[00:00:00 - 00:04:29]

Will Smith: Today's guest was fortunate to have great business buyer fit. Joe Wynn had been successful in medical device sales, so buying a sales and service business in the operating room supply industry was a natural transition. So natural in fact that the supplier went to bat for Joe. They wanted him to buy the business and that gave Joe leverage in the negotiation with the seller. Leverage he used.

Joe's Multiple on this 600,000 ish SDE business was about $2,200,000, not to mention $150,000 in working capital, not to mention a seller note of around 90%. A note with the same nice 10 year amortization as an SBA loan, but at a lower rate and no personal guarantee. We unpack the business model, the opportunity for Joe to grow, and the possibility for others to buy a business like this, even if you don't come from medical sales. It's early days for Joe. He closed in late January, but he's bullish on 2026, projecting to grow the business from 2025's 2 million in revenue to 3 million, maybe more.

And he already has some battle scars. Listen for how he dealt with his bank closing the business's account, leaving him unable to submit payroll or receive payments. Huge lesson in post close liquidity there. Okay, please enjoy this conversation with Joe Wynn, owner of Surgical Specialties Real Estate.

Can make or break your deal to.

Acquire a business Attorneys Bill Barlow and James David Williams return for an office hours today Thursday that is focused on the legal issues that come up when dealing with real estate in a business acquisition transaction. Topics to include dealing with third party landlords, leases with the seller as landlord, purchasing the real estate alongside the business or not and sale leaseback structures. You'll gain an understanding of the fundamentals for how real estate affects SMB acquisition structures and risks. The webinar is Real Estate Issues When Buying a Business and it is today, Thursday, April 16th noon Eastern. Link to register is right at the.

Top of this episode's show Notes or on the Acquiring Minds homepage available acquiringminds co.

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. Buying a small business sounds simple.

Find a company due diligence, get a loan close.

In reality you wear every hat just.

To get the deal done and then the moment you close you have to throw those deal making skills out the window and learn how to operate. You shouldn't have to rebuild this infrastructure from scratch and you Definitely shouldn't do it alone. That's why Walker Deibel created Acquisition Lab, which started as an accelerator, has expanded into a complete ecosystem for acquisition entrepreneurs. Over six years, the lab's 1,200 members have acquired over a billion dollars in businesses.

The lab puts everything under one roof. An active community, deal reviews, post close services, and a dedicated fund helping experienced operators buy large businesses. If you're serious about buying a business, come see why Lab members have a 40% success rate. Learn more in the show notes or@acquition.

Lab.com acquiring minds Joe Wynn, welcome to Acquiring Minds.

[00:04:30 - 00:04:32]

Joe Wynn: Hey, I'm happy to be here, man.

[00:04:33 - 00:05:02]

Will Smith: Joe, you are very recently into your business.

You acquired at the end of January. So we're going to get a view from the very first weeks of a transition.

We're also going to hear about your purchase price in terms what you were able to negotiate there.

That has aroused a lot of interest in the Acquisition Lab where you and I are both members, many members reaching out to you, wanting to learn more. Let's begin though, Joe, with a little background on you, please.

[00:05:03 - 00:05:41]

Joe Wynn: Yeah. So you know, before purchasing the business, I get a little backstory. I played college football, but then once I got done with college football, I got into the world of sales.

I was a medical device sales rep for about seven or eight years. My previous company, I was there for about six years, had a lot of success. I knew that I wanted more and to kind of, you know, build my own ladder. And I, and I started on that, that journey to, you know, see what it was like to acquire a business. So I come from the world of sales and obviously that plays a role in business that I ended up purchasing.

[00:05:42 - 00:05:59]

Will Smith: And so your decision to buy business was because you just kind of looked around and wanted to build something for yourself as opposed to building, working for somebody else, even though you were making probably pretty good money in medical device sales.

[00:05:59 - 00:06:23]

Joe Wynn: Yeah, no, yeah. You know, the way I looked at it is instead of climbing the ladder, I wanted to create the ladder for myself. And that was the, the goal for me is to be able build something that was, could be long standing or even in the short term having a short term success in terms of building something that someone else could be interested in acquiring.

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Will Smith: And then you first looked at real estate as I recall.

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Joe Wynn: That's correct, yeah. So I had a guy, one of my mentors, we started looking at real estate and when I started looking at the numbers, look at the margins, it was pretty low. You know, the way that I equated it was the Way to really make money on the real estate side was just about more doors, more units that you have. And then that's when we kind of got into the discussion as to still acquiring an existing business that was already producing good margins and good profits. And that's when I kind of got into that journey is to kind of looking to see what it was, what it would take to acquire a business.

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Will Smith: And did this person you were working with, somebody on the real estate side, you said?

[00:07:03 - 00:07:34]

Joe Wynn: Yeah, so I got introduced to him from another mentor because I had an interest in getting into real estate and acquiring. And as we were looking at different units, I'm looking at the numbers and they're not really making a lot of sense to me. And we got in onto the conversation for as the corner business. And this mentor actually introduced me to a business broker.

And then that business broke broker actually recommended the Buy Then bill book, which essentially started me on. On that journey.

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Will Smith: You and many others. Yeah, but Joe, this mentor of yours, had he bought a business before he introduced you to the broker? Was it his path?

[00:07:42 - 00:08:14]

Joe Wynn: He did, yeah. So he. He bought a franchise, a sub franchise business years ago. And it ended up venturing off and more into kind of in the world that he's in now. But he did do that years ago.

So we talked through that kind of what that looked like and gave me a lot of foundation as to kind of what it takes to acquire business and run a business. But he did acquire one years ago to kind of got him started to his journey as a entrepreneur.

[00:08:14 - 00:08:17]

Will Smith: Okay. And so finally you get buy, then build in your hands.

[00:08:17 - 00:08:19]

Joe Wynn: You read it, you.

[00:08:19 - 00:08:22]

Will Smith: I guess that affirms that this is what you want to do. And then what?

[00:08:23 - 00:09:03]

Joe Wynn: Yeah, so I read it and I went to find the acquisition lab once I did an interview with. With Chelsea and I knew that this was the journey that I wanted to take and learning from Walker, who obviously the book that I read that in my opinion completely changed, changed my life and put me in a whole another aspect in terms of the way to think about things in terms of what to build. So read the book, went through the acquisition lab.

And that even in itself is paid great dividends for me and what it's done for the business that I ended up purchasing.

[00:09:04 - 00:09:18]

Will Smith: When you got into the lab. So let's. Let's get into some of the time here. Yeah, when you got into the lab, you had a goal of buying that was pretty aggressive and you even beat that goal.

Give us a quick timeline.

[00:09:18 - 00:09:51]

Joe Wynn: Yeah, so I joined acquisition Lab. I want to say last year of March, I was a part of cohort 55, 56 out to double check. I was part of the that cohort in March. My goal was to purchase a business within the first year.

So I was approaching it pretty aggressively and had a number of conversations. But I actually did end up closing one before that timeline actually closed it in on January 21st of January. So just a couple. Couple weeks ago.

[00:09:52 - 00:09:54]

Will Smith: Yeah.

So you basically did it in 10 months.

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Joe Wynn: Yeah.

[00:09:55 - 00:10:01]

Will Smith: From far from March to January. Great. And you're based where.

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Joe Wynn: I'm based in Atlanta.

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Will Smith: Based in Atlanta. And what do your. Well, let, let's. Actually I touched on the fact that you were in medical device sales.

[00:10:15 - 00:10:16]

Joe Wynn: Yeah.

[00:10:16 - 00:10:24]

Will Smith: And that is known for being, if you're good at it, for being a very high earning profession.

[00:10:24 - 00:10:25]

Joe Wynn: Yeah.

[00:10:25 - 00:10:38]

Will Smith: Was that the case for you? And how did you think about replacing your salary or not?

But leaving a big salary to go have a less of a salary? How did you think through that?

[00:10:38 - 00:11:36]

Joe Wynn: Yeah. So in the in medical device you can make a substantial amount of money. For myself, I was mid six figures as an earner, so I did fairly well.

I was a top performer at my previous company. And the way that I looked at it, which really looked iron things out for me as to kind of what type of business to acquire was the numbers of the business as to what the ste was for the previous owner. So I knew that I would end up taking a pay cut, but it was a temporary pay cut. Right. So because for me it's just about getting that loan paid off as quickly as possible.

But I know kind of what the business produces. So even though I was leaving a high earning job. Right. The way that I looked at it was, you know, at any point my territory could be cut and what I made last year will be cut in half. So that decision made it pretty easy for me.

[00:11:36 - 00:12:35]

Will Smith: Yeah. So despite the fact that you were high earning, two things. First, the quality of revenue, if you will, for a W2 job is never very high because as you as in your case territory could be cut or you could be laid off or whatever, some single decision above you on the, on the hierarchy can complete have your revenue or completely eliminate your revenue. So if we think about ourselves as individual businesses and our employers as our, you know, 100 concentration in that customer, it's really low quality revenue. So you were, you understood that in, you understood that and then on the earnings of the business that you wanted to buy, it didn't need to match your mid six figures salary out the gate, but you did want to see a path presumably to getting back to mid six figures in your pocket at some point in the not too, too distant future?

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Joe Wynn: No, yeah, absolutely. That was the key piece for me as I was looking to acquire. That was on my buyer profile, you know, within the range that I was looking for type of business. So I knew what I was looking for was the SD that was producing that type of money. But then I had the ability to take less to, to pay off the loan.

So that was a must have for myself because for me I do have a family at the house, wife and the kids. And you know, we, you know, we, you know, have a specific lifestyle. So you can't take too much of a pay cut. Right. So because we have, you have bill.

So.

[00:13:17 - 00:13:39]

Will Smith: Yeah. Okay, so mid six figures SDE is what you were looking for with the idea that half of that would go to the loan. You pay down the loan as quickly as possible, also grow the business and hopefully get back to mid six figures into your pocket in single digit number of years. Hopefully something like that.

Okay. Okay, great. Let's hear about the business that you found and how you found it.

[00:13:40 - 00:15:25]

Joe Wynn: Yeah, so it's actually interesting. So before I joined the acquisition lab, I found this business.

Prior to that, so found this business in January of last year before going through the acquisition lab, didn't know anything about what it took to actually purchase the business, but found the business, had a conversation with the owner and then conversations just fell off. I think there was a change in brokerage that was being represented. He was represented by. And then obviously revisited months later. But the business that I purchased is a medical equipment company.

So essentially what we do is we design and build out hospital healthcare rooms with the, with lights, surgical lights, surgical tables, product called a boom, different things that we can supply. The business has several different functions to it. So we have a sales function which we sell to a hospital, for example. We also have a installation portion to the business and then we have the service which is probably the, the biggest revenue for the, the company because that's something that is controlled in house. So three prone folks, function of the business.

And the average sales price of our equipment is about 75k per equipment. And then project projects that we do can be pretty large as well. So. So yeah, but found it on biz by sale in January of last year before joining the acquisition lab and then revisited a month later.

[00:15:26 - 00:15:29]

Will Smith: Great.

And it was local to you?

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Joe Wynn: Yes.

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Will Smith: And so what jumps out at us here Joe, is the at least what seems to be good business Buyer fit. This is it. This is a medical equipment sales business.

You were in medical device sales. There's probably some overlap there. Speak to that.

[00:15:47 - 00:16:27]

Joe Wynn: Yeah. So me coming from being a medical device sales rep, I was in the rooms where the equipment was being used.

So I had a lot of experience navigating the equipment. But then also the piece that made it a no brainer for me as well is that it was the same customers that I was already calling on from my previous job as a W2 employee because I covered the state of Georgia previously. And then essentially this business that I purchased mirrors that from a customer standpoint. So it made a lot of sense in terms of I could leverage a lot of relationships that I have built within being a rep and then now leverage that as the, as a business owner.

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Will Smith: And so literally some of the same people or like sort of in theory.

[00:16:32 - 00:17:06]

Joe Wynn: Some of the same people in so in theory, some. So in some capacity. So for the most part there are the same people, same customers that I would call on that may make decisions within that can influence my business. So out all of the relationships that I have, they're on the calls that can get you over the hump in terms of getting you approved as the vendor that they want supplying their room for. But then what I've done in a short period of time as well is just leverage those relationships previously to get me to who's actually the decision maker.

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Will Smith: And who is the customer. Hospitals.

[00:17:11 - 00:17:43]

Joe Wynn: So any healthcare facility, so it can be a hospital, can be a asc, which is essentially an outpatient center for different physicians, but then also urgent cares, anything you want to do an exam. So the, the range is, is pretty broad in terms of who we call on from a customer base. But the, the dominant is definitely the hospital just because of spend.

But then you can branch out and essentially work with a number of different.

[00:17:43 - 00:17:49]

Will Smith: Customers anywhere where there's sort of a medical, what did I called it?

[00:17:49 - 00:17:49]

Joe Wynn: A bed.

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Will Smith: You called it a what? A medical.

[00:17:52 - 00:18:10]

Joe Wynn: Yes. So anywhere that there's any type of medical procedure being done that requires a surgical table or a light, that's. Yeah. So that's where we, where we play in. And we have a number of different products that we offer that we can fit with any customer.

So it's unlimited as to who we can work with.

[00:18:12 - 00:18:14]

Will Smith: And what did the numbers of the business look like?

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Joe Wynn: Yeah, so last year they did a revenue of just over 2 million in revenue. And SDE on that number last year was 889,000 for, for last year.

[00:18:32 - 00:20:12]

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We're going to turn our attention back to the kind of business itself in a few minutes. But we got to hear more about these numbers. Yeah, so 2,2 million in revenue and 889 in SDE. Let's call it 900 to make it easy. Yeah, so those margins are eye popping.

That's almost, that's almost. What is that for like 45% net margins?

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Joe Wynn: Yeah.

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Will Smith: So how is that, how is this such a profitable business?

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Joe Wynn: Yeah, so the great thing with it being a distributor is that.

So the distributor pays my company a commission based on the sales that we sell the equipment to facility. But then also so from a installation and service piece. So installation we get about 90% of the installation costs. But then service is 100% of the service call because the service team is employed by me. And that's where essentially we'll get five, three service calls in a day.

And then it can range in terms of what that cost would be to a customer. So that's, you know, makes up a lot of, makes up a lot of the business as well. So those three functions, so the commission base from the supplier and then the installation cost which is at 90% and then 100% of the service.

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Will Smith: But Joe, why do you think, I mean when I see margins like that, that says to me a lot of pricing power, that the business or your category just has a lot of pricing power and something's got to give it that pricing power. Is it just that they're there, there aren't.

There's not a lot of competition because it's hard to have these relationships with suppliers or is it on the labor side that they're not that many people who can actually install this equipment. And so you can charge higher than you might expect fees for the installation or the. And the servicing. What do you think is it that gives it like if, if another way of asking is if this business is generating 45 net margins, why isn't the marketplace flooded with competitors? Why aren't more people getting into this game?

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Joe Wynn: Yeah, so it is from a competitive standpoint there. There aren't many competitors in this market specifically. But then also from a service perspective, because the service team is local, I control the costs that a customer is going to spend for that service. So. And that can obviously fluctuate depending on what type of service they need.

So one of the things that I came and came on board was looked at the pricing look, you've seen when it was last adjusted, it was Last adjusted in 2020. So obviously that occurred a pricing increase amongst all service across the board. So that service gives me a lot of flexibility to control kind of what comes into the, comes into the organization because services assumption essentially something that would come in on a daily aspect from a need from a customer. So from a cut, from a competitive standpoint, there aren't many competitors that are in this line in terms of competing, but then also the service is the big component for it.

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Will Smith: And Joe, so what you were saying about the fact that the prices haven't been raised since 2020 is that you think you have room to raise prices actually, as the new owner.

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Joe Wynn: Yeah, I already have raised the prices. Yes. Oh, wow.

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Will Smith: So those 45% margins are only going to get better.

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Joe Wynn: Yes.

Yeah, yeah. So.

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Will Smith: Well, the other thing, the other of course big thing in our world when we see a business with great net margins is we assume that it's been run incredibly lean, like unsustainably lean by the previous owner because they were, they were pocketing as much as they could and doing as much work as they could. And to build a true more robust business, they should have another two or three people in there doing some of the work. Was that the case here?

[00:23:46 - 00:24:28]

Joe Wynn: Yeah. So the previous owner essentially did all things from administrative work, sales management, a lot of things to where you actually probably need an individual to run those things. But then the great thing for me since taking over is that creates a lot of opportunity, especially from an administrative standpoint to where for me is I don't want to get bogged down in the business. I want to be able to work on a business and actually in that process of hiring an administrator to take some of those things off My plate. So that my sole focus is to grow the business.

Right. So yeah, so yeah, he was running it pretty lean, but I think that also probably hurt him a little bit as well.

[00:24:29 - 00:24:51]

Will Smith: Ah. Because he couldn't grow. He didn't.

He chose. And Joe, the price increase that you just introduced, by the way, Bolt, you're. You're what, six weeks in? Yeah. You.

You got the comfort to raise prices. Did. How did customers react? Did they?

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Joe Wynn: Yeah, no.

Yeah, there was no, no issue. I think all the customers knew that they were paying pretty low for the type of service that they were getting. So in, in some type of calls, it went up 50%.

Yeah.

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Will Smith: 50.

[00:25:08 - 00:25:37]

Joe Wynn: Yeah. 50%. Yeah.

So some things went up 50% and then others kind of around 20 to 30%. As I was kind of looking at the pricing list that the previous owner provided, but seeing that obviously costs didn't change since 2020 gave me a lot of, you know. Yeah. So that, yes, it was huge to where it needed to be done, but no issues with the customers because from a service service perspective, those are things that they need done. Like that has to get done in order for them to continue to make money.

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Will Smith: Yes, yes. How interesting. Another thing, Joe, about the business is that 900,000 SDE number is great. Large, what self funded searchers love to find, hard to find, but that's actually also a bit exceptional. The year before you bought it was a very strong year.

The prior three years it wasn't as high as 900. So give us the historic numbers going back two or three years.

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Joe Wynn: Yeah. So last year the SDE was around 630,000 last year. And then the year prior to that was around 340,000 in SDE.

And the reason for that is. So this is essentially project management. Right. So there are projects that will go, but then there are projects that will be delayed to a number of things. So as I was looking into that, obviously that was a big concern as to having a huge jump and then looking at the previous years as to the previous performance.

But then it kind of all made sense as to why that was kind of reflective and.

[00:26:42 - 00:26:45]

Will Smith: Sorry, what, what was the explanation for.

[00:26:45 - 00:27:24]

Joe Wynn: The explanation? Yeah, so explanation was that they had some projects that were in line to go in. Was that I guess two years ago, but then those projects got pushed until next year.

Right. And then I see he didn't have anything essentially to backfill those things. So. So getting that information made a lot of sense as to why it was the case. So for me, you know, my whole thing since kind of stepping in is to obviously continuously to have as many place spinning as possible.

So that if there's a project that's not going that we expect to go, you still have other opportunities kind of coming through the pipeline.

[00:27:24 - 00:27:31]

Will Smith: Yep. But when you think about this business at. And it's sort of stabilized earnings level.

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Joe Wynn: Yeah.

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Will Smith: Historically. Not, not. Not with you going forward because you're going to change things and grow that number. Did you think about it as a kind of 900 is the stable. Is the stable earnings level or more like 600 is the more stable?

[00:27:45 - 00:28:21]

Joe Wynn: Yeah, I saw more as more of a 600 type of business. And the reason being is because when I just looked at it this performance over time, but having that effect to where you do have projects that will go and then some projects that won't. That's kind of the number I was kind of comfortable with in terms of truly evaluating that. But obviously I know there's a lot more opportunity, but that was the one that I kind of equated to where this is probably truly where that the. The businesses kind of perform at his rate consistently.

And then obviously for me it's obviously improved that.

[00:28:21 - 00:28:32]

Will Smith: So when, when we get to your multiple and and so on, what you were underwriting in your own mind to your deal, to your purchase price too was. Was kind of more 600ish than 900ish?

[00:28:32 - 00:28:33]

Joe Wynn: Yeah, that's correct. Yeah.

[00:28:34 - 00:29:06]

Will Smith: Okay, great. Fascinating. And Joe, so we've heard you say the word, the. The dreaded word project a few times now. Right.

And so talk to us about how you thought about that. The mix of revenue sounds like this. The business's income can indeed be quite lumpy depending on projects a year with a lot of projects a year within projects. But that also happily there's this whole service piece where there's an ongoing need for service. So tease that out for us.

[00:29:06 - 00:30:28]

Joe Wynn: Yeah. So the obviously on the sales side that's controlled by the customer who's buying the projects, but also what construction companies we're working with. But the thing that we control, that I control is a service piece. So when I was evaluating the business, I recognized pretty early that the main piece that keeps a business going is a service and the opportunity to grow the service really is what's going to drive the business forward. Because the previous owner didn't necessarily.

He left a lot of meat on the bone in terms of from a service perspective. So there's an avenue that we take as far as it's called a pm, a preventative maintenance agreement with a hospital and you sign them up from a, on a two year basis and you charge them X amount every year to essentially check their equipment two times a year. But they have to pay that fee up front to you that's providing that service. So there's a lot of customers in the territory that we don't have those things in place with. Which for me is.

That's the primary focus to get kind of get that in line which will help streamline the business and kind of keep it steady, especially when we have some fluctuation from a sales perspective.

[00:30:29 - 00:30:34]

Will Smith: Okay. So there's, there's these, these service agreements which are two years for two years.

[00:30:34 - 00:30:41]

Joe Wynn: Yeah. So it can be, it's just depending on.

You could do it a year and then auto renews or just depends on how you want to set it up.

[00:30:41 - 00:30:44]

Will Smith: And the previous owner didn't chase that revenue.

[00:30:44 - 00:31:15]

Joe Wynn: Not as much. So there's only currently a couple customers that have have a, A PM agreement in. But I've already sent out a number of quotes to customers for PMs and have gotten some to already purchase up front.

So. So that's been a huge focus for me kind of stepping in because he left a lot of things on the table. I think kind of being older, not really wanted. Well, I know in the conversation with him he didn't really want to do a lot of things. He was pretty comfortable with kind of the way that the business was.

[00:31:17 - 00:31:31]

Will Smith: And so this revenue, this service revenue that you're trying to turn on now is great because it's not lumpy, it's consistent and it's paid in advance of the service.

[00:31:31 - 00:31:32]

Joe Wynn: Yeah, paid up front.

[00:31:34 - 00:31:54]

Will Smith: Wow. So obviously regular listeners know that working capital is always a challenge in small businesses. And what you want is people to pay you before you actually deliver the service.

And that's, that's what this is. And those for an annual service contract that's probably a pretty large sum for the level of equipment, the value of the equipment that you're servicing.

[00:31:55 - 00:32:10]

Joe Wynn: Yes. No, you're huge. Huge fee that you a customer can pay.

It can range depend on. Depends on how much equipment it can range between 30 to 100 plus grand depending on you know, how much equipment that customer has.

[00:32:11 - 00:32:15]

Will Smith: Everything sounding really positive so far, Joe. And no business is perfect.

[00:32:15 - 00:32:15]

Joe Wynn: Yeah.

[00:32:15 - 00:32:56]

Will Smith: Although although, although we did talk about project. That's not, that's not perfect.

This is, this is so the other thing, this is a kind of, I guess the business model here is your classic sales and service. Is that what it would go by? You sell something and Then you service it. And, and, and part of being a sales channel is effectively being a distributor. So there's an, there's an element here of being a distribution business.

And part of being a distribution business is usually, not always, but usually the fact that there's a lot of supplier concentration. Meaning you're, you're the distributor for a vendor, a single vendor. What does that look like in your case?

[00:32:56 - 00:33:43]

Joe Wynn: Yeah, so we have a primary distributorship with one of our, that we're a exclusive distributor for, which represents a large portion of our business. But the great thing in being a distributor is you have a lot of flexibility with additional suppliers, obviously just not competing with your primary distribute partnerships that you have from a supplier standpoint.

So the previous owner had some other relationships that were within the company as other suppliers. And then I've kind of started looking to see, looking to see what other suppliers kind of make sense for the business that complemented what we already do. So that can be added to kind of a, added as a line that, you know, we can go out and sell and service as well.

[00:33:44 - 00:33:58]

Will Smith: But I suspect that even if you're able to turn on other suppliers and sell through their product, that it's, it's going to be hard to compete at the same level of revenue that that represents. Because you're selling the most expensive stuff.

[00:33:59 - 00:33:59]

Joe Wynn: Yeah.

[00:33:59 - 00:34:24]

Will Smith: That goes into a hospital. Right. The surgical tables, the boom, the lights, all the stuff in the operating room. Yeah, that's, that's the most valuable stuff in the, in the, in the building.

I, Well, I guess there's MRI machine, there's, there's high tech as well, which. So respond to that. Do you, do you think that you can materially grow revenue from other suppliers for other purchases in the hospital?

[00:34:25 - 00:35:22]

Joe Wynn: Yeah, I think that's kind of the piece to where it has to make strategic sense. Right.

So the way that I look at it is if, if I'm bringing in a supplier and from bringing in a supplier, it has to complement the projects that we do currently with our main suppliers because we can add that a part of the deal. Right. So, but if it's a supplier to where we can't essentially tag it with our current supplier, then it becomes more of a challenge in. Then we're more spread thin as a, as a company right now. More, more spread thin.

So it has to be something that will have to be evaluated, but it has to make sense into kind of what we're selling now to be able to complement maybe where a, a bigger company can, does offer. But we don't offer it as a distributor, but we can have a supplier that does offer it just so that we can kind of compete more from a larger style standpoint.

[00:35:22 - 00:35:58]

Will Smith: Yeah. And short of that plan was the supplier concentration. It was just something you had to get comfortable with basically.

And it's just, it's as we hear about from distribution people who buy distribution businesses, it's just, it seems almost structural to distribution businesses that there's going to be supplier concentration. You just got to get comfort. You could, you can develop plans to try to diversify that risk, but, but also some of it's structural and you just got to get comfortable with it. Is that basically what you did in your own mind?

[00:35:59 - 00:36:49]

Joe Wynn: Yeah.

You know, when I was kind of going through the process, I met with the supplier I think about nine times. And I think the benefit to working with the supplier is that they're number one insert in the market within some of the products that we sell. So it's a very well known supplier. But yeah, you have to get from an assure standpoint how to get, you know, comfortable with, you know, essentially primarily partnering with that supplier because they're the, the main supplier to the, to the company. And from a pay standpoint, they pay the, the majority from a commission standpoint.

So it's, it, it works in your favor as being associated with a well known organization. But then on the flip side, obviously from a, the diversification standpoint can present some challenges.

[00:36:49 - 00:36:56]

Will Smith: Yep, yep. Well, you met with them nine times. You like their reputation in the market.

[00:36:57 - 00:36:57]

Joe Wynn: Yeah.

[00:36:57 - 00:36:58]

Will Smith: And they liked you back.

[00:36:59 - 00:36:59]

Joe Wynn: Yeah.

[00:36:59 - 00:37:12]

Will Smith: So this is a nice segue into the actual purchase price multiple and how you structure the whole deal. Yeah, let's get into it.

What Actually maybe the, the story piece here, you'd seen it listed for X, you offered Y. Walk us through that.

[00:37:13 - 00:38:18]

Joe Wynn: Yeah, so. So like I said, a little bit earlier, connected with the owner previously early in the year, last year. And it was listed at 1.5 million early last year.

And then when we connected again later in the year, once I went through the acquisition lab and had all the resources to make me a adequate buyer, it really set me up to really dissect the business as to what the true evaluation of the business was. So he was asking 1.5 million, got all the information evaluated with all the advisors throughout acquisition lab. And initially because the, the numbers weren't aligning, my initial offer was actually close to a million dollars in the purchase price. And then we kind of got more into the weeds and they provided, um, but the actual purchase Price ended up being 1.35 million as the actual purchase price of the business. Okay.

[00:38:18 - 00:38:32]

Will Smith: 1.35. So it was listed at 1.5 million on biz Buy Sell. You can imagine, you know, the broker or whomever, the, the, the copy on the Biz Buy Sell page saying, you.

Know, less than 2x for 900,000 of SDE.

[00:38:32 - 00:38:33]

Joe Wynn: Yeah.

[00:38:33 - 00:38:51]

Will Smith: And pretty misleading as we've already covered. In your own mind, you ultimately underwrote this as sort of a $600,000. Yeah. And you got it for 1.35. You offered a million, he pushed back, you got 1.35.

Still a great multiple.

[00:38:51 - 00:38:52]

Joe Wynn: Yeah.

[00:38:53 - 00:38:59]

Will Smith: And why do you think you were able to or why did you have the confidence to be so aggressive in your multiple?

[00:39:00 - 00:39:24]

Joe Wynn: Well, I knew that the owner, because it's a distributorship business, ultimately it's the supplier that signed off on who purchases the business because you're a exclusive distributor of that supplier. So I knew in conversations with them, and this is one of the things I learned in Acquisition lab is if you just get an owner talking, they'll tell you anything.

And.

[00:39:26 - 00:39:30]

Will Smith: I didn't know that. I thought they were always cagey around the buyers. But good, good to know.

[00:39:30 - 00:40:17]

Joe Wynn: No, yeah. I mean, and coming from a sales background, you know, having the ability to probe played a, played a big role in that as well.

But I knew that the owner didn't have, have anyone else essentially to sell it to because the supplier required specific experience to purchase the business, which is one coming from sales, preferably coming from medical sales, which is all of those things that I've had. But then also coming from the same market within where the business kind of played in as well. I knew a lot of those things played in my favor, especially once I made with the supplier for the first time. And they kind of gave me a little insight as well. So which that gave me a lot of confidence in terms of where I stood in terms of purchasing the business and kind of where I can get it.

[00:40:18 - 00:41:21]

Will Smith: Yeah. So interesting. So we often talk about business buyer fit and how, you know, it's a, it's key to the success is, is the business that you buy, what do you bring to it, what can you add to it?

And we don't usually talk about it though, from the perspective of the leverage it gives you in the transaction. Yeah, but in this case it, it did because the supplier had the veto power as to who, who was going to buy this business. And so the fact that you were such a good fit for this business, they liked and they were, they were kind of playing kingmaker and they chose you. Yeah, and, and so that, yeah, so that's a lot, a lot of power and it means that or a lot of leverage. And it also just means that structurally in this, in this transaction, as you said, there weren't going to be many other buyers.

It was going to be hard to sell this business. It was going to be hard to find a good, a good owner of this business. And one that the supplier blessed.

[00:41:22 - 00:41:57]

Joe Wynn: Yeah, no, yeah. Even in, in talking with the broker, the, the actual evaluation of the business, they actually, you know, thought it should be listed at 1.8 million.

But if you look at the numbers, I mean it probably would have been in line, but they knew that it was going to be a challenge to find a appropriate buyer. They had a couple buyers lined up but, and in the conversation with the previous owner, he let me know that they had previous buyers that were lined up, but then the supplier did veto them and told them that they could not purchase a business.

[00:41:59 - 00:43:47]

Will Smith: The team at Aspen HR recently published a short white paper targeted at searchers Entitled A New CEO's Guide to Human Resources. It lays out the key items you should be thinking about as you transition into CEO and owner of the business you bought. The link to download that is in the Show Notes Aspen HR is a professional employer organization or PEO which provides HR compliance, flawless payroll, robust HR technology and Fortune 500 caliber benefits all for a fraction of the cost compared to using multiple vendors.

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So Joe, I'm, I'm just intrigued by your business. Yeah, it seems great in many ways but, and, and I suspect listeners are too. But it's like a key theme of your whole transaction is the fact that you were such a good fit for it.

And so the, the, you know, the, the, the hesitation people will have is like well if I don't come from medical sales, does that disqualify me from, from buying a business like this? We've already heard that I guess the supplier had vetoed or was going to veto other would be buyers. So, so how do people need to look like you or their resume need to look like your resume to, to buy a business like this?

[00:43:47 - 00:44:07]

Joe Wynn: No, I don't think so. I think, you know, just having sales experience is ultimately the right.

Because what you're going to go through, what the person goes through is the same thing I went through is the interview process, right? Interview process with the supplier, just making sure you're a good fit for them and kind of you have the vision that they have in terms of the future.

[00:44:08 - 00:44:08]

Will Smith: Right.

[00:44:09 - 00:45:36]

Joe Wynn: So I think that's the only thing that really you need to have and just be able to convey, you know, what your plans are for the business and how you plan on growing it. That's the, the important piece for the supplier and just being a good part partner.

You know, I think someone that could make a lot of sense in these, this type of business that I'm in is someone that's coming from, you know, business development with a construction company, especially if you have a little bit of project management experience. I mean, because a lot, some of it is project management and where you're dealing with drawings and all those things. Which supplier has a dedicated team for that. But you want to have some type of understanding of it. So I think anyone that has sales experience, but that can convey the type of territory that they're going to build with this supplier, you can have, you can purchase a business similar to this as well.

So I don't think it's just geared towards people to have healthcare experience because if it, if it was, then there would be a lot of opportunity out there to where people wouldn't be able to purchase it because there aren't many people with specifically healthcare experience. And there are other owners that I've spoken with throughout the, that are partners with me that don't come from healthcare experience. Exactly. So. So you can definitely purchase a type of business like this.

It's just about conveying how you plan on exactly growing a business.

[00:45:36 - 00:45:45]

Will Smith: And is this a case where a lot of businesses like yours are run by people at retirement boomer age?

[00:45:45 - 00:46:58]

Joe Wynn: That's correct, yeah. So, you know, you have the business that I purchased, the guy was started to visit 30 years ago and so it was 60, 64. Right.

So. And similar to other current owners, they're older. Right. The supplier wants to get younger because obviously they have goals. The business needs to continue to grow.

Right. So I think the conversation in the direction from the supplier is to, you know, have a transition. Right. So whether it's a business similar to this or another one, everyone's facing the same thing to where a lot of these businesses are owned by boomers and they have to go somewhere. Right.

So especially for a business like this to where you have a good amount of revenue for a supplier. Right. They don't want that to go anywhere. So they want that to transition to someone and someone that's, you know, gonna treat it with value. So I think there's a lot of opportunity in these type of businesses because there are a lot of boomers that are looking to transition in terms of retirement and sell it.

[00:46:58 - 00:48:15]

Will Smith: So, Joe, I'm, I'm just reminded of the, of when I listen to you talk about the supplier of the dynamic in franchising that we see a lot where a acquisition entrepreneur like yourself, a buyer will have this, you know, develop a relationship with a franchisor. And if it's a legacy franchise system, there could be a lot of retiring owners, and the franchisor wants to see those units transition to younger owners and often can, will. Will. If you demonstrate to the franchisor that you're a good franchisee, that you can operate and grow a business. So you have to build some credibility over some number of months or years of ownership.

Yeah, they'll. They'll have you on the short list when units need to turn over and transact.

Similar thing here where as you develop,.

As you deepen your relationship with your supp, you demonstrate success in your business that you can, they'll call you, or you could even call them and say, hey, are there other partners, distributors like me that are businesses that. Where the owner is going to retire soon that you might want me to be the buyer of, like they become a source of deal flow for you?

[00:48:15 - 00:48:52]

Joe Wynn: No, yeah, that is, that is true. You know, we. There are several other owners that have followed that exact model to where folks have retired and they've purchased that other person's business and now they have a larger book of business. Right. So.

So yeah, that's the, the piece is obviously you have to do well within your current business and then you do get those opportunities to be on a short list to acquire that business. Because obviously if you're doing well in your business, they want you to take over that business because you've already shown that you, you. You've dem. Demonstrated it.

[00:48:53 - 00:49:04]

Will Smith: And do you have to buy like in contiguous territories or something?

Or you're limited to near where you live, Georgia, something. Is there some geographic restriction there or not?

[00:49:04 - 00:49:43]

Joe Wynn: No, no. So no geographical restrictions. You can purchase essentially wherever the opportunity is.

It's just obviously being able to draw the business in that area. So, you know, obviously I'm here in Georgia, and if I wanted to purchase something that was in Texas, I have the ability to do that. It's just obviously the commute, in terms of the strategy would look a little different in terms of you know what, I was set up differently there. So yeah, you have the ability to purchase wherever you want within, within the state if it's open. It's just about obviously you making that commitment to assuring that the business is going to grow.

So, so yeah, you're not, you're not limited to a certain area.

[00:49:44 - 00:49:54]

Will Smith: You and Joe, at what stage in the, in the transaction or the negotiating with the seller were you granted access to the supplier?

[00:49:54 - 00:50:35]

Joe Wynn: Yeah. So once we got kind of towards the due diligence part, that's when I got access to the suppliers and they wanted to move pretty quickly. So once I submitted a offer that was, that was accepted.

Accepted by him, then that's when I got full access to the suppliers. And they gave me a lot of insight as to how the business was performing over the last couple years with them as the supplier, which gave me a lot of, a lot of leverage because I knew that they, the direction that they wanted to go in from our conversations. And then that gave me the confidence to be able to negotiate a deal that made sense for me.

[00:50:37 - 00:50:38]

Will Smith: So you get the business under loi.

[00:50:39 - 00:50:39]

Joe Wynn: Yes.

[00:50:39 - 00:50:55]

Will Smith: And then owner connects you with supplier. Supplier gives you all this additional intel about the history of the business and what they'd like to see from you or changed or improved in the business. And what was that? Obviously more sales, but can you be more specific?

[00:50:55 - 00:51:54]

Joe Wynn: No.

Yes. So there were two key product lines from the supplier that had zeros next to them from a sales perspective. But then also what the supplier was looking for was great partners with them. Right. So the supplier has a goal of growing, hitting a, hitting their goal from a revenue standpoint over the next couple years.

And what they equated was, you know, obviously getting newer and young, younger talent within the, to support them from a rep firm standpoint. And those who have had a lot of success that can kind of bring that, that as a business owner and replicate that. So, so that was a lot of insight that I got in terms of how the business performed over the last couple years with key product families having zero next to them from a sales perspective. But then also what they really wanted was just great partners in terms of people that can partner with them for, for the long, long haul.

[00:51:54 - 00:51:58]

Will Smith: Yeah.

What were the product lines that had zeros?

[00:51:58 - 00:52:53]

Joe Wynn: So one of the product lines which is very important to the supplier is called integration, which is a, can be a big ticket item, but I think with the previous owner, you know, obviously being in his 60s and then the, the sales, sales reps, you know, being in their 50s, they didn't understand the integration piece behind it because it was more tech, you know, which, which was a challenge. But I think also they just lived and died by the bread and butter that, that helped them be successful, which was the lights, the tables and booms. But the supplier was kind of looking to diversify because there was huge opportunity with the video integration piece. So that's been a key focus for me talking about.

And we have a couple projects this year that look promising that we're going to get, which will instantly take us from zero to a good bit of sales.

[00:52:55 - 00:52:55]

Will Smith: So.

[00:52:55 - 00:53:10]

Joe Wynn: So I'm definitely looking forward to that closing out. But yeah, I think it was just the owner being older, not really wanting to invest much time into learning it. And then he was just pretty much good with kind of what he's built.

So. So he was. Yeah, he, he didn't really want to. Want to sell it, quite honestly.

[00:53:11 - 00:53:36]

Will Smith: And Joe, as you, as you.

As we talk about this low entry multiple and that it does make sense because there just aren't going to be a lot of buyers for the, for this business, for reasons we've already discussed. Does, does that not also mean that on, on your exit that it's going to be similarly low? So it kind of is, is a wash. You get in for low, but you also get out for low and so kind of cancels out?

[00:53:37 - 00:54:33]

Joe Wynn: No, no, I don't, I don't think so. And the reason being is because I think within this, this business what I found is that, yeah, you have the sales component, but I think where the interest from other buyers come into play is where service has grown.

Right. Because what, what buyers want to be able to. Want to be able to predict is reoccurring revenue. Right. So.

So I don't see it as a thing that can hurt me in terms of if I ever decided to, to sell it. I think, you know, if I did decide to sell it, what I would probably do is, yeah, I would want to sell it to someone that came from a sales background. But I think too I have a lot of, of leverage just being able to. My whole goal is being able to diversify as well to where that doesn't affect me kind of in the future as well. So I think the service piece, you know, makes it more appealing to other buyers.

[00:54:33 - 00:54:58]

Will Smith: Yeah, yeah, absolutely. So, so shifting the, the mix of the revenue incre. The. The ratio between sales and service and pushing more of that into service and growing, that is not only good for you, sturdier revenue, higher quality revenue, but on the exit as well. That will be rewarded by the marketplace for, with a higher multiple if you go to, to sell it.

[00:54:58 - 00:55:24]

Joe Wynn: Yes. No, you're 1,000%. That's the, the goal for me is being able to grow the business from a reoccurring revenue standpoint and being able to predict, you know, what we expect coming in win. But then also, obviously from a sales perspective, you know, we're having a lot of success even in a short period of time that I've taken over to where kind of our expectations have grown in terms of where we forecast kind of end of the year so far, so.

[00:55:25 - 00:55:32]

Will Smith: Oh, well, I would probably ask you that at the end, but let's hear it now.

What are you forecasting for 2026?

[00:55:32 - 00:55:40]

Joe Wynn: No. Yes. We did 2 million last year and we're actually forecasting passing about 3 to 3.5 million this year. Really?

[00:55:42 - 00:55:56]

Will Smith: Well, aren't you, aren't you confident for a new business owner? Oh, yeah, man. Most people, Most people, Joe, at whatever we're at now, six weeks in are, you know, having a fetal position moment and sweating bullets and here you are.

[00:55:58 - 00:56:35]

Joe Wynn: No, I've had those moments, you know, obviously in this transition, but I think the great, great part for me is just seeing where the business was and then seeing where I could fit in immediately. And I've already started to see that payoff with a lot of the relationships that, you know, I've built over the past and, and meeting with a lot of decision makers in these last six weeks has, has paid dividends.

And so, yeah, now we're, we're expecting some, some great things this year and, and already working on things for projects for next year. So. So yeah, now I've definitely had those moments in this short period of time as well.

[00:56:35 - 00:56:50]

Will Smith: Well, well, we want to hear about them, but not yet. The.

So your idea that you could reach out to your existing Rolodex or your existing people in your CRM and activate those relationships, but in the context of your new business that has come to pass, that.

[00:56:50 - 00:57:32]

Joe Wynn: Yeah, absolutely, it definitely has. Went to see a customer, I think, two weeks ago about a project that we're doing in, in early April and actually saw one of the, the previous guys that I work with a lot in my previous role and they actually told me about a project that'll be coming up at some point in time. So being able to leverage that kind of get that information has been key because a lot of this is kind of getting to the table early, but then also seeing exactly who you, who you are up against in there from a cost perspective, kind of where the customer's trying to stay within and just being that consultant from a, a design standpoint, that makes sense. That's kind of what they're, what they're looking for.

[00:57:32 - 00:57:52]

Will Smith: Awesome. Joe. So and so before we get into your operations, as, as short as it's been these six weeks, there's, there's, you know, some good stuff there. We still haven't heard about the structure. We've heard about the purchase price, but not the structure of the transact transaction.

You got not only a good purchase price, but a good structure on top of it. Let's, let's hear.

[00:57:52 - 00:58:17]

Joe Wynn: Yeah. So purchase price 1.35. I put down $120,000 in the deal is a seller finance deal over 10 years at a 7% interest rate.

We have a standby of no interest, no payments for the first three months of the deal. And there is no personal guarantee as.

[00:58:17 - 00:58:30]

Will Smith: Well for people who might be new to this. If you're kind of apples to apples comparing this to an SBA loan, the interest rate would have been, I don't know where interest rates are now. I should, would have been higher.

[00:58:30 - 00:58:30]

Joe Wynn: Yeah.

[00:58:30 - 00:59:09]

Will Smith: Than 7%. So much more in interest or, you know, materially more in interest. And of course there would be a personal guarantee which for many people precludes them from using an SBA loan at all. So you, the amortization period of an SBA land of 10 years is considered long and roomy and generous.

And usually with seller notes, you're not able to get that long amortization. You did, you got Basically SBA is 10, you got 10 years. So 10 years, same, same nice long amortization, lower interest rate. No pg.

[00:59:09 - 00:59:10]

Joe Wynn: Yeah.

[00:59:10 - 00:59:20]

Will Smith: And, and so is this just another benefit of you being, you know, the right buyer for this business and, and, and the seller not having a lot of options?

[00:59:21 - 01:00:19]

Joe Wynn: Yeah, I think so. You know, I think I was the closest that he's got into selling it. Right. So it gave me a lot of, a lot of leverage and a lot of confidence that I can get the deal that I feel comfortable with.

But then also in having con in the conversation that we had, he, you know, gave me a, gave me some information from a. Because I think the broker was telling him one thing. But then, you know, being two sales guys, I knew the best thing to do was to be able to just get him on the phone and just have a conversation as to kind of, hey, this is kind of where, where I am. You know, I'm interested in the business. But this is kind of where I feel most comfortable.

And. And yeah, we ended up getting it done. And you know, in our conversations, because initially the standby was at six months, but that was the one thing that I decided to decide to change. But. But yeah, got the exact deal that, That I wanted, so.

[01:00:19 - 01:00:22]

Will Smith: And you had to circumvent the broker is what I just heard.

[01:00:22 - 01:00:56]

Joe Wynn: Yeah. So. Because I, I knew also in conversations, he was pretty frustrated with the broker because the business had already been listed for a long period of time. He wasn't really getting anywhere with the sale of the company.

And so we had conversations about that. Obviously the broker was upset about it, but ultimately the decision came down to him as to what the deal, what he agreed to. And that's essentially what I knew. So that's who I communicated with in terms of, this is my. This is my offer.

And he agreed to it. And, you know, I sent it over.

[01:00:57 - 01:01:03]

Will Smith: And when you say salesman to salesman, say. Say more about that. I would have loved to be a fly on the wall for that call.

[01:01:03 - 01:02:07]

Joe Wynn: Call, you know, and sales is. It's more about listening than talking. And I was just able to exactly know he felt really good about me as a buyer, that I would fit. I would do extremely well. And once that was conveyed to me, obviously from a sales perspective, just kind of, you know, I want to take this over.

Right. I want to. Want to grow this business, but this is where it has to. It makes sense for me to continue to success from a financial standpoint point. And, you know, obviously not going through a bank, you know, I think made the conversation much, much easier and simpler because in the conversation as well, if.

If we go through a bank, the process is going to be much longer. Right. So this is. And I knew also we had. We're on a tight schedule because the supplier had a, A national sales meeting with all the rep firms that came up in January.

And this was already towards the end of the year. So it was either us moving forward or this was going to take another six months.

[01:02:08 - 01:02:34]

Will Smith: Well, congratulations, Joe, and well played. Boy, this seems like a great opportunity for you. Okay, let's get into now a couple more things on the, on, on, on.

On the project overall. Yeah. So let's talk about the people who work at the business and, and that includes you. So did you tell us how many employees were there? I don't think you did.

How many are there there?

[01:02:34 - 01:02:52]

Joe Wynn: Yeah, so initially there were. Excluding, obviously excluding myself, there were four employees. So two sales reps and then two service techs and then we have several 1099 folks that help out. But as far as W2 employees, there were four.

[01:02:53 - 01:02:59]

Will Smith: And how much you had said that the owner was also just doing a lot. So he was probably doing a lot of the back office.

[01:03:00 - 01:03:01]

Joe Wynn: Yes, yes.

[01:03:01 - 01:03:05]

Will Smith: Yeah, but how, how, how key did you see him as being?

[01:03:05 - 01:03:47]

Joe Wynn: No, yeah, I saw him being key from a, from a. Yeah, I saw him being key because obviously he was already.

He had been established with the supplier for 20 years. He's, you know, worked in this area for a long period of time. Right. So I knew from a transition standpoint it was going to be key to, you know, obviously have him engaged, but then also have a proper transition. So in the LOI specifically outlined that we have a 12 week transition so that key relationships can be transferred properly because obviously we have active projects that we're working on.

We just want to make sure communication is directed to the right person.

[01:03:48 - 01:03:52]

Will Smith: And then this is a small business, just four people.

[01:03:52 - 01:03:53]

Joe Wynn: So.

[01:03:53 - 01:04:15]

Will Smith: So, so one of those people leaves or one of your sales people leave and there goes out walks a lot of revenue potentially. Yeah.

Similar with the same with the technicians. You got to have people who can go install the, the sales that you're making. So a lot of risk in such a thinly peopled organization. How did you think about that?

[01:04:15 - 01:05:10]

Joe Wynn: Well, the way that I equated it was if any sales risk rep left, I feel felt pretty comfortable that I could pick up the product and go sell it myself.

Just coming from the background of just sales and already have established relationships throughout the area. And then from a service perspective, if I did have any service folks that would, that would leave. We already have 1099 folks that are established with the business, so maybe leveraging those folks as well. But my concern is more from a service perspective than the sales perspective because just from an installation standpoint, you kind of need those guys. But the sales I necessarily wasn't worried about as much just because I knew if that's what gave me the confidence in purchasing the business is that if everything hit the fan, you know, the next day, I could still run the business and operate.

[01:05:10 - 01:05:13]

Will Smith: So the sales piece.

[01:05:13 - 01:05:15]

Joe Wynn: Yes, yeah, yeah, yes.

[01:05:16 - 01:05:22]

Will Smith: And on the technician piece. So a lot of the 1099s you referred to, those are technical people that can do some of the technician work.

[01:05:23 - 01:05:24]

Joe Wynn: Yes, that's correct.

[01:05:24 - 01:05:46]

Will Smith: They're just not W2 full time or permanent. The. And then what does finding technical people to do this installation work look like in case you lose technicians or the 1099 and or you grow, you just grow into needing more technicians. How technical of a technician do you need? What kind of training?

What's, what's that look like?

[01:05:46 - 01:06:41]

Joe Wynn: Yeah, I mean it helps if someone comes from a construction background. Construction? Yeah. So you know, electrician, H Vac, those type of things.

It helps. But the great thing also about this company is that if once I, you know, continue to grow from a service perspective, the supplier actually trains them on that specific, those products. So how to install the equipment, obviously that pay well, the travel is covered by me. But, but from a, a training perspective, the supplier trains all the, the service folks. So they get go, they go up to the headquarters and then they get certified with the supplier.

So even if they don't come from a construction background, they can still go learning and get trained. I think just from a construction, if you come from construction, you just know more ins and outs. Right? Yeah, but, but if you don't come from that background, it's completely fine because you can go up and, and get trained by the support supplier.

[01:06:42 - 01:06:59]

Will Smith: And so all of that being said, then do you think that finding new technicians or people who are, have the, the backgrounds or, or propensity to be good technicians for you, do you think that will be hard, easy yet?

[01:06:59 - 01:07:35]

Joe Wynn: That is the concern for me. And the reason being is that, you know, a lot of people look at this type of from a service perspective as hard work. Right. So you know, the guys that I have now are both over 50. Right.

So that's one of the things that I've talked to him as well in terms of, you know, if we know any folks that might be interested in opportunity. So, so yeah, that is the challenge is from a backfield standpoint, trying to get younger and then having people that actually want to do this type of.

[01:07:35 - 01:07:37]

Will Smith: Work because it's so physically demanding.

[01:07:37 - 01:08:16]

Joe Wynn: Yeah, it can be. Yeah.

And obviously, you know, a customer calls and they need you, you know, their table is down and now you have to kind of since you drop things and, and go. So at times it can be pretty busy as well. So, so that is the challenge that I'm trying to think through from a recruitment standpoint, but then also, you know, a baffle standpoint, just seeing the best options kind of for the company going forward. But yeah, it can be, it can be a challenge. You have to really enjoy it.

Right. So that's why I say construction, just because you already come from that background. But, but yeah, so that's kind of things I'm just trying to navigate what.

[01:08:16 - 01:08:24]

Will Smith: Kind of, what's the best options and this. Right.

So this equipment is not stuff you just plug in either. There's a lot of configuration to it.

[01:08:24 - 01:08:51]

Joe Wynn: Yes, no, a lot of configurations to it. With the mount, you know, setting up the mounts, there's wiring. Yeah.

You know, it's definitely, obviously you'll learn from with the supplier, but it's not just something you just plug up and go. There's a lot of moving parts to it and it has to be placed properly because also you have to remember this equipment is over a patient. So that has to be installed correctly.

[01:08:52 - 01:09:33]

Will Smith: And what of that, Joe? Let's not forget what this equipment is.

The context that it's being used in, in surgeries often times and the kind of zero room for error that you, you have there that the equipment work or that, you know, somebody's, you know, needs a surgery and can't get it because the, the table's not working properly or whatever. Is that a, is that a feature of the day to day of this business? Is it, is it as stressful as I just made it sound or, or maybe not because it's usually like if one table's not working, they just go to a different or car and then you, you know, it's not, it's not as the urgency isn't as acute as I made it sound.

[01:09:34 - 01:10:25]

Joe Wynn: No. Yeah, there is a urgency.

So obviously if a table goes down, that means that room is down and that hospital can't make money because they can't use that room for, for surgery. So it's definitely an urgency to it. But then that's also comes into the kind of what I spoke about a little bit earlier with placing the PM agreements in place for the, for the customers. Because if we place the PM agreements in and we check the equipment every six months, it's less likely to where that room will go down. So that's been part of the conversation I've been having with customers.

But yes, it is. You know, a room goes down, you have to look at it as that hospital is losing thousands of dollars by not being a complete surgeries for that day or that however long it's out. Right. So that's a lot of money that they're losing.

[01:10:25 - 01:10:29]

Will Smith: And how often does that happen?

Do you get, do you get the sense it.

[01:10:29 - 01:10:56]

Joe Wynn: It happens often? Obviously, yeah, those surgeries are happen happening on a daily and a lot of it doesn't come from the actual equipment. It comes from staff abusing the equipment and then obviously us just kind of coming in and you know, just making some quick changes. To it.

But, but yeah, that's a lot of it doesn't actually come from the equipment. Equipment can last pretty long, but it comes from the use and abuse typically from, from staff.

[01:10:56 - 01:11:04]

Will Smith: You've made some changes for the employ employee benefit, right, Joe?

Yes.

Can you talk, talk us through what you've done?

[01:11:04 - 01:11:48]

Joe Wynn: Yeah. So the previous owner was offering 401k, right? That's one of the things that, that I've been kind of looking into but haven't settled on kind of what that looks like. But the main thing that I've implemented to the team is systems and processes is the key thing for me. And you know, the previous owner also didn't offer health insurance.

That's one of the things that I'm kind of looking into right now as well to see kind of what can we implement for the company. But yeah, so those are, are, you know, two of the things that one that was offered but kind of looking at to kind of see what's another option. And then healthcare is something I'm looking to offer to the employees as well.

[01:11:48 - 01:11:52]

Will Smith: Okay. All right, so those are coming, but they haven't happened yet.

[01:11:52 - 01:11:53]

Joe Wynn: That's correct, yeah.

[01:11:53 - 01:12:02]

Will Smith: Anything else to share about the transition so far and what you've done and, or, and, or this would be the time to hear about any fetal position moments you've had? Joe?

[01:12:02 - 01:12:55]

Joe Wynn: No. Yes.

So actually these past couple weeks the bank that we, we were using, Chase, actually froze the business account and then so I've essentially had to front load things from a personal standpoint and then the check was sent out via FedEx probably overnight. But it just so happened that when it got to the Memphis hub up, there was a chemical spill in Memphis. So essentially the money from the business account has been held in Memphis for about a week now. So the payroll I've had to essentially front load personally until obviously that that check comes in or, or that Chase is going to resend another check as well.

[01:12:55 - 01:12:59]

Will Smith: Wait, so the freezing of the account was related to Memphis or a different thing?

Thing?

[01:12:59 - 01:13:22]

Joe Wynn: No different. So the frequency of the account was because it looks like I think someone tried to get into the account or they thought it was fraud just due to I guess all the kind of the money coming in. So they froze the account and then issued out a check from that account that was in.

[01:13:22 - 01:13:28]

Will Smith: Oh, they froze the account and sent you the balance as a way of kind of closing you.

Closing the account down. Down.

[01:13:28 - 01:13:30]

Joe Wynn: Yeah. So.

[01:13:30 - 01:13:33]

Will Smith: And then the check got stuck in the mail or at Memphis at the chemicals.

But.

[01:13:33 - 01:13:53]

Joe Wynn: Wow. So essentially since the 15th, February 15th. I've been front loading, well, funding the business personally until the, the check comes in. So we're almost, almost at a month, it'll be on the 15th here.

So.

[01:13:55 - 01:14:12]

Will Smith: Wow. Okay, well, so this is a lesson in post transaction liquidity. Happily you have a balance sheet that allows you to literally personally bankroll your business for a month. So you're paying everybody payroll.

You're paying payroll out of your own checking account?

[01:14:13 - 01:14:15]

Joe Wynn: That's correct. Yep. It is, yeah. Wow.

[01:14:15 - 01:14:17]

Will Smith: And how much is this check from Chase going to be?

[01:14:19 - 01:15:23]

Joe Wynn: It's over 160 grand. And a check for the, for the business. Oh, I think also with the structure that I didn't mention that I just thought about, I actually also got $150,000 in working capital before the business as well. So obviously that check was a part of that.

But then also we've gotten several commissions since, since I've taken over. So it's just, you know, that's definitely the liquidity piece. They're all, you know, you have the down payment piece. But then also there's things that you can't account for. Like obviously the account being closed and the check being sent up being kind of frozen within one location.

So luckily I have the personal cash to, to, you know, make payroll and everything. But that's. Yeah, so I've been kind of dealing with that for the past couple months. But luckily I think we're at the end of it. So now the business account will get all his funds and you know, we can kind of go back to normal and I can, you know, reimburse myself as well.

So.

[01:15:23 - 01:15:28]

Will Smith: And is there anything to be learned from having your bank account frozen or, or shut down on you?

[01:15:28 - 01:16:51]

Joe Wynn: I think the, the, the issue of it was one, luckily, you know, I had the, the funds to fund, fund the business, but then also just making sure the business is protected. Right. So because you never know who's trying to get into your account, but then also make sure everything matches.

So when you're getting money in from a supplier or a customer, it needs to match exactly the way that the business, when they look it up in the state, from a state standpoint, it needs to match. And I think also that was a part of the issue to where with that initial deposit from the 150 in the working capital. What. When I went to the bank, they actually showed me probably what flagged it. It was because the attorney that sent the money had their name in the wrong spot where my name should have been.

And that's what Flagged the account.

So a simple, simple mistake caused, you know, a month's worth of headaches. But. But yeah, that was the issue that the attorney's name was in a spot to where my name was supposed to be, and that's why Chase ended up flagging the account.

[01:16:52 - 01:17:03]

Will Smith: That's. So, I mean, that.

Fair enough that, that would. That they would flag the account, but it seems just like very punitive to just shut the account down forever goodbye just for that.

[01:17:04 - 01:17:32]

Joe Wynn: No, and no. It's no explanation to it. It's worse.

Just, you know, the explanation was, hey, Chase can end relationship at any point in time. So. So, yeah, I mean. But yeah, I guess, you know, it was definitely a quick lesson in being a business owner and just being able to. One still be able to take care of the employees.

Yeah. Because obviously they have no idea. But being able to take care of employees because at the end of the day, I know that obviously the money is going to be coming, so.

[01:17:33 - 01:17:37]

Will Smith: Yeah, yeah. And.

And then you just spun up another checking account at a different bank.

[01:17:38 - 01:17:38]

Joe Wynn: That's correct.

[01:17:39 - 01:17:42]

Will Smith: And put all your suppliers and vendors on point at that.

[01:17:42 - 01:17:43]

Joe Wynn: Yeah.

[01:17:45 - 01:17:54]

Will Smith: And so this working capital from the lawyer was.

So it wasn't. They were sending you the money. It wasn't just leaving the 150 in the account. You said 150, right?

[01:17:54 - 01:18:06]

Joe Wynn: Yeah, the 150.

No, they sent me the money because I created a. Another account. I didn't take over the. A. A previous owner's account.

So they stay. Yeah. They w. Yeah. Wire me money. Yeah.

[01:18:06 - 01:19:18]

Will Smith: So, yeah. Yeah. Okay. Well, that's a hard one. But by.

So, but by the way, on this 150 and going back to the structure of the deal, so that's yet, you know, yet again, another strength. Strength of the. The deal that you negotiated for yourself, Joe, that 150,000 in cash and working capital is almost, you know, the few cases where I've heard of that happening. It's almost like the buyer, you got paid on closing because you put 120 in. Yes.

But there was also 150 grand waiting for you in cash on the balance sheet, which is 30 more than you had put in. So you could pay your. In theory, you could pay yourself back 120 on day one. Now, having put no money in and still have 30 grand left over in the business for some working capital capital Y. Now, obviously, that's a.

That's a bit of a overstatement, because you probably want that 150,000 to just be sitting there because you need working capital and. And so but you could make the argument that it was like that and many, and many buyers don't have any working capital when they get into the business. So the fact that you had some was great.

[01:19:19 - 01:19:53]

Joe Wynn: No, yeah, that was uh, that was the way that I looked at it. It was uh, it was a 30.

It was positive 30 with the, with the transition. And yeah, if, if I could just gave myself back to 120 but then also not knowing exactly what I would need from working capital. But now that I'm in the business, I see that the working capital piece is actually fairly low. So that actually made me pretty excited. So, so yeah, that 150 was, was, was pretty, was pretty good to get and pretty good to have.

[01:19:54 - 01:20:30]

Will Smith: Yeah. Yeah. And let me restate what I said just a minute ago that a lot of buyers don't get any working capital. While that can be true, the amount of working capital in the business is very much dependent on the working capital needs of the business. And some, some businesses need a ton of working capital.

And so you should, that should be a key part of your negotiation you buyers negotiation. And generally in those cases a seller is going to understand that. Although not always. But in your case, as we've heard, the working capital of dynamics of your business are extremely favorable. So this was not a business that needed a ton.

Although it was still nice to have.

[01:20:31 - 01:20:51]

Joe Wynn: No, yeah, absolutely. You know, after kind of getting into it, seeing how many transactions we actually do from a project standpoint in service. No. Yeah, the 150 is good to have what it actually you.

It wasn't what I thought I needed for just to be able to kind of COVID standard things, but no, it's definitely, definitely good to have in the account.

[01:20:51 - 01:20:58]

Will Smith: Great.

Joe, anything else good, bad or ugly that has happened since January 21st?

[01:20:58 - 01:21:00]

Joe Wynn: No. Yeah, I mean that's, that's.

[01:21:00 - 01:21:02]

Will Smith: How you feeling? How you feeling?

[01:21:02 - 01:22:44]

Joe Wynn: I feel, I feel pretty good. I'm super excited with the decision that I made to step out of being a W2 employee and, and now running my own business. I think think this business was the perfect business for me to purchase.

You know, just with the background of it and the comfortability in terms of the learning curve is, is pretty low. I think the thing is obviously learning how to be a business owner is the, is the piece, but also for me it's, I'm very self aware and I know my strengths and my weaknesses and, and so that's been a huge focus for me as well to be able to get an assistant in place and all these things. That allow me to focus on a business and then empower others to have responsibility to take certain things off my plate. So now I feel like I said earlier, reading the book Buy Them Bill completely changed my life and obviously attending going through acquisition lab have completely changed my life. And seeing things from this side of being a business owner is great, but it also shows just all the tremendous opportunity that I have within the current business.

But then as we continue to grow and you know, the sky is really the limit and I'm super excited to get more people into the organization as we continue to grow that, you know, can make a difference because that's the thing that I've really noticed is it's great to be the business owner, but the piece is really just seeing the effect that, that the business has on people that come within the organization and just kind of watching them, you know, grow and have success.

[01:22:45 - 01:22:47]

Will Smith: You've already felt that in six short weeks.

[01:22:47 - 01:23:42]

Joe Wynn: No. Yeah. So I mean I thought I would feel a lot of angst to, to pay payroll and, and have the responsibility of, of people's mortgages, but it actually, actually makes me feel really good to where something that has my name on it is helping others, you know, pay their mortgage, pay their car note, all these things.

And people that enjoy, you know, the employees, they enjoy the transition. It's a new energy within the company and they love the vision because my whole goal is to be able to put money, more money in every person's pocket, but then also to make their jobs more easier. So. So that's been my thing in these last six weeks is just collecting feedback, but then also seeing where we can implement better systems and processes to make us more efficient.

[01:23:43 - 01:24:24]

Will Smith: You had said that you feel like the sky is the limit after being in here for six weeks.

How do you grow? Do you grow geographically and is that, is that complicated by like. I guess you probably have a territory. This is kind of a territory based structure with the supplier as, as I guess most distribution businesses probably are. Yeah.

So can you, can you grow Geograph by acquiring other territories or is there a ceiling there? And then, and then, and then. How do you grow within your own territory? I guess selling more product through which we've kind of already talked about that. But say more on both of those.

How do you, how do you. How is the sky the limit? How are you so optimistic that there's a lot more revenue left to be, to be earned?

[01:24:25 - 01:25:49]

Joe Wynn: No. Yeah.

So the, the previous owner didn't want to expand more into the current territory, so he primarily focused on metro Atlanta and we cover a pretty decent size of the state. So growth is going to come from hitting those places that we haven't been, haven't supported in a while, just from our current territory. And then from a geographical standpoint, you definitely have the option to grow, to acquire other people's business. So that would be something I'll be interested in as well. But then also I think what I mentioned as well earlier, a little bit earlier, from a supplier side standpoint, how do we continue to, how do we diversify to where it makes sense?

So obviously growing within our current relationships with our current partners, but then looking at things to where it makes sense that supports what we currently do, that that can be added rolled up into that to the current structure and then also whether that's acquiring other businesses outside of kind of what we do. Right. So that can complement the current business. So there's a number of different options that we can do from obviously from a sales standpoint, from growth, but then also acquiring other territories, but then also acquiring other businesses that's, that have different products that I'm also interested in.

[01:25:50 - 01:26:44]

Will Smith: And yeah, I mean, I guess the way to think about this is basically medical needs are growing in the country, obviously one of the, kind of one of the biggest tailwinds to be happening in the US So medical needs growing and you're selling kit equipment to the roofs.

You know, the hospitals, the outpatient centers, the urgent care centers, the surgery centers that, that are proliferating and, and are going to have ongoing needs. And so it's just you, you. So that's just a big market to be playing in. And you, you, you can just. There's all sorts of product to be sold and serviced as a, as a channel from suppliers to these, to these, all these different centers that sounded very abstract, but basically you're playing in a big market is a way to put it concisely.

[01:26:45 - 01:27:36]

Joe Wynn: No, yeah, that's, yeah, that's the thing.

There's a lot of products that make sense to where from a partnership standpoint, but then also from an acquisition standpoint of people who already have the existing business that I've already kind of started to, to look into, you know, to where those things make sense. So it's very exciting kind of seeing the way the current structure of the company is, but then also, you know, looking at additional companies to acquire, to roll up into this company to where a lot of people have built very successful businesses and then now obviously looking to have a transition as well. So. So yeah, a number of different ways to growth. Obviously just natural growth in, in sales, but then acquiring other territory but then also acquiring other businesses as well and.

[01:27:36 - 01:27:51]

Will Smith: The acquisition of other businesses. Do you think you'll find the same dynamic there where the buyers for those businesses is? It's going to be a very thin buyer pool because suppliers are going to be looking for just the right type of buyer sort of thing that we heard in your case.

[01:27:51 - 01:28:46]

Joe Wynn: Same. Yeah.

So I've, you know, had some conversations and yet it's going to be the same piece to where similar from a supplier standpoint. They want obviously the business to be transition. Transition to the right. The right buyer. So.

But then also I've. I've discovered to where there's a lot of sellers that have built companies to where they are a supplier. So a diff. A number of different AV avenues to take in terms of, you know, when of how to evaluate some of these businesses. But there are some, some big ones out there that I've kind of looked at to looked at that would make a lot of sense, you know, for us.

But obviously it's about the right timing and right fit. And so that's kind of some of the stuff that we're kind of, you know, I'll visit obviously later in the year towards next year and to kind of see kind of what can roll up into this current, current structure.

[01:28:47 - 01:28:56]

Will Smith: You mentioned that you, you know your strengths and you know your weaknesses. What's one of your strengths other than sales? Can't say sales.

We already know that. And one of your weaknesses.

[01:28:56 - 01:30:33]

Joe Wynn: No. Yeah. So one of my strengths is just the ability to figure things out.

Right. So me coming from a, my background, coming from a small town in South Georgia, rural Georgia, has benefited me tremendously because I did a lot of things with my hands as a kid. It was, you didn't have a choice. And then going off to college and seeing things a little bit differently. So the benefit to me is that I can be a chameleon in, in all spaces and, and understand different conversations.

But then one of the, the weaknesses for myself I would say is, you know, I can get pretty dialed in on things and I think that's why for myself I would like to have a assistant is because, you know, there are things that, that that person could take off my plate that will allow the business to continue to flourish, especially getting those things out in a timely matter. Because from an administrative standpoint, if I do them myself, that takes a lot of time away from other things that require, you know, immediate needs. So for myself you know, I know that I want to pass those things off because those things require a proper attention. And my, my goal and what I do is getting out, meeting with customers to see kind of what projects we can get, how can we get better those things. So I know for sure that's one of those things I want to pass off.

[01:30:33 - 01:30:42]

Will Smith: You, you get, when you say you get really dialed in, you become just, just a machine on getting the task in front of you done. And sometimes that's. That's not the best strategic use of your time.

[01:30:42 - 01:31:18]

Joe Wynn: Time. No.

Yeah, yeah, 1,000%. And obviously as. As a business owner, you have to wear multiple hats. Right. So you have to be aware.

So for myself, that having that administrator allows me to not necessarily worry about the administrative work and primarily focus on growing the business from a customer standpoint. Where we at with these projects? Who do we need to speak with with, you know, what events we need to attend, those type of things instead of kind of getting bogged down with some of the administrative tasks that are required on a daily aspect.

[01:31:18 - 01:31:19]

Will Smith: Anybody you want to shout out show?

[01:31:20 - 01:31:37]

Joe Wynn: Yeah.

No. So obviously I'm a huge fan of acquiring minds. And there were two episodes that really stood out to me. And one was Brian, who's with the north side Professionals, which is the tree company, which I know.

[01:31:37 - 01:31:38]

Will Smith: Brian Hark Hartman.

[01:31:38 - 01:32:43]

Joe Wynn: Yep. Brian Hartman, who built, bought a company, I think around the same size or he had the same. Similar path to where he came from within the industry and then purchased the company. And now, you know, he's built something that's, you know, huge and it's continuing to grow. So that interview really, really resonated with me.

And then also Iris, that was also one. One as well. That, that really stuck out to me as well because I actually reached out to her personally to kind of get more of her story because initially I was looking at construction companies and all these type of things, and I think it actually worked out in my favorite to where I mean, the company I ended up purchasing is essentially a medical construction type of company where it's installations and all those things that's similar. So her story as well resonated with me as well. So those two individuals, I've kind of go back and replay their interviews just to kind of get more of their story, kind of how they structure things as well.

[01:32:43 - 01:33:07]

Will Smith: So yeah, Iris's business was. She's a porch builder in Nashville. Yeah, exactly, yeah.

Joe Wynn.

Congratulations on the acquisition.

That is such good business. Buyer fit. You use that to. To great advantage, as you should have. And some early wins in the business.

It'll be really fun to see what you do here. Thanks for joining us on Acquiring Minds.

[01:33:07 - 01:33:08]

Joe Wynn: No, thank you. Thank you for having me.

[01:33:09 - 01:33:53]

Will Smith: Hope you enjoyed that interview.

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