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Building a Construction Empire: Ryan Pudenz's Strategic Acquisition Playbook · The Inspired Stories Podcast

0:04
Welcome to another edition of the Inspired Stories podcast
0:08
where leaders share their experiences so we can learn from
0:11
their successes and be inspired by how they've overcome
0:14
adversity. My name is Anthony Kotaspodi and
0:17
today's guest is Ryan Pudens, founder and managing partner at
0:22
Merit Management Group. They specialize in acquiring
0:25
small to mid size construction businesses, focusing on
0:29
enhancing legacies, empowering futures, and ensuring smooth
0:33
transitions for owners. They have a proven track record
0:37
in revitalizing operations and improving profitability,
0:41
demonstrating their commitment to strengthening the
0:43
construction industry. Orion has been instrumental in
0:47
shaping Merit Management's strategic direction, drawing on
0:51
over 20 years of experience, including a role as a sales
0:55
trainer at Service Corporation International.
0:58
His background in sales and training has helped him become
1:00
an effective leader who understands both the people and
1:04
process sides of business growth.
1:07
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1:38
All right, back to our guest today, the founder and managing
1:41
partner of Merit Management Group.
1:43
Ryan, I appreciate you making the time to Share your story
1:45
today. Yeah, great.
1:48
Great to be on and and appreciate you having me.
1:51
So, Ryan, I'd like to talk a little bit about some of your
1:56
work history before founding Merritt.
1:59
And as I understand, after college there was just one stop
2:03
Service Corp International. Tell us about that and why you
2:06
stayed there so long. Yeah, so quick funny story, I, I
2:12
actually, I was at the University of Northern Iowa and,
2:15
and thought I wanted to get into sales and had accepted a
2:19
position with a office solutions company, you know, selling copy
2:24
machines and that type of thing, printers and moved to Ames, IA
2:29
to move in with my fiance at the time, my now wife.
2:34
And found out they, they called me and and shared with me that
2:38
they put a hiring freeze on. And so I went from having
2:41
employment to not having employment and ran into a guy
2:46
that worked for Service Corporation International,
2:49
started talking to him and next thing I knew, I flew out to St.
2:54
Louis, MO and interviewed and a month later was hired.
3:00
And 18 years later and five stops later, I was still working
3:05
for SCI and fortunately had made it back to Iowa once we had had
3:10
our, our first child and got to be by family.
3:13
And it was a great ride. I've really enjoyed it.
3:16
I stuck there because they had a great culture.
3:18
They took good care of me. Obviously, I, I put in the work
3:21
and, and proved myself. I, we started in Saint Louis and
3:25
then we were moved to Phoenix and then to Las Vegas, then to
3:28
Dallas, then to Houston. And eventually they allowed me
3:33
to come back to Iowa and, and set up shop here.
3:35
And so really enjoyed my time there.
3:37
Learned a lot about business management, learned a lot about
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sales, learned a lot about employees and people and how to
3:43
handle them and have been able to use that now in my my current
3:48
endeavors. So what does Service Corporation
3:50
International do? Yeah, they're the largest owner
3:54
and operator of funeral homes and cemeteries in the world.
3:57
And so when I first started with SCI for short, they were
4:03
acquiring other consolidators. So there was really a group of
4:07
three to four companies and eventually SCI bought those
4:11
companies and then transition more into strategic acquisitions
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based off of market share footprint and started to buy
4:18
some of your mom and pop funeral homes and put them into their
4:21
portfolio and and manage them the way they run their other
4:25
locations. And so that's why I moved around
4:28
as they would acquire, I would get moved and help get things
4:30
set, let up, get leadership in place and and deliver to
4:33
targets. So not it doesn't sound like so
4:37
much of A sales role then? No, it was you know I focused on
4:42
our sales growth, but with that it, it encompassed all aspects
4:48
of the business. I worked hand in hand with the
4:50
operational leader and so very involved on both operations and
4:56
sales. There was a lot of crossover
4:57
there from both parties and so really got exposed to just
5:01
business in general, even though my title had sales in it, but
5:06
really it was it was help managing the business and and
5:09
grow the businesses that were in our area.
5:11
Gotcha. OK.
5:12
So from Service Corporation International to, you know,
5:16
managing funeral homes across the country, how did the idea
5:21
for starting Merit Management? Group come about.
5:25
So my wife is an interior designer.
5:27
She has her own interior design business.
5:29
And when we moved back to Iowa, obviously that opened up a whole
5:34
other book of business for her because she had been doing this
5:37
from afar and has a big network back here in Iowa.
5:40
And so started to get calls and then, you know, the question
5:44
from the potential clients was do you know a good contractor to
5:47
use? And I think one day I said to
5:50
her, we're foolish to keep passing business along.
5:53
You know, we could get the design plus do the work.
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And so we stumbled across a a local remodel company here in
6:00
Des Moines that was looking to sell and my wife and I bought
6:04
that and ran that operation and really got it going.
6:08
And fortunately for her, she didn't have to do a lot of
6:11
design. They had designers and kind of
6:13
were self-sufficient, but was another resource for her and her
6:17
business. And you know, what I started to
6:19
recognize was very similar to the funeral industry, skilled
6:24
trades. There's a lot of baby boomers.
6:26
You know that silver tsunami is there and you know, a lot of
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these folks are really great skilled trades individuals and
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that's how they started and then demand picked up and and they
6:38
turn themselves into a business and, you know, really didn't
6:41
have an exit plan. And so I saw an opportunity for
6:45
something that I believe can't be replaced by AI that, you
6:49
know, housing markets never going to get caught up.
6:51
There will be ebbs and flows, but we're always running at a
6:54
deficit there. And you know, from a labor
6:57
force, you, you don't have all the labour that's needed.
7:00
And so demand is there. It's, it's being able to supply
7:04
the services. And so when I wanted to get away
7:07
from the corporate world, started to formulate the merit
7:10
idea and put into place our team, our infrastructure and
7:16
target skilled trade businesses. And you know, large private
7:19
equity has done similar. I think we separate ourselves
7:22
because we still have that small family feel and we'd like to
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keep that. And so, you know, owners that
7:28
have spent 30-40 years building this business can gain the
7:32
confidence knowing we're going to come in and not change
7:35
everything day one. What our goal is, is to take,
7:38
you know, a successful business and get it thriving and and be
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able to inject resources that they haven't had previously.
7:46
So tell me a little bit more about the portfolio you're
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talking about, you know, home services, trades, what what are
7:53
we looking at specifically? So we have two HVAC companies.
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We have another HVAC company that we're currently under LOI
8:02
for. And then we have 3 remodel
8:04
companies. We have a flooring retailer and
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then we have a power equipment supplier as well as a cabinet
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manufacturing, manufacturing business.
8:15
So really target within those businesses, both residential and
8:20
commercial. So we do work on residential new
8:23
construction, we do work on residential remodel and then we
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do work on commercial new construction and commercial
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tenant improvements or or remodeling on the commercial
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side as well. Is this all close to you
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geographically in the state of Iowa?
8:40
Yeah, we're all in the Midwest. We have location in Minneapolis
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and then in the Des Moines metro area.
8:46
OK. Are there plans to expand to
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other geographies or to kind of broaden the scope of sort of
8:53
these home services or do you you kind of like the spots that
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you're playing in now? Yeah, we like the Midwest.
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We like kind of that middle sized market.
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I think we'll continue to stay in in what we would call a
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middle market with middle sized medium sized businesses.
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But you know we want to expand our footprint and we want to get
9:13
across the Midwest where we've looked at a couple businesses in
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the South as well. We're not opposed to that, but I
9:19
think it comes down to more as we start to meet owners and look
9:23
at opportunities. It comes down to a fit in our
9:26
ability to see where we can enhance that business as well as
9:31
supply the resources necessary to it to to help it continue to
9:35
grow. And right now the Midwest, we
9:37
feel like we know really well, but we're not opposed to expand
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and pass that. And So what is it that you're
9:43
looking for specifically in an acquisition?
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Is that the the owner is staying on as an operator for a period
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of time? Is it a certain size?
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When we look at a business, what we're really looking at upfront
9:57
is brand and reputation. So our average portfolio
10:01
companies 32 years old and what I tell people is I can't, I
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don't have 32 years to build a brand, but hopefully we can
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acquire 1 and, and, and make it even better.
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So the first thing we're looking at is what is brand reputation?
10:16
What is their overall reputation throughout the market that they
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serve? And then from there we look at
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customer concentration and if it makes sense to where the
10:25
business has been spread out over multiple accounts, you
10:29
know, we'll continue to pursue that.
10:30
We do come across acquisitions where, you know, the owner
10:33
started it and he's the point of contact.
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And so we run a risk if we were to acquire that owner's not
10:39
there, you know, what's the tie that business.
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So we make sure there's a good brand, we make sure that it's a
10:44
reputable company. And then the next is what's the
10:46
split of business and how can we supplement that business with
10:50
the businesses that we already own, whether that be, you know,
10:53
the company we're buying can buy from one of our other companies
10:56
at a lower cost. Great.
10:58
That's a big advantage for us if it's we're in the same market
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and now we can share accounts and you know, one offers one
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service and the other offers the other.
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We know or can go into an acquisition with some pretty
11:10
good confidence that we're able to grow that revenue just simply
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by tying some of our accounts together.
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So we look at that from an owner standpoint.
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You know, we love it when an owner stays on if it's a fit and
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you know, normally we don't close on business if we're not a
11:29
good fit for the owner and vice versa.
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So we like when owners stay on, we generally don't have them in
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a leadership role. We have them more, you know,
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what did you enjoy doing when you were owning the company?
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And a lot of them, it's, I liked going out, talking to the
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accounts great. You know, they're great
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ambassadors for us. We leverage that and then we
11:48
take the the real fun stuff of payroll payables and people off
11:53
their plates so they get to just go have some fun and and keep
11:57
promoting the brand and and help us continue to grow.
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So I mean, you're just. Having the dream of so many
12:02
founders take all that administrative stuff off my
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plate so I can focus on the work I love doing.
12:08
Sorry. That's right.
12:09
Yeah. And you know, it's interesting,
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Anthony, when we go to talk to an owner and, and, you know,
12:15
start talking about the acquisition side of things.
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And I always ask them, what would you do to grow the
12:21
business? And what's interesting is
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they'll all tell you exactly what they would do to grow the
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business. And my next question is, well,
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why don't you do it? And it's, I'm tired.
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I don't want to, I'm comfortable where we're at.
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We've done a good job and it took a lot to get to this point.
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And so, you know, we kind of build off that conversation.
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It's like, well, let us do that and you go do the fun stuff and,
12:44
and help keep us relevant in the community.
12:47
People know your face, they know your name, name, it's your name
12:50
still on the business. And, you know, we're, we're
12:53
happy to do that and set up an agreement to do so.
12:56
So when you're coming into a new opportunity, are you
13:00
traditionally buying the entire company 100% and and are you
13:04
taking over sort of operational control then?
13:08
Yes. So we, we do 100% acquisition
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and then we we run as the operator.
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We're a little unique in that at the merit level, what we really
13:20
are is a support arm. So we have ACFO with the
13:24
accounting department, we have head of Marketing with the
13:27
marketing department. We have HR, we have new business
13:30
development, we have directors of operations and then we have
13:34
recruiting. And so we're able to acquire a
13:37
company, bring them into our ecosystem and now they get
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access to all these services that in some cases they didn't
13:45
have previously or it was a limited exposure to them.
13:49
And now our group comes in, we help with local management.
13:53
Generally speaking, when we acquire business, there is an
13:56
employee there that gets promoted into a leadership role,
13:59
our Director of operations. They work directly with that
14:02
leader and help them understand what we look at from a business
14:06
perspective and then start to build out their business plan
14:09
and how they can use the resources here at Merit that we
14:12
have to help them speed up that process and become even more
14:16
successful. We're very hands on on the
14:18
operation and sales aspect of every company that that we
14:23
acquire. Can you maybe point to a
14:25
specific example of something recently where you guys have
14:29
come in and really helped to pull an operational lever that's
14:33
helped to advance the company? Yeah.
14:36
So one of our our recent acquisitions mid to end of last
14:41
year when we acquired it, you know the the marketing end of
14:47
what they had done was very limited and from a cost
14:51
perspective just simply leaning on vendors hadn't really been a
14:56
conversation. Well, we are fortunate.
14:58
We have another business in the same skill trade and we're able
15:03
to go to our vendors, create savings right off the top on our
15:06
goods. We are able to create savings
15:09
from a spend that they had done on an administrative side
15:12
because now it's a fractional spin.
15:14
They get the full service, but you know, our employees are
15:18
divided over 8 different companies versus just one.
15:21
And so, you know, we use a combination of our own debt and
15:25
equity and then we bring in investor dollars.
15:27
And one of the ways that we can help a company perform better
15:31
and we can get better returns to our investors is because we are
15:35
able to fractionalize cost to these businesses.
15:38
We are able to leverage some scale and create savings from
15:44
from a good side of things and then we're able to push the
15:47
revenue lever with with our marketing and our sales
15:50
background. What's your holding strategy?
15:53
How long do you want to hold the companies you is there a roll up
15:57
coming? How do you guys think about this
15:59
sort of long term? So we model everything on a five
16:02
year hold and and our approach is at that five year hold first
16:06
and foremost. What we'd prefer to do is do a
16:08
recapitalization and buy out our investors.
16:11
So that way we're 100% owners there could be an opportunity
16:16
because we run everything on syndicated fund structure to be
16:19
able to roll all of our syndicated funds into one big
16:22
fund. But you know, our hope is to
16:26
hold for the long term, but for the short term for the investor
16:30
and and be able to then have 100% on this you.
16:32
Want you want to help your investors cash out within a five
16:36
year time period. Your goal beyond that is is
16:39
merit to hold on to these for the.
16:41
Long term, that's correct. What are you looking for in an
16:46
investor? So we do require accredited
16:51
investors, but really what we look for an investor is someone
16:54
that understands our thesis, our story, and we've been very
16:59
fortunate. You know, we really only target
17:01
retail investors at this point. And when we sit down and tell
17:04
our story, they're able to see the vision and also understand
17:07
the need. And so, you know, our first set
17:12
of investors have now kind of introduced us to our second set
17:15
and 2nd into third word travels and people have been pleased
17:19
with our performance. But really it's someone that,
17:21
you know, is invested in their 401K, they're invested in the
17:25
stock market, but are looking at what are some alternative
17:28
investments I can make. Real estate's always nice, but
17:31
it's, you know, it's real estate, it is what it is.
17:34
These businesses create extreme upside in my opinion because of
17:38
the EBITDA or the EBITDA that we buy it at and what we believe we
17:41
can grow it to and then exit at A at a price that's very
17:45
beneficial to the investor. What do you found have been sort
17:48
of the biggest growth levers for you once you acquire a company?
17:53
Yeah. So you know, you can, you can
17:56
only save your way to a certain profit, right.
17:58
At some point you run out of savings to to get, but we're
18:02
able to create savings right off the bat.
18:04
But really our growth lever comes with our marketing
18:07
department and then our sales approach.
18:09
You know, I think sometimes when you have legacy companies, you
18:14
get tired eyes looking at the approach.
18:16
And so we bring in a different spin on how we think we should
18:20
market and how we think we can grow sales.
18:22
And then you know, bring in fresh sales folks that can help
18:25
do that. And so I think that's the
18:27
biggest lever for our growth is of course upfront we're going to
18:30
create some savings, whether that be on goods or or from our
18:34
resources here. But the real lever comes when
18:37
our marketing department gets instilled and and we start to
18:40
get in through our sales approach and training.
18:44
So I'm going to guess and tell me if I'm right or wrong here
18:47
that that marketing involves a lot of online marketing, you
18:52
know, getting to the top of Google, showing up on, you know,
18:54
somebody's mobile phone when they're searching, when they
18:56
they want that service. And then sales.
19:00
There's probably a particular technique or strategy that
19:03
you're teaching to each of your portfolio companies.
19:06
Hey, we have found that XY and Z sort of taking these steps is
19:11
really helpful. Yeah.
19:14
So from, from the marketing side of things, you know, we we have
19:19
two individuals that are in charge of social media and
19:22
making sure that we're relevant and present on social media.
19:26
We have a content creator and website developer, so we always
19:31
refresh websites. If a, if a logo needs refresh,
19:35
we'll do that as well. And then we have a gentleman
19:39
that that goes out and does live shoots on all of our projects.
19:42
You know, our type of work, people have to see it and, and
19:45
it's got to speak to them. And so we're constantly
19:48
refreshing content on live work that's going on in completed
19:52
projects and that helps us out From the sales side of thing,
19:55
really, you know, my background being focused on sales where I
20:01
think, I guess you could say we set ourselves apart, but I don't
20:05
think it's a novel concept on anything.
20:07
But in sales, it's pretty straightforward.
20:09
The person that follows up the most generally wins.
20:12
And so everything we preach is speed delete.
20:15
If someone calls in, we need to get in front of them and we need
20:18
to make sure we're following back to get a decision with
20:21
them. And you know, you earn that
20:22
right by going out, talking to them, understand their problem,
20:25
diagnosing a solution, and then, you know, building a report to
20:29
where they feel as though you've got my best interest.
20:32
I think you're a reputable company.
20:34
This is the people I want to do business with.
20:36
But so many times in all sales, but especially in skilled trade
20:40
sales, it's if I don't get the yes right there, then I move on
20:43
to the next one. And you know, we, we hear it all
20:47
the time. Someone came out to look at my
20:49
project and I never heard from them again.
20:51
And we don't want to be that group.
20:52
And so we're constantly preaching just follow up, follow
20:55
up, follow up. And that's all based off of your
20:58
ability to to build rapport and value and what we have to offer
21:01
on that initial meeting. You've probably got some tech in
21:04
place, some CRMS and whatnot and some automated follow up
21:08
sequences. Or at least Ding the the sales
21:10
Rep to tell them that they need to make that call again.
21:13
Yeah. Yeah.
21:15
And and that becomes a little bit of a challenge from a merit
21:18
level because every, every company has their own CRM and
21:24
and lead management system and point of sale system.
21:28
And really it has to be that way because they're so specialized.
21:32
And so it's hard to find one program that encompasses, you
21:36
know, cabinet manufacturing along with HVAC install just
21:39
it's hard to find. And so each one has their own
21:42
system and, and then what we're able to do is generate rolled up
21:46
reports by getting them together.
21:48
And Tim and our accounting department does a good job in in
21:51
marketing from a CRM standpoint of that.
21:54
So you're able to allow each of the acquired entities to
21:57
maintain sort of that CRM structure that they've got in
22:01
place because like you said, the the tool that they're using is
22:05
so specialized for their industry.
22:07
It has the different feature sets that they need.
22:10
So what you have to do is come in and figure out, OK, how can
22:12
we get the data out of there to make sense from a reporting
22:16
perspective and let us know that we're hitting our metrics.
22:19
And if we're not, let us know kind of where that coaching
22:22
needs to take place. Yep, exactly.
22:25
And so from a financial perspective, some of these
22:28
systems that we have drive our financial statement.
22:30
And so that becomes another challenge is to do exactly what
22:35
you just said, to be able to harvest that data, roll it up
22:38
and make sure that we have accurate reporting.
22:41
The advantage though, if they're, if you wanted to point
22:44
out the biggest advantage of everyone having their own CRM is
22:48
we're able to extract those leads.
22:50
We keep them at the business obviously, but extract them and
22:53
load them into our merit database.
22:56
And what that allows our marketing team to do is take the
22:59
leads from our HVAC company and now be able to market to them
23:04
for cabinetry and flooring and remodeling services as well and
23:08
vice versa. Our remodeling companies now go
23:10
into the pool of merit leads and they might get marketed for HVAC
23:16
installation and furnace insulation, whatever that may
23:19
be. And so we're able to now these
23:21
businesses that were kind of on their own island make them a
23:24
part of a bigger group and their lead pool now becomes a part of
23:28
a bigger group and allows us to offer, you know, more programs
23:32
to more customers between all of our our companies combined.
23:36
I'd like to hear a little bit more, Ryan, about what you've
23:38
learned from due diligence. You know, when you go in and
23:43
you're thinking about acquiring a company, you're doing research
23:45
on them. You're looking at their
23:46
financials. You know, you're taking a look
23:48
under the hood like what's the state of this company?
23:50
I want to know what I'm getting into and if this seems like a
23:53
healthy company, you're not. And that can be a difficult
23:56
process. Anybody who's ever been through
23:58
it, you know it. It's hard to spot all the the
24:00
warts and wrinkles from whatever is being presented to you.
24:04
Is there anything in particular that you've kind of learn
24:07
through experience in the process where you're like, oh,
24:11
here's something that we do now that we didn't know to do when
24:15
we first started? Yeah.
24:17
I, I think the biggest thing that we've, I guess, conditioned
24:22
or trained ourselves to do is to remain disciplined in the sense
24:25
that if we see a red flag, generally speaking, there's a
24:28
red flag. And so, you know, if you're
24:32
getting surface level answers on something that you think doesn't
24:35
look right, the chances are they're trying to hide
24:38
something. And so we continue to dig and
24:40
you know, we try to safeguard ourselves with that.
24:42
We, we do a pretty in depth due diligence here at our merit
24:47
office, but we also hire external externally, another
24:53
company that will do the same. So that way we can cross compare
24:56
and compare notes and make sure we're not missing something and
24:59
vice versa. And so we've learned again that
25:05
if something doesn't look right, it's probably not right unless
25:08
there is a clear explanation from the beginning.
25:10
But more more times than not, that explanation is very surface
25:14
level and it probably tells you everything you need to know.
25:18
I think that's a great reminder. I mean, anybody who's ever gone
25:20
into a deal, you get excited about it, right?
25:23
I mean, you're, you're, yeah, This is why this is fun.
25:26
Like let's grow the business that we see opportunities here.
25:28
And sometimes you see these flags and you try to explain
25:33
them away or it's not a big deal or, you know, even if it is
25:37
true, we can still work around that.
25:38
And so it's great to hear, you know, from your experience,
25:42
somebody's been through this multiple times.
25:43
You're like, now if it looks like a flag, it's probably a
25:45
flag. Time to.
25:47
Step away. I think human nature also is it
25:50
might be a flag, but I can fix it.
25:52
And I think you have to keep the approach of assume you can't fix
25:56
anything. Read the business as though it's
25:59
going to continue as it is. And if there's a red flag there
26:03
that you know, pretty much if again, if you aren't getting the
26:06
answer that you know, you probably need to get, which is
26:09
some details behind it that's going to tell you what you need
26:13
to. Know Ryan, if you had to
26:15
recommend one resource to our listeners, a book, a course, a
26:20
podcast that's been really helpful for you, what would it
26:24
be? Let me think here.
26:29
You know, my, mine's a little hard because I think my greatest
26:34
resource was my corporate life. I got exposed to so many
26:37
different businesses in, across the country and multiple former
26:42
owners and leaders that approach things differently.
26:45
And so, you know, I, I really let I, I lend myself back to
26:51
that training as what, as I'm working here at merit is what I
26:54
learned from my time with SCI that really helped me gain a
27:00
business knowledge and be able to, you know, look at a
27:03
business, What am I looking for and what do I think is possible
27:05
with them? And so, you know, that's not the
27:07
answer to your question that you're looking for, but that
27:10
really is my #1 resource was, you know, the people that helped
27:15
me the most are the people that I was paired with and really
27:19
asked questions And, and, you know, I wasn't afraid to say, I
27:23
don't know the answer. So train me and teach me and
27:26
still try to keep that today. But you know, that's, that was
27:29
my learning ground was my 18 years of being able to, to see
27:33
live day-to-day real scenarios and to be able to inquire and,
27:38
and learn and listen and and remember and, and act on what,
27:44
you know, what I was told would be the best approach.
27:46
And there's a lot of trial and trial and error in that.
27:50
Well, I think there's a ton of value in what you just shared
27:52
there for our listeners, Ryan, because, and sometimes we get
27:56
sort of distracted with, oh, what's the, the cool new book
27:59
everybody's talking about or the podcast du jour where I'm going
28:03
to, you know, level up my game and, you know, hearing your
28:05
story. It's like, and I learned from a
28:07
lot of great folks that I worked with.
28:09
Like I I was just super involved in my job and asking questions
28:13
and not afraid to admit when I didn't know something and
28:17
actively asking for acting, asking for help, asking to be
28:22
trained on that thing. And man, what a great way to
28:26
learn. I, I can think of no better way
28:28
myself to learn than on the job. Like it's one thing to learn
28:32
theory from a book or to hear somebody else in a podcast talk
28:35
about the way that they would approach something.
28:37
It's great to get those new ideas.
28:38
But man, hands on, you know, roll up your sleeve, get your
28:42
fingernails dirty, get right in there and learn.
28:44
I mean, I, I think those are that's the best way, period.
28:48
And I think there's a lot of people even today, you know,
28:51
because I'm still new to merit and, you know, I, I think I have
28:56
a good business knowledge, but always learning.
28:59
I still run into people today that, you know, I meet them,
29:02
they've been very successful in their line of work and, and they
29:05
offer, you know, if I can ever help you, I'm happy to do so.
29:08
And think sometimes when you're getting going or, or, you know,
29:12
starting to learn what it is you want to pursue, you feel as
29:16
though those people are too busy to talk with you.
29:18
And it's amazing how many people out there will actually spend
29:21
the time with you and, and want you to be successful.
29:24
Even if you're a competitor, they're willing to share what's
29:26
helped them. And I think sometimes we just,
29:29
we assume they won't do that. And, and I would encourage
29:32
people reach out to professionals in the, in the
29:35
line of work you're looking for. And you'd be amazed how many
29:38
people will spend some time with you and share some pretty good
29:41
secrets that'll save you a lot of time of of making your own
29:44
mistakes. Oh, that's a gold nugget right
29:46
there. You don't know if you don't ask.
29:48
Don't assume that even if you guys are, you know, traditional
29:52
competitors, that you know there isn't a bond to be formed there.
29:56
I like that, Ryan, I want to shift gears a bit and would love
29:59
to hear about a serious challenge that you've overcome,
30:03
whether it's personal or professional.
30:06
How'd you get through it? What did you learn coming
30:08
through the other side? Yeah.
30:11
So I, you know, I kind of hinted on it earlier with my challenge
30:15
of thinking I had my first career set up, you know, coming
30:18
out of college and, and getting a three day notice that I no
30:22
longer had that job. And I'll tell you what, when
30:24
you're young and you're excited to get out of college and get
30:27
into the workforce, that that's somewhat of an ego boost.
30:30
Now all of a sudden I'm starting all over and have to find
30:34
something and, and figure out what I'm going to do.
30:36
And then, you know, I would say that challenge grew once I got
30:39
hired by Service Corporation International.
30:42
You're in the funeral and cemetery business and I never
30:45
saw myself being in funeral and cemetery business.
30:48
And the challenge was I needed to learn it and learn it to the
30:52
best of my ability. I had resources around me and
30:55
training around me. But really at the end of the
30:57
day, that type of business is getting in skin in your knees
31:01
and figuring it out. And so that was a big challenge.
31:04
And and I will say there were times where you question, is
31:07
this what I'm really supposed to be doing?
31:09
Is this worth it? And, you know, in the end, here
31:13
we are 19 years later and I had a great career in the corporate
31:17
world. And now I feel as though I've,
31:19
I've started, you know, to form a really nice company and can
31:23
have a great second career. But really that challenge of
31:27
just second guessing what you're doing.
31:29
And and, you know, am I cut out for this?
31:32
And you hear it all the time. People quit right before they
31:35
see the reward And and I kept telling myself that and I was
31:39
able to see some rewards and you know, there's days now starting
31:43
my own company where you question, is it worth the grind?
31:46
And you just got to trust it is it's just continuing to fight
31:49
through those challenges and really taking care of what's in
31:53
between your ears and, and what you're saying to yourself.
31:58
Let's say a little bit more about that.
32:00
You said something interesting there.
32:02
You kind of asking yourself the question, is this what I'm
32:05
supposed to be doing? And and I'm curious from your
32:07
perspective, was that kind of more of like a existential like
32:11
is this my like the purpose of what I'm here on earth or man,
32:15
this is just too freaking hard. Maybe there's some like an
32:18
easier path out there? Yeah, I, I think mine was, you
32:23
know, I felt as though I wanted to be in business and in
32:26
business management and then, you know, really like the sales
32:29
Ave. And there were times where at
32:32
starting out, you know, you feel as though you're just always
32:35
playing catch up. I don't know what I don't know.
32:38
And so then I started to question it.
32:40
Is business and being a business leader really what I'm made out
32:44
to be? And and then shift to the sales
32:47
side. Am I really cut out to hear?
32:49
No more than I hear yes. And you know, it's hard to get
32:52
in front of somebody and pitch and let alone pitch by your
32:55
cemetery space from me. And so, you know, those were the
33:00
questions that I had and, and went through my head was am I
33:04
equipped to be a leader, which is what I've always envisioned
33:06
myself as? And am I willing to put in that
33:09
work? Because, you know, I always felt
33:12
like I was playing catch up to get up to the people that were
33:15
in those roles just from an experience standpoint.
33:18
And then what you tend to find out is experiences in
33:21
everything, right? It's your ability to to handle
33:25
difficult situations, to handle yourself through that.
33:28
And you know, that's leadership because now the people that see
33:32
how you handle it realize that, you know what, that's the right
33:35
person to be in front of a group and show them how we handle
33:39
adversity and how we handle success and how we can continue
33:43
to grow employees that that have the desire to grow and, and be
33:47
successful because they want to emulate the leader that they're
33:50
ahead of. And you know, there were plenty
33:52
of times before I got to that that I just questioned if I was
33:55
cut out for that. How do you work through that?
33:58
I mean, you talked about taking care of that Gray matter between
34:01
your ears, that doubt that you're talking about that
34:05
questioning of your own abilities, especially when
34:07
you're getting a lot more Nos than yeses.
34:10
That's that's common. But how did you figure out to
34:13
pull through that? What what?
34:14
What's been a helpful tool or or process for you?
34:17
Keep going. I mean, eventually if you get
34:21
enough of bats at bats, you're going to get a hit, right?
34:24
And once you get a hit, you get confidence.
34:25
And once confidence grows, the the hits come more often.
34:29
And what I kept telling myself was I just got to keep going.
34:32
I just have to go back to it. And if I'm not cut out for it,
34:35
what I don't want to do is tell myself I'm not, you know, you
34:38
start to question that they have to make that decision at the end
34:42
of the day. And and they being my employer
34:45
and so, you know, now owning my own company, same thing.
34:48
It's like every day you just got to go back to it and you got to
34:52
keep pushing forward because there's no sense in going back
34:55
and there's no sense in stopping.
34:56
And when it's time to stop, the stop sign will hit you, right?
34:59
You'll be done. But for right now, just keep
35:02
going. And I think, you know, that's
35:04
how I got through that was just continuing to tell myself learn,
35:08
but keep stepping forward and, and trust that, you know,
35:12
eventually it'll click. And, and it did.
35:14
The light bulb went off and you go OK now I got this.
35:17
Yeah, 1 foot in front of the other is what I'm hearing you
35:20
say. And I hear it from a lot of
35:23
entrepreneurs or a lot of C-Suite level folks that it, it
35:27
can be really hard. And it's a hardness that people
35:29
from the outside don't see. And so hearing you give voice to
35:34
it. And like I, I don't know, I
35:37
just, I get up and I, I take another swing, I put my foot in
35:40
front of the other foot and I just keep going.
35:43
I mean, that's the recipe, right?
35:45
And like you said, at some point, if you're supposed to
35:48
stop, you'll know the stop sign hits you in the face.
35:51
But just because it gets slow and hard, that's not the time.
35:54
That's that's the time to double down.
35:57
Behind every great business is a great team.
36:02
My experience, Ryan, nodding your head like you agree.
36:05
What's been your strategy for attracting and then retaining
36:11
good folks? Yeah, I think a lot of times my
36:17
experience has been people look for experience within the field
36:21
that they they currently oversee and and I didn't always find
36:25
that to be the best approach. What I looked for to build a
36:28
team was attitude and effort, and I believed I could teach
36:32
them the role as needed to be teach.
36:36
Now, granted, there are some people that it requires some
36:39
background. I'm not saying that in some
36:40
positions, but I think at the end of the day, the more you can
36:44
do to really test someone's ability to handle you know what,
36:50
what is your attitude? Just as you asked me, when
36:52
something goes wrong, what's your attitude?
36:54
When something goes right, You know, attitude and effort to me
36:57
go a long way in, in helping a company be successful in a team
37:01
to build a culture because it's contagious.
37:04
And, and next thing you know, you have a team full of doers
37:08
and you know, are, are patting each other on the back and
37:12
celebrating wins and successes and lifting people up and each
37:15
other up when things aren't going well.
37:17
And, and you need that. And so in order to build out a
37:21
successful team, that's been my experiences.
37:24
I try to find out how can I figure out what their attitude
37:27
is on a daily basis. And most people will show you 2
37:30
minutes into your interview and you know, how do you judge what
37:34
effort can get out of them? And that's to me, based off
37:37
background. What have they done previously?
37:39
How did they work themselves through it?
37:40
How did they work themselves to be successful?
37:42
Keep that job, you know, get promoted, whatever that may be.
37:46
And those answers will tell you a lot towards the effort that
37:49
they're willing to put in. That was going to be my question
37:52
is how do you ascertain that in an interview?
37:54
And so you like asking questions about something that they had to
37:58
work through in a previous job. Give me that example and kind of
38:02
talk me through the steps that you took.
38:04
Is that right? Yeah, and I think on the
38:06
attitude side, you'll find out a lot just asking, you know, as
38:11
you think of the places you've worked, what what was your
38:14
favorite culture environment that you worked in and why?
38:18
And a lot of times they will tell you I worked at X and it
38:22
was my favorite because you know what, we celebrated, we had a
38:25
good time, we worked hard, but everybody just really got along
38:29
and made things happen. Well, they were a part of that
38:32
as well. And so, you know, generally
38:34
speaking, they get along because they're they're positive
38:37
individuals that have great attitudes that are looking to
38:40
celebrate success and helping people when the success isn't
38:43
there. And so that can tell you a lot
38:45
right there. Right.
38:47
Do you have any particular daily habits or rituals that you go
38:52
through? Either something to help you
38:53
start your day or to keep you centered throughout the day.
38:58
Yeah, so I'm, I'm fortunate I have a home gym and so I usually
39:02
get up about four in the morning.
39:03
I try to have a cup of coffee before my I have a six, four and
39:07
two year old before they get going.
39:09
So I I like that morning routine of quietness.
39:14
It's dark still. So I get some time to just think
39:17
to myself and then I try to get in a 45 minute to an hour
39:20
workout and get all that done before anybody else in the house
39:24
is up and, and go on. And really to me, that's my time
39:28
to have to myself to think through, you know, what it is
39:32
that I did the previous day that helped me be successful and what
39:35
I need to do today to make today a success.
39:37
And so that's really my, my number one, I guess go to is
39:44
making sure that I have that time to myself.
39:47
And then I get a workout in and I try to push myself in a
39:50
workout because if I can do that before 7 AM, 6:30 AM, you know,
39:55
and get one of the hardest parts of my day out of the way, I know
39:58
I'm set up for success the rest of the day.
40:01
So if you're up at 4:00 AM, what time does that mean you're
40:03
hitting the sack? My wife and my friends will tell
40:07
you I am that guy. 8:30 I'm in bed and if I see 9:00, it's a
40:12
late night for me. So I'm very fortunate, Anthony,
40:16
I can fall asleep like that. So if I lay down and and I, you
40:21
know, I'm shot at the end of the day.
40:23
I like I said, between dealing with employees all good, you
40:27
know, never bad, and then going home and chasing three boys
40:31
around and when I put them down, I'm ready to go.
40:35
It's time to sleep. Well, what's something fun that
40:37
you do outside of? Work Ryan spend a lot of time
40:40
with my family. I coach my boys in baseball, do
40:44
a lot of wrestling with them that my 2 oldest are heavily
40:48
involved in wrestling. They like that.
40:50
I don't coach basketball. I love basketball, but I have
40:53
someone else coach that. I think it's important for your
40:55
kids to hear from someone else occasionally.
40:57
And so I other people coach that and then they're involved in
41:01
football and soccer as well. So my time is eating up with my
41:05
family. But you know, outside of that,
41:09
really enjoy spending some time with my wife.
41:11
We like to take vacations, we like to go to dinner, you know,
41:14
those things to just kind of get away from the kids, get a little
41:17
break and recharge and and then go back to being full time
41:22
parents and business owners. What's the best decision you
41:26
ever made for your business? The best decision I ever made
41:32
for my business outside of just starting the business, which was
41:36
a huge jump, right, because that's that's scary.
41:39
I listen, I had a great role. I was, I make good money and I
41:44
could have continued that for the rest of my life and retired
41:47
and been happy. But you know, I wanted to
41:50
challenge myself. And so, you know, the best
41:52
decision was starting it. The second best decision was
41:56
putting in our leadership team because that really speed up our
42:00
growth. In my opinion.
42:01
It's a lot on one person and so I think you have to surround
42:05
yourself with other people that can see your vision and can help
42:07
you build it. And so you know we built out our
42:10
infrastructure at the at the merit level after just one
42:13
acquisition, but we knew more acquisitions were going to be
42:17
coming and we needed to be prepared for it.
42:19
And I think that speed up the growth of our company because
42:23
now we're not hiring roles as we are acquiring.
42:26
Those roles are in place and we can hit the ground running day
42:29
one and help these companies become even more successful and
42:32
intern make Merita a success. What's your schedule?
42:37
You hoping for one new acquisition a year?
42:42
So last year we had four acquisitions.
42:44
This year we're hoping for three to four acquisitions.
42:47
We'd love to see us right in that 100 million in revenue by
42:51
the end of this year with some of the stuff that we have lined
42:53
up. And we have one that we should
42:57
close here in the next, I'll call it 30 to 45 days.
43:00
And then, you know, a couple that we're in conversations with
43:04
now. So that would help us get to
43:05
that goal. And you know, while we set that
43:07
goal, we also recognize, you know, buying a business is a big
43:11
commitment. So if it means we can only make
43:14
one acquisition this year because the other ones didn't
43:17
make sense, then so be it. We go back to the drawing board
43:19
and we figure it out. But there's a lot of good
43:22
businesses out there and now our names kind of spread and we're
43:25
getting approached. So we have a lot of confidence
43:27
in, in this year being able to do that three, you know, 3 to 4
43:31
acquisition and grow our top line revenues to a number that
43:34
we think is realistic. That's exciting.
43:38
Let's say that you and I connect again in a year, Ryan, and
43:41
you're celebrating something. What would you hope that is?
43:45
I think it would be that we've accomplished the acquisitions
43:49
that that I just shared with you.
43:51
I think we're pushing at 120 million in revenue.
43:54
I think we're looking at some recapitalization on a couple of
43:57
our businesses that allow us to have 100% ownership and give our
44:02
investors on those original funds a really nice return.
44:06
And so now they're looking to continue to invest with us on
44:09
future endeavors. And I think you Fast forward a
44:12
year from now, those are very realistic and and something that
44:15
we're shooting for. What's one thing you wish more
44:18
people understood about the industry that you play in?
44:25
The costs that are behind what goes into whether it's HVAC,
44:31
whether it's a remodeling project, cabinetry, flooring, I
44:35
think some people have an unrealistic expectation.
44:37
And I always tell folks this, it's because of HGTV, because
44:41
they go on there and someone redoes their, you know, home
44:44
kitchen for $20,000. The fact of the matter is you
44:47
just can't do that today. Stuff's expensive.
44:50
And, and so, you know, when I hear people say, how can you
44:53
charge that much? It's like, well, we have a
44:55
building, we have a showroom, we have employees and things cost
44:58
money to get. And you know, we're not, we
45:01
don't want to be the cheapest in town.
45:02
We never do. We want to be the best in town
45:05
and to get the best, you got to pay a little bit more.
45:07
And so I think I wish people would just understand just I
45:11
think there's this, I'm jumping around here, there's this
45:15
perception of, you know, blue collared skilled trade job by
45:18
some people that it's low compensation.
45:21
It's not it's a skilled trade. These folks have have trainings
45:25
and certifications and not everybody can do it because if
45:29
they could, nobody would be in remodeling because everybody
45:31
just remodeled their own house, right?
45:33
And so there's a lot of costs that go into getting good people
45:37
and putting out a good product. And I just don't know that
45:40
people understand that or don't realize what the true cost is in
45:44
today's world. I think they still think back
45:46
to, well, you're remodeling. When I built this kitchen, I
45:49
could build it for 10,000. Now you're telling me it's
45:52
50,000. Well, some time has passed
45:54
since. Then just got one more question
45:58
for you, Ryan. But before I ask it, I want to
46:00
do 2 things. First of all, I'm going to
46:02
invite everyone listening today to hit the follow button on
46:05
their favorite podcast app so you can continue to get more
46:08
great interviews like we've had today with Ryan at Merit
46:11
Management Group. Ryan, I also want to let people
46:14
know the best way to either get in touch with you directly or to
46:18
follow your story or that of Merit.
46:22
Yeah. So our websitesmeritmgt.com and
46:27
on there has all the information about our companies and about us
46:31
and and our story and then also newsletters and and investment
46:36
information for anybody that's interested there.
46:39
And then they can also shoot me an e-mail,
46:42
its.ryan@meritmgt.com. And happy to share any
46:47
information with anybody, whether it relates to merit or
46:51
just personal experience. That's great.
46:54
And for those folks listening, Merit IS1R and 1T.
46:59
We'll have a link to both the website and Ryan's e-mail
47:02
address in our show notes. But in case you don't have those
47:05
in front of you now you know how to get in touch with them.
47:07
So last question for you, Ryan. As we look to the future over
47:12
the next two to three years, what exciting changes do you see
47:16
coming to your industry or industries, you know, kind of
47:20
across the different construction sectors?
47:23
Yeah. I think, you know, hopefully we
47:26
see some relief on rates. I think that will happen which
47:29
will bring up new construction, especially on the residential
47:32
side and even on the commercial side.
47:34
So you know, that starts to increase demand and you know
47:38
that's exciting to me because I think we're well positioned to
47:42
serve that demand and capitalize on that demand.
47:45
I think the other piece that that excites me is, again, we
47:49
talk about the deficit that we have here on residential homes
47:52
in the US. And so I think you're going to
47:55
see as rates start to come down, that demand goes up and we could
47:58
start to chip away at that deficit.
48:00
And that plays really nicely into the businesses that we own.
48:04
And the other piece that excites me is, as I said at the
48:07
beginning, you know, this space can't be replaced by AI.
48:11
It's dependent on human interaction.
48:13
And I think we're going to continue to see AI take a bigger
48:17
percentage of jobs and, and be more day-to-day interaction, but
48:22
not in this space. And that excites me too,
48:25
because, you know, we continue to get to have human interaction
48:29
and, and show our skills and not worry about being replaced with
48:32
them. When you said something earlier
48:34
in the interview too, that I thought was really interesting
48:37
about the silver tsunami. So we've got baby boomers who
48:40
are aging. And I traditionally hear, you
48:43
know, folks in sort of the senior care, the home health
48:45
care space talk about this and how, you know, demand is high
48:49
and it's increasing and there's sort of a gap and you know, what
48:53
they're able to provide and what the the demand is for it.
48:55
But you're kind of coming at it from a different angle.
48:57
These same baby boomers are, are kind of aging out of their
49:01
businesses now. They're getting to the point or
49:03
they want to retire, they want to slow down and there isn't
49:06
that succession plan in place. And so that creates an
49:09
opportunity for a group like Merit to come in and you know,
49:13
give those folks a nice retirement and and you know, be
49:17
able to carry that that legacy business on.
49:20
Totally, Yep. And that, you know, that number
49:23
will continue to grow for the next few years and, and creates
49:26
great opportunity for us to, to show what we can do and, and,
49:30
you know, hopefully build a relationship with some of those
49:32
sellers and, and be able to enhance what they've what
49:35
they've built on. Ryan, I want to be the first one
49:38
to thank you for sharing both your time and your story with us
49:41
today. I really appreciate it.
49:43
You bet. Thank you.
49:44
I I appreciate you having me on. Folks, that's a wrap on another
49:48
episode of the Inspired Stories podcast.
49:51
Thanks for learning with us today.