Will Smith (3:31)

on the Acquiring Minds homepage acquiringminds Co.

Alex (3:36)

Then on Thursday, Real estate issues can make or break your deal to acquire a business and attorneys Bill Barlow and James David Williams return for an office hour session focused on the legal issues that come up when dealing with real estate in business acquisition transactions. Topics to include dealing with third party landlords, leases with the seller as landlord, purchasing the real estate alongside the business or not, and sale leaseback structures. You're going to gain an understanding of the fundamentals for how real estate affects

Will Smith (4:15)

SMB acquisition structures and risks.

Alex (4:18)

The webinar is Real Estate Issues When Buying a Business and it is this Thursday, April 16, noon Eastern. Link to register is right at the top of this episode's show notes or on the Acquiring Minds homepage. Acquiringminds Co.

Analia Berrigan (4:42)

Foreign

Alex (4:46)

welcome to Acquiring Minds, a podcast about buying businesses.

Will Smith (4:50)

My name is Will Smith.

Alex (4:51)

Acquiring an existing business is an awesome opportunity for many entrepreneurs and on this podcast I talk to the people who do it Looking to secure an SBA loan to buy a business? Meet Pioneer Capital Advisory your Go to Partner for sophisticated buyers who want deals closed quickly and and on the best possible terms. The Pioneer team has closed more than 100 SBA loans, averaging timelines well below industry standards. Founder and owner Matthias Smith and CEO Valerie Stash bring over two decades of SBA lending experience. Matthias and Valerie have built a team that meticulously works your deal from underwriting to close. You'll have a full bench working on your behalf, sales associates who streamline onboarding M and a financial analysts who craft investor grade lender decks, and an operations team that manages every step of the closing process with institutional level rigor. Pioneer is not a single person, but your true deal team. Visit pioneercap.com or or click the link in the notes.

Will Smith (6:06)

Analia Berrigan welcome to Acquiring Minds.

Analia Berrigan (6:09)

Thank you so much for having me. This is really a dream come true.

Will Smith (6:15)

Analia, you bought an indoor plant business last year. You closed in July 2025. Buying a business was your attempt to solve a personal and professional problem. We're going to hear all about that, whether it solved the problem for you and much more. Let's begin with some background on you please.

Analia Berrigan (6:37)

Analia yes, thank you so much. So Analia and I was born and raised in La Paz, Bolivia and went to Germany to do my undergrad with a full scholarship and studied international management. And that kind of opened the doors for me to live in France, do my master's in the US and then do a final internship in China, after which I started a job at a broadcasting company in Germany, one of the biggest private broadcasting companies. And by that time I was already married. I married relatively young. And so my husband, at that, he got bored with his job. And I told him, you know, you're the smartest person I know, so look for something different. And he did. And a little bit as a joke, but also a little bit serious. He sent an application to a rocket company here in the Seattle area. And when I heard that, I was like, oh, we're going to move to Seattle. And I was right. We ended up moving to Seattle. And so, yeah, we left everything in Germany, packed our bags, and came to here to Seattle. And I had to wait about eight months to get my work permit. And once I did, I started working in tech, which I did about five years. And that brings me to today, which is quitting my job and buying a business.

Will Smith (7:53)

Great. That was perfect. The rocket company, is that Bezos company?

Analia Berrigan (7:57)

Yes, it is. And funnily enough, I worked at Amazon, so we both just worked for Bezos for a while.

Will Smith (8:05)

Yes, well, you either work for Bezos or you, you know, you send them hundreds and thousands of dollars a year

Analia Berrigan (8:11)

or both, which we sadly still do. But we try to buy local, but it is very practical, we gotta say.

Will Smith (8:19)

Yeah, yeah, yeah, okay, that was great. And so in all of that, you made this very large decision to pursue ETA entrepreneurship through acquisition. What was all of the lead up to that decision? What problem were you having?

Analia Berrigan (8:38)

Yeah, so that is just a very personal question for me because I had two kids in two years. In 2022, I had my firstborn, and that was a huge change in my life. And then in 2024, I had my second baby. And by the second baby, when I went to maternity leave and just spent all that time with her. And having your second baby is very different because you can apprec much more. You're not having all that first time stress of not knowing if you're going to kill your baby, you know, by holding him the wrong way or holding her the wrong way. So I knew how to do diapers. I understood the cues. And so it was just so much more relaxed the second time. And I enjoyed it at a very different level. And so when I was kind of getting ready to return to work, it just really hurt me in my body. It was a very guttural feeling to be away from my kiddo and also from my older one that by that time was already, you know, saying words and being. Becoming such like a grown kid. So I, yeah, I just started feeling wrong to go back to work. But of course, work is safety, right? And I knew what I was doing. I liked my job, I liked my team. I liked the culture of the company. So of course I went back to work. And then I think for me, all of the planets started aligning. It was the fact that I had already that feeling that I wanted to be with my kids. But then when I went back to my work, it was just around the time where they started reintroducing. Go back to the office. That took away from flexibility that I had had in the past. And I started realizing in that job that I didn't have the opportunity to grow at the pace that I wanted. And both my salary and my professional outlook were just stagnating and I didn't have a clear path forward. So all of that combined into me feeling like I am putting so much into this job, but I don't really see what I'm going to get back from it long term. And I'm missing time with my kids. This is the time for me to move on. And the question was where, where do I move on to? Do I move on to another tech role, another company? And that just didn't feel like the right step either because I had already worked in three different companies already eight years in like careers. And it's a very short career, I think, in comparison to others. But I already felt like I consistently had the same challenge. I consistently grew really fast and then hit like a top where I just had to wait until it was natural for me to get promoted or to grow. And so that just didn't feel like the right way to do it. And during that time, I started my search very on the side because I started playing with the idea of buying a business. Hadn't really made the full decision.

Will Smith (11:30)

Let me interrupt you with a couple of questions on your motivations. Sure. So. So it sounds like you wanted. You were pained by being away from your kids. Yes, but not, but not necessarily. But you still wanted to be working hard and devoting yourself to your career. This sounds very lean in. Ish. Don't know if that book is. Is even.

Analia Berrigan (11:55)

Yes, I did.

Will Smith (11:55)

I read. If I'm allowed to invoke. Invoke that book anymore. I feel like it's controversial. But, but, but you kind of.

Analia Berrigan (12:02)

You.

Will Smith (12:02)

You really wanted to be. Have the flexibility to be as present as possible for your kids while still pushing hard in your career and growing in your career. And so obviously, correct me if I'm wrong, having your own business would allow that because it's sort of uncapped. It's. It's whatever you can build. And then while it's a lot of work, in many cases, in most cases even more work than having a, a salary job, more is flexible. So you may be working 12 hours a day, but they're the 12 hours that you choose. So this was why, this was, this was why you saw it as the solution?

Analia Berrigan (12:42)

Yes, I absolutely. And you know, to be a good mother for me, I need to have multiple spaces of my life filled. Just to be a mother is not enough for me to be fully fulfilled and therefore does not allow me to be the best self for my kids. And I do think that they deserve my best self. So I need other types of challenges. And my career has always been something that I've really enjoyed and it is. When I worked at this last company, I started my day at 6am and I was still working by 6pm and so I didn't have time with my kids in the morning, I was tired at night, went to sleep so late because they demanded time with me. They didn't have all the rest of the day. And then I was exhausted and just wasn't fully there. And you know, working at a corporate job comes with certain challenges that's like maybe politics, maybe some drama, some decisions that you may not be fully aligned with, but you, you know, I do believe in the disagree and commit that I learned at Amazon, but all of those things, you know, they carry some weight mentally on you and take away from being with your kids. And so having a. My own company for me had the flexibility aspect for sure that I could maybe work. And that's kind of what I do from four to six and then be with my kids and then go again at nine when they are in preschool or daycare and then leave at 3 and then be with them and then work maybe at night and just do the things differently. And as well as being like, okay, if I have to take the day off, I will take the day off and it's okay because I get to dictate that. So that was very attractive to me. But also on the sense that the mental load is very different when it's your own. I don't want to say it's not stressful. It is hyper stressful to have your own business, but you have control over the stresses that you allow yourself to have and you get to solve them. So if you have too much on your plate, you get to hire someone. If I had too much on my plate in my other job, I told my boss I wanted to hire someone. He might have said, yes, but it might have taken two years. Right. And so that's the kind of thing, and I believe a lot in agency and that you get to resolve your own problems and make your own problems. So I was kind of excited about like, okay, I get to make my own problems, learn from them and then fix them and then stop making so many problems for myself. And that is very exciting to me. So that, that definitely those were two very big points of why buying a business extremely attractive to me. And as you said, there's no cap. If you work really hard, you will get the benefits. If I worked really hard at my company, I did not get the benefits. If we made more money at the end of the year, I didn't really see much of it. So the 12 hours I was putting, sometimes a day, the weekends that I invested, if I had to invest any, those didn't come back to me in any way. But in this job they do so.

Will Smith (16:00)

And Analia, you have been an Acquiring minds listener and you. And you hear how the mostly the. The vast majority of stories are men. And often the guest will be talking about having a child or the family is having a child during the search or before, just before, just after, whatever. And we males talk about that as a big deal and a factor of our lives, but not anything compared to what it means if you're the woman bearing the child. So just flesh that out a little bit, that contrast between the fairer gender and my gender.

Analia Berrigan (16:42)

Yeah. Well, it starts with pregnancy, right? I was nauseous for half of my pregnancy, so 20 weeks I was just nauseous with the first one. With the second one, it was the entire pregnancy and I still had to operate and I was exhausted and I still had to operate. I still had to do all the things I normally do. So physically, it is just really taxing. Then you have your baby and now you're going through emotional havoc because all your hormones, like, literally it's physiological, right? It's not that we were going to be dramatic, but your hormones are doing all of the things you don't want them to do all at the same time. And you're getting to know this little human and you're in some way involved in feeding them. If it's not breastfeeding directly, then it might be pumping and then giving the baby the bottle and the baby. They have been in your belly for nine months, listening to your voice. They just are very attached to you because they've spent the most time with you already at birth. And that's what I noticed because my husband is the best father I could imagine for my kids. He is hyper involved. He's definitely a teammate. I am one of those women that can say, I don't even know about lunchboxes for my kids or dressing them in the morning, because that's my husband's job. Like, he does that. I don't. I am not involved at all. I don't even plan it. So the mental load and everything is offloaded to him. So he's a wonderful dad and still like that. My kids gravitate to me when they are very sick or very, very stressed or need to calm down. And so the load is really heavy on the person that bears the baby. Right? Just, I think biologically, it's the way that it is done. And so I had to carry a lot of that weight. And I decided personally that I wanted to breastfeed, which increases that load, because my. I can tell you, my firstborn, she breastfed every 20 minutes. She was a tiny baby. She was born. Yeah, she was born so small that she had needed to have special tests and everything. Now, I want to say, right, she's Bolivian, but in her DNA, and I am five feet tall. So I wasn't surprised that she was tiny, but for American standards, she was, you know, almost unhealthy in that respect. And so they tested her for everything. And she was a beautifully healthy baby, but tiny. And so that meant she had a tiny stomach. So she fed every 20 minutes. That meant I was just sitting there feeding a baby all day, every day for about four months, and it's exhausting, and you don't get to be anything else but that, and it's really hard. And I remember having days where I was at home after a day with my baby during maternity leave, feeding her all day or changing her diaper all day. And my husband came with all these fun stories about work, and I hated him for a second. I was like, why do you get to have all this fun and I have to be here taking care of the baby like that? And I knew I couldn't say, you stay here and stay with the baby, because he couldn't feed her. Especially because my babies made it hard and they decided never to take the bottle. We tried everything. We bought so many bottles, and they just never did. And so the load was on me. And it still partially is. Although, as I said, my husband is an amazing dad and an amazing partner. So as a woman, you just have very different considerations. So when I hear someone say, yeah, we're having Our third kid. And I'm still just going to go ahead and buy my business as the kid is being born. It's just insane to me because I would never be able to do that. And I was already insane for my standards to buy a business when my youngest was a year and three months, right? So that felt like a lot. And it is a lot, right? It is a lot. And every time I go and have to work and they cry, it's like, mommy, why are you leaving? We miss you. It breaks my heart, but I know that I'm doing this for myself in a way that I have never done, and for them as well. And when they are a bit older, I think, and I hope that I can be a role model to them and they can be like, hey, my mom did this. I can do it too. I can do whatever I want because she was brave enough to do it. And that for me, pays off everything and all of the issues. But I do try to make dedicated time.

Will Smith (21:11)

That's a great why, Analia. Okay, thank you for that. Really valuable for us all to hear. Returning to the story, then. So you were about to tell us about your discovery of or you're working with New Majority Capital. Please pick us up there.

Analia Berrigan (21:28)

Yes. So I applied to their program and I got accepted. I was so excited to get accepted. And later on, when everyone introduced themselves, I was shocked that I got accepted because everyone there was amazing, Amazing. And I felt like I don't really think I belong, but I am so grateful for this opportunity. So I will do the best that I can and make the most that I can out of it. But that was, for me, the last piece of the puzzle, to quit my job. Because by that moment, and this is January of 2025, by that moment, I had already come to the conclusion that my job was not giving me as much as I was given it and therefore was not worth it. And I had to come to the conclusion that buying a business was a great alternative. And I just was missing the piece of confidence. And when I got accepted into New Majority Capital and the Beta program, I thought, okay, that's gonna give me the confidence, so I'm gonna do that. And again, here, as a mother, right, I cannot do everything at once. I just wanna say out there, for anyone listening and any mother listening, you are not supposed to do it all. It is a complete lie. I don't know where it comes from, but it's not going to be helping you. You can do one or another thing. That's it. It's opportunity cost every single decision you make as a mother. So I had to decide either my job or my search or my kids. Like that's it. And I can handle two things. I can handle my job and my kids or my search and my kids. And so I decided my search and my kids and the job had to go. So I quit my job and went into the new Majority Capital program two weeks after and really took advantage of every minute and every lesson and all the amazing people that I was allowed to be in a room with and found my business as I graduated from the Beta accelerator. And that's the business I finally acquired. Yes.

Will Smith (23:23)

And before we get to that, Analia, remind people what new Majority Capital is, what it's positioning is, who it's for and just the bullet points of the program itself.

Analia Berrigan (23:33)

The BET Accelerator is a 10 week program in which you learn how to buy a business and they want to close the equity gap and so they help entrepreneurs really understand the process and give them support as well as financial means based on their programs that they offer so you can buy a business. And so I was in a group of a lot of people that were very amazing and created a cohort. It was a small cohort, 43, I think something that I adored was it was 50% female, which I had very seldomly experienced in my career in tech to have a room 50% female. So that was very enriching for me. And yeah, wonderful program. I can definitely recommend to check their website and learn more about them because they can give better information than I ever can.

Will Smith (24:27)

Yeah, yeah. Well, people might recognize the name. We've had a couple of new Majority Capital grads. I don't know if that's the language that alumni, I think they use. Alumni, yeah. Gabe Perez, Daryl Lindy. So there have been and I may be forgetting others as well. So definitely an important program for the space.

Analia Berrigan (24:51)

Absolutely.

Alex (24:54)

If you ask owners in the ETA and search community which insurance broker provides highest quality work, great outcomes and has a practice dedicated to searchers and acquisition entrepreneurs. One name comes up again and again. Oberle. Oberle Risk Strategies has worked with hundreds of searchers over nearly a decade and is in fact led by a two time successful searcher, August Felker, which makes Oberle a specialty insurance brokerage for searchers by a former searcher. And if you've got a business under Loi, Oberle will provide complimentary due diligence on that business's insurance and benefits program. An easy, no risk way to get

Will Smith (25:40)

to know August and the team at Oberle.

Alex (25:42)

To take advantage, check out oberle-risk.com that's O B E R L E- risk.com,

Will Smith (25:52)

link in the notes. Kelly Green is the name of the business you bought. How'd you find it and how did you move so quickly?

Analia Berrigan (26:01)

So I, when I started my search, one of the things that I remember reading was that you should get into. I get mailing lists from brokers. That was the way that I had understood it. So I reached out to brokers and tried to get into their buyer database. And there was a local brokerage called iba and so I just applied for them. They had a little bit of more convoluted application process where you had to do your personal financial statement and send all those things in. So I did that and I started getting emails of pre market deals from them. Not, not very frequent, but from time here and there. And so I remember I was actually already talking to for two other deals, cleaning companies at that time. And I got this email with Kelly Green's sim. It's more than a sim, it was almost a teaser, very short. And I remember reading that and being like, oh my God, that's my company. So yeah, so I immediately connected with the broker, sent her an email. And before that I had already worked with other brokers in that company. So I think they already kind of knew me. They.

Will Smith (27:16)

So this is Greg, Greg Kofsky's company.

Analia Berrigan (27:20)

Yes, exactly.

Will Smith (27:21)

I know Greg. Yeah, yeah, he's, he's been at it for a long time. They're a big deal. They're kind of a big deal broker in, in the Pacific Northwest.

Analia Berrigan (27:28)

Yes, yes. And I worked with Sally, wonderful, Andrea, wonderful. Everyone that I encountered from that company, amazing people. So I had worked a little bit with Andrea in another deal that I tested myself in and didn't get it. And so then I think my name probably got exchanged or they kind of knew that I was serious about doing this. So Sally and I hit it off really well and we're like, okay, let's make a meeting. And so I met the wonderful owner of Kelly Green. She was ready to retire, had been doing this for about 30 years alone, which is incredible, with her husband helping her and some of her family helping her. Like a real family business, very small, but just beautiful. You know, it was plants, it was taking care of plants, it was installing plants.

Will Smith (28:21)

What is an indoor plant business for people who don't know? Analia. What does that mean?

Analia Berrigan (28:25)

Yeah, so an indoor plant business is basically a company that looks at your space and your environment, your light conditions and proposes different plans for your space together with the planters, then installs them and maintains, maintains them on a regular basis so they always look beautiful. So you never have to worry. Because the job of most companies is not to take care of the plants, is to make revenue that comes from completely different business model. So wasting their time on plant maintenance, which can take, you know, 30 to an hour, two hours depending on how many plants you have, is not worth for the company. But the investors.

Will Smith (29:03)

So the customers are companies. So we're talking about corporate environments, lobby, office building lobbies. So this is a B2B business.

Analia Berrigan (29:11)

Yes, I only do commercial. I have heard of people that also do residential. That's not a space that I'm interested in getting into. But yes, you could do both. But I do specifically commercial.

Will Smith (29:24)

Okay. And we're going to hear more about Kelly Green here in a second. But you by the time you left New Majority Capital, the beta, the beta program, the 10 week program, you either had already acquired or had it under loi.

Analia Berrigan (29:38)

Yeah, I had a countersigned loi.

Will Smith (29:40)

Countersigned loi. And essentially this the it was by chance that it moved so quickly. You had subscribed to the IBA list and you just happened to see this business come for sale early in the program and kind of that's how it. I'm just trying to tease out whether there's anything to learn from how quickly this went or it was just sort of a happy, the happy accident.

Analia Berrigan (30:05)

Well, I had, I sent I think 5 Lois during my whole program those 10 weeks and would have had I think 3 countersigned Lois at that time. So I, I think if there is a learning to be had during that is for me was don't be afraid of the loi. And I have heard that a lot of times in your podcast. Actually that was where I got it from. I wanna, I don't remember the name.

Will Smith (30:31)

Oh that's so great.

Analia Berrigan (30:33)

Yeah, I learned so much from your podcast. That's why and maybe we will have time but I definitely am a fan and fangirled over you as like commented crazy. But I learned so much and I remember you had either a webinar or also I think it was a webinar with a guest that kind of explained how they moved so fast and I took so much from that and I remember the not be afraid of the loi. So for me it was that plus again being a mother. Right. Time is such a sparse and scarce resource for me. So I did not have time to sit down three hours to research and analyze a deal that I wasn't even sure I wanted. So I looked at deals like numbers game. I just checked deals and it's like, okay, this looks okay. I'm going to contact the broker. If once I contacted the broker, it's like, I'm just going to talk to the seller. It doesn't matter. Like, what's the worst that can happen? I love the seller. I hate the seller. And then the decision is made. And so I had a bunch of seller meetings. And so with this seller meeting, I really liked the owner. I think she liked me. We just really hit it off in a way. And I was like, okay, that sounds good. So then I took a second stab at the financials, just again, very general. I think I spent 30 minutes on it. I was like, okay, sounds good. Here's my loi. Because you also don't know if it's going to get countersigned. So it's like, what's the worst that can happen? It can get countersigned. So it got countersigned. And then it's like, okay, now I'm going to stop. And then for me, the next step was to do a deep dive due diligence that I did. I didn't want to spend $1 on it, so I didn't have a job at that time. Right. Majority capital program had already ended, so. So I had some more time. Not much. We reduced childcare for my kids because I wasn't working. So financially we needed to reduce costs. So I had three days a week, about two and a half days, really, a week where I could work. So those two and a half days, I dedicated myself from every minute that I had and did my own due diligence, did my own proof of cash, learned how to do all those things and legal due diligence. Everything that I could imagine, I did. And then once I was feeling good with that deal, I decided to move forward. Got my Q of V, got my legal due diligence after the Q of V. So it was kind of like a Gates that I implemented so I wouldn't spend money I didn't have early on, and then the deal would die and try to kill the deal every time. But the deal survived. And so by the time my legal due diligence came back clean and we found very small risks, we're like, okay, we're gonna do that. And so I, yeah, we sent out.

Will Smith (33:25)

Let me, let me stop you here and just underline some. Some of these. This is great. First The, Yeah, the thing about sending Lois, so in case for new listeners or people who haven't heard that, that mantra, it's very common that first time buyers are intimidated to send an LOI and, or they overthink it and they, or they try to over research it, what have you. It's just a psychological sticking point for many first timers.

Analia Berrigan (33:52)

I understand.

Will Smith (33:53)

And so there are a lot of people in the, in the ecosystem, vendors and so on who will say you got to push through that. And the best antidote to pushing through it is just to do it. Send out some. Lois, if they're imperfect, they'll be, they'll be rejected. And it's not, it's, it's not a document that you're committing to. There's no, it's not legally binding is that phrase. So there's really low, very little risk and a lot to learn and most importantly, getting over that psychological hump. So really great to hear that. That prescription you took to heart. You did and it paid and it, and it paid better. Paid, paid dividends for you.

Analia Berrigan (34:29)

Yeah.

Will Smith (34:31)

On the, your diligencing and how you did that. So I wasn't, I, I thought you were going to say you basically diligence the whole deal yourself and I was going to, I was going to ask you about the wisdom of that, reflecting back on it. What you did was as much of your own diligence, trying, if, correct me if I get this wrong, you were doing your own diligence, proof of cash, even legal diligence, trying to kill the deal at every stage. And when it got past those gates, only then were you going to deploy more of your personal cash into this in the form of a property Q of E that you paid for some 10 or $25,000. And legal diligence, Right, so far?

Analia Berrigan (35:13)

Yes. Correct.

Will Smith (35:14)

Great. Great.

Analia Berrigan (35:15)

Yes.

Will Smith (35:17)

So that was that. It's just a really wise way to do that, especially if you're tight on cash diligence as much as you can, try to kill the deal. But if it passes your own amateur, no offense, but frankly, amateur diligence.

Analia Berrigan (35:31)

Yeah, absolutely.

Will Smith (35:32)

Then, then, then hire the pros and cons and spend more capital.

Analia Berrigan (35:37)

Yeah, no, I was going to say I agree with the amateur. Absolutely. But I also think that the benefit, additional benefit to that is once you have done yours and you get one from a completely different perspective, from a professional that is not invested in it, doesn't care if you do it or not, and you have a mismatch, that is where it gets interesting. Right. So for Me, it was really helpful to see that we all had the same conclusions. So it's like, okay, I am thinking about this in maybe not the right way, but in the most obvious way. So everyone seems to be thinking about this properly. And that just gave me confidence that it was a good deal. And I would recommend everyone to do a Q of E and get professionals to look at the deal because, you know, you're doing this alone and if you had a team, maybe you could use someone from your team. But I do believe teams are much stronger than individuals and so getting just a second pair of eyes is always so, so valuable. So if you don't have the cash, find a friend that is wonderful in financials. You know, find other entrepreneurs that have done this already and can give you another perspective, but get additional pairs of eyes because that is going to change maybe your, your outlook on the business. And so it's important you can, can get in, fall in love with the business. Right. And so it's good to have an unbiased opinion.

Will Smith (37:03)

Great. Analia. Okay, so let's hear more about the business. How many employees, if you could share revenue, sde, age, some of those bullet points.

Analia Berrigan (37:14)

Yeah. So no, really, no employees, really? It was the owner and her husband. So I didn't inherit basically anyone. The revenue in 2024 was 385,000. The SDE was 185,000. The customer base was around 30. And with 61 locations that we serviced, the business had been around since 1997. So close to 30 year mark always led, but the same person that had grown it from scratch. And that was basically it. It was a simple, easy, beautiful small business.

Will Smith (38:01)

Well, let's talk about that size. Analia as a listener, you know that size of business is always a big question and the conventional wisdom is generally larger is better. This is quite small. So you said the sce, the earnings that the previous owner was taking home were about 185, which is about, you know, that's kind of a full salary in techland. So this was really a case of buying a very small business, buying a job because it sounds like it was basically her with her husband contributing a few hours a week. How did you think about that?

Analia Berrigan (38:34)

Oh, I love that question. So let me just start with a little anecdote on this because that's when I realized like I was able to formulate this for me. I was at the Beta accelerator and the first day in the introduction they kind of ask everyone their buy box and everyone was like 800,000 SD a million and a half, 1 million, everyone. And then I'm like maybe 300,000. So I already was thinking slow, small. And the reason why I was thinking small is for me it was not a matter of sd so much. It was a matter of my potential to grow and a matter of how much debt I felt comfortable taking on. And so as background for your listeners, right, I had two little kids at the time I bought. My youngest was one and a half. My oldest was almost like three years old, almost not full. I have a mortgage. We bought a beautiful home. We are a family of four now, so we have a bigger home. And if you live in Seattle, you know how home prices. So we don't live in a mansion, but it's very easily a very, very expensive house. So you've got that, you've got childcare, you've got all these things. And now I go and tell my husband, hey, I'm going to go insane and quit my job that we need for our expenses, we're going to use all savings and I'm going to buy a business. Right? I say that to him, he's like, holy gamoly, what's happening here? So for us it's like, okay, if we're going to do this. And he was very supportive. It's like, okay, but what if this doesn't work? And that is just a possibility always. Even if you do the best due diligence, even if you are the most prepared and it's the perfect acquisition for you, you never know what's going to happen. I cannot imagine how it was to be in E Commerce when the tariffs hit. It is something you can't control and now you have to deal with. And so that was a little bit my, my, my, my thinking like, what if again, there is something like the pandemic and I am caring for plants and offices and everyone goes home suddenly.

Will Smith (40:49)

My. Just to be clear, so just to be clear, Analia, you're thinking if you buy a smaller business, it'll cost less, your SBA loan will be less. So if the business completely craters and there's just some horrible, you know, black swan or whatever, you just don't know what's going to happen. That, that the loan would be small enough that you wouldn't have to declare personal bankruptcy, that you pay it off.

Analia Berrigan (41:16)

Yes, I could use some of my savings for one month or two and I could get another job in tech and pay it off. Right. Since I've worked in tech and I, I'm hopeful that if every ever I need to go back. I could go back. So in that case I could pay it off with my salary. And yeah, we would definitely be stretched for money, but we would not lose all our lives and our house and everything. And that was really important for me, for my family.

Will Smith (41:45)

And so just to give people who this might resonate with, your approach might resonate with people in the audience. You had said so just to kind of try to arrive at the size of business or the loan amount. You had said 300,000 SDE when, when you were going around it, new majority capital. And so that sounds like about a million dollar business. 90% of a million dollars is about $900,000. And then whatever that comes out to as a monthly principal and interest, I don't know what that would be, but that was whatever it was. You thought if the business collapsed, you could service a $900,000 loan with a tech salary. Returning to tech.

Analia Berrigan (42:25)

That's kind of the numbers that was around. Yeah, the math that I did, plus it was kind of like the max of all the savings I could put together without stretching myself there either. And that's something also for me was important, is not to have any investors. Because for me, why was that important? I mean, I have heard again in all your podcasts, the bright side of having investors, which is you have mentors, people with experience that are helping you. You've got more cash to do things and to search. Oh my God, Yes, I agree with all those things. They are great points. For me personally, I had in my business and my personality, I am very aware of my responsibility to others. And when I was in corporate jobs, I was very aware of that responsibility. And I stressed out about any little mistake, anything at all. So much. And I thought to myself, I actually don't want that in my life anymore. I just wanna be responsible to myself. I'm mean enough to, to myself that I will be okay with that. You know, it's enough. But having an investor for me was like, okay, then I have to respond to someone, right? I am responsible to someone and if something happens, I'm going to be obsessing about it. And I don't want that in my life. For me, it's very personal again, right? A lot of this is not so much business or my math. It was a lot of like how I felt in that moment. I did not want to have investors for this first acquisition where I was so much, there was so much to learn for me that I wanted to have the freedom to make all of my mistakes without having to explain myself to anyone. So that's why my capital was relatively constrained because of that.

Alex (44:05)

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Will Smith (45:17)

Back to the business itself. Analia so it was a simple business, as you said, installing and servicing plants at these 30 customers across 61 locations. 30 customers, that's a recurring revenue model. What does the revenue quality look like in the business?

Analia Berrigan (45:35)

Well, that was one of those things that you find out when you're a little bit more intelligent. At the end of the day, you always know more once you close the business, right? So there was really no data, no tracking that I knew of when I was doing the due diligence. My QOV provider also didn't really see any that would tell me the ratio between one time and recurring revenue. So I asked that explicitly and I have a document where it's written that the owner gave me and she said 90 to 10. I'm like 90% recurring. 10% was one time. I was like, okay, this is perfect. And that's around that the industry average actually. So it's pretty good. So I was like, oh perfect. So I don't even have to work really hard. Like I just need to almost maintain and I'll be fine. I'll be able to service my dad, yada, yada, all happy times. And then when I get the business round out. No, almost, almost. When I get the business. This is like a week before closing, we had done shadowing. I have gone to this location. So I knew what the job was about and then I told the sellers, okay, the last thing I don't understand or don't know is like, how do you get your money? So she's like, okay, I pay someone to do my invoice thing, I'm like, okay, so I just want to spend one hour with those people and learn what you do. So I spent one hour, and I looked at what they did, and then I looked at the numbers, and I was like, wait a second. If I multiplied all of the invoices you send every month, this doesn't come up to 90% of revenue. This comes to 70% of revenue. And by that time, it was almost too late to do anything, and I was already, like, sure, I wanted to take this business. So I decided to just go for it, hopeful that with a little bit more effort, I would close the gap. But, yeah, I had less quality revenue than I thought when I was buying the business. So to anyone listening, ask for invoices. It did not occur to me to ask for invoices, partially because I wanted to really maintain trust with the seller. And invoices are very personal because they have all the customer data, all of the addresses, all of the things. And so I did not ask for them, but I should have. Especially if you're buying a business because of recurring revenue. The best way to really gauge recurring revenue is to know how much every month is, like, how much is invoiced every month. So that would be. That was a huge learning that I had. But. But, yes, I have been able to increase my recurring revenue by much more, and my ratio now is closer to 85%.

Will Smith (48:23)

We're going to hear more about that. But, Analia. So you felt the connection you had with the seller you thought was a big. Played a big role in the. In the whole process. In fact, there had been other bidders, as I recall, right in your. And you won, though you weren't the best bid on paper because of this connection.

Analia Berrigan (48:46)

I think it was that. But I also think this. My. The seller, she had worked so hard. She was a really hard worker. You know, she was nearing her. I would say she was around 67 or something like that. Like, definitely, for sure, retiring age. She walked so fast, I could barely keep up. You know, she was a hard worker. She was like a little bee, an amazing woman. And I think that she felt that it was really important that the person that took on her business was like that as well, really worked hard. And when we talked, she saw that I was willing to work hard. And again, I mentioned this was a business with no employees. So I'm not going to sugarcoat it. I am going out on customer routes and I am touching every single plant and watering the plant. Right. It's not an easy job. It is very physical. It's exhausting. And you're in traffic a lot, which is. Is the only part of this job that I do not enjoy. But so I do the work and I am working on getting out of operations, but I am doing it now. And I think that she felt that it was important that the owner did that and a lot of other bidders were gonna send someone else, maybe not really train them properly and were not willing to do the job themselves. And that I feel put me at an advantage.

Will Smith (50:12)

It's really interesting, Analia, because I hear that about her perspective and respect it. But what she was doing as business buyers, the way we think about this, what she was doing was frankly underselling the value of her business because she's basically broadcasting that, no, this is a job. You know, this. The more savvy seller is, no, no, no, this isn't a job. You don't need to be the one to go out. You know, I, you know, you can hire easily to. To do it for you. That that's the appropriate way to position, traditionally to position a business for sale on the market. And instead she was like, no, my buyer needs to go out and do the work themselves. This is a job.

Analia Berrigan (50:56)

I. I want to clarify. She never said it like that, and I do think that they positioned it as something that you didn't have to go and do. But I think that when she and I got to meet each other, I felt that from her. And as I shadowed her and heard her, I felt that that was really one of the things that gave me an advantage. And once I bought and she helped me transition, so she came with me on routes for about two months, just the way that she described things, and we got along so well. She's such a beautiful person. I really appreciate her and she's a mentor to me. And even though I found things now where I'm like, oh my God, I don't blame her. Right? Like, I know she did everything with her best intentions and gave me the business she really thought she had. So I have a great relationship with her. But I mean, I heard out of those things and my empathy with her that that was important to her.

Will Smith (51:54)

Yeah. Back to the quality of revenue for a second. So, by the way. So you're disappointed to learn that it's not. Not 90%, but more like 70% still. 70% recurring revenue is a good. It's a good amount of recurring revenue. So that's still pretty appealing. The 30% non recurring is what Exactly. The installations. New installations for new customers. Okay.

Analia Berrigan (52:19)

Yes, correct.

Alex (52:20)

And, and so say what you said

Will Smith (52:23)

something about the Q of E not catching it or not being able to tell what was recurring and what was not. Why. Why say more about why Q of E didn't catch this or. And, or why you weren't able to catch it when you did your proof of cash.

Analia Berrigan (52:36)

Yeah, my proof of cash and everything. Well, the reason why I wasn't is because when you look at the P and L and you see the sales position, you're the first item really in your P and L. Sometimes in some businesses you'll see that broken out by business or revenue stream. In this business, you didn't. And I actually think it should have been broken down by one time revenue and recurring. It wasn't. And so when I looked at all the numbers and all of the data per customer as well, I couldn't know which customer that appeared there was a one time installation and which customer that appeared there was a monthly. And I did not receive the data on a monthly basis. I received it for the year. Because normally you analyze per year, right? Not per month. I think think that that's kind of how it got lost. It was just not. It was not being tracked. I would have had to go really into each invoice and been like, okay, recurring, non recurring, recurrent run. Recurring with the seller together to be able to build that. Yeah.

Will Smith (53:38)

Yes. Great. And. And that is ultimately what you did.

Analia Berrigan (53:42)

Yeah, ultimately that's what I did. And realized it was just 70%. I was like, holy gamoly. And now I own my. In my business, I do market mark my revenue. So I do have it broken down. So I understand because I have goals based on that that I track.

Will Smith (53:58)

Great. Okay, well, really great tip there for people who to. To uncover quality of revenue or recurring versus not if. If it's not clear in the QuickBooks or the books because it hasn't been tracked properly. Okay, let's hear about the business, the deal to acquire the business, your terms on Aaliyah. And then I want to spend the rest of our time talking about your operations and how it's gone. So the business again. 185 of SDE. 385 of revenue. Can you share what you acquired it for and how you structured everything?

Analia Berrigan (54:32)

Yes. So I acquired it for 436,000, which was broken down by a 5% seller note, 10% my own capital. And the rest was an SBA loan that covered everything. So the loan was 387,000. And the rest came from the seller. And for me, very simple in that aspect. I didn't really need the seller note. I could have paid everything myself and do like 1090. But I had always heard from your podcast and also other people, really, I could quote your podcast so many times. Times. So everyone please listen to as many episodes as you can that the SBA likes to see seller notes, because seller notes indicate that the seller has some skin in the game, that you should be successful, and then therefore will be more invested into helping you transition. So that made sense to me. So it's like, okay, let's do a small seller note. And what I did for my structure is I actually, if you do the math, the price of the business was the price I paid for the business. Basically, those 21,800 that I did as a seller, those 5% were like a little extra that I gave the seller to the initial price that she had asked for. So her business price was like 395,000 or something like that. And I kind of added on top the seller note and a tad more, so she would, you know, prefer me, hopefully. And she had more like better offers. But that for me was a way of saying, okay, you know what? Seller note will be your extra. So it doesn't hurt you to give it to me, you know, because I know some sellers don't want, especially in this buy, like market where we have so many buyers, a lot of the sellers are just not willing to do seller financing. Especially if you're retiring, correct? Like, if you're gonna get your Money in like 10 years, it's not as attractive, right? You want your money now you're retiring. So it was a way of me of saying, hey, you know, it's not gonna hurt you. You're gonna get what you need. But choose me, because then you'll get a little bit more and I'll be the right buyer. So I also sent her a video.

Will Smith (56:53)

Oh, yeah? What was in the video?

Analia Berrigan (56:55)

I. I sent her a video saying, hey, it was so great meeting you. I am sending my offer and I really hope you consider me. And if not, it was just great meeting you. It was so inspiring and I hope you have a wonderful time. That was it. It was just so simple. But I sent it with the loi. And I think she really appreciated that.

Alex (57:14)

Oh, wow.

Will Smith (57:14)

That's what a. What a great touch. I'm a passionate user of loom to explain for very much more utilitarian reasons, explaining stuff for my team and so on. But. But I Do I do love video. And how especially yeah, when submitting something like an loi, which you might want to explain a little bit or not. There's a strong argument that the LOI should just speak for itself and you shouldn't necessarily over explain it or walk people through it, walk the recipient through it. But you can add a personal touch, like you did of just saying, great to meet you, love your business. Here's my offer. Something like that. I have not heard that Analia. So you did not learn that one from acquiring minds. So future listeners will learn it from you. So let's just. The 5% seller note. This was also new to me. Really interesting technique. So you didn't need to do a seller note because you could bring the 10% yourself from your own cash. So you could have structured this, you could have afforded to structure this 10, 90, 90 SBA. But two things, the SBA likes to see seller notes. So you kind of wanted, slash, needed to have a seller note in there. And yet you recognize that your seller wasn't going to want to provide a seller note, as many sellers don't. So instead what you did is you gave her your purchase price plus an additional 5%. And you said this additional 5% will be as a seller note. So I'm offering you more. But the additional 5% will be paid out over time, etc. So that kind of neutralizes what would have been her resistance to a seller note. Because it's basically gravy. It's.

Alex (58:56)

It's new.

Will Smith (58:56)

It's new found money. It's found money for her.

Analia Berrigan (58:59)

Oh, gravy. That's the word. I was looking for that. I was thinking in German. And that's whipped cream. That's how you say it in German. Not gravy, whipped cream. So like, wait, that's not in English. Something's wrong. Yeah.

Will Smith (59:14)

So gravy for her and. Yeah, and so that really interesting technique. So you offer basically 105% of her purchase price. Okay. And then the. So your full, your full purchase price was. You said four, 35.

Analia Berrigan (59:28)

436.

Will Smith (59:29)

436. And so the multiple was something between what, like two and a half? Do I. Yeah. Is my math right? Yeah. Great. Okay.

Analia Berrigan (59:39)

Yeah, it felt like a good multiple to me. A fair multiple plus, you know, something that was attractive about this business and why I felt that multiple was okay because, you know, if you think about it, buying a job, it's a high multiple if you really just think about that. But at the same time, it is High recurring and very high margin.

Will Smith (60:02)

Oh yeah, let's talk about those margins. I hadn't highlighted that. What are the margins? Do the math for me there.

Analia Berrigan (60:07)

48%. Yeah. From revenue to.

Will Smith (60:12)

Yeah. 185. Over 385. Yeah. Yeah. It's almost half.

Analia Berrigan (60:16)

Yeah. It's a high margin. So I felt okay, every dollar I grow, it's a half a dollar I keep. How about. That's really good. So my effort will be paid out better than in other companies where the margin is 10% even though they have way more revenue. Right. So I have to do a million to get 500,000 roundabout in another 10% business. It looks very different.

Will Smith (60:46)

So great. I'm so glad you, you brought this up. High margins are good for that reason. Just you know more, more of the revenue drops to the bottom line. The kind of self evident reason. Also good because they suggest not always but kind of directionally suggest value of your service, some pricing power, lack of competition or not at least, at least not as competitive as other markets. So it's, it's a signal of some, some kind of a healthy supply demand dynamics in the market where you compete.

Analia Berrigan (61:20)

That and cost structure. Right. Because I do think those points you're bringing up are correct. But the cost structure in this case is the most interesting one. If you handle your cost properly. It's a very low cost business.

Will Smith (61:35)

What are the costs other than the people doing the work? Some light sort of landscaping stuff. Planters and water.

Analia Berrigan (61:43)

I mean sort of. Yeah, well you know planters are paid off by the customer when they buy the customer installation. So it really isn't a running cost. It's people is the highest for sure. It's a very labor intensive job. And then plans. That's it. All the rest is menial. And of course you can spend on other things if you want to like technology and things and pay very expensive software. But it's not needed. My husband and I together developed our software in like a week with AI so it's possible. Right. There's a lot you can do.

Will Smith (62:18)

Oh we got to hear about that. We got to hear about that in a second here. Well and the other thing in particular in your case where you're buying a job and but of course you probably don't want to have it be that structure forever. And so you want to grow and have people doing it under you hire. It means that you. That there's room there, that there's a lot of room in the margin to. If you can get revenue to a certain point to more than afford people to. To be going out and doing the site work.

Analia Berrigan (62:48)

Absolutely, yeah.

Will Smith (62:49)

Very, very interesting. Now, now, to the point about the earnings of the business when you bought it. So 185. Half of that roughly, is going to go to your SBA loan. So that leaves about 90,000 bucks of earnings without reinvesting anything. What did you anticipate? What are you paying yourself?

Analia Berrigan (63:13)

Well, I am paying myself. Is it like 36,000 a year? So not much. Yeah, not much, but I'm reinvesting a lot, and I'm actually cash flowing very well, so I think I can. I can pay myself more. I just really want to grow, and I want to grow through acquisition, and I am not eligible to get SBA loans anymore. So I need to make sure that I save as much money as I can so that I can finance additional acquisitions, even if it's small ones, to just get more accounts. It's just the. Really the easiest and the fastest way to grow, especially in this industry where there is a lot of fragmentation and a ton of solopreneurs that are just doing the interior landscaping for people. So, yeah, now I have to be able to pay cash, so I want to keep as much cash in the business as possible.

Will Smith (64:08)

Cash and seller notes to the extent that.

Analia Berrigan (64:10)

Exactly.

Will Smith (64:10)

Get them.

Analia Berrigan (64:11)

Yeah.

Will Smith (64:12)

The fragmentation of the industry, the many solopreneurs. One of the earliest, like, single digits acquiring minds episodes was with Nick Hashka, who's gone on to make a name for himself in other ways in our industry, our world, but he bought an indoor plant business. So this was actually one of the very earliest businesses I thought about as an acquisition target because of that early episode, anyway, and he bought his in the Bay Area and same thing. It was fragmented, and there were a lot of. There were a lot of kind of retiring boomers that he went on to acquire. So in Seattle, you see a similar dynamic. It hasn't. Those people are still around, ready to retire, and could be good targets for you.

Analia Berrigan (64:55)

Yeah, I just bought a second company a month ago now, almost March 1st. We closed, had 10 customers, 12 locations. So I acquired him also cash and seller note. So just added more customers to my list. And, you know, that's kind of how you have to do it, I think. And he was 76, so definitely ready to retire. And that was a proprietary deal. And he reached out to me through Sally that sold me Kelly Green. And, you know, Sally's like, it's too small for me, so she didn't represent him. But he and I worked together and it worked very well. I already had enough experience to do it and guide him through it and build the right trust. So yeah, we just closed and now I.

Will Smith (65:50)

That's amazing. And so that's a smaller business than yours. 10 customers to your. You're 30. But how much revenue did it add? And if you could, how did you structure, how did you value and structure the deal?

Analia Berrigan (66:02)

Yeah, so I, it added 10% of my revenue, so about $2,500 a month. It's not a lot, but it's all recurring. And this time what I did is I actually only looked at recurring revenue and the margins that came from recurring revenue and multiply that by a multiple from 2.1 and that's what I paid for. So I did not consider his entire revenue only recurring. So this time I did ask for the invoices. Yeah, yeah, for the last three months and double checked that and did the math there. And also, always don't forget the sales tax, you know, because the numbers they send you are with sales tax. And here we've got 10.5% sales tax. Roundabout. So that is poof, not there. So don't pay on a multiple there with the sales tax. Be always mindful of asking whether the revenue numbers you're getting are with or without sales tax.

Will Smith (67:02)

So his invoices would be reduced effectively to about 90% or whatever the sales tax amount.

Analia Berrigan (67:08)

Exactly.

Will Smith (67:08)

And you paid him on that revenue and you only paid him for recurring revenue to bring those customers over, those clients over. Fantastic. And he was amenable to a seller now?

Analia Berrigan (67:19)

Yeah, he did a small one, 20%. So.

Will Smith (67:24)

Ah, so you paid 80% of the deal in cash.

Analia Berrigan (67:28)

That was. Yes, that was how I built trust because he didn't really know me. So I referred him to the seller of Kelly Green and said, talk to her, then you'll see who I am. So he did. And then that he felt more comfortable after that. But he doesn't know me, so he doesn't know if I'm going to pay him a seller or not. Right. And so I said, no, it's okay. I can upfront cash if you do all these things for me. And this is the price you take. So that's what he got. Like he got more cash up front, which was really important to him because he's retiring. That's what he needs right now. And I needed a very attractive price and I needed him to replace plans and I needed him to do a bunch of stuff. So he did all those things for me for that from on cash. So it felt like a good deal for me, and I had the cash, so it worked out.

Will Smith (68:18)

And now that you're on the other side of that, although that was just a couple weeks ago.

Analia Berrigan (68:21)

Yeah. Yes.

Will Smith (68:23)

But, okay, so you're very early in that little bolt on. But now that you're on the other side of it, do you feel like there's a pretty strong playbook here to do. To do a lot of that and.

Analia Berrigan (68:33)

Yeah, it's a lot of work, I have to say. Right. They. I gotta integrate all of the stops into my route. It increases just the amount of days I'm gonna have to be on the route. I have to make a lot of plant exchanges. I have to clean up things to get it to the quality that we have at Kelly Green. We have a very, very high quality bar. You know, I did work at Amazon, and there were so many things that were just not aligned with my values. But I did learn a lot, and something that I learned was customer obsession. And we are customer obsessed with at Kelly Green. And so why would you pay for plant services if it's not amazing? So we want to be amazing. Right. So I have to get everything to that level, and that's a lot of work, but it's, you know, a joyful work, so it's okay.

Will Smith (69:25)

Well, speaking of joyful work, we're going to close the interview in a little bit talking about the quality of life now, since this kind of was all essentially done to pursue a particular quality of life, but we're not there yet. The. You mentioned that you're not eligible for more SBA loans. Yeah, talk to us about that, please.

Analia Berrigan (69:48)

Yeah, well, there was a new SOP change that just came into effect March that excluded permanent residents from getting SBA loans. And I am a permanent resident. Resident. A green card holder. So, yeah, I have a path to citizenship, so hopefully eventually that won't be a hurdle. But for now, I cannot ask for an SBA loan. It already felt a little bit harder when I did my first SBA loan. They needed to double check my permanent resident status, although I had a green card. But they still needed to do a check that took three weeks and delayed our closing. So I. I guess the writing was on the wall, but now it really is an SOP change that you cannot buy a business if you're a permanent resident or if you have investors that are green card holders. They cannot really also be investors in

Will Smith (70:48)

your deal because they can't be on the cap table. No ownership, essentially.

Analia Berrigan (70:53)

Exactly. No ownership at all for anyone. That that is not a U.S. citizen.

Will Smith (70:58)

All right, now, obviously this conversation gets political basically instantaneously. And, and you know, we don't want to get too political. People will already have their opinions. But I do think it's really valuable, analia for anybody where whatever their politics are, just to hear from somebody that is affected by this very, very directly. You were able to buy this business because you, you just, unbeknownst to you, you beat time wise, you beat the fact, you beat the change like you got in there before the change happened. But you fully invent. You fully intended to continue using your $5,000,000 of SBA available SBA 7 a debt to make more acquisitions, as we've already heard and now you cannot. So maybe just say more about how this, I don't know, feels. Change changes things for you.

Analia Berrigan (71:52)

Well, definitely the change made me take a deep breath because it will make me much slower into achieving my goals and I need the speed so that this can be a job that can sustain, you know, the life we have right now. A lot is coming from our savings and that has an end. So it definitely is bitter pill for me to swallow. But you know, at the same time, I think I myself and I think a lot of people that have immigrated are very resilient because you're consistently encountering challenges. And I've been an immigrant almost my entire adult life. Right. I'm a Bolivian citizen, born, raised there and lived in Germany, in France and China and here in the US Always on a visa. So I've gone through all of the hoops and all of the interviews and all of the things and have stories to tell about that. So I am used to that feeling that you just have to work harder. And so I'll just work harder and it'll be okay. I'll just find ways to resolve it and stay strong with my business and keep pushing every single day. Yeah. To show people that we can still do it even though it is harder.

Will Smith (73:17)

Well, what a, what a graceful reaction to something that probably feels unnecessary or unfair to you. So kudos to you for just soldiering on. Half of the audience or more will, will be disappointed by this rule change and, and, and feel similarly. We're not feeling it personally, but feel similarly that it's wrongheaded and a shame to see. But here we are. Okay,

Alex (73:53)

let's start wrapping up.

Will Smith (73:55)

But. Well, I. Maybe not quite yet because you put pen to paper and posted on LinkedIn about a few learnings. Yes, actually, I will say this there. You had two LinkedIn posts and the first one was about this SBA rule change that affects you so personally. So we'll link to that in the show notes. People can read about it in, in those words, which is as I said, how what got my attention about your story and I really wanted to have you talk about that and share your overall story. But anyway, the, the second LinkedIn post here is more, you know, business related learnings. J curve stuff. Let's get into it. I'll walk you through it here. Annaliyah, one of your first learnings was the revenue mix trap. Yeah, we've actually, I think basically already addressed that one. But indulge me in and quickly walk us through it.

Analia Berrigan (74:55)

Yeah, again the revenue was not 90% recurring, 10% one time, but 70% recurring and 30% one time. So that just meant I had to work so much more to get to the revenue level I had bought. Right. But you know, the thing that made me move forward with it is that this business didn't even have a Google profile, like no online presence at all and had been able to maintain 30% one time business with, with nothing but referrals. So I thought to myself, good, well if I keep the referrals and I on top of it, invest someone like being online, hopefully that will help. And yeah, the referrals were very strong. There still are 90% of my business is coming from customers I already have. So that's thankfully stayed strong. And I've been working really hard to convert one time to recurring revenue. So that has been addressed. But it was definitely, yeah, definitely tough.

Will Smith (76:00)

Yeah.

Alex (76:01)

Because the way you basically see this

Will Smith (76:03)

business or your, or how you envision spending your first year or two is really just operating and doing the work and not doing a lot of sales. So you that, so in your case the recurring revenue really needed to be there because you hadn't, you don't sort of, you hadn't allocated on your day, in your week time to go out and generate new business. You, you really were relying on those contracts.

Analia Berrigan (76:23)

Okay, exactly.

Will Smith (76:25)

Point two, accounts receivable. The accounts receivable and the friction that doing an asset purchase creates to getting paid to working capital.

Analia Berrigan (76:39)

Yes. Oh my God. So this was one awakening for me because again in your podcast, but also in your webinars, but also in general and for from lawyers and everything, the message that I got consistently was do an asset purchase, don't buy the liabilities. It's like, okay, that makes a lot of sense to me. So I did that. But what that means also is you have a different entity than the seller. And so that means that every single customer you have needs now to change their W9s, all of their records to a completely new entity. So you need to touch base with, with each individual customer and make sure that they do that change. Because before that change is done, they won't pay you. And I did. I only had 30 customers, so I had it easy peasy in comparison to a bigger company. Right. But this 30 customers, they don't really have an interest of doing this. Right. They are doing like they have other things in their head. It takes so long and you have to contact them so many times to make sure that they make those changes. And you're gonna laugh a little bit about it, but it actually was one of the reasons why I bought the business. When I asked the seller for her CRM, she's looked at me like question mark and I said, I just need the contacts of the people that you work with. She literally was searching in her emails for the names of the people. She had nothing. So I had to extract all that knowledge from her brain while we were on route. So the whole ride I was typing on my phone like crazy, creating my CRM and HubSpot while I was talking to her. And the result of that is that a lot of the people that she had contact with was like two years ago and they were not in the company anymore. So when I reached out, I was like, there's no one. But they kept, there was like this constant, once you're in the system, you send your invoice, you get paid. So she kept getting paid, but I wasn't getting paid. So it was a whole thing. That means I was expecting some revenue, but I had no revenue almost for the first two or three months. So thank God I listened to all of your other advice and had a bunch of working capital, so I was fine. And again I said it's a very low cost company, a business model. So I didn't need too much. But those first months were like, oh my God, I'm running out of money and these people are not paying. What happens? And I had a customer that took six, six months to start paying.

Will Smith (79:10)

Wow.

Analia Berrigan (79:11)

Once they got me through, they paid, right? But, oh, it just takes time. So I didn't, I didn't think about that. So think about that. If you do an asset purchase, it's a heavy lift.

Will Smith (79:22)

And then, and then even though it took six months to change over, you still got paid for all those months. So there was probably a big infusion of cash once all of these customers finally figured it out.

Analia Berrigan (79:33)

Yes, exactly. That was some happy time for sure. But at the same time, like unpaid work for six months, you don't know you're gonna get paid. I was like, should I stop coming? You know? But I trusted that they were gonna eventually show up.

Will Smith (79:48)

So, yeah, Point three is related to this point, as you called it the newness effect. What's the newness effect? So.

Analia Berrigan (79:59)

Oh, my God. Yeah, I called it the newness effect because. And, you know, it reminded me of when I lived in China. I also have another one that is called the expat effect. So when you are new in a place or in a different place, something you're not used to, whatever, there's always like a tax on you. Like, when I was in China, I had to pay more for things. I had to go to the supermarket, for example, and pay higher prices because I didn't speak enough Chinese to go to the market. And, you know, just. Just. Is a haggle the right way in span in English, I don't know, to just negotiate. So I was again, here, right? You always have to pay something because you're new and you're different. So the same here, this people were used to the old owner and Kelly Green. And I never thought about this, and suddenly I come, and now they're thinking about this again. So now they're like, wait a second. What does the contract say? Wait a second. How do my plants look? Wait a second. So they started doing all of this, like, reviews, and suddenly they're like, okay, you gotta sign this master contract we have now. And when I looked at it, it's like, you need 500 different insurances that I didn't have. And that would have cost me like, six, seven hundred more a month, which is much more than they were paying me. So it's like, ugh, what do I do now? So in some cases, I was able to increase my insurance a little bit because it still made sense with the customer, what they were paying me. In some cases, I told the customer, I can't do that. Like, what are the other. And then they were like, okay, then just come during business hours. And, you know, and what that means is just like, I cannot plan my route wherever I want because we were going the weekends. No, I couldn't go the weekends. So that just made the route harder to plan. Some others just suddenly called me and was like, we don't like our plans. I'm like, oh, my God. And the former seller, like, never said anything about the former owner, never said Anything about anyone complaining. And then suddenly, like, like, bunch of people were complaining and some of them said, well, you know, we had been like, very unsatisfied for a while, but we loved the owner and we didn't, you know, we knew she was kind of gonna retire, so we didn't want to bother her. So they just waited for me to get there to dump all of that on me. So I had to change plans. And for some, like, a bunch, like, big investments, you know, I was like, oh, my God. And yeah, I did it because I wanted to retain customers. And the reason why retention is so important is because these customers really refer you, so you want to retain them. Even if it doesn't feel worth it, it will be potential new business in the future. So I really made the investment and I changed the plans and made sure they were satisfied. Because as I said, customer obsession really is something. I mean.

Will Smith (82:47)

But yeah, you did lose a big customer.

Analia Berrigan (82:50)

I did. This was like the worst part. We were doing so well with them. And then one day I just received an email and this was. We didn't get to that. But the only big risk that this customer, like this business has was customer concentration. One of the customers was 20% of the revenue. And the reason I took on that risk, there were two reasons. First reason was because the customer had been with this lady for 30 years, like, since the start. So I was like, okay, seems to be a good relationship. And number two, because I did the math and if I lost that customer, I could still pay off all my SBA and my employee and everything. Like, it would be tight for me, but I could still go on in business. So it's like, okay, there's like a way and hopefully I'll grow and then that won't be so much of a deal. And of course, because lack of is what like is, the risk came and they sent me an email December 1st being like, okay, we've decided to take this internally. 400 planters, say, among four different buildings. We're going to do it internal. I'm like, are you really? This is a lot of work, but what am I going to tell you? And it's because they change cos. And when you've got a change like that, the first thing they want to do is slash cost costs. And of course, it was a big cost. It's four buildings, 400 planters probably, you know, compared to other things that they were paying for, it was peanuts. But it's an easy thing to cut. So since January, I lost 20% of my revenue, but I've been growing enough that I still am 6% above revenue that I was last year. So.

Will Smith (84:33)

Well, that's just a, a fantastic accomplishment. Customer concentration of 20%, losing it. But diligencing that item, it's a 30 year old relationship. 20% is a lot. But you think that it's, it's just an ancient relationship, very steady. And in fact you do lose it and you rebuild to, to that 20% and more back to above what you bought it at. Revenue wise. Your last learning is also going to dovetail into my question about how you do the work. So your last, your last learning here was what you call the product quality ambiance.

Analia Berrigan (85:12)

Yeah. So when you buy a business, either service or product, you need to make sure that what you're selling is really worth what you're, you know, selling. So it's easier to think about with a product. And this is actually an anecdote that comes from someone else that I know. Like let's say you bough a business that sells shampoos and when you do your diligence, you see that only 10% of customers are actually returning customers. That means something is wrong with your product. Right. Like, why would just 10% of people decide your product is good enough for them to buy again when it's something so easy as shampoo? So in services it's similar. Like would people call you again? Do they want to stay with you? Are you offering a high quality product? And that's really, really important I to have. And so when I was buying this company, I was not knowledgeable enough to gauge the quality of the product, which were how the plant should look, how the installations should look. I just didn't know enough to look at a plant and be like, this plant looks beautiful, it's healthy. And so I bought the business and I never asked the seller to change any of the plants. And then as I started hearing complaints and stuff, I started learning what people see as good versus bad and looking also, you know, once you do this business, you're looking everywhere and you see plants everywhere. So now as I go to buildings, I'm like, oh, look at that, look at that. And so I start comparing. Now I have a much better feeling of like, what quality is in my business. And because I want to achieve that quality, I have invested way more than I need to really, or way more than I expected. Not that I needed to, that I expected in making sure to achieve that quality for my customers, because it wasn't there. So when you buy a business really look at the product you're selling or the service you're selling and make sure it has quality and learn what is quality before you buy it. And I think that that's still valid for H Vac. How do you treat your customers? How responsive are you? Are you responding to emails, to calls, or are you not? All of those things are very easily forgotten during due diligence, I think, but are so important because if you don't have a good quality business, eventually people will stop coming. And it's hard to make it good. Right. Once it's bad, especially if you have employees, you gotta change the whole culture. It's a whole thing. So yeah, that would be my other learning.

Will Smith (87:55)

Well, that's a great one. And that's a hard one to diligence because your most business buyers are coming from outside the industry. So the best they can go on is those reviews that they see online. Yeah. And even if you know, you, you might say another proxy for it would be the long standing, the, the age of some of these relationships and contracts. But as you found out painfully, in fact, age of contract often, often might just be kind of momentum or inertia and it's not. And in fact, they're even looking for a reason to sever ties with the provider. They're not actually happy with the provider. So don't take for granted that a long standing relationship or contract means that it's a high quality service necessarily.

Analia Berrigan (88:40)

Absolutely. Yes. Oh please. Yes. Those words, write them down. That's exactly how it is. Because people, you know, don't want to say in the wrong way, but people get complacent and you know, once something is running, it's like the same. Once you pay for your Internet provider, even if you hate them, the amount of energy it needs for you to research again and find another one is just high. So you might just stay with them and complain forever. So think about that. Because we operate like that, especially in big organizations where you have to do multiple decision making loops and stuff. It's like, let's just stay with them, whatever.

Will Smith (89:16)

Yeah, yeah, absolutely.

Analia Berrigan (89:18)

Yeah.

Will Smith (89:19)

Analia, tell us about this AI software that you guys, you and your husband vibe coded.

Analia Berrigan (89:26)

Yeah, so again, my background, my last job was as a manager in the data science team at a company. I built it up from scratch and was leading it. And so data is like something I really enjoy. And this part, like this company had no data. I was like, how much does like a minute cost me? How much does it cost me to replace a plan? Like, is this customer, even a customer that is worth it. And so I was like, no, no, no, I cannot operate like this. So the first thing we did is kind of build a software where we could measure the time where we are at location, where we could tag all the plans so that I know when I replace a plant, I know how much that replacement cost me and where I can plan my routes and I can audit that my route has all of the stops and all of these things that I'm like, I need to know all these things. And so we built one with the goal of having a dashboard where we could monitor our operations and whether we are reaching our goals. So of course I have goals and we need to track them. So yeah, my husband is a software engineer, right. So he knows a lot of that. And I was a product manager, so I know a lot about requiring writing. So together we kind of put it together and build basically this tool that helps us in our operations to track everything and that eventually will serve us for me to step out of operations. Because it's an app that an employee can have that tells you the stops, helps you navigate there directly tells you access codes, floor numbers, what key card you need, measures the time on location, tells you if you're replaced or not replace the plant, allows you to add pictures so that you know what plant you need to replace and everything. And that automatically then gets checked with an AI and creates a list of purchases, purchasing list that I can then send to my wholesaler. So all of that basically will eventually be so automated that I don't need to do much and just need to send the people out in check quality regularly. So, yeah, we're working on it. I think it's 90% complete. It's pretty good. We've been testing it all around and it's working very nicely.

Will Smith (91:32)

And I mean, that sounds like, I mean, that sounds like a very custom piece of software specifically for your business. We're seeing all these headlines about the software industry valuations of big software companies collapsing because everyone's worried about the use case that you just described, that people are going to be able to do their own custom software right off the shelf, super, super tailored to their businesses and not even hire software developers to do it. Now you're. Your husband is a software developer. My question is, so what did you build this in and how much of his software development expertise was needed here? I mean, is this something that listeners could do or was this actually quite technical because of. Because he's a developer?

Analia Berrigan (92:20)

No, I think that the most Technical parts of it are the deployment of it, you know, once, because once you develop something and your computer, you have to be able to deploy it to the App Store, make sure you can update it when you make a change, create those pipelines. CI cd. That is the part where you really need software development skills or have the patience to have AI teach you. So we work with AWS and we kind of set everything up there and we have containers and kind of have a deployment pipeline. And you also need to really think about safety and security, cybersecurity. And when you do it with AI only, that's not enough, right? You want to test now? Our software lives just very. Just our AWS instance. It's not out there. Nobody can really access. We hope we think right, but that doesn't mean somebody can't. And so that's the part where eventually, as it grows more, we will definitely hire someone to do a assessment on our side and make sure that everything is secure. But other than that.

Will Smith (93:28)

And what did you build it in Analia?

Analia Berrigan (93:31)

Well, we use cloud code and it's a combination of Python and JavaScript and CC Plus. And it's just different things depending on what exactly it is that we're doing at that time.

Will Smith (93:46)

But other than the deployment pipeline, did your husband write any lines of code or was it all just with bugs?

Analia Berrigan (93:53)

I think it was mostly cloud code. He and I can read code so we can double check things. And I am a great tester as well, so I find all his bugs. Well, all the AI's bugs.

Will Smith (94:05)

I'm sure he loves that.

Analia Berrigan (94:07)

Yeah, yeah. But yeah, we are a good team. We have a lot of fun together and we brainstorm about like, you know, we have this saying, we engineer the piece out of life and that's how we've operated in our life forever. And so this is just a playground for us to engineer everything. And, you know, and we love it because I think that the difference is anyone can do this in theory, but in practical terms, that's when it starts failing. That's the thing that I kept telling my friends, like, in theory, I knew what it was to be a mother. In practical terms, I had no idea what I was getting into. You can study everything you want, you can, and try to do the vibe coding, but there's just way more things that are involved and you need to have the right mindset to really put the requirements properly and build it. So, yeah, we really are enjoying that. And I do think that eventually that will do a spinoff into helping other small Businesses with their tech stack in a way that is very accessible to them and very personalized.

Will Smith (95:15)

Well, that is the impression I'm getting, as incredible as it is, that the two of you were, you know, in downtime or whenever you could find the hours, were able to build this incredibly tailored piece of software for your business or 80% of the way there, 90% of the way there. Yeah, it actually does sound. You both are technical by background. It actually does sound like probably not nearly as accessible for the average listener of this podcast.

Analia Berrigan (95:41)

I think it's a little bit harder and built. Yeah. But I think with the right guidance and the right mindset, it is definitely so much more achievable than it was before. And still I am a proponent always to buy off the shelf, if you can. The reason we didn't buy off the shelf is because we would have needed like three or four different products and you know, to, to get all of the functionalities we wanted at incredible high prices and it still wouldn't have covered everything we, we needed. And I, I dare to say that I'm probably one of the few, if not the only landscaper out there that has a dashboard that automatically updates itself with data about my margin per customer. So I would almost dare to say I would too.

Will Smith (96:33)

Although Nick Kashka is pretty technical, he's built some stuff too.

Analia Berrigan (96:36)

I'll ask him. I tried to reach out to listening answer my LinkedIn. No, yeah, I would like to ask him that. I mean you can do dashboards and stuff with QuickBooks, right? But operations are hard to track and I know some that have done it at a lot of money with Salesforce and things. I've done it with no money and it gives me the same functionality.

Will Smith (97:04)

Well, the other thing here is even if the listener gets into their business and they're not technical enough to build as you and your husband have built, the point still is for technical people, how quickly you did build what you build means that the cost of software is coming down quickly. And so a non technical person could find on upwork or wherever somebody like you with your skill set to build the software for them. And such a person should be able to build this software for way, way less than even two years ago, I would expect. I don't want the, I wouldn't want, I don't want the listeners to think that this is out of reach for them them if they can't do it themselves. We hear a lot in the press about people just building their own stuff with AI and that's great. And powerful and it is happening more and more and people should learn it. But short of that, you can still hire AI consultants to do it for you and the hours that it takes them to build something will be far less than it was just two short years ago. So there's still opportunity here, even if

Analia Berrigan (98:03)

you're not absolutely

Will Smith (98:07)

okay. Anna Leah, tell us now, nine months into your business, how being an owner has or not solved the problem or improved your life in the way that you wanted it to or not.

Analia Berrigan (98:25)

Yeah. So on the flexibility side, definitely helped. I do routes maximum three days a week. So I have other four days that I don't have to do routes and that get to work. And I get to work at the times that work for me. So I work early mornings. I start my day at 4am and I heard that.

Will Smith (98:46)

Very impressive.

Analia Berrigan (98:48)

I am very impressed too. I still don't understand how that works, but I do that and then I help get my kiddos ready for school and then I work until they're back, pick them up, I'm with them and then I fall asleep with them at night. The moment I put them down, my kid is trying to always wake me up because I fall asleep in middle of the story of telling her. So I go to bed with them and the next day it starts again. So I get to spend so much more time with them and do dates with my babies. I do dates, regular dates with my kiddos where I'm one on one time with each of them and I didn't have time for that before. And so it's, it's wonderful, it's really fun. So that part has worked a lot. I still work a bunch. It's tough work. When I do have a route, I start at 4am and I come back home at 6 or 7pm and I still need to take the plans, make sure everything is fine. And it's a lot on those days, but I wouldn't trade it for the world. And the one huge difference, I have to say that I did not know before I bought the business well, but I realize now I am a doer and a builder by design and I really enjoy seeing results of my work, which is why corporate was very often challenging to me because I worked a bunch and I didn't see the results, especially in the roles that I was at that were very internal. Right. I didn't see revenue increase, I didn't see anything really happen. And so it felt frequently like I was burning or you know, burning my tires. But here I see results, results immediately Right. If I water the plant incorrectly, I will know. If I reach out to the customers properly, I get business. If I plan my day properly, I get a bunch of things done. It's just, I see results every day and it's so rewarding to me. So my mental health and just everything is much better. Even though the amount of work I have is enormous and I still have two little girls that need a lot of attention, so. But great.

Will Smith (100:57)

Analia. And what about the. The. The question of size now that you're on the other side of this and the fact that you bought a job?

Analia Berrigan (101:03)

Yeah. We didn't get.

Will Smith (101:04)

How do you. Do you. Do you think that it's what you expected or would you say no, people, you. You should not buy a job.

Analia Berrigan (101:10)

What.

Will Smith (101:11)

What do you.

Analia Berrigan (101:11)

What do you think I would say learn who you are before you buy a job. And I am someone that is absolutely enchanted with really understanding every little single piece of the things that I do. So for me, operating this business by going to my customers and doing the job myself was so valuable because now I know exactly how it is to take care of a plant. So when I hire someone, I get to train them to what I think should be the right way of caring for the plants, the right standard of quality. And I get to understand when they say something to me if it's true or not. Right. Nobody can fool me. I know what I'm talking about because I've done it. And so the same way I can have the empathy with them in a very different way than another boss could if they didn't ever do the job. So that, for me was so valuable. And I don't mind getting my hands dirty at all. And literally, they're literally dirty. And I have black nails, like, constantly. I don't care about that. I don't mind. I don't need to be on a high level and be the manager and, you know, to feel satisfied with my job. But although that was my role most of the time, I really don't see this as that I lost anything. But I know that that is a challenge for other people. Right. You might feel you're in the grind and you're not getting anything done and you're not growing, and I get those things and I have had those moments. But then you address them and I am hiring more people and going to step out of operations. We built the app. Now I feel ready to do that. That I. The only thing I would give people is when you do buy a job, think about the future and how you will get out of it. Don't just buy the job and stay in the job, unless that's what you wanted to do. But I have a plan to get out of it and we're very close, so that's why I don't feel bad about it.

Will Smith (103:13)

And you bought this business with the idea that you would always not remain the, the main operator, the manager.

Analia Berrigan (103:20)

Yes.

Will Smith (103:20)

And the plan essentially is grow revenue to the point where you can afford help or some other manager below you or, or technician in the field and systematize things, automate things where you can, hence the software. So kind of the obvious, hard but obvious things. And. And you've been executing at that and are. Are getting close to being able to do that.

Analia Berrigan (103:46)

Exactly, Exactly.

Will Smith (103:49)

Great. Okay.

Alex (103:52)

Analia, anything else that we didn't get

Will Smith (103:53)

to that you wanted to share?

Analia Berrigan (103:56)

I mean, I could talk to you for five more hours. It's so much fun. So I bet we could find more things, but I think we've covered the most important points for sure.

Will Smith (104:07)

Great, Great. Well, thank you for coming on and sharing. Hope that other women, moms who are thinking about their careers, their work and whether or not buying a business might be right for them will get a lot certainly. But I think we all got a lot from, from there. Just a lot of angles to your story that are valuable for the whole audience. So thank you very much for sharing them so transparently. Coming on. And congratulations.

Analia Berrigan (104:38)

Thank you.

Will Smith (104:38)

On, on, on making, on making this happen for yourself. When we met in person, person, as you reminded me, you were on your search and here you are now having done it nine months in and, and really successful at it. So great full service.

Analia Berrigan (104:53)

Thank you so much.

Will Smith (104:54)

Thanks Alex.

Analia Berrigan (104:55)

Yes, thank you so much for having me. It has been a pleasure.

Will Smith (104:59)

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Alex (105:01)

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