Host: Welcome to Acquiring Minds, a podcast about buying businesses. My name is Will Smith. Acquiring an existing business is an awesome opportunity for many entrepreneurs. And on this podcast I talk to the people who do it. My conversation today is with Mike Botkin, who acquired a landscaping company in Orlando, Florida. This is a very cool story. First of all, for the speed, Mike just barely had the idea that maybe he would acquire a company eight or nine months ago. And here we are now he's acquired the company. He's gone through the crucible of the first three months of ownership of this company, cleaned it up, optimize the processes. You're going to hear all about what he's done and now it's positioned for growth. So in nine months went from having the idea to owning an almost million dollar a year landscaping company that is very well positioned to grow and to potentially do other acquisitions. You're going to hear all sides. It's unvarnished, but at the end, very inspirational. Here he is, Mike Bodkin. Mike Bodkin, thanks for joining me today on Acquiring Minds.

Guest: Absolutely, man. Happy to be here.

Host: So you acquired a landscaping company in Orlando, Florida, BNB Landscaping. It is over 40 years old, BNB Landscaping. And so you're really at the front lines of SMB acquisition, which is what this podcast is all about and what there's a lot of interest in in general. For our conversation today, I want to do the first half is I want to hear your story, what led you to get into the acquisition, entrepreneurship on that path, and then the story of the acquisition itself, how you found BNB and the terms of the deal to the extent that you can share. And then the second half is I want to hear about your thoughts on SMB acquisition because it is getting so much attention. There's a lot of, I think, romanticizing it. But you, you know, you're in the trenches now. You're about six months into this acquisition, so. And you yourself have tweeted some really interesting observations about what you found. So that'll be the second half. But by way of introduction, why don't you tell our audience, in brief, you know, your professional history that led you to want to acquire a business in the first place.

Guest: Yeah, no, absolutely. Appreciate the kind words. Growing up, born and raised in Orlando, Florida, I had no knowledge or sense of buying businesses. It's just a realm I was never going to be familiar with, with the way I grew up, you know, did the college, untraditional college. I'm not an Ivy League. I went to South Alabama, left there and accomplished My childhood dream, I became a high school teacher and I reached the pinnacle of my childhood dream, found out that's not financially rewarding, left that and I think this is important for part of the journey. But I took a giant bet on myself and gave up almost all of my income and benefits and I joined a startup. It was a SaaS startup based out of New York and joined and we went from, you know, a handful of us to over 115 and Series A and Bs and exited to the Dallas Cowboys and left that not really knowing what I was going to do and was just taking some time to reflect and move back to Orlando and hooked up with a developer here in the area and became the COO of that company. And we ended up having just under 800 million of assets under management. We had about 52 subsidiaries that we controlled. And my, you know, the CEO was traveling internationally and this is before COVID and the CFO was based in Ireland. So I was really the guy here in the United States that and what that meant at a younger age. I'm only 31 and I became that at 27. I had managers looking up to me and asking me questions and wanting answers and decision making and strategic visions. And along with the operational side of that, it led me to the investing side. We are on the buy side on a lot of different avenues. We invested and bought and controlled hotels, restaurants, bars, water parks, property management company. Obviously real estate, land development was a big part of us, our core. And then we got into service businesses, pool cleaning companies, lawn care companies, H Vac companies. And I got to see an inside world of those companies, albeit under the guise of we had financial backing and we were structured right and everything went perfect because our org chart was set up properly. And that kind of led me into small business. And, you know, it really didn't hit me to start looking at, you know, small businesses as an option to purchase until I started seeing it more and more on Twitter and I started seeing more and more people started talking about it. And on a personal level, I felt like, you know, I feel like. And they're similar people to me, what I'm going to say. I, you know, great financial setting, more than I ever dreamed of. I was, you know, higher than a lot of my peers growing up where they were at this time. And I had, you know, a great plan at my previous firm. But, you know, I wanted the chips to follow me, good or bad. And I wanted to take that journey out on my own and see what could happen. And I Did not know it was going to be lawn care or landscaping. During COVID we think about the business. As I said, we owned and operated hotels, restaurants, bars, water parks, they were all completely shut down. So we built a brand new 10,000 square foot office for our senior team. And it was like me and one other person in it during COVID And it's like, well, yeah, you want to know how to burn 10 million bucks? Build an office building before COVID Yeah, it was rough. Rough. And I'm driving on the high about a 40 minute commute to work. I'm just passing gas station after gas station and it's littered with landscaping businesses. And our landscaping business was still full service, full go. All the employees were there. And I started looking at that like, all right, this is obviously Covid proof there's something here. I know our metrics and our financial performance. I wonder what other people's are. So I started researching more and more into that industry and, you know, liked what I found. And ironically.

[7:06] Host: Can I ask. No, no. When you're. Your previous employer did. And they were. You said they were getting into home services toward the end of your tenure. There was. Did you see any landscaping acquisitions up close while you were there?

Guest: We bought one eight months before I left. I'm sorry, it was a year before I left, so I got to see it. But it's different from a standpoint of. And you know, we had. We had enough capital to deploy where risk at the level we were buying, there really was no risk.

Host: Okay.

Guest: And we're land. We were land developers at our core. And we had developments and HOAs and commercial properties. So we were really buying a guy could. We buy a guy that could run a landscaping division for us. Okay. Because we had enough work to feed it. So it was different. And I was looking at them with a different lens than when it's my own skin. Right. And I think, I don't think it's a negative to say because like I said, my previous firm, you know, we could inject a million dollars of revenue in the business by a snap of our fingers just because we own those properties. Yeah. And they needed lawn care.

Host: Yeah.

Guest: So.

Host: So you'd acquire home services stuff that other subsidiaries within the same company would just immediately be the clients for.

Guest: Yeah. And don't take this wrong, but we kind of looked at the Amazon approach of turn everything, you know, on your balance sheet into income. And we looked at it, you know, think of it. We had a property management business with, you know, anywhere between 800 and 1500 homes, majority of we're in Orlando, Florida. Majority of them have pools. So why are we spending 70 bucks a pool a month when we can go hire the employees and do it ourselves? Why are we spending million bucks a year on landscaping? We can do it ourselves. Yeah, so on and so forth. And that was really our last big push before I left was home services.

[9:10] Host: And so your interest in landscaping was because of this. I mean, that's a great image of seeing all these landscaping companies lining up at the gas station. In the peak of Coke Covid business, that industry continues to thrive. So that's really what led you to landscaping versus seeing some of these other home service industries at your previous company, like pool service or some of the other ones. You mentioned property management. It wasn't there that you got the idea for landscaping. It was that inspirational moment driving down the highway, seeing all these lined up trucks lined up at the gas station.

Guest: Yeah. And I can touch super briefly on some of those other industries and a lot because they're super popular, especially in the small business Twitter world, I'll call it. My thoughts on the H vac world was we struggled with techs and we paid very well. Those guys are licensed to do those services. We're in Florida. It was very hard to retain employees because either they were getting poached off and we were high paying and they were still getting poached off. And if they became so good, they just started on their own. Yeah, I was nervous about the workforce. You're constantly having to raise your labor costs on that and I did not want to get in that game. The pool industry, not everyone has a pool and some people like to clean their own pool. It's not that difficult to do. All ages and demographics can do it. I thought lawn care was the best one because every majority of people have a lawn and it sucks to do. I have a lawn and I don't like doing it. You know what I mean? It sucks to do. No one likes doing it. And grass grows, right?

Host: Yeah, exactly. Cool. That's great. Okay, so you make this decision and then tell me about your search. Did you go to one of the websites online? Did you engage with broker? All of the above. Tell us about the search.

Guest: Yeah, so I went to the normal sites. You know, a sneaky site that people aren't aware of is LoopNet. They look at it more for real estate versus you know, business buying. But LoopNet, especially here in Florida, has a lot of businesses. It's similar to biz by sell. Started contacting brokers and sort of pulling these businesses and looking at the, you know, the differences of them. And ironically, the one that I ended up buying was about 10 minutes from where my office was. So I was able to. I don't know if that played into me picking that one over the others, but I definitely got to see it more intimately than the other ones. On my drive to work, I would look at the properties. Yeah, lunch. And I would see the HOA that they're doing and the quality that it had. I would see the guys on the road. I was able to ask some of my employees like, hey, who does your lawn care? And they tell me who it is. I'm like, oh, very interesting. Are they good with you or are they, you know, good customer service? So. So I got a really good insight into them and I felt like that was the best one to pull the trigger on for me.

[12:12] Host: And were the. I mean, that's amazing. Kind of that sort of informal accidental due diligence you were able to do. But did the financials also, Were they also compelling compared to the other deals you were looking at, or were they right in line or maybe even a little worse, but you were more comfortable with them or what?

Guest: Top line, it was the second biggest one. I was looking at cash flow. It wasn't as great as some of the other ones. And it was, in my opinion, due to some mismanagement of just business metrics. But the top line was there. And I knew if there was a low hanging fruit, if I could clean X, Y and Z up, the cash would grow enormously. And the other ones, it was more, oh, man, we really got to hone in on sales and growth and top line revenue to make something of this. So I felt like the easiest thing to do is clean up a balance sheet versus ad revenue, so I can go in and clean that up pretty easily. And so I looked at their cash and what they were doing, but I knew it could be better. So it was definitely on a higher end for top line. If you look at the bottom line, it was probably middle of the pack.

Host: And so you actually saw it as an opportunity that it was frankly not as well run a business that spelled opportunity for you rather than the other way rather than being off putting.

Guest: Yeah. And I think this is safe to say in a lot of industries especially, I mean, very, very true to landscaping unless you're buying a bit. The one I bought did on average about 800,000 a year. So that's the realm of what I'm talking about. The ones that are True businesses you're not going to see until they're about 3, 4 million plus. Anything below that, they're owner operated. And when I say owner operated landscaping, it's the guy is on a mower. And how that comes about is they're normally lifelong landscapers. They're not, you know, college educated. They're not, they didn't have previous even employments. You know, they didn't go work at, you know, this company or this company or this company and learn how to do things. You know, hell, they didn't work at Walmart to learn customer service. They've been landscapers and that's what they know. And I saw all the businesses I looked at their multiples were super low and I saw that as a huge opportunity versus H vac. Multiples are pretty high because of license requirements of it. And this one specifically, we were able to negotiate really, really favorable terms on this business. And in a way, it's like we brought a gun to a knife fight with how we were able to set up the deal terms. Because unfortunately the brokers, they just want a deal to get done. They're not going to haggle, they're not going to beat anyone up. If a buyer's ready, they're going to make that seller agree. If a seller wants to just get rid of it and fire sale something, they're going to try to align the buyer with it and get it done. So I didn't really have to worry about the broker in terms of negotiation of price. What I had to worry about the broker with was the terms that I wanted and I even had to take the seller to lunch or sorry, dinner privately, without the broker and say, this is the only way I'm doing this deal. So it's take it or leave it. But yeah, they were not.

[15:38] Host: So can you go into what those terms were? Yeah, so

Guest: there's a. I know we're going to talk about the SBA in a little bit, but this is one of the reasons why, you know, really couldn't go SBA even if I wanted to, which I chose not to. But we did 50% cash down and the rest was a seller note with 0% interest. I made the broker eat the interest just for my liking to brokers. So we got it at a good multiple and it was only 50% cash and the rest was on a seller note there. You know, we initially tried an earn out with a clawback and you know, some more tools and to get the 50% down, we had to get rid of the clawback in the earn out, which at the end of the day still made sense for us.

Host: Okay. Okay. And can you share what the multiple was? It was 2x2x on cash flow on EBITDA.

Guest: So these trade on SDE seller discretionary earnings. So it was 2x of his SDE.

Host: Okay, so you're basically paying him upfront.

Guest: I'm sorry, go ahead.

Host: I was just gonna say you basically paid him upfront for a year. For a year in advance of his take home of his sde and then financed the second year of that. He'd get a second year of that over time. Had no interest.

Guest: Over time, correct. Over four years. Yeah, over four years.

Host: Wow, that's a great deal.

Guest: Yeah. And you know, I think it's a big distinction between SD and ebitda, even though you can really look at them in a similar vein. But, you know, the cash flow wasn't phenomenal when I bought it, but it's because especially in a small business doing under a million bucks, those guys that are owner operators don't really care if there's, you know, why is there's no need to have cash in the bank at the end of the year to do anything with it. If they have decent equipment, they're paying their guys, they're paying themselves. They're living like a rock star. They got a boat, they got a big house, they make good bucks. Cash in the bank is useless to them. So it either needs to go in their pocket or go to Capex or something like that. So I had to really change how I looked at cash in a small business. So SDE was obviously much bigger than ebitda.

[18:03] Host: So he basically emptied his cash, his bank account at the end of every year into his own pocket, which is fine. No reason to keep the cash in the bank account, as you said. And then you have to then figure out what of that stuff could have and should have stayed in the bank account in a more professionally run business. And that represents the true profit. Cause he was basically just pocketing it all.

Guest: Exactly. Right. Yep.

Host: All right, cool. Okay, well, I want to now. So I listened to you on Alex Bridgman's podcast and one of the things that struck me was you. Well, yeah, you discover at this business that there's just like a lot of stuff that isn't, you know, modern or well run. So there, there aren't. There's not much in the way of record keeping. Nobody's picking up the phone in real time. There's a fax machine, all those. And that's kind of like the cliche with these really small businesses that, you know, more like younger hungry or more tech forward types are like, oh man, you know, I can go in there and you know, get rid of the fax machine and move everything to email and throw in some SEO and I'm off to the races. How true is that? I mean, it sounds like in fact this business was really old fashioned, was this low hanging fruit. Did it just make it super easy to make the business super profitable? Just like that? Talk me through that.

Guest: Yes, is the answer to your question. All those things are true, at least in the business I bought, in the businesses I looked at as well. And he didn't not take phone calls. He didn't have a phone. He had a fax machine that had a answering machine. Not an answering service, an answering machine connected to it. So think of, think about that. Give me 10 seconds to explain this. I have to know what number to call, right? I find it, by some stroke of luck, I call it. It doesn't even ring. It goes right to the answer. I have to leave a voicemail, which I'm 31, I don't leave many voicemails as an individual person. And then I have to hope that he hears it. He hears it, gets my number, calls me on his personal cell phone. And then we start the perspective of client joining a service, which is a nightmare as it is with the delays. So think about all the issues in that customer acquisition platform. That should explain a lot of it. All those things. I mean, there's a story like that for almost every part of the business. What he was really good at was service, meaning the quality of service was unbelievable, the reputation in the community was unbelievable. And I came to find out later, which I think we'll get into when we talk about some recent Twitter posts that I've made that also hurt him in a lot of ways. His reputation being unbelievable and him being a good guy and customer friendly and all those things. But to answer your question, yes, all those things are low hanging fruit. One of the more challenging things that I found was I walked into the business with a list of 200 things, right? I mean, this is going to be a piece of cake. I've ran much bigger businesses than this. I can grow this thing with my eyes closed. Just show me the door and I'm in.

[21:29] Host: Yeah, exactly. Yeah. That's the mentality, right?

Guest: Every single day I got punched in the mouth. I mean, you name it, it happened. An employee went to jail, Court dates missing labor constantly trucks breaking down, you know, equipment missing. You know, people don't know. Literally, they don't know what route to go on. There was no signage. Like, there's no clock in or clock out. It was. Yeah. What time was John okay? Yeah, John was here about seven. Great. I'll pay my seven. What? So, you know, my list of 200 things, I crumpled it up and threw it away. And I said, I got to deal with all these fires right here, right now, before I can do anything with growth. Now, we grew organically and naturally just by, you know, little small tactics we could do to improve customer experience as well as add revenue to us. But, yeah, it was not an easy thing. And I think that really took up three months of my time was dealing with those fires. And then I was able to start really honing the list that I had three months prior

Host: after three months. So it is three months of hell getting punched in the face daily. All this unforeseen stuff, People issues, which are, of course, the hardest issues. Um, but you do survive. And, you know, three months is kind of like anybody can do. You know, we can all suffer for three months. It's not. It's not that long. Um, you reach back into the trash can and, you know, and smooth out the paper that you crumpled up with your. Your list of 200. I mean, while it sounds like it was harder than you thought it would be, it also sounds like it's still kind of doable because you're on the other side of the three months now. And is stuff cooking or how many of those things have you implemented? The growth. The growth ideas?

Guest: Yeah, quite a bit. I mean, just, you know, the subject line grabber is we had record months as far back as I could go in the company history, but record months back to back the last two months. Yeah. Grow the top line. And obviously with that, we see margin increase. So we've been able to do it is, you know, the short and sweet version of it. But, yeah, And I think the first three months is going to make or break you. Right. There were plenty of days on the drive home where I'm like, oh, damn. Like, I don't know what I did. Like, I used to sit comfortably in an office computer and do some spreadsheets, and so, yeah, that looks great. Let's do that. And now I'm dealing with, you know, you're dealing with real people problems, dealing with a guy going through divorce. And it's not like it's going through divorce. I'll figure it out. It's like he's going through a divorce, has no money, he has kids like daycare, you know, you're going through and you're neck and neck with them. You know, you're arm in arm with them and you're dealing with people and not college educated people. You're not dealing with figured out people. You know, you got to guide them, right? You got to be a big brother or kind of a parent. These people as well as maintain simultaneously customer relations. Right? You're a new guy, these customers don't know you. And I bought a business from a guy who was in it for his entire life and they knew him and he grew up in here. I did not. I grew up about an hour away. So you have to be able to get through the first three months and if you can, there should be light at the end of the tunnel. And we were able to capture that and kind of expand upon it. But yeah, we finally started tackling some of our list and the things we had, we're seeing the fruit of.

[25:23] Host: That's amazing. And just before we get off this first three months thing and all those problems, some of the things you described, just like people's personal lives interfering people have complicated personal lives. That doesn't seem like. That seems like something that could just be chronic. Like people are always going to have problems in their personal lives. The things that you've sorted out now that you're on the other side of those, those hard first three months, are they kind of permanently fixed or are they always just going to. There's always going to be some of them there. There's always going to be some punches in the face or can you come in, suffer for three months, but fix it and then now you have a finely tuned machine.

Guest: You know, I look at myself when you ask that question. My life isn't perfect. I have issues in my life on an ongoing basis. Right. Like I think we all can relate to. So I think it'd be foolish for me to say we put that to bed. That solidified that people are problem free now. And problems could BE they're constantly 10 minutes late because they have to take their daughter to school. Or it could be they don't show up, you know, half the time. Or it could be, you know, it's hot, right? We live in Orlando. It's hot outside and they're getting lazier because, you know, the heat and they got to re acclimate. Or it could be financial. They have new burdens. You know, one of my employees had a baby and that comes with A whole host of new issues, especially financially. You have to deal with all that. And I'm not even talking performance. I mean, think about all the things I talked about. I'm not talking about, man, you did a great job today or man, you went a little slow today. We need to pick it up. So I would be foolish to think that all those problems are solved. What I think we've done is they know how to deal with me better and I know how to deal with them better. They know what to expect from me on a daily basis and I make it clear what I expect from them on a daily basis. And we try to stay in that. One of my things I like to tell them and others I can handle good news, I handle bad news. I do not like surprises and I cannot handle surprises.

[27:18] Host: Yeah.

Guest: So just give it to me raw and uncut and let me figure it out. And you know, that's seemed to work so far. And we've also adjusted the org chart a little bit where there is now a layer in between most of the time. And that's helped and allowed me to focus on growth and allowed me to focus on employee care and customer retention and customer growth and employee morale.

Host: Yeah, that's great. So I don't want to try to distill this and to be over simplistic, but when you hear about this interest in people buying a small company, it sounds like you are an example of that this is possible. And now it sounds like you have a pretty strong base for good growth. But it's harder than you think. Is that a fair encapsulation? But it is possible. This isn't a fantasy. It can really be done.

Guest: It can be done and it's great. Like I wouldn't, you know, all those things I just talked about, which suck. Right. You know, dealing with all that stuff sucks. That's not. We don't wake up wanting to deal with those things. Yeah, but man, I, you know, I wouldn't go back. I think it's awesome. I get to have a stamp on where our business goes. I get to have a stamp on, you know, seeing my employees succeed, seeing customers happy. And you know, at the end of the day I get to be rewarded as well, financially as well, you know, specifically. So I wouldn't change it, you know, for anything. It is possible. I do think, you know, the NBA guys and the PE guys that listen are smarter than me. They can work on Excel sheet better than me, their IQs are bigger than mine. I do think they struggle with understanding. Not every Deal is perfect. And I do think they should spend more time on people management, and I say they. And that's a big classification, obviously. But there's more to a business and a deal than the multiples, the Ebitdas, the margins. It is a people business, and I feel like if you can understand that, you can have success.

Host: Yeah, great. Well put. Well, before I let you go, I want to hear about one other optimization that you just recently tweeted about, which I found very fascinating. That go to the unit economics of your business, which you're being humble, but anybody who even knows what unit economics are knows their way around Excel. I know that you know how to run the numbers. So tell me, walk me through what you tweeted and this giant discovery you had, discovery you had and what you've done to rectify it.

[30:17] Guest: When I was finally able to take the water hose out of my mouth and look up at our business, our margins just weren't what I thought they should be. Our cost of labor was really high. I understood that obviously from a P and L perspective and a financial perspective, but some common sense just took over. You know, I'd go look at a property and, you know, if I'm doing your house and your neighbor's house, they're the exact same size, they take the exact same time to do. But we're charging you 200 and we're charging your neighbor 100. And the 200 is not over the moon expensive. So I know that's okay, but why is this only 100? And I'm going to jump back in my story about how the previous seller, or excuse me, the previous owner is great community guy. Maybe your neighbor was his baseball coach growing up. You know, maybe that was his buddy, his kids, you know, teacher or his kid's friend. And that caused for emotion to play into pricing as well as all, you know, all revenue is not good revenue to me. Some other people may like it, right? They may want to just grow top line. And I think a lot of people in this industry get caught on just taking revenue when it's available. And we were able to decipher that and go through literally property by property by doing some work. And my guys got mad at me because I'm making them essentially clock in and clock out of every property.

Host: How dare you?

Guest: Yeah, man, that was a challenge in itself. The first day, it's funny. Quick story. The first day I got the sheets back, it was like I got there at 9. I left at 9:15. I got to the next one at 9:15. I left at 9:30. And it's like, so did you fly there or how did you leave one at 9:15? How's that possible? So had to go through that, obviously. But yeah, man, we looked the unit economics were awful. We found almost a third of our customers were negative margin.

Host: So you're losing money on fully a third of your accounts.

Guest: I'm paying them to service their property essentially by providing labor and all that. And this is after, and I think this is important. I knew something was off, so I changed up all the routes. We had anywhere between six to eight trucks going out on the road every single day. I changed the routes up to get more density. I changed the crew up, I leveled out the wages to see if that mattered. And at the end of the day, a bad account's a bad account and no matter what you do, it's still a bad account. Yeah. So, you know, we realized that and unfortunately to customers, we had to drop them. And I, you know, this morning I took a call from one that we dropped. We are not raising your price. We're just dropping you because it's not worth the conversation. We tell you you're paying 50% of what you should be paying, so you need to double your price. And we took another third of our customers and we did raise their price anywhere from 5 to 20%. And we have not had much kickback on that on the ones we permanently drop. You know, we've had a handful come back and agree and say, name my price and I'll do it. Which is just speaks to the quality of service that my guys provide. And there was one neighborhood which this got a lot of traction. One neighborhood. We have 17 homes in there. They're vastly underpriced. And I told all of them, one guy kind of led their group and I said, everyone needs to go up 25% across the board or else we can't service. And 15 out of 17 agreed. And it's like a think about what it's going to do to our margins over the next couple months. Going from even if it's negative 5 to plus 15%. Think about that. That's insane for our business.

[34:11] Host: That's insane. That's a huge amount of new cash flow.

Guest: Exactly. Yep. Top line will go down, obviously, because we got rid of a lot of customers, but our margins will increase. And now we're able to focus on, you know, going after better margin customers. But think about this. Business has been in business for almost 45, just over 45 years actually. And you know, they were doing accounts that did not make money. And you know, that's part of small business. Right. That happens in every business. So every business is not perfect. But if you can get through the weeds and understand it and do something like, you know, unit economics test and figure it out, that's real low hanging fruit, you know, that's the low hanging fruit of turning that faucet off and now gaining margin immediately. And it's had, you know, this is our first week of doing it, of searching our new routes. Our guys are happier because we're doing less accounts, we're spending more time there. I'm happier because now they're spending more time there, but I'm making more money and I've accounted for the time that they're spending there. And honestly, the bottom third of those margin customers now, and I say that they're not bottom third of revenue. Bottom third of margin.

Host: Yeah.

Guest: Those guys were pain in the asses. They're holding my guys up every trip because, you know, the grass is a centimeter higher than what it should be. They're calling the office constantly. They constantly went face to face with me.

Host: So you noticed there was a correlation between the folks who got a great deal or not paying very much and your worst customers anyway.

Guest: Your worst behaved customers, generally speaking. There were some. There was a bucket. I would put them in two buckets. One bucket was, they're all underpriced. Right? Right. One bucket, they're just underpriced. Right. And I would feel like a dick going to you saying, you need to pay me double what you've been paying me when there are guys, you know, that have a single truck and their buddy that will service that property for that price. But I have a full professional crew, you know, the multiple mowers, the four guys, all the equipment. That's not for your property.

[36:19] Host: Yeah.

Guest: So that was half those customers. The other half were time suckers. And what I mean by that is they're constantly calling, they're texting, they're wanting something, they're wanting stuff for free. If sprinkler head breaks and you charge them 10 bucks for it, they're going to argue that 10 bucks and it frees up a lot of headspace by getting rid of them. Was a correlation to that?

Host: Yeah. That's great. Yeah. I mean, it just. I feel like I have to learn and relearn this lesson that, you know, charge more and get better clients. It's so counterintuitive.

Guest: Yeah. You know, and when I was going through this you know, I was nervous, right? And I don't know if I illustrated this well on Twitter or not, but, you know, hey, man, I gave away a big chunk of. Voluntarily kicked off a big chunk of revenue, right?

Host: Yeah. Yeah.

Guest: And that's scary, right? Scary. And when I was going through that process, we landed a very large HOA customer with 40% margins if things go well, 34, 35 if, you know, normal stuff breaks or whatever. But that 35 to 40% margin, and I was like, okay, this is possible. You can charge quality pricing and perform quality work and, you know, get paid, you know, good margins. So I shouldn't be scared of dropping these people because they're not good clients to have anyway. So I'm losing money.

Host: You just run the numbers. You're super tight. You make sure that the punch in and punch out times are accurate from your crew, and you're just very confident that you're actually losing money on those jobs. Then there shouldn't be any doubt at all. In fact, the sooner you do it, the better. But I can understand how it's scary. No matter how certain you feel it would be scary to walk away from revenue, which is probably precisely why the previous owner got into the fix in the first place. It's hard to say no to revenue.

Guest: That's right. And I'll give my investor, JD Ross, who's an unbelievable partner to have told me a month prior, you need to drop these customers or you need to just raise triple their price and see what happens. I was like, oh, man. Our math is saying that's the right thing to do. Our common sense says that's the right thing to do. You're looking at it fresh, saying we should do it. And, you know, just in me, I'm like, no, I need to pencil this out one more time. I need to make sure I need it. It's the right thing to do. When you remove all obstacles to it, you have to do it, and it's going to make our company better for sure.

Host: Well, Mike, despite the 90 days of being punched in the face, where I'm sitting is I'm seeing a guy who didn't even know this space existed eight months ago, now owns a business. Three months of pain. I'm not saying it's not painful anymore, but three months of real pain got through that, optimized the crap out of what you had. And now you do seem like you're kind of off to the races. Not saying it's easy, but it seems like you really have a trajectory in front of you. So we're much more focused. You're going to give people, you know, you're going to give people a bad example. Everyone's going to want to come do this.

[39:30] Guest: Now, listen, man, I hope so, man. If it works, it's the American dream, right? I grew up, you know, I don't know how it is where you live, but in, like, elementary schools where I live, you know, they do like canned good rate, canned good raises and gift. I was one of those families receiving it, right?

Host: Yeah.

Guest: So the fact that I was the first person in my family to go to college, I can say I'm a business owner and I'm impacting other people's financial situations. Dude, that's a home run, man.

Host: Yeah.

Guest: You know, if you can find a good business or make a good business and, you know, feed other people's families, you know, I encourage everyone to do it. And I think there are a lot of older generations looking for, you know, resolutions to their issues of, you know, what to do next. And, you know, I encourage everyone to do it. You know, there's obviously some caveats, but, man, it's awesome.

Host: Well, the other thing, and not to be too flattering or too overly positive, but the other thing about your story is that, like, the American dream can also just be having your own business and starting that business from scratch, which is also amazing and great. But your entire story so far is only eight months long. I mean, eight months from a twinkle in your eye to where you are now. Do I have that chronology right?

Guest: Roughly. Yeah, roughly.

Host: So that's a very accelerated timeline to go from zero to business owner. So I think that's also an important part of the story compared to starting. If you had started this landscaping business

Guest: from scratch or if I did a search fund for two years.

Host: Yeah, right. Or the people who are doing kind of slightly, you know, search funds bigger, looking for bigger deals and being more choosy, who may never pull the trigger or spend years at it.

Guest: That's right.

Host: Well, there's more to talk about, Mike, but I'm going to end it there and hope to have you back on plug for next time. Would be that you raised money on Twitter, which is a story in and of itself. Raised money for this deal on Twitter, but we'll save that for next time. Thanks a lot for sharing your story, man.

Guest: This was.

Host: It's a great story. And yeah. You really transparent and appreciate all that.

Guest: Absolutely, man. I really appreciate you having me on it. Thanks for all the kind words. Cool.

Host: All right. Till next time. Thanks, Mike.

Guest: Sam.