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Patrick Rogers on Why Acquiring Businesses Beats Growing Them Every Time · 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. As you listen today, let one
0:17
idea shape what you do next. My name is Anthony Coduspotti,
0:21
and today's guest set a goal to help 1000 business owners sell
0:25
their companies on their own terms.
0:28
That number is not a marketing line.
0:30
It's a personal mission rooted in a belief he has carried since
0:34
before he knew where it would take him.
0:36
That wealth creates options and options create freedom.
0:40
He did not arrive at investment making in a straight line.
0:43
He moved through engineering, industrial sales, real estate
0:47
and business coaching before finding the work he was really
0:50
built for. Each chapter taught him
0:53
something the next one needed. His name is Patrick Rogers.
0:57
He is the Managing Partner at Elk Ridge Advisors, a Newport
1:01
Beach based M&A, an investment banking firm that has generated
1:05
over $500 million in value for its clients.
1:09
Patrick holds the Certified Exit Planning Advisor designation,
1:12
has guided more than $250 million in completed
1:15
transactions, and he hosts the High Performance CEO Podcast.
1:20
Elkridge works with owners of 7-8 and nine figure companies
1:24
who are ready to grow, partner or exit.
1:28
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All right, back to our guest today, the managing partner of
2:29
Elk Ridge Advisors, Patrick Rogers.
2:31
Thanks for making the time to Share your story today.
2:34
Yeah, you bet, Anthony. Great to be here.
2:35
Thanks for having me. All right, so Patrick, you
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studied engineering physics at RPIA, pretty serious technical
2:44
degree, but at some point you decided that wasn't the path for
2:47
you. What was that actual turning
2:49
point? You know, Anthony, I got out of
2:53
the Navy, I, I ran nuclear reactors for them, got out of
2:55
the Navy and took a position with a, a nationwide chemical
3:00
sales company as in sales. And that was kind of my first
3:05
introduction away from doing something technical.
3:08
And the goal was, I always knew that was meant for something
3:14
more than just a paycheck, right.
3:16
So it started looking into sales, sales management and that
3:19
growth strategy with a corporate, corporate kind of
3:22
career path. And I started realizing that,
3:26
you know, as I rose through the ranks, 10 years later, I'm
3:29
district manager running, you know, California and Oregon for
3:32
my company. That even with that, you know,
3:36
you're making a salary of a great salary of 150,000 + a
3:40
bonus. You know, you maybe make, you
3:41
know, Commission sales 200,000 with that, you know, you, you
3:47
incrementally, you put in, maybe you put in 70 hour weeks to get
3:50
that. Well, next year, if you put in
3:52
8090 hour weeks, you're not going to get much better than
3:54
that. And so I, I quickly realized
3:58
that even, you know, 10 years from then, the best I was
4:01
probably going to do is 300,000 in a similar role or in that
4:04
structure. And I just knew that there's
4:06
another way. If I'm going to create real
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wealth, it's going to be through entrepreneurship.
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And that's what really started my entrepreneurial journey.
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So before we get to where you kind of cross that threshold
4:18
into entrepreneurism, take us back to to Malco Water.
4:23
I think that was the group you were referring to where you're
4:25
kind of working your way up. You know, you're managing a team
4:28
of sales and service reps. You were there for 13 years,
4:31
kind of a, you know, pretty decent run at a company.
4:35
What did that environment teach you about yourself that you
4:38
don't think you could have learned anywhere else?
4:41
You know, Anthony, good question.
4:43
That number one Nalco company was the best experience I've had
4:49
in in civilian any, any leadership environment.
4:52
I had an amazing manager, the very top down positive
4:55
environment. So it allowed me to to flourish
4:59
in in really whatever I wanted to do with with within the
5:02
confines of of that company. But what I, what I learned there
5:07
is if you want to be amazingly successful at something, find
5:11
somebody else who is already amazingly successful at it and
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model them. And just literally, that's what
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I did with my my old manager, Dave Lofsted.
5:21
I would just follow him around. He would come down to my
5:24
territory and, and we'd go on sales calls.
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And I still remember those sales calls to this day, sitting there
5:31
just observing him for the first couple months, taking literally
5:34
word for word notes on everything he did.
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I wrote down every answer to every question that was ever
5:41
there. And and I basically took that
5:44
computer program, rehearsed, rehearsed, rehearsed, rehearsed,
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created my own script and plug that into my mind.
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So now I became a mini Dave. It's kind of funny even you
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actually even picked up some of the, you know, NLP, some of the
5:59
ways he would talk and answer questions.
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It definitely brought that up. But so, so for me, that was, you
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know, if you want to have success in something, find
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somebody who is wildly successful at it.
6:10
Observe what they do and make it.
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Obviously make it your own overtime, but do what they're
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doing. Just do what they're doing as a
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foundation and then you can grow from there.
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What was one of those NLPS you remember that he did?
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Oh my gosh, so many. But one of the main ones was
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really mirroring the kind of the, the tone, the inflection,
6:36
the tonality, the speed of, of talk of the person that you're
6:40
meeting with. So, so if you're meeting with
6:42
somebody who is, who kind of talks like this and they're,
6:44
they're just super excited. And there's a whole, there's so
6:47
much more into personality discussions on this, right?
6:49
We could dive into, But if they're talking like this and
6:52
excited and you're sitting back here like this, because that's
6:56
just normally how you are, then it makes them feel
6:59
uncomfortable, right? So it's, it's, there's a course
7:02
called versatile salesperson. We went through and that's the
7:04
really hinges on NLP science that you you really want to try
7:10
to mirror them because people that people trust people that
7:13
are like themselves. They'll be more comfortable, and
7:17
if they're more comfortable with you, they like and trust you.
7:19
Absolutely, yeah. So is it while you were at Nalco
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that you started running the real estate and property
7:26
management business? Yeah, back in 2008, 2009, we
7:32
actually got into that because again, it was just looking for
7:37
the way to jump out, right. And so one of the things was
7:39
doing was a Wendy Patton, she's a real estate investor.
7:43
She had these sandwich lease option deals.
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And so I would go out there, I would meet with people who had
7:48
homes for rent. I'd meet with them and I would
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tell them, hey, listen, you know, you could rent it out for
7:54
this or you could give me a lease option to buy it and I
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will give you 150 more per month for rent.
8:03
We'll get a lease option for this amount.
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And then I would turn around and find someone to basically do a
8:08
no finance option on their home for an additional $150.00 a
8:12
month cash flow and an additional $20,000 over the
8:15
lease option. And so I plug people in there
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was doing that from like 2005 to 2006.
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And so we had a whole bunch of these properties, right?
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I thought this was my direction. Oh, this is how I'm going to get
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rich, wealthy. And then, you know, the crash,
8:30
the real estate market crash of 2007, 2008.
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So now we had all these properties and all of the not
8:37
one of them actually executed their their option because the
8:41
real estate market tanked. So they got in at a lease
8:44
option, let's say 200,000 bucks. But now that that property is
8:47
worth 180,000, of course they're not going to execute it.
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So we had 30 property owners Now that came to us and said, well,
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what do I do now? I said, well, we can manage it
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for you. But in order to do that legally
8:57
we have to have a license. So we went out and got a
8:59
property management license and overnight we had a property
9:02
management company. So from lemons, you made
9:05
lemonade because this felt like at the moment the thing that was
9:09
going to shut you down, right? And you're like, well, this door
9:12
closed, a window opened, and here we are onto a business.
9:16
So at that time I started we started new foundations with my
9:19
ex-wife, Shelley Rogers. And yeah, it was mostly she did
9:24
a lot of the work in that. I did a lot of the back end
9:26
stuff because I was still working a nine to five.
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And you know, we were building that business again with the
9:31
goal of getting me out of the the 9:00 to 5:00 and be able to
9:34
make the jump. OK.
9:36
So tell us a little bit about the kind of consulting that you
9:38
were providing there at Rogers. For the consulting for who?
9:45
You were running. Did I understand that correctly?
9:47
You were running Rogers Consulting Group.
9:51
So what? Yeah.
9:52
What ended up happening there is with the property management, we
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grew the property management company over the next 2-3 years
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did very, very well to the point that we gave a talk at the
10:02
National Association of Residential Property Managers on
10:05
what we've been, what we were doing.
10:07
The growth strategy, which was a lot of search engine
10:09
optimization, which was new at that time.
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And I ended up, we had, I ended up having like 25 of those
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business owners reach out to me and say, hey, will you do this
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for us now? So that actually spawned right
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into literally overnight was almost making more from coaching
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and consulting other people on how to do what we did compared
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to the actual property management itself.
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So that's what spawned me into that.
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And that's started the the 17 year stretch or whatever it is
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in, in coaching consulting business owners on organically
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growing their company. It went from property management
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and then it went to all, you know, agnostic.
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Is it still in existence today? Still going on?
10:52
No, well, inside of Elkridge, really what that did is there
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was 17 years of experience, raw experience being in the trenches
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with CE OS and business owners on growing their companies and
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of all types of businesses, manufacturing, landscape, pool
11:07
maintenance, you know, HVAC. And so it was a phenomenal
11:11
growing curve for me because it forced me to read every book in
11:14
existence, learn from every course, every mentor possible so
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that I could adequately coach and consult my clients on how to
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grow. And so for what we do in
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Elkridge, we right, we acquire companies and then we grow and
11:28
scale them. So it taught me all the
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foundations that I needed to know.
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For that growth and scaling part.
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Yeah, exactly. So now we don't do it.
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We don't do consulting unless it's a company that we have
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equity in, right. So unless we're a minority
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equity stake or majority, then you know, that's where we want
11:45
to focus our time. And that's really what kind of
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transition to be away from consulting is, is I'd like just
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a, just an example, I'd start working with a client and you
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know, maybe they're at like 1.5 million in revenue.
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We get done working with them 3-4 years later and you know,
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they're at what, 810,000,000 and then they're off and running and
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I'm not making consulting fee anymore because they're all set.
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They got a good management team. They don't really need me
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anymore. They they do, but they they
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think they don't. So this is interesting.
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So you go to give a, a talk at this, you know, industry event
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and you end up with 25 clients that set you on this path.
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Did you have any idea that that's was going to happen or
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likely to happen? You were just getting up there
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to, I don't know, provide a service for, you know, just,
12:30
hey, let me be helpful here. Yep, Yep, exactly.
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And and then from there, you're like, hey, I've been doing such
12:39
a good job for my clients that in a few years they don't need
12:43
me anymore. I've got the foundation in place
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for them. OK.
12:46
So how did you actually bridge from there into, OK, now I want
12:51
to start buying my own businesses?
12:54
You bet. So one of my clients, 2019 Well,
12:59
OK, let me back up. 2015 I actually attended a webinar on
13:03
buying your your own businesses. And I was always attracted to
13:09
real estate, like buying, buying the company, like doing the
13:12
lease option things. We did some buys and flips too.
13:14
So there's always been this innate desire for me to see the
13:19
gold in someone else's trash, right?
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Someone one, one man's treasures and one man's trash is another
13:25
man's treasure. So I've always had a knack and
13:27
some kind of just an innate desire to take something that is
13:32
broken and fix it and it and it works in business and real
13:35
estate, but it does not work in relationships.
13:37
By the way, a little side note there.
13:38
So you know what we're all learning.
13:40
And so I attended this webinar. I was like, OK, that's, that's
13:44
what I want to do ultimately. That's, you know, this is to me,
13:46
this is the pinnacle of business is being able to come in, buy a
13:50
business, grow and scale it yourself, sell it for more down
13:52
later, you know, whatever. So, so there's that.
13:55
And then the other is that one of my clients came to me and,
13:58
and I had worked with him. I had worked with him.
14:04
Don't know why that came through.
14:06
I, I had worked with him, we started out at 600,000 and then
14:11
grew his business to 4.5 million over, you know, 3-4 years.
14:15
And he came to me and said, Hey, I got a buddy of mine who wants
14:18
to sell his business and he's going to sell it to me because,
14:20
you know, you have friends in the industry.
14:22
And he, I think he was taking home, I want to say he was
14:29
taking home like 400 K. He acquired his friend's
14:32
business, which was bigger than his.
14:33
And overnight I saw somebody go who we had worked three years on
14:39
getting his business up to 400 K per year, which is really good,
14:43
right, 400500K. And within six months he took
14:47
that to 1.2 million by acquiring another company.
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So when I sat back and looked at that, I said, OK, it, it's good,
14:56
organic growth is good. But if you want true wealth
15:01
acquisitions, So then, so then we started looking, OK, why
15:04
don't we do this every year? Then we just, you know, why do
15:07
it just once? We do this every year and then,
15:10
you know, you, you really accumulate true wealth.
15:12
And so that's really what sent me on the path here.
15:15
And from, from there I found, and I started reading every
15:18
book. I, I, I'm, you know, nuclear
15:20
engineer, I dork, you know, geek out on the stuff.
15:23
And so I started reading every book on mergers and
15:25
acquisitions. I couldn't consume enough.
15:27
I was thirsty for the knowledge. And in that I read a few books
15:31
from a certain gentleman and reached out to him and then
15:35
mentored under him. What I was really good at at the
15:37
time was B to B marketing. And so I was really good at
15:41
going out there and finding clients, finding people to bring
15:43
into the firm to who are looking to buy businesses.
15:46
So I did that, focused on that, brought in lots of business.
15:49
In return, we would share the profits and he would mentor me
15:52
on mergers and acquisitions. So I did that for a number of
15:54
years. So for you, kind of the big
15:58
unlock was holy cow, I had this brand that helped to get him to
16:02
$400,000 in annual. I don't know, either revenue or
16:06
profit or whatever it was. You've grown profit.
16:10
OK, great. And and so, you know, you would
16:12
help him with this growth and then he makes this acquisition
16:15
and like that he's at 1.2 and you're like, this is the
16:19
ultimate growth multiplier, right?
16:22
We can acquire somebody else's business that's already, you
16:25
know, you know, has that extra cash flow and boom.
16:30
And on top of that, we're, we're in a very interesting time right
16:35
now, a very phenomenal time for acquiring businesses because the
16:39
baby boomers are retiring. So, so they used to, they used
16:43
to be generational hand downs. They used to, you know, give the
16:45
keys to their kids or grandkids and less than half of them don't
16:50
want it. So now there's a surplus of
16:52
businesses that are out there that we can go and acquire.
16:55
And it's we're, it's here for another, you know, three to five
16:57
years or so until, you know, all the baby boomer businesses will
17:01
be transitioned. And in response to that,
17:04
organizations like the Small Business Administration have
17:06
recognized that and they've created new programs so that
17:10
people can get in for as little as 5% of the transaction value.
17:16
So what that means is if you acquire a company for like one
17:20
of our deals right now, we're picking it up for like 7.3
17:22
million and the cash inlay is going to be you know, less than
17:26
400,000 for a return on investment of probably 600,000.
17:33
You know, we can dive into financials, but so they're going
17:35
to get a year one cash on cash return of of, you know, 125%.
17:41
So where else can you do that in America?
17:45
That's phenomenal. I hadn't.
17:48
I heard that you can. I thought SBA minimum was 10%
17:52
down? It is, but what's the structure,
17:56
the deal correctly and you know what you're doing, you can get
17:58
in for as little as 5%. In fact, none of our deals have
18:02
ever been 10%. They've always been 5%.
18:05
There's a little bit extra there for like working capital and
18:07
such, but but yeah, 5%. So if you know what you're
18:10
doing, if you know how to structure it correctly, then
18:13
yes, you can get in for 5%. So you know nowhere in real
18:19
estate crypto anywhere you're going to get a one year cash on
18:22
cash return of of 100%. Our deals range from 50% return
18:27
on investment on that's on the low end, Anthony, that's 50%
18:32
that's a low end that's. Phenomenal return.
18:34
Which is already phenomenal. So 50% to we've had deals like
18:40
one right now where it'll be up to 200% if we end up getting it.
18:44
Wow. OK, so you're kind of dancing
18:47
around it. Do you want to share what the
18:50
hack is the shortcut to get to that 5% on the SBA down payment?
18:54
No. This is, you know, absolutely.
18:57
Yeah. So, so yeah.
18:59
So the, the, the hack really is getting the seller to agree.
19:05
So, so SBA wants 10% equity injection.
19:08
What they don't say is it's got to be 10% that needs to come
19:12
from capital injection from the buyer.
19:15
It just needs to be a total of 10% post acquisition liquidity
19:19
or equity. So what how that works is if the
19:22
seller agrees to put 5% of the transaction value on a 10 year
19:29
standby note, it accumulates interest, all of that, but
19:34
there's no payments for 10 years, then you only have to put
19:38
in 5%. Now let me blow your mind even
19:42
more. If you 5% is good, what if you
19:47
could do it for 0%? That's even better.
19:50
So there's ways to structure the deal for that to happen as well.
19:54
If you already own a plumbing company and you're going to
19:58
acquire another plumbing company.
20:02
Good chances you can get it for 0.
20:03
There's a, there's one called the SBA business expansion
20:07
program loan and you can literally get it for 0.
20:10
If you can prove that you own and operate a business in the
20:15
same industry and you have healthy business results,
20:19
healthy, you know, margins, then you can get it for 0.
20:23
Wow. So in that first example, we're
20:25
talking about how to get it at 5%.
20:27
The seller is going to carry a 10 year note, yes.
20:32
Standby. Yep, exactly.
20:34
No payments, no payments for 10 years.
20:36
Why would a seller want to do that?
20:37
I mean, you're talking about a baby, baby boomer there.
20:40
You know, later on in life that you know, they, they want these
20:43
funds to enjoy in their golden years.
20:45
Why? Why are they going to say OK,
20:48
yeah I'll I'll kick the can not take a payment for 10 years?
20:52
Business acquisition is all about finding out.
20:56
Just like anything else in sales, we are finding out what's
20:59
important to the seller 99.9% of the time.
21:04
If it's a baby boomer, what's important to them is the legacy
21:07
of their company and their employee safety.
21:10
So we are coming in and we're gaining their trust.
21:15
We're showing them that we're going to come in.
21:18
We're people driven organization.
21:20
Our priority is to preserve your legacy and to ensure the safety
21:27
of your employees. And we, when we talk about all
21:30
the things that we're going to be doing, they get very excited
21:32
about it because we know what we're doing.
21:33
We know how to scale companies very, very effectively.
21:37
And so when that happens, a little 5% thing that they're
21:42
going to put on the back burner for 10 years is not a big deal,
21:45
especially when we tell them that typically speaking, I think
21:49
it's 80% of SBA loans get refinanced within two to three
21:52
years anyway. So we're going to cash you out
21:54
when we refinance to make our next acquisition with this
21:57
particular. So they're not actually sitting
22:00
and waiting for that for 10 years.
22:02
No, no, Just yeah. Very interesting, clever stuff.
22:07
So as I understand it, your team, the Elkridge team, is
22:10
made-up of people who describe themselves as self-made
22:13
entrepreneurs, folks like yourself.
22:16
So walk us through specifically, what does Elkridge Advisors do
22:21
and who is it built to serve? Yeah.
22:24
So Elkridge Advisors, what we specifically do is we acquire
22:30
companies for our investors, we grow and scale those businesses
22:35
and sell it for a significant profit over the original
22:39
investment. So an example of that might be
22:41
we buy A5, ten, $15 million company over the next 357 years.
22:47
We're growing and scaling that organically and we're also
22:50
acquiring other companies that tuck into that fold for maximum
22:55
enterprise value. In that vein, we are looking for
23:00
as much as we can off market deals or deals through
23:02
investment bankers that are solid.
23:04
But when we look for off market deals, we run across sellers of
23:09
businesses. And So what we do on that end is
23:13
we help those sellers prepare for exit.
23:17
Sometimes they want to sell right now they're like, hey, you
23:20
know, I, I, I would, I don't want to, you know, wait to get a
23:23
higher value. But one of the first things we
23:25
do is we come in with the sellers of a business and we
23:28
perform an audit. So we're understanding where are
23:31
you now? This isn't just a very, you
23:34
know, this isn't something you're going to go to a broker
23:36
and get. We're doing a very complex,
23:39
detailed audit that looks into every facet of their
23:43
organization, sales, marketing, leadership, operations, systems,
23:47
owner dependence, everything that's going to determine the
23:50
value of the company now and, and compared to what it could
23:53
be, financial bookkeeping, all that.
23:56
And so we prepare this audit for them and then we sit down with
24:00
them and we share with the seller of the company, here's
24:03
what you could get for your business right now and here's
24:07
why. And we, again, we go through
24:10
every facet of the organization, every department, explain
24:13
exactly how business valuations are calculated and so why
24:18
they're here and then we prepare for them.
24:20
Here's what you could get if you had a little bit more runway if
24:25
you were to do these things and kind of walk them through XYZ.
24:29
Here's the gaps to you getting X, you know, whatever the value
24:33
is a higher value for your company.
24:36
Mr. Seller, Mr. Missus Seller, we have investors that can buy
24:40
your company right now at this price.
24:43
And here's how that what that would look like, you know, from
24:46
a high level or the range and, or we can work with you
24:50
one-on-one together to help you achieve that higher value, get a
24:55
higher exit. But it's going to take work.
24:57
It's going to take a period of time.
24:59
And here is some of the top things that would need to be
25:01
done that we would that we would do together over the next year
25:05
or two to get you to that exitable value.
25:08
And then we would help you shop for the right investor.
25:11
We have you know, well over 30 investors all throughout the US
25:15
And so that would be the next step is to help them either A,
25:20
consultatively make a decision on selling now or B putting in
25:24
some more work, energy and effort and I can get instead of
25:27
10 million for my company, I could sell it for 20 million.
25:30
What do you typically find most folks want to do?
25:33
Which path did they choose? Most want to sell now.
25:36
Most want to sell now. The ones that are that's if
25:41
they're over 70 years old, they just, they don't have it in
25:44
them. Even 65 are like, you know, and,
25:48
and quite frankly, it probably wouldn't be the right candidate
25:51
for us. If they're a baby boomer,
25:52
typically speaking, they just go ahead and sell.
25:54
Now most of the time they're independently wealthy already.
25:58
They just want to know that they're aligning with somebody
26:00
who's going to take care of their baby.
26:03
OK. And so you see you've got 30
26:05
investors kind of around the country.
26:07
So these are folks that you take these opportunities to and are
26:12
they the new owner, are you the owner?
26:15
Are you the operator? Kind of what's the relationship
26:18
between everybody here? Yeah, great question.
26:22
And by the way, just to, to kind of build on your last, your last
26:25
question, folks that are under 65, as a general rule, we're,
26:30
those are the ones that are going to maintain equity, some
26:32
equity in the company, maybe 2030%.
26:35
We acquire the rest and then we work together.
26:37
They, they're the ones that have more energy, they're more open
26:40
to it. And then we can help them, you
26:42
know, we help them take millions off chips off the table now and
26:47
then they have 20% equity. Well, then that 20% equity
26:51
double S and triples as well. And they, sometimes they, they
26:54
get the second bite of the apple that's just as good as the first
26:57
one a few years down the road. So, so how do we structure it?
27:01
It, it depends. If it is a smaller company, 5
27:04
million and under typically speaking equity, you know,
27:07
enterprise value, we're going to do a Small Business
27:10
Administration loan and our partner, our, our partner will
27:15
have the full ownership of that. And then we have we just partake
27:20
in, in the profits if it's a larger deal, if we're talking 10
27:25
million typically and above will actually be on the cap table
27:29
with them. So in that first scenario where
27:32
it's smaller, 5 million and under and you're taking part in
27:35
the profits, you don't have an equity stake, but you have some
27:39
sort of an agreement that says, hey, we get X percent each year,
27:43
you know, in exchange for the value that we brought, the work
27:46
that we've done. Basically, yes, It's a type of
27:49
agreement that allows us to enjoy the benefits of equity
27:52
without actually having equity. And the risks that come with it,
27:56
right? Correct.
27:57
In the in those in those circumstances, yeah, yeah.
28:01
OK. So what does the engagement
28:03
typically look like with a client from that first
28:06
conversation to getting the deal closed?
28:09
Take us through the process. Yeah.
28:11
So with the seller of a business.
28:14
Yeah, yeah. So we have we have a number of
28:17
folks on our team. So one of the first one is the
28:21
first conversation with someone who raises their hand, you know
28:23
from an e-mail and says, hey, I want to sell gets on with one of
28:27
our team members Andy. And Andy goes through with them
28:30
a very high level kind of a screening, if you will, 20
28:33
questions. And if out of the results of
28:35
that they are they, they meet our criteria, we then move them
28:40
on to the next step, which is meeting with our head of mergers
28:43
and acquisitions. And actually my daughter,
28:44
Alyssa, she's working in the firm with us.
28:48
And so then Alyssa and Jack meet with them and we have a little
28:51
bit more of a, a deep deeper dive, right?
28:55
We OK, they met some of the initial screening.
28:57
We go into a deeper dive. What could this potentially look
29:00
like? We explained to them our overall
29:02
processes and really map out kind of what I walked through
29:05
earlier in the podcast that we're, we're going to go the,
29:09
the next step is for us to really audit your company for,
29:12
for lack of better terms, take a deep dive into the financials.
29:15
You're going to work with one of our team members.
29:17
We're going to go through, spend a couple hours and answer a lot
29:20
of questions as we go through every facet of your organization
29:25
and, and really just explaining that that kind of process it
29:28
during this call and then share with them that at the end of
29:31
that process, we're going to come to you.
29:33
It takes a couple weeks to get this done.
29:35
We're going to come to you with a very, very thorough report on
29:38
the current status of your company, the current value of
29:41
the company, what a transaction would, would and could look like
29:44
now and then if we were to work together, if you decided not to
29:48
sell, we would work with you in a consultative manner, help you
29:52
get the business value to where you need it to be.
29:55
We we would likely partner with them on an equity stake to help
29:59
them achieve that. And then so, so that kind of
30:03
walks with that process. And then from there, they're
30:06
setting up the next call. We're getting a NDA in place to
30:09
protect. So they feel protected.
30:11
We're both protected that we're sharing, you know, it's not
30:14
sharing secrets. They're going to get out there,
30:16
we collect their financials from there.
30:18
We're we're meeting with them hopefully 2-3 days later and
30:21
we're going through the entire business.
30:23
We're starting the audit process.
30:25
So once that, that meeting happened.
30:27
So now we're into the third meeting.
30:29
We get all the information from the business owner.
30:31
We then takes us about a week to process everything, create the
30:34
overall audit strategic value, you know, mapping session.
30:42
We then get back together with them, review everything and we
30:45
walk through some of the options, what that could look
30:47
like. And so post transaction,
30:51
Patrick, are you guys involved in the operations of the
30:54
company? Yes, completely.
30:57
OK. So that was the part I wanted to
30:59
make sure that I was clear on. Yes, yes.
31:02
So both my partner, Robert Andries, we, we both have 1520
31:07
plus years of experience in doing exactly that.
31:11
Me, I coached and consultant CEO.
31:13
So I would meet this with the CE OS generally once a week or
31:16
their management team once a week.
31:18
And we would go through everything together And then
31:21
we'd at the end of the call, they would have a clear plan of
31:23
action for what they're going to do for the next week.
31:26
Why Robert is an amazing partner for me is coaching and
31:30
consulting. It's good as long as your client
31:34
does what they agree they're going to do at the end of the
31:37
week. Well, we both know as an
31:39
entrepreneur, it doesn't always happen like that.
31:41
And So what Robert did is he created a business and system
31:46
that instead of just coaches them, it actually does the heavy
31:51
lifting of of most of that work. And so he's created a platform
31:56
and environment that does that. So I actually had Robert on my
32:00
podcast four or five years ago where he was explaining what he
32:03
did. And over that time I started
32:05
referring him a lot of clients and they just, they were like,
32:07
oh, wow, this is this guy's amazing.
32:09
And so when it came time to develop the Elk Ridge Advisors
32:14
concept, it just made a lot of sense to not stop after the
32:19
acquisition because most people that are investors and, and, and
32:23
looking for this, they want to escape.
32:25
They want to escape from the 95 or they want to build their
32:28
wealth, but they don't want to run the company themselves.
32:31
They don't want to be coached on how to run the company right.
32:34
So the there was just a just a great pairing of the two.
32:38
So what Tell me more about this platform and how he's able to
32:42
take that heavy lift away from the entrepreneurs on actually
32:45
executing on these to do's? Yeah, sure.
32:48
So the, the when I say platform, yes, we do have a platform.
32:53
We have an in house ERP system, if you will that that Roberts
32:58
developed over the years. So he has a whole offering that
33:00
we come in, it's a business operating system.
33:03
But what I'm really referring to is the methodology on how you
33:07
grow and scale a company. Most companies Anthony, they are
33:12
just operationally running. They're not.
33:16
There's nothing necessarily in place to create an owner
33:20
mentality amongst the employees and and really be a people
33:24
driven organization. So when we come into our
33:26
organization, we're creating something where every employee
33:30
is excited to be there. Every employee has an ownership
33:34
mentality. The direction of the company is
33:37
not determined by a few couple people at the top.
33:40
We implement methodologies, accountability, strategic
33:45
planning sessions that incorporates all employees.
33:48
So when the day is done, the employees of these companies are
33:52
just passionate about what they're doing because they're
33:55
the ones that determine the direction of company and what
33:57
are the changes going to be. And then they're actually
33:59
implementing it. So it's it's when you start
34:02
implementing this business operating system that takes a
34:05
new paradigm. It's not just operationally
34:08
doing the thing that the company does, it's also how do we become
34:13
a continuous improvement organization fueled by people
34:19
who feel like they own the company themselves.
34:21
And when you can, when you can hit that, you're winning all
34:24
around. What is this term acquisition
34:28
arbitrage? Acquisition arbitrage.
34:32
So that's a little bit of A twist on the standard term
34:34
called multiple arbitrage. So we kind of coined that inside
34:38
of Elkridge. And acquisitions arbitrage, What
34:42
it really is, is let's see a good example.
34:48
If I go out and I buy 5 HVAC companies and I spend $5,000,000
34:54
for each one throughout the US. If I then take those HVAC
35:00
companies and I put them under one umbrella, I have some
35:03
common, SO PS some common management in place, maybe
35:06
common brand that you don't have to do that.
35:09
But now I've, I've between my down payments and my, my loans,
35:13
I've, I've got $25 million, right?
35:15
55 businesses times 5, there's 25.
35:20
The when you do that, the market value of those businesses is not
35:25
$25 million anymore. The market value of that
35:29
business is now somewhere probably residing between 40 and
35:33
$50 million. And the reason is, is you're now
35:37
attracting a new level of buyer. You're attracting what are
35:41
called private equity companies, strategic buyer in in the HVAC
35:45
space. So private equity companies will
35:49
gladly pay you twice as much for that same EBITDA that was, let's
35:55
say the profits were a million for one business.
35:58
You put five of them together, you have $5,000,000.
36:01
They will gladly pay you double for that same profit.
36:06
So this is well known in the industry, right?
36:08
There's different thresholds here where the multiple goes up,
36:13
and for an outsider that can just seem like a magic
36:15
threshold. What's actually the reason?
36:18
What's the mechanism that's going on behind the scenes for
36:20
why private equity at a certain threshold is willing to pay
36:24
double what other folks are? Yeah.
36:27
So, so the companies that are small, so small companies, small
36:33
EBITDA is generally correlated with a business that has not
36:37
gone through the growth stages to help it be stable and
36:42
reliable. So it's a much higher risk to
36:45
those private equity companies to acquire this company.
36:48
It's all about risk and reward. So if they have to come in and
36:52
acquire a company where it's a $5,000,000 company, $1,000,000
36:57
of profit or EBITDA, but the business has run out of the, the
37:01
business owners head, huge risk, massive risk.
37:05
They're not going to touch it with a 10 foot pole.
37:07
But now you take that same company, you partner with other
37:11
money and you put in standardized operating
37:15
procedures, you have a management team in place, you
37:18
have a proven methodology for growing and scaling.
37:21
You're off to the races. All in the financial, the
37:23
bookkeeping is all solid. It's all buttoned up for them.
37:27
They're going to pay you double for it because it's much, much
37:29
less risk. And that's something that they
37:31
can grab onto. They can then come in and very
37:34
easily implement their processes, their systems, their
37:37
methodologies. Whereas if they have to come in
37:40
and take a business, that's all, you know, in a, in a business
37:44
owners, there's a high level of owner dependence is the term.
37:48
It's so difficult for them to come in because now they have to
37:50
fix everything just to get it to a baseline so that they can grow
37:53
it. It it's it's just not that a
37:56
game that they want to play in, rightfully so, because they make
37:59
no money after that acquisition, because you have to fix
38:02
everything. You have to spend all this time
38:03
fixing the business before you can start growing it.
38:06
Well, we're going to do that for them.
38:08
So tell us a little bit more about what that process looks
38:11
like because you know, on the surface it's like, oh, you spend
38:14
5 million on five different companies, it's 25,000,000 and
38:18
hey, we're just going to slap the same logo on everything and
38:21
then turn it around the next year and sell it for double.
38:24
But it clearly that's not the case.
38:26
There's a lot more elbow grease into it.
38:28
There's a lot of elbow grease, so when we come in, one of the
38:32
first things that we're doing is we're observing.
38:35
So we spend 60 days just observing what's going on.
38:38
We're interviewing every employee for where they are now,
38:41
where they want to be personally and professionally.
38:44
We're we're interviewing them determining where they think
38:47
their department and the company is right now and then where they
38:50
think it could be. And that is amazing data.
38:53
We're starting, we're going to measure the culture, we're going
38:55
to measure operations, financial.
38:57
We have AI software in house that we're going to put in on
39:00
top of everything that's going to measure all of this
39:03
information. And then after 60 days, now
39:06
we've done all of these surveys, we've interviewed every
39:09
employee. We now know all the financial
39:13
data. We know some of the KPIs,
39:15
baseline bench line, right benchmark.
39:18
We now have the 1st annual meeting.
39:20
And during that meeting we are bringing everybody from the
39:23
company in and we're having brainstorming strategy sessions,
39:27
open brainstorming strategy sessions on, on, on how do we
39:31
fix this? We're taking all the data that
39:33
we've already gotten and we're now creating a plan that
39:38
developed from the employees of the company.
39:40
Again, this isn't us coming in and saying this is what you need
39:43
to do and the reason this is important, even if we know what
39:46
they need to do, which we typically do or to a certain
39:49
degree there were always surprised.
39:52
First of all, that went because people on the ground, they know
39:54
what needs to happen in that company.
39:56
And when you give them a voice, when you give them an outlet,
39:58
and then you actually follow up on that and do the things that
40:02
they want to do. And allow them to even have the
40:05
ownership on making those changes overnight.
40:09
We are changing the culture in those companies.
40:11
And so, so that's, that's the process.
40:12
So through that process, one of the things that everybody always
40:16
comes to is, well, we don't have any, you know, this, this
40:19
person's overstepping this person.
40:21
And we do it different than this.
40:23
This, you know, Johnny's in the same role as Jane, but they do
40:26
it differently. One of them things that
40:28
everybody comes to is we need to have SO PS in place.
40:31
We need to have a standardized way of doing it.
40:33
So everybody does it the same. And so now this isn't us coming
40:37
in and saying you need to do this.
40:39
This is them saying we need to do this.
40:42
And when you have that in an organization, when they're.
40:44
Driving. They're driving exactly.
40:47
And so now we're off to the races on becoming a continuous
40:51
improvement company because they're bought in on it and they
40:54
love the idea of it. They they're implementing the
40:56
changes they want to see to then feel like it's home for them.
40:59
We do that across on on every single business that we
41:02
incorporate. So I'm curious what a, a
41:06
realistic timeline is for that integration to take place.
41:10
And obviously, it's usually dependent because it's not like
41:13
you're acquiring all five companies at the same time.
41:15
You start with one, you find another one, another one.
41:19
And so you're sort of bolting these on as you go.
41:22
But I don't know, give us some sense of how long does it take
41:26
once you've got them to have them fully integrated and you're
41:30
ready to repackage and put them back to market?
41:34
Generally speaking, most of the businesses that we acquired do
41:37
not have a structure for growth in place.
41:39
Why is that? Because they're baby boomer
41:43
owned and they're, you know, hey, they, they've been getting
41:46
most of their business from referrals.
41:47
So they're growing at 5% per year, maybe gaining some
41:50
customers, losing some customers, maybe being pretty
41:53
flat. So the first thing we do is we
41:55
take 6 to 18 months to prepare the business structurally for
42:01
growth. It could could take as little as
42:03
six depending on the team into excitement and and just to where
42:07
things are now, it could take as much as 18 months.
42:10
Once that ends in place and it can support growth and
42:13
structure, we then implement a a new sales and marketing program
42:18
targeting the right clients for the business, then really
42:24
everything. So, so now we prepare the
42:25
business for infinite growth, you know, or we have a plan in
42:28
place and then we turn on the floodgates of clients.
42:32
And so typically speaking, just by just by preparing it for
42:36
structure, assuming we don't grow the business at all, that
42:39
increases the value typically double.
42:42
Typically speaking, then we go and we turn on the floodgates of
42:46
of clients. And so then 3, five years out,
42:50
we're bringing a ton of clients along the way.
42:53
We're also doing what's called tuck in acquisitions or bolt on
42:57
acquisitions depending on the industry.
42:59
So a tuck in acquisition if you, if you bought your first one was
43:02
a $5,000,000 plumbing company. Once we have that in place,
43:06
we're then going to go out and start acquiring smaller
43:08
companies as well and getting fantastic multiples on those.
43:12
So let's say it's a plumbing company, we $1,000,000 of
43:16
sellers discretionary earnings or EBITDA.
43:19
The multiple was a four, let's just say.
43:21
So we paid 4 million for it. We're now, we now have a
43:24
platform, we prepare it for structure.
43:26
Once it's ready to grow to Infinity, we then start gobbling
43:30
up all the other plumbing companies in the vicinity that
43:34
this company can service. But we're paying a multiple of
43:37
maybe 2 for those small companies.
43:39
And immediately, overnight, as soon as that business closes and
43:43
it falls into the fold of our platform company, this is the
43:46
whole acquisition arbitrage, multiple arbitrage.
43:49
If it was doing, let's just say it's doing 500,000.
43:52
No, let's say it's doing 100,000 of profit.
43:56
We paid 200,000 for it. But as soon as it goes into our
44:00
business, it's worth 400,000. So we made $200,000 overnight
44:05
just by bringing those clients into our business and our system
44:08
in our fold. So now we go out and we do that
44:11
as many times as possible and that is a multiple arbitrage or
44:15
acquisitions arbitrage consolidation theory.
44:18
Fascinating. So Patrick, you've got a stated
44:21
goal to help 1000 business owners sell on their own terms.
44:26
It's a big number, audacious number.
44:28
Where's it come from? Well, really the the the goal
44:32
itself is our our goal in Elkridge Advisors is to create
44:36
1000 DECA millionaires. OK.
44:39
That could come from business owners selling or it could come
44:42
from our our acquisitions. But it's going to, it's going to
44:46
always happen. We're always going to be even 1
44:47
investor with one portfolio is going to be always buying and
44:50
selling. So, so that's our goal and what
44:54
what it really comes from is Robert and I both we know that
44:58
our purpose on this earth is much higher, a higher calling
45:01
than just making a lot of money. So our goal is to align and
45:06
create as many Decca millionaires as possible because
45:09
it only with good people though, with good people that we align
45:12
with on our values because we know that good people with
45:17
wealthy good people do great things on this earth.
45:22
So 1000 Decca millionaires, meaning, you know, $10 million
45:26
or more, it's significant. And so as you look at the
45:30
different parts of the equation to make that happen, there's
45:34
investors, there's sellers, there's you guys with the
45:37
operational expertise in the middle.
45:40
What do you need more of to get to that goal?
45:45
Great question. We need more good businesses.
45:49
We need more businesses to acquire.
45:51
We're, we're actively looking for folks who are, you know,
45:55
hey, they, they've, they've put in their 20-30 years and they're
45:58
ready to take some chips off the table, ready to cash in on some
46:01
of that hard work they've done. So our goal is to align with
46:05
those business owners and really we're industry agnostic.
46:08
We can work with any industry. We just Robert and I both and
46:12
our team have had experience in any industry.
46:15
And so we we're looking for those folks who are ready to
46:18
take enjoy some of the benefits of the hard work that they put
46:21
in for 10/20/30 years and and sell their companies.
46:28
So industry, sorry, you got something else you want to say,
46:30
Patrick? No, no, no, That was it.
46:32
So industry agnostic, certain revenue thresholds or
46:36
geographies that you guys want to focus on?
46:40
Really. No, anywhere in the US, We, we,
46:44
we have, we have clients all throughout the US to be honest
46:46
with you. Really.
46:47
So G as far as revenue threshold, really anything
46:52
under, you know, anything under 3,000,000 a year is, is, is a
46:56
little bit tougher, right? Because that's typically that,
46:59
that area where between 2 to 3,000,000 where everything is
47:03
still inside the owner's head. And so it just makes a little
47:06
bit more more tougher, but we're definitely willing to look at
47:10
it. There are some business owners
47:12
that got it early on and had are not actually running the
47:16
business every day, right. And so if if the seller of the
47:20
business is actively involved in the business right now, we
47:24
probably really actively involved, we would probably be
47:27
very tough to come in and acquire that business.
47:30
But we'd be more than happy to meet with them, go through our
47:34
audit process together. In fact, we're doing this right
47:37
now with with, with someone and we're and charter out a path for
47:43
them to sell their company and to be able to get what they
47:46
actually deserve for it. And so in those cases, while
47:50
they're not ready for us to acquire, we'll still work with
47:53
them, probably partner with them in some form or or fashion on
47:57
equity cap table side of things. Put the plan in place for them
48:01
to get there and then help them get there and get what they
48:04
should be getting for the company instead of selling it
48:07
for nothing or worse off. What what ends up happening,
48:10
Anthony, is these, these business owners that are sub 2
48:13
million, sub 2.5 million, their business is just not ready for
48:17
sale. It's very tough to sell
48:19
something where it's all you. It's a very hard find to find
48:23
somebody else that wants to come in and do exactly what you're
48:26
doing. Most people want to buy a
48:27
business, not a job. And so that's what we really, we
48:31
walk them through is how do we transform what you're doing now,
48:35
which is you, you're basically have a high paying job and, and
48:41
transition that to something that's going to make you a lot
48:43
of money. And one of the biggest things is
48:45
owner dependence, creating those business systems, getting that
48:48
business so we can scale and grow without you.
48:51
Is there a Max size in terms of revenue that probably outside
48:56
your comfort zone? Probably above 3040 million.
49:00
You know, we're just, we, we, we can work with any size business.
49:05
I mean our, our M and A-Team will help them sell or buy.
49:12
But for our investors probably we're looking 30-40 million to
49:16
actually have Elkridge acquire. Now on the sell side advisory,
49:21
we're actually working on deals right now that are well over
49:24
$100 million. So we're helping or excuse me,
49:27
buy side advisory. So we're helping some investors
49:30
acquire those larger companies. We're looking right now in the
49:33
defense and semiconductor industry.
49:35
So, but that's a whole different, that's a, that's a
49:37
bit of a different ball game, right?
49:39
We're not, we're not going to be on the cap table for that.
49:41
We're just helping those investors find and acquire these
49:45
large, larger companies. So you're not part of that going
49:49
forward. So this isn't like a different
49:51
part of the business than what we.
49:52
Different part of the business, exactly, right.
49:54
So we'll help them, we'll put together the investment thesis
49:57
and the mandate and then we go out there and locate the the
50:00
companies in the defense or semiconductor industry that
50:03
they're interested in. Their current mandate is 50
50:06
million to a billion. And so we'll find those
50:09
opportunities. We'll then prepare.
50:12
You know, obviously there's a lot of work that goes into that,
50:14
but we have a, we have a number of team members in our network
50:16
and, and with our organization that have experience in that.
50:20
Does your background and being a, you know, nuclear engineer
50:24
come in handy and sort of this defense work or it it just more
50:28
your M&A experience that's helped?
50:30
It's more M&A really because you need to make sure that you're
50:33
aligning with somebody that really knows what they're doing
50:35
what you know some of the some of our investors are over in the
50:39
Middle East and so you start getting into some cross-border
50:43
issues, there's CFIUS issues. So there's there's just a whole
50:47
another level of knowledge there.
50:50
Tell me about a deal that looked like it was going to close and
50:52
then started coming apart. You know, because this, these
50:55
things happen and it boy, it's like a gut punch.
50:58
What do you do? How do you work through that?
51:04
I've had a lot of deals fall apart.
51:07
I can you know which one shall I pick?
51:10
The deals don't fall apart in the honeymoon phase and the
51:14
honeymoon phase is just getting to the LOI and then a for a week
51:17
or two after. Where the deal falls apart is in
51:24
after that, when we start looking at the actual
51:29
acquisition, what, what ends up happening more times than not is
51:34
we'll go in, we'll look at a deal, we'll have an LOI for an
51:37
agreed upon term and price. And then what ends up happening
51:41
many times is when we dig in, everything isn't as rosy as, as
51:46
it seems. So we might do the financial due
51:49
diligence and what they told us, what they believed, the EBITDA
51:54
and even what was on the P and LS says, let's say it's got
51:57
$1,000,000 of EBITDA. When we really get in and look
52:00
at it, while there's some funny numbers in there, there's some
52:03
things that they're doing on taxes.
52:04
And so the actual EBITDA is 700 and 5800 thousand.
52:08
Well, it doesn't seem like that would be that significant of a
52:11
change, but it changes the price of that value significantly.
52:14
So you'd multiply that difference.
52:17
So let's say it's $250,000 less, multiply that times your
52:20
multiple of four, that's $1,000,000 less that you're
52:23
going to be able to pay for that company.
52:25
So that's where things really start falling apart is after the
52:30
LOI, we're doing financial due diligence.
52:33
Typically it's not the operational due diligence that
52:36
has us fall apart because we already have a pretty good idea.
52:38
But once we get into the books and so now it's it's a
52:43
renegotiation game because what they thought in their mind, they
52:47
were already like, OK, we're getting, you know, whatever, 10
52:50
million for the business. They're already picturing what
52:53
life's going to be like with that 10 million.
52:55
So they're say they've already got it spent before they've
52:57
gotten it. So there's an emotional
52:59
attachment to that exit value. And so we try to preclude this
53:03
ahead of time by being upfront and setting expectations that,
53:07
you know, this is what's going to happen.
53:09
Typically, you know, these are the numbers that you believe
53:12
when we get into it. So I so I didn't used to do this
53:14
in my earlier days. And so they already know that
53:17
when we come back to them, it's probably going to be a bit less.
53:19
And here's why. But we walk them through it and
53:22
we explain. I think the key to all of this
53:26
is transparency, Anthony, setting proper expectations and
53:30
transparency as to why the price is where it is.
53:35
The more we can do that, the more it makes sense.
53:40
Patrick, walk us through one of the hardest things that you've
53:43
had to overcome personally. Yeah.
53:49
Well, one of the hardest things I had to overcome.
53:54
So I have a number of things. There's so many.
53:57
I've got so many battle wounds. One that comes to mind
54:00
specifically was with my previous M&A mentor.
54:06
So with my previous M&A mentor, it was a, it was a good
54:10
relationship until things started getting really serious.
54:14
And by that I mean I started bringing in companies that were
54:17
large companies with $20 million of EBITDA and the transaction
54:22
value is going to be you know 150 million.
54:26
Up to that point we were working much smaller deals, deals that
54:28
were you know, 3, four, 500,000 EBITDA.
54:32
So transaction value was anywhere from 7.5 to 20 million.
54:35
That was the most of our deals and I started doing some
54:38
campaigns. I, I won't go into too much
54:41
detail and started bringing in some big companies.
54:45
And what ended up happening was after I brought in those
54:51
companies, so I, I stood to make about 1.5 million closing one
54:56
deal. So after I started bringing in
55:00
these big companies, my mentor at the time started being very
55:04
squirrely about the deal structure, who's going to get
55:10
what, how much of it was going to be shared by who, and to the
55:15
point where my 1.5 million ended up being like 500,000 when it
55:21
closes, it's actually still going on right now.
55:25
So this was tough for me. So I had to make a decision.
55:28
I had to make a real hard decision because I was in a
55:31
place where I could make a lot of money with him.
55:35
Continue to learn. But I obviously had aligned with
55:39
somebody who's who is not of character, of ethical value.
55:45
And so I made the decision to not go any further with him.
55:49
But I didn't know what I was going to do from there.
55:51
I had no idea. You jumped ship without a new
55:54
plan. I I exactly.
55:57
And this wasn't that long ago. This was two years ago now.
56:01
Oh. This is still fresh.
56:03
It's still fresh. So, so I had just moved down to
56:06
Southern California with, with my daughter to kind of help her
56:10
on her way and I did not have a new source of income.
56:15
I had enough to keep by, you know, I've done, you know, like
56:17
6 months a year, you know, all that.
56:19
Whatever I've done, done well for myself, but I didn't know
56:22
where I was going and it was very, very stressful.
56:26
I had just exited a three-year relationship at the time or 2
56:30
1/2 year relationship. And so there was a lot of loss
56:34
in this in, in, in one period of time, right?
56:37
A lot of changes. I just moved to Southern
56:40
California, broke up with, you know, the, the, the last
56:43
relationship didn't work out. And then this thing, which I
56:45
thought was my career is crumbling in front of me.
56:48
And so I was searching for answers.
56:52
How do I find the direction of where I want to go?
56:54
And I've been on a spiritual journey for a long time and I
56:58
have known about meditation and known about manifesting, but I
57:02
had not actively done it to any affected degree.
57:05
And I literally spent the next three months ingrained in
57:10
meditation, ingrained in learning.
57:13
What is this manifestation thing?
57:15
How do I become re rooted with myself?
57:19
Because when you're going through stress, stress of
57:22
relationships, stress of life, you've got all this stuff.
57:25
There's a lot of mud on your windshield.
57:27
There's a lot of stress there. And it's very hard for you to
57:31
see and it's very hard for you to allow your, your body and
57:36
your subconscious mind to determine what you need to do.
57:39
And interestingly enough, right, I think most people, you really
57:42
can't argue that less than 5% of our our activity or what
57:47
determines our actions is our actual conscious frontal,
57:51
frontal pre cortex, whatever it's called.
57:54
I always frontal lobe, prefrontal lobe.
57:57
Yeah, most of it is 95% of it is your subconscious, which was
58:00
printed a long time ago. And it's, it determines how
58:05
you're going to respond in life. So I went started going down
58:08
this road and learning this and spent a lot of time in
58:12
meditation, manifestation, understanding, reconnecting to
58:16
myself. And that's when this concept of
58:20
Elkridge Advisors really came about is, is when you reconnect
58:24
with your subconscious to source, the universe starts
58:28
really doing things for you, acting on your behalf in your
58:32
sleep, during day, things come to you that would not have
58:35
otherwise come to you. And that's how you know, I
58:38
really started down this path of this concept of, of creating
58:41
this because no one else is doing this business model.
58:44
This doesn't exist. I think that's why it took me a
58:47
minute to sort of gather my thoughts around what was
58:50
happening and wait, are you guys involved operationally?
58:52
So come back to the manifestation, explain that in a
58:57
bit more detail. What does that look like?
58:59
What does that mean? How does it work?
59:03
So yeah, not to go to woo, woo, woo with everybody.
59:09
We all have, we all have beliefs about, you know, what's what's,
59:12
what's real, what's existence, what's God, what's the universe?
59:16
And what I believe in and have been led to believe is that
59:19
there's infinite realities in existence at any given time.
59:28
And it's your decision on whether you're going to tap into
59:31
a reality that is ho hum and normal, or you're going to tap
59:36
into a reality that is exactly what you want in life, achieving
59:40
abundance and achieving all of your dreams and goals.
59:44
And so when you, when you start to believe that, you start to
59:47
realize that how you tap into the reality of that you want to
59:52
create, is there a thoughts drive our actions and a thoughts
59:56
drive our emotions, emotions drive goals, you know, actions,
1:00:01
all of it's kind of in one thing.
1:00:03
And so there's a way to tap into that and actually reprogram your
1:00:08
subconscious. So when you get into meditation,
1:00:12
when you bring yourself into a Theta brain wave, it's actually
1:00:15
the same thing as hypnosis. You're just conducting self
1:00:20
hypnosis. You're doing it through
1:00:21
meditation. And during that time frame, when
1:00:24
you're in Theta, when you're in that meditative mode, you're
1:00:28
communicating with your subconscious.
1:00:31
You're able to actually reprogram your subconscious from
1:00:34
all those limiting beliefs. You know how many kids and when
1:00:37
you grew up, did your parents say money?
1:00:38
Money doesn't grow on trees, right?
1:00:40
I would probably say at least half, if not more.
1:00:44
And so those are all things that end up holding you back as you
1:00:48
go throughout life. And and you may not know that
1:00:53
until you may not even recognize that.
1:00:56
So all these limiting beliefs, all these lenses are there that
1:01:00
prevent you from becoming one with a source, one with the
1:01:03
universe and, and abundance because that they're all, they
1:01:06
all really go hand in hand. And when you connect to your
1:01:11
subconscious, when you start feeding your subtunct conscious
1:01:14
new programming in the meditative state, you're able to
1:01:18
achieve that. And one of the most important
1:01:19
things with manifestation is if you, when you get into that
1:01:24
meditative state, you believe that you already have and
1:01:28
already are whoever it is you want to be.
1:01:31
You put yourself in the emotion of that place and that person,
1:01:37
and the universe has no other choice but to deliver to you
1:01:40
that exact thing, because that is the reality that you're
1:01:43
building. And this is what helped you get
1:01:46
from that low point to now where you are at Elkridge Advisors
1:01:51
going up and to the right with this completely new concept that
1:01:54
nobody else is doing. Yep, And it's not like I thought
1:01:58
of it, to be honest with you. What ended up happening is I
1:02:02
opened. I know that I opened myself up
1:02:04
to the universe and things started coming to me.
1:02:08
Information was started coming to me literally, I know I again,
1:02:11
this is again, this is super woo stuff.
1:02:13
Like I get chills even now thinking about it.
1:02:15
But for a month straight, I started seeing 1111 everywhere.
1:02:20
When I was when I was actually carving out this and things were
1:02:23
coming to me, 1111 was everywhere.
1:02:26
And if, and if you're not aware, that's the, that's one of the,
1:02:29
the Angel numbers and it tells you that you're on the right
1:02:32
path. Keep doing what you're doing.
1:02:35
One of the things actually, it's an interesting story, A little
1:02:39
bit of a sidebar. Anthony is building on this six
1:02:43
months after into into building Elkridge Advisors.
1:02:47
I hadn't created the full company as it is now.
1:02:51
I just had the mergers and acquisitions side of thing
1:02:54
combined with coaching. So I was just going to coach
1:02:57
them, started getting a lot of momentum, a lot of clients and I
1:03:02
started getting stressed out and and I literally was like, I
1:03:06
don't, I don't know what I'm going to do.
1:03:08
I don't know how I'm going to handle all of this.
1:03:10
So I went to bed that night, meditated, preyed on it.
1:03:13
And that morning Robert, who I had not talked to in a year,
1:03:19
messaged me. He said, hey, man, just wanted
1:03:23
to connect, see how things are going.
1:03:24
Well, we connected and I shared with him, you know, what's going
1:03:29
on and what we're doing. And what he specializes again
1:03:32
is, is implementing business system.
1:03:35
So at first I was just hiring his company to come in and
1:03:40
systematize my company for growth.
1:03:43
So I know how to it. It's very interesting when you,
1:03:45
it's very easy to coach somebody else on how to do it.
1:03:48
But when it comes to your own organization and your own that
1:03:50
you, you, it's, it's a different story.
1:03:53
So I hired Robert to come in and infrastructure eyes Elkridge
1:03:58
advisors. And when he started doing that
1:04:00
over the next few weeks, we started meeting and started
1:04:03
meeting and he started realizing what's in front of me and what,
1:04:06
what I have the potential here. He's like, dude, there's a whole
1:04:12
another side of this that that I think I think we should partner
1:04:15
because you bring me in, I'll be able to actually grow in the
1:04:17
scale of the company for these people.
1:04:20
And now you've just doubled your value proposition double the
1:04:23
amount that that your firm will be our firm will be able to make
1:04:25
if we partnered, right. And yeah, I just, it was just
1:04:29
off to the races after that. Fun stuff.
1:04:32
Yeah, Patrick, I've just got one more question for you today.
1:04:35
But before I ask it, I want to do 3 quick things for the
1:04:37
audience. First of all, to get in touch
1:04:39
with Patrick or the business, Elk Ridge advisors.com.
1:04:43
Real easy. It'll be in the show notes, but
1:04:45
Elk Ridge advisors.com and you can find Patrick Rogers, Elk
1:04:50
Ridge Advisors on LinkedIn, and we'll have the link to that in
1:04:54
the show notes as well. And if you're enjoying the show
1:04:56
today, please take a moment to subscribe wherever you're
1:04:59
listening. It also sends a signal that
1:05:01
helps others discover our podcast.
1:05:03
So thanks for taking a quick moment to do that right now.
1:05:06
And as a reminder, you can be the hero advisor that helps
1:05:10
clients give their employees access to therapists, doctors
1:05:13
and prescriptions, while paradoxically increasing your
1:05:17
net profits, real gains that can change how business is valued.
1:05:20
Contact us today at adbackbenefits.com.
1:05:23
So last question for you, Patrick.
1:05:25
A year from now, what is 1 very specific thing you hope to be
1:05:28
celebrating? We hope to celebrate.
1:05:36
We have a goal to get 25 businesses across the finish
1:05:38
line this year. Love it.
1:05:41
Yeah. Simple, direct.
1:05:42
Simple, indirect, easy. If we can do that, we're we're
1:05:45
doing fantastic. Patrick Rogers from Elk Ridge
1:05:49
Advisors, I want to be the first to thank you for sharing both
1:05:51
your time and your story with us today.
1:05:53
I really appreciate you being here.
1:05:55
Anthony, thanks for having me man.
1:05:56
This was a lot of fun. Folks, that's a wrap on another
1:05:59
episode of the Inspired Stories podcast.
1:06:02
Thanks for learning with us today.
1:06:03
And if one thing stood out, put that into action right now.