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- [00:00]
Will Smith
Today's guest developed a thesis early in his search. He wanted to digitally transform a manufacturing business. And more than just the standard playbook of putting in a CRM or erp, Lucas Phillips wanted to transform the business's very model. He found a great target to do just that, and since 2021 has been at it. The business he bought is a manufacturer of interior upholstery parts for vintage automobiles. Think replacement carpeting for your 1970 Plymouth Cougar. The business historically sold its product through dealers. Lucas stood up an E Commerce business selling direct to customers. Today's interview is a deep dive into how he's done has been brutal. He suffered fetal position moments, lost a relationship, turned over the entire team he inherited and and has hardly paid himself. It has also been fruitful. He's made incredible tuck in acquisitions, digitized the intellectual property that was all literally just hanging on a dry cleaning conveyor on the factory floor, widened the moat of his business, refined the manufacturing process and built the E Commerce business that he envisioned. Today, over a third of Newark Auto's revenues come from D2C E Commerce and that number will only grow. Overall sales at the business are up 60% under Lucas's ownership. Here he is Lucas Phillips, Owner Transformer of Newark Auto Announcements webinars today, Thursday, February 20th you may have heard my recent interview with Carlo Santelli whose incredible story involved using a sale leaseback to to fund his acquisition of a $3 million EBITDA business, enabling him to own the business with no investors and no personal guarantee. Well, the vendor that provided him the sale leaseback Stream Capital is coming to do a webinar on that very topic. What sale leasebacks are, how to identify opportunities to use them, example cases as you learned from Carlo's interview sale leasebacks can be a very powerful instrument in your deal. So come learn how they work for SBA and non SBA buyers alike. That is today Thursday, February 20th at noon Eastern. Register at the link in today's show notes or on the Acquiring Minds homepage acquiringminds co. Then next Wednesday. As you know, transitioning a business is a delicate and high stakes process for any searcher. So come learn best practices from Chelsea Wood including employee retention, culture management, the Day one speech in Communication tools. This is also an office hours so come with your questions. That's next Wednesday, February 26th at noon Eastern. Register at the link in today's show notes or on the Acquiring Minds homepage acquiringminds code. Also SM Bash is coming back around. SM Bash is the original self funded search Conference uniting small business buyers, operators and investors. There are dual tracks of content, one for current searchers, one for operators. And Brent be sure of Permanent Equity fame will be in attendance this year. It's in Dallas April 2nd through 4th and tickets are at a more inclusive price point than years past. So get yours now@smbash.com and finally, yesterday was a very exciting day for me and my partners at Minds Capital. We launched a podcast called Meeting of the Minds, a weekly show focused on independent sponsors. As you know, the independent sponsor format of buying businesses is quite different than that of search. Larger businesses, much more outside capital, stricter expectations of an exit by investors. You can think of it as an entrepreneur doing private equity, but deal by deal without raising a fund. And for many searchers, it's where their business buying careers might take them. Being an independent sponsor is actually doing more of what they like, deals and strategy and less of doing what they want to get beyond operations, people, management, the hand to hand combat of being an owner operator. So come learn about another model of business buying and the stories behind the entrepreneurs doing it. It's called Meeting of the Minds. Every Wednesday we're on YouTube, Spotify, Apple. Please join us. Welcome to Acquiring Minds, a podcast about buying businesses. My name is Will Smith. Acquiring an existing business is an awesome opportunity for many entrepreneurs. And on this podcast I talk to the people who do it. An SBA loan broker, as opposed to a direct lender, doesn't work for a particular bank. Instead, the broker pairs you with the right SBA lender for your deal based on industry terms, risk thresholds, then helps you navigate the process better than many lenders themselves do. Matthias Smith of Pioneer Capital Advisory is just such a broker. Matthias worked at two of the country's top 10 SBA lenders. So he's been on the inside of the SBA process and knows well the pitfalls and hurdles and how to avoid them. He struck out on his own to laser focus on the ETA and search space. Our niche is his niche. You'll see Matthias at all the ETA conferences. He's closed over 30 search deals since starting Pioneer in May of 2022, including some acquiring Minds guests. To learn more and get in touch, go to PioneerCapitalAdvisory.com or click the link in the notes. Lucas Phillips welcome to Acquiring Minds.
- [06:31]
Lucas Phillips
Thank you for having me, Will. I'm very excited to be here. I've been an avid listener for years, so it's, it's cool being here right now.
- [06:39]
Will Smith
Well, I, I love to hear that. I Love having former listeners, successful entrepreneurs, now as guests. It's, it's so much fun. And in your case, Lucas, you bought an unusual, interesting business. Replacement carpeting and rubber mats for vintage cars. We're going to hear all about it. It's going strong now. It wasn't always so. This is a story of both success and peril. So much ground to cover with you. Lucas, please start us off explaining why it was you chose to buy a business in the first place.
- [07:15]
Lucas Phillips
So I bought my company. I decided to buy my, to pursue ETA when I was 23 years old and I was coming off of a five year journey building a startup with traditional equity financing, you know, venture backed financing, while I was in college at Northwestern and then for a few years following college. And I had learned so much from that experience. And one thing that I just in terms of operating a company and working with a team, I mean as a young person, that was the extent of my professional experience. And so when I left that business to pursue something else, and I left because I was really just ready to do something new and there was a team in place running that thing properly at that point I knew I wanted to be an entrepreneur and continue to pursue entrepreneurship. And I figured I could either start something new and bootstrap it and build it very slowly or I could start something new and raise outside capital like I had done. And neither of those appealed to me because I didn't enjoy the practice of needing to constantly raise more equity finance financing for some rocket ship outcome that is very improbable. I didn't want to bootstrap something very slowly. And so a friend of mine who had gone to Kellogg introduced me to the ETA idea and I read buy, then build. And I was living in Austin, Texas at the time. And then I joined the acquisition lab and I moved back to New York City where my family is, to be closer to my father, who's a small business owner himself and has actually done the ETA thing himself. He, he bought his company in 1997 before it was even ETA, and start my search in a location that I would want to be planted for those, you know, decades of business ownership.
- [09:33]
Will Smith
Lucas, let me jump in with a couple follow ups. Your startup tech.
- [09:38]
Lucas Phillips
It was a coffee business, retail brick and mortar coffee business. And we started this business, it was called Brew Bike. On Northwestern's campus is a student run coffee business. And then we expanded to many other campuses with this student run model brick and mortar coffee shops. You know, students learning to be entrepreneurs on college campuses running their own businesses. And with that, we would have a brand that differentiates us from the Starbucks and the Dunkins of the world, this homegrown brand on college campuses. So that was.
- [10:08]
Will Smith
I love that concept.
- [10:10]
Lucas Phillips
Yeah.
- [10:10]
Will Smith
And. And would you consider that a success?
- [10:12]
Lucas Phillips
I started the business when I was 18, and I had so much fun running it with the money that I had gotten from my bar mitzvah and some credit card debt when I owned 100% of the company. And then I teamed up with a Booth mba and we expanded the business to many more schools with capital from, you know, angel investors and family offices. And I didn't enjoy it as much doing that. And.
- [10:40]
Will Smith
And eventually, because you had to answer, you had investors to answer, too, or was there something else about it you didn't like?
- [10:46]
Lucas Phillips
It was the expectation, the growth expectations that we had to meet in order to have a successful outcome.
- [10:53]
Will Smith
Yeah.
- [10:55]
Lucas Phillips
And I didn't see that path for this business, but my business partner at the time really did. And so I helped support the company for a number of additional years after we transitioned from that, like small business at Northwestern that Lucas is running to expanding to more campuses. Right. I assisted operationally, I assisted with the fundraising. And then it had gotten to a point during COVID where I had helped position the business to get through Covid and continued to expand after Covid. And at that point, I was ready to do something else.
- [11:31]
Will Smith
And given that also that it wasn't tech. We. We. We hear startup, we think tech. And tech is, you know, founder in his laptop or her laptop coding often, if they're technical, not always. In this case, this was more. This started as more of you said. You started by saying this was brick and mortar. Where I'm going with this is while it was a quote, startup with outside growth, investing, growth, growth capital involved. It gave you a taste of small business as we understand it, did it not brick and mortar small business?
- [12:06]
Lucas Phillips
Yes, it absolutely did. And I have, and I come from generations of small business owners, like Jewish, you know, Ellis island immigrants who came to New York and couldn't get a job somewhere, and so they started a business. And that's. I mean, that was my great grandpa. That was my grandpa. That's my dad. And so the comfort that I have or the eagerness to be in a small business, I think comes from that as much as my experience with Brew.
- [12:40]
Will Smith
Bike and say more about your dad, seeing your dad, that direct exposure to small business and, and what you liked or didn't or whatever, why that. That has served as an influence.
- [12:52]
Lucas Phillips
Well, when I Think about the reasons why I chose to pursue this path. Even when I got to college and started the coffee business and have decided to continue on some sort of entrepreneurial path after I think my role model and all, and a lot of this has been my dad. And when I've dug into why that's the case, you know, I grew up in Manhattan in this very high pressure, high power, high wealth environment. And I was one of the few students whose parents were, whose dad was able to drop him off at school in the morning or take me to hockey or tennis practice. And that was because he was a small business owner and had know, control of his time and wasn't working at an investment bank or in consulting or you know, corporate attorney of some sort. And we were able to have a lifestyle that was wonderful. I mean I was able to attend a private school and go to a private college and we had a second home to go to in the summers. I mean it wasn't. And I mean some of the students I was in class with were like, you know, being dropped off at school with a driver and we're flying around on private planes. Like that wasn't at all my upbringing, but it was very comfortable and in a very high cost of living place like New York City.
- [14:19]
Will Smith
Yeah, yeah.
- [14:20]
Lucas Phillips
And so going to school, I, I saw my friends and a lot of other people being interested in getting on this, you know, treadmill towards corporate America. And I was very cautious to do that because I knew I wanted the freedom that business ownership would afford me. And, and it was, and that was back of mind in the beginning. Right. It was just kind of like a gut instinct that I had from my upbringing. And then over time I have done, you know, self exploration and figured out that that's really the motivator.
- [15:05]
Will Smith
In our pre call, Lucas, we, we talked about the framing of do you want to be, do you want to be king or do you want to be rich? I love this framework. You actually volunteered it to, to, to overlay on your, on your thoughts here. And so I'll just, I'll just share it and you respond, your high school experience was a perfect encapsulation of that because while you, while you were exposed to very wealthy families, private jets being dropped off in the Escalade, whatever their fathers, we presume, were also the epitome of golden handcuffs, had no freedom, didn't see them, didn't see their kids, etc, but were probably multiples wealthier than your family, frankly. I mean to have a private jet. So they were rich. But Your dad was king because he had all the freedom that you just described. And so that's something that you have chosen for yourself. And, and, and so that's just, it's such a good framing and it's something that the audience should always be thinking about themselves. And I, I think there's a lot of self selection of wanting to be king types in this world because you can make a million dollars a year in corporate or more for a lot of the people who choose to buy businesses. And so you can have a net worth that is perhaps comparable, maybe even more. Not everybody, maybe even more and less risk. Arguably you could always be fired. So you do have customer concentration of one when you're an employee. But let's just for the sake of argument say less risk but less freedom. And so business ownership is, I think it's, it's freedom. I mean it's what we hear about entrepreneurship all the time. That's the, that's the word, freedom. Anyway, anything more to add to that? It's such a, it's so. It's such a great philosophical area to explore.
- [16:58]
Lucas Phillips
The only thing to add is that Rich versus King outcome is, is all about that. It's the Founder's Dilemma is a book and that entire book is about the rich versus King outcome. And it's not, it's definitely more of a book that's read in the tech world, but it's also I think very applicable to the search world as searchers are considering doing. Doing a funded search. Right. Which is maybe a bit more of the rich outcome.
- [17:23]
Will Smith
Yep.
- [17:24]
Lucas Phillips
Or a self funded search, which is that King Outcome. And I, I recommend that book. It goes into a lot more detail on that philosophy, you know, philosophical dilemma.
- [17:34]
Will Smith
Ah, I, I have not, I did not know, I've never read the book and didn't know it was about that. Great recommendation. Super Lucas. Great context. Okay, so back to. And, and we should just say too that you're also just emphasize that what you already said your father had an amazing outcome. He's able to put his live in the Upper west side of Manhattan, which by itself is an amazing outcome, but also put you in private school, have a second home. I mean by, you know, that is wealthy by any normal standard.
- [18:09]
Lucas Phillips
And I have experienced the trials and tribulations of being a small business owner as being the child of someone who is a small business owner, you know, in the furniture industry and who had completed an acquisition in like OH6 or 07 right before the financial crisis and then demand went, you know, collapsed collapsed and you know, selling, selling our apartment, selling our second home, moving to a smaller apartment, renting for a few years and, and you know, now there's, they're back to where they were and I think that his business is even stronger. And again, that whole time it wasn't like I was pulled out of my school or there was any true discomfort.
- [18:57]
Will Smith
Yeah.
- [18:57]
Lucas Phillips
I can't say that I had like real true hardship. I can just say that I, I experienced the stress that he had.
- [19:05]
Will Smith
Yeah.
- [19:06]
Lucas Phillips
And the reality of setbacks.
- [19:10]
Will Smith
The reality of setbacks, yes, yes, I.
- [19:12]
Lucas Phillips
Was familiar with that.
- [19:15]
Will Smith
You know that one of the most common levers to pull in a target acquisition is technology updating the systems of a business that may still be running off a spreadsheet or even pen and paper. But tech is complicated with tons of solutions out there. So choosing the right cloud platform, CRM, telephony compliance and cybersecurity, not to mention implementing all that is a job in itself. Acquiring MINDS Guest Nick Akers knows this firsthand. As a former searcher who now owns Inso Technologies, Nick has seen the tech challenges searchers face when acquiring businesses. His team at INZO regularly works with searchers and their acquisitions, offering a complimentary IT audit of the target company. Nick takes a personal interest in all their searcher clients, drawing from his own experience in the search phase. Enzo dates back to 1989. So this is a company that has managed the tech for hundreds of small businesses over decades. And one last thing, no long term contracts with Enzo a big differentiator. Check out inzotechnologies.com I N Z O or email Nick directly@nicknzotechnologies.com and don't forget to tell them you're a searcher. So let's back up to the present. You have explained why you choose to buy a business that you join the lab Walker and Chelsea woods acquisition lab which of course is how we met as well. Take us from there. What what was your did you develop a thesis? What kind of what your search look like?
- [20:55]
Lucas Phillips
I knew I wanted some a physical product business not a services business and that was just because I grew up with my you know being around my dad's business furniture business. I had a coffee business and I really liked I like having something tangible and physical that was really it when I went into the lab and I was very open minded and Chelsea and what the lab does one I think the most valuable part is help searchers figure out what they're looking for by developing a target statement. So everyone I and when I went through the lab. Everyone fell in love for a period of time with the whole four hour work week. E commerce, quiet light deal.
- [21:41]
Will Smith
Yep.
- [21:42]
Lucas Phillips
I was one of those two. I had a period of that. Multiples were really high. You know, the Amazon aggregators were doing their thing.
- [21:52]
Will Smith
It was Covid. Yeah, it was a different E commerce was just booming.
- [21:56]
Lucas Phillips
Exactly. And so I figured I'm in my early 20s and I'm not really interested in buying something and not that I don't need to spend a lot of time on, but there's all this interest out there in these e commerce businesses. And I'm sure there's companies out there that could be turned into an E commerce business. Right. Like an E commerce ized business.
- [22:24]
Will Smith
Say more like what?
- [22:25]
Lucas Phillips
Yeah. What I was specifically looking for was. And I figured, okay, there's probably companies out there with a physical product that is being distributed B2B. That physical product is somehow differentiated. It's not just a commodity good. And that company that's distributing the good is selling it. Yeah. B2B. Lower margins than they would realize if they sold direct to consumer. And that company probably has some sort of story that can be told and a brand that's built around that physical product if they wanted to go direct to consumer. And, and that would be an interesting way to expand the business using the cash flow that's being generated from the B2B sales.
- [23:05]
Will Smith
Yeah.
- [23:07]
Lucas Phillips
So that was the thesis that I had and what I was looking for.
- [23:11]
Will Smith
I, I love that thesis, Lucas. And spoiler, you found it. But I will say it's incredibly narrow, so. Or it would seem to be narrow. So did you find lead flow? Were you worried about deal flow being but a trickle?
- [23:26]
Lucas Phillips
I didn't find it to be super narrow because I wasn't so constrained by size. I didn't want. I, I wasn't, I was, I wasn't. I knew I wasn't able to buy something, you know, over $800,000 in SDE. My family was going to help me with the down payment. Again, I was in my early 20s. I hadn't accumulated enough cash to do that myself. And so, and my, my family was very clear that they were not willing to fund me buying a much larger business. Help with that. So, so I was, I was looking for something, you know, around 500k in SDE. And I was also willing to look all across the U.S. so I, and, and with the, with the, with the.
- [24:13]
Will Smith
Idea you'd be that you would move or that you would run it remotely because I thought you Said you wanted to be in Manhattan and buy in the tri state area.
- [24:20]
Lucas Phillips
So my assumption was if I find something in some far away part of the US that's a great opportunity and it's a physical product business. That means there's probably just a warehouse with warehouse staff.
- [24:33]
Will Smith
Yeah. Yeah.
- [24:35]
Lucas Phillips
And that business can probably be relocated fairly easily within a year or two. And my. My dad has a large warehouse in Connecticut and he's got some extra room. So that was. That was one of my angles into this. That's not. That's not what ended up happening. But that's it. And I, I also there. I don't think there are a lot of searchers with this thesis. And so the deals with physical products that were not yet turned into direct to consumer e commerce brands on Shopify weren't getting as much interest from my experience and so I was able to find a few deals. I looked at a lighting company so long ago now but I remember I met with. I met with the. The owners of a lighting company in la. That was one option.
- [25:28]
Will Smith
And, and Lucas to be. So we understand the thesis clearly. The criterion is that it. That it's not just a dis. Can it be just a distribution company but one that hasn't gone fully online or does it need to be its own branded product? You see what I mean?
- [25:45]
Lucas Phillips
I would have looked at a distribution company but I would have preferred to find something that was maybe designing and importing goods from overseas that were being distributed to retailers without. And there's maybe there's a brand but that brand story isn't being told properly.
- [26:03]
Will Smith
Yeah.
- [26:04]
Lucas Phillips
Or as well as it could be. Maybe there's assembly or light manufacturing involved. Right. That was. And it. You're. You know we're. It's not the clearest thesis. Right. It's. There's like qualities that I'm talking about that are a bit vague. And that was. Okay. My target statement was that I was looking for a consumer products business with 2 to $500,000 in SDE. I believe 200 to 500,000 with the op. And. And I needed to phrase with the opportunity to modernize operations and sales in a way that wouldn't offend the owner thinking essentially calling their business really old school. But that was. That was the gist of the target statement and I was able to get traction with brokers who would think huh, that's interesting. I have these few deals that could work for you. So.
- [27:03]
Will Smith
Yeah. And do you still think it's a good thesis? You probably don't have your nose to the ground anymore so it's hard to say but I haven't let's I do my data set. I haven't talked to anybody else in my 300 plus interviews who's done this so it probably those opportunities remain. It's only been a few years and if anything E commerce has gotten less attention, not more in the interim.
- [27:25]
Lucas Phillips
Correct. I would agree with with the E commerce getting less attention these days.
- [27:29]
Will Smith
Fascinating thesis. Um, what'd you find?
- [27:31]
Lucas Phillips
It took me 60 or so days to find the deal that I closed on and which was exactly what you.
- [27:39]
Will Smith
Were looking for and in your home market. Unbelievable. Was that just dumb luck?
- [27:43]
Lucas Phillips
You know, it's luck but it's also as I went through the lab and was listening to Walker and Chelsea talk about the experience of searchers and I listened to all of the videos of former searchers that have been interviewed. They have a whole library for like a few months. Every day when I exercise I would just listen to a video and something that kept coming up was searchers would sometimes see a great deal that checked all the boxes in the first few months of their search but they would pass on it because they just hadn't seen enough deals yet and they thought there would be something better that they would find later on. Yeah and there is, there were stories of people regretting passing on that deal or and then years would go by they said I wish they wish that they were in the seat in that business even if it wasn't perfect and there was hair on it kind of turning it into their business instead of just being on the sideline waiting for another deal, having to do that work. So I was not trigger shy with when I, when I found this business and I, I, I, I had reached out I you know set up a bunch of email automations with my target statement sending them out to brokers. I don't know if that works as well anymore but there was a broker in the tri state area who actually Ben Jasper also bought his business through a former guest who's become a friend now. And I think there's a number of other searchers who have been on your podcast who bought through this, this group called the Benjamin Ross Group. They were excellent.
- [29:28]
Will Smith
Oh yeah, rings a bell. I think Ben mentions them in his interview.
- [29:31]
Lucas Phillips
Yeah, yeah.
- [29:31]
Will Smith
And for the audience, Ben Jasper it bought the manufacturing business in Jersey. Waking up at 3:30 in the morning to go learn how to use this machine that makes plastic bags and it's, it's an absolute horror story of a transition. But he Pulls it off. And it's such a great, great interview.
- [29:47]
Lucas Phillips
Yeah. We have another transition horror story coming, by the way.
- [29:50]
Will Smith
Okay, great.
- [29:52]
Lucas Phillips
So I found the business and it's a 120-year-old manufacturing company of replacement carpets and other interior parts for classic cars. And they also distribute a line of rubber mats which they don't manufacture in house. And I was like, okay, cool. Like this could fit the bill. And so I, I, I looked at the sim and that was on like a Thursday. And then on Friday I had a call with the seller. Business was doing just under $300,000 in SD and I don't, I didn't even know that much more about it at that point. But I had a call with the seller who was, you know, a 62 year old man. His name, his name's Ben. He and I remain good friends to this day. Like we have lunch every week. He was in my factory building racks this week for us and Ben. And then the following week, on Monday we did a site tour. And then by Tuesday evening I was under loi because it was competitive and there was apparently somebody else interested. Now to this day, I don't know if that is true, but again, I wasn't trigger shy. Right. Like the deal penciled, it was a little over a 3x multiple. There wasn't a lot of inventory because everything's made to order. I, when I did the site tour, I mean this is the most old school factory you can possibly imagine. And, and it, it seemed like to, to fit the bill exactly for what I was looking to do.
- [31:31]
Will Smith
Well, let me double click on that, Lucas. First, what was the model exactly? The business model and how did it fit your E. Commerce Izabell criterion?
- [31:45]
Lucas Phillips
Perfect. So the business was, the business had a catalog of thousands of patterns. And when I say a pattern, I mean a stencil on a hanger that of big pieces of paper that are stencils with markings all over of them. And there might be five to 10 or even some 30 pieces per pattern on a hanger hanging on a dry cleaning rack that spins around like one of those laundromat conveyor systems in the back of the factory. And there's thousands of them there. And every single pattern fits a different group of year, make, model, door number, body style cars for from the early 1900s all the way up to the early 2000s. And so the manufacturing process was the process and really the business model was we were able to offer these products that on a made to order basis to many online retailers of car parts and they were able to send a, you know, acquire customers, acquire orders and then send us those orders. And we would drop ship on their, on their behalf under either the New York auto brand or private label.
- [32:57]
Will Smith
So you are so great. So the business was the. Worked via channels. It was not direct to consumer. You had these relationships, these car parts, whatever dealers you call them, and they would sell, and then they would just, they would sell it. So you had all these channels, they would send you the order, you would drop ship the order. So you already had the shipping and everything ready to go. You were doing that?
- [33:20]
Lucas Phillips
Yeah, they were, they were doing that already in the facility. And, and it would, I mean the, it was done incredibly inefficiently. Right. I mean, the patterns, you. We would receive an order from one of these dealers via email, enter it into a Microsoft Fox Pro system which is like only runs on Windows XP. Right.
- [33:46]
Will Smith
So I haven't heard FoxPro, yeah. For a good decade.
- [33:49]
Lucas Phillips
Correct. The order would be printed on a dot matrix printer that would then be handed to the, you know, added to a stack of orders on a clipboard. And we would give, you know, 15 or 20 of them to the manufacturing workers every day to get started on. And one order would say a certain pattern number on it. And that cutter would then go to the shelf and spin, you know, the conveyor system around until that pattern number came up. Take the pattern number off, bring it over to the cutting table, pick a roll of fabric, a big, heavy, bulky roll of fabric out from stock of, you know, this, the fabric that we get, which is similar to what was originally in these cars from domestic mill. And you know, pick the roll up, put it on the table, spread it out, and then start putting the pattern pieces on the back of the carpet, tracing it with chalk and then cutting it with hand scissors. Okay. So that, that's how the fabric was cut. And then it would be marked with letters to indicate to the sewers how to then put the fabric back together and with sewing machines. And then it would be packed up. There were a couple other workstations depending on the product that's being made, but simple stuff. And, and then it would be packed in a box and chipped out. At that point, the orders would come back into the office and the office manager would bill the order through FoxPro, print the invoice out through the dot matrix printer, scan the invoice back into the computer through a scanner, and Then email those PDFs to the customers. So super inefficient process. But the process was there Right. Order comes in, send it to the floor, cut the fabric, sew the fabric, ship it out, bill it, and, and, and so it, I figured, okay, if, if, if this process is here, we can modernize the process with new machinery. And I, and I knew about that machinery from my dad's business because he's in the furniture world and he manufactures upholstery. So he has these cutting machines that cut, cut fabric according to these patterns that he has.
- [36:06]
Will Smith
Would that be this a cnc?
- [36:07]
Lucas Phillips
Yeah, it's a CNC cutting machine.
- [36:09]
Will Smith
CNC cutting, which I, I know in the context of plastics and metals, but I guess there's CNC for everything. It's basically for fabric. I guess it's for those who are unaware. Anybody in manufacturing will know what it is, but it's basically a modern cutting machine that you program and. Yeah, right, exactly, exactly.
- [36:26]
Lucas Phillips
So, so I figured, okay, one, we can do that on the floor to make this process more efficient. And then two, we can do all of the Cloud ERP QuickBooks implementations that would make the rest of the process much more efficient. And then once we're really ready to scale up, we can build that Shopify storefront and start delivering ads to customers who are searching for these items and just get more orders in the funnel. That's the very simple idea that I had for how I could grow the business.
- [37:00]
Will Smith
This is so cool. So let me follow up here. First of all, your point about, your point about there being a process. It's a subtle point I've never thought about, but the fact that there was a pretty well defined, well followed process versus just it being a hot mess is great. Right? Like you said, because now, you know, the business has discipline, the business has structure, this manufacturing business. So you just need to make it more efficient as opposed to just everything being disorganized. It sounds like it was a pretty organized place, just inefficient, which is kind of seems like a great Venn diagram. Inefficient, but organized. I don't know if I'm reaching.
- [37:43]
Lucas Phillips
There was full of junk, Will, like full of junk. Every corner. I mean, the owner was, I would say he had hoarding capabilities, like in, you know, capacities. Like he would. There was just so much junk in there. And, and so it was, and it was very disorganized, but there was a process. Right. So it, it was a mess, but there was a process.
- [38:12]
Will Smith
Yeah. Well, this conveyor belt. What a visual. The entire business sitting on that conveyor belt. I can't. I mean, we're recording on January 15th and we're hearing about California. Well, all day long. I mean, you just can't help but think about how vulnerable this business was. All of the. That's, that's, that's essentially ip. Even though we're talking about this being an old dusty manufacturing business, you have intellectual property and it's all hanging in a. Whatever, 15ft by 15ft conveyor system.
- [38:42]
Lucas Phillips
Very vulnerable. And so you're touching on another thing that I liked about the business, which was there's a moat around these patterns that we have.
- [38:50]
Will Smith
Yeah.
- [38:51]
Lucas Phillips
That makes it hard for someone else to start a business to compete with me.
- [38:55]
Will Smith
Yeah.
- [38:56]
Lucas Phillips
Because I have thousands of these patterns and all of my, the majority of my sales are these long tail. Right. Search terms on Google where somebody's looking for, you know, carpet for a 1950 Packard, which.
- [39:11]
Will Smith
Yeah.
- [39:11]
Lucas Phillips
There might have been a few thousand of them made. And just because I have that listed, I'm the one to make that sale.
- [39:17]
Will Smith
That's amazing.
- [39:17]
Lucas Phillips
And so for somebody else to then develop that product, it makes no sense if they're going to sell four of them a year.
- [39:25]
Will Smith
It's, it's, it's so good. This is, this is a. Well, let me come back to that. I was going to say this is like the Chenmark fish tackle business where it's a, it's a monopoly, essentially. I mean, your, your, your intellectual property makes this something of a monopoly. It's just not interesting enough for somebody to invest to come in to compete with you. So you will forever own this market. Now, maybe I'm overstating it. Maybe you have competitors. Well, you do. We're going to hear about some of the acquisitions we have so far to go, Lucas, but let me just. On your decision that you like this business. $300,000 of SDE in a business that is over a century old suggests that it's a very small market. Obviously it's a niche market. But, but even layering on E Comm and going direct to consumer, you believed that there was a big enough market to make this worth your time.
- [40:22]
Lucas Phillips
I mean, I think how I thought about it was one. It was clear that this business had had shrunk over time. And the prior owner was an amazing operator, but he was not a salesperson and he was not interested in expanding the business. He was interested in, in, you know, earning a quarter million dollars a year and that's it. Right. So he ran the business in a very lean way and he, and, and, and if the, if he lost a customer, it was okay. Right. A recurring relationship. It was okay. He was eventually going to retire and sell the business. So there was a, there was a point in time where it was a much larger business. That's one, two, you know, it's, it's actually I, it's a declining market. So that's another thing that I, I thought about when I was evaluating the deal. But it's, it's a declining market where I think people will continue to restore these cars. Like there's, there's both like the top, there's a top down analysis. Right. Like where you're looking at IBIS World Reports and, and thinking about like the, the MBA approach which is, it's a declining market. There's, there's other aspects. It's not growing, you know, whatever. I didn't, I don't, I'm not that type of entrepreneur as much. I'm more of like a bottom up guy. Where I looked at this, I evaluated what it was currently doing and I, and I, I thought that I could really expand the business by, by improving the product line and selling direct to consumer. And, and, and by the way again I, another thing that I want to keep going back to in our chat and I keep going back to when I think about a lot of the decisions that I made about this is I was 23 at the time and I'm like, I'm four years into this and I'm 27. So I think there's a lot of searchers who approach this, you know, ETA process towards know after a corporate career.
- [42:27]
Will Smith
Yeah.
- [42:28]
Lucas Phillips
And but for me this is, this is like one of hopefully many entrepreneurial experiences I have. And so to me I was okay if I'm in my 20s now and if I buy this business with you know, $300,000 of SDE and can get it to a point where it's doing over $500,000 of SDE and you know, flip it or hire somebody to run the company and then do it again. Like that would be a great outcome.
- [42:52]
Will Smith
Right. By age 29.
- [42:54]
Lucas Phillips
Exactly. And I still have, I'm at 29 at that point.
- [42:58]
Will Smith
Right. No, it's, it's a huge point. You know, more years are more value than. More valuable than dollars. And so you are rich in a way when you're in your early 20s, mid-20s, going down this path versus somebody whose mid career is poor in the, in this way. Great point. Thank you for calling it out. And we probably will come back to it. Running payroll, paying your bills, closing your books and producing financials. These are critical tasks every business owner must do or oversee. But spending time on them distracts you from the leadership in growth work you want to do. So let system 6 do it for you. Owned and led by a former Searcher, Chris Williams, System 6 is a leading outsourced finance team for hundreds of SMBs, including over 50 searcher acquired businesses. Chris, Tim and the System 6 team understand firsthand the challenges, the opportunities of jumping into a business as its new owner. So whether you own your business already or have one under LOI, talk to System 6 about how they can give you time back and improve your financial operations. Mention acquiring minds and they'll provide a free review of your books and Financial Ops, a $500 value. Check out system6.com link in the show notes or email helloystem6.com so quickly terms of the acquisition I acquired the business.
- [44:38]
Lucas Phillips
For just under a million dollars, including which that included about $70,000 of inventory. Right. I love one of the things I love about the business is there's no finished goods in stock. It's all just raw materials. So that was just rolls of carpet that I could then just immediately start converting into finished goods. So that was the inventory included and 90% SBA loan, 6% fixed interest rate for 10 years, which is one of the best decisions I've made since buying this company was fixing. I paid more to fix that rate in an environment when no one thought rates were going to go up.
- [45:22]
Will Smith
Wow.
- [45:23]
Lucas Phillips
So I think I paid three quarters of a point more to fix it. And I just figured there's no way they can't go down any further. The interest rates were so low that if they can't go down any further, there's only one direction they can go. And if I, and I don't know if I would still be in business if I had a variable rate and you know, it went up to 12 or 13%.
- [45:48]
Will Smith
Well, good. Good on you. That was a, certainly a wise move. And the idea of paying a premium to fix the interest rate on an SBA loan is that common? Do you know because, because we so rarely hear fixed interest rates.
- [46:00]
Lucas Phillips
I don't.
- [46:01]
Will Smith
So did, did you raise your hand to ask if it was possible or did your lender offer it to you?
- [46:05]
Lucas Phillips
I did, I I and I I maybe it was just a conversation that I had with my dad who, who deals with, you know, traditional commercial lending for his business, which is larger and has access to that type of capital, where he, he was saying is there a way you can fix it because rates are so low. Right. Now, but it knows. I don't remember how I got the idea to. But I did ask. Maybe one of the lenders gave me the option. I was working with a few different lenders and one of them gave me the option to fix it for seven years. And then I was like, oh man, that would be an awesome thing to not have to worry about. Can all of you do this? And who can do it for the lowest amount? And so great.
- [46:45]
Will Smith
Did you use a loan broker?
- [46:47]
Lucas Phillips
No, I ended up using the. The acquisition lab connected me with a number of different brokers, number of different lenders. And I pursued the deal with three different lenders, including the broker's suggested lender who was brokering the deal. And I ended up choosing the broker suggested lender simply because they had the best. Yeah, you know, they, they were willing to sell me the money for the cheapest amount.
- [47:18]
Will Smith
And your family helped you with the down payment. Given that this was within the. Within their range of what they said they would. Sweet. Okay. I want to move into transition in operations now, Lucas, unless I'm. Unless there's anything more to say about. Okay, great. I guess you tell me where in your roller coaster of a ride for the last three years should we begin? Probably with what you found staff wise and kind of practices at the business.
- [47:49]
Lucas Phillips
So I wish I had asked for time cards because if I had seen the time cards of the employees while I was going through diligence, I might have not bought the business because no one was showing up to work on time. And I'm talking, you know, there were five or six manufacturing workers and it was. And, and all of them were related to each other in some way. And none of them were showing up to work on time. And it wasn't like we started at 8 and they were getting there at 8:15. It was like we started at 8 and some people walked in at 8:15, others came at 8:45, someone's bike broke. So they showed up at 9:30 every day. And, and I have like a huge stack of orders to get out the door. So that, that was, that was the first problem that I was immediately hit with. And I had 90 days with the owner to learn the business. And I'm realizing that his opinion about the workers not showing up is when they don't show up, I'll just get that work done and save a few dollars because they're not here, right? Because I'm not paying for their hourly wage. And I can get. When they're not here, I can get that work done. Much faster than they would when they are here. So it's all good.
- [49:06]
Will Smith
But he would do it himself.
- [49:08]
Lucas Phillips
Yeah, he would just do it himself. And he was okay with that.
- [49:12]
Will Smith
Yeah.
- [49:13]
Lucas Phillips
Because he, he's saving money.
- [49:16]
Will Smith
Saving him a few bucks and he.
- [49:17]
Lucas Phillips
Knew he could do it faster than they could.
- [49:19]
Will Smith
Yeah.
- [49:20]
Lucas Phillips
And that's his mentality. And, and that's okay. It's not a grow, it's not a mentality that will allow him to expand a business. But that's, that's. I learned that that was the culture and that was the mentality and, and I would need to address that first. And I was not. And so that was a huge problem in the business. In addition to want feeling eager to get started on the projects of modernizing. Even though it's now clear to me that it's naive to think that I could accomplish that in the first 30, 60, 90, even the first six months. So that, that was like the, the content of what I was dealing with every day when I was in the factory. But then I was also really struggling personally with the burden of this debt that I had taken on and the personal guarantee and how poorly the operations of the company were relative to what my expectations were when I, when I bought it. So it was in that those two things combined were. Made it harder for me to solve those problems in the company because personally I was just, I was a mess. I was anxious.
- [50:28]
Will Smith
Say more about being a mess because you gave me some details on the pre call that the audience should hear.
- [50:32]
Lucas Phillips
I was an anxious wreck. I think I knew that I would need to get rid of all of these people.
- [50:37]
Will Smith
Yeah.
- [50:38]
Lucas Phillips
And I had just bought a manufacturing company and I didn't know how to do anything and I only had 90 days with the seller and I. And, and, and it was, and I was going to need to get rid of all of them and learn what they're doing without even them being there. And that. That was a terrible position to be in.
- [51:02]
Will Smith
What did Walker say?
- [51:04]
Lucas Phillips
Walker. I called a few days after I closed. I, you know, walked into the back of the warehouse and called Walker nearly.
- [51:11]
Will Smith
Acquisition lab I've been built.
- [51:13]
Lucas Phillips
And he said, he said Lucas, you, you burned the boats. You know, the only way out is.
- [51:18]
Will Smith
Through tough loving Walker.
- [51:21]
Lucas Phillips
Yeah, big time. Tough love. But also I'd rather that sugarcoating the truth. Right.
- [51:26]
Will Smith
Totally.
- [51:27]
Lucas Phillips
That's, that's the truth.
- [51:28]
Will Smith
Exactly.
- [51:29]
Lucas Phillips
And, and so I, I mean personally I was in a long term relationship that ended at the time because I just had no time to devote to the relationship and and the person I was with then wasn't willing to do that. So that was, that was, that was tough. But also it was very clear why it happened and I didn't have a lot of bandwidth to process it and all I was doing was working and it, and, and, and I mean, in the actual business, how I hand, I guess. So that's, that's like the personal side of it.
- [52:06]
Will Smith
Yeah, you say it now with a smile, but we should be clear how, how despairing you were. Right? Let's.
- [52:15]
Lucas Phillips
Oh yeah. I mean it was, it was like losing sleep. It was waking up in the middle of the night and having a panic attack or two. I think at some point I decided that I, that, that this, this, the level of anxiety that I had about the situation that the business was in was getting in the way of me solving the problem. And so I, I, I went on an SSRI for a couple years to, to deal with, to, to kind of make sure that, that, that just basic, that the basis of just stress that I had could be dealt with so that I could just focus on getting shit done. For lack of a better phrase. I was addressing that and at the same time I was addressing the problems in the business. And the, the, the main problem was the lateness and the lack of, yeah, just the lack of respect and showing up late every day from all the workers. I mean, one day somebody didn't show up and just texted me that he was hungover and would be in the next day. And so within a few weeks, I had a team meeting with everybody where I said, look, the context before this is everyone was paid at a starting wage of $12 an hour. And a few people had gotten raises from there to maybe 13 or 14. Right. And this is in 2021 and costs are rising. And so I said to everybody, look, I don't think anyone in 2021 should make less than $15 an hour. But I also don't think that employees of a business should be showing up late and, you know, working significantly less than 40 hour weeks. So I'm putting a plan in place where if you show up on time and work 40 hour weeks for four weeks in a row, I will give you a raise such that you started at $15 an hour. So everyone would get essentially a $3.
- [54:16]
Will Smith
Raise on 12 bucks. So that's a 25% raise.
- [54:20]
Lucas Phillips
Correct. Or if somebody was making 14, they'd be making 17. Okay, but it's a significant grade.
- [54:27]
Will Smith
Right.
- [54:27]
Lucas Phillips
And of the six manufacturing workers, I. Okay. And also I didn't say, and if you don't, you know this isn't the right place for you. I didn't need to say that. I think that was pretty clear. Within a few weeks, four of the six manufacturing workers were gone because they wouldn't show up on time or work 40 hour weeks. I also asked everybody to get vaccinated and a number of them said absolutely not. And we were all just butting heads and I had to. And it wasn't like they were, they were showing up on time, working 40 hour weeks and were really core members of the business. They were clearly just a lot of them had been there for a year, year and a half and we're trained, but not super well trained. And I figured I'd rather replace this person than have to have to work with them.
- [55:26]
Will Smith
What about, what about the fact that the skill set of, you know, of being able to produce your product is walking out the door when they leave? How are you going to address that? If they called your buff bluff and a lot of people left, which they did now, I don't know you if they were calling your bluff, but they just decided it wasn't for them.
- [55:43]
Lucas Phillips
Yeah. So there, there were, there were two people who I really wanted to retain and, or I needed, I didn't want to, but I needed to. All of the other ones were positions that I could fill fairly easily, like a sewing machine operator. There's a lot of sewing machine operators in the Newark, New Jersey area who have decades of experience in, you know, the garment world. And then the cutting machines which were just cutting with hand scissors. Really the, the entire, the knowledge there is knowing how to work with the patterns that are on that. Right. That conveyor system. And so there was somebody named there who was a, been there for over two decades who was the lead cutter. And then there was one sewing machine operator there who knew how to sew everything. And These were the two old timers and they were earning well over $15 an hour, close to around $20 an hour or more. And I really needed to retain them. And they also started showing up on time and working 40 hour weeks. So I was able to retain them. Now the cutting machine operator, when I say cutting machine at this point, I'm not talking about the CNC machine operator was an alcoholic and would be drunk the majority of the day, I think so much so that in the summer when it was very hot out, he would have seizures and we would have to call an ambulance.
- [57:12]
Will Smith
Oh my God.
- [57:13]
Lucas Phillips
And yet he was the only one who knew all of the different patterns. So I knew I needed to keep him at least until I was able to get all of those patterns digitized into, you know, CAD files that could then be cut on the CNC machines and then the same thing with the sewing machine operator. But he was not an alcoholic. He was. He was just. He was honestly a great worker, and we were happy to have him for a number of years.
- [57:43]
Will Smith
Lucas, what do you think you learned from the fact that offering a significant raise to people to just kind of, you know, baseline do. Do the normal amount of hours a week didn't work? What did you learn about human nature or maybe even kind of this end of the market or, or I don't know how you. How you want to characterize it or frame it.
- [58:08]
Lucas Phillips
I don't necessarily think the amount that somebody earns is correlated to their qualities as a human being in terms of being prompt to work and, you know, responsible. Sometimes. I've hired somebody at a, you know, lower wage relative to the other folks in my factory since in the last few years who's proven to be far more responsible, timely, and capable than anyone else, and I've rewarded that person as a result. But maybe the. That incentive program that I offered, what I was trying to do was change these people, right, by saying, if I pay you three more dollars an hour, will you. Can I. Can you change as a human being?
- [58:56]
Will Smith
Yeah, right.
- [58:57]
Lucas Phillips
Can you? Can you? And either that or, you know, have. Can you. Would you have more respect for me and the business, or would you care more about showing up to work for another $3 an hour? And the answer was no. I. I knew that. I knew that these people would probably still not work out in the long term, But I was. I was thinking very short term at this point of. I have a stack of orders I need to fulfill. Demand is strong. Some of them are getting canceled because the turnaround time is. Is. Is so bad, so long. And, And. And so I either need to get. I need to get these people to a point where they can just continue to. Where we can get through this stack of orders, and then I can deal with them individually over time and figure out who to retain and who to. To, you know, let go, or I need to figure out very quickly that none of them are going to work so I can hire new people and I can have enough time with the prior owner for him to help train those people while he's also training me.
- [60:03]
Will Smith
And so where does it shake out? You. You. Four of those people didn't even make the month.
- [60:09]
Lucas Phillips
Do you three or so of them didn't make the month. It's. It's tough. I don't have exact. Like, I can't tell you exactly how it played out because it was four years ago and it was just such a crazy time. But what the. Those two old timers who had a lot of knowledge stuck around for another two years. And during those two years, maybe two or three of the really bad eggs in the beginning were gone by August. You know, I closed in the beginning of July. And then the re. And everyone since I've. The whole team has turned over since then.
- [60:44]
Will Smith
Well, how have you evolved as a manager? Are you harder now than you were before?
- [60:50]
Lucas Phillips
That's a good question. I've had to learn how to fire well, and I've had to learn how to trust my instinct when somebody isn't working out on the team and then follow that instinct. I've learned that when I start, when I start thinking, is this person dead weight? Right? Is this person not the right fit? And I'm. And I'm just thinking about that, that probably is the right time to talk to them and either let them go or give them some feedback and put them on an improvement plan. And in the past, that was not. It was a much longer process to get to the point where mentally I was ready to part ways with somebody. And because of my level of comfort with that, what I just described, I'm actually less hard, I think, because I want the people who work for me to just be who they are and I don't want to micromanage them. I want them to just be themselves. And we have core values in the company that we've put together. Work smart, be a team player, and sweat the small stuff. And if we are all embodying those values, then. Then I don't need to be a hard manager at all. And if somebody is not a good fit for the team, I'm very comfortable parting ways with people now.
- [62:21]
Will Smith
Great. Lucas, let's turn our attention to how you ended up improving the business. So maybe the process, how you've modernized the business, maybe the process, maybe digitizing, not yet. How, what you've done with E Commerce, that will be its own question. Okay, but anything else other than than making it a D2C? Adding on D2C?
- [62:47]
Lucas Phillips
So improving the company. I would say the first step was cloud ERP inventory system for managing the manufacturing and understanding our inventory levels and understanding the cost of each product that we're making. So we implemented a cloud ERP in the first year of ownership. And, you know, we have. We use Xero, which is a competitor to QuickBooks, and a new billing system, and we use ShipStation for shipping instead of World chip. And just all of those basic improvements which work very step by step. Let's take this legacy system and replace it with something new. Okay. The next legacy system, let's replace it with something new. And once, and then once all of that was done, we were able to offshore some of the tasks that were very expensive to complete in the office. I had an office manager who had been with the business for over 20 years and was earning a very, very healthy salary for what she was doing every day. And again, I was. I knew I would either find that she could learn these new systems and, you know, manage these new systems, or she wouldn't be able to. And. And it became clear to me that she wasn't able to. Even after a lot of training, it was. It was very hard for her to let go of the old way of doing things. So she would both be doing the new way and she would continue to do the old way behind my back, which wasted a lot of time because we didn't need to do it anymore. And after a lot of different feedback sessions and just it wasn't working anymore. And so I ended up replacing the office manager position with. With a nearshore. A number of different nearshore and offshore contractors that have been. And that's been a huge cost savings for the business. And we've only been able to do that by implementing the cloud software systems.
- [65:02]
Will Smith
What did those savings look like? What was she earning? And then what are your offshore earning?
- [65:08]
Lucas Phillips
Probably 75 to $80,000 a year after bonus. And my. Currently I have a woman in Bolivia who is wonderful, is doing an excellent job and she's paid very handsomely and has a second home. And, you know, is. She's set there and she's. And I'm paying her around $2,000 a month, you know, 50 to $55,000 savings a year.
- [65:39]
Will Smith
Yep, yep.
- [65:41]
Lucas Phillips
Right. And so that, I mean, that was the software side and then in the factory, the digitizing and the CNC machinery was the modernizing that went. That took place in the factory.
- [66:00]
Will Smith
How did you find the woman in Bolivia, Lucas?
- [66:04]
Lucas Phillips
I think it was higher with near, which I think isn't Is. Do they advertise on acquiring minds?
- [66:11]
Will Smith
No, that's near is. Is Michael Girdley's. I think.
- [66:15]
Lucas Phillips
Yes, yes, it was through his. It was through his folks.
- [66:19]
Will Smith
Great, great. Okay, so back to the. So you modernize the the factory floor with basically the implementation of a CNC machine, which a lot of the cutting now becomes programmable, done by a machine. That must have been an enormous savings. Of course, a CNC machine costs many thousands of dollars.
- [66:38]
Lucas Phillips
You know, it's. There's a lot of items that I've invested in over the last few years that will be that. That were required investments in order to scale the business from a capacity standpoint. Right. I could not have scaled this business from a capacity, from a, you know, just a throughput standpoint without this machinery. I could not have continued to, you know, be tracing patterns on the back of carpet with chalk and cutting it with hand scissors and. And increase our volume with that. It just wouldn't have worked. It would have just the amount of training of each employee that would have been required. The quality control, the consistency. It just. So I. I needed to convert the patterns to digital files that could be pulled up on a computer and just cut on a CNC machine, which sounds very simple, but, you know, the software and the hardware to do the conversion is, you know, 10, $20,000 of purchase. And then. And then there's labor that needs to be actually spending doing the digitizing. Right. Which is. Call it another $50,000 a year position to be digitizing all of this stuff. And then there's another machine that needs to be purchased, which is probably another $50,000. Right. And then there's been a second machine that needs to be purchased as our volume continues to our capacity needs to expand. That's another $30,000, because I got a really good deal on it. But I'm throwing all these numbers out because I bought a business with $300,000 in SDE and after debt service, there's like 150k left over.
- [68:20]
Will Smith
Exactly. I wanted to ask what you're paying yourself, and you just talked about basically 150,000 in investments. So what does that look like?
- [68:28]
Lucas Phillips
Yeah, I'm not really paying myself. Like, I haven't really been taking much of a salary out of the business. I will take some draws out when. Distributions when I'm. When I can. And this is not a realistic setup for somebody who has a family and a mortgage and, you know, returning to.
- [68:48]
Will Smith
Our theme of your age.
- [68:50]
Lucas Phillips
Correct. Right. Like, I kind of knew some of this going into it and was okay with that. Yeah, I wish I had bought a bigger business because I have needed additional help from my family to finance some of this growth. And so, I mean, we went through this big J curve related to just modernizing the existing business. But then since then there's there have been additional add on acquisitions and each one of those is another J curve. Both the capital to acquire that business and then to integrate a manu. To relocate a manufacturing company in some cases across the country and then integrate it into the existing platform business requires additional capital. And, and Newark Auto will be at the point where it can start financing those acquisitions on its own, but it hasn't been because it was still going through its own J curve. So this, this goes back to in the beginning of the, the interview I was saying you were talking about how I was interested in fundamentally transforming a company and how that's different from other searchers who might be looking for an asset that's already performing really well, that's stable, that they don't need to transform, that they can operate and improve. But cash flow on day one or cash flow, you know, after a year of building some reserves and, and so that's, that's not what I've done and it's part of the reason why I haven't done that was probably my startup background, right where my instinct was to expand and transform and pivot and all of that stuff. Like that's my, my entrepreneurial learning before this. And in a long term sense it's going to be an excellent outcome for me. I'm really transforming this business into the business into something that is valuable, is more valuable than it was when I bought it. But it's been very capital intensive in the process and if I didn't have the support of my family, I would not be able to take advantage of the opportunities that I have taken advantage of and I'd probably be a lot closer to where I was on day one.
- [71:04]
Will Smith
So you mentioned the acquisitions. We're going to end with hearing about some of those. There's both interesting stories, but also some important themes in there. But before we do, let's hear what the results of E commerce sizing this business have been. Maybe some of the steps to get there and then what it actually looks like from a numbers perspective.
- [71:25]
Lucas Phillips
There was a challenge, I mean just building a website, right? Like building a Shopify site from scratch and then, and then improving it over time has been a very iterative process where we start with something that costs very little. Just to test out the thesis that you know, we can start generating sales from our website and we've grown it from there, but it's it. A lot of people view building a website as a one time project where you spend a bunch of cash, you Work with an agency and then it's done. Right. And I haven't had any one project that's been like that. It's only been. It's only been iterations over time. But I love that process. Right. I really enjoy the process of saying, okay, let's improve these aspects of the site and then measure how our conversion rate is impacted by it and that sort of thing. Yeah.
- [72:19]
Will Smith
Well, it sounds like you enjoy it, but it's also tremendous, tremendously valuable. I mean, you're baking in a lot of value when you do that. Optimizing your funnel. Yeah.
- [72:28]
Lucas Phillips
And you. And you can't do that with one project. You can only do it with the feedback of time in between each of these iterations.
- [72:36]
Will Smith
Yeah.
- [72:37]
Lucas Phillips
So the site has just been an iterative approach for years. But I'm at a point now where we're generating more sales from the website than we are from all of the dealer accounts.
- [72:49]
Will Smith
So does that mean that you doubled the business? So you had just dealer accounts before. Now you have more direct E commerce revenue. Is that mean you've doubled it or have you lost some of the dealer revenue?
- [73:00]
Lucas Phillips
I want to make sure we touch on the pricing dilemma that I had also. But I'll answer that like, so let's talk about that after. And then. And the answer is it's such a niche product set that if somebody's searching for that 1950 Packard carpet kit. Right. And the only people who had that listed online were my dealers. And now I'm in a sense competing with my dealers online.
- [73:27]
Will Smith
So there's a word for this, Lucas. I think it's like channel cannibalization. It's not that, but it's something like that where you go into anytime there's a business with a channel where the channel is a big source of revenue, the channel partners, in your case the dealers actually always have to worry that you, their supplier is eventually going to do an end run and compete with them, which is in fact what's happening. But I digress.
- [73:50]
Lucas Phillips
It's happening. But I needed to be really careful about that. Right. So the business, the business has grown from about a million and a quarter year in sales when I bought it. And we did just under 2 million in 2024.
- [74:03]
Will Smith
Oh, fantastic. I didn't ask you for revenue. So it was a million and a quarter.
- [74:07]
Lucas Phillips
Yes.
- [74:07]
Will Smith
And now it's 2 million.
- [74:09]
Lucas Phillips
It's just under 2 million. Will definitely break 2 million this year. I think we can do far more than that, which we'll talk about why later. But. And Then we mentioned the beginning of the call that rubber mats. Rubber mats are a group of products that we've distributed for decades. And we have their rubber mats for classic pickup trucks that are exactly like the original ones that were in these, like you know, old Chevy C10s, which are a very popular car. And we distribute these mats to very large dealers across the US and that line of business was sub half a million dollars of sales. And, and hasn't I haven't focused on really expanding that just because I don't, I don't manufacture those items. Right, right. They're not. And so I mean I do, a partner does, but I really want to focus on expanding the sales of the items that will fill up the capacity in my factory and make it much more profitable. Right. So, so, so, so we've actually, we've more than doubled carpet sales. Right. We've more than doubled the sales of the items that we manufacture in house. Because if you remove that half a million, call it of rubber mat sales beforehand, we were doing three quarters of a million. Right, right. And now we're doing, call it a million and a half. So we've doubled the carpet sales.
- [75:31]
Will Smith
Yep.
- [75:32]
Lucas Phillips
In, in those last few years. And, and, and the sales of items through our dealers has increased and the sales of items through the website have increased. And the way that I've been able to do that has been with a pricing model where I tell all of my dealers that I have a manufacturer suggested retail price. I had to put together an MSRP for every single item that I sell based on not cost plus, but value based pricing. So we did a whole value based pricing assessment and we analyzed for the products where there are competitors. What are these products selling for? And we set our MSRP is based on that. And then I commit to only selling at msrp. I will not sell below msrp and my dealers get a discount from MSRP that's fixed. And if they want to undercut me, they can. So that's how I've given them price protection in a way where they aren't saying, yeah, we're not going to work with Newark Auto anymore.
- [76:40]
Will Smith
So if I want to buy carpeting for my 1982 Porsche 911, I can come directly to your website and get it for 200 bucks. What, what is the average order value get?
- [76:52]
Lucas Phillips
Just throw it three to 400 range. But that, that product category that you just mentioned might be a fifteen hundred dollar product.
- [77:00]
Will Smith
Okay, so fifteen hundred dollars, I can get it directly from you or if I go to One of your dealers, it will be similarly, it will be priced also at fifteen hundred dollars, maybe even less. You've given them permission to undersell you, but you promise not to undersell them.
- [77:13]
Lucas Phillips
Correct. And I think the value that you get coming to me is I am a real specialist of these different fabrics. Right. I, I, if you're just looking for a carpet and you want to work with the manufacturer of the item and work directly with us, and maybe there's some customization you want, or you want to really make sure which fabric and which backing and which binding and which vinyl, like all of that is being used, you come to me. But if you're looking for, you know, parts for your engine and door seals and glass and carpeting, if you go to one of my dealers, you can, you can buy all of that together from them. And that's not something that I offer.
- [77:51]
Will Smith
Yeah.
- [77:52]
Lucas Phillips
So they're just two different value propositions.
- [77:55]
Will Smith
Yeah. Well, in this also, Lucas goes back to this incredible moat you have with your intellectual property. It sounds like you're really trying to do right by your dealers, but given your, I don't know what the, I guess the degree to which there are, you have competitors varies from vehicle to vehicle. So Maybe there are 911, other 911 carpeting business, vintage 911 carpeting businesses, where the dealers can take their business, but some of your dealers are going to have no other option than to go to you anyway. Right. You're probably the only provider of some carpets.
- [78:35]
Lucas Phillips
Correct.
- [78:36]
Will Smith
At all. And so they, if they want to be able to offer that at all, they're going to have to accept your terms.
- [78:43]
Lucas Phillips
Exactly.
- [78:44]
Will Smith
And then so obviously building the website and iterating on the website and conversion optimization, etc, that whole digital marketing or that whole piece of on site optimization has been, been a big part of this story, but so too has been the digital marketing. So what did you hire an agency to do your, your Google and Instagram ads sort of thing?
- [79:06]
Lucas Phillips
So I will just say the biggest issue and the biggest challenge for me with the website has been the amount of vehicles that I offer products for, the amount of different fabrics that are available. And then data and making sure that all of that is database properly and then listing it to shopify a way that's efficient. I mean we're talking hundreds and hundreds of thousands of lines of data, you.
- [79:32]
Will Smith
Know, because it's every permutation, every, every model of every vintage car cross all the different fabrics.
- [79:39]
Lucas Phillips
Correct. And, and, and you think, you know, you think it's just, you know, 1970 Plymouth Cougar. Right. But it's not, it's. It's. It's. There's a different carpet for the two door hardtop and the two door convertible. Right. And so you have to literally database all of it. And for these, for the much older vehicles in the 20s, 30s, 40s, 50s, 60s, even 70s, there's not, there's not easy databases that give you all the different permutations that existed. So it's, it's research that we have to do to figure that out. And, and all our pattern says is 68 to 72 GM midsize. Right. And then we have to figure out from 68 to 72 all of the different permutations of year, make, model, body style and dirt door number for the GM midsize, which is the A body car, and then map our SKUs or patterns to each of those and then generate it out in all of the different materials and colors and list it all to the site in a way where you can go and put the year, make, model and end up on the right product page and it be simple for you. And that's just one pattern. And there's thousands of them.
- [80:57]
Will Smith
Wow. Yeah, I'm overwhelmed, Lucas. But, but, but, but I'm also, but I'm also just like, I'm also just kind of salivating because it's as painful and meticulous as all of this, as all of this is. It's such an, it's such a compelling moat. I mean, this is a data business masquerading as a manufacturing business or I just. I like using that phrase. I don't actually think that's the case here. But there is so much value in your data.
- [81:23]
Lucas Phillips
There's a lot of value in the data. And so now we are making some investments in some AI tools this year to help with that management and the research.
- [81:33]
Will Smith
Good. AI to the rescue. Okay, Lucas, great. Well, I want. We're going to start wrapping up here, but the final chapter to our conversation is an important one. And it's all about how your Bolton acquisitions that you've done since acquiring Newark Auto proper. Newark. Newark Auto Newark, yeah. One of my favorite themes of acquiring minds is, is the value of just being in the game. The value of having acquired a business. And, and if it goes well, of course, always with that giant caveat, the doors that can open, the opportunities that can present themselves once you find yourself in the seat. And I think it's fair to say that that's happened in your case because now you're a player in this industry, you're probably one of the, you know, the young, the young buck, the young turk who's making moves in this tiny little industry. And so you probably have the attention of your competitors. Take it, take it from there. Because we hit on this in the pre call.
- [82:33]
Lucas Phillips
How I see it is I have built this process in my factory to take these old school businesses that manufacture cut and sewn products, classic cars, and turn them into. And. And, you know, take those patterns, put them through my process such that I can then list them on my website and with my dealers very efficiently and in a way that resonates for the customers who are searching for them online and also in a way that allows me to manufacture them in my facility in a much more consistent and efficient manner. Right. With these CNC machine, the CNC cutters and everything. So once I had that system built, I realized I want as many patterns as I can get. And so I made that clear to a few of the dealers that I worked with that, you know, if they know of any, if there's any suppliers that they have that are looking to retire or sell to, please let me know. I did. And so. And from that was one acquisition opportunity that I found, which was one of my dealers told me they reached out to a company in Georgia that was mom and pop shop in a garage manufacturing headliners, which is the fabric on the ceiling of the interior of the car for all of the classic American cars that I make carpet kits for. And this sounded wonderful because it's. Yeah, you know, it's an upsell opportunity and it's a really good fit for my catalog. And so I flew down there and I, you know, I reached. And my dealer who had reached out to this manufacturer, the manufacturer said, sorry, we are, we won't sell you product because we don't want more business. We're. We're older. We're wanting to retire. If you want to buy the business, you can do that. So he called me and said, hey, Lucas, you know, go, go check out these guys. And I met with them and it was a website that was doing $150,000 a year in sales. And I was able to acquire it for, I think, 50 grand. And I have patterns now to make headliners for hundreds of the cars that I make, you know, carpets for. And that was literally just all cash deal. I got their website, I got the patterns, I got the supplier relationships, a few B2B customers, but very few of them. And, and I'm. And I'm still in the process, really like all of that whole business has been digitized and is now being manufactured in my facility. And it's a really nice way to fill up the floor when things are slower. Those headliner orders that we're getting in, there is seasonality in the business, so there are slow periods. That being said, I haven't yet taken advantage of really growing that line of business because at the same time as that deal, I found another one in Oregon that a friend of mine, my parents friend, who has a lot of old Porsches, asked me if I made anything for Porsches and I realized, wow, this would be an amazing market to serve, right? Porsche owners are really enthusiastic about their cars and there's a cult following to that. So I went on ebay and I looked for other suppliers of Porsche items and I found this guy who, you know, his ebay listings were horrible, like terrible photos, product photos, misspellings in the descriptions. But he had the best reviews, amazing reviews about his product quality. And so I reached out to him and asked if he would ever be interested in selling his business. It was clear he was doing the same thing, you know, himself, cutting and sewing fabric and, and shipping out these custom parts for, you know, air cooled 911s, 944s, that sort of thing. And he said yes. And so I got on a plane and flew out to Oregon and I made a huge mistake when I got to the Hertz rental counter and I had one of those credit cards that gets you, you know, the ability to take whatever car. And I had a four hour drive through the Oregon countryside and I took the convertible Mustang. Well, I arrived at this guy's business, his home, which was a trailer home and this fancy convertible Mustang. And on the phone he had told me he would sell me everything for 30 grand. And two days later he told me he wanted $320,000.
- [87:07]
Will Smith
Oh my gosh. Just because you're driving a fancy car.
- [87:10]
Lucas Phillips
I think it was probably because I was driving a fancy car and I was like, oh my God, what an, what a, what an error. So I then, I mean that it didn't happen for another year or so, but eventually we settled on a price which was around the same as the price for the headliner business. I think he was doing more like 100 grand a year in sales.
- [87:32]
Will Smith
Wait, so it started at 30, it went to 320 and it came back down to about 50? Yeah. Oh, okay. Well, good negotiating.
- [87:40]
Lucas Phillips
I mean, and that's the thing about these deals is, you know, these are, these Are craftspeople doing this work in their garage? These are not businesses.
- [87:49]
Will Smith
Right.
- [87:49]
Lucas Phillips
There's nobody else who's gonna buy. Who can buy these? Sure. Other than my competitors and my com, most of my competitors are also owned by older folks who are eventually looking to retire. So I knew I, I just kind of let him sweat it out for a year and then I went and, and, you know, put all the patterns in a U haul box and they picked it up and brought it back to my facility. And, and we've really expanded the Porsche business. I mean, really, that is the single make that we sell the most items of. And a few months ago, the primary competitor to that Porsche business that I tucked in went out of business due to a health issue. And I haven't been able to acquire his company. And I don't know if I will even want to because all of his customers are coming to me now. And that could be within a year from now. That can be a million dollars of revenue just from serving this Porsche community, at least.
- [88:51]
Will Smith
Wow.
- [88:52]
Lucas Phillips
So it's the value of being in the game, right? Is, is you have, is you're in the game and then, and you're in an industry like mine and, and you, you tuck in this deal and then all of a sudden things start breaking your way. Like, you know, your competitor goes out of business and all those customers come to you. So that, that's, and that's. We're in the process of that right now.
- [89:11]
Will Smith
Well, and there, there's also something to be said there. I don't, I don't know exactly how to put it, but the nature of your business, where you, where you, you know, overhauled your own manufacturing system, made it scalable. And so these bolt ons, really, there's no, they're completely seamless. I mean, it's almost like a digital business or something where, where you just plug in more of these, of these patterns that you acquire and there's no additional overhead even. I mean, it all is just IP that you can monetize with no additional cost.
- [89:49]
Lucas Phillips
And it's all.
- [89:50]
Will Smith
So I don't know what the learning is there, but it's very, it's a very powerful model.
- [89:53]
Lucas Phillips
And then, and then the last, I mean, one other part that's wonderful is a lot of times it's a negative cash conversion cycle for these sales because somebody orders the item, is willing to wait a few weeks for it, and I then order the fabric. This, especially for the specialized European cars. I order the fabric from a specialized supplier who deals in this Fabric and I, you know, then I receive it and ship it and I've already been paid for the, the sales. So that's a wonderful dynamic in the business too. And you're right, it's just a matter of having more part numbers in this, you know, system that we have in the factory and listing more products on the site. It doesn't require more overhead. Except I've, I want to really expand this year and so I've hired a salesperson and I've hired somebody to really be in charge of the digitizing process. But that's, that's just you know, growing up. The last deal was in November. I was in California for a trip for my girlfriend was giving a talk somewhere and I met with my fabric supplier for European items. The one who, I was just telling you when I have a special, special order for something for you know, 1500 Porsche carpet kit, this, this supplier of mine sources the fabric from Europe. That's exactly like what was originally in the car. So I was, I was meeting with him and he said that one of his, his customers had recently closed in a very messy way and owed him a lot of money and owed a lot of people a lot of money. And so, but this business that closed manufactured seats, headliners, door panels, carpets, interior trim parts like dashes and that sort of stuff for classic Mercedes, Porsche, BMW, Rolls Royce, Jaguar, Ferrari, Alfa Romeo, Bentley, all the really high end European cars. And I would love to get into that market. And so I mean when I learned about this opportunity, the business was totally shuttered. The landlord had locked out the tenant and I essentially was through like lean searches online and sleuthing, just general sleuthing, was able to get in touch with the landlord and get a tour of the building and saw the machinery there. But all the patterns that I was interested were no longer in the building they were in. And so then I went and I knocked on the front door of the owners home because I couldn't get in touch with him in another way and I really wanted these patterns and, and he eventually led me.
- [92:34]
Will Smith
It sounds like he's somebody that doesn't want to be found as well. Yeah, it's.
- [92:39]
Lucas Phillips
No, it's, it's definitely that because I'll, and I'll explain that dynamic. But he led me to a storage facility, you know, a few miles away, like a self storage facility where all the patterns were located. And I was eventually able to work out a deal with him where I was able to acquire the patterns to make everything. And then he was, he. Because I was in touch with the landlord. The landlord asked me to ask the seller if he would forfeit all of the items in the building to the landlord so the landlord could clear out the building. And so he did. And then the landlord was willing to let us take the things in the building that we wanted.
- [93:22]
Will Smith
You're kidding. A CNC machine?
- [93:24]
Lucas Phillips
There were no CNC machines, but there was other machinery that was. That was, you know, valuable to me and useful to. To manufacture these items. And then my fabric supplier was also able to be made whole by so. So I could have just taken everything in the building, including all the fabric that was owed to my supplier. But I brought my supplier in and he cleared out all of the fabric to try to make himself whole because he had a big AR balance with this. This company.
- [93:53]
Will Smith
So wild.
- [93:55]
Lucas Phillips
So, I mean, it was a wild deal. This business had taken payment for orders from many customers and never fulfilled it and then just shut down. And so it was. It was a. I'm not sure exactly what happened, but we're in the process of spinning it back up now that all of the IP and such are at my facility in New Jersey. I only bought assets, right? To be like, I didn't want. I didn't buy anything. I didn't buy the whole company. I just bought the select assets that I needed. And we're now trying to figure out how to spin this thing back up and make good with the customers who have all submitted chargebacks or are still waiting for their items six months later, and they don't know what happened.
- [94:52]
Will Smith
But because you think there's brand value to this business.
- [94:55]
Lucas Phillips
Well, it's going to take a very long time for us to get to put this business through our process. It's going to take a year or two probably, to get all of the patterns digitized and cataloged and on our site. And in the meantime, they have a website that was fully functional. I mean, they were doing over a million a year in sales.
- [95:16]
Will Smith
This was a legit business. This was not the garage door situation.
- [95:19]
Lucas Phillips
No, this was a garage business. Yeah. And so they were doing over a million a year in sales. It was about the size that Newark was when I bought it. I was able to buy these assets for the price of a used car and then paid a few times that to get them moved from three 18 wheelers. Moving manufacturing equipment from California to New Jersey. And now I've hired a few additional people to help with the process of selling, digitizing, listing. So I'm back in that J curve again, right which is the theme of this conversation is all of these opportunities I've taken advantage of put me back in a J curve and have made it such that it will take longer for me to take home a meaningful salary from the company. But that's okay. I'm thinking in a long term way.
- [96:11]
Will Smith
Yeah.
- [96:13]
Lucas Phillips
And. And I think this will. I think this. Yeah. So there's a lot of interesting stuff to figure out. I mean, the deal just happened in December and we're talking in January, so we're still kind of in the middle of it.
- [96:26]
Will Smith
So the way I characterized it before, where you take these. Where you take these patterns that you buy from, where you effectively buy the assets of a business and just plug them in, that was actually an oversimplification. There is cost in integrating those patterns into your business, which is mostly the digital digitization of them.
- [96:46]
Lucas Phillips
Yeah. I, you know, with every. The fixed cost base of the business goes up if I hire a dedicated resource to just be digitizing all the time.
- [96:56]
Will Smith
Yeah, yeah.
- [96:56]
Lucas Phillips
Right. A year ago, I didn't know that I would constantly have a, you know, backlog of patterns that need to be digitized and probably will if I continue to do these add on acquisitions.
- [97:08]
Will Smith
Yeah.
- [97:09]
Lucas Phillips
And so at this point, I've decided to add that, you know, overhead to increase my fixed cost base of the business to then digitize the stuff, because I think it'll be worthwhile. Yeah. But now that I have that addition, I don't think, I don't think it will get to a point where I need two people to do that. And so at some point, it's kind of somewhere in between.
- [97:32]
Will Smith
Yeah. Yeah. There was an additional overhead cost, but that overhead cost is now sunk and it's just going to stay there. So you can layer on more acquisitions without. You have the capacity for more acquisitions without additional cost, Correct. Yeah. For the. On the digitizing the patterns piece, at least. So last question for you, Lucas. Is there a buyer for this business? Is, are there obvious buyers for this. For this business? Because I just as I, you know, when you think about all this data and this intellectual property that you're accumulating, that becomes really enticing if there's a buyer who will want it because you're doing. But if there is no buyer for this business, maybe it's less valuable. It's valuable to you as a moat for your business for the duration of the business's life. But you could see there being an even like a giant premium paid for it if there's, if there's a Buyer who wants this business for some reason.
- [98:30]
Lucas Phillips
Yeah, that makes sense. As I said on the pre call, I don't think a lot about selling the business or like what I want to do with the business in the future because I'm so focused on what I need to do now to get to a point where I have that option. Right. It doesn't matter what I want to do in a few years from now when I get to that point at all. All that matters is I do the things now that will get me there and then I can think about that then. And any time I spend thinking about that in a number of years is taking me away from what I need to do next to get there. So I try to spend very little time and I don't think that I would build the business differently over the next few years if I want to exit in a few years or if I want to just, you know, continue to own the business. So, so I haven't thought about this a ton and I think for other searchers out there who are thinking, you know, I'll buy something and exit in a few years, it's at some point the exit thing goes on the side and it's just all about actual operations and growth in the moment. It's never, I don't think it's ever that simple. But the, the answer is yeah, I mean there's, there's a number of buyers, there's pro. There's a, there's a large group, a private equity company that owns a group of manufacturing companies like mine, competitors to me, that are all owned by private equity. And there's a few different private equity players who have rolled up businesses like mine. So there's a few different groups that maybe one day I would explore being a part of. And then there's also a few independent larger companies that have product lines that are not exactly the same as mine, where mine would be really complementary. Complementary to what they do, where they might be interested. Yeah. And then there's, and, and, but there's also, I mean, I think that there, there will be interest as I grow my business in being acquired because as I will start to compete more and more with the other manufacturers which are owned by a private, by private equity. And I imagine those private equity companies will assume it would be better to just not have this other competitor on the market. So our moat is even deeper and our pricing power is even stronger so they can build like a monopoly right in, in this market. But I haven't spent a ton of.
- [101:08]
Will Smith
Time thinking about that well, and it's just so much of it comes down to how scarce this, in these patterns, this intellectual property is. If there's 10 players who have it, it's, it's far less, you know, out there that have it. It's far less interesting than it, than if there's two, you and somebody else. And that somebody else wants to be the loan owner of the intellectual property and have a true monopoly. Be an amazing position to be in. Very interesting business, Lucas. Very interesting story. Really a fun interview. If people want to get in touch with you with questions either about your business, people can ask you about the lab, right? Acquisition lab.
- [101:47]
Lucas Phillips
Yeah, absolutely.
- [101:48]
Will Smith
What, how do you prefer they reach out?
- [101:51]
Lucas Phillips
My email is Lucas L U C a s@newarkauto.com that's, that's, I'll. That's the easiest. If you want to hit me up on LinkedIn, you can do that too. I'm not on, I'm not really on Twitter or Instagram or any of that stuff because I'm trying to spend, put all of my energy into my business and I'm finding those things to be distracting to me.
- [102:17]
Will Smith
So that's what you should be doing.
- [102:19]
Lucas Phillips
If you email me, that's the best way for me to get back to you. And if you're a searcher or considering search and you reach out to me, I just ask that you come with specific questions and not just a general. I'm thinking about doing this thing. What do you think?
- [102:38]
Will Smith
Yeah, fair enough. That reminds me of a public service announcement I go in and out of making but I'll make it here because you've teed it up that anybody who, who does reach out, want to reach out to Lucas. I'm now talking to you listener. He's kind of already said it. Treat his time as the very precious resource that it is. He's very busy. Not just an open ended what do you think of my plan but something very, very specific and have done your homework. That goes for Lucas and all guests that they're really busy people and so if they get on the phone with you, you should really treat their time with respect. So thank you for saying that, Lucas and thank you for coming on Acquiring Minds.
- [103:18]
Lucas Phillips
Thank you for having me. Will, this is exciting.