Latest / The Turn: Blue Collar to Billions / His Sale Number Was Fixed Before the Deal Ever Started

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His Sale Number Was Fixed Before the Deal Ever Started · The Turn: Blue Collar to Billions

• 0:01
  SPEAKER_00: Just like hiring that talent from a sales perspective where cut him a big check, but he's gonna go out and you know make you a lot of money.
• 0:09
  SPEAKER_00: Those investment bakers and the good brokers are gonna do the same thing for you.
• 0:36
  SPEAKER_01: Welcome back to the turn.
• 0:38
  SPEAKER_01: I'm Corey Mitchell of iconic founders.
• 0:40
  SPEAKER_01: The turn is where blue-collar founders talk about the business that they've built, the value they've created, and what comes next after after they stuff.
• 0:49
  SPEAKER_00: When people, when competition doesn't give you credit or an ability to do something, use that to your advantage.
• 0:57
  SPEAKER_00: That's what I did.
• 0:58
  SPEAKER_00: I I I didn't sit there and argue with them and tell them, oh yeah, well, let me show you what I've done.
• 1:03
  SPEAKER_00: I'm like, okay, keep thinking that, right?
• 1:05
  SPEAKER_00: Because the more you think that, the less you're sitting there trying to think of how you're gonna stop me.
• 1:09
  SPEAKER_00: No, well, eventually we we reached a point where everybody, okay, these guys are players and they can bid on everything.
• 1:15
  SPEAKER_00: And so we then start to have to have a uh a greater offense because their defense was coming out, but we took advantage of that opportunity when we were small to to really be stealth-like and uh and get positioned well for a lot of good opportunities.
• 1:29
  SPEAKER_01: I mean, doing the Apple project in Austin, I mean, that had to really be planting a flag for you.
• 1:35
  SPEAKER_01: Was that was that the biggest job you'd ever done?
• 1:37
  SPEAKER_00: Before that, our biggest project was 500,000, and that project, the initial base contract was 1.9 million, and it ended up being almost 3.2 when it was all said and done.
• 1:51
  SPEAKER_00: And believe me, when when they sent me this 500-page hard contract, three copies that I had to initial on every single page, I was the the nerves were sending in and going, like, okay, we need to triple our size and hire this many people and recruit this much talent.
• 2:08
  SPEAKER_01: And try not to go broke.
• 2:10
  SPEAKER_00: Yeah, that's what it was.
• 2:11
  SPEAKER_00: You know, going back to my parents' store where they said, Yeah, we know the fiber optic experts.
• 2:15
  SPEAKER_00: We're we're we're the ones, we'll get it done.
• 2:16
  SPEAKER_00: It was like, we'll we'll figure it out.
• 2:18
  SPEAKER_00: And we did, and it it will it wasn't easy, but we got it done, and then it, you know, it just set a set of basis to you know do that again and again on being able to just continue to scale um and build that brand and reputation within our in our our area and our industry that people knew we could get it done, and so continue to just double down on that approach.
• 2:39
  SPEAKER_00: So, what year was the Apple job?
• 2:40
  SPEAKER_00: I think that was 2014, so only three years in.
• 2:43
  SPEAKER_00: Yeah.
• 2:44
  SPEAKER_01: So 2014, you take down a three million dollar job.
• 2:47
  SPEAKER_01: What kind of revenue were you doing at that time?
• 2:50
  SPEAKER_00: Maybe three million, I guess.
• 2:51
  SPEAKER_01: So it was like your whole it was like your whole year.
• 2:54
  SPEAKER_00: Yeah, yeah, exactly.
• 2:55
  SPEAKER_00: Yeah, I think we hit 10 million in 2015 or 16.
• 3:01
  SPEAKER_01: Okay, well, that's fast growth.
• 3:02
  SPEAKER_01: So you triple between 14 and 15 or 16.
• 3:05
  SPEAKER_00: Yeah, my motto was always from our bidding, estimating, and sales side, it was the the metric I used to kind of set goals for how much work we needed to pull down was based off of how many employees we employed.
• 3:20
  SPEAKER_00: I broke that down into hours and said, this is how many mouths we have to feed.
• 3:24
  SPEAKER_00: Everybody that worked for us in-house and doing our labor was an employee.
• 3:29
  SPEAKER_00: I felt like that's how we kept our quality, kept our brand.
• 3:32
  SPEAKER_00: Um, but it also creates a need for like going, hey, you know, they're committing to you.
• 3:37
  SPEAKER_00: We need to commit to them.
• 3:38
  SPEAKER_00: And so using that as a tool or a metric to go, here's how much work we need to work.
• 3:43
  SPEAKER_00: And so in doing that, it naturally split us even winning more work and then continuing to grow.
• 3:49
  SPEAKER_00: And my parents' company had got to like like 19 million.
• 3:52
  SPEAKER_00: Um, and I was like, man, if I could ever get to that size of a company, I was like, that would be that was that was the last goal post I said I'll ever need.
• 4:00
  SPEAKER_00: I'll need to like go past that.
• 4:01
  SPEAKER_01: Well, that's so you then doubled again from 10 to 19 or more over the next year.
• 4:09
  SPEAKER_01: So you went rough.
• 4:11
  SPEAKER_01: I'm just I'm just giving you rough numbers here.
• 4:13
  SPEAKER_01: 2014, you're doing three million, 2016, you're doing 10 million, 2017, you're doing over 19 million.
• 4:21
  SPEAKER_01: I mean, that's incredible growth.
• 4:22
  SPEAKER_00: So yeah, we did uh we hit that 19, and I think we hit that 19 million in like it was October, right?
• 4:30
  SPEAKER_00: It wasn't even uh so it was so we ended up clear, I think 21 that year um of what it was.
• 4:37
  SPEAKER_00: And so we got to I think it was 2019, we were doing about 30 million, and that's when like just everything was up and to the right.
• 4:47
  SPEAKER_00: Um, you know, we were doing our highest revenue and our highest margin um because we were still just operating very thin.
• 4:54
  SPEAKER_00: I had been operating the company in the way of not scaling it.
• 5:01
  SPEAKER_00: It was and when I say that I mean not investing in all the different things, the systems and processes to grow them into, which take an investment now, which aren't going to pay off till later.
• 5:10
  SPEAKER_00: So our margin was really good, but it was stressful.
• 5:14
  SPEAKER_00: Everybody was working incredibly hard to put the company on the market in 2016 or 15, actually.
• 5:20
  SPEAKER_00: You know, I was getting all the emails of like, hey, we we see your company, you want to sell the bubble.
• 5:25
  SPEAKER_00: At the time I had no intention.
• 5:27
  SPEAKER_00: Um, really, I was my whole intention of even signing with uh the company was because I wanted to know what the company was worth.
• 5:34
  SPEAKER_00: And one of the things my dad always told me when I was uh collecting baseball cards back when I was younger was like, I'd open up the Beckett and I'm like, hey dad, this car is worth this much.
• 5:42
  SPEAKER_00: He's like, son, our car's only worth as much as somebody's willing to pay for it.
• 5:47
  SPEAKER_00: And you know, I want to know how much my company was worth, and you know, you could pay a consultant like$100,000 to do it.
• 5:52
  SPEAKER_00: And I was like, you know what, I could just pay this other company to put me on the market and get an offer, and I'd know how much I'm worth.
• 5:57
  SPEAKER_00: So that was like the initial intent.
• 5:59
  SPEAKER_00: And then as I did that, seeing offers that were coming in and then just that thought exercise of like, oh wow, I didn't realize company was worth this much.
• 6:07
  SPEAKER_00: I had a really, really good, compelling offer that um I almost pulled the trigger on, but everything was up and to the right.
• 6:16
  SPEAKER_00: I was kicking off my lifestyle at this point, it was still very, very under what I was generating from an income standpoint and distribution, even with reinvestment and everything else.
• 6:28
  SPEAKER_00: And so I was like, man, I don't need to do this, let's just keep going.
• 6:31
  SPEAKER_00: And then COVID happened, and honestly, COVID wasn't COVID actually was a boost in our business.
• 6:38
  SPEAKER_00: Um, didn't it was scary, uh, certainly at the time because of the unknowns, but you know, in retrospect, it was or we grew even more through COVID.
• 6:47
  SPEAKER_00: Get from that 30 to 50, I think it was 2021, we did 50 million, and that was when we got to the size where I was making a lot more mistakes than I had been before, and they were bigger because of the size of the company, and yep, you know, your ship's bigger, it doesn't turn as fast, you know.
• 7:05
  SPEAKER_00: And I started to try to scale the company a different way, hired a creating a whole sea level suite team that I was like, all right, I'm gonna create all these apartments so we can grow into this.
• 7:14
  SPEAKER_00: Um I didn't do that right.
• 7:15
  SPEAKER_00: I learned the hard way of how to not do it, I guess, technically.
• 7:19
  SPEAKER_00: And we lost, you know, the first year we ever had a loss.
• 7:22
  SPEAKER_00: We still did 50 million, but we lost money in 2022.
• 7:24
  SPEAKER_00: We had a bunch of projects here locally that we were working on a one big one that just you know really, really hurt us um because we just weren't we weren't prepared for it.
• 7:35
  SPEAKER_00: I at this point in time I had like sort of started doing other a little other ventures, kind of delegating a lot, having more free time.
• 7:43
  SPEAKER_00: You know, I just had our our my first kid, and so I wanted to spend some time with the family, and so I was enjoying a little more of that work-life balance, um, but had to jump back into the company in 22.
• 7:53
  SPEAKER_00: We got stricken with just complacency and kind of lost our way a little bit.
• 7:56
  SPEAKER_00: Took a good two years to go back in there and fix all that to get us back in a good position, eventually to sell in uh 2024.
• 8:06
  SPEAKER_00: And ironically, the the what I ended up selling for was the same amount that I got offered for in 2019.
• 8:11
  SPEAKER_00: So now I got us back to that because we were certainly undervalued that in between that span, but took me five years and a lot of hard work and a time when I wanted to spend it with family to get us back to that point.
• 8:21
  SPEAKER_01: Were you able to take money out in those five years though?
• 8:24
  SPEAKER_00: I was, yeah, I was able to take uh um a little bit and in so a lot more relative to to what I had been doing before, but I was taking money out because my CF CFO at the time had a working capital methodology that we were using that said I could, and we really shouldn't have been.
• 8:45
  SPEAKER_00: And so that was all part of the problem.
• 8:47
  SPEAKER_00: I mean, it was it wasn't intentional, it was just you know the way we were looking at things and the jobs we were taking and not tracking things right.
• 8:56
  SPEAKER_01: Yeah, I'd love to dive into a couple of topics.
• 8:59
  SPEAKER_01: You know, so one of the earliest things you said is I wish I'd uh done a big boy ERP at the beginning.
• 9:05
  SPEAKER_01: Okay, so you you start going through these struggles, you know.
• 9:09
  SPEAKER_01: You grew, maybe you grew too fast, you got unwieldy, maybe you brought in the wrong talent.
• 9:14
  SPEAKER_01: At what point in the journey do you start using data to manage the business?
• 9:19
  SPEAKER_00: I tried to do that throughout the entire course.
• 9:21
  SPEAKER_00: I would say we we really started doing that well, probably around that to get from 10 to 30 million, we did a really good job at that.
• 9:30
  SPEAKER_00: We had a medium-sized ERP, we did one transition after QuickBooks, and you know, we were looking at everything the right way and using it correctly.
• 9:38
  SPEAKER_00: When I went from 30 to 50, we tried to do that again with another ERP transition, and I think that's where my hindsight now of wishing I wouldn't use a big one at first because I it didn't go well.
• 9:51
  SPEAKER_00: It didn't work, it took it was a time suck, it created more problems than it helped.
• 9:57
  SPEAKER_00: And then I don't know if that was you know the people involved, the team that could the number of consultants we were using that didn't work, or if it was simply we were just too big at that point to kind of make this transition of almost what it felt like.
• 10:10
  SPEAKER_00: Like it was like we had too much going on and still trying to grow, and we were not able to like dedicate the time from the our people were already working 110, and like tell each of them to carve out 30 more percent somehow to manage this transition wasn't something had to give, and it did give, and that was some of the pain.
• 10:29
  SPEAKER_00: So, specifically to go from 10 to 30, we used it well from 30 to 50.
• 10:33
  SPEAKER_00: We tried it again and just didn't do it right.
• 10:36
  SPEAKER_00: And I think there's a lot of lessons learned in that.
• 10:38
  SPEAKER_00: Obviously, I would do it differently, but yeah, it was using using the data was uh it's always important, but I think timing of when you want to use that data and how you're gonna use it is important too, especially if you're a fast growing business.
• 10:51
  SPEAKER_01: Yeah, it sounds like at a certain point you lot, you know, you sort of lost your way.
• 10:56
  SPEAKER_01: And also, I mean, your your financial guy is telling you you can take money out you probably that you probably needed for working capital.
• 11:02
  SPEAKER_01: Tell us a little bit about that that shakeup.
• 11:05
  SPEAKER_01: You know, something happened there to get yourself back.
• 11:08
  SPEAKER_01: And what did you do?
• 11:09
  SPEAKER_01: What were some of the key things, key moves you made?
• 11:12
  SPEAKER_00: I really just reinserted myself.
• 11:14
  SPEAKER_00: I was probably at that point in time before it happened, I was towards that business alone.
• 11:19
  SPEAKER_00: I bet I was putting in 25 to 30 hours a week.
• 11:23
  SPEAKER_00: Once I made that switch, I was back to putting in 70 hours a week.
• 11:26
  SPEAKER_00: So I just dug back into every single part of the business that I had delegated, just made sure that we we were doing it the right way.
• 11:34
  SPEAKER_00: The way that I had built the company from the very beginning.
• 11:36
  SPEAKER_00: And so going through every department, every process, every person, personnel, leader.
• 11:43
  SPEAKER_00: And at this point in time, it was business intuition, and I had validated my gut a hundred times over.
• 11:49
  SPEAKER_00: And so it was very easy for me to go into a situation, a room, whether it was people or process, and identify it like that.
• 11:56
  SPEAKER_00: And so the other folks did not have that ability yet, certainly in the business I created.
• 12:02
  SPEAKER_00: And so there was only one person at that point in time that could really do it that quickly, that's what we need, and it was me because I had done it before.
• 12:10
  SPEAKER_00: And so, yeah, it wasn't great on the personal life of having to jump back into the business, but that's what it took, and that's what needed to happen.
• 12:17
  SPEAKER_00: And so that's what I did.
• 12:18
  SPEAKER_01: So now let's let's go towards the the selling the business part.
• 12:22
  SPEAKER_01: Do you is there a certain point where you bring in an advisor, an investment bank, or a broker, or somebody?
• 12:27
  SPEAKER_00: So during this time, the income statement said we were making tons of money, but we were borrowing four million dollars on our line of credit.
• 12:36
  SPEAKER_00: I didn't understand it.
• 12:37
  SPEAKER_00: I'm not a I wasn't a numbers finance guy.
• 12:39
  SPEAKER_00: Now I know I'm like, well, that's not right.
• 12:41
  SPEAKER_00: So I was trying to figure out how do we get cash into the business.
• 12:43
  SPEAKER_00: And, you know, you get these investment bankers fluttering emails all the time trying to represent you.
• 12:50
  SPEAKER_00: And I didn't, at this point in time, I wasn't trying to when I made that decision in 2019 not to sell, I was like, I'm gonna keep this thing going and just be as big as we can.
• 12:57
  SPEAKER_00: So my goal was to try to sell off a minority portion of the business so I still maintain control.
• 13:02
  SPEAKER_00: And so I just answered one of the emails and in hindsight looking at it now, it was the writing was all over the wall.
• 13:08
  SPEAKER_00: It was a broker basically that wasn't exclusive and didn't charge you an upfront fee.
• 13:14
  SPEAKER_00: And I was like, oh, this is great.
• 13:15
  SPEAKER_00: I was like, you know, look, they don't have exclusivity, they're not gonna charge you a fee.
• 13:18
  SPEAKER_00: Well, there was a reason for that.
• 13:21
  SPEAKER_00: So the quality was not there.
• 13:23
  SPEAKER_00: They and this is it's also at the point in time where I'm figuring out that the company's not doing well.
• 13:27
  SPEAKER_00: So I go down the whole road with them of giving them all the data they need to build a pitch deck and all that stuff.
• 13:32
  SPEAKER_00: And then I'm like, hey guys, uh, this we're going the other direction right now.
• 13:36
  SPEAKER_00: So I got to jump back into business and fix things.
• 13:38
  SPEAKER_00: That's what I focused on, and they're sitting in the background.
• 13:40
  SPEAKER_00: And then once I kind of fixed things, we paid off the line of credit, we redid everything, I brought new people on, and you know, really good CFO that helped me during this time too.
• 13:48
  SPEAKER_00: And and at this point in time, like I was not having fun.
• 13:52
  SPEAKER_00: Um, I felt like it was a job, it was nothing but cleanup, and I it became very clear that I wanted to not do this anymore.
• 14:02
  SPEAKER_00: But I had invested over a decade of my life towards this.
• 14:06
  SPEAKER_00: I wasn't just gonna give it away either.
• 14:08
  SPEAKER_00: And so I was like, uh, I gotta get this back up to a point that makes it worth, you know, letting go of.
• 14:13
  SPEAKER_00: And so that's what we did.
• 14:15
  SPEAKER_00: And I I probably I should have changed brokers.
• 14:17
  SPEAKER_00: Um, honestly, I definitely should have, but I didn't.
• 14:20
  SPEAKER_00: I got caught myself back into that same position again.
• 14:23
  SPEAKER_00: And you've been there.
• 14:24
  SPEAKER_00: It's you know, you you want to sell when nobody wants to buy you, right?
• 14:27
  SPEAKER_00: And you're not valued at anything because you know it's going down.
• 14:30
  SPEAKER_00: And then when everything's up to the right, you're doing good.
• 14:33
  SPEAKER_00: You don't want to sell because you know you think it's just gonna keep going that direction.
• 14:36
  SPEAKER_00: As we started cleaning things up and going that direction, and and I use that to my advantage.
• 14:40
  SPEAKER_00: We had a few offers that just were very low valued and undervalued, and one of them finally I told my broker, I got, you know, I was like, quit bringing me these.
• 14:49
  SPEAKER_00: I gave you a threshold, a number that I said I wanted to be at.
• 14:52
  SPEAKER_00: Stop bringing me these offers that don't meet that.
• 14:54
  SPEAKER_00: And one of the groups that I basically told them to, you know, no, I rejected their offer like immediately.
• 15:02
  SPEAKER_00: It kind of sparked them on, you know, oh wow, you must really think something of yourself.
• 15:06
  SPEAKER_00: Uh I want to meet you, right?
• 15:09
  SPEAKER_00: And so happened to meet like the CEO um of the company because they were in a close city uh because I just acquired another company, had dinner, really impressed them, and they impressed me.
• 15:21
  SPEAKER_00: And so I basically cut the broker out of the deal and basically negotiated my own deal at that point with the ultimate buyer of the company on just direct negotiations.
• 15:32
  SPEAKER_00: I actually renegotiated my broker's fee through that part too, because I was like, I was like, man, you're not doing anything.
• 15:39
  SPEAKER_00: And actually you're hurting me this whole time that I now realize.
• 15:42
  SPEAKER_00: And so, and like most most of these guys, that they get percentage of you know the business.
• 15:47
  SPEAKER_00: And at this point in time, I'm cleaned out the business, the value's increasing, and therefore my broker's commission is increasing because he's still tied to this deal.
• 15:55
  SPEAKER_00: I was like, Well, this is not right.
• 15:56
  SPEAKER_00: I was like, so I had a very frank conversation like, you know what, here's your cap.
• 15:59
  SPEAKER_00: You could take this or or leave it, right?
• 16:01
  SPEAKER_00: Basically, and he was like, All right, so actually saved myself a pretty good amount of money by capping the broker's commission at and just saying, here, just is you you really didn't do a whole lot besides make the introduction, and this is a very fair amount if this transaction goes through, right, for you to get he's like, Yeah, you're right, I'm good.
• 16:20
  SPEAKER_00: So, and so continued negotiating it myself, basically.
• 16:24
  SPEAKER_00: And uh he got his they they got their check at the end, and it worked out.
• 16:27
  SPEAKER_00: I was my own broker through the deal for the most part.
• 16:30
  SPEAKER_00: I was fortunate at this point to have been like three or four years into YPO, so I had a peer group that I could bounce a lot of these ideas off, which was very, very helpful.
• 16:40
  SPEAKER_00: I don't think it would uh ended up as well as it did if I didn't, you know, me kind of quarterbacking my own deal, if I didn't have some resources to kind of bounce these ideas off of.
• 16:50
  SPEAKER_00: Back to your very visual question.
• 16:52
  SPEAKER_00: If I were to do it again, just like hiring your piece, you know that you want to sell.
• 16:56
  SPEAKER_00: Getting a really good investment banker that can help you just set, have build the timeline, help you get things in a perfect situation of like where the company needs to be so you can go put it on the market is perfect because I've I got to meet a lot of those guys and I got to hear the stories, and I I wish I would have done it that way.
• 17:15
  SPEAKER_00: I didn't, but it would have been a lot less painful for me and probably have garnished a higher value at the same time.
• 17:22
  SPEAKER_00: And so just like hiring that talent from a sales perspective where cut him a big check, but he's gonna go out and you know make you a lot of money, that those investment bakers and the good brokers are gonna do the same thing for you.
• 17:34
  SPEAKER_00: They may take a lot and it's gonna be a tough bill to swallow when you cut that check at the end.
• 17:38
  SPEAKER_00: But the value that they're probably gonna increase to the your organization where you're gonna get is gonna put a lot more money back in your pocket.
• 17:45
  SPEAKER_01: And I couldn't agree more because I had the same experience.
• 17:48
  SPEAKER_01: And the funny thing, um, for me, in my experience when we sold our company, we had a fantastic investment banker, and now she came in-house and works with me at Iconic Founders.
• 17:58
  SPEAKER_01: So I, you know, found someone that did a great job, uh, and now is is at my side working with me as a partner in our firm.
• 18:06
  SPEAKER_01: So how does the market think about valuing your business?
• 18:09
  SPEAKER_01: I mean, is this a is this a multiple on, you know, a lot of people don't understand how this works.
• 18:14
  SPEAKER_01: So is this a multiple on EBITDA?
• 18:16
  SPEAKER_01: Is this a multiple on revenue?
• 18:18
  SPEAKER_00: Like Yeah, so our business is a multiple of EBITDA.
• 18:21
  SPEAKER_00: Um, and that multiple changes obviously uh depending on what size you are.
• 18:25
  SPEAKER_00: I basically came up with a number.
• 18:28
  SPEAKER_00: I looked at everything in my life that I had.
• 18:30
  SPEAKER_00: I was like, if I had to pay off every amount of debt that I had, if I had to put away a certain amount for retirement and kids college, I came up with a number that I said this is the very minimum that I need.
• 18:41
  SPEAKER_00: Um, and fortunately, I was not in a position where I had to sell.
• 18:45
  SPEAKER_00: Like I was still still young, um, was of good health.
• 18:48
  SPEAKER_00: I didn't have to, I could keep going.
• 18:50
  SPEAKER_00: And so I was fortunate to have that on my side too, where I could walk away from the table.
• 18:54
  SPEAKER_00: And it was true walkaway power, and that's very powerful in negotiating killing.
• 19:00
  SPEAKER_00: And it wasn't fake leverage, but I had I came up with a number post-commissions, post taxes, post everything.
• 19:06
  SPEAKER_00: And so I had a floor, and I remember one of my YPO buddies telling me this, just hypothetically, I was like 10 million.
• 19:13
  SPEAKER_00: He's like, Okay, your number's 10 million.
• 19:14
  SPEAKER_00: He's like, he's like, so if they offer you 999, 9 million,999, you're not gonna take it.
• 19:21
  SPEAKER_00: And I was like, Well, no, I would take that.
• 19:22
  SPEAKER_00: And he's like, Well, then 10 million is not your number.
• 19:24
  SPEAKER_00: I had to figure out what that number was to where I was not gonna take even a dollar less than that.
• 19:28
  SPEAKER_01: I love this point that Corey makes about knowing your number.
• 19:32
  SPEAKER_01: I think this is really important because a lot of people they start thinking about selling their company and they really don't know what their company's worth, and they also don't really understand how much it would take to really be able to live for the rest of their lives without stressing.
• 19:49
  SPEAKER_01: You know, you end up having this cash machine, this business that generates free capital, and a lot of people they live the lifestyle that goes with it.
• 19:58
  SPEAKER_01: But one of the things I see all the time is people don't realize how much that lifestyle costs once it's in your bank account.
• 20:06
  SPEAKER_01: So he talked about knowing that number and setting the floor.
• 20:11
  SPEAKER_01: And ultimately that gave him a ton of leverage.
• 20:14
  SPEAKER_01: He was able to negotiate an amazing valuation for his company, and that's because he really knew what he needed to get, and he knew the value of his company, and he was willing to walk away, and that's incredibly powerful.
• 20:26
  SPEAKER_00: Your job as a seller is something is to find out how much you can get them to and what they're willing to pay, and their job is to try to find out how low they can get you to.
• 20:34
  SPEAKER_00: And you know, you usually find the middle ground there, assuming it's two you know amicable people negotiating.
• 20:40
  SPEAKER_00: Um, but that's what I did and how I established my value.
• 20:42
  SPEAKER_00: And then at that point, for me personally, I had a number.
• 20:47
  SPEAKER_00: And so no matter what the multiple was, you know, and what the eBITA ended up being through you know, the due diligence process was it's I I know it doesn't always work that way, but that was kind of the what I was telling the buyer at this time was like the Q of E and all this other stuff is gonna come back, and it you know, with all the adbacks and things, it's gonna come back at a less number.
• 21:07
  SPEAKER_00: I was like, I kept saying, I was like, this is my number.
• 21:11
  SPEAKER_00: So if it if it if the EBITDA comes back lower, then you just need to change the multiples to get to my number, basically.
• 21:17
  SPEAKER_00: That's right.
• 21:17
  SPEAKER_00: And that's sort of what ended up happening um of how we got there.
• 21:21
  SPEAKER_00: And you know, it doesn't always work that way.
• 21:23
  SPEAKER_00: I think there were some things in my favor, right?
• 21:25
  SPEAKER_00: Having true walk-away power, um, understanding some of the market dynamics, um, but that's how we ended up arriving at a good spot that I was very comfortable with, um, that I thought was very, very much worth the time and effort and sacrifices made through my journey at the company to not only just reward me for what I put in, but also a good organization that was going to take care of the people as well.
• 21:49
  SPEAKER_00: And looking back, I I had this fear I never talked about selling at the company, even when I was talking to brokers all the time, because I just I I had this mindset of That's betrayal to your employees, and they're gonna run off and go somewhere else.
• 22:05
  SPEAKER_00: And in retrospect, I look at it now, I'm like, that's not at all.
• 22:08
  SPEAKER_00: It's like what actually ended up happening was somebody else has come in that has the resources that has the framework to help the company grow even more and provide opportunities to a lot of the people that I really myself couldn't get the company to.
• 22:23
  SPEAKER_00: So it was it ended up being a good thing for a lot of people.
• 22:26
  SPEAKER_00: Um, and it was definitely something I I shouldn't have been afraid of because I was kind of living two lives the whole time, telling everybody one thing while I'm doing something else in the background.
• 22:36
  SPEAKER_00: And that was that was stressful in itself.
• 22:39
  SPEAKER_01: So common, you know, this feeling of guilt and betrayal.
• 22:42
  SPEAKER_01: Um, I see it, I had it myself.
• 22:44
  SPEAKER_01: I was terrified to tell my employees, so worried about it.
• 22:47
  SPEAKER_01: Could not have been a bigger, like nothing burger for my team when we told them.
• 22:51
  SPEAKER_01: You work yourself up.
• 22:52
  SPEAKER_01: I didn't sleep the night before, you know, when Wentz told our people.
• 22:56
  SPEAKER_01: So it's so common to go through, and you know, you have so much wrapped up in your people.
• 23:01
  SPEAKER_01: They become your family over so many years, and they put in their, you know, their heart and their lives and their they sacrifice being away from their families to to help you, you know, do well.
• 23:12
  SPEAKER_01: And so you just don't want to let them down.
• 23:14
  SPEAKER_01: One thing that I, you know, really could relate to in his story is this thought that when you sell your business, you're betraying your people, your employees.
• 23:25
  SPEAKER_01: You end up spending a lifetime in your company.
• 23:28
  SPEAKER_01: I worked in mine for 25 years, and these folks that work with you, they become like family.
• 23:36
  SPEAKER_01: And I remember thinking back the day I was going to announce our sale to our team members.
• 23:44
  SPEAKER_01: I was I was terrified about it.
• 23:46
  SPEAKER_01: I was worried.
• 23:47
  SPEAKER_01: And the reality was it really wasn't as big a deal to my team as it was to me.
• 23:54
  SPEAKER_01: I built it up in my head.
• 23:56
  SPEAKER_01: Harry had that same feeling.
• 23:58
  SPEAKER_01: You know, you're thinking about selling your business, you want to talk that through with someone, I'd love to talk to you about it.
• 24:05
  SPEAKER_01: It's something that so many founders I meet with, they go through it.
• 24:10
  SPEAKER_01: It's totally normal.
• 24:11
  SPEAKER_01: Tell us about what's happened since with the company.
• 24:14
  SPEAKER_00: They're they're continuing to grow, they're focusing on the bottom line.
• 24:18
  SPEAKER_00: Some of the most rewarding feedback I get, I get I wasn't the easiest person to work for.
• 24:25
  SPEAKER_00: I and I look back at two, and I really challenged people hard.
• 24:29
  SPEAKER_00: And then I would challenge those who I saw the most opportunity in.
• 24:33
  SPEAKER_00: Um and and they would, and I would tell them this is how you could do it 1% better, right?
• 24:38
  SPEAKER_00: And I wasn't always the best way of doing it, but I had a few people tell me recently, like, yeah, you know what, you weren't the easiest one to work for.
• 24:46
  SPEAKER_00: You challenge us so much, and I felt like we could never, you know, reach the your your the level of satisfaction that you wanted.
• 24:52
  SPEAKER_00: But now um not working for me anymore, they're like, I didn't realize how much I learned underneath that tenure with you, and I'm grateful for it.
• 25:00
  SPEAKER_00: Like, I they have people tell them, like, how do you learn so much so quickly?
• 25:04
  SPEAKER_00: And so I think there's all different styles of leadership out there um on how you lead an organization.
• 25:10
  SPEAKER_00: And and mine was from that very just hard work aspect and really, really challenging people, um, which pushed a lot of people out sometimes or frustration, but it also elevated a lot of people to new levels really faster than they probably would have been too, which for me is it that's one of the most rewarding things I've heard post-exit is certain people come back in and basically tell me, you know, thank you for pushing me so hard because it made me uh it made me better.
• 25:37
  SPEAKER_01: So you built this business from from scratch.
• 25:39
  SPEAKER_01: You you grew it to$50 million in revenue, which is an unbelievable accomplishment from completely bootstrapped, other than your dad helping you get a loan to get that first bond.
• 25:49
  SPEAKER_01: I'm assuming a business that size, you get a pretty meaningful financial exit.
• 25:53
  SPEAKER_01: Any any regrets?
• 25:54
  SPEAKER_00: I'm the only one who's not selling it for that same amount in 2019.
• 25:58
  SPEAKER_00: Definitely tons of things I would have done differently, knowing what I know now.
• 26:03
  SPEAKER_00: But I think at the end of the day, I mean I couldn't be more grateful for the opportunity I had, the path I took, um, the people I met, the things I learned, you know, and and being able to do it at to just to get into YPO, by definition, it's young professionals organization.
• 26:21
  SPEAKER_00: You know, you have to have accomplished meaningful success at a young age.
• 26:26
  SPEAKER_00: And so being able to do that, yeah, I would have redoes, certainly, because I am that I want to make it 1% better.
• 26:32
  SPEAKER_00: But at the end of the day, no, I think it's I couldn't be more happy of where I'm at today, given where it started, um, able to have the financial uh security, not only just for my immediate family that I'm building now, but to give back to my parents who lost everything to help out other parts of you know, my family to take us all on family vacations that we couldn't do before.
• 26:56
  SPEAKER_00: So it's uh it's a it's a great place to be in.
• 27:00
  SPEAKER_00: Well, that's amazing.
• 27:01
  SPEAKER_01: Congrats.
• 27:01
  SPEAKER_01: I want to take it back, you know, to close out, you know, your dad, you made a half a million bucks, you know, in that first year.
• 27:08
  SPEAKER_01: You know, you do a million-dollar job, you make a half a million bucks, and he said, dude, like you're good.
• 27:14
  SPEAKER_01: Keep doing what exactly what you're doing.
• 27:16
  SPEAKER_01: You hear this about, you know, the this generation.
• 27:20
  SPEAKER_01: There's the boomer generation, there's these people that will live through the Great Depression, they suffered some hardship and they know what it's like to be hungry, they know what it's like to struggle.
• 27:30
  SPEAKER_01: So you can understand why they're averse to risk.
• 27:35
  SPEAKER_01: I I I saw my grandfather who did everything in cash, I saw my dad who never had a mortgage, this conservatism, and then you decide to take a leap.
• 27:46
  SPEAKER_01: How does your dad think about it now, looking back on your journey?
• 27:52
  SPEAKER_00: He's definitely has said, Oh, I'm glad you didn't listen to me.
• 27:56
  SPEAKER_00: To your point, like I it's his his advice was the most authentic advice given his experience.
• 28:04
  SPEAKER_00: I think what he didn't have in his path that I did have was watching that happen and being able to use, you know, the his failures, unfortunately, to help put better guardrails up for what I was doing.
• 28:19
  SPEAKER_00: It's always going to be risk, but it's calculated risk.
• 28:21
  SPEAKER_00: At every point in time, um, making sure that as we continue to grow, that I was, like you said, playing chess.
• 28:28
  SPEAKER_00: I try to map out here's a hundred different scenarios at this inflection point, right?
• 28:33
  SPEAKER_00: Let's walk through each one of those.
• 28:35
  SPEAKER_00: The whole family is extremely proud.
• 28:37
  SPEAKER_00: Um, it's first generational wealth for our family.
• 28:40
  SPEAKER_00: You know, my goal is to create comfortable living for everybody in my circle and take care of them as much as possible.
• 28:48
  SPEAKER_00: But I also have this mindset that I want this just to be a stepping stone for our family too.
• 28:54
  SPEAKER_00: So I want my kids to ultimately, I would love for them to walk the same path.
• 28:59
  SPEAKER_00: I used to think the legacy was the name on a company and watching what that company would do.
• 29:04
  SPEAKER_00: No, the legacy is in is in your children.
• 29:06
  SPEAKER_00: Being able to just instill all that in them and and and see what they do with it is going to be that's gonna be the next fun two decades of my life.
• 29:14
  SPEAKER_01: It started with family business, your father, his experience.
• 29:19
  SPEAKER_01: It ends with the you know, the education that you're giving your kids, the opportunity for them to succeed in the future.
• 29:28
  SPEAKER_01: As we always say at the end of the pod, let's win.
• 29:31
  SPEAKER_01: Thanks for joining us on this episode of The Turn.
• 29:33
  SPEAKER_01: We really appreciated everyone tuning in, and the growth of the show has been awesome.
• 29:39
  SPEAKER_01: So if you haven't yet, please subscribe.
• 29:41
  SPEAKER_01: I know that that gets annoying uh hearing me say it all the time, but it really does help the channel.
• 29:46
  SPEAKER_01: And if there's anyone you know that would enjoy it or appreciate it, please forward it their way.
• 29:51
  SPEAKER_01: And until next time, let's win.