Latest / The Turn: Blue Collar to Billions / He Left a Billion-Dollar Family Business to Buy a Fence Company

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He Left a Billion-Dollar Family Business to Buy a Fence Company · The Turn: Blue Collar to Billions

• 0:02
  Brenden Van Buren: Those are kind of like almost like mini P.
• 0:05
  Brenden Van Buren: The difference being normally a P fund finds a platform and then finds the operator.
• 0:10
  Brenden Van Buren: This time they find the operator and then that operator goes and searches for their own platform.
• 0:17
  Kory Mitchell: Welcome back to the Turn.
• 0:18
  Kory Mitchell: I'm Kory Mitchell of Iconic Founders.
• 0:20
  Kory Mitchell: The Turn is where blue-collar founders talk about the businesses they've built, the value they've created, and what comes next after they sell.
• 0:29
  Kory Mitchell: This week we interview Brenden Van Buren.
• 0:32
  Kory Mitchell: Brenden has an amazing background because he comes from a fifth-generation construction business.
• 0:38
  Kory Mitchell: But instead of taking the easier path, climbing the ladder within his family business, he actually decides to leave and go buy a company instead.
• 0:47
  Kory Mitchell: The story that he tells is really like a seminar in growth.
• 0:51
  Kory Mitchell: From organic growth to adding service lines to adding on six acquisitions before he sells the company.
• 0:59
  Kory Mitchell: I know I learned a lot by talking to him.
• 1:01
  Kory Mitchell: So let's get into it.
• 1:03
  Kory Mitchell: Brenden, welcome to The Turn.
• 1:05
  Kory Mitchell: Thanks for joining us today.
• 1:07
  Kory Mitchell: Yeah, thanks for having me, Kory.
• 1:09
  Kory Mitchell: Yeah, I'm super excited to hear your story because there's like a whole bunch of elements of it that I feel like we could have a whole show on.
• 1:18
  Kory Mitchell: You know, you've got you've got family business dynamics, you've got search fund, which we've actually never had on the show, which is cool, and just a whole bunch of different pieces.
• 1:27
  Kory Mitchell: So I'm looking forward to just piecing together some of your journey.
• 1:32
  Kory Mitchell: So maybe just start us out a little bit with the fact that your family is like a fifth, isn't it, did I get that right?
• 1:39
  Kory Mitchell: A fifth generation family construction business?
• 1:42
  Brenden Van Buren: Yeah, that's that's where I worked before I worked.
• 1:45
  Brenden Van Buren: I mean, I now have my own business, but um I was working, I was a fifth generation inside our family's business whenever I was there.
• 1:52
  Brenden Van Buren: My third cousins are still working for the business.
• 1:55
  Brenden Van Buren: So so there are five generations in the business.
• 1:59
  Kory Mitchell: So did you grow up just thinking that you would work in this business?
• 2:05
  Brenden Van Buren: Yeah, that I mean, I I had all intentions.
• 2:07
  Brenden Van Buren: I was gonna go, I mean, I thought I was gonna go run the family business someday.
• 2:11
  Brenden Van Buren: Went to underground.
• 2:12
  Brenden Van Buren: I mean, in the summers, worked in the field laboring, uh, worked in a quarry one summer, but I just figured, yeah, that I was gonna go work my way up and do like my dad and my grandfather and kind of have my hand at the upper management of the business.
• 2:28
  Brenden Van Buren: So walk us through a little bit.
• 2:29
  Brenden Van Buren: First of all, what kind of business is it?
• 2:32
  Brenden Van Buren: Uh it was a heavy highway construction and material supply business.
• 2:36
  Brenden Van Buren: So we we were fully vertically integrated from quarry to bridge and road.
• 2:42
  Brenden Van Buren: So we mined the stone, we made the blacktop and concrete, we had uh we made roadway signs, we did all types of highway work, and then we also built uh highways and bridges across Pennsylvania, but also uh New York, West Virginia, Maryland, um kind of mid-Atlantic area.
• 3:06
  Kory Mitchell: So so this is a big big business.
• 3:08
  Kory Mitchell: I mean these highway jobs are huge jobs typically.
• 3:12
  Brenden Van Buren: Yeah, yeah.
• 3:12
  Brenden Van Buren: I mean, I I don't know the exact numbers of where they are now, but I we were just shy of a billion in sales whenever I left the business.
• 3:20
  Kory Mitchell: Yeah, so you're you're you grew up in this business, a huge company, billion dollars.
• 3:24
  Kory Mitchell: I mean, that's a really, really large construction company.
• 3:28
  Kory Mitchell: Just kind of curious, like where did you like where did you fit in in the business?
• 3:33
  Kory Mitchell: Like what was your trajectory before you left?
• 3:35
  Brenden Van Buren: Yeah, I I was uh so after graduating from University of Richmond, uh I started as a project coordinator, which basically was project management assistant.
• 3:45
  Brenden Van Buren: I'd go around and set up waste sites or get permits or I mean go through job costs for the project managers.
• 3:55
  Brenden Van Buren: Within about a year, I was managing my own projects, uh, mainly small bridges and some large dirt excavation projects.
• 4:05
  Brenden Van Buren: Um things that didn't have tons of scope, but you know, were were decent sized.
• 4:10
  Brenden Van Buren: And then by the time I left in 2015, I was running a few, I just had a $50 million project, a $20 million project.
• 4:19
  Brenden Van Buren: Um, I think I was probably, I mean, I don't know this is a fact, but I assume I was the youngest project manager managing uh Pendot work.
• 4:28
  Brenden Van Buren: Um, so I mean I was talking to my counterparts at Pend Dot who were, you know, in their 50s, and I was, I don't know, 23, 24, which was a unique experience.
• 4:40
  Brenden Van Buren: As I left, I actually was about to get promoted or was offered the promotion to chief estimator, uh, which would have been estimating uh I think we sold our that portion of our company sold about 300 to 400 million in in construction projects.
• 4:59
  Brenden Van Buren: So I was uh I actually turned down the offer and then left and was applying to business school and went and worked for my dad for a little bit at uh a company that he ended up buying in pre-cast concrete, uh pre-stressed precast concrete manufacturing.
• 5:15
  Brenden Van Buren: But yeah, my engine highway and bridge projects was the main gig.
• 5:20
  Brenden Van Buren: I also we also were doing well sites.
• 5:22
  Brenden Van Buren: Uh Marcel Shale was huge at the start of my career there, and I was managing our whole well site division as well.
• 5:32
  Kory Mitchell: So this sounds kind of like a big deal that your dad left the company.
• 5:37
  Kory Mitchell: Was that like a complicated family dynamic to have him leave and then it ultimately caused you to also think about leaving?
• 5:44
  Brenden Van Buren: Yeah.
• 5:45
  Brenden Van Buren: Uh so it's my mom's family's business, which is where the whole complicated dynamic started.
• 5:50
  Brenden Van Buren: So my dad, whenever I was three, we moved from Philly.
• 5:53
  Brenden Van Buren: My grandfather convinced my dad to come work for the business.
• 5:56
  Brenden Van Buren: And my dad did that, and he had a lot of success kind of growing within the business like I did.
• 6:02
  Brenden Van Buren: I I don't know that they had a title project coordinator, but he was doing project management and then you know worked his way up in the construction division and eventually was the chief operating officer.
• 6:11
  Brenden Van Buren: Um, but it his last name was different than the rest of the family's last name, and he just, you know, family dynamics are are unique, and um, he just decided that you know he wanted to go do his own thing and have his own final say at some point.
• 6:27
  Brenden Van Buren: And so that's um really what caused him to shift.
• 6:31
  Brenden Van Buren: And I think he wanted to prove himself too, right?
• 6:34
  Brenden Van Buren: I mean, kind of, which has been for me a great experience going and proving myself um in my business, and I think uh that was a driving factor there too.
• 6:43
  Brenden Van Buren: So he just, I mean, he still sat on the board for a while, um, but just decided to go try his own thing in the construction world out.
• 6:53
  Kory Mitchell: So you you grow up, you're in this business, there's this big legacy, there's a bunch of cousins, there's your mom's family.
• 7:01
  Kory Mitchell: Um and I I can imagine this like drive to like want your own thing, right?
• 7:08
  Kory Mitchell: To to want to go improve yourself.
• 7:10
  Kory Mitchell: Um, but also was there like this piece about you that like just didn't want to wait to have more authority?
• 7:16
  Kory Mitchell: Because I can imagine you kind of got to work your way through all this bureaucracy of family members to get sort of to the top.
• 7:23
  Brenden Van Buren: Yeah.
• 7:23
  Brenden Van Buren: Um a little bit.
• 7:25
  Brenden Van Buren: I mean, I I'd been moving fairly quickly.
• 7:28
  Brenden Van Buren: Uh, I mean, I was about to take on uh potentially the chief estimator role.
• 7:33
  Brenden Van Buren: I think I mean, maybe a little bit.
• 7:35
  Brenden Van Buren: I mean, I probably wanted to move faster, right?
• 7:37
  Brenden Van Buren: You see, even just like random people that aren't family members getting promotions and stuff, and you're like, I, you know, I'd rather be in in the daily decision making versus running these projects.
• 7:48
  Brenden Van Buren: But I I did love building things.
• 7:50
  Brenden Van Buren: I think I had my dad left.
• 7:52
  Brenden Van Buren: Maybe it still eventually would have been the right decision.
• 7:54
  Brenden Van Buren: I think my dad always wanted me to try something else before even coming into the family business.
• 7:59
  Brenden Van Buren: I was a little bit of a homebody and really wanted to be back at home and in rural central Pennsylvania where I was from.
• 8:06
  Brenden Van Buren: There weren't many other jobs.
• 8:07
  Brenden Van Buren: And so it was either I'd have to go live in a city and do something different, um, or work for the family's business.
• 8:13
  Brenden Van Buren: And so that was definitely a driving factor.
• 8:16
  Brenden Van Buren: But yeah, I don't think, I mean, I definitely wanted to be in charge, but I I knew that that was there was time involved in that.
• 8:24
  Kory Mitchell: Sure.
• 8:25
  Kory Mitchell: No, I I get it.
• 8:26
  Kory Mitchell: Yeah, and I also, you know, I look in my own family business, both my brother and I went and worked outside of the business before we came back.
• 8:34
  Kory Mitchell: And I think that was really important for us to like get a different perspective because you also know all these habits of a of a company that just get embedded.
• 8:45
  Kory Mitchell: And maybe there's a better way to do things uh by going outside.
• 8:49
  Kory Mitchell: And so for me, it was a really important part of my journey.
• 8:53
  Kory Mitchell: It was kind of just kind of learning outside of the company and having my own independence.
• 8:58
  Kory Mitchell: The turn is produced by Iconic Founders Group.
• 9:01
  Kory Mitchell: At Iconic, we support founders who build and maintain our world.
• 9:06
  Kory Mitchell: Whether you're a contractor or have the technology that supports job sites, we'd love to help you think about scaling and selling your company.
• 9:16
  Kory Mitchell: So reach out to us at iconic founders.com.
• 9:19
  Kory Mitchell: So you go off to grad school, you leave the company, tell us a little bit about that journey.
• 9:24
  Kory Mitchell: What did you study, and then how did you end up, you know, getting to the point where you're ready to start a business or buy a business?
• 9:31
  Brenden Van Buren: Yeah.
• 9:31
  Brenden Van Buren: So interestingly, I applied to business school.
• 9:35
  Brenden Van Buren: You know, one of the things is what do you want to do uh as a result of business school or post-business school?
• 9:40
  Brenden Van Buren: And I wrote, I want to go buy a small business.
• 9:43
  Brenden Van Buren: My dad had just bought a subsidiary of the family's business and was running that.
• 9:47
  Brenden Van Buren: You know, we talked, I wanted to run, I wanted to be the guy at some point.
• 9:52
  Brenden Van Buren: And my my dad's business that he bought wasn't necessarily big enough for me to kind of grow into a role if he was still around.
• 9:59
  Brenden Van Buren: I mean, he's he's nearing retirement now, but um it's you know, that was uh over a decade ago.
• 10:06
  Brenden Van Buren: And so I applied to school saying, I want to go buy a small business and I want to learn how to do that.
• 10:11
  Brenden Van Buren: I mean, that's why I applied.
• 10:12
  Brenden Van Buren: I already studied business in undergrad.
• 10:14
  Brenden Van Buren: There's a lot of new things, but frankly, networking and learning how to buy a small business was really what I was hoping to accomplish.
• 10:22
  Brenden Van Buren: As luck has it, I ran into a classmate of mine.
• 10:25
  Brenden Van Buren: His dad had done a search fund under the term search fund in 1986.
• 10:31
  Brenden Van Buren: Um and he's like, which was he was, you know, for all intentions and purposes, the first searcher, um, his dad.
• 10:38
  Brenden Van Buren: And so, which was very fortunate.
• 10:39
  Brenden Van Buren: His dad came in and talked and did all this other stuff while we were in school.
• 10:43
  Brenden Van Buren: And so it was like, okay, I'm uh I I got this clear path that I didn't even know existed in the search fund world.
• 10:51
  Brenden Van Buren: You know, it's all luck, right?
• 10:53
  Brenden Van Buren: I was very lucky that Rob happened to be in my class and is like, hey, go explore this search fund thing.
• 10:58
  Brenden Van Buren: Basically, I ran in him like the first week of school, and he's like, Hey, Brenden, check this out.
• 11:02
  Brenden Van Buren: I'll send you some stuff.
• 11:04
  Brenden Van Buren: He sent me the Stanford search fund primer.
• 11:06
  Brenden Van Buren: I read that.
• 11:08
  Kory Mitchell: It it was really eye-opening.
• 11:10
  Kory Mitchell: Can you take a step back real quick?
• 11:12
  Kory Mitchell: Because most people don't know what search fund is.
• 11:14
  Kory Mitchell: I will tell you, like, and it's funny, even 10, 11 years ago, search fund wasn't even that common yet.
• 11:20
  Kory Mitchell: And when you talk 86.
• 11:22
  Kory Mitchell: So, like, tell tell our audience a little bit about what that even means.
• 11:25
  Kory Mitchell: Um, and just so that we can kind of catch people up.
• 11:29
  Brenden Van Buren: So a search fund, I'd say there's three classifications of search funds.
• 11:34
  Brenden Van Buren: Um, there's traditional, self-funded, and like incubator accelerator uh search funds.
• 11:41
  Brenden Van Buren: And so basically a search fund is a means in which generally a young professional, but it could be a mid-career professional, uh, goes and acquires a business.
• 11:51
  Brenden Van Buren: Generally speaking, under the traditional search fund model, which is what Stanford tracks, it's a person recently out of MBA school goes and raises a fund from 10 to 20 individuals or funds that support them for searching.
• 12:09
  Brenden Van Buren: So now I think searchers are raising about half a million dollars.
• 12:12
  Brenden Van Buren: Uh that sponsors them to pay their own salary and search for a business.
• 12:18
  Brenden Van Buren: Uh, it does it pays for a little bit of the diligence and some of the travel expenses.
• 12:24
  Brenden Van Buren: Then once they find the business, those investors get right a first refusal.
• 12:29
  Brenden Van Buren: So they get a step up at one and a half percent their initial equity into the new business, and then they get right a first refusal for the business.
• 12:36
  Brenden Van Buren: Oftentimes the equity raise are two to ten million dollars, and so those search investors then reinvest in the company.
• 12:45
  Brenden Van Buren: Uh, my dad and I now participate pretty heavily in those.
• 12:49
  Brenden Van Buren: Um, I think we've got 15 active searchers right now.
• 12:53
  Brenden Van Buren: Um have acquired half a dozen businesses through that model in the past three years.
• 12:59
  Brenden Van Buren: Um, and so pr very heavily familiar with that model.
• 13:03
  Brenden Van Buren: Um, there's so that then there's traditional, or then there's self-funded searchers.
• 13:07
  Brenden Van Buren: So those searchers just go and pay for the whole thing themselves.
• 13:11
  Brenden Van Buren: Then they might raise, they might use SBA loans or they might go to a wealthy individual or two and buy a business.
• 13:19
  Brenden Van Buren: Then the the last methodology is there's now these, I guess, platforms.
• 13:25
  Brenden Van Buren: We actually started one a little bit out of grad school.
• 13:27
  Brenden Van Buren: That's how I searched myself and two of my classmates.
• 13:31
  Brenden Van Buren: But that model is there's already a pool of money and they basically pay you a salary to search, and then that pool of money buys the company.
• 13:42
  Brenden Van Buren: And so those are kind of like almost like mini P would be a way to put it.
• 13:47
  Brenden Van Buren: But the difference being normally a P fund finds a platform and then finds the operator.
• 13:52
  Brenden Van Buren: This time they find the operator and then that operator goes and searches for their own platform.
• 13:58
  Kory Mitchell: And then how how much equity does the searcher usually end up with?
• 14:02
  Brenden Van Buren: It varies on the model, but traditional and and platform is usually about 25% of the common equity.
• 14:09
  Brenden Van Buren: Um a self-funded searcher could end up with 30 to 90 percent.
• 14:16
  Brenden Van Buren: It really varies significantly.
• 14:17
  Brenden Van Buren: I mean, they can end up with 100% if it's if they go SBA and are able to sell it, get a seller financing on some portion of it, which is also pretty common.
• 14:26
  Brenden Van Buren: So very significantly on the self-funded, but pretty pretty standard 25% in three different tranches.
• 14:34
  Brenden Van Buren: 8.5% for finding the business, 8.5% for staying there for five years, and then eight eight point three, so eight point three, eight point three, and then eight point three percent for hitting different return thresholds.
• 14:50
  Kory Mitchell: Brenden introduces us to a concept we haven't talked about on this show, but it's something that's gotten very popular over the last decade, and that's called a search fund.
• 15:00
  Kory Mitchell: Brenden actually went out after studying business for his MBA, and he started searching for businesses specifically to acquire.
• 15:09
  Kory Mitchell: Well, that's not something everyone thinks of.
• 15:11
  Kory Mitchell: He started out literally with that intention when he went to get his MBA.
• 15:14
  Kory Mitchell: There was a ton of great advice here because I hear so many people complaining today that they can't find a business to acquire.
• 15:21
  Kory Mitchell: And so some of the tips that he gives you are not rocket science, it's sort of the good old-fashioned pen to paper.
• 15:29
  Kory Mitchell: But it turns out that's what it takes to actually find the right deal.
• 15:33
  Kory Mitchell: Thanks for explaining that.
• 15:34
  Kory Mitchell: Because, like for our audience out there, first of all, just know that's a thing, right?
• 15:40
  Kory Mitchell: Um, and there's a ton of YouTube shows on this and and podcasts on this, and uh lots of folks have now done that.
• 15:47
  Kory Mitchell: And now it's very common with entrepreneurship through acquisition, ETA, and in lots of grad programs.
• 15:53
  Kory Mitchell: And so now you see a ton of these MBA guys coming out, or someone that just wants to uh you know shift their career and they'll they'll launch a search fund.
• 16:02
  Kory Mitchell: And it's been pretty neat to watch that evolution over the last you know decade.
• 16:08
  Brenden Van Buren: Yeah, I mean, and I I mean I was fortunate it got a little heavy right before I started grad school, but it was I was the first class at Carnegie Mellon to have an entrepreneurship through acquisition track.
• 16:21
  Brenden Van Buren: So before that, there had been some classes, a couple professors here and there had done it, or students had done it, and a couple of them were now teaching classes, but it it definitely grew significantly, I'd say 2013 to 2017.
• 16:37
  Brenden Van Buren: I was kind of fortunate I was right there in the middle of that threshold at grad school.
• 16:42
  Kory Mitchell: Well, it's also fortunate because now there's so much penetration trying to buy these businesses that it's like so much competition trying to find deals.
• 16:51
  Kory Mitchell: So tell us a little bit about that deal search process.
• 16:55
  Brenden Van Buren: Yeah, I know the opinion of searchers, which is there's ton there's too much competition.
• 17:01
  Brenden Van Buren: I will give you my opinion, and that's that they're not doing a great job building relationships.
• 17:06
  Brenden Van Buren: I think for every searcher, there is a correct business, but you have to go find it.
• 17:12
  Brenden Van Buren: And so that means you got to send out tons of letters, tons of emails, you got to knock on doors, you know, both figuratively and literally, but you got to open up channels to help you find a business.
• 17:23
  Brenden Van Buren: If you're relying on brokered networks, I hunt then I agree with that sentiment.
• 17:28
  Brenden Van Buren: There is way too much competition.
• 17:30
  Brenden Van Buren: But I mean, the statistics are you know out there, but it's what there's a hundred thousand plus businesses that are of the proper size that the business owners are of the age of 50 plus.
• 17:43
  Brenden Van Buren: Um, you know, it it's a staggering number.
• 17:47
  Brenden Van Buren: But I think what it is, it's you got to send a letter, you got to be genuine in yourself, and for that, there is a right business owner for you as a searcher.
• 17:56
  Brenden Van Buren: But you have to do a ton of work.
• 17:58
  Brenden Van Buren: It's not easy, it's really hard, there's tons of rejection.
• 18:02
  Brenden Van Buren: There's a lot of businesses that you run into and you you have to make the smart decision that it's a no.
• 18:07
  Brenden Van Buren: And I think a lot of searchers chase bad deals because it's a it's something in front of them.
• 18:13
  Brenden Van Buren: And that might be, it might even have great economics to it.
• 18:17
  Brenden Van Buren: But the owner and the the searcher aren't meshing and they keep pushing forward.
• 18:23
  Brenden Van Buren: That's to me one of the worst outcomes because you're chasing something that you're never culturally going to fit into, or you are gonna culturally fit into it six years from now after you've like just felt absolutely miserable because the culture was so much different than what you want to be running.
• 18:41
  Brenden Van Buren: I do think there's a lot of opportunities out there for searchers that are committed to turning over tons of stones.
• 18:47
  Brenden Van Buren: And so Promax, which is the company I I own and run now, but uh I found that by a letter.
• 18:53
  Brenden Van Buren: Uh I was sending a a searcher from I don't know, 2012.
• 18:59
  Brenden Van Buren: I got on the phone with him and he was like, I bought a company in 11 months, and I was like, okay, what'd you do?
• 19:05
  Brenden Van Buren: And the he told me I did this and then this.
• 19:07
  Brenden Van Buren: And but basically he sent out 500 unique communications every single week.
• 19:13
  Brenden Van Buren: And so I had in my mind I was gonna send out 500 every single week.
• 19:17
  Brenden Van Buren: Did I hit that every week?
• 19:19
  Brenden Van Buren: Uh there were you know holidays and some other stuff that I probably didn't, but I was that was what I was gunning for.
• 19:25
  Kory Mitchell: And are you talking about a paper letter with a stamp on it?
• 19:28
  Brenden Van Buren: Uh so it was paper letter or email.
• 19:31
  Brenden Van Buren: So I would send out of the 500, about 150 were letters and 350 were emails.
• 19:38
  Brenden Van Buren: Amazing.
• 19:38
  Brenden Van Buren: And my wife helped me significantly in this process too.
• 19:42
  Brenden Van Buren: I mean, we and I had interns, but we'd come home and it'd be like a football weekend, and we would just be hand addressing letter envelopes for hours while watching football games.
• 19:53
  Brenden Van Buren: I really am a fan of the written letter.
• 19:56
  Brenden Van Buren: I mean, I I typed the letter, but I'd handwrite the envelope and you know, make sure that everything made sense within the letter.
• 20:02
  Brenden Van Buren: But it was it was a lot of work.
• 20:06
  Brenden Van Buren: I mean, I'm I'm not kidding.
• 20:07
  Brenden Van Buren: We would spend four or five hours a weekend just handwriting envelopes.
• 20:13
  Brenden Van Buren: Now there's AI and all this other stuff where you can like make it look like it.
• 20:17
  Brenden Van Buren: But ours were legit handwritten envelopes that we were sending out.
• 20:21
  Kory Mitchell: So tell us a little bit about like were there there were there some deals that got close that you almost closed on that like got away?
• 20:29
  Brenden Van Buren: There were several that I chased, you know, maybe a little too long, where I made offers and the our our idea of value just wasn't um accurate.
• 20:39
  Brenden Van Buren: I mean, uh there was a cabinet company that I really liked that I ended up not we ended up walk separating on uh mainly deal terms.
• 20:50
  Kory Mitchell: Tell us some of the things that like where was some of the hair on them or that maybe you decided weren't a good fit for you.
• 20:55
  Brenden Van Buren: So things we've walked from the workforce.
• 20:58
  Brenden Van Buren: So we look at the work, I mean it was something I tell searchers you got to diligence hard, but how people are paying their workforce, there's a lot of gray area, and I'm I didn't want anything to do with gray area, right?
• 21:09
  Brenden Van Buren: It was black and white.
• 21:09
  Brenden Van Buren: So if you weren't in the black and white, we were walking from that.
• 21:13
  Brenden Van Buren: You know, that might be that there were 10, 99 employees that really should have been W-2 employees.
• 21:18
  Brenden Van Buren: That's something that I walk from.
• 21:20
  Brenden Van Buren: Uh there were the couple where like I think that the owner was really nice, they were pie in the sky, right?
• 21:26
  Brenden Van Buren: So like their their company had been doing decent, but they had this kind of idea on what was possible with their product or service that they offered.
• 21:35
  Brenden Van Buren: And I just wasn't in agreement with that.
• 21:39
  Brenden Van Buren: I'd say that from a relationship standpoint, that was probably the most common thing.
• 21:43
  Brenden Van Buren: It's like, hey, I'm just not feeling this business because you've got this kind of expectation that we're gonna grow this product or open some new market, and I just you know you don't see it.
• 21:55
  Brenden Van Buren: There were a couple where the owner wanted to stick around longer than I kind of wanted.
• 21:59
  Brenden Van Buren: I mean.
• 21:59
  Brenden Van Buren: we talked about I want to I wanted to run the show and if an owner was sticking around um even if I was running the show there would be confusion and so I didn't want to deal with that type of scenario.
• 22:12
  Brenden Van Buren: I walked away from a couple deals like that also.
• 22:16
  Kory Mitchell: So you you align on on ProMax and this is uh this is a fencing business?
• 22:20
  Brenden Van Buren: Yes.
• 22:21
  Brenden Van Buren: Yep.
• 22:21
  Brenden Van Buren: Commer mainly commercial we do a little bit of residential fence installation.
• 22:26
  Kory Mitchell: What size what size of a business was it when you acquired it?
• 22:29
  Brenden Van Buren: We were a little north of 10 million in sales.
• 22:32
  Kory Mitchell: In revenue.
• 22:33
  Kory Mitchell: Yeah yeah okay okay so what what about it like did you like?
• 22:39
  Brenden Van Buren: So I meshed really well with the owner.
• 22:42
  Brenden Van Buren: He and I I'd say to start off I showed up down here my wife actually had a conference down towards Reading.
• 22:49
  Brenden Van Buren: So we drove down I was like hey I'm gonna be in the area let's get together uh we met a Saturday morning and I think we ended up talking like five six hours and probably only like one hour of it was about business right it was about life it was about hobbies all types of stuff and we just we were in sync we're both big skiers uh we we golf a fair amount I mean I I still hang his name's Ross I still hang out with him you know I I don't know once a quarter or something like that we do we do something and and I just it seemed to click from that perspective um I mean you can't buy a bot business that isn't profitable its profit margin was was solid so that's something that was nice its workforce is a workforce that I understood right I mean I'd been installing bridges and and paving and doing a lot of different you know blue-collared uh hands-on work I mean both I'd physically done it and I'd managed it and this seemed to fit that profile in terms of the workforce it wasn't a super complicated business but there were definitely barriers to entry and so those are kind of the things that I looked at and were like hey this is a a really solid business I get along with the owner uh the margin profile is good the workforce is something that I feel like I can manage the projects I can understand I mean I'd hired subcontractors like ProMax on my jobs as I'd been managing them and I I just felt like this was a good opportunity to really accentuate those strengths that I had uh and and hopefully try to grow the business okay so so you you buy this business we don't have to go through all the the you know the the nitty gritty of how you actually got a close but was the owner planning on staying so he and I from the very beginning had a plan and we executed on that plan and that was 90 days you run the business this I mean Russ runs the business and I follow you know just taking notes.
• 24:52
  Brenden Van Buren: I mean I think I've got I have notes that I go I go home at where actually I'd stay usually at the end of the day and I'd spend 30 40 minutes looking through the notebook on all the stuff Russ had told me that day or anything that I noticed and then I typed up notes on it.
• 25:07
  Brenden Van Buren: Then the next 90 days I run the business and he follows me and gives me input throughout the day.
• 25:13
  Brenden Van Buren: So you know he's in charge first 90 days next 90 days I'm in charge.
• 25:17
  Brenden Van Buren: So we we got through the first 180 days um and then we kind of just slowly shifted from you know full time and Russ would come in you know in the mornings and then then he'd come in once a week and we just kind of slowly morphed where he was spending less and less time in the office.
• 25:34
  Brenden Van Buren: There was a we there was an acquisition that I worked on and that was someone that he knew so we ended up buying a Bolt on in 2019 with with Russ's help there a little bit and then then COVID hit and actually we kind of talked I I just hired a uh an operations manager who I was teaching schedule to but you know to be successful I was like listen we have no idea what COVID's like don't like maybe I get sick and someone needs to run the business for two months like you know at the time no one knew.
• 26:06
  Brenden Van Buren: And so that was kind of a natural point at which he just was staying home and you know maybe I we talked once a week or something like that.
• 26:14
  Brenden Van Buren: But um that was a good natural break point where he just you know was able to kind of fully retire at that point.
• 26:21
  Kory Mitchell: So I mean this sounds like a really successful transition.
• 26:24
  Kory Mitchell: I mean I gotta tell you like that doesn't happen that often where it's just that that's I mean I'm there may have been some bumps along the way but that sounds really successful.
• 26:33
  Brenden Van Buren: Yeah I mean like I said I think it it part of it's a relationship that we started with I mean and and I know we're not going to go in the nitty gritty of getting a deal across a finish line but you don't get a deal across a finish line without a relationship with the business owner because your lawyer and their lawyer are going to fully disagree on something.
• 26:50
  Brenden Van Buren: And so you have to somehow between the two of you come with a compromise that the lawyers can't think of.
• 26:56
  Brenden Van Buren: I've now bought I don't know six businesses that are all ProMax entities now and that's happened in every single one of those.
• 27:05
  Brenden Van Buren: And so if you don't build that relationship you're not getting the deal across the finish line or you are and there's just going to be crazy contention after the fact.
• 27:14
  Kory Mitchell: I thought one of the things that was unique about Brenden's story is that the transition from the business he bought to himself as ownership was pretty smooth.
• 27:26
  Kory Mitchell: I have to say like that's not very common.
• 27:29
  Kory Mitchell: And it started out with the relationship.
• 27:31
  Kory Mitchell: He built a strong relationship with Russ, the owner and from that they built a plan and then they just worked the plan.
• 27:39
  Kory Mitchell: And so I think we can learn a ton from his strategy because so many people try to buy companies and integrate companies but they don't start with the basics just building a relationship and communicating with the former owner and founder.
• 27:52
  Kory Mitchell: Because if that doesn't go well believe me it's so common that after an acquisition the business just doesn't go very well and oftentimes they even get closed as we've seen from some of our other episodes.
• 28:06
  Brenden Van Buren: But yeah we but we build a good relationship to start off with I think we you know we had a plan that helps right it we didn't go into it like hey who's in charge what's going on like or and I wasn't I mean I wasn't naive enough to say hey I'm gonna show up and day one I'm running the boat right like that I I think some searchers do that they they like hey you know you're gone day one and I'm here day two or hey I'm I'm fully in charge day one and you got to get the buy-in of the entire workforce to you that's right I mean that's that's a big key I do like I would I went out and labored I I've made every person that I've hired that's kind of been in this level I mean whether it be our CFO our operations manager who is now our COO no matter who it is I've had them go out in the field with the guys using a pair of diggers and a digging bar you know for a day with the guys really helps in the in this industry.
• 29:02
  Kory Mitchell: I mean that speaks a lot to the leadership style because you know I see a lot you know folks that you come from this ivory tower they might have gone to a fancy MBA Wharton or Harvard or Stanford or wherever they come into a business they've never run anything right because like the reality is is most people that have an MBA have never actually run anything and unless you're able to get the buy-in from the team and sort of show them that you're worth following it's hard to get that culture around you so I I love that you got dirty.
• 29:35
  Brenden Van Buren: Yeah it was probably helpful that I'm not smart enough to get into Harvard or Stanford or Wharton or whatever.
• 29:40
  Speaker: But Carnegie Mellon is pretty good.
• 29:46
  Brenden Van Buren: Yeah I was fortunate um but yeah it I mean hand having hands on on experience is something that's really helpful in this in especially in this industry but in a lot of industries I mean whenever I went and worked with my dad for eight months in his in the pre-conscious concrete manufacturing business I was down on the floor tying steel poorly but tying steel with the guys and pouring concrete with the guys and finishing concrete with the guys on a weekly basis, right?
• 30:15
  Brenden Van Buren: I mean I think it's really helpful in order to grow and and learn how to grow the business to understand what the field is experiencing or the manufacturing floor is experiencing.
• 30:26
  Brenden Van Buren: I have not done much with payables but otherwise at ProMax there's not an accounting function that for some period of time I wasn't doing.
• 30:34
  Brenden Van Buren: So I mean when a payroll person leave and I was entering payroll we've had a billing person leave and I was entering billing.
• 30:41
  Brenden Van Buren: I mean it really helps you know learn the process by going and doing the process to allow it to scale because if you don't understand where the bottleneck's gonna pop up you're gonna run into problems as you scale.
• 30:55
  Kory Mitchell: Something that I thought was pretty cool is that Brenden actually went out in the field and he worked in every department in the company he got his hands dirty he showed the team that he wasn't too good to work right alongside them.
• 31:09
  Kory Mitchell: And I honestly don't hear that very often because most people you know they go to school they think maybe they really know how to run the business but they haven't necessarily run anything before in from your team show them that you're willing to do everything it takes to actually do their job.
• 31:30
  Kory Mitchell: By getting that buy-in from the team he was a lot more likely to succeed and it turned out working really well thanks for joining us on part one of Brenden Van Buren make sure you tune in next week where we continue the journey let's win