18 Acquisitions in 15 Years E: 14 Top M&A Entrepreneurs Jeff Charlton

Beautiful. Jeff, welcome to the podcast. Top entrepreneurs. How are you doing? My pleasure. I'm good. Hey, thanks for doing this. So, uh, let's just talk about your career in M&A and I mean, the first time I saw you was uh on the uh some of the courses with Epic and Roland. uh, so you've been, how long you've been in printing? 29, well, in print in the industry about 35 years, but I've had my own business for 29 years. 29 years. Have you always wanted to do uh printing, or is it something that came about that parents started or what? Total accident. I'm an engineer by degree. I did engineering for 3 years, decided I didn't like that. I knew I wanted to be an entrepreneur, uh, and it wasn't gonna be engineering, so I sort of just fell into printing by accident. Looking for some sort of an industry at the time. I, I was married to a gal whose father had a print shop. And uh so anyway, I He was about, uh, I think about 50 years old at the time. And I thought, you know, maybe I'll, uh, work for him, learn the business, and then buy him out when he retires. That was my plan. I ended up doing that for a couple of years, then deciding that that was, that plan wasn't gonna work out. So I just branched out of my own completely cold turkey, and that's what I've been doing ever since. Did you buy the first business? No, I started with nothing in my basement. In fact they gave up. I was doing very well for this other company, and I walked away from it all to, to start from zero in my basement. Yeah. Uh, that was 29 years ago. It was me and now I have like 40 employees and 15,000 square feet and Relatively successful. Well, I the, the engineering part. I'm an engineer by training a long time ago too, and uh I'm not really doing that either. So, I, I gotta ask you about, you're moving along, you're growing the business. I mean, what was it, what was the first time you said, you know what, I gotta start acquiring a business, cause I remember on the Interview you did with Roland, you've had about 18 acquisitions since then, about 1 a year. Correct, about 1818 and 15 years I did, yeah, which I, my last one happened about 5 years ago, so it's been a while since I've done it, but uh yeah. But what it did, what did, what happened the very first time you decided, you know what, to grow this business, I can either grow it organically or I can do it with M&A. I mean, what was that process when you first started talking about that? Uh. Well, two things. First of all, the first one I did was Uh, I was, I, I started out as a print, what they call print broker, which means I bought and resold everything for the 1st 10 years in business. And it was getting tougher and tougher to do that. And my, one of my main suppliers was a small print shop in St. Louis, and he was struggling as well with finding customers. So, I decided to get into manufacturing. So I made a deal with him and I bought him money and he brought his entire staff with me. That was my first no money down acquisition too, because He literally took the entire thing on a, uh, you know, he took the note. So I, I agreed to a price, but I didn't pay him anything upfront. I, I paid it all based on success going forward. And we set some parameters of what defines success. And I paid him out over a period of 5 years. And, um, yeah, it worked out good. And I brought, that got me into the actual manufacturing business, cause I had no experience to do that, doing that. And he had his entire shop and his staff, the entire thing came with it. He actually moved into my office, but, uh, well, we bought a new space to make room for it, but Essentially, he came to me, and that was the first one sort of strategically. Everyone thereafter was because I sucked at managing sales people. So I tried, I tried to grow it organically by hiring salespeople, and I was literally like, oh, for everything. Until I, I hired my brother, he was, he's successful, he's still with me, and he's been with me 20 years, but he's the only guy I've ever hired that was successful in sales. Every other one failed, and I don't know how many there were, but there's a lot. And so I finally after beat my head against the wall for probably Well, this started before I even bought that print shop. So probably for 10 years of trying to be a sales manager and manage salespeople, I finally realized this model's not working. Clearly, I gotta do something different. So I decided to switch gears and start buying companies with the objective to buy sales. And I was hoping I'd find some good sales people along the way. But I wasn't a corporate raider. I wasn't rich. I didn't have a lot of money. So I had to do it creatively. And since I'd done that one deal, was able to do for no money down, I figured, well, if I could do one, I could do others. So I went with a complete open mind to the marketplace, seeing what I could do. And I was able to put together almost every deal for almost no money out of pocket. It was various different structures, but in general, the structure was, I'll pay you. Uh, over time based on the success we have with your clients over time. And sometimes the employees, well, the employees always came with the deal. Sometimes the owner came with the deal, sometimes they retired or or went somewhere else. So it was about 50/50, about half of the owners came with it, the other half did something else. Yeah, um, how do you structure that deal, I mean, based upon the cash flow, you, you, you still, the first thing you gotta do is set a value for what you think the business is, right? Correct, correct. And if it's a, is it where the business is always making money profitable, or was it? Well in my case, none of them are making money, so they were all printing business is a tough business and people have been failing and going out of business and printing for my entire career basically. So when I got into it, they said this is the, you know, a losing deal. You picked a bad industry. So in retrospect, that was probably true, but I've made the most of it. But I, that's a different story, but I've had to adjust with the times and I've gotten into. I, I've been pretty forward thinking in the way I, I run my business and that's served me well cause we're very successful. But Um, well, the part of the forward thinking was this acquisition thing too. When everybody else is looking to, you know, get smaller and figure out a way to survive, I was looking to expand. Uh, and that was unusual. It still was unusual. Um, when times got tough is when I got more aggressive in marketing and expansion. In fact, I made most of the best deals I ever made in recessions. Um, so because when everybody else is hurting, that's the best time to buy, best time to buy. Yeah, I read a book about uh Thomas Watson RBM. He actually, the, the, the worse the economy was, the more he expanded. Right. Yeah. So, and I never had a lot of money. I mean, I do OK now, but I still won't have millions of dollars laying around to go buy companies. It's, uh, you know, it's, you just have to be creative. I've I've always been a creative thinker when it comes to running a business in general, and I took that same approach to Acquisition. I simply go to an owner and say, hey, well, what I did in the beginning is I sent out letters, in fact, I think I talked about a Roland's thing. In fact, you're doing it right now. Oh yeah, that's just perfect, because I, I wanna segue into this. I mean, I actually uh hired you guys to, to do a marketing direct mail campaign. Yeah, I just bought it. I bought a mailing list of the printers in my area and I'm a local company, so I was looking for within about 50 miles of my office. And I just bought a list of all the printers and uh I weeded through it and took out the ones I knew were too big that I couldn't afford anyway. But other than that, I sent it out but when I first did it, it was about 300, the list had about 300 people on it. And I've done this 5 or 6 times over the years, uh, and every single time I did it, I had at least 1. Good prospect that came out of it, and I was able to make a deal. I never did it where I wasn't able to make a deal. I never had tons of responses, but I had enough that I had something to work with. And so once I get a response, I'd simply call the guy and say, hey, I talked to the owner directly, no brokers, or anything. It's me talking to him. And saying, look, hey, you, you're you're looking to sell. Why are you looking to sell? What's your objective? What are you trying to do? And I look for what I call a win-win situation. Is there a way that I could help him meet his objective and me meet my objective, and do it for as little money as possible up front. And uh that's what I did, and I couldn't make them all work. I probably looked at the 18 deals I made, I probably looked at 50 deals. And the other 32 I couldn't make for whatever reason, you know, a lot of, most cases it was because the people were unrealistic about how much money they wanted for the, you know, people, most business owners are way overestimate how much their business is worth. The reality is a business, if you're if you're losing money, your business has no value, except for the value of your, your hard assets, the equipment and things like that. That has a value no matter whether you're losing money or not. But in printing, Most of those are old machines that are worth literally the value of the scrap metal, that's about it, because nobody wants that old equipment. Um, they want the new modern stuff. So that was the case with us, of all those deals I made, I think I only kept maybe, maybe 10 pieces of equipment. Uh, maybe, I don't think it was even that much. Most of it went in the dumpster or we, we sent it for sold for scrap metal. Um, you know, it was all I was about buying the customers, and then what an unintended good consequence of this whole thing was, and I never thought of this, but it's really been critical to my success, is when companies are failing, they're generally down to 1 or 2 people, including the owner, maybe 1 employee or maybe 2, and that's usually the best people, cause they get rid of the the weak people first and they keep the best people right up to the end. Well, those best people all came to work for me and they're still working for me. I lost one single person from an acquisition other than people that left in retirement, or and actually a couple of them died unfortunately, but, uh, but uh nobody has quit. Um, and that's been great because I probably have 15 people that still work for me that came from these acquisitions. They're all outstanding employees. Yeah. In fact, I'm looking right now to do another one, not because I want the business, because I want the employees. I'm having a heck of a time hiring people right now, and I'm looking to acquire strictly for employees. Yeah. Yeah, employee acquisitions, they got the Silicon Valley, they do that a lot. I mean, I, I'll tell you this story. I worked for Intuit at the time, and Intuit bought this company called Step Up. They paid $60 million. One year later, they didn't even use the technology, but they kept the five most important employees. Yeah, it really is. I, I never thought of that when I first started doing this, but it turned out that's absolutely a huge benefit to doing this. Yeah, my buddy, uh, that I had known for a long time, he walked away with 10 million bucks, but he didn't be like unbelievable, unbelievable that they do that. So these now all of these employees that are still with you that, uh, you know, the ones that are twos that you keep and they're just the employees. Yeah, they're great. I mean, it's uh, and they've all been, I've never had any problems. That's been the best part of this whole thing as the employees, a bar none. And, and I've done well. I mean, I was when I first started doing this, I was about a $1.5 million dollar company, and we're gonna do $6.5 million. Well, last year we did $6.5 million. I think I'm gonna do 8 to $10 million this year, but that's not because of acquisition. That's, I finally have uh Taking all this that I've done, and I've, I, I sort of, uh, developed a niche and we're really expanding that niche right now. That's where, and we've gone nationwide too, so we're doing really well right now. But I'm using the people that I bought through that, uh, that I got through the acquisition. So it's, uh, they're key people, to the expansion. What kind of niche is this that you, you're, you're focused on we focus on real estate. We're, we're, we're in printing, but when I say printing, that's a very wide category. We most of our growth is coming from direct mail printing. So we do marketing materials for companies with a heavy focus on mailing those marketing materials. Is that the real estate things we get in the mail with the broker and they say, hey, check this out, or is it yes, but that's, that's not the major part of my that's real estate agents that do that. We focus on real estate investors, people that are buying houses for cash, the house flippers, that we buy ugly houses type of people. People would say, I'll buy your house for cash. You see all these shows on TV where these people are buying houses, they fix them up and they sell them. Well, that's a massive market in the United States. And the challenge is they have to find the houses to buy. Well, they don't go on the MLS and they don't go through real estate agents. They find houses that are not on the market, and we help them find them through direct mail. We send postcards and letters to people that fit a certain niche criteria that they're looking for, says, I want to buy your house for cash. And it works. And we developed some unique products in that, and we have a nationwide, uh, presence now, and we're doing really well. Yeah. Did that niche come from a company you purchased, or is it kind of developed organically internally, just say, hey, oh my God, here's, here's where our business comes from, this is this, and this is did it pop out? Oh, OK, real estate in general, I'll tell you the best, the best deal I ever made. It was the easiest deal I ever made too. We, one of our paper salesmen, he knew I was doing this, and he knew I was looking for. That's another thing we've done, by the way, that's another key strategy as we spread the word in our community that we're looking to buy people. And it was so we talked to all of our suppliers, do you know anybody? Because they supply other people in the community. Do you know anybody that might be looking to retire, they're having trouble, they're in financial trouble, whatever. Anybody you think might be somebody that might be interested in making a deal, a win-win situation, let me know. I've made, but I told you, I sent 5 or 6 letters. I made, I think, about 8 deals out of those 5 or 6 letters. Uh, but I made, I'd say about 5 deals from pure word of mouth. The rest of them came from looking online. That's another strategy I use. I just go online periodically and look for companies for sale. And there's various different, like biz, buy, sell. There's 5 or 6 major websites that have companies for sale, and I just, every once in a while go look and see what's available. Yeah, yeah. But anyway, the best deal I ever made was, it came from one of my paper sales, when they said this gal's got a little print shop, wasn't too far from us, and her husband just died, and he was the guy that was running it. She didn't know anything about it, but she was trying to keep it afloat, knowing nothing about it. And she was, you know, was killing her and she loved to get out. So anyway, I called her up. Sure enough, she said, she, she told me, I would give it to you for free if I didn't think my husband would turn over in his grave. So how about $5000? And this was a very small operation. It was a little small retail print shop and they only had $60,000 a year in total business. So we're talking a very small. That's a small one, yeah, yeah. However, they had one customer that was one of the major real estate agents in Saint Louis. And they were just doing, that was her major customer, and at the time of the 60,000, that was like 40,000 of her sales. And they were doing these black and white kind of crappy looking postcards, and at the time the world, most people were selling, sending out color postcards. So, I, I paid her the $5000 no questions asked, because to me, that was, I had something in there. I mean, I was so low in amount. I didn't worry about any creative deal. I just paid her a $5000 check, and that was done. I was done with it. We literally made that deal in like a week. I mean, I made the deal, no formal contract. It was almost a handshake agreement, and, uh, we took it over. But anyway, that one client was a real, a major real estate agent. I went to her. And said, and at the time, I did not, I was not in digital printing. I had all old fashioned printing presses, and I wanted to get into digital printing, but it was expensive to buy one of these digital printings, essentially, it's really, really fancy copiers, and they're, they can, they can be as long as you want and these, you know, right now we have, we have them they're like 40 ft long. But anyway, back then, this is the, the dawn of this industry. And I went to her and I said, if I told her making this deal. I bet you want color postcards, and it turns out she did. And I said, I'll make a deal. If you'll commit to me for a year, I'll buy this machine to do your color postcards, and I'll do it for the same price as your black and white postcards for the first year, just to, you know, we'll both win in this situation. Well, anyway, long story short, she agreed to that deal, and that turned out to be about a $200,000 a year customer. And that also got me into the digital printing business and got me into real estate. And I realized, wow, this real estate could be good. A lot of people send out postcards. So I started with brokers and agents, but that has morphed into over the years, that was about 15 years ago I did this. That is morphed into the the investors, which turned or which were a much better opportunity for us. And we, our, our shop is 10 times bigger than that now, so we're all digital now. I got rid of my old printing presses, we're 100% digital now, and we do all kinds of stuff. How how long do those machines last? I mean, how much can you run them and how long do they last? I mean, you're the perfect manufacturing business where even uh really makes sense because you got amortization and depreciation. Yeah, it's unfortunately, they don't last very long. They uh they build these things to fall apart, which drives me crazy, cause with my old printing presses were 50 years old and they still ran fine. These things, if I can get 6 years out of them, I'm doing really good. Most of them are dying before the lease is even paid for, and which it it drives me crazy because, you know, when you buy one of these things, you have a maintenance agreement, and they agree to fix it unlimited for the period of the maintenance agreement. But it seems like there's a point where they're, they're, well, we have 6 large machines down. We have a maintenance guy here every single day all day. There's always one of them broke down. In fact, I have to have, I have 2 extra machines in my fleet, just because they break down so much. You need that because there's always something broken down. There's a guy, you, you have a lease for fixing these things, and there's somebody on staff all the time there, at the least, yeah, the the the leasing company. I mean, it's a They call it clicks. In the in the copy world, the maintenance agreement also supplies the toner, and you pay, you pay usage fee, and it's called clicks, and that's part of the maintenance agreement. So they'll fix it, and they supply the toner all as part of that deal. And they'll come out every day for whatever, whatever it takes, and the parts and everything are included. But they just break down so much. Uh, there's always somebody there, and it's very frustrating, but I've come to accept that's just the way it is. It's They, they build it for forced obsolescence, and that's the market, and they expect them to, you know, the last 4 years, and then they want you to buy a new one. That's their whole plan. And they're not cheap. I mean, they spent, they're at least $100,000 and up for one machine. So it's, you just have to build that in your model. We have that now. We, we have the, the cost of machines and the click charges all built into the model. So we charge our customers, that's factored into our cost, and we, you know, we mark that up appropriately so we can make a profit. So it works, but it's still frustrating because I, I, I can't get through my head that this $100,000 machine is gonna be worthless in 4 years, you know. And you can't do any, I mean, you don't sell it, you just trash it, or do they take it back or what? We keep them, we stretch them longer than that. We, we, I generally have a 4-year lease is the deal I usually make. And sometimes I'll get a loan instead of the lease, depending on the, the banking rates at the time. But either way, I pay it off in 4 years, and I try to keep it for a couple more years after that. As sort of a backup or we have, we have some. We have so they they don't completely not work. They just don't, the quality gets worse and you start having problems with them. But we can run things that are less critical quality, like black and white copies, for instance. Those don't have to be super high quality. So we can get more use out of the machines to kind of repurpose them for things that aren't as mission critical, and we'll keep them. But they, generally, after about 7 years, they're completely dead and they're worthless. And I almost can't even sell them for anything. I might get, you know, a couple of grand. And for a machine I paid $100,000 for for 5 years before that. It's almost like these uh HP printers. I mean, the price of them gone, the quality of the printing's gone up, but they only last for 1 or 2 years. I mean, they do that on purpose. That's all part of their strategy. Yeah, it is what it is. What's model, but it works and, you know, we figured it out. Yeah. What, what's your plan for the future? You just want to keep running this until your, uh, room temperature, or do you want? I'm 58 years old and I am starting to think about, you know, what I'm gonna do at some future date, but I have not set a date for retirement. I'm enjoying what I'm doing, and we're growing like crazy right now, and I I'm kind of a, uh, where my engineering has really helped me through my career, cause I'm kind of an innovator with things. And I've I've developed several things that are unique to our industry. In fact, in our industry, I'm the guy that Google, you, you know, you go on Google, you can do what's called the street view of your house. You get the front view of your house. Well, that's been available on Google for, I don't know, probably 5 or 10 years. But nobody was ever using that in the printing business. Well, we, we wrote some software about now about 3 years ago. We could take a mailing list and upload it to some software we wrote to go download that Google image and then print that as variable data on postcards and letters. So people would say, hey, I want to buy your house, and it's a picture of their actual house in the postcard. A guy calls you get every week. Hey, I heard your house is for sale. Yeah, I'm the first guy in the United States that, that was able to do that. Now, unfortunately, I wasn't able to patent that because Google had this code readily available. You just had to figure out how to use it, but we've had several people copy this now and all kinds of industries. However, I'm the guy that came up with that for about a year and a half, I was the only one in the whole United States was doing that. That, that sort of really launched me nationally. And I've come up with a couple of other unique products that are in the, in the real estate mailing that nobody else has. I'm always trying to do that. I try to come up with unique things that other people don't have. We've got a unique way of doing business that really, uh, you know, we're, it's catching on. People are, we're getting a pretty good reputation nationally, and we're growing pretty, pretty, pretty aggressively. Yeah, what kind of engineer were you, software or I was techno, I would say civil engineer, civil engineer, you know, I like construction and things like that. Uh, I actually worked as, I never did civil engineering. I worked for Procter and Gamble as an industrial engineer right out of college. Did that for about 3 years. So I learned how machines and things like that work. I learned how manufacturing plants work, which has also served me well in the printing business. Didn't plan that, but it sort of, sort of worked out. So I don't know, I'm kind of a process guy and, uh, my mind works that way, and I know how to build things and create things, and I don't know, I'm just You know, you ever watched that show How It's Made? I mean, it's I do. I like that show. It's an amazing show. I don't think it's like how you made the chips. It's like, who made this production line, right, I agree, it's amazing. We're trying to do that right now. I'm working on some internal. I've got uh programmers working for me. I got a full-time IT staff, and we're working on technology right now internally to, to completely automate our internal system, so I can go from an online order, literally off the end of the machines with no human intervention. And that's really It's complicated when you throw direct mail into that. We can do that today with like business cards, but with direct mail, when you, when you have mailing lists and things like that, it gets super complicated because you have to make the post office happy too. And there isn't software available to be able to do that. We're, we're writing it right now. And we're, we're about a year away from being where I want to be. But, um, I'm excited about that because that also is gonna fuel our growth. It's gonna allow me to, to do a lot of things I can't do today, and do offer some things in the marketplace I can't do today once I have that completely done. So how, how did you learn or discover that this real estate, the investment guys were the, were, were, were the way to go? I mean, did a couple things just keep hitting and hitting and hitting, or was it just you saw the profitability in the business? I am a real estate investor myself as a side business, and I've never aggressively done, I've never flipped houses as a business, but I have, I mean, I mainly buy and hold. I buy rental properties and keep them. And over the years in doing that, I built built some relationships with some pretty good companies in the industry that were doing a lot of marketing. There was one in Memphis just called Memphis Invest and uh I bought some properties through them about 15 years ago, and uh they ended up, they're growing, they're over a billion dollar company now, and I've been their marketing arm ever since. Well, in doing that, I got involved with helping them market because they, they buy and flip houses on a very, very, hold on a second my PA said they buy houses on a very massive scale nationwide. They do hundreds of houses every year. Well, they gotta find those houses. So I helped them do marketing to find those houses, and that sort of got me into it. And then I saw, wow, this is great. So then I expanded that to other. You know, companies, and now it's individual most real estate flippers, it's individual guys. But, uh, you know, it's just, I know it kind of grew. didn't, it didn't happen all overnight. It was just one piece at a time, and I just kept, I've always been very good at seeing opportunity, and that's how I've been able to survive in this tough printing business. As I tend to see opportunity where other people don't. And I've always, I'm heavily focused on marketing and looking forward. Most printing companies are focused on buying equipment, spending millions of dollars. They buy the latest machines, and then they hope they can sell it. Unfortunately, that doesn't work that way. I've always been in the the mindset, I'll sell it first, then I'll figure out how to do it. And so I don't have a lot of debt. In fact, I'm a 100% debt free in my business and with all these acquisitions, because I've never gone into too much debt, even with all these machines I buy, I have leases, but it's not such a lease that's gonna put me under if we have hard times. I limit my exposure, make sure we're always growing, make sure we're always marketing, and yeah, what's up? And I play the same toss up when I was buying companies. I look for deals where it's not gonna take too much risk, you know, where I can afford financially afford it. And make it work. And if the worst case scenario doesn't work out, it's no big deal. When you take over a lease of a company, you know, let's say you're buying a company and what's the biggest expense? Is it the lease part of the equipment I don't take over anything, by the way, that's a key element. I never take over debt, never take over liabilities, I only buy assets. So if somebody has that, that's one of the sticking points, sometimes it gets in the way of a deal, is if somebody's got a bunch of debt that they got to do something with and they can't afford to pay that, you got to figure out how to get rid of that debt. Yeah, so most of that's the leases, right, of the equipment. Usually, most in printing, most people are leasing their equipment because they don't have the money to pay the, usually banks won't give them the money either. It's easy to get a lease, it's not easy to get a loan. So most people do leases. So we, I, I did take over a coup, I can't say I never did it. I did take over a couple of leases when it made sense when I thought, OK, a couple of copier leases I took over a couple different situations where we could use the equipment and it wasn't, you know, a bad deal. So I was able to take it over. And I was able to make a deal with the leasing company to do that, uh, without any out of pocket. It was just taking over the payments. But usually, we walk, we find a way to walk away with it, and that's what comes, that's the sticking point, cause the, the, the deal I try to make is I, especially if a guy wants to retire or something or do something else, they don't want to walk away with debt. They just want to wash their hands of it. So I figured out a way to allow them to wash their hands of everything, including the, you know, the hassle of closing down your shop. In many cases, we would literally like that little 5000 deal deal I mentioned. This is the lady, and it's an old lady, and she didn't know what to do, and she had this, it's a small shop, but it was still filled with equipment and junk. And it was an overwhelming task for her to look at it. We said, you know what, here's your $5000 check. All I want from you to show me where your files are, and let me write a letter to all your customers that you'll sign that says you're, you're selling the company, and you walk away. We'll take over everything, including your shop and everything. We'll make it easy on you. And that made her happy. That really makes it easy, helpful to, yeah, yeah, and so that was a win-win for her, you know, she walked away, she was happy, she felt like she got something out of it, and so, you know, and uh she got that headache off her shoulders. Yeah. So what about those deals, most of these deals, it sounds like, hey, I, the seller is really trying to, they're motivated. Do you ever come across somebody that sounds motivated first of all, then he goes like, well, you're just not ready to leave and you pass or. Oh, absolutely. That happens, that's happened a lot of the uh of the 32 deals I couldn't make, that was the most common thing is they think they want to sell, but they have this, they're losing money. Almost every print shop is losing money, or if they're making money, even the ones that survive, there's nobody getting rich in the printing business, cause it's a tough business and the margins are really small, they're tight. And so, even if they're making money, it's not very much. And so there's not a whole lot of value in most of the companies, but the owner thinks it's worth way more than it is. And so he's got this, he wants to get out if he can get $2 million when his company might be worth $200,000 you know. And, uh, he can't accept that, you know, and they, they don't, they don't deal with reality. They're dealing in this fancy world of what they think their company's worth, and it's just not. The company is worth a multiple of the, the net profit. And some people call it EIDA. I don't, I don't believe in EIA, frankly, I think IBEDA is a bogus number. It's in, in small business, it's the actual money the owner's walking away. When you factor in what he actually pays himself, the profit, and anything, any funny money, like he's paying for his car, or his insurance, or whatever it might be. You add all that up as to what total money is he walking away with. That's what you look at, and then you'll come up with some sort of multiple of that. I never pay more than 3 times that number, and even that is way too much in the printing business because it's such an unknown. And I've learned over the years too, even if the owner and the entire staff comes with it, we'll lose at least 25% of the business they think they have. In most cases, it's more like 50% because there's, it's just what happens there? Well, there's a combination of factors. Number one, a lot of people don't like change. So when there's a change in ownership, even if you're a great guy and you got a great thing. They don't like that. So they, they take that opportunity to go somewhere else. But in most cases, what it is really is their books, the numbers they show in their books do not reflect the current status. Like, let's just say, like right now, we're at what? we're in May of 2021. Well, most guys will only have books through end of 2020, and maybe they have current books, maybe, but a lot of these small guys are not very good at accounting. And so their books are way behind. So even 5 months into this year, last year's books, they're relevant, but it's still kind of old news. You don't know how much business they've lost in the last 5 months if they don't reflect yet. So, that's mainly what it is. They've lost more customers than they think they've lost, especially when they're on a downward trend, and they're not doing that well. Because customers, you know, when when somebody senses you're not doing well, Customers leave just because they don't trust you. And a lot of companies that are not doing well, there's a reason they're not doing well. They don't serve people well, they don't do good quality, whatever. There's reasons why they're failing and all that reflects in customer loss too. So whatever their books say, I don't believe them. So what I've learned over the years is I take whatever they tell me and I cut that in half, and then I say, can I, is this deal make sense to me with 50% of what they tell me. And then I figured out how to make that work. Were you ever successful on the, you know, somebody saying it's too, you know, they think it's worth $2 million a year and it's really only worth $200,000 a year. Were you ever that's usually too big of a gap. You can't make that. But what, what, what I did do is I say, look, what generally happens is Either, either the deal's easy right away, and I can literally make it like right now, it's, we have no trouble at all. The guy's ready to go, like right now, and he can't get out of the business fast enough. Those are the easy, and that was probably half the deals. The other half took some time, you, you approach the guy and say, OK, here's what I'm willing to do, and he's going, ah, there's no way. And then 6 months later, he comes back to me and says, OK. Maybe you were right, let's talk, you know, because his business continues to go down, he's got nobody else willing to give him the kind of money he thinks he can get, and he has no choice. He gets to a point where he's got to do something because he's bleeding too heavily, you know. And, and I'm trying to take advantage of anybody. I'm just saying, look, uh, I'm just, you know, it's got to be win-win. For it to be win for me, I have to get something out of this. I can't just pay you money and get nothing out of it. There's gotta be a pot of gold at the end of my rainbow somewhere. And so I'm willing to do is pay you a cut of that pot of gold. If you're right, and this thing really can generate all this cash, I'll pay you a cut of that. I have no problem doing that. But I'm not gonna pay it to you upfront when it's such an unknown. Yeah, well, I don't understand the argument but like, how do you You're gonna pay them out of the cash flow of their customer and business list because you're gonna do what better than they do, because we're just better at doing business in general. Plus, we expand it. What I do, I, I told you I'm very aggressive in marketing. So the first thing I do is take their customer list and we go contact them all and say, hey, we made this deal, and by the way, we've got all these other capabilities, so we've got a lot of capabilities, usually more than the company we buy. So we can, and we try just like I, that example I gave you that real estate agent, we can take some of their best clients and expand them in some cases. And I tell them, look, I'll pay you, let's say we take that $100,000 client and make it a $500 million dollar client, I'll pay you a cut of that half a million dollars too. Whatever I can grow it to over a period of 3. My standard deal is I'll pay you 10% of sales from all your clients over the next 3 years, whatever we do, that's my standard deal. If I grow it, then you get a portion of the growth too. And if I don't, you know, we do not doing anything. Are they usually in the business or out of the business? They're out of business. Even if they come to work for me, usually they're not part of that. Um, then maybe they'll still handle it, but I have found the best way we can do it is we let our people take over. That's the best chance of growing it. Yeah. And how do they enter, they, they believe that? Did they say I'll give you 10% of whatever the business from your trust thing, and I, you know, that's part of it. They might think I'm full of crap. Uh, well, but I'm pretty good at getting people to trust me because I am an honest businessman. I do what I say I'm gonna do. And over the years, as I've done, you know, the first couple of deals were a little harder because there was no track record. Now that I have this track record. I can say if you don't believe me, there's a list of 10 people I made deals with. Feel free to call them and talk to them. Yeah, that's what I was getting to. I mean, if I did what I said I was gonna do. Did I pay him all the money I said I was gonna pay him? Did I cheat him in any way, you know? And I know I didn't cheat anybody, so I'm no, I could talk to anybody. Yeah, building your reputation, yeah, it's beautiful, yeah. Do have you ever considered looking at other bigger, I mean, I see the MO that you have for the type of business you guy, you're like, oh, there's a printing business doing 3 million. Should I go purchase that? That's outside your MO? That's so those are too big. The biggest deal I ever made was 1.2 million in sales, and that that company ended up being, they were they were hemorrhaging money. That was one of the deals I made. The guy could make that deal fast enough cause he was hemorrhaging money, uh, he was losing $300,000 a year and and he didn't have he couldn't afford it. So, but the reason they're losing money is even though they're 1.2 million in sales, they were giving it away. They were selling in some cases below their cost, and they didn't know how to run the business at all. He was a horrible businessman, and he knew it because that's kind of a long story, but an investor had bought the business, and but the investor wasn't running the company. He'd hired a guy to run the company that didn't know, have any printing experience. And the guy was just running into the ground. It was hor horrible. They made mistakes at every level. And I could see that. So that was a deal. I said, I'm not paying you any money upfront for this because this thing is hemorrhaging, but I will agree to pay you on the back end, and they made that deal. Um, 1.2 million was really more like $300,000 of actual profitable business. The rest of it, we just let go. It was so, it was so unprofitable. We, we had to raise the prices like 50%, even make a profitable and most of those clients just went away because they were, yeah, because they were people that wanted something for nothing. And, you know, there's no such thing as a good client that doesn't pay their bills or doesn't pay it where you can make a profit. So what, what do you think about that deal? I mean, would you ever look at a deal like that? Actually, that deal, now there's a good example. That deal in terms of pure money, that was the worst deal I ever made. Even at what I did, um, It's just didn't work out very well financially. However, they had 12 employees, as part, that's one of the reasons why I was hemorrhaging money. He had way too many employees for 1.2 million, but I still have half those employees, and they were the ones I have are some of my best employees. They that was outstanding. So when I look at the overall picture. Uh, yeah, the money wasn't great, but the long term impact of these great employees is, I can't calculate that. It's way, it's so it ended up being ironically the best deal I ever made overall, but it's probably the worst deal financially. So, because I just didn't even though I know he was, I didn't, I didn't even dream that the 1.2 million would end up with only 300,000. I didn't think we'd hemorrhage that bad on the sales, but he was just, his books were, that was another thing in that deal. The books were horrible. So I literally was taking it like purely. Uh, on a guess. Yeah. And, uh, you know, it was just way worse than I thought it was. Yeah. What's, I'm just curious, what inspires you like to come in every morning, just like, you know, skipping to work and stuff. Is there any books, any mentors, any, you know, leaders, any like Warren Buffett or anything that you kind of follow? Not really. I do read a lot of books, uh, mostly, and I, it's all 100% educational books. I don't ever read fiction or things like that. Uh, neither do I. I'm not a fiction guy. My wife strictly things that are gonna enhance me in some way, shape, or form. Um, I used to do more than I do now. A guy named Dan, probably if I'd have. Uh, my entire career, Dan Kennedy, I don't know if you know his name, but he's a, he, he used to live in Scottsdale for a while. I don't know that guy has been probably, uh, my best mentor over the years from a marketing standpoint. And I've read every book he's written, uh, and I met him in person. I was actually the mastermind that he ran for a year, um, recently, I had that was 2 years ago I was in that. And, uh, yeah, but he's probably the number one guy, but I, I, I've got a whole bookshelf of books. Uh, there's only one guy that I think is awesome so much. It's just in general, I'm a student of marketing. What I do do a lot is I observe what other people are doing. We're in the direct mail business, so I, I pour over every piece of direct mail I get. I have all my employees bring in all their direct mail, just to see what they're getting in the mailbox. And I look at, like, I'm not a social media guy, but I watch it to see what people are doing on social media and how they're marketing, how they're advertising. We have gotten into social media over the last year with a pretty good level of success, paid social media. Uh, we're doing some paid advertising. I'm, I'm, I'm, I'm not an expert on that at all. We've been kind of experimenting, but it's working for us. So, it's it's because we're in a niche though, we're folks on this one real estate niche. And so we're still kind of learning, but, um, not for you outside your kind of geographical area because that seems like, you know, that's a, that's an area that's just not gonna stop. It's like the mail. I mean, in real estate investment broken, but it's all over the, yeah, we're national real estate investment national. We're local for most general printing. We still do about, we do, I said we did about 6.5 million last year. All that about 4 million was direct mail. And the other 2.5 was local business in St. Louis, just general printing of all kinds. Anything from forms in the manufacturing plant, to labels, to business cards, or letterheads, or brochures, just all kinds of stuff. Shirts, we do a lot of apparel. We, we have an embroidery shop as well. We actually do that in-house. So, uh, You know, it's a little bit everything when it comes to that, but it's the direct mail area that's my growth focus going forward. And the reason being is, especially recently, you probably don't even know this, but the SEC and the uh the Federal Communications FCC are cracking down big time on cold calling and unsolicited texting. And in the real estate business, especially, a lot of people have used that over the years to try to find deals. Well, they're cracking down on that big time and they're saying you can't do that. And if you Yeah, SEC considers that boiler room stuff. They don't like that. And uh that's great for direct mail because that we're losing business to that type of technology. Well, it's coming back to us cause they don't have it, they can't do that, but the only other way they can market is direct mail. Uh, that's beautiful for, yeah, because there's no restrictions on direct mail. You can mail any piece of mail to anybody. That's totally legal. Yeah. So do you have any plans for more acquisitions 2020 on plus? I don't have anything on the table. I'm looking right now. I told you I'm looking for, uh, employees, but it's hard. It's my model is kind of run its course because most of the small print shops are failing. They're already gone. There are any of those left. And that, yeah, with COVID didn't hurt, you know, yeah, that was the last straw for most of them. Uh, there was a lot of people hanging on, but they're, most of those are gone now. And, uh, so I, there's not a lot of that opportunity anymore. So I've been looking for about a year and I haven't found anything that's even close to even worth talking to. So, uh, you know, I'm, I'm, I've got this formula figured out now how to grow this thing organically. So I don't think I need to do that anymore. I think I'm investing in, uh, I'm not, I've solved my hiring salespeople problem too. We now have a formula that works. And so, and I had, and basically what I did there. Just tell you that story. For years, I had, in my mind, I had to build a sales force before I hired a sales manager. So I tried to be the sales manager. I'm not a good sales manager because you need somebody that really is hands-on, really deal with people every single day, and I'm not that guy. I'm the, I'm a bigger thinker. I'm running the business. I'm thinking, you know, making all these deals. I don't have time to really do what I need to do to be successful as a sales manager. But I always thought, if I don't have a, you know, if I have people to manage, Well I have a sales manager? Well, 3 years ago, I decided that model isn't working either. My acquisition model sort of run its course. So I decided to hire the professional sales manager with no sales team to manage and task him to build a sales team. And that's what I did, and it worked. So I now have 6 full-time salespeople and the model's working. Yeah, where did he come from? Well, he's the sales manager. Somewhere else or headhunter. Yeah, I, I, it sort of happened. I think it's divine intervention because I started, I was just thinking about doing this and I doing this, and I got a call out of the blue from a headhunter. So I had not hired a headhunter. guy calls me out of the blue and says, I got this, you know, I wasn't in the market for a sales manager, and he says, I, I got a guy. I know you're not in the market for a sales manager, but I think you ought to talk to this guy, cause I think he might be good for you. And long story short, he was right, and I hired him. It's been great. Yeah, beautiful. So, I wanna thank you very much for taking the time today. This is an interesting uh story you have there, yeah. Yeah. Well, I appreciate it. I appreciate the opportunity, you know, I, I enjoy sharing at a point in my life now where I feel like I'm trying to start sharing some of this knowledge. I enjoy doing things like this. Yeah, that's good. He's ever thought about writing a book? You got actually I've got several books I've written. So, but most of them are directly related to like the one I have, uh, the most recent one is it's about direct mail. It's called Killing it with direct mail for Real Estate Investors. Um, I, I do have a book in mind. That I have an outline for that I never started. It's just generally my philosophy in business that I I used to make some speeches on this years ago, and I've still got the outline for those speeches, and it would be a good book. I just have never sat down and turned into a book. Yeah, sign me up. I'll buy it. Yeah, so I might do that though next year too, so beautiful, yeah, yeah, thank you so much for the time today. All right. All right, great. Good talking to you. Thank you. Bye.