was 50k um I don't know just being adding painters like I started subbing out a lot less like that added like 15% to a lot of these like gross margin to a lot of these contracts because like that's basically what you're giving when you sub out at least you know so there was a lot of upside you know and like the old owners were turning people away so like there was a backlog of like requests you know that like of work so I mean for result of that like we're at 2.5 million of contracted work for this year and it's May you know I think we'll probably pretty easily close over 3 million and their previous best year was like two you know so we'll see a probably a 50% growth um and it's all high quality Revenue that that we're adding like none of this is general contractor work you know um so it's D meaning it's high quality because it's direct sales you have a direct relationship high margin yeah like you were talking about earlier we're not getting B like I've won a few bids but like I won the bids at my number like I didn't come down on like I I'm actually now that I'm kind of where I wanted to be Revenue wise thinking about backing off the margin you know what I mean so cuz like the way I look at it is like I've I've already paid my overhead for the like you know what I mean so I mean not that and the way construction overhead works is like or really not construction overhead overhead works a lot time it's like a step cost it's not like a lineal Peg to like your Revenue right so I think I can do three and a half million with my current overhead you know what I mean and so effectively all of the gross margin from here flows to the bottom line so it's like do I get greedy and try and maintain my margins or do I like do whatever I can to get Revenue through through the door to hit that threshold because like it would actually optimize the bottom line you know yeah yeah so well I guess I guess the the the question there is is there is there some unforeseen negative consequence to loosening your own standards for your gross margin is it is that a some sort of slippery slope thing where you can't come back from it or uh can you just do it for a few months particular jobs yeah like these customers don't talk like right you know and uh I mean I would hold the margins like I would hold my pricing is very consistent like across the existing clients like CU certain clients send us multiple properties right so the pricing is consistent across those but like if I get like I don't know a bid for next yearor block building in uh West Bloomfield that I know knows none of my clients like there's no downside impact of me running that at a 30% gross margin and getting it versus a 40% gross margin and not getting it the only downside is not getting it you know um yep I mean you we can under bid sure but like I mean I like I said I still have the old owner on here and he's spot on bidding usually like he's just done it so long you know um there's been things where maybe one job we lost money on but it was like it wasn't even Los it was like maybe 10 bucks that we lost like I'm I'm exaggerating but it it was insignificant right and I mean the other benefit of run like even if you broke even you don't want to do that right but like it's a people business right the more throughput you have like the more people you can hire and then like if if there is a downturn you can let go of the weak ones and keep the good ones right like you just want to I kind of want to constantly be turning over people and filtering out the bad and keeping the good because like that's that's where you where you make your money is being the best right yeah yeah fascinating and and just curious what Revenue level do you think you can support at current overhead without having to then make your next step up an overhead cost I think I could do 3.5 comfortably um basically that's me working 40 to 50 hours a week or so I like to work right so it's not a problem right for like I could probably do it with less I actually just hired a project manager and an off a general manager this year like so the general manager like overseas all these are all us-based it's not it it's not Filipino or outsourc but like so so that and a project manager basically it was 200k roughly of overhead so like given the gross margins I need to sell 500 to 600 to work which is basically what I did so um I mean you add in the overhead of like uh the added debt so for me to make the same SD as like the previous sellers I really need to do a little over three probably um and that would make it worth my time I think I think that' be a desirable outcome but uh yeah and I think it's very a achievable like I said I'm at 2.5 2.6 roughly depending um how we how you look at it kind of but um so I've only got 400k to sell roughly 500k to sell before I hit that and then after that it's upside but I think I could do up to 3.5 million roughly without the wheels coming off 3.5 to four like I could do it probably but it would be more stressful which is not a problem but yeah great well col before we get too far away from the deal was there anything that you want anything more to say about the was there anything more to say about your transition period or the or the deal itself um and and and also answer this how old were you I was 26 when I closed um but the transition I don't know to me like a lot of this stuff is so standard right like I I don't think you have to be smart to do a lot of this like so much of the stuff is just common sense and maybe it's not but like for me like my like I just worked a lot in the field like I didn't have like the field expertise like I I I wanted to know it so I did it um you know and now I haven't been in the field like maybe 10% of what I was last year just because like I feel like I understand it like now I kind of am trying to work more on the business like I've hired the people like I know what they should be doing I know what their responsibility is like I just feel like I have a good Baseline of fundamentals um for the business you know so that's how I I got that during the the transition like I still had the sellers like you know to smooth things over with existing clients like if there was an issue right like I was working a lot because I wanted to work I wanted to learn the business and now I feel like I have a good foundation for growth and now so that's kind of like I don't know it wasn't planned like there was no design of when phase two growth would necessarily start but like I feel like I'm in that now you know and and so it to be clear that two big advantages there were you're you're one month working in the business before you even closed on it actually being a technician a painter out in the field and then second your seller sticking around and being and being this person who can interface with the new with the existing customers clients and also with the existing employees so so a bit of a kind of a a soft transition there yeah I mean they couldn't unplug they're addicted to it you know they're a sucker for pain I guess but you know I think that was huge like could I have done it without them maybe it would have been a lot more challenging like I think everybody who's bought a business is keenly aware of how many ways after the fact that they could have gotten screwed basically you know what I mean um luckily for the most part none of that happened it was pretty much better than what I expected on all all fronts essentially but you know that's not going to happen every time you know but I think I I did what I could to make sure it happened right so and and and don't want to beat this to death but what do you think that you did anything I didn't name was there anything else that you you feel like you how you drisk I just I mean I had Capital right like that was that's how like I put zero like I put as minimal down so I had liquidity like I mean you're going to be in a liquidity Crunch at some point unless you're like perfect in a perfect business right you know so I had that you know and again like being in a liquidity grunch like doesn't mean you're doing anything wrong right you might be doing everything right actually you're pushing growth so hard right like but I did that you know that's why I put 5% down you know I wanted to preserve that and I also wanted to preserve my like lifestyle like I have a Bo like boats and dirt bikes and condo like I didn't think I didn't want like any of that to suffer too you know so I mean I wasn't really using much of that during the transition ever but uh but yeah and then I just worked my ass off as much as I could you know like I got to know the business I got to know the guys like I don't think any of them like if like I think they knew pretty quickly like if if they wanted to like mess with me like I can do your job right and then I hired people so like the previous owners were not good at hiring like they were the classic like oh there's nobody good out there I hired people pretty much as soon as I could it was like basically I just wanted to send the message to the guys like you're here because like I want you here you're here because you're good at your job you're good like we're building a team here for the most part like if you don't want to be a part of that if you don't want to contribute it to the positive work environment you're gone like there's no questions like you know even like I do that con like I said I I'm constantly trying to hire like I'm constantly trying to screen the bad keep the good you know because I don't know what Colin this thing about the owners previous owners were the quote classic they say there's nobody good out there meanwhile you're bringing people through the door all the time what what is that difference all about what do you see that they don't or is it just your attitude what you just said that you're basically trying to you're just kind of want to be a magnet magnet for people so that you can always be finding the best and weeding out the worst or or what what say more well they already paid the most right to keep their guys so like it was already a proof of concept that like they could support good margins while also paying people so like I saw that and like that was a huge like Advantage but you the biggest change was like I literally just posted the job on indeed instead of like putting a t like a magnet on the Vans with small lettering with our number saying Help Wanted like that is like the biggest change I made you know and it's really not Rock CL now I'm really good at hiring because like I have my like general manager who's like who comes from like a $60 million Company You Know That Grew From 3 million to 60 million 60 million in foundation repair and she is like a rock star like at like just organizing interviews getting guys in you know so she yeah like that that's huge one other thing col about the transition and then I want to hear about how these changes that you've made that it bettered everybody's lives you've you've described your own background as bluish collar farming um but then you go to university fancy University work in private Equity um and then and then now back into a blueco collar business did you did it feel the there was no adjustment for you cuz you kind of already knew uh come from that world or were priv Equity guy from Cornell so uh how did how did you fit with the guys I I fit pretty good like I'm not like it's doing everything I can not to be swearing right now on this podcast like that's just how I talk right like that's how I'm raised right you know what I mean like I don't know like like I like all the fancy stuff like I've ateen my fair share of like nice dinners you know what I mean like I'm over that like really all I care about now is my lifestyle like I like being outside like I like I'm not like I think the guys know like I'm not here trying to like triple evida so I can flip this to somebody you know what I mean like I'm literally just here because like I like like I don't need to be here right like you know what I mean like I could be making fine money and I have Capital right to a minimal amount in the grand scheme of things but like good for 27 year olds right so I think that I think they kind of know that I'm not here just to like collect a paycheck like and that I think that they see I'm investing in the business and like that they can I mean obviously I don't think they've got like the accounting jargon to like label it as like I'm not just looking to strip cash flow out of this business like I'm trying to grow it like I made that pretty clear so do I think that and couple that with the fact I like it you know couple that with the fact that I don't know like me painting I enjoy painting I don't get to paint at all like because like I'm mostly doing like the BS work like going and doing work orders or talking with clients I'm not really doing that anymore but I was last year when I started you know just chasing them around so the transition wasn't hard for me with the guys maybe they don't like me maybe I'm completely oblivious but I don't really care either uh okay you gave everybody health insurance huge change you said small things but that would be a material difference in people's lives put in Tech what else uh I mean really like I mean it wasn't the wasn't broken for the most part you know what I mean it was just like literally technology being able to like that like digital time clock direct to posit like I mean that was what's kind of nice from the operational standpoint hired a general manager like who's a rockstar like those are stuff um and then I hired a project manager who literally started like two days ago and I I I think I don't know I don't know if I'm good at hiring but like it seems like it's worked out you know like my my goal with the project manager I literally said yeah like I mean go out in the field work every day for 3 weeks and then we'll reassess in three weeks and basically I was like okay if he complains a lot like he's no good and if he doesn't he's good so he didn't complain at all so we kept him on I think that's like the H biggest change is like that's gonna help fuel growth here you know and having a project manager where before there was none yeah I mean it was me and the old owner that was Project managing and then I was also the accountant and the book or well I have I Outsource accounting but like the little things that come from that and like doing everything that and literally just telling my clients like I want more work not don't send us more work pretty much we're already but like they would tell people by right now they would they I was here last year they were telling people we don't have we're filled up for the season you know and whereas I'm still telling people since I've got the guys like I have like eight more guys literally in house W2 like I can jump to things um that's the beautiful thing about the commercial contracts too is like you have some scheduling flexibility so like a resident they like they send you the residential like they send you the deposit like you better paint their house like within a week to three weeks if you promise that whereas the commercial stuff like you give them a month a two Monon range and they're generally good to go so so basically I tell people if if you've got something like we'll jump to it you know and I'll strip off some guys whoever fit that job and and we'll go knock it out so it's small things but it makes a huge difference like the hiring I really I think being a being a c if you can't hire you're going to get screwed because like your guys know when you can't hire right and when when you they know you can't hire they're going to be getting a raise you know right like so they don't leave so I mean I've dropped down you know it's interesting I haven't heard this Colin that this this double benefit of being good at hiring the obvious one is business you know that that's that's the constraint of so many trades businesses is is finding the people not actually the demand side it's the your own supply side but this thing that it has this has this benefit this internal signal to people that um you know they need to they they can't act like a primadonna because there's you're out there in the market always looking at the next applicant everything I do is to like basically not necessarily have leverage but like like I want two of like my goal is to get two of everything I two project I don't want any like basically one link that in the chain it breaks like I I get I get screwed like even with clients right like if you don't if I don't win this bid at the margin I want like okay like you know that's why I try like my goal now is to focus 100% on sales if I can I feel like if I can Crush sales and marketing and uh and hiring like that's really like I'm good to go right like um because I don't want to be dependent on any clients you know and I don't want to be dependent on any employees and like I don't know one of the huge things operationally that I did is like I promoted a guy to Foreman Al a lot of my guys are competitive which is really good because like I am and like if you're not competitive like it's just weird in my opinion but um but like I'll put I'll put Crews on the same job since we run big jobs right we're big residential communities so there's like homogeneous buildings so in terms of accountability I put two Crews of four guy crew of four guys one building a crew of four guys on another and then sometimes I'll drop in a sub on another building so they're all watching each other you know what I mean and it's a it becomes a competition right and not just from speed but quality too um you know what I mean because so that's what matters to the client yeah so I love doing that um and it's it's fun so Colin one last thing to ask about something that I I belabor here but it's always interesting buying Big versus small your business was you had set on the preall a little smaller maybe than ideal or than you wanted 3 to 400,000 in SD um and you know you you worked in it so I I feel like there's something in in all of that how do you feel now reflecting back about the size of business that you bought I think it was perfect for me for like I didn't have experience managing people you know what I mean like I didn't have like a a bunch of experience working on the business not in the business and um I think for me to be successful at that in the long term um I need to I needed to learn the fundamentals basically like how to do a layup like in the business pretty much you know so and wait so Colin are you referring to your your month of working in the field or are you just referring to buying a small enough business where you really had to be in there working in it what what do you I think both um I think I worked in the field for a month and even after I was in the field a lot like maybe 20 40% of the time and I just think I think I needed that to to just know where I needed to go and and understand my my business and I don't think I was the guy that could just come in and work on the business and see it grow successfully from there like you've had a lot of speakers on that that were able to do that and and I understand that like it makes sense and like I said I'm not trying to contradict them like that that is if you if your goals to generate as much wealth as possible like that's the way to do it right but you need to like know yourself too and like if you have the skills to like immediately jump in and do that and I I don't think I did at the time like I think I'm much more well positioned for that now that I've done it and and so the point being that kind of buying a a somewhat smaller business was a forcing function that kind of sucked you into the business but you're better for it boot camp it was boot camp it was it was I feel a lot I feel so much more confident in my like abilities now that I've done it you know what I mean that part of it and like gu i' I'm hiring a general I have a general manager I have a project manager I've been to the job like twice this week you know like not much but to it to that point to like hold hold the people accountable to to let them succeed I I just had to see how the process worked up up close and personal for for a little bit great Colin have you said directly you grew revenue from 1.8 or 2ish million where it started to two and a half you said that you're doing it but yeah um talk to talk to us about how and then how you how you think three is Within Reach by the end of the year so I so I said I want to I want to be good at sales and marketing like I don't consider myself good at sales and marketing right now I think a lot of that growth literally came from me telling the clients like like it's a it's a honeyhole like the property managers they that like a lot of these people have 80 communities and we're doing three you know like they've got work there's more work out there I've lost a lot more bids like I've spent a lot of money sending old out to estimate jobs that they never would have estimated they're like you know we're probably not going to win this and I'm like yeah I know like I don't care like we gotta you got a bid like our close rate's probably 80% on existing clients on on new bids were probably 20% roughly or so which is not great so so so if your existing clients represent this so much opportunity that's right there in front of you and you already have a foot in the door why are you doing bidding for new work just to continue to grow there's new prop point of contact with the market yeah I mean you never know like one I've got one guy that sends us like 500,000 to work it's kind of uncomfortable actually but you just never know when you're going to find that the next one of those guys like you need so I mean just fill the funnel keep filling the funnel I view it as a marketing expense some of this estimating stuff you know not technically but uh I mean it'll come at some point like I just sent out a bunch of direct mail um I mean the way I look at is like okay I want to be a $10 million company let's say so I need to add on like seven and a half million of Revenue to get there probably in the first year I need to spend 700k I mean financially I can't really do that for the most part but like that's what I think it would I think it would take 10% roughly of Revenue to to I think you can add as much revenue as you want as long as you're willing to spend roughly 10% of the Top Line you know what I mean to get there so that's where are you by way where Michigan what Market Detroit Metro Detroit Metro okay and you had also said to me in the preall uh and I think you've already touched on it that there could be a big strategic push into residential uh yeah why uh I mean it diversifies my revenues one like do I want I would do Property Manager work all day long for if there if I could push a button go to 10 million in property manager and Revenue like I would do that um it's just e it's it's bigger contracts less communication with individual homeowners but I want to diverse I don't want to be entirely like dependent on one segment of work you know what I mean like I I I'll do it like like I said we the the skills translate right from commercial work to residential to even a lot of industrial stuff like I mean it's good mother repetition is the mother of all skill right like especially with painters like if they do one job they do it over and over again they're so efficient that's actually one of the reason why our margins are pretty good on these commercial properties because we've been doing these communities for five seven 10 years some of them like one Community we've been doing 20 years literally so um for somebody to come bid against us like they have to be able to do that as efficiently you know like and there's no question like there's certain operational efficiencies that naturally come from doing the same for 20 years you know what I mean so there's that but but residential it's a different segment and like I was saying like you need a certain amount of throughput to grow your business like um and add overhead which I mean generally it's not people's goal to add overhead like it's actually kind of my goal be assuming I'm growing right because like the bigger I get I feel like I'd rather have the problems of a big company than a small company you know what I mean so that's part of it and and the industrial facility stuff like I would love to grow there but that's all door to-door sales for the most part and like I don't worry about being able to do that like if we get one of those contracts we can do it easily there's no problem so whereas residential like it's a numbers game with marketing you send out 10,000 mailers you get 10 15 leads hopefully you convert you know what I mean so I I thought that was an interesting observation so the marketing funnel in residential is more predictable than the Marketing sales funnel on the commercial side or on the industrial side it's a standardized Playbook like may maybe I'm I'm wrong on that but like as far as I know that there's a lot of people that have been successful in residential sales I think industrial facility sales like I think that's an opportunity for sure but yeah I I just don't know if I can put my foot on the gas there easily and get where I need to go but there's a playbook in residential putting in dumping some money into Google and bada bing bada boom sort of thing right that easy um what what uh when what year would you like to see yourself a 10 million in Revenue next year but like well but Pro fora what does the pro fora say I I think given the capital requirements like I think two to three years I I'd love to be at 10 million three years is probably realistic and aggressive um if I can do 4 million this year which I think is possible that's my stretch goal um like that would that would be I'd have a better indication of when it's possible but like there's two $10 million paint companies in my market and like I've talked to one like I actually missed our preall right the first time because I was talking to the one guy and he basically laid it all out and like and the other guy literally is right down the street both of them go on podcast and and literally tell you exactly what they do like there's no secret like it's the same thing as like the old San Antonio Spurs like you knew like how like they beat you right like you just got to stop them from doing what they do to you you know what I mean so or or doing what they do but like or you just have to do it right every there's a Playbook to be come I don't know there's always a Playbook so and Colin the other thing speaking of our preall that you had pointed to was that maybe your Revenue growth has been so strong um because you came in dur in a good season so you were like a little bit conservative that you know that when this when we go into Down Season your Revenue you know that might that might correct all this all this growth that ostensibly has been the case this year are you not feeling that way anymore that in fact you that this that this growth will sustain for the entire year regardless of season I think it's a like a personal accountability thing like you know know like if I get my ass out there and sell all day like I'll see results I'm not worried about that you know you can make the change like you like you have personal agency right you know I I have no worries about like if I go work hard if I make good decisions like I'll be able to grow the revenue you know it's been done before it's it's always a question of why why shouldn't this be me right okay it's a good business like you know like it's it's not a horse and buggy manufacturer like stuff needs to be painted you know yeah yeah Colin let's Circle back to what I had said at the very top about you stepping back and and looking at this path and marveling at it for being the amazing opportunity that it is and and then this this also plays into your thoughts on personal guarantees and and people's aversion to them go ahead and yeah I'm pulling up a soap box and putting it at your feet to come stand on I mean I I don't think it's like marvelous necessarily like I think it's like to pull off my old Finance career like it's appropriate compens compensation for like the risk adjusted path you take right like it is stressful like you're putting a ton of capital in you know you're taking on huge leverage like the returns are like appropriate if you if you do what you should do right and things work out but um the personal guarantee thing like we've we've we talked about that like it's just crazy to me that people don't think that you should put a personal guarantee it makes no sense like nobody considers like the other side of that trade like at 5% leverage like the person's taking 95% like Leverage for you and you're not even willing to like Pledge Your $12,000 or whatever you have like as collateral for them to like repos it makes no sense like this wouldn't be possible without that like so I I won't even take calls from people that say they won't take a personal guarantee like Maas like recommends like a bunch of people speak with me like when they're like looking at businesses and it's just it's not something like if you if you if you're trying to get out of that I just would recommend not doing this path that's not to say like if the bank says here you can do this without taking a personal guarantee like you shouldn't like okay sounds good but like for my business it's like 100% Goodwill if I go bankrupt there's like nothing to recover why would I ever get alone like how like the whole like system would fall down on itself if that was possible right you know so again I don't think it's too controversial to some people it's controversial like I've had multiple people call me in the beginning and be like so how did you get like your head around that and I'm like there's no way to make this money without taking some huge risk like that's just the way life works you know it like work at a tech company if if you want to make a lot of money and take no risk you know it's still a lot of work to get there like people act like those people just make that money for no reason like it makes no sense to me you also coming from agriculture there's personal guarantees for getting loans in that space is just like so commonplace nobody bats an eye correct yeah my dad literally just bought a big farm like got alone for it they they at the last minute they said yeah we need you to pledge more Equity he's like okay like it's just standard like it's to me everybody just knows that like nobody like I've never heard of anybody before entering the search World saying I want a huge loan I want to risk nothing the bank you should risk it all like that makes no sense to me um I mean I'm not like a person like some people like don't like banks at all like I mean the banks are the like the greatest things ever like I mean the fact that they're wanting to take a risk on you like yeah they get paid right like I get it like they they're in business for a reason but like it wouldn't be possible without them you know like it's it that's that's the real Marvel you know that's ba is the Marvel you know like that's a right I'm a big fan of America for that one great we've mentioned his name a couple times now Maas uh he is a sponsor so uh full disclosure everyone um but he's a lone broker as opposed to a lender and it's not something that I've talked about a lot on the podcast or guests haven't um talk to us about the experience and the benefits of using a loan broker rather than uh going direct to banks on your own yeah he's a beast like uh I mean there's just no way around it he's just a workaholic right like um and I haven't said anything about his services but like yeah so it's it's a no-brainer why you would work with him right like one you've got this guy that's hyper motivated financially too to get your deal across the line it costs you nothing you know and you don't know what you don't know right like nobody unless you're Maas is an expert on like the SBA loan process and most people that are getting loans have not been doing working as a closer for a SBA bank for a couple years you know what I mean so there's just there's just no down there's no downside if you want to close fast if you want to shop your rate if I mean why would you not use him makes no sense well and to be clear you know there are big there are a couple really big names banks in the space they do a great job of getting their name out there and they have great people on staff names that will be familiar to the to the audience here why not just pick up the phone and call such a person directly yeah uh I mean you could go that route but like they're not going to like your application isn't going to be like top of their mind without Maas hounding them I mean maybe you could but like I don't know explain a little bit more there what what does a loan broker do other than bring you in bids or a good loan broker other than bring you in bids from various he keeps you honest like I mean on getting stuff in the into them too like it's a two-way street right like they need documents like I mean you should assume that you'll probably be the most motivated one to get your deal across the line but like he keeps you organized too which like that's a huge benefit he helps coach you on ways to like answer certain questions from the bank you know what I mean he like he knows like the rules like um when you might not have to pledge the equity in your home like for example if you're in Texas like there's a lot of minute rules that you probably don't think about that he knows you know so why pledge 30% Equity if you don't have to like I mean it's just everything and he keeps them on their toes like these Bankers are people too right like if they drag their feet on something he'll call them out and like they'll respond like accordingly so the whole it's just lubricant for the deal pretty much lubricant for the deal all right you hear that Mias he's all right um and then just one more time on working capital where you said that you can understand it intellectually and in a spreadsheet but until you're in a business and responsible for it and and see the way cash Moves In and Out and around you don't really feel it have you is there anything more to say there it's such a it's just such a an important theme we've done a webinar on it but I I I feel like it deserves extra special attention precisely because of the point you made that while you can understand it intellectually you don't really understand it until you get in there so the more exposure people the audience has to this I think the better so anything more to say on it I mean I'm I'm just in it right now right like I mean I've had to write like checks to the business this year like I mean it's money hardart just because like I wanted to grow faster than historically right like and I hired eight people like my my payroll like doubled pretty much you know what I mean the couple that was starting more jobs um still keeping the some of the subs going like I mean your bank account goes down faster than you think like I mean you think you've got enough and then like I mean again like you you're still making money right like it just you feel like you're it's a it's a mental thing too right like you could you're technically making money a cruel base but like you're losing money in reality like in terms of cash flow and yeah you have to get your mind around that and like it it's depressing to watch your bank account go down while you're working your ass off getting yelled at by clients over certain little things you know what I mean and you know you've got to be ahead of it right because I don't know like you can't just expect a transfer from your loc and like it Go perfectly you got to be ahead of that you know and you got to be like oh like I forgot like the insurance bill is due on the first of theth month or something like that you know boom your bank account's like four or five grand low or whatever like surprisingly oh like we broke we hit got overspray on this person's car we need to buy them a new car whatever like I mean it's an insurance problem but you get my point like things happen you need to be ready for it and when you're looking at a model like everything on a on a business that's profiting 300 KSD like you're not looking at the like cash flow J curve in at the start of the Season particularly with mine which is seasonal I also like another thing like I stopped taking deposits for jobs like which so that hurt my working capital too um one I it's an extra step for invoicing which is not like a big deal but I also just I I don't want like I like being able to tell the clients like we haven't got any money like I feel like for solving issues like just pay when you guys are happy with the job it's like a messaging thing too you know so wow but it's been a but you're really sticking your neck out to do that that's just absorbing that much more risk and this world yeah I mean it probably cost me 40 50k a month of of C or it probably delays cash flow of 40 50k a month you know and so at least at at least well I mean 25% of whatever 400k we're doing so 100K you know a month so that you got to have and and so to be clear that's a to use your earlier word that's a a lubricant for sales uh and also I guess and also kind of strategic positioning if you can be one of the highest quality shops in town and oh by the way offer this incredibly favorable these incredibly favorable terms no deposit just kind of one more thing to make you differentiated in in against your competitors yeah I mean most these condos like they're they're doing fine on money like they're not like they budget in advance for this stuff so they've got the money it's more so like I mean I just want to be the easiest person like painter to deal with like I don't want to be like I've dealt with contractors before and like oh I need a deposit I need a deposit for this like I know these guys are good for it for the most part it's a bit different on like a residential thing you know what I mean or a yeah like where like unknown a complete unknown new customer yeah all my clients are for the most part existing you know what I mean like I know they're good for it like the only hiccup I had last year one condo didn't but it was that client that sends me a ton of work he's like can you give them terms I gave them terms it was actually a big job it was like 80 grand like that wasn't fun but it was at the end of the year so I was at at the end of my cash collection cycle so I had cash flow to cash to like cover it for them but I just like I I just try and make it as easy as possible you know what I mean like I want them to like be able to know they can call me and it's not going to be like them doing my job for me like can you check this can you check this like and you know I just when the job's done it'll be and you're happy with it then you can pay you know what I mean anything else Colin that we didn't get to in your story or in your takes no I think you've got a good biography my life now and then all right if people want to reach out Colin is there a medium of choice email LinkedIn yeah probably just email you said you're an old old Twitter OG Twitter yeah yeah but I'm the Quasi lurker I have a profile pick but I don't post anything so so did you say what you like LinkedIn uh email seates Mastercraft codings it's on the website and so painting it's a good industry I haven't had as you pointed out John John was on a few weeks ago um did painting but I haven't for for such a kind of ubiquitous or needed service we all sit in four walls and need Paint on those walls surprising it doesn't come up more often um but any you you like it as an industry yeah it's a good thing focus on HVAC and plumbing and electrical nobody need I'm not trying to sell so there's no benefit for it to become popular you know what I mean there are reasons like it's non-recurring right um and it's Project based and lower skilled technicians and stuff but I mean cash flow it's good right like there's low capex quick terms and stuff like that but yeah stay out of it basically all right all right Colin Gates thanks very much for your time sir cool thanks I hope you enjoyed that interview make sure you subscribe to the acquiring minds Channel below we are now publishing twice a week so tons of new interviews and stories to come stories that will help you along your own path to acquiring a business