How 2 Friends Bought a Business That Prints $780K/yr

[00:00:00]So we when we bought the auto shop it was doing 500k in Eva like 2.6 in revenue. Organically we've grown it to hopefully 3.4 this year doing about 780 in Eva. Yeah. I [music] want to hear more about those first couple months you know first 3 months because you mentioned you know 6 weeks in [music] the day-to-day I guess general manager left >> that our acquisition strategy is so much less [music] reliant on it because that operator did leave within the first like 6 weeks of of being here. Since then, we've actually bought out all of our investors at a 2x return [music] after the first 13 months.

[00:00:33]>> But how are you guys thinking about financing moving forward now as we [music] stand up this holding company too? We wish, you know, we want to grow into a $100 million plus holding company. [music] Hey everyone, it's Helen from SMB Deal Hunter. Today we have Sarah Charles and Matthew Ferguson with us. Uh Sarah and Matthew are building a holding company that acquires and operates local businesses in the Aspen area. They acquired Aspen Total Automotive and Auto Repair Shop and are pursuing additional acquisitions now. And previously Sarah and Matthew both worked in venture capital. Matthew worked at some late stage startups as well. So really looking forward to to hearing Sarah and Matthew's story today. It's great to have you both on.

[00:01:17]>> Thanks for having us. We've been looking forward to this.

[00:01:19]>> Well, let's start with your guys' background. tell us a little bit about what you were doing before and kind of what prompted you guys to get into the world of business ownership and acquisitions and buying a business really.

[00:01:30]>> Yeah, so Matthew and I have known each other since second grade. We're both Aspen natives, grew up here. My family's been here for three generations. So really, we've been kindred spirits our entire lives. We both went to school to study mechanical and aerospace engineering. Ended up, like you said, Helen, jumping not straight out of engineering school into the VC side of things. So we were investing in aerospace and defense companies. We kind of reconnected after college and started working together. During that time, we loved our job so much, but we were also like constantly ideulating in a shared Apple note on like what we could go do afterwards, what startups we could start together, different real estate acquisition strategies, all of those things. Like we always knew that there would be something that came out of this beyond just working at somebody else's venture firm. And like you said, Matthew went and did some kind of operational things at late stage startups. But once we learned about small business acquisition, we really like the bug just hit. And I think it does for so many people these days too. It resonates so much. And once we thought about okay, like what is our opportunity? What's our kind of alpha? Who could we reach out to about raising money etc. Because like there has to be some sort of execution strategy. We realized that like our hometown one is full of so much opportunity through whether it's acquisition, potential acquisitions, investors, operators, etc. But also like Aspen does have its own brand and obviously like anybody that hears from Aspen is like oh beautiful silver spoon type thing but it really is like a town that you know most of the commerce happens through small businesses and most of like growing up our friends families like all own small business and really grew careers here and we had seen during co such a massive shift I mean real estate process prices had probably 3x since then so there was like a a semi like, okay, let's go and save our town type thing, too. Like, build a localized holding company where all of the money is reinvested back into this town that's so beloved by so many people. We can give our friends, you know, an on-ramp back to our hometown. So, it was like a combination of so many things of like a huge opportunity for us. We're not doing this in a nonprofit by any means. We intend to be very financially intelligent about how this is structured, the returns that we're promising and whatnot, but then also like not forget that like this is our town and we care so much about it and we want it to feel like local businesses still, but that like we're building real private equity firms at the end of the day, too.

[00:03:56]>> Where were you guys living as you were, you know, doing the search for this first deal?

[00:04:00]>> We were both in Los Angeles for a long time. Sorry came back a little bit before I did, but yeah, we're both in Los Angeles. I think we also didn't do really a traditional search I'd say. I mean like like Sarah said we had this Apple that we built 25 decks of different startups, different venture funds, different like real estate. We just it just was all over the place. So then we listened to a podcast and basically everything we were trying to do was encapsulated in this small business acquisition thing. And then we kind of looked in LA and we looked elsewhere and then it just it just made sense to to to do it in Aspen. Like Sarah said like both of our business Both of our parents are small business owners. Everybody thinks of everybody who lives here as millionaires or billionaires. But the people who live here are the people who have the small businesses, own the auto shops, own the local law firms, own the local started the last company. So we started to look here, but at first we weren't as educated as we are now. Like we hadn't been listening to to you or to acquiring minds to all these other podcasts for a long time. So first you were like okay maybe we'll buy fractional ownership in the local veil company or in in a salon or something and then when we started doing it we realized there were much bigger companies here than could build it proper productively for so I was still in Los Angeles we get to that later but um thinking we could do this a little bit part-time realized pretty quickly we couldn't but it took us about a year of kind of passive searching to find our auto shop we can also go into this but we're not a typical search fund. It was all self self-funded. So, you know, we didn't quit our job. We didn't quit our jobs have have a fund and and target. We just were like looking at and talking to every single property we could.

[00:05:37]>> I'm curious because as you guys dialed into sort of only looking in the Aspen area, obviously there, you know, I think a lot of people struggle with a very narrow geo search. How did you guys navigate that and kind of get deal flow when you know you're only looking in this very specific area? It is a very small town apart from it's a very rural town but you know we had lived here our entire lives as well obviously but our parents were still here and like I said we every single one of the businesses we would ever want to buy here are basically owned or run by a close friend an old lacrosse or hockey teammates parents um so we had to deal flow kind of right off the bat. Um there's also nobody else doing this here. Um, there's a couple brands who want to buy in the valley, but it's it's a lot of the business owners don't want to sell out.

[00:06:26]They they care so much about staying local. It's like it's such a it's such a thing here. So, finding the deal actually wasn't as hard for us as you would have thought. And, you know, actually, our our problems operating in Aspen are very flipped in a lot of ways.

[00:06:41]It's relatively easy for us to raise capital, easy for us to to find deal flow, but it's kind of hard for us to buy big enough companies to there's there's not the big companies that we want to go for are on the market that often, right? Like we we will know the owners that they might not want to sell for 10 15 years. Same with the auto shop. It's kind of easy to find types in big cities, but it's really hard to compete to on pricing and whatnot. Here we are able to sell tickets really easily. We're able to get cars in here really easy. be of high demand, live so hard versus findex and stuff. So that was a long way away to say it actually wasn't as hard because we were from here to to do it. I think we had tried to do this anywhere else, it would have taken years, but we already had a combined almost 60 years of experience with that.

[00:07:24]So >> yeah, I think Matthew said we went to one of the Denver ETA meetups and spoke there. truly across the entire SMB acquisition ecosystem and like the process we have the 180 degree different problem like when we were talking to somebody who was buying a business in Denver this business got 30 IOIs like it's so competitive and you're trying to sell yourself but not here like we're truly the only ones we're often not using brokers we're they're calling their numbers or we're calling their sales they're getting a 970 phone number but it's so hard for us to operate these businesses, real estate is expensive, all of those things. So, it's just really interesting to kind of compare geographies and and so that's like the true value of a localized geo focused holding company too is that like we're solving these issues so that we can replicate across many industries and verticals.

[00:08:19]>> Tell us about sort of industry and you know size of business you guys are looking at because obviously you know with the tight geo you have to be le a little bit more forgiving on the other factors. tell us about that and where you've landed in terms of your sort of thesis there.

[00:08:34]>> Yeah, >> box.

[00:08:35]>> So, we when we bought the auto shop, it was doing 500k in Eva and like 2.6 in revenue. Organically, we've grown it to hopefully 3.4 this year, doing about 780 in EVA. So, it's been really fun to dive in and like truly take over the retiring business owner old tech type business and come in with Young Energy and implement new systems and do marketing and all those things that then we've proven out the thesis there. That being said, our buy box has changed a lot.

[00:09:02]like we are truly are capping ourselves at like 1.5 million in above now because of I think that we saw like the autoshop has always done well but that being said like when Matthew and I decided to jump in full time and we need a little bit of extra capital reserves and you have personal guarantees on SBA funding and whatnot we don't want the pressure of cash so much and also with a certain size of business comes a certain sophisticated or or chart versus in these smaller businesses like it's so reliant like there is true keyman risk and like it's operating on such thin margins too that it's dependent on people on empirical knowledge on systems all of those types of things so that our buy box has definitely shifted over time and that we're focusing on much larger businesses now especially as we're modeling out like how do we maybe raise some equity for the next two businesses we buy but we want to turn this into a self-funding hold co we need to start targeting those large companies as well >> yeah I'd say like we're looking for something I mean 1.5 is kind of the lowest we'll go um we're looking at closer to 2 I think between two 2.5 3 million ether debt what and you know kind of going back to what Sar said you have a company with five people one person does 20% of the business gone you have 20 people one person it's not as big of a deal obviously we're trying to retain as many employees as we can but we've kind of realized you know kind of going back to to how we bought this you know we thought maybe buy ownership and salon would be a good starting point it is just as hard to run in our opinion a business that does 500,000 in STV as it does 2 million in STE. So definitely going bigger. That being said, there's not that many of those businesses here.

[00:10:44]So we kind of have to pick and choose and and really go after what what we what we what we want. I think we hope to have four to five maybe six verticals over the next couple years. And each one of those verticals has to be able to do at least 15 million to to a million ideally in in revenue. And that's not just mass, but there's a couple there's a couple cities in our valley. So we can kind So for instance, the auto shop we're like to buy the next closest the next most the next closest of the portfolio of five to six five to six shops. Another thing on that iOS that we've learned through the auto shop is it would be nice to also buy businesses that aren't capped um in terms of how big they can get and buy real estate. So Yamshot, we've done we've done really well. We got it for almost over a million dollars of of revenue, but the problem is we only have a certain amount of days, a certain amount of hours in the day. Like we can maximize efficiency. We can get the pricing right and everything, but there there is really a ceiling. Whereas if we were to buy a waste management company, we could always buy more trucks, more roll off, more portaotties, do more business development, expand our area. You're operating with one garden, maybe you have to expand that. But you can grow a business from instead of 2.4 four million to 3.4 million could grow from six million in the revenue to 15 plus.

[00:11:59]So um our buy box is coming down is through a bunch of growth does have at least 2.5 million or 1.5 million in in are the margins over 20% you know net profit.

[00:12:12]>> No that's uh I feel like a lot of people come to that realization especially after their first deals and they >> Yeah, that makes a lot of sense. Tell me about you guys obviously looked at a lot of offmarket deals cuz you kind of knew the seller through your own network. How did you guys navigate those discussions without a broker cuz I think that is often one of the challenges when it comes to unbrokered deals or offmarket deals, right? It's just like nobody's pushing this process along. How long did it take you from, you know, first discussion to actually getting to LOI and then closing and tell us about some of those challenges you had to navigate.

[00:12:45]>> The auto swap we act was one of the only ones that was on market. So, we had a broker for this. We've gone through now we are as we're looking to buy our second third companies um which we're act we're actively working on those don't have brokers. It's been a much different process but the broker was incredible. We worked with a guy who's local. We love working with brokers.

[00:13:08]Honestly, like you would almost encourage people who are off market to take a broker to bring a broker in, especially a trusted broker. Um because every seller thinks that their business is worth more than it is and we think it's worth less than it probably is sometimes. And so having somebody be a source of truth that feels like they're on like you know they've been through this a bunch of times of reasoning for both sides they understand how many documents, how many how many things need to be signed, how many processes you go to you need to go through. Um is really great. I I think you know for instance one of them we're working right now he's never sold the business and so there's a lot of like education as to what has to happen how we how we value stuff how what's interesting how you deal with balance how you deal with that so that has been a lot harder that being said we've also worked with a bunch of different brokers um on a lot of different businesses and finding a broker you trust is so important to us we have kind of got burned by working with people that were didn't have the same intentions >> real estate agents you know like ac brokers and they don't know about business acquisition they know about real estate transactions but it's a different thing.

[00:14:16]>> Yeah.

[00:14:17]>> No that's super interesting. Tell us about more about the first deal. How long into your search did you kind of come across the auto repair shop and what attracted you to it and maybe what continues to kind of attract you to to the industry to the business itself.

[00:14:32]>> In our search our search was relatively unsophisticated. Again, we didn't raise a search fund and decide like, okay, this is what we're going to do. It was like, oh, who do we know that owns businesses that we had heard are retiring, those types of things. And so then we kind of started to reach out to brokers and what not. I would say the auto shop was like one of our first two actual books that we were taking at businesses. It fit the thesis very well of like it's a relatively high margin business. I think it was operating at probably 50% gross margins at the time.

[00:14:59]We've gotten them up to 60% gross margin, but still operating at like 20% net profit. So, it's a great recurring business. It is a little bit operationally challenging, which I think we've only learned since the acquisition, but once you get it, it's very formulaic. It's very, it's very approachable industry. I think that like in the deal evaluation criteria, it had been here since 1971, too. So, we've been here for 76 because it's our 50th year this year. Um, wow.

[00:15:27]>> It just it met a lot of the criteria. It was the only auto shop in Aston. So this mini monopoly, it was a cornerstone business. I know parents had taken their cards here for years. So it just fit things really well. Interestingly in hindsight too, one of our deal criteria was that they had like an excellent operator that, you know, could potentially run things in the future.

[00:15:46]And I think that our acquisition strategy is so much less reliant on it because that operator did leave within the first like six weeks of of being here.

[00:15:56]>> Again, in hindsight, like he was super burnt out. the former owner was not involved enough in the business. This guy, I mean, I don't even know how he ran the business as he did, but that was very challenging. Like, I know that everybody refers to the fetal position moment. Like, that was it for sure with this newly bought business. We have investors. We have personal guarantees.

[00:16:16]We don't know anything about this industry. We've convinced the bank that we can figure it out. And then like that was the government we had to do it. So I think future acquisition strategy relies less on you know having a key man which is often a risk but also like it was part of our strategy of oh if you just dangle the carrot enough they'll surely stay and you can incentivize them with equity and they'll never leave and uh he did.

[00:16:40]>> Yeah.

[00:16:40]>> Wow. Okay. Well definitely dive into that before even diving into sort of first couple months. How did you guys finance the deal? You know you mentioned investors, you mentioned SBA loan. you know, tell us about how you ended up structuring the deal with the seller and how you ended up financing it.

[00:16:56]>> Yeah, so that we had to get creative with that. Um, and I think we in our creativity kind of got honestly pretty lucky that we didn't know that much about the search world. I think having known more, we might have just raised a search fund or something. The way that we did it though was it was technically still funny, but Sarah and I didn't really have any personal capital. I've been working at startups and was basically a great either hoping that they they would do well in the future and whatnot. And then our parents um extremely supportive and and helped with you know some you know gave us like 10k for as an investment to help with initial legal fees but we didn't really have access to cash on hand to do a full self search. So what we did was we raised for 20% of the purchase price. Uh we bought the business for uh 1.5 million but the whole project also was 1.72 million with some acquisition fees and and uh working capital. But we basically sold 20% of the company, but two, if you invest in us, you got equity of a 1.5x step up. So if you were to put in $10,000, you would have got $15,000 worth of equity. So it's kind of an initial, hey, you guys are taking a big risky spread on us. Here's the extra 50%. I know a lot of people raised on a on a 2.5 step up. The best we felt like it was a good deal. So in the end, we basically ended up only 70%, our our investors own 30%. Um and then we got an SBA loan for the rest. That also because we didn't have any personal net worth and whatnot was hard. We reached out to Soie Banks. Eventually we reached out to um Matias at Pioneer and uh he connected to us us with a bank and the woman had a daughter who still worried. Sarah's a huge snowboarder back in the day. They she's an we kind of just got along but they took a big a big bet on us. Um, so SBA and then then [clears throat] raising 20% for the down payment. Since then, we've actually bought out all of our investors at a 2x return after the first 13 months and we totally kind of rethought how we were going to go buy businesses moving forward. For for that first one, we got pretty lucky and we retain 70% had investors who believed in us and were also willing to take a decent buyout after the first year.

[00:19:04]>> Hey, quick break from the episode. If you're serious about buying a small business in the next 6 to 12 months, check out our business buying accelerator, SMB Deal Hunter Pro. We source deals both on and off market catered [music] exactly to your criteria. We give you one-on-one support with M&A advisers to help you review deals, structure offers, and negotiate with sellers. On top of that, we help you secure financing so you can buy a 7 figureure business with as little as 50 to 100K down. [music] In the past year alone, we've helped our members close over $60 million in deals.

[00:19:32]Some escaped their 9to- fives and avoided layoffs. others [music] added to their growing portfolios. If you want to be next, head to pro.smbbdalhunter.xyz to apply. The link's also in the description below. All right, back to the episode. Were the investors you ended up bringing on sort of from your personal networks? Were they kind of local to Aspen as well? What did that look like?

[00:19:52]>> Yeah, it was super cool. So, I mean, mostly friends and family. We took probably the smallest check was $2,500.

[00:19:58]Some of the larger checks from our friends and family were 20 to 25. And then there was a gentleman who had just moved here from Silicon Valley too who was bringing that valley mindset to Aspen and solving a lot of these problems that talk about housing costs things like that. And I saw he was writing these different newspaper articles and I saw that he was like oh thinking very similarly to the way that we were and so I just Googled him and I ended up finding his assistance phone number on the internet. I cold called her. We got connected and he's been our biggest supporter to date. So he was a larger tech and then he actually helped us structure a convertible boat to buy out our investors. So that it's basically the wholly owned subsidiary of our holding company. So that was like super like serendipitous that that connection happened because he's going to really guide us and usher us through this process of building into a holding company and how we're structuring things and thinking about QSPS and all of those types of things that the like immature investors of two years ago, you know, would not have. So, it was very small friends and family checks with the good fortune of one larger check who's just been like a sent from the heavens.

[00:21:06]>> I'm curious. Love the hustle there.

[00:21:07]That's awesome that you just kind of cold cold reached out. Did you guys always know that you wanted to buy out your investors eventually or was that part of the plan or what made you decide to sort of buy them out so so quickly into this?

[00:21:20]>> It it definitely wasn't the plan. I the what became pretty evident was you know so if we have we have we're we be honest company right now hopefully that's going to change in the next month or two but we view ourselves in our operating as a holding company we build every system we build is so that we can scale this thing what we realized is you know we have basically one big one source of income that is the outshot and in order to operate as a holding company we we're going to have to spend money to go after other deals we're going to have to get a fractional CFO to help us speed up the process we have to pay ourselves.

[00:21:52]There's a lot of expenses that we would need to use. And what we could have done is is done distributions and then taken 70% of that and reinvested it. But it just kind of was causing a tax a tax headache and and and um so what we did was we basically bought out our investors so we could use our one bank account as both the bank account for the holding company or for for the auto shop but then also the holding company. It basically just gave us the flexibility to start to grow. The way that we had raised two was we raised money for just this auto shop, not the holding company at large. So it would have been anti our fiduciary duty to our investors. Um but at the same time, you know, by us buying them out there and missing out on this big holding company we're building, they just we basically we achieved a lot of the goals that we thought we achieved in year four, five, six after the first year by adding new systems and whatnot.

[00:22:39]Um, so that return that we're hoping to get, we could basically advance it in quite a few years and just clean things like it.

[00:22:46]>> I'm jumping forward a lot and I'm everyone's going to be like, Helen, why are you not getting into the most fun part, but how are you guys thinking about financing moving forward now? You know, you obviously you you still have some room to, you know, get more SBA financing in theory, but are you thinking of going a different direction now? Tell us a little bit more about that. Yeah.

[00:23:04]>> So, we're raising for the holding company right now, but just for hold co overhead, aka to pay matime, to hire a holdco employee, to, you know, keep our lawyers on retainer, a CFO, etc. Still operating very lean. In the future, we're structuring this so that all subsidiaries are wholly owned by the holding company. So we intend to raise equity at the holding company for each deal that we do on a kind of predetermined EVA multiple that's potentially higher than what we're buying the business for, but that shows the accretion of like the value of building a holding company, not just buying these one-off businesses. And then really like this is where we're leaning as far as like credit goes and things like that. This is where we're leaning into our local relationships.

[00:23:48]So, simultaneously to building and operating the auto shop and building the holding company and what not, we've really focused on building relationships with local lenders who understand what we're doing, who have seen us grow up here and all of that because part of the strategy too is like we have to control our own destiny and have credit available to purchase our real estate and to have, you know, different lines of credit if we want to pursue green models and things like that and build it into the brand that we want. So, we have a local bank who's been incredibly supportive of us and is is willing to continue to just finance on a deal by deal basis with us. So, most likely we won't use SBA financing for the next few acquisitions or potentially ever again.

[00:24:28]And most likely we're actually going to refinance out of our SBA loan at the outshot just to kind of prove that we're along for the ride with them as well. is also very synergistic for us um in that it's a it's a local Colorado bank that really leads into being a Colorado bank meeting with the local communities and and they you know they they've got a certain adation of what you know real estate spend commercial step spend but here basically not even because they're trying to but just because it's a good business they are just funding these tens of millions of dollars home homes and just do it and that's become a big part of the portfolio so they're looking to diversify a for diversification financial purposes, but then also to like kind of lean into their mission as well. So, there's nobody else really doing this in town. So, we're kind of trying to be like, hey, we will be your partner to get a bunch of commercial loans out there. And it's it's been really great. I It was something that I don't think we could have achieved for this business because we had no background at all in this, no commercial capital at all before this. And but working really hard. I mean, even for for our last few, it was funny. We we finished, we're kind of pitching for this next album that we're going to dance with them. And the guy's like, "Look, I I'd love to talk. This is a lot of fun, but I actually have to drive my car at your shop." So, we ended up driving maker's car back to the shop.

[00:25:41]So, it's just it's it's cool to have those those relationships. I think kind of moving forward. So, we we're raising the whole tail level. We have one of that we have that mess we were talking about earlier who's a wonderful ride.

[00:25:52]He's incredible. He's he's been a wealth of knowledge and he's brought in one of his best friends. I think we'll probably keep that whole our whole co cap table to two, maybe three, maybe four. really really strategic local investors. But the goal is you know we want the holding company to always have 80 roughly 80% in the end um equity of everything and our investors 20%. That is achieved by that predetermined multiple. But then also the the the the real power of this to our to our investors is the businesses we're buying here. We're not going from buying a business for $1.7 to $10 million to 20 million to 100 million necessarily because there aren't those companies here. Really like the biggest businesses we're ever going to buy are between 10 and $20 million. And so for 20 to 30% down payment with our after we've bought like another vertical or two, it becomes fully selfunding. You only need a couple million dollars as a down payment and we'll have that. So their value really starts to compound when they bought two businesses, but then after 10 years they have 15 businesses. So it's it's the mini bureer model. We're basically taking our cash flow, not taking anything out, and just buying more businesses with our cash.

[00:27:03]>> No, that makes a lot of sense. That's super interesting. And how do you think the terms are going to compare with, you know, commercial loans from a local bank versus SBA financing? How are you guys kind of weighing the pros and cons there? It appears to be about 2% lower than our current SBA limit. Definitely can get more creative on this structure whether it's interest only uh when it balloons all of those types of things.

[00:27:27]They have certain like ea kind of multiples that they want to stick to but otherwise we're open to have they're open to having conversations especially if like there are assets tied to it and there is real estate component and whatnot. It appears that it's much more friendly. I mean when we first took out our SBA loan we were at 11.25% 25% and luckily it was variable quarterly which we were willing to do at the time because interest rates were just like through the roof in the I guess it was October of 2024 and so it has gone down slightly but still like if we can refinance that it's that that just unlocks a lot more cash flow for us.

[00:27:59]>> I will say like nothing nothing but grace for the SBA program though I mean we wouldn't be able to do this and get that better rates if we didn't have the SBA program allow us to take this swing.

[00:28:10]So I think we advise a lot of friends come to us ask me how they could do it and we always advise kind of I mean honestly talk to your local bankers if you get lucky but the SBA process is is incredible.

[00:28:20]>> Yeah the tried andrude model.

[00:28:22]>> Yeah tot especially over the first one that makes a lot of sense. Let's dive into the actual you know first acquisition note now. I mean I I want to hear more about those first couple months you know first three months because you mentioned you know 6 weeks in the day-to-day I guess manager general manager left. I mean, tell us what those first couple months looked like for you guys after close and you know, what were you guys doing? You know, you obviously didn't come from a blueco collar background, auto repair background. So, um, well to that bit.

[00:28:52]>> Yeah. I mean, when we bought the business business, we were both in relationships and I was living parttime in LA and the job we were like, oh, we'll just take a little bit and uh that changed that all >> I'm glad to change again later. But yeah, so you know, we kind of came in and and the the texts have been here for a long time. We have texts who've been here for over 20 years. And then there was this front desk guy who incredible really agree with with customers.

[00:29:18]Everybody knew him and a lot of people thought he owned the business and we don't we're going to obviously help help him [clears throat] out. But the front of house is basically has three computers for three advisors. There was really just him and occasionally a second person. We came in and tried to learn as fast as we could, but once she left, we just we really had to to go all in. We were for the first 6 months, we were here from 7:30 a.m. until 8 9 every night. We didn't have our software systems in place. There was one that had been put in place right before it came, but we hadn't realized yet that it wasn't it wasn't it wasn't going to work. We didn't have any systems in place. We were learning really baptism by fire. One thing that we did do and I think this is something we we'll look forward to every in every vertical we ever go into is we we joined a program called ShopFix which is basically a a a program for auto repair shop owners. We there's you know quarterly conferences but then there also put you have a coach and then you also have a tribe that you meet with. So there's about 15 20 other other shops. They try and make them somewhat similar shops to you. So you have similarish things but we joined that. We went to Tennessee for a while, learned how to run auto shops, learn for the best, and then had this community that basically were like, "Okay, we have a million things to do every week. Let's just implement one of them, one of them, one of them. Hire hire more people." And after a year, this shop is looking better than it ever was. But I don't think it would have got to this place if we had just gone with our original plan of like, "Oh, it's working well enough.

[00:30:51]We'll improve things here and there, but this guy this guy runs the shop and it's going to be good to go.

[00:30:56]>> And was the seller involved at all >> in this in the transition?

[00:31:02]>> Yeah. [laughter] >> After a few days, we realized that potentially we were marketable operators. He did have contractual obligation to be and I think that we just really like we got this.

[00:31:13]>> Yeah. Really nice guy, really good intentions, really smart guy. But basically this was owned by a this started by Nitanic 50 years ago was run by meic for a long time. So didn't really become like a proper business. It was bought by this last owner he owned for 5 years. I think he had he was a Wall Street guy who came out of retirement. I think he thought it would be more fun to own an auto shop. He took a lot of vintage jobs and whatnot and then realized, oh wow, this is a very very hands-off business. Um and sold it to us. So he was there and I don't think in any malicious way. There was no it was just hey we've got a different way we're going to run this than I think you ever did. So we're going to we're going to run with it.

[00:31:56]>> Yeah. As I'm sitting here like thinking about the listeners of this they probably are like searching for a business right now and you know trying to figure it all out and find the perfect thing and even maybe they have a business under contract and they're figuring out their transition plan and all of those things. And we like we were calling everybody like how do we uh act on day one and how do we make them love us and all those things and at the end of the day like across the board there's no replacement for just working hard for showing up for wanting to learn for being humble like if you when you ask about the first couple months I'm like I don't remember it but I just remember like essentially like the only thing we didn't have is a cop like in the auto shop we just we poured our heart and soul full into it and have continued till until this date. And the thing about it, one that's cool is that you, let me say it in reverse, that you're pouring so much energy into it and you feel like you're not seeing anything happen, but when you zoom out and you're a year into it, you see how much like the fruit, you see the fruits of your labor and like we could not be more proud every day of walking to the business. like we painted the walls, we redid it so it looks and it feels like our business and there's nothing more fulfilling. Like if we would have thought about staying in venture or pursuing a startup and whatnot, like the constant banging your head against the wall is inevitable in any career path you have. And in this one, like you see the fruits of your labor so much. You see the business account change. You see people's lives changed. I mean something we love to talk about too is that and because it's super important to us is like doing this in our hometowns when I bought the business there's only one person that had ever made over six figures in this business and now we have uh sever people on payroll making over six figures like it was really important to us to >> push the business to make more money so that our employees can make more money and so that we could like turn this into our idealized version of it and I think that like people are happy and I was talking to our our um boardman yesterday and he's like the vibes he has been here for 9 years. Like it has never felt better at this place. And we were all just like hanging out in the front desk yesterday and watching our little TV that we have and playing with our puppies and like it was it's just you don't see that when you're in the like killer first couple of months, but once you're like into it and it's starting to work, like it just feels so rewarding.

[00:34:16]So I would implore anybody who's like thinking about it and overthinking about it. It's just like you'll get in there and just make the next right decision at the time that it presents itself because it can be so overwhelming with all the things to do and change and fix and but there's only so many hours in a day.

[00:34:31]Don't kill yourself over it and just make the next great change.

[00:34:35]>> Yeah. I mean the system that we read is every single Monday we sit down and say what are like two things each that will make a successful week. everything else we got 7 billion things to do but if we do these two things we take a step in the right direction and that has just paid dividends over time I you know you we had originally bought this with the goal buying a bunch of businesses and everything thinking it'd be easier put them in give people the right incentives change a couple things and and move to the next and and it has been so rewarding getting to really lean into our first business I think we'll lean into all all businesses not in terms of the staying there all day, every night, all all day and all night. But we've kind of learned what works and and really like these guys are our family now. We have Christmas meals and Thanksgiving meals, you know, all their kids and their wives and and uh it is it was just a function of us. Everything was clearly on fire, but we never kind of shied away. We really just doubled down, leaned in. I I moved here, quit quit my job, and was like, "Look, this is what this is. This means more than anything to us. We're going to we're going to get into it." I love how fulfilling it it's been. And I guess going back to the six week mark, what happened? I mean, how did you guys navigate that? You know, it's kind of one of the I guess people's worst nightmares, right? And you guys actually had to deal with, you know, the operator leaving. So, tell us exactly what happened and how you guys sort of handled the GM leaving.

[00:36:00]>> Yeah, I mean, in so many ways, I mean, so many things happened. Uh well, also we were cleaning out the some of the final cabinets up here in the office and we found that he had actually resigned the former July and that he got $80,000 at that time and got a raise to $150,000. So our suspicion is that he was asked to stay through the transition. And that being said, like there this was a legacy businesses like have their own identity to them. Like I don't think that they're just like a business. I think that their personalities that like it's its own entity. And when you come in with new ownership, we very much bring our spirit and our personality to this thing and whatever changes is meant to happen too.

[00:36:43]So we had um Adam Mark is pretty well known within the ETA community too and so we got connected he's in Colorado as well and he reminded us like as we were kind of going through this that whatever happens in the first six months of business acquisition is inevitable. like you kind of can't prevent bad things from happening from whatever because you're building an identity like as a business too. And so in hindsight like he was younger and whatnot, but I think he was completely burnt out from having ran this business for six years for sure. No doubt about it. And like we came in with business owners that were 15 at least years younger than he was who had this like brighteyed bushy tailed spirit and were probably like a bit just like I don't want to work for these guys. I think it was just like a cultural thing too. So it was incredibly challenging and he was gracious through the process and we really leaned on our network here of like do you know anybody that knows anything about cars and we ended up finding the most incredible operators. They're our age. They're kindred spirits. They want to build equity with us. They want to build this like platform of auto companies. And so while the transition and him leaving was like some of the hardest moments of our lives in hindsight like it worked out.

[00:37:57]And it's they have the personalities that our the personality of our business has too. And our customers love them even more. I mean like our the reviews that we get like Matt and I have notifications set on our phone so that we can read our reviews and just feel like yes we're building something and people feel the spirit here. So I don't know maybe that's like a more energetic way to take it but >> at the end of the day too stuff happens and you just have to like say Jesus take the wheel [laughter] thing.

[00:38:23]>> What's your day-to-day role like now or what are both of your roles and how has that sort of evolved?

[00:38:28]>> It's evolved quite a lot. I mean one when one when one when one when one when one when one when one when one when one when one when that happened we we luckily had hired a second employee who then has also just been such a godsend so many left we we had him to help us got through that process but still it takes at least three people realizing to run this place in the front of house um so for a while it was truly like we are running we're learning how to run an auto shop we became service advisors essentially learning how cars how cars work and how to sell it and how to what was actually really helpful I think for us coming Um, and then I'll get back to the exact day of the day. But one thing that was really helpful was we did we had an engineering background. So we were able to kind of graph these things relatively quickly. But we also came at this from total outsiders. So we understood how our customers feel, right? We didn't come in and we knew how to d it down, what was what needed to be said, what didn't, and we didn't get frustrated with them for not understanding why these certain things that for people who be the street forever, they would just be like, how how can you not understand that this is a must do? Um, so we did that and it's it's been really helpful. Now it's shifted a lot. I think it's going to take another big step in the next couple weeks because we're bringing out a a whole co employee who is essentially going to take what we're doing now off our hands and do it. We're basically using it to train him how to run an auto shop, putting him into the weeds, starting a front counter assistant and working as a service advisor before putting him in as an operator for his business. But really what we're doing now is, you know, we're still here. It's still a business beyond like it's it's worth being here. We got nice office upstairs, but we're also on the desk all the time. Our main goal because now we have people who really run the business is to be in the business and observe and just question everything. Question do we how do we make processes more streamlined? How do we train not enforced, but yeah, I mean, how do we drill in systems? The these a lot of these people have been working in one way for 20 years and now we're trying to have them change and how do how do we kind of align everything? One thing that Sarah and I have real like we came into this thinking we were the exact same person and we are a lot of ways but realized we could not be more different in a lot of other ways. I think one thing Sarah is her absolute superpower is just leaning in to the nitty-gritty looking at every detail building systems. She is so good at going through the the P&L finding what's off by 0.2% 2% that is a unbelievable operator like really respected by everybody on the team you know she is really like a true leader of the shop I'd say one thing that and then I've kind of realized what I'm really good at is kind of building more flow right like how do we do business development how do we build the brand how do we shift it so that everybody in town knows who we are what we're doing whether it's at the auto shop or how do we become the absolute deacto buyer for any business so kind of the way we think about it is I help get a lot of the materials and then she becomes like the and get get like the rough the rough shape of a sculpture and then she goes in there and just makes it there's a lot of kind of pros and cons of doing that so early on right sometimes I'm trying to build the next thing but really what we have to do is focus on this and then sometimes we get frustrated we're only focusing on this but we need to build the next thing and build that momentum so like really what we grapple with is how do we continue to like improve the shop by one thing every week one big thing every month but at the same time build the foundation and the systems that when we do our next shop, sure way isn't the same as as auto shops, but what how do we hire, who do we hire, what systems do we put in place, when do we change the CRM? When do we do this, this, and this? And like building that playbook is really our main focus right now. So, it's kind of a longer way to say we really do everything. Like, this is really what we love doing during the week. We're at the we're at the shop working on stuff. on the weekends we're at the local cafe after taking it out of Steam Mountain just working on how do we build these bigger systems. Yeah.

[00:42:14]>> Yeah. I think we kind of think about it we have the pleasure and the good portion now of being able to zoom out and think about a hold code strategy as opposed to an auto auto repair facility strategy. And so Mac is like really filling filling the top of the funnel.

[00:42:28]And he's so creative about how we're connecting with new business owners. I mean, like we said at the very beginning, our strategy is not dependent on brokers around here. It's really warm connections, one degree of separation, cold calling, etc. And so, building a real relationship and we have such a long-term outlook on what we're doing too that it's actually okay if they don't want to sell for another two, three years, but often times once you get the bug of like a potential sale, like most people actually come back to us like, you know what, I am ready. Um, so building that and then also like a talent pipeline is so important here too. like Matthew and I are not going to be able to operate this alone forever.

[00:43:03]So, we need to be building relationships with potential operators that want to live in this valley and that's also we're so lucky for that we're surrounded by beautiful mountains and a really high quality, you know, way of life here. Um, but yeah, Matthew is like really filling the top of the funnel and going through the conversations and trying to get them to a deal and then like everything postacquisition I like love and I love creating those systems and kind of I mean I'm such an engineer. I've realized too of like everything can and should be black and white and if it's not yet black and white if there's room for ambiguity that's not going to fly here because because of where we want to take this right like I don't need everything at our single auto shop to be perfect but it's like if I solve this problem now I never have to solve it again across a portfolio of 50 businesses so that's my >> I'm I'm really curious earlier on you mentioned you know joining a a program a community for auto shop auto repair owners or auto shop owners. Um, how what were some of the biggest levers you felt like or things that other more successful shops at the time or more dialed in shops were doing that maybe you guys weren't? And what kind of contributed what were some of the biggest levers uh leading to your growth in this first year because a lot of people hit this J curve in the first year right where uh the business declines but you guys were able to you know grow it quite a bit. So tell us a little bit about that.

[00:44:27]>> A few things on that. I mean, I think we hit somewhat of a J curve, too, because we really had to load our talent bench in a way that uh was not loaded before.

[00:44:35]I mean, we said like there was one operator. Everything was falling on him.

[00:44:39]And we've needed three people to do his job, but but it's not necessarily his job and what he was doing before, but it's to the customer experience side of things. So, like we need somebody that's going to interact with you, but then that's going to handle all the parts we're doing behind the scenes. and and so we hit a J curve as far as I would say like our you know net profit at the end of the day too we again reinvested back so heavily back into the business um but as far as the leverage that we pulled I mean I can think of a few things off the top of my head one would be just tax systems too and using the proper you know whether for us it's a shop management system so for other businesses it' be different CRNs different kind of proprietary softwares but I think there's no replacement for having a super robust tech system. Even the business that we intend to buy uh operates across a few different ones. I do all the building through Quickbooks.

[00:45:32]I for the shop I got a quote from our our largest steel manufacturer here that we actually looked at the deal and this is a huge company and I received a pen and paper like hand drawing picture. So like tech there's no replacement for it.

[00:45:45]I think I think that um having good vehicle records and and just like when you walk in, we know everything about your car like, "Oh, we saw that last time. We told you your brakes for 4 millimeters." Like, "We're going to make sure that we check them this time because they're probably due." Like that there you go. You're selling a thousand job right on top of it. I mean, there's so many there's so many little things, too. having industry standard uh targets for gross profit, for your parts markup, for your labor rate, like all average repair order, how how much we're selling, like we really have industry standard metrics that we can start to compare ourselves to. And if something's off, we work towards that.

[00:46:24]And so even we change the way that we like mark up and that's how auto shops make 50% of their revenue is through marking up parts. changing that, that's an instant unlock. All I did was log into our system, change the matrix, and then it unlocked immediately. And so we hit our metrics immediately. Some things, you know, take longer. We're trying to increase our average ticket size. And so we're thinking about how we structure and all those things. Um and then the third I think something you know is is optimistic business owners and maybe potentially inexperienced whether it's like from just coming from venture or stuff or you know even being working in private equity job where you're comfortably sitting behind your computer you don't have to deal with people so much and as when we first jumped it you can get so overwhelmed by everybody's emotions by you know somebody being upset all of those things and you realize that like it's the same story different stop type thing. You're like, you know what, they'll be fine.

[00:47:20]You know, and like there's so much of that of just like dealing with personnel issues and things like that. It's like don't worry about it. Even I mean, especially when the operator left Mat, you know, we're panicking and if we didn't have shop like a coach at that point to be like you're fine. I've seen this a hundred times >> and you know, we still continue to not be not be fine about it. But just to like have someone kind of pull you forward, pull you towards like how do we solve for these personal issues so that they don't continue to struggle into a thing and and nip things in the bud and create standard operating procedure and have writeups and all of those things. I think that's like invaluable too. So beyond just the numbers and the business growth and all of that, it's like the sanity of being a business owner and operator because it can it becomes overwhelming too. I'm curious, you know, going into this, you guys were very ambitious about, you know, you I'm sure you wanted to do more deals by this point. You know, what point did you realize like you guys need to slow down and and also what point did you realize, you know, we can get back into, you know, trying to find more acquisition targets?

[00:48:25]>> Yeah. I mean, we kind of came in thinking we we we actually went off to another deal and we were on acquiring mods. We had just submitted an LOI and we were thinking, okay, next time anybody talks to us, we'll be have another business table, we'll have three. Who knows? Um but we went through a process trying to buy a local business another a great local business but it wasn't a service business. It was a retail business essentially. Um local liquor the biggest local liquor store.

[00:48:49]Um and the way we had to we structured it. We would have got it was basically more of a two and 20 deal unlike what we had done here. Um we had there was so many cooks in the kitchen. There was two business brokers. We even talked to the business owner for the first four months of like negotiations which was crazy. we had like very very diff it was everything was kind of misaligned. Um we were trying to talk to the the real estate owners to give us a better lease but then it was just it was it was a total it was a mess. Um and we learned a lot from it and we realized okay we can't just be that 100% opport opportunistic right we have to have a a deal box we have to have a system in place of what we go after what we don't go after I think what we don't go after is probably even more important than what we go after um how we go after it how we do not go after it. So, we kind of like realized, wow, okay, the first deal we didn't get lucky because we had a lot of roadblocks. It took us a lot longer than we would have thought because you asked how you personal capital. So, we had to prove that we could. We had to find the right bank.

[00:49:46]And it was, you know, it didn't take us three months. It took us about a year.

[00:49:49]Um, I think going forward, it just basically will take us as long as it takes to do a quick quick diligence, put through our system, and get a get a loan. But, um, we realized and then also by shifting our focus there, things kind of slipped a little bit here. We had we had stuck on the right path, but it still needed to get over that roller coaster of being really self-sufficient.

[00:50:10]I think that part of being ready for the next thing was just was was two things.

[00:50:16]I I think a just building that trust with our employees, right? Like I think we could leave the shop now and feel really good about it. I don't think we were always kind of the back like how's it going there? Um, but then also our to-do list is always still very it's it's it's infinite, but also like these 60 things need to happen this week. It's now like, okay, these five things could happen this week. If not, the business is doing really well. We're we we we um, you know, even like last, we finally have all the systems in place. We have our people where we need them. We've got our our our uh our tech, all of our, you know, processes, our scheduling shifted, everything. Um, and now it's really kind of small things. we realize that we have that kind of desire to go do it do do it over again there is also that risk sign we have like we we could spend three more years perfecting this place we just have that desire to for momentum I think when we have momentum even if there's if our if that's grows up grows huge so does our appetite to go through that so we kind of just hit hit a point where we bought our investors we had everything in place and we just have that H like we had before um I I think also buying the shot felt like the biggest thing that we could have ever done. Coming here felt like this crazy daunting task. We like what are we doing and now it feels not like small in a way like right like we know we can do go bigger. We know how we have the ability to to to grow more. So um >> and with that with that last deal that died um you know you had mentioned that this next deal you want to go bigger.

[00:51:50]anything else you learned or how else have you refined your deal box um in the past year?

[00:51:56]>> The biggest thing is a how do we do how do a finance how do we finance deals?

[00:52:00]We're not going to just raise a fund and get 20% because we would have put in the opportunity cost would have been gargant, right? We would have put in so much work in this thing and then our cash flow after year three would have been an extra $80,000 or something, right? Um and also the the the revenue was huge but the margins were terrible.

[00:52:18]So while it looked like we were doing all this revenue as the STA holding company, the act at the end of the day, right, revenue is revenue is vanity, profit is sanity is really important to us. Like we are we don't I don't care what the revenue is. What do we have at the end of the day to play with and reinvest? Um and then uh yeah, doing the deal with the right people, making sure we're aligned with the owner and the business at at start the business owners know the business. Like we're talking about earlier, every business has a personality. Are we aligned with that business owner? Because we could be aligned with the broker, but the broker is knows the numbers. They've got they've got a job to do like so meeting meeting the owner right away >> and you can hear those subtle cues the way they speak about business and their employees and all of those things like we want to do deals with good people that want their employees. They're the the first question is well I want Gustavo to have some equity in the you know that was not really the sentiment before too. So I think like using that gut feeling test too like is this a good person because if they are it's probably a good company and vice versa >> even who we go after right so like part of the our our thesis here is there are really good businesses here and private equity firms are going to reach out and they're going to make offers or they might win some deals but you know for instance this next deal we're we're in and we're working on the owner was we're we're not going to be private firms on on multiples we're going to give a very good returns. We're we're going to try to be really competitive, but it just keeps going up. We can't compete there, but where we can't compete is leaning and telling that story where all of a sudden we have eight people making six figures and they have equity in the shop and and stuff. And so finding the people who care more about their legacy and their people that they've worked with for the past 10, 15 years, it just means that they've been thinking about this right the whole time. And so yeah, I I I think you know the way we want to do this too is is if a private equity firm comes in, all that profit is going to Chicago, New York, LA. If we can keep that profit here and incentivize our employees, of course, like hopefully we do well, our holding company does well, but we want every single person here to retain that value that's in this this value so that they can risk that can have the wonderful offering to be had.

[00:54:30]Um, so yeah, just kind of aligning on if they're if they're just going for profit, it's probably not going to work because that trickles down to how they run their business.

[00:54:40]>> No, that makes a lot of sense. And I think that does appeal to a lot more sellers than than buyers think. Um, I'm curious, you spoke about the talent pipeline earlier. Tell us a little bit more about maybe some of the unique challenges of operating in Aspen.

[00:54:54]>> Incredibly high cost of living for sure.

[00:54:58]um it is wholly unaffordable to live in Aspen if you're using like free market real estate. So there is some like employee housing programs and things like that, but even with that your income's capped and so sometimes we want to pay people more than the cap. So right now I mean two answers to that.

[00:55:15]One is a lot of our guys commute pretty far every day. We I think it's sustainable for like a lot of our blue collar workers. It's just part of life here. I mean southern California and whatnot. We will commute from Orange County to Los Angeles, which is unpathable to me. But um as we stand up this holding company too, which you know, we want to grow into a hundred million dollar plus holding company. We equally want to invest in real estate and some of that will be on the commercial side and owning our real estate and like we said controlling our own destiny there but also would be owning employee housing whether it's our blue collar employees or lower income or our higher income you know full CEOs and operators and platform companies too where the hold can subsidize some of it too because obviously like one of as we were alluding to in the beginning the main problem we have to solve for is housing here and so if we can use our connection with local developers. We know of like many development projects on like the employee housing side that are coming up and if we can buy them rebuilt because we have a you know war chest that's ready and our investors are equally as gung-ho about this as well um then that I mean as far as like the relief that Matthew and I get of just like we can recruit and we can say and we've got housing for you and it's going to be affordable based on what you're making. I mean that's just that's just an unlock for us and that allows us to recruit. I mean our first hold come and play he's somebody that grew up here and so he has family here and can just like start and be super scrappy in the beginning but we can't build a holding company off of that strategy of okay everyone's a little bit their parent [laughter] you know >> also I mean like yeah so so finding housing and everything is is really important I think that another thing that we're realizing is really leaning into brand in a really holistic way not just like cool logo but you know we want to build a place that our texts when they're so there's kind of complex that was 45 minutes away. It's kind of where a lot of the blue collar workers work or live. Uh we want them to want to wear their cool hats, their cool jackets and stuff and be like, "I work at this shop." And if you look online, the average repair shop right here has like 3.9 4.0 stars. We have pushing 4.9 hopefully within the next month to four place 4.8 stars. Um you have these like great reputation. um when the front front of house instead of it being kind of this beat up place with parts everywhere and bad lighting. We're investing pretty heavily into having a gorgeous coffee stand and really nice local local woodworkers who built our our stuff and a cool TV and a sound system and everything because they think it's it's great. It's a great work environment. Um and they also have that upside, right? If if you can tell somebody, hey, if you we're asking you to work with and either way if you work with a hard you're going to get a certain out of this, that goes a long way. Um, so people are willing to to commute a pretty big distance because it also is really beneficial to they feel they feel good about working, but they're also being paid so much more than they can elsewhere. And in order to achieve that, we have to build a good working environment. We also have to it's on us to make this business as profitable as as humanly possible so that our our employees can benefit in that. But yeah, it's it's really hard and it's changed a lot too since co since before co was an entire different town. It's changed in so many ways. The biggest is Zoom became a big thing, right? Before the CEO is always >> gazillionaires would come out here for a week, a long weekend. They'd have their summer house. They come out here for two weeks of the summer. Now they like live out here. Um and all of a sudden you have all these I think it's the second highest uh zip code billionaires or third highest in on the in the world. Um and all those millionaires don't they don't come in they risk their own businesses, right? they can spend so much money to have their 25 person staff on house that all of a sudden like the the market got smaller and smaller and smaller. So we have to compete with not just the businesses in town but like the family offices in town and to do that we have to incentivize the right way pay well and build a brand school. I think we've this we we've this nice hire. I've known him basically my whole life. He's my little brother's best friend, but he reached out to us because we had done a podcast like this and we've been talking in town in the papers and stuff. I'm so building this kind of cache locally is going to attract the right people.

[00:59:34]>> No, it's super interesting. I'm going be sensitive of time, guys. You know, final question for me. I'm I'm curious. You guys both came from venture and startups. What's your perspective on you know folks from you know VC space or you know working at early late stage startups you know getting into operating a small business buying a small business you know who's it for and who more importantly probably like who isn't this for?

[00:59:58]Yeah, we have so many and it's something that we talk about with each other so much too because we really feel like sometimes we're on an island of a lot of our friends are making like high income jobs but super unsatisfied, right? And we're kind of the opposite where we're risking it all, paying ourselves very little, but so satisfied and so like insatiable in in what we want to build.

[01:00:20]you need so much appetite for risk tolerance, but then also just like drive and being able to push through and all those things. I mean, I think that if you're a startup founder that's raising a lot of money, you probably have that experience, too, just like needing to go through the next door when there feels like there's no other option. You just have to keep going because yeah, it feels like you're getting kicked in the teeth at least like once a day, if not once a week. So, that's just going to be a part of it. So if if somebody's considering this and and they're very comfortable at their job and they just want to like live a kind of good lifestyle, then I would say continue on that path. But for us, like there's something in us that just like wants to see how far we can stretch this. And we're super into personal development and like growing ourselves as people and working. I get we don't see this like work life balance. I think we just see life and it's all happening at once. And sometimes we're on the phone with each other at 11:00 p.m. But because we're so lit up by an idea and all those things, so there just becomes no separation between, you know, you're building and working on and and maybe that does for some people. Maybe you can buy one business and like that's just your thing and that's awesome, too. But as we see this thing growing, it's like how far can we stretch ourselves? How big can we take this and continue to like grow as people in that journey?

[01:01:39]>> Yeah. I think you need to like genuinely love I guess business is the right word, but just minding, right? This is really it is so fun for us to work on the weekends. We don't have to most times but it's it's fun because there's problems and if you if you have that that drive it is is so rewarding because there's always problems. There is nothing but problems. Um [clears throat] and but yeah I think also like kind of one of the things is is coming from any world. I one one thing that we that one of my life favorite quotes is this frog in the well knows nothing of the mighty ocean. It's really like if you're in your own little silent world and you have this one expertise maybe this isn't for you. If you are out there and you know a bunch of things, you come for adventure, you've talked to 10,000 companies, you're in private, you go to these different deals, that's going to serve you so well in this because you're going to compete with other people. For instance, in Ottawa who grew up with trans mechanics and they just see this one way and it's it's really hard to break that mold. If you can come and take this other this like ambitious thinking to a company that has true expertise, then you can learn from them, leverage your expertise, and they can leverage your kind of drive and will I guess to learn about new things. It's really synergistic. So yeah, I think I think that's important. And then also I mean the other thing is and like I left the kind of venture path to work in startup to kind of get closer and closer to the the problem and the app pros I still working for a big startup was way too far away from that. Um but you know if you're a venture you're giving a check and hopefully in 10 years you see a really great product that you you're that somebody else has built and you feel good because you had some part in that. But here you the feedback of the is instantaneous. You giving hugs to people because you fixed their car for half the price that they thought they're going to do and you go around town and people give you feedback about how great your employees are. So I think if you have that drive but then also having that like competitive you're scoring goals all the time and it feels so good, you know. Um so >> there's a lot of podcasts that say like this this is the business thing. This is the skill we sell you. This is the skill set you need. It's going to be hard to become private equity or behind a computer. I think as long as you just have thrive and are willing to be flexible and learn on the fly, this is for you.

[01:03:45]>> Yeah.

[01:03:46]>> No, it's uh that's it's great insight.

[01:03:48]Well, Sarah and Matthew, you know, I love your guys' vision. hearing today about all the unique challenges you guys are facing and dealing with in ASP.