From Rookie Deal to $17M in Revenue
The one thing to remember
A cheap multiple and seller financing do not protect you from bad people, bad books, or a business you are not ready to run.
What happened
Chandra, with partner Colin Anderson, started buying small service businesses in 2018, beginning with an electrical contractor bought for about $500,000. According to Chandra, that first deal was advertised at over $500,000 of EBITDA but lost about $300,000 in the first year after weak diligence, withheld accounting files, and misunderstood construction project economics. The biggest mistake came later in 2022, when they bought a trailer manufacturer for about $1.85 million, rushed diligence, discovered revenue and deposit problems, and burned more than $1 million operating it before selling in 2023. The portfolio later recovered and grew around electrical, underground construction, and fiber splicing, with Chandra emphasizing seller character, culture, and disciplined diligence as the lessons learned.
Who's telling it: Chandra, the buyer/operator describing his acquisition history This is mainly Chandra’s buyer-side account; the accused sellers, broker, former partner, employees, and later buyer are not heard from.
Timeline
- Sourcing
In 2018, the buyers found their first electrical contractor on BizBuySell, advertised at roughly one times EBITDA.
- Due diligence
They accepted reports instead of native QuickBooks access and did limited seller-background and construction-project diligence.
- Closing
They bought Go For Electrical Construction for about $500,000, with about $160,000 down and the rest on a seller note.
- Operations
The first year produced about a $300,000 loss, partly because they inherited mid-project construction work where profit had already been taken.
- Closing
In January 2020, they acquired another electrical contractor and brought the first seller in as a one-third partner because he held the master electrician license.
- Operations
The partner damaged culture and contributed to employee churn, while later review uncovered alleged personal expenses buried in project costs.
- Closing
In May 2020, they bought underground construction and fiber splicing companies for about $2.3 million total.
- Operations
Chandra personally operated the underground and fiber businesses while still holding his W-2 job, and those businesses became the strongest growers.
- Closing
In 2022, they bought out the difficult partner and, within days, closed on the trailer manufacturing company.
- Operations
The trailer company burned cash as the buyers discovered deposits counted as revenue and had to rebuild drawings, costing systems, facilities, and sales channels.
- Exit
In 2023, they sold the trailer business and real estate, estimating they had set more than $1 million on fire and lost significant time.
- Operations
By 2024, they bought another electrical service business with better cultural fit and later projected about $17 million in revenue across the group.
stage where a mistake was made
What went wrong 7 issues
Deposits counted as revenue
In the trailer deal, the seller allegedly took large deposits, delivered little or none of the product, and treated deposits as revenue. After closing, the buyers discovered the business was burning cash rather than producing the advertised EBITDA.
Mistake made at Due diligence → showed up at Operations
“and just count the deposit as revenue.”
Warning signs
- The seller showed contracts and deposits as proof of profitability, but the buyer did not yet know whether products had been delivered.
How to prevent it
- Before closing, the buyer’s CPA should reconcile every large customer deposit to a signed contract, production status, delivery evidence, and deferred-revenue balance.
- The purchase agreement should include a specific escrow and indemnity for unearned deposits, undelivered trailers, and misstated revenue.
- The buyer should test gross margin by product using actual material, labor, and overhead costs before accepting advertised EBITDA.
Rushed diligence under pressure
The buyers accelerated the trailer acquisition after being told a health-related urgency story. They also had to untangle several businesses from one accounting file, making the fast diligence especially risky.
Mistake made at Due diligence → showed up at Operations
“So we we speed through the transaction.”
Warning signs
- The seller and broker said the seller was dying of cancer and the buyer needed to act fast.
- The trailer manufacturing business, towing company, and campsite were all run through one set of books.
How to prevent it
- The buyer should set a minimum diligence period in the LOI and refuse to waive checklist items because of seller urgency or emotional pressure.
- Any health or family-emergency claim used to accelerate closing should be treated as irrelevant to diligence unless independently verified and documented.
- When one set of books covers multiple businesses, the buyer’s accountant should rebuild standalone financials from bank statements, invoices, payroll, and tax returns before valuation.
Misfit drained cash and focus
The trailer manufacturer did not fit the buyers’ construction-services platform and consumed cash, time, and attention. They sold it in 2023 after spending heavily to make it sellable.
Mistake made at Thesis → showed up at Operations
“we had burned more than a million”
Warning signs
- The buyers were already dealing with partner issues and operating several construction businesses when they bought a manufacturing company.
- The facility was two hours away from the other operations and required significant hands-on fixes.
How to prevent it
- At thesis stage, the buyer should define why manufacturing belongs in a construction-services platform and what capabilities are missing before pursuing the deal.
- Before signing, the buyer should model management time as a scarce resource and identify who will run the acquired company day to day.
- The partners should agree in writing on a stop-loss trigger, such as cash burn, missed margin targets, or hours diverted from the core businesses.
Bad partner for license
When buying the second electrical contractor, the buyers brought the first seller in as a one-third partner to secure the license and sales capacity. Chandra says the person damaged culture, caused employee churn, and later was tied to personal spending hidden in project costs.
Mistake made at Closing → showed up at Operations
“he was almost like a cancer to the business because”
Warning signs
- The buyers already knew the first seller had character issues and was not good with people.
- They gave him 33% of the combined entity because he held the master electrician license and could bring sales.
How to prevent it
- Before giving equity to a license holder, the buyer should price alternatives such as hiring, renting, or contracting with a qualified master electrician.
- Any partner admission should require values interviews, references, role clarity, spending rules, and a buy-sell agreement before closing.
- The buyer should separate licensing, sales, and employee-management authority so one difficult person cannot damage culture and retention.
Accounting access refused
In the first electrical contractor deal, the seller resisted giving actual QuickBooks data, and the buyers treated it as normal small-business tax behavior. After closing, the advertised EBITDA proved far from reality, and they lost about $300,000 in year one.
Mistake made at Due diligence → showed up at Operations
“really reluctant to give us QuickBooks data.”
Warning signs
- The seller would provide reports but not the actual QuickBooks file.
- The seller explained the refusal by saying there were personal items in the books.
How to prevent it
- The buyer should require a native QuickBooks backup or accountant access before signing a purchase agreement, not just exported reports.
- The diligence team should perform tax-lien and IRS-issue searches on the seller and company before closing.
- If the seller claims personal items are in the books, the buyer’s CPA should quantify them, verify add-backs, and treat refusal as a walk-away event.
Unfinished projects hid losses
The first electrical contractor had projects in progress where the seller had already taken much of the profit and built ahead. The buyers inherited work that operated at a loss after closing.
Mistake made at Due diligence → showed up at Operations
“the seller had forward built a lot of things.”
Warning signs
- The buyers took over projects mid-project without fully understanding how much profit had already been pulled forward.
- The headline valuation looked so cheap that they accepted more risk than they understood.
How to prevent it
- For construction targets, the buyer should review every active project’s percent complete, billed-to-date, cost-to-complete, and remaining gross profit before closing.
- The closing statement should adjust for profit already taken by the seller on incomplete projects through working capital, escrow, or purchase-price reduction.
- A construction CPA or experienced project manager should validate job-cost reports against field progress and customer billing records.
Underpaid staff inflated profit
In the second electrical acquisition, the business was real, but some profit came from key employees being paid below market. Once integrated with a problematic partner and changing culture, churn reduced the upside.
Mistake made at Due diligence → showed up at Integration
“being paid below below market.”
Warning signs
- Profitability depended partly on key team members being paid less than market.
- The buyers were still doing diligence themselves and acknowledged using rose-colored glasses.
How to prevent it
- During diligence, the buyer should benchmark wages for all key employees against local market rates and adjust EBITDA for required raises.
- The buyer should conduct stay interviews with key staff before closing, asking what compensation or role changes would make them leave.
- The valuation model should include a post-close retention budget for critical employees, not just historical payroll expense.
Prevention checklist 0 done
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Thesis
Sourcing
LOI
Due diligence
Closing
Integration
Operations
Transcript 1964 lines · 11986 words · auto-generated captions
What happens when you leave a $20
billion rocket ship startup to buy your
first small business? Chandra thought
his first electrical contracting deal
was a no-brainer, one times EBITDA, 80%
seller financing. Instead, he lost
$300,000 his first year. From reluctant
sellers hiding QuickBooks files to
discovering fraud after closing, his
story is packed with lessons every buyer
needs before signing the dotted line.
Since then, he's built a portfolio
spanning electrical services,
underground construction, and fiber
splicing, growing revenue into the tens
of millions. In this episode, Chandra
shares the deals that worked, the one
that nearly broke him, and the number
one thing he looks for now before buying
any business.
>> When you're a searcher and you're trying
to find your first deal, it's the way to
go, right? BizBuySell, US Businesses for
Sale, all those publicly facing sites.
The deal was $500,000. It advertised for
above $500,000 of EBITDA. How wrong we
were. After the deal was done, we ended
up losing about $300,000. The seller was
really reluctant to give us QuickBooks
data. So, he would just give us reports.
He wouldn't give us the actual
QuickBooks file. And his continued
pushback was, "Well, I've got a bunch of
personal things in there that you don't
need to see." We looked at it like,
"Well, this is just probably another guy
who's trying to avoid taxes by putting a
lot of stuff through his business. It's
not the end of the world." And then,
when we did our little bit more due
diligence on the seller, he had a lot of
IRS issues. Didn't get too far into it.
We only found out kind of afterwards,
but he had built a cabin and marked
everything as a business expense. He
built himself a house. He built himself
all these things and just said, "Oh,
they're all business expenses." So, now
that's a big red flag. I mean, looking
looking at businesses now, we always
look at the character of the seller.
Whereas before, it was more like, "Well,
we could fix it. As long as the business
makes money, then we don't have to deal
with these character issues moving
forward."
>> Historically, my background was in
technology. So, I I worked for some of
the big guys like Oracle and then I
joined a really small startup. Um and
that startup happened to go crazy. It
was called Coupa Software.
Uh and went from a company valued at $50
million. So, not not really small, but
you know, mid-tier to when I left it was
$20 million. So, it was a a huge rocket
ship. But, that taught me a lot along
the way around scaling and and a few
other things around company culture
which are super important and I'll touch
on that later.
Um during this time, uh you know, I also
started acquiring businesses.
So, in 2018, uh I had my first
partnership with a one other person who
name is Colin Anderson.
He and I decided, we've been friends for
so long, we decided, let's just start
buying businesses. Let's Let's do what
we can to to build the portfolio. It'll
be easy. Uh is kind of the thought
process.
So, we went on BizBuySell like everyone
does and we ultimately came across an
electrical contractor.
We had no idea what we were doing.
But, this electrical contractor was
advertised at basically one x EBITDA and
we thought this is a no-brainer. We're
going to get our money back in 1 year.
I'm so excited.
Uh so, we went through and we ended up
buying this company Go For Electrical
Construction. Um
Some hiccups along the way with the
seller and I'll get into that uh as we
as we jump into the conversation. Uh
but, it was the jumping off point to
start really going after companies and
starting to get this idea of like, hey,
let's let's build our own Berkshire
Hathaway or let's let's build something
worthwhile.
So, then that was in 20 the beginning of
2018. Fast forward to 2020, we closed on
another electrical contractor in
January.
Closed on two more acquisitions in 2020,
uh underground construction and fiber
splicing.
Um and then, you know, we did uh acquire
some real estate in 2021 as, you know,
as part of the the holding company.
Then,
fast forward to 2022, we acquired a
trailer manufacturing company, which was
a disaster and we'll no doubt we're
going to jump into that as well.
>> Yeah.
>> And uh in 2023, we ended up selling that
trailer manufacturing company because it
didn't quite fit the the holding company
after spending just a ton of time and
money fixing it.
And in in 2024,
we closed on our latest uh acquisition,
which was another electrical
construction
uh a company. That was more home
services based.
>> That's awesome.
>> Yeah, we've done a number of number of
acquisitions that we still hold in the
platform and
you know, along the way we did actually
do uh you know, a
uh another partial buy. So, we did a
stock sale to invest in another company
we ended up selling that off as well.
So,
>> Nice.
>> so far it's been a lot of fun.
>> That's awesome. So, let's start with
that first one. So, it's a an electric
it was an electrical construction
company or was it just pure electrical
electrical services?
>> It was it was construction. It was 100%
uh
you know, big projects.
Um you know, I think the specialty was
more around multi-family,
uh hotel builds, things things along
those lines.
>> Okay. And uh what So, what were they
doing the underground construction or is
it just install So, they were doing the
install electrical?
>> Yeah. So, it was more more the latter.
And if there was any underground
component,
it was always sub subcontracted out.
>> Got it. Okay. And so, you said one time
EBITDA, how do you find a deal?
>> It was just BizBuySell. Like like
everything. That's When when you're a
searcher and you're trying to find your
first deal, it's the way to go, right?
BizBuySell, US Businesses for Sale, all
those all those publicly facing sites.
>> What was the
Go ahead, sorry.
>> Oh, the the deal was
was $500,000. It advertised for above
$500,000 of of EBITDA.
Um how wrong we were.
Uh
Um first year's performance, we ended
up, you know, after the the the deal was
done, we ended up losing about $300,000.
>> So tell me a little bit about that. Um
did you finance or was it cash?
>> So this was a 100% seller note.
>> 100% seller note.
So this is like the perfect Hold on. So
this is like the
>> All the finance part was seller note. We
we did put down, I think uh $160,000.
So the remaining portion, 340, was
seller note.
>> It's the perfect deal for brand new
first buyer.
>> Yeah.
>> One one multiple EBITDA and uh 80% uh
seller fi- or 75% seller financing.
Okay.
>> Um
>> Yeah. Yeah, so you did your due
diligence. What did you miss?
>> No.
>> Uh you no due diligence.
>> I I I mean we did uh to an extent, but
I think what we have learned through the
last several years is that we need to
have a good team around us
to, you know, one to help us with the
due diligence, but also to
to not look at at the data with
rose-colored glasses.
So
you know, when we when we took the
business or when we're going through the
the process of researching the company,
we found a few things. I mean, one, the
seller was
you know, really reluctant to give us
QuickBooks data. So he would just give
us reports. He wouldn't give us the
actual QuickBooks file. And his
continued
uh
pushback was, "Well, I've got a bunch of
personal things in there that you don't
need to see."
Okay. All right. And then, you know, we
we looked at it like, "Well, this is
this probably another guy who's trying
to avoid taxes
by putting a lot of stuff through his
business.
It's not the end of the world."
And then, you know, we we did our little
little bit more due diligence on the
seller. He had uh you know, a lot of IRS
issues. So, uh
you know,
didn't get too far into it. We only
found out kind of afterwards, but he had
a lot of
um
I think
I think it was claims from the IRS. Uh
we we found out afterwards that
he had built a
uh
a cabin and marked everything as a
business expense. So, he built himself a
house. He built himself all these things
and just said, "Oh, they're all business
expenses." So,
that that is a big red flag. I mean,
looking looking at businesses now, we
always look at the character of the
seller.
Um whereas before, it was more like,
"Well, we could fix it. As long as the
business makes money, then we don't have
to deal with these character issues
moving forward." So,
>> Yeah.
>> It always comes back and bites you.
It does. I had I had a an interview with
a seller where on the call, she tells us
we we were pushing her a little bit with
the due diligence. This is where hiring
the quality of earnings person. And she
brings her accountant. And we're asking
like for more uh details on the
add-backs. And then she says, "Oh, uh I
don't have anything on on that on
those." So, it's like, "Well, how did
you come up with the number?" "Well, I
just made it up."
And and then the and then she talks to
the accountant. And then and then we
said something about like, "Well, it's
okay. Give us the bank statements and
stuff. We'll redo the you know, we'll do
the whole
uh
books." She didn't have any QuickBooks,
nothing. And then she says, "No, I don't
want to do that because that's part of
the IRS
uh letter that I letters I'm receiving."
And then I'm like
>> Okay.
>> Okay, I think we're going to need to end
this conversation right now. There's no
point moving forward. Uh but you learn
because I think in your case in the
beginning that rookie mistake, your
first deal
the deal is so good. The seller is a
one-time. Like this it's still that that
lure of this 1X multiple plus 80% seller
finance or 75% seller finance. Those two
combinations you think are going to
de-risk your deal.
>> Exactly. And you know, we this is you
know, I I look back at that deal and I
think, "Hey, we've come such a far
away." But that deal did get us in the
game.
>> Yes.
>> Uh so we we sometimes romanticize buying
businesses. And that's that's where we
were, right? That's where we were
looking at everything with rose-colored
glasses.
And I can I can point to all of the
errors that we made, but once again, it
just comes back to it got us in the
game.
>> Yes.
>> we jumped headfirst. We have a little
bit of brain damage from it, but now we
can take that onto the next deal.
>> And it's great tuition to learn uh
everything that you've learned. So uh so
your first year you lost 350 and then uh
and that's we said 2019, right?
>> And that was 18.
>> 18, okay.
>> yep.
>> So and then the following year, so
>> The following year we made, I want to
say about $400,000. So we were slightly
when you So taking the 2 years, we were
slightly ahead.
>> Okay.
>> Um
And then you said the reason
Go ahead, sorry.
>> Oh no, I was going to say the reason for
the big loss and this is something that
any uh acquirer should know about if
they're looking at buying construction
business is primarily how far uh the the
group has built already on a project. So
we took over all these projects mid
midyear or mid project and the seller
had forward built a lot of things. So he
he took a lot of the the profit. He took
you know, he took a lot of the profit
for the from the projects themselves,
but also forward built. So then we were
working at essentially a loss.
So it's it's it's just something to take
for we didn't pay attention to as
closely.
Once again, it was the allure of
this is one one X. Well, even if it's
0.75
X. It it should be it should be fine,
right? So that was the thought process.
>> That makes sense.
Uh so now
you waited till year three to do the
next acquisition, correct? Like in 18,
19,
>> Yes. Yes. So we did Yep. We did the next
acquisition in January of 2020.
>> Okay.
>> Um that was another electrical
construction business.
Um so the the big mistakes that we made
and I'll I'll talk about the mistakes
throughout the course of the journey,
but what we did was when we made that
acquisition, we decided to bring the
seller from the first business. He had
become an employee. We decided to bring
him in as a partner because he was the
the master electrician. So he was the
license holder. We thought
you know, we'll just we'll just lock him
up and we don't have to worry about the
license moving forward. And since Colin
and I are very well aligned, if there
are issues that require, you know,
voting or anything like that, we have
2/3 the vote. It should be fine.
Um unfortunately, it didn't didn't quite
work out that way.
Uh it was a lot of an a lot of issues
with respect to the culture of the
business, how we wanted to build and it
it really did set us back, I would say a
couple of years, just by having him be
uh part of the organization. Um I look
at the the business we acquired. The
reason why we were, you know, I say we
it set us back a few years is
he was almost like a cancer to the
business because
see, we knew that he was uh you know, he
wasn't great with people. Um so we said,
"Hey, you you have a gift for sales,
keep keep filling the pipeline." But any
interaction that team members had with
him, they came away with a negative
experience.
And it got to the point where we were
just churning through people. And you
know, in this space, in the electrical
space, finding talented and trained
people, it's like finding unicorns.
Yeah. So we were we were churning
through talent and that was a big driver
as to why well, one, we wanted to
you know, segment him off from any
employee interactions. Uh but also it is
the it is a reason why we did take, you
know, an extra few years to get the
these things stabilized.
>> Well, it's also like, you know, in in in
that space, the talent acquisition is
the bottom line.
And if and that's what's holds your
growth. So if you're churning,
you're not growing.
>> Uh
>> Yes.
>> It's not a matter of like getting more
clients, it's getting the talent. So So
he was on the first deal uh and then now
you're going to buy the next deal. Did
you have to kind of figure out agreement
to get him out of the the entity before
going to the next deal?
>> So we ended up just combining the two
organizations and we said, "Hey, you put
up the down payment uh or part of the
down payment for the next acquisition,
we'll bring you on uh and then we'll
also refi your seller note into a bank
note that the business is paid." So the
seller note went away, the business has
started paying the the bank note, which
is one of the, you know, that was one of
the more attractive things.
Um and so we said, "Yeah, bring come on
in, 33%."
>> Looking at the whole entity.
>> Of the whole entity.
>> Oh, wow.
>> So, and that was the driver once once
again was, "Hey, you you're going to
bring sales.
>> Yeah.
>> We're going to refinance your debt, and
so the company pays the debt. So, you
know, we're all third partners and the
company's using EBITDA to pay the debt.
Perfect. It makes a lot It makes a lot
of sense. Um what we
once again, we did not take into account
was the values and kind of the
background of the person.
>> Yeah.
>> And so, we we now are very
uh
we're
we're we're very specific in terms of
folks that we want to do business with,
and it has to be the the baseline has to
be a shared set of values.
>> Makes sense. So, that second deal, how
how large was it? What's the What was
the size and then what was the size?
>> It was it was another small uh business,
so it was right around 650k.
Uh was the deal size and
just about 250 to 300 of EBITDA.
What which is what was uh what was
advertised.
>> Got it. Okay, so like 2x.
And then so this time this time this
time you did you did diligence.
>> To an extent.
>> So,
>> it and you'll see through the course of
the story, it's really about, "Hey, we
we shouldn't be doing due diligence
because of our rose-colored glasses."
I think I think the business in reality
this business was sound. It did It did
what the seller said it did.
Um and I joke about that part because
what we didn't uncover was that we had
several key team members that were
uh being paid below below market.
And that's where some of the some of the
profit essentially was being generated
from.
But because we brought this, you know,
this other person in as a partner,
it it was within 6 months that we
started to see churn from the acquired
business to and and also the the organic
company that we had.
Um so that was the big cost. We still
generated a little bit of profit from
that business in year three, um but
comparative to where we could have been
yeah, it was significantly lower.
>> And so uh so at this stage, so 2020, so
in 2020 you did only one transaction,
right?
>> No, we did we did three. So so that was
January of 2020.
>> Okay.
>> And then in May of 2020 as the world is
shutting down so I hey, you know what?
Let's uh let's be aggressive. So we
bought our underground construction
business.
Um and then along with that it was the
same sellers they wanted to also sell a
fiber splicing
>> Okay.
>> uh
company. So we bought both in the same
>> Same one.
>> time frame. Yep.
>> They were and you were split two
separate entities.
>> Correct.
>> Got it. Got it. Okay. And what was the
size of that deal?
>> So the total size between both companies
was right about 2.3 million.
>> Okay.
>> Um we had
a seller carry of
I would say it was about $300,000.
>> Okay.
>> Um and we came to the table with about
$300,000 $350,000 and then I did a
conventional financing for the rest.
>> Okay. So did you have to like
refi the first deal you just the first
loan that you did into No, it was a
separate
>> No.
>> So you kept both separate separate you
kept the entities separate.
>> We did, but we did have to cross
collateralize. So
because we were you know, we we were on
the same bank. Um you know, the bank had
been doing you know, we built a really
good relationship with our banker. Uh
his name is Caylin Schwartz.
So now
>> at uh American National Bank, so that's
a quick shout-out. But, he he really
helps us through kind of all of our
transactions now. So, one thing that I
would give the listeners here is that
build the relationship with your
financing team,
but also realize that if they're putting
up roadblocks,
it's not to you know hinder the deal. It
is because they're your only advocate in
the deal.
>> Yeah.
>> The broker uh trying to sell the
business has the deal in mind and the
the seller. The seller really just cares
about getting that check.
>> Yeah.
>> You have to have yourself
uh really represented. And I think your
bank, your attorney, uh your your deal
team does that for you. Um so, just I
I've heard a lot of acquirers say that
uh bankers give me a lot of trouble. I
just I can't deal with these people.
Flip it on its head and realize that
they want the best for you because
that's how they get paid back.
>> Yes.
Yeah, they're in the risk mitigation
game and and you need uh you need as as
many eyes on the deal um to highlight
any risk that you may not have seen.
>> Yeah.
>> And uh and then, you know, adjust the
terms within your deal to cover for that
risk. Uh 100%. So, now uh so, end of
2020,
you end up with a a size what, 3.5
million? What is I'm sorry. Let me go
back. So, the first deal was uh how much
revenue by by 2020? How what's the
revenue there?
>> So, our
our electrical business was generating
between 4 and 5 million dollars of of
revenue uh with those combined entities.
>> Okay.
>> And the underground construction
business was
about 2
million revenue and the fiber splicing
is
about 4 to 500,000.
>> Okay. So, what about seven what about 7
million now? By the end of 2020, you're
at 7 mil.
>> 6 and a half Yeah, 6 and a half 7, yep.
>> 6 and a half 7. Okay.
>> Um well, I would say that we the
advertised revenue for underground
construction was about 2 million. Um
what we actually got in 2020 was less,
and I think a lot of that was the uh you
know, the the environment at the time.
It was COVID.
>> Chaos.
>> Um so, there were projects that got
kicked and things like that, but
it was
it was a cash-flowing business, which
was nice.
>> Okay. And so, you're you know, this is
like a one of the hardest things to do.
Like, you're you're just coming out of
like the hole with a deal with a partner
that's not the greatest. You buy one,
and then you have this churn culture
clash, and then you buy two more.
Uh how did you uh
how did you manage, you know, now you
have like three two at least two
cultures, but three cultures in your in
one business? How did you manage that?
>> I know.
Must be a masochist.
>> Yeah, yeah. No, I
So, the the issue with culture from, you
know, the other the other partner, we
were starting to see that boil up more
and more as we finished this
acquisition.
Um and
you know, we finished the acquisition
and we thought, all right, well, we want
to we want to segment him off just to
electrical. So, I started managing the
underground construction and the fiber
splicing business myself. Um so, I was
kind of the the GM or the the CEO of
that that line of business.
Um and at the same time, I still had my
corporate job. So, I still had my W-2.
>> Oh, wow.
>> Uh and was working at, you know, pretty
pretty decent level, high level at uh
you know, the software company
doing consulting.
It was a very difficult time. So, I
would get up the after the close uh of
the acquisition, I would get up
3:45,
drive 2 hours away to try and understand
what was going on. I didn't I didn't
have a construction background. I have
no idea what's going on. But, I probably
lift a hammer, swing and miss. But,
so really try to understand what the
processes of that of that business.
Hop in the truck, give a presentation to
a consulting client for my W-2,
uh and then try to understand what's
going on with their, you know, their
business. And these are Fortune 50,
Fortune 100 businesses.
Then hop out of the truck and try to try
to help understand a little bit more on
what's going on. So, it was a it was a
very difficult time. So, like I said, it
was, you know, waking up at 3:45,
getting out there, and then coming home
at
10:00, 10:30, and then trying to do it
all the next day. So, definitely burning
the candle at both ends.
But, what came out of that is that
this was our fastest growing business.
>> Yeah.
>> And it it still remains to be that way
today because of the foundation that we
we've laid.
Um so, we went from, I think year one,
we because it was COVID, we delivered
something like 1.2 million dollars of
revenue.
The next year, 2.2.
The following year, four.
Uh and then the following year after
that, 5.6. And this year, we should
deliver
right about 7.5 to 8 million dollars
just within that that business.
>> Wow.
>> Yeah.
>> Um So, that must have been tough period.
So, how long did that, you know, burning
the candle both ends last? How long is
that did that period
take?
>> It It lasted about a year.
>> A year?
>> Yeah. And
at this time, my, you know, during that
year time frame, my wife was also
pregnant. We had our first kid.
Uh
and
I think back to this. We had our first
kid, and 2 days later I was back at
work. Wow. So, I reflect back on that a
lot, and I think, you know, there's a
there's a better way to do this.
Uh obviously taking the lessons learned
for the for the for my next uh kiddo who
was born, but man, it was it was
definitely a tough time.
>> So, so uh how long did it take you to
feel comfortable and you get your arms
around that business?
>> It did take some time. So, we you know,
immediately I started firing. I hired a
project manager who helped do a lot of,
you know, get out on site a lot more.
Um so, that was I want to say 4 or 5
months in after I started to understand
the business, started to get to know the
people, and build a rapport.
Uh
I ended up quitting my W-2
about a year after we closed the
acquisition. So, April or so of 2021.
>> Okay. And then by then you feel
comfortable. Now you feel comfortable.
You understand the business. You
understand the drivers of the business.
Now, remind us again, what is the
business? Just so so people understand.
>> So, it is underground construction,
meaning we take these really big
horizontal drills
uh and we
essentially drill underground, pull
conduit, fiber, other utilities
uh back under, and then ultimately do
the hookups. So, whether this is and
this can apply to to any utility,
whether it's power, water, fiber. Our
specialty is fiber right now, but as I
speak, we are actually
going into other other utilities as
well, and we see that as the big green
space.
>> Yeah. So, electrical's probably the most
uh the fast growing segment now with the
data centers and AI. You and I have
spoken about this. So, that's the
opportunity that's that's ahead.
>> Correct.
>> Yeah. So, in in the wireless world, what
is the time?
>> That was the idea, right? We we always
thought about this of, like, "Hey, let's
get this
peanut butter and chocolate mix of
electrical and we'll do all the
underground in-house and we'll expand.
Like anything, it takes twice as long
and costs you twice as much to get from
concept to to ultimately implementation.
>> And between those two businesses, which
is also something we talked about in the
past, you have the underground
construction and you have the splicing.
And I remember the splicing part had
higher margin than the underground
construction, but which one is your
favorite? So, like which which which
part is your favorite?
>> I You know, I I will say I I do like the
underground construction business. Um I
And I I I have a bias there, right?
Because I'd been working I've been
working on it for for so many years.
Um that being said, I can no longer call
it just an underground construction
business because we expanded this year
to aerial. So, now we just do we do
everything on the poles as well as
underground. So,
uh
just very very happy with how the team
has embraced
great company culture, with how they've
embraced company values, and how they've
pushed for growth.
So, I'm really really happy with that
team.
>> So, the the beauty of the these two
businesses and and I think which is why
it's difficult for you to say, "Okay, I
like this one better than the other." is
that they compliment each other. They
help each other.
>> Correct.
>> You know what I mean? One feeds the
other. And and then one is profitable
because of the other. So, you can't just
separate them and say, "Okay, you know,
how about I guys just do this as as
opposed to that?" But then you don't
have this to generate that.
>> Right. And we are trying to diversify.
So, we are trying to get instead of uh
you know, everything being tied
together, we're trying to have that
splicing division go out to other uh
whether it's underground construction or
aerial groups or other ISPs and try to
cross, you know, instead of just
cross-selling services, go out there and
make the sale itself. So, I think
>> Yeah.
>> that is uh
that is very promising for this year.
Uh and I think that, you know, we hadn't
paid much attention to this business. It
started off at 4 to 500 K in in
earnings, and it this year will probably
going to be our best year at maybe 8 to
900,000.
>> Wow.
>> Um, but we are going to put the gas on
it because we see the opportunity ahead,
and uh,
we think that hey, now that the others
are stabilized, let's let's pour some
gas on this one.
>> So, so you started in '18 with the first
one, you got the next uh,
one or next three at in 2020, right? And
then
>> I'm for punishment.
>> And then what's the when did you get
the, you know, the next one? The next
one, yeah, the next one was the the the
trailer business, right?
>> Yeah. Yeah.
>> What year was that? '21?
>> This was '22.
>> '22.
>> So, so it started it started off with
myself and Colin really
trying to figure out how we can,
you know, do things on our own versus
having the culture that this other
partner was was putting in. So, rather
than really just push for
uh, him to be out of the business, we
thought, well, let's just buy something
else over here, and it'll be the two of
us, it'll be start of our next platform.
Um, anyway, he got the other partner got
wind of it, was uh, kind of emotional
about it, and wanted to sell us his
shares of the business. And so, it was a
it was a great thing. It was it was,
hey, we're getting two birds with one
stone.
So, in 2022, we bought out that third
partner, so it's now just myself and
Colin.
>> Nice.
>> Um, and we also bought this trailer
manufacturing company. I think the
closings were 2 days apart or 3 days
apart.
>> Wow.
>> Um, what we should have done
is just have the adult conversation and
said, hey,
this isn't working as a partnership, uh,
you know, whether it's controlling
personal spend through the business or
just,
you know, developing a good company
culture, it's just not there with this
person. So, let's let's part ways. Let's
just, you know, go through with the
buyout.
Um because it was hard enough to go
through and
you know, get all of the things that he
was doing,
you know, off his plate and get that
stuff, you know, kind of figured out
while the same time dealing with the the
trailers acquisition.
>> Yeah.
>> So,
>> So, that makes sense. That makes a lot
of sense. So, so you did you have
someone else So, obviously, you bought a
number of your companies. So, you had
people with licenses within your
when you're your new your new your
acquisitions that you'd be able to
leverage to get him out, if you will.
>> Yeah, and we I mean, now now we come at
it from the perspective if we need a
master license, we can just go out to
the marketplace and rent one. It's not
It's not something that is Yeah.
Uh at least not a showstopper.
It It's just the inexperience in the
space and then the emotional decisions
that you make at the time that you
reflect back and think, man, there was
such a better way to do this.
Um but we take those learnings with us
in the next one.
>> Yeah. Okay. So, tell us about the
trailer manufacturer. I know you don't
want to talk about it, but let's just
one last time.
>> This is our I'll say this is our our
biggest error.
Um
So, the company uh the company was about
1.85 million dollars, came with 1
million dollars worth of real estate.
So, we thought, all right, we're we're
hedged in terms of the downside.
Um the business with 850 advertised for
doing about 400k in EBITDA.
So, we thought, oh, great. This is This
is fantastic. We met the seller. We
thought, okay, we don't share the same
values. This guy's kind of a, you know,
he seems very
The only word that's coming to mind is
he seems like a scumbag.
But, you know, we don't have to live
with this guy. We can fix the business,
and this will be This will be easy.
Keep on coming back to this will be
easy.
Um
add on top of that both he and the
broker said that this guy is dying of
cancer.
Uh we you know, we need to act fast.
Like okay, well he's dying. This is
tugging at our heartstrings. He just
wants to go and
uh you know, be with his family.
So we we speed through the transaction.
We speed through due diligence.
It was a little bit tougher because he
was running, you know, a towing company,
uh kind of a campsite, and this trailer
manufacturing all out of one set of
books.
And so we were trying to pull data out
of out of that to to go through and
validate the financials and validate
what was on the tax returns.
But, you know, he he gave us a lot of
confidence with contracts that were
signed, all these different things. So
great, we close on the transaction.
We admittedly did not go to the facility
as much as we should have in the early
days. So this is a facility that was
about 2 hours away from our other
operation that also required some of our
attention.
And you know, I honestly I just don't
want to drive 2 hours to get somewhere.
This is just a
kind of a a fault. Um
so we we ended up spending a little bit
less time, but we did bring some of our
electricians over to make sure that the
shop, manufacturing facility was
improved. So we did everything from
upgrading services to making sure that
people had quick disconnects could
basically connect to
you know, their welders and everything
like that in a safe way and a quick way.
So we improved the the facility. We
built a paint booth, all those things.
But when we dug into the numbers after
the first few months, we realized that
we were burning cash.
And the contracts that this guy had
signed, the trailers that he had sold
what he would do and to show
profitability, this is what he did. He
would take a large deposit,
deliver some, if any, of the product to
the
to the customer,
and just count the deposit as revenue.
Right? So, instead of it living on the
balance sheet, he just said, "Hey,
here's
here's this. I'm robbing Peter to pay
Paul." The base of any any Ponzi scheme.
So, after digging in, we're like, we
have to we have to raise prices. We have
to develop a different product set.
We have to develop all of these
different things. So,
it took us
a year to try and get that business, uh
you know, stood up properly. So, we
ended up having professional drawings
made. Uh we had, you know, more design.
We had
finally had costing systems, uh or at
least some systems to develop to to
identify cost.
You know, pushed out the dealer network,
all of those things. But, in that year,
we had burned more than a million
dollars.
Uh to try and get this thing. So, the
the steepest of the steep J J curve. And
we were not paying attention to our
other core business.
Right? It doesn't make sense, in you
know, reflecting back, to really
to just fund our problems. We have this
profitable set of construction
businesses,
and we have this unprofitable set of,
you know, this one trailer company. But,
we are spending our capacity, our
time, energy, efforts, everything
on this.
So,
we decided, "Hey, we have to
we have to sell this thing.
It doesn't fit the platform. It doesn't
make sense for us to own a manufacturing
facility and a construction business. Uh
we fooled ourselves into thinking this.
Uh there were some sort of synergy.
And the benefit is that the real estate
appreciated. So, we thought, "Okay,
well, let's
let's recoup what we're what we can. We
just have to stop, you know, stop the
investment cuz we're robbing our other
businesses to to invest in this. So, we
ended up selling the business for
you know, 1.4 million was the
um
real estate, $400,000 was the business
itself, and the business was just the
assets. We said, all right, the business
is running at a loss. We're basically
seeing the uptick of the J-curve. Hey,
this is on you, Mr. Buyer. You've got to
focus on sales, but we've done a lot of
the work in terms of getting this thing
from, you know, ground zero to to one.
Yeah.
>> And
um So, you exit that business if you
break even or what what was Yeah, okay.
>> Yeah, we we set about a million dollars
plus on fire.
>> On fire. Okay, in a year about a year?
>> Yeah.
>> Okay.
>> That's the bigger That's the bigger
cost.
>> Yeah.
>> So, we we lost so much time in terms of
what we're trying to build.
>> Yeah.
>> Though, we're trying to build something
special, just a business that has a
great company culture that has
you know, it's not just about the the
money, but we're building something that
every team member can have a great
employee experience.
>> Yeah.
>> And it it set us back years
both from that perspective as well as,
hey, what can we do for our next
acquisition or what can we do to grow
organically?
>> Yeah.
>> So, time was the biggest factor.
>> And your existing construction and
electrical businesses were going through
this transition where the partner is not
there, and then your guys are installing
the new the new culture, new processes
at the same time. And have they Have
they grow? Did they stable? What
happened to that business during that
time when you're dealing with this one?
>> So, our underground construction
company, it thrived. So, it it continued
to push growth. It was It was great.
Continued to deliver EBITDA to the
bottom line.
that was fantastic. Our electrical
business suffered and it was to
it was continuing to suffer from the
actions of that third partner.
You know, it it takes a lot of time to
turn the ship.
>> Yeah.
>> In addition to this, after we, you know,
we bought him out, we started digging
into what he was doing
and unfortunately there was there was
significant level of fraud there. So, he
you know, he would bury personal spend
inside the business and project costs.
>> Wow.
>> He built himself a pool, hid the cement
cost in in one of our projects. He built
himself a barn or a man cave, whatever,
another structure, hid that into you
know, the you know, one of our projects.
We were seeing profitability decline
and he was just embezzling a ton of
money.
>> Wow.
>> Um and that that comes back to the value
side.
>> Yeah.
>> If somebody is willing to
cheat or steal from the IRS,
>> Yeah.
>> I get it. Nobody likes paying taxes, but
just pay your taxes.
Just play by the rules.
>> Yeah.
>> He's willing to steal from the IRS, he's
willing to steal from you.
>> Yeah.
>> There's no there's no gray line.
>> Yeah. Um dude
>> And then one one other note, one other
note, we also found out, so thinking
about fraud, because of the trailer
business and I mentioned the other
seller, he told us he had cancer in the
stop story. We found it afterwards, it
was all it was all a lie. He didn't have
cancer. It was just one of those things
to get a couple of suckers to
to buy.
>> To buy fast and not look at anything.
>> That's crazy.
>> Yep.
>> Dude, like you know, you guys have uh
uh you you're blessed, you have some
some good uh some good luck because, you
know, one of the reasons why the
underground business was doing so well
during that period is because of the
infrastructure
uh money that was going, you know, the
bi- what was that called? The
infrastructure
>> bill.
>> The infrastructure bill. And so, there
was a big influx of capital into the
system, which helps kind of lift that
business while the other businesses but
man, it could have gone the other way
pretty easily and
but yeah, you guys are blessed.
>> did tac- we we did tac- tactically say,
"Hey,
third partner,
you're you're going to be segmented away
from this business." So, we kept him
away from it.
>> Yes.
>> I was managing it and so we limited the
exposure to the cancer spread.
>> Yeah, the exposure to the cancer. Yeah,
absolutely.
>> Yep.
>> Yeah, yeah and I mean it was a good
business. Those are good businesses that
you bought and that's kind of a good and
I've seen this trend where people like
it's it's interesting. I I've seen this
trend many many times with business
buyers who do a bad deal at first, do
another okay deal and then they you
know, they land a really good deal and
and that really good deal kind of like
makes everything, you know, work.
>> Um
>> Right.
>> And and and then eventually they kind of
figure it out and and so this this not
it's it's very common trend that that
happens or but without that first bad
deal, you couldn't do the the really
good deal.
>> Correct.
>> And
>> Correct. Like we could have done without
the bad, you know, the very bad deal.
>> Yes.
>> Yeah, yeah, the very bad deal. Yeah,
that one you could have done without.
Yeah, a little bit more due diligence
and a little bit but I think the theme
around
working with good people, buying from
good people is so critical, is so
underrated.
People think that they can fix things
but they don't understand that the
business culture, the business soul,
the business has that
has that person in in its DNA.
>> Yes.
>> DNA of the founder in it. So, if you you
know, you take the the if the person is
not a
ethical person,
it's not someone with good character,
uh foundation is going to have that in
it.
>> Correct.
>> know, so you almost have to, you know,
unless you're like him, you're not going
to be able to run that business with
your character.
>> Right.
>> you cuz you have to literally kind of
gut the business from from the roots and
then restart over.
>> And it is it is a bit of starting to
believe your own legend because the
other businesses that we acquired, I
mean, the our underground construction
company did not have the best culture,
but we were we were able to turn it
around. I'll give you an example.
So, this was a business that was run out
of somebody's farm
and none of the workers, none of the
team members had access to facilities.
So, if they had to use the restroom
um
they would they were told to go by the
side of the barn.
And that was the that was the that was
the base of the culture and there were
so many stories of being short-paid or
of, you know,
of course there were no benefits or or
anything like that for team members.
We started to believe our own legend
because we took that, we started to get
it to grow, we got, you know, everybody,
you know, the the baseline for benefits
and now, you know, what's deployed today
is best in class.
But
thinking back to our trailers the
fiasco, it's hey, we we started to see
the turnaround. Hey, we could do this.
We could we started to believe our own
legend and that was a
>> Yeah.
>> that was a big mistake.
>> Well, that was, you know, I remember
that time you and I spoke in, you know,
early that period when you were dealing
with that manufacturer. This is not like
the whole time, cut your losses, cut
your losses, just
>> Yeah.
>> Yeah, but I we had a loan on it and that
was kind of the reason why you couldn't
completely walk away. You had to like do
a transaction to, you know, get rid of
that debt, that liability.
>> And the saving grace, once again, is
that the real estate appreciated.
>> Yeah.
>> That we didn't take a huge loss on the
on the actual buy versus sell. We took a
huge loss operating it to get it to a
point where we could sell it.
>> So, that's 21 to 22, right? So, 22 you
exited that that
>> 23 is when we exited. 22 is when we
bought the bought the business, yep.
>> Oh, you bought it in 22, you exited 23.
And then then 24 you bought something
else.
>> Correct. We bought another electrical
service business.
>> Okay.
>> And I think this is kind of our best
acquisition from the perspective of what
what we're now looking for. Took all the
lessons learned from the other
transactions and we applied it. The
first thing is shared values and
culture.
I I, you know, we'll we'll still go out
and grab lunch with the the old owners
of the business. They're very ethical
people.
Um and they're just they're just
they're just good people. Uh shared
value sets.
I think that is the most important
baseline of what you have to look for
when you're buying a business.
Do you have a shared set of values with
the person you're buying from?
That is what made the transaction go
super smooth.
One I mean, both Colin and I are not not
folks who have an eye for detail, so we
kind of trusted, you know, our CPA, the
attorney on our side. They also had the
same kind of trust in their team.
And we would have just like very open
conversations about how we wanted things
to look, what we want to do with the
business, which is we want to maintain,
we want to continue their traditions,
we want to reinvest into the business.
Um and it wasn't just about, "Hey, this
is about cash flow for me." or, you
know, anything like that. It's
maintaining and making sure that the
guys are taken care of uh who work in
the business.
I think with that alignment of like
culture or values, it made everything so
smooth. Uh it is actually now, you know,
we've also started to deploy EOS and
we've brought all of the businesses into
kind of that one EOS umbrella.
This electrical service business is now
helping our organic electrical business
try to develop some standards, try to
develop, you know, the the right sales
pipeline, things along those lines. So,
it's just been
overall just a fantastic acquisition, a
fantastic experience.
>> Wonderful. How How big is that
acquisition?
>> So, the total price was
I'd say it was about 4.4 million.
>> Okay.
>> Um we did uh
we actually used the SBA for this.
>> Nice.
>> Um and did a uh
a mix of SBA financing with a seller
note.
Um
and we also acquired some real estate.
So, real estate was about 750k.
Uh the remaining portion um was the
business itself and the business, like I
said, the whole transaction was
you know, it's created through debt.
>> What was the revenue?
>> Revenue was between 4 and 5 million over
the last several years um and between 1
and 1.5 EBITDA.
>> Nice. Okay, that's really good. So,
about 3 and 1/2 times EBITDA?
>> Yeah.
>> Okay.
>> But that's including it's including real
estate. So, if you take the real estate
out of it, it's uh below three.
>> Below three. Okay.
That's great. Uh that's great uh deal
and it complements the original
electrical business that you have. So,
now you kind of have three three
categories, that commercial electrical,
you have the underground, and then you
have the splicing, correct?
>> Yep.
>> Got it. And uh and then where like how
you and your partner kind of split the
responsibilities?
>> So,
I've taken more of the
kind of like the the financial lead, the
the you know, any sales lead, I'll take
that. He'll take more of the operations.
Um that kind of was the historical
setup. Now, because we've deployed EOS,
we've hired a great integrator. We have
general managers for each of the
divisions. We've stepped away from any
of the day-to-day tasks, right? So, I'm
not in there getting phone calls about,
"Hey, we have to pay this vendor." Or we
have this this particular issue. Well,
no, that's going through the right
channel. It's going through uh our
integrator, whatever business challenge
there is.
>> Yeah.
>> And we spend our time coaching our team
members, coaching the leadership team.
So, we'll spend one
um we'll go to one level 10 a month.
We'll spend our planning sessions with
the team and really set guidance around,
"Hey, here's what we want to build.
Here's the vision for the future of
these businesses. Let's let's figure out
how to get there together."
>> So, are they now functioning as three
separate units or is it all one
business?
>> It does have a shared service center, so
it's kind of like the hub and spoke
model.
>> Yeah.
>> So, there's shared shared support when
it comes to admin,
um when it comes to AP,
AR, finance, legal, whatever.
>> Yeah.
>> Um there's that shared hub. And then,
you know, the three businesses, which
are you know, the the initial
electrical, the underground
construction, and the fiber splicing,
they're all housed in one building. Uh
so, they have some additional shared
cost uh or at least split cost there.
And then, the last acquisition is in a
different location, but still have that
shared support.
>> Got it. And so but you're treating them
so like say when you think about L10
they're going to be you know four
different L10s or they're going to be
three L10s?
>> it's it's basically one L10.
>> What?
>> have the general managers from each of
the divisions
>> Okay.
>> as well as our integrator and then our
lead admin.
>> So how many general managers? Four?
>> So it was four we're now in the process
of consolidating to one so it's one
representative for all of the electrical
side
or one one leader for all the electrical
side. We have one leader for the
underground side splicing
>> Yeah.
>> admin and then our integrator
and then myself and Colin.
>> So technically you split it into two
divisions with two general managers and
then your integrator acts like a COO.
>> Kind of yep. Yep.
>> Got it. Okay. Yeah, so that's
interesting. I was trying to figure out
and then is is there a sales division?
Is there marketing? Where does that sit?
>> So that still falls under our admin
side but we are now moving towards
an outsourced SDR. Running a little bit
of an experiment experiment as we speak
of hey let's let's actually go through
and deploy a CRM.
Let's have an SDR go through and use you
know some AI tools whether it's Apollo
or something generate lists. Let's start
cold calling.
We know where our greatest profitability
is right? Let's focus on partners that
are going to generate that
profitability.
>> Yes.
>> So an example is you know our
underground construction company the
uh really great thing about fiber is
that they're really long projects and we
can we can determine you know our our
workload far ahead of time.
The bad thing is it isn't as profitable
as some of the other utilities.
Right? You're drilling in fiber for you
know somewhere in that $10 a foot range.
But, if I look at things like supporting
geothermal or supporting gas, solar,
those expand the profitability marks.
Even though it's the same it's virtually
the same worth.
>> Yeah.
>> Um it expands the profitability
significantly. So, we're going to try to
build on hey, what are the most
profitable areas that we can and then go
from there. It's the 10x is easier than
2x, right? We want to
>> Yeah.
>> Let's figure out what the the 20% is,
build on it, get rid of the maybe not
get rid of the 80% but not grow it as
much.
>> So, so you're uh like so total across
all the companies, what's the what are
you going to end the year at?
>> We're probably going to be right at
about 17 million in revenue. We're going
to be
probably about four and a half four to
four and a half of EBITDA.
>> Nice.
>> I'd love to see us beat that stretch
goal, but we'll see how how August turns
out.
>> Nice. And so you've done all this
without any sales team.
>> It has been me.
>> Without a CRM. No CRM, no sales.
>> Yeah.
So, it's been me on the underground
construction side. We had
estimators on the electrical side.
Um so, that's the uh
the electrical side of sales basically
on these big projects you've got EM
estimators. They're just going to give
bids. They're going to figure out what
the costs are and they're going to
submit it. And a GC is going to then
just pick the low bid.
>> Yeah.
>> Um but when it comes to things like home
service, it is really about your name,
your marketing,
>> Yeah.
>> things like that, which is what our
latest acquisition does bring to the
table.
So, we want to continue to build on
that.
>> So, the latest one does both commercial
and residential?
>> Yes, it does have it Yes, it does have a
service component. And instead of
focusing on residential service, we
really want to
capture commercial clients.
So, uh just a place where, you know, one
example is we've got a customer who is
you know, they're a
industrial or they're a factory. They've
got a ton of machinery that has
electrical requirements.
They'll call our team or we'll have
almost a dedicated resource for them
uh to fix machinery cuz for them, if a
machine goes down, it is it is lost
revenue.
>> Yes.
>> So, that's where that's where we see the
big potential in the near term. In the
long term,
I do feel like it is more about the
infrastructure plan bringing the
businesses together
for that peanut butter and chocolate mix
of how can we support the demand
for, you know, all of the power that is
going to be needed for, you know, AI and
all these technology upgrades that we're
getting in what seems like
short order.
>> Yes. And I know you and I talked about
this. I want to kind of revisit a little
bit. So, um
you know, how do you see that evolution?
You know, obviously we're bringing a lot
of manufacturing back in the US. There's
a lot of reshoring that's happening.
Uh manufacturers are going to want to
expand to take advantage of, you know,
all these tariffs are hitting export
imported products so they can be more
competitive and be able to produce more.
And then you have the AI and data
center, you know, you have the data
center on one side and you have the
utilities on the other. What's your
approach there? You know, what what is
your kind of plan for the next, you
know, 1 2 3 years to kind of take
advantage of that trend?
>> Yeah, I think it is definitely capturing
the AI play. So, it is hey, you have all
of these data centers being built that
are going to support, you know, all of
our queries as you and I as consumers
are are are creating.
But, the build that's going to be
required for this is going to be
massive.
Um and so that the key is going to be
building relationships with, you know,
the folks that you know, are
transitioning from maybe it was solar in
the past and now they're going to focus
on delivering power to data centers.
It's going to be building those
relationships to say, "Hey, we have all
of this stuff in one house."
It's one place to go for
getting pipe in the ground, getting it
hooked up, and ultimately having power
going to the data center. So, that's the
that's going to be the the value
proposition and we're really going to
push here in the next
year or so
to
to break in to that space.
>> That's awesome. And do you have any
plans to for an exit?
>> No, not not right now. I think for for
us, the goal is to continue to build
something really special.
It is to
to enable our team members to
you know,
gain more responsibility, to build their
skill sets, to build their leadership
ability. Us to be coaches, of course, uh
and to try to help steer the vision the
business into what we see as the right,
you know, vision.
But right now it's it's say, "Let's
let's grow something special. Let's
build something worthwhile."
>> So, so far you've been growing the
talent pool through acquisition. And so,
how many people across all companies?
>> I would say it's it's a mix. So, we are
growing the talent pool by, you know,
acquisition as well as organically. Uh
so, our our
you know, I think at the height of uh
the
the underground construction season,
total across the businesses we're about
90 team members or so. Okay.
But you know, when it's the winter, we
we shrink significantly because there is
no outdoor construction in Minnesota.
>> Makes sense.
Makes sense. So, you go from 90 to what
number? What's the lowest number?
>> It's it's probably around 45 to 50.
Yeah.
>> But it's incredible because I think it's
I don't know what I'm finding amazing
because I've always been in warm places,
but I know that you know places that are
cold like Michigan and and Minnesota,
they're used to that. They're they are
periods where they expand and then there
are periods where they shrink and the
population there is used to that as
well. The workforce is used to it as
well.
It's very common.
>> We have we have team members that they
love the lifestyle, right? I'm going to
put in
50, 60 hours a week, maybe more for 8
months out of the year, 9 months out of
the year, and then I'm going to take 3
months off. I'm going to go ice fishing,
I'm going to go, you know, do whatever I
want to recharge and then hey, 3 months
down the line, I'm going to I'm going to
be back at it.
>> Or go to Jamaica.
>> There you go.
>> Yeah. Nice. So so so you're within your
company, did you build like a a
recruiting team? Is there like a like a
a funnel for you know, finding talent
and and
>> Yeah, so we use outsourced services. So
we initially tried to bring this
in-house. We were less successful, but
we have now found the right partner
to help us with acquiring talent. So
in the past we'd just go with, you know,
hey, there's a
you know, recruiting or staffing agency,
we'll just give them a shot.
Usually pretty terrible.
>> Yeah.
>> Now we work with an organization. They
charge us by the number of hours that
they put in versus a percentage of
salary of the person that they
they bring us.
>> Okay.
>> So their goal is really not just to fill
the seat, but to fill it with somebody
who is going to outperform because
that's how we're going to go through and
get the next person from them.
It has been a really good model for us
to have.
>> I've I've never seen that model before.
So they're they're charging you per hour
spent
on Also, essentially, they're step
They're you're you're They're
outsourcing the recruiters to you.
>> Perfect. Yep. Exactly right.
>> Okay. And they're, you know, so it's an
outsourced recruiter
and and then
is there like a
Is there like a
you recoup some of that cost if the if
the if the person is not the right fit
or no?
>> So far, we have not run into that issue.
Every person that we got from a staffing
agency,
they were not the right fit. And we
we've we've hired them. So, that that's
like anything, it sets you back in time.
>> Yes.
>> Um this was
uh you know, we've had several hires and
they've all been and I'll knock on wood,
they've all been out performers so far.
>> Wonderful. And And what are the roles
that you're recruiting for?
>> So, everything from, you know, the
call it the leadership team to field
staff. So, we had a foreman recently as
an example. So, a leadership in the
field
uh hired and all of the feedback, now
he's about a month in, all of the
feedback has been so positive that he is
removing roadblocks for the team that
he's helping execute. Um and ultimately
driving the business forward, it's been
fantastic.
>> Wonderful. And
you know, so okay. So, and I I I agree
with you. I think you have to test a lot
of different ways and
even, you know, whether it is staffing
or temp to hire or some kind of hybrid
model, you just have to
just like hiring anybody, you just have
to go through a a number of them before
you find the one that's going to deliver
the the outcomes you're looking for. And
then even in that case, you know, they
they may good for a couple of years and
then it kind of like the performance may
taper down and you have to go find
someone else, but you have to constantly
be And in your in your system, your
world, it's all about having the best
talent, the most, you know,
the best talent in your on your team.
>> Yeah, and that's I mean that's every
business, right? It's the people with
the best teams win. And so that's what
we're trying to to build and build it
around company culture,
company values.
I think
that is the biggest takeaway that I had
from my experience at Coupa Software, a
company that went from, you know, a $50
valuation to a $20 valuation in
6 years.
That company values actually matter.
>> Yeah.
>> I used to think of it as, oh, these are
just words on a board, nobody gives
nobody cares.
But if you get everybody rowing in the
right direction with those company
values in mind, you are going to be a
rocket ship.
>> Yeah, and I mean it's not a, you know,
esoteric
you know, concept. It's like a it's a
practical concept because if you have
people of the same value, then there's
trust. Then people are going to trust
each other and then people are they're
going to trust the leadership. And if
there's trust, there and between people
between each other and and they're feel
and they're aligned, so there's trust
and there's alignment on where we're
heading,
then there's very little communication
that needs to happen. It's very
efficient communication
that needs to happen. And and then also
communication is much easier. We can
talk about what's not working. We can
talk about what needs to be changed
without
>> Right.
>> doubting the intentions of the other
person and without, you know what I
mean? So it's much, you know, less at
we're spending less energy, you know,
solving these issues and then moving
forward. Uh we're moving quicker where
So it's it's and and speed is the key.
So the pace of the pace of movement is
the key to
how fast the money's going to come in.
You know, your bottleneck your
bottleneck
is the speed of the lowest denominator.
>> Yeah, how fast you can grow and with
with respect to, you know,
you know, like the communication side
has been helped out tremendously by
deploying things like EOS.
I'm a very big fan of that system now.
We're about a year
and a half into it. Um still have a lot
of room to to grow,
but that has been fantastic. And then
once again, those company values. I
think those two things in mind
have really allowed us to to stabilize,
to grow, and to push for for some new
heights.
>> That's awesome.
So, as you're, you know, as you're
growing moving forward, why are you
not committing to going full force into
building like a like a larger sales team
that's going to be like, you know,
actively pursuing more growth? Or are
you
you know, or you or you just love the
acquisition
the acquisition game, so growing through
acquisition and just buy the next one is
a lot easier, it's a lot faster.
>> It is it is a blend, right? So, we have
you know, we have those estimators who
are bidding out different projects on
all all of the business lines, right?
So, that's just kind of the staple of of
construction. Um now,
as we continue to grow, we we are going
to have seats designed for, you know,
just relationship building.
You know, as we we had one earlier that
the person ultimately didn't didn't stay
with the organization. They weren't they
weren't the right fit, so we had we had
to counsel them out. But,
we can we can once we define the right
person, once we define that, we'll be
able to fill that seat, we'll be able to
continue to push that relationship
building, and ultimately concentrate on
those projects that are more profitable.
Yeah. When our
PM estimators are really focused on just
getting estimates out the door,
all that is is a race to the bottom.
We want to build relationships and show
here's the value that our companies
bring.
It's not just about the lowest dollar
amount because we there are so many
other value-added services that we bring
to the table that others aren't going to
provide.
>> Yeah. Yeah, that makes sense. Yeah,
because it it's it's nuanced and it's
uh it's it's getting missed by the
people on the other side, especially
when you're dealing with either large uh
companies or government entities or you
know, almost like semi-governmental
entities where
uh where you know, they're just going
for the lowest price.
Uh it makes a it makes a lot of sense. I
Do you have any acquisitions in the
pipeline now?
>> So, we have we've talked to a few
different organizations, and
we don't have any LOIs out or anything
like that, but I would love for us to
complete a transaction in 2026.
>> Nice.
>> Um but we'll see we'll see how it goes.
>> Nice. Okay. Well, I appreciate it,
Shannon. I know we we we've done this a
few times. I'll I'll love to to hear
your updates and see how the how the
company has grown. You guys have done an
amazing job, and uh I'm always uh
rooting for you guys. So, uh hopefully
we'll see you in a year or so to hear
more updates.
>> Excellent. Thank you again. Thanks for
having me.
>> Have a good one. Thank you.
>> Cheers, my friend.
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