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- [00:00]
Podcast Host (Narrator)
Today's guest came to Commercial H Vac with a product manager's eye. Pat Beal spent years in B2B SaaS thinking about product market fit. Does demand exist? Is the product solving it? Are there competitors crowding the space? So when he pivoted to buying a small commercial H Vac and refrigeration business in Northeast Ohio, Pat ran the same analysis. His conclusion? The product market fit here was endless. Pat closed in May 2024. The business was doing just under a million dollars in revenue. He financed it almost entirely with a seller note, 90% of the $370,000 purchase price, which meant no bank, no SBA and no personal guarantee from the seller. That structure had a practical upside as well. The previous owner could stay on and lend his license while Pat worked toward getting his own. In less than two years since close, Pat doubled the business to 2.5 million in revenue and he's on pace to close this year with 3.5 million, a quadrupling of his baseline in two and a half years with just two additional technicians. This is a happy case of pent up demand. Because the previous owner wasn't chasing business, Pat has chased it and has been rewarded handsomely for doing so. Here he is. Pat Beel, owner of Temperature Control Maintenance
- [01:42]
Will Smith
we hear it all the time on Acquiring Minds. A smart buyer closes on a great
- [01:48]
Podcast Host (Narrator)
business, then quickly realizes they underestimated how much cash they'd need to actually operate it. In a webinar today, Thursday, July 23, top SBA loan broker Heather Anderson will take a deep dive into working capital
- [02:05]
Will Smith
and its role in entrepreneurship through acquisition.
- [02:08]
Podcast Host (Narrator)
Among the topics you'll learn today what working capital actually is and how it functions in a business why so many buyers underestimate their working capital needs how working capital impacts deal structure and SBA financing. Common post close cash flow challenges including payroll and how to prepare so you
- [02:31]
Will Smith
have the liquidity you need from day one.
- [02:35]
Podcast Host (Narrator)
The webinar is Working Capital One of ETA's Most Expensive Mistakes. And it is today, Thursday, July 23rd, noon Eastern. Link to register is right at the top of this episode's show notes or on the Acquiring Minds homepage acquiringminds Co. Then this coming Tuesday, attorneys Bill Barlow and James David Williams return for an office hours session, this time joined by special guest tax attorney Joshua Siegel. How you structure your entity and your deal has tax implications that follow you long after closing. And Bill, James, David and Josh will walk you through the issues that matter most. Topics to include asset versus stock sales, F reorgs, QSBs and S corporations versus partnerships. The webinar is Tax issues, entity and deal structuring and it is this coming Tuesday, July 28, noon Eastern. Link to register is right at the top of this episode's show notes or on the Acquiring Minds homepage.
- [03:47]
Will Smith
Acquiring Minds co.
- [04:00]
Podcast Host (Narrator)
Welcome to Acquiring Minds, a podcast about buying businesses.
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Will Smith
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.
- [04:13]
Podcast Host (Narrator)
The team at Aspen HR recently published a short white paper targeted at searchers Entitled A New CEO's Guide to Human Resources. It lays out the key items you should be thinking about as you transition into CEO and owner of the business you bought. The link to download that is in the show notes Aspen HR is a professional employer organization or peo, which provides HR compliance, flawless payroll, robust HR technology and Fortune 500 caliber benefits, all for a fraction of the cost compared to using multiple vendors. Reach out to Aspen HR for your complimentary HR diligence checklist and benchmarking analysis. Go to aspenhr.com or contact Jenny Thier directly at jennypenhr.com
- [05:17]
Will Smith
Pat Beel welcome to Acquiring Minds.
- [05:20]
Pat Beel
Thanks so much Will. Great to be here. Thanks for having me.
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Will Smith
Pat, you bought a very small commercial H Vac business, less than a million dollars in revenue, but you have more than doubled it in the two years that you've owned it. We're going to hear how you've done that, what the trajectory is that you're on, but let's start, as always, with some background on you first, please. Pat sure.
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Pat Beel
So now like you said, in the commercial H Vac refrigeration space, but it hasn't always been that that way. I started my journey as a mechanical engineer at Ohio State and ended up building some startup companies with friends there. So I've always been interested in entrepreneurship and after that, jumped over, you know, graduated from Ohio State, jumped over to to General Motors where I was working on some really cool concepts with a really young group of guys. But, but the thing that kind of like the thing that I wasn't really getting my, you know, wasn't scratching my itch, if you, if you will, was a lot of the projects we were working on were like, hey, this will be great, but it's going to be out in production like 15, 20 years. So my patience wasn't really there. Ended up joining something that was a lot more fast paced. So I joined some technology startups in Columbus where I switched from being a mechanical engineer into product management. It was working with engineering managers and engineering teams and had a lot of fun doing that. But then Covid hit and basically shut everything down in the Columbus area. I was working from home in my one bedroom apartment by myself. I didn't really feel super fulfilled. So I moved back up north to Northeast Ohio, where my family's from. And I did realize that when I made that move back to Northeast Ohio, there wasn't those same opportunities to basically work in the office and be a part of a technology company really in. In this area. And so I started kind of thinking, you know, how can I get out from behind the zoom calls every day and be a part of growing something bigger? And that's when I really started to consider buying a business that was local to Northeast Ohio. So it's been a long journey. But I wanted, I do want to say that the thing that really got me into potentially purchasing a business was growing up. You know, we'd eat dinner together as a family, and my dad was in the insurance business, and every night he would be like, yo, guys, just wait until you hear about this small business owner. He's doing this, this, or this. And I just thought that was super fascinating and probably put a bug in my ear at an early age that this was something that people do and it was something that I could potentially do given the skill set that I had developed over my short career so far. So it was accumulation to kind of where I've gotten to today. But long story short, started in mechanical engineering, software, product management, turned H vac refrigeration Business owner.
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Will Smith
Pat, that story about your dad, I often wonder this with myself about my own interest in entrepreneurship. Was it that you were interested in all of those people or that you saw your dad's admiration for them? And so, yeah, that's. So you were seeing the reflection of your dad. I remember my, my own father saying early on to me about somebody in our local community that he admired. And I remember him. I remember it was the first time I'd heard the word. He said, he's very. My dad said of this guy, he's very entrepreneurial. And I said, what is that? And we proceeded to have a conversation. And. And so I've often wondered if it was, you know, chasing my dad's admiration that not. Yeah, you get it.
- [08:53]
Pat Beel
Yeah, I'm. I'm sure that's probably a part of it, Will. I just. I always thought it was fascinating that people could basically create something out of nothing or take something that was existing but maybe not completely optimized and grow it and also my dad and my whole family really was very much like, anything is possible kind of mindset. When I remember being in high school and my dad and me and my siblings getting together, like, oh, what are some of these business ideas we could do? He was an artist on the side, and so we were, like, always setting up, like, you know, art, being at art shows, and he was selling his artwork. So, like, we were kind of always around that, like, hey, if you have an idea, like, go and make it happen kind of mindset.
- [09:39]
Will Smith
Yeah.
- [09:39]
Pat Beel
And I think it was really that. That probably stuck with me as a kid. It continued on to college. Like, we in college. Like, one of the startups that we created was a carplaying app to connect students that were traveling long distances together. And it wasn't even like, a thought of, like, should we do this? It's just like, let's do it and how do we do it? And that's, I think, just how I was kind of raised. So, yeah, it was probably part admiration of, like, wanting to get that. Like, I seeing my dad be so fascinated by these people, but also part of, like, him and my mom just pushing us to be like, if you think something should exist, just go and do it. Like, make it happen kind of thing.
- [10:19]
Will Smith
Totally. That's so cool that he was an insurance guy by day and artist by night. What a superhero identity.
- [10:29]
Pat Beel
And he kind of had his own entrepreneurial journey too. Like, when he was in high school and paying his way through college, he would do odd jobs for people. He started a roofing company. So he has always had that entrepreneurial bug as well. And he ended up coming of, I think, scratching that itch through the sales route in the insurance world. But even to this day, like, we're as a family, like, we're always talking about, hey, like, what if we could do this? Or, like, should this exist? Or what about this concept? Or I heard about this other thing. So it's just kind of like, I don't know, it's just always in our conversations whenever we're getting together, which is super fulfilling for me at least.
- [11:08]
Will Smith
Absolutely. How cool. Cool family there, Pat.
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Podcast Host (Narrator)
Yeah.
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Will Smith
And so the idea of buying a business as opposed to starting something. Did you say where that came from?
- [11:18]
Pat Beel
Yeah.
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Will Smith
So
- [11:21]
Pat Beel
I do remember early on my dad talking about a mechanical engineer that was buying pizza shops. And I think that was kind of my first memory of, like, being able to potentially, like, acquire a business. I then was buying. I was working kind of my. My day jobs as in a software, product management Role and I started buying single family homes for from real estate purpose for real estate investment purposes. And that was kind of like a light bulb for me. Like oh, you can actually like go and purchase assets and you know, potentially build your portfolio this way and maybe even turn this into profession. At one time I was actually considering like flipping houses as kind of like my full time thing. And then my buddy actually purchased a heating and cooling company down in Columbus, Ohio and successfully completed that. He was about 6ish months kind of ahead of my journey. And to see him go through that to purchase that business, how that worked, that was kind of like all of these light bulbs going off at the same time. One of the software companies I was working at was actually undergoing an acquisition by a much larger organization as well. So different scale. Right. But the concept was pretty similar. So I was kind of my cup was filled up if you will, by being involved in those strategic conversations or kind of, you know, whether it's purchasing a single family home or like being kind of somewhat involved in my buddy purchasing this business or kind of like hearing about how our business is going to be acquired and stuff like that, it got me thinking. So then I ended up reading the Harvard Business Review book on how to acquire business, saw that like this is definitely possible, started listening to your show will shout out to acquiring minds and just started thinking about like okay, how can I go about this and how can I potentially pursue something like this? So I started my search probably pretty broad and I'm sure we'll talk about that. But I was like yeah, this is definitely possible. Let's start like considering this as a career path. And luckily I'm sure we'll talk about this too. But luckily my wife was super on board and she's like this is a great path for you. You kind of got to pursue something like this. And so far it's worked out well.
- [13:31]
Will Smith
Let's do hear how you approach things but because I feel like there's business buyer fit here. You were a mechanical engineer by education and then proceeded to have technical and sort of producty jobs and startup kind of dabbling in startups that does seem to pair nicely with commercial. Commercial H vac. So were you looking for something that paired nicely with your mechanical engineering background were the criteria of your search?
- [14:03]
Pat Beel
Yeah, I, I want to say that it was a super sophisticated search, but that wouldn't be truthful. So I was interested in buying a business. My number one criteria was something that was going to be more or less in person because I was Getting burnout by being on zoom calls kind of nonstop. And it by being in person. That kind of constrained me to Northeast Ohio because that's kind of where I was starting the next chapter of my life. I just had recently been married and we were going to plan our routes in the Northeast Ohio area. So that was a big. Geography was a big part of it. And then I just started kind of talking to as many potential business owners as possible. So to get those conversations, I talked to people in like the local chambers of commerce, commercial real estate agents that potentially knew businesses that were moving out of their lease because maybe the owner was retiring at the same time, my buddies purchasing that H VAC business in Columbus. So I knew that the trades were kind of more or less like a hotbed for acquisitions. I was kind of all over the place and it just kind of was by happenstance that a trades business fell in my lap. So I was talking to commercial printing businesses, painting businesses, signs businesses. I did like the trades a lot because especially the commercial H VAC and refrigeration side, as I got to know more and more of it because I came from the like the B2B SaaS world where you had that stability and that reoccurring revenue. And also working with a more of like a business client was really interesting to me rather than working with an individual or homeowner. So I guess like I started compiling the criteria of my search as I was doing it. And by the way, I was like working my full time job as this was happening. So like there was a little bit of an element will, like if this didn't work out, it's still going to be okay because I still had the financial stability of my W2 at the time. But the thing I really loved about the business I ended up buying was it's B2B, which I was very used to in the B2B SaaS world. It had the element of the reoccurring revenue, which SaaS did as well, and also the demand. As a product manager, I'm always thinking about product market fit. The product market fit is like perfect in the trades. It's like the demand completely outweighs the supply. And I was like, if that is true, then I could really optimize a business in that kind of realm and take it to the next level. So I kept using the term like product market fit in the trade because working in some of the technology companies I was at, product market fit was super hard to get to. And so it's like, okay, this is Something that has product market fit. We just have to optimize it, grow it, you know, add to it and we should be able to build a really solid company here.
- [16:50]
Will Smith
Well, you, you just encapsulated very well. One of the, one of the big appeals of ETA is that you. Not just that the business already has revenue in some stability and a lot of infrastructure and you're sort of starting on first or second base.
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Pat Beel
Yeah.
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Will Smith
But that the core problem for most entre that most entrepreneurs encounter is I. E. Build something people want has been solved in the building something people want thing. If, if you come from a sort of product tech entrepreneur background, as you do, as I do, is very difficult. And in fact yc the, the. The acclaimed and prestigious. What is why you even call itself an incubator. I guess their catchphrase, their mantra is build something people want. Point being that they're in the world of creating something from nothing, creating products. There's a lot of that. That's A, very hard and B, a lot of sort of people building things that, that frankly there's no market demand for. So. So anyway, it is very appealing to be able to focus your energies as an entrepreneur on things other than figuring out if people want the darn thing.
- [18:09]
Pat Beel
Yeah, that's already like in the trades and especially in the commercial H Vac refrigeration. Like that's already figured out. Right. And it's. The other thing I was looking at too is like this is not just product market fit today. Like this is product market fit long term, even with all the dynamics around AI and the changing landscape and technology. So maybe at some point that really like changes a bunch of. But I don't really foresee the product market fit in many of the trades, especially in the trade I'm in changing very much. If anything, like those tools enhance it. And that was an element Will, as I was looking at my next career path was like, okay, I can stay in the software product management space. I really am unsure how AI is going to impact that career path long term. And I was like, I know in the trades I think that risk is pretty minimal around that. So it just, it seemed risky but at the same time like it also didn't seem risky because it was like the product market fit is there. You know, it's really hard to disrupt this industry, you know, with the changing landscape of technology. So this is a great opportunity to go build something. That's like a long way to put it. But those were the things that were going through my mind as I was going on kind of this Search
- [19:23]
Will Smith
Looking
- [19:23]
Podcast Host (Narrator)
to secure an SBA loan to buy a business? Meet Pioneer Capital Advisory your go to partner for sophisticated buyers who want deals closed quickly and on the best possible terms. The Pioneer team has closed more than 100 SBA loans, averaging timelines well below industry standards. Founder and owner Matthias Smith and CEO Valerie Stash bring over two decades of SBA lending experience. Matthias and Valerie have built a team that meticulously works your deal from underwriting to close. You'll have a full bench working on your behalf, sales associates who streamline onboarding M and a financial analysts who craft investor grade lender decks and an operations team that manages every step of the closing process with institutional level rigor. Pioneer is not a single person but your true deal team. Visit pioneer cap.com or click the link in the notes.
- [20:30]
Will Smith
What were the criteria, the strict criteria?
- [20:33]
Pat Beel
Did you My number one was like something in Northeast Ohio, right? Something that was going to have I needed cash. I needed cash flow because I was starting a family. I couldn't just jump into nothing. Essentially something that was going to kind of.
- [20:48]
Will Smith
Would you be more specific there though? There. That's a wide range.
- [20:51]
Pat Beel
Yeah, I, I needed something that didn't necessarily meet the same salary and bonuses and all that stuff that I had before, but I needed I me and my wife knew kind of our numbers for what our expenses were and I needed to be able to pay myself at least something that was going to keep us going. Right? So I was like that was a part of my as I was starting to analyze more businesses, I was like okay, can I buy this business and also be able to pay myself at least a little something even though I know I'm going to take a pretty significant pay cut so that we can keep our lives moving.
- [21:26]
Will Smith
And what was that number for me
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Pat Beel
at the time it was like $50,000. I was like my expenses, our expenses were super low. It was like can I pay myself 50 grand and keep on going, going? And I was able to do that with this business which was great. So it was like Northeast Ohio. So in that region is it something cash flowing and can I pay myself at least $50,000? And does this business basically have product market fit and have kind of security when it comes to like not being crazily disrupted by AI in the future?
- [21:59]
Will Smith
Okay, great. Now I'm jumping ahead a little bit, but I do want to double click on how you thought thought about commercial H vac and and the how it's be. It's a B2B business, as opposed to B2C, which are the, which are the trades businesses we hear about more often. The residential H vac businesses. The home services, which of course have been so popular for the last half decade or more.
- [22:22]
Pat Beel
Yep.
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Podcast Host (Narrator)
The.
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Will Smith
So commercial H Vac. The quality of revenue, what are those, what do those customer relationships look like? I've heard you say, I don't know if you said recurring or reoccurring.
- [22:37]
Podcast Host (Narrator)
Which is it?
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Will Smith
And then like, yeah, just kind of talk, talk through the quality of revenue in a commercial H vac business as. As distinguished from residential H Vac, which is basically a lead gen game and converting those leads and just, you know, duking it out on Google AdWords sort of thing.
- [22:57]
Pat Beel
Yeah, the one thing that I found fascinating about our business so far, and mind you, like, there's gonna be other stages that I'm sure we get to, but we've spent $0 on sales and marketing and the company, as I bought it, had $0 in sales and marketing. That was really fascinating me. And it's primarily because a lot of it's a relationship game. So for example, like in our business, we really focus on any kind of customer that has commercial refrigeration equipment and they also have H vac equipment. And most of the time that's restaurants. Right. And so our kind of target Persona is a restaurant group or a corporately owned restaurant where they have a facilities team, maybe that's one or a handful of people and they manage 20, 30, 40 locations. And so a lot of our business is coming from that. So, you know, some big accounts that we have that usually kind of roll up more or less into like one relationship with one team is like the Bob Evans of the world, which is a bigger chain up in this area of the country. Corporately owned Dunkin Donuts, large franchise groups that own Buffalo Wild Wings or Wingstops or seven Brews or things like that. That's kind of our target Persona. The way that revenue really works is you basically work with those sites and they all, for the most part, want to keep their equipment up to spec so that they don't have downtime, so that they have longevity of their equipment, they can reduce their expenses. And so they have preventative maintenance packages. So those preventative maintenance packages might, you know, have us in the store two times a year or four times a year, but essentially you're taking care of all their equipment, making sure it's operating. And if there's any additional service or install work that has to come from that, you're working then with that, that group of facilities folks and, and bringing that to their attention kind of more or less being a partner for them versus just being a contractor. And that's how the business is working. So you really set. You sell a preventative maintenance contract, and that's where your reoccurring revenue comes from. Those maintenance contracts could be set up where they're paying you monthly or they're paying you quarterly, or they're just paying you on the time of service, but you can count on that revenue. And then there's additional revenue that could be generated from the service work or the install work that comes from that. So it's, it's.
- [25:16]
Will Smith
And those maintenance contracts, Pat, are they a material amount of revenue though?
- [25:23]
Pat Beel
Um, I wouldn't. There's. They're a decent amount, but I wouldn't say that that's going to be the majority of your revenue. Right. Like the majority of your revenue is really going to come from the service and the install side. And so kind of a rule of thumb that I've seen is for every $1 of maintenance contract you have, you should kind of expect about $3 of service and replacement work. So that's probably a good way to think of it. When I bought the business, temperature control, specifically, a large, large. One of the things that the former owner and team did was like they were very good at selling maintenance contracts and doing very high quality maintenance, which is fantastic. And then that ultimately converts into the service work. The one thing that we didn't have that we have started building is really a solid replacement install arm where you can now get higher dollar value that might be kind of like not, I wouldn't say one off, but it's like, you know, one specific project, higher dollar value to get that step change in revenue. But really like the meat and potatoes of the business is going to be from. That's that. That maintenance contract that turns into the service work, if that makes sense.
- [26:31]
Will Smith
Okay, so. And just to repeat what you said, so what for one. One of every four dollars. One dollar, or was it one of every three dollars?
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Pat Beel
Yeah, the way I like to think of it is for every $1 of maintenance contract you have, you can more or less expect $3 of service replacement work.
- [26:51]
Will Smith
Okay, that's what I thought you said. So in other words, 25% of your revenue, excluding any installs, kind of back of the envelope, 25% of your revenue is a nice, true recurring contracted revenue. I would say so not a ton, but 25 is a lot more than zero. That's great. Also, that revenue converts into the service revenue. So it's, It's. It punches above its weight because it maintains the relationship that then leads to the other revenue. So it's, it's not strategically valuable revenue as well.
- [27:25]
Pat Beel
Yes. And it's not like you're creating service work for the sake of creating service work. Right. It's these customers want their equipment to be maintained and to be operating so that they don't have the downtime. Their employees have a better experience, all of the goodness that comes with having equipment that's working. And so it's, It's. It's great because the customer has that feeling of like, we are truly taking care of them, but also like, the business is. Is benefiting and succeeding from that, as, you know, is benefiting from that as well. So it's true. It's kind of like that win, win situation. And you. There's not a feeling of. There's never a feeling of like, oh, like, this is grimy, or like, you. They don't really need that. It's like, no, like, there's true needs out there. And if it wasn't for the preventative maintenance, this was gonna be an overtime service call, you know, two or three weeks or three months down the road. So it's, It's a really good, like, I really like to use the word partnership. It's not just like, we show up and we, you know, fix stuff for you. It's very much like, we.
- [28:27]
Podcast Host (Narrator)
We're on.
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Pat Beel
We're an extension of your team. We. We are your partners. We give you the information for you to make good business decisions. And that just feels. That feels right. Like, that's. Feels like that's how you should do business.
- [28:39]
Will Smith
That's great, Pat. Well, I want to learn more about commercial H Vac, so we're going to return to it. As I said, I jumped ahead. Back to the story. Tell us the. The happenstance of how you did find this business.
- [28:51]
Pat Beel
Yep. So I was kind of going on my search. I had talked to a couple of business owners at this point in time. I was working as a product manager at a software business, like I'd mentioned. And I was also kind of in the middle of, like, flipping houses. I got really into that, and I'm still like, super into house projects and stuff like that. But a gentleman had moved across the street from us. His name was Rich. And I was over his house one day, kind of helping him renovate, work on his house, renovate a couple things on his house, and just kind of out of the blue. I kind of felt a tug. And I was like, hey, this is a strange question, but any chance, you know, anyone trying to sell a business? And he looked at me, he's like, yeah, actually I do, but it's H Vac. You probably don't care about that. And I was like, huh? I really care about. I think that that would be really interesting to meet this individual. So Rich ended up connecting me with the former owner of Temperature Control. His name's Steve. And Steve and I met up at a coffee shop at the time. Steve is probably around like late, like mid-60s, 65. He had run his business since 1985 and was just kind of looking towards like the next stage in his journey. And he had four technicians, a dispatcher, and then his wife was helping with the books as well and got to talking with Steve over coffee. And long story short, you know, I come home and I'm like, hey, you know Alexis, my wife, I'm like, hey, I met this gentleman, his name's Steve. He owns this, this commercial H Vac business. And she goes, really? Steve? And she's like, he's the guy that helped lead this missions trip that I went on to Costa Rica a couple years back. And he made me feel so comfortable when I was nervous going, you know, out of the country, I was like, no way. Like, what's the chances of that kind of happening? And it was in that moment that she kind of looked at me. She's like, I feel like this is a meant to be kind of thing. Like, you should really pursue this. So then over the course of the next many months, Steve and I would regularly meet for coffee and just kind of talk about the idea of me, you know, me buying the business from him. And yeah, it just, I couldn't have been more blessed with somebody to buy a business from because I feel like I've only had a data point of one, of buying one business so far. But I feel like that transition of the former owner to the new owner is so mission critical. And it has been so. Steve has been so graceful. It has been so solid to work with him over that transition period. And I think a large part of that is because of that previous context. Well, Steve's a great guy, but also it seemed like we were like interwoven a little bit. Um, if I could, if I could add to this was I didn't mention this in the pre call wheel, but my first week at temperature control, I was in the, in a basement of Steve's cousin when we were Replacing a. An AC unit. And I saw these duck decoys, and I was like, hey, Dennis, where'd you get these duck decoys? And he's like, oh, there's this guy. You know, I used to work with him at Fisher Body. His name was Bill, and he taught me how to carve. And these were some of his decoys. And it turns out those are my grandfather's decoys in his basement. And so at the time I'm sitting there, I'm very much like a person of faith and kind of of like, things happen for a reason. And I just felt like it was my grandfather who, you know, I was really close with, kind of like telling me, like, hey, you're doing the right thing.
- [32:40]
Will Smith
So, yeah, super cool. Wow, that's cr. That's very powerful. Thanks for sharing that. That extra story, Pat. And. And so when you take Steve to coffee and then you guys proceed to meet a number of times over months.
- [32:58]
Podcast Host (Narrator)
Yep.
- [32:59]
Will Smith
So it doesn't sou. This is. This is like, you quickly clicked into, let me buy the business. Let's start the process. Let's kick off due diligence. It was an unfolding of over months as you sniffed each other. Each other out. That sounds a little crude. You were really just getting to know each other and seeing if there was a fit.
- [33:21]
Pat Beel
Yeah, no, we probably talked for a good. I would. I would want to say we talked for a good eight to 12 months before we actually finalized the acquisition of the business. And it was. A lot of those conversations were about, what's your kind of philosophy on leadership? Here's some things that are happening in the business. He would be asking me, here's some things that are happening. How would you handle this situation? Because he, too, he wanted to continue on the success of the business because he had spent so much time building it out, which I totally get. So it was a lot of brainstorming, a lot of collaboration. And I'm sure Will. He was like. He was feeling me out. Like, this is some guy who has never owned a business before. You know, he is in the software space right now. He does like to work with his hands, mechanical engineer. So that probably gave me some credibility. I know his wife, so that probably gave me some credibility. But he was, I'm sure, trying to fill me, feel me out, say, like, could this be somebody that could take, you know, could jump in and help continue to take temperature control to the next level? Um, and I was also feeling him out, too. Right. Like, I was like, hey, how solid is the business? What kind of customers. I do remember, you know, he was telling me a lot of the customers names. And so I was actually calling, you know, I'd call the customers and act like I was just a random person and be like, hey, you know, who do you guys use for refrigeration work and how are they doing? And they would all speak super highly of temperature control. And so I was trying to do my diligence just to see if it was a solid run business. And all the diligence that I was doing even before I was looking deep into numbers led me to believe that even though it was small, the customers were really happy, the team that he had was really good, even though again, it was small. And so I was trying to minimize my risk in those conversations as well. Before we actually made the jump in acquiring the business.
- [35:19]
Will Smith
I suppose that because you had, you were retaining your job, you weren't in a like a white heat to, to move him toward close nor him you. Because he's got his business, he, he doesn't need to sell it tomorrow. I, I don't mean to press on this too much, but it's a little bit different of a pattern where you guys kind of both were not did. It doesn't feel like either of you felt a sense of urgency to make this happen. You know, it unfolded naturally the relationship over some months and then once everybody got comfortable, you, you proceeded or consummated things. Yep. A little different than a searcher who's quit their job and is basically every day that ticks by is a day of lost income and they really want to move into their next chapter as soon as they can.
- [36:06]
Pat Beel
Yep. I would 100% agree with that. We neither I nor he were super pressed, but we both knew we were kind of interested in something like this. And I would say Steve definitely was eyeing retiring. So we knew something was going to happen in the next six to 12 months. And we thought that there was a pretty high probability that this relationship that we had then started creating would potentially work out A large part of those conversations as we got closer to the deal started turning into like, how could we make this happen? Right. So we did get evaluation done on the business and then we started talking about dynamics of what does the paperwork look like and what are the terms of the deal. And that was if we met, let's say we met for about 12 months. That was a good like six. The back six months of that was kind of just talking about like how the deal would actually work.
- [36:59]
Will Smith
Yeah, well, at the risk of nitpicking Pat, I will say that your approach risked you guys not being on the same page. I mean, he. You may have found when you started talking numbers that he was like, well, my business does, you know, 200 of SDE, and I'd like $5 million for it. And so, you know, people who are doing this very systematically and, you know, they're always trying to. They're always trying to learn as quickly as possible if the seller has reasonable expectations. And you took the risk that he didn't. But I'm just pointing it out. I'm not.
- [37:33]
Pat Beel
No, it's a great. I mean, it's true. Like, it's very true. It's a good point. If I was, like, really, like, very focused on, like, I need to find this business, and this is the timeframe I want to find it on, and I'm. And I'm. And I don't have W2 income coming in, I definitely would approach it a lot different. I did have some ballpark understanding of kind of where his numbers were at early on. So, like, again, going back to some of my criteria early on, I knew that with his business, I could probably still pay myself about $50,000 and kind of go from there. And so I didn't have all the details, but I knew enough to say, okay, this is probably a conversation worth continuing. But, yeah, I don't know if I would recommend my approach, to be honest. That's just how it necessarily unfolded for me.
- [38:22]
Will Smith
Yeah. And so let's hear, Pat, the numbers of the business more specifically, please.
- [38:27]
Pat Beel
Yeah, so when I bought it, the business was doing about, on average, about $900,000. 900,000 to a million in revenue. SDE was about, around, like, 120 ish. 120 to 150 ish. We did get a valuation done on the business. And so Steve's books were really solid. His wife Jenny's done an excellent job with his books. And we pulled in a broker. They did an evaluation business valuation for us. And the number that they kind of came up with and said the business was worth was about $370,000 based on other comparable deals. And so Steve and I kind of getting our coffee together, we just talked about that. We said, hey, does that seem reasonable to you? I asked him. He would ask me. And basically, long story short, where we settled on was, he said, hey, if we don't get a broker involved or anything like that, he said, I'll sell the business to you for $330,000. I then came back and said, Would you be interested if I did 10% cash down and 90% seller financing? He was. And so I ended up buying the business on paper for that $330,000. I did a 10% cash down, 90% seller financing, and I had a one year more or less, a one year grace period. So I wasn't 100% sure how the cash flows were all going to work. So I said, give me at least a year to get in the business, and then I'll start paying on a monthly basis that owner's note after the first 12 months, and we'll have that paid off in five years. The one thing that I really didn't fully understand and I didn't really know how to communicate effectively was the concept of working capital. So I knew that there was some money that needed to be used to keep the business going. And so what I ended up doing was pulling in $40,000 cash into the business to keep everything going, because we didn't really work out a concept of working capital. So I would say the final acquisition price really was about 370. And it's all that little bit of cash up front. And then the seller note that I'm continuing to pay off today.
- [40:46]
Will Smith
That was fantastic. Pat, thank you for so much transparency. The working capital, that 40 grand you so wisely, what you just said is that that should be considered effectively part of the purchase price. Even though it didn't go to him in your own, it was really off of your own, out of your own savings and onto the balance sheet of the business. Correct, yeah.
- [41:08]
Pat Beel
That's how I would look at it. Um, for sure, yeah.
- [41:11]
Will Smith
And, and, and that 40. So in retrospect, was $40,000 the right working capital number? What. Now that you're in the business, how do you think about working capital? What would have been the, the right way to. To structure it?
- [41:26]
Pat Beel
Yeah, $40,000 was definitely not the right number. Those, those first first couple months was. So we can kind of get into this too, but I actually was continuing to work my W2 job after the business was closed. And so for those first handful of months, I was not able to pay myself, you know, to work in the business, primarily because the working capital crunch had me in a spot where I just couldn't afford to. It probably should have been closer to, you know, 80 to 100, and I would have been a lot more comfortable. But it is like when you're buying this small, and I'd be really interested to hear other people that have done this and have had a similar Problem or maybe they didn't. But it's really difficult to communicate the concept of working capital because the thought process is I was the owner at that time and I did those jobs and I did that revenue that should go to me, which I can understand that completely. But then you do have a business that you're handing off or a machine that you're handing off that doesn't have any fuel in the tank, which makes it really, really difficult. So yeah, it was way off. We came up with that number because myself and then Jenny, who was Steve's wife, the bookkeeper, we thought that that was kind of like, let's try it. Like, we think that this was probably right.
- [42:57]
Will Smith
Which number? The 40.
- [42:58]
Pat Beel
The 40. We thought like the 40 would be right.
- [43:02]
Will Smith
Oh, so they did understand. They did understand that there was going to need to be some, some fuel in the tank.
- [43:08]
Pat Beel
Yes, but it was really difficult to, for me at least to communicate as to why that fuel should be left in the tank by them. Right, right.
- [43:17]
Will Smith
Why they should pay for the fuel
- [43:19]
Pat Beel
as opposed to you. Yeah. Which again I can relate to. But I probably didn't handle that situation like from an E, like a true ETA perspective. Like I, I didn't handle that situation right and I didn't communicate that appropriately as we were like closing on the deal. But I also, at the same time I was, I saw so much potential in the deal that I was okay with just doing what it took to get the deal done. Which maybe was naive looking back at it as turned out. But yeah, I was just like, okay, if I need to bring this $40,000 to the table, I'll do it. I just need to get in there and I can, I can really make a big impact. That was kind of my, my main focus,
- [44:01]
Podcast Host (Narrator)
you know. Enzo Technologies as one of the leading IT managed service providers serving the search community. Led by Nick Akers, an acquiring minds guest who bought the 35 year old business. The team at Enzo regularly works with searchers and their acquisitions. And one feature of acquired businesses that Enzo is seeing over and over is the new need to implement cybersecurity promptly. During the transition. So many acquired small businesses either have glaring vulnerabilities, lack security best practices or both. That step one to de risk the deal you just closed should be addressing these issues. INSO is your full service IT MSP for post close stability. They assess your target, surface the biggest risks in plain English and give you a day one through 30 plan to cut exposure, prevent downtime and even find cost takeouts like bloated telecom bills. Check out enzotechnologies.com I N Z O or email Nick directly at nick@enzotechnologies.com
- [45:17]
Will Smith
well, let's revisit the other components of the deal. I, I, I don't think you should be beat up on yourself here. I mean, so a 330 on. Call it, call it. 130 of ste. You said it ranged from 120 to 150.
- [45:31]
Pat Beel
Yep.
- [45:32]
Will Smith
So call it, let's say, actually say, let's say 135. 135 times three is exactly 400.
- [45:39]
Pat Beel
Yep.
- [45:39]
Will Smith
And so he offered it to you for 330.
- [45:42]
Pat Beel
Yep.
- [45:42]
Will Smith
So that's a, what, two and a half X, is that right? Yeah, about two and a half X. So that's a nice valuation. Now it does of course need to be a low valuation because it's a small fragile business. So you're, you're not going to pay up for something like that. But still you didn't pay up. That's good. Also, it was 90% seller financed and he gave you a grace period of a, of a year, so, or the loan was on standby for a year.
- [46:10]
Pat Beel
Yep.
- [46:11]
Will Smith
Over. And then a five year amortization. So six years in total for to pay off the full price, right?
- [46:17]
Pat Beel
Yep.
- [46:18]
Will Smith
So you brought 10% of 330. So you brought $33,000 to the table that he got on day, I mean that's all he saw.
- [46:27]
Pat Beel
Day one when I signed it. Yep.
- [46:29]
Will Smith
Handed him a check y $33,000 and then you brought another 40. You're buying a, a small and fragile business. But, but you're also not, I mean, I feel like this is a pretty mitigated deal structure. The, the seller financing, was that personally guaranteed?
- [46:48]
Pat Beel
That's another big part of the deal that we should probably hit on. So I put up, I, at the time I had a couple single family home rental properties and so I basically put up as collateral enough property value to cover that on the balance of that loan if need be. So we did put, we ended up putting liens on those properties. But also I felt reassured because God forbid something went awry. I'm not losing my house that I was living in, you know. Yeah, I'm not losing. The assets that I was putting up were assets that I don't want to, I don't want to lose those assets. But if worst case scenario happened, like, I'd still be able to, you know, gather myself and, and move on and, and still be okay.
- [47:38]
Will Smith
Um, so, well, that, that is one of the Benefits of buying small is that, God forbid, it just goes to zero.
- [47:45]
Pat Beel
Yep.
- [47:46]
Will Smith
Depending on your balance sheet. And everybody's situation is different, but you're more likely to be able to absorb an absolute failure.
- [47:54]
Pat Beel
Yes.
- [47:54]
Will Smith
Than if you buy a, you know, max out your SBA loan and it's got, you know, four and a half million dollars of SBA debt hanging over your head.
- [48:02]
Pat Beel
And I also knew too that, you know, my monthly, when it would hit my monthly seller note the business as is today, without having to grow it, it would, I would still be able to sustain that payment, no problem, and also pay myself at least $50,000. So I was doing very simple, simple numbers and math on an Excel spreadsheet, but I felt pretty confident in that.
- [48:22]
Will Smith
And Pat, but also talk to us about this period where you retained your W2.
- [48:28]
Pat Beel
Yes.
- [48:29]
Will Smith
That of course mitigates it a ton because you actually have income. You, you have, you still have another source of income, one that is presumably a lot more than the 50 that you were going to pay yourself out of the business. But I also assume that you couldn't sustain that because in particularly in such a small business, people were going to need to see their new owner leader there. So how are you thinking about that?
- [48:55]
Pat Beel
The plan was initially to leave the W2 and start full time in the business. So I wasn't really ever accounting for having that W2 income. But at the company I was at, I knew we were more or less in a transition period and potentially going to be acquired. And so there was, the business itself was that I was working at as a W2 was changing and evolving and temperature control was so small and kind of everything. A lot of the day to day operations was run through the dispatcher so I could be there and handle, you know, handle things and meet the team and be on site with the guys. But also at the time in that, in that W2 job, I was a lot of like, a lot of sales and so I could bring my like what I was doing when I started was like bringing my laptop on service calls with guys and I'd be like, hey, I gotta take this quick call. And I would jump on like a sales call in the van for the W2 and then go back to the service call. So like the goal was to never continue to really work that W2. It just happens, it was like, happened to kind of work. But once I got to the six month point, like, basically I bought the business in May of 24. Once I got to December of 24, I was like, we've already grown too much that I can't do this. I was basically working the W2. I was working H vac during the day, working the W2 at night, and just kind of getting burnt out. I was like, the business is in a spot now where I can really confidently sustain myself. So let's move on from the W2 at that point.
- [50:38]
Will Smith
Yeah. Well, you didn't plan it that way. And it was probably a desperate six or seven months, but from a financial and cash flow perspective, it sure. It sure did give you breathing room. You. I mean, you had your salary, and you didn't have to pull anything out of. Out of. Sorry, what's the name of the business?
- [50:58]
Pat Beel
True Temperature Control. Temperature Control. Yeah.
- [51:01]
Will Smith
I mean, you didn't have to take anything out of temperature control control. So you could just be reinvesting what would have otherwise gone in your pocket that whole time.
- [51:08]
Pat Beel
Yep, it was.
- [51:09]
Will Smith
And the. And the guys were cool with that. I don't. When you would take out your laptop on a. On a service call, they weren't like, oh, who's this? Who's this? New kid, thinks he can, you know, moonlight, you know, whatever their.
- [51:25]
Pat Beel
Yeah.
- [51:26]
Will Smith
Notions might have been. It. How is that?
- [51:29]
Pat Beel
That's such a good question. I don't. I don't know if. If everybody on the team really knew, to be honest with you. Um, the thought might have been like, oh, yeah, Pat is just taking a call for something. Or maybe they didn't care. I'm not sure. Uh, I never got pushback and never received any questions. Um, but really early on. And we can dive into this, too. But I made it a point to let these guys. Cause we had. We had four technicians, right. So if one of those technicians left, it was not gonna be good. And so I really made it a point and continue to make it a point to have. Relate. Like, relationships are everything in this business with your customers and also with your team. And so to have those relationships and let the team know, like, hey, I got your back, kind of no matter what, was a huge thing for me. And also coming in and not being like, oh, I know everything, and, like, help me learn from you, help me understand what's broken, and I'm here to help fix it. I'm here to help kind of build. I'm here to help, you know, help you guys make more money. That was my approach. I knew I needed to have solid relationships with the guys. But going back to your initial question, like, I don't. I never received pushback. I never received anyone questioning. I Don't know if they were amongst themselves, but it never became a problem while I was doing that.
- [52:48]
Will Smith
Great, Pat, let's carry on now and hear about your ownership. So we've kind of just heard about those first seven months again. You closed in May 2024, it was December 2024, where you did break ties with your W2 and go all, you know, full time in temperature control. Anything else to say about that transition period?
- [53:12]
Pat Beel
Yeah, yeah, I would say again, like, having a former owner that is super supportive and helps with that transition was extremely beneficial for me. So what I mean by that was we, my first day, we got into a room, you know, there's four technicians, the former owner and the dispatcher at the time, and introduced. I get introduced to the team and kind of tell the team about, you know, why I'm here and why, you know, why I'm excited about this. And, you know, I do remember telling the team, like, hey, take a moment to look around this table and, you know, remember this moment because a year from now, two years from now, five years from now, like, you guys are going to be the OG guys that you say, like, remember when? And I really.
- [53:58]
Will Smith
What a good line.
- [53:59]
Pat Beel
Yeah, I just. And we actually had a team meeting at the two year mark just recently and I showed the picture of the team, you know, at the time and I was like, guys, remember when we were, you know, remember when we were just the four of us in this room? So super, super cool. But yeah, I just, my, my approach was just to be kind of like, just learn about the people, learn about what was working, learn about what wasn't working. But my approach was not like to change anything. And going back to having an owner, a former owner, that was super helpful in that transition. You know, Steve came in and was like, hey, I really am confident in Pat. He's going to be great. He's going to be a great leader for you guys. He was definitely building me up, which I think reduced some of the potential pushback that I could have gotten because it's maybe very easy for the team to just perceive me as, oh, who's this young guy that doesn't know what he's doing? I think they saw early on I was super interested in learning about the operation, learning about them as individuals, learning about their goals, what they're trying to accomplish in the next 1, 2, 3, 4, 5 years, and being a part of building something. So that was what I really remember from early on. And then diving into the weeds, I just saw a huge opportunity for Follow up. You know, the business was running. You know, Steve at that time, you know, he was kind of just tired in his career and looking for the next thing. So I'm sure things weren't perfectly optimized and I just saw an opportunity to. Guys would send work back into the office and say, hey, you know, this customer needs this, this and this. And literally just to come part, like put that together and proposals and send that out in a timely manner and effectively communicate to the, communicate to the customers. And even without growing the number of technicians, like we vastly grew the business. So it was early on it was like a lot of like ride alongs, learn about the trade, learn about the intricacies of the equipment and then just meet the customers, communicate to them and follow up on work. And that's, that was the main focus probably for the first eight months to eight to 12 months without really changing any processes, systems, adding new people, anything like that. And it worked out really well. So then you start thinking, man, Pat,
- [56:15]
Will Smith
that's the, that's the pattern that we hear about. And you, you wonder if it's overstated where the retiring owner is. You know, he's kind of taking his foot off the gas, so he's not hungry and he's not chasing business. And all you got to do is kind of return phone calls in quotes, you know, just be more responsive to new and existing clients. And because the like going back to this point of product market fit and demand, the demand is there, it's just not being, it's just not being seized by the current owner because they're not as hungry as they once were. And so if you just come in, um, and start being more responsive, you can watch that revenue go up. Yeah, again, that picture can be overstated, but it sounds like in this case it was true and has, has worked swimmingly.
- [57:06]
Pat Beel
It's worked great. Yeah. Like my, my whole thought has been my, our job at temperature control is to get you like you as a facilities manager, you know your business inside and out. Our job is to give you business information for you to make the right decision for your business. And that's all I was trying to do early on. And it like was working and continues to work. And it was just that follow up, like this was not, this was not like come in here and turn on a new website. This was not like come in here and toss like marketing dollars in. It was literally just follow up on the existing work, build the relationships and go from there. When I started, for example, like every, this was crazy. To me. But every new customer that would call us, that wasn't a contracted customer at the time, the dispatcher would just say, nope, we're not taking on any new customers, and then just hang up.
- [57:58]
Will Smith
Oh, man.
- [57:59]
Pat Beel
And I was like, whoa, what's. What's going on? So.
- [58:03]
Will Smith
And did Steve, Steve tell you this? Did he recognize that all the money that was being left on the table,
- [58:08]
Pat Beel
Steve was very transparent about that. Yeah, Steve was very transparent about, you know, we're really capped on capacity. It's. He was. He would also tell me, like, it's very hard to find. Find technicians. He would also tell me, like, I'm getting emails all the time for new work and install work, but we don't have capacity. And again, like, no fault to Steve at all. He was just at a time, at the time of his career that he wasn't interested in taking that on. Taking on that headache, taking on the additional, like, burden that comes with that. I definitely was interested in that. And so, yeah, he was. That's one of the things that also kind of got me interested when we were having those coffee shop chats was, you know, Steve would be like, yeah, we're three months behind on, on our maintenances and we can't take on any more work. And again, I'm thinking product market fit, you know, like, we just have to fulfill this capacity somehow fulfill this demand and we'll be able to. To figure it out. The other thing I was thinking too, Will, was it is very. It's hard to find technicians, right? But I was kind of placing a bet on, you know, if you build the right culture, if you, if you really focus on craftsmanship, you can, you can really attract, like, really solid talent and also like young talent that wants to sustain and be at the company long term. And so that, that has kind of
- [59:29]
Will Smith
proven to say more.
- [59:30]
Podcast Host (Narrator)
Say more.
- [59:30]
Will Smith
Pat, you, you.
- [59:32]
Pat Beel
Yeah, yeah. Like, like nowadays in the trades, and you've probably seen this, and the listeners have probably seen this, but like, the generation tool belt is like a very real thing where kids are opting not to go to college and pursue a career in the trades and get paid really well to do it. And at the time, the team that I had jumped into when I acquired the business was pretty young. I mean, the average age of the technicians, the former owner's son, was probably in his late 30s, early 40s. The other technicians were in their 20s. And everyone. I was very fortunate. Everyone on the team was really interested in what they were doing. And my thought process was, I bet some of these young guys have additional friends and colleagues that are interested in building a career in the trades as well. And so if I don't treat them like a number, you know, if I pay them the right way, because the technicians were pretty vastly underpaid or they were just underpaid, you know, if I can pay them the right way and show them like a career development progression and this is not just a job, but this is like a career and you can actually make a great living doing this and building a culture where, you know, people want to hang out after work kind of thing. You know, we'll, we'll be okay. Like we'll be able to find technicians. We'll first tap into the ecosystem of our existing team. And that's exactly what we've done. You know, we've, we've built our team based off the referrals that came from the existing team. And there's also been an element too of getting some talent that were just unhappy working at some companies that were acquired by larger private equity groups where they started to be treated a little bit more like a number. We have that very much just small, locally owned. There's no other larger group in Chicago or Cincinnati telling us what to do. Um, we have that tight knit bond and I think that's what, that's what people want, you know. So even though it's been hard to find technicians, when you have that and you're focused on like that kind of culture, if you will, it gets a lot easier. That's what I've seen over the last two years.
- [61:41]
Will Smith
Really good stuff, Pat. And, but interesting that the technicians are younger because we. The generation tool belt, by the way. I hadn't heard that phrase but of course I'm familiar with the concept that the rising appeal of the trades, but I still thought it was very early days in, in this trend and that so. Meaning that most technicians today are still going to be on the older side. They're going to be basically in the same realm of age as, as the owners themselves. That's, that's the pattern that you see time and again with my guests who buy trades businesses. So anyway, just to comment that, that I'm interested that it seems like that maybe the trend of younger people getting into the trades, at least taking your business as one data point, is actually more mature than I thought it was. It's further along in that trend than I thought.
- [62:32]
Pat Beel
That's what I, that's specifically what I've seen Will, in every, every young technician or, or wannabe technician That I interview, I do ask them, I say, hey, like, help me give, give me like a pulse, give me a data point. Like are people in high school? Are they pushing you into college? And more and more the answer I'm getting is is no. Which is super exciting.
- [62:53]
Will Smith
Yeah.
- [62:53]
Pat Beel
And I think it's a great, it's a great career path for them as well. So when I was in school, you know, however long ago, it was definitely like, yeah, you're going to college. Like there's no, like you're, you're just going to go to college. But it seems as though that, that people are still pushing college obviously, which is, which is great.
- [63:12]
Will Smith
Yeah.
- [63:12]
Pat Beel
But it seems as though it's less and less of a absolute that you're going to college and more and more of a, hey, yeah, like the, the trades and working with your hands and moving atoms is actually a lucrative career path for you.
- [63:25]
Will Smith
Well, as any, any of the listeners will know, there's just, there's, there's just this confluence of factors contributing to that. AI is the, the big one. But that is, but, but one of many, Pat. The speaking of this particular trade, of course licensing is usually a factor in trades businesses. Not always, but certainly in an H Vac business. How did that, how was that structure? What does that look like?
- [63:50]
Pat Beel
Yeah, so that's, that's a really important part of any kind of trade specific deal. Depends on what your state requirements are. Right. But in the state of Ohio, you do need, in my business, you need an H Vac license and a refrigeration license to do the work that we do. The kind of, the catch is you have to have five years of experience working under someone that is a license holder and show five years of permanent jobs in order to get that license. Or I believe there's also kind of a cut the line if you have an engineering background where you can test, I believe after three years. But I didn't qualify for either of those. Right. So I had to again know that I was buying a business and we were going to be okay from the licensing standpoint. And Steve was grandfathered into having a H Vac and refrigerations license years ago and was super gracious on like understanding that this is obviously a need and that if I, you know, was to acquire this business that he would let me use the license for that five year period to allow me to go and test or use it, you know, as long as I needed it essentially to go and test. And so that was a really big point of contact or point of conversation in those coffee chats was how that would work. And I felt like it was kind of a good give and take because I had this 90% seller note that I owed him. But also it'd be a lot harder for me to deliver that too if I didn't have that license. Right. And he obviously wanted to see that 90% of that seller note. So it was kind of like we were both benefiting from him being able to retire, step away. I could still use his license and as a result of that, I could still make those payments to him. Right. So it was a win win in that regard. Today we continue to use his H VAC and refrigeration license and I do hope to test next year for my license and see how that goes. But yeah, the licensing is a huge part of this commercial H VAC and refrigeration business.
- [65:52]
Will Smith
A few things to call out on this Pat, which is important. The fact that you didn't do an SBA loan here is what enabled this. Because if you were to do an SBA loan to buy this business, the current rules say that he, he, I mean the SBA doesn't want the previous owner to stay in the business, so he would have to be an owner of the business. He would have to roll some equity for his license to remain in effect. I believe I have this right. I should know this. And if he was on the cap table, then that also meant that he was going to have to personally guarantee your SBA loan, which this is a new rule change from last year which
- [66:45]
Podcast Host (Narrator)
effectively
- [66:48]
Will Smith
just kills that whole structure because some seller owner is not going to want to have to personally guarantee your have personal guarantee hanging over there.
- [66:57]
Pat Beel
SBA loan. Yep.
- [66:59]
Podcast Host (Narrator)
So this.
- [67:00]
Will Smith
So all of which to all to say that there is another subtle but powerful benefit to buying buying small when it comes to a trades business where there's a licensing thing. If you can buy so small and get such a, such a structure as you did 90 seller financing, that's rare, no matter the business. Big, small, everything in between. But if you can do it and you can completely avoid doing SBA at all, that simplifies. I mean that, that simplifies the licensing thing dramatically.
- [67:29]
Pat Beel
You're.
- [67:29]
Will Smith
Because there's nobody, there's nobody there, namely the SBA or SBA rules saying you can't do this, he can just so he is he a de facto. Not de facto, but sort of on paper employee. Employee of the business.
- [67:43]
Pat Beel
You got it. You got it. Yep.
- [67:44]
Will Smith
But he's not being paid. But you're not the paying him as an employee. You just have the seller, the seller note structure.
- [67:51]
Pat Beel
You got it. Yep. And you hit, you hit on such a good point. One of the things about this deal of owner financing is like you cut out so much hoops. So many hoops, if you will.
- [68:04]
Will Smith
Yeah.
- [68:04]
Pat Beel
And like that conversation about the licensing, for example, that was 1:30 to an hour long conversation over coffee. So it was like, yeah, we can do that, we'll do that, we're good and we move on. So yeah, yeah, it was. Yeah, it was way. I was so thankful that I didn't have to necessarily go through the hoops of working with a bank or working with the sba. And also for Steve's end too, like there's capital gains tax benefits of getting that payment over time versus just in one lump sum and all the things that come with that too. But kind of along the lines of buying small, you know, just transparently, like, I don't know if Steve had a ton of options, you know, on like when you're that small like it, it's kind of tough to sell it to a group or a private equity group. So like you are willing to be a lot more creative in the deal terms. And I think that's probably why we were able to get to a point where he was okay with the 90% seller financing because maybe there wasn't a ton of options really available there outside of potentially just shutting the business down.
- [69:10]
Will Smith
Yeah, I mean, and I hear that although I'm a little, I'm a little surprised, at least in H Vac, that he wouldn't have had some other buyer because as we know, private equity has just devoured the category more on the residential side, but I'm sure on the commercial as well. And while a private equity certainly wouldn't buy a tiny business like this as their platform, you can see them being happy to buy it as just a little tack on, bolt on. But maybe not. Maybe it's even too small for that. Don't know. But point remains, when seller doesn't have a lot of options, that benefits us as buyers.
- [69:47]
Pat Beel
Yeah, totally. Needless to say, you can just get more creative with how you want to structure the deal and what that payment looks like and all those things.
- [69:55]
Will Smith
Yeah. And just to underline something that you've already said, but it's so important if you that 90% seller financing, so effectively all of the enterprise value of this gentleman's sale was tied to your success and your success is tied to his license. It's just it's just such a mutually reinforcing skin in the game.
- [70:18]
Pat Beel
100.
- [70:18]
Will Smith
Because, because off, you know, there might off. I mean, often we hear about seller financing is 10% or 15, maybe 20% and people act like that's enough of enough skin in the game for the seller, skin in the game or investment in your future that that's going to keep them really incentivized. And I've never felt that that's material enough for the seller to care that much. A little. A little. A little additional 10%. But 90% is basically effectively the whole enterprise value is tied to your, to your success.
- [70:53]
Pat Beel
Yeah, now, now if I did fail for whatever reason, he still would basically have access to those properties that I was talking about. But, but yeah, like he, he wants to see the business be successful. And again, like I need access to that license. So it's again a kind of a win, win situation. Yeah, he, he did also will like, he did stay on, you know, the business for. Our goal was to basically stay on for that first year where I wasn't paying the seller financing. He would stay on as an employee and I would pay him as an employee. But we did get to, I can't remember exactly what month mark it was at, but we got to a point in time where Steve and I had a conversation and he's like, you understand how to run this business now? And I was like, yeah, I feel like I do. And then he went down to part time and then ended up, basically we said like, okay, we're good, you know, we're, we feel pretty confident about this. And then he went completely, you know, retired, if you will. So it was supposed to be a full year with him being on. I do think he officially retired probably after the first seven or eight months and went part time after the first three or four months. But again, he was great. And you know, this is Pat to the team and also to our customers. You know, this is Pat. He's going to be the main point of contact, everything like that.
- [72:15]
Will Smith
Yeah, but Pat, didn't you need him as a technician given that you're doubling your business? Speaking of that capacity constraint, now that you were saying yes to all this new business, where did you find the extra capacity to serve all that new business?
- [72:30]
Pat Beel
When I bought the business, like I said, we were doing around 900,000 to a million in my first two years. We doubled the business on the revenue standpoint and, and we went from four technicians to probably six. So there was like a lot of like unused capacity essentially like There was a lot of like a higher dollar value jobs that we could have been working on and that all came from follow up. And so it's, it's not like we had to double the number of technicians necessarily in order to double the number of, to double the revenue at least for that first growth stint. Now if that, that probably is going to be different for future growth. But no, like he, Steve was not a working technician. He was more, I would say like more so like a service manager if you will. But he had built the business in a way that a lot of the work flew through the dispatcher and he was not necessarily involved in the day to day which excited again as a buyer, I'm seeing that he's spending this time, a lot of time in Florida and the business is still running. I'm like, oh, oh yeah, okay. Like this is good, this is a good thing.
- [73:39]
Will Smith
Oh well. And going back to buying small, like if you can, buying small, kind of the key reason not to is because the business is fragile. But if there are, if there are signs that in fact the business might not be as fragile as a typical really tiny business is, in this case that, that the owner is spending a lot of time in Florida, that sure is a happy signal that this isn't as fragile, as fragile a business as it seems.
- [74:04]
Pat Beel
So business might not be, business might not have been optimized, but it shows sign of being able to run without the owner's involvement in everything. So again I'm like, this is, that's a good thing, right? So there was a lot of like, as I was getting more and more into learning about the business, there was just a lot of like green lights where I was like this, that's good. You know, this other thing, that's good. And I felt as though my risk again was fairly minimal. Like buying it, buying a business this small is, is not it. You're kind of buying a job. It's risky, you know. But I saw a lot of green lights where I was like, okay, like there's some bones here that and there's a foundation here that we can really build off of for sure.
- [74:43]
Will Smith
And so you doubled the revenue in the first two years?
- [74:47]
Pat Beel
Yep. So first two years we doubled the revenue and then if everything goes well, the back half of this year, we should be on pace to triple the revenue in three years.
- [74:56]
Will Smith
Wow. So, so you bought in May20, closed in May 24. We just passed May 26. So you're, you're at month 25ish right now. And so revenue today is about 2 million. Your run rate is about 2 million.
- [75:09]
Pat Beel
So. So when I say we doubled the business, we did so last year. We. Last year, the calendar year of 2025, we closed about $2.5 million in revenue. And then this year, 2026, we should do about 3, 3.35 to $3.6 million in revenue. Oh, yep.
- [75:29]
Will Smith
So, okay, so by the end of this year, which will have been two and a half years under your ownership.
- [75:34]
Pat Beel
Yep.
- [75:36]
Will Smith
Right. Two and a half years, you will have quadrupled. If you're on track to have quadrupled revenue from 900 to 3.6. Is that.
- [75:46]
Pat Beel
My math has been wrong? Yeah, it'd be quadrupling. Yep.
- [75:49]
Will Smith
Yeah.
- [75:50]
Pat Beel
Because 2.6.
- [75:51]
Podcast Host (Narrator)
All right, Mr.
- [75:52]
Will Smith
Mechanical Engineer.
- [75:53]
Podcast Host (Narrator)
Wow.
- [75:53]
Pat Beel
I feel sill. 2.7 would have been tripling the business.
- [75:57]
Will Smith
Tripling.
- [75:58]
Pat Beel
Yep. You're right.
- [75:59]
Will Smith
Yep. Wow. Yep. So now you've got.
- [76:02]
Pat Beel
Thanks for helping. Hey, thanks for helping me realize that.
- [76:07]
Podcast Host (Narrator)
Yeah.
- [76:09]
Will Smith
Now, so let's, let's assume that you hit that big assumption still. Six more months to go. Seven, six and a half more months ago. We're, we're recording in mid June.
- [76:17]
Pat Beel
Yep.
- [76:19]
Will Smith
Let's assume you get there, though.
- [76:20]
Podcast Host (Narrator)
That's a $3.6 million H vac business.
- [76:24]
Will Smith
Another good reason for, or another kind of appeal of buying small is your business. Now, two and a half at the end of this year, two and a half years in is at the size where you would have searched and searched and searched and hopefully found a business of that size. You would have had to take an SBA loan. You'd have all this personal guarantee debt hanging over your head, understanding that you're, that your seller does have liens against your property. So it's not. There's teeth in your loan as well in your seller financing loan, but still. So, but instead you grew yourself there and your loan payments are relatively de minimis for a $3.6 million revenue business. And how does profitability look? How do, how do earnings look? How does that $50,000 a year salary you're going to pay yourself look?
- [77:14]
Pat Beel
Yeah, I still, I still have kept my salary really low, to be honest with you.
- [77:17]
Will Smith
Okay.
- [77:19]
Pat Beel
Because my, my mindset is just keep every, like, keep reinvesting in the business until, like, just keep reinvesting into the business. And so the profitability obviously is scaled really nicely. Where we are in this zone now where I've, you know, a lot of stories I hear is between this like 2 million and $3 million revenue mark in this trades business. You, you. It's kind of called like owner's hell, if you will, where the owner was able to, to do so much, right? So like I did take on like, candidly I took on a lot of work, you know, to get from 900,000 to, you know, the 2.5 million I've had.
- [78:03]
Will Smith
What do you mean took on a lot of work?
- [78:05]
Pat Beel
Like, when I say work, like this is not passive, right? Like, like review, like, like reviewing jobs, like even like scheduling jobs, making sure parts are on order, you know, making sure the fl. The fleet is maintained and everything. You know, sales, operations, everything that comes with owning a business. Like you can, from what I've seen so far is as the owner, you can kind of manage, not in a 40 hour workweek, maybe a 50 or 60 hour workweek, but you can kind of manage that up to about like $2 million. Like more or less yourself. Like you'll probably have some help in the office. But as soon as you start hitting at least what I've seen is I've gone from like that 2 to that 3ish range, it really starts. Stuff starts to really get difficult and you have to build out the systems and the processes and get the right people in the right seats in order to scale beyond. So right now with that, going back to your question about profitability, right now I'm trying to reinvest as much of that money as possible so that I can build the right seats, build the right roles, build the right systems, build the right processes so that we can scale well beyond that 3 million and hit 5 and then hit 10. So when I went from 900,000 to 2.5, the profitability is awesome. Like, oh man. Like, this profitability is incredible. Like, I can't believe that I was able to buy this business at that price point given where this profitability is at. But now it's like, okay, let me spend some of that profitability, right? So I can maybe reduce that a little bit in hopes of continuing to grow. So it's not. I, again, maybe I was naive when I started this journey, but I kind of thought like everything was going to be extremely linear. You just add more technicians, add more customers. The profitability always maintains in that desired 15 to 20% range and everything's good. But it doesn't really work like that, right? There's ups and downs and kind of stages of growth from what I've seen. So in order to kind of get out of that owner's hell, period, it's a lot of like reinvestment back into the business to get to 5 million, then ultimately get to 10 and beyond.
- [80:19]
Will Smith
Well, in a human capital business and a services business where there's no capex, it kind of, in theory it kind of should be linear. You have more work and you need three more guys. You. Okay, so there's some upfront investment of the three guys, but really if you can deploy them on day one, they should sort of be generating 20% EBITDA of the revenue they generate from. From day one, where the staging become, and I'm oversimplifying dramatically, like, you know, there's always kind of infrastructure costs of building an organization. Maybe that's what you're talking.
- [80:59]
Pat Beel
That's what I'm talking about.
- [81:00]
Will Smith
Maybe, maybe we're talking about making a hire or two.
- [81:04]
Pat Beel
Correct.
- [81:04]
Will Smith
That are not revenue generating. Correct. They're, you know, they're administrative. And so all of a sudden that's big expense with. It doesn't generate any net new revenue sort of thing.
- [81:14]
Pat Beel
That's exactly what I'm talking about is like, yeah, building out like the right coordination roles. Building out the right operations manager roles. Also like thinking about like commercial account management and how do we go sell? Like all of those things are more or less kind of in that overhead bucket. That is that, that's the investment I'm talking about. Where a lot of that.
- [81:33]
Will Smith
Yeah.
- [81:33]
Pat Beel
Yep.
- [81:34]
Will Smith
Gotta let you go here pretty soon, Pat, but wanted to ask just two final questions. The learning the trade. So we've heard you talk about, you know, kind of you learning. Yeah. But you're never going to learn and that you want to get your own license. So I guess you are going to learn some true hard skills here. You'll have to pass a test at least to get that, to get that license yourself. But what does it look like? How much are you trying to learn and how has that been? And really put yourself in the shoes of a searcher who might themselves be considering buying a commercial H VAC business.
- [82:17]
Pat Beel
Yeah.
- [82:18]
Will Smith
How technical a journey has this been for you or does it have to be for you, the new owner?
- [82:23]
Pat Beel
Yeah, I've, I've just learned by doing when it comes to the trade. Day one, when I started, I really didn't know much. Um, I had done a little bit of research like about the refrigeration cycle leading up to day one. But still I was extremely novice. Um, I'm, I'm not an. I'm not, I wouldn't say I would be the best technician. Um, I don't think it's actually good for the business. If I was a technician, I think it's a competitive advantage that I'm not because I can think about the systems that are needed and kind of like where we're going and the vision and all of those things that are needed from business ownership. So I view it as a competitive advantage that I couldn't jump in a truck necessarily and solve every single problem that a customer has. Because my job is to build that system, to recruit, to grow, to sell things like that. I have learned a ton because when I first started, I was the person that was doing all the follow up proposals. So, you know, call would come in from a tech, hey Pat, you know, we got a cracked heat exchanger on this rooftop unit, you know, and basically from there it's just asking questions to the guys like, hey, what does that mean? What, what is this involved? What's the ramifications if this doesn't get fixed? And then going on this job site with them, right? And doing ride alongs, that was a huge part of beginning, was just getting your hands on the equipment, asking a ton of questions and learning. And then also, I can't say this enough, but there's so much good content on YouTube. Shout out to this gentleman. His name's Chris. He runs a channel called H vacr Videos. He records every single service call and he works primarily in commercial restaurants and it's every call that we get. So for a long time there, I'd watch a video a day just to understand, okay, this is how he approached it. These are the numbers that are important and then simplifying it, right? So like, I'm a big fan of analogies and I've been able to more or less simplify the refrigeration cycle into a baseball field, which we don't have to get into, but just simplifying some of these complicated, you know, concepts so that I could understand it. And then I could also teach people as well to get a basic baseline understanding. So I would say by now I'm, I'm pretty, I'm pretty technical, like technically competent, but I don't think I needed to be 100% technically competent leading into the business. Like, I think I just needed to have a genuine interest in what we were doing, the product and the service that we were offering and I could kind of learn from there. But to buy a business like this, you definitely do not have to be an expert technician. I think it's actually a competitive edge if you aren't an expert technician, because you could take something that got to A point that I had bought temperature control at and like, really build the structure around it to get it to that next level, if that makes sense.
- [85:13]
Will Smith
Yeah, but you are going to try to get a license in your name, so you will. So what will that look like? You will have to have some real level of technical competence to pull that off. No?
- [85:25]
Pat Beel
Yeah, definitely. Well, good point. And yes, definitely, a lot of that will, from my mindset, will be coming from the knowledge I have now, which will be useful, but then just putting together a study plan, like, one thing I was really good at growing up was school and tests. And so I'll create some sort of structure together to, to study, to learn as much about the test as possible and to put that time in to pass that exam. So, yeah, that'll be an endeavor in itself. But I think my. At least my initial gut feel and the people I've talked to, well, that will be like a lot of book work in order to, To. To take and pass that exam.
- [86:04]
Will Smith
Okay. Okay.
- [86:06]
Pat Beel
I'll let you know in the future if that's actually true or not.
- [86:12]
Will Smith
Okay, Pat, and then the other question was, and actually have yet another was about the. An observation that you made in terms of the private equity presence in the H Vac market and to. To provide some. Some context. We all know that PE has gobbled up the trades, particularly H Vac, Although, although, again, as I said earlier, we think about it mostly residential H Vac, but probably commercial H Vac as well. And that what that has done is just made it more competitive to get business. I mean, pe, what it does is try to professionalize the businesses that it acquires, make them better. And so it would. It would seem that all of this, all this PE money would make the. Would make the market less hospitable to a small guy like you, to a new guy like you, more. More competitive. What are you finding?
- [87:12]
Pat Beel
I do think from what I've seen today and the people I've talked to and just what I've seen on the street, private equity definitely started in the residential space and is definitely expanding into the commercial space. You make an interesting point that it could on paper look like it'd be harder for somebody like me, but I don't want to put anyone down or anything like that, but I feel like it's made it easier to be honest. People, like, when you're in such a relationship business like we are in, you know, people want to have that relationship and they want to be able to meet in person and to have to know that they have somebody that they're going to be able to call or a group that they're going to be able to call that has their back. And while yes, private equity has gotten into the commercial space, I do, I have seen that the operations for some of those private equity health companies seem to get clunky. Their pricing seems to go up and then their technician experience, so their customer experience seems to start declining and then their technician experience also declines quite a bit because they don't have that like personal feel as much anymore. Like I've heard a lot in interviews, you know, I just feel like a number, you know, they don't care about me and I kind of view all those things again as an advantage for us because we don't, we don't have that same approach. So we are super relationship focused when it comes to the technicians that work here, everyone that works here for that matter and also all of our customers. And from what I've seen on the street is customers not being happy with some of those private equity owned companies and them coming to us because we are representative of providing that high quality work that used to be before private equity came to the scene. If that makes sense.
- [89:05]
Will Smith
Yeah, it makes sense. And you're not the first person I've heard say that. I guess a few weeks ago Hickory we the interview was with the co founders of Hickory Residential H Vac and they have been at it for longer than you and they have acquired. I can't remember what their aggregate revenue number is but it's large. And so while they are rolling up H Vac they are doing it with a long term view. They're not looking to exit, hence the name Hickory.
- [89:38]
Pat Beel
Like it?
- [89:38]
Will Smith
Like the tree. Yeah. And they mentioned in that interview that all of the sort of fallout from private equity activity in this market is to their benefit because they can come in and offer a counter narrative, a better experience, both the customer and to technician etc. Etc. All the stuff you said. So it's interesting.
- [89:59]
Pat Beel
Exactly. I'm seeing the exact same thing in the commercial space in, in this market. So yeah, the data points very similar to, to what Hickory shared with you for sure.
- [90:09]
Will Smith
So final question Pat, just again about the industry, commercial H Vac. So one thing that I noticed is that two of my recent and more impressive interviews, at least in terms of the trajectory of the, of the entrepreneur are Ling Tran and Steve Carroll of Kelso. Ling bought a commercial H Vac business. I believe it was commercial H Vac.
- [90:37]
Pat Beel
Yeah, he was primarily focused in refrigeration to start. Yep.
- [90:42]
Will Smith
Okay. And. Okay, so refrigeration. And so refrigeration obviously is not H Vac, but they often are serviced by, by the same companies. Will do both as you guys do.
- [90:51]
Pat Beel
Yeah, this is a good, this is a really good point. So we're very similar, but usually there's a company that will specialize in refrigeration. And when I talk about refrigeration, what I mean by that is walk in coolers, walk in freezers, ice machines, anything that's up for cold storage, usually a food. The components in a refrigeration system, while very similar to H Vac, are slightly different. And so there, there are a lot of, from what I've seen, there's a lot of H Vac companies that want to get into refrigeration work. Um, there's, there is a difference though between companies that start in refrigeration and expand into H Vac. From what I've seen, it's a lot easier to expand or take on H Vac as well. The, the refrigeration piece is just a little bit more, you know, it's just a little bit more, it's a little bit more unique. Uh, it, it does definitely has different components in it. There's also an element too of, you know, you have a customer, like a restaurant, their walk in freezer goes down at 11pm like you got it, you gotta be there. Like they got 10,000, 20,000, $30,000 of product in there. Like you gotta be there. So there's an element of definitely of urgency there. Whereas if you're working on a retail space that has one rooftop go down, but they have 15 rooftop units, you know, they might not even know that that unit's down. So there is definitely sets of.
- [92:17]
Will Smith
We're talking H Vac, we're talking the unit, the H Vac unit.
- [92:20]
Pat Beel
So like there's definitely still a sense of urgency in H Vac, obviously, but in refrigeration it's definitely, it's a lot more of like, hey, we need you here, like right now.
- [92:30]
Will Smith
Which is then that's a more strategic, better, totally place to be.
- [92:35]
Pat Beel
And there's a provider, of course.
- [92:36]
Will Smith
Of course. It does mean though that you are, you need to be prepared to be deployed at all hours.
- [92:43]
Pat Beel
Yes, but, but also like there are, from what I've seen, there's a lot fewer folks that specialize in refrigeration. So it kind of becomes like your Trojan horse. Like we'll start working on your refrigeration equipment. Oh by the way, you know, we can work on your exhaust fans, your makeup air, all your, all your H Vac and rooftop units as well. Okay, but, but yeah, so Ling started by buying a commercial refrigeration business, specifically, like working at grocery stores and stuff like that.
- [93:09]
Will Smith
And now he services Whole Foods, and I think he knows. What's the Whole Foods founder's name. I'd know it if you said it, but I think he knows him personally. So. So Ling and Ling bought very small.
- [93:21]
Pat Beel
He.
- [93:21]
Will Smith
I think he, I think he jokes in his interview that it was 300,000 of SDE on paper, but really it was more like 150, which is right in your range, actually.
- [93:31]
Pat Beel
Yep.
- [93:32]
Will Smith
And, and today, as I, as indicated by my Whole Foods comment, Ling has built a major business which does, I think, you know, kind of high mid to high single digits, mid to high seven figures of EBITDA every year. And that's just that business. I think Ling's got a lot more going on these days. And he's done that in probably, As I recall, 10 to 15 years.
- [94:04]
Pat Beel
Yeah, I think he bought in 2012. Ish. Around that time.
- [94:07]
Will Smith
Yeah, exactly, exactly. So just an incredible outcome. And you know, it's early days. I mean, he's not yet 50 then. Steve Carroll of Kelso, but I think it was commercial H Vac as well. Anyway, the point, it was an, it was an SBA acquisition. It wasn't as small as you guys, you and linguistics, but it was, it was SBA small. And today has acquired a number of other. Lots of other H Vac businesses or commercial H Vac businesses around the country. And his at Kelso Industries is now at a billion dollars of revenue. So it was my first time using the B word on acquiring minds vis a vis one of my guests. Yeah, incredible.
- [94:53]
Podcast Host (Narrator)
So
- [94:55]
Will Smith
long, long winded intro to my question about this industry. Both of these guys were basically in H Vac refrigeration on the commercial side. You and I have talked a number of times today about the product market fit.
- [95:12]
Podcast Host (Narrator)
Here.
- [95:13]
Will Smith
You've said how the demand well outweighs the supply. It's a vast market. Basically, any, any, any commercial building has an H Vac unit. Any restaurant has a refrigeration unit on top of that. So is this as juicy a market as all of these data points would suggest?
- [95:31]
Pat Beel
I'm very, very, very bullish on the commercial H Vac and refrigeration market for sure. I do think that there's so much more juice to squeeze in the product market fit kind of Just going back to that theme, like the product market fit is endless in the commercial H Vac and refrigeration space. Specifically in my mind, the refrigeration space.
- [95:53]
Will Smith
Yeah.
- [95:54]
Pat Beel
I just, I think that it's still early days. I think that there's, there's always going to be a need for some for this type of work. People are always going to have to have their food cold or stay cold or, you know, warm in the wintertime. It just comes down to like, can you build the right culture, can you build the right systems, can you recruit the right way to fulfill the demand in the market? And if you can do that, I think you can jump a lot of the hurdles that some other businesses have that struggle with product market fit. So yeah, will, I think that there's a huge potential in the commercial H Vac and refrigeration space long term. Obviously there's a potential for a business like us down the line to add additional trades, but I don't even think we have to think about that really anytime soon because there's so much more juice to squeeze in our market just in commercial H Vac and refrigeration for sure.
- [96:49]
Will Smith
Let's end it there. Pat Beel Great interview. Thanks for sharing so transparently. Congratulations on your pivot into this and how you went about it slightly unconventionally or at least the size of the business and how you structured everything and your success so far, which is really impressive and promising for the future. Thanks for joining us.
- [97:09]
Pat Beel
Thanks for having us on. Well, I really appreciate it and thanks for everything you're doing for the ETA community.
- [97:14]
Will Smith
Hope you enjoyed that interview.
- [97:16]
Podcast Host (Narrator)
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- [97:19]
Will Smith
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Podcast Host (Narrator)
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Will Smith
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Podcast Host (Narrator)
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- [97:34]
Will Smith
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Podcast Host (Narrator)
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- [97:49]
Will Smith
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Podcast Host (Narrator)
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Will Smith
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