Host: Today's episode is an update with Bruce Vann, who came on a year ago to share his story of acquiring a stage curtain manufacturer. Bruce and I grabbed lunch here in Virginia a couple weeks ago. He told me the updates in his business, including another acquisition, and I wanted to bring him on to share those updates with you. You'll learn what it feels like to run a niche up and down Feaster famine manufacturing business. We also talk about the opportunity that Bruce sees in the many small window blinds retail stores across the country whose owners are at retirement age. Also, I encourage you to go back and listen to Bruce's original episode, not only for the story, but because he articulates one of the most powerful motivations for acquisition entrepreneurship that I've heard. He wants to ensure for his kids the autonomy and personal agency to work for themselves so that no one in his family is ever again held back due to ill will or ignorance. That has stayed with me since our first interview. Here is Bruce Vann, owner of Luxout Stage Curtains. Welcome to Acquiring Minds, a podcast about buying businesses. My name is Will Smith. Acquiring an existing business is an awesome opportunity for many entrepreneurs and on this podcast I talk to the people who do it. You already know that business owners are making amazing use of virtual assistants, often based in the Philippines. And while virtual assistants are helpful, virtual professionals are transformative. More Staffing is a boutique agency that hires a players in the Philippines not for task execution but for but for deep competency work. Think controllers, operators, Supply Chain managers. Moore Staffing helped an e commerce company build their entire supply chain, analytics and finance team. It saved them over $400,000 and enabled them to build the in house expertise of a much larger business. Global staffing is increasingly the norm and building the muscle within your business to take advantage of it will be crucial in the years ahead. So if you're sourcing the next management hire within your business, make sure you speak with More Staffing first about the pool of capable, affordable managers they can connect you with. Check out Morenow Co. That's Morenow Co. Bruce Van welcome back to Acquiring Minds.

Guest: Thank you for having me Bruce.

Host: We talked in January 2022. So about 14 months ago you had acquired a stage curtain manufacturing business and I thought it would be great to have you back on to just tell us how things have gone in the last year or so. First things first though, Bruce, please just remind us why you chose the path to buy business and a little bit more about Lux out, the business that you bought.

[3:07] Guest: Sure. So long story short, I started my career in finance and had ended up in a career rut for a little while. So I was looking for a business to buy. Searched for, let's say six or seven months. Ended up finding Lux out products, which is like you said, a stage curtain and drapery manufacturer, stage curtains and shades. And really thought the business was great and was a durable business, had been around for a long time, since the 1940s, operated in a nice niche. So I bought it, started my search in January of 2019 and ended up acquiring on February 14th of 2020, a month before the stuff hit the fan.

Host: Great. Okay, so it's actually been three years that you've been in the business now. You survived Covid, which is. We spent a lot of time talking about last time. How are you feeling now, three years in. What, how do you feel about your, this path of buying a business and also about Lux out in particular the business that you bought?

Guest: I think it's very much akin to if you do anything, if you do any job or you like, it's just like anything. Like if you date a person, you have this time of limerence and then eventually that kind of wears off and you're dealing with the, the, the, the, the woes and, and, and the throws of, of dealing with that particular person. And I think that's the same way with the job and I think that's the same way with an acquisition. I, I love the company, company dearly and I think it's done very well for me there. What, what stands out in my mind are the ways that it, that I would, the things that I want to improve. But still, overall we've done fine. We've, we've grown in the pandemic. We survived a time when nobody was on stages for several months.

Host: Yeah.

Guest: And that was very, very scary. And it's a buoyant little business, just like I, just like I wanted to buy. So overall I'd say it's great. And then it's allowed me also to afford to, to purchase other companies, which has been outstanding.

Host: Yeah. And we're certainly going to hear about that. Two follow ups to this. So when you say that your attention is just drawn to all the things that are imperfect about it that you want to improve and is that what's getting in the way of making those improvements? Is it just time change management or need more capital or why, why can't you flip a switch and fix all those things tomorrow?

Guest: Yeah, it's a matter of, it's not needing more capital. It's more than anything you have to have the right people in the right feedback loops in, in the markets that you want to play, that you want to participate in. And because my business has a such a long sales cycle, it's very difficult to know what's really going on at any given time. It's sort of like it's very much akin to what the job, what the people do at the Federal Reserve or what these economists do because it just takes so long to really notice a secular change. So that's one thing the, and the other thing is just getting the right people on board. Some folks show up to jobs and, or to work at a company and they give their all. Other folks are like, okay, well I'm just going to punch a clock and try to keep everything going and do the minimum until, so, so no one fusses me out. And you really want to get, you want to attract and retain and reward the first category and you want to let go of the second category. And I think especially given how tight the labor market has been over the three years that I've owned the company, we, I don't even in the three years I've owned the company, we didn't, we've never had, I don't think we've ever had unemployment over 4%. Yeah, floor percent was, was, was the, that's the, that's full employment in the economy. So it's very tough to get people and keep them in there. But I think I have a pretty good plan going forward of, of what we need to do and, and I feel pretty good about it. And I also really appreciate the team and my, my folks who've stuck by us all this time, both, both my staff and my company. And the third thing is just something always comes up like last this past Friday, not to be too graphic, but a toilet clogged and there was literally sewage coming up out of the bathroom. And I had to, I had to figure out a way to remove the toilet, drill that down, clean up and mop and all these different things. I had to stay extra or late on, on Friday just for that very reason. So there's always something on top of the strategic stuff. There's always something from an operational standpoint that kind of stands in the way of you, that tries to distract you from the North Star of what you, what you really want to accomplish as a, as a general manager or CEO of a business.

[7:56] Host: Bruce, you called it, I think you said, the buoyant little, little business that you had that you had envisioned, that you'd hoped for. So just more specifically on that, the numbers that you had projected and that you'd received from the seller three years ago, those, those played out or were there any. I mean, is it basically as profitable as you had hoped and expected when you signed on the dotted line?

Guest: Yeah, good question. It's about, it's about as it's, it's been a mixture. So it was more profitable in 2020 than it, than it was in 2021 and it was about the same level of profitability in 2022. So far this year is kind of too early to tell just because like I said of that long sales cycle. But it's, it's been, overall it's been really great. I mean I got a heck of a deal on this, on this, on this company. So yeah, it was there.

Host: And with the profitability, the question of course is what, what to do with that cash? Do you expand if you see growth opportunity in this business and maybe if you don't see huge growth opportunities in the business, you could put in an operator to do what you're doing, the day to day operations and step out and go look for your next acquisition or adventure. This is probably going to play into, you know, the acquisition that you did make. The answer to this question, but how are you thinking about what to do with the cash that the business is generating?

[9:31] Guest: Yeah, that's, that's a good question. That's actually the question that keeps me up at night because I'm the type of person where I'm not. The goal is not necessarily to make money. My goal is to manage well. I want it the hand that I feel like I've been dealt, I want to play the hand really, really, really, really well. And if you have some cash and you're not using it, it's not going to work. And I feel like I'm not playing it well. The question of how to expand. So fortunately it's kind of two sided for the base business. It's the only way to really expand is to go into new geographies or to hit the geographies that you're currently in harder and get the right person to hit those geographies harder. So that's really like a people centered kind of problem. For the shades business. The best way to expand is to have a solid digital product. And we've been working on that for three years and that's been extremely challenging. Matter of fact, there's a gentleman in, in, well, not even I wouldn't call him a gentleman. There's a scoundrel in New York who, who's conned my company and my predecessor and, and me out of a decent amount of money to, to build a new website with the functionality that we would need in order to better service our customers there and to really kind of hit the growth trajectory that the previous owner envisioned. And that I definitely buy into and see is extremely like very low hanging fruit. If we can just get there. The other thing in terms of your question about whether to put an operator in, I wouldn't want, I wouldn't feel comfortable putting an operator in until I feel like we're at the scale, like at the proper scale and have the proper operations necessary to, for someone to come in and do that. Because there's a lot of, A lot of this is though a lot of this is operational. A lot of it is also strategic. A lot of what I do requires being strategic and trying to look at the numbers and figure out the story that they're telling you and whatnot. And not everybody has the skill set to read the tea leaves, so to speak, and understand exactly what's going on and how to pivot and adjust as an organization. So once we get there, then maybe I will, maybe I won't. We'll see.

Host: So and so just so we understand your business, stage curtains are of course the, the heavy, tall, big fabric curtains that you'll see at a stage, at a, an auditorium, in a school or a church or at a theater. So that's one core piece of the business. And then you referred to the shades business as well. So shades for consumers or for what is the shades piece of the business?

[12:19] Guest: Yeah, that's a good question. So the shades piece of the business, we have built lux out shades as where we focus, we try to focus on designers and being the go to shades for interior designers. That market is a little hard to go after and it would be significantly easier if we had the proper digital products. So what I would like for everything to happen the way I want everything to work, there's someone goes and says, hey, I want this, this, this, this and these fabrics. And they go click on the website and they figure out the sizes and the type of shade that they want and they get their quote, they can go buy it seamless. It just seamless from the end to end. What we have right now is very, there's a lot of touch, there's a lot of human element to it. It's very kind of antiquated with the way that we do it and we're trying to move that forward but if we can do that, we should be fine. I would, I would be that realistically, the shades piece of the business can probably out become bigger than the stage curtain piece of the business, which is the bread and butter of the base business right now. That answer your question?

Host: And so that's interior designers who do custom shades in kind of fancy houses.

Guest: Yep. Yeah. You think about it like in some of these places, people can spend a hundred thousand dollars on their shades alone in their house.

Host: Yeah.

Guest: And that's, that's nothing to thumb your nose at if you can get a bunch of those all at one time. So.

Host: Yeah, yeah, yeah. Great. Now tell us about the acquisition that you did. Yeah. So the blinds one and then we'll get to the machine, the machinery one.

Guest: Okay, sure. So the acquisition was, that was actually a pretty cool story. So I was doing what I do best, which is talk about things to random people. And I was talking with a gentleman and he, he wanted to do, was, was interested in doing a search and then he ended up doing one. And his, one of his interns found blinds and more. It was a little bit too small for, for them, but he said, hey Bruce, I came across this. You may want to check it out. He sent it my way. I didn't think it was going to be something that I would end up buying because obviously at that time I was also trying to get something larger also. But, but it worked out and ended up being great and we had a great transition and I got it at a solid multiple and I'm, if I'm fortunate, I can, I want to try to buy some more that are in this space, the same space, these drapery stores, because they, they're, they're nice little businesses and I think they're kind of poised for someone to come in and consolidate and hopefully that someone's made.

[15:01] Host: Well, I, I want to dive into that thesis a little bit. But first tell us more about, about the business blinds and more. First of all, is that a franchise? It's a franchisee location.

Guest: Good, good question. It's not a franchise. So the, the strange thing about the, the window treatments industry is there are a lot of these like sort of mom and pop window treatment stores that are for sale and they're owned by people who are getting of retirement age. And so they. Actually some of them are, they have to retire. But a lot of them are dealers of these companies called like, like Hunter Douglas or Norman or Graver. A lot of these window treatment stores and some of them are, they only sell one of Those products or some of them, like lines and more, sell all of those different products. But it's not exactly a franchise. But, but the model is, it's kind of franchise esque, if you will, in that the, the, the manufacturer like 100 Douglas would try to come to you and say, hey, look, okay, put up 50 to $100,000 and start your own store and you can make X amount of dollars. And this is what we, we. And you can put it in these locations and this, this, this, this, this, this, this. So that's so like a d. It

Host: can be kind of a dealer model in some cases.

Guest: Exactly. Yeah, it's, it's a dealer model. And what I like, really like about it is the, from a working capital perspective, it's fantastic. I mean, you get half of your money up front, you carry no inventory. That's great.

Host: Yeah.

Guest: So.

Host: Yeah. And so how big was it? You had mentioned that this business, you thought it would probably be too small for you, but then you ended up liking it. Give us some numbers around this blinds and more business.

Guest: Sure. Revenue roughly around a little bit more than a million. That puts you, that puts you there. And then in terms of ebitda, depending on how you would calculate ebitda. Well, we'll say more than, more than a hundred, less than four. Makes sense.

Host: Okay. Between between 100 and 400,000 in EBITDA.

Guest: Yeah.

Host: Okay.

Guest: Okay.

Host: And, and so is, are these. And it's all retail. Right. So you're selling to consumers.

Guest: Yes, mainly. I mean there's a few contract customers, but it's mainly to consumers. Yeah.

Host: Okay. And does, given that it's, as you said, window treatments, is this, is there any overlap or synergy with your, with Lux out with the existing business?

Guest: Yes, if I can get everybody to play, to play nice in the sandbox together. So for example, one of the things that we immediately started to do was work from orders. Right. Like, so custom drapery was being done, was being sold out of blinds and more. And this source was another company. What we've done now is I've given Lux out the first dibs for that. And then I, my gut says once I kind of get our shades to the, our shades website, to the level of the user experience that I wanted to, to be at, I think we'll be in a much better place to, to try to get these folks who are pretty much like lines and more to, to do exactly what we want them to do, which is shop with us for our shades. I think we have a very competitive product there so we're getting there. It's just slower than one had hoped. And that one.

[18:38] Host: And did you buy blinds and more as an individual or did you did Lux out by blinds and more?

Guest: Good question. I had Lux out purchase all the shares of the company.

Host: Oh, okay.

Guest: I did.

Host: And why did you, why did you do it that way? Out of curiosity?

Guest: Yeah, good question. Well, I tend to like stock sales better than asset sales. That's just me. And I think you can also get a better multiple and have a better outcome. You also, it's also easier to get the working capital if you do a stock sale, if you do an asset sale and you start parsing things out in all these different ways. You just kind of you, you to me I see a risk there of running out of cash. And obviously my, my biggest concern whenever I'm buying a business is in that first 90 days. I cannot run out of cash. That just cannot be a scenario. So that's the reason I did that. So those two businesses were done with stock sales. The other one was done as an asset sale

Host: and on blinds and more. So even though there's some overlap, it's kind of the wind, the large umbrella of kind of the window treatments industry. It's a retail business which is a very different type of business. So do you have and I assume for kind of a smallish business like that, the owner seller was somebody who was actually at the store pretty often or not necessarily. What is the. Who. Who's in that store? Yeah, day to day. And I, because I assume there's some key man risk here a little bit.

Guest: I mean, I think so. And what, what sort of absolve that, that concern for me was the previous seller who had built this business from, from nothing essentially. She started it in 2007. By the time I bought the business, she had been, she had already moved out of state for several months. So it was, it was running on its own with, with the staff that's here. So there's, there are two front desk ladies, there's one full time salesperson and then we have part time installer and then some third party installers also. So it's a pretty lean operation.

Host: Listeners of Acquiring Minds know that for almost any business you acquire, its success comes down to the people and how you develop and manage them as their new leader. Thing is, in addition to management there is also a lot of process and bureaucratic work when it comes to your new employees. Payroll, compliance, hr, technology, hiring, to name but a few. These processes are crucial to get right. But at the same time distract from where you want to be putting your energy in leadership. So Aspen HR is an HR firm and PEO that takes this work off your plate and handles it with the care it demands. Aspen is owned and run by Mark Sinatra, himself a successful former searcher. So Aspen's own leadership understands the HR challenges that searchers have. Post acquisition, the firm is offering Acquiring Minds Listeners a complimentary pre acquisition HR and PEO review for your target business. Check out aspenhr.com or contact Mark directly@markspenhr.com Tell us a little bit more about what you this opportunity that you see in all of these retail blinds businesses that are pretty small but lots of retiring owners, lots of them nicely profitable. Maybe not that individually, not that very interesting as by businesses by themselves, but aggregating a few of them together gets gets pretty interesting pretty quickly. So what was your discovery there?

[22:29] Guest: Yeah, I mean my discovery is that this is a great way to expand and probably and a fairly seamless path to do so. So for my the, the one of the major differences in between Lux out and blinds and more with the way that we do with the way that they do business and the way that they install is that blinds and more would only install mainly in a smaller geographical area, let's say the south side of of Hampton Roads, whereas Lux out will go much further Lux out we will go past Baltimore all the way into South Carolina if we have to for and that's just the mid Atlantic that's not encountering the other states that we're we're in like Florida and Texas. So the, the geographic footprint is much larger. So my thought this is just my thesis is if I can get stores that are in some of these places that are further out and reach a little bit I can cut down on the travel and and, and use the installer bases that are in in these locations and hopefully have something something good to show for it at the end of it. So that's that's my my big hairy dream if I can get my wife on board is to have several of these. We'll say I would love to have about 15, 20 of them and if we could do that both both ends of the business would be kind of

[24:03] Host: hitting on all cylinders and so so I understand. So your curtains and shades when you sell them, the installation of them I imagine.

Guest: Yeah.

Host: Installing like a theater curtain is fairly complex and technical so you need specialized talent to do that and currently you have to send your own people expensively out to the customer destination to do that. And versus if you had an on the ground team in the form of a blind store, you could train those people up on installing curtains and shades too, I guess.

Guest: Yeah. Because the thing is, when you're installing, installing stage curtains is really, they're really just big draperies. So. And they're much more forgiving than, than other window like, than traditional window treatments like shades and, and smaller curtains and all of that. They're. Because they're so much bigger, they, they have to be more forgiving. But it is, it does require a certain level of training and understanding and familiarity with them in order to know how to, how to install them and bring them moving forward. The other part of that is, the other part of that geographic constraint is the measuring of the curtains too. So like some of our competitors, if they would get an, let's say they got a, a call from someone in Idaho, right. In such a niche product, they said, hey, this, this school in Idaho or this theater in Idaho says, hey, look, we need new curtains. We have this, We've had this theater for a long time. The curtains are 20 years old. They're tattered, and they have lead weights in them. And we don't want lead around people. We need, we need new ones that, that place may call someone else and they may try to walk them through over the phone how to do the measurement. We would, I'm trying to get us to the place where, if, where we would, of course, we. With a trip charge, but we will be willing to go out to wherever the customer wants us to go and measure the stage for them and just have the soup the nuts experience. For that's, that's really where I want to bring the culture with my, of, of my team too, and the availability of the, of the reach of the business.

Host: And so if you had a blind store in Boise, then, then you wouldn't even have to fly people out. They'd be right. They'd be in state already.

Guest: Exactly. I mean, they say from an operational perspective, it's Tim Wood. And that first one is in. Tim Wood is, and this is from business school is travel. So if you can cut down travel, you can cut down a lot of waste. Yeah.

Host: Do you think that your, your concept for buying up retiring owners of blinds businesses is interesting for people who don't already own a stage curtain and shades business? And I mean, because you're, you're, you're envisioning a, you know, a synergy that you can take advantage of, which is like this real strategic synergy for you are these Blind stores. Interesting in their own right, I think.

[27:03] Guest: So it depends on. So it depends on who you talk to. Right. Like, so a lot of the folks that probably listen to you will want to go after larger targets for the most part. And that's kind of the bias of people in the search community in general. I think there's a lot of value. This is just me. I think there's a lot of value in going for these places that have the mid to low six figures of EBITDA and just getting a whole bunch of them. Even if you don't have, even if you weren't in the position like I am to have a stage curtain company, I just think there's a lot of value in that because if you can do that and have, have that in an industry, you can then become an effective target, I mean, an attractive target for a much larger organization, which is kind of what everybody wants anyway. So it's. You got to think big by thinking small, in my opinion.

Host: Well, speaking of which, are there bigger fish in the stage curtain world that would acquire you, or is it too small an industry to have some really big companies in it?

Guest: There are definitely bigger fish. I don't know if they would be in a position to acquire us. The, the stage current industry is kind of all over the place. I, I've seen, basically, I'll say this. I've seen companies that are much larger than us and then have the exact same profitability that we do, which is wild to me. But I've seen, I've seen that. So I don't know if there's anybody who has like a really good. I don't know. I, I don't have a really good answer to that. What I do know is I, I'm. I, I think, I'll put it this way. I think I should. If someone wants to sell to me in the industry, we should have that conversation. But if someone else wanted to buy, I, There may be some room out there to have those conversations. I just don't know if they would really under. I don't know if they really understand this. The secret sauce of what makes Lux out.

Host: Lux out.

Guest: Great. Yeah. And I don't mean to talk your head off about it, but I just, I just know the way we, the way that we execute for all the challenges in the feast or famine in the business, the way that we execute is just way better than everybody else that I've ever heard of in my industry. And you can see it from the customer reviews. We just do a really good Job.

Host: And is that to your credit or is that that to the previous owner's credit or both?

Guest: I wouldn't say it's so much mine. Well, some of it is. The only part I would say is mine is that I get reviews. I made, I, I, I hammered my team to say, hey, look, get reviews from your customers. Get reviews from your customers. Doesn't matter what we say about ourselves. It only matters what the customer says about us. But I, I think more than anything, it's just the folks that we have on the ground there. My hat is really off to the team at Lux Out. Sales Plant manager is really great. The folks who work in the workroom who cut, sew and surge and pack the curtains, all of it, the way we do, the coordination and the back office coordination, all of these different parts do an excellent job overall. And I think we do significantly better than anybody else.

[30:27] Host: Bruce, we're wrapping up here, but I wanted to ask a couple more questions. You just touched on the feast or famine nature of the business. So this, this is obviously particularly on the stage curtain side. Well, what, in terms of revenue, what is the split between stage curtains and shades?

Guest: About 80, 20.

Host: Okay, so it's mostly stage curtain, huh?

Guest: Okay, maybe 75, 25, but yeah, around there.

Host: Okay, so stage curtains have a life span of 20 years more. Maybe so. So anyway, no recurring revenue. And, and certainly in Covid, when it's all dependent on people, the stage curtains exist in communal spaces where theaters where people are going to watch something, stages. So that was obviously extremely vulnerable during COVID But in reflecting back on the business that you bought in the, in the feast or famine nature of it versus what of course everybody would kind of ideally want recurring. Do you, Is it fine? Is it like, you know, this is just, I just factor this into my, my model, my financial model, that there's going to be thin months and then there's going to be awesome months. Or is it, is it a nagging, constant concern? Because I often just kind of feel about this argument for recurring revenue. Of course, we all understand why it's appealing, but at the same time, as long it always feels to me like as long as you model in that you're going to have swings, then you, you should be fine as long as you're planning for that. So maybe disabuse me of that or is in fact that how you feel?

Guest: I think it is, I think it's overall fine. It doesn't feel fine when you're going through the, the famine parts. But, but it, but Overall, it's fine. The, the reason that it's feast or famine in my business is just because one, is because of the long sales cycle. Two, it's because of, because it can take so long. Like because that sales actually really, that's just really the reason it's really the long sales cycle. If, if you order something today, it may not be, we would place the order for the materials today. And then let's take today what we're talking in March, that thing wouldn't get installed until maybe June or July. And everybody in their cousin wants everything installed before school starts. So that's, that's really the kind of the nature of it. So it's the same thing that saved me during the pandemic is the same thing that gives me worry during the times of famine. But overall it's, it's, it's worked out really well. And I think you just fat like you say, you just factor in the math. The other thing is if you, if you acquire something with recurring revenue, you're probably going to pay a more aggressive multiple because everybody and their cousin wants that. So if, if you can get something at a lower multiple that does not have that but has. And then there's still some part of what we do that is a little bit recurring. Like for example, some school districts will come to us and say, hey, look, we know we're going to do X number of schools per year and we want you to check them out. We've put it in the budget, we want you to check them out and quote them for us. And those are like really great customers. We, if I could have those customers everywhere, that'd be wonderful. So it's a, it's a mixed bag, but overall it's okay, I hope. Yeah.

[33:55] Host: I think the point that you've now made a couple times about your long sales cycle is actually a really, a really valuable point to harp on a little bit because so many searchers, the kind of, the underlying thesis, not some industry thesis, but the underlying thesis of almost like search itself is that there's a lot of improvements to be made in a business that you buy because the seller, founder, whatever, hasn't been proactive about their business or isn't tech forward or whatever it might be. And so, you know, searchers get in there and they're eager to improve the business. And of course delivery of the product or service is, is what the business does. And so if, if you have this long sales cycle, you get so many less at bats per month per, per year to iterate and figure out where the low hanging fruit is. Figure out where those efficiencies can be, can, can be found. That, that's a really interesting point. And so, so maybe one criteria that people listening should consider is in addition to recurring or not recurring is how long that sales cycle is. Because if you've got a six month sales cycle versus you know, a plumbing business where you're, you know, you're, you've got multiple jobs per day, you've just got so much more input that you can work with to figure out how to, how to refine and improve the business versus a long manufacturing and sales cycle.

Guest: It's really interesting and I would add to that to the point that also made that tangential point that I made earlier. If you can have a long sales cycle and you can collect some portion of your capital up front, then from a working capital perspective you're in a much better place because it gives you a certain level of safety. Because say for example, someone Orchard orders $40,000 worth of stage curtains from us and they're a new customer, we never heard from them before and my salesperson tossed them into putting half down. All right, so we get $20,000. I don't have to pay on whatever pieces were ordered for that job for like another, I don't know, the stuff may come three months later and then I don't have to pay until 30 days after it comes. So that's like four months. So for, I got basically a no interest loan for $20,000 for four months in that. Because of the long sales cycle and end of that, of the, of that. So that's, that's one of the other things that kind of can be attractive if you don't have recurring revenue with a business.

[36:17] Host: Yeah, great, great point. Bruce, wrap us up with your second kind of quote unquote acquisition. I mean it is an acquisition, but not of a business, of a, of a what?

Guest: Yeah, of a machine. So we purchased a ribbon weight machine. It is the only one.

Host: Ribbon machine.

Guest: Yeah. So at the bottom of stage curtains you have to have. Stage curtains generally will have weights. They would either be chain weights like iron or steel chain or lead weights. You don't, they used to use lead. And a lot of. If you go into hotel rooms and you check the bottom weights in your hotel room, if you can bend it, it's lead. And you don't want that, that's, you don't want that near anybody, honestly. But you especially don't want that in kid with your kids. But our alternative is to have this fabric that's folded in half, that has little steel weights in there and the fabric is kind of fused once it's folded in half. And those ribbon weights, we use them ourselves, but we also sell them to other stage curtain companies around the country. And we're the only one of our kind with it. And the machine. I don't mind telling you what I purchased with the machine for, but the cause, I mean it was kind of industry wide knowledge what it, what, what the guy was, was selling it for. But I talked him down on the price. I got the machine for less than 300 and it cost me a couple tens of thousands to move it. But that that thing is replacing that is, would be somewhere around, definitely somewhere north of one and a half million if I had to replace it. So I got a, I like to think I got a pretty good deal. Um, and, and also have kind of built a, a little bit of an economic mode around my business.

Host: Yeah. Yeah. That's interesting that that's such a kind of manufacturing business phenomenon where you know, a large piece of machinery can be this big strategic move. It's, it's not something that I'm super well versed in, but it was a million and a half dollar machine new. You got it for 300. It was in Atlanta as I recall. And you had to move it up to, to Richmond, which was costly and complicated. And were, were you a customer of this, the business who owned the machine in it before?

Guest: Yes, yes I was. And real, real nice guy. Built it with his son, but some years back and then he ended up, he and his wife ended up moving out of the country and really retiring. And this was the last peg before they, they retired. So I've, so I've purchased three businesses from, from three retirees now.

Host: Yeah, the Silver Tsunami is real people.

Guest: Yeah.

Host: The, and, and so are you now selling to some of your competitors because they need, they need this. The, the ribbon, what did you call it? The ribbon weight? Yeah. What was it called?

[39:11] Guest: Yeah, it's called a ribbon weight. You got it.

Host: The ribbon weight. Okay.

Guest: Yep.

Host: Okay.

Guest: Yeah, we, so we sell to competitors and the, the, the window treatment industry in general is like, it's kind of, it's, it's interesting. It's not like as cutthroat as other industries. Like people will help competitors will help one another out and buy supplies from each other. For example, when we buy, when we sell our track, one of our main competitors is Rose Brand out of New Jersey. We tend to get our track from A company they own called ADC out of Pennsylvania. So it's, it's not uncommon in this industry to have stuff like that happen. It, it was weird to me when I first got in the industry, but it's less weird now.

Host: Well, it bodes well for if in fact you, you know, you, you joked that there's not a big fish out there to buy you, maybe you should be buying, you know, you, you would be the buyer in this industry if you develop good relationships with your competition. Maybe.

Guest: Right.

Host: Matter of fact, why don't I ask you, because in our first conversation, you did mention, like, it's a small enough business industry that there's like, you in Virginia and then there's like, not somebody else until Pennsylvania. Maybe that's who you just were referring to. And then again south of you, not somebody until the Carolinas or like South Carolina. And do you think there's an opportunity for yourself ever to buy one of those businesses or does it not strategically make sense or. Right.

Guest: I would absolutely buy one of them. If I could get them at, at a solid, under solid terms, acceptable terms to me, I would absolutely buy one of them. Yeah, I think they, the hard, hard part of that is it's just that when people sell their businesses initially, they, they think they're valued too much. They think you can get 8, 9 times EBITDA for businesses not growing. Yes, that's, that's, that's the first thing. And then you kind of come down to earth over time. But if, if anybody's listening in the industry or any brokers that know anybody that's, that's selling in the industry, please feel free to reach out to me because I'm absolutely interested.

Host: Yeah, as long as it doesn't happen for, until maybe next year because yeah, Bruce, Bruce has another new business on the way with his wife. And, and so she has pumping the brakes on you, you making more business moves until that baby comes. Congratulations.

Guest: Yeah, thank, thank you, man. That's, that's the other thing a lot of people don't think about is having your significant other and family on board with you in this search journey. And even, and if you're going to do it, continue to do future acquisitions like it's, it doesn't end with the one. I think my wife kind of had the expectation that, okay, well, you've done one. Okay, now you've done two. Okay, well, now you've done three. Can you slow down? And in my head it's like, no, I can't slow down because I have to alloc. The capital. But, but we're, we're figuring that out. Cool. Yeah, that's great.

[42:06] Host: Bruce, anything that you would want to tell the audience that I forgot to

Guest: ask, and the only other thing I would, I would say is there's a whole lot of crap going on in the world and there's always going to be something that happens. There's always going to be some pandemic or banking crisis or something, something big and scary that makes you say, oh, okay, I'm not going to take the plunge and whatnot. I, I think if somebody wants to go and do this, you can make every excuse not to do it. You can make every excuse to do it if it's really in you. So I would encourage folks to just go after it and, and to just let the chips fall where they may and see what happens. Because fa. Fa. Fortune favors the bold.

Host: So awesome note to end on Bruce fan. Thank you very much for coming back on, sir. Oh, and for people who might want to reach out, what's your preferred method of communication? I'll link to it all in the notes.

Guest: Sure. It's just email. It's bvan with two ends at Luxout L U X O U T dot com. Any anyone wants to reach out, I'm more than happy to talk.

Host: Great. And also a plug for a couple of threads that you put on. Have put on Search Funder, one of your early ones, or I don't know if it was early, but the first one that I saw of yours was why we connected in the first place. It was like your five or seven learnings from first week or first, first month as CEO. It was awesome.

Guest: Yeah.

Host: It just gave a, a window into what it's like to transition to business. But I've, I've, I've seen subsequent posts that you've made as well, so people on Search Funder should look up Bruce Van 2 ends. Bruce, until next time. Thank you, sir.

Guest: All right. Thank you, Sam.