Host: This is word for word a tweet that appeared in Chandler Reed's Twitter feed in January 2021. Quote, Interesting opportunity for an entrepreneurial searcher operator who has more hustle than capital and willing to move quickly on a deal here in Tampa. End quote. Chandler was entrepreneurial. He had more hustle than capital. He already lived in Tampa and he jumped sending the author of that tweet, Sam Rosati, a dm, to raise his hand and say I'm interested. This is the story of how one guy was presented with opportunity and seized it. Impressive too, that Chandler didn't even know what search or entrepreneurship through acquisition was before he dove in. Only later did he learn that searching for and buying a small business is a thing. In the last two or so years, Chandler has gotten an accelerated education in buying, operating and growing a small business. Two of his biggest takeaways that you should listen for one Buying a project based construction business, what that's like and would he do it again? And 2 the hazards of buying a business whose fortunes are tightly tied to interest rates. Please enjoy this conversation with Chandler Reed, owner of Get Green Noi. 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. August Felker is a two time successful searcher, first with a traditional search fund. The second time around he did a self funded search. Today August runs Oberle Risk Strategies, an insurance firm with a dedicated practice group for searchers and acquisition entrepreneurs like you. If you've got a business under loi, Oberle will provide complimentary due diligence on that business's insurance and benefits program. A great no risk way to get to know August and team. They love helping searchers. They've worked with hundreds. Oberle is a specialty insurance brokerage for searchers by a former searcher. Check out oberle-risk.com O B E R L E- risk.com link in the show notes Chandler Reed welcome to Acquiring Minds.

Guest: Will Smith thanks for having me man.

Host: Chandler A single tweet by a then stranger changed the course of your professional life.

Guest: Yep.

Host: Put you on a path to buy business and got you heavily involved in this world that we call search. It has been a roller coaster for you. Humbling but. But it also seems like your excitement about the possibilities here is undiminished. So let's get into it. Start us off with some background on you please.

[3:08] Guest: Chandler yeah, so me like you said to your point, I kind of had the backwards entrance into this whole space where typically, you know, you learn about searching, you learn ETA, you learn about SMBs, and what a wonderful opportunity this is, and a growing opportunity that this is. And then you go search for a business and then you buy it. Where in my case, I found, to your point, a tweet online from my now business partner, and I guess you want to call him OG SMB, Twitter Sam Razati, about an opportunity that he had. He needed an operator here in Tampa, Florida. That's where I was currently living. And basically, long story short, from three months from when I saw that first tweet, we closed on the business, and then all of a sudden, I bought a business. I was running it from the day to day, and then I kind of stumbled into this whole space. I didn't even realize. I didn't even know what ETA stood for, what SMB stood for. And all of a sudden, I think it was actually my first. It didn't really hit me how big and great this community was until the first SM bash I attended, which I know you recorded a live podcast there in Orlando, Florida, and I was just completely blown away. I had no idea that there was such a thriving community around this whole space.

Host: Cool. Yeah. Well, I was also pleasantly surprised when I got into it to find all these great people. But, Chandler, rewind us a little bit. What were you doing before? Why were you so receptive to a tweet about buying a business whereas the next guy or gal wasn't? What were you doing before? Give us a little professional background on you. Sure.

Guest: Yep. So I went to school for finance and real estate. First job out of school was asset management for a multifamily private equity firm. Which is one of the biggest reasons. Reasons why I was so jived about the opportunity. But in between there. So, flashback to January 2021. I'm working for a prominent commercial real estate developer here in Tampa, Florida. Actually helped develop the building that I'm sitting in right now and that I currently live in, which is pretty cool. So January 2021, you know, Covid is still in full swing. We'd have been working from home for almost a year at that point. Um, I'm getting a little bored, to be honest with you. Like, quote unquote, this is my. Or this was my dream job, quote, unquote. But, you know, I was still getting a little bit bored. And, you know, I see the tweet from Sam. He was basically looking for an operator to pursue a multifamily lighting business. So right when I saw that back up a little bit too. Another prerequisite was I was based here in Tampa, Florida. And you either had to move here immediately or already be here.

Host: That's what Sam's tweet said.

Guest: This.

Host: This opportunity is for somebody who has to be come live in Tampa if they're not already there.

Guest: Correct, Correct. And you have to know about multifamily and you have to be willing to, you know, hustle. It was a turnaround, which we can get into later. So I'm just sitting there, I'm like, all right, that literally checks all my boxes. Let me shoot this guy a DM. Shoot him a DM. You know, we hop on a 20 minute phone call, we realized that we knew a lot of the same people. Both born and raised in Tampa, both went to the University of Florida. I was like, how don't I know you already? Cause Tampa, I know Reno. They have it on the plaque. The world's smallest big town. Their biggest small town. I forget which one it is, but that's like Tampa to me. Everyone knows each other down here, especially if you're born and raised here. And we just hit it off. And yeah, like I said, it was about three months after we ended up closing on the business together. But to your point, why I got comfortable about it was the industry that this business serviced was an industry that I'd previously worked in. I knew it was speak the jargon. I knew how to. Knew how to get, you know, in front of the people. I had a role, decks myself in this industry. And after that, you know, the rest is kind of history.

[7:04] Host: And Chandler. But what about the. The whole kind of X factor of wanting to be an entrepreneur or wanting. Being willing to buy a business? Because there are other people in Tampa who are in real estate, you know, in multifamily. No, multifamily. And they didn't respond to Sam. So there's this. There's still something very entrepreneurial about you, that this opportunity even appealed to you, and tie that into what you said a minute ago about getting a window into like some of private equity experience. Kind of whet your appetite for. For what? What did you see there that brings all this together in terms of, like, being a person who would chase this opportunity.

Guest: Yeah. So I guess, you know, you kind of get your first taste. And I've heard this story a lot from other people that work in private equity or kind of in investment sales, etc. You know, you're working on the deal, you might get a little Bonus from it. And then you look and see at the P and L who's really making all the money. And it's the owners, right? It's the entrepreneurs. So I'm sitting there, I'm like, all right, cool. I got a nice little bonus check here. But this guy on a deal I just worked on just made 10 million bucks. So I'm like, okay, there's something interesting there. Maybe I need to dabble in that. And even beforehand, I kind of always knew I wanted to do something. I had no idea what it would materialize in. Maybe I thought it was going to be in smaller scale commercial real estate development. But up until that point, I tried starting an E Commerce brand. I tried selling fantasy football projections. That was one of my passions at the time. Just hustling and nothing would work. But, you know, that's kind of how it goes. You get to 100 no's or 100 failures until one finally clicks and kind of the stars align for you.

Host: Cool, cool. Okay, well, so you. You do have kind of a hustler. Hustler mentality or hustler background. You. You've done stuff before and kind of had an entrepreneurial streak, Correct? Cool. Yeah. It's so funny about what you say about the. The private equity experience. So many of my guests that have come from a private equity background had that moment where they're like, there's a lot of money flying around here, and it seems to be disproportionately going to one person in this room.

[9:08] Guest: It's not me.

Host: Yeah. Even though, of course, everybody at the table is making more money than your average Joe. For sure.

Guest: Exactly.

Host: All right, cool. And so wasn't the language in Sam's tweet something like, by the way, quick aside, Sam Rosati. That is definitely a name most many people will recognize who are listening. Sam was on the pod, actually, just a couple months ago. I've never had him on to tell his own full story, but I need to do that because I've heard him tell it elsewhere.

Guest: It's a good one.

Host: Yeah, yeah, the dumpster business. But he said something to the effect of more hustle than money or more hustle than bankroll or something. What?

Guest: Was it correct? Yes. More hustle than capital.

Host: More hustle than capital.

Guest: That was one of the boxes that I certainly was checked at that point in my life.

Host: All right, well, so. So you don't. As you said, you don't know what ETA stands for. You've never heard of ETA or SMB or quote unquote search. So you don't do a search. You basically respond to this one opportunity that you see on Twitter. You talk to Sam. What does Sam tell you about this business? Tell us about the business in this opportunity.

Guest: Yeah, so the business was a commercial or it is a commercial lighting contractor that primarily worked within the multifamily space. Why you need a little bit more hustle than capital was, you know, people joke all the time in this space like you never want to buy a job. But Sam told me, hey man, you're probably going to be buying like 10 jobs here. So I'm like, hey, you know, my first foray into this, that's fine with me. I want to get my hands as dirty as possible. So I guess some more context on the business. It was probably the biggest turnaround you may have hear about. So the seller, long story short, had started another business, another multifamily vendor based business that had kind of taken off. He raised a series A for it. He kind of gutted his time, attention and resources away from this lighting business. The lighting business at the Time only had one employee. It was doing about 900,000 bucks in revenue, basically no net income. I know another name in the space, Bruce Marks, SBA lender. At first Lake of the Banks, he has a punchline that goes, congratulations, you've brought me a deal that doesn't work. So this was by no imagination going to get approved for SBA financing, which kind of ties back into the more hustle than capital. It was great because we got in at a pretty attractive basis and at pretty attractive terms. So the more hustle and capital part, we long store short the business ended up. We ended up taking it down at a 25% cash down and a 75% earnout basically which got me very comfortable as it aligned the previous seller with us. The better we did, the faster he got paid back. Incentivized him to connect us with his old contacts, show us the ropes, all that good stuff.

[12:13] Host: Great. Got a lot of follow up questions here, Chandler. So commercial lighting. So tell us exactly what the service is that the business provided or provides.

Guest: Correct? Yep. So it's primarily a lighting like a retrofit. So imagine, you know, right down the middle of fairway project for us is like a 300 unit garden style, you know, typically older vintage apartment. The lighting all across the community that you can think of, like every single light bulb on the community is something that we would come in and replace or lighting fixture typically. So there's two good things on for that for owners to do is one, the newest lighting has, you know, it's much more efficient. So immediately on day one, you're going to receive energy savings from, you know, your power bills going down. And then two, you know, if you are trying, if you're buying a community, you know, you have a value add business plan, you want to spruce up the place. You know, if the lights across the apartment community in the hallways, you know, have yellow lenses, bugs in it, all that stuff, you know, if you're trying to raise rents and get some more tenants in the door, they're probably not going to be willing to pay that higher rent, you know, if you got crappy lights across the community. So that is the business in the, in a nutshell. Basically we're effectively a project manager. So we have no in house labor. We sub out all the labor, which, you know, it basically depends on what kind of business you want to run. For me, it's great. I have less overhead, I have a very lean team. We can move fast and quick and it allows us to work nationwide and on multiple projects at one time. However, the sacrifice with that is, you know, the margins are a little bit lower if you had your own in house labor. But that was a trade off that I was willing to make just for me personally in my own lifestyle.

Host: Fantastic. And the. So let's get a little bit more context about the business. So how old was it?

Guest: The business was founded in 2014. And so I would say the business was doing great. I think its best year did 6 million top line in about 2017. And that was right around the point where the seller had started this new business that all of a sudden that was taken off. He basically had a faster horse hitched his reins to that one. And then literally between literally some of the employees that were at the lighting business, he started transferring over to this new smart home apartment business. And all that was left at the end of the day was a couple contracts that were just coming in inbound and then basically one employee that was doing all the fulfillment himself.

Host: So when you look at a business that is, you know, unfinanceable and essentially wasn't, you said, I think you said wasn't profitable on 900 when you, when you and Sam were looking at it, it was doing $900,000 in revenue and not profitable, did you say, well, you

[15:10] Guest: know, the seller was running, you know, his wife's Porsche and his Tampa Bay Lightning tickets through it. So there was certainly a little bit of meat on the bone with some advice. But yeah, by no stretch of the imagination. Something that, you know, would have got you excited to get out of bed for most investors, I would say.

Host: And, but, so, but the, the promise here or the opportunity is that a few short years ago it had been doing 6 million and now is doing 900. So it's a, a shadow of its former self, but only because the founder diverted his attention to his new thing. So that's kind of the narrative. And, and so as long as somebody starts paying attention to it, in theory, you can, you know, whether or not you get back to 6 million, you can get it to 2 or 3 or 4. Like that seems pretty realistic.

Guest: Exactly. So where most people would have said, oh my gosh, you know, I wouldn't touch this business with a 30 foot pole, I kind of saw it as an opportunity to put some TLC back into it and try to in a playbook, you know, to try and return it to its former glory.

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 and do you know what the margins were when it was doing $6 million like in its fully realized self. How profitable is this business?

Guest: Yeah, it was doing about 15% bottom line, I would say. Truly, you know, when you account for all the add backs, it was doing about 15%.

Host: Okay. And you just said use the word playbook. So were you going to fashion a new playbook or were you? Or basically like all of the stories on Acquiring Minds that you know you're stepping into an existing business, so there already are processes and all that, you know, all that stuff kind of waiting for you. Were you expecting the same here, that you were basically just going to apply energy to what was already being done, or were you going to reinvent internally a lot of the stuff, a lot of the processes and everything or you didn't know you were just going to look under the covers and see what you saw and figure it out from there.

[18:09] Guest: I would say primarily look under the covers and just say, you know, bright eyed, bushy tailed young guy coming in running it. We'll see where it goes. But the game plan was to take what the lighting, I guess vertical or it was pretty much all that business was doing was just lighting and grow that back up. But then my experience in my previous work lives was especially with the commercial real estate developer. We were developing the first well certified community in the whole United States. Every building was the top platinum LEED certified. So I'd kind of seen where the market was trending as far as like esg, Green energy. Every big kind of commercial real estate firm is now building out sustainability departments. So I saw it as an opportunity to one, build the lighting side back up to its former glory. And then two, we already have customers who are already buying potential other products from other people. So I saw it as a great way to start integrating some new project lines into the business and then one, get it back to its former glory and then two, take it to a

Host: completely new level where you become kind of a one stop shop for all kind of green related retrofitting, not just lighting.

Guest: Correct.

Host: It sure seems like really an attractive opportunity. What it was doing the just the lighting, what it was doing before this, you know, your grand vision of what it could become was that was it unique in the space or is is this something that's, that's a, a proven business model outside of just this business where there are, you have competition that also do lighting retrofits in multifamily for sure.

Guest: Well, I would say right when the seller started it, it was a very like nascent business model if you will. But since then it had been, you know, a little commoditized. You know, LED lights are not something new. Everyone's heard about it now. But more of the where I thought we could get a competitive advantage was like having the kind of core lighting business and then a value add of these other business lines. And then as you know, some of our clients like to say why they like working with us is because they only have one neck to strangle. So we can take all these business or we could take all these projects. You have one source that you're getting the jobs done from. We do completely turnkey and that was going to be our competitive edge. Hey, why go try to Do. If you're going to do all four of the projects that we were offering, why go to four different people? Or you could just come to one one stop shop and get it all done at one time. Sure.

Host: And the reason for the sale was that the founder finally recognized that he should be selling because he wasn't giving it an attent any attention and revenue was collapsing.

Guest: Correct? Yep. So he kind of, you know, he had his pinky toe still in the business, I would say. And you know, some of his investors in the newer business were like, dude, if you want to grow your new business, you got to completely cut ties with this one. You got to turn all of your time and attention fully 100%, get that pinky toe out of the water and get it back into this new business that we're throwing a lot of money behind you to go grail.

[21:13] Host: What is the name of the business?

Guest: The business that we acquired was called Onyx Energy. And another interesting nuance of the transaction was the seller was contractually obligated to change the name by October 2021. And so we ended up changing the name to Get Green Noi to truly reflect. Because Onyx Energy, I didn't really know what the heck it meant. I kind of, it sounded like a utility company or something like that. But we were kind of brainstorming on some potential names and you know, a lot of our clients are construction blue collar, project manager types. So I'm like, all right, what's something that kind of strikes a chord with them and it's simple enough for them to get. And so we settled on Get Green

Host: Noi and for the non real, multifamily, real estate savvy folks in the audience, what is noi?

Guest: Yep. NOI is basically real estate's term for bottom line profit. So, you know, you take the Get Green, we're gonna get your commercial assets green while improving your noi on it.

Host: Noi is fair to say that it's kind of roi, but on kind of on. On a. On a building by building basis or project by project basis.

Guest: Correct. Net operating income. Yep.

Host: Yeah. Operating input. Great, great. And this lone individual who stayed in the business, you know, a lot of granted, it's already a turnaround. Granted, there's pitfalls everywhere, but you, you know, you know, so. So there's a lot of risk all over the place. Of course you got this. These great terms which we're going to return to in a second. So. So, you know, but one more risk is that there's this lone individual in the business. So, you know, I guess when you're looking at a business that's got so much risk, does that make you more or less careful about, like, every additional risk? Are you just like, man, screw it, there's so much risk here, I'm just going to dive in? Or are you extra careful about every additional risk because there's, there's already so much of it, like you're just trying to minimize, Minimize. Minimize the risk. Anyway, this one individual, how did you kind of diligence whether or not this person would stay, whether you like this person, whether they were competent, so on?

Guest: Yeah. So to answer your first question now, I just viewed it as, hey, we're already taking a decent amount of risk. And I know key man, risk is one of the probably most important ones to pay attention to in any due diligence phase and any business you're trying to acquire, but I kind of viewed it as, screw it, what's a little bit more risk? Right. This is already pretty risky in itself, but to your point, yeah. So before the transaction finalized, we went out to lunch. Sam, my other business partner, Bert in the business, the seller, and then Richard, the solo employee. We all went out to lunch, just kind of introduce ourselves, get to learn a little bit more about him. What I really liked about Richard was he started as an intern with this company, like in the first couple months of its genesis, and since worked his way up from literally entry level, ground floor all the way up to basically running the business, at least the fulfillment side of our projects, all by himself. So I'm sitting here, I got to know him. He's a great guy. You could tell he's sharp. He knows these projects like the back of his hand. He knows his whole business. He knows the whole business model like the back of his hand. And, you know, we kind of sold him and our vision. Like I said, hey, we're going to get the lighting business back to its former glory. But then we also want to build this business around you, the new project lines. And then also to, as part of the transaction, the seller gave him a stay bonus that was paid quarterly for the first year of our acquisition. And then we also instituted a new to him bonus structure that was basically tied to the success of the company. So we wanted him to be incentivized to one, stick around and then two, give it his all and kind of give him some quasi ownership type incentive structure.

[25:14] Host: Yeah. And so the, the dynamic between the two of you, if you buy the business and become its owner, is that will he be the operator or you? No, I mean with the turnaround you're definitely going to be operating too. But he's going to be the project manager to all, all existing and new projects until you can hire more people.

Guest: Absolutely correct.

Host: Yeah. Okay, now return, return us Chandler, to just these terms. 25% down, 75% earn out. Go through it slowly for us again.

Guest: Yeah. So the total, you want me to go like just detail by detail, like total purchase, all that stuff? Yep. So we, the, the seller was asked, he was asking a million bucks for the business. We kind of knew. We kind of heard through the grapevine that we were kind of the buyer of last resort. Kind of some strategics turned it down. So we ended up negotiating down that purchase price to $625,000, 25% of which would be funded at closing by myself and my two partners. And the other 75% basically seller note in the form of an earn out. That earn out was structured as a minimum payment per quarter or 33% of gross profit. So I kind of like that the minimum payment is 25k a quarter. I got pretty comfortable. Hey, with our current kind of just default alive mode inbound projects, I think we can certainly cover that debt service. But you know, hopefully we're growing it where we're not having to pay the minimum and we're paying this guy down as fast as possible.

Host: So 25 grand a quarter or 33% of gross profit you said, Correct? Yep. And you could choose the lesser of the two, I assume every month, whichever.

[27:04] Guest: The greater of the two.

Host: Oh, the greater of the two.

Guest: If the 33% of gross profit was 15k for that quarter, we'd have to pay 25 or like our last payment. We can get into this too. We actually just paid him off completely about two and a half years ahead of schedule a couple weeks ago. And that final check was 104k. So that was. I didn't like seeing that go out of our bank account. But you know, it got the job done.

Host: Yeah, yeah. Well the $625,000 with these really great terms. But it's still that you gotta pay em for a business that's not generating much. And now it needs to also pay Chandler, Chandler's living expenses, salary, what have you. Can I ask what you thought you'd pay yourself?

Guest: Yeah, so basically I had a salary. I think typically some people right down the middle of the fairway deals paying themselves like 150k salary plus distributions. Obviously I knew cash was tight so I even took A little bit of a pay cut from my previous job just to get in the door. You know, I had some money saved up, prepared to, you know, float myself if I needed to. I was just, you know, I kind of viewed the opportunity as, you know, obviously one, a huge learning experience for me. Kind of like about as good as an MBA you could get with a call option of making some more money on the upside. So that was really my thought process there.

Host: Well, one. One thing that we haven't clarified is that you're pretty young. So this is also, you know, age factors into people's risk profiles and the value of experience. The younger you are, kind of the more valuable experience can be. The older you are, the more you want to leverage the experience you already have. So how old were you?

Guest: Yeah, so when we closed, I was 25 years old and kind of going back to it too, how I got comfortable with it. I was kind of running through the absolute worst case scenarios. So, like, let's say we go buy this business and it just, you know, it fails. So option one, you know, I was like, I could always just go back and get another job. Option two, let's say it was so bad, you know, I had to end my apartment lease, you know, sell my car, whatever. Like I said, the business is still based here in Tampa. I have a lot of friends and family here, so I was, you know, prepared to eat ramen and couch surf if, you know, it hit the fan that badly, which kind of got me comfortable taking this risk.

Host: And Chandler, when you said that 75% of the purchase price was an earnout, does that mean a seller note?

Guest: Yes. Correct. So we are contractually obligated to pay him. Let's see, I'm trying to do this math in my head. I believe it was 475,000 bucks. I think that was. I think that math checks out.

Host: Sounds about right.

Guest: Yep. And yeah, so it was basically, hey, you know, you're on the hook for either 25k a quarter or 33% of gross profit till that nut is paid back down.

[30:04] Host: Okay. And was your this loan personally guaranteed?

Guest: No, that was another thing we got attractive about it with as well.

Host: So worst case scenario, you're not gonna. He's not gonna come after whatever other assets you have, correct?

Guest: Yep. Worst case scenario, not coming after anything. And, you know, maybe I'm. Maybe I'm on a buddy's couch for a couple weeks until I can find another job, or maybe I'd barten night, something like that.

Host: Yeah. But even. Frankly, even if it had been personally guaranteed. Another advantage of being young when is that you don't have a ton of assets that would. Would have been at risk. It's not like you have a mortgage. Well, correct me if I'm wrong, right?

Guest: No, I did not have a mortgage.

Host: Well, since we're. Since we're so in the weeds of your personal finances here, Shaylor, can I. Can I ask, the 25% at closing, that was from you, Bert, in Sam Rosati, did you put actual cash in or was it all for you? All sweat equity?

Guest: Yes. No, I put in 10% of the cash down, and then I had a kicker of sweat equity on top of that. Once, kind of the principal plus a prep was returned to our investors, Sam and Bert and myself.

Host: Great. Thank you for all of that detail and transparency, Chandler.

Guest: Yeah.

Host: All right, so you get the deal done, take us into what it looks like to actually operate getgreen. Noi.

Guest: Yeah. So, oh, my gosh, it's like taking Prime Mike Tyson's biggest punch in the face right on day one, not only learning a new industry, but learning new kind of business operations. So day one, I was the CEO, basically, coo, cfo, half the accounting department, hr, helping out with the fulfillment side, project management, invoicing. Pretty much every single little thing that you can think about in a business I was fulfilling outside of actually managing the projects. So I was running most nights, like, five, six hours of sleep, waking up, trying to put out fires, trying to put in processes. But I think the most important thing that I learned in that whole process was just really documenting everything that you're doing, because I kind of knew, hey, if we're going to end up scaling this business and growing, I can't stay doing all this stuff myself. So it was literally, I'm running all the invoices, signing all the contracts, setting up health insurance, setting up our accounting software, setting up our project management software. Pretty much anything that you can think of, I had to do and get my hands dirty on doing. And obviously, you only have so much time in the day, so I would say my social life took a big hit. Like, people were wondering. I kind of disappeared, fell off the face of the earth for a good eight months or so, which was, you know, not great. You know, I had to, you know, I grew distance distant with some friends, you know, obviously prioritizing family, if anything, outside of business. And, yeah, it was apart from learning, you know, just business operations, also learning a completely new industry to me. Like, I know I said I knew multifamily so I knew the benefits of our projects because I was the client a couple years beforehand, but I certainly didn't know squat about light bulbs or the process of installing light bulbs or sourcing the materials, signing contracts, payment terms, accounts receivables, whole nine yards. So it was drinking from a fire hose times 10, I would say.

[33:41] Host: And all of this that you're doing, that not learning the industry, all the other stuff, the operations, who was doing it before Richard wasn't doing it, but. But the business, I mean. Yeah, because typically, you know, like a lot of the stuff that you just said you were doing, the story would be that the seller had been doing that and then business buyer comes in and steps in to do what the seller is doing. But nobody presumably was doing that before. So. So yeah, how does that.

Guest: So the seller certainly wasn't. So Richard was basically focused on the actual fulfillment side of the projects. And then it was kind of like a shared service model with his new. The seller's new company. Like the CFO was doing the books for Onyx with a couple spare hours of her time. Some of the new company salesmen would help pitch in and try to do on sales calls. But the seller was not really doing anything. It was just some shared services with the new business. Kind of. I would be taking on all of that at one time.

Host: Gotcha. So this is the pinky toe. This is like the stuff in the new business where some of the resources are being diverted and distracted by continuing to keep the lights on. Haha. At dead green noi at Onyx.

Guest: That's one of my favorite jokes. He is.

Host: You knew it was gonna come up at some point in his iterates beat

Guest: me to the punch.

Host: So, okay, and so through all this learning, learning how to business and learning how to operate and then learning a new industry, what do you look back on is the hardest part to learn? What was the steepest learning curve?

Guest: The steepest learning curve? 100%. The people, not only the one employee that we transferred over, but you know, as we started growing, you know, I had to hire. I'd never hired anyone in my life before. I'd never managed anyone in my life before outside of. I wouldn't even call it management, but I've been in leadership roles in the past, whether it was in college, high school sports, high school clubs, stuff like that. Which granted is nothing compared to running a business. But yeah, the biggest thing, probably my biggest takeaway from it is you can't model people in Excel. And that was literally all I was Doing in my commercial real estate world was running financial models in Excel. And the people component is. And I would say for any small business, is truly the crux of the whole organization and something you got to nail and be prepared for.

[36:12] Host: So the people piece is something that we hear over and over and over again. That is the most challenging part, even if you do have some management experience. So can you give us any more detail about maybe a story or a particular aspect of the people piece that was so challenging?

Guest: Yeah. So I think I was trying to make a small amount of changes to the way that we were, or a couple small, different changes. And one, you know, I kind of was going in there saying, like, oh, I'm the boss. I know best. Let me go do this. Let's do that. Without failing to consider, like, hey, how is this impacting, you know, the people? How is this decision impacting the people? And also failing to consider, like, hey, Richard has been literally doing this, Been in this business for six years now. this point, he knows how it is. So when he's pushing back on me, instead of getting frustrated and saying, like, he doesn't know what he's talking about, I need to do it my way first. Taking a step back and saying, okay, well, why does he want to do it this way? He must have seen some problems that have arise in the past that led them to ultimately keep doing it this way, because it's probably better than some of my ideas. So I think the biggest thing was some of the ways that we were presenting our proposals or our bids. I wanted to change it up a little bit. And he's like, hey, I hear you on this, but this is why we've been doing it this way. And this is how it's worked in the past and how we've had the most success. Whereas maybe it was a little bit egotistical saying, like, oh, I know better than this guy, or, hey, I know a better way to do this, and kind of just checking. I had to learn to check my ego at the door and just really, you know, put my best foot forward and taking his considerations and all decisions at that point.

Host: And so then crystallize what you would have, what you would tell yourself on day one. Just. Just listen more. Less action, more listening sort of thing.

Guest: You're. You're not the smartest guy in the room. Never pretend you are, especially for a new business, in a new industry, especially when you're working with people who've been doing this basically their whole career. Take their input. You need to Be able to hold two kind of sometimes potentially conflicting ideas in your head. The old way of doing it, the new way that you want to do it, and then try to meet in the middle somewhere.

Host: So what does life look like after these eight months of transition? I think you said eight months, you kind of disappeared under a rock from, from, from your, your social networks perspective. So when you reemerged, what did life look like?

Guest: Yeah, so life looked like. We made our first two hires, one of which was a virtual assistant from the Philippines who was primarily operations coordinator. So basically any computer based tasks that you can think of that I was doing to keep the business running. So invoicing, kind of data entry, some lower level email responses, stuff like that, made a loom video, did an SOP for it and kind of pass it off and check progress, making sure the ship was still taking its due course. And then the next piece was a project engineer who at this point we, I had drummed up kind of more revenue and so I was helping Richard out on the fulfillment side, traveling, you know, across the country to the apartment complexes that we were working on to create the scopes that we would go make our bid based off of. And so if you can imagine, every day that I wasn't in the office kind of working on the business or trying to drive revenue was basically days that we were losing out on potential revenue. So I needed to make the hires to take me out of the kind of the more in the weeds, day to day operations, smoothness of it, so I could just focus strictly on driving more revenue into the business. So what life actually looked like was I finally got to the point we made these hires. I was able to take my first true vacation where I even like, I deleted Gmail off my phone. I'm like, hey, I need a true check checkout here. Deleted Slack and Gmail off my phone. I didn't want to get tempted and took a vacation. I believe it was with my family too, which was great. And then slowly started the text you get from the buddies, hey, what are you doing this weekend? What's going on? Instead of telling them, sorry, dude, I'm working. It was like, oh yeah, hey, I can come meet you out for a couple hours. Nothing crazy, but I was starting to gain my social life back, which is good. It was good for my mental health.

[40:42] Host: Great. For sure. Yeah, that, that's sort of just heads down. Hardcore can be really valuable in spurts, but of course it's not sustainable. And, and what about the business? So aside from your learning Curve of the industry, your learning curve, how to be an operator and run a business. What about. What did you find in terms of the potential of this business? Was it. Was it looking like it was your thesis was gonna. Was gonna carry through?

Guest: Yes, it was. So I think the biggest thing was, one, we had the lighting business back, kind of on a good trajectory. But then also, two, some of our clients were asking us even like it was on a roadmap. Hey, we want to do water efficiency projects, we want to do EV charging stations, we want to do solar energy at some point. And the interesting thing was that timeline kind of got dragged into the future for. For one day when one of our clients asked us if we did EV charging stations. And I just said, yeah, we do. And I go back to the team. I'm like, hey, guys, we're now doing EV charging stations. I know we've been talking about it for a few months, but we have a live deal. We got three weeks to figure it out and kind of just hit the ground running.

Host: So you got the two hires, the. So what year are we in now? What year is this?

[42:02] Guest: This is like basically the first tire was early February 2022, so not even to a year from full acquisition yet. We had the project engineer start one week, and then the week after the virtual assistant started. So I was like, all right, hey, if we're going to be. I guess of all the headache that comes with hiring a new person, especially for someone that's never hired anyone before. I've always say, hey, let's just bunch up all the stock together and just knock it all out at one time versus spreading it out.

Host: And you said that this was less than a year into your tenure. So you bought in what month? 2021.

Guest: We bought basically may we close on April 30, 2021. And this was early February 2022.

Host: And what is revenue looking like? Has it materially changed from that 900 number that from when you bought the business?

Guest: Yeah, I think so. In year, like kind of from the stub month, if you will. So from May 2021 to December 2021, we did 900K. So if you annualize that, I guess if you will, probably like, I think it was around like 1.1. And then it kind of started getting crazy with, you know, interest rates were still basically zero. We're coming out of COVID People are, you know, have all this dry powder to. In the multifamily space. And things just kind of started taking off. People are buying apartments. So kind of a big driver of our revenue is value add apartment transactions. So someone goes to buy a dilapidated or apartment that has some work that needs to get done on it. And our projects are kind of on that docket. So next thing you know, we almost can't keep up with the demand that we're getting, which is a good thing. Right. So flash forward from February 2022 to June 2022. We make our next hire on the fulfillment side, a project manager. So kind of like a hybrid between what Richard was doing and then a hybrid of what the project engineer was doing. We're getting all these inbound requests to come. Hey, we need a lighting project. Las Vegas. We have one in Texas, we have one here in Florida. We have one up in New York City. When can you get out here? So it was going well, I think kind of flashing forward. So in 2022. So I told you, in 2021 we did about 900k of revenue in that accounting for some stub months, annualized probably 1.2 in 2022. Top line was just north, I think by pick, maybe a couple hundred bucks of three million dollars. So a big jump. Everything all happened at once. And we were kind of like growth at all means.

[45:02] Host: And you are feeling like a genius.

Guest: I think, oh my gosh, I'm the next Elon Musk. Look at me, I'm a genius. Everything I touch turns to gold. All my hard work, those eight months where I kind of went monk mode like I was telling you about, oh my gosh, it paid off. I'm a genius. I'm the best SMB acquirer of all time.

Host: And just to be clear, when you say people are buying apartments, what you mean is real estate groups or. Or investors are buying apartment projects. Like actual projects are transacting. Correct. So some investor developer will buy a project and then need to retrofit the lighting. So that's what we're talking about.

Guest: Yeah, so that was a big spur of our jump there. And then we can kind of Flash forward to September 2022, which luckily we signed a bunch of projects during the summer in Q3 before September, that kind of trickled out through the remainder of 2022. But September 2022 was really when the Fed started jacking up interest rates. And all of a sudden, all the people that didn't even know about apartments that were trying to get in to buy apartments disappeared. Our clients stopped, basically fell off a cliff overnight. The multi family transaction market, which that might be a good segue into kind of September 2022 to March 2023 timeframe, where all of a sudden I wasn't Elon Musk anymore.

Host: And you dropped 50 IQ points.

Guest: Exactly. Probably even 100 IQ points. So yeah, so I thought, like I said, I thought I was the greatest operator out there. Lo and behold, a lot of that had to do with the market, not just my hard work and dedication into the business and strategery, if you will. So kind of from that September 22nd timeframe to about March of 2023, the new opportunities that we were getting kind of fell off a cliff. Like I said, luckily we had some previous transactions or previous projects from mid to Q3 before September 2022 that kind of carried us through the remainder of the year. But kind of flash forward to March of 2023, going from a 3 million top line year in 2022 to I think the exact number was $10,262 in all of Q1 of 2023.

Host: Wow.

Guest: Like, damn,

Host: that's like a big turning off. Yeah, yeah, Incredible. So, okay, so keep, keep going. So what's that look like? And what's your head the headspace look like or.

Guest: Headspace is not good. I'm, you know, like a madman calling up all our clients, hey, what's going on? What are you guys seeing in the market? And everyone said, hey, we're pencils down right now. And then all the money that we were planning, I know we told you, hey, we're going to have a bunch of projects for you in 2023. So you kind of. The two ways we get projects are new acquisitions. So customer already has a big capital budget to go invest into this apartment that they just bought. Or two, hey, they bought the apartment a couple years ago or they've held onto it for a long time. They're planning to spend some money on capital projects in the next year. So in September, even though the transactions had fallen off a cliff, our clients are saying, hey, we have all this money budgeted to spend on these lighting projects and ev charging projects we were telling you about. It'll all happen in Q1, 2023. And then lo and behold, with the interest rates, most of the people that are buying these value add apartments use floating rate debt. So all of a sudden their interest basically goes from 0 to 5% or so, which is sizable. When you're taking down $100 million, you know, loans to buy these projects, all the money that was previously going to be used for capital expenditures, AKA our projects, all of a sudden is now going to pay off the interest on their debt service. So, yeah, just from both angles all around. Not good.

[49:09] Host: Yeah. Okay. And so I guess at some point you're wondering if the business is even viable. I mean, if you go, if you drop to $10,000 a quarter.

Guest: Yeah.

Host: I mean, obviously that, you know, if even if that were profit, that wouldn't be enough to pay somebody for. For a year. I mean, that's correct. Half a salary.

Guest: Yep. So obviously, you know, I told you we made these hires. So I made my first four hires in 2022. Yeah, first four hires in 2022 and made my first five hires in 2022. And then like I said, I'm still our CFO or I still am our CFO. So I'm doing some cash forecasting and I look at it and it spells very bad news. So I go back to Burton Sam and I say, hey guys, here's where we're at. If we don't do something soon, we're going under or we're going to have to put a bunch of money back into the business to keep us afloat. And we came to the conclusion that we had to trim up operations and get into a default survive Mode. So in March 2023, after doing just that, 10K, had to let go. Basically one of the VAs that we hired and then the three kind of in office hires that we had made in 2022, which was a big gut punch to me, going from at top of the world to literally lowest of flows especially too just selling them on. Part of the reason all the people that we hired had other offers elsewhere, but they bought into me. The vision for the company and the growth projections that we had at the time. But obviously I didn't have a crystal ball. I had no idea this was going to happen and so I had to let people go. So now even today, as we stand here on September 15th. Yep. It's now just we're back to it's me, it's Richard. And then the first VA that we hired are still holding down the fort here.

[51:21] Host: Well, that's a lot of experience in a year and a half. Chandler.

Guest: Yeah, I feel like, I don't mean to laugh at it because obviously it was very sad for me, but just laughing at like, yeah, I feel like I've lived a whole decade in the past two and a half years, which is good. Like I said, I viewed this as, you know, like I said, a learning opportunity more so than, hey, you know, with a call option on the upside to make some money. And I'VE let's just say I certainly got my money's worth as far as education goes, experience.

Host: Yeah. Yeah, man. Okay. And so, so are that. Is that where things stand today? $10,000 a quarter, three and a half thousand dollars a month of revenue or.

Guest: Yeah. No. So I don't know what if. What it was. But not two weeks after we had to make the headcount changes, we got rid of our office, we went fully remote. Like literally all the nice to haves that we were paying for all of a sudden became, hey, we're only paying for the mission critical items. But yeah, to your point, as we sit today, I'm not sure what was in the water, but come April 2023, we have the best month that the company's ever seen. We do 800k of signed contracts in April.

Host: Wow.

Guest: As we sit. Yeah. So I don't know. The SMB gods were smiling upon me and get green.

Host: So as we sit today from call it three or $4,000 a month to $800,000 in one month.

Guest: Yeah. So that's the blessing and the curse of these project based businesses is. Yeah, I don't. It comes in waves. We have huge months. We have $3,000 months. But yeah. So in April we signed about 800k. I think it was just north of 800k in projects. And then as we sit today here in September, we're right at 1.2 million bucks of top line.

Host: You're annualizing that or that's what you've already.

Guest: No, that's signed contracts in 2023 to date. So. And that was strictly between basically May and September.

Host: So as we said today, if you keep that up, you could get to 1.5 or 1.6 by the end of the year.

Guest: Yes. So our goal is I'm trying to hit 2 million bucks this year. So we have some promising projects in the pipeline right now. But again, it's certainly not as fast and furious as it was in 2022. We're having the scratch and claw for every single dollar that we're bringing to the door these days.

Host: Well, you seem to be scratching and clawing pretty effectively, Chandler, but I'm a little confused that the spigot turned off and then turned right back on because interest rates have only kept going up. Yeah. So what do you think it was that caused the absolute freeze up of any spend and then another kind of gushing of spend?

[54:22] Guest: Yeah. So the freeze up was just like uncertainty. No one knew what the heck was going to go on. Are interest rates Going to go up even higher? Are they going to get, is the economy going to get really bad and get cut again? Basically everyone was playing their money super close to their chest and then come, you know, one quarter of operating under this new financial environment, they're like, okay, I think we're here to stay in this higher interest rate environment for the foreseeable future, reallocate some capital and then try to move forward with some of our community level business plans. As stated, the acquisitions still haven't come around. There's only the deals that are getting done right now. There's a story to it. One of our biggest clients who bought I believe 40 apartment communities, which is a huge. For anyone that's not familiar with the industry, buying 40 $100 million projects in one year is a monumental run to going from September to basically March of not buying a single apartment complex. So a huge drop off. So some of the deals that they're getting done are buying six portfolios from a distressed buyer at one time. So basically, long story short, all the deals, transactions that are getting done have a story. They're a little bit funky, they're not true, like right down the middle of the fairway deals. But luckily we laid that groundwork, we developed those client relations all throughout since we acquired the business. And then lo and behold, some deals are starting to get done. And then the people who were playing the kind of same store owners who were previously playing their money close to their chest were like, hey, this is a new environment that we're in. Let's start getting back to work. And luckily that all happened culminated in April, a month after I thought we were going under.

Host: So you're at 1.2 now. You may be conservatively 1.5 or 6 by the end of the year, but you're gunning for two. Are you going to continue in the business now? What are you up to?

Guest: Yeah, so these days, like I said, it's certainly been slower. One of my, actually it was funny. My old boss at the previous company, I kind of caught up with him, told him everything that was going on. And one of the things that he told me, it's like, hey, you know, obviously the economy goes in cycles. One of the best things that you can do in kind of down markets is, you know, if you're not that busy, that's a good time for you to improve some other areas of your life, whether that's fitness, relationships, family. So this summer, you know, obviously I've been working, been traveling, trying to meet some clients, but also Taking some time to kind of reprioritize and look forward. Like hey, what's my next five years, two years, three years gonna look like? So at this point right now I'm still very much working in the business, but to your point or going back to it also with that big 800K and that big swell kind of in the middle of this year, it got us to the point where we were able to pay the seller back. So now every dollar of profit that we are getting is now going back, pay myself and our partners back and then hopefully to be reinvested in the business. So kind of what I'm doing right now is I'm really focusing on going back to the documenting point. Like all right, what am I currently actually doing in the business? What do I need to do? And then also what are kind of the things that I was doing in growth mode? Making sure I'm documenting those. So once the market picks back up, which obviously I don't have a crystal ball, if I would, I'd be recording this podcast from my island estate somewhere. So yeah, so we're kind of doing a game plan of like, hey, what am I currently doing right now? Can we get softwares to do that? Can we get VAS to do that? Do we need to make a kind of onshore hire for that? Button that up and then what's the game plan for when we start getting those calls? Hey, we're buying apartments again. So I'm kind of just in kind of like a pre planning phase of hopefully trying to remove myself out of the day to day operations and this becomes kind of like a 5 to 10 hour if that lift for me weekly.

[58:39] Host: So not to work on the business rather than in the business, but to actually do a different something else or a different project or maybe buy another business or something like that?

Guest: Yes, correct. So what I'm kind of doing now is going back to has been running a in person boot camp in Tampa. Just basically, hey, go from, you know, someone like me that didn't know what ETA stood for or anything like that can kind of take you from, from square zero to after the three day boot camp. Hey, I not only have the knowledge, but I'm also equipped with a deal team and a playbook people to call how to do it, to go out and search for my own business. So even so, San's been doing that for now for like two years. So I went to the first boot camp and I spoke at it. Kind of the third day in these boot camps is kind of like the case study days. Sam wheels us out there like, hey, these are operators I've backed and invested behind. You can actually do it kind of. It brings it all together for these people. And I was talking to Sam, I'm like, dude, why aren't you doing this? Why aren't you scaling this up? It's great, it's successful. You've had probably like 25 people that have come through your boot camps, buy businesses. We know it works. Why don't we try to bring this online or make it bigger? And Sam was like, you know, man, I really don't know why. I'm like, all right, well, this is something. Going back to that first SM bash as well. I kind of fell in love with the space. So I'm learning more about the space, I'm operating the business and I'm kind of sitting there thinking like, this is a space that I want to play and operate in for at least the next decade. And I kind of cozied up sand to the idea of bringing this online and making it bigger. And so that's kind of what I've been feeling with my spare time, trying to get myself out of get green and then helping Sam bring his In Person bootcamp one online and then two just doing more of them in person. So that's kind of where we're sitting right now, actually. Super cool. I know I was telling you before we started recording, like, this week has been incredible for us. Just Tuesday we went down to Fort Lauderdale to teach SMB ETA to a group called Professional Athlete Community, which is primarily focused on the NFL, which is awesome. So Sam sitting there, hey, we got connected with the pack Professional Athlete Community. They want us to come teach SMB to a bunch of former NFL players. You in? I'm like, of course, man. So we went down there and I'm literally talking about SMBs to guys that I looked up to, idolized, like played, played with them in Madden. Like, I was very starstruck.

[1:01:24] Host: That's amazing.

Guest: Yeah. So we have all sorts of angles going on right now to kind of spread the gospel of eta. And I think Sam and I pack a great one, two punch. Obviously this stuff is like riding a bike to him. He knows it in and out, all facets, knows everyone in the space. And then me, kind of the more Internet savvy, Internet business minded type and also, hey, living, breathing proof that you can do this. And so I think we pack a great one, two punch in that regard.

Host: Great. So the picture for Chandler for the next few years is Getting get green to be somewhat running on its own with some attention from fuel.

Guest: Just making sure the ship, yeah, making sure the ship is pointed in the right direction. But hey, you know, I'm not fielding sales calls anymore. I'm not. I'm certainly not trying to go out to any apartments to create our scopes and just making sure that everyone that on our team is happy knows exactly what they want to do, knows what they should be doing and making sure that we're all moving forward in the right direction. Kind of the orchestrator, if you will.

Host: Well, you're doing what a lot of people aspire to do with the SMBs that they buy, which is some people want to operate indefinitely, but often it's I want to operate as long as I need to or it makes sense for me to. And then if, if maybe the growth opportunities aren't huge, be able to step out and then do do something else, maybe buy another business, what have you. But that all always requires, of course, having a great GM or a great operator, which is another theme that comes up time and again on this podcast. So what is your picture for that? Is Richard going to be your operator? Are you going to hire an operator or are you thinking that your 10 to 15 hours a week will be the kind of CEO, the necessary CEO within the business?

[1:03:20] Guest: Yeah. So the plan is to keep empowering Richard. He is great. Like I said, he knows his business like the back of his hand. And even too, the big test will really be at the end of this month. I'm going to Europe for two weeks. So we're going to see where some cracks surface in the operations standpoint and then try to button those up after to just truly keep making the business more resilient and truly getting ready for me to pull out. So Richard is going to be kind of running the show, signing the contracts, making the kind of tactical decisions on the project and within the business. Obviously me helping with guidance and stuff like that. But even going back to it, like you said, like I said with the EV projects. Right. Like an opportunity presented itself. I didn't have a choice or I had a choice, but the choice was to move quickly on it. And so same thing here with Sam and SM boot camp and the stuff that we're working on here. This opportunity kind of presented itself to me. And so now it was always kind of in my plan down the road to kind of pull myself out of operations at some point, whether I didn't know what it was going to be for. But this opportunity presented itself so I'm like, all right, hey, it's time to, it's time to go and we'll, we'll see how it goes.

Host: Well, actually, but to Chandler, to tie it back to that, that episode where you get the lead for the, for the EV installations and you say, let's go team, let's do this. This is, this is the window. The, that was really showing a lot of leadership that, that maybe somebody who, you know, didn't see themselves as the leader owner of the business might not have gone after so, so aggressively so enthusiastically is, if you're not going to be in the business full time, do you think somebody else will, will jump at those opportunities? And I guess the kind of implied question there is, is the, there's still a vision to become an all in one solution for any kind of green retrofitting or are you guys kind of going to keep your scope narrow on just lighting?

Guest: Yeah, that's a great point. So, yeah, so right now, at least we are solely focused on just being the best lighting and EV installer as possible. I kind of learned, I spun the wheels so much on trying to get some other project lines in it and luckily we had a bone thrown to us on the EV side. That one certainly had some more legs. But yeah, so right now, at least until kind of the commercial real estate market starts ripping again, we're just going to be kind of at a scaled down version of the grander vision and just, you know, truly focusing on being the best lighting and EV install group out there.

[1:06:04] Host: Yeah. And, you know, so the business, when it was peaking under the previous ownership, it got to $6 million in revenue. Then, you know, in your first year there, you have this great Covid bump or, you know, post Covid bump where all this capital comes rushing in and then you have this capital freeze where things collapse momentarily. And then, and then now things have started coming back. Whereas, you know, so you've never seen, you've never seen this business in a normal environment, in a stabilized environment. What do you think this business looks like? Stable. Like in terms of revenue and size stable.

Guest: I think that the 6 million bucks is certainly attainable.

Host: Okay.

Guest: But, you know, like I said, I'm hoping that we can get to two this year in what otherwise is a pretty down year. I think this is hopefully going to be the bottom. But then. Yeah. So I'm hoping at all, in all that this business does, you know, without me even, you know, getting on any sales calls, obviously, you know, we probably need some sales folks to get up to that 6 million because that's, you know, the previous seller had some sales guys and girl that we're helping get to that 6 million bucks previously. But I think that's kind of. We're just basically trying to recreate that business in 2017. That $6 million business. That is probably what we're trying to recreate.

Host: Okay. Okay. Well $6 million business, 15% margins. That's a pretty great. That's a pretty great business.

Guest: Yeah. Not a, not a bad day at the office. Yeah.

Host: Before I let you go, Chandler, I, I'm getting in the back of the weeds a little bit but I think it's important because I heard you express some emotion around actually I think the emotion was in our pre call. But so, but you touched on in this conversation it being a project based business and kind of. Or construction product. You know as it's a construction business technically and everybody listening to this probably knows. But for those who don't, you know, project based businesses are less appealing than recurring recurring revenue businesses where you can really project out what your, what your revenue is going to look like for the in the coming months. And this, you're basically just waiting for the phone to ring or trying to make the phone ring. And your revenue is only as good as those projects are active and are coming in. So that's less appealing. How do you. And yet, and yet plenty of buyers buy businesses that are project based. And there's actually this kind of interesting intellectual debate around this because we'd all love recurring revenue businesses. We all understand why that's more appealing, why the quality of that revenue is higher. But you can't always get it. Most businesses are projecty and so a lot of people buy a project based business and they do very well with it. Thank you very much. And you're on your way to doing well with this one. So. But I know that, I know that emotionally you feel how.

[1:09:10] Guest: Yeah. Searchers out there. Unless I would say, unless you have some sort of edge. Like unless for example, for me, unless like I was a lighting industry expert or a commercial property vendor expert and I brought some edge to this project based business where I could outcompete some in a relatively commoditized industry if you will try to avoid it at all costs. There's a lot easier ways to make money than project based construction businesses. However, like I said, if you're the right girl or guy for the job and you find an opportunity like I found, go ahead and get into it. But then that kind of ties it back to me, buying a business first and learning about searching in eta. Most people learn about search and ETA and learn about the types of businesses that are more attractive than others and they say, okay, I don't want to do this project based business. Whereas I was, hey, I bought a project based business and I learned, oh, there's a lot easier ways to make money or a lot, I would say more attractive to the majority of people to make money. So yeah, so that being said, I'm not sure going back I would do what I did 100%. But if you're asking me, hey, would I go buy another commercial like a construction project based business, probably not unless it was super compelling. And I thought that I could bring an edge to it that other people couldn't.

Host: And, but so let me understand, is it, is it is, do you have an aversion to it going forward because the quality of revenue is, is so much less in your, you know, you're kind of having to bid and fight for every, every dollar or is it, is it something else? Is it the nature of the work itself that you don't like? What is it that you now dislike so much?

Guest: Yeah, I would say all the above. Well, I think really it's like all the above. But it's funny because I have friends that kind of run Internet based businesses where people click buttons and all of a sudden they get income in their stripe account and they don't have to do anything they charge by card. Whereas our sales cycles are like three to six to nine months long at some points people pay us by check in the mail. As much as I've tried to push towards ACH and instant payments, you know, we work a lot of dinosaur clients. Things can go wrong. You know, a big construction project like for example, you know, in my probably like month three of operating the business, Richard took a week long vacation and so I was the de facto project manager. I get a call from a client that says, hey, your cherry picker just cracked a bunch of our sidewalk on site. What are we going to do about this? I'm like, I don't know, I'll get an answer for you. There's just a lot of things that can go wrong in construction based businesses. Going back to the payments and all that stuff. Just, I've learned that there's a lot easier ways to make money. But like I said, if you're the right person for a job like this, you have an edge or you enjoy it, by all means go for it. Because you can make solid money in this space, it's just, you know, comes with some, some headache for sure.

[1:12:19] Host: Yeah. And even though, because one aspect of the business that we should also touch on a little bit here is the fact that you were using subcontractors to, to fulfill all the jobs. Right. And but it's still your throat that is choked when there's a problem. So the subs are on site, they break something and you get the call and then, and then you have to call the sub and be like, wtf? How does that look?

Guest: Yeah, call them, say hey dude, what's going on here? A lot of times they're like, you know, sorry, like we'll go through insurance, we'll go through something and then it's a lot of times it's just like, because especially in a commercial construction based business, like relationships are everything. Like the project managers that we are getting projects from, you know, oversee sometimes like 20 to 50 apartment communities. So they're going to have more projects for you down the road. So I guess our business is reoccurring, not recurring in that regards, like the same guy that's giving you one project or girl giving you one project, you know, it probably will have 20 others for you, you know, in the next few years. So it's almost like, you know, preserving that relationship at all costs. Sometimes that looks like splitting the cost of the damage that the sub did between us and the sub. Sometimes the sub is going to pay for all of it. There's a lot of moving parts there.

Host: Yeah, yeah. And the sub using. So if you're going to get into a construction business and you know, either use subs or not use subs, this is going to show my naivete because I'm sure people who have worked in construction project based businesses have strong opinions here or the ads or the answer is obvious. If you have subs versus your own, your own teams doing it, what are the pros and cons there?

Guest: Yeah. So primarily having your own kind of install crew is one. Your margins on your projects are going to be a lot better because obviously if you use a subcontractor they're going to get you a markup versus you're paying your own guys an hourly rate. No matter how many projects you have going on or not, they're getting paid that amount, they're doing the work. But on the negative side of that is, let's say we were flashback to Q1, 20, 23. I have this huge overhead install crew which is great. When the projects were coming in, all of a sudden we don't have any projects coming in. You're still having to pay them their salary even though they're not working on anything right now. So it just really depends on, and I recommend this to everyone that's searching for a business. It's like, what do you want your life to look like post close. And for me, keeping a lean team with subbing out all the labor was something that I was attractive to me, you know, at the expense of, you know, some points on your margin. I was willing to live with that because, you know, life was going to be easier for me.

[1:15:10] Host: Yeah. You know, Chandler, you've already said that. You know, take your, your perspective here with a grain of salt because for other people, they might be perfectly at home in a construction based business.

Guest: Exactly.

Host: But just to kind of, to emphasize that what is clear about you is that you are you kind of like digital businesses. I mean, and how can you not, you know, press a few buttons and make a million dollars? Right. That's what they're all about, at least. No, but, but, but you know, you have, you cited your friends or colleagues that have businesses like that and how appealing that is. And what you're bringing to Sam's bootcamp is, is, is taking it online. So it does seem like your orientation is just kind of digital businesses. So audience be keeping that in mind when listening to the types of businesses that Chandler does or does not like. But I hear you. Digital businesses, if you can get them, they're hard to beat from an operational perspective.

Guest: Yeah. And that's the most important thing. Like everyone that I talked to at Sam's boot camp or even the NFL guys. Right. Earlier this week, it was instead of, you can go find a great plumbing business. And, but it might be located in North Dakota. So. Okay, do you want to go uproot your whole life just because the returns on paper in your Excel model look good? Do you want to go move to North Dakota and let's say all of your technicians call out sick on a weekend? Are you going to go have to go plunge toilets or clog and snake a drain on the weekend? Yeah, you might, you know, whatever your IRR might be 50% on that. But, but how does your life look so really important? I think that when you're going and searching to buy a business, figure out what you want your life to look like post close, whether that is emphasis on family. You want to spend the weekends with your family, you want to take your kids to school, you want to be able to go do stuff, take a trip, figure out what you want that life to look like and then go find and search for a business that fits it. Not perfectly, obviously nothing's perfect, but go find a business that fits the best for the life that you want versus structuring your whole life around the business that you find.

Host: Yep, wise words. Why don't we leave it there, Chandler?

Guest: The best piece of advice I can give to anyone.

Host: Yeah, great. Anything that, that we didn't touch on,

Guest: I don't think we didn't touch about how much I love your podcast and how great I think it is for the community. So props to you. Keep, keep spreading the word and doing great for this community. I think it's a huge thing. You know, when people talk about, you know, the ETA SMB podcast, obviously this one's front of mind and I think you do a lot of great work for this community. And like I said, you know, and I'm sure you probably know this too, I think that we are, you know, people talk about the Silver tsunami and all that stuff, which, you know, if it's fully True, I'm not 100% sure, but based on what I'm seeing, I think it's certainly true. I think we're in the really early innings in this industry and I think that eta, while, you know, obviously it got started a long time ago, Stanford search funds, traditional searches, all that good stuff, the self funded search is now, I think, more promising than ever with the Internet, with Twitter, all the resources are at your disposal. If you don't have a lot of money, don't worry about that. There are literally people that are dying to stick money into these self funded searchers in these businesses, obviously from a financial perspective. And then also too just this business model is really never been bigger and it's only going to get bigger. So I would encourage anyone, this is a great space to play in, I would say, at least for the next decade. And if you have any questions, listen to Acquiring Minds, I'm happy to help out however I can. And you won't be disappointed because I truly love this space and I kind of fell into it and I'm incredibly blessed that I did.

[1:19:06] Host: That was great, Chandler. And not just the nice thing that you said. No, that was, that was such a great endorsement for this space. That was really inspiring. So speaking of getting in touch with you and Sam's in your boot camp, you want to plug that, plug that, plug the boot camp and then tell folks how you prefer to be reached out to if people have questions.

Guest: Yeah. So boot camp, um, so if you want to sign up for the in person boot camps, just head over to the pursuant capital.com website. You'll see a button in the top right corner that goes apply for the Bootcamp. That'll give you all the details on it. We have one next week that we are at max capacity for. We're super jazzed about that one. We have one coming up the week after Thanksgiving that we still have some spots for. So if you're interested in it, I encourage you to apply. SM Bootcamp is pending launch here soon. We're making sure that it's the most valuable thing out there. We still have a couple more some polishing to do.

Host: But if you go to SM Boot Camp is the virtual version of the in person boot camp. Smbootcamp.

Guest: Smbootcamp co will be how you can sign up and join the waitlist. You'll sign up, join the waitlist, you'll get an email basically outlining everything that SM Bootcamp is going to offer. And then the best way to get in touch with me is on Twitter and you can find me chandlerread, SMB all strung together great.

Host: And all of that will be in the show. Notes for people to just click through

Guest: to and smbash too. I'm now involved with SM Bash. I forgot about that. I got my weekly call with Sam, Kevin and David from the SMB Law Group that is coming up April 18th through 20th, 2024, Salt Lake City. You can sign up for that, look for that anywhere online, just SM Bash. And it's going to be the best one yet. And will I hope that you'll be there too to get another live podcast recording in, maybe some skiing beforehand if you're into that. I'm going to be hitting the Park City two days before then, so it's going to be awesome.

[1:21:14] Host: I look forward to it. And maybe you already answered my question. But so year one, the inaugural year was in Orlando, as you said, this past year was in Austin. How did you guys choose Salt Lake City for year three?

Guest: I guess we're just going by time zone, right? We did East Central. Salt Lake is in Mountain. So maybe next year it'll be west coast. Maybe we'll bring it back home east. But I think the just on the SM badge note, one of the coolest things is so year one was kind of the operator. It was kind of operator focus heavy. Year two in Austin was Searcher heavy. And then this year, year three, we're actually doing two tracks. So we'll have some joint sessions with everyone but there will be a searcher track with searcher speakers and then an operator track with operator speakers, all in the hopes of making this the biggest and best SM Bash to date. And I think it'll be awesome.

Host: That's great, Chandler. That was actually one of the pieces of feedback that I heard from somebody at SM Bash that this idea of tracks, which, of course, you know, is bigger conferences have to have that because there's just. You can't. All of the content doesn't apply to every person. So I also just think it's a sign of. Of a show that's maturing and getting bigger that you eventually got to kind of slice and dice the content a little bit and target it at different segments of the. Of the crowd. So that's really a sign of SM Bash's growth, I think.

Guest: Yeah. So, attendees, we heard your feedback, and we're here to make this, you know, in my opinion, the most valuable SMB conference out there. So it'll be great.

Host: Good.

Guest: Hope to see you there.

Host: Stuff, Chandler, this was a lot of fun. Thanks for coming on, man.

Guest: Yeah, well, thanks for having me, man. This has been a blast, and looking forward to what's next out there.