you mentioned the loan the SBA loan that you'd paid it off I think did you we did
you'd paid it off I think did you we did say can you say say more about that
say can you say say more about that that's that was quick yeah so um I
that's that was quick yeah so um I believe we paid it off in either late 22
believe we paid it off in either late 22 or
or 23 um you know it was we were knocking
23 um you know it was we were knocking down the loan um we had the SBA and we
down the loan um we had the SBA and we had the line of credit so I think at the
had the line of credit so I think at the time we had enough cash flow coming in
time we had enough cash flow coming in to just go ahead and pay it off uh it
to just go ahead and pay it off uh it might not have been the best decision
might not have been the best decision because we were using the line more but
because we were using the line more but at with the SBA you paid it off with the
at with the SBA you paid it off with the line of credit well we had cash but that
line of credit well we had cash but that meant that we're relying upon the line
meant that we're relying upon the line of credit because it made up all of our
of credit because it made up all of our cash right uh we were relying upon the
cash right uh we were relying upon the line of credit but you know whenever we
um I I don't remember what the term is with the bank but as you know while
with the bank but as you know while we're using this line if we have cash in
we're using this line if we have cash in the bank then they're just going to go
the bank then they're just going to go ahead and move the cash to pay off the
ahead and move the cash to pay off the line so it was going to reduce the
line so it was going to reduce the amount of interest that we were paying
amount of interest that we were paying on a loan or you know on the line of
on a loan or you know on the line of credit so it just seemed like it would
credit so it just seemed like it would make sense and a hand you know all three
make sense and a hand you know all three of us had properties that were tied up
of us had properties that were tied up with the SBA so if the business would
with the SBA so if the business would default or whatever they would go snatch
default or whatever they would go snatch up the properties so we wanted to get
up the properties so we wanted to get our rentals freed up so that was the
our rentals freed up so that was the reason why we made the decision to do it
reason why we made the decision to do it we could have stretched this out over 10
we could have stretched this out over 10 years and paid a low interest rat on it
years and paid a low interest rat on it but we just wanted at the time some of
but we just wanted at the time some of us personal U situations we just wanted
us personal U situations we just wanted our properties freed up all right Mike
our properties freed up all right Mike well so just just to um level set us for
well so just just to um level set us for where the business is at here where
where the business is at here where where the day after Thanksgiving so
where the day after Thanksgiving so coming in toward the end of
coming in toward the end of 2024 you'll have a light year this year
2024 you'll have a light year this year in the 4ish million range um that's down
in the 4ish million range um that's down from 9 and a half million in
from 9 and a half million in 203 but it looks like you're going to
203 but it looks like you're going to get back to in that range in 25
get back to in that range in 25 so you have a nine let's call it a $9
so you have a nine let's call it a $9 million business um that could swing um
million business um that could swing um but but let's we could a let's average
but but let's we could a let's average what you're projecting for 25 20 and
what you're projecting for 25 20 and then 24 and 23 so what is that 9 plus 9
then 24 and 23 so what is that 9 plus 9 and a half is 18 and a half for 22 and a
and a half is 18 and a half for 22 and a half so call it 7 million is the average
half so call it 7 million is the average revenue um grown from 2 and a half
revenue um grown from 2 and a half million when you bought it in 2020 so
million when you bought it in 2020 so you've almost Tri tripled the business
you've almost Tri tripled the business and again I'm I'm being ungenerous
and again I'm I'm being ungenerous because I'm using this low year as part
because I'm using this low year as part of that average yeah um almost triple
of that average yeah um almost triple the business but you also have this team
the business but you also have this team you got Jesse an operator uh who's now
you got Jesse an operator uh who's now got a lot of experience in this business
got a lot of experience in this business you have the woman who to take has taken
you have the woman who to take has taken over duties for you you Jess you Mike
over duties for you you Jess you Mike are working five hours a week your loan
are working five hours a week your loan is paid off what are what are margins in
is paid off what are what are margins in this business if if his best year was
this business if if his best year was two and a half million and he was doing
two and a half million and he was doing 250 in SD SD two and a half th000 sorry
250 in SD SD two and a half th000 sorry 2 half million in Revenue 250,000 of
2 half million in Revenue 250,000 of SD 10 perish what our margins look like
SD 10 perish what our margins look like we operate I mean with with the overhead
we operate I mean with with the overhead that we have now um again whenever he
that we have now um again whenever he was bidding all these jobs so it sounds
was bidding all these jobs so it sounds great to go do 7.75 or 7.18 and 21 but
great to go do 7.75 or 7.18 and 21 but we weren't making anything because he
we weren't making anything because he was bidding these jobs with the overhead
was bidding these jobs with the overhead that he was operating at previously so
that he was operating at previously so at the end of these years that we're
at the end of these years that we're doing this we were making 2% 1%
doing this we were making 2% 1% net Jesse took over the bidding process
net Jesse took over the bidding process uh and the previous owner didn't feel
uh and the previous owner didn't feel that he could get any more for the work
that he could get any more for the work that he was performing but we were
that he was performing but we were actually able to double if not more and
actually able to double if not more and um double so in double the gross profit
um double so in double the gross profit margin so um so we were able to get a
margin so um so we were able to get a lot more money for the work that we were
lot more money for the work that we were doing because he was just the lower
doing because he was just the lower lowest bit bitter on half these projects
lowest bit bitter on half these projects so whenever we changed that started to
so whenever we changed that started to reflect at the end of 22 and then in
reflect at the end of 22 and then in 23 you know Jesse had been handling all
23 you know Jesse had been handling all the bids that it you know that he had
the bids that it you know that he had done in
done in 2022 uh so we operate currently on every
2022 uh so we operate currently on every single project our net net is around
single project our net net is around 9% so from the whole business so your
9% so from the whole business so your your net
your net income margin the end of everything 9%
income margin the end of everything 9% wow so n so like next year 9% on $9
wow so n so like next year 9% on $9 million is is $810,000
million is is $810,000 yes phenomenal okay and and in a
yes phenomenal okay and and in a business that you are by the way did you
business that you are by the way did you ever quit your W2 I did but I quit
ever quit your W2 I did but I quit whenever I took over the PO companies
whenever I took over the PO companies that we bought in May last year may of
that we bought in May last year may of 23 yeah so I was working double dipping
23 yeah so I was working double dipping and working you know a job been running
and working you know a job been running a business on the site and still
a business on the site and still flipping houses so no yeah it's chaotic
flipping houses so no yeah it's chaotic right we're going to hear about the pool
right we're going to hear about the pool for just a minute here as we wrap up
for just a minute here as we wrap up point is do you feel validated in going
point is do you feel validated in going down this path $800,000 coming off a
down this path $800,000 coming off a business that you work five hours in Now
business that you work five hours in Now You granted you have to split that 800
You granted you have to split that 800 across two partners across three
across two partners across three Partners so but even still that's going
Partners so but even still that's going to be 250 for you if if we're doing it
to be 250 for you if if we're doing it basically at a third uh third a third a
basically at a third uh third a third a third um no debt on the business paid
third um no debt on the business paid off the debt I mean seems seems and and
off the debt I mean seems seems and and let's not forget your entry point into
let's not forget your entry point into this business you said what what was it
this business you said what what was it 365
365 375 I think I put in
375 I think I put in 125 you put in personally 125 to be
125 you put in personally 125 to be generating now somewhere between 250 and
generating now somewhere between 250 and $300,000 a year
$300,000 a year yes so are you so how does so is that as
yes so are you so how does so is that as happy as it sounds you you're not
happy as it sounds you you're not smiling no I mean it's I am I mean it's
smiling no I mean it's I am I mean it's it's been great um you know you know the
it's been great um you know you know the uh I think you know the three-way split
uh I think you know the three-way split I think it's um it it worked out you
I think it's um it it worked out you know I've got you know there was my
know I've got you know there was my tuition paid and uh I'm happy with
tuition paid and uh I'm happy with tuition paid meaning you're you know
tuition paid meaning you're you know learning to be a small business off
learning to be a small business off exactly yeah I mean I've been through
exactly yeah I mean I've been through the headaches I've been through the
the headaches I've been through the fetal position moments I know how to
fetal position moments I know how to deal with the stress now um you know
deal with the stress now um you know it's uh it was it was hard you know
it's uh it was it was hard you know dealing with that you know my wife and
dealing with that you know my wife and she experienced a lot of these things it
she experienced a lot of these things it cause family problems and stuff but you
cause family problems and stuff but you know I can deal with it and you know I'm
know I can deal with it and you know I'm running three companies right now so
running three companies right now so obviously I can I can handle uh the
obviously I can I can handle uh the pressure um you know the way that things
pressure um you know the way that things are cut up at the moment I don't think
are cut up at the moment I don't think that I don't think that if if it was
that I don't think that if if it was today and I was going to look at this
today and I was going to look at this company I don't think that I would bring
company I don't think that I would bring in a Partners especially with the low
in a Partners especially with the low down payment needed for it but um
down payment needed for it but um especially since they're silent Partners
especially since they're silent Partners but at the time it was necessary and you
but at the time it was necessary and you know the way the operating agreement was
know the way the operating agreement was written it's you know it is what it is
written it's you know it is what it is um but yeah looking forward if I was
um but yeah looking forward if I was going to do this again you know the the
going to do this again you know the the split would would be different
split would would be different yeah right because because you put in
yeah right because because you put in whatever TW you said 12 and a half right
whatever TW you said 12 and a half right um and have a third of those profits
um and have a third of those profits whereas you could have put in three time
whereas you could have put in three time 375 and had you know fully 800,000
375 and had you know fully 800,000 coming out of the business um and
coming out of the business um and obviously in our world a lot of
obviously in our world a lot of self-funded Searchers use that Equity uh
self-funded Searchers use that Equity uh you excuse me take investor Equity uh
you excuse me take investor Equity uh and then don't don't have full ownership
and then don't don't have full ownership of the business but typically that's
of the business but typically that's when the they're really going to need
when the they're really going to need more money this was such a small
more money this was such a small business you probably could have found
business you probably could have found that 375 yourself yeah absolutely I mean
that 375 yourself yeah absolutely I mean I had I had the cast to do it myself
I had I had the cast to do it myself it's just you know whenever you've never
it's just you know whenever you've never done this before and having people that
done this before and having people that are you know already own businesses that
are you know already own businesses that are experienced and have a Lifeline you
are experienced and have a Lifeline you can call you know you spread the risk a
can call you know you spread the risk a little bit it just it just feels better
little bit it just it just feels better even if they're silent partners for
even if they're silent partners for whatever reason it just still feels
whatever reason it just still feels better that you got somebody that you
better that you got somebody that you can call at tot any time of the day to
can call at tot any time of the day to talk to about it yeah and also in that
talk to about it yeah and also in that moment of that that cash flow crunch
moment of that that cash flow crunch that you had you were able to spread out
that you had you were able to spread out the the infusion across the three of you
the the infusion across the three of you otherwise if you'd been the sole owner
otherwise if you'd been the sole owner you would have had to bring all the
you would have had to bring all the money all that stop Gap money yourself
money all that stop Gap money yourself which would have been pretty burdensome
which would have been pretty burdensome okay um and how old are you Mike uh I'm
okay um and how old are you Mike uh I'm 39 39 great any takeaways that we
39 39 great any takeaways that we haven't given attention to any learnings
haven't given attention to any learnings from this this adventure we we just
from this this adventure we we just talked about we've talked about so many
talked about we've talked about so many of them but any that you want to
of them but any that you want to articulate explicitly here understanding
articulate explicitly here understanding the cash flow is the biggest thing I
the cash flow is the biggest thing I mean if you don't I I've heard some of
mean if you don't I I've heard some of your other guests I can't remember the
your other guests I can't remember the guy's name but I think that he got into
guy's name but I think that he got into a cash flow Crunch and you know wasn't
a cash flow Crunch and you know wasn't able to get out of it um but
able to get out of it um but understanding you know how the the cash
understanding you know how the the cash flow operates in the business uh is is
flow operates in the business uh is is number one getting that line AC credit
number one getting that line AC credit day one I mean you have to have it even
day one I mean you have to have it even if you don't need the money I mean these
if you don't need the money I mean these two other businesses we don't need the
two other businesses we don't need the cash but I've taken out as much as I
cash but I've taken out as much as I possibly can on the line of credit in
possibly can on the line of credit in case we get into a pinch things happen
case we get into a pinch things happen you never know what's going to happen um
you never know what's going to happen um you know getting key main Insurance in
you know getting key main Insurance in case the worst thing does happen um to
case the worst thing does happen um to cover yourself because if we if
cover yourself because if we if something would happen Jesse it would be
something would happen Jesse it would be a problem but we would be able to Pivot
a problem but we would be able to Pivot to um I mean the the team would be able
to um I mean the the team would be able to handle it but we would be able to
to handle it but we would be able to Pivot to a subcontracting model uh so it
Pivot to a subcontracting model uh so it wouldn't you know kill the business but
wouldn't you know kill the business but you know just having these things up
you know just having these things up front and you know understanding how to
front and you know understanding how to you know to do the due diligence better
you know to do the due diligence better than we did um would have been you know
than we did um would have been you know those are the takeaways that I would say
those are the takeaways that I would say that are needed and small
that are needed and small businesses sometimes they're small
businesses sometimes they're small because the owner wants them to be small
because the owner wants them to be small They Don't Really Care it for growth
They Don't Really Care it for growth they don't have any Ambitions to go get
they don't have any Ambitions to go get any bigger so wouldn't look past them
any bigger so wouldn't look past them we' you know these other two companies
we' you know these other two companies that we acquired they've got a ton of
that we acquired they've got a ton of growth potential um we bought them
growth potential um we bought them obviously at higher multiples and higher
obviously at higher multiples and higher price but um you know there are some
price but um you know there are some gems out there that all they really need
gems out there that all they really need is just somebody that's willing to put
is just somebody that's willing to put in the work and put systems in place and
in the work and put systems in place and something that the previous ownership
something that the previous ownership never
never did and and the systems youve put in
did and and the systems youve put in place have have been successful
place have have been successful so starting to use email uh would be one
so starting to use email uh would be one system and getting on QuickBooks
system and getting on QuickBooks anything else any other systems to talk
anything else any other systems to talk about uh you mentioned the the lone
about uh you mentioned the the lone waiver stuff that there excuse me the
waiver stuff that there excuse me the lean waiver there's
lean waiver there's a yeah s line it's it's pretty fantastic
a yeah s line it's it's pretty fantastic um the the amount of hours that we're
um the the amount of hours that we're getting put on the bookkeeper was more
getting put on the bookkeeper was more than what she wanted so this technology
than what she wanted so this technology was able to help streamline some of the
was able to help streamline some of the the lean waivers that were getting sent
the lean waivers that were getting sent out people are people and they're not
out people are people and they're not you know you send an email out they
you know you send an email out they might get busy swamped and they just
might get busy swamped and they just look past it and for us time is
look past it and for us time is everything so you know she didn't have
everything so you know she didn't have to continually send emails out to get
to continually send emails out to get these lean waivers signed from them so
these lean waivers signed from them so it's it's really cut her hours probably
it's it's really cut her hours probably by 10 hours a week just not having to
by 10 hours a week just not having to deal with the stuff so uh that was huge
deal with the stuff so uh that was huge um you know the the bidding platforms
um you know the the bidding platforms there more you know I square foot uh
there more you know I square foot uh it's free to an extent and then we got
it's free to an extent and then we got another bidding platform um just to be
another bidding platform um just to be able to get access to all these jobs um
able to get access to all these jobs um so yeah we do have technology in place
so yeah we do have technology in place now I'm sure there's more that we could
now I'm sure there's more that we could implement but for right now this
implement but for right now this we're we're good with what we've got and
we're we're good with what we've got and when you talk about implementing systems
when you talk about implementing systems this is mostly what you mean yeah I
this is mostly what you mean yeah I don't I don't really outside of getting
don't I don't really outside of getting a we have a project manager that's in
a we have a project manager that's in training right now uh so that's the next
training right now uh so that's the next step for us is to take off some of the
step for us is to take off some of the work off Jesse's plate and then once
work off Jesse's plate and then once that's done you know if we're going to
that's done you know if we're going to get any bigger than 9 million 10 million
get any bigger than 9 million 10 million a year we're going to have to bring in
a year we're going to have to bring in you know additional Crews and probably
you know additional Crews and probably explore that subcontracting model
explore that subcontracting model more this subcontracting model where you
more this subcontracting model where you guys actually sub yourselves yeah we
guys actually sub yourselves yeah we would sub out the labor and then we
would sub out the labor and then we would fly in a a foreman to oversee so
would fly in a a foreman to oversee so whether that's just flying in once a
whether that's just flying in once a week or he would just stay on the job to
week or he would just stay on the job to make sure that they're doing it
make sure that they're doing it according to our standards that's we've
according to our standards that's we've we've been successful with that so it's
we've been successful with that so it's it's an option but it also takes away
it's an option but it also takes away work from the installers that we have in
work from the installers that we have in our
crews I think one other thing to call out we I mean we did at the top but just
out we I mean we did at the top but just to re reiterate is
to re reiterate is the value of having Jesse so when this
the value of having Jesse so when this deal came along you had an operator that
deal came along you had an operator that you trusted because he was a
you trusted because he was a friend um who had the exact necessary
friend um who had the exact necessary experience to be applied as operator of
experience to be applied as operator of this business so that that as you put it
this business so that that as you put it that was an alignment of the Stars I'm
that was an alignment of the Stars I'm not sure there's a lesson there other
not sure there's a lesson there other than to point out that there was some
than to point out that there was some good fortune here I would say the lesson
good fortune here I would say the lesson there is that if you've got somebody on
there is that if you've got somebody on salary it's easy for them to walk away
salary it's easy for them to walk away but if you've got the equity piece tied
but if you've got the equity piece tied in you know the 5% with the potential to
in you know the 5% with the potential to earn more that was I would say the hook
earn more that was I would say the hook but that's what kept him around when
but that's what kept him around when things got tough yeah so you know like
things got tough yeah so you know like hey you're making this but you know look
hey you're making this but you know look at the potential if we bid these jobs
at the potential if we bid these jobs correctly you know you could be walking
correctly you know you could be walking away with a 5% bonus and when you get
away with a 5% bonus and when you get your full Equity stake in the company
your full Equity stake in the company 20% of the profits he could easily be
20% of the profits he could easily be making 300 Grand a year so for somebody
making 300 Grand a year so for somebody that wasn't making more than 60 and
that wasn't making more than 60 and that's the potential now that's why he's
that's the potential now that's why he's here yeah and so it was $1,000 of extra
here yeah and so it was $1,000 of extra earnings um additional earnings that he
earnings um additional earnings that he earned he got another uh percentage
earned he got another uh percentage point of the business what is that
point of the business what is that number up to now what is his ownership
number up to now what is his ownership up to uh I think he's over 15% now over
up to uh I think he's over 15% now over 15% good that's great good for him what
15% good that's great good for him what about you had said to me that you hear
about you had said to me that you hear all these people or you hear a lot of
all these people or you hear a lot of people on the podcast
people on the podcast gu uh and you have a you have um some
gu uh and you have a you have um some communication with uh the Washington
communication with uh the Washington University where ET there's an ETA
University where ET there's an ETA course or uh I guess yeah a course a
course or uh I guess yeah a course a program um and so anyway you you're
program um and so anyway you you're exposed to NBAs who are doing this doing
exposed to NBAs who are doing this doing ETA entrepreneurship through acquisition
ETA entrepreneurship through acquisition and the the models and the technical
and the the models and the technical speak of IA and and and so on um
speak of IA and and and so on um and you didn't you don't come from that
and you didn't you don't come from that background react to to what is your
background react to to what is your reaction when you see some of those
reaction when you see some of those folks approaching this from a guy who
folks approaching this from a guy who doesn't come as a guy who doesn't come
doesn't come as a guy who doesn't come from that background and has been
from that background and has been successful over these last four is years
successful over these last four is years doing it you know it's uh speaking the
doing it you know it's uh speaking the language I definitely feel incompetent
language I definitely feel incompetent sometimes when I'm talking to these guys
sometimes when I'm talking to these guys because they they rattle off iida all
because they they rattle off iida all these acronyms and it's
these acronyms and it's like and I'm not scared to say look what
like and I'm not scared to say look what you know what do you mean by that or
you know what do you mean by that or what does that stand for um so it it's
what does that stand for um so it it's just they they have all the um the
just they they have all the um the experience the knowledge that they're
experience the knowledge that they're gaining from these universities that are
gaining from these universities that are teaching them ETA and teaching them how
teaching them ETA and teaching them how to go about raising money uh talking to
to go about raising money uh talking to private Equity firms whether they're
private Equity firms whether they're going to do their own search or they're
going to do their own search or they're going to join up with private Equity um
going to join up with private Equity um you know I I've met with a handful of
you know I I've met with a handful of private Equity companies and
private Equity companies and just I when I when I speak when I talk
just I when I when I speak when I talk to these guys I definitely feel like
to these guys I definitely feel like that I don't have the vocabulary to um
that I don't have the vocabulary to um communicate with them on the level but I
communicate with them on the level but I I don't have I'm not nervous or I'm not
I don't have I'm not nervous or I'm not um
um um I'm more than willing to just go
um I'm more than willing to just go ahead and say look like I I don't
ahead and say look like I I don't understand what the hell you're talking
understand what the hell you're talking about like can you break it down to me
about like can you break it down to me like I'm a 5-year-old and uh you know
like I'm a 5-year-old and uh you know several of them said you know whether
several of them said you know whether you are um going to do this on your own
you are um going to do this on your own or you're going to join up with a PE
or you're going to join up with a PE down the road like you know you got the
down the road like you know you got the grit you've got the determination to go
grit you've got the determination to go ahead and get after it this the kind of
ahead and get after it this the kind of person that we're looking for it doesn't
person that we're looking for it doesn't matter if you graduated graduated from
matter if you graduated graduated from Harvard or Wu or whatever it's going to
Harvard or Wu or whatever it's going to be these kids that are getting out um
be these kids that are getting out um thinking that they're going to go
thinking that they're going to go conquer the world like they definitely
conquer the world like they definitely can because they've got the education
can because they've got the education behind it but they don't have the
behind it but they don't have the experience and I feel like that gives me
experience and I feel like that gives me a leg up over these kids that are
a leg up over these kids that are getting out because you know yes you're
getting out because you know yes you're got a a prestigious University behind
got a a prestigious University behind you but you know I've got the experience
you but you know I've got the experience behind me and um so it it does feel a
behind me and um so it it does feel a little weird you know networking with
little weird you know networking with some of these guys but you know it's
some of these guys but you know it's been nice because they're reaching out
been nice because they're reaching out to me asking me questions how did you go
to me asking me questions how did you go about doing it and I think the one thing
about doing it and I think the one thing that stands out between myself and them
that stands out between myself and them is just experience and willing to stick
is just experience and willing to stick it through when things get bad you know
it through when things get bad you know what's the O scenario look like and
what's the O scenario look like and are you willing to deal with that
are you willing to deal with that pressure and the problems that come up
pressure and the problems that come up from it my take us home by telling uh us
from it my take us home by telling uh us about this latest acquisition or latest
about this latest acquisition or latest Acquisitions uh so may uh
Acquisitions uh so may uh 2023 we acquired Pool King Recreation
2023 we acquired Pool King Recreation which has been around for 42 years and
which has been around for 42 years and Florida Pool and Spa not in Florida
Florida Pool and Spa not in Florida they're based out of Maryland Heights
they're based out of Maryland Heights previous owner called a Florida pool
previous owner called a Florida pool because he had a partner that was from
because he had a partner that was from Florida um not the best for SEO but you
Florida um not the best for SEO but you know it works out um so we closed on
know it works out um so we closed on Pool King May 1st and we closed on
Pool King May 1st and we closed on Florida pool May
Florida pool May 26th uh so two transitions at the same
26th uh so two transitions at the same time uh chaotic hectic still running
time uh chaotic hectic still running another company um but it's been we've
another company um but it's been we've had a lot of uh hurdles a lot of
had a lot of uh hurdles a lot of challenges but it's been great um they
challenges but it's been great um they did have the team in place which was
did have the team in place which was very different they had the technology
very different they had the technology um buing obviously had you know they
um buing obviously had you know they were still dated with a lot of the ways
were still dated with a lot of the ways that they did you know they ran their
that they did you know they ran their leads so we've been we've changed a lot
leads so we've been we've changed a lot of things and we are still in the
of things and we are still in the process of improving
process of improving systems um but it's been going good it's
systems um but it's been going good it's different you know I'm more involved
different you know I'm more involved with P King on the I'm almost a um I'm
with P King on the I'm almost a um I'm doing a lot of general manager type
doing a lot of general manager type that's kind of the role that I'm um I am
that's kind of the role that I'm um I am here Florida pool is the team's running
here Florida pool is the team's running we we moved around a lot of people we
we we moved around a lot of people we had to let a few people go but we have a
had to let a few people go but we have a good team in place right now and I if I
good team in place right now and I if I wanted I could probably spend two hours
wanted I could probably spend two hours a week there maybe less but we're in
a week there maybe less but we're in growth mode so um you know 7 o'clock in
growth mode so um you know 7 o'clock in the morning I'm up at Florida and then
the morning I'm up at Florida and then um around 8 n o'clock I'm over at Pool
um around 8 n o'clock I'm over at Pool King and um yeah it's been it's been a
King and um yeah it's been it's been a busy year or busy what 19 months and
busy year or busy what 19 months and what is the combined revenue of those
what is the combined revenue of those two pool businesses uh Pool King is
two pool businesses uh Pool King is sitting around 5 million a year and
sitting around 5 million a year and Florida pool is we're hit 1.4 mhm so his
Florida pool is we're hit 1.4 mhm so his best year with Florida pool was probably
best year with Florida pool was probably about 1.2 so we've grown that company uh
about 1.2 so we've grown that company uh Pool King we bought it postco so there
Pool King we bought it postco so there was an enormous drop off from the
was an enormous drop off from the revenue they were probably doing over
revenue they were probably doing over six so we dropped about a million
six so we dropped about a million dollars in Revenue um so it's uh it's
dollars in Revenue um so it's uh it's been a bit of a challenge to see that
been a bit of a challenge to see that drop off we knew it was coming we bought
drop off we knew it was coming we bought uh the company at like a 2X uh with
uh the company at like a 2X uh with Revenue right now would probably it's
Revenue right now would probably it's it's about a 4X that we paid for it um
it's about a 4X that we paid for it um and then Florida pool we paid a 4X on
and then Florida pool we paid a 4X on that so it's uh it's been good but yeah
that so it's uh it's been good but yeah P King it's um to see what the company
P King it's um to see what the company looks like postco has been stressful uh
looks like postco has been stressful uh but there's a lot of things that we can
but there's a lot of things that we can change as far as the systems and
change as far as the systems and efficiencies to uh get us back up to
efficiencies to uh get us back up to where they were and did you buy these
where they were and did you buy these businesses with an SBA loan and partners
businesses with an SBA loan and partners so the gentleman that I mentioned that
so the gentleman that I mentioned that own the 100 50 businesses he uh they had
own the 100 50 businesses he uh they had this deal under contract the operator
this deal under contract the operator that was going to come in he had some
that was going to come in he had some family issues that he couldn't execute
family issues that he couldn't execute on the deal and um so the deal was going
on the deal and um so the deal was going to fall apart and um I had mentioned
to fall apart and um I had mentioned that I was out looking him and I had a
that I was out looking him and I had a conversation and just said that look I'm
conversation and just said that look I'm I'm ready to take the next step I want
I'm ready to take the next step I want to get a little bit more management
to get a little bit more management experience I I don't really have much of
experience I I don't really have much of a role at state line anymore outside of
a role at state line anymore outside of just making bigger
just making bigger decisions um so I was ready for it and
decisions um so I was ready for it and we made that decision probably February
we made that decision probably February 2023 and we ended up paying cash for
2023 and we ended up paying cash for both the deals um just to be able to
both the deals um just to be able to close before the busy season started we
close before the busy season started we wanted to catch all the upside so we um
wanted to catch all the upside so we um paid cash and it's a 4951 split so I
paid cash and it's a 4951 split so I have minority ownership in it and the uh
have minority ownership in it and the uh we refinanced after we closed on the
we refinanced after we closed on the deal it took probably about 3 4 months
deal it took probably about 3 4 months to get the refinance done um but went
to get the refinance done um but went conventional with the refi uh we have a
conventional with the refi uh we have a seven-year loan on both the businesses
seven-year loan on both the businesses we kept them separate I know some people
we kept them separate I know some people would disagree with that because one's
would disagree with that because one's service-based and the other one is
service-based and the other one is retail so they feed a lot of business to
retail so they feed a lot of business to each other and it would make my life
each other and it would make my life easier if we brought them together but
easier if we brought them together but the attitude is that we want to keep
the attitude is that we want to keep them separate because if one business
them separate because if one business fails it's not going to drag the other
fails it's not going to drag the other one down so there is potential down the
one down so there is potential down the road to go ahead and put these two
road to go ahead and put these two together once we're comfortable with
together once we're comfortable with that but they're both performing really
that but they're both performing really well
well separately and
separately and um yeah so it's been um I'm trying to
um yeah so it's been um I'm trying to think of anything else with the deal so
think of anything else with the deal so so your partner who is the the gentleman
so your partner who is the the gentleman with 150
with 150 businesses presumably has done well for
businesses presumably has done well for himself so he you guys bought these two
himself so he you guys bought these two businesses in
businesses in cash his cash and then just so you get
cash his cash and then just so you get the deals done and then promptly
the deals done and then promptly refinance them uh with conventional debt
refinance them uh with conventional debt not SBA debt and how much did did he
not SBA debt and how much did did he take out or you guys take out when you
take out or you guys take out when you 20% yeah so how much do the
20% yeah so how much do the 20% you took out okay gotcha
20% you took out okay gotcha gotcha no you took out 80% and left 20%
gotcha no you took out 80% and left 20% in yes yeah sorry sorry yeah right okay
in yes yeah sorry sorry yeah right okay um great and then the split is
um great and then the split is 4951 mhm yeah gotcha gotcha um and
4951 mhm yeah gotcha gotcha um and what's your plan with
what's your plan with those um there's been I mean are you
those um there's been I mean are you building a holds Co here Mike or or Buy
building a holds Co here Mike or or Buy and Hold or what it wasn't really the
and Hold or what it wasn't really the intention I mean it's a Buy and Hold um
intention I mean it's a Buy and Hold um you know my partner he he likes to keep
you know my partner he he likes to keep businesses he doesn't like to just flip
businesses he doesn't like to just flip them uh it's always a potential that we
them uh it's always a potential that we could do it but um with the number of
could do it but um with the number of companies that have approached us to
companies that have approached us to purchase them there's a lot of baby
purchase them there's a lot of baby boomers that are getting out of the
boomers that are getting out of the business
business um private Equity doesn't typically like
um private Equity doesn't typically like the retail side so since we're already
the retail side so since we're already doing this and if we were able to cover
doing this and if we were able to cover more territory in the St Louis market
more territory in the St Louis market and over in Illinois um there's
and over in Illinois um there's definitely a lot of potential there
definitely a lot of potential there again I've already had several
again I've already had several conversations with a handful of
conversations with a handful of companies uh that would like us to take
companies uh that would like us to take over they've seen what we've done with
over they've seen what we've done with the companies and you know it's small
the companies and you know it's small community here they all talk um so the
community here they all talk um so the ex the there's a lot of positive
ex the there's a lot of positive um there's there's a lot of positives
um there's there's a lot of positives that they've communicated to these other
that they've communicated to these other companies that they thought that we
companies that they thought that we would be a good fit so it's just a
would be a good fit so it's just a matter of time to take them down and
matter of time to take them down and having the right price in mind so um you
having the right price in mind so um you know doing a rollup would be great uh
know doing a rollup would be great uh taking on some new pool routes with the
taking on some new pool routes with the service company we can expand
service company we can expand organically we've got a handful of
organically we've got a handful of product lines that we could add to Pool
product lines that we could add to Pool King so um organic growth Acquisitions
King so um organic growth Acquisitions when the time's right um but you know
when the time's right um but you know the pool industry it's it's an easier
the pool industry it's it's an easier it's an easier business to understand if
it's an easier business to understand if I had to go out there and I had to learn
I had to go out there and I had to learn all this stuff and do it myself in case
all this stuff and do it myself in case something happened it would be easier
something happened it would be easier for me to do this than the garage door
for me to do this than the garage door business so I see more potential there
business so I see more potential there in the fact that there are several
in the fact that there are several companies identical to us that we could
companies identical to us that we could acquire it just seems like there's more
acquire it just seems like there's more legs on this than what the garage door
legs on this than what the garage door business has at the moment great Mike
business has at the moment great Mike anything else to add about your story
anything else to add about your story anything we didn't talk about I mean
anything we didn't talk about I mean there's we could probably do another
there's we could probably do another podcast on the pool companies because
podcast on the pool companies because there's plenty to tell there but um you
there's plenty to tell there but um you know I I think a lot of people get hung
know I I think a lot of people get hung up on the equity splits and stuff and
up on the equity splits and stuff and you know for me since I didn't really
you know for me since I didn't really come from this background and I didn't
come from this background and I didn't have the ETA education on it um you know
have the ETA education on it um you know I feel like I'm paying my tuition right
I feel like I'm paying my tuition right now so sometimes if the deal isn't
now so sometimes if the deal isn't perfect um you know my attitude with
perfect um you know my attitude with these companies is it if I can grow them
these companies is it if I can grow them hire myself out and then go do it again
hire myself out and then go do it again and more favorable deal and have
and more favorable deal and have majority ownership I mean that's that's
majority ownership I mean that's that's my path and that's what I'm planning on
my path and that's what I'm planning on doing so sometimes the deals you know
doing so sometimes the deals you know maybe they don't pencil out um you know
maybe they don't pencil out um you know perfect but you know you got to do what
perfect but you know you got to do what works for you and this has worked for me
works for you and this has worked for me pretty well and uh you know I I don't
pretty well and uh you know I I don't have a hold Coast set up but this is um
have a hold Coast set up but this is um you know it's a uh that's way that's
you know it's a uh that's way that's kind of the direction that it's going
kind of the direction that it's going but all this to this um you feel like
but all this to this um you feel like you're paying tuition is that to say
you're paying tuition is that to say that you're not you're not psyched about
that you're not you're not psyched about the 4951 split oh I am I mean it's it's
the 4951 split oh I am I mean it's it's great you know at the end of the day
great you know at the end of the day with the money that this company's
with the money that this company's making I'll be you know between the
making I'll be you know between the three companies I'll be pushing close to
three companies I'll be pushing close to million dollars a year once these are
million dollars a year once these are all paid off but you know so it is it is
all paid off but you know so it is it is great um having minority ownership just
great um having minority ownership just is a little uneasy at at times because
is a little uneasy at at times because you know if the majority owner wasn't
you know if the majority owner wasn't happy with the way that I was performing
happy with the way that I was performing I could be fired we could sell the
I could be fired we could sell the business I don't have any I don't have
business I don't have any I don't have any uh say so in what what goes on
any uh say so in what what goes on obviously you know they want to keep me
obviously you know they want to keep me around because I'm running the companies
around because I'm running the companies they got the respect of the employees
they got the respect of the employees but you know I'm dispensable at the end
but you know I'm dispensable at the end of the day so majority ownership and
of the day so majority ownership and whatever is coming down the line is is
whatever is coming down the line is is the direction that I I want to go yeah
the direction that I I want to go yeah yeah makes sense Mike if people want to
yeah makes sense Mike if people want to reach out with any questions uh how can
reach out with any questions uh how can they do that LinkedIn so I'm more than
they do that LinkedIn so I'm more than happy to talk to anybody like I said
happy to talk to anybody like I said I've been talking to some of the wasu
I've been talking to some of the wasu students I've had a handful people reach
students I've had a handful people reach out just to you know hear what I've been
out just to you know hear what I've been through uh I think the advice that I can
through uh I think the advice that I can give to anybody that is going to reach
give to anybody that is going to reach out is you know uh you got to do it at
out is you know uh you got to do it at some point you can overanalyze something
some point you can overanalyze something to death and never do the deal um
to death and never do the deal um sometimes you just if it if it looks
sometimes you just if it if it looks like it makes sense just pull the
like it makes sense just pull the trigger and do it and uh you know you
trigger and do it and uh you know you it's never going to be perfect I mean
it's never going to be perfect I mean like I said with the pool companies
like I said with the pool companies they're endless amount of things that we
they're endless amount of things that we missed in the due diligence um but we've
missed in the due diligence um but we've been able to work it out and get through
been able to work it out and get through the problems so you know sometimes you
the problems so you know sometimes you just got to just got to do it great note
just got to just got to do it great note to end on Mike Keith thanks for your
to end on Mike Keith thanks for your time today I appreciate it thank you I
time today I appreciate it thank you I hope you enjoyed that interview make
hope you enjoyed that interview make sure you subscribe to the acquiring
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