From Corporate Analyst to $1.5M Business Owner in 11 Months w/ Eric Clewis

Summary

Action Academy | Millionaire Mentorship for Your Life & Business Episode Summary: From Corporate Analyst to $1.5M Business Owner in 11 Months w/ Eric Clewis Host: Brian Luebben Date: March 30, 2026

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Episode Overview

In this episode, host Brian Luebben interviews Eric Clewis, who successfully transitioned from a 15-year oil and gas corporate career to co-owning a $1.5 million small business—all within 11 months. Eric shares his journey of leaving the “golden handcuffs” of his W2 job, navigating the business buying process with a partner, and offers actionable insights for high-income professionals ready to take the leap into business ownership.

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Key Discussion Points & Insights

1. The Corporate “Golden Handcuffs” and Search for Purpose

• Eric’s Background & Discontent (02:36)
  • Spent 15 years as a project controls analyst in oil and gas, managing up to 16 people.
  • Felt like “just a number” in a 50,000-employee company.
  • Lacked purpose and fulfillment: “Just didn't have the sense of purpose. And I was kind of in a career that I never really dreamt about to begin with.” (00:00–03:12)
  • Repeated attempts to leave for commercial real estate failed due to comfort and security.
  • Mentor’s advice: “If you don't want to do this, get out now, otherwise you will be golden handcuffed because it's hard to beat once you get going.” (03:12)
• Catalyst for Change — Family Wake-Up Call (04:18)
  • Eric’s father, also oil and gas, retired, was diagnosed with cancer within 9 months.
  • Realized time is not guaranteed: “I can't spend 40 something years in the corporate world working for somebody else. And then that's it.” (04:18)
• Host’s Reflection on Urgency
  • Brian: “You act like you have time, but you were never guaranteed that.” (00:06, 05:05)
  • Importance of impatient action versus patient expectation for results.

2. Joining Action Academy & Deciding to Buy a Business

• Discovering the Podcast & Community (06:12)
  • Eric’s fiancée discovered Action Academy podcast around Memorial Day 2024.
  • After 3 months of deliberation, a bad workday triggered his decision: “It's like a flip, a switch flip... I submitted the application, had the phone call... and then I joined Sunday.” (07:18)
  • Host describes the urgency and action-oriented culture of the group.
• Choosing Business Acquisition vs. Real Estate (07:53)
  • Commercial real estate seen as a long-term net worth play.
  • Business buying offered quicker cash flow replacement: “It basically came down to cash flow to replace current lifestyle… worked backwards into what I needed as a minimum cash flow and figured out that business buying was probably the best bet.” (07:53)
• Actionable Insight: Use reverse engineering—calculate needed monthly/yearly cash flow, then search for businesses that fit the necessary SDE and price range. (09:07)

3. Partnership Best Practices

• Why Partner? (09:37–11:28)
  • Eric partnered with fellow Action Academy member, Bailey. Both brought complementary skills (Eric: operations, Bailey: construction/vision).
  • Partnership rationale: “You don't know what you don't know... it always helps to have somebody's soundboard or skill set that you lack.” (10:18)
• Assessing Fit—DISC Profile & Values (12:58)
  • Both high “SC” on DISC (stability, compliance), faith-based alignment.
  • “It's essentially marriage... date beforehand.” (12:58)
• Structuring Partnerships & Operating Agreements (14:16–16:30)
  • Use a reputable attorney; never DIY or use generic templates.
  • “Get a good attorney and get a rock-solid operating agreement.” (15:28)
  • Ensure all roles, responsibilities, exit/buyout structures are clear: “It was a good, probably 25, 30 pages of operating agreement, every scenario and what happens when…” (15:37–16:30)
• Host’s Emphasis: Failing at this step can result in “multi-million dollar mistake(s).” (16:30)

4. The Acquisition Process—Challenges and Realities

• Search & Diligence is Grueling (18:11–19:31)
  • Hundreds of business listings reviewed, ~100 NDAs, ~30 LOIs, only one signed and closed.
  • “What I was not expecting: how lonely the business search is... Community is so important.” (18:11)
• Community Provides Encouragement (19:32)
  • Being around others normalizes the struggle and persists through doubt.
  • Memorable quote: “You’re willing to hike up the cliff if you know that you’re going in the right direction.” (19:34)

5. Deal Structure, Profit Distribution & Transition

• Deal Numbers & Structure (21:24–23:59)
  • Purchase price: $1.75M, $500K average annual SDE.
  • Financed 90% by SBA loan, 10% down—no seller financing due to guideline changes.
  • SDE breakdown: ~50% to debt service, remainder split by partners as W2 salaries (S-corp/distributions).
  • “That's the same amount of energy and effort you’d spend finding a rental property... but now you get six figures of cash flow.” (20:52)
• Key Metrics
  • DSCR (Debt Service Coverage Ratio): 2.0 (“You want at least 1.7. Ours was around 2, I believe.” 24:01)
• Due Diligence (25:00)
  • Full Quality of Earnings (QoE) by specialist CPA ($7,000), legal review ($7,000).
  • Out-of-pocket expenses; possible to wrap into financing later but sometimes speed is critical (27:08).
  • “If you're buying an off market business, you need a Q of E report. That is just a non negotiable.” (28:26)
• Business Model & Remote Operations (29:16–31:07)
  • Niche: Furniture, Fixtures & Equipment (FF&E) procurement for commercial real estate (hotel/hospitality, multifamily, office).
  • Fully remote; core team in New Jersey/New York, with specialists in Brazil and Turkey. Owners in Houston and San Diego.

6. Transition & Working with Family Members

• Ownership Day (31:39–32:42)
  • In-person transition in NJ office. Actual closing “uneventful” due to bank delay, but otherwise smooth.
• Assessing Family Employees (32:55)
  • Previous owner’s twin brother is a key project manager; concerns about family “red flag” resolved by his professionalism and contribution: “Absolutely, like just Rockstar, loves doing what he does... been a great resource for us.” (32:55)

7. Growth Plans & Owner Experience

• Short and Long-Term Vision (34:03)
  • Hold and grow, focus on boutique hotels, seek preferred vendor status with large chains.
  • “We got really lucky finding the one we did with the team we have.” (34:58)
• How It Feels on the Other Side (35:10)
  • Humbling to “be the new guy again” after 15 years as an expert, but “so much fun”—work is no longer a chore: “I honestly cannot remember the last time I had fun working.” (36:04)
  • No more “Monday blues”: “Every day is just, you know, it’s a day, no better, no worse than another. And I love it. I love it.” (36:04)
• Host’s Vision for Impact: “Brick by brick creating a million business owners across this country, and it’s freaking sick.” (36:35)

8. Advice to Aspiring Corporate Escapees

• Facing Fear, Taking Action (37:08)
  • “The hardest part is joining. The commitment to just do it. That was... it took me three months to build up the courage.” (37:08)
  • “Nothing good comes from staying in your comfort zone. Joining will 100% challenge you, change pretty much every expectation you have of yourself.” (37:08)
  • “Stick to the plan. Don’t let time wear you down... it’s going to be harder than you think, but it’s worth it.” (37:08)
  • Host: “Everybody does need that breaking point, though, because comfort is dangerous.” (38:12)

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Memorable Quotes

• Eric Clewis:
  • “Just didn't have the sense of purpose. And I was kind of in a career that I never really dreamt about to begin with.” (00:00)
  • “You don't know what you don't know. And there's a whole lot to buying a business and running one successfully.” (10:18)
  • “Nothing good comes from staying in your comfort zone.” (37:08)
• Brian Luebben (host):
  • “You act like you have time, but you were never guaranteed that.” (00:06/05:05)
  • “The good news is it's a one time document [the operating agreement]. It's a one time suck. But it's a necessary suck that will set you up for a long, long, long time.” (17:13)

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Key Timestamps

• 00:00 – Intro & Eric’s lack of purpose in corporate
• 04:18 – Family catalyst (father’s illness) prompting major life change
• 07:18 – Joining Action Academy after a pivotal workday
• 10:18 – Rationale for partnership (complementary skills, reducing risk)
• 14:16 – Importance of legal counsel & bulletproof operating agreement
• 18:11 – Emotional grind & loneliness of the business search
• 21:24 – Deal breakdown: purchase price, SDE, profit split, SBA loan
• 25:00 – Quality of Earnings (QoE), due diligence process, costs
• 29:16 – Structure of the business: remote ops, team composition
• 31:39 – Ownership day and real-world transition
• 34:03 – Growth plans, industry focus, owner mindset
• 37:08 – Eric’s advice for those still on the fence

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Connect with Eric Clewis

• Instagram: @ecluew
• Facebook: Eric Clewis (CLEWIS)
• Open to outreach for advice, partnerships, and business opportunities in hospitality/FF&E.

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This episode is a must-listen for:

• High-performers in corporate jobs seeking financial and personal freedom
• Aspiring business buyers wanting a step-by-step, actionable game plan
• Anyone considering a business partnership or worried about legal pitfalls during acquisition

Listen for a raw, practical, and motivating blueprint to escape the rat race—and replace the job you hate with a business and life you’ll love.

Transcript

[A]

Just didn't have the sense of purpose. And I was kind of in a career that I never really dreamt about to begin with.

[B]

You act like you have time, but you were never guaranteed that.

[A]

The catalyst for me of going, you know, I can't spend 40 something years in the corporate world working for somebody else. So ended up going headfirst into small business. Came out to be about 500,000 or so SDE or half is left over for us. Ended up being enough six figures for both of us.

[B]

That's the same amount of energy and effort that you would spend finding a rental property and. But now instead of getting a couple hundred bucks a month of cash flow, you guys get six figures of cash flow. This stuff is stuff that people don't think about when they're buying businesses. That will set you up for a long, long, long time. All right, Eric Clues. Welcome to the Action Academy podcast, buddy. How are you?

[A]

Appreciate it. Yeah, I'm good. Thanks for having me.

[B]

Excited to have you, man. 11 months and some change coming, huh?

[A]

Yeah, yeah. Longtime listener for quite a while now and yeah, not quite a year. Well just past the year mark of joining, but yeah.

[B]

So walk us through, man. What happened? Why are you on the podcast here today? What did you buy?

[A]

I bought a furniture, fixtures and equipment procurement firm business with another member in Action Academy that I partnered up with. I have a 15 year oil and gas career as a project controls analyst. So kind of like data management, finance and project management kind of all rolled together and yeah, ended up buying this one about 11 months to the day from joining Ashen Academy and closed on it. So doing that full time now, I guess to been about six weeks. So enjoying it, loving life, infinitely better than the W2 and looking forward to everything else yet to come.

[B]

Man, I want to take you back from first so back to your career so that somebody that's listening to this, that's sit in the corporate job can take some advice from where you were, your experiences, so that they can know when it's finally time for them to make a plunge. Then we want to go through the business buying journey. What parts were a surprise to you, what parts weren't a surprise to you? And then finally at the end, for the audience that's listening or watching this, we'll wrap it up with, you know, what challenges are you going through with the post acquisition phase? I'll try to help you out there live on the podcast as much as I humanly can to get you guys in the right direction and solve any bottlenecks for you guys. So let's start with 15 years, oil or gas, making great money. What was wrong, what was off? You know, you're, you've got the golden handcuffs, you've got the security, you've got this comfort. What more were you looking for that you couldn't find?

[A]

That's. Yeah, good question. Honestly, kind of purpose or meaning just being a, a number, you know, my company had 50,000 odd employees and just being one of those, you know, I, I managed a team of 16 at one point and just not really having kind of a final say in things. You know, you can make some decisions, but a lot of it's just out of your control. Just didn't have the sense of purpose. And like many others too, I mean I was kind of in a career that I never really dreamt about to begin with. It was just.

[B]

You didn't wake up as a, as a kid and decided that you want to be an oil and gas.

[A]

Exactly. Yeah. Being a Houston native is kind of inevitable. You know, you can't find something else to do, you end up in oil and gas and you know, whatever. It gave me a great life. I had no complaints with it. It just wasn't really fulfilling. Wasn't something I planned on doing. And so I tried to get out several times to go into commercial real estate related stuff and just could never get out. But like you had mentioned, I mean, golden handcuffs. I had a mentor my first two years who told me, you know, if you don't want to do this, get out now, otherwise you will be golden handcuffed because it's hard to beat once you get going. And he was 100. Correct. So it was good enough. Which you also said is, you know, and numerous times it's. That's dangerous, dangerous place to be because

[B]

you don't move forward, you don't move back and, and now you're afraid to take risks because there's always something on the line. But the, the best quote that I've ever heard, man, is like every single thing that you want is on the other side of fear. It's on the other side. Like you have to sometimes give up good to get great, you know. And so walk us through what happened with your father that convinced you.

[A]

So the last probably two years of my job, it was the oil and gas post Covid. That industry has just changed and I could see kind of the direction it was going and it wasn't really sustainable for me. And so I knew I didn't want to stay in. It couldn't really figure out what I needed to do or kind of make that final decision. And so my dad retired also in oil and gas, and within not quite nine months, got diagnosed with cancer, a really, really bad, aggressive form. And so that was kind of the catalyst for me of going, you know, I can't spend 40 something years in the corporate world working for somebody else. And then that's it. So that was kind of the jumping off point for me, knowing that I needed to finally figure out what I needed to do.

[B]

Man, it's. It's really powerful because as soon as we see, like, we have this idea that we have all the time in the world. And while I think that it's good to be patient with the results, it's better to be impatient with the actions, you know, because none of us are guaranteed. Like, once you get into your 30s, we've all seen so many people go so young in every different way, shape and form. And that's why I told people. I was like, man, you. You act like you have time, but you were never guaranteed that. Like, there's nothing that was ever signed that promised you that. And so, you know, it's. You owe it to the world to come out here and do what you got to do to make things happen. So, man, you join Action Academy? I'm curious. I. I don't ask this question enough, but, like, you were listening to the podcast. What convinced you to. To come hop in with us freaking psycho individuals, you know, because it's funny. All you guys listen to the podcast and other people are listening to now, and it's just like, okay, cool, I'll listen to the show. But then it's funny because as soon as y' all join, you all stop listening to the show because you're too busy doing stuff.

[A]

Yeah, no, it's a good point. I joined or. Sorry. I started listening to the podcast probably. I think it was around Memorial Day weekend of last year, 2024. My fiance at the time, actually, she found the podcast just while driving to Dallas, and I listened to it off and on. So you had interviewed Tyler Cobble because she was looking for commercial real estate stuff, and I followed him and all that. So, yeah, listen to that one. And I was like, all right, what's this Action Academy? What is all this about? This sounds like something that is kind of what I'm looking for, but it took about three months for me to join, just basically way out of my comfort zone. And, you know, it's like you said, you know, nothing. It's scary. I guess nothing good comes from staying in comfort zones. So it took a little bit, but I kind of had a day at work one morning I made it literally like three emails in on a Thursday and said, I know, it's like a flip, a switch flip, sorry, and whatever. Submitted the application, had the phone call with Caitlin, I think the next day on Friday, and then I joined Sunday.

[B]

Let's go, man. Well, it's been an honor to have you. And yeah, everyone's a freaking psycho individual that's in, in the group. Everybody's hungry, everyone's urgent, everyone's wanting to take action. So walk us through. You go through all the different asset classes you're choosing. You're thinking that you want to do commercial real estate and then you discover business buying. So somebody that is in oil and gas or in another adjacent position, that is a high paid profession and maybe they're thinking about commercial real estate. Talk to them a little bit about your decision making process to kind of switch from commercial to buy. Buying a business and actually pursuing the business path.

[A]

Yeah, it basically came down to cash flow to replace current lifestyle, you know, minimal needs at least. And commercial real estate's still something that I plan on doing ultimately, but it's more long term gain, you know, net worth, equity growth. And so I kind of worked backwards into what I needed as a minimum cash flow and what would be, you know, ideal cash flow and figured out that, you know, business buying is probably going to be the best bet in terms of shortest timeframe and especially current skillset from work. And what that gave me, I felt like that was going to be the best fit. So ended up going headfirst into small business.

[B]

So let's talk about the acquisition journey because there's a lot of things that I want to ask you because you guys are transitioning a lot more elegantly into your business because this is something that you're used to in your career. And I want to talk about that really quickly, but we'll, we'll, we'll bookmark that and come back to it. Let's first begin with acquisition. So the biggest issues that I see people running into with acquisition are number one, figuring out what size of business to buy, and number two, what type of business to buy. So how did you come across the answers to both of those questions in your own journey?

[A]

Working backwards, honestly, I mean, trying to figure out, you know, what did I need per month, what did that equate to per year? Which then left me with, all right, I need to figure out that Per year plus debt service equals basically sde. And then sde. You can kind of work into purchase price from there based on multiple for whatever industries you're looking at. And then just kind of. Yeah. Figure out what parameters you need to be searching for industry wise as well as price to get you where you need to be. That was kind of where I started.

[B]

And I'm curious. So you are now partnering with Bailey, and can you talk about that partnership and why you chose the partner versus doing this on your own? I think how you guys did it is if I could wave a magic wand for the best bet of success for somebody in Action Academy or that just wants to buy a business in general, it'd be doing it together for your first business at minimum, and then maybe doing something on your own afterwards. But walk us through the partnership structure. So, A, you know, how did you think about partnership when it comes to business buying? B, what made you choose Bailey? And C, advice that you would give on partnership in general, how to do a good one.

[A]

Yeah, so I approached it, you know, in the modules, talk about, you know, your disc profiles and top and bottom line CEOs, and those are definitely great starting points. In an ideal world, you know, one of you guys is top line, the other's bottom. And in the reality, Bailey and I were both. I mean, we're both essentially operators. But Bailey's particular skill set is his construction background for the businesses we were looking at. It would essentially kind of work as sales and business development and maybe a little bit of marketing too, just because he can speak the language and that kind of sells. I mean, that essentially makes you the salesman in many ways. So while we were both operators, we both had kind of complementary, as well as overlapping skill sets. Um, and just the partnership made sense to me because you don't know what you don't know. And there's a whole lot to buying a business and running one successfully. So it always helps to have somebody else's, you know, a soundboard or a skill set that you lack or just anything. So that was kind of my mentality of I could do this on my own, but it would be a whole lot easier and get me further to find the right person to help me along the way.

[B]

Yo, what's up, guys? One sec. You're listening to a podcast right now, and I freaking love that. But this is not making you more money. What makes you more money, more wealth, more equity, is being in the room with the people that you're hearing on today's episode. If you Want to be around hundreds of other people like you leaving corporate America, doing big deals in business, commercial, real estate and land. Check out actionacademy.com Go in the show, link the show description and click the link to book a call with our membership, director and team. We'll give you the resources, the connections in the community to actually pull off the stuff that you're learning about on this podcast. And we'll hold you accountable to the actual implementation of the information that is actionacademy.com now let's get back to today's episode and walk us through. So you, you talked about a disc profile. So describe what a disc profile is and maybe some other litmus tests that you use with Bailey or that advice you could give to somebody that is partnering about how to do this the proper way. Because I see a lot of people that do bad partnerships either it's just a buddy that they know that they know and like that reminds them of them. Which again, I'd like you, for you to hit on the complimentary skill sets instead of the same skill sets. And then also the operating agreement and the structure is poorly positioned and poorly done. So walk us. Let's, let's stick on partnership for a little bit more because this could be your greatest superpower, but it could also be the thing that takes you down.

[A]

Yeah, absolutely. It's definitely something that other Action Academy members talk to me about quite a bit with partnerships and how important it is. You know, it's essentially marriage. And they say to date beforehand, Bailey and I didn't know each other all that long. But so with the disc profile just kind of, yeah, I guess what your skill sets are, how you look at things, how you approach things. And I think we were both pretty high on the sc. I was like a dsc and I think he was an sc, I believe so pretty similar. But like I said, we had a lot of complimentary skill sets in that he's more CEO visionary and I'm more coo, just operations. So it was a good fit. You know, he had, we both had a bit of a vision, but he's a little better at it than I am. And then I, from my day job was good at operators, operations, procedures, implementation stuff, running a team, all that. So I don't mind doing that part, which was not something he had previously done. So it was just a good fit in that, in that way. And then personality wise too. I mean, we're both faith based people and so that was a big component for me, having kind of that Same faith to lead on. And yeah, it's just like you said, we were a good fit personality wise and just direction we were going in life.

[B]

Beautiful. So last thing that I want to hit on here and then I want to get into acquisition is your operating agreement. So for people that are listening, it's like what I'm asking Eric is a lot of the stuff that we teach, but I'm curious about his own lived experience because the disc profile where we're talking about is a mindset test. You guys can find it online. If you type in disc profile, you can be able to see how your brain works, how you respond to like your social, levels of social interaction, your drive, all this different stuff, your attention to detail. And you can really get a good snapshot of how your brain works and how you show up in partnership. And now the ways that I see people mess this up is either a, they put no thought into who is doing what in the company. And they also have no buyout structures in their operating agreement. So the operating agreement is the agreement that you sign for your entire team when you guys are buying the company for your LLC that you're forming. So walk us through roles, responsibilities, and how you guys went about determining who does what and what happens if one of you guys just decides to just stop working. Because that's the main reason. If there was one reason people don't partner is because they're scared that they're going to get screwed by the other guy. So how do you mitigate this for somebody that's terrified to partner, that's listening

[A]

to this honestly, get a good attorney that does operate.

[B]

That's a good answer. That's a dang good answer.

[A]

Yeah, so that's what we did. We had a great, got a great attorney through also Action Academy, just endless networking connections within the group. So yeah, we, we basically started a swim lane of you know, who's going to do what within the business, who's responsible for what, and sent that over after, you know, a couple phone calls with our attorney explaining kind of the partnership, the way it's going to work, who's bringing what to the table and everything else. And he wrote up, you know, I guess he used his template that he has and kind of modified it to what we need it for. But it was a good, probably 25, 30 pages of operating agreement of, you know, every scenario and what happens when, yeah, one of us wants to sell or what happens when one of us isn't performing our duties or. Yeah, yeah, pretty much anything you can Think of. So number one rule for me was get a good attorney and get a rock solid operating agreement.

[B]

Yeah. It is not something that you chatgpt and people that are trying to buy businesses on their own. This is the number one area that I see them messing up where it's a multi, multi million dollar mistake. I've seen guys get dragged that I know personally for like 4 to 7 million dollars because they had a partner that they bought a business with and the business grows over five years and now they have a market multiple on the business. To say you buy a business for you know, $2 million and it's a 4x multiple. Right. And then you have a partner that's now saying that they want to get bought out at a 7x multiple because that's what they believe that the market demands versus a forex that you bought it at. If that's not in your operating agreement, they can just drag out and do nothing until you pay them out that those millions of dollars for their position at a higher multiple. So it's so, so, so important. I just did this on a business I'm buying with Ashley and Kyle. Like I told them to go back and redo their operating agreement because they didn't have clear language. And what multiple and how they'd get bought out. Is it going to be seller finance? Is it going to be cash? When are the due dates of the payments? Like this stuff is stuff that people don't think about when they're buying businesses. That is the most important. The good news is it's a one time document. It's a one time suck. But it's, it's a necessary suck that will like set you up for a long, long, long time. Let's go quickly now into acquisition. What parts of acquisition were you expecting that kind of lived up to expectations and what parts were you like, whoa, this was way different than anticipated.

[A]

I would say the number of businesses you have to go through and look at in terms of finding a good one. I knew that was going to suck. And it lived up to the expectation. I mean we got, I don't even want to know how many hundreds and hundreds and hundreds of listings we look through on a daily basis. For eight months I think we had probably over 100 NDA signs and I think a good 30 ish ilis and another 20 plus that were submitted and only one of those lois was signed. So that part would definitely live up to the expectation. What I was not expecting was kind of how, honestly how lonely the business search is. Which not to go off too tangent, but how important Community is with Action Academy and like being around like minded people. Um, when you're kind of doing that stuff on your own for weeks on end, months on end and not really getting anywhere, like it's discouraging. Yeah, it's very isolating. Very discouraging. And so going to some in person events where you meet up with people that are all doing the same thing as you and whether it's the same asset class or not doesn't matter, but going through kind of the same trials and tribulations as you are, it makes you feel a little less crazy and kind of gives you that, I guess, encouragement that just stick with it, stick to the plan. It'll. It'll work out.

[B]

Yeah.

[A]

So that, that was an unexpected part for me.

[B]

Dude. It's so big because, I mean, and that never goes away. Like, there's just always different levels that you need to continue doing that at. I mean, even like with ad spend. Like right now we're taking our company to, you know, we're trying to 10x the company and it's like, oh, okay, cool. Hey, we're doing this. And somebody's like, dude, like, you don't even, like that's not even, that's not even a fraction of what we use to test something. It's like, oh, I'm gonna go film an ad. And they're like, brother, I'm doing four ads a day. And you're like, got it. Okay. And then so you shift, you shift what you believe quickly. And then that's why Community is so important, because you don't feel like an idiot. It's like all of us are willing to embrace the suck. And like, if we're doing like a freaking hike, you're willing to hike up the cliff if you know that you're going in the right direction. You're like, yep, this is the path. I need to go north. It's marked. I'm going to walk. This is going to suck, but I'm going to walk. But if you're just walking in the wilderness, you're like, dude, I don't know if this is a good idea. Like this starting to go down. The sun started to go down and start to get cold. Like, I think I'm going to go home. We just had a guy in Action Academy. I forgot, I forgot his name of the, of the Post, but he was like, yeah, you know, I've been looking for a week and I just can't find anything. I'm like, well, welcome to the show, dude.

[A]

Yeah, it gets worse.

[B]

Yeah, it gets worse, man. But yeah, there's a lot at the end of the tunnel. What the good news is, why I love this is that's the same amount of energy and effort that you would spend finding a rental property. But now instead of getting a couple hundred bucks a month of cash flow, you guys get six figures of cash flow. So walk us through the deal that you guys got. You know, how does it break down? And walk us through like kind of what it pays out to the owners and how distributions work. Because I really want to hit on the number of profit and ste that you guys got versus what's, what's take home.

[A]

Sure, yeah. So this business is a 1.75 purchase price. That's what it was listed at. And that's what we agreed, like that was a comfortable price for us as well. After going through the underwriting came out to be about 500,000 or so SDE on average, with continued kind of growth year by year as an eight year old business. And we got in, our first offer that was accepted was April 18, Good Friday, and then I think the following Monday is when the SBA guidelines changed, going into effect June 1, and that affected our, our offer. So we basically did kind of like two months worth of due diligence in like three weeks trying to beat the deadline. And long story short, we missed it. There was about eight of us that did not make the cutoff. So we had to change the structure a little bit. No more seller finance. It's so it's just 90 SBA, 10% down, no seller finance anything. So that was a bit of a bummer. But it was nice in that as we got to know the seller more and more, we weren't really too worried about not having, you know, skin in the game, so to speak, from him. And so, yeah, it's ended up being a 9010 split. And then out of that 500,000 or so SD, about half of that's going to be debt service and then the other half is left over for us to take home. And it's a W2 salary because it's taxed as an S corp. So we'll do, you know, normal salary with distributions as needed. But yeah, ended up being enough six figures for both of us should we need it.

[B]

Yeah. And so I want to hit on that specifically because, like, that is the structure that you actually need in this because a lot of people come in to business buying for the first time and they say, I want to take home $120,000 and they see a business that's doing like $150,000 of SDE, which is profit, or they see a business doing $200,000 of profit and they're like, yeah, I'm going to buy that business. And when you're doing this on your own, like, that is the biggest, biggest mistake that you can make because you just don't realize how quickly that profit goes. And like, that's not your take home, that's just the profit of the company. And so. And the best the business is ever going to look is like on the SDE sheet, like however the seller is packaging it. Because there's always going to be bodies that are buried, no matter how, like, you know, noble and you know, how, how honest the seller is. And so I love the 500 number because with the 500 number, allows is number one, you've got debt service, which if you do it correctly, like, what was your dscr?

[A]

It was around two, I believe.

[B]

Gangster. Yeah. So that's amazing. So for people listening, DSER's debt service coverage ratio, so it's like how much of your debt, how much is your debt in correlation to the monthly profit? And so you guys had 2 to 1, which is amazing. Like you want at least 1.7. And so for 500, 250 is going to debt service debt pay down right now. So then you're left with about a quarter million left over and, and then you split that between two partners and then that's where you actually get the take home. So that's from 500. And then so it's like you guys did it perfectly. I think this is textbook. And now you guys got a lot of room to grow it and a lot of room to expand it. But I think that y' all nailed it in a fricking textbook manner. So walk us through the actual process of closing. So for people that are listening to this, that are going through this, they're going through acquisition, maybe they're under LOI and they're going through diligence right now. Walk us through the actual closing process, the diligence process, and what people can kind of expect.

[A]

Yeah, so we went, since this was our first one, we were in a position that I guess we could afford to do full QoE quality of earning, sorry, with the CPA and get an attorney involved to do the due diligence portion while looking at, you know, any contracts and things like that.

[B]

And explain what, explain what that is to a listener that hasn't done a QOE before for.

[A]

Yeah. So quality of earnings from a cpa. It's kind of a cpa, they typically specialize in that rather than, like, bookkeeping or tax strategy or end tax prep, stuff like that. They basically just go through the whole business.

[B]

Verify.

[A]

Yeah, verify everything, you know, P and L balance sheets, cash flow statements, bank statements, tax returns. They go through all of that and just verify that what the business is showing is legitimate and that the numbers that you're buying are actually correct, which to me is huge, because, yeah, it was vital to me to get a QOE done. And then from the attorney standpoint, we had him go through and review contracts with different customers and make sure that those were legitimate. And, you know, there weren't any outstanding liabilities within the business that we were going to. We did a full stock purchase, so you buy the assets and the liabilities, and we wanted to make sure we weren't buying any problems. So I would highly recommend that. If you can afford it.

[B]

How much is it?

[A]

We were getting the qoe was about 7,000, which was. I felt like probably on the low end, maybe somewhere in the middle, but it can get as expensive as you want to, I guess, depending on the size of the business. And the attorney was about the same, about seven, which was also. I was getting quotes anywhere between six to seven to upwards of like 20,000 from attorneys. So that. That was excessive for the type of business we were buying. So didn't feel the need to go that high. But.

[B]

And then.

[A]

Yeah.

[B]

And then. Do you. Did you guys bring this out of pocket? So I'm just trying to break this down as, like, simple as possible for the listener. Do you bring it out of pocket? Do you wrap it into the loan? How do you guys go about that from the actual funding?

[A]

We did it just out of pocket. I guess the loan was. Would have been an option. Yeah, you could have done that with the bank, but we did it just out of pocket to get things moving because we were trying to meet that SBA guideline change deadline, so we had to do it pretty quick. But, yeah, so it was just out of pocket for us.

[B]

Yeah. And the SBA change, for people listening, it sucks. But they're, They're. They're just stricter. They're stricter. Way more strict, man. I am buying a business right now, and we're. We're literally going to the closing table in five days. So in five days, we're closing on the business. And they were asking for, like, I wired the money and they were asking for like screenshots of the account. Then I needed to go back and explain like why I deposited money in the account four months ago. Where did that money come from? And so it's like very, very intricate because they had a lot of people like that were defaulting on SBA loans and like that's their reasoning behind like kind of tightening up the program. But regardless, I still think SBA is a good path to go, especially for your first business. When you're talking about Q of reports, I think that is great to do when you're buying it on, on market. So you guys got this. It was listed correct?

[A]

It was correct. Yeah. Yeah.

[B]

So it's listed. So if you're buying your first business, I think what you guys did, like you just did it textbook. Will you get the best deal and the best profit? Maybe not if it's listed. But what I can guarantee is at minimum the seller is packaging it up and it's going to be cleaner. Like the brokers already looked at it. Everyone, there's already a bunch of eyeballs on it. It's going to be cleaner with the SBA. But if you're buying off market, you 1000% need to do a Q of E report. This isn't even a nice to have. If you're buying an off market business, you need a Q of your report. Like that is just a non negotiable. So sweet man. So you guys take over. Is, is one of you living in the location? Like where's the location of the business? Are one of you nearby in person? Are you both remote? Walk us through the actual transition and the ownership day.

[A]

Sure. Yeah. So it's it. The business is based out of New Jersey. They do a lot of business up on the east coast, New Jersey, New York, Maryland area, but also do State, about 10 or 11 states total where they do business in. So Bailey, my partner lives in San Diego, I live in Houston. We work remote. It's, it's a remote business minus, you know, the installation portion of what we do. You can kind of go out to site for the installation for a few days. Other than that, I mean it's 100% remote. There's see two employees in New Jersey, including the previous owner. There's one in New York and then there's an agency junior project manager down in Brazil and a bookkeeper over in Turkey, so kind of scattered all over.

[B]

Cool. So walk us through like the business model, how that works and what. Yeah, like I'm assuming you guys were looking for that Specifically so that you guys could be able to run it remotely. So walk through the importance of that.

[A]

Yeah, so I was a little more industry agnostic when I was searching and Bailey was looking for construction based stuff, since that was his background. And so I said, all right, I'm in. Let's do that. So this is a furniture, fixtures and equipment procurement firm for commercial real estate. They kind of specialize in, let's see, multifamily office space and hospitality hotels, boutique hotels, things like that. And so they, they're the FF and E, the procurement firm for all those projects. We don't do the in house design. Everything we get fully specked out. We'll price it with the vendors that we have relationships with, which is, geez, probably 6, 700 of them, and cover everything from purchasing all the way through to receiving delivery and installation. And so, yeah, it's a great business.

[B]

And so you guys are both living remote. Bailey's got his construction company that he's got rocking. And then. Are you working the construction company with him now too as well, or just this?

[A]

No, that's him and another partner. Yeah.

[B]

Okay, cool. So yeah, so Bailey's over here doing, doing his, his construction company while he's also running this. You're running this, man. I think like this is just a textbook deal. Like you guys just got a textbook. Like you're like, let's get on base, let's get this thing rocking. So, okay, so ownership day, you didn't even really have like an in office, like transition day. So what's a, what's ownership transition look like remotely?

[A]

So we did actually go. I went out to New Jersey for two weeks and Bailey came out for a week. So we did actually close in the office. They do rent a little office in Westfield, New Jersey. So. Where the previous owner and his brother both work out of his twin brother who's one of the project managers. We can talk about that if you want, about the red flags of family.

[B]

Yeah, let's, let's do that. Let's finish this thought first.

[A]

Sure. But yeah, so we closed. Closing day, I'll say was one of the most uneventful things of like the whole process. Unfortunately, the. We had a great due diligence process. Unfortunately, the legal team from the bank, from the lender kind of dropped the ball and basically we didn't get the disbursement and closing certificate to sign until the next day. We sat around the office like all day long, had the document signed in the morning from the, from our side, and then we didn't actually get the closing everything and disbursement schedule until the next day. So we, it was kind of like, we're closed, we think, but I guess so. Yeah.

[B]

Okay. And then so talk a little bit about the twin brother. So what's he do? What role does he play? Because normally, yeah, we, we say, hey, you know, family's still in there. Like, what, what's going on there? Because it normally doesn't end too well. So walk us through that.

[A]

Yeah, so that was definitely a concern of ours going through just, you know, you hear horror stories about all of it. And as we kind of got to know the previous owner through due diligence and just kind of learn a little bit more about his backstory and his family and stuff, it became less and less of a concern. So his twin brother is a project manager. He started, he didn't start the company with the founder with his brother, but he basically came on kind of early on and it's been there for the last eight years. So he runs projects and covers installations and all that? Absolutely. Like just Rockstar loves doing what he does. He's incredibly good at it. Very analytical, detail oriented. He's been a great resource for us in terms of kind of getting things documented and as new sops written and things like that. So yeah, it was, it was a concern of ours, but thankfully, I guess, in a rare case, worked out really, really well.

[B]

Let's go, man. So what's the, what's the goal? What's the vision for the next 12 months, for the next couple of years? Is this something that you guys are looking to, to hold for a prolonged period of time or like what's, what's the vision?

[A]

Yeah, so trying to just get through the end of the year, you know, learning that more, putting some things into place to help us kind of springboard starting in first quarter next year. But yeah, I mean, the goal is to hold on to it. We don't plan on, you know, flipping sell kind of scenario. So plan is grow it as much as we can. We really want to double down on kind of the boutique hotel space. Have a couple, had a meeting with one of the larger hotel chains, trying to get in their RFP process hopefully this month to maybe do be one of their preferred vendors for FF&E. But yeah, the plan is try and, you know, grow the business as much as we can and just enjoy it. It's a, it's a fun business. We got really lucky finding the one we did with the team we have. So we're just really excited to be a part of it and see how big we can get it, man.

[B]

How's it feel on the other side of this? When you guys, you guys had a whole celebration for you leaving. Now it's your first day at school again. So how does it feel on the other side of this?

[A]

One thing I did not expect honestly was it's been 15 years since I've been the new guy who didn't know what he was doing and I forgot much. I hated that feeling. And so trying to like temper my expectations of being the expert again is not going to happen, you know, overnight. So that's been a huge learning curve for me because Bailey has the expertise in this industry kind of already from his background, so he can speak the language, he knows kind of what's going on with the meetings and all that kind of stuff. Same with the previous owner. So there's been a bit of a learning curve there for me from that aspect. But I'm having so much fun. Like I honestly cannot remember the last time I had fun working. And you know, I'll work 1012 hour days and they go by in like 30 minutes. And I just, I haven't had like a Monday since we started. I mean every day is just, you know, it's a day no better, no worse than another. And I love it. I love it.

[B]

It's crazy because now it's your thing and if you add an extra $100,000 of profit, like that's yalls profit, like that goes to you because the debt service is already taken care of. So. Dude. And then it just, it's really fun. Yeah, it's really fun. And that's why I love like each, each one of you guys that buys one like just moves like I've got. Well, I've got. I need to figure out how to more formally track it. But like, dude, it's just brick by brick creating a million business owners across this country and it's freaking sick. Dude. I love, love watching you take off and, and really freaking crush it here, man. So, dude, that's freaking awesome. What's some pieces of advice that you can give to somebody that is listening to this and they've heard 50 other Action Academy members on here or just 50 people in general buying businesses and there's still like, oh, I should do that, I should do that. But then that fear is keeping them from doing it. What's the advice that you would give them in closing? To push through and make it to the other side.

[A]

Honestly, the hardest Part is joining the commitment to just do it. I mean, that was. It took me three months to kind of build up the courage, so to speak, and just. Just say yes. But like we said earlier, you know, nothing good comes from staying in your comfort zone. Joining will 100% challenge you, change pretty much every expectation you have of yourself. And then it's just stick to the plan. Don't let. Don't get discouraged. Don't let time, you know, wear you down. I mean, it's going to take a while. It's going to be harder than you think, but it's worth it. And honestly, like I said, the hardest part was just getting the courage to just join. After that, it kind of just snowballs from there, between the community, between the modules, between the help that's there, the network, like, everything is. It's 100% worth it. But you just got to. You need a breaking point to get you to say yes to joining.

[B]

Yeah, let's grind you guys down. That's why we do a freaking podcast every day, man. I'm just like, dude, I've been talking to you for three years. What are we doing?

[A]

Everybody does need that breaking point, though, because, you know, comfort is dangerous. And so if you're just okay, it's hard to say yes to doing something hard thousand. You kind of need that trigger.

[B]

So where can people find out more about you? If they want to connect with you, if they want to partner with you on something in the future, if they, if they maybe are in the hospitality industry and they want to do business with you, where do they go?

[A]

Yeah, so I'm on, I guess, Facebook and Instagram. Eric, clues. C L E W I s on Facebook or just E clue E C L E W on Instagram. Reach out to me on there. I'll be happy to help, give any kind of information or guidance that you know I can based on my experience. So feel free to reach out.

[B]

Go, man. And if you guys want to be the next success story, you want to be the next one on the Action Academy podcast, we've got some pretty cool people like Eric in our community. You can check us [e-mail] or as always, go in the show notes, show description and book a call with our team. We will yell at you until you're successful. Eric, dude, awesome. Awesome having you on here, man. Long time coming. Excited to see where you guys take it.

[A]

Yeah, appreciate it, Brian. Thanks again and thank you to Action Academy, everybody. Go join.

[B]

Let's go, man. It's been Erica Brown with the Action Academy Podcast signing off. Boom. Thank you guys so much for listening to another episode of the Action Academy Podcast. My one ask real quick before you go. If you enjoy this episode, if it brought value to you, please share this episode with one to three friends that you think could get value from it. This is how we grow the show and at minimum, if you could leave us a five star rating and review on Apple Podcasts, Spotify or whatever platform you listen to, that would mean the world to us is how we get in front of other entrepreneurs. If you're done, sit on the sidelines. You're done listening to the podcast. You want to be the freaking guest on the podcast? Go into action academy.com, go in the show description, the show link and book a call to speak with our Action Academy community. We have hundreds and hundreds of people just like you buying businesses and commercial real estate with full coaches, full mentors, full support, full capital. Everything. ActionAcademy.com is where you'll find us.