Host: It takes courage to acquire a business, especially when it's your first one. A lot of people interested in acquisition entrepreneurship never quite get there. Well, now imagine your first acquisition being across the country. Chris Munn did it, is doing it. He bought a cleaning business in Tampa. He and his wife live in la. He didn't take this distance, this remoteness lightly, but he's making it work and well enough that he's considering a second and much larger acquisition of also in Tampa. Make sure you listen to the last 10 or 15 minutes of the interview as well, where our conversation digresses a bit into more personal territory. We talk about Twitter, where Chris has gained 30,000 followers in only seven months, how he's done that, and the purpose underlying his Twitter account. I so enjoyed this conversation with Chris Mun. 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. Have you signed up for the Acquiring Minds newsletter? I send it out alongside every interview and it contains a summary of the episode that you can quickly read in case you missed it or just don't have time to listen. Sign up at the website acquiringminds Co. You'll see a big box to enter your email again. Acquiringminds co Chris Mun, thank you for joining me today on Acquiring Minds.

Guest: Thanks for having me.

Host: Will Chris, you have been a financial analyst, a multifamily real estate investor entrepreneur and now you're an acquirer of small businesses and judging from our pre call a couple months ago, are really passionate about this discovery as so many of us are when we, when we learn about the path of acquisition entrepreneurship. So what we're going to do today is basically here, here about your journey, your, your acquisition. You, when we talked you had a second business under loi. I don't know yet if that closed. I'm sure I'll find out here in the next few minutes. And so why don't you just kick us off, Chris, with whatever, you know, start wherever on your background and we'll go from there.

Guest: Sure. So like you stated, my name is Chris Munn. I always start that. I grew up in Detroit. I'm a very passionate Detroit sports team fan. So I grew up in Detroit my whole life basically. And then I left for college. After college I moved to New York, worked in finance, a bunch of different roles, but my last role in New York I worked at a hedge fund and then I moved down to Atlanta to do corporate development. Corporate M and A for a oil pipeline company where we bought and acquired assets, cash flowing assets. So that was kind of my first little peek into the entrepreneurship acquisition world. While I was there, I did acquire some multifamily properties in Michigan that I still have today. And then shortly after that I did my first small business acquisition down in Tampa. So that's kind of what led me to you and what led me to this interview here. So I'm sure we'll dive into more of that.

[3:40] Host: Great. So when you say in that first job or the second job at the pipeline company, it was your first peek into small business acquisition, was it actually small business acquisition or just kind of like how the kind of using leverage to in cash flow to acquire assets or just tell me more about your education on this topic.

Guest: Yeah, so at that role my job was I did a lot of financial modeling and a lot of financial due diligence on either companies that the pipeline. So I'll step it take a step back. So there was a oil pipeline that goes from Houston to New York City, oil and gas. And it's full, so it's like at capacity. So there's really no opportunity and it's regulated so there's no opportunity to just raise rates and make more money. So the only way the business could grow was through acquisition. There was no like organic growth possible unless they built another pipeline which is ridiculously expensive. And if you've seen anything in the news, nobody wants a pipeline near them. So I kind of, that, that was my team. My team was, we were tasked with finding opportunities, doing the due diligence on opportunities, whether it be a small business or an asset of another business to acquire. And those were always cash flowing assets. So sometimes they were small businesses, other people in our space that we would look to acquire, sometimes they were big assets, oil and gas assets that were cash flowing that we would look to acquire. And I was responsible for doing the financial due diligence and the modeling for those acquisitions. So that's kind of where I started to understand, okay, here's what leverage is, here's what you look for. Here's the kind of multiples you may pay to buy these businesses or to buy these assets. Here's how to integrate them into your current fold. That's a huge task. I think that sometimes goes overlooked in the small business acquisition space is the integration of the business. So I learned a lot and that kind of gave me my peek into oh, this is a real thing. People buy small businesses. Obviously those businesses were a little larger than what I'm acquiring. But it still gave me the nuts and bolts of kind of what to look out for. And it just gave me a good glimpse into what the life was like.

[6:10] Host: Yeah. Were other people on your team or other people who were exposed to this model of using leverage and cash flow to make acquisitions similarly enticed to go off and do this for themselves?

Guest: No.

Host: So. So what do you think? What do you. Why were you the weird one?

Guest: I always knew I wasn't gonna work for another, for other people, like, since I was probably seventh, eighth grade. So that was always my goal. So even my career path of the finance world, like, I don't love finance. I'm not like, to be honest. I did it because it was a good way to make a good amount of money while I was young, because I had other things that I wanted to do. So. And I know if I wanted to do those other things, like, okay, yes, I may, I love sports. I would love to work in the sports world. But the salaries there didn't match what I could make in finance. And I'm like, if I'm only going to work for 10 years or five years or whatever it may be, just maximize that time, even if the work sucks. So like I said, I worked at a hedge fund. I literally, I worked every day till 11 o' clock at night. Like, that's not an exaggeration. I never left work early and. But that was for another go, right? So I think that's. That I was already. It was predetermined before I got to that company that I would be different. So I think it was just that fact.

Host: And so why, why was real estate first, if you, if you, this experience is really fresh experience that you were getting was kind of more around business acquisition. Why the detour into real estate? And just kind of give me, give me the quick story there.

Guest: Yeah. So honestly, I kind of got into real estate by mistake. So I obviously, I think anybody who knows anything about alternative investments probably learns about real estate first. It's super common. There's a house on every block, right. And so when I was younger, maybe seven, eight years ago, maybe, my grandmother passed and my family, you know, had to sell her house. And so this is a funny story, but so I'm like, okay, this is, this is perfect. This is my perfect foray into real estate. I know my grandmother's house, I'll buy it, I have the money, blah, blah, blah. So my cousin was the real estate agent. I'm like, this is easy, slam dunk. Perfect way to get into real estate. So I go to the cousin, I put in an offer. I made sure I had the best offer, and someone in my family, I won't say who, who was responsible for making the decision, did not sell me the house. So I was understandably upset. And I, like.

[9:09] Host: It feels like you still are.

Guest: Oh, yes, I still hold some resentment about that because that's. It's. It's. I'll go back in a minute. But it. Yes, I still hold resentment. But. So from that point, I was like, I. Well, I'm. I have to show you now. Like, you know, that's my. I have. I don't know what's wrong with me. I have that gene. And I was looking at houses and I happened to come across an apartment building and that. It just started from there. I just read as much as I could, talked to as many people as I could, and I was like, you know what people that start with houses always say, like, oh, multifamily is the dream. I would love to get to the point of that. And so I said, why not just skip a step? And. And, you know, you don't know what you don't know. So I did it.

Host: And this. Your grandmother was in. Back in Michigan, in the Detroit area. In Detroit.

Guest: In Detroit.

Host: In Detroit. Okay. And so is that why you also then looked there? Because you're not living in Detroit at this point. You're in. You're in Florida.

Guest: Yeah, so I was. I was not. Yeah, that's why I looked there. I knew the real estate market well, and so I didn't know. Everyone I talked to said, look, you got to know your market. And I know that even living in Detroit, like, one block can be a good block, and literally the block around the corner is not. So if you don't know that and you're not on the ground, that's always hard to know. So I felt comfortable.

Host: Okay, so you acquire this building. Did you bring in investors?

Guest: Yeah, so I had a few family, just family and friends. It wasn't really like a big investor thing, but I did. I put up majority of the money, but I had family and friends come in, and we still hope we still have that building today. It's about to be five years. We just got it appraised because we're going to sell it this summer, but it's going well, surprisingly.

Host: And then you also bought a second building, right?

Guest: I did. So maybe two years after that. Yeah, two years after that, I bought a second building, which was like three times the Size. The first one, I felt more comfortable. It's a newer building, so it a lot less maintenance. I learned some things from the first one and I bought a second one. The whole time I was looking for SMBs, but opportunity came across my desk and I said, you know, this is a good deal. I'll take it out to it. And that one's going well too. So I kind of feel like I lucked up a bit because I'm not some real estate expert. But you know, you got to pay to play and you got to be in the game to win. So that's kind of how I approached it.

Host: And, and how big are unit. How big are building one and building two in terms?

[12:01] Guest: So the building one is eight units in the. And building two is 22 units. So I have 30 units total.

Host: 30 units. Okay. So you acquire these 30 units and. But as I recall, you're. You're flirting with the idea of making this your entrepreneurial full time pursuit, but you choose against it. Why?

Guest: So a couple reasons. So one, to start there was not my ability to generate deal flow wasn't great. And I was getting a lot of on market deals and the off market deals I was finding weren't that great either. And so this was coming at a time where as I mean, we're sitting here talking 2022. There's a ton of money in the markets and in real estate, all that does is increase values of the real estate, which can be great if you own, but it also decreases the amount of yield that people are willing to accept on a building. So where people may say, hey, I want to make 7% on my money, 8% on my money, when money is flush, people are willing to make 1% or just nothing. Some people are willing to make negative cash flow because they think it'll appreciate in the future.

Host: Yeah.

Guest: And that was never my strategy going in. My strategy was always, I want to buy for cash flow, I want to distribute that cash flow. And that kind of became very difficult to do in the market. So the deals were getting tighter and I kind of just sat and said like, okay, I either have to like truly max out on finding deal flow because it's not coming to me in the current state, or I can, you know, go with what I know with the SMB world. And I just, when I just sat down one day and I said, you know what, I think there is a lot more value for me to add in the SMB world. And I think I could be, I think I would be better equipped to Find not only deal flow, but to actually do these acquisitions. And real estate is expensive. Like, there's no way around that. Compared to SMB, real estate is. You can pay 20 times cash flow for a building. You could pay 40 times cash flow in the SMB world is 3 to 8. That's just a big difference. So I just found it more attractive. And I, you know, I was still young, so I just sat down and said, what do I want to do? And SMB just won out.

Host: How old are you in this time frame?

Guest: 30, I think. 30? Yeah.

Host: Okay. And this was how long ago?

Guest: Four years ago.

Host: Okay.

Guest: Yeah.

Host: So you, you, you even though you did this second deal, you actually, I mean, you were already excited about SMB acquisition.

[15:01] Guest: Absolutely.

Host: But this, this second building, kind of the opportunity presented itself and you grabbed it.

Guest: Yeah, but that was equipped to do it. So I said, why not?

Host: Yeah, but that didn't. For, for all the reasons that you just shared that, that, that wasn't going to be your. Your final path. You were still really excited about S and P acquisition the entire time, for sure. So when did you, when did you get kind of more like, how did your learning progress from that first job at the, at the pipeline company where you're exposed to this whole model, to actually getting serious about it yourself? Are you on Twitter? Are you just on Biz Buy Sell every night looking at what's out there? Like, how did you, how did you continue to educate yourself?

Guest: Yeah, Biz by Sell. I was not active on my Twitter. My Twitter was not an SMB Twitter. That's a mistake on my end because it's a super valuable resource. But it was literally just Biz by sale and the two books, Buy Then Build and the Harvard Business Guide to Acquisitions. That's literally my education. That's it.

Host: Well, those are the big three. Yeah. Yeah. Half my guess, it's those two books and that website, and that's the, that's the trifecta.

Guest: That's literally it. And now I. If I could do it now, it would definitely. Twitter is like an amazing resource and they will point you to the best resources and stuff, like your podcast, which I think are great, but at that time, yeah, that was it.

Host: So you're looking at deals on Biz Buy Sell. I know you're in LA now at this time, you're still in Florida, so just geographically, catch me up to speed. Are you looking at deals while still in Florida? And are you looking at deals in Florida? Like what? Like orient me geographically?

Guest: Yeah, so I was looking at Deals in the Southeast, basically, that was kind of my focus. But on Biz by Sell, I would look everywhere just so I could start to get a feel for what's out there, what kind of valuations, who are the brokers, whether I found any nationally or anything like that. So my, my focus was Southeast, but on Biz by Sell, I, I literally would, I would go every state and just, you know, see what was being offered just because, you know, it was, it was like getting reps in, I guess so, and just try to model stuff out and see what worked and see what stuff I liked.

Host: And so you were asking brokers for businesses that piqued your interest. You were asking for the information, modeling them all kind of about. Even if you weren't necessarily serious about that particular business, you were, you were putting in the reps, learning.

Guest: Absolutely. So I would, I would try to, I would try to find businesses that I think would be attractive to acquire, model them out, see what works, see what I liked about the business, and then go back to bizbot or, excuse me, Buy, Then build or the HBR guide, and then just think about, okay, this is the due diligence list. What would I ask? What are the main drivers of this business? Just stuff like that. That's really. Yeah, that was really what I did.

[18:04] Host: You know, I've heard many guests say talk about the reps and others talk about the reps, but I don't think I've actually crystallized that. A tip on acquiring minds that I should. But, you know, that is such a part of the search game is like just looking at deal after deal after and not just looking at it, not just looking at the listing on Biz by Sell, but asking for the memorandum and then, and even doing the financial modeling. And you really, you really need to do that. And you'll be so thankful you did because after doing that a couple of dozen times, the other thing I hear people say on this topic is like, you know, I, I, after doing that for a while, I could very quickly decide if a deal like, was worth my time or not. So not only does it obviously make you ultimately choose the right deal, but it also saves you time if you can invest that time upfront because you stop wasting your time on things that are just obviously bad, you'll develop a nose for that, an instinct for that.

Guest: 100% and same thing in real estate. I would start to see stuff like that doesn't work. But with the S and B world, absolutely. And I think more than getting the practice in, it's the confidence that you gain over time from doing the reps. And so you see a deal and you know you've done them. Everyone's scared to take the jump, right? It's a huge jump to take and it's no different. Anybody who's acquired a business has been scared to take the jump. But the reps lower the fear. You start to know what to look for. You know, they're always going to be unknowns, but it helps to build your confidence on. Yeah, this is, this deal looks good. I think I can do this. And I think I can do it because I've looked at 15 others just like this and this is why this one sticks out. So the confidence more than anything actually, I think was what was important for me.

Host: Yeah, that's. That's a great point. So what size business are you looking at? And yeah, so tell us the story of the business you actually acquired.

Guest: Yeah, so I was looking for businesses around 700,000 to a million dollars total enterprise value at the time. So what I end up acquiring was a business that was $800,000 enterprise value and about 250, $260,000 SDE. And so it's a commercial cleaning business. They do a lot of what we do, a lot of specialty floor work, which is kind of our, how we make most of our money. So that's going into a building four times a year, every quarter, and doing the waxing of the floors or the stripping of the floors, whatever it may be, and then nightly commercial cleaning as well. So a lot of recurring revenue. And then you have the floor work is a lot of reoccurring revenue, which is great. So that was something that, you know, was important to me. Trying to have something that was somewhat recession resistant, something that had recurring revenue. Recurring revenue would be great as well. I just felt a little more comfortable in that space than I did like, let's say D2C or something that is just completely foreign to me. It made me a little bit more comfortable. So. So yeah, that was the parameters of the first deal. And so I probably look for, seriously look for maybe nine months before I found it.

[21:41] Host: And where is the business?

Guest: It's in Tampa, Pinellas County, Florida. So Tampa, St. Petersburg area.

Host: Oh, but you now live in la.

Guest: That's right, Yeah, I live in LA now.

Host: But did you acquire the business when you were still in Tampa? And did you. Was it a geographic specific search?

Guest: So. No. So I acquired it when, once I was here, I was looking there. And what made me confident in being able to do it. So California is not business friendly, in my opinion. So I did not want to acquire a business in California. So that was number one. So that was kind of out. I moved here for reasons that have to do with my wife's career. So we were out here, and I knew I didn't want to buy a business here. I just don't like the labor laws, don't like the employment laws. And so what really gave me the confidence to do it, right or wrong, was the. The fact that I bought apartment buildings in Michigan, and that was a huge concern of the banks. When I was going in, they're like, you're not here. What are you gonna do if, like, there's a fire at the building or, you know, which I thought were really silly questions, because I'm just like, I don't know, call the fire department. I'm not a fireman. I'm not. I go, like, if you have toilets out, like, if my toilet goes out, literally in the bathroom right there, I'm not fixing it. So I'm calling somebody. So I was like, I don't know who you think I am, but I'm not, you know, Bob the builder here. So doing that gave me a lot of confidence in the fact, like, okay, something can be run remotely. I'm in. I'm in Tampa a lot, so I won't act like I'm not. But I don't physically live there. I'm not physically there every day. Like today, I'm not there, but I am there a good amount. But I also felt like if there are weeks that I'm not there,

Host: if

Guest: I buy the right business, then, you know, there should be no concern. I should be able to run it.

Host: I will say that. Yeah, that. I mean, fair point about Builder Bob and Fireman Fred or whatever, but I have to say, to acquire your first business that far, I mean, from Florida to California, I mean, that's about as far in the continental 48 of a distance as you can find. For sure. That was a lot of confidence to do that.

[24:12] Guest: Yeah. I mean, it wasn't as your first

Host: acquisition on top of, you know, first business acquisition.

Guest: Yeah, for sure. It wasn't a. It wasn't a. You know, I didn't take it lightly, I'll say that. I certainly didn't take it lightly. And there was a lot of, you know, thought. But I knew I was here, and I knew I didn't want to acquire here. And so I said, okay, you know, for the time that we're here, I Don't know how long we'll be here, but for the time that we're here, I still want to acquire. And that, you know, that, that little, the, the apartment thing really sealed it. If I wouldn't have done that, I wouldn't have bought the business. I would have been too scared to do it. But yeah, you find ways to make it work. And I'm sure a lot of your guests say, like, as you grow, your job as the, as the head of the snake is to work your way out of the business. And you know, if you want to sell to someone else down the line, you want to almost have no day to day responsibilities. That's what a true, you know, acquisition would look like for somebody playing in with bigger stakes. So I'm like, in my mind I'm saying, okay, I've done this before, I've done something remote and if my job is to work myself out of the business, then I shouldn't be scared of this. This should be something that I'm gonna have to face a challenge. But if I meet that challenge, then, you know, I can go ahead and say like, yeah, I don't, I don't run this day to day. This is run by these people day to day. I oversee them. But I think it just creates a better business environment and it helps me to, it helps me delegate, to be honest. So like if I was there, I know I would micromanage and I would be all over stuff and I can't do that. And at the end of the day I shouldn't do that. So yeah, that's my natural kind of a forcing function. Absolutely. It forces me. So there are a lot of people who, you know, run sites, you know, in different parts of the country. It may not be the main business, but they may have a plant somewhere or distributor somewhere.

Host: Sure.

Guest: And that's how they have to do it. So I treated it like that.

Host: Sure. And I guess being in California and not one wanting to acquire, being in LA and not wanting to acquire anywhere in California meant that wherever else you might acquire is going to be a plane. I mean, you're going to have to get on a plane.

Guest: Yeah, absolutely.

Host: So if you're getting on a plane, even if it's in neighboring Arizona.

Guest: Yeah.

Host: You're still, you may as well like it's a plane. So an additional few hours on the plane actually isn't that.

Guest: No, that's exactly right. And I take, when I go, I take a red eye, I leave at night, I'm there first thing in the Morning. I don't miss a thing. So it's a three and a half hour flight, four hour flight. Phoenix is an hour flight. So Phoenix is pretty much as close as you can get to LA for big city. So it didn't make that much of a difference to me.

[27:07] Host: Well, and let's talk more about what it's now like to run it remotely because I think people will be really interested in this. So the other thing that strikes me about this is to your point, like the ideal is to eventually work yourself out as the head of the snake out of the business if you want to. If you want to then at some point sell your business to somebody else. You need to have extricated yourself from the operations. But what that typically looks like is a larger business. I mean, you've gotten revenue to a point where there's a management layer or at least a general, a general manager or some sort of operator in there. But your business, you know, probably at that size.

Guest: Yeah.

Host: Can't support a general manager. Correct me if I'm wrong. Talk to me about who is there on the ground in Tampa.

Guest: Yeah. So I do have a general manager.

Host: Okay.

Guest: That runs the day to day. Now this is something that, you know, you don't know until you do it. But if I could go back, I would have bought a bigger business. Like that's without a doubt. And so we talked earlier about, you know, what I'm doing now, and that is the reason so to. I don't know if we're going to get into it yet, but I have not closed on the second business. But within three months of owning this business, I mean, I say, you know, I should have bought a bigger business because to have a true management layer, to have the true scale, that you need to get yourself completely out, you do need more revenue and you do need more cash flow. And that's. You're 100% right about that. So that became my focus. And unfortunately we went through Covid right when we acquired the business. And so a lot of it was just stabilizing what we had. I didn't have time to go and try to find another business. I was just stabilizing. And that took time. That took a lot of time. And we went through some pain with COVID for sure. But now, like I said, the business we have under contract, now I won't talk too much about it, but it would probably 4x the size of my business. And so that would allow me to take the next step on the path of, you know, having a sizable Business that somebody may want to acquire one day. It's kind of how I look at it.

Host: Chris, when you, when you were looking, going back to the first business acquisition, now I assume that you, you, you knew this principle of like, you know, buy a little bit bigger if you can, because you're going to. Because small businesses don't have enough margin to play with to invest in the business. And so on the very thing you just said, I assume you knew that when you bought this business and so this first business. And so why did you buy on the small side?

[30:08] Guest: Yeah, so I did. So I knew that. And part of it was not knowing my capabilities and trying to take too big of a bite, but going back to almost going back to getting the reps and things. So I did know that. To your point, I did know that. I did know, you know, the bigger the better. But you know, there's some balance with that, right? So you can't just go out and buy a $50 million business. That's not what people do. And so I should have known this from my apartments, because with my apartments, I felt the exact same thing. I bought an eight unit. Excuse me? And I said six months later, I'm like, I should have just bought a bigger building. But the questions and the struggles that I had to go through to get that eight unit, I don't know if people would have given me the credibility to go buy a 22 unit building right off the blocks. So I kind of felt that's probably, it might just be an insecurity, it might be real, I don't know. But I felt that same thing. When thinking about a bigger business, I'm like, okay, if I want to go buy maybe a four million dollar business, well, like, what are the banks gonna say? What are they gonna have to come back to me about? And I felt I got, I had such a hard time getting my first apartment building and I had a really hard time getting my first business that I'm not sure I could have done it. So it's kind of a fear and maybe it's irrational, but I just think that there are, there were some forces that were working against me as they work against everyone. But I think that kind of made me say, okay, let's just start here and then we'll, we'll go on to the next step later.

Host: What on buying the first business, what were, when you say it was really hard for you to get this deal, why?

Guest: So the bank was not great to work with and there were times I'll just Be. I'll just be completely honest when I think, when. Sometimes when people see, especially with my apartment building, a young African American male in his 20s coming in and saying, hey, I want to buy a business, I just don't think that resonate like people pattern match. Everybody pattern. The smartest people in the world, pattern match. So when they see something that comes in that doesn't match the pattern, it's like, no, this isn't right. And so nobody explicitly says that, but that's the sense that I get. And my wife is. She senses the same thing in her space. And so being a woman, so I understand from her perspective too. So I just think some of the questions. And like, to me, my background is like, you know, I don't have an mba, but, you know, I worked on Wall Street. Like, that is usually a rubber stamp for some people. Like, oh, work on washer. Like, he knows everything. Like, I see that with, with people, with colleagues that I have and the ability to raise money that they have that I don't have. And so I think going into those banks and I think they pattern match and they see something that doesn't match the pattern, and they're just like, no, this is, you know, they'll just ask irrational questions like, how are you going to, you know, how are you going to manage this? You've never managed anything before. And it's like anybody who's jumping in the SMB space has never managed the business. That's the, you know, that's the point. You know, that's what the SBA loans are for, is for. You know, if you had a perfect candidate, then, you know, we wouldn't need you here. We could just rubber stamp everything. So that was, that was and continues to be an issue that I face. I think in the industry, there's not a lot of diversity, not a lot of women. And so I think the pattern matching, especially at the banks, is real. And so I sense that.

[34:12] Host: And so was your, your thinking maybe subconscious, maybe totally conscious, like, let me. I'm just going to get what I can here to get in the game. I might have to build more credibility than, you know, a white guy. Yeah, but that's the game I got. I'm going to have to play. So I'm. That's. That's what I'm doing.

Guest: Yeah, that's been the, I mean, that's, to me, been the game my whole life. It's like, I may have to do John, may have to do X, I may have to do X +Y. Right? And then that may get us to the same place. But, you know, I'm willing to do that. I don't, you know, I don't. I'm not going to cry about it. If that's what it takes, that's what I'm willing to do. But it does. Yeah. A lot of times you're just like, look, let me just get in the room. And if I can get in the room, then I can, you know, and I can try to show my abilities once I'm in the room. But. So, yes, it's a. It's certainly a conscious thing that I think I. I've experienced. I mean, I was lucky to grow up in Detroit, and I was surrounded by 11 family that, you know, encouraged me and gave me a lot of confidence in what I could do. So the outside distractions don't deter what I think I can do. I just know that sometimes I have to do a little bit more to get the same results.

Host: And so now on your. On the second deal. So do you feel like that you. The fact that you acquired and have been successfully running this first business, in fact, is giving you credibility? And just catch me up on the second deal, where you at with it.

Guest: Sure. So like I said, second deal, the same geography, same industry, it's about three times the size of the first deal. And I do think that there is some credibility now that we've done it. We're in a space, we have a business that does exactly this. But I still, you know, there's still questions that I don't, you know, that I think are irrational. You know, banks come and say, oh, well, you run a business that's $1 million. How do you think you could run one that's $3 million? It's like, you know, that it's. That's how it works, guys. Like, you know, people grow, and that's how people, you know, grow an empire. You don't grow it by just adding one plus one all the time. Sometimes you need some exponential stuff. So. But I do think we have a lot more credibility, and I'm a lot more confident when I talk to the banks about what I'm willing to share, what I'm not willing to share, how I'll answer questions, how I won't answer questions. I'm just a lot more. The first time you're going through it, you don't know what to expect with banks. And the banks can be brutal. They can ask a ton of questions. They can ask them 10 different ways to make sure they're getting a consistent story, but this time, I'm like, we're gonna move at the pace that I want to move at. If a bank wants to work with that, great. If they don't want to work with that, that's fine as well. But that comes along with having credibility and doing a deal. When you're doing your first deal, you can't dictate terms the same way. So that's been helpful. And just getting in the room and getting in the game and knowing the lingo has helped a ton. So I certainly think it's helped with the credibility.

[37:35] Host: Maybe a slightly ignorant question. Are you not working with the same lender? Like, wouldn't you, you know, develop a relationship and be able to go back to that same SBA lender over and over? They get to know you, and they. They themselves feel increasingly confident in you?

Guest: Yeah, that would be ideal. Like that. That is. I mean, that's what we're trying to do now. We're trying to find a lender who understands exactly what we want to do. We want to buy in this space, in this geography and grow this business through acquisitions mostly. You know, we'll have organic growth as well, but. And I want a bank that understands that, and it's like, yeah, we get that. We totally understand that. Let's do it. I would have loved to go back to the first bank, but literally the experience was awful. And I wouldn't. I wouldn't give them. Even though they didn't get my. I wouldn't give them my business again, let's put it that way.

Host: Okay, Chris, we're. We're. We still got a few minutes, but I want to be efficient here. So just going back again to the fact that you're. You're running this remotely don't mean to beat this to death. No, but. So. So the first acquisition, had you said what, to 250ish? 230ish? Did you say SD?

Guest: 250SD.

Host: 250. SDE. And that's after paying a general manager?

Guest: Yes. Yes, that's after paying a general manager. Yep.

Host: Great. So in theory, you could pocket all of that, the 250, and not be working on the business. I mean, if you really want it to be absentee and sort of as passive as possible, you could do that. Okay.

[39:12] Guest: Yeah, you could do some form of that.

Host: And so when you're going to Tampa now to check in with the business, what sorts of stuff are you doing? Are you just kind of putting in facetime? Are you making strategic moves? Or what?

Guest: Yeah, so a lot of it is meeting with owners. Sometimes I'll meet with owners of other businesses or meeting with, trying to get, try to gather more business, whether that's through organic sales or that's through acquisitions. So that's one thing I do. Of course, the FaceTime with the team is always important. I like them to know that I'm there and I'm around and we have a really good relationship. I've built it so that we have a lot of asynchronous communications so that they don't feel like they have to be anywhere at any given time. I don't feel like I have to be anywhere at any given time and that has helped a tremendous amount and I plan to carry that along to any other business that I acquire. I think that's very important for people, especially now with the whole work from home and work remote not being on all the time. I think my team really appreciates that. So that's something that we've implemented, but it's just checking in and business, I would call it business development, whether it's internal business development or external. So that's pretty much what I consider my job.

Host: And your general manager, you have a good relationship with that individual and, and that individual just really is just running the day to day and the operation. So all the minutiae and the details she's on top of, she's awesome.

Guest: I can't say enough about her. She's everything you would want. She takes responsibility, she takes accountability, she treats it like it's hers. So all the day to day, the hiring, the firing, knowing what people get paid, negotiating, comp, all that kind of stuff, I leave to her. And she manages that with the team, which is a blessing. I know everybody doesn't. Without her, I wouldn't need to be there for sure.

Host: Did you, did you diligence her like before you bought the business? Did you understand and appreciate how central she was to everything?

Guest: Well, I knew she was central. Right. I knew like, because the previous owner didn't do a lot day to day either. And so I knew that this person was central. But you know, you don't really know what they're going to be like until you start. So that's always a huge risk. And it's a risk that we have going into this next business. They have a, they have a GM and they've been there a long time. And so, you know, I'm like, okay, they obviously, you know, some things you can just assume they know the business, they know how to run it. They're doing a good job because they've been there over a decade. But will I get along with this person? Will they fit into like my plan? That's the stuff that you really don't know until you take over. And which is what I was kind of saying a lot that I learned at my, my last corporate job was the integration of businesses is a huge, huge, huge component. Integrating the team is a huge component that I think gets overlooked sometimes with these acquisitions because you're taking over completely different enterprise and may do things differently than you and may have different values than you do. So it's very important to kind of get a feel of the people in the culture that you're taking over because you know it can be a clash and you may have to let some people go or they may not like your style. And you know, it's, it's just a, it can derail an acquisition for sure. Especially losing people at this, at the businesses, the size that we buy these key people, losing them is, can be a death kneel. So you might not be able to replace them or you might not be able to replace them in a month. It may take 3, 4 months to find someone. So you really have to vet, you know, who is running this business, what, what are they incentivized by, what do they value and try to match that.

[43:20] Host: You know, I, I was just having a conversation last week with an acquisition entrepreneur and they bought in to their industry and then rather than, they, they quickly learned or, or concluded that rather than acquire to growth, they would just do organic growth. Because kind of what you're talking about. Well, not, not exactly we were talking about, but just the, the cost involved in acquisition. I mean there's more risk. First of all, to your point, like integrations can just be explosive. And even if an integration works, there's just a lot of time and cost involved in that integration. So those are resources. And so their conclusion was rather than investing those, if we invested the same resources and energy that we would and doing an M and A process and then doing the integration and all the culture fit and all of that stuff, and then doing it again, doing again, if we just took all of that energy, invested it in organic growth and building out a sales team with the platform business that we've acquired, we think that's a faster path to growth. And that's what they did and it worked. Well, not saying it's a universal rule, but it was a great decision for their playbook.

Guest: Yeah, no, I will say and this is from my experience, acquisition growth can be fast. You can go from $2 million in revenue to $10 million in revenue in six months. And you would never do that organically. But it's not clean. And so that $10 million comes with a lot of costs. So if you grow from 2 to 10 organically, that's as smooth as it could be. Like that revenue came through your channels, through your funnels. You were able to control what customers you went after, what margins you went after, what geography you went after, all that kind of stuff. So that makes it very clean. So organic growth is very clean, in my opinion. It's slower, but it can be right for your business for sure. If we could grow organically as fast as we could acquisition, I would rather do it organically. I'll put it that way. I just don't think that we can grow that fast organically, especially with stuff that's recurring revenue. Because you have to get your customers off of the contracts that they're currently on. And that doesn't happen every day. Right. So it's not, you know, you may be able to sell somebody a new kind of hand soap tomorrow. They're not, they don't love their hand soap. But, you know, whoever cuts your lawn, if somebody else wants to cut it, you're going to have to be either unpleased with who cuts your lawn, displeased with who cuts your lawn now, or some event has to happen. So that's why I think for our business, organic growth is a little slower, but we focus on both because the organic growth is clean and we go after the customers that we want. And that's important to me.

[46:26] Host: Yeah, yeah. And of course, in many of these quote unquote boring businesses, these, you know, these, these blue collar, sweaty businesses that were. Many of us are interested in buying the market. It's not a growth market. It's a pretty stable market. So you're, you're basically kind of always stealing customers. I mean, you're just. That's how you're.

Guest: Yeah, it's Hungry Hungry Hippos. Yeah, it's like whoever gets it, gets it. So, yeah, you're stealing from other people. That's 100%. And whether those people, you know, retire or go out of business or whatever, you're still in growth. And, you know, it makes the organic part a little bit more difficult. So, you know, we focus on it for sure. But it's, you know, it depends on the industry, I think, and what your goals are.

Host: Chris, with the few minutes we have left. I want to touch on two more topics. Just, just, I like to just get a taste of the industry itself that you. That I guess has acquired into just to educate people a little bit on that particular industry. And then I want to talk about your annoyingly successful Twitter growth. So first on, on the business. The business itself. So you said it was $800,000 enterprise value. So does I assume that's kind of. That puts it at 800 to 1.2 million in revenue. Is that about right?

Guest: Yep. When you acquired it, just over 1 million in revenue. Yep. You're right on.

Host: Okay. Okay. And so. And so margins then are what, 25% if you had. If you had. Or 20 to 25%.

Guest: 20 to 30, depending on what kind of customers you go after and stuff like that. But yeah, somewhere between 20, 30 would be great. 20 to 25.

[48:05] Host: Usually 20 to 25 for a business that doesn't have super high barriers to entry.

Guest: Correct.

Host: And you're kind of subscale that seems like pretty good margins when you're comparing the kind of these types of industries. Can you.

Guest: Yeah.

Host: Weigh in.

Guest: So it's a lot of. It comes from the. So the regular nightly cleaning. Not a lot of money in that. So you go to somebody's, you know, go to your office building and take the trash out and vacuum the floors. Not a ton of money in that. Anybody can do it. People are willing. Big, big companies are willing to take 5% margins because, you know, it grows their enterprise value. Right. So they just want the contracts. So that stuff is hard. Like an airport. Those people that clean in the airport, those margins are under 5%. So it's ridiculous. But the floor work is not so low barrier to entry. Everybody can't do it. You can't just. Bob just can't come and strip the wax on your floors and we re wax it. So that's kind of where if you're in the commercial cleaner space, you have to kind of make your bones. Is doing the more specialty work. It's not going to be every night, but it's reoccurring and that's where you can kind of run your margins on the higher side. 50% or higher on that kind of work.

Host: 50% or higher. Okay.

Guest: Yeah, absolutely.

Host: Okay. So that's so your average out to 25%.

Guest: It's hard to grow a business just doing that because you want to be.

Host: Yeah.

Guest: You want, you want the nightly cleaning to get you in the door and then you can sell them on. Oh yeah. You know, this needs to be power washed really badly, and your floors need to be done. And that's where you. Once you're in there, you can sell that work. It's hard to sell that work without being there every day.

Host: And for companies that do that type of floor work, is it. Is there portfolio of offerings similar to yours where they're. They kind of have the. The janitorial, the nightly janitorial, stuff that is kind of lower margin and. But it's kind of the Trojan horse that serves the other side of the business.

Guest: Yep.

Host: So is that a common format?

Guest: Yes, common a lot. It's. It's becoming more common. I think people are catching on to it, and they just call it. Call it building maintenance. So they don't really call them cleaning companies anymore. They'll say like a facility maintenance company or a building maintenance company. And the idea is like, whatever maintenance, recurring maintenance that your facility may need, they can provide. Whether that's power washing, floor work, cleaning, any stuff like that, they can do

Host: great. So, Chris, you're. You. So, you know, I'm out there as many of us are trying to grow our Twitter followings. I'm doing all right. I'm at whatever, 23, 20, 400. But it's. It's hard. Or actually, I don't think it is for everybody. I don't think it is for you. And so when I see Twitter savants, you know, I get a little. A little envious. You have. I checked just before our call, 30,000 followers. And I think you were. Maybe I'm wrong, but I feel like at least 10,000 of those have come just since we talked two months ago. Anyway, when did you start. Where were you when you started seriously going after Twitter?

[51:28] Guest: Yeah, so I. I came across a tweet that was offering online writing, basically online writing help. And I used to like to write a lot in high school. And so I was just like, I should do it. I should learn how to write. I enjoy Twitter. And I was like, I wonder how to write for an online audience. And I always appreciate it. Brevity in writing. And so Twitter is like the perfect place for that. And so I had no real goals or real ambitions with my Twitter, but I took the class in early October of 2021, and I had 200 followers. Those were just my friends, you know, that people that knew me personally. Right. People that I actually met in real life. And so I took the class, and it taught some concepts about virality and brevity and how to get an audience and how to nurture your audience and stuff like that. So I just kind of took those little nuggets to heart and started writing on Twitter. And the first month or so, it was like writing into black hole. You don't, you're not talking to anybody. I was talking to my friends who didn't care about what I was talking about. But eventually it started to pick up and you meet people in the community that enjoy your stuff and send you encouraging messages, positive messages. So, yeah, I've grown. Yeah, I think I'm at 30,000 now. So I've grown from October till, what is it, April? So that's six months, seven months. So I've grown like 30,000 women. Yeah. But I, I look at, I look at what I tweet and I look at who like, or I look at what resonates with people, and I try to just double down on content that resonates with people. And it's worked, surprisingly.

Host: Yeah. But you know, Chris, I've taken a course, I think, and I've seen people write threads about how to. And a lot of that advice is the same. It's, you know, stick to one topic, see what works, do more of what works. Like you just said, you know, develop a brand around yourself. And I'm trying to do all those things and I say, and I see a lot of other people out there trying to do those things as well, so I think there's still a little bit more magic to what you've, you know, you've unlocked for yourself than you're giving, than you're giving yourself credit for. I mean, that's, that's just because. And I've seen a bunch of accounts grow really quickly, but that, that's particularly impressive. And so did you just make a decision to like the topic that you were going to go after, which was going to kind of going to be entrepreneurship, small business. Yeah, I'm gonna write.

[54:14] Guest: Yeah, that's what I'm interested.

Host: I'm only gonna write threads about this.

Guest: Yeah. So I'm interested in business. So I try. The way I think about it, I have like three, I have like a funnel. It's a three tiered funnel. And my top tier is just business. So I could tweet about anything in the business space. That's with my audience. And my second tier, smaller, gets smaller down the funnel is entrepreneurship. It's a little bit more niche than business, but it's something I enjoy. And then the bottom of my funnel is entrepreneurship through acquisition. So that's the most niche. But I can get the most affinity by tweeting that kind of stuff. I'm sure, like your audience, like your audience probably only cares about entrepreneurship through acquisition, right? Like, exactly. So you have a ton of affinity there. I don't have as much affinity as you do there. So that's kind of a sacrifice that I've given up for trying to, you know, grow the Twitter a little bit more. And I just tweet general business stuff from time to time that. That comes to my head or I see on the Internet or whatever. So I think about it like that. So I don't have as much affinity as smaller accounts and accounts that are very specific like yours are. But, you know, it's. It's value in both. I think I see some small accounts that people love and I see some big accounts that don't get much engagement. So it just all depends. I just try to be consistent on Twitter and tweet every day and, and

Host: so but this funnel concept with kind of broad at the top and more affinity at the bottom, that implies. Funnel kind of implies directionality. Like, are you trying to work your audience who's interested in your broad business tweets down into entrepreneurship through acquisition? Are you trying to kind of introduce them to entrepreneurship through acquisition by kind of proceeding down your funnel and just 100%.

Guest: 100%.

Host: So we talked about, man, you're doing my job. I'm out here also. I mean, I'm not trying to sound competitive, but I'm like, how do I increase awareness of this? And what I'm doing wrong is I'm already talking to people who know about it. You know, I need to be doing what you're doing, which is talking to everybody.

Guest: Yeah.

Host: And then working them down a funnel.

Guest: Absolutely. So this is probably a unique experience for me. But I said I grew up in Detroit. I went to Detroit public schools. So I went to like one of the worst school systems in the country. So I don't know any. I never knew anybody that had a white collar job. I never knew anybody that was a lawyer or a doctor or anything like that. I didn't know anything about entrepreneurship. I didn't know anything about finance. I didn't know anything about Wall Street. And so for me, that's part of what I like to do it for, is to introduce people to things that they may not know about. Because I think there's a lot of talent and a lot of people may be interested in the world of entrepreneurship, especially entrepreneurship through acquisition, that just aren't exposed to it. So, you know, I Talked to some people on Twitter, and one of my buddies, SMB Attorney, is on Twitter who has good affinity in this space. And we talk about it, about it a lot. It's just there aren't people that look like me in the space. Like, there's not many. They're mostly just white guys in the space, which, you know, I still enjoy the space, but there are people that should be in this space that aren't because they don't know about it. And so where, you know, you can tell your buddies and they can tell their buddies and. Oh, yeah, I went to college with this guy and he's doing this and like, I'm the only person that went to my college that's doing it. I'm the only person from my neighborhood that's doing it. I'm the only person I know from Detroit that's doing it. Like, so me getting the word out about it is important to me. And it's like a little form of giving back that I can do for, like, people who grew up like I did.

[58:13] Host: So you're really. Your funnel is not just broadly trying to increase the awareness of entrepreneurship through acquisition, but specifically for people of color. African American folks.

Guest: Yeah. Women to be made people who do not have.

Host: Fit the existing profile of minority, typical guests.

Guest: So we were talking about pattern matching earlier at the banks. I'm trying to do the opposite. Right. So everybody pattern matches. People talk to people they're. They're close to. People talk to people in their neighborhoods. And that doesn't expand the pie. The pie just stays the same. So, like you say you want more people to know about entrepreneurship through acquisition, you have to talk about something else because that's not going to get new people into the space. It's like, you know, talking about astrophysics, like, maybe you just need to talk about science. And then people may say, oh, you know, astrophysics is kind of interesting. So, you know, it's just. It's a. It's a different approach. And I'm probably gonna. Most people aren't gonna be interested in it. Right, I know that. But the few that are, I'm happy to help them. I do. I do a call every. I do calls every Friday, and I talk to people who just want to learn more about the space. And I try to help as much as I can, because I know I didn't. I didn't know anything about anything when I was 20 years old. I really did. I didn't. I went and walked on Wall street because I. They have free food at some event

Host: they were throwing at my school.

Guest: Like, I didn't know anything about it. So I'm just like, there's kids out there like me or adults out there like me who wouldn't have known anything about that. I learned all that because I went to college and like, that's a blessing that I had. But, you know, everybody doesn't do that or other people. If I, if I wasn't hungry that day, I wouldn't have gone. It's like, simple as that.

[1:00:05] Host: Yeah. So you, you, you. I saw on your LinkedIn that you went to Howard.

Guest: Yeah.

Host: The Mecca.

Guest: Yes.

Host: Is there any, Is there any inkling in you to somehow reach out to Howard and talk to people on campus about eta?

Guest: Yes. So that. That is. I was just talking to somebody about this yesterday, actually. That's one of my goals for this year is to try to do some ETA stuff at my, at Howard. I'm glad you know about it. The Mecca, That's. I'm glad to hear that. But yes, I'm very. Howard did a lot for me, for sure, and it did a lot for my friends. My wife went to Howard, and it's provided us the best network that I think we could have, considering where we came from. And so I'm forever indebted to that school. So, yes, that is absolutely. I have that on. My goals this year is to get involved with the entrepreneurship program there. They do have one. And so I want to go and find out where they could use some help and provide that.

Host: And just to, you know, what is so clear to me in this space is that a lot of people who are exposed to acquisition entrepreneurship, just broadly, it's from their MBA program. I mean, that's, that's really where you're seeing kind of a ferment of interest is because these, these MBA programs are now have ETA classes and curriculums and, and, and it's really growing within that. That world. So it does seem like a great place to, to grow awareness is at the, is at the university level.

Guest: Yeah, yeah, for sure. And, and yeah, everybody doesn't go get an mba. Most people don't. Right, so.

Host: Right, of course.

Guest: Yeah. It's just creating awareness. And I'm glad you're doing what you're doing with the podcast and other people have podcasts now in the space, and I'm glad to see it grow. And it's a very positive space, which I, which I also appreciate. It's a lot of people willing to help, and I just want to be the, you know, the guy that like, oh, you know, he. The guy that points out and shows that, you know, there are other people in the space is not just, you know, it's not just an all boys club or all white guys club or whatever, you know, people may think from the outside and so, you know, there's other people in the space and I just try to make sure that people know that.

Host: That's awesome, man. Let's leave it there. But tell people, Chris, where they can follow this, this fast growing Twitter account.

Guest: Yeah, so I tweet all the time. I'm at Chris X Mun Mu N N. Yeah. And I try to tweet. I've been trying to tweet more about my deals and what I have going on in the day to day, but yeah, you can find me there.

Host: Cool. Chris, thanks so much for the time and for this last 10 or 15 minutes. Got a little bit more personal and tactical on the Twitter side stuff. Selfishly very helpful for me. So thanks for that. Thank you for that.

[1:03:09] Guest: No problem.

Host: Just person to person and thanks for your time.

Guest: Thanks a lot. Will.