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- [00:00]
Will Smith
If you're hoping to buy a business in your home market where you already live, deal flow is going to be a challenge. There just aren't that many good businesses for sale at any given time in a single market, so you're going to have to work at it. And that will almost certainly mean networking Alex Holley set out to buy a business in Louisville, Kentucky. In networking, proactively and systematically was how he made it happen. He tallied 100 meetings over about three months, which is one meeting per day. It's a good high standard to measure yourself against. If you're searching locally and frustrated by deal trickle instead of deal flow, ask yourself are you meeting with one person per day for two other interviews where networking resulted in the searcher finding their deal? Check out Ben Rizzo, who bought an elevator servicing business in Pittsburgh, and Adam Duggans, who met with over 600 people in and around Greensboro, North Carolina to find his first deal. Adam has since built a Holdco to 75 million in annual revenue. Link to both those interviews in the show Notes Back to Alex Today's Guest his networking led him to his acquisition and in only a few months the home services business he bought is actually two in one. We unpacked that and it's good sized, averaging $4.5 million in revenue per year with margins around 20%. So call it north of $800,000 of SDE. Here he is Alex Holley, owner of Bdry Systems of Louisville and Ramjack Louisville Announcements Upcoming Webinars Today Thursday Legal Office Hours this one on legal questions related to debt financing SBA Loans Attorneys Bill Barlow and James David Williams return to cover the main legal hiccups for both SBA and non SBA loans. James, David and Bill will also discuss the new multi step partial buyout process just approved by the SBA. That's today, February 13th at noon Eastern. Register at the link in today's show notes or on the Acquiring Minds homepage Acquiringminds co. Then next Thursday you may have heard my recent interview with Carlos Santelli, whose incredible story involved using a sale leaseback to fund his acquisition of a $3 million EBITDA business, enabling him to own the business with no investors and 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's next Thursday, February 20th at noon Eastern. Register at the link in today's show notes or on the Acquiring Minds homepage. Acquiringminds Co. Finally, 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 and one for now. Owner 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 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. If you ask owners in the ETA and search community which insurance broker provides highest quality work, great outcomes and has a practice dedicated to searchers and acquisition entrepreneurs, one name comes up again and again. Oberle Oberle Risk Strategies has worked with hundreds of searchers over nearly a decade and is in fact led by a two time successful searcher, August Felker, which makes Oberle a specialty insurance brokerage for searchers by a former searcher and if you've got a business under loi, Oberle will provide complimentary due diligence on that business's insurance and benefits program. An easy, no risk way to get to know August and the team at Oberle to take advantage. Check out oberly-risk.com that's o b e r l e-risk.com link in the notes. Alex Holley welcome to Acquiring Minds.
- [05:22]
Alex Holley
Thank you for having me.
- [05:23]
Will Smith
Will Alex, I got an email from you the very morning you closed on your business. Actually businesses, which is a little unusual. We'll get there. You were so excited. Then when we talked for the pre call you were having a ton of fun. I hope you still are. We'll find out. Now let's get into it. Please give us a little background to start.
- [05:45]
Alex Holley
Alex I graduated from the University of Kentucky in 2008. I am from moved to Louisville when I was about 11 years old from Eastern Kentucky. So local to Kentucky for the most part of my life. You graduated from University of Kentucky in 2008 in the spring. At the time I was working while going to school full time at a bank thinking that commercial lending was a potential next step for me. But if you all remember that was the time of the financial crisis with lending so that didn't look like it was going to pan out. So I just started to think about what my next steps would be professionally. Ended up landing an offer from a consulting firm, I think that was June of that same year in 2008. And then worked at that consulting firm through the end of 2016. Uh, so it was technology consulting, which I knew nothing about graduating out of college, but learned the technology portion. I was confident in myself on the people and communication portion of the job. So it was just a matter of learning. So that was client facing role. Ended up doing pretty well there, you know, rose up through promotions and that sort of thing. Up to a management level where eventually I was the business team lead on one of our projects. I knew in 2016 that I was really wanting to look for something else. I'd always been fascinated by small businesses. And so at the beginning of 2016 I actually tried to look into small businesses and see how you get into at least running one. I don't know that I would have been ready to purchase one at the time, but I was on the road, I think 50 or 52 weeks that year. So a little difficult time wise to kind of figure it out. I also knew that I wanted to be local here to Louisville, where my family is and my now wife's family are. So that made it a little stretch or a little tough with those constraints. So ended up leaving there at the end of 2016 to work at a small business in more commercial communications type of industry, which again I knew nothing about, but ended up running that company here locally. A small company, about 14 employees, 15 employees through Covid and then left there in 2022 in the spring. Actually got recruited to go back to the consulting firm and more of an internal role, which I did for a couple years until the end of 2023. But again, I knew I wanted to get back into this small business space. So I spent the first, first part of this calendar year 2024 doing my search and closed on the businesses at. I think it was the. The. Excuse me, the 31st of August 31st of August.
- [08:59]
Will Smith
Well, Alex, give me more on this. The magnetic pull of small business. Why for a guy who started in consulting, thought he'd be in banking way back. What was this desire to be in small business all about?
- [09:15]
Alex Holley
So I mentioned growing up in eastern Kentucky, at least for the first part. I had a couple of friends whose parents had small businesses. One particularly was owned a coal mine. And we got to go out and ride around with his dad and see some of those things. I just started seeing it seemed like small Business kind of was a good place to be. The older I got, the more people I was was meeting that may have been a little bit older than me, but I just always seemed to be fascinated by what they were doing and how they got in it, even if they weren't related from an industry standpoint. So the more I kind of dove in, the more attractive it kind of looked. And I'll be glad to share more about that. But I did kind of get a free pass to learn a company and operate it as well that I mentioned in between my two stints at the consulting firm. So I kind of saw it firsthand. So I had a real good indication that this is what I wanted to do. It was just a matter of when a good time to do it was. Um, and I didn't necessarily choose this timing, it chose me. But I'm. I'm very glad that it happened this way.
- [10:29]
Will Smith
And what do you mean by that? That it shows you.
- [10:32]
Alex Holley
It shows me in the sense that I was. I finally got caught up in the rounds of layoffs from the consulting firm at the end of 23. So you know, challenging at the time but looking back over, you know, the last year plus it was, it's was supposed to happen.
- [10:51]
Will Smith
And as somebody who thought he, or maybe didn't think he would, but kind of felt the, the appeal of small business, the idea of buying an existing one versus starting one or becoming a franchisee, something like that, some of the other options did you consider and dismiss those or was it always buy a business?
- [11:14]
Alex Holley
I. So I considered. So I am a person that I am better at figuring out what I don't like or don't want to do versus figuring out exactly what it is that I want to do. So I'm more of a process of elimination type of approach. So a good friend of mine who's been very successful in the bourbon industry reached out to me almost immediately after I told him the news that I wasn't going to. I wasn't working at the consulting firm anymore. And he had a good startup idea that was more tech related for the bourbon industry. And you know why it sounded. I was excited about it honestly at first. But you know, there's a big difference in need and demand. And so while there was a need for his idea, the demand and you know, trying to convince people that there was a need for them, I thought that that would be a little more challenging, a little bit more bigger challenge than I really wanted to take on at the time. Again, this was like right after this Happened in November of 23. So I knew I still had some time. You know, I was 38 years old at the time with a 6 and a 4 year old or I guess they would have been, you know, five and three at that time. So really just wanted to kind of see what all was out there. And that's one that I kind of eliminated early on was a startup. They've. They've been very successful with their own startups, but that just wasn't for me.
- [12:40]
Will Smith
Man. Alex, I'm hearing coal, I'm hearing bourbon. You are just a picture of 10 of Tennessee. You are just a picture of Kentucky. And okay, so then the notion of buying a business was one that you just kind of came to on your own or had you heard about this thing we call search?
- [12:59]
Alex Holley
I didn't know what search was, so I kind of had an approach that, that I was wanting to take and it all kind of. The story just kind of unfolded. I didn't have this roadmap at the very beginning, so I kind of took the end of 2023 off. I did have a, a lunch with a friend who. So what I was doing at the consulting firm internally was kind of more what they call Venture Studio. So he kind of is very familiar with Venture Studio. So we talked about that and then the conversation ended with. Or you could look at buying a business from a generation of baby boomers that are looking to retire. And so I ended up driving to Lexington to meet for the first time a gentleman who was in Venture Studio currently, but he had started his own distillery previously. He's very entrepreneurial, so I got connected with him, made the trip to Lexington in the early January of 24. We chatted for quite a while. I was very thankful and still am for his time. But at the end of the conversation it came back to or you could look into buying businesses for sale. He had a couple that he had purchased as well. And so we kind of chatted about that a little bit. And something that I'll never forget, he told me that it would be important for me to tell everyone that I knew that Alex Holly was going to be buying a business in 2024. Now, I didn't go and shunt that off the mountaintops, but I did start to believe it more the more that I thought about it that way. And I think it made me a lot more confident but a lot more inspired to go and actually try and do this.
- [14:47]
Will Smith
Wait. So this tip of his was about just networking to. Just because you're going to need to be scratching and clawing for whatever deal flow you can get or because there was an internal effect that it helped you convince yourself every time you heard yourself say it that no, this is really something I'm committed to doing.
- [15:05]
Alex Holley
I don't know the true intent of that comment from him, but I had already started networking at that point, which I think he kind of picked up on. And so when we came kind of came back to this, to me it was more like, you know, self fulfilling prophecy type of thing. So again I wasn't going out and shouting this, but I think once I started feeling that when I started talking to people after that conversation, everyone was blown away. They're like, we've never seen you this confident that you're going to go out and do something and like you're a very confident person in yourself. But something changed some point after that.
- [15:43]
Will Smith
Wow. Well, I wonder if this is one of these sort of visualization or you know, state, state, what is it manifesting sort of things. I don't know much about that stuff.
- [15:57]
Alex Holley
But I don't either. But all right, well whatever you did.
- [16:00]
Will Smith
It worked because here you sit. All right, so let's hear what can you tell us about the search. Anything to share there?
- [16:08]
Alex Holley
Sure. So I was wanting to hit the ground running in January. I kind of got a little head start over the holidays in December of 23. But I really started to make a targeted list of people within my network that I could start talking to about this process. So I spoke with people who have owned and sold their businesses that I know that are probably in their mid to late 60s. I talked to, I mentioned my friends with the startups. That's a different type. It's still, you know, kind of getting into your own business. I've talked to, I kind of have a, had a mentor of a guy who had done this. I met with him in 2016 when I was originally hoping to go through with something like this. And we kind of reconnected again with this. But I really just started kind of targeted networking to the point where I had somewhere around a hundred meetings between January and mid April. Now some of them were with the same people but you know, more of a recurring. But I really kind of made it my, my full time job as much as I could. I also did, you know, I played Mr. Mom during that time too, you know, with the kids, with pickup and stuff like that. So I wasn't working full blown days on this. But a lot of time this is kind of what I was doing is networking and just trying to to learn and read as much as I could. And then sometime I don't remember the exact week, but sometime probably late January, early February is when I found your podcast.
- [17:46]
Will Smith
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 this wasn't something where you knew other quote unquote searchers or you were plugged into the quote unquote search ecosystem or any of that?
- [19:05]
Alex Holley
No.
- [19:05]
Will Smith
Had you gotten your hands on the HBR Guide to Buying a Small Business or Buy then Build?
- [19:10]
Alex Holley
So I'd like to, I'd love to get into that. So when I had a friend of mine who I've known for probably 25 years, he's in, he's in banking and when he heard through a friend of a friend that I was starting this process back in January, we met for coffee and went through this and he said I would like to help you with this. So he sent me an email afterwards with a little recap and some targeted people to meet with who I don't, I think I may have known one of the people on the list but the other people were connections of his that, that I did not know. So started working the list kind of like that. And then he scheduled a lunch with a guy who had bought and sold some businesses before. Very successful guy I'd never met before. He is a MBA grad from Harvard and so this would have been in April of 24 when I met with him. We had lunch and we're talking through everything and he's asked me a bunch of questions and then at the end of the lunch he pulls the book out and he says it doesn't sound like you need to read this book, but you may want to read it for validating what your process is doing. But a lot of what you're doing is in here. So I read it in a day and a half, which validated a lot, helped clarify a few things I will tell on myself. I'm more of an article reader than carrying around a paperback book. My wife read 103 books in 2024, so we're slightly different. But when I walked in with the book, my son asked if I'd stolen one of my wife's books. I told him I was actually going to be the one reading that one.
- [21:00]
Will Smith
Well, Alex, one of the core takeaways in that book are the parameters of what to look for in a good business.
- [21:09]
Alex Holley
Absolutely.
- [21:10]
Will Smith
And. And we hear them over and over, and I'm always asking guests about them. Recurring revenue. A lot of people kind of point to that. Of course, it's well known in. In business buying land, but a lot of people point to that book as. As really influencing them on that. And then, of course, size of business.
- [21:27]
Alex Holley
Correct.
- [21:28]
Will Smith
HBR Guide really, really stresses the, you know, the kind of. I don't know what the number is, but the higher end of six figures, low seven figures of ste. Had you already had parameters like that?
- [21:41]
Alex Holley
I did. So I kind of learned quickly in January that I wanted to definitely stay out of competing with private equity. So I was kind of looking more in the 1.5 and below range. Probably not even up to the 1.5 ideally, but that's kind of where I was trying to. To focus was kind of in that range just to stay a little bit smaller.
- [22:07]
Will Smith
So you had figured out yourself that the sweet spot, which some regular listeners will know is, is what you just described as big as possible without bumping up against private equity. So that is kind of between half a million and a million and a half of sde.
- [22:24]
Alex Holley
And you had.
- [22:25]
Will Smith
You'd come to that on your own.
- [22:27]
Alex Holley
Yes, but not. Not completely on my own. So my friend that I mentioned, the. The banking friend, when we were looking, that was kind of where we both kind of landed. And your podcast pretty much confirmed and validated that for me as well. So I knew that we were on the right track once I heard many of your other listeners kind of in the same ballpark range.
- [22:52]
Will Smith
Great. Well, awesome, alex. Okay, so 100 meetings between January and April. This is now last year, so we're talking 12 months ago last January. That's about a meeting a day, maybe.
- [23:03]
Alex Holley
A little less if that's somewhere something like that.
- [23:05]
Will Smith
Three, four months. Yeah. So that's a lot. And did you. So is that how you found the business sis that you bought?
- [23:13]
Alex Holley
It is. So at that same lunch with the Harvard Business Review book, that gentleman said that he had a goal that was ended up being more of a monthly goal, but he was trying to make it weekly where he would have coffee with somebody he didn't know once a week or once a month, whatever his time frame was able to be. And unbeknownst to me, that's kind of what I was, was doing maybe a little bit more than that because I had the time. But a lot of my meetings were people that I either had not met before or I very loosely know through a connection. And that part was, was really, really fun in the search. Just getting to, you know, hear other perspectives and learn from, from people that I hadn't met before and stay connected, that sort of thing. So that's. Those numbers are about right. I'd have busier days than others. Typically people don't want to meet with you on a Monday morning. But that was about it. I mean, I kept a pretty full schedule. I would kind of panic on a Friday if I didn't have a fairly full schedule for the following week. So I did a lot of making sure that all that was, was set and squared away. I was trying to be as I could.
- [24:24]
Will Smith
It's that it sounds like you're treating your networking meetings as your pipeline, if.
- [24:29]
Alex Holley
You will, 100% versus.
- [24:34]
Will Smith
Traditional deal flow, which is actual sims or listings that you're looking at. Or am I wrong? Were you looking at Biz Buy Sell? Were you subscribed to the local Louisville broker lists and so on that as well. I assume that's.
- [24:48]
Alex Holley
So this all happened pretty quickly. So Louisville is very, very network based. So you can learn a lot and hear a lot about what's going on through people, you know, versus like cold calling or anything like that. I know there's a lot of other cities or maybe smaller towns around here where your listeners have been able to do that too. But honestly, through that first email, this wasn't my first attempt, but we got in contact with somebody who suggested that we meet with a broker. And that broker just happened to be representing the person that I purchased the businesses from.
- [25:33]
Will Smith
So what'd you find, Alex? What did this broker present you with?
- [25:36]
Alex Holley
So he had a couple. He had, I believe a lumber distribution. He had this one and there was another one that I don't. I think I'd found him a different way. But honestly I got this one and was looking through the sim and as soon as I saw the names, it's a pretty powerful name in the waterproofing and foundation repair industry here in town. So I was blown away by the name to start. And then when I started looking at the financials and then knowing that, you know, Gen AI is not going to change what, you know, this industry, this company does, I immediately was very interested in looking forward to it. So I met with the broker quite a bit and really just kind of, I know it goes against a lot of what we say in the search world. Don't fall in love with your first real one. But it was and I did and I was all in.
- [26:39]
Will Smith
Had you been a customer of the, of the business because I, I, I. For a name to be big in waterproofing and foundation repair, I assume you would have had to been a, had to have been a customer at some point. I couldn't tell you locally here who's the big name in foundation repair.
- [26:55]
Alex Holley
So before a good friend of mine and I both got married, I owned a house that he lived in especially while I was traveling. So he was my, we were roommates and so I was having a little bit of water come in through one of the foundation walls and his dad live or his parents lived just down the street from us. So we, we went over there because he wanted to show me what they would do if you know, I ever wanted to move forward with it. And it was a B dry system. So he showed me that. So that was my first like real experience with that. And then it was like I just noticed a lot of times whenever someone would, you know, all my friends were talking about first time homes and you know, all the problems, especially the older homes and you know, that would come up from time to time and that was kind of thrown around. So I wouldn't say I knew everything about it because I didn't. Definitely did not. But the name for sure recognized but.
- [27:50]
Will Smith
Yeah jumped off the page at you. Wow, you know, brand that, that does that would be really appealing. Okay, so tell us more about B dry numbers, age, employees. Exactly. Waterproofing, I think it speaks for itself. But waterproofing and foundation repair. Maybe give us a picture of an example job. Exactly what the service is.
- [28:09]
Alex Holley
Sure. So the company has been around since 1980. I'm the third owner of its B Drive Systems of Louisville. The oddly enough the person that I bought the business from, he found this business and closed on it in the spring of 2016. So only had I known back then who would have known. But anyway, so he purchased it and Then he ran it for about eight and a half years, and then I came in. So it is. When I was first looking, I think There was about 24 employees here. We have 20 full time here right now. So a decent size. Size a little bit bigger than what I was used to when I previously ran the small business here in louisville. So, you know, we have crews that run out and do different types of waterproofing jobs. We'll work in crawl spaces and encapsulating those, you know, stabilizing foundations either through, you know, piering or, you know, I beams, things like that to support the joist. But a lot of it is our bdry system, which we install these sheets on the wall to invite the water down into basically a drain, where we drain it into the sump, pump and discharge out of the house. So that's kind of the bread and butter of the waterproofing work that we do. But we do some different services that the previous owner had added, like some yard drainage, things like that had added on to because it was strictly waterproofing, I think, when he bought it. But he did add some different services. We do egress windows, which are your big windows where you can, you know, exit the. The basement. And we do basement windows as well. So those are just kind of high level, some of the services we have.
- [29:59]
Will Smith
And I'm hearing the bdry system as is that just. Are you just kind of throwing that around, or is there actually kind of a proprietary system that you guys have developed?
- [30:11]
Alex Holley
So b Dry used to be. It was founded in 1958, I believe, and for. I don't know the exact date, but it used to be that you paid a license fee back to the headquarters. But after arbitration ended up that. That kind of got dismantled. So, you know, I got everything that kind of comes along with it, the system being one of them. But there's no, you know, we're independently owned and operated. So it is. It does have its own proprietary way of doing things and putting it in wait.
- [30:47]
Will Smith
So. So in 1958, B dry as a system and as a brand was founded. And it was a licensing, like it was a franchise system, essentially.
- [30:57]
Alex Holley
So there's like, there's a b drive Alabama, There's a b drive Syracuse. I mean, they're in all different cities. But the original person who brought b drive to louisville did it in 1980, and he was the first. First owner of it here in Louisville.
- [31:13]
Will Smith
And there no longer is a franchisor. It's out of business. Business or it doesn't exist. Or all these. So all these b dries are totally independent. All independent kind of have their own local trademark on the. On the. On the.
- [31:25]
Alex Holley
Basically. Basically, yes. I don't want to talk too much about what all, you know, was encompassed during that, but how it is now. Yes, that's basically what it is.
- [31:35]
Will Smith
Well, I, I'm picking at it because it's unusual and it's kind of interesting. But I, I have to ask you would. You would wonder if there's some legal diligence that would need to happen there during your acquisition to make sure that you're not somehow vulnerable with the brand or some one of these other b dries is going to try to claim that they own the name or somebody. You know, it's just don't know what you don't know. So is that something that you worried about in, in diligence or was is this kind of ancient history and you're not that worried about it?
- [32:08]
Alex Holley
I was worried about it. I wouldn't say that it was on the top of my list but you know, enter my M and A attorney who kind of did some digging on. On some of that was kind of some reassurance as well and just kind of we laid out what all the risks were. And so at the end of the day we figured the rewards outweighed the risks.
- [32:29]
Will Smith
Okay, all right. But it sounds like there's stuff there that is. You don't want to touch publicly.
- [32:33]
Alex Holley
Nope.
- [32:34]
Will Smith
Okay, I'm intrigued but we'll leave it there. All right. And I'm noticing your sweatshirt. It. It's got the Bdry logo and the Ramjack logo. I have teased that you bought two businesses.
- [32:50]
Alex Holley
Yes.
- [32:50]
Will Smith
And you've actually already kind of mentioned that without mentioning it. The foundation stabilization. What is it? What is the two businesses, the two brands all about?
- [32:59]
Alex Holley
So the, the Ramjack is a franchise. It's. I wouldn't say it's that dissimilar to. So you have like we were at Ramjack of Louisville, you know, they have them in different locations in Texas, South Carolina, things like that. But we basically use their patent pending steel for their peers for foundation or to raise foundation of. Of homes is kind of what that part of the company is. So you know, we operate as one. We have different employees that you know, are either certified or more knowledgeable about different parts of the. The two businesses as far as crew members and leaders go. But you know, when I, when I first started there was either you're either wearing a B dry shirt for the day or you're Wearing a ramjack shirt for the day. And so we'd have guys on the same crew that would have blue shirt and a red shirt on. And so we were in need of some new uniforms for the crew guys as well. They had a lot of, you know, just cut up sweatshirts and T shirts and just needed a little refresh. So our. Our VP and I talked, and I just kind of gave her some. Maybe some ideas that I had, and she kind of ran with getting a design, so showed the guys the proof, and they fell in love with it. So we just decided to go ahead and. And double down on the logos and our trucks. It has the B draw on the driver side and then the Ramjack logo on the passenger side. So we were already kind of doing that. It just made sense to me to mentally, you know, unify everything.
- [34:40]
Will Smith
And you can't unify under. You can't choose one of the two brands because they basically. They offer different services.
- [34:47]
Alex Holley
That's.
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Will Smith
And I guess Ramjack, you have a franchisee agreement anyway, so you can't. I mean, you can't just untangle that at a whim.
- [34:54]
Alex Holley
That's correct. And the Ramjack portion is good too, because, you know, they have a. A headquarters and where, when we're looking at different bids or proposals that we're looking at, we can get, you know, a second opinion from. From them and headquarters on what we're proposing. So that's been very helpful. I love that setup as well. When I was kind of looking into this, so it just seemed like, you know, we were able to offer a lot more services with the both of the companies combined. So. And they were also being sold together. So it was either both or none. So I kind of had to make a decision if that's something I was willing to take on. And obviously the answer was yes.
- [35:36]
Will Smith
Yeah. And had it. Was it the previous owner of bdry who had started the ramjack territory, or had he also bought the pair as a pair?
- [35:48]
Alex Holley
He had bought B Dry, only it was in. So that was 2016. Sometime in 2018, I believe, is when he got the ramjack franchise here.
- [35:59]
Will Smith
Okay. So he. He chose to start a new franchise, and we presume that he thought he could with all of his B Dry customers, where you're waterproofing, which happens at the ground level or below the below ground. What's the phrase? Sub. Below grade. That he could do some. He could cross sell. Right. He could introduce a new service. Often these sorts of synergies are better in theory than they are in practice. But it seems like he's made it work that he can. He's grown the Ramjack franchise presumably based on his b Dry business, that. That kind of that. In fact, they do feed each other, the two sides of the business. How's it work?
- [36:47]
Alex Holley
They do. So he did a really good job of adding services to be dry when. After he purchased the company. So it was strictly waterproofing, none of the egress, none of the yard drainage, that sort of stuff. So he was looking into what else he could do and was looking to add the ramjack franchise here, which he ended up doing. And the way he explained it to me kind of early on when I met him was when it's raining outside, that's going to end up getting work for the b dry side of the company. But when it's dry or a drought, your the dirt pulls in, the ground pulls back from the foundation, allowing it to settle a little bit. So to stabilize that or even jack, you know, the foundation up, that's where the ramjack portion comes in.
- [37:36]
Will Smith
Oh, very clever. So he strategically chose something that was counter to the cycle that his existing business suffered. So he has this kind of. He has this kind of smoothed out revenue pattern. And the way he's assembled these two lines of business, yes, it's still very.
- [37:53]
Alex Holley
Weather dependent, but he's captured kind of all the different types of weather, adding the services that Ramjack does. So when I looked at the P. Ls for the first time monthly anyways, that's kind of what I noticed is you're still gonna have some of your bigger months and lower months. But there wasn't, you know, the huge roller coaster rides from month to month. It was a little bit more, I'd say a baby version of a roller coaster were smaller ups and downs.
- [38:20]
Will Smith
And we also assume that he can basically turn on his cruise to ramjack if they can do the same crew, the same people. If they could. If they're doing waterproofing, they can learn how to do foundation stabilization. So he's already got the people in place sort of thing when he envisioned launching this.
- [38:36]
Alex Holley
Yes. And there was a certification process involved. I don't know all the backstory, but I think There was a be a RamJack in Louisville already where the previous owner. I don't know what happened there, but was either looking to get out of it or whatever. So that's when the opportunity came up. So I don't know if he inherited some of the certified people to come along, but he at some point got some of the certifications from some of his B dry people too. Who is who we use.
- [39:06]
Will Smith
Gotcha. Great. Well, I wanted to to understand that just because it is kind of unusual to to have this package, not to have a package that's being sold, but that these businesses kind of live under the same roof, but different brands. Can you tell us some numbers around the how much these businesses generate and earn?
- [39:27]
Alex Holley
Yes. So I need to be a little vague, but around the five year rolling average, little north of I'd say the average is probably four and a half revenue. And then your. So this is when I really, really stopped looking at EBITDA and started focusing more on sde. The SDE was fairly healthy. I'd say it was probably in the five year rolling average, probably in the 20% of revenue somewhere in there. Okay, so that's so north of 800 somewhere in there.
- [40:08]
Will Smith
What do the following Acquiring Minds guests all have in common? Doug Johns, Morley Desai, Tim Erickson, Chirag Shah, Shane Ursam. They all went through the Acquisition Lab, the accelerator in community for people serious about buying a business. But they represent just a sliver of the Lab's success stories. The number of deals across the Lab's cohorts now stands at over 120 with over $300 million in aggregate transaction value. The Acquisition Lab was founded by Walker Deibel, author of Buy Then Build, the book that introduced so many of you to the very idea of buying a business. The Lab offers a month long, intensive, almost daily Q and A sessions with advisors, live deal reviews with Walker, Deal team introductions, and an active community of serious searchers. Check out acquisitionlab.com link in the notes or email the Lab's co founder, Chelsea wood. Chelsea buy then build.com when you said that this really highlighted the difference between EBITDA and SDE for you, what did you mean?
- [41:21]
Alex Holley
I think I was so early on trying to educate myself on EBITDA and I had really not paid a ton of attention to SDE until it kind of came to life with this one. And so I started I was already engaged with the lender, so I kind of knew what type of rates and terms we might be looking at. So I started running numbers and that SDE number was what I was using to kind of flesh out if this would work from a financial standpoint or not. So that's when I really started kind of focusing on those numbers as well. I mentioned my, my banking friend, so he ended up he's a partner in this with me, a a small behind the scenes partner, but he really helped kind of flesh out a lot of of these financials with me. And those are just kind of to be consistent the numbers we started looking at.
- [42:17]
Will Smith
And, and so it was important to you to think SDE because when you were, because you saw the earnings of the business and you needed to be very clear about how much you'd pay yourself out of that, out of that final earnings number. So if it's 800 or 850 and you want to pay yourself X, you really, the, the true earnings of the business are going to be, you know, 850 minus X sort of thing.
- [42:41]
Alex Holley
My, my whole goal was to make sure I could pay myself basically what, you know, my wife and I would need just to kind of maintain. And then my real goal was to pay down the debt at an accelerated fashion if possible. If it works out that way. I mean, I'm 20 weeks in, so I can't say that that's a hundred percent going to happen or not. But that was kind of my goal early on was looking to see, all right, how fast could we pay off the business notes and get that out from under our head? Cause then that's kind of the real, especially at my age now, I guess kind of the real goal is to get to that point to where the debt is off of our heads and that's kind of what we're focusing on. So that's the mindset I've had and that's me personally as well coming into it. So it wasn't always, you know, how much can I have left over to pay myself? It was a lot of like, this is a long term play for me. I want to see what the numbers could potentially show for that.
- [43:41]
Will Smith
So you're, to the extent that you're sort of reinvest underpaying yourself, maybe it's a salary or not, you're not taking as much out for your own, for yourself or your family as you could. It's mostly to pay down that debt faster as opposed to reinvesting in the business. I assume you're doing that too. How interesting question. How do you these earnings, how are you choosing to allocate that capital in these first few months?
- [44:06]
Alex Holley
So we can talk about the terms, But I have a, the first six months I have interest only periods. So right now I am focusing on cash flow and reserves. So I've been taking advantages advantage of this six month interest only period and able to do that. And then once we get through that, see what a couple of the, you know, the normal pay monthly payments feel like, and look like to our bottom line, then I think we can really know, you know, how we're going to approach all of this. We've got a list of some things that we could invest in. I've also got a list of some equipment that we can sell. So really just trying to keep my head down and get through this period, both from a learning standpoint and financial standpoint, to be able to make kind of the best decisions that we can.
- [44:57]
Will Smith
Well, we're going to turn our attention to how the transition has gone and what you've learned as new owner operator here in a minute. But are you paying yourself what you paid yourself what the salary that you were earning in your previous life or not yet?
- [45:12]
Alex Holley
No. No.
- [45:14]
Will Smith
So you, you and your wife will presume your, that, that this was a conversation you had with her maybe not that that you were going to take a step down in salary for a time.
- [45:29]
Alex Holley
Yes. And again, this is a bigger long term play for me. So my thought is, you know, especially at our age, the age where our kids are, if we can, you know, take a look at doing this and we're okay. I mean, we're not, you know, it's. I've been a saver investor for most of my adult life, so. But it was just kind of the approach I wanted to take. My business partner kind of agreed with. That was funny. He actually, when we were meeting one day, when we kind of landed through, you know, getting the deal, you know, at least agreed to, that's kind of. We both came up with the same number independently for salary and then what we would do with the other funds to kind of pay down debt and that sort of thing. So, you know, I mentioned through all these meetings and I mentioned earlier, kind of my story just kind of kept coming together. This was just another example of something that, you know, he and I were on the same page about and continued, you know, moving down this path. So that's kind of why I felt like this was absolutely the, the one that was meant to be for me, the deal that was meant to be for me. And then I mentioned the package with the two, two companies. But what we haven't mentioned yet is it actually came with some commercial real estate as well, which we, we purchased as well.
- [46:42]
Will Smith
And, and let's, let's return to that in just a second. Alex. I want to hear about that in basically the terms of the acquisition, which we haven't heard yet. But before we do, why did you partner with somebody? Did you need his equity? Did you want him along for the ride. What was the thinking there?
- [46:59]
Alex Holley
He came to me, you know, like I mentioned early on, and kind of not gave me confidence that I needed, but in a way, he kind of did. And it just became fun to. To look at with him. And so when we kind of found this one, he came to me, which I was not expecting. And he said, you know, I would like to be a part of this. I'd like to be in for this. And he's kind of done this before. You know, he's kept his normal job, but he's part of a group that owns some residential. A little bit of commercial housing that they run. They owned and operated a popular pizza place here in town as well. So he's kind of seen this a little bit before, too. And I think, honestly, the timing was just right where he was wanting to be along for the ride. And it's looking back, I don't know that I could have done this without him, especially during the deal phase. But it's been great to have somebody along, you know, for the ride. So it's honestly worked out. He wanted to be in the background. He didn't want, you know, especially anybody here really knowing his involvement or whatnot. And so that was kind of a situation that I was also looking for, and to find that, I feel like is very rare. So was kind of happy to do that with him, especially with all the. The effort and time that he gave to me, you know, throughout the search and that I knew we would be, you know, all the time that would be spent after the deal was closed, you know, hopefully getting there. So I was happy to do that.
- [48:35]
Will Smith
And how much time do you guys spend? He's kind of a silent partner, but it sounds like you will have regular communication with him. So what was your structure there?
- [48:47]
Alex Holley
So we had been pretty informal during the search process. So we would. We did have a recurring meeting. We would meet. We live very close to each other. There's a new coffee shop that's not too far, so we would meet there. We had a recurring meeting once a week at the beginning. It's kind of that cadence. And then if things came up, we would schedule another meeting, or if we had a thought we were in the car, we would, you know, call or whatever. But that's kind of how we operated. And it's. It's worked. You know, I mentioned we've been friends for a long time, but I wouldn't say that we were like, you know, best friends by any means. But it was nice because we'd always been with each other on the social side of things. It was nice to kind of work professionally and how we view things pretty, you know, we're very well aligned, I would say. And so it's just worked for us. We've met with some, another group out of a different state that's kind of doing the same thing that we're doing for like a long term vision or potential vision. And they're a much more formal structured, which probably works for their setup. But you know, we were talking a little bit recently how we like the kind of informal structure that we have because, you know, he does see financials. So I think that's a comfort thing. You know, a lot of our conversation is me trying to teach him what has happened here and how that's affecting or impacting the financials that he's seeing. You know, we, I was texting him right before this call. I mean we text quite a bit almost every day. We try to leave each other alone in the evenings and weekends. But you know, it's, it's been really, really fun and I, I'm not going to say his name, but I'm very thankful that this is where we are.
- [50:40]
Will Smith
And can you share if you guys are 5050 or what?
- [50:43]
Alex Holley
The split is 90 me. And then through his group and himself individually, they're the remaining 10 of the operating companies.
- [50:55]
Will Smith
Ah, okay. So you have 90% of the common equity of the business.
- [50:59]
Alex Holley
Yes.
- [51:00]
Will Smith
Oh, okay. I thought it might be 50 50. But in fact you wanted him along for the ride because if he had contributed a significant amount of capital, he probably would've had a bigger piece of the business. So you really didn't need him for the capital either.
- [51:12]
Alex Holley
It was nice to have, I won't lie about that. It was nice to have especially when our LOI got accepted pretty quickly and we had that short window to pony up the escrow. So that was definitely helpful there because we at that point didn't have all of the financials exactly figured out. We had options, but we didn't know what options we were going to do at the time. So that was helpful and he helped in some other ways too. And we'll talk about the real estate in a little bit, but he's got a little bit bigger piece in the real estate portion than the businesses too.
- [51:51]
Will Smith
Ah, interesting. Okay, well, yeah, let's turn our attention now to the structure of the deal. What was it selling for?
- [51:57]
Alex Holley
First of all, I don't know that I ever really saw a list price. I found it on biz Buy, sell. But I want to say it was a little like maybe mid-30s somewhere in there.
- [52:13]
Will Smith
Okay.
- [52:14]
Alex Holley
That's all in with the building. Correct.
- [52:19]
Will Smith
Okay. And so I'm going to operate under the. You had said that kind of the five year average was 20ish percent on four and a half million. So we'll, I, I'm just going to for easy Math, call it $800 in earnings. Pretty, pretty roughly. So how much was the real estate worth? I'm trying to back into the multiple here.
- [52:46]
Alex Holley
So what we did was I kind of got to know the seller through this process and I had met with a few other people who had sold companies before and I kind of had learned that. Learning what the seller's appetite is a pretty big part of the deal. You know, some people like one guy, his scenario was he paid the guy out over 10 years and it was a good chunk every year. This one I got the sense that it just needed to be a done deal, get him paid out and move on. So we just basically I'd met with his broker individually, quite a decent amount too just to try to get some, some feelers out there. And we just made him an offer total. We didn't really break it up by what we're offering for each. We figured the bank was gonna appraise the property, they were gonna tell us what it was worth anyways. We just had to guess. And then that way we would back into what each of the businesses combined were gonna be. And then obviously at some point we'd have to break those out into what we're paying for each for, you know, for the bank. But we did. He removed a couple of, you know, I had a template loi that I got and reviewed and made some updates, made him an offer and he came back and took out a couple of the things that weren't applicable and we sent it back and he accepted.
- [54:14]
Will Smith
And Alex, how did you arrive at that number you offered him?
- [54:19]
Alex Holley
So we looked at the businesses, we looked at the, the sde you know, I was trying to do some research and the industries on and size as well about what the multiples typically were. I had some friends in commercial real estate so I kind of had a couple of calls with them about the, the property just to kind of see what their opinion was on, you know, what its value might be. I think it had been somebody had made him an offer on the, just the building previously and I knew what that number was. So I kind of had an idea. And early on in the process we had Learned through the SBA, that if the building is worth 51% or more, you can amortize it over a longer period. So at one point, that was in consideration, but we. You know, we were really close, but it was a little bit less than half of what the total deal was. We thought we knew what the businesses were. It came to a nice flat number, and that was the number that we offered.
- [55:25]
Will Smith
Okay. And I'm getting the feeling you don't want to say what that number is.
- [55:28]
Alex Holley
I don't. I don't. It is south of. And I don't know what the exact listing is, but I. I think it was somewhere around there. And it was not that, but I think it got him. What he was hoping to get is the sense I got, especially with really no back and forth on it.
- [55:45]
Will Smith
You got a separate loan, a completely separate loan for the real estate. So it was two transactions, one for the businesses, one for the real estate.
- [55:53]
Alex Holley
We did it. So closing. My hand was worn out after closing, but so we did. We did one note on bdry, So I created an entity that purchased bdry. We did one note for ramjack. So I created a separate entity that bought ramjack. And then on the building, we did two notes. We did originally, like, a bridge loan, and then that ended up being a 504 loan. And because the SBA was doing the 504, they were able to take on a little bit more risk of their portion of the building, which helped us from a rate standpoint. So we had the four notes, basically. And then we also have a line of credit for the b. Dry, and then a line of credit for ramjack. So we have six debt facilities all in all. And that was our thought, was the. The lines of credit would be kind of more working capital at the beginning if we needed it. So that was the reason why we wanted to do that, which we really haven't. We haven't used it, but that was kind of the rationale.
- [56:57]
Will Smith
Now, turning our attention back to the businesses. So they are. They are, in fact, two different businesses, even though they operate kind of in the same space, same crew, same everything. But use two sets of books.
- [57:08]
Alex Holley
Yep. Two sets of books.
- [57:09]
Will Smith
And now two entities. Probably two entities before.
- [57:12]
Alex Holley
Yes, two entities. He. Yeah, he had them in two entities. I did the same thing. The building is in its own entity. We run them off the books, or we run them separately on the books. But as far as operationally, other than, you know, needing a certified person on some of the ramjack stuff, the crew guys can go on either One, it's the crew leader that we have to have. But, but yeah, I mean we've got the guy who does a lot of the ramjack stuff. He does waterproofing on the bead drop portion or whatnot. So really it's more like capabilities and different, you know, services that we offer versus like having two absolute separate businesses and entities. So that's kind of of how it operates. We have different websites. I mean we have different kind of marketing for each one. But as far as like the actual operation, that's, that's what it looks like.
- [58:11]
Will Smith
Let's turn our attention now just as we start to wrap up to what it's been like as owner operator of this business. This is your second stint now in small business land. As you said, this is a somewhat bigger business than the one you had experience running. It running in the 2016ish range. So how's it going? What do you think?
- [58:33]
Alex Holley
I'm having a blast. Good. I'm loving it. It has been a great learning experience. The team has been fantastic. It's been very important to me to come in and kind of learn them and what they do as it is to actually learn the business itself. You know, I really didn't know a whole lot about this business, you know, in this industry but I've had to basically learn, you know, different industries and things my whole career. So that part, that part didn't scare me. If anything, it's a challenge that I've, I'd wanted to tackle but it was so it would have been Labor Day weekend that we closed. So everyone had Monday off. So none of the employees knew, not even key employees. So the seller on Monday started telling a couple of the long term employees and he calls me Monday night. So I've been at my brother's all day just pacing, waiting to hear from him. And so she gets here real the vp, she gets here really early in the morning and he said I think she's going to be worried. I think it'd be really good if you went in early before anyone else gets in and just had a one on one with their. So that Tuesday morning I got here at about 6:30 in the morning and we talked for about 30 minutes and I could tell she was terrified but I just kind of let her know that everything was going to be okay, she wasn't going to lose her job. We ended up going to lunch that day and I don't recall if it was that day or the next day that week as a whole blur. But she ended up giving me a hug just in thanking me. So, um. Yeah, no, that was. That was good. Did my. So I talked to her and then went out and talked to the crew leaders. They do a morning and we still do meeting every morning at 7:15. And we told the crew leaders there. And then our vp, she got everybody together back in the shop in the warehouse. And I am petrified at this point. I've got, you know, 20 some people in hoodies staring at me, not knowing what's going on. And you know, I give my quick spiel speech. And when I'm done, I am about ready to walk outside and get a deep breath. And a younger person who is no longer here walked up to me and asked me for a loan right after my opening speech.
- [61:04]
Will Smith
How do you handle that? What'd you say?
- [61:06]
Alex Holley
I just said, I just started. Give me a little bit and maybe we can talk about it. I don't even recall what I said, but it was something along those lines. So. Wow, that happened. My first payroll would have been the. So we paid a week in arrear. So it would have been that Friday the 13th, the second week. I won't mention names, but this payroll provider, I had been notifying them since July that this was happening. And they, the previous owner was using the same one. Nothing was set up in time to run payroll. So we are, Friday morning of payday, finally running the payroll. We had to manually key everything in. And I had been transparent with everybody up until through that point and just saying, look, I'm working on this. This could happen. So first payroll people aren't getting paid. On that Friday morning, I offered everyone a paper check before they left if they wanted it. This was early. This is first thing in the morning. They said, no, you know, we want to trust you, so we trust that this will work out. So we're all coming back to the shop. I'd been out with the crew that day. I was terrified. It's about 4 o'clock and we start texting around and everybody's direct. Direct deposit was starting to hit their bank accounts. So.
- [62:25]
Will Smith
Oh, good.
- [62:26]
Alex Holley
That was terrifying at the time. But I also think that may have helped a little bit in the sense that I was willing to work through that for them. And so you thought it was good.
- [62:37]
Will Smith
That they saw now?
- [62:39]
Alex Holley
I do. Back then, I did not.
- [62:42]
Will Smith
Yeah, inside. The fact that, yes, you made it happen, but the fact that there was, you know, the possibility that it wouldn't happen could itself still create doubt. Even pulled it off.
- [62:51]
Alex Holley
Correct. So, you know, there's been some hiccups like that. I mean, there, there's definitely been things that have come up that's like, why is this happening right now? But I mean, I'm enjoying it. I'm learning a lot. The, the seller has been fantastic. You know, he's taught me quite a bit. He's taken the time to do so and to be thorough with me as well. I know a lot of our long term and key employees I've been leaning on quite a bit because that's what everything's going to look like in the future anyways. And they've been wonderful. And so I've been very appreciative that, you know, we've kind of built a good rapport together with them because, you know, without that, things could be a little bit different than they are right now.
- [63:37]
Will Smith
That's great, Alex. Well, it sounds like, I mean, I'm glad you're having as much fun as when we talked last and when you had originally reached out to me. What about the now, you have worked in small business before, but you also have a lot of corporate experience. What about that change? This is a complete shift in how you spend your professional life.
- [63:59]
Alex Holley
How does it feel? It's different. So I'm wearing a hoodie today. I would have never done that in the corporate world. Just with. So we have. We got a massive snowstorm here a couple days ago and so, you know, I didn't know if I was going to be needed to be a crew member today or not. So dressed in uniform in case I need to get out there and trucks and haul buckets and you know, I've used a, I've used a pick hammer and a pickaxe so far. They won't let me run the jackhammer yet. But it's been fun in that aspect. Just kind of getting out there and working, you know, with the guys just because I'm a learner by, by doing. One story I'll share with you was Halloween week and most of the crew leaders are roughly my age and we, you know, our kids are somewhat in the same age range and it was a longer job. It was going to take a few days to do and we were running into some issues. And the crew leader the day before Halloween was just like really worried that he wasn't going to be able to be done in time for trick or treating. I mean, we, again, we start, you know, fairly early in the morning and typically 4, 4:30, everybody's done and gone for the day. But this one was going to Take longer. And so he was worried about not getting his kids to trick or treat. So I walk in Halloween morning with the T shirt and a hat on, and they don't recognize me. And they walk to the back where I walked. I walked straight in. I didn't say a word to anybody. And they were like, who are you?
- [65:32]
Will Smith
What are you?
- [65:32]
Alex Holley
And they're like, oh, what are you dressed up for Halloween? I was like, no, I'm running out with you today. And so I was on his crew that day, you know, doing all the dirty work and hauling buckets from the back of a F450 down to a basement and using. That's the time I use a pickaxe for the first time. And, you know, just getting out there and learning with them, and not just learning what they do, but getting to interact with them and just kind of see how they work too. So that's been very different. I think it's a lot of fun. I don't do that every day, but I'm happy to hop in right now as needed. So, you know, that's definitely been different from the corporate world. I think just willingness to jump in and learn, no matter what it is, is very important. Understanding your audience, also very important. But there's some.
- [66:22]
Will Smith
What do you mean by that?
- [66:24]
Alex Holley
So in my experience, I mean, my crew members have a little bit different personality than, you know, working on a technology project. So kind of getting to just, you know, to learn people's different working styles, personalities, you know, where they may be in life, things like that is definitely different. But in a way, you know, I. I enjoy it, that part of it. And I think that's one reason why I knew I could do this. But there are some. Some sort of similarities too. I mean, every day is different. There's going to be challenges, there's problem solving all the time. Even though I don't know how to do all the jobs yet, I mean, I've problem solved for long enough to know how to think through things and depend on, you know, them for some of the expertise and information so far. So that, you know, if you've looked at financials before, learning how those fluctuate and work and what the numbers actually mean in reference to the activities of the business, there's a lot of that that's transferable. But I mean, I don't. I don't know the exact audience and what everyone's background is, but I know we hear a lot of more, you know, either corporate or some PE or consulting, and there's A lot of those skills that are transferable. It may just be more like there may be some, some physical aspects involved as well versus only the, the mental at least in this industry and home services. So.
- [67:49]
Will Smith
And what about levers to pull growth possibilities? Are you, are you seeing a lot of opportunities there? Understanding that you are, this is a long term thing for you, you're interested in paying down the debt. So it may be more that you're trying, kind of just trying to maintain and, and grow along with the market, but no big, big changes. How are you thinking about that and are you seeing opportunities?
- [68:11]
Alex Holley
Yeah, my, my biggest thing was I didn't want to make any drastic changes in the first six months. I mean I wanted to soak everything in. Now we have nothing too drastic, but we've definitely made some changes where it just made sense and wouldn't, didn't want to wait on that anymore. But you know, what I've kind of thought and learned is I think I'm always a quality person over quantity and I think that you know, as we're getting in leads, having you know, the quality sales guys go out and run these leads is a lot better than having multiple, like more salespeople than just to have numbers. That's been something I've learned pretty quickly. And so we've been, our close rate has increased a decent amount just with the personnel that, that we have and it's, it's proven to be true and that marketing goes along with it because it's paid for pay per click. So you know, that's kind of involved in some of the areas we get our leads. But you know, I've used a lot of my network. I didn't mention this, but when we were, look, when I was looking at companies, you know, I started making a list of my network and how we could move the needle forward with each of the different types of company. This one had the longest list by far as, along with, you know, my, my business partner. So um, we really started tapping into using that because I know that some of these calls that we're getting for leads may never have come into this company. They may have gone to a competitor or something like that. So that's kind of where I'm trying to move things forward a little bit. But go ahead.
- [69:45]
Will Smith
Well, what do you mean Alex, that you, you, you're talking to your network, that they, that you now own this business? I think what I'm getting inbound from people in your network as opposed to just Google.
- [69:55]
Alex Holley
I think what I'm mumbling about is instead of trying to come in and change a bunch us so far, utilize what we have, but grab a bigger market share and how to do that. And so that's kind of where I've focused on some right now. I still don't think I'm all the way there to be able to do it kind of on more of a full time. But it has been something I've been working on kind of diligently. But I mean we're, we're doing, we're doing well so far. We did, we did have the big rain that I mentioned. We had a. We've had a lot of rain recently, but November was our highest sales month of all of 2024. And I believe if I've seen all the final numbers that December would have been second. So I think we're, we're doing the right thing now. We don't get paid until we get work in the ground. So that's something that we're, we're working through where we may need to grow a little bit there. But. But we'll get that figured out for sure.
- [70:52]
Will Smith
But. But if you have a busy month, November and December, you said you get paid often within a few days of doing the job.
- [70:59]
Alex Holley
Those are the sale. So that's a sale. So then we'll have to schedule going out and doing the installation and the work, which we're booked out, you know, several weeks now. So we don't get paid on the number that you see for November and December until we actually put it in the ground. So it's a good thing to be booked out. But again, just learning with, you know, with what numbers mean for different activities and actions of the business, that's been something I've tried to pay attention to quite a bit.
- [71:28]
Will Smith
Anything to share about this industry, about foundation stabilization and waterproofing. I mean, it's, it's a. Is it fair to say that it's a project based.
- [71:41]
Alex Holley
Yep.
- [71:42]
Will Smith
Construction.
- [71:42]
Alex Holley
E business, very much construction.
- [71:45]
Will Smith
But it's a nice, it's not a nice to have. It's a need to have. People are calling you because there's a leak. People. People are calling you because there's a foundational issue. So that's good. I imagine there's a pretty high conversion rate. What, what are some of the characteristics of this business?
- [72:00]
Alex Holley
Yeah, and this has been something I've learned that I kind of thought would happen. But again, back to validating. But you know, we are not a, a nice to have. Like you mentioned, we're a need. So On a sunny day when somebody's, you know, having dinner outside, they're not thinking about calling beedrive the next day if they haven't seen know, water in the basement. We're more of either an afterthought or oh my gosh, it's raining so much. Or when all this snow melts, you know, and starts to, to flood into the cracks of basements. You know, that's when, when we come in basically. So we're a need. We're very much a construction company. I mean we all the, you know, we have F450s with, with dump beds in the back. You know, we have trailers, we have excavators, we have, you know, machinery and dingoes. Like it's very much a construction company, just happens to be for home services. So we're running crews, multiple crews was. That's one of the things I was probably most nervous about coming into this. But I do have a friend who has a, a fence installation company so where he runs crews. So kind of met with him a little bit just to see like horn what that was like and kind of some tips and pointers. So I've definitely, I've definitely leveraged a lot of my network for things I don't know about to help me find, find out and learn about.
- [73:21]
Will Smith
And when you say you were most nervous about running crews, what, what about it?
- [73:26]
Alex Holley
So previously the company that I operated, it was just operating like an individual technician. And you kind of knew that typically the jobs were, you know, either going to take a day or it was going to be an hour long service call these with, you know, being potentially two, three day jobs. What crew members were good at doing these types of jobs and what crew leaders were the best to suit, you know, these type of jobs and you know, how quickly, you know, people work and you know, scheduling is a big thing and that goes hand in hand with running the crew. So you know, we were, you know, with again going back to, with the snow. Like we had to change some of our scheduling this week kind of on the fly. So I think the scheduling and the cruise hand in hand was being kind of a learning curve for me, but one that I'm starting to get the hang of and I've had plenty of help, as I mentioned, from our, from the employees here. So that's been, that's been very helpful.
- [74:26]
Will Smith
Well, speaking of that at that topic, let's return now as a last question to your day one, when everybody's out in the yard and you're gonna go talk to the 20, 20 guys in hoodies. What were the contents of that day one speech?
- [74:43]
Alex Holley
Basically, I wanted them to know that, you know, I was not some big group or anything like that. I wasn't looking to cut jobs. You know, I was not looking to go out and replace a bunch of people. I wanted to keep the positions and the roles that we had. I was looking, you know, I kind of opened up a little bit personally, just let them know that I, you know, I've lived here for most of my life. I've gone to school here, you know, I have a young family, and this is what I want to do, you know, for the rest of my career and just try to provide some sort of stabilization, if you will. I know that's a foundation term too, but just try to provide a little, you know, safety to them. You know, I did a little thank you speech. I've only done like two, three speeches, I think, but I did a little thank you speech a couple days before Thanksgiving just thanking them for. For how well the transition has. Has gone. Just working with them and together with them. And they said the same back. So I think that was just making sure that I made the entrance in the right foot because I think I through things could have gone differently very easily. So I've put a lot of time and effort into spending time with them. After our meetings, when they're all loading up the trucks, I go out back with them, I talk with them, I'll help them load up, I'll ask them questions. And while I might be annoyed them some days, I know that for the most part, they appreciate it and like that I'm interested in them and interested in the job and the work and excited about it. So I've gotten some. Some comments on, you know, my positive attitude and how that's kind of changed how they go about things as well. So I just wanted to make an impact like that. And I think so far, mission accomplished on that, but still a long way to go.
- [76:34]
Will Smith
Perfect note to end on anything that I didn't ask you, Alex, that you wanted to communicate to the audience.
- [76:41]
Alex Holley
I just want to thank you. When I first found you early this year, I mean, if I didn't have meetings, I was going on walks outside if I could for hours and hours, and I would throw the podcast on. And I just. It was so cool to hear everyone's stories and a lot of them were different, but there's a lot of similarities too. And so to everybody who's been on here, just thanks for sharing your story and thank you big time, Will. It's been, it's been very, very beneficial just kind of knowing that one, other people have done it, but two, just kind of hearing the different stories. And personally, I really didn't think that I wanted to come on here, but after talking to you and if there's, if this helps anybody, I'm glad that I've spent the time to do this.
- [77:30]
Will Smith
Well, we thank you for doing it, Alex, and thank you also for thanking the guests because whenever I get a thank you, it's really, you know, people like you who choose to come on here, maybe despite their, their first reflex and, and especially how much everybody shares, like it's, it's really all about your and everybody else's willingness to get up here on stage and do this. That makes it all possible. So turn it back, back to you, Alex, and thank you for saying yes.
- [77:57]
Alex Holley
I do want to share one I'm going to tell on myself. Yeah, so when we. The first week I mentioned was a blur and so we didn't really change any systems or anything. So I'm getting set up in QuickBooks by the, the guy I bought the company from and we're like rushing through all this because, I mean, it's a short week. We're trying to get five days of work and then four in that week. You know, I, I'm trying to pay attention to what all is going on. But for whatever reason, however we set up my QuickBooks for my different entities. It didn't like I didn't have access to it for whatever reason, but my VP did. So I was like, I can at least see it. There's so much going on. You know, I would pay attention to our bank accounts and we would do all the reconciliation stuff. And I was looking at it through her, but I didn't have my own access. So this is my 20th week. I did not get my own access to QuickBooks until the 15th week. And so I would not let myself come on here, nor would my partner until we got that. So I wouldn't recommend that. I wasn't totally naive and in the dark, but, but yeah, I wanted to tell myself there's, there's a few of those from time to time.
- [79:07]
Will Smith
Well, you say this with a smile and it's kind of a funny story, Alex, which it actually sounds really stressful. So I. It was your reputation around the office for having a positive, positive attitude. I'm totally seeing here first, first person. Great. And if people want to reach out, Alex. LinkedIn email. Absolutely.
- [79:25]
Alex Holley
LinkedIn. LinkedIn. Would be best. I don't do the personal email as much as I probably should these days, so LinkedIn would absolutely be the best.
- [79:34]
Will Smith
Super. We'll have a link to that. Alex, Holly, thank you very much, sir. Thanks for coming on and congratulations.
- [79:39]
Alex Holley
Thank you very much. Thanks for having me.