Host: A few weeks ago, you heard Matt Rayla talk about buying a termite business. Well, today we'll go one better. Derek Croft left the prestigious management consulting firm Bain to buy a small business after looking at hundreds. The one he fell in love with was Lice Doctors. This lean, high margin business sells in person lice treatment services to the tune of $3 million a year nationally. And if that number surprises you, consider that it actually only comes out to about 17 orders per day across the entire U.S. 17 daily orders, when 6 to 12 million children each year get head lice, according to the cdc. So with a growth orientation and pulling a few key levers, it doesn't seem unreasonable to imagine 17 daily orders growing to, say, 50. Which would mean a tripling of the business to $9 million in annual sales. Do you see why he got excited about lice? Here he is. Derek Croft, owner of Lice Doctors. 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. An SBA loan broker, as opposed to a direct lender, doesn't work for a particular bank. Instead, the broker pairs you with the right SBA lender for your deal based on industry terms, risk thresholds, then helps you navigate the process better than many lenders themselves do. Matthias Smith of Pioneer Capital Advisory is just such a broker. Matthias worked at two of the country's top 10 SBA lenders. So he's been on the inside of the SBA process and knows well the pitfalls and hurdles and how to avoid them. He struck out on his own to laser focus on the ETA and search space. Our niche is his niche. You'll see Matthias at all the ETA conferences. He's closed over 30 search deals since starting Pioneer in May of 2022, including some acquiring Minds guests. To learn more and get in touch, go to PioneerCapitalAdvisory.com or click the link in the notes. Derek Croft, welcome to Acquiring Minds.

Guest: Yes, sir. Excited to be here, Derek.

Host: One of the joys of this podcast is uncovering all the unusual place that businesses exist and thrive. Case in point, the business you bought, Lice Doctors. Sort of an uber for lice model, which of course we are going to spend time on. But start us off with some background on you, please. First, Derek.

[3:09] Guest: Yeah, no, I'm, I'm excited to talk about it. It's, it's definitely a unique business model. So I was originally a mechanical engineer of all things. So going from There to lice is, is quite the story, as you might imagine, but started as a mechanical engineer in the autom industry. Kind of quickly got done and a little bit bored with that and did an MBA and then did management consulting. So I worked for Bain and company for four and a half, five years and really enjoyed my time there, but always had kind of as an end goal a desire to own a business and do my own thing. And so decided to jump ship back in 2023 and through the search process ended up finding lice doctors. So I went from mechanical engineer to. I did an interview with a news article where they called me the quote unquote lice king now of America. So I don't know how much I want that title or not, but it was at least given to me by one journalist. So mechanical engineer to quote unquote lice king of America.

Host: Lice king of America, man. You might have just written my headline for me. Thank you.

Guest: That's right.

Host: Okay, well, let's get a little bit more detail on why you embarked on this path. You're at Bain, which the audience will know that name a very. One of the top management consulting firms in the world. Why did you decide to step off that track?

Guest: Yeah, I really enjoyed my time at Bain and I talked to people a lot about Bain. It was a great stepping stone for me into the world of business. Coming from mechanical engineering where I knew nothing than going into, into consulting and, and learning the world of business, seeing a bunch of different businesses. But ultimately what, what drove me to leave a great career and as you can imagine, the compensation gets better and better. The influence and, and opportunities you have get better and better as you stay there was that I wanted, I wanted a few things. The first, I wanted control over my own life a little bit more. When you're a consultant, you're beholden to the partner, as you might imagine, and you're beholden to the client always. So that was one major factor. Another factor was I wanted to have more time with my family. That, that was a big thing. Obviously at Bain and any of these large consulting firms you're working a lot, working 60 plus hours a week or, or more. And so I, I decided I've got four kids with a fifth on the way, that I've got a big family, my wife is taking on the burden. Maybe it's time for me to, to help out a little more and be a little bit more available. So that was kind of reason number two. And then financially I think it will ultimately hopefully be Better than it would have been at Bain. But the first two were probably the primary drivers for why I would leave so.

Host: Well, those first two are certainly compelling, but I want to spend a second on the final one, the latter. The financial reason you mentioned that if the compensation gets more interesting the longer your tenure at a Bain, is this sort of a golden handcuff situation like you'd see in the finance world, where you can really start making a lot of money the higher you go.

[6:15] Guest: Yeah, absolutely, that's the case. And I don't know how much people know about kind of top tier management consulting firms and how they're compensated, but as, as a junior partner, which I was on the path to reach, hopefully in, in three to five years from now, we would have been making just shy of a million dollars, so probably 600, $750,000 after that. If you're in the partner tier and you kind of graduate past that initial two years of a junior partner, you're making over a million dollars a year almost for sure. Like, nothing's guaranteed. Of course, it's obviously highly bonus based and commission based, but yeah, you're making a lot of money every year and that is definitely a golden handcuffs. It is. It hurts a tiny bit to give that up in what is essentially a guaranteed career path if you decide to go that way. So.

Host: Yeah, yeah. And, and also there are lots of corporate environments where one can make a lot of money, but Bain is, is really this top tier, really prestigious. So you're also leading, leaving prestige behind.

Guest: Yeah, very much so. I, and that is, that is still a funny thing to me whenever I, whenever people ask me what I'm doing now, you know, hey, you left Bain. I heard you left Bain. You were, you were doing great there, it seemed like. Yeah, I was. I really enjoyed it. And you're working with, you know, CEOs and VPs of companies and you're in board meetings, you're leading their leadership retreats and things like that. And to go from that to, yeah, I run a lice business now is always, it's always a bit of a shock for people, I think, at first when they hear that. And it's definitely kind of a culture shift where I'm now in a small company with, with people who, many of them haven't worked in a very professional environment in the past. They kind of grew up in the lice industry either as a technician and now they work in our office staff. They might have had a few other jobs before, but definitely not kind of VP level CEO. Level jobs of Fortune 500 companies. Right. That I was used to working with. So it's definitely been a shift, but I think in a lot of ways a good one for me as well. So.

Host: And how did you, given that you were looking at like in the not too distant future, maybe making 600, 750, 000 a year with a very big family, four kids, fifth in the way, so seven mouths to feed. You give them more. You know, this is always the thing, freedom and money. They're. They're often a little bit intention or, or a lot intention until you become rich. And you have both.

Guest: That's right, hopefully.

Host: But, but in this case you were going to give it, give up money for more freedom and control and time with your family. But it also meant that it was going to become presumably much more. I mean your family was going to have much less disposable income and things. The pocketbook was going to become tighter and that might have, might be adding to your anxiety. So anyway, how did you think about a growing family but. But choosing a path of less income at least in the near term?

[9:08] Guest: Yeah, it's a great question. It probably starts from how we, we kind of set this goal relatively early on that this was something we were interested in. So while we were in the MBA program, I had a number of friends who were exploring this path and they were looking at businesses and I had a few friends that bought it soon, bought a business soon after they finished their MBA program. And so that was kind of always in the back of my and my wife's minds is this is something we want to do, we want to be prepared for that. And so we consciously made kind of lifestyle decisions for that. We were making quite a bit of money as a Bain senior manager and we were definitely living below what many would probably expect we should be for that level of income. We bought a maybe a little bit more modest home. We just shoveled as much money as we could into savings so that we'd have a lot of money so we could do a surge so we'd have equity to put into a company and we kept our living expenses relatively modest. And we're not poor by any means. We still have a great life. We go on vacations and have a good time, but we definitely weren't living it up like some people might. I still drive a 2011 Ford Escape that I've had forever. It's got like 125, 000 miles on it or something like that, and. But it gave us that opportunity to have that flexibility and to leave and go buy a business. And that was important to us.

Host: Well, Derek, good for you. That's just that to me I just heard like a lot of kind of old fashioned savings and prudence, but, but it is kind of old fashioned. People aren't, it's how families all lived before and how fewer and fewer families do. But you're, you're now rewarded for doing that by being able to go down this path. So that's awesome to hear. Okay. And well, just one last thing. I don't mean to beat this to death, but when you told your, your, your fellow Baines, is that what you guys call each other?

Guest: We do call each other Baines. Yeah. We are being. Yeah, you do.

Host: Okay.

Guest: That's right.

Host: When you told your other beanies that you were going to go buy a small business, was the reaction like, what are you talking about? Was there action? I'm always curious.

Guest: Yeah. You know, one thing I really liked about Bain is it's a pretty entrepreneurial environment. There's a, it kind of attracts that personality. A lot of somebody that wants to go build something and tends to try and be a little bit more scrappy. And so a lot of Bainies will go out and start their own companies, they'll do startups. So most people I think were, were actually pretty supportive of it. There were a few partners who had kind of tried that in the past and they didn't enjoy the experience because you have to deal with a lot of issues, obviously as a business owner you don't have to deal with as a Bain partner. So some of them were definitely like, are you sure you know what you're doing here? You sure you're gonna like it? But for the most part they were actually pretty supportive. And I've got other friends from Bain who have gone on and bought businesses as well and seem to be doing well. So it's a little bit of a little pipeline for that ETA world.

[12:03] Host: Great. Okay, Derek, thank you. So what did the criteria and the plan for your search look like?

Guest: Yeah, so I started my search back in April or May of 2023. I was actually on a extended paternity leave from Bain and so used that time to kind of kick off my search and make sure that this was really something I wanted to do. I mean, I'd been thinking about this for years. I'd been playing around in the space for a while, but decided to kind of fully commit during that paternity leave, so started searching. My initial criteria was honestly relatively restrictive I was looking at smaller businesses, like $500,000 EBITDA businesses. I was looking to stay in North Texas, where we are here, we're in the Dallas area, or in Utah, which is where my. My family and my wife's family are from. And was looking at home health businesses. That was my original criteria. So really pretty limited. And I think when you talk to most people that have gone through this, you kind of quickly realize that it's really hard to find a business if you stay that limited in all those criteria. And so I kind of quickly made that decision of, hey, if I do this, we're never going to buy business. It's going to take us 2, 3, 4 years of searching before we ever get anything. And I just, I can't wait that long. And so we expanded. My wife and I decided, hey, we're going to expand our criteria. I started looking at bigger businesses. I was willing to raise money, bring in investors to be able to do that. Expanded in from just home health to be regional services, and that. That was everything from like lawn care to dentistry to home health or, or lice treatment falls in that as well. And then also started looking nationwide. So we were no longer geographically constrained. We were essentially willing to move anywhere. And as soon as I made that, there was a huge shift, obviously, in just the volume of businesses. You can look at the deal flow that you get and the opportunities, you find more of them. Anybody that's been in this for any amount of time, deal flow is a huge issue. And if you limit yourself too much at the beginning of that funnel, it's just really hard, really hard to do. So that was kind of key for us as we built out the criteria.

Host: What's interesting about that is I actually don't think your criteria was that tight. I mean, I've seen tighter. It was pretty tight. I mean, frankly, if you're geographically con constrained, that by itself is a giant filter, so.

Guest: That's exactly right.

Host: That's exactly. But, but, but the Dallas Fort Worth is. Is a big and growing area, really dynamic area. It's probably. It's probably overrepresented on the podcast in terms of number of searches I've talked to there. And you looked at Utah, where Salt Lake is also doing really well. So. And then 500 SD is not. Is not crazy. It's not, you know, a million, which is what we're all encouraged to look for, but it's so hard to find. 500 is quite reasonable. And then home health is also a big and growing industry, and you See a lot of those types of businesses transact. So I actually don't think that your criteria was too restrictive. There was so restrictive. But at the same time. At the same time, I mean, yeah, I mean, I guess it is. It's as simple as you look at all the home health businesses for sale in Dallas and in Utah and you could do that in a day. And if none of them fit the bill, then why.

[15:28] Guest: That's exactly right. And then I did, I did do a cold outreach campaign as well. You know, I got a bunch of emails, you know, hundreds and hundreds of emails, maybe thousands, I don't remember how big it was, and started sending them out not just to North Texas, but kind of Oklahoma area and Utah and Colorado and Idaho and Wyoming and kind of that Mountain west region and did a cold outreach program that way. That was. I, you know, I got like three or four bites out of those hundreds, thousands of emails that I got and none of them were ultimately open to selling at the time. And so, yeah, to your point, it was kind of like I just kind of wait around and keep getting funneled by these brokers and the deal sites and this cold outreach I'm doing and hope I find something good over the next little bit or I be a little bit more aggressive and open in what I'm willing to do and open the funnel so that I could try and find something a little faster. I ultimately decided on the second one,

Host: you know, that one of the most common levers to pull in a target acquisition is technology updating the systems of a business that may still be running off a spreadsheet or even pen and paper. But tech is complicated with tons of solutions out there. So choosing the right cloud platform, CRM, telephony, compliance and cybersecurity, not to mention implementing all that, is a job in itself. Acquiring minds Guest Nick Akers knows this firsthand. As a former searcher who now owns Inso Technologies, Nick has seen the tech challenges searchers face when acquiring businesses. His team at Inzo regularly works with searchers and their acquisitions, offering a complimentary IT audit of the target company. Nick takes a personal interest in all their searcher clients. Drawing from his own experience in the search phase. Enzo dates back to 1989. So this is a company that has managed the tech for hundreds of small businesses over decades. And one last thing, no long term contracts with Enzo. A big differentiator. Check out inzotechnologies.com I N Z O or email Nick directly@nicknzotechnologies.com and don't forget to tell them you're a searcher. You not only opened that funnel, you cracked it wide open. The fact that you were willing to move anywhere, were you really basically looking, did your deal flow become regional? Regional, agnostic?

Guest: It did. It truly did. Yeah. I was looking literally everywhere in the United States. There were some deals that I would turn down if they were in a very small town, like very small rural areas. Not because I necessarily have anything against those, but my family maybe wasn't as willing to move and live in those smaller towns. And so we ultimately would cut some of those out. Like, there was actually a great Porta Potty rental business that I was really interested in that was just in a little bit too small of a town for us to say yes to. Great business, though, had a great operator, great financials. And similarly, maybe strange as Lies is, you know, Porta Potty King, lice King. I don't know which is better.

[18:40] Host: But

Guest: yeah, we were essentially willing to move anywhere, which that was a tough decision as a family to make for sure.

Host: And Derek, curious, how long did it take you to do your search under the initial criteria and reevaluate and be like, I need to expand my criteria a week, six months?

Guest: No, it was probably about three months, I think, by August. So I started in May, and I kind of went through the summer, May, June, July with that smaller criteria, trying the outreach, trying the broker outreach like you learn about in all the books and, and everything that you can read about it, and was just not, not having enough luck. I'd looked at a lot of deals still, but just not enough good deals that, that I wanted to go after. And so at that point, I had a month before I officially had to go back to Bain. Like, Bain was starting again in September. My paternity leave was over. So like you said, I cracked it open in August, started getting a lot more deal flow to the point where when September rolled around and I had to go back to Bain, it became very easy for me to pull the plug on Bain and say, hey, I'm. I'm done. Like, I. Even though I don't have anything yet, I hadn't found lice doctors at that time and I didn't have anything under loi. I just decided to cut the cord and jump in with both feet and do it. And so that. That was a big decision too.

Host: Sure. Yeah. Well, that was your burning the boats moment when, when you. And that was basically because you just felt that confident at that point you'd find something somewhere, some half a million dollar SDE business in the U.S. that's right.

Guest: that point, I, I also just couldn't imagine myself going back to Bain again. Bain was great and I really enjoyed the projects I did there. I, I have all like, literally nothing bad to say about that. You go in knowing the workload, you know what it's going to take. But I was hearing about the projects I was going to get staffed on when I came back and I was like, oh man, I've, I've done that same project for another company. I know how to do it. I know exactly what it would take. There wasn't kind of that learning drive that kind of drove me at first at Bain and, and the more I was doing ETA in the search, I was like, man, there's so much to learn here. I, I can just grow so much more. Plus all the other benefits of the flexibility that we've, we've already talked about just became very real to me. And so it was, there was just almost no way I could go back to Bain at that point. And the learning is huge. Like, when I started search, I felt so dumb. Like I, I was going from this Bain senior manager. I felt pretty confident and felt confident in, in these board meetings and things like that. And then I go into search and I'm like, I know nothing. Like I'm just, I just know nothing. And so that learning was exciting for me too and, and it was starting to pick up at that point, so.

[21:28] Host: Excellent. Okay, Derek, so what happens next?

Guest: Yeah, so I start, I start, I leave Maine. I'm still searching. I have a few deals that are actually pretty interesting that I'm looking at. I had a roofing business in the Dallas area, actually of all places. Even though I was searching nationwide. There was this great roofing business I started looking at in dfw. There was a dry cleaning business up in Connecticut that we talk about. Oh, and there's a lot of issues with that one that came up and helped inform me about search in general. But I also started talking to investors. And so I got involved with a group of investors here in the area because I, I started looking at these bigger deals. I knew I'd have to bring in some investors to make it happen. And at the time I was nervous that I wouldn't be able to raise the money to do a deal. I was, and probably unjustifiably so, I was nervous, but it was just kind of still an unknown for me at that point in time.

Host: Time you were a little bit nervous around working with investors. Probably unjustifiably so. So what have you learned that reflecting back you, you, you don't feel like you should have been nervous?

Guest: Yeah. And this is maybe telling a little bit of the end story of that investment. But it, it was really easy to raise the money one, because the investors themselves liked the deal. But then I had so many other friends and people I knew that when I would tell about this deal, they wanted in on the round, they wanted to be a part of it. And the round was over subscribed. So we, we didn't have enough room for everybody that I would have, you know, preferred to have in, in the deal. We didn't have room for them.

Host: And these other folks were just friends and family.

Guest: So the people, Friends and family, yeah, people that I knew. And so I, I kind of quickly realized at least, and I do have a bit of a unique network I will say with, with Bain and, and everything like that tied to that.

Host: Yeah.

Guest: But I realized I could have raised money pretty easily the money that I needed to get that deal done. And you know, as I've talked to more people that have done this, there's enough, there's enough money out there. There's so many people that are actually interested in the space, whether they're just normal individuals that want to invest and are high income individuals or they're small private equity offices that have arms that are willing to do this. And you don't have to raise, necessarily raise a traditional search fund. You can still just go raise money for a specific business and a deal. And I just, I didn't realize that fully at the time. It was kind of still an unknown for me. I was, I was focusing on other parts of the search. But now I, you know, I, I don't think it's, it's not something somebody should be worried about necessarily. You need to have a plan. You need to know how you're going to go after it. But I think there's enough capital out there. It's not something you have to be overly concerned about doing. And as long as you find a good deal, of course you have to find a good one.

[24:18] Host: Well, I think one of the things about feeling nervous or anxiety about raising money from investors is what you just described. Will I be able to, is the supply there? How do I find these investors and so on. And most people say what you say, which is that there's a lot of supply, there's a lot of investors, they're not that hard to find. Even if you don't know anybody, you there's resources you can, if you're at all resourceful, which you should be if you're going to go down this path, you can do it. The. But the second thing that gives people anxiety is what, how to communicate with investors, what materials to put together. And at the, the nut of all of that, of course, is the, the financial piece, which for people who don't have a financial background putting together a model and the numbers around the numbers that show up in the deck, that is really the meat of the deck. Did you have that experience from, from Bain? Were you, were you financially pretty financially fluent?

Guest: Yeah, I, I did. I did have the benefit of, of having that training at Bain. Both, you know, we worked Bain works with a lot of private equity companies, as you might imagine, both in evaluating their deals and then in, in working on companies they've bought to help grow it. And so you have to kind of be able to talk private equity language to be credible. And so yeah, I did learn kind of that financial model skills and everything at Bain and I honestly, for anybody that's getting into search, I'd encourage them to learn those basics at least. You don't have to have a super fancy model or anything like that, but you at least need to know how to do those projections and understand the P and L, because if you're going to own a business, I mean that is the life of the business is that P and L. And you've got to know it, you've got to understand it. And so that, that is a big part of it for sure. You have to be able to communicate that very clearly the expected return, your projections and why those projections are reasonable or not.

Host: Yeah, yeah, great. Well, and then so the tip there is what you just said to people who don't have the benefit of that experience or that knowledge already, you gotta go learn it. And you know, YouTube University, there's courses you can buy, you can, you can. This stuff is this, this is their materials online, plenty of them for you to Webinars Acquiring minds. Webinars that I've hosted will give you a good, a good primer on, on this stuff.

Guest: That's right.

Host: Okay, Derek. And then the other thing that you said is, so these investors that you worked with, they had the deal and they said so, so let me understand. So under, say more about. What do you mean they had the deal?

Guest: Yeah, it was a little bit of a unique situation. So they had found the deal, they were working with another searcher who ultimately decided not to move forward with the deal. And and not, not necessarily related to. To lice doctors itself. He. He had another deal he was more interested in. And so they, they had it. They had it under an LOI and they were, they were moving on it by the time they had come to me with it. And so it, it was a little bit of a unique situation in that way, where this was a deal that was already under LOI that I was kind of coming into and inheriting, which is definitely, I'd say, a little bit unique in the search world. I haven't really heard of that happening often, though. I think it's becoming more common as, as it becomes maybe a little bit more institutionalized. Search does. But yeah, so a unique, A unique deal and it came with some unique terms, right? They. I maybe gave a little bit more equity to the investors than I normally would have because of it, but ultimately you got a good deal because of it as well. And you know, when I first saw Lysdoctors, it was easily. I'd looked at hundreds and hundreds of deals at this point in time. Hundreds and hundreds of sims. It was easily top 1, 2%, maybe, maybe just even top 5 deals in general I had seen at all. And so it was very obvious to me that this was a deal worth taking, even if I maybe had a. To give a little equity to the investors for the work they'd put into it beforehand, more than I would. I would necessarily normally do. But got a company, right?

[28:25] Host: You fell in love with lice.

Guest: Love at first I fell in love with lice. That's some strong words. I don't know if I fell in love with lice, but lice doctors.

Host: Absolutely, Derek, but this. So just to be clear, this is not a situation like a private equity model where it's a private equity shop and they're bringing you in as an operating partner. No, you are going to be the owner. But they are. This group already had the deal under loi, so they're going to keep some effectively for themselves or as a finder's fee, however you want to call it. They're basically saying, you know, here's a deal you can, and here's how we're going to split the equity with you.

Guest: That's right. That's right. And you know, I had, I had pretty clear goals with them as far as what I wanted. And I won't get into kind of equity splits here, but suffice it to say, like, I, I have full control of the business and, and everything to do with the business, which was my. One of My primary goals, that first, first reason why I left to do a search was that control aspect of, I wanted to be able to make the decisions about a business and, and not necessarily be beholden to investors. And so I, I mean, I'm obviously beholden to them in the sense that they've invested. I, I want to make sure I get a good return for them and, and maintain that good relationship with them. But as far as day to day operations, major decisions, really, literally any decision outside of selling the business, I have full control and, and they have no say in, which is in my mind, kind of ideal. They become almost passive investors. They're also there for advice and counsel. They're, they're experienced people that have run businesses and so that's always helpful. They're there for advice and guidance. But as far as, you know, we just made a really big investment in the business this last week. Completely changed our operations. Very large software investment for us. I ran it by them as like, hey, I'm doing this. I just want to make sure that you guys don't think this is completely dumb. And they're like, yeah, no, this sounds like a good idea. But even if they had said no, I, I could have technically done it if I wanted to, but at that point I was already pretty sure, so.

[30:37] Host: Well, you said you can't share with us what the equity splits are, but given that you have full control, I think it's fair for us to assume that it's 51% or more that you have. That's fair.

Guest: That's a fair.

Host: Okay. Okay. And then. So, well, I guess we'll get into the structure of the deal in a second, but we'll return back to how the investors and you how what the deal structure looked like. Let us now turn our attention to this gem of a business. What did you, what, what, what caused you to fall in love when you look, when you looked at lysdoctors?

Guest: Yeah, you know, I was actually just at my alma mater at BYU and, and did a little case, they did a little case on lice doctors. And so I was there to talk about it. And it's actually funny, when they read the case before we got into it, the professor asked them, you know, how many of you would invest in lice doctors? Literally no one in the class raised their hand. And so I was, I was honestly shocked by that. And so by the end of the class, it was a different story. And they, they all, not all, but they, many of them raised their hands for the deal and it was For a few reasons. Lice doctors, what we do, we do at home lice treatment. And so we have technicians that are spread all throughout the United States. And like you mentioned at the beginning of this podcast, we do uber for lice. So as we have lice appointments in the area, we send that to the technicians and they go and do that deal. And there are a lot of things that to me are attractive about this one. It's regional based competition and that regional based competition I like because it's hard for somebody with a lot of money to just come in and, and just overwhelm you and win, win your business and knock you out of business. Where in some CPG worlds that might be possible or even in some tech spaces with a lot of investment in enough devs in R D you can kind of knock somebody out of the race. Harder to do that in a regional competition type business. So I was number one.

Host: Sorry Derek. And why, I don't follow why.

Guest: Yeah, so if I for example, if I have a CPG company and I'm selling some widget, some product that I've got and I've got manufacturing in some, some area of the, of the U.S. somebody has manufacturing facilities in China and they have enough money and enough capital, they can overwhelm me and they can beat me because they just need to manufacture it and then shipping and distribution so easy nowadays they can get it to anybody in the world super easily. In a regional based competition model you need people, regional services, you need somebody in the region to go and service. And so there's a large hiring component associated with it of you need to find the people to do it, which is honestly lice doctor's hardest thing to do. And to, to be win at it, you have to be the best at it. And then you also have to market regionally because people are looking for those services regionally. And so you can't just pump a bunch of money into relatively simple search terms and search ads. You have to do it on a regional basis and you have to spread those dollars regionally which makes it harder to compete to him if you're not already broadly regional because it's just kind of diffuse.

[33:51] Host: There's no, there's no single point of target sort of thing.

Guest: That's right. Every market is, it's is its own little market. You have to go and grow. And so if you're not already there, it's harder to get in there and win.

Host: Yeah.

Guest: And it's so SEO based that it, if you're not already there it's hard to come to the top quickly or easily. So I like that a lot about lice Doctors. And it's one of the reasons why I looked at regional services in general. The other benefit to life doctors is we're almost a negative networking capital business, which sounds a little weird to say, but essentially our main cost is our people that we're paying to go do the service. And so we collect our payments via credit card from our customers that's billed essentially at the time of service or the next morning after their service. We complete the billing and collect the funds. And so we are almost, almost always paid before we have to pay our employees, because our employees, we pay them each week, but you know, they have to do their service and then they're paid a week after, and they're the vast majority of our expense. And so it's almost negative net working capital, which small business, large debt, cash matters a lot and cash flow matters a lot. And it's very easy to manage this business from a cash flow perspective. Perspective, because cash comes in before cash goes out almost always, which is not the case for many businesses.

Host: Absolutely.

Guest: So that was a major thing I liked. There's tons of stuff. I don't know how much you want me to go into detail on some of the other things, but those were kind of the two that first caught my eye about livestockers.

Host: Well, I actually do want you to keep going, but first, more on the model. So take us through the user experience.

Guest: Yeah. So if you are a family that has lice, say you, you have your son or daughter, they come home from school and you notice that they're scratching their head and you look and you say, oh, my gosh, I think they have bugs in their hair. You see little bugs crawling around or little eggs in their hair. What most parents do is they immediately go search Google. How do I get rid of lice? Right. How do I get her a lice or lice treatment in my area, or is this lice? Right. Those kinds of things, you immediately go to Google because you're just kind of panicked, or at least that's the general. If somebody, especially if they haven't had it before, when they search lice treatment in their area, we will pop up. We're number one or three, top three in almost every market where we are on Google, we will pop up and it's lice doctors at home, lice treatment. They will then call our. Our people, my call center, who will then explain our process to them and our pricing and everything like that. And book an appointment with them. At that point, we send one of our technicians out to do the appointment. The technician has all the materials and supplies that they need to do that. They show up at, at the appointment, they treat the individual. And it's a really straightforward treatment. We use olive oil, it's an all natural treatment. And then they comb through and pick out the bugs. That's really the only way to be sure you got rid of lice. I knew none of this, by the way, before I bought the company. Knew nothing about lice. My children have never had it, luckily, but that's the only way to get rid of it. And then they're rid of it. We offer a 30 day guarantee as well because we're that confident in it and we have a really low guarantee rate. I think we're at like 1% or something like that as far as people that need that guarantee. So our technicians are well trained, they do their job well, they're very detail oriented. You get every louse, every knit. Which knit is the egg of a, of a lice. That's where the term nitpicking actually comes from, is picking out the nits from the hair. You're picking out a small thing. That's where that comes from. Also didn't know that before I bought this business. And then we complete the billing after that's all said and done, we complete the billing and our employees are paid. So. So that's kind of the work.

[37:51] Host: And how much does the treatment cost? I know it varies by geography, but average.

Guest: Yeah, it does vary a little bit by geography, but our average treatment takes about two and a half to three hours. We bill on an hourly basis, actually, which is different from other lice companies. They'll tend to bill by head. We actually think it provides better value to our customers to bill hourly, but when we bill Hourly, it's about $480 is our average cost per appointment right now.

Host: And what are your gross margins? In other words, what are you paying your technicians to go do a $480 run?

Guest: Yeah, we pay our technicians, we try and pay them well. We pay them 30 to $40 an hour and that'll vary by geography and experience. I think our highest techs are paid $45 an hour right now. And we also compensate them for mileage that they're driving. We compensate them for the supplies that they're using, obviously for that. And so they're compensated quite well. I also pay my dispatchers and call center with some commission as well for each of the Jobs that they book and the process for that. So overall, our gross margin is somewhere around 55 to 60%. Kind of varies. And then we've got. We obviously have a bunch of marketing expense and other overhead expense that we have to pay for. But yeah, really good gross margins, which is another very appealing part of this business for a regional, for a service business. Good gross margins.

[39:17] Host: Well, of course, because that's the thing not to like about services in general, is that they're lower margins. I wonder how you're able to command such margins here.

Guest: Yeah, the real reason for that is lice is an urgent need. And so people need it removed and so everybody charges as much. We're actually one of the cheaper ones in the industry. It's possible somebody might come in and try and undercut us. But really when it's that urgent of a need that somebody has, when somebody gets lice, you just kind of want it gone. And our base of people that we market to, they do tend to have more money. They're more affluent customers. They probably don't have the time, whether because they're. They're working or have other obligations to sit there for hours to pick out the lice from their child's hair. And you really have to treat the whole family is the other thing to make sure the lice is gone because your daughter might have a lot of lice or your son might have a lot of lice, but you might have one louse in your hair. And if that one louse stays in your hair, it becomes more lice very, very quickly. And, and so they, that's, that's the value we're providing to them, is one, you get that guarantee. We're going to make sure your whole family's taken care of. Two, you don't have to drag your kids to some salon somewhere, which is, they're also quite expensive. Where you're going to sit there with, for me, four kids in a salon running around while they're getting treated for hours. That's just impossible. Where we want to do it in the comfort of your home and you don't have to do it yourself and you have confidence that it's done right. So that's the value that we bring as lice doctors and why it, why it does command a high price too, for that.

Host: Yeah. Yep. That is a pretty. That, that does strike me as a pretty. Your guarantee generous, I guess, because it seems like it would be very easy to miss a single light. A single louse. Excuse me learning my vocabulary here. A single A single louse or a single knit in a family of five, for example.

Guest: Yeah, and that's a great point we do have with our process. There is a follow up plan that all of our customers follow that it's real simple. They put some olive oil in their hair for a few nights after the appointment and that's in case there was one last mist that, that will, that will kill that louse before it has a chance to, to reproduce and make, make more lice in your hair. And so that there's a part of that, that our follow up plan that was developed by the former owners and, and a doctor they worked with that adds to that value of if you follow our follow up plan and you follow it well, yeah, you're not going to have license, you'll be done, there won't be any lice in your hair. And if there is, for whatever reason, we'll, we'll of course come back and make sure it gets taken care of.

[42:05] Host: Well, the good news for you is with, with, with 50 margins or better than 50 margins, you can send somebody back, do it all over again and still be in the black on that family by a couple points.

Guest: That's right. That's exactly right. Yeah, that, that is, that is part of why we can offer that 30 day guarantee and also why we charge that much to make sure that we could if we need to. We want to make sure they're taken care of and that it's not going to destroy the business to make sure that the families are taken care of.

Host: What do the following acquiring minds guests all have in common. Doug Johns, Morley Desai, Tim Erickson, Chirag Shah, Shane Ursum. They all went through the acquisition lap, the accelerator in community for people serious about buying a business. But they represent just a sliver of the Lab's success stories. The number of deals across the Lab's cohorts now stands at over 120, with over $300 million in aggregate transaction value. The acquisition Lab was founded by Walker Deibel, author of Buy Then Build, the book that introduced so many of you to the very idea of buying a business. The Lab offers a month long, intensive, almost daily Q and A sessions with advisors, live deal reviews with Walker Deal team introductions and an active community of serious searchers. Check out acquisitionlab.com, link in the notes or email the lab's co founder, Chelsea Wood. Chelseauythenbuild.com Even though it is expensive and

Guest: an admittedly expensive service, we do, we do like the value it provides in our technicians. When they walk away from a family that they've treated, oftentimes they're walking in and the mother or father that's there at the time is going to say, oh my gosh, I was ready to burn my house down because I have lice. I thought I had to just, you know, get rid of everything. We're, we're just ruined. And our technicians are trained on, on teaching them about lice as well. And so when they leave, they have no more lice in their hair. They now understand lice and that it's not something you have to burn your house down for. And so there's a pretty strong sense of satisfaction that our technicians get from that as well. Because, yeah, they, they know they helped the family and they really did help them. So.

Host: Yeah, well, well, one of the things that you hear about a lot in the world of small business is the satisfaction that many technicians and, and by extension owners, people that I interview feel that they're really, often the service that they're, that they're delivering is a, is an acute problem that they're solving. So they, they, they help the client. Client feels much better about the world and, and they, they then do too. And it just, the, the, the feeling of having really helped somebody is, can, can really perpetuate or can really kind of fuel people's motivation in small business.

[45:04] Guest: Yeah, and it's a very tangible thing. Like we, there's a few cases I can think of specifically where the technicians will contact me if it's a very severe case. Mostly just to kind of share of, wow, this is so, so difficult. We do work with foster care organizations and we do give our government and foster care organizations pretty significant discounts for the service we'll provide to them where they'll be paying for a foster child that's come through their system. And, and oftentimes unfortunately, those kids have been neglected in some way and so they'll have very severe cases of lice. I mean, like, like sand in your hair is what it looks like with how many eggs are in there. I know people listening to this are going to be cringing at hearing that. And your head's probably going to start to itch. And just imagine how this, this child feels. You know, they're going to school that looks like this. Many of them are wearing hats or putting hoods on just to hide it because it's, it's embarrassing. And even though it's not their fault. Right. Anybody can get lice. Doesn't matter. Your hygiene, whatever. Like it literally doesn't matter. Lice won't discriminate. But if you're neglected and don't have it treated, that's when it becomes that bad. And so while our technicians love to go in and treat those children because they, they're really helping those kids that need it. And, and the kids are clean after that. They're able to go to school without being embarrassed. And it's a much better situation for them. So that is very satisfying for me as an owner and for our employees, of course.

Host: Yeah, that's, that's amazing. That's heartbreaking to hear that.

Guest: Yeah, it is very sad.

Host: Some kids have that. Just one last thing before we leave your gross margins, which I keep going back to. I guess the other thing here is that you can charge premium prices, but on the other side, the labor cost maybe isn't so high because this isn't plumbers or H VAC technicians that have required years of training. There is training involved, but maybe it's not years that.

Guest: That's right. Yeah. We do all of our own training for our technicians. It's, you know, there is, there is a technique to it for sure that we make sure they understand and are doing well for our customers. And even, even more than the technique, we're trying to hire the people that are one okay with lice. You know, it's kind of a unique, a unique skill set of somebody that's willing to go into somebody's house and pick. Pick bugs out of their hair. So we're trying to find that kind of unique skill set. And then we're also looking for somebody that's detail oriented, but outside of that, we can train them to do it. It's not a difficult process. It is a process you have to follow. But as long as you're able to do that, we can train you to do. Does mean that our. Because it's not an extensive training we do have, and by extensive, I mean years of training. It does mean that we have relatively high turnover, which is maybe a negative or a downside to lice doctors or a hard part about lice doctors. We have really high turnover. It's just like you would imagine. Uber's turnover is for drivers. Same kind of idea for lice. Uber for license. High, high turnover with our employees.

[48:13] Host: Yeah, but yeah, going back to the Uber for, for lice phrasing, that sort of implies an app. So. So let's not over overstretch this analogy. There's no app here. It's just simply on demand. Some somebody coming to your house to deliver the service is what we mean. These are basically web based orders. Right. People go through the Google or Google Ads and find you and go to your website.

Guest: Yeah, they're primarily calling us or, or they can submit a, a forum or something like that or chat us and we'll schedule an appointment. But yeah, primarily finding us through Google and then calling us. Yeah, may. Maybe we'll have a, a true Uber for lice model someday, though I'm not sure the market will demand that exactly.

Host: I think you somebody would have to be.

Guest: Yeah.

Host: I mean what kind of person actually commits to downloading an app? Uber for lice must expect that the problem's going to be coming back again and again. Hopefully not. What was there anything. Have we covered? Basically everything you liked about it or. I wanted to get back to the other things that you did. If we didn't get them all.

Guest: Yeah, no, there's definitely more things. As I dug into the business, there was just a ton of opportunity I saw and this goes to that, that BYU class I taught where, where I saw opportunity, these students saw like bad things. Right? Like, oh man, this business is, is not good. But for me, I was like, wow, it's still making really good money and it's this bad in some ways I'm like, wow, that's great for me as a, especially as a consultant, that consultant mindset coming in, like, look at all these levers. I can go pull for growth. Growth. So one of those was they were missing, literally missing calls. Hundreds and hundreds, if not thousands of calls every year. Hundreds a month. Thousands and thousands a year. Where our, our dispatchers at the time were just not, not picking up the phone. And you know, I, if my dispatchers listen to this, they know because we've been talking about this. Who knows why that was? I haven't even shared all of their numbers with them at the time because. Cause it was astounding how many missed calls there were. But for me that was like, oh great. Like we're still doing a lot of, a lot of revenue and we're missing calls. Amazing. Like that's just low hanging fruit for me where these BYU students who, who haven't been in it as much are like, oh man, that's terrible. Like they're missing so many calls. That's a bad thing about the business. But they forgot they're missing calls and making a lot of money. If I can give them the answer as a clone, you know, maybe, maybe I can make more, help this thing grow. So that was one big thing. The Other was how we are actually even though we are everywhere, we're relatively under penetrated in many of our markets. And again, that's something somebody could say is, oh, that's a negative. But for me with lice doctors is actually a positive. We have presence everywhere, we have capability to serve everywhere. We just have to go out and execute a little better from an operations and marketing standpoint point to grow there. But we have a presence and having a foothold is, is a big deal, especially from an SEO perspective where we get a lot of our, our leads. So those were, were a few things. I, I also saw some opportunity to raise prices. I know we just talked about how expensive we are. I don't, I don't want anybody that listens to this to feel like we're price gouging or anything like that. But when I looked at competitors in the market, we were still well below our competitors. For our competitors, if you have, if everybody in your family had lice, many of our Competitors are charging $200 a head to treat you for lice. And so if you have a four person family, which is kind of our average treatment for a family, it's going to cost you $800 if all of you have lice, or it's going to cost you 600 if only three of you have lice. If one of you have licensed, probably two of you have lies and probably three, probably four. So we're actually still underpriced I think, relative to the market and so saw an opportunity to raise some of our prices there and bring us more in line, which as any business owner or a potential searcher will tell you, you know that that's the best lever you can do. That's immediate gross margin and EBITDA improvement as you raise your prices. So yeah, those were just a few of kind of the biggest levers I saw. And there's other smaller ones that I'll do at some point in the future, but that's kind of my main focus. And then turnover, like we mentioned, we have really high turnover and if we can improve that, there's meaningful cost improvement that comes from that as well as hopefully revenue improvement as we just have a more consistent service base of technicians. So.

[53:00] Host: Well, I want to return, Derek, in a little bit to you what you perceive as opportunity not just for improving the business, but actually growing it. Because I don't think you mentioned that. Well, you said penetrating each of your markets more. But I want to, I want to kind of hear more about how you envision doing that. But we'll, we'll get to that toward the end.

Guest: Yeah.

Host: And I also just want to highlight and highlight again the point this, this gap between your understanding and the, the MBA students understanding because this, this gets to, it's slightly subtle. It's not really subtle. We, we, we who are in this world have just developed a reflex for it. But if you're new to this world, it, it might not be something that you perceive because it's a little bit subtle, which is what you want. What in fact, the best opportunities are those where you take an imperfect business and though. So you want, you want the right kind of, of imperfection. Imperfection that is easily fixed, that, you know, you see obvious solutions for that is beautiful. That is where so much value can be created really quickly. That is, that is margin of safety almost in this world. So great lesson to those students and to anybody listening. If you haven't been an ETA long enough to, to perceive this, hear us very clearly. You, you want to find businesses that have some, some, some imperfections. Imperfections that you can see, that you can see fixing. And actually I'm leaving off an important detail that are still making bank, that are still right, are almost are successful in spite of themselves, if you can, if you can say to yourself, this business is successful in spite of itself. There is a real really good bones to a business. So.

[54:51] Guest: That's right. And prior owners had, you know, the prior owners had no business experience really. They had a little bit of marketing experience and things like that, but they were just two women who, who knew lice treatment were doing lice treatment themselves. And just over 10, 15 years grew this business just organically over time and expanded, but they didn't have the discipline of processes and things like that that I, I was hoping to bring. And so to exactly your point, it was like, wow, they build this business. It's. It's big enough for me to want to buy. It's doing lots of money. And wow, look at all these levers. Yeah, it was just, it was perfect from that perspective.

Host: Great. And so, so things you didn't like about it or weaknesses you saw in the business, the turnover, keeping people difficult. On the flip side, hiring people and training them up, you do have to find people who are willing to nitpick all day. On the other hand, to train people to do that, it's, it's not, doesn't require years. So that's good. What other weaknesses or flaws in the real ones? Not, not the, not the imperfections we like, but the imperfections you didn't like, perhaps with the model, for example, you had said that the investor group, that somebody actually looked at this business and then didn't buy it. So there must be something not to like here.

Guest: Yeah. One of the biggest things that, you know, and these BYU students said it as well, there's no recurring revenue with this business. We. We kind of redo our revenue every single day in this business, which. Which can be tough. Right. It kind of goes against what many people want in a business when they're searching. Because all of our customers are not all, but almost all our new customers. They're new people that have come with lice, or they might have had lice before and used us in the past. And so. So they come back. But many of them are new. They get lice for the first time and they're. They're looking for a solution, and we are the solution they come to. So that is definitely a risk of this business is there's no kind of comfort of I have a guaranteed income stream of subscription or contractual revenue that's going on. So that's a major weakness for this business. A second major weakness for this business is that we don't have great differentiation from a competitive standpoint. Right. What we do is not some secret sauce. There's not some secret chemical or patent that we have that's going to get rid of the lice. It's technically a process anybody could go and do if they wanted to. And so that's risky. For sure. Risky. And where we try and differentiate is on that base of technicians, really, as I've been in this market, more. More now especially, you realize you win by being first. It's speed to get somebody to their house, whoever they call, first, that you have to be number one or two on the rankings for sure if people are going to call. But if you can guarantee you're going to get somebody to their house first, you're going to win in this market because they just want it gone. They just want whoever's going to go and do it. But there's not like a product differentiation from that standpoint point. It's just lice treatment. And technically, anybody could go and do it, which is risky.

[58:04] Host: Although, Derek, I will say almost any home services business would say the same. And sort of a commoditized offering. Speed is how you differentiate.

Guest: Yep. Speed and having reasonable customer service. Right. You have to have a reasonable level of customer service and good delivery of that service. But. Yeah, exactly. It is a commodity. And a lot of people don't like that they want something that has a little bit more of a fence. And from a product standpoint, we don't have a great fence. From an SEO and kind of scale perspective, we do, which is what kind of mitigated that for me. We're so big, if I don't do so great in a single market in a week or a month, it's okay because I have a bunch of other markets where I probably did fine and it all kind of evens out at the end, day of the, the day. And so that geographic revenue diversification was a big deal for me where you don't, you don't get that in a smaller regional service business if you're just operating in a single geography and location. If you don't do well in that geography and location, you didn't do well. And so that, that was another kind of nice side of lice doctors that mitigated some of that risk for me. Those were probably the biggest ones with turnover being the other.

Host: Well, just on this point of not having recurring revenue. So, so it's, and really, I think you said not only do you not have recurring revenue, you don't really have reoccurring or repeat revenue you would hope. Right. Is really, it's kind of one and done. You're, the families you serve are probably never coming back. So how do we, how would we overlay the quality of revenue framing on that? Is it high quality of revenue because it's such an acute need or, or can you not really even gauge quality? Well, of course you can always gauge quality of revenue. So, so how would, how do you think about, think about it in those kind of, in that abstraction?

[1:00:02] Guest: Yeah, it is, it can be difficult to grade the quality of revenue for this company. What gives the revenue benefit to me is one, it's highly collectible revenue. Right. We're, we're charging a credit card and that credit card is billed. And so it's, it's very easy to make sure you're going to collect on the revenue so that even though it's not a recurring or repeat, it's at least essentially a guaranteed revenue whenever you do book an appointment. Yeah. And then the geographic diversification, like I mentioned, is the other benefit to this revenue quality, so to speak, where even if on an individual basis, I can't really grade the revenue of a single transaction. Well, as a whole for the company, I can see that I have good revenue quality, that my markets are performing well, that my search performance is bringing in enough leads and my people are doing enough jobs in that area that I have enough consistent revenue over time in a geography and as a company as a whole, that that's kind of what gave me confidence in that revenue quality, so to speak. And that bears out through Covid. After Covid. Pre Covid, like you can see kind of the growth pre Covid. You obviously saw a dip during COVID Surprisingly not because people weren't willing to pay for life services. But when people start hanging out with each other, lice stops spreading. And so there's just less lice in general during COVID But then you see like the perfect recovery after, after Covid, when I was looking at their financials, it was, it was perfect. Right. It came back almost immediately to pre Covid levels and then was growing after that as well. And so when you look at it from a holistic base, at least that's how I evaluated kind of quote unquote revenue quality, even if it's. It doesn't fit the typical term for it.

Host: Yeah, well. And I think actually one way to think about quality of revenue is if a business earned a dollar last year, how likely is it to earn a dollar in the same way this year? Right. It's that robustness of revenue. What it did, what it did in the past, will it continue doing. And so you've just answered the question about historicals. It's. It's performed historically quite consistently right now. One thing I gotta press you on, Derek though, is that where you're getting these, where you're getting these calls and leads, you say you have good SEO. So it's combination of SEO and also ppc. So paid Google Ads.

Guest: That's right, yeah. It's a combination of both.

Host: And is that. Are you, is your, is the marketing dialed in enough that you can see exactly all of your sources of leads or not quite yet.

Guest: It's pretty darn close. Are the former owners didn't even care to look at it. I mean they were making good money. It didn't matter. Right. They weren't as concerned about growing it as I am. But I have dove into it. We are 90% plus SEO. We have relatively low PPC, which for me was actually a very strong positive. And when I looked at their marketing spend and PPC dollar spend, it was really low, which was actually another lever I saw very quickly we could go pull is we can put more money into PPC to win. And we continue to invest quite a bit in our SEO as you would imagine. Right. I've got marketing agencies working for me on that SEO we're constantly working to make sure that we're coming to the top of everybody's list, just organically, and then also investing in the markets that are most profitable for us. But it's something we're working on. PPC is obviously a tough thing to do well. And I actually just switched my marketing agency this week to a new one that hopefully will do my PPC a little bit. A little bit different, a little better than my former one, but. Yeah, yeah. So a strong organic presence is a huge benefit for this business, at least in my mind.

[1:03:56] Host: You know, Derek, it's interesting this. This one might be one where we're going to have the opposite dynamic to what you had with the students in the mba, where a strength that you see is one that I call out as a weakness, as opposed to they call it.

Guest: Yeah, yeah, I love it.

Host: Which is. Oh, no, no, sorry. I guess that's the same thing. No, I'm. But basically, SEO is great. It's a great asset. Of course. I mean, who doesn't want to be getting organic leads?

Guest: Sure.

Host: But if 90% of my leads are coming from one channel, and SEO is notoriously, you know, one Google algorithm change away from. From implosion that. That particular lead source, it almost feels to me like it has serious platform risk. It's. You almost start thinking about at least. At least the channels, at least the marketing channels, almost in the same way you would about E commerce or some digital businesses where in almost any business where all of your. Where all of your revenue is essentially generated from one of the online channels you work, there's platform risk. And here there feels like platform risk. Now, there may be no way around that, but it does feel like that to me.

Guest: Yeah, no, that's a very, very fair assessment, I would say, Will, where we are very dependent on Google. Yeah. Everything goes through Google right now. We have explored doing some social and things like that as well. But when we think about where our customers are, they're coming here from Google, they're coming from search and Google, Bing, whatever. Right. All the search engines. Yeah. So it's a great call out, especially as ChatGPT and some of those AI businesses start to take over the search space more and more. How do we manage that? I think that's a great call out for kind of the future of the company.

Host: Well, the good news is now speaking out of both sides of my mouth. The good news is that because you're not doing much ppc, you have this whole new ceiling where this whole new channel that you know works now it's going to cost money and the margins aren't going to be as good. Although, I don't know, maybe, maybe they're dumping tons of money into SEO at the same time. But at least, you know, at least you haven't exhausted your marketing channels. You have this whole new giant channel in the form of Google ppc, Google Ads to try that new. You're doing a little bit, but to

[1:06:09] Guest: really, it's really small like I said. Right. That split is tiny as far as, and the, and the money investment is comparable in that where it's a very small amount that we're investing in PPC each month. And so if you think of that, yes, definitely there's a lot of room to grow there. We also have, you know, we talk about weaknesses of this. There's a little bit of an awareness issue, myself included. Right. Before I even heard about lice doctors, I didn't even know there were people out there that would treat lice for you. Right. That would come to your home and treat lice. So there is a large kind of awareness issue that over time, hopefully we'll be able to overcome. Just letting people know this is a real service so that when you do have lice, you maybe you don't go to Google first, you just come to us. Right? You just come to lice doctors. Yeah, but that, that's, that's probably a longer down the road kind of target for me as far as what I want to go after in terms of levers. But it's definitely a concern for the businesses. Nobody knows what we do. Right? Nobody knows there's live streaming at home. So.

Host: Yeah. Well, at least you got a great brand. It's a great name that you can leverage. It is a good, you should be, you should be, you know, the sponsoring little league teams.

Guest: Every time you put on that helmet, I want you to think about the lice that might be going on. Exactly right.

Host: Point on kind of not knowing that there are people who will come to your house and help you with lice. So actually most of the quote lice market is already captured. Captured by school nurses. Right. The schools deal with it. So, so, so what does that. How do people who don't spend $800 or $400 dealing with this, with your solution, how do they deal with it?

Guest: Yeah, school nurses, you know, nowadays they're not treating really, they will just send your child home with a note that says they have lice. And, and school districts vary. Some school districts will say, hey, they can't Come back until you get something signed by a doctor or a professional like ourselves that says they no longer have licensed. Other school districts aren't that strict, so school nurses actually aren't doing the treatment. Most treatment is actually either being done at home by the parents. So there's obviously all the shampoos. You can go buy the Nyx shampoos, that is kind of the big brand and you can do it yourself. And so the way to do that is you. You put the shampoo on your child's hair, it'll kill any live bugs. Unless they're super lice, which are a real thing. That's the real term for them. They are immune to that. Again, something I didn't know until I started exploring this space. And then assuming it kills the lice, then the parents are the ones that are combing through and taking the, the eggs out of the hair because the eggs aren't killed by the shampoo. And so I think that is where the vast majority actually of lice treatment is actually happening. People are doing it themselves. And so our market that we cater to are people that either don't want to do it themselves because it grosses them out enough that they just think it's disgusting, or they don't have the time to do it because it is very time consuming to go and do it. Especially if you have a child with very long hair. It can take a very long time. And multiple children with long hair takes even longer. Or people that just aren't sure or they've tried Nyx. We'll have people that have used the shampoo multiple times so much that their kid's head is, you know, red and kind of almost burned chemically from the shampoo they're putting on their hair. And so they'll call us and nothing's working and we'll come and take care of and make sure they're taken care of. Yeah. Vast majority of the market is at home treatment kind of product based sales. Then we have salons that do it as well. We have a large competitor that's a salon. And then there's at home lice treatment, of which we are the biggest in a small market.

[1:10:02] Host: Okay. Okay, great. That was great.

Guest: Yeah.

Host: Okay, Derek. Well, we're going to start wrapping up, but I still got a handful of questions for you. Sure. Quickly give us the history of the business. You touched on it 15 years. Co founders. Say it for us again.

Guest: Yeah, yeah. So it was two women up in New York that started this business. They started it. I think it was roughly 12 years ago where they were just doing it themselves. They, they did lice treatment, just the two of them in the New York area. And over time they just grew it and decided to hire people. Originally the employees were all 1099 employees that were just contracting. They'd send them leads, they'd send them out there. We're actually now W2, which is another conversation we could have and why the irs how that's the worst thing for the business, honestly. But it's fine, it works. But we have our employees now that go and actually do it out in, in there. They, they grew that over time and expanded geography by geography, added more and more marketing and, and SEO and, and landing pages and everything like that in each of those markets until it is what it is today. So they went from nothing, these two women doing it, to having 200 plus technicians out in the US in 40, 45 states that are doing live stream.

Host: So and so this was sort of a greenfield opportunity that these women happened into. They're just weren't people doing it. So they were kind of the first in many of their markets.

Guest: They were, they, they kind of hit this as people realized it was a thing people were willing to pay for. And so now when you look at our market, we actually have a lot of competitors. Another potential negative you can say for this business. But most of them are just single individuals that are there doing the lice treatment themselves in an area when they have time type of idea and they have maybe a little website they've created, but rare to have kind of a larger professional organization that's going out and doing it because they were first. Which is also why we, we do well on Google and, and why we have a good brand name. And we've been in a lot of kind of news articles where they do interviews with people and, and so we, they built a really nice brand. And like you said, the name is quite good. Lice Doctors is quite a good brand name as well.

[1:12:16] Host: Yeah, yeah. You know, I'm just reminded, I think they're, I don't know if you know my first million in the podcast, but there, it's another entrepreneur entrepreneurship podcast. And I think there's an episode where they talk about a local like lice lady. There's in some market, there's a woman who's well known in the school communities or whatever. Yeah. And this is her thing. Did that ring a bell? Do you know who I'm talking about?

Guest: I haven't heard that podcast, but we do have. Those are our primary competitors. Are people just like that who have gone and done it. Some of our technicians will occasionally leave and try and do that. Most actually end up coming back because they're just not able to generate as many leads as we were for them. But yeah, that is definitely the case. And people make a decent amount of money, especially if it's just you, you have no overhead. Right. You're just going to people's homes doing a little bit of marketing and a website on the side. Yeah, people make good money doing live streaming. Yeah.

Host: Mind blowing. Now the other thing I want to, I want to call out here is my episode with Carly Midas, which will have aired a few. A couple of weeks before this one. Carly bought a home inspection business, but similar, very similar model where she has. I actually think her inspectors might be 1099. No, maybe they're W2. No, I think they have W2. Anyway, home inspection business where calls come in for a home, needs to be inspected, goes to her call center and then those are dispatched out to her home inspectors. Only in a single market or it was only active in a single market of Knoxville when she bought it, but she's taking it to Nashville and Chattanooga and I think Atlanta and margins are similar to yours. I mean a lot of the structure that we've talked about here is similar to yours. Good margins, pretty. Not as an acute need as. Or the urgency isn't there, but when people get a home inspection, it's, it's, it's semi urgent because they're probably looking to close on this house. So they need to get it done within a pretty tight time frame and one and done. You know, so people aren't probably. Even if you, you know, you may need more than one home inspection in your life for every time that you sell a house or move or whatever. But, or buy a house, but it's unlikely. Most people just go with whoever their, their agent recommends. So. So anyway, it just. And, and so it's a great little business. It's a smaller business than yours, but it's also just in a single market market. And so if she just takes it just a little bit. Yeah. So it just makes you wonder again. So. So, you know, you could call it Uber for home inspection. What, what other services are. Is this ripe for now? You know, in, in home services, the big home services, H vac plumbing. There's, you know, it's already, already really competitive. I remember John Wilson saying that, you know, in 2016 there. You know, that was when if you were really aggressive and progressive as a Home services business in, in the big giant categories like plumbing, you could kind of grab market share but that's long since been competed away and you know, private equity is all, all up in

[1:15:37] Guest: the big services all over, home services all over.

Host: So the opportunities close there. But, but where else I wonder are there, is there Uber for X in as you called it, regional services or home services, still an opportunity. And just one other, one other kind of side thought to that. As I said, Uber for X. You know, if, if anybody was following tech in the 2012-2015 range, there were a lot of apps that were Uber for X. Now maybe the re. And many of them failed. And it also almost became like a byword for like the lack of creativity in, in, in Silicon Valley and VC investing. Totally. But maybe the problem there wasn't the fundamental business model but just that people don't need an app for this. They just need to, they just need to have just one service on demand first. Second, maybe these businesses just aren't VC scale but they can generate a million or two or three of EBITDA a year, which for our purposes is pretty damn nice.

Guest: Yeah, exactly right.

Host: So how do you respond to all of that, Derek?

Guest: Yeah, no, you know, again, talking to these BYU students, they gave me some good perspective here on this where the same idea, it's like I don't need to be a billion dollar company, I don't need to generate $300 million in EBITDA. If I generate two, I'm going to be pretty happy. If I generate five, I'm going to be ecstatic. Right. I'll have won the game if I can generate that at the end of the day for me. And so I do think that that's one reason why to look at this style of a business is that it can be great. And I do, you know, I've thought about, there's opportunities we could take this. We have a very large customer list generated from many years of doing this business. We have people out there that we could go and train to do services as long as we can. As long as they're relatively. I don't low training type of services where you could kind of teach anybody to go and do it. Yeah, there's tons of opportunities here. I have friends who own pest control businesses and run pest control businesses. That's a real similar model. They lean much more heavily on a door to door knocking sales kind of strategy to grow that. But it's the same idea of relatively low training technician that's going to go out there and do something at a home and do a home service. I've thought of there may be a small market though not likely for hair cutting or something like that or other bug type of treatment in the home that you need to get rid of bedbugs or there's all kinds of these little things you might be able to go and do. Which was also exciting about lice doctors because I see a really nice growth path for lice doctors just in lice. But if I ever did start to tap out on growth there, I've got a base of people regionally spread throughout the US that I could go train to do another product or service. And so that's definitely appealing. Definitely appealing.

[1:18:30] Host: Yeah. Yeah. Fascinating. It's a great model. It's, you know, not, not maybe not VC scale model but, but for our purposes it's, I mean it's so, it's such a, and by the way, similar to you, Carly has no capex, no office. It's a basically, it's basically a virtual business. Yours is virtual, right? Yeah, yeah. So, so very, very lean operating structure. So yeah, really great.

Guest: Yeah. And as long as you can find the people to do the service in, in the area where you have to be, that's, that's really the biggest hurdle in this kind of business. So yeah, it's fun. It's a good business model for sure.

Host: Okay, Derek, we said we'd return to the structure of the deal. Oh, and the size of the business. Did you tell us it was revenue

Guest: if I said that? Yeah, yeah.

Host: Break that down for us please.

Guest: We're roughly around a three million dollar revenue business and about a million dollar EBITDA business. So it came in right where I was kind of hoping to it was on. I, I guess it depends on your listener base. It's maybe a little bit on the large side for some listeners and maybe a little small for those that are looking for a 2,3 million dollar EBITDA business. But for me it was kind of that Goldilocks situation. It was just right where it gave me enough cash, I could feel comfortable, I had some cushion, I could pay myself an, an okay amount again. We took a pay cut from Bane for sure, but could pay myself an okay amount and still have cash to go invest in new projects and, and the things that I want to do to grow the business. So yeah, it's a nice sized business. And again, when you think you're making that much money, you know that company's making that much money doing lice. Yeah, yeah, it's Pretty, pretty great. Pretty, pretty great business from that perspective.

Host: Well, and on the, on the money piece, I just did some, some crude math. So 3 million bucks a year divided by. I said your average order value is. You said 480, so I did 500 divided by 365 is about 16 to 17 orders a day. Does that sound right?

Guest: Which is when you think of that across the U.S. again, that's so low in my mind. The fact that we are only doing that much and we are spread throughout the entire US Is again, maybe a bad sign for the business in some ways, but in other ways is a. Is a huge opportunity for us. Yeah, we're working on a lot of that. We have lots of leads coming in that we are not able to capture because our operations and our staffing base cannot meet the demand. You know, we talked about marketing before. Marketing is not necessarily my biggest problem right now because we still have too many leads that we're not serving. Right. That we could serve. So.

[1:21:14] Host: Wow. So. So really, because, you know, 16 to 17 orders a day across a country of 330 million or whatever.

Guest: Yeah.

Host: Is. Is really infinitesimal. And so.

Guest: That's.

Host: Right. It sure doesn't seem weird to think that you could get that number to 32 and you know, 48.

Guest: Right.

Host: Not without too much difficulty. And so the bottleneck really at this point isn't even on the demand side. It's on the supply side.

Guest: Finding people fully on. It's fully on our ability to meet that demand. That's the supply side. So when I, when I think about this business, you know, the stated goal I've said to the company, and I'll tell this to them, is we're going to double this thing in five years is what I say when I think about it. We're going to double this thing in two years. By the end of next year, we're going to try and double this company. The first year we're on the path to scale is what I would say. Kind of preparing to scale, making sure our operations are in place to do that. But yeah, the goal is to double this thing by the end of next year. If it takes a little longer and it's the year after, I'm fine with that. And by five years. Yeah. Can we triple this business? Can we quadruple this business? Quintuple, you know, that's. The sky feels like the limit for this given our breadth of coverage and our relatively low service amount from a number of jobs perspective.

Host: Well, one of the things we talked about on the pre call. That's a nice feature of this multi market business that you have. Is that how you can do little experiments in a market. You can play with pricing, you can play with marketing, you can, you know, do all, you have all these little petri dishes. So you can try it, you know, you can try it in the D.C. area and if it doesn't work, you haven't harmed your other markets. And if it works great, then you can try it in a few more and roll it out across the whole thing. It's this. You know, I remember in the early days of Facebook you'd hear that they would try something in New Zealand and if it worked in New Zealand, they'd roll it out around the rest of the English speaking world sort of thing. So it feels like you could do that here. There's just lots of easy ways to play and experiment and tinker.

Guest: That's right. And it's that way from kind of a business standpoint and also from a hiring and personnel standpoint. Right now we give our technicians a lot of freedom. They can kind of set their own schedules. And that's both good and bad for us because it means we're able to hire a few more people, but it means we have less control over their schedules and ability to schedule jobs. And so there's worlds where we might hire a kind of a part time, 20 hour dedicated technician for a market and they're going to do all the jobs that come in during that time period or we're going to hire multiples of those in our larger markets and be able to scale that way. So those are all things that I haven't done yet as we're fixing some other operations. To give some perspective, this was a $3 million revenue business that was being renamed runoff of Google Sheets for, for that whole time. Almost, almost the entire time of its existence. So we're, we're definitely adapting from that and kind of getting set up where we can handle more volume. But yeah, yeah, great, great opportunities to test and experiment.

[1:24:19] Host: Derek, you'd mentioned some big tech investment that you just made or were about to make. What was that? Was that in getting, getting rid of the Google Sheets and putting in a CRM or something?

Guest: Yeah, luckily the, the former owners did that before they sold. They knew it would be hard to sell to anybody on a Google sheet. Cause you just, it would be really hard to do anything like that. So luckily we were already on a CRM, but this was a scheduling software. We were doing everything by text Literally by text, we would get something in. We would then text the technician and tell them about it. We might hear back from them. And then it's been an hour. And like we talked about before, speed is how you win. And it's an hour before we're getting back to a customer. They've already called three other license companies at that point. We're lucky to get the ones we do. Again, negative. That's like we're still making money doing that. But this is a new app where we now have visibility into our technicians availability. My dispatchers can see it on the screen. They can now book an appointment in five minutes with you on the phone where before it was an hour. And we lost. I won't even say how many we have lost because it is insane how many we have lost because of that. How much revenue is lost just each day, honestly, from that is. Hurts you as a business owner to think about a little bit how much money is being lost because of that. So we rolled that out literally yesterday. By the time this podcast airs, it'll have been at it for a while. But yeah, yeah, so a big, big change. Definitely the biggest change this company's ever seen.

Host: Well, congrats on that, Derek. And let's just not. Let's not forget that if revenue had been much higher than where you bought it, you might not have been able to buy this business because it would have been too big for you.

Guest: That's exactly right. That's exactly right.

Host: Let's thank those inefficiencies. That's what you got, why you got your hands on it. Speaking of which, getting your hands on it. I. I didn't want to leave without hearing about the structure of the deal and the investors that were involved. It's a 3 million business. A million in SDE. How much did it cost? How'd you structure the deal?

Guest: Yeah, it was about a. I won't give maybe specific numbers, but 4 1/2 to 5x EBITDA multiple. So near the high end, probably for that size, but still relatively reasonable and doable. We financed it primarily with an SBA loan, so we're 80 to 90% levered on the business. So very highly levered on the business, which. Good and bad. Right. There's definitely times where I wish maybe I'd raised a little bit more money and taken a little less debt, just so I'd have bit a little, little more cash to do stuff with in the business. So that's maybe a learning for another acquisition. If I do one down, the Road. But wait, wait, let's say more about

Host: that, Derek, because that is something that so many listeners will confront and the temptation is to lever the thing up as much as possible. Yeah, and I think that that's maybe a little bit unsophisticated or first time, a first time error.

[1:27:09] Guest: That's right.

Host: You know, a lot of, a lot of more sophisticated financiers will do quite a bit of equity and put quite a bit of equity into deals to give themselves breathing room. So say more about how you're feeling and how it's, how it's tied your hands a bit.

Guest: Yeah, no, I, I mean, it just makes decisions that would have been easier, harder. Like, like this software decision, for example. It's a relatively expensive, expensive software that we've rolled out. There's, there's some inefficiencies that, that come from that, that will reduce our cost overall too. But it was a, it took me a while to be able to be willing to pay that much. Probably longer than it should have, if I'm honest. Now looking back at it, I should have made this decision much faster than I did. And it was because I was a little worried. It was like, oh, that's a, that's a decent chunk given how much cash I have left after debt service. Right. That's a decent chunk of that money that I'm deciding on this big investment for where if I had done a little less debt, maybe had a little less equity or had structured that deal a little bit differently, it might have been better. And I think, you know, as, as a searcher, you really want a lot of equity, obviously. And I, like I mentioned before, I maybe gave up more than I, I really wanted to with my investors, but it was still got a deal done. But when I think about the long term vision of, of growing Hope, maybe selling this company at some point, like 5, 5 percentage points of equity, like, you know, 5% equity, is that going to make a huge difference to me? Probably not. Could it have made a difference to me and how much money I would have now to invest more quickly? Possibly. Right. And so I think that having that longer term perspective of can I have a little more cash now, what can I do with it? Am I going to give up a little equity? Sure. But at the end of the day I'm still going to make, make enough money, right? It's going to be fine and my investors will make money, I'll make money and it might be easier if I have a little less debt. So that's just One thing maybe for some of your listeners to chew on as they think about how they structure their deal.

Host: Yeah. Well, if you think about these search deals as mini private equity deals or you're somebody who envisions eventually exiting the business that you're buying, right? And you take more equity so that you have more cash in the business because you have a lower loan payment and that allows you to move more quickly. Well, time is money, and the sooner you can get to your revenue or your, Your target EBITDA number and sell to the next buyer, there's a lot of value in that as well. Like value that can be quantified in a spreadsheet. So. So it's actually not even necessarily that you have to treat it like, oh, I'll just pay my. I'll just earn a little less in my exit. If you reach an exit sooner, right.

Guest: Your irr. Slightly.

[1:30:01] Host: Your IRR is better. Even if it's for a slightly, your. Your, Your equity value is a little bit less. If it comes a year sooner, it can be better irr. And then you have your hundred million dollars that you can invest and all of that, all that interest will make up the difference anyway.

Guest: That's exactly right.

Host: Yeah.

Guest: No, I. And that's, you know, getting into it, especially as this being the first deal I'm doing. I, I didn't quite have that perspective. I, I knew it mathematically. I didn't know it in the gut, right? Of like, that's. That that would make a difference. And yeah, it would be totally fine. You know, I was a little. Maybe more. More precious on. On that equity and kind of fighting over that a little bit. So. But, yeah, that's a lesson I've definitely learned here of, yeah, if I can grow a little faster, game on. Right. Give a little equity to do that.

Host: Yeah. Derek, close us out with. How is it becoming an operator?

Guest: Are you any.

Host: Does a business that kind of. Is so lean like this give you any. Have you had any fetal position moments or has it been. Has it been okay? What can you say about becoming an owner and an operator?

Guest: Yeah, it's a great question. You know, getting started, it was obviously the toughest part, as I'm sure anybody will say. And I'll try not to be too long winded here since I know we're at the end of our time here, but, like, day two, after I bought the business, my payroll company called me and said, hey, actually, you guys are too big and complex for us. They're really small payroll company. We don't Want to work with you anymore. Good luck. And this was a company I'd gone in expecting, and we pay payroll every week. Like, I had to process payroll in five days. And it was right around Christmas, this was December 20th, that I got that call from this payroll provider.

Host: How dare they?

Guest: It was really.

Host: I mean, how dare they?

Guest: It was pretty brutal for us. And as a new owner, I just had the meeting with all of our employees in this big zoom meeting, right? All our employees across the destination, introducing myself. Their immediate questions are, am I still going to get paid? Right? Like, how is this going to work? Is this still going to work the same? And if they don't get that first paycheck with a new owner, exodus, right? Like, they're just going to leave or at least will be very painful. And so I was very stressed about that. That was a fetal position moment for me, for sure. We got it worked out, right. We got a new payroll provider, it all was fine. But Christmas was maybe a little more stressful than it could have been as a new business owner. And there's been adjustments along the way, but overall, I'd say it's mostly met my expectation of. I have control and flexibility. I still am working and investing a lot in the business, but I have the flexibility to choose to do that when I want to. And this rolled out of the software. You're probably catching me on one of the weeks I've worked the most in a long time, but.

Host: Well, thanks for making time for us.

[1:33:01] Guest: Yeah, of course, of course. But there are also other weeks where I've had a lot of flexibility and time and been able to spend it with my family and with my wife. And so those are all great positives. And it's fun to build. It's fun to build something and build a business and work with my employees and drive some of these improvements to the end of the line. Whereas a consultant, I was just telling people about it and hoping it would work or hoping they'd implement it the way I would, but now I get to do it, and so that's extremely satisfying. And company seen good growth, too. We've had good growth through Q1 and Q2. Q3, we fell a little flat just because of the hiring issue. And Q4, we're ramping back up, so. But overall, it's showing good growth for year one, and I think it's just upwards from here for Q2, though, I may still just be a little naive as a new business owner. So we'll see what happens on year two. But Year one so far has been pretty good.

Host: Great, Derek. And when did you close? What date?

Guest: We closed December 18, 2023. So I'm almost exactly 10 months into into it as a business owner. Great, great.

Host: Well, what a great business, Derek. What an interesting, unusual business. As I said at the top and as we have kept coming back to. If people want to reach out to you, Derek, because they're thinking about lice or thinking about, you know, Uber for X or what, whatever it might be, or coming from consulting and trying to get out. How can they do that? What do you like?

Guest: Yeah, LinkedIn's always the best. Just look me up on, on LinkedIn there and just Derek Croft, you can, you can find it. I don't know if you'll have a link or something like that will in the, in the podcast description or something like that. Happy to, to provide that. If I'm slow to respond on LinkedIn, just, just ping me again. It's probably because I just forgot and you know, I do get a decent amount of incoming messages still. Mostly Bain focused to people trying to figure out how they get to Bain. But I, I like talking about ETA stuff a little more than that, so feel free to reach out. Always happy to help out.

Host: And Derek, Reed Pennebaker put us together for. Of ETA Circle. Reed, who runs ETA Circle, kind of an ETA meetup. Big successful ETA meetup in Houston. Are you going to be on stage there? Is that why he did that? Or did he just happen to think you're right? I think that you had a really interesting story.

Guest: Yeah, no, Reed and I connected just kind of separately. I'm trying to remember who exactly first connected us, but somehow we connected and I love talking to people who are doing stuff in the ETA space. And so, yeah, I will be there in January. I've got to look up the exact date here. I don't know if you are exactly aware of it. Will I know you. You talk with Reed some as well. But there in January, I think it's the 21st or 24th. I'll be down there in Houston sharing my story and answering any questions. And I like to do that kind of stuff all the time, so it's fun.

Host: So you will be on stage for their January meetup, whenever that is. We'll. We'll figure that out.

Guest: That's right. That's right.

[1:36:00] Host: Okay, great. Super. Derek Croft, Lice Doctors. Life's king. Thank you for coming on.

Guest: Thanks, Bill. I appreciate it.

Host: Derek. We concluded the conversation and then I remembered a question I really wanted to ask. And so I turned us back on to get this on recorded. Have you yourself done the actual work that your. That your business delivers? Have you learned how to pick, how to nitpick and kill lice?

Guest: It's a great question. Well, I. I unfortunately have not. I have not gotten. Unfortunately pick lice. Yeah, I say unfortunately, fortunately. You know, maybe with a little wink there. Yeah. I have not gone out to treat lice, so I have learned a ton about lice, as we've talked about on the podcast today. I know. I know a ton about it, more than you probably ever want to know about lice, but I have not treated it yet. So I've got to get out there with one of my technicians and have them train the boss on how to do that.

Host: And do you really expect to do that, Derek, or are you just pandering here?

Guest: I should do it. I myself don't love the idea of picking bugs out of someone's hair, so I will have to overcome that. But I think as an owner, I probably need to do it at some point. So, yes, this is my commitment to you, to you will, and to the Acquiring Minds community that I will, at some point treat somebody for less.

Host: You'll send us a photo when this

Guest: happens, and you can. You can post Mess it up on Twitter or whatever.

Host: Thanks, Derek.