Host: Today is one of those painful stories of buying then losing a business. Philip Blackett bought a Cemetery Services business in the fall of 2019. Seemed like a great business B2B recurring revenue super niche Cemetery Services entrenched in its clients businesses and a big fat pipeline of sales opportunities to boot. Philip was expecting to double revenue in his first year of ownership and things were going well for the first three months or so. But then Covid hits. You'd think that would strengthen his particular business, ugly as it is to say. Instead, it precipitates a slow motion death spiral that consumes Philip over the next three plus years as he valiantly tries to keep things afloat, including taking a second job moonlighting as a manager at a Chick Fil A. He finally and officially shut the business down two months ago. Today, as I read this, this is his story. I said it in the interview and I'll say it again here. Thank you Philip for sharing it with us. Here he is, Philip Blackett, former owner of Cemetery Services. Quick announcement everyone. I'm really excited about this. We have a series of webinars coming up that are fantastic tactical learning opportunities. The first of the series is a financial modeling deep dive. Modeling is probably the most technical part of putting your deal together and it's daunting to those of you without a finance background. So come learn how to model a self funded SBA financed search deal. As you know, these are the types of deals that are most common among Acquiring Minds guests. And we're going to model a real SBA acquisition. It's actually one you've heard the story of on Acquiring Minds. This is John Hubbard's deal to buy Express trailers, the trailer fabricator in Tampa. Now, in addition to the content, you'll also be given access to the model itself so that you can learn it with us and then use it in your own deal. The webinar is tomorrow, Friday, January 12, noon Eastern. The link is in the show Notes. So open your podcast app, look for where it says register for the webinar. Do so and then join us tomorrow. And if you can't make it tomorrow Friday for the live webinar, make sure to register anyway so that you can get access to the recording later. I'm partnering with Sam Rossati on these webinars. You'll recognize that name. Sam runs a boot camp for self funded searchers. He's been on the podcast. He's an investor in search deals. He has his own Holdco. He's a founder of SM Bash. Needless to say, Sam knows modeling cold and maybe most importantly, he's a great teacher of the material, having taught it so many times. So come learn how to model a self funded search deal tomorrow Friday, January 12th at noon Eastern Register in the show Notes. 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. I want to share an update on the Acquisition Lab. As you know, the Lab is a highly vetted cohort based accelerator and community for people serious about buying a business. After going through the Lab's month long intensive, you have ongoing access to almost daily Q and A sessions with advisors, regular live deal reviews with Walker Deibel, author of Buy, then build potential deal team introductions, and a very active Slack group with other searchers on the path. Well, the update is that the Lab recently passed 60 businesses acquired and for well over $100 million in aggregate transaction value. Also, all members now enjoy lifetime access to the Lab because when you buy a business, it's often just the first of many and the Lab wants to support you in every deal, not just your first. Lastly, check out my recent interview with Shane Ursum, episode 105. Shane acquired a business with over $1 million in EBITDA in just six months and he attributes a lot of his deal success to what he learned in the lab. Check out acquisitionlab.com or email the lab's director, Chelsea Wood Chelseie then build.com Philip Blackett welcome to Acquiring Minds.

[4:47] Guest: Thank you so much. Happy to be here.

Host: Philip, you bought a business just before COVID and two months ago. So just two months ago you officially closed it down after a long struggle with it. And we're going to hear that story today. But before I go any further, I want to thank you for being willing to come on and share the story. What is, I'm sure an uncomfortable, painful even experience to recount for us. But these difficult stories, as you probably know, are the most educational of all. So people looking to buy a business benefit a ton from hearing them. So thank you. Before we get into the story itself though, Philip, why don't you share with us how you're feeling? This is really pretty fresh just two months ago.

Guest: Yeah, I. I definitely appreciate it. Well, I mean, honestly like tomorrow is like literally like the. I. I guess it's weird to say like the two month anniversary of shutting your business down. Like it's not really something you really commemorate or like, hey, we're going to have a celebration like, you're not looking for Hallmark cards for, like, hey, anniversary, shutting down your business for a little. You should grab this for yourself. And not to mention the fact that yesterday was my birthday, right. I turned 39. And I think at this point, when you get to a certain age, and I think I've started to reach it, the birthdays are less about, like, birthday parties and, like, celebrations at the bar and stuff like that. And more like reflections is like, okay, how did this past year go? And some reflections are better than others, and this one was a lot more sobering compared to like, 38 or 37. So. But overall, I feel. I feel. I feel good.

[6:32] Host: You feel good. Well, what can you give us an example or two of. Of reflections from yesterday?

Guest: So I think what comes off top of mind for me was, you know, about four or five years ago, I was really looking to buy a business, and I looked at that as pretty much the gateway for me for a better life at that point. Four or five years ago, you know, I finished grad school, was looking to do something. I had a family. They were two years old at the time, my twin daughters and my wife. And you were kind of looking for something like that stability factor from your end. And, you know, for me, like, it wasn't so much as far as, like, finding the right corporate job and consulting or investment banking or private equity as a lot of people who I graduated with would tend to go with, but it was one that was just like this whole essence of finding a business that you felt like you can grow and it would help you grow as well. And I really thought that that was like, my ticket, like, to, like, retirement. It's like my forever meal ticket. Take care of my kids, hopefully, like, bring my. My wife back home from work. And that's where, like, a lot of these things that many people in my position, or at least what they were aspiring to do was look into, and, you know, just in reflection, just seeing how that didn't turn out the way I was hoping to. I mean, that first month, October, last month, was really tough for me. Like, a lot of days at the house, just kind of like thinking, what's next? You're trying to pick up the pieces. You're seeing other people do things. You thought you'd be a little bit further along. A lot of this comparison anxiety, like, worry, some sort of stuff, and then just concern as far as, like, you know, am I going to be able to take care of my family the way I was anticipating now as I'm trying to Figure out the next chapter, which I didn't anticipate before, but I think now like two months removed now as it will be officially tomorrow. But thinking about it in the birthday was more so to thought of more so what have I learned through this experience of four years? And we can get into it, but just the thought of like, you know, when you buy your first business, going into a pandemic that you did not anticipate beforehand, it's quite a roller coaster ride. And I think for me, it was just one to say, okay, what did I learn from that experience? Which honestly. Well, like a lot of people, it used to kind of tick me off when people said that when he's like, oh, I had, I. I lost the election, but I learned a lot. Or I got fired from a job, but I learned a lot. And it almost seemed like it was just like a common catch all, like, like, dare I say cop out phrase. But I think it was my turn to think about saying that it was more like, no, seriously, like, you ran a business for four years and it was successful and you navigated a pandemic and its post effects for four years. It did not go the way you want it to, but I think it was probably one of the most valuable work experiences I can ever draw on. And it clearly open up a whole new way of looking at, you know, like I said, I'm at 39, you know, like retirement age of 65. That's another 26 years from now, God willing. So when you're thinking about that sort of experience you already have under your belt, and you're saying to yourself, okay, what do I want to do next? And you still want to get into business ownership, you still want to buy another business, you still want to, you know, get back on the saddle and start riding again. When most people would just clam up, say, look, that's it. I had it. I'll just go on one of these job searches, you know, and just retire from that sort of entrepreneurship dream. Yeah, some people could think that's crazy, but I think this was also more clarifying for me about where, like, my heart really is at and where I could see myself really adding a lot of value, not just for myself and my family, but, you know, for a lot of people going forward. And so wanting to share those lessons and not keep that to myself, that was a huge thing that really prompted me to want to talk to you today.

[10:51] Host: Great. That was great. Philip, thank you for, for sharing the reflections. And as you said, you did learn a ton and there is value to that personally, to you, but certainly to all of us. So we're going to get into some of those concrete learnings, or they'll probably just surface as we go on their own.

Guest: But.

Host: So let's turn to actually what happened here, Philip. So you had said about four or five years ago you really wanted to buy business. So take us back to that time or even before. How did you get the notion to go on that crazy adventure?

Guest: Yeah, so it actually started, you know, it's 2023 right now. the time we're recording it, it actually started seven years ago. So I, I, I finished business school. I graduated the day after graduation. I got married. So now I'm, in a sense, it's like, okay, you're now into family life. What do you want to do? And so at that point, I had signed on to work with a, with a group of investors that would help me, along with some other searchers of mine in my cohort, to look for a business to buy and run a CEO. And so I was working out of Boston, for that matter, and looking at a number of different businesses across the country. I was pretty vast, I was pretty industry agnostic, was just trying to find the right fit that would complement the past experiences and education. I had a telltale sign for me, that really was a driving point for me going forward in that search was I mentioned that I got married the day after I graduated from business school. Well, what also happened was that first year of marriage, we got pregnant. And we didn't just get pregnant with one kid, we got pregnant with two twins. And so the thought that came out of my mind, and bear in mind, my wife was more surprised than I was because the truth was, I actually prayed for twins. But she didn't know that until she found out. And then she was upset at me for good reason afterwards. But anyways, that's a whole nother story. But essentially what happened, Will, was we were having a meal at one of our favorite places, Shake Shack, at the time. And we had an agreement that as I was searching for a business to buy, we were on the same page. Like, wherever that business is, we would relocate from Boston to wherever it's going to be at, and we would just set up shop there, you know, just us two and maybe a kid, too. You know, she would move on from her job and do something different. You know, we're putting all our eggs in this one basket as far as this business to buy. When we had twins, though, when, when two, two girls are are basically cooking in mommy's oven right now. At the time, that conversation went a lot different because at that point it was just like, okay, think about double the diapers, double the formula, double the clothes. All that, like two kids for one mother to take on and a new father too. Let alone. As opposed to one that changed the story where we basically say, hey, do we really want to go down this route and go wherever this new business takes us or doesn't make sense for us to say, hey, we're going to be new parents. We've never done this before. Would it make sense for us to stay local and find a business that's within 30 minutes, 45 minutes of where we lived in Boston area that would allow my wife to keep her job? And so she would be like that rock of stability and that sort with that stable, good paying job with benefits and that sort of thing. And I go about this dream of trying to conquer the world with this business to buy. And so that's where we went. We decided to make that, that compromise which clearly cut my prospects of businesses to buy from huge to like very, very small.

[15:04] Host: Yeah.

Guest: But long story short, when we did that, I came across a company that was definitely atypical from what you would typically look for in businesses to buy. This was wasn't your typical window washing or septic tank cleaning type of company or landscape and that sort of thing. It was like a company that like operated and managed cemeteries.

Host: Cemeteries.

Guest: Right. Like just the thought of it is like, okay, there's a business that focuses on operating, managing cemeteries. Like 20 plus cemeteries.

Host: Yeah. Wow.

Guest: Right in the New England region. It was definitely something that was novel. And on top of that, it was within that 30 minute to 45 minute radius of where we lived. So basically at that time I learned more about the company, learned more about the owner, thought this was a good fit. The investors and I at the time didn't see eye to eye. The business was a little bit small relative to what they were looking for at that point. We had came to a standstill when it came to negotiations at that point. And I basically ran out of time. I went through all my prospects. The investors didn't think it was a good deal. They didn't want to move forward with it. I didn't have any other deals to present them at that time because I went through all my area local businesses very quickly.

Host: And Philip, let me, let me ask the. So you were working with an accelerator, with search fund accelerator sfa, which is one of the well known and original Ones and I believe based in Boston at this time or.

Guest: Absolutely.

Host: Okay, so you were working with search fund accelerator, as known as SFA in Boston. And the way that accelerator and many like it work is that it's essentially like a traditional search fund. The economics are similar to a traditional search fund. And the kind of investors that are part of that are the kind of people who work for buy own the accelerator are your investors. And you're bringing them the deals, and they need to give the deals thumbs up or thumbs down. And also similar to traditional search fund is this. This. You've. Your search has been funded, but there's a Runway to it. And if you reach the end of that Runway without having bought a business, that's the end of your search and you go off and do something else. And so that's where you, you were. And again, with a traditional search fund, as with sfa, you're going to want to buy a bigger business. The expectation is that you're going to buy a business of a certain size and your investors are not going to look favorably on a business that isn't of that size. Sounds like this one was not. And you are at the end of the Runway. Is that all accurate context?

Guest: Yeah, I think you hit it on the nail. Well, it's just, you know, I love the guys over at search front accelerator. They're doing great things now, expanding, they're doing multiple cohorts and, and taken on multiple businesses, have good relationships with many of the team members there. So I definitely respect where they were coming from. You know, I definitely, you know, signed on wanting to accomplish a certain type of business. It was just that when our circumstances changed lifewise, as far as, like, my wife and I, we had to make a tough decision because we knew that there were consequences either way as far as what that would mean for the search, what that would mean for us as far as a family. And so it really was about, you know, I just had to make a decision that ultimately I need to put my family first on this one. Beyond, you know, my dream of having this mega business that's like, like eight figures, you know, in sales, like everywhere and that sort. So, yeah, like, you know, my time ran out. We didn't move forward with that business. I had to find something else to do because March 2017, my twins were born, Sophia and Elizabeth. And so I had done a couple jobs afterwards. I basically hadn't really found, like, the right thing. That was really like my bread and butter, like, this is it, right? And I think, like, I'VE been involved with, like, education. I've been involved with, like, finance and that sort afterwards. And it just. It. What was going on just didn't hit. It's like, okay, this is, like, the long term. This is where I'm going to plant my flag. I'm a build something substantial, go ride the distance until retirement, that sort of thing. So at that time, when I was in finance, there was this huge gas explosion that happened in, you know, the greater Boston area. And I thought about this business, this cemetery business. I thought about the owner because we had been friends during the time. And so I reached out to him, checked on him, his family, his business, his office, and said, hey, I heard about this gas explosion happening in your neighborhood. Are you okay? He responded, yeah, we're. We're fine. Philip, thanks for thinking of me. When all this kind of settles down, why don't you and I get together for breakfast or something like that and just catch up? So I didn't think much of it outside of just catching up with an old friend. At the time, I was in, like, sales within finance, maybe with this entrepreneur, this small business owner. Maybe I could pitch some investment products for his portfolio. I don't know. So we met up and we had breakfast, and we talked, and I thought I was going to, like, learn more about him, maybe pitch him on what I was offering. He later pitched me on working with him in the business on the inside. So at that point, for me, I. I liked the finance job I was in, but not as much as far as sticking with it compared to working inside this novel, unique business that manages cemeteries. So I basically say, okay, I'll take. I'll take this on. I'll come in and work as your business manager. And that story.

[20:52] Host: And the idea was that you would also then be kind of being primed to buy it.

Guest: Absolutely. Because we were friends at the time. We had tried to work this deal beforehand, and the thought was, you know, I'd gotten the accelerator's blessing to pursue this again, like, years later. And I was like, okay, well, let's see if we can make this work.

[21:14] Host: As you graduate into being a business owner, you are going to want to optimize your taxes like never before. Because for business owners, effective tax strategy easily amounts to thousands of dollars per year in savings. Steed is a tax firm that creates personalized tax strategies for entrepreneurs and business owners, including searchers and acquisition entrepreneurs. Sted has specialists on staff who understand the challenges you face buying a business and can maximize tax benefits during the acquisition process. They're running an exclusive offer for Acquiring Minds listeners, a free tax strategy session. There's a link in the Show Notes to book the session directly. So try out Steed Risk Free and see how their CPAs can deliver immediate value. You can learn more@steed strategy.com or click that link in the show notes to book your free tax strategy session today.

Guest: So while I was operating from the inside as a business manager, I was seeing a lot of the ins and outs. Like, I definitely see what's under the hood of this car. Much more so than a searcher from the outside. Yeah, that's going off of just like financial statements, you know, sanitized meetings and that sort over the phone. And that's where like, I'm really getting a good sense of what's going on.

Host: Yeah.

Guest: And I still wanted to buy it. I was that interested.

Host: So he obviously hadn't found another buyer who's interested in the time since you talked to him the first round.

Guest: Right. And I think the other part of it too. Well, was just there was a huge emphasis on relationship, you know, I think with any business owner. And I echo this now after having been a small business owner before and hope to be one again in the near future, the thought is, is that when you're thinking about something that you put your blood, sweat and tears in over many, many years to support not just your family, because you're not just looking at just for yourself, but for the livelihood of your employees and team members and providing great service for your customers and also providing, you know, livelihood and continue business ongoing continuity for your vendors and suppliers. Like, you're part of this huge ecosystem. You don't want to just walk away from that with just anybody running it. Like, there's a huge trust factor that has to come into play. You can't just necessarily, unless you just didn't care. You can't just necessarily just leave that legacy to somebody that you didn't feel like would do their best to do right by you. And so I felt like that was a huge factor and me wanted to honor him and do right by him. And so in September that year when we bought it, we were both on the same page. Like, we were anticipating that we're going to grow this business significantly within the first 12 months. We had a good sense of where we're going to grow from here. And then 2020 happened and this little world event called Covet happened. And that's where a lot of things change from there.

[24:26] Host: Well, let me. Let's. Before we jump into your owner operator phase. So you, you, what was it like working for these six months in the business? You were, you were learning the business, you were, you were liking what you were seeing because ultimately you did buy the business. Talk to us more about what that was like. You know, I think obviously really de risks the acquisition for you because as you said, you get to really see under the hood. You get to know the business intimately, the staff gets to know you. I mean, it's such a great way to de risk an acquisition. I mean, you really, I mean, so much of the risk of buying a business is not really knowing what you're going to get. People will say, like, you know, the business I bought is not actually the business I thought I bought. It's so different once you actually get in here and you get a, you get a preview and then there's not even a, there's not even an obligation that you buy. So if you, if you don't like what you see, you can walk away. So anyway, talk to us more about that. This is such an interesting wrinkle to your story.

Guest: Yeah, I think you hit on the right point. Well, it's about as close as risk free as you can get because I think at that same time it's like extended due diligence, meaning, like, it's a

Host: good way to put it.

Guest: You know, every day you're coming to work, you're helping that business further its goals as far as growth and continuing operations. You're interacting with the team, they're getting to know you on a first name basis. You're getting to know them and what they're going through and what they're doing. You're getting to see what it's like from a business manager standpoint. Like, I'm seeing like what the revenue truly is looking like. I'm seeing where the customers are coming from. I'm seeing where the expenses have to get taken care of and that sort of thing. I'm interacting with the current owner on where he wants us to go and where it's gone up to this point. So you have a really good sense of where this business is and where it's trying to go, while at the same time just further layering on trust with that owner so that he can see, okay, is Philip the right person? And I'm starting to see on my end, is this business the right business for me? Yeah, like you said before, well, like, if it, if things didn't work out, the owner could have said, you know what, Philip, I don't Think this is the right fit. I appreciate you taking the time to be with me. I know that means a lot, especially you leaving your previous job to do it. I'm going to go ahead and let you go.

Host: Yeah.

Guest: And I would just, I mean, look, I was employed by him, so like, I can't really push that when I had to go move elsewhere or vice versa because we were thinking about this as far as doing a deal together. If things that came out where you know, from what I was seeing from the inside was really concerning to me, that didn't feel like this really made sense, then I would have a similar conversation with the owner and say, you know what? I really like you and I appreciate the opportunity for me to get to know you from the inside as long along with this business. However, at this point, I don't see like this is the right business for me. And so I don't want to take on any further part of your time, let alone staying on your payroll at that point too. If this doesn't work, I will walk away and then allow you to continue going on with your business and that sort. So I think that was a good amount of trust building as well as far as that relationship. And quite honestly, when I look at, you know, the next business I want to acquire, I may not necessarily want to be on someone's payroll to determine if this business is the right fit or not. But I would look for a ways to be able to engender myself, like connect with the owner in a much better way than just your typical like fly by night, send a random email, spam and that sort of thing from some person you never met. And that's like recognizing the relationship. But also if I was in a position that I could help that business, maybe even if not an employee, maybe as a contractor, maybe as a consultant, but having a further like having your foot in the door to get a better gauge of what's happening, participate in helping that business. Which would then mean like, look, I'm helping the owner get more what he or she wants. There may be a time later on that they say, Philip, like, compared to everyone else as far as the other male and attention I'm getting, I feel more connected working with you. Would you be open to taking over my business or being part owner of this business? Because I trust you. That's that, that's one of those like takeaways I got from these past four years that I think a lot of other people may not have if they didn't have that type sort of Experience. But yeah, I think it was definitely a much helpful period leading up to the acquisition.

[29:18] Host: Well, the, the question is, Philip, like, how you, is there a way that a searcher out there, a searcher listening can make this happen? You know, so this opportunity came to you in this very kind of roundabout way, kind of, kind of unexpected way. And there was years of history. You, you first met this owner, whatever it was, a year, a couple years prior. So, so, you know, the stars aligned. So I wonder though, if you're a searcher listening to this and, and you're like, yeah, I'd love to work in a business for six months and only then decide if I'm going to buy it first. You got to find a. I mean, it's hard enough to even find a business you like. You found the cemetery business that you really liked. You just didn't buy it because the SFA guys didn't want you to. SFA folks didn't want you to. And then you gotta say to the owner, well, owner, don't sell it to anybody else. Let me work in the business for six months to see if I'm the right person to buy it and then let's negotiate. You know what I mean? It's like, it's great how it worked out for you, but it seems like it would be hard to architect it from the, you know, you know, from some, from a standstill, from somebody just like who's out there searching right now sort of thing.

[30:35] Guest: Yeah, I totally agree with you, Will. I think it's definitely a novel, more unique sort of experience. Yeah, the other thing I'm thinking of too, just putting, you know, the same sort of hat you have on, on this one. You're thinking about it from a searcher standpoint. Like the key word for you is volume, right? You know, you got to get a number of outreaches out there. You got to get a number of emails or LinkedIn invites or letters or whatever the medium you are using to contact these owners. You're not going off of just one person because more than likely the odds are that person's gonna say, buzz off. No, get away from me. I've heard like from 10 other of you, I'm not selling, I'm not interested. So you gotta put the volume to get that sort of, you know, outreach out there on a day to day basis. What I would say on top of that would be, yeah, like as you're doing that volume, you know, the quantity, you may look at someone or some business that has that sort of quality about Them that as you're starting to get to know him or her, as you're starting to better understand that business, maybe there's some things that you can do to further understand that business beyond just requesting the financial statements. Right. Beyond just looking at somebody's website and just doing like an interview over like video conferencing, Zoom or Microsoft Teams or anything that sort of. It could be something where it's like, if I have experience in that industry, or maybe I have an education that can complement what they're doing. I think a good question may come off to the owners, like, look, you know, what are the things you're. You're currently struggling with in this year, and what is your plan to navigate through that? And how could you bring on help to help you with that? How could I be of help to you? There might be the case. It might not be the case for every business you reach out to. I doubt it. But there might be one or two or a few that there's something about it that you can connect with with the owner and be able to add some value outside of just saying, hey, I'm another person looking to buy your business.

Host: Yeah.

Guest: Because that's going to help help you stand out more from your own relative competition. And it's going to also make that owner feel like, okay, this person really cares about me in this business. And going, well, even if this doesn't end up as a deal for us, I've now benefited from this interaction and I'm more likely to think of this person later on, which might have been the case with me where things didn't work out the first time around. But hopefully we left. We left things in a good place that later on the owner did think about me later on that say, hey, maybe we could try this again.

[33:29] Host: Yeah. Yeah, great. Well, let's hear about the business, Philip. So before pre transaction, you're in the business. What do you learn about it? Tell us. Tell us about it. It's actually called Cemetery Services or.

Guest: Yep.

Host: So the name of the. It provides cemetery services. The name of the business is Cemetery Services. What else can you tell about us? Tell us about it. What does it do exactly? Head count numbers, etc. Please.

Guest: Yeah, so I. I think, you know, it's based in the Boston area, or it was. And you know, at that point, its main focus was the main engine, management, the operation of cemeteries. Over 20 cemeteries at the time, where it's doing everything from actually doing burials as far as, like putting people in the ground. Right. Like preparing for it. And then after the body's in the ground, you backfill it, cover it and that sort of thing. Landscaping, cutting the grass, weed whacking, trimming, fall cleanup with leaves, spring cleanup with leaves and that sort. So you're taking care of that sort of thing. Records management. So that's a lot of records of people that have deceased and next of kin that you're trying to keep track of. Really what came about. This, as far as the business model Will, was a lot of cemeteries were one offs. Meaning, you know, each cemetery would maintain all the people to maintain it, to operate it, to keep the records that will have their own team to do that. Over time, though, it got to a point where it wasn't as, for lack of better word, profitable to try to do it all in house yourself, right. As costs were going up, you know, labor, equipment, all that sort of thing, and you could only charge so much for a burial without seeming obnoxious, right. For lack of a better word, it became increasingly more difficult to do it all on your own. And so the business model here was we would have the people to do the bearing, the landscape and the records management. We'll travel to your cemetery as needed. So instead of just having people on the clock in house, whether there's a burial or not, eating up on your payroll, right, Your benefits and that sort of thing, now it's like you can streamline that. We could take that on. So when you do have a barrel, we'll send our people to your cemetery to do it. When you need to get your grass cut, we'll send our people there. And so at the same time now it's like if you don't have any activity that day, we're probably going to be at another cemetery working, you know. And if you have 20 plus cemeteries, then that means every day you're bound to have something to do somebody's grass to cut somebody's loved one to bury, someone's manage records to manage and update and that sort. So basically by doing that, you're helping each cemetery, especially if they were like, you know, controlled by church of that sort, better manage themselves financially so they can sustain themselves. Not necessarily to be profitable, but in this case it's a. It's a blessing just to break even, you know, and if we can help do that and then they take care of us as far as like compensating for our services. That was a business model that saw like a lot of potential that could go beyond just New England, but maybe something that could be franchise and that was part of the thinking I had was like, okay, maybe this is something that could grow across the country, maybe beyond just regionally.

[37:09] Host: And so is, is that to say that it's not a model that exists? It's not like every market has cemetery services management, outsourced cemetery services management. This was kind of a novelty in

Guest: Boston to some degree. I think when I did my initial research, there was something about the New England region that there's a couple of big players that are into cemeter and funeral homes down south that have a broad reach across the country, but they couldn't necessarily have that same reach in New England more so due to like laws and regulations. And so what happened was, is like, okay, you have these big companies down south, they actually would own like buy the funeral homes, own the cemeteries. We didn't own them, we just serviced them. We were a contractor. And that's a huge difference between, you know, us working on the land and somebody owning the land and what all that means from a financial standpoint, stewardship and all. And so I think that's what did make it different. And at the same time the thought was, okay, that probably means you don't have a lot of market to acquire outside of New England, but you could find some, you know.

Host: Yeah. And well, so obviously there's a lot of appeal to the business model. It is recurring revenue business to business, super niche. It is. I guess it's kind of essential. I mean certainly it's recession resistant. People are passing away regardless of what the economy is doing. And the services that you're providing to these cemeteries, I assume are essential for them. Like they, they. Because if you're not going to provide your services to them, they need to scramble to figure out how to do. Because you provide a portfolio of services to them. So they're going to have to plug in, if they let you go, they're gonna have to plug in a landscape or plug in people to do the bear, the digging and the, the burial, plug in records management. So. So maybe if they become desperate, which actually may be what happened, we're going to get there, they'll let you go.

[39:22] Guest: But.

Host: But generally it seems like it's pretty essential. You're pretty essential to your customer, to your client. It's going to be hard. It's going to be hard for them to. It's pretty sticky.

Guest: Yeah. And not to mention the fact too. Well, like this is kind of an example, one of those rare, almost rare hybrids of a labor intensive business and a capital intensive business. What I mean by that is, I talked to you about the people. But the people aren't necessarily digging the graves with shovels, right? They're digging with like heavy duty equipment, like backhoes, like excavators, like things you have to like get licenses on how to actually operate. You know, we didn't just like take the bus to go to these cemeteries. You gotta get trucks. You gotta get trucks to take this lot and trailers to take this. These excavators, these backhoes, these loaders, these, you know, mowers, these, you know, these people, these trimmers, all this sort of stuff. You gotta transport all that to different places around this radius. And all that costs money. And so if there was an in house cemetery, they wanted to do it themselves. Yes, you had to take, you had to bring in people, but you also got to bring in the tools. Last time I checked, you can't just get a cheap excavator. Like they're like five or six figures to buy. That's not necessarily something that every cemetery could just wake up one day, brush off their budget and say, yep, let's go ahead and get another caterpillar. Yep, let's go ahead and get one of these loaders. You just can't do it. So, yeah, it will put a lot of pressure for somebody to say, or be tempted to say, nah, I'll just take this inhouse. Okay. But recognize there's a, a flip side, a trade off to that that you may be able to finance in a. For maybe or maybe not.

Host: Yeah, well, really, really seems like a really strong model, Philip. And, and can you give us a sense of head count and revenue margins, etc. Age of the business as well?

Guest: Yeah. So age. The business at that time was probably about over 10 years, 10 to 12 years headcount, probably over 20, 25. Revenue low seven figures. And what else did you ask?

Host: Margins.

Guest: Margins. Margins. Probably about 20 to 40%.

[42:02] Host: Okay, Philip. And then so you work for six months in the business. You decide you it's as good as it looks and that you want to buy it. And, and quickly on the transaction. An SBA loan. How is that structured?

Guest: Yep, SBA loan, some seller financing involved. And we had to kick in some equity ourselves. Great.

Host: So kind of a standard 70 to 80% SBA, 10ish percent note. 10ish percent equity.

Guest: Right.

Host: Okay. And so you close. And when did you say? Was it September 2019?

Guest: Yeah.

Host: Okay. So you're six months out from COVID Little do you know, there's a ticking time bomb here that Says six months on it from when you buy the business. How do those first six. Yeah, go ahead.

Guest: Everything was good for the first three to six months.

Host: So what get. Let's have a. Just a minute on that. You got in there and by the way, while you were there as the quote unquote general manager, I don't mean to put that in quotes like it wasn't true. You were the acting general manager, but did the other folks know that you were also the prospective buyer of the business? You're not at the team with that. Okay.

Guest: Not at that point because the thought is like, if it didn't work out, you know, it's kind of like, you know, introducing your kids to like a potential stepfather or stepmother. Like, you know, you don't want to do that early on. You want to do that when you're pretty sure you're going to make that commitment to marriage. So.

Host: Okay, potential stepfather. So you buy the business, you become the actual stepfather. Just give us a minute on the transition and what those first three to six moment months in the business look like prior to Covid hitting, they were

Guest: relatively the most stress free months of my whole experience. Everything was going very smooth. I had no. I almost came in there like excited to pay bills, you know, like, oh yeah, we can take care of that payroll, no problem. Let's do that. The lights, like everything you could see where, you know, revenue was coming in. Everything was just kind of coming in on clockwork. And you were basically following up on these. On this growth plan, you had to essentially double the business in 12 months. Right. And so everything was essentially going to plan. You were following up on customers and prospects, getting to know the team. I was all smiles during that period for sure.

Host: And give us more on this plan. You had touched on it earlier, so get put some, make it concrete for us doubling in 12 months.

Guest: So at that point we were in talks with a few prospects that could add on a number of cemeteries that would be significant in revenue on a monthly basis. Monthly recurring basis. There also was a big kahuna prospect, we'll say that was gonna be very sizable. That was looking at that time looking for someone to basically take on all the cemetery management work and maintenance work and.

[45:10] Host: And these. So this was pipeline basically of new business. Had you built this pipeline or had the owner seller been working on this prior even to you becoming gm?

Guest: Right. So it was more so credit to the owner. He had great relationships with people that he had a good sense of that the timing was coming right to basically outsource that work to us. And it basically was like, you know, hey, like, you know, this is what essentially we'll be coming into. And all the more reason for this to be a good opportunity for you, Philip.

Host: Yeah. Okay. And so doubling in 12 months. This was basically the plan. Here was. Here's the pipeline, here's the potential value of each of the closing each of these opportunities, you know, with some percentage there of. Of actual close rate. Probably not going to close 100 of all that stuff, but whatever percentage you guys were projecting would get you to doubling the business in. In. In your first year in it. And so that was kind of the plan and the hope. Okay, then.

Guest: So, like, covet happened up here in.

Host: In.

Guest: In New England, in. In Massachusetts in particular. Covet happened to the point where there was a question as far as whether people could even come to business to work, right? The closures, the shutdowns. It was more of a question as far as whether or not our business was a, quote, essential business.

Host: Right?

Guest: And if it wasn't a central business, then your people do not come to work. If your people do not come to work, well, how are you going to relay these services to your customers? And that puts you in a really tough spot that unfortunately, or fortunately for us, but unfortunately for others, if you didn't have that happening, that could very well shoot your business dead. Right? And so there's a lot of retooling fighting to make sure that, you know, we made sure that our business was deemed an essential business so our people can come to work. We were trying to address the whole sense as far as, like, you know, how contagious is Covid, because this is a new thing. This isn't the flu, right? You know, flu season's happening every year. You know, you should probably get your shot. If not, you take on your chances. This is something completely new. So you gotta. To basically help relieve the anxiety and the stress from your employees that are dealing with dead bodies and meeting with people in public that may or may not have the virus that making sure you have enough mask, making sure you have enough, you know, hand sanitizer, all these safety precautions that now all of a sudden I had. That was on my plate, it was on my desk to really take charge of, because for me, I was holding on a number of different hats. I wasn't just focused on just growth strategy here. It wasn't just focused on building the bottom line or the top line. It's like I was taking on a number of things. And so what happened that really Put us spinning our wheels was for that pipeline I mentioned to you before, Will, for us to land those customers, we had to make sure we were prepared on our end. Meaning if they said we're starting next month, then we needed to make sure we had the manpower, the equipment, the vehicles, all that ready to go. By that point, we couldn't just like start all of a sudden. We had to be repaired. So I had to make investments ahead of time to make sure we had the trucks, we had the excavators, we had all the equipment, we had the people. And so what happened was when Covid happened for a number of those cemeteries that weren't getting a much burial volume, we'll say as before, when that changed because of COVID we had a number of those same customers we were anticipating taking on as customers ourselves, no longer prospects now saying, philip, I think we're actually good. I think we actually have enough. We'll just go ahead and take care of this. We weren't anticipating this, but we got a busy season ahead of us, if you want to say that. So let's pause on the outsourcing part. We'll take it from here.

[49:23] Host: So. Okay, so let me make sure I follow. So Covid. So as kind of grotesque and insensitive as this sounds, Covid is probably going to be good for business, for cemeteries and they're going to get busy. And you would think that that would also therefore mean that you're going to get busy in a good way. But in fact, these prospective clients you had in the pipeline did get busy. But because they were going to get, they foresaw getting so busy with COVID they didn't want your services anymore. Why was that they were going to continue doing it all in house? Why was that?

Guest: Well, it's just like if things, if things weren't, if the volume wasn't picking up on your end, where you're taking on all this payroll and expenses, whether or not a barrel was happening. So if will cemetery was averaging, for example, two barrels a week, and you have a team, an in house team that digs the graves, people to answer the phones, people to interact with the people visiting, regardless of your volume, and that all costs X amount of every month, and you're like basically struggling because you have all that extra overhead and expenses, that's where you might have yourself saying, is it possible we can outsource to Philip, take away some of that overhead, still get those one or two barrels done each week? But we now are more closer to break even than at A loss.

Host: Yeah.

Guest: Come, Covid. Now you're one or two barrels a week. That triples.

Host: Yeah.

Guest: Now you have more revenue, triple the revenue coming in. That can help you better close the gap between that loss you were. You were suffering and hemorrhaging to now being closer to break even or slight profit. And so now you're thinking to yourself, maybe I could just write this out. Maybe this is the new normal.

[51:18] Host: Yep.

Guest: Maybe I don't need somebody else to do this. Maybe we could just keep the people here because. Yeah. Like, if you're letting go of overhead, that means you're letting go of jobs. So maybe. Oh, no. I was just saying, like, maybe the sense, like the people that you have working for you, you can keep their jobs.

Host: Yeah.

Guest: And you might be more apt to do that than pointing to the business case of we are losing money, we got to do something or we're not going to be around. I'm sorry to say, but I got to let you go versus, quote, unquote, business is better. We actually can keep you if we decide not to work with Philip.

Host: Yeah.

Guest: Yeah. But that's just one side of the coin that happened.

Host: What else happened?

Guest: The second side of the coin is just like I talked to you about how your volume basically tripled because of COVID The arrangement we had with a number of our customers was a monthly all inclusive fee. Meaning for X amount of dollars, will. We will do your burials, we will cut your grass, we will take care of your leaves, we will winterize your water system, we will take care of your records. All this for one fee, regardless of volume, as far as how many people are buried in a particular time. Well, what happens if your cemetery is used to burying one to three people a week and that now becomes three to nine people a week? Do you pay any extra money to compensate for me coming out to your cemetery? Three times more than I had before? No.

Host: Yeah.

Guest: Do you pay any trip. Any more money to compensate for the triple in gas I'm now paying? Which at the time, gas prices were going up. Right. So gas has gone up triple for me. As far as usage and prices going up. Are you paying for the extra people I have to put on payroll to take care of these at your cemetery? No.

Host: Yeah.

Guest: What about the materials? No. What about the equipment? No. What about the vehicles? No. Mind you, I had already made an investment in these vehicles and equipment and people for these customers that later, tell me, thanks, but no thanks, but now I'm footing the bill because I had to finance those equipment and vehicles. But I have no revenue to offset that. So that's. That's problem number one. Problem two is now with my existing customer base, the volume as far as what we're doing has now doubled or tripled because of COVID But they're still paying the same amount each month.

[54:13] Host: And now you go ahead.

Guest: No. So I was like, so basically, now who's getting closer and closer to in the red? What was once profitable customers now is dwindling very, very quickly, and now we got to make some tough decisions.

Host: Yeah. I mean, this is really a double whammy. Either of those sides of the coin sounds like they. It could have been catastrophic. And. And you're here. You're getting it twice at once.

Guest: Absolutely not.

Host: Not to mention the kind of swirling anxiety of just covet. I mean, everybody's. You know, there's the. There's the kind of undercurrent of, like, what's going on in the world. Everybody's just.

Guest: Yeah.

Host: Everybody's carrying around new stress.

Guest: Like, not only that will, but it's like all this is happening your first year of running a business.

Host: Yeah.

Guest: This isn't like, Philip's been doing this for 10 years. Okay. Didn't anticipate this, but we can navigate this from our past experience. It's like, now, like, this is your guinea pig moment of, I bought a business, I'm running it. You're thinking, things are going to go a certain way. Covid happens. A whole lot of uncertainty comes into the equation. And now this is your testing by fire on how to navigate both sides of that coin. I just illustrated to you, in addition to the huge unknown of COVID and what happens all in your first full year.

Host: Yeah.

Guest: A business you bought.

Host: Yeah. Philip, the.

Guest: The.

Host: A lot of the learnings that you've taken away from this experience are kind of more. Kind of at a higher level. But just tactically, when you reflect back on this, what do you think tactically you could have done, should have done differently? I mean, obviously maybe not have overinvest or, you know, gotten somehow gotten more assurance that this new business was really going to sign on the dotted line before making those investments. But how do you do that? How would you now, with the. The benefit of 20 of hindsight, how would you have done this differently? And about both of your two issues.

Guest: Yeah. I mean, I think you hit on one of them, clearly. It's like, you know, one of the things I don't want to jump ahead of those lessons I talked to you about. We'll go over soon. But one of them was, you know, yeah, I have faith in God, but not faith in people and what they say. I need to be very conservative and show me the money first before I make that investment. Right. Let the. Let the ink dry on the contract and everything's ironed out. We have contingencies in place of what happens if X, F, Y, then I'll make the investment. Then I'll go to the bank and ask if I can get a loan for. For these vehicles or this excavator or this equipment and that. So. So that's 1, 2. On the flip side of it, I basically retrofitted this solution once it happened. But it may have been the occasion where it would have been a good thing for me to say, hey, coming into this business, hey, we want to renegotiate, if we can, all of our contracts to make sure that each one of them has a limit to the number of barrels you do in a year. Meaning we're not going to not service any burials if it exceeds that number. But if it does exceed that number, the cemetery will be paying to compensate for that additional burial going forward. Every additional burial beyond that number, we're

[57:49] Host: going to invoice you and Philip. Why had the. Had the contracts or the pricing structure of the business that you inherited, why had it been structured in such a way that it was flat, basically flat fee, as opposed to some sort of, you know, proportional to work unit that you all were delivering.

Guest: So I think the big thing that comes off is one just how the contracts were done with the previous owner and the customer. It was one where this probably like, okay, you have to come up with the right value for the customer to sign on. And you don't want to come off like your nickel and diamond, which we definitely weren't.

Host: Yeah.

Guest: So you're trying to say, like, okay, we're going to package this all together.

Host: Yeah.

Guest: And the end result is what you're paying every month is still going to save you compared to what you're doing currently.

Host: Yeah.

Guest: Right. And so to get the business. And that's where you want to make it attractive. That sort. It was just more so you can keep that package. I just. We just should have had that contingency to say, okay, once you pass this range of burials, pass this range of. Of cuts and trims. That's. I haven't even talked about that yet either, Will. We talked about burials. Right. Once you get past a certain number. Okay, that's fine. You know what else gave us a hard time during COVID Mother Nature, the weather, because we were also having in that inclusive fee I talked to you about. Each month, we'll cut your grass, we'll trim your grass certain number of times, and that's where. But that was like the range based off past experience. Just like the barrels. What happens which happened in 2020, when you have a influx of rainfall during the summertime that causes the grass to grow like weeds, and instead of having to cut once every two weeks, you now have to cut every cemetery, 20 plus cemeteries. Not every once every two weeks, but every week. Just that alone is a sharp influx in your cost with people, fuel, because you need gas and to power your mowers and your trimmers along with your trucks. Equipment maintenance and repair is another one. Things break down. Not everyone who's servicing a weed whacker is going to take good care of it as you're working. So something might happen. You got to repair it. But the more time you're playing with the law of large numbers at that point. Well, it's like the more times you cut, the more times you trim, the more likely something bad is going to happen that's going to require repair. And what you weren't expecting is you get that bill for $2,000 that you didn't have the budget for that. Now you have to figure out how to do it, because you still got to go there that next week and cut and trim.

[1:01:02] Host: Yeah. So give us a sense of kind of the timeline here. How is. How are all of these happening, you know, in June 2020, three months after Covid starts? I mean. Or have you just recounted kind of something that unfolded gradually over three years, like. Yeah. Give us a sense of how the. How quickly all this is happening or not.

Guest: Yeah, I think 2020 was just. It was a make or break year for us. By October, I realized we were in trouble. Right. So, remember, it was all good. Just a few. Just a week ago. You know, six months. First six months. Right. March 2020, Covid. Okay. Seven months later. I don't know if we're going to make it. Well, payroll is high. Gas is high. We're going across these cemeteries to cut and trim more often than we budgeted. We got more barrels than we budgeted. There's no, you know, compensatory, you know, fees being paid off for all these extra burials we're doing out of pocket now. They're. They literally all this stuff is coming out of our pocket. Like, I don't think we're going to make it. So that was where it just started from October 2020 to this, for lack of better word, the next three years of just adjustments on steroids. Like, you know, they talk about like a smooth sea doesn't make a good sailor. We had some turbulent seas. Well, and they lasted for three years. Like just to be short with it. We had to get additional financing from non traditional sources. I'll say. I had multiple times. Had to take myself off of payroll for months on end. I paid everyone else on my team but me multiple times. I had to put myself out on the field to save money and cut the grass myself, trim around the headstones or bury the people myself. I wasn't operating excavator, but I was definitely the person helping dig. You know, I'm the CEO. I'm not supposed to do that. I'm supposed to be behind a desk. No, I wasn't, not at that time. Later on 2022, which was the toughest year for us as far as adjustment, I had to get a second job. I had to work at this business during the day and then leave four or five hours into it to travel across town to manage a chick fil A and close that night. So I'm like working from like 7 in the morning till like 11 at night and then you get home smelling like waffle fries and chicken, only to do the exact same thing the next day. I remember actually when I was in the drive thru line one time working as a manager, chick fil A and I got a call from one of my team members saying Philip, I don't know how else to tell you this, but one of your dump trucks blew up.

[1:04:21] Host: What

Guest: exactly. I was like, what were you talking about? Excuse me, Excuse me, sir, like you know, hey, can you take his order? I got this phone call. Okay, tell me what happened. Yes, your dump truck blew up and is in flames right now. We're down one truck now and I have to come up with some solution for the meantime and then get back into the drive thru line with the thought of what is going on in the other side of town while taking somebody's order for number one with fries and a strawberry shake. Right. So say to say it. Well, those, those next three years was ups and downs that would make anybody throw up. It was that type of roller coaster ride. There were definitely nights where I quite honestly like cried myself to sleep. Ask God why mornings where I was behind the steering wheel in the car and just saying, is this worth it? Just in general now, not even just the business is everything that's going to. Is it Worth it right now is what I'm about to do. Like, is it worth was probably. Like I said, these were the most testing four years of my professional life for sure. But the goal was will. It's like, look, I wanted to do right by the former owner. I had payroll to take care. I had people's livelihoods, I had rents to pay, I had food to put on these employees tables, I had school education costs to take care of by making sure that our employees were taken care of. And then the businesses that we supported in our ecosystem, they had what they needed. And so if that meant me being out on the field half the day, going out in the city, literally cleaning up human feces across abandoned church because we took on extra project work because we needed the money and picking up used syringes from a homeless alleyway when other people quit the job. And I had to go do it as a CEO and owner myself because somebody quit and they didn't want to put themselves in that situation. I had to do because we needed the money to take care of payroll that Friday. These were the type of things that I had to do because I wanted to make sure that I did the best I could to do right by the previous owner, by our team, and give us the best chance of success. Because what I didn't want was to get to a point where we couldn't keep going, where we couldn't take care of payroll. And we basically did the best we could up until a few months ago.

[1:07:22] Host: Philip, how long were you working two jobs?

Guest: Almost a year.

Host: And I'm just so struck that you were able to make it last as long as you did. I mean, three years is a long time. I mean, it's a long time for the psychic pain that you were experiencing and the slog of working, what is that, you know, 16 hour, 17 hour days, but also just, just robbing pot, robbing Paul to pay Peter, however you were making it work. You know, I'm just surprised you, you could, you could keep juggling so many dishes in the air, plates in the air for three long years. But I guess the answer is what you just, you kind of just described it for us. You were just any, any thing you could do to keep your finger in the dike. I keep using all these metaphors of impending disaster. To keep your finger in the dike or just to keep, to keep it all together, you were doing and you that. So that's the answer. That's how you got through three years?

Guest: Yeah. I mean the thought was like that Was my family. Right. Like, if. If my own immediate family went through hard times, if that meant that I had to make sacrifices and I had to bag groceries or I had to do something that other people might think was beneath them. You do what you got to do. You know, hopefully it doesn't last forever, which more than likely won't. But in the time being, you just got to do what you got to do. And that was the same case with my family at work. It was like we were doing what we could in the midst of all these circumstances that were not going to our favor, whether it's truck. Trucks blowing up, you know, high gas prices, or even people trying to compete with us all of a sudden and poaching our employees. They saw blood in the water, and they were trying to literally take our employees and. And push us in some sort of, like, for lack of better word, rise in wages, like a race to the top in wages that could have easily priced us out.

[1:09:30] Host: Yeah.

Guest: Because we had a. A much more funded, emerging competitor that we. We did not anticipate all of a sudden that said, hey, we want to get in this game, too, and we'll offer X more than what you're offering.

Host: Yeah.

Guest: And you're thinking to yourself, I can't compete in that. I'm losing employees right and left, and we still got barrels to take care of. Okay, well, I guess I'm gonna have to cut the grass and drive over to Chick Fil A afterwards. You know, you just. It was like I said, like, I. This was stuff we didn't anticipate. Well, at the same time, I also realized, as much as I didn't like being in that situation, this was something that I needed to do my very best to do right by, because I had people depending on me. This is my family. And this was something that said to myself, okay, one way or the other, if we can just make it another day, then there's hope that, you know, we can make this work.

Host: And how do you feel that your family guess, namely your wife and your seller, your owner and your employees reacted to this? Do you think that they saw that you were trying your damnedest and respected the struggle? Or were you getting. Were you getting a lot of heat from all sides as well? And. And, you know, how alone did you. I'm sure you felt very alone, but how supported did you feel?

Guest: Listen, if it wasn't for my wife and the. And the previous owner, like, we would not have made it as long as we did. Clearly, I need that. That was my support system. Those two people, the former owner and my wife, like, if either one of them was not present or was not trying to help or not trying to be understanding, we would have had a much shorter Runway, honestly. And it would have taken a much bigger toll on me personally. Psychologically, mentally, spiritually, emotionally, all this sort of thing. Employees, for the most part understand, but at the same time as well, they got to do what's right for their family too. And if they're seeing that things are not as stable at work as they once were, as. It's kind of like what people often say. It's like when you go through bad times, you. You find out who your real friends are. You find out the people that are willing to stick it out. And I appreciate those who stuck it out with us to the very end, because that wasn't the case for everybody. And I understood that that's just. That's just business. It's not necessarily personal. But yeah, I had to get through that too, because there were a lot of hurtful moments that people that I didn't expect to leave us, they did. And that hurt not just me, but it hurt the former owner too.

[1:12:23] Host: Well, Philip, it was three long, painful years. And I'm sure you probably have more stories about things exploding. We don't have time to go through all of them. Get us up to the end where you decide that it's finally time to. To wind things down. How did you finally come to that conclusion and what was that process like?

Guest: So 2022, we had a point where if I didn't, in the midst of everything else I was doing, right, the plates I was juggling, I also had another hat that was business development in terms of we had to find more customers. We lost a few customers, some major customers. In light of this, that further put the pressure on us as far as whether or not we're going to survive or not. And it got to a point where I had to find another customer to match one, you know, as close to one to one as possible within a matter of time. Otherwise us shutting down in 2023 would have actually meant shutting down in 2022. Right. And so we had a customer that we were working on a one year trial contract and I was doing everything for them as we possibly could. This time it was more like I quit my job with Chick Fil A. And instead of working there and in the office full time at the cemetery company two days a week, I was traveling about an hour and a half to two hours back and forth to this Customer to do administrative work as part of our contract. I was the one that did it. So for those two days I couldn't take care of anything else except that one customer in particular. Doing everything we can to service that customer in the best way we can towards getting a long term contract out of them. After that first year trial, August 2023 comes around, we start asking if we can do an extension of that at least for another year. They said honestly, we rather go a different way. And at that point you now lost a significant customer that I knew for sure was responsible for helping cover at least a week's worth of payroll for us. So that means that that month, which. August 2023 was a month I remember particularly because it was a five week payroll month. I don't like five week payroll months. Well, not because I don't like paying my people, but because if you have a set amount of revenue for that month. Right. The monthly fees. Right. All inclusive.

[1:15:12] Host: Yeah.

Guest: You have an additional week of payroll on this month that you didn't have the month before.

Host: Yeah.

Guest: And with the high payroll we had at that point, because of the high headcount we had in the midst of the summer, cutting the grass more than twice, more than once every two weeks is now every week. Our expenses were really high. Labor was high, gas was high, equipment repairs was high, debt was high. The last thing I needed was another week of payroll to figure out how am I going to David Copperfield make out a appear out of thin air just to make sure our people were paid. Not me. I wasn't. I clearly wasn't on the payroll that one, that not that week, but for everyone else making sure that they were taken care of. And so when that customer disappeared, was gone. I recognized that we were about like a week or two from finding out if we were going to find a replacement or I had to deliver the bad news I never wanted to do in the first place. And I always like. Well, part of the reason that why I worked so hard in the midst of all that that we went through the past three years was to avoid having that moment of telling my employees that we don't have enough cash for payroll. And unfortunately that month in August, I couldn't avoid that any further, despite how much I tried. And so once I share that news to my team on an early Friday morning, I knew that was it. I saw the responses from my team.

Host: What were the responses?

Guest: Disappointment. Disappointment was an understatement, quite honestly, Will. It was to the point where the former owner, as a friend Told me, philip, I know this is hard. I honestly. My hat's off to you and respect as far as how best you've managed this whole thing. And we've tried our best to avoid getting to this point. As a friend, my advice for you is to come in early Friday morning, tell the team what happened, be honest with them, answer any questions they have of you, if any, and then afterwards, get back in your car and go home. I never thought that I would have that sort of experience, but that's exactly what happened that day, and that's when I knew it was over. And once that took place, it was happened in August. I knew that we had to transition the business and basically worked on that for that next month and then shut down operations officially September 30, 2023.

[1:18:11] Host: And do you feel like your people under. Understood might not be the right word, but, you know, recognized that there was no other way and had seen all of your efforts for three years. How did. Yeah. Now, obviously, probably they're not going to spend a lot of time on thinking about you. They're probably just going to be scrambling to figure out what they're going to do for their own. For their own next check, their own next employment check. But I'm just curious what that looks like. What do you think? Yeah. What the mood is like or what the response is like from them directly to you?

Guest: It was varied because it's like, for the most part, most of them were hearing this for the first time.

Host: Some people just didn't realize that things were as dire as they were.

Guest: They knew what was going on. Like, that we were in worse times than before. Like, if they see Philip, like, cutting grass the best way he could but still lagging behind the rest of the team just. Just to hold it on. They're thinking themselves. Okay. There has to be a reason why Phillips out here.

Host: Yeah.

Guest: Okay. He wouldn't cut the job either way. You know, either way outside of that. But it was like people got a sense, like, they knew I was leaving work early to work another job. You can connect the dots there. You don't have to graduate from Harvard to recognize like, something's up. You know, it. Why does he have to do that? Why does he have to travel an hour and a half to two hours out of Boston just to keep a contract going when he didn't have to do that earlier? Something's up. Yeah. So I think it was more so, like you're hoping that that day didn't come because you're trying to figure out what does it mean to you afterwards and how do you, like you said, scramble to make things work? But yeah, it's like the suddenness of the moment when you realize that's it. And so your head goes in a tailspin of what goes on next. And I think the former owner was very instrumental to helping calm the storm from getting any worse and just allowing us to figure out this next month of transition just to make sure that the employees were taken care of and that the customers were taken care of. So we had that continuity, even though this was essentially the death of the business.

Host: Philip, you talked earlier. You said earlier that one of the many. Your many kind of stopgap measures was to take on more debt, to get financing from an unconventional source. Can you say anything, say any more about what that means?

Guest: Yeah, merchant cash advances, working capital loans, and that sort like those type of financings that you see, like, advertised to you. Once people know that you're a business owner and that sort of. You try to stay away as much as you can because the interest rate's a lot higher. The terms may not be the type that you're looking for. You're basically favoring compared to more conventional. But I was at a point that it's like, look, if I didn't do it, we would have missed payroll back in 2020. Yeah, period. That's 2020, not 2023. I'm talking about October 20, 20, when we realized something was up. That was when I had to figure out additional financing at that point and figure out how do we make this all work? Because if we didn't, that would have been an open and shut case within one year.

[1:21:52] Host: And when you decide to shut down and you have these debtors, the high interest debtors, and then you have an SBA loan, what does that look like? Well,

Guest: I think I'll leave it up to your imagination. What can happen when you have certain loans that are personally guaranteed.

Host: Yeah.

Guest: And, you know, try to figure out how to make things work from there.

Host: So is it a process that you're going through now, or. I mean, you're basically involved in now and will be involved in for a while sort of thing?

Guest: I would. I would say so, yeah.

Host: Yeah. Okay. Well, this is an excruciating story, Philip, but you. You do seem to have kept your wits about you. I mean, this might have drove. Driven other people crazy or in. Or to depression.

Guest: Maybe you.

Host: Maybe you are. Maybe you were depressed at times, but you seem, for a guy who's just suffered, suffered an absolute SMB nightmare I have to say, you seem. You seem as mentally healthy as. As could possibly be asked for. Is that accurate?

Guest: Yeah, I mean, like I said, without a support system, as far as my wife and the former owner, you know, at the time, without God, like, I would not be here. Yeah, clearly, like, something. Something would have went awry in my head that would have caused me to do something that I probably would have regretted for the rest of my life or not even live to see, like, that regret because things were just so dire and so dark at that point. And so, yeah, it's just. Just believing that, you know, if I just didn't give up and I just kept doing good, that I would see a harvest at some point in the near future. Just that was like the Bible verse I was like, claiming on to Galatians 6, 9 for sure every day. And just, you know, my wife praying for me each morning before I left the house to go to work and just telling me three words every time. God will provide. One way or the other, God will provide. We don't know how, but he will. Like, it's those certain things day by day, moment by moment. The former owner saying to me, look, Philip, we were friends before this deal. We were friends during this deal, and even if the wheels fall off on this deal, we'll still be friends. It's stuff like that. Those three things to me is what kept me through it, through it all, and kept me at a place now where it's just like, yeah, it's still hard. It's. It's not easy, but it's given me reason to have hope the next day and just to keep persevering, just keep moving forward.

[1:24:40] Host: Philip, what was the bible verse?

Guest: Galatians 6, 9.

Host: And can you cite it by memory or the gist?

Guest: Yeah, the gist essentially is, you know, if you don't tire from doing good, if you just keep going, you'll reap a harvest in due time. If you don't give up. Great. Just to paraphrase.

Host: Yeah, yeah, yeah. Well, is there anything from this crucible that I haven't asked you or that you wanted to say that you haven't had a chance to yet?

Guest: One of the things that kept me in the race to do this again after this crucible moment was just being exposed to great teachers and mentors that been into similar situations, that have acquired businesses, grown them, and then sold them successfully. And two mentors of mine, Jay Abraham and Roland Frazier, they came out with a book called Business Wealth Without Risk. The paraphrase, the Subtitle was How to Create a Lifetime of Income Every three to five Years. That was a book that I read in its entirety in one weekend. I recommended it to all the search funders. I get nothing out of the deal, it's just more. So I told them it's the best 99 cent investment they can make into their business buying endeavors as far as buying the Kindle version of it. And so that's probably one thing I would say like if the question was if there was one particular book that you would recommend to listeners that could help them on their journey, both acquiring a business and then growing it to sell it at some point, Business Wealth Without Risk from Jay Abraham, Roland Frazier, that would be the one I recommend.

Host: And Philip, if people want to get in touch with you directly, what's the best way to do that?

Guest: Yeah, two options for sure. I'm on LinkedIn. Just look that, look up Philip Blackett. And so you definitely find me there. And then my website, dream business makeover.com that's where I focus on helping other entrepreneurs and small business owners grow their businesses. You know, focusing on my core four of dream business growth there. So dream business makeover.com give us a

Host: little bit more, Philip, on what the services you're now providing to small business owners.

Guest: Yeah, yeah. The thought is just from my own experience, crucible wise, it's just like, listen, I've been through a lot. I got the scars, I got the T shirt to show it. If there's a way I can be able to help other people navigate their own business growing experience without some of the obstacles and learning curves I've had to learn, I definitely think it's worthwhile and that my struggle wasn't in vain. And so for me, I work on working alongside entrepreneurs and small business owners really focusing on their core four dream business growth. How do they grow their business exponentially through the core four, which is basically how to grow sales, grow profits, grow via M and A and grow their exit value. And I basically do that working alongside them in consultations and then at the same time, if it merits us working more closely together, we can do that as well. Just helping them, you know, achieve the business they always dreamed of before life happened.

[1:27:53] Host: Philip, thank you very much again for coming on and sharing, sharing the story. What, what a ride. People are really going to appreciate that you put yourself out there like that and really respect you for having survived those four years. So thanks a lot.

Guest: Absolutely happy to help and share this story. Hope it's helpful for listeners on here. Thank you so much for the opportunity. Paper.