Host: 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. Many entrepreneurs who are looking at buying a business wonder if they can buy a business in an industry that they know nothing about. The conventional wisdom often is, no, don't do that. But actually, there are so many successful counterexamples to this conventional wisdom. My guest today, Cassy Niekamp, is one of them. Cassy acquired a fencing company just two months ago. She knew nothing about fencing or the industry. So for those of you out there considering buying a business as an outsider to an industry, you gotta listen to this episode with Cassy. She approaches this problem of not knowing about fencing with humility as an eager student. And it really seems to be working. Her team is already performing a lot better after only two months and she's starting to get her arms around the business. There's so much to learn from this approach, especially for those of us who think we need to project competence all the time. Really enjoyed this conversation with Cassy and congratulations to her on her recent acquisition. Here she is. Cassie Nee Camp. Cassie Nee Camp. Thank you for joining me today on Acquiring Minds.

Guest: Thank you, Will, for having me.

Host: You have acquired Bowden Fence, a 38 year old fencing company in Columbus, Ohio. So you are living the SMB acquisition dream. This is two months old to the day. So this was a June. You closed June 11th. Today is August 11th. So you're right in the very first moments of this. So I'm really eager to hear how it's going. I know you've already had a success or two, which is actually how I found you. One of your colleagues tweeted about it, so we'll get into that. But why don't we start by with just a little bit of your history? So if you would give me two or three minutes on your professional background that led to the concept, the idea, the decision to want to acquire a business.

Guest: Sure. So I think what's most relevant is a couple of things. Number one, I grew up on a large farm.

Host: Okay.

Guest: That because most of my family is involved in the trades or contracting in some way. So although I hardly ever touched a trade myself, personally and professionally, it was something that I grew up around this blue collar attitude and workforce, which I think led to my comfortability in approaching this type of business. But most recently I joined a, probably about eight years ago, a digital marketing startup company in Columbus, Ohio. We grew super rapidly over six years from almost zero revenue to about 30 million by the time I left. Wow. And I was on the ground floor of the sales and sales leadership of that company.

[3:12] Host: What was that company?

Guest: Revlocal.

Host: Revlocal, okay.

Guest: Awesome group of people. They're still continuing to crush it today. And when I left, I made the decision to join a small business consulting firm out of Chicago. They're called Cultivate Advisors and was with them in the past three and a half years in a sales and also recruiting capacity. But we worked with companies under 10 million helping them grow and scale all across North America and myself today. And one of the first items of business that I, I did was to hire them heading into this business acquisition.

Host: So you had seen a lot of small business up close through Revlocal helping those small businesses basically sales and market and digitize their marketing efforts. And then at Cultivate, actually being more of kind of consulting small business owners to become, I don't know, grow revenue, become more efficient, improve operations 100%. Yeah, cool.

Guest: Of serving small business owners whether it's in marketing, whether it was in consulting and hearing their stories. And I was highly inspired.

Host: Okay, cool. So you had these two stints that lead into wanting to acquire into kind of small business that really dovetail with small business nicely, but still a big leap to decide to acquire a small business. So how did connect those dots for me?

Guest: Very big leap. I was going through a bit of crisis of meaning on my own end around what was my dream, what was my purpose in life? Where was I having the most impact with my God given talents? When I thought about my future, I really wanted to make an imprint on something that was ours. My husband and I. He remained in his business full time. He works in. In ground up construction himself for a developer. But my decision was to hey, what would it look like if we owned a business? And I ran it was on one day on Buy Sell Biz came across this fencing company for sale. Submitted my financials, got to meet the owner. And it was from that first meeting with the owner that my husband and I just really kind of fell in love with this man around built his business. He's a wonderful man. And I think what was most shocking about that first meeting was he is 70, he was looking to retire. A couple of his nephews worked in the business, his brother works in the business. This was very meaningful for him. This was not I'm just selling my company type of thing. This was I am giving my baby up for adoption. What was unique about that meeting was he looked at Me with as much respect as he looked to my husband. So when I asked him questions around the business, he didn't assume much, like the broker we engaged with, that Ross was going to be my husband, rather running the business. He gave us both respectful answers. And that was just really telling to me because.

[6:28] Host: Just to be explicit, as explicit as possible, because you were the woman, you saw people, like, on financial matters or business matters orient themselves toward your husband, and he treated you as the equal to your husband.

Guest: Absolutely. I mean, it was everybody from our attorney, our lawyer, the broker, all looked to my husband for the answers leading up to this acquisition. And he was maybe one of the early ones to give me as much attention and respect to my questions as my husband's. And more importantly than that, I mean, that was a small thing that just made me feel very welcomed. But more importantly than that, he just had such an adamant, relentless focus on quality and treating people well that it was just warming to us to hear. And his reputation was really something special, we felt.

Host: Sounds like a great guy in a great culture. I imagine he instilled great culture. But let's take a couple steps back. So was this the first. So you're on biz by sell, you submit your financials. Was this the first company on BizMuycel that you reached out to the broker for more info? Don't tell me first, that is now, I have to say, like me being an analytical type, I just wouldn't let myself buy the first. No matter how in love with the first one I was. I'd be like, I gotta. I gotta do 20 reps before I. Before I buy one.

Guest: I think a wiser person would've said, there's no way we're buying the first business we take a look at. Or we dug into it. The more it just felt so right for us. I mean, and I wouldn't call him a great salesman at all. He was brutally honest, almost to a fault. He doesn't have a greedy bone in his body. So this was really a lifestyle business. But to your point about, hey, we should have gone through several, you know, businesses before we landed on this one. I don't disagree. I don't know that I would advise people to do what we did. This felt like the stars aligned in such a wonderful way that the margins were there. The owner we really identified with, we built a great relationship with him. We love the product. We saw the demand in fencing over the next several years, projected, and really felt like this was a business we could sink our teeth into.

Host: And again, kept taking a couple steps back. So you and your husband, you were having this sort of crisis of, what's the meaning? What do I want to do with my professional life as my next stage or from here on out? And you said what it would be like to own a business. So had you guys fantasized about being entrepreneurs before? I mean, how much on your radar was being an entrepreneur before you had this kind of this big crisis moment?

[9:17] Guest: We had kicked it around in terms of the idea for years around my skillset, my husband's skillset. We felt that we had seen enough around leadership cultures, art, perspective, experiences. His mostly in lending, construction, finance, mine most in sales, recruiting, building teams, that together there would be almost nothing we couldn't solve. That's kind of the attitude of if we did it right, We've seen it done not well in past cultures and past types of leadership experiences. But what if we got it right? What if it was up to us to do that? And I think that we had the confidence to say we're willing to take that step and we believe in our abilities to the extent of we could give this a shot.

Host: Yeah. And what about buying versus building? Why not build something from scratch?

Guest: My husband still, still may build something from scratch. I think that's very much something that he has his eye on. I, however, felt that I was less a creator and more a sustainer builder, et cetera. So when I really thought about starting a business from scratch, that honestly just feels so exhausting to me. However, to go in through the lens of this is what exists today, what can be improved upon, that fuels me, that excites me. I can see the holes. I can start to really strategize within what that looks like, creating. I don't find myself a creator interesting.

Host: I wonder what the personality types are, if that shakes out in a way that would be clean for the audience to understand. Is it just something you know about yourself, or is it something that you've learned about yourself because you've been in certain roles?

Guest: Well, I should correct that and say I'm a creator of things that would not make money,

Host: such as I love

Guest: to create great meals, but nobody's, you know, that didn't seem like a passion thing to me to be a caterer or, you know, a home chef. I mean, that didn't feel like something that could take on legs for me.

Host: Do you feel that, like, to create a company from scratch, you have to have some new invention, some newfangled thing? Is that kind of the thinking?

Guest: Maybe Maybe a better idea than the next guy. Or I guess also what it lacked for me was a lack of credibility. So this team that I was acquiring had the credibility, had that longevity. That was something that I myself didn't find myself in a trade or a skill that had that credibility. I guess when you measure it upon building versus coming in to grow and sustain and improve.

Host: Yeah. If you were to build a fencing company, you'd probably have to know much more about it to make those sales. Yeah. All right. And so tell us a little bit more about Bowden. How old is it? What were the revenues, the size, number of employees, Give us the kind of specs on it.

[12:19] Guest: So, like I mentioned, the company had been doing between about 750 and 850 in revenue over the past four years. It had really kind of. It looked like a rolling hill. They weren't growing year over year, per se. The company had eight employees. Half of those were family members. So that comes with its own different set of dynamics. But the company ultimately had 15% net profit margin.

Host: 15%, okay.

Guest: Net profit margin, 25% EBITDA. And we really liked that. They had this deep history within the Columbus, Ohio market, and they're just relentless. Focus on quality. We saw a lot of opportunities with what we saw.

Host: Were you not intimidated by the fact that you would be managing the previous owner's family? They probably feel some. As you said, there's more nuance to managing family members. I don't know. I could imagine them, even if they're not owners of the business, feeling some sort of ownership because it was their family member who had hired them and who had built the business. How'd you feel about managing four of his family members? And by the way, what were the family members?

Guest: The family members were two nephews, a brother, and I guess there were three total family members plus him is four. Yeah, I guess. You know, a couple thoughts were running through our mind in terms of that thought process. Number one, we thought that the people in general were going to be the biggest risk. A, I'm a female with no industry knowledge, and B, there's this huge knowledge gap that I didn't come in knowing about the fencing industry. And so when you thought about how would they view me as a leader, how could I come in to earn their confidence? What would it look like to replace this amazing man who has 40 plus years of fencing industry? I had to create my own leadership style. I had to come in with a different blueprint than what he had done. A lot of things he had Done really, really well. I think that I have been able to come in, knock on wood, the past couple months and really win people over in other areas. So far now we're not out of the woods. There's still, you know, there's still dynamics at play and we're really working hard to really craft that people aspect of it. That was my number one goal, to sit down, to have one to one meetings with every single individual. Hear about what did they like about their role, what they didn't, what suggestions do they have for the company? What do you wish we would be doing? If you took this business over, what suggestions would you have and really listened to? And so now that we're two months in, my promise to them was, you know, I took all these great notes with everybody I sat down with, but my promise was, hey, I want to circle back 60 days from now and I want to revisit these things. You know, what does it look like to have career path things in place here? What did you tell me that was important? What am I working on? How do I see that in the priority grand scheme of things that I think I did really well coming in to listen and because I could come in with such vulnerability to say, I don't know this industry, but I make good on my promises and if I told you I was going to tackle that, I have a plan to tackle it and here's what my plan is. So that's what I think I did well, but we've got miles to go with the team. There's a lot more that they've mentioned that we're working on. So.

[15:56] Host: Sure. But it sounds like they've been receptive. Did you receive any static on the fact that you don't know fencing yourself and that you were an outsider to the industry, or did people basically get it? They were like, we get it. You're coming from another industry and you're a manager and an entrepreneur and that's

Guest: fine for the most part. I think that they were highly understanding. I mean, it's almost developed into this relationship of I am being taught. And I love that, you know, our, our head, our head welder is the former owner's brother. Help come in to show me parts or come in to show me different things that he thinks I should know. And when I'm on the job site, there's no, there's no ego in me to say, oh yeah, I know all about that. You know, they can really start from the ground level and help me through that curve. I mean, I've got a year more of a learning curve in terms of parts and you know, post sizes and how do we construct that to last a client for 20 to 30 years? How do we not cut corners in this area? I've got a lifetime of learning left. But more specifically, at least a year until I really feel on solid feet is what my projections are there.

Host: I mean it's. I guess the takeaway here is like just don't make it no appearances. Like just come in vulnerable and be like, hey guys, I don't know this industry. I'm going to be a student here and my role is to take your ideas and improve the business. This is the moment to do that. You probably all have ideas about how your individual roles or how the business could be better. I can do that. The world of fencing. I'm going to be a student here and I'm just going to ask questions and I'm not going to pretend I know anything because I don't. That's that I can see that being really effective. But I still think it takes a certain character to, you know, express that vulnerability. We all want to feel like we're competent, especially if you're the one who just came in and bought the business. You're the boss. You know, you just feel like my reflex, which is wrong, but my reflex would be like, I gotta project competence here.

[18:03] Guest: I think that's a lot of people's first inclination. I do vulnerability naturally. Well, it's something that's really comfortable for me.

Host: Uh huh.

Guest: So really wanted to be humble and hungry to the fact that I was relentless to be humble and hungry. I want to be the person in the room asking the most amount of questions and checking my ego at the door so that there is so much to be gained when I can put my ownership hat aside or my ego hat aside or whatever you want to call it. And I really was intentional about that fact.

Host: That's awesome. That's really cool, Cassie. Okay, let's get back into the deal itself a little bit. A little bit of the numbers. So how did you due diligence this business? Tell us first you mentioned that you had learned that the prospects for the fencing industry, demand for fencing looked good. Tell us how you learned that and what else did you do aside from this conversation with the previous owner to diligence this deal?

Guest: Yeah, I don't want to make it sound like all sunshine and rainbows because it was not. I mean there was at least three to four points within the deal that we thought this isn't Going to go through. I mean, from the appraisal coming back lower, from us getting cold feet, from, I think the seller getting cold feet. I mean, there were definite bumps in the road end to end. It took about seven months.

Host: Oh.

Guest: So could have felt like a lifetime. To others, that might feel super quick. To some, we're somewhere in the middle there. We felt like other days it was taking years. And other days like, whoa, oh, my goodness, we're not quite there yet. I can't, you know, we don't want to close yet. We got more due diligence to do. The most difficult part about the due diligence is there were no tracking, there were no metrics, There were hardly any software. And so what we went off of was his P and L and the conversations, the stories he told us. So we came in with a lot of blind spots around specifics on just about everything. I mean, they had not tracked any sales conversion numbers, no estimates. Everything was ballpark. He thought he could tell me how much they did commercially versus residentially. But it was just a gut pulse. It was not actual. And on one hand that really terrified us. On the other, we said, we know that there's healthy profitability here. So what they have been doing, we have the margin both metaphorically and literally to mess around and really get gritty with some of these numbers to start tracking. That's the appeal. Many small businesses operated like this where it was very much a lifestyle business. There were absolutely no business goals and certainly none shared with the team around any sort of sales number projections or field projections. There was none of that. And I think to an extent, if I had to read between the lines a bit before we came in, it's a very defeating thing if you put yourself in a blue collar atmosphere. It's very defeating to clock in and clock out and not know where you participate in the wheel of the business success. And so one of the, I think it was my. I instituted Monday morning meetings. They had never had that before we took over. They never met together as a company ever. Like, office does the office things and the field does the field things and they never intermix. And there was no meeting of the field. There was no meeting of the office.

[21:32] Host: Wow.

Guest: Each man for themselves. But when I instituted Monday morning meetings and when I shared, hey, this is our weekly production goal. This is what the field needs to do in order for the business to break even. And here's the goal. They were on the edge of their seat. They had never been shared before, why they mattered, what their Contribution was, and I would say for 80% of the team, that felt very exciting for them to know. There were a couple people that I think felt exposed or vulnerable in that number too, around the accountability factor. That had never been there before, but we're presently working through those things.

Host: Yeah, I would imagine that there would be some sense of, okay, I mean, the employees first feel like, oh, am I going to lose my job? Is this person going to come in and fire people? So if you assuage that concern, then their concern is, oh, is more going to be expected of me now? Am I going to have to start working harder? And in some sense, maybe they're not going to have to work harder, but they're under Cassie, but they're going to have to change some processes or implement some new processes and be accountable to certain numbers and performance metrics. And so do I hear you correctly that about 3/4 of people were cool with that and were even excited by that and then, and then maybe a quarter of people were kind of did have the negative reaction, like, oh, I don't want things to change.

Guest: Correct. When I left Cultivate Advisors, the CEO was super supportive of my move, really excited for us to buy this business. You know, just championed us the whole way through. But one of the things he said to me, which I still remember just crisply in my mind, was, change management is the most difficult thing you can do. And I thought, no, you know, I am just persuasive enough to really kind of bypass how difficult it is. But we are creatures of habit. You know, the main foreman has been doing this for 30, 35 years, a certain, certain way under a certain style. And I'm asking him to really morph into a different style. And you know, I'm 35 and when I think about my learning velocity, it's quicker. You know, I'm able to bobbin weave. I'm comfortable with that. And to some, they might not have that learning velocity speed that I'm asking of them. And so that's something that we're, we're having to navigate.

[24:05] Host: Going back to the demand for fencing. Like, what did you see in this industry that you liked and where did you learn that?

Guest: Two things. Number one, the search engine known as Google there. In terms of what was fencing demand across the US what were their projections, etc. That was one and was our attorney really helped us. He really acted like a tremendous mentor guide to us in this, in this, in this acquisition. One of the things I called him on a particularly low day and I Said, yep, I think we're pulling out, we're not going to do the deal. And through his lens of where the industry was heading because he helps all across different types of industries, but specifically contractors. He said, this is a good one, this is a good one. That what I've seen, what I've observed. You're going to want to stick with this, Cassie. And really kind of talked me through some of the doubt we were experiencing and so those two things. So our mentor throughout the process, which was our attorney as well as Google,

Host: the doubt that you had that day, what was that based on or share any of the times over that seven month period where you guys got cold feet, what did you see that spooked you?

Guest: I think two things. Number one, our lending got a bit rocky. So lenders have a wide array of appetite for risk. And when we thought about the particular lender that we went with, there was an issue with the appraisal of the land. So we purchased two acres of commercial property in addition to the business. The business appraised perfect. The land did not. And we had to come, we had to really get creative in that lending process. It caused a lot of turmoil I guess in the deal overall because we really wanted those two acres. In addition with the business, it was where our shop was located. We have two pole barns on the location. It was critical in our eyes around the long term ROI of investing and acquiring in this business. So that was number one. The second one was when I really thought about our goals with the business. It was, Cassie is going to be in the trenches for five to 10 years implementing processes, hiring, growing the team. And then I want to step back. My goal is to not be in the, you know, the seven to five every day over the next five to 10 years. And I started to really feel some doubt in ourselves of is that possible? Yeah, it looks fine on paper, but when I am working 12 hour days and you know, what does that look like? Am I a fencing contractor now? This is, you know, it was almost like this thought of can we really tweeze ourselves out of the day to day in the way that we have planned and you know, that has yet to be determined. I still have those thoughts today around is this feasible? Can we get a driver to replace myself within a business who we have utter confidence in and you know, yet to be determined, but that's a bit down the road.

[27:21] Host: Yeah. And why do you think that that would be so difficult? When you look at yourself, you didn't know the industry so you let's assume that the next year goes pretty well. You've proven to yourself that an outsider can come in and run this business. The outsider has to be smart and hungry and vulnerable. But it's not impossible. You don't like only have to look for people who already know fencing. You can look at anybody out there who has those characteristics. I just said yeah. So why did you get concerned that you'd be stuck in the business for the rest of time?

Guest: I think we find ourselves a bit in the fork of the road today because we are now seeing. When I talked about trends and demand and researching online about that, that's one thing. The past 40 days we've tracked how many estimates have gone out in terms of. We sent our estimator out, they quoted, they measured the space accurately, they delivered a quote. We have over a million dollars of quotes in the past 40 days.

Host: Wow.

Guest: With no marketing. That's word of mouth. And that is a $300 yellow page ad that they were doing. There's no marketing. And so the fork in the road that we observe now is, wow, this could be a five to $10 million business. Have that appetite or we get profit margins maintaining as healthy as the former seller, you know, the former owner rather had. And it's a lifestyle business to fuel some other pursuits around real estate, et cetera. So that's kind of the fork in the road of who's a better driver than the owner. I'm sure there's a lot more individuals that are highly more skilled than myself, but who cares the most? You know, it's going to be my husband and I. So that's the fork of where do we want to take this business? Is it a lifestyle business? And that's going to fuel and propel some other really creative outlets for us in terms of real estate or self storage, etc. Or is this a business that actually has a lot of opportunity, even more so than we projected and we want to swing for the fences.

Host: When you acquired the business, it was doing, as you said, 750 to 850. So let's call it $800,000 a year. So just under a million dollar a year business and now you've got a million dollars in quotes in your hands from. You said 40 days.

Guest: Yes.

Host: So if we. And is that, are you, are you, are you like peaking now? Is that, is that a seasonal spike because it's the summer or is that representative of the entire year?

Guest: Well, that is a great question. Will to be determined because I've never tracked before we have a big dark hole that we don't know. And you know, we are recording this in the middle of summer. So, yeah, we're at our peak season. So to be determined, well, let's just

[30:10] Host: be really conservative and assume demand now is twice as much as it usually is. So that would be. You see a million dollars in quotes every 80 days. What's the math on that? So maybe $4 million a year in quotes. Four to $5 million a year in quotes. And yet the business is only doing 800,000. So it could grow if you just closed better. I mean, you could, you could. There's just so much demand. Like, it sounds like you're only closing 20% of quotes now. And so that's just so. And as somebody who's done sales before, that's probably just sinking your teeth into that because there's just so much low hanging fruit. So that's very exciting. Conversation with your attorney when he said, hey, Kassy, this is a good business. Don't. I've seen a lot of these. What. Do you remember what he said to convince you that in fact this was a solid business? And the reason that that's so interesting to me is because the biggest risk and the biggest fear and the biggest horror stories in all of this SMB acquisition space is that you buy a bad business and then you're really saddled with it. It's scarier than buying a bad house. There's always going to be a market. I mean, selling out my home is a pretty liquid market. You can find a buyer, even if you have to lower your price, lower your price. You could be saddled with a business for which there is no buyer. So that's the risk. And we all know that SMB is messy. Even the best business is going to be, um, it's just that that quality, that question of the quality of the business is, Is such a hairy one. What did he tell you to. To say, bowden, this is a good company?

Guest: Well, one of the things he reassured me, I guess, was the psychology of every deal. He said, kassy, there is not one of my buyers who doesn't get to the point where you are like, it's scary. It's a lot of money. It's the most you've ever purchased. You know, we have a big amount, you know, big SBA loan that we're about to sink our teeth into and be, as you said, saddled with. That's terrifying for somebody who does not like debt. The second thing. So he hit on psychology he said, hey, you're not alone. Everybody goes through this, right? There's some solidarity in that. And then in terms of the business itself, he was privy to all the financials. We talked about the margins with him over the course of several months. He was intimately aware of it. And he said, I just really feel like, based on what I'm seeing financially, this is a great opportunity. You know, I don't want you to regret not moving forward on this based on what we're seeing and what I know is important to you. And so half psychology, half digging into the numbers to say, this is a good deal.

Host: Back to the numbers again, which always interests me and the more financially oriented folks. So you said, let's call it again, $800,000 in revenue, about 15 margins. So that's throwing off about. That's $120,000 a year. Does that include. So was that including his. Yeah, please.

[33:10] Guest: It was about $180 to $250,000 of profit per year.

Host: Oh, okay. And does that include the gentleman, the owner's salary, or was that added back in? So are you paying yourself out of that, whatever, $250,000 or is that after even you pay yourself?

Guest: That is before the owner paid himself. And I'm not drawing a salary right now. I've oftentimes thought about, you know, over the past, so my husband's role affords us, you know, a living salary where we're able to meet all of our demands, you know, from an income perspective, while I can go figure out, invest, you know, continue to pour ourselves into this business. I think that's a unique position where I am not worrying about my salary yet. You know, of course we want to get there, but we also see it through the lens of a long term investment. I want to have bonus structures. I want to pour into different equipment, different things for the team to make a great culture, to make a higher quality of work for our team. Before then, we would start to draw on the tail end and those dividends.

Host: Sure, sure. On the other hand, if you wanted to take salary, there's enough, there's certainly enough meat on the bone to do it. And the reason I'm pressing on this is because for a lot of people, that's a big part of the appeal of an SBA acquisition or a small business acquisition is that they can acquire this company, it's profitable enough that they can immediately pay themselves so they can support themselves and there's profit left and there's money for the loan to pay down the loan. And hopefully there's even profit left over from all of that to reinvest in the business. And it sounds like you could comfortably do that in this case. You just choose not to.

Guest: We chose not to because we did not want to have that stressor of my own income almost clouding our vision for what we really wanted to do in the business. And I've often thought about, if that was part of the equation, how much more sensitive, fragile the growth decisions that I would have made over the past

Host: 60 days would have been the acquisition price. What did you guys pay, if you don't mind?

Guest: We ended up paying, in total, about $1,200,000.

Host: $1,200,000. So that's. What is that? Three to four times earnings. So three to four times profit. Okay. And you took an SBA loan and

Guest: that included the land as well?

Host: Oh, right. That's huge. And what did the land appraise at?

Guest: Land appraised at about, oh, gosh, I think 420.

Host: So the business itself was really selling for a lower multiple between two and three.

Guest: Yes. Business itself was selling for 560.

[36:02] Host: Oh, wow. Okay. All right. So one thing that you touched on and we've already talked about offline, was this is part of a longer term strategy that you want to maybe get into real estate, have sources of passive income. Now we're talking, I assume, 10 years out kind of retirement. But share with us what that vision is for your future financial life and how this fits in.

Guest: One of the things that, when I told you I had that crisis of meaning around, what is my imprint in the world, how do I share my talents, et cetera. One of the things that was a heavy factor in all of this was the time value of freedom later on in life. You know, I think that as Americans, we are just so focused on, okay, I'm going to work super hard my entire life and then retire by 60 or 65. And I have this nest egg and we have a son, he's four and a half. And he. I thought a lot about witnessing his life and the availability to travel later on or to not work five days a week, 12 hours, days, you know, as I witnessed a lot of my family members do. And it was kind of like this untethering decision of what would it look like, hypothetically, if we allowed ourselves this more value of time freedom down the road? Now, today, it's hard for me to look at that lens just because I am in the thick of it and I am working all those hours and I hope for that payoff of time value. But that was our decision there around long term.

Host: And you had mentioned to me that real estate interests you and your husband works very closely in real estate, and so at some point you'll want to acquire real estate, correct me if I'm wrong, and build a portfolio. And so if you bought this business and between you and your husband agreed that you actually wouldn't draw down any salary because you're just kind of investing everything into the business and you didn't want it to muddy the decisions that you make with the, the business and how you would reinvest those profits. Why not just skip buying a business and running a business and just start accumulating a portfolio of real estate right now?

Guest: Yeah, we could have done that. The way that we saw that path was it was going to take us much longer to acquire the portfolio based on our current salaries. So when we thought about, hey, we can stay in our current jobs and our current roles, we continue to save, but at the end of the year, how much are we able to save versus this type of investment, which maybe you call it a gateway investment business, in terms of it's spitting off this amount of cash flow, we know it can support the debt, we know we can learn a ton of really valuable skills surrounding running a business and set up us in a much better position to go acquire real estate assets more healthily in a shorter amount of time. Was that thinking?

Host: Okay, all right. So it's a step in that direction. It throws off more capital so you can have that much more to invest in real estate later. And in the meantime, you've gotten your feet wet, learned a lot, haven't started to accumulate, pay down a debt. And having an asset in this business, it's great. As I said at the top, I learned about you from one of your colleagues who tweeted about an early success you've had at Bowden. Now in your operations. Tell us about that. The production, doubling production. Tell us about that.

[39:31] Guest: Right. So we had probably two weeks in the business and we decided at the advice of our cultivated advisor, Simone, who is a dear friend and also my advisor now, which is a fun dynamic. She had said, I recommend you go down to four tens. The guys were working five days a week. There are a lot of efficiencies that can be obtained if you go to four tens. And for those of you who don't know, it's four days a week, 10 hour days. And in the contracting world, it's super appealing to my team because they are Able to have another job on Fridays or Saturdays if they should choose. Or it really accounts for rain. So one of the glaring things, when I first got into the business, I ran their timesheets for the past six weeks. So six weeks prior to Cassie taking over the business, what did their average weeks look like? And I was shocked that they were only getting between about 25 to 35 hours a week consistently. Yet we had this huge supposed eight week wait from the time somebody signed up to when we get to their fence installation. And I was very confused at that. I couldn't understand why that was. So my first order of business was digging into the production. And that's where the 410 switch came from. You know, I think in business we want to control the controllables. And one thing we cannot control is weather. And so if it rains on a Tuesday, we have that Friday then to make it up. Or if it rains two days, then we have potentially Saturday to make that up, et cetera. So I can start to control this environment of we are going to have a production team that's responsible for X amount per week and we can remove that element of surprise. The weather is not in our favor. And so by doing that, the team has almost doubled production. And that coupled with the fact that I shared our company goals, I shared where we want to be, they have been working harder than ever. I mean, I have just been absolutely blown away. The caveat to that and really the secondary challenge we have is we're blowing through production at such a rate that now I have a sales issue. And now we're focused on estimating in sales. And to your point about that 20% closing rate, you're right on the dot. And so how do we get that more? How do we increase that? How do we make our sales process more efficient, More white glove service on the sales? By educating our clients, our customers, and getting more bites, getting more bids to be accepted by our customers and commercial clients.

[42:11] Host: Tell people exactly when you're a fencing company, exactly what your revenue, where it comes from installing fences, making fences. Please break that down.

Guest: Great question. So we do a lot of fence installations. That's probably 80% of our business. The remaining 20 is custom gate fabrication. We do a lot of welding in our own shop to do custom gates, cantilever gates, roll gates, et cetera. Really big with our commercial clients.

Host: Okay, so the 80% of the business is fence installation. And so it's essential. Is it labor or you also, you're marking up the material, the fencing materials? Well, I Assume so there's some profit in the supplies.

Guest: Yes. And we also have. One thing I failed to mention is we have a decent amount. I'd say anywhere from 5 to 10% of our business is do it yourself. So somebody who feels savvy enough to put there in their own fence, but doesn't want to go to somewhere like a Lowe's or a Menards to get fence supplies will actually call us. And we have specialized packets ready to pick up with everything a homeowner could want.

Host: So doubling production essentially means doubling really the revenue or the realized revenue?

Guest: The installation numbers. Yes.

Host: That's remarkable. Well, that's got to be encouraging.

Guest: It's so wonderful. I am so proud of the team. We just had a team event last night where we took everybody and their family to a baseball game just to really celebrate how hard everybody has been working to get us there. I feel that there's almost like a renewed sense of excitement around the business and I'm really, really proud of our team.

Host: Cool. If you were to advise people out there, you've already provided a lot of advice, but like, imagine yourself during that seven month process or even earlier, like you're cruising biz by sell, looking at businesses. Anything that you would advise that person, anything that in retrospect you did wrong.

Guest: I think three things come to mind. I probably wouldn't buy the first business I stumble upon just a buyer beware type of scenario there. But I think the first thing is fostering a great relationship with the seller. We had a situation where the broker really wanted to be involved in every aspect of communication from the start. And that may be how it is just with every broker, I'm not sure, but we really started to have almost this cadence of every Friday afternoon about 4pm I would swing into the business and get my eyes on it. You know, I wanted to see what orders they were working on and what types of jobs they had done this week and talk to the seller. And every time I did that, it was so valuable. I learned just small nuggets of information around just about everything and it was really, really valuable.

[45:02] Host: But were his employees seeing you stop by?

Guest: No, because they were gone by Friday at 3, Friday at 3, Friday at 4. You know, we always were mindful to say, hey, coast clear, we good to swing by kind of thing. So that was a really great.

Host: And this was before you had a deal. So he was investing this time in you. You guys were getting to, getting used to each other, getting to know each other, but it all could have fallen apart. At any time and in fact came close to falling apart a number of times.

Guest: Correct. Yes, we had had the signed loi, but we were not yet to that closed, closed point. But also I think the third thing that we did not push as hard for that I really wish we would have was to meet the team sooner. So when you think about the family dynamic, I think one of the most shocking parts was, you know, his main foreman, who had been with him for 35 years, knew two weeks before we closed on the business. When you think about change management and just processing that information, that hit him like a ton of bricks. And I heard several comments around, well, we thought we were going to carry the former owner out in a coffin out of this place. We never thought he'd sell. Like, we're shocked he sold. And just that process, you know, I often think about what would it look like if five months or four months we really got to foster that same relationship with the foreman or the other key team members, how that would have led to an even smoother transition. And from what I've observed and talked to other people about, our transition has been very smooth. I cannot thank the former owner enough. He has just bent over backwards for us. Continues to be in the business every day. 6:15 When I get there. I mean, he's just incredible. But I oftentimes think about it from the team's perspective. It was still shocking, you know, being that close to the sale close and just hearing about it.

Host: Well, Cassie, this is, this has been great. How can people reach out to you if they, if they want to get in touch with you directly?

Guest: Sure. My email is cassie cissiowdenfence.com okay.

Host: That's the best way. Great. Thank you very much, Cassie. Let's check in again in a few months or maybe give you a little bit longer than that, but maybe in another eight or 10 months and see how things are going. This is such a cool story. I love that you. It was a love at first sight situation.

Guest: Thank you, Will.

Host: Cool. Sam.