Ever heard of leasing a business with the option to buy?
And then Flip the Option to another buyer and make 13.5x ROI?
Well, I did it... &
@WilsonCompanies
encouraged me to write it up.
Thanks, John!
Thread time!
My last boss in the Army Just died in a single engine plane crash.
On the local news they didn't even mention that he was a Major General and dedicated 30 years of his life to the Government and the Army
Y'all, nobody cares
Go live your life the way you want to live it.
My wife and I have 7 kids.
4 things take up the most time:
1. Laundry (unbelievable)
2. Cooking (huge meals)
3. Dishes (never ceasing)
4. Cleaning (always needing)
Who has figured out a cost efficient way of outsourcing one of these?
I think "Fuck you money" is being able to turn down opportunity with no effect to your lifestyle.
Just talked to a really good friend this morning who turned down millions of investor money cause the $2mm+ in EBITDA he is making is enough.
AND, he gets to do whatever/whenever
Super proud owners of Mesa Plumbing, Heating and Cooling in Boulder, Colorado
Thanks to my ride or die
@bridgetgleslie
, you're the absolute best!
Hitting the ground running this morning.
LOI signed by both parties on a Plumbing/HVAC deal at a 2.4x SDE.
They are out there--keep pushing.
Due Diligence starts today with basic financials and calls with banks.
Today I stuck to my guns
I promised my team I would not require them to work on weekends unless they wanted to.
Turned down a $8500 Saturday job because my techs were not super interested.
Turned out he would wait til Monday.
Stick to your word, Homies.
If you have doubted it, running/owning a Home service business is amazing 10% of the time, but shitty 90% of the time.
Beware. This is a difficult road my Homies
1 plumber quit to move to alaska Monday
3 related employees quit today-2 didn't want to be team players and the other followed their relatives
Hard lesson: no siblings or married couples.
They were admin and helpers/apprentices
So, that's 4 employees that quit this week.
Which of the two paths?
1. Invest/grow a business as large as possible, exit for $12-20m and enter real estate investing
2. Invest less and grow the business slower, don't exit and invest in real estate along the way
I'm not kidding:
1. Pay 20k
2. We meet 1-2x per week for 6 weeks
3. I talk you out of buying a home service business
4. I convince you to focus on your skills and lean into those
5. If you end up buying a home service biz, I'll give you 10k back
Here's to discouraging people!
It's ok...
It's ok to feel like you are gonna go outa business
It's ok to feel like you are a failure
It's ok that you are working IN the business
You are NOT failing in everything, just FEELS that way.
Sit in it, feel it
Acknowledge it.
Get up, call a friend
Love you.
The test prep course taught me nothing....
Had to learn where to find things in the book on the fly and learn the formulas on the fly
But, fuck it, I passed!
I'm splitting the company into three divisions: Sewer, HVAC, and Plumbing Service.
Master plumber is coming on in December
Already have my head of Sewer
Just made the offer for HVAC head--Really hope he accepts.
People in place? Yup. Let's grow!
My first two questions to a broker are now:
1. Did the biz take a PPP Loan?
2. Where is it represented in the Financials
I swear if I spend hours pouring over cash flow statements trying to make sense of a profit spike and it turns out to be PPP, ima reach thru the phone.
Let's talk the reality of owning a business.
Rarely is it a hockey stick or smooth growth curve.
Ever.
You steady get punched in the face and keep getting back up.
Let's go. Get up. Convince yourself you can do this and then go do it.
I have accomplished what I wanted to when I started out.
1. Get out of the Army to put down roots
2. Buy a plumbing/HVAC biz
3. Develop an asset that can take care of my family if I am debilitated or die
Life insurance will only go so far.
No stopping now.
I loved being in command in the Army.
Buying a business doing over $2.5m in topline isn't quite as complicated as commanding 75 Soldiers on overseas missions, but being an owner of a small business is as close as I've gotten to command since finishing in 2018
Love this shit
Woke up at 3:50
Mind racing
Felt like I couldn't get my breath
Needed to breathe deep
Am realizing I don't recognize when I'm stressed/anxious
I manifest it in my body
My mind usually feels ok
Getting to self-awareness means going thru hell
You're gonna be ok
DMs are open
-I had a Roth IRA-liquidated it
-Never invested in the stock market
-Don't have any investments other than
#mesadeal
-saved 10years to be able to afford the downpayment for the SBA loan
-buying tuck-ins to grow
-not investing in anything else at the moment
-bet on myself 100%
The “financials” on the plumbing deal I’m working are:
1. One Sheet with penciled tallies of expenses for each year
2. A tax return each year
No true P&Ls.
I love these businesses.
Most SMB owners' dreams would be to have an exit that sets them up for life.
But, that kind of large exit requires some serious pain and sacrifice.
It's ok if you just want to own the business forever, not grow it huge and just make a great income.
It's ok to not want massive growth.
Sometimes you need to stop, rest and reflect on what you want.
I don't want a plumbing/HVAC roll-up.
I want to enjoy some of the fruits of my risk and labor.
Maybe you need to take a break, too?
If you own several businesses:
Consider starting an company that employs all your employees.
Example:
-Start an employment entity
-Transfer all employees to employment entity
-All benefits and w2s come from this co
-you can move employees without hassle
Long-term move only
Bought a business last week.
From CIM review to close was 4 days
From DD call to close was 36hrs
That is all I will say about that, buy ya boy knows how to close on a biz
1. Last week I got some very unexpected news
2. I freaked out & cried in the bathroom at my shop
3. I knew there was a positive, but I couldn't see it
4. When this happens, feel the feelings and let emotions run
5. Then sleep-wake up-start working on the solution
Love you
Just put an LOI in on a plumbing company,
@StrongpointRich
and
@WilsonCompanies
Found it, spoke with the owner, just wrote the LOI and sent it.
Time from finding the biz to LOI= 6.5 hrs
When your wife says, " thank you" for taking time off after 2 years of grinding, you know you messed up.
There are periods of hard head-down work, But I have a serious problem of not taking time off.
Change is hard.
My personally impactful contribution to the SMBtwitter community:
Encourage people to get treated for their mental health whether it be medication or therapy or a combo
If that is all I do, I am happy.
An Illustration of going all in on an approach/niche and killing it over and over again.
David Royce, Pest Control Baller
When David was in college, he was gettin' money as a door to door pest control salesman for Moxie (a Texas based Pest Control company)
#mesadeal
1. Got turned down by a good prospective employee
2. Lost highest salesperson ever yesterday (moving home
3. Employee down due to covid
4. Busiest we've been in months
5. Do you love this shit?
How do you use credit cards in your biz and personal life
Cashback or points?
I feel like points might actually make me take vacations and spend on myself.
If I set up an LLC, who would want to join as a member/employee to get on a large health insurance plan?
membership fee would be the premium and a fee.
The LLC would be barely profitable.
@prestonholland6
had the idea and I wanted to see what everyone thought who followed me
Today I started negotiating my next deal.
Inspired by
@girdley
and
@CoffeeToro
.
One of my best friends managed Starbucks and wanted his own shop. I am doing a really creative deal with an earn out.
1x/
Email hit inbox
Almost deleted
Saw a biz I liked
Contacted broker
got the CIM
emailed the broker
Said I wanted to move quickly
Called
@StrongpointRich
He told me I would be stupid to not write an LOI
hung up with him
wrote LOI
Submitted
Time elapsed: 1.5hrs
#mesadeal
update
1. Employee ran the truck cowling into a tree
2. Giant hole in the fiberglass
3. Need to get it fixed, body shop booked out 3 months
4. Learn body work
5. Repair/drying paint to sand and paint again
6. Yes, that's a space heater
7. New skill
Ever been at a company that bought a cabin or a vacation spot and used it as a perk for employees?
Maybe they bought some asset that the employees could use as a perk?
Mesa is in a vacation spot (Boulder, CO) and these things could be great recruiting tools
IDEA:
If you want to acquire a service business and haven't either worked in or owned one, you should at least get a taste before committing.
*Find the largest most professional example in your area and ask them if you can write a case study for them and submit to business pubs
Why should RE investors have all the fun?
Where's my 1031 for SMB Acquisitions?
I mean, if I sell a biz and buy another biz, it should be a "like kind" exchange.
Asset Sale ---> Asset Purchase
Just sayin'
If you're interested in acquiring businesses, make sure to get the reps in.
Reps are looking at deals, talking to sellers, talking to brokers, following SMB Twitter accounts.
You are training your subconscious. At a certain point you'll be able to cull deals fast
Sometimes you have to admit you aren't the best
I admitted it this last week
Mesa deserves a killer operator who can run with my vision
If you or someone you know might be interested in stepping into my position at Mesa--let me know.
Prepping my next step.
Let's say:
1. Your business has a 10% net profit margin
And
2. Your business generates revenue 20 days per month
It only generates profit 2 days of the month.
The other 18 days is paying expenses
If you ever come across a plumbing/HVAC biz for sale, you need to realize that those are 2 completely separate businesses that run differently
You will be running 2 businesses at the same time
Many times one is the backbone and the other lags.
Oh, you want a plumbing and HVAC company?
On my way to drop off four space heaters for a client that required a Band-Aid repair for her furnace versus a full replacement.
Trying to avoid a bad review even though we have fixed it twice
Last day in the Active Army.
It prepared me for so much.
I'm grateful for what it made me, but I'm so grateful for what it allowed me to do.
I'm leading a badass staff of plumbers and HVAC techs.
I'm literally living my dream.
We moved to Denver and have been working for 25 days straight with my wife on moving, military and business stuff.
Today is our rest day. Need to recharge for the next push.
Take care of yourselves.
Let's all celebrate a HUGE step in
@Patrickhaddison
's career as the General Manager of
#mesadeal
!
He passed his Master Plumber's 5hr intensive test after thousands of hours of work and hours and hours of studying.
He scored a 96! So badass!
Legitimate complaint today from a Plumbing client:
"There were 2 techs here instead of one! You didn't tell me there would be 2 techs here for the job!"
Welcome to crazy town, folks
Update Plumbing HVAC deal:
1. Announce business name tomorrow
2. Final Wires went out
3. Rushed a payment processor application including emergency bank letter trip to the local bank
4. Got all the gas cards ready
5. Printing all truck insurance cards
6. Printing W-4s
Whoa, someone did a joke application for my HVAC sales position, and it was pretty aggressive towards me and they knew my personal email address.
I know former fired employees follow me and have been petty.
Quit hiding behind your keyboard.
You know where to find me.
My wife said she didn't want to sell Mesa
I wanted to sell. I was worn out
Pushing against what felt like an immovable rock... I didn't want to sell either
I just wanted relief and what I thought would be the result of selling
So, in the last year, we built what we wanted