Stacking Small Acquisitions to $5m in Revenue

Summary

Acquiring Minds | Stacking Small Acquisitions to $5m in Revenue

Host: Will Smith
Guests: Kyle Boyden & Jake Forfaro (Co-Owners, Rainier Cleaning Solutions)
Date: August 25, 2025

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Overview

In this episode, Will Smith interviews Kyle Boyden and Jake Forfaro, co-owners of Rainier Cleaning Solutions, about their unconventional journey stacking multiple small acquisitions—primarily in the cleaning industry—to build a $5 million revenue platform. They candidly discuss their early foray into property management, their pivot to cleaning businesses, how they funded their buys with low down payments and seller financing, and the operational lessons (and headaches) they encountered along the way. The episode dives into the risks, rewards, and hard realities of choosing micro-acquisitions as a growth strategy, offering a front-row look at the scrappy, sometimes painful, trajectory from tiny deals to real business scale.

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Key Discussion Points & Insights

1. Why Buy Businesses Instead of Real Estate?

• The guests originally pitched business acquisition to a room of real estate investors, including past guest Ken Seo.
• Kyle Boyden (07:42): "On business, the risk-reward could be 20 fold, could be a hundredfold."
  They felt that creative seller financing strategies that rarely worked in real estate were almost “standard” in small business acquisitions.
• Control and upside are greater in business versus real estate. Real estate has hard caps on returns and limited creative deal structures for ordinary investors.

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2. Backgrounds & Real Estate to Acquisition Pivot

• Kyle: Born to entrepreneurs, dabbled in business, found real estate too slow to reach his goals.
• Jake: Former ICU nurse, invested in multifamily/mobile home parks. Hit a wall when interest rates rose, making new deals unworkable.
• Jake (11:28): “155 doors, over 13 properties” was their combined peak real estate portfolio.

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3. First Business Buy: Property Management (The "Tuition" Deal)

• How it Happened: Seller reached out to Jake out of desperation. Bought a small property management business for under $10K—without meaningful due diligence.
• Kyle (13:56): “He was essentially just bleeding out day by day...we kind of needed to pull the plug and get out of here.”
• Realization that property management was harder than anticipated: 24/7 headaches, thin margins, difficult clients, and constant emergencies.
• They were able to quickly turn it from deep red ($8K/mo losses) to $6K/mo profit by cutting costs and then offloaded it as a 'book of business' to another property manager.

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4. First Lessons: The Value of Doing, Not Studying

• Both admit their initial business buy was "negligent" on diligence, but the fast, cheap experience was “worth the tuition.”
• Jake (16:33): “Now the level of due diligence I'm able to do and I do do on a regular basis, it's from this. I call that just is tuition, you know.”

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5. Entering Home Cleaning & Stacking Micro-Acquisitions

• After seeing all the money sent to cleaning vendors, they decided to buy into cleaning businesses.
• Initial businesses: Home cleaning, window cleaning, then branching into pressure washing and commercial services.
• Jake (23:11): “We bought a house clean company...around $300,000 of revenue per year...then...a similar size window cleaning company...that’s kind of how we were really trying to maximize the value of that client.”

Home Cleaning Pros and Cons

• Recurring revenue and easily removable owners
• Low margins, tough client/staff dynamics, price competition due to low barriers to entry
• Difficult to scale with high quality because clients want ‘their’ cleaner; hard to substitute staff on residential jobs

Residential vs. Commercial

• Operated both, but gradually focused energy toward commercial cleaning for scalability, cross-selling, and higher margins.

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6. How They Funded the Acquisitions

• The first six acquisitions were done without SBA loans, mostly through generous seller financing (often 0% interest) and low down payments.
• Kyle (41:04): “All seller financing. Very small cash out of pocket. Owner carrying the note from anywhere from three years to all the way up to 10 years. Ten years on some of them. We have a number of them at 0% interest.”
• Total equity contributed: $100,000 to acquire $5M in revenue ($1M EBITDA); today, take-home cash stands at $650,000 with 90% ownership.

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7. Stacking Small Deals: The Pain & the Payoff

• It took five small acquisitions to reach $2.5M in revenue, then two larger ones to hit $5M.
• Jake (35:07): “The last two [acquisitions] were much larger…What we've learned to get to this point, I don't think we would have been ready to jump into that million dollar EBITDA purchase.”
• Operational pain was high: integrations were hard, no immediate financial reward, all cash reinvested, partners worked other jobs for years.

Would They Repeat This Tactic?

• Jake (43:53): “No, I wouldn’t do it differently…The lessons we learned doing this is, is what led us up to, to the current strategy we’re in.”
• Kyle (45:22): “We had to hit $5 million revenue to actually celebrate anything. And we still felt like we haven't scraped, scratched the surface.”

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8. Their Acquisition Strategy & Criteria

• Extremely proactive, outbound search: hired freelancers to build lists of every cleaning business in the region, cold-called hundreds.
• Focused on “retirement-age” operators running businesses with solid client lists (often neglected), often in operation 30+ years.
• Willing to buy any business connected to cleaning—carpet, janitorial, etc.—as long as it cash-flowed and had potential for cross-sell.
• Early on, bought whatever fit their parameters; as skills/confidence grew, tightened buy-box and went for larger, better-run businesses.

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9. Leadership Lessons & Integration

• Early on, they lacked elite leadership skills; learned the importance of vision and culture in small business.
• Jake (36:54): “A common factor in the businesses that we purchased, a lot of them lack elite leadership and vision where the company was going.”
• Success increasingly dependent on their hands-on, humble approach to staff—”first in, last out.”

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10. Large Acquisition via SBA Loan: Surprises and Diligence

• Their 7th acquisition (first using SBA loan via US Bank) nearly fell apart when forensic accounting revealed the financials were questionable—P&Ls overstated revenue by $300K due to poor, possibly fraudulent bookkeeping.
• They learned that SBA lender diligence is less rigorous than reputed; “never even asked for bank statements”—a warning to would-be buyers not to rely on the lender’s due diligence.
• Eventually renegotiated the price downward and closed the deal with ongoing seller support.

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11. Risk, Rewards, and Advice to Future Searchers

• Acquiring small businesses is “low risk” because capital outlay is small, seller financing terms were favorable, and there wasn’t competition to buy these businesses.
• Most sellers didn’t even realize they could sell their businesses (gave them “found money”).
• Jake (47:21): “You would have to be someone with a threshold for pain. But I also think you need to be very, very humble and, and not have any sort of, of ego...If you have capital or access to capital, save yourself some gray hairs and go bigger.”
• Encourages anyone stuck in a low-reward job to consider small business acquisition as a calculated risk.

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12. Go-to-Market & Growth Vision

Service Model

• Two separate brands for commercial vs. residential, with cross-utilization of backend/admin, but distinct brand-facing teams.
• Build “total facility care” customized programs for larger commercial clients (not just janitorial bids).
• Central strategy is to land a client and then cross-sell multiple services: floor care, window cleaning, pressure washing, etc.

The Big Goal

• Target: Reach $10M EBITDA for optionality, legacy, and (potentially) a large exit, but now motivated as much by the journey as the payday.
• Kyle (70:39): “The plan from day one was 10 million EBITDA...Whether or not that is true, I guess we'll find out when we get there.”
• Acknowledges they may return to further acquisitions (“never say never”), but want to focus on integrating current businesses and growing organically for now.

Commercial Cleaning Industry: Pros & Cons

• Pros: Recurring, business-to-business revenue; many businesses poorly run by competition; economies of scale for cross-selling services.
• Cons: Still a hard business; tight margins; persistent labor challenges; recurring contracts not as ‘sticky’ as often portrayed.

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Notable Quotes & Memorable Moments

• “The risk-reward could be 20 fold, it could be a hundred fold.” – Kyle Boyden (07:42)
• “We were longing for more...we watched a YouTube video, read a book, watched a podcast, bought a business.” – Kyle (09:35)
• “It was negligent. Looking back on it now, however, I wouldn't change it because of the lessons I learned. I call that just is tuition.” – Jake (16:33)
• “Anybody with a mop and a bucket could offer to clean your house. So the pricing is...it's hard to maintain strong margins in a house cleaning business.” – Kyle (22:51)
• “I think we both lived below our means for a long period of time...Everything needed to be reinvested into marketing and other acquisition opportunities.” – Kyle (25:59)
• “We have a number of [seller notes] at 0% interest.” – Kyle (41:04)
• “I think hard is okay and the fact there was two of us in it together...There was a lot of dark nights..., but the promise to each other was I'm not going to quit today.” – Kyle (45:22)
• “If you have capital or access to capital, save yourself some gray hairs and go bigger.” – Jake (47:21)
• “The owners were willing to sell because they were at retirement age...And because there aren’t other buyers for tiny businesses like this.” – Kyle (51:49)
• On due diligence: “Never even asked for bank statements at any point. So they had P&Ls and tax returns that matched...we went pretty far through this process.” – Kyle (57:36)
• “The plan from day one was 10 million EBITDA.” – Kyle (70:35)
• “You know, we just had our very first celebration dinner three days ago. We had to hit $5 million revenue to actually celebrate anything.” – Kyle (45:22)

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Important Timestamps by Topic

• 07:42 – Comparing risk/reward of real estate vs. businesses
• 13:15 – First micro-acquisition: property management
• 16:33 – The “tuition” deal: learning by doing
• 19:08 – Entering and dissecting home cleaning
• 23:11 – Stacking cleaning businesses and cross-sell strategy
• 25:40 – How they funded themselves (working weekend jobs, reinvesting everything)
• 29:58 – Building acquisition muscle, narrowing focus to commercial
• 35:07 – Painful lessons and learning operational leadership
• 41:04 – Seller financing and their typical deal structures
• 43:53 – Would they repeat this approach?
• 47:21 – Who should consider this strategy?
• 51:49 – Unconventional advantages of micro-acquisitions
• 57:36 – 62:19 – Navigating a difficult (SBA) acquisition, discovering financial inconsistencies
• 70:39 – The big vision: $10M EBITDA
• 74:35 – Deal fatigue and the next phase: focusing on organic growth

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Final Thoughts

Kyle and Jake’s journey is a rare look at the high-friction, bootstrapped approach to acquisition entrepreneurship. While their strategy required grit, humility, and willingness to work for a delayed payday, their story demonstrates that stacking seemingly unglamorous, small deals can ultimately build a substantial business—with careful integration, diligent learning, and fierce capital discipline. Their openness about the risks, messes, and emotional tolls stands as both inspiration and caution for listeners considering the micro-acquisition route to entrepreneurial success.

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Contact:

• Kyle Boyden – [LinkedIn]
• Jake Forfaro – [LinkedIn]
  (Links provided in show notes)

For more actionable summaries, subscribe at acquiringminds.co

Transcript

[Host 1]

Today's guests set out to acquire cleaning companies.

[Will Smith]

Their search was proprietary.

[Host 1]

Looking in the greater Seattle area, turns out most cleaning companies are very small sub million dollars of revenue. But Kyle Boyden and Jake Forfaro were open to such micro acquisitions and stacked the acquired revenue in their nascent platform up to 2.5 million.

[Will Smith]

At that point, they decided to go bigger.

[Host 1]

Their next two acquisitions got them to the $5 million where they are today. And only for the most recent acquisition, their seventh, did they finally use an SBA loan. The previous six acquisitions were structured with generous seller financing and low down payments, a key benefit to their approach. Kyle and Jake have only put a combined $100,000 of equity into the project, even after servicing seller notes. Their take home cash today stands at $650,000 and the duo owns 90%. Pretty impressive. Now this model is not for the faint of heart. Buying such small businesses flouts the conventional wisdom on target size. It was very difficult operationally. They plowed what little money the fledgling rollup generated back in, so they had to make money elsewhere. They themselves say they wouldn't recommend it, but for them in their journeys, it enabled a couple of hungry, scrappy, action oriented entrepreneurs to move quickly and learn. They acquired the revenue very inexpensively. Risk was low, no personal guarantees. On those first six acquisitions they built operating muscle, integration muscle, the confidence and competence to run and grow. Their platform today is leagues beyond where it would have been if they just acquired a single $5 million business at the outset. See what you think of how Kyle Boyden and Jake Forfaro have built Rainier Cleaning Solutions.

[Will Smith]

Enjoy.

[Host 1]

Fall conference season is upon us. Kicking things off next weekend, September 5th and 6th, is the Southeast Entrepreneurship through Acquisition Conference, aka CETA. This year hosted at Darden Uva's Business School. CETA is in partnership with Georgetown, Duke and unc, so it actually draws people from all over the south and Mid Atlantic region. Also in yours truly will be giving the keynote. I'm so flattered by the opportunity. Thank you to the CETA organizers. I have many personal connections to uva, so I'm just thrilled at this honor. Then later next month in St. Louis, September 24 through 26 is the buy Then Build Summit, the inaugural conference hosted by Acquisition Lab. The Lab is of course a longtime sponsor and friend of this podcast and the event will be filled with people from inside and outside the Lab, both current searchers and those already in the ownership seat. Walker Deibel will be there, as will his co founder Chelsea Wood, who you've seen host many valuable Webinars with Acquiring Minds. I'm looking forward to finally meeting Chelsea.

[Will Smith]

And Walker in person.

[Host 1]

Then the McGuire Woods Independent Sponsor Conference is October 14 and 15 in Dallas. This is by far the biggest conference for independent sponsors in the capital providers that serve them like our fund, Mind's Capital. If this path of independent sponsorship interests you, maybe you've been listening to our sister pod, the Mind's Capital podcast, then McGuire woods is ground zero.

[Will Smith]

Mind's Capital will be there.

[Host 1]

We'll be meeting sponsors we've invested in already and those we hope to invest in. And we'll be hosting a special off site for our LPs. You know who you are finally M&A Launchpad's fall show is October 25th in Chicago. The lineup is full of Acquiring Minds guests Dustin Carrion, Dominic Blue, John Murphy, Sam Rosati, Ryan Sullivan and Reed Pennebaker, who runs ETA Circle in Houston and has introduced us to a bunch of wonderful acquisition entrepreneurs who've then come on Acquiring Minds M and A Launchpad is a one day packed event that is.

[Will Smith]

October 25th in Chicago.

[Host 1]

Now there are even more shows this fall, but these are the ones I happen to be involved with this year. Maybe I'll see you at one, and if so, please say hello. Welcome to Acquiring Minds, a podcast about buying businesses.

[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.

[Host 1]

What do the following Acquiring Minds guests all have in common? Doug Johns, Morley Desai, Tim Erickson, Chirag Shah, Shane Ursam. They all went through the Acquisition Lab, the accelerator in community for people serious about buying a business, but they represent just a sliver of the Lab success stories. The number of deals across the lab's cohorts now stands at over 120, with over $300 million in aggregate transaction value.

[Will Smith]

The Acquisition Lab was founded by Walker.

[Host 1]

Deibel, author of Buy Then Build, the book that introduced so many of you to the very idea of buying a business. The Lab offers a month long, intensive, almost daily Q and A sessions with.

[Will Smith]

Advisors, live deal reviews with Walker, Deal.

[Host 1]

Team introductions, and an active community of serious searchers. Check out acquisitionlab.com, link in the notes or email the lab's co founder, Chelsea Wood.

[Will Smith]

Chelseauythenbuild.com Kyle Boyden Jake for FARO welcome to acquiring Minds.

[Kyle Boyden]

Pleasure to be here.

[Jake Forfaro]

Thanks for having us.

[Will Smith]

Kyle Jake, you too are recovering real estate investors now building a roll up in commercial cleaning. I was introduced to you by my own recent Guest Ken SEO Ken saw you on stage at an event for real estate investors, which he was at the time, and it was something of a debate. I believe you guys were up there advocating for buying businesses instead of real estate. That that's the better path. Whatever it was. Ken left that hotel conference room a convert. He walks the path. Bought a business, came on acquiring minds to tell us a story. So first question for you guys is what did you say up there that was so convincing to Ken?

[Kyle Boyden]

Yeah, Ken is now a year recovered as well. So congratulations Ken. We, we really harped in on the, the upside of the investment in a real estate. If everything goes absolutely amazing, you might double your money on, on business. The risk Reward could be 20 fold, it could be a hundredfold.

[Interviewer/Moderator]

Right.

[Kyle Boyden]

And, and so the big part of the debate was greatest return on every dollar. And I think what really resonated with Ken was a lot of the real estate strategies that he had learned. The seller financing, kind of any of the creative financing never really turned out to be all that true. And when it came to businesses, this is almost just standard how you, how you acquire a company and how did.

[Will Smith]

Buying businesses get on the, on your radar?

[Jake Forfaro]

I think, wait, I honestly, I think good old Cody Sanchez. But you know, we, that event there with Ken, it's all about controlling your future and having control of an asset. And when you have real estate, you have very little control.

[Will Smith]

And Great. So let's get both of your backgrounds in brief. Kyle, go for it first for me. Give us some context. On to the path you're now on.

[Kyle Boyden]

Yep. So I was born to two entrepreneur parents. It's kind of always in my blood. They begged me to go to school rather than start a business as a cocky 18 year old. So I went to school for, to college for entrepreneurship as well. Came out, had a couple internships with business owners, kind of dipped my toes. And I ended up landing in a what I would consider a safe sales job. Was making pretty easy good money golfing a couple times a week, kind of cushy sales jobs. And eventually I just got kind of tired of looking at myself in the mirror. I just kind of wanted more. I wanted to follow my, my passion. And real estate kind of initially tickled that fancy. I could make good money during the day, I could buy real estate, I could start building towards my future. After stacking a half a dozen or so single family houses, I realized that I was only about 300 more home purchases away from having my financial goals. And it, it felt entirely too slow. All of A sudden. And I kind of longed for something more. And I saw that Jake, not to take his story at all, but was out doing bigger things than I was in real estate, so connected with him. You know, the market changed a little bit, and. And none of our underwriting kind of penciled out for our criteria for real estate anymore. And someone sent him an inbox saying, hey, do you want to buy my business? And Jake and I watched a YouTube video, read a book, watched a podcast, bought a business. I mean, that was about as much thought as we put into this entire thing. But we're just. We were longing for more. And we'll share the story of that. And it wasn't the greatest idea probably we've ever had, but at least it was that leap of action that got us in the game. And had we not done that, we probably wouldn't be here talking to you today.

[Will Smith]

Yeah, for sure. And you guys are in the Seattle market or. No, Washington.

[Kyle Boyden]

Greater. Greater Seattle market. Correct.

[Will Smith]

Greater Seattle.

[Interviewer/Moderator]

Great.

[Will Smith]

Jake, please.

[Jake Forfaro]

Yeah. So my background, my first career, I was a critical care nurse in the ICU here in Washington state. I was tired of being the best at what I did and being capped as far as pay goes, and I wanted to look for something else. So I started in real estate, started buying real estate, multifamily mobile home parks. And when interest rates took a turn, it really made deals hard to pencil out. And that's kind of how we got set on our business buying venture. So the short of it.

[Will Smith]

And. And how much of a real estate portfolio had you built up at that point?

[Jake Forfaro]

155 doors, over 13 properties.

[Will Smith]

Oh, wow, okay. So you guys were. So it was when interest rates went up that. That you stopped with your real estate investing. And so that was what now?

[Jake Forfaro]

2022.

[Interviewer/Moderator]

Okay, great.

[Will Smith]

And so what was this? Who slid into your DMs there, Jake? About this? Buy. Buy my business, which is, by the way, an interesting approach to. To selling a business.

[Jake Forfaro]

It was this guy that was, you know, asking to have coffee for a while, and I just, you know, I just didn't have time. And then he sent me a dm is like, hey, I'm in. I'm in a tough spot and I'm looking to just get rid of my business, property management business. And we met, and I think within a couple weeks we had documents signed and we dove into property management headfirst.

[Will Smith]

So we're going to. I know this story. We're not going to spend too much time on it because it's. It's just one step toward where you now are, which is where we want to spend most of our time. But give us the quick 3 minute version of this first adventure because it's kind of crazy.

[Kyle Boyden]

The fast forward version of it is we went out to dinner. The guy told us about his property management company. It was a small company. He had 115 total units and he was bringing in like 15 or 18k a month of total revenue of all of his management fees. And he had I think two secretaries, a brand new truck, a building office, two or three in house maintenance. His expenses exceeded his management fees by like 5 or 6k a month. So he was essentially just bleeding out day by day. And we asked him, so what do you want for the business? And he said, he said 50k. We both just kind of looked at each other and we're like, we'll give you. You remember what the number was?

[Jake Forfaro]

I don't.

[Kyle Boyden]

5K or 8k was not, not a large number.

[Jake Forfaro]

Yeah, it was, it was pretty, it was, I felt bad saying it, but it was just kind of a Hail Mary. And we came to an agreement, we moved forward. We started to find some, some things that just were not adding up. Discrepancies, maybe some fraudulent stuff going on. And so we, you know, we, and I hate, I just the, you know, with property management there's tenants, of course, but even more than that, more of a headache is the owners, to be completely honest.

[Will Smith]

Sure. And well, they're the client.

[Interviewer/Moderator]

Right.

[Jake Forfaro]

Exactly right.

[Kyle Boyden]

And can be definitely unreasonable as well. And so we were, we were annoyed and frustrated with the purchase and we're like, dude, what the heck? And he was like, you guys didn't even ask these questions or do any due diligence. So at this point we're, and I think on the transition over, we lost 30 doors or something. We were down to like 80 doors by the time this thing actually closed. And we kind of needed to pull the, pull the plug and get out of here. And so we actually reached out to a, a really large local property management company and said, hey, we got 80 units. Want to bring over with us? We'll help you with sales, but we want you to do all of the back end everything. So we got rid of all of the employees, the lease, we had zero expenses. And on that first month when he was, I think he was losing 8k a month or something on average, we brought in 6k.

[Jake Forfaro]

Yeah.

[Kyle Boyden]

Of profit the very first month and rode the horse for about a year or so. And eventually like this is just not where we want to be. And we sold that book of business to the property management company. And I wouldn't say we made out of like bandits, but we got out of a pretty sticky situation with our head still on our shoulders. So that was good.

[Will Smith]

So you buy this business for less than 10k. That said it is a money losing business. So hard to. Hard to know who got the better deal there, but still a nominal amount of money. You get in there and you find it's even, even worse than the numbers suggest. But you turn it around quickly and you're able to go from you know, 8,000amonth in the red to six in the black. You said. And just the first month or two, 30 days basically. Yeah, yeah, first few days. And just real quick, I assume that was letting people go is how you did that.

[Kyle Boyden]

Yeah, we just kind of cut every cost.

[Jake Forfaro]

We wiped it clean.

[Will Smith]

So you wiped it clean and, and then proceeded to operate it for about a year, decided you didn't like the property management business and basically sold the. Sold it as a book of business as opposed to a proper business to a larger property management business. Business property manager locally in got out and actually at all given how loose this initial transaction was, kind of a win.

[Kyle Boyden]

A bit of a miracle honestly given given the. The amount of research we had put into this. But the lessons we learned doing this is, is what led us up to, to the current strategy. We're and.

[Will Smith]

And just a couple more questions before we leave this chapter. Why did you guys do so little diligence when you first bought this business? Because it was like how, you know, even if the worst, I mean all we have in this is ten grand sort of thing or less than ten grand.

[Kyle Boyden]

We, we were real estate investors and when I tell you we watched a podcast that might be an exaggeration, we kind of just went and bought a business.

[Jake Forfaro]

It was, it was negligent. Looking back on it now, however, I wouldn't change it because of the lessons I learned. And I feel like now the level of due diligence I'm able to do and I do do on a regular basis, it's from this I call that just is tuition, you know.

[Will Smith]

Yeah, yeah, yeah, exactly. And then why was it that you decided it wasn't for you? The business of property management? Maybe.

[Kyle Boyden]

Yeah, for one it was 24 7. I was either waking up every night with someone calling with something wrong or having a nightmare that someone was calling that something was wrong. So it was. And Jake said that the owners are a bigger pain in the butt than the tenants. And the tenants are no peach to work with either.

[Jake Forfaro]

Margins are thin. There's problems 24 7. It's not higher margin work. So it was you know and we looked at our, what our biggest expense was every month and you know, of course it's subcontractors and we're sending you know, thousands and thousands and thousands of dollars to cleaning companies. Whether it was interior cleaning for move outs, exterior to. For the, for the building. And that's kind of what sparked how we got to where we're at today.

[Will Smith]

So you were paying these other vendors and you were like they, you were making the classic mistake of they've got a better business than I do. Although.

[Kyle Boyden]

Exactly.

[Will Smith]

Actually I think today you probably would. Would still believe that you are, you're in a better place than you were property management. But just one thing about property management that is to love about it of course is that nice recurring revenue.

[Interviewer/Moderator]

Sure.

[Will Smith]

But I'm, I'm hearing you say that it's not so nice that it outweighs all the, all the unmentionable, all the other stuff.

[Interviewer/Moderator]

Okay, all right.

[Kyle Boyden]

I think the recurring revenue was the one part we enjoyed about it. But in doing further due diligence we saw there was some other industries that had recurring revenue as well. That was really attractive.

[Interviewer/Moderator]

Great.

[Will Smith]

Well Kyle, from our pre call I got the in depth story and that you guys did lots of twists and turns to get where you are now. And so we're not going to take the audience through all of them. But you did go into home cleaning. In fact I think you still have kind of a side business in home cleaning. Maybe give us let's, let's spend five minutes on just that industry. What kind of the story and super brief and then what can we learn from you about that and whether or not people should look at that as a business? Very few searchers end up with of home cleaning businesses, but some do. So let's, let's hear.

[Kyle Boyden]

Yeah, I think cleaning is a good industry. The home cleaning might be what Jake thinks about the property management company. It's, it's kind of low margins but there's still some attractive. There's the recurring revenue when you get the, the repeat clients. There's low customer concentration. It's pretty easy to remove yourself as an owner. Pretty darn scalable. Of course there's a lot of competition. There's not a lot of great competition. I think we found that our average competitor was a phenomenal cleaner that got so busy that out of demand she was forced to hire help. And then fast forward three or four years, she has five, six employees. But at no point was she ever a business owner. She was just a really good cleaner that now happens to run a business. So by us bringing a little bit of digital marketing and systems and processes and automations and just using a CRM software and a scheduling software, we've kind of differentiated ourselves from 90% of the market already.

[Host 1]

You know that one of the most common levers to pull in a target acquisition is technology updating the systems of a business that may still be running off a spreadsheet or even pen and paper. But tech is complicated with tons of solutions out there. So choosing the right cloud platform, CRM, telephony, compliance and cybersecurity, not to mention implementing all that, is a job in itself. Acquiring Minds Guest Nick Akers knows this firsthand. As a former searcher who now owns Inzo Technologies, Nick has seen the tech challenges searchers face when acquiring businesses. His team at Inzo regularly works with searchers and their acquisitions, offering a complimentary IT audit of the target company. Nick takes a personal interest in all their searcher clients, drawing from his own experience in the search phase. Enzo dates back to 1989. So this is a company that has managed the tech for hundreds of small businesses over decades. And one last thing, no long term contracts with Enzo, a big differentiator. Check out inzotechnologies.com I N Z O or email Nick [e-mail] and don't forget to tell them you're a searcher.

[Will Smith]

So what's not to like about home cleaning?

[Jake Forfaro]

The level of detail when you go into somebody's house, when you're talking about interior cleaning of, you know, kitchens, bathrooms, floors, etc. The, the complaints definitely pile up. The, the cleaners. The avatar of a cleaner is a challenging avatar to hire and retain. And clients only want their cleaner, right? So you're, you're kind of handcuffed by the client and the staff.

[Will Smith]

So I think they want the client. The homeowner wants the same specific person from your agency coming every time or they'll clean.

[Kyle Boyden]

So if the cleaner calls out sick, it's just revenue is gone.

[Interviewer/Moderator]

Right?

[Will Smith]

And that's because we as homeowners, of course we can all kind of relate to this. We're very particular about how, you know, you clean my vase and you know, the toilet downstairs, make sure you get, you know, behind it or whatever sort of thing. And so once, once we as homeowners feel like we've adequately taught the, the home cleaner then we want only that person in there. In some ways the clients invest, they feel like they've invested in the home cleaner.

[Kyle Boyden]

Yeah, nailed it.

[Interviewer/Moderator]

Yeah, yeah, yeah.

[Kyle Boyden]

And in addition to that, anybody with a mop in a bucket could offer to clean your house. So the pricing is, it's hard to maintain strong margins in a house cleaning business.

[Will Smith]

And so give me, give me the two minute version of the story here. What did you guys bought, you bought a small home cleaning business and then a couple others you bolted on. Tell us, tell the audience please.

[Jake Forfaro]

Yeah, we bought a house clean company, had about seven or eight cleaners doing around 300,000 of revenue per year. Great, great staff, a great previous owner. And then we decided to branch off and we bought a similar size window cleaning company in the sim in the same geographic area. So that's kind of how we were, you know, really trying to maximize the value of that client.

[Interviewer/Moderator]

Right.

[Jake Forfaro]

Because now we can cross sell other services etc and it's still up and running today are how many cleaners do we have now?

[Kyle Boyden]

We have about 17 house cleaners.

[Jake Forfaro]

17. So we're maintaining and growing and the goal is not to grow the house cleaning business, but when we can cross sell windows, gutters, roofs, pressure washing floors, that that client becomes a lot more valuable than just a house cleaning client.

[Interviewer/Moderator]

Right.

[Jake Forfaro]

Because if we naturally grow that company organically, then our other companies are also going to grow because of being able to cross sell.

[Will Smith]

You have this house cleaning business and then you have the pressure washing, window cleaning, etc. Businesses as well that you actively sell into your home cleaning clients. Your house cleaning clients.

[Interviewer/Moderator]

Correct.

[Will Smith]

But it's all, this is all kind of a side thing. This is not the main project today.

[Jake Forfaro]

I feel like there's the commercial side of our business which Kyle runs and there's a residential side of our business that I, that I run. And so I think the home service business is, is probably equally as far as revenue goes. But you know, when you're talking about a commercial side where it's janitorial work, in the home service side, you have your cleaning and then we have the floor company and the window company which both service the commercial and the residential cleaning company. Okay, does that make sense?

[Will Smith]

Sure, sure.

[Interviewer/Moderator]

Great.

[Will Smith]

And so before we get into more about kind of what you've built today, give us a picture of where your income was coming during all of this. Are you living off of your real estate? Because when I hear a three hundred thousand dollar revenue business for two partners, obviously there's not much profit to be supporting you guys. So. So what did that look like? Is this. Did you have day jobs? Paint a picture?

[Jake Forfaro]

Yeah, up until this year, I continued working on the weekends in the hospital as a critical care nurse. I was doing that, funding my life. I have a wife, so dual income and just reinvesting everything into the business to continue to grow.

[Kyle Boyden]

Yeah, I think we both lived below our means for a long period of time. A little bit of real estate income. We held our jobs through, through part of it. I didn't hold mine quite as long as Jake held his, but we just lived a simple life knowing that the reward would, would pay off down, down the road and we hadn't taken any. I mean, you're spot on. Wouldn't have enough money to take anything out of it. Everything needed to be reinvested into marketing and other acquisition opportunities.

[Will Smith]

Well, this is good because, because it sounds, you guys are really relaxed and it sounds like you were just kind of loosely with your risk on. So you are, you are pretty, you, you take risks and you move quickly, but kind of cavalier about this whole thing. But in fact, you were working your tails off. You were both retaining jobs and for income of which you didn't have much because it wasn't, you know. Well, I don't know about you, Kyle, maybe it was a full time job. But Jake, you were just working on the weekends. You were plowing everything that was coming out of these businesses back into them. So this was really, this was really, you know, difficult venture. This, this was not buying a business that you then immediately could live off of, as is the case with so many of my guests.

[Interviewer/Moderator]

Correct. Great.

[Will Smith]

And just for the kind of people know where we're going, where are you today in terms of revenue and are you living off of it and what you're, are you working, etc.

[Kyle Boyden]

Yeah, we are at pretty much just shy of 5 million revenue and just shy of 1 million EBITDA.

[Interviewer/Moderator]

Great.

[Will Smith]

So.

[Jake Forfaro]

And so you started to pay ourselves.

[Kyle Boyden]

Yeah, and just started paying ourselves.

[Will Smith]

And are you paying yourselves the bare minimum? Are you paying yourselves a breathable salary? The bare minimum?

[Jake Forfaro]

Yeah, bare minimum. I mean we, we certainly could pay ourselves more, but we're invested into this long term vision of continuing to grow. Um, and until I have another child, I don't really need to pay myself anymore. Kyle, you know, he doesn't have kids, so it's delayed gratification at its finest.

[Kyle Boyden]

Yes.

[Will Smith]

Delayed gratification at its finest. I love it. Let's return to what you built.

[Interviewer/Moderator]

Where.

[Will Smith]

Did things settle into a very clear strategy because you were dabbling, you were following your noses, you were figuring out what industries you didn't like, what you did. But eventually it settled out into a kind of crystallized strategy that you now have today. Take us there. How did that happen and what is the strategy? Of course.

[Kyle Boyden]

Yeah, I think, I think with the calmness, there was also a certain level of confidence. And we were. We were directional correctness is what we call it. We were going forward in, in at least kind of the right direction in learning. And I would almost compare it to, to like dating. Like, maybe there's a couple intangibles. And I kind of like this and this attribute and feature, and I don't really like this, but if they do this, as long as X, Y and Z are true, maybe it's okay. And that was kind of how we were looking at these business purchases. Like, man, there's not a lot of employees and it's kind of small, but it's 38 years worth of past customers. There's 10,000 customers I can market to. They're all in the same geographic area I want. So as long as I can buy this at a. A1x multiple and, and on seller financing, like, this could be a deal. And we were talking to, at this point, hundreds of people that kind of fit our avatar of they're in a certain age group, they're thinking about retirement, maybe they thought their kids were going to buy it. It's a lot of the kind of blocking and tackling of buying businesses. But we were finding the people that fit the avatar. Three of the owners actually work for us today. They, they sold and then joined, joined forces with us. So we built incredible relationship with them. We just did. We've acquired seven companies now, and we just closed last week on our first SBA deal, the other six.

[Will Smith]

And we're gonna. And we're gonna get into that one because there's a. There's a lot you learn there. But Kyle, when you, you're. You're basically telling us about your search, what, first of all, what sorts of businesses were you searching for? And how was it that you were talking to hundreds of owners in your local area?

[Kyle Boyden]

I was hiring guys on Fiverr to pull me lists of every single cleaning company in. In Washington state. So geographically, we're just sticking to our side of the mountains. And we were calling vent cleaning, carpets, janitorial, house flooring, anything that cleaned, we were just calling them and having conversations, posting on Facebook groups, telling brokers we pretty Much drew a line in the sand and Jake was going to run the portfolio and Kyle full time was going to find business opportunities. And we, I think it's kind of the power of we say one plus one equals three. The two of us together. Together is kind of, kind of what our cheat code is. So by being able to go full time on that, I don't know if that's. It's almost more small scale maybe than a lot of searcher strategy might be. But the amount of just reps that we got on that led to some really good opportunities. And for a while we were just buying things that made sense and it was again the directional correctors. We were moving forward and eventually it kind of struck us about last year the same as the real estate. We have to buy 300 of these companies to get to where we want to go and that's when the parameters got a little bit tighter. We're going to go larger.

[Interviewer/Moderator]

Great.

[Will Smith]

Let me stop you there. So Kyle, so you were reaching out to just any sort of cleaning company. So you were cleaning agnostic. Any sort of cleaning residential, commercial floor, carpet, exterior, interior, this, that and fit and all in the spirit of like that we're going to kind of figure out which ones we like the best or, or we're just going to, you know, have this conglomeration of all these different businesses and they're basically all kind of sort of similar in the way that they operate. So we, we can they it can be a grab bag of these little businesses and, and we'll just operate them and it'll be fine. They don't need to have kind of a logical coherence to them. What, what were you thinking there? What was the strategy? Or was there one? Was it just. Were you dating this, the dating stage?

[Kyle Boyden]

I would say logical coherence enough of we weren't going to try to start selling security systems or sprinkler heads or whatever. But like if, if it fit under cleaning and it cash flowed, can we buy it at a really, really good multiple? We're still investors at the end of the day. Does this make sense? Can we sell these same services to our existing clients? Is there a large database? Like what kind of additional juice or meat does this deal have on top of it? But yes, we were calling the net was pretty darn wide and for the first 18 months or so that was just the strategy. Touch as many people as we can.

[Jake Forfaro]

I think the Northern Star was always commercial janitorial business.

[Interviewer/Moderator]

Right.

[Jake Forfaro]

And with that being the Northern Star, a flooring company is a great bolt onto that. A window cleaning, pressure washing gutters, etcetera is a good bolt onto that. If I'm controlling all janitorial spend for that client, I'm going to choose who I'm a subject to. Why would I not sub it out to myself?

[Interviewer/Moderator]

Right.

[Will Smith]

Yeah. A nice, a nice trick you learned from property management.

[Interviewer/Moderator]

Right.

[Will Smith]

Be the, be the point of contact that is the one who then select subscribers. So you did have your eye on commercial cleaning by pretty early in this process. You knew that that was okay pretty early on.

[Kyle Boyden]

As you might imagine, most cleaning companies that we talked to were a little one man, two man operations. It was pretty hard to have a good conversation with a large cleaning company that had enough meat that was super exciting. So it definitely took the, the hundreds and hundreds of conversations to, to find these companies that were even north of a million of revenue. There's just kind of few and far between.

[Will Smith]

And so say, say Kyle Moore, about what you just said, where you started having the feeling that you'd had in real estate, where it was going to take you 300 acquisitions to get anywhere. These companies were, were tiny that you, you were striking good deals, but they were just like really small amounts of revenue. Give it, give us, give us more.

[Kyle Boyden]

300 to 500k of revenue. Missing some pretty simple scheduling software, some kind of easy stuff. So I think each one of these little acquisitions might have took in one to two years off our life expectancy and after doing a, a handful of you get some sort of deal fatigue. And it was like, look, at this point we have the confidence, we've done it. We're actually really good at transitioning. We're really good at negotiating deals. Like it's time to just like pull the pants up and go, go a little bit bigger. Here we, we have the fundamentals down. We've got good team in place. We've made all the mistakes we need to make in, in hiring and changing prices, customer communications, how to handle employees, so on and so forth. Like it was time to be more picky with the next deals.

[Jake Forfaro]

And if I could give it a little bit of context, you know, it took us five acquisitions to get to two, two and a half million of revenue and it took us seven acquisitions to get to five million revenue. So.

[Interviewer/Moderator]

Right.

[Jake Forfaro]

The last two were much larger, um, still below I think the average searcher. What they look for as far as you know, I know it's around a million dollars EBITDA give or take. And but I, what we've learned to get to this point, I don't think we would have been ready to jump into that million dollar EBITDA purchase.

[Interviewer/Moderator]

Really.

[Jake Forfaro]

Correct. Yeah.

[Will Smith]

Because you guys seem very resourceful, you see, and you seem like you have high pain tolerance. You were, you, you were doing really, really hard work, learning as you went, making mistakes. All things that are characteristics that mean that you could probably take on a bigger business and you know, figure it out.

[Jake Forfaro]

No, probably couldn't have figured it out, but I don't know if I would really would have wanted to. I don't know if you know, that, that, that fetal position moment would have hit a little bit harder. But you know, the biggest thing with transitions for me is that the people aspect of it.

[Interviewer/Moderator]

Right.

[Jake Forfaro]

The employees we've been through, I think we 40, 50 employees now. So it's, you know, getting to know everybody, showing them that you care like that, that there's an art there that I didn't necessarily have a really good grasp on. And I think I needed some of these smaller ones to get to the point point where now I can confidently go in and say, hey, this is the vision. This is, this is the direction we're going. We need you to row the boat with us.

[Will Smith]

So that's great stuff. Jake. Say, say more about, say more about that. What, what do you think you learned? Help somebody who hasn't had all this hard won experience, you can accelerate them to, to know just by listening to you what you have learned the hard way.

[Jake Forfaro]

Yeah, I think a common denom, a common factor in the businesses that we purchased are a lot of them lack elite leadership and vision where the company was going. And I think stepping in there and being able to be a presence, first one in, last one out and lay out the vision for people and get people to buy in and obviously treat people with kindness and respect and love and hold true to your values and morals as a person and not just run the business by a spreadsheet. I think especially in small business, it's such an important that people factor. People are everything, right. People are replaceable, sure. But at the same time, if you want, if, if we're going to go where we want to go, we need a strong team behind us that believes in us. And it takes time to build that, but it also takes time to learn how to lead. And I think the last few years, you know, if you look at the first acquisition to the latest, that the buy in is, is undeniable.

[Will Smith]

And so Jake, when you get into an acquisition today, what do you, what do you say? Not word for word, but what, what is the kind of, what's the kind of vibe? What's the gist?

[Jake Forfaro]

Yeah, I, I think the most important thing is to come in with, with humility if I am not an expert in that industry. For example, this, the latest acquisition of the carpet and floor cleaning. I've never ran a truck mount machine before and, but the thing is that's not what I'm coming in to do. But I, I tell them straight, straight up, you know, you know more than me regarding the technical aspects of this, of this industry. And that's okay. Nobody's going to learn it as fast as you see me learn it. However, I'm going to give you the tools and the resources you need to do your job effectively. And this is where we're going. We, we, we have a meeting and we say, hey, here is a vision. We need everybody to buy in. If you're not going to buy in, then unfortunately we, sometimes you have to cut ties.

[Interviewer/Moderator]

Right.

[Jake Forfaro]

And the, the buy in that we have received and the amount of support we have from our team is, is incredible.

[Kyle Boyden]

And, and it definitely all comes from how bought in Jake is. He, he's not exaggerating. It's first in, last out. Every single day. There's a Restoration call at 10pm Jake's on the truck. Jake's a hundred percent bought into it. When on the first acquisitions we, we said we were and I think deep down in our heart we were, but it wasn't really visible. So the, the, the buy in that we got initially isn't the same as it is today. I've heard it seems like brokers mostly. I've heard so many people say, oh, just buy a good business and don't screw it up. Like that's your strategy for buying business? Yeah, never really. It's like, okay, cool, as long as it doesn't get screwed up. That's a good strategy. But what happens if something goes bad in, in with our hands on approach, if things go really, really bad, like we could actually save this thing.

[Jake Forfaro]

Yeah. Buy a business and put an operator in place. Yeah. Okay, let's see how, let's see how long and great your business goes. Let's see the culture of your company when you're putting everything into that person's hands. And, and the, the vision for me it's, it's not to sit on a beach and drink a martini. I don't know if I ever will retire. I feel like God put men on earth to, to work and that's what we're called to do. And you know, I want my fingertips in it. Of course I will let things go and delegate and I already, you know, have a good team, but I think it's important you lead from the front and, and that's what it's about.

[Will Smith]

It's great, guys, and, and thank you for, for that on the leadership. We're going to probably return to it. Let's get into a little bit of deal dynamics now. So these really small acquisitions that you were doing, you said, what did you say, three to five hundred in revenue. You said, you said it took five acquisitions to get to two and a half million. So call it half a million. Average was revenue each. What did the deal structure look like there, Kyle? Because as I recall, you were, you were able to get a pretty, pretty good deal terms as a rule, they.

[Kyle Boyden]

Were all seller financing. Very small cash out of pocket. Owner carrying the note from anywhere from three years to all the way up to 10 years. Ten years on some of them. We have a number of them at 0% interest.

[Will Smith]

Give me one deal in particular and let's double click on it.

[Kyle Boyden]

Oh, two really fast ones. One is the first one we pitched, no interest, and she responded and said, I'm going to go ask my accountant. And we're like, oh, this is not going to be good. And she came back and she's like, my accountant said, everything looks good. And we just could not believe that the accountant signed off on a 0% interest loan.

[Will Smith]

For how long and how much of the deal was it?

[Kyle Boyden]

That was four or five years. Five, Five years. So our monthly payments, I think when we bought it, the company was cash flowing 7 or 8amonth. And our monthly debt service on it was 2200 at no interest. So as an investor, it made sense.

[Will Smith]

And you did you have to put cash into the deal? How much of the. Or was it 100? It wasn't 100. Seller finance.

[Jake Forfaro]

30.

[Kyle Boyden]

That one we dropped 30,000 into the deal.

[Will Smith]

30,000.

[Interviewer/Moderator]

Okay. Okay.

[Kyle Boyden]

I think so we total of our own money at $5 million of revenue now, which is 4 million of that is acquisition. About just shy of a million is natural growth. We're a hundred thousand dollars of our own cash.

[Will Smith]

Oh, so that would be a good number to get.

[Interviewer/Moderator]

I.

[Kyle Boyden]

That would be another attractive part of, of stacking and building. And if we're looking in decades instead of years or days, we saved a heck of a lot of money doing it this way and gained some invaluable experiences.

[Will Smith]

Yeah, yeah, absolutely.

[Host 1]

You know, I just Wonder.

[Will Smith]

Yes. As you said, Jake, the, the conventional wisdom on this podcast and in this world is, you know, bigger is better. Although I've entertained the debate a lot here about buying smaller and plenty, plenty of guests have bought small and we always talk about it. I mean, it's a really important conversation and I don't think there is a super right answer. You guys, your approach is, you know, buy small plus.

[Kyle Boyden]

Plus.

[Will Smith]

I mean you got, you guys really lean into that. You bought small and then did it again and then did it again and then did it again. But it's interesting because this is an approach and it was painful and you weren't really making money, but as you said, it was kind of tuition and now you feel really confident it is. Is my, is my impression fair?

[Interviewer/Moderator]

Fair? Very fair.

[Host 1]

Well, it.

[Will Smith]

Let me, let me flip, let me flip this. What would, would you have done it differently? Even though you've, it was, it's been painful, but you seem pretty psyched about where you're. You're at now. So would you have done it differently? Reflecting back, do you allow us to.

[Jake Forfaro]

Have the, the, the experience in our head though, the wisdom that we learned from it?

[Will Smith]

No. No.

[Jake Forfaro]

No. Then I wouldn't do it differently.

[Kyle Boyden]

I, I agree. I think, I think hard is okay and the fact that there was two of us in it together. Entrepreneurship's extremely lonely and there was a lot of dark nights and a lot of what in the world have we done? And just the promise to each other was I'm not going to quit today. And we do that enough days in a row and stack up enough, enough of these which seem very small wins at times, but eventually you get the momentum just for, for the same exact reasons we're buying, buying businesses rather than starting at zero. It's, it's just stacking momentum.

[Will Smith]

And, and what were some of those dark moments, Kyle? Just like 10pm crises or something or.

[Kyle Boyden]

And then looking at the bank account and there's like $4 in there and transferring from one account to another and then just figuring out how to get by. And, and we're, we're, we're so smart. Why aren't we making money and we're working so many hours. Like why did I walk away from a six figure job where I was golfing three times a week for this. And a lot of self doubt and in the winds when you're kind of in, in the moment, don't really feel that great. Like of course that should happen. Like obviously that would happen with this much effort. I, I can't believe I'm not this much further ahead. And so really remembering we just had our very first celebration dinner three days ago. So we had to hit $5 million revenue to actually celebrate anything. And we still felt like we haven't scraped, scratched the surface.

[Will Smith]

Just getting started.

[Jake Forfaro]

Just getting started.

[Interviewer/Moderator]

Yeah.

[Will Smith]

That's so cool guys. That really, that really is inspirational. But I have to say then, so when you were up there on that stage bending Kinsier, you were not in the clear just yet.

[Jake Forfaro]

Well, I would say when we're talking to other people, I think what the hindsight here is, I don't, I wouldn't encourage anybody to do what we did, but that's a different question than what I do, what we did. Right.

[Will Smith]

Totally.

[Jake Forfaro]

I think people should go bigger. I think you should, you know, try to shoot for above 500,000 EBITDA to, to, to leave a job, especially a well paying job. And I, I feel we can speak on that because we went the opposite direction. We know what the opposite direction was like.

[Host 1]

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 it is in the show notes. Aspen is a professional employer organization or peo run by a searcher for searchers. Search fund veteran Mark Sinatra runs the company which provides HR compliance, flawless payroll, Fortune 500 caliber benefits and HR due diligence support for your acquisition, all for.

[Will Smith]

A fraction of the cost.

[Host 1]

Go to aspenhr.com or contact Mark directly.

[Will Smith]

At Mark aspen hr.com.

[Host 1]

And so then.

[Will Smith]

Jake, is there a personality profile, somebody who might be listening to this for whom you would prescribe what you guys did? This, this really scrappy, tiny acquisitions, stacking the acquisitions. Pain, pain, pain, pain. But learning, learning, learning, learning.

[Jake Forfaro]

Yeah, I think you would have to be someone with a threshold for, for, for pain. But I, I also think you need to be very, very humble and, and not have any sort of, of ego because you're not going to have great conversations with seller if you're not humble. You're not going to have good transition periods with employees if you're not humble. It all comes down to humility. And I think if you don't have a lot of money capital or you don't have access to capital, sometimes it's the place people have to start. And I think that just throwing off the wayside because it's the harder way doesn't necessarily mean it's impossible, but if you have capital or access to capital, save yourself some gray hairs and go bigger.

[Will Smith]

Yeah, yeah.

[Kyle Boyden]

I think anyone that hates their day job and isn't making a life changing amount of money, this should be an interesting proposition too. If you're not liking your day job, you're kind of already stuck on the wrong path. If you already know you're on the wrong path, is that not the greatest risk of all, just continuing down, down the wrong path? Why not take a calculated risk, do, do your due diligence, do the opposite of what we did initially and, and take a bet on yourself. And, and if you take these small calculated bets like we did initially, if that proper, if that company didn't work out, we could have cash flowed it and got the heck out of there and been back on track. I think I've said this before, but the worst case scenario is we go back to our W2 job and we retire at 65, which is most people's A plan. And that was our B plan.

[Will Smith]

Totally. Yeah. Oh, I love that. Very well put. But to the point about these small acquisitions which we haven't yet addressed, but it's kind of the glaring appeal of them is that the risk is, is very small. Your capital outlay is not a, is not a lot. You don't have a loan. Well, you have seller financing, so you have that loan. But this is probably not personally guaranteed debt and it's not a lot of debt because these are such small acquisitions.

[Interviewer/Moderator]

Right? Correct. Correct.

[Kyle Boyden]

And when you're buying it at 2x multiple, you got a lot of room for something, for things to go really bad and you can still service that debt. I mean, this is 2x multiple. You.

[Will Smith]

We didn't ask it, we didn't hear the multiples. What were the, how are you getting.

[Kyle Boyden]

These valuations lower than that in many cases?

[Jake Forfaro]

Also, a lot of times you'd have to teach the seller about what, what the company's worth. You know, there's, there's times where we'll have a reality check where they'll come and ask four or five times what the profit is and the market doesn't agree. And you got to show them proof that the market doesn't agree. And, and I think, you know, just a side note really quick here, one of the great parts about going small for us, it's, it's a lot of the previous owners are, are helping us so much and they're pushing us forward as far as introduction, selling, helping with the team, et cetera. So there, there are some, some pros there as well.

[Will Smith]

And you think that they're more friendly toward you because the business was so small or you think that's just a happy accident of the deals you bought?

[Kyle Boyden]

I think a lot of them see, see themselves in us back when they first started, started their business. And a lot of these businesses were booming until Covid or, or something happened at some point and they just kind of let it fall apart or they, they lost energy, they lost momentum, they, they took enough bullet wounds where they just didn't quite have the energy to grow it again. So when we come in super excited about the business and wanting to grow it, and I'm going to give you a path where you're going to make money for the next 10 years, like they're, they're kind of bought into the success of this business. Anyone that's owned a business for 30 years, you're, you're purchasing a, almost one of their limbs, like a piece of their identity at this point. So they are very, very invested in the future success of that.

[Will Smith]

And so. Okay, so, so the businesses that you're buying there, unlike the property management business, which, which was just a mess, these are very small. But, but they're, these cleaning businesses that you were buying were small but old with staying power with, with long term clients in some cases. I'm sure that was a blend.

[Jake Forfaro]

But yeah, 30 years plus at least four of them.

[Will Smith]

And the owners were willing to sell because they were at retirement age. You said that was one of your criteria. And because there aren't other buyers for tiny businesses like this.

[Interviewer/Moderator]

Correct.

[Kyle Boyden]

That's a huge advantage of this. Most, most people aren't going to buy this. You listen to anybody on YouTube or a broker and they're gonna say you don't, you don't buy businesses like this. But if we already have the platform in place, we can just transition basically just clients over even at that point and we structure that deal in a way that we're not taking a whole lot of risk, but if we just pay you a percentage of sales for a short period of time, we kind of found a no risk situation there.

[Will Smith]

Yeah. And these are. These owners, do you suspect would have just eventually shut the businesses down? Is that what they thought they would kind of what they expected in their future if they would just close it down one day?

[Kyle Boyden]

A lot of them didn't know you could sell businesses. So we're, we're not taking advantage of people that don't know by any means at all it's never once felt that way. It's. It's giving them an out that they didn't even know was there.

[Interviewer/Moderator]

Yeah.

[Will Smith]

It's found money from their perspective.

[Jake Forfaro]

Yeah.

[Will Smith]

At two and a half million after five acquisitions, what is the business or platform that you've built look like at that point?

[Jake Forfaro]

Yeah. So we, we have at that point in time it was a home service business where we offered house cleaning and window and gutter cleaning as well as pressure washing. A team of about 20 in the field and some help with some virtual assistants that are a big part of our admin team. Keep costs down and they're. They're a great part of our team. Fantastic. And more recently we've dove into where our Northern star has been all along is the commercial side. And that is kind of the, the four, four or five million or I'm sorry, two and a half million on to five million is. Is more commercial.

[Will Smith]

So at two and a half million you say to yourselves, I think we're ready for bigger businesses now. And what did those then next to acquisition six and seven that together represent two and a half million more of revenue. What did those two businesses look like?

[Jake Forfaro]

Funny enough, the, the janitorial company was the. The seller of. It was a previous seller of the house cleaning business. She. She separated her business and sold the house cleaning side. She knew how we operated. We had a great relationship with her. They were moving out of state and we made them an offer for the commercial side of the business and they accepted it. And that's Kyle's baby now at the.

[Kyle Boyden]

Two and a half will. We were getting random from our. Our efforts out there, just random requests for can you do flooring? Seemed like we're getting one of those a week or something, didn't it? And we just kept saying no or passing it off to a referral partner. And we were starting to get some commercial. I think we had almost 20 commercial accounts just by being alive basically. And so it really felt like we can make a concerted effort towards this. We can capture all of the revenue and with a concerted effort we can grow this as well because we're already naturally getting some of that business. So on. On this particular search we were only going significantly bigger. We had. We had a much tighter buy box around this next surge.

[Will Smith]

Bigger and more committed to commercial. A janitorial.

[Kyle Boyden]

Yeah, yeah, yeah. Janitorial being 100% and then the flooring company having a big percentage of their business as well. And we wanted. Since we were new to this space, we didn't we didn't really want to buy a bunch of small companies and, and kind of build from the ground up again. Like we wanted to buy real solid, good companies that had management in place. And so we knew we needed to be above a million dollars revenue. And there's again, just a bunch of cold calls until we found two very good targets. And I mean, they both might have been a year or so.

[Jake Forfaro]

The carpet floor company, we're working on that for a year and a half. Seller backed up three times and the fourth time was a charm. And the janitorial company, the one I referenced before it was a previous seller of the house clean business we bought.

[Interviewer/Moderator]

Okay.

[Will Smith]

And so those were roughly evenly split terms of revenue.

[Kyle Boyden]

Pretty, pretty close, yeah.

[Will Smith]

Okay, so a little bit over a million each in revenue. But you, you've got all these services again, you've got commercial and residential, you've got cleaning, you've got exteriors, you've got floors. But in your vision, cleaning is the main thing in all these, all these services kind of that orbit around cleaning. So you're cleaning. I'm trying to define the company and a sentence.

[Jake Forfaro]

I would say it's a full service commercial and residential cleaning company.

[Will Smith]

And you're at 5 million. Now, your last acquisition, Kyle, was your first SBA acquisition, correct? Let's hear, let's hear the story of that, please.

[Kyle Boyden]

So I'm trying to think of even where to start. We came to terms that we'll do an SBA loan. They didn't want to do seller financing. They, they just wanted the cash. We used US bank and they were doing 7% loans at the time, which was about 3 or 4 points below the market. And we had looked at an original financials, an original P and L, and it showed little north of 300k of profit. We came to a million dollar purchase price and then right as we're about to turn it into the SBA, we.

[Host 1]

Saw.

[Kyle Boyden]

P Ls that showed like $570,000 of profit on.

[Will Smith]

So like 50, 50% net margins.

[Kyle Boyden]

Yeah, yeah, yeah. So we're. Which was a bit alarming as, as we know this.

[Will Smith]

Amazing. But too good to be true.

[Kyle Boyden]

Yeah, a little bit too good to be true. And we just, we'd always been told the SBA is the, the greatest underwriters in the world. They'll do such a great job. So we trusted them to, to kind of knock the dust off this thing and look through it and fast forward a little bit. They never even asked for bank statements in any appointment at any Point. So they had P&Ls and tax returns that matched. And we went pretty far through this process. And eventually Jake just kept saying, dude, something about those numbers doesn't seem right. Something about those numbers doesn't seem right. And finally I was like, yeah, I, I agree. So I requested the bank statements and I looked, and the, the total sales of the company was about 300k short of what they had claimed. And so that right there just said, something's off with the bookkeeping. We ended up hiring a. She called herself a forensic bookkeeper that went through. Through the books to try to, to create what we believe the real P. Ls to be. And she thought the bookkeeper had stolen upwards of $300,000 of profit from, from this company.

[Interviewer/Moderator]

Wow.

[Kyle Boyden]

We are learning all of this on the side and not wanting the SBA to know anything because we want to keep this deal intact and we want to figure out what, what the real purchase price is going to be and then just let the SBA know that we've reached different terms. So this is all happening in the background as we're getting closer and closer to closing.

[Jake Forfaro]

So you remember and your thought was.

[Will Smith]

That if, if the SBA heard about potential embezzlement, they would just. Or your lender, that they would just disqualify the deal out of hand at that point.

[Kyle Boyden]

Correct. So we're trying to keep this, keep this as far from them as possible. And then back from my thing of how are we going to tell the SBA that we're going to offer significantly less with no real explanation whatsoever, but we still want the deal regardless. A phenomenal company, great management, great systems in place, like the, the processes they've created and their onboarding process and their training program and everything was that of a Fortune 500 company. I mean, a really well ran company. We just want to pay the appropriate price for it is all.

[Interviewer/Moderator]

Yeah. Yep.

[Jake Forfaro]

And the owner of this company, the seller, she was learning this in real time as we were. She had no idea about any of this.

[Will Smith]

And how could she have not felt in her own, you know, pocketbook that it's $300,000 less than it should be?

[Kyle Boyden]

Had we not already had a really strong relationship with her, I just flat out wouldn't have believed her.

[Will Smith]

That's my reaction.

[Kyle Boyden]

We asked her that question. It's kind of a hard question to ask, but she, she said, you know, I'm not used to making this kind of money. This, this company just blew up. So this was a, a whole new world financially for Me and she was embarrassed. She's like, I, I don't know explanation, but that was my thought too is how, how could you possibly miss 300k? And ultimately the bookkeeper wasn't stealing. The bookkeeper was like double tapping invoices. She wasn't canceling them out. She would transfer money from one bank to another bank account that is income. It was as if it was a mess. It was as if it was her first time ever doing books. So it was such a mess that the, the, the lady that was hired for forensic account bookkeeping still doesn't have an answer to this day. So we, we went through. And basically the, the beauty of this whole thing is that sets. It sets. Since it's such a recurring nature of the business. It's janitorial. It's the exact same dollar charged every single month. Even if you skip a claim, you charge them the exact same every month. So all we needed to do is recreate a couple of the most recent months and we would have the run rate for the year and then we could come up to a multiple in which we could. Could cash flow and, and still be protected. So we ended up becoming the forensic bookkeepers. Came to the price it was. Is undisputable there. There was no arguing between us and the seller. It was definitely a significantly less of a purchase price. So they had to be able to stomach that. And we ended the whole thing amicably. She's still helping us every day. She's phenomenal. And we told the SBA that.

[Jake Forfaro]

Didn't we just.

[Kyle Boyden]

Yeah, we told them that, yeah, we negotiated down a little bit and that we thought the. It was way more. The owner was completely removed is what we thought. And we've since learned it's not. And that I'm going to have to work this full time and I'm going to need to justify a, a very large salary to have this be my main thing. And the SBA asked very, very few questions and approved it.

[Will Smith]

When you guys keep saying the sba, you mean your lender.

[Kyle Boyden]

This is. Yeah, this is US Bank. They were. It felt like it was everybody's first time doing an SBA loan through, through the entire process. It was a pretty choppy thing, but maybe because of that, it, it ended up benefiting us.

[Will Smith]

But I'm surprised that you guys feel that they would have run away scared if they'd found out that the revenue was less than initially reported, because that's not, I mean, that's not totally uncommon down here in this, this world.

[Kyle Boyden]

It was significantly less with incorrect tax returns with monies owed. I mean it was pretty darn sloppy. And there was still no clear the company makes the this much other than my word that hey, here's my Excel spreadsheet that I built. So that. That was hard fear.

[Will Smith]

Okay, well, your what you'd heard that the sba, the underwriting for an SBA loan is this airtight process. I feel like I, my understanding of how rigorous that is on the back end has also been like corrected that it's not that these, you know, these underwriters for, for SBA loans that are supposedly really diligencing your deal or at least you know, looking closely at things. It's much more formulaic and less analytical than you'd think. Of course, it varies from underwriter to underwriter, bank to bank. I don't want to make some sweeping negative generalization, but I do think it's important for people to hear because I think I myself have said from time to time that your SBA lender can be something of a backstop. If you, if you know, if you've done your own diligence or whatever, you hopefully you've hired a due diligence provider, but you also have this one more filter in the SBA lender underwriting that to go through, which is, you know, a good thing. They'll catch something that maybe you haven't. And most my confidence in that is less than it used to be. And I think especially based on your experience now people's, people's listening, their confidence should, should also not be so high. In other words, you know, don't, don't lean on anybody else for, for your diligence. Great catch, Jake. Or great listening to your instincts, Jake.

[Jake Forfaro]

And I think that they took on full circle here from where we started as far as the level of due diligence that we did on our very first deal to this one. It just shows you that, you know, we've learned along the way and refine those skills, whether it's analytical, spreadsheet, financial evaluation, or if it's, you know, talking and meeting employees. Well, whatever the due diligence is, I feel like there's not many people that can do it the way we're doing it outside of like a third party, of course.

[Will Smith]

Well, I have to ask, despite the fact that you have all this hard won experience and what you just said, that you've gotten pretty good, you think at diligence, I still would argue that it's a best practice to pay an expert, a third party. Diligence provider who do this by profession, especially as your deals got bigger, did it occur to you this decision to go bigger, did it occur to you to use some third party services to build a deal team around yourselves rather than just leaning on each other?

[Jake Forfaro]

I agree with you. I think it is best practice and I would encourage everybody to do that. I think I brought it up a couple times in the process.

[Will Smith]

Kyle's looking guilty.

[Kyle Boyden]

I was gonna say fundamentally you are 100 correct for cleaning businesses. We've done enough of these acquisitions. I, this might be cocky or whatnot, but I, I would trust my own underwriting ability for a cleaning company at this point is much as anybody that would pay $10,000 for. Honestly.

[Will Smith]

All right.

[Kyle Boyden]

If it was any other industry, sure, I would definitely and I would highly encourage everybody else to do it as well. Had we not had these prior experiences, we would have paid way too much for this company. We would have probably bankrupt ourselves. So yes, everybody should make absolute certain of the numbers on all of their deals that they do.

[Interviewer/Moderator]

Yeah.

[Jake Forfaro]

Higher than the third party.

[Interviewer/Moderator]

It's great.

[Will Smith]

Guys. I want to in just close with the big vision in the big number and kind of how you, how you see getting there. But first, just one more time, the kind of the service offering that you have and what the strategy is there. So full solution cleaning, both residential and commercial. And so it's not just janitorial, it's kind of as you said, carpet, floor exterior, all of that. So and that's, and that's slightly differentiated in the market. Usually it's just janitorial and then, and then bringing in third parties or subs to do carpet. Say more about the your go to market strategy if you will.

[Jake Forfaro]

So two different brands.

[Interviewer/Moderator]

Right.

[Jake Forfaro]

So when a client's reaching out, they're not reaching out to somebody that is specializes in both. Because I feel like that you need to be a specialist and keep it together. It's just not a good vision. So yeah. So commercial cleaning, janitorial control everything. We truly want to be a janitorial partner control everything when it comes to the building. And then on the residential side, house cleaning at the core and then leveraging out the subs on both the commercial and the residential. But we are subbing to ourself and those are different brands as well. We have a long term vision of building the same brand on the residential side. But right now we're trying to keep, keep things separate. It's all, it's all separate client facing but the back end, it's the same Team, we're cross utilizing our, our admin in our office.

[Interviewer/Moderator]

Great. Great.

[Will Smith]

Thank you for that. And one thing that I want to circle back to. We, we joked earlier that you learned that from property management that, that you know to be the, the gatekeeper to, to other services that the client needs is a useful place to sit. But the reality actually is when I, when I've talked to other people who had kind of a vision of building a, having a property management business and then building a vertically integrated, you know, having H Vac and all the other services that the client, the, the landlord, so the, the, the client of the property manager might need. In fact that falls apart because your client, the landlord, the property owner wants you to not be double dipping. They want you. Part of your role as property manager is to go out and get bids on H Vac that are, you know, the most competitive. So you can't just sell to yourself. Do we, do you follow me? And so is that not something that you'll bump into that, that, that at some point your clients are gonna want you to go hire the cheapest carpet cleaner or the one that provides the best value, not yourselves, even if it's under a different brand. You haven't encountered that yet.

[Kyle Boyden]

How we're marketing is we are, we're not another janitorial company. We're a total facility care solutions provider. Whatever a facilities care program that we've built custom for your industry. We're coming, we're going to do all of your maintenance cleaning as well as every quarter will come in and let you know what, what additional cleaning needs to be done. So it's, it's more of a, a differentiator in the market.

[Interviewer/Moderator]

Okay.

[Kyle Boyden]

When, when all of these companies are used to year in and year out turning janitorial company from janitorial company whoever's the cheapest bid. And, and this, this service in this program doesn't really make sense for companies that are spending under a thousand dollars a month on, on facilities because who really cares where they buy it from? For these big companies that have a level of complexity, multiple locations, multiple buyers. Any security clearance, security clearance, multiple floors, different kinds of floors. If image is huge like a car dealership or a bank, the windows need to be done more frequently. Any level of complexity, that's our client.

[Will Smith]

Great guys. Close us out with the, the vision in terms of how big you want to build this numbers.

[Kyle Boyden]

The plan from day one was 10 million EBITDA.

[Will Smith]

And how did you arrive at that? It's nice and round.

[Kyle Boyden]

We heard somewhere we could get a 10x multiple at that point. It's nice and round. 10x multiple, 100 million sounded kind of nice. Whether or not that is true, I guess we'll find out when we get there. I think initially the plan was a really large exit. And we've had so much fun in this process and we're enjoying the growth and the pain even that the desire to sell has kind of fallen by the wayside. And now we're just enjoying the process and growing this company out and as Jake said, the relationship with employees and whatnot. So the goal remains the same as far as size, but what the, what the exit looks like is to be determined.

[Jake Forfaro]

Yeah, I would be happy if there wasn't an exit. And this is kind of a legacy play more than anything. But, you know, the future, we can say, you know, this is the plan, but everybody has a plan to get punched in the mouth. And I'm sure we have a few more punches left.

[Will Smith]

Sure. Well, and, you know, if you get into, you know, EBITDA of. Well, already in a million, but if you get into 2 and 3 and 4, I mean, every, every incremental million of EBITDA that you generate, your options just expand. So if you're at 10 million in EBITDA, you can do whatever the heck you want.

[Kyle Boyden]

You want that? That's exactly right. It feels like we have the platform in place now. So now we're looking forward to organic.

[Jake Forfaro]

Growth at this point, but we're done with acquisitions.

[Kyle Boyden]

Yeah, we get some serious.

[Will Smith]

Okay, well, well, hold on. I was just going to say, as a reverse engineer, that 10 million EBITDA number, and I assumed it was going to be lots more in organic growth, in other words, buying. Buying more businesses. And you're saying definitively you're done with that, so you're going to, you're going to grow 9 million more of EBITDA through.

[Kyle Boyden]

In six.

[Will Smith]

Natural organic growth in six months.

[Kyle Boyden]

You might have a different.

[Jake Forfaro]

Yeah, I think it's one of those things where, you know, you have a child and those nine months afterwards, you can, you don't want another one right now.

[Interviewer/Moderator]

Right.

[Jake Forfaro]

And sometimes you could envision never having another one. And then they start to get cute, you know, two, three years old, and then you're like, well, I could, I could do this again. I need, just need some time to, to, to really relax as far as the transition process. So give me a year, ask me again. I'm sure we'll buy something else, but I think we have enough to stabilize and Systems, processes and continue to build for the future. I'm sure we'll buy something else. Just not right.

[Will Smith]

Yeah, I'm just not sure. This is pure instinct. I can't back this up really. But I'm not sure getting to 10 million in EBITDA in your lifetimes is possible without some, without doing some acquiring. That would be a huge amount of organic growth.

[Jake Forfaro]

Let me, let me, let me retract my statement. Nothing small ever again.

[Will Smith]

Yeah, okay, great. Well, that was going to be my next question. So these little tiny businesses that you were buying, no more of those?

[Kyle Boyden]

No, Kyle, I, I, I, I totally agree. And, and you see the, the strategies where people will bring their $3 million EBITDA to a $5 million EBIT and they partner together and then have an exit together or enjoy a, a way larger valued company. So I, I would rule nothing off the table except for anything south of a million dollars revenue probably.

[Host 1]

But you know, it's interesting to me.

[Will Smith]

Because I feel like now that you have kind of much more of a real platform, integrating those tiny little bolt ons would be easier. Now you could, you could, you could just, you know, fuse it into the Borg pretty easily. No, it's not pretty easily, but much easier than you were doing before. And also you have all this, all this experience at doing it. So you guys are much more experienced. There's more of an institution to, to receive the, the bolt on.

[Kyle Boyden]

No, we had just closed on these last two and a half million dollars of business acquisitions in the last two weeks. We had to absolutely will them over the finish line. And we are, we are tired, we do have deal fatigue. So it would be nice to catch our breath, experience some more organic growth and then we might come back on your show in a couple years with a whole different 2028.

[Jake Forfaro]

Yeah, if we held true to what we said.

[Interviewer/Moderator]

Great.

[Will Smith]

Well, let's, let's assume you do hold true to it and no more acquisitions, no more inorganic growth. How, what, what is the plan? To grow, to grow these organically. What, what, what are the levers you're pulling?

[Jake Forfaro]

A combination of obviously paid marketing, but cross selling as much as we can and getting you, you know, really increasing that LTD of a client for as much, as much as we possibly can. And that's to get them in the ecosystem and then nourish and provide phenomenal service.

[Kyle Boyden]

Yep, that's it.

[Will Smith]

So cross, cross selling is a big part of it. Get them in the door for cleaning or for something and then eventually also be providing them these, these other, ancillary services that they will eventually need.

[Interviewer/Moderator]

Correct.

[Kyle Boyden]

That's kind of the golden egg right there.

[Will Smith]

And your focus equally on commercial and residential.

[Jake Forfaro]

100 of Kyle's focus is. Is focused on growing the janitorial side of the company. 100 my focus is on the residential side in the, in the bolt on, you know, carpets and windows.

[Interviewer/Moderator]

Okay.

[Will Smith]

And you don't feel like going all in on either residential or commercial is the strategy you want to do. Because don't you feel like a future acquirer?

[Interviewer/Moderator]

Very.

[Will Smith]

You know, generally like the, the big janitorial companies, they don't also do house cleaning. They just strictly do commercial. So how do you think about that?

[Kyle Boyden]

I mean that's 100 the advice that everybody has given us. But the nature of window cleaning, exterior cleaning, and then all the floor cleaning is they service both. It's the same employee servicing both. So in the short term it doesn't make sense for us right now to just chop it in half and completely pull the plug on one of the plans when it comes time to an exit. If it comes time to an exit, we'll have to make some strategic moves to line up for that. Because you're right, most people aren't going to want a commercial residential play. And maybe there's a day where the residential side gets sold and the commercial side gets held onto so that there's. All doors are still open at this point.

[Interviewer/Moderator]

Mm.

[Jake Forfaro]

And I think that's the nice thing about having two of us. That 100% of his focus can be on janitorial. And I'm, I'm helping that in the sense of, you know, we're, we're really pushing the carpet and the window cleaning company towards the commercial side. However, we have a great database of residential customers. We might as well service them and make money.

[Will Smith]

Yeah, sure. And now that you're taking a breather from acquisitions, you're both full time operators, your day to day operations, seven days a week. And the business of commercial cleaning is. What would you say to people. We already heard your opinion on property management. We heard your opinion on home cleaning, house cleaning. So what of commercial cleaning? A lot of people seem to like it, you know, recurring, you know, commercial clients, business to business, high quality revenue. Of course, I've also heard, you know, very tight margins. I just heard you guys say that every year you're. It's not, it's not that recurring because every year you need to rebid for the business. People heart labor's hard.

[Interviewer/Moderator]

Right?

[Will Smith]

Because. Because commercial cleaning's done in the middle of the night. Say, say more about pros and cons of commercial cleaning please.

[Kyle Boyden]

It, it is hard but again hard is okay. Hard means less people are going to do it. A lot of at least is what I tell myself in my head to justify this decision. But I think a lot of really, really sharp business owners aren't starting commercial cleaning companies. So I feel like our, our efforts combined with our wherewithal are going to automatically separate us from 90% of the competition. I think it's really easy to go from nothing to good and it's really really hard to go from good to great. So that's just focusing on being the greatest that we can be from the customer experience to controlling back end costs scales of economy on, on, on the back end how we're combining all of our companies together. We definitely have some major advantages and, and Jake said earlier but I think our, our greatest cheat code is the fact that there's two of us twice as fast, twice as far as most people that, that we're competing against.

[Interviewer/Moderator]

Yeah.

[Will Smith]

5 million in revenue. A million is of EBITA and of that ebitda. How much of it is is actually not going to debt payments? I mean how much free cash flow is the business generating before paying yourselves?

[Kyle Boyden]

About 700k. About 600. About 650.

[Will Smith]

So 650s SDE after after servicing debt.

[Kyle Boyden]

And a couple after servicing debt fall off in the next two years.

[Will Smith]

That's great. On a hundred thousand dollar investment combined.

[Jake Forfaro]

And we've retained 90% equity.

[Will Smith]

That's not bad. And how long?

[Kyle Boyden]

Two and a half years at this point.

[Will Smith]

I mean that feels like a, a pretty amazing. I mean going back to our real estate comparison that's an incredible return on equity.

[Jake Forfaro]

It's, it's been fun. It really has. It's been hard. It's been hard right? It's been fun and I, I wouldn't change it for nothing.

[Interviewer/Moderator]

Great.

[Will Smith]

Well anything else to add guys?

[Interviewer/Moderator]

No, no, no.

[Jake Forfaro]

Appreciate it.

[Kyle Boyden]

Appreciate the great opportunity.

[Will Smith]

Yeah no, thank you guys for coming on. Thank you for being so transparent. I'll provide links to your LinkedIn in the show notes. People can reach out if they are interested in in cleaning or want to stack revenue 100 and $200,000 businesses and go about it. That way they'll, they can reach out. Kyle Boyden and Jake Forfaro. Thank you guys for coming on Acquiring Minds.

[Jake Forfaro]

Appreciate it.

[Will Smith]

Hope you enjoyed that interview.

[Host 1]

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[Will Smith]

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[Host 1]

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