How I Bought a $3.4M Business For $200K

you've ever thought about buying a business then this episode is gonna be for you because on the internet there are a lot of people telling you about how amazing it could be to just go buy a business that's already working you just take out a loan you put very little money down and boom your cash flowing and you're working passively but those are also people that are kinda selling you the dream now my buddy dan is one of my best friends from college just actually did this a couple years ago he bought a business a very random un sexy business that he had no experience in he didn't have a lot of money coming in he had never bought a business before but he did it and it's actually worked out pretty well and i asked them to come on and tell the real story so tell us like what was it like what did you do the first hundred days how did you actually find buying the business how much money did you have to put down how much money did it make what are the downsides what are the traps all the real stuff and i love it because dan was very honest he was very open about all those things and then at the end he actually brainstorm a couple of business ideas that he saw because when you buy a business you look at hundreds of businesses he actually saw has a couple of his favorite spaces that he thinks people could go into we brainstorm that at the end so this episode i think is gonna be a lot of value for anyone who's ever thought about buying a business and then we have a fun brainstorm also at the end for other businesses that people could check out alright enjoy this episode with my buddy dan i feel like got rude world i know i could be what i want to hunt put at all in it like a days off on a road less travel never bad this is a special one my buddy dan from colleges here and me and dan we've started a sushi restaurant together we've owned a pet mouse together we've tried to bring down the house at a casino together we have gone through many schemes and dreams and then dan called me a couple of years ago and i convinced him to try to buy a business and then he he's done it now he bought the business and he's here to tell the story of that whole journey of going from a guy who never could thought that he would ever buy a business to now owning one of the most random businesses that you'll ever hear about and then i got sam here who doesn't know dan it's me and my college is buddy and then sam you're third sort of the third wheel on this date are you ready for this yeah sign me up isn't the first time it's happened but i'm gonna ask questions that it usually what what i think is what the audience think so so i'll ask some questions yeah exactly alright so sam what do you wanna start just maybe first question like who who the hell is this guy who are you yeah who are you certain dan certain so i wasn't in his roommate in college i was like the next door neighbor so for the seinfeld filled references i was like the kramer i'd show up from time to time una unanswered live with this guy for four years so i go way back with sean and by the way sam the funniest part of meeting dan the first day of college i walk in and dan the way he looks now he looked exactly the same at age eighteen so dan understand and he used to wear a visor because he's like i don't know that was got from new jersey there so i thought he was someone's dad i was like this guy with a pilot i'm from the back and he knew everything he was like laundry down there yeah you have to do this know you plan it's not gonna work until you activate it you have to go he knew everything about the campus and i was totally clueless i didn't know anything about going to college and so well he was and he had a he had a single he was like one of the smart guys who like requested having a single room didn't have to have a random roommate so day has been ahead of the game for a long time and okay and what business did you end buying by the way so i bought a company called fleet packaging so it's a a packaging distributor so effectively we work with large retailers in the us who need any sort of packaging so if you know you go to a mall you know you leave with one of those to go bags we help companies buy those and then we help with warehousing distribute distribution we make it easy to buy bags overseas so he is dan the bag man now which is all you really need to remember dan the bag man but to get there i think it's a fun kind of journey right so we're gonna skip the part about me a day in college and then the company we try to start together we're gonna skip that for now we'll we can go back there later the i think the the buying a business story starts where in actually kind of a funny way so after we in after we kind of try and fail at our first business we go off and do different things i go move to australia dan moves to san francisco and he goes and get the job at facebook a few months later dan calls me and he's like oh yeah sorry i like don't i know what he said but he was like yeah i was just quickly just fixing a bug and i was like fixing a bug what are he what are you talking about and he's like yeah i'm coding now it's like your coat it europe he was like a economics fine he was like our finance guy why is the why is our finance guy what are you doing in code and basically what he did i don't know if you know the but i guess at facebook they have just like oh a coding academy internally facebook dan is that how you describe like a boot camp basically the non non engineer could go like become an engineer just while on the job is that how it works it's not explicit so it's was actually four engineers when they show up so when you show up and i actually think they just got rid of this a few weeks ago so this might be old news but you know for the first twenty years of facebook's existence you know when you get a job as an engineer at facebook you go to this eight week crash course on how to be an awesome facebook engineer and it's not typically open to non engineers but you know why why accept the status quo so i was actually one of the few people who are early on was able to take classes there so i started in fraud do you have a good farm fraud story what what is an average person like us not know about like fraud on a farm like farm sounds like the stupidest thing in the world the fact that there's even fraud going on it's like you know i stealing crops from sam's farm you are stealing crops well what you're doing is you're probably you're wanting to make a better farm than sam but you don't have time is a pride or money it's well the fraud are doing it for money so the the buyer is doing it for pride they're like i want a bigger farm than sean but i don't have time to actually spend my time playing the game so i'm gonna go online to the black market wherever that is and someone's gonna sell me whatever two hundred mushroom seeds to plant in my farm and they've procured those illegally because they stolen someone's credit card and there's this whole world of facebook games fraud that existed so so farm bill was basically like i don't know is this is that the laundering part bay basically the guy steals the credit card uses it in farm sells the farm stuff to me which looks harmless and he gets cash out the other side precisely this is like a much less cooler version of the wire it's pretty much well there was also like real money laundering too where like people would make their own app and then lau money through that that one was was a little more intense dude i have one time i was like damn what believe you doing at facebook dude what are you mean fraud what is the facebook fraud and he goes have you ever opened up your time on a facebook you just seen a dick would i got no he goes you're welcome noah that was so no that that that was the later iteration i moved on to community community tooling yeah but effectively preventing full porn on facebook so that that was my go to line and what did you do at for facebook so after facebook i all of a sudden you know had transitioned into engineering i went to a startup called namely it was a payroll company and i joined as an engineering manager eventually worked my way up to be cto for that you gotta tell sam the the brilliant so dan's dan's actually a marketer at heart he just never worked in marketing for some reason but the way he framed himself in the job market was amazing so he's he's at facebook he becomes an engineer there right so it's not like he's like mit computer scientist right like when you think about like nam duke a duke spanish major he's a duke spanish major when he was at duke he kept he kept taking this class called le where he's going to the zoo and looking at le all day like demos that's what david gonna do but then he trains himself to be an engineer and then when he goes into the job market he has this brilliant way of framing himself so that he ended up becoming a cto of this like fast growing startup alright so i leave facebook as you will see most of these things are schemes that sean and i have done in our lives slowly elevated to good ideas but i left facebook you know basically the best of the best at the time like it was you know still is you know one of the best technology companies but i'd say you know i was i was i joined facebook there were three thousand people i left one that were sixty thousand people so i saw a lot of things and i'm not like old school facebook rich i missed that and i wasn't an engineer in the beginning so just wanna clarify that but i left and i had you know kind of this weird amount of experience like i had whatever four five years of coding experience which is cool maybe enough to make me like an one or two at a normal company but you know i had moved into management while i was at facebook and and the way that i positioned it was you know i am a facebook manager i know how things work at facebook let me come into your startup and let me whip your team in shape let me help your team run like a facebook engineering team alright so i've built a few companies that have made a few million dollars a year and i've built two companies that have made tens of millions of dollars a here and so i have a little bit of experience launching building creating new things and i actually don't come up with a lot of original ideas instead what i'm really really good at what my skill set is is researching different ideas different gaps in the market in reverse engineering companies and i didn't invent this by the way we this guy brad jacobs guess we talked him about on the podcast he started like four or five different publicly traded companies where tens of billions of dollars each he actually is the one who i learned how to do this from and so with the team at hubspot we put together all of my research tactics frameworks techniques on spotting different opportunities in the market reverse engineering companies and figuring out exactly where opportunities are versus just coming up with a random silly idea and throwing it against the wall and hoping that it sticks and so if you wanna see my framework you can check it out the link is below in the youtube description but sam isn't that great to just be like how to re how to re brand yourself to be like i'll make your engineering team run like a facebook engineering team and is if you're a startup founder who's you know sitting like name was in new york right that's gonna kinda aspirational to have somebody say that versus just i have five years of experience right yeah i man that's great yeah it's all about storytelling so the story is so far it's like you know whatever pretty good you're you're stumbling into things just guy a smart guy with a smart guy of the dream and a little bit of steam and and now you're in a position where you're like i'm at the start up we just raised a bunch of money at a good valuation i'm the cto i got these shares i'm gonna be rich gonna be rich what happens didn't get rich second time facebook cool really didn't get rich this time didn't get rich you know the so you know long story short we found ourselves in a place where in order to do what we needed to do we needed to sell the company or in order for the company to do what it needed to do next to we needed to sell the company and it became very clear that this wasn't gonna be kind of this massive windfall that i had been expecting long story short the company sells i find myself out of a job because as part of the transition the acquiring company was like we have a cto so we don't need you so it's like five years of hard work and kind of that dream of like hey we're gonna take something and and turn it into something else kinda goes away pretty quickly and that's kinda where things start to get interesting because you know i have sean on speed dial so had a had a fort conversation with him that day was he the one who inspired you to do or did you listen to the m mfa or how did that insight gonna be because like it's not normal for a facebook duke facebook unicorns startup guy to buy business correct so no it was in it and it wasn't even like hey sean i need advice it was just like a random like we catch catch up call yeah yeah let's just catch up it's been a while wait so it's sean did you say like i use this bad company no no that's something we're on this college catch up call what's going on with you what's going on with you dan tells us this story got we got acquired you know there can only be one cto there they they already have one so great i'm gonna be and so he was just saying like if you know any cool companies let me know i'm i'm gonna be looking and then i kinda just mentioned him i was like dude dan you're so like like ever since i known you you've been entrepreneurial and i think like neville said this once he goes you know other people sometimes see your gifts easier than you can see them so he was saying for neville he also used to think i'm gonna be a scientist and his mom was like no no you're gonna be a business person he's like what no science right and she's like oh like every time we walk by a pizza shop you're telling me all the three different things that they should be doing to run their business better like you're always doing that you're naturally you're a natural fit for a business person like that's what you're good at and so dan same thing dan was always somebody who was like shooting a shot like when our freshman year at duke all of a sudden there's like this huge package and dan has like a lifetime supply of stride gum and i'm like damn why did you buy this much come i didn't buy it i want it and he would always be entering contests i went you know one day with dan i go to i go to work and dan goes hey i gotta get off early i got an audition i'm like what yeah what are you doing he's like i'm going to try to get on wheel of fortune right now and so we i went with them and we both got casted on the wheel of ford you yeah you you leave out the point we like we came we were doing the sushi restaurant on the time so we like we're both like been working all day we have the bright green headband like we have not like we came in with knives like we had our sushi eyes on our belt we come into this interview like no wonder we got cast it was like this is good tv man these clowns but he was always doing this he was always like he early on he started recording like product review videos for like i don't know two cents of pop or something like that like he was just doing random shit all the time so it just seems strange to me that he was like going to get a corporate job like this didn't it's not like the vision i had i was like dan you ever started thought about starting a business he's was like i don't really have like a killer idea and i feel like i need like a killer idea if i haven't gonna like put my whole life on the line for something i oh that's fair i said you know do this podcast and like it's not something i was doing a lot of but like we've met a few people who go and buy businesses and it's honestly seems like a little bit of a cheat code like as in the business if you find a business it's already working you don't have to come up with genius ad id it's already validated it's already working it's got years of profitable history you could buy it at a fair price and then if you're good at executing like you can grow it over time and you know there's retiring business owners like there's reasons these are were up for sale and so i just kinda like planted that seed was like would you i don't like consider that and then dan i i don't what your first reaction was but i i bet it was probably just like lukewarm i don't know it was lukewarm i mean it was two part one you know in the beginning i said sean you know always knows what he's talking about seems to seems to have his life figured out my first response like sean has no idea what he's was talking about he's never bought a business before to this day that is still my for you know my my main thing is like you don't know matt but the second one was like but sean is a pretty smart dude like and he you know if he's saying this a good idea that's it's a good idea but you know my real my second reaction after that was with what money am i buying this business because let's recall miss the boat on facebook riches miss the boat on the name riches but it actually turned out and you know we'll i'll get into this more later like you don't need that much money to buy the business that's the crazy part and i think it it took a little bit of digging initially to figure that out and i'll talk more about that in a let's let's do a quick tara so let's give the ending first so let's say you you buy you you you ended buying a bag business as in like literally if you go to a shopping store and you buy something and they have a custom branded bag when they check out like there's a decent chance i i made that bag so it's it's it's it's that big it's that big i unfortunately can't i like i'm under confidentiality agreements with most of my clients but if you go to mall there's a pretty decent shot that you're gonna touch on my we're gonna get it out of this somehow we're gonna we're gonna get out of you i'll you're after i'm not bound by any comments here i can say some things alright so but dan let's give the headline so you buy a business let's we're gonna we're gonna work backwards for like because it's gonna sound cool and then we're gonna be like here's the crazy journey of how i got alright so how much did you buy that business for i bought the business for three point four million dollars you buys a bag business for three point four million dollars that business had been around for how long and about how much money was making when you bought it yep so it was about fifteen years old the business had been making anywhere from and it was right after covid so it was a weird few years but it had been making anywhere from eight to eleven million dollars a year in revenues in revenue and it was doing on average about eight hundred thousand dollars in profit and what's the url what's the fleet fleet packaging dot com best bags in the business best bags you have like a do you have like a slogan yet so jingle we're we're working oh maybe we could come up with it later brainstorm later it's like no we're working on rethink your packaging partner or rethink packaging partnership because what we're trying to do is you know there's a lot of people sell packaging but what we're trying to do is just do it better than everybody just kinda go that extra level of like let's make your life easier the packaging so dan explain so you said you bought this business this about eighteen months ago it was doing eleven million in revenue about eight hundred thousand in profit that the sell seller that the the guy who owned it was able to that was his living he's making grand a year and now last year how much revenue did to do you grew last year we had a record year i think we did we did about thirteen eight million in that was that was pretty pretty easy to get the information out of didn't you just say he can well this is i guess your client just that i can't your client names i'll share you share information how much money did you put down to buy this business because again you talked about like most people assume if i'm gonna buy a business for three and a half million dollars cool where am i gonna get three half million dollars from yep and really quick how much profit does it do now on the thirteen on the thirteen we did like one point seven million dollar profit last year so you you you've cream it i mean you crushed it you've you yeah last year was twelve suck on that zuckerberg on there you go more there you got got it so you bought a business that made eight hundred k and profit to you've more than doubled it yeah and there were lots of and you know was it every you know things that i did the doubled it certainly that was part of it a lot of it was getting out of covid and figuring out how we position it and it turned out you know the business had not kind of reached its potentially yet and back to what sean said you bought it for three million or so where did the money come from thirty point four million so we did it through an sba loan and we ended up putting two hundred thousand down i say week because i say me and my wife because we put our house on the line like we went we went all in on this business we spent hundred fifty thousand from our savings and then my wife took a loan offer four zero one k for the other fifty so that was the again house on the line four zero one k on the line like this was it was she just down from day one to do this or what did you did you take a lot of persuasion how how did you position this with the wife to make that happen she was down i mean she has a similar kind of philosophy on you know we should do something that's gonna be kind of a step change in where we're at you know if we're gonna bet on someone we should bet on us and you know she knows john she knows what we've been up to for the past you know however long she knows she married a stallion who just needed to run so this wasn't like oh my goodness where did this idea come from this guy's crazy it's like no that that sounds about right that this is what you're doing how much of the loan have you paid back now but but but the same so he put he put down two two hundred k he got an sp alone and then he had a seller note also which think is is a key part of this so you're you wanna explain that where the rest of the money came from so two hundred thousand from you where the other three point two come from sure so one point eight came from the bank two hundred thousand came from me and then the other one point four came from the seller which effectively we said hey like you know we're not gonna pay this upfront over the next five years assuming the business continues to do well you know we'll pay the second part of the business oh sorry second part of the debt so it's a forgive seller note which means effectively if the business doesn't do what it's supposed to do that debts forgiven on any given year so that was part of what made me feel better about the deal you know because you run all these scenarios when you first buy it's like alright we're gonna put our life savings in house on the line what happens if things go bad and it's like alright at least half of this debt if things go bad we'll go away why they wanna sell the company that seems like he retiring he just wanted to he was he out and and that's kind of the what i loved about kind of this world once sean kinda turned me onto to it is like the baby boomers are retiring like the past few years to the next ten years i forgot what the window is but like a lot of them don't have kids or they have kids that don't want this guy had three kids and none of the kids one of the business dana told me he goes anytime i ran into a business that looked really cool and the guy who owned it was twenty six he's like i don't wanna buy this off of twenty six girl why are you selling this i want to buy from a boomer that is my goal i wanna buy from a guy that wants to move to florida and play golf like that to me is like that we this business has been great to me and now i'm done i've made my money here and ready to go like that's the type of business i want now here probably still answer your phone calls when you had impressive exactly like and you know spoiler alert i found like the nicest buyer in the history of the world like i got incredibly lucky cutting your sales cycle in half sounds pretty impossible but that's exactly what sandler training did with hubspot they use breeze hubspot ai tools to tailor every customer interaction without losing their personal touch and the results were incredible click through rates jumped twenty five percent qualified leads quadrupled and people spent three times longer on their landing pages go to hubspot dot com to see how breeze can help your business grow so to me there's two kind of good things out of this episode one i get to hang out with my best butt alright the second would be for other people who are listening to this that they hear what i'll call like the real life take of this because dan's not selling courses he's not telling you you should do this he's not like a the business buying guru got a book and a in a mastermind none of that i think he's got good opinions and like a real story of like alright where do you start so to me this episode would be interesting because if if i'm interested in buying a business i kinda wanna know what is it like from a person who's smart but came in with no experience no money and know like kinda clue where to start because even though i was like hey you should do this it's not like i was there helping you every day or you know you you were wandering around figuring this out you know by yourself so he he told me this i i called in like last week to be like alright what do wanna talk about you he had said something great he goes it goes alright i started and i was high excitement and low knowledge so i bought the boat you ever heard this framework like like no you went through four it's like you start high high excitement low knowledge and then you become you know you kind of go up in knowledge and down in excitement you kinda enter into the pit of pit of despair which is low knowledge low excitement and then you learn more and you slowly kinda get out of this this pig his quote was this is great it's gonna be great it's gonna be easy i'm gonna be rich and he goes then i started i realized this is not easy this is not going great and i might not be rich and so do you wanna talk about like how you actually like what'd did you do we you first maybe a hundred days what'd you do well first how'd did you find the company so i ended up finding the company through a broker got it yeah a lot of what i started to do and i'll go back to the beginning in a second but you know there's a ton of business marketplaces out there acquired dot com probably the most known for for tech biz by sell for kinda of more of the those main street businesses but there are these brokers that effectively represent buyers and kinda put together these packets of like hey i have this bag business here's is what it does and most brokers i was telling this is sean hate search because they just assume like you know people are you know they just saw cody sanchez video they're about to buy a business like they're pumped you know the this morning they saw the video and now they're ready to buy the business so they reach out to the broker this one broker actually like understood he's like i get it i understand this jump from tech to this and then like several months later he calls him back which is rare like most people didn't he's like i got this business you know check this guy out so it ended up happening zero broker but and to go back to sean's saying the first hundred days so the first thing you hey google started reading books started watching videos started to just learn like what is a search fund that was something that like sean didn't use that word but eventually i found it where effectively there's kind of a few models to do this one of them is is kind of a search fund where someone will actually you know you get someone to finance you looking for a business and then you take a small piece of it and they effectively own most of it like there's lots of courses now in business schools you know teaching entrepreneurship through acquisition it's kind of the the fancy way of of talking about it and then there's kind of like this other model of you know you just do it yourself you know you're effectively bootstrap it find the money yourself do it through an sba loan so first it was kind of like educating myself on the different models you know i it's thought a little bit about getting the funding but at the end of the it's like no if i'm do this like it's gonna be me i i don't wanna answer to anybody and then it was really like finding this community and there's a really cool community in search it's been growing pretty steadily over the past you know call it five ish years i think but there's a there's a there's a website called search fund dot com like those were my people during the time because search like it's a very lonely process when you guys say look at a hundred you what does that mean does that mean browse a website with a hundred or does that mean actually due diligence on a hundred so it's something in the middle so you you basically see kinda like the headline on the website it's like laundromat for sale you know four million dollars like usually you'll get like the flashy headline and and not much more information then you kinda got a double click in and request information and so usually sign kind of a an nda and you'll get something called a sim or a confidential information memorandum so it's kind of look at like a hundred of those because that's really gonna show you like user here the finances of the business like here's kind of the story that they're putting to together it's like a summary of the business today and so that's the one where it's like you know i think something a mistake is people think do you fall in love with the first the few businesses you see oh this is great yeah i i could buy this you kind of really like i mean you're just like a teenager that just went through puberty you just fall in love with the first you know the the the first set you see and you're like well no that's probably not the right way to do this let me let me actually just plan that it's probably gonna take me over a hundred david find one good one and let me have that mental expectation and let me start counting how many i'm looking at and not just like being desperate to find you know the one right away and then you're saying like you're you're looking at an hvac company you're like i don't what hvac is you're looking at these financials you're like i don't know which number to look at it's overwhelming but you got you kinda gotta go through those reps and figure it out before you have any idea of what you're looking at i i kind of liken it to looking for a house because i think that's that's a pro you know or an apartment even but because that's something that that most everyone goes through even if they're renting you know usually the first time you see you have nothing to compare it so you end up kind of getting to a place where you can you can spot the winners from the losers faster but like sean said when when i first started it was like super exciting because it's like the ultimate career fare it's like oh cool i'm gonna be a landscape or i'm gonna be you know i'm gonna own you know a scrap metal recycling center it's like you just get so excited and again the business brokers especially like they make these things sound amazing it's like of course i wanna buy this business so what what were some of the cool businesses you you saw like what's what give us an example of one that you kinda like but he didn't end up pulling the trigger so my favorite example is i i i got pretty close to buying a sausage company it did about like ten million dollars a year in sausage you know my favorite my favorite anecdote on this time is it also a fellow sausage man yeah we i i i know the kid spirits well we held an event might also be a sausage fast we don't know you're you're almost a p of fine wiener that could've been i i could've been and still maybe so you went about you you didn't just like look at you didn't just read the same you're like touring i went there i went to this austin i went to the talk i'm like walking through like pretending to know what i'm talking about like you know how hot does this up and get like it's like that that's the beast that you hear like figure out what questions to ask this is a really common have you get sort of the secretary problem yeah somebody talk explain this somebody told us that on the pod so i used it when i was looking for an apartment the other day and it was actually pretty magical and so the thing is is that so i'm i'm repeating for memory so i might get wrong but basically if you have i it started with the secretary if if you're hiring a secretary you'd wanna interview let's say you had ten interviews lined up you wouldn't want to pick who to hire until you saw at least thirty seven percent of the applicant pool in in so for example if you saw ten or if you had ten to see ten interviews you'd wanna go through the first four and then after the first four you would select the first person who you met that was of equal value to or close to the highest person you saw in the first four does that make sense so for if you see an apartment let's say you go and see one hundred of them the first thirty seven you don't do but the next one after the first thirty seven who you that you see that is as good as the best one that you previously saw that's the that's the one you select and that's called the secretary problem so you can't go back and buy that first one you can't go back you cannot go back but you need to like you need to spend time like exploring the first third to see one old is out there that's fair i bought the house that i found on the first day of touring so i just wanna make sure i didn't like violate the secretary problem but i did yeah you did but you didn't with the business and so you the business and so what of the hundred or so that you saw were there any that looking back here like that was a winner no it wasn't until we saw and you know there were a few close ones where like i i was under lo like three or four example that sausage company had like one huge client they had one huge client and no contract no contract but you thought they were amazing that's kind of my point is you thought of some were so good that you're under lo yeah but then you get you know you're under lo and then you get you know the full amount of information and then you very quickly see like also in this business is like a very it's kinda like agreeing to a first date more than it is an engagement people people make lois they'll have three lois out at the same time and it just says it's an agreement to it's we agree to look more right we agree to take this seriously to to show you some interest here but it's not like it's not binding in the way that you would that you think when you first go into this or if you're the seller you're like oh we got it's like well hang on i would bet the to close ratio is probably i don't i no idea but i would guess it's like under twenty percent you know in terms of just analyze received during a process yeah because you know you're not giving the a lot of the information you're not even getting until that point anyway so you know you're checking all the boxes up until there like this seems good i think this is gonna be good and then you know you get their financials or you go to it and you find kind of that oh this is why you know you're selling it or this is why it hasn't been bought yet that's another thing one thing you did that that was great i think i think i kind of was like the one piece of advice i think i was pushing on you was like hey write a memo for every one of these deals that you like basically you would he would write me like a one page notion memo that was basically like what is the business why does it you know like how like what is the current state of it just speaking numbers only right why is the seller selling you know what's the one reason that you would buy this business what's the one reason you would not buy this business you know what what are the kind of and you would just go there and would write these memos and i feel like that was key because i remember you would call you were like excited about let's say like i don't know what what was an example of one you were excited about that then after the memo we talked it we we beat it up and then we were like no this is not worth doing it was a clover app i remember the conversation so basically like so the the clover point of sale system like when you're like checking out of a restaurant kinda it's like you they flip it and like what's your tip this guy made different apps for it so like you know like when you round up for charity for instance i think that was one of his apps so it was actually pretty interesting it was like hey clover are growing super yeah very niche but he own twenty of these things it was you know more up my alley in terms of tech but you know when i actually hash it out with sean you know it was kinda like at the end of the day it was very niche very small and there wasn't necessarily a good path to grow that business it was just something that like was interesting now but probably didn't have the longevity of hey you're you're about to swing you know this is gonna that that's another thing you said to sean were like this is gonna be you know don't don't listen to all those like blogs out there like yeah you're gonna buy this flip it and the next year you're gonna buy two more businesses like no you're probably gonna be working in this business for for a little bit of time make sure it's good make sure it's lasting and i think that first one was an example of like sure if i was gonna buy ten businesses maybe that was one of them but like that's not the game we're playing right now a couple other i thought like key points one was don't buy a job so i think early on when you go to search you see big price tags and you get scared a little bit because it's like how am i gonna afford this and like how this is too risky and so you gravitate towards things that feel like kinda safer and more achievable but it's actually a bit of a trap because it's like yeah this is safer more achievable it that's a hundred grand a year of profit i can buy it for only you know he only wants a hundred and eighty or something like that you know and and and so you get excited because it seems cheap but the problem is it's still gonna take all of your time to own to to buy this business to run this business and you're basically bought a job versus the thing you bought which was like eleven million dollars in revenue doing a million dollars real almost at real fit real dollars yeah that's not a job anymore now that's like an asset that's like a real business and yes it took more risk and it took more time to find a good one of those but it was like well worth it so i feel like that was another kinda of like key learning i think we both had during this process like became blatantly obvious yeah not rust the search and and you want to trust me like call it like five months in you know when you really hit of this pit of despair of like i'm never gonna find anything everything under five million dollars is trash you know private equity scoop scoop up all the good stuff and anything that's left you know under this point like there's a reason it's there you kinda just get to this places like you're never gonna find it it's easy to want to just grab one and say like those things are fine like we'll kind of ignore those yeah those holes in the business i've made so many bad decisions like most all bad decisions that i've made it was i could like it's like i had principles living in this and i got fatigued if i didn't stick to my principal fatigue yeah exactly exactly there was one that was like a seo business it was actually like a good business but what what was the the situation with that one yeah so that one was it was like a competitor for like sem rush you know it was a solid business it made i think it did like a million it it was like half a million a million year in profit like it was a was a nice business but this was right as you know ai was really starting to becoming kind of the center point of the conversation especially as it relates to search i helped a friend by a company that was in the seo space and anytime in seo company wants to sell it's sort of like at a time do you guys remember bitcoin minors mh like the it's like so if these are so good why are you selling a money money printer yeah and seo it's sort of the same way or it's like wait so if you're just getting like a fountain of traffic and customers why would you wanna get rid of us well that's the same thing it's like when you meet a thirty year old selling a business it's like you know why and that that was exactly that and i think going into you know let's call it to ai headwind it was like there's a lot of reasons this business might be completely different and i think sean said like unless you feel like you're the best suited to take this seo company into the you know the next five years there's more risk than upside and it's like that is not my background that you know that's not the game wanna play and funny enough i was actually in lo with this seo company when i found fleet and i i was i almost wrote off fleet like it seemed really interesting and i like there was some part of me that you know didn't have me rejected even though i was kind of in very late stages with this other company thank goodness i you know i made that pivot so let's tell the story so you you the broker crawls you since check out this business what happens from there so from there i think this was before i was under lo but you know effectively fleet looked very different than a lot of these other companies like the finances at first glance like were super clean you know the story made a lot of sense like a lot of these sims and a lot of these brokers like you know yes they're padding things and trying to make things sell but there was always like a blatant gotcha a lot of these like let's let's take the sausage example they're like oh yeah this makes half a million a year oh and by the way he also makes another four hundred thousand in cash but we don't pay tax on that so like you can't see that anywhere and it's like a part of me is like that's kinda cool also sounds a little dangerous like selling four hundred thousand dollars worth the sausage on the side of the road but like there's always something like that with a lot of these businesses but but fleet was like very clean like everything was kind of buttoned up the story was really tight and it kinda checked all the boxes of like this is a recurring business like people are buying the bags several times a year they have these amazing clients they have these amazing factories they're like it looked very different than than these other than these sort sounds like mi of bags exactly yeah exactly i am michael scott good you know it's it's it's a it's a necessity that these companies need so what'd did you do you go you meet the guy i was actually gonna say no to the broker because again this seo thing was heating up i hadn't had my you know come to terms talk with sean yet he's like hey the seller wants to meet you you know let's all go out for lunch i was like alright i'm like free lunch that's cool so we meet for lunch and like my goal was like you know entertain this business but at the end of the day like i'm under lo so i really shouldn't free lunch yeah free i should i should break up with him after this lunch but we start talking and like you know just had this instant connection with this guy like he was the most stand up guy i had met in in the past few months especially when it comes to like the business ownership you know he wasn't trying to you know pull something over my eyes like he wasn't trying to spin the story he's like this is the story like a lot of people like you know put lipstick on a pig this guy was like selling a rabbit or selling a different animal like it wasn't like he kinda set it as it is and it was it was very refreshing and like in that moment it was like i kind of abandoned like i'm gonna break up with you and like we kinda went the other way we started talking about okay well how we're gonna work together during the transition and how are we gonna grow this and then my favorite part is they you know they asked if we wanted any dessert and he's like oh do you wanna share a tart and i was like yes and we shared a tart i i don't think i've shared dessert with my wife ever but i shared a tart with this guy and like i i remember calling my wife after and i was like you know i didn't do what i was supposed to do like i was supposed to break up with this company but like we shared a and like i think we're gonna buy a bad business now it was just like this like complete one eighty buddy my little michael scott right it doesn't even have ever seen a chili that's like exactly this yeah exactly it would be like a a lava cake or something like that a tart a tart very i don't i think that was my first tart flow i've ever had too who knows what a tar tart is i had a google and i i you're you're my type of people dan i tell you that there we go and then you know from there i you know i broke it off with the seo guy i you know we ended like diligence took a while that's like the second part was like okay like now you're committed to buying a business how are we gonna do this now and like it actually took four months because again like i'm signing my house away signing my life savings away like i needed to be damn sure that this thing was gonna be solid before i did that and then like the world of search like took on kind like that next chapter of like alright well how you actually like figure out you know are the assumptions you've made in this quick few week period of dating like are they correct and we kinda transition to that that phase of the process what what what was wrong and what was right for your assumptions and what was the difference in his asking versus the ping so we actually negotiated the price of it pretty early like that part actually happened during the lo for the most part like ninety nine percent of it and were actually five bidder which i thought was a lie like i kind of assumed this was them bluff because they were like yeah we got four people in the packaging industry that wanna buy and then there's you you know it's gonna be competitive blah blah blah but again i just figured that was a a tactic to try to drive the price up but to this day the you know the seller maintains if that was the case so at this point i have no reason not to believe it we ended up taking i think they wanted three five or three six for the company so we ended up agreeing to three four the part that took the most negotiation was that seller note so the biggest kind of red flag in the business was that one client was over fifty percent of their revenue so my biggest fear rightfully so was you know everything's great today they've been a client for fifteen years you know what happens if next year they leave all of a sudden is a very different business so what we did was you know kind of ran the numbers of the bank and said hey in order for us to finance this like this is this is the number that we'd have to have for whatever reason we lost that client so that part was probably the you know the most intense of the negotiations but for better or worse like most of what he said ended up being true like there weren't any of these and and he said that in sam like that that wasn't news what was surprising to you or what was different than the dream that gets sold on social media so if you watch the videos and you see cody sanchez peloton tone you'd bought just buy a laundromat it's gonna you you you'll be rich whatever that that type of shit like was it in line with that was it different than that what was the difference if there was one yeah it's not nearly as easy as a cody sanchez makes it seem and i i probably went a little more overboard i think like when i think about the amount of time i spent in diligence the amount of money i spent in diligence you know i like i'm a risk taker for sure but i'm a calculated risk taker so it's like before i make this gigantic gamble on the rest of my life i wanna make sure i've done everything humanly possible and i think when you watch a lot of these videos about buying the business like they make it seem like you know you can just find one and then kind of transition right away and and the whole process is really easy like the process of getting the loan like some people liken it actually i think cody sanchez liken it to this so maybe maybe she actually isn't setting unrealistic expectations but it's like it's a financial colonoscopy like they wanna know everything about you and like that part's tough and then you give the company a a a colonoscopy to try to figure out everything about it quality of earnings that sort of thing and one of the things that i did i think that i'm happiest that i did because it got me the most comfortable outside of you know paying for accountants and lawyers to scour things was i shot with the guy so every week because he he happened to live new york city too the whole thing was ser like he lived twenty minutes from my house wow and i let the the you know before i signed the sim it was like packaging distributor in in the northeast so like you know could have been in boston could have been wherever this guy lived twenty minutes me that's how the tart was so accessible but i literally went to i went to the office every week sat with the guy for several hours i'm just he walked me through packaging he walked me through his day to day and it just gave me it you know it started my training of like okay well how gonna run this business but it allowed me to really kind of take what was on that paper and figure out you know okay this is these are the skills that i will need to run this business this is how i might be able to grow it this is where i might need more help it made it more real and i think i was lucky in that i was able to do that because i talked to other searches i was like you know but let's go back to laundromat you know you buy a laundromat i would imagine day one you kinda walk in and the machine breaks and you're like oh crap like what do i do i know nothing about these machines now i need to find a mechanic like everything is a little more complicated than nuanced with regards to even like how laundromat mats are you know i went down to laundromat path like i spent a while thinking that was gonna be my destiny and i was like well know like valuing a laundromat like actually has a number of facets and you need to kinda really get into the weeds there so you know i'd say like the biggest takeaway is like it is hard and it takes time it's not something that you can just do you know for a few minutes a day like you really gotta invest in making this happen if that's what you wanna do or you're gonna end up you know with some surprise on the road i think that's probably my biggest relief is like i've been waiting for you know the shoe to drop somewhere and like this is what i missed and like know knock on wood haven't had that yet how many hours a week are you working on it now how many hours a week was he working on it he was probably working let's call it twenty five to forty i think he definitely was working less he kinda had it on autopilot i think he had started to you know kind of tune out a little bit but not in a way that like he neglected the business it was just like he'd been in packaging all his life like he could run it in his sleep he wasn't as focused on kind of doing the growing or rene negotiating things with suppliers building the supplier base you know i'm probably working on in you know fifty to sixty hour like i spend a like a bunch of time on this how much are you were you able to take home so that's the the million dollar question it's was like okay cool your business is making all this money you know at the end of the day two years in i'm still only making you know a hundred fifty a year like i take the minimum amount that i need to for you know irs compliance because i'm saving the rest able to finance growth like i like i've made enough to pay back the loan but i'm not paying back the loan because i need that cash to fuel the growth it's a very cash intensive business and i'm not in a place quite yet where i can take as much off the table although sean has been giving me some other framework saying like hey you actually should be doing this what's that framework which is like if you wanna replace yourself you have to pay yourself the replacement costs no not that but basically i did this in one of my business is not right for everybody but i think it's easy to go into rainy day mode as a business owner when you play like two conservative so you know several of our businesses right now have just like like one of our business has just like two or three million dollars just sitting in the bank account and the big like it goes up every month it's not like where you have this like wild swings where you need this big cash reserve buffer it's not like a heavy inventory business it's like you know your your all of your operating expenses a salary and you know your salaries so there's no surprises coming next month and even if there was like one of my friends everybody so told me i was like how much do you keep in like three months of working capital six months twelve months like i think i have like twelve months of working capital sitting in the bank right now he's like no i just take it all out i'm like zero months he goes yeah he goes i own this business myself so if i ever need the money i just lend it back into the business like i just i could always write the check back it forces you to make a profit as well yeah and so andrew wilkins because i came on this podcast and had this book he was talking about profit first and i really like the philosophy of it which is basically with normal business you have your revenue then you have all your expenses and then it's like surprise here's how much profits left over after all that and usually what actually happens is does not as less profit than you would have guessed and it's why because expenses were a little higher blah blah and you're always in this profit comes last profit first was basically you decide up upfront you say okay i wanna have a twenty percent profit margin so you take your revenue you set aside money for taxes which you know is gonna be or so you you you take your revenue you take your profits do set aside amount for taxes what's left is your expenses budget so instead of making profit the thing that comes last you make the expenses come last and then you have to say alright cool then my marketing budget can only be this much because i've decided to take this much as a as a profit a set profit margin out of my business and i don't adhere to a hundred percent i don't think it's right for every business but i do think that you know dan in this case i think he's being a little overly conservative of as to how much cash he's leaving in the business i did that too and the longer i delayed it i took away one very valuable thing which is if you have if you pay yourself every month out of the business and one month that's light or another month that's heavy the body just reacts to it if it's light you're like yeah what the hell and you will go fix a part of your business that was broken if you just leave it in and it's just like a p and l it's just numbers on a spreadsheet it's not money you actually receive you know you'll wait fifteen months before you end up correcting that problem because it's all fictitious money anyways this it's not money you're actually getting and so i think that actually getting that check every month creates this feedback loop that's actually like quite valuable to a business owner it'll it'll call you to sc unnecessary expenses or like go after it because once you taste a big month like sam we have this with m mfa we have a big month in the next month i'm kinda like look i kinda like the feeling of that again what do we need one extra episode two is should we go get a guess well what doing today let me see what's going on over there right like you start to think about what you could do to go to go drive it back up and i think there's an unhealthy version of that but there's some healthy components to that yeah so i think i that's a lesson learned for me i think i'm still in the very conservative you know what if i need this money and i i do have high working capital costs especially around now kind of pre holiday i'm about to have to write a bunch of checks but very soon i should get to a place where i can take more out and or start paying back some of the the debt a little faster alright listen up turn the volume up because it's boys sean and i got a little message for you i talked to hundreds of founders a week and when i talk to founders everyone says the same thing that's the one thing they need the most it's not funding it's not more resources it's just having more time the goal here is to win and the way use win is you get yourself free time to do stuff that's high impact how do you do that well i'll tell you my solution the answer is gabby well you might be wondering who is gabby gabby is my assistant she is my wonderful assistant gabby lives in latin america and she helps me save about twenty hours a week so what she's doing for me is every morning my inbox is sorted and triage and the most important stuff is right at the top with draft replies ready for me so i'm never behind on email and then if as i'm on the go i'll just send her voice notes saying hey can you find my kids a soccer class hey could you take care of this coverage registration thing for me all these little tedious bs things that would take up time in my day she takes care of for me and so that's free time i'm getting back so if you are a ceo who's serious about growing your company do you need to get yourself an assistant the best place to go is somewhere dot com some sources the best assistance from low cost areas for you so you can get an amazing executive assistant who's got you know business experience and has supported other ceos for seven eight nine ten dollars an hour and so go ahead go to somewhere dot com tell them i sent you to hook you up with a good deal and get yourself and assistant and you could take me later alright back to the zips episode so sam i'm curious what's your reaction to this whole thing so i think that for people who have your personality type which is you you're a very serious person i think like like you're a person like if i was a broker and i met you i would not think you were kicking tires i'm like oh this guy's for real like it's you have that very obvious for real energy and if you have that very obvious for real energy we're like no i'm going to do this this makes sense i think that the path that you're taking is so wonderful and i my assumption is that you're gonna be wildly successful and so i think it's very wise to do i think that if you if you are an serious person where you are not willing to put your house up or something like that that's kinda like that one of the tells like if so if you're like not serious like that and you are not willing to do the diligence and say i'm willing to look at one hundred things i would say do not do this yeah i think there's also one i think you said it perfectly there is one more thing to it which is what situations do you shine the the most and so like for dan i think he always had an entrepreneurial streak that was used as like random side quests in life like we would go try to win the mcdonald's monopoly game every year like we tried to like actually win it not just like hope no we thought like we thought we were gonna win we were like dumpster diving try to trying to win this stupid right like or you know we started a blackjack club at on campus and we're running simulations to see how much money we could make if we started a blackjack club like we were always trying to come up with ideas it was more fun to come up with our own idea versus just like go get a job and do the thing and so i i feel like if you know that you actually turn up the most and you're the most version of you when you're doing this type of shit when you're like in control of your own fate and you have your own project as arbitrary as like you know bags are doesn't matter it's like i'll take bags super seriously i took you took gum seriously black seriously sushi seriously like all those things i think that that's the other part which is not only the part you said but then also if you really are like at your core more entrepreneurial and you're more switched on doing that then you're gonna have a better result doing this than you are if you you know stay in a a a more traditional job that's that's mine i think i think people you know when i tell them about you know first it's always like the unbelievable way you do what but then the second like their mind goes to like oh i should do that because you know it sounds great and high site right like when everything works out it's like cool of course this is easy of course anyone can do it but i think people miss the point that there's a lot of ways that this doesn't go like that and it's not necessarily the most glamorous site i also think most people shouldn't do this so first agree this is not something like this does not fall within my skill set so my like if i had to guess you when you were buying the company like you guys were negotiating over ten twenty thirty forty thousand dollar things like if i had to guess you were incredibly anal about the paperwork you were asking you're like what's this three hundred what's this three thousand dollar charge what's this that is not what i do i do not do that that kills me that does not fit my personality type so i i've bought it invested and done a bunch of real estate stuff in my time and i lose on all of it because you make your money when you're buying it and when you sweat the details up upfront which is dumb that is not what i do i don't think necessarily that is what sean likes to do and i think that if you are the type of person who plays a board game and you memorize all the rules and you like sweat the details and you have that attribute then this buying a company is it could potentially work well for you i'm the guy that takes the the back out of the box that reads it to explain to everybody exactly if you have that trait this could be awesome life changing yeah so dana one of the other cool things about doing a search for business is you realize how big the universe of businesses is and i asked you i said you know we try to brainstorm business ideas with people like what opportunities do you see you said you would come up with a couple ideas give us a couple of your ideas of what you think other people could go do this is just like the the sort of random section yeah i think the i mean the biggest takeaway like from buying a business before i get into in into the ideas like everything's a business right like you walked you know go look at any store you know every little piece of that business is something that someone sells like that display that says for sale like someone sells that like the the holder for the gum on the store like that's a business like i don't think i really appreciated how random and how basic some of these businesses can be and and people make really good money doing it even packaging it's like you don't really think about that by the way i'm pretty sure robert kraft the owner of the patriots the cr owns the craft group i think that's a packaging company it could be there are so many packaging they even made corrugated hard cardboard okay one of our best episodes ever if you wanna go list a great episode is the sarah moore episode on this podcast and she's the i think it's called the egg carton queen and her thing was she she did the same thing you did basically she went and found a retiring guy who owned a business that's sold that sold egg cartons like not the eggs the carton they come in and you don't even think that's a business but you when you go look at you're like eggs yeah okay eggs there's a farm that's sells eggs you don't even realize that the farm has to been buy egg cartons and there's somebody whose job is to make egg cartons and they sell it at the best price and the best value blah blah and so her episode i think is amazing and and you see that the other example sam that i always given and i explained what this podcast is to people is i talk about like everything you see is there because someone sold it like if nothing gets there by accident so i was like you know even in the workplace if you go to your break room and there's a poster on the wall that's like the labor code there's a guy in minnesota that sells that he makes a million dollars a you're selling you the the poster every year once i heard that i was like oh shit it's like a physicist when he learns about string theory or assumption shit you know it's like oh it's everywhere i get it oh there's the world of the components yeah all the components themselves or businesses too and and then you realize like if you're not making it in business it's mostly because of a lack of you know creativity and effort it's not because of a lack of opportunity because literally every item everywhere is itself you know a business that somebody is running to get it there and so you know there there's no lack of opportunities in that sense yeah so now i'm like hardcore on the other the end of spectrum of like as un as possible i wanna do that like i wanna i wanna be the guy that has like the most random thing like packaging is pretty random like you know in a in a future world once i you know if and when i'm done with this like i wanna go even further yeah by the way you would you lay you're laying in bed at night what do you think like in ten twenty years we're gonna we could be this like do you have do you do you think this could be a hundred million dollar company do you think you're you could sell it for a certain amount what's your sort of north star that excites you so you know at this point i don't have any plans to sell it i do think it could be a hundred million in sales company easily like there's so like some of these big packaging players are huge and we're able to compete with them that's kind of the you know we're small in the scheme like it's a it's a nice sized business but we're small in the scheme of things but what i'm finding is as we as we work with these brands like we actually do have a pretty differentiated offering because we are small we're scrappy and people love that and you know as we've been able to kind of add clients i'm like oh this thing can really take like we can really scale this up and and you know start to gain more traction with these large brand brands and you know the crazy thing is people spend technically these big companies spend tens of millions of dollars on their packaging so you could easily get like five clients to get you to a hundred million like like that if if it's the right five so my goal is to grow it i i do think in a few years i'll i'll hire an operator to run it one of my biggest pieces of advice to people searching is like don't assume you're gonna hire the operator day one especially if you're putting your house on the line because there is not a single person that i trust to run this business when i'm gonna get kicked out on the street if it fails when i get to the place that i feel better about that like only then will i then decide okay well maybe i'll hire someone and just do more strategic work but at the like i'm loving doing what i'm doing now so i think it's eventually scaling my time so it's not like i'm very involved in all the processes right now and i designed it that way because that's how i learned you know i'd love to be able to go away and i'll have to take a call because the blue isn't blue enough like you know i get a lot do a lot of color matching when we were doing the sushi restaurant dan was not only sweating the details in the finance side but we were like dude we don't really know how a restaurant works none of us have ever worked at a restaurant so dan went and got a job at noodles and company oh yeah and he studied him from the inside and we treated it like it was like ocean's eleven like every day he'd come home and we were like what did read report yeah yeah and he was you the like draw the workflows or he like did you learn and what did you bring me give me the pesto cavity yeah did he bring the pesto cabo eddie be like trust me do not eat the tomato basil soup we're like why it seems just tomato soup say don't eat the tomato based soup and so he was like win undercover and he was like willie go like the big reveal like the big undercover boss reveal at the end when i quit yeah we're we're by the way were they blown away by the fact that you're like i am creating a sushi i think i tried to hire the gm and she's like alright like that sounds better than i'm doing here and it was a company like she was like like i thought you'd like you'd betrayed me and it's like cool you're like oh you're trying to move next door great like we can trade food at lunch so dan you let's do let's do actually do you have that the business plan that we made do you still have that binder yeah sec let's find it so the story here is that not only did i'm work undercover at noodles and company at some point also this was not a the i didn't just put that there like that's lived there behind keep there i don't have one i do i to get a copy of this alright so this i also like our sa sushi hat is right there nice yeah so basically the first business we me and dan and our buddy trevor had out of college was to create was brand called sa sushi the idea was to create the chipotle for sushi so go get go get sushi the way you eat chipotle where you can just walk down the line you pick your ingredients if you get the thing this is our big idea and which i maintain a good idea i think good time good proven it's been proven it's a bad idea but like i still want it okay so so we not only did dan work undercover at noodles company we then go and i don't know how we get a meeting with the founder of noodles and company and we show up to this meeting with this binder this binder is our business plan we have been working on this for months while we were searching for a location and can you just hold up the thickness of this binder just the people say like thick let's see yeah like this is probably a couple hundred pages of a business plan in there and there was stupid things so part of it is what you would expect like here's the start of cost but part of it was dumb stuff like the uniforms and how we're gonna like progress people from from entry level to manager and what their values are and all we had not sold a single role to a single customer and we're worried about all this other shit what we think we're tricking ourselves into thinking that planning equals productivity and you know spoiler planning did not equal productivity we're basically doing a very fancy form of procrastination and so we get to this meeting with this guy from noodles a company so i think his name's aaron if i remember correctly and he forgot that guy's name he's like alright so like what's the plan and we think we're about to wow this guy and we're like plan oh funny you should ask whip out that binder slam it on the table it's basically like here's our plan look how great this is and i remember he looks at it and first of all it looks like a kid's project even though even the cover is like we inserted this colorful thing and the front plastic thing and he flips through and he's like realizes pretty quickly oh these idiots were at a two hundred fifty page business plan for their sushi restaurant and they don't even have a location they don't have any customers they're they're they're starting on you know from scratch and i remember the look on his face and then i remember like the moment that was rock bottom for me in the whole sushi journey which was that he should have just ripped us and been like guys what the hell are you doing this is so ass backwards like why don't you get out there start testing your concept so if people actually want this and then like you know you'll learn by doing and instead he kinda took pity on us and didn't say that i could tell he wanted to say something and then he was like and then he just tried to be nice about it and i was like oh my god we're so bad that he feels like he needs to be polite about this that means we're even worse than just being bad and i just remember realizing like well i don't know what the right answer is but whatever we're doing is dead wrong i could tell you that right now after that meeting i just wanna years later to wait years later someone did tell us that though in boston there you know we were talking about we're about to sign a ten year lease and we literally just met this guy like ten minutes ago and he oh he was it was a guy he like owned a bunch of boston markets i don't yeah john john p gassed pen grove my i know i that call that's his name he was not he was doing a a tech company now but he was like you know early in my career i own twenty or thirty boston markets and he's like know a little bit about the quick service industry let me you know be your mentor yeah but he basically just tore the whole thing the shreds like within five minutes i was like this is wrong don't sign that lease and like trevor like wasn't in massachusetts stuff us when we when we were doing this like he was like about to sign the lease they called him like wait no yeah well this guy this guy was great because he's like you know so like he asked us a question and we gave him the answer we've been giving everybody else so i think he was something like you know so what makes you think that there's like there's demand for this and we were like well you know sushi been on the ride we gave him this like spiel hey he's like alright so this is gonna work or what and he basically cut through the nonsense and he's like how do you know are you testing this you're just gonna sign a ten release with the personal guarantee with no clue if this messed market actually even wants this like doesn't that seem insane to you guys and he gave us real talk at i'll forever be grateful for him for giving us that real talk because he saved our ass from signing that that lease and he gave us a different plan and he was like why don't you test this rent out a comm kitchen like bakers and cater use they're what turned out there they were like twenty dollars an hours like super cheap no and no long term commitments and he's like rent those out do it delivery only validate the demand see if people like your recipes people like the price points you'll learn so much by doing that and then you'll know what you need out of your first location if you're gonna go there and that saved ass that advice saved saved us and you know that if i whenever somebody asked me for like any advice or help i just remember like can i can i give them one tenth of the value john gave us is the new like north star for that that situation yeah i remember he introduced us to like lean start up and you know actually figuring out you know we we used to pull people like you know would you eat sushi but once a week like how many times a week we you eat sushi which is a bad badly phrase question anyway yeah in hindsight it's like oh i'd come two to three times a week and it's like we we did this proof of concept on the cheap as as quickly as we could and like the answer was like not even once a month yeah like night day right outside of outside of like la s f new york the answer is like if i eat sushi at all right to make a concept like this work and it needs to work in texas colorado you know it needs to work everywhere and the answer was if i eat sushi at all i eat it about once a month and i'm happy with that i'm not trying to eat at three times and i'm gonna go to the nice restaurant to do it like right and we were looking for like the three people who validated us rather than in ignoring the ninety seven people who were saying no were like have see those three he also did one other amazing thing that as an entrepreneur i i'd now see like this pattern over and over again so he suggested to us he's like do a delivery only and we were like but he like saw the look on our face he's like what and we were like delivery just sucks and we we started to you know he's like why so like delivery i mean you order food you don't even know when it's gonna come this before door dash by the way this i think the biggest thing is we we probably invented door dash and didn't know it and we were fixing we were fixated on the sushi but we really you know came up with a better model exactly so so this before all those so we were like you you know you call in an order you don't know when it's gonna come it shows up an hour later the packaging is all shitty the food is cold it's leaking out the bottom and just feels cheap and we're like that's why like it sucks and our takeaway was therefore no and his was wow looks like you found all the things to improve to make this ten better experience and like since then now i see this all the time if you talked to entrepreneurs it's like do you think about a space and you're like oh that's horrible the horrible for these reasons and like the entrepreneurial response the customer response is it's horrible the response is wow one an opportunity because if i just change those four things i've now have created this huge like you know level up in the customer experience and so we ended up doing it where our delivery times were sub thirty minutes you knew exactly when it was gonna come we stamped on the food when we made as you knew it was fresh we put a webcam in our kitchen so you could see us working on your order we did like all these other things to try to make delivery actually a cool experience and the bar was so low by basic delivery standards that it that kind of actually worked and so i i thought that was the other like really brilliant thing that john did for us yeah rethinking rethinking what you know everyone kind of assumed we would make with a restaurant and kind of flipping it on its head and a allowed us to fail faster thought so back to the business ideas you had a few here are there any that you think are cool or interesting that you think somebody could go do i i'm very into what i'm calling a fund to run businesses so i actually looked at a few of these towards the end i think i found fleet when i when i saw some of these like laser tag bowling alleys like kind of these family entertainment businesses and i have kind of two hypotheses around them one is like i think i saw like one or two p and l again do your own research don't just blindly accept that this is a good space the one or two i saw like wildly profitable very low cost there's probably a high start up costs in the beginning but like climbing gym or something like that it's like once you get it set up they have like these autonomous ones now too you don't even need that much labor but also as a dad i have two kids like i'm always spending money on these things like my son had a a laser tag birthday party there's like one person working at this laser tag thing they like own the laser tag game in town they charge you for the adult standing at the birthday party and i'm like wow like i could do this better i you know they and they have you hostage honest all the arcade games you gotta buy their food kind of these very easy to run like almost a single person but you know let's call it like a teenage business so you hire teenagers to work there like anything that they're not gonna mess up yeah like a bowling bowling alley and then how do you find things that like have multiple purposes like there's a bowling alley in my town and i you know it's you know during the day it's for kids like they have the kids activities and like after school activities and then at night it's the bowling leak for the adults and they have a bar so it's the local die bars like you know then there's like five you know five vending machines in there i got teenager working on like the no frills but i have to imagine if you can find the right business like this kinda great to be able to just go bowling at your bowling alley like i can't do much with my paper bags like i go and i check them out and maybe walk around with them but like not much like wife family entertainment why this out of home entertainment why now like is there anything that's changed in the market why because you know these have been around forever laser tag pop gardens bowling alley whatever my hunch is they been profitable for a while like i think a lot of these are like sneaky businesses that you don't think of family you know i think there's also kind of more of a trap i was reading about this like you know millennials like don't drink as much they want more like sober events i think this idea of doing more like games is starting to take on again you know small sample size of of things in in my town but like you know you go to these like unlimited you know there's an arcade in my town it's like you pay like eight bucks for an hour you can play unlimited arcade games place is packed you know that sort of thing never really existed but i think there's like this desire to like leave the house and do things maybe it's a post covid thing i'm not sure the thing that i think is really interesting about this is like and this is probably true across the country like if i think about like i always drive by like these large commercial real estate you know old malls you know these big buildings that know wants to buy anymore and then when i see one when i see what people put in them like it tends to be kind of like these newer that you know more interesting things like pickle ball courts like i think i read something it's like they're taking all the old bed baths and turning them into pickle ball courts so it's actually like take something that maybe you can get that's not being used and you know make a climbing gym make it a ninja course boy i think he's like the most incredible marketing where they like just marketed gymnastics to boys and now all of a sudden doubled they've doubled the amount of like demand for this and then there's like the climbing team and like this place is packed all the time right so that one is one so so one of my biggest investments over the past two years has been in my brother law's commercial real estate so he does what everybody thinks is dying but is actually like thriving so for example these kinda like mall like strip mall location it's not like a mall like a indoor mall but basically a shopping center and a shopping said with a grocery store you know maybe so there's gotten a trader joe's there may be like a crunch fitness they're like whatever there's a bunch of these types of locations and then how do you fill up the rest of the boxes and people think that shopping centers are probably dead because e commerce or whatever everything's on the amazon now or whatever these things have like ninety seven percent occupancy it's like really it's like higher than multi family in office like it's it's a really great category and even the few concepts that are like kinda going out of business like a bed bath and beyond or like joanne fabric he's replacing them when tram parks and pickle ball and tesla charging networks he's like there's just new tenants that are always there and he's like the the best part of this entire model because the returns are bananas for this thing like i it's like it is by far like the thing i've been most bullish on in the last twenty four months has been investing into this i basically took all my spare cash and put it over here and the reason why was a is a good operator but b there's no supply so nobody builds any new cyber shopping centers so like even though like you know every everything else people build more they build more condos they build more stuff nobody builds new shopping centers and so it's all just retrofit existing centers you buy them usually like below the actual build cost of the of the center themselves and so i've seen this my kids go to this thing called little kicker it's in sandra remote like a little town like you know in the bay area and it's exactly what you're describing a teenager runs it like i asked to speak to the manager and the manager was seventeen years old use the switch to their yeah like a chain on and like the f boy haircut and i was like what you're in charge of this and he was great by the way he he was actually like really good good best but everybody who works there is young like he's young he's like we probably he's definitely like i don't know under twenty three years old and all the coaches there's two coaches per class that they're all they're all also like just kinda soccer players who were high schoolers probably and but this thing is packed and it's just like one large venue for kid soccer and this thing has to be printing like i just doing the rough math of it this thing has to be printing they have you know definitely over a thousand members it's like two hundred to three hundred dollars per month you know this is this is a a very big business that's basically like you said sort of like a fun business that's teenager yeah and it's you don't need to and it's ai proof right like so like if you're looking for where do i do business if i know the whole world is changing with ai well ai is probably not gonna like do a tram lean park or you know to a a kid soccer center you know like those are those are pretty safe businesses yeah and they're predictable i mean like their kids are always gonna wanna jump it's not like you're buying a product that you know all of a sudden you don't know if it's gonna last right you put a bullet point on here the least sexy business possible touch the taboo what do you what do mean by that so this is i start again when in the pit of despair you start to you start to go crazy with ideas where they alright well what are what you know i started looking at like medical ambulances which is still think could have worked but effectively you know the government subsidize medical transport for disabled and elderly from you know nursing homes to their medical appointments so it's actually government contracts if you have a fleet of you know these special handicap accessible vans you know you effectively can you mobilize this fleet every day you kinda fill up your appointments with the people and you just transport them to and from super simple you don't really think about it but like the demand is is there especially as as the population is aging that's a that's a good example of an non sexy one i would love to buy a funeral home like something that's just like oh man like you work in that it's like how do i mean all of the deal like if you wanna find a deal that's kind of like you know punching above your weight if you will like there's gonna be some hair on the deal like on at the lower end of the market like i said like private equity is gonna scoop up the easy ones there's gonna be something like if that's something can be that is just like weird and like no one really wants to touch it or or think about it like to me that's a great a great reason to buy it right because it because it might mean that you know let's say there's a really sexy business on one side right there's a business that's like maybe it's like software only you don't have to run it you know you know it's it's low operations bubba blah blah it's it's about whatever party planning or something fun the hair on that deal by be maybe just that the valuation is extremely high so it's gonna take you a long time to get your cash back or it might be some other something else like you know users are very f the competition is very intense whatever they're there's gonna be here in every deal the good thing about what you're saying is that if you choose the hair that it's not the most fun thing to run well yeah where the hair is gonna be like you gotta cr someone it's like right like i don't actually know if i wanna do that like now that i'm saying out loud like right that's i mean i hired a teenager to do it but like that's a better hair that's about a better amount of hair like you kinda know what it is it's like the hair is the thing almost right not like the p and l has hair or the the there's a lot of dead on the business so there's other problems in other areas exactly so if there's something that like like if twenty people are gonna to flock to the software only party planning one but only like too crazy enough people are like let me roll up these funeral homes try to like ag i'm sure people do this like the you know i'm not the first one to think about this but i like that the other thing i really like right now party city just went out of business who's by where are you buying balloons there's a guy the twenty minutes for me he had a fireworks store his fireworks store happened to sell balloons the day party city went out of business he rebranded man now his store is called balloons it used to just be called fireworks now it's called balloons he's taking out all the ads on the street and we went there you know for my for my son's birthday in he's doing awesome so it's like how do you like kinda and don't copy party city that clearly didn't work right but the demand for balloons still exist and long do exist exactly the supply just strength like a whole lot right and i imagine as things change like the landscape for better or worse changing very rapidly these days you know maybe something goes out of business because they can't compete because of tariffs or whatever like how do you think about being you know opportunistic in that sense of doing it and you can do it like you don't even need like you could start selling balloons like get a permit and start doing delivery only balloons like that actually saw a truck doing that when i went to mon p house he's he's great investor and he on his desk there's a like where you have a name pla don't you just have your name engraved on it engraved on it it just said trouble is opportunity and he just had it on his desk because at all times you know he's reading the news or he's hearing something as a reminder trouble is opportunity i love that yep that's awesome cool well dan dude awesome hanging out with you as always i'm glad you got to tell your story and congrats man blown away by what you did with the with the business that you bought you are officially dan the bag man thanks for telling the story yeah thanks for having me on that's exciting to to be here cool alright my friends i have a new podcast for guys to check out it's called content is profit and it's hosted by luis and ph ka after years of building content teams and frameworks for companies like red bull and orange theory fitness luis and ph are on a mission to bridge the gap between content and revenue in each episode you're gonna hear from top entrepreneurs and creators and you're gonna hear him share their secrets and strategies to turn their content into profit so you can check out content is profit wherever you get your podcast