E152: Austin Linney, Investor and Entrepreneur Discusses Buying and Growing Businesses

[00:00:00] Ronald Skelton: Hello and welcome to the how to exit podcast today. I'm here with Austin Lenny. He is an investor, entrepreneur, and mindset coach. I'm looking forward to having you on the show today. And, you were recommended by some people that listened to the show and hang out with me. And they told me I really should have you on the show.

[00:00:14] I'm intrigued about where this conversation and go and what we can come up with today. Thank you for being here today. 

[00:00:19] Austin Linney: I appreciate it. I laugh the first time I ever launched my podcast, I went to a real estate meetup and like six dudes knew me and that was the weirdest moment of my entire life.

[00:00:29] They're like, Oh my God, I listened to the podcast. I was like, nobody listens to the podcast. And I left that meeting. It's like those guys recommended me. I left that meeting. I'm like, All right. Well, I must be doing something right. If people, you know what I'm saying? Like you don't, a lot of times you're speaking into the ether. Most people don't comment. So it's really nice to hear. 

[00:00:46] Ronald Skelton: Yeah. I had the same occurrence, I guess it was last year or something. I've done almost 200 shows. Most there's only about 150 of them out yet. So we got some shows backed up or some, I recorded shows we didn't put on. Mostly it was because attorneys and stuff were really dry and about halfway through the show or three quarters of the show, I was like, look, this is boring.

[00:01:01] We're not going to put this show on Mena. I love you for your time. Thank you. And then I apologize and bow out. But sometimes it's just the dry conversations are dry conversations. But I was playing poker, I guess it was, last year and I sat down and there's a guy beside me and he's like, there's three or four of his teammates are on there.

[00:01:17] I call them pro baseball players. I guess there's different tiers and they were a second or third tier. Local here going to college for engineering. He goes, I was like, you said your name is Ron Skelton, right? Kind of looked at him and was like, did you see my name? Cause you got these membership cards or whatever.

[00:01:31] Like you see him scan me and he goes, yeah, you have a podcast on buying businesses. And his buddy's like, yeah, that's that guy. Like two of them at the table, watched like they're going to go to college, get an engineering degree, but they want to buy a, an engineering company.

[00:01:43] So they've been listening to me. So I've had it a couple of times. So, that was cool, but yeah, it's not very common for me either. This is a small audience, right? this isn't marketing to all businesses where you have a chance of, millions and millions of potential listeners. This is like, buying companies growing through acquisition and selling them.

[00:02:00] So really tightens down who potentially would be listening. Let's jump right into your origin story, man. How did you get started? I always joke with the same joke, like, Hey, you're born. And now you ended up on a show about mergers and acquisitions. Can you fill out that little gap in between for me?

[00:02:13] But, it's just for fun there, but can you tell us how you kind of, got to where you are today? 

[00:02:19] Austin Linney: Yeah. I mean, bumpy road. what's interesting, I think a lot of times we don't realize what our parents are doing. Fast forward to 17 years old, I was making straight A's all the way up until, junior year and just kind of lost interest for school.

[00:02:34] Didn't really see the point. Had a photographic memory. Was just getting in a ton of trouble. And my parents basically said, either you need to go to Beaumont Tech, we were in Houston. You need to go to Beaumont, Texas, or you need to go to military school. Well, I was like, I don't know where military school is, but it sounds better than, I said, I don't know where Beaumont, Texas is, but it sounds better than military school.

[00:02:53] So I'm in. So I went and my parents, my mom went with me. And shortly after that, my parents got divorced. And then I proceeded to tell my story to myself that I was the reason they got divorced. So that led me to not really speaking to my father for 20 years. I got addicted to meth, cocaine.

[00:03:13] I was homeless briefly. And then kind of kicked the hard stuff like two years in, but then proceeded to be a functioning alcoholic for, better part of 20 plus years. Which was hard because I sold wine and I was a master bartender. So it was kind of a rough place to leave. And, we lived, my dad was a doctor. My dad was a dentist. He was very successful. He had his own business. We lived across the street from a couple of Houston Rockets. We lived on the golf course. And then, fast forward two years later and I had nowhere to live. And the only place I could find to live was I stayed in my best friend's brother's closet.

[00:03:49] So I literally slept in the downstairs closet underneath the stairs. So like where you would keep luggage and stuff. Like I put a single mattress in there. There were a lot of conversations that you have with yourself in a hundred square foot room, in the dark when you went from there to, a 4, 000 square foot house with a maid, a pool on the golf course, country club.

[00:04:10] So, but what I realized around 36 is that my entire life, the alcohol, the drugs were not the problem. It was my victimhood mentality, that I blamed everybody. I never took credit for anything. And through some great mentors, through a lot of work, through a lot of deep work, here we are today, 40 years old, buying companies and, changed my life. 

[00:04:35] And that guy was super talented. He always was, but everything I was doing was pointed in the wrong direction. Every behavior, every action, every subconscious thought I had, was the wrong one. And so when I met people from a mastermind that were, had three Airbnbs, 3000 units, multiple businesses.

[00:04:58] They kept saying like, Hey kid, we don't know what you got. Cause you're all over the place, but man, you got something dude. Like keep pushing, keep pushing, keep searching. And one of my favorite quotes of all time from a doctor, a coach of women and men, she said, sometimes you don't love yourself enough to change.

[00:05:16] That you have to borrow the belief in others long enough till you believe it in yourself. And that was basically my story. 

[00:05:22] Ronald Skelton: Wow. So, I have a similar background, not on the addiction, but on the real estate side. I was surrounded by addiction as a young, early age. I was telling you before the show, my dad was an alcoholic until he had thyroid cancer and the thyroid medicine, had his thyroid removed. Thyroid medicine made him so sick he couldn't drink anymore.

[00:05:40] But we didn't associate with most of our aunts and uncles and relatives because they were all addicts of some sort or another. And, my dad needed to be away from it and we'd have families and dinners. I told you I had about 37 cousins growing up. We had four or five that would come over, families would come over for dinner.

[00:05:54] But, I ended up in real estate, through a happenstance, I guess. I had a marketing agency. One of my clients was a real estate investor. Loved how his margins worked. You can be really bad at marketing and make a lot of money in real estate. Like, you have to get results, but you can be mediocre in real estate and make good money. And I'm not mediocre. I was pretty decent.

[00:06:14] So I was good enough. He come down probably once a week or twice a week. He ended up renting the office above me in the same building. And he kept coming down and saying, let me just buy you, take you upstairs and just become part of our team. And then he offered me a piece of his business.

[00:06:26] And so I ended up becoming a part of his team that worked until it really worked really well. And he wanted to treat me as he switched me back. He had majority share, I think I had 16 or 18 percent of his company. He's like, he voted himself to put me back to employee status and take my shares away one day and still owed me about 60, $65, 000 in back pay.

[00:06:45] And so I left, created a competing company and stomped on all over him. But, we did short sales, we bought houses out of foreclosure, we negotiated short sales for other people and, did that for years. I'm surrounded in here in this little portable office by still closing documents, the red folders of keeping my financial records for seven years kind of thing.

[00:07:05] But, I did the same thing. I ended up in mergers and acquisitions cause I hired a performance coach. Somebody like you, somebody really good with mindset. I thought I was getting burned out again because I'd switched careers so many different times. But, there have been many times in my life where I would, I get into something going really good and just the next thing I know I'm doing something else. And I thought, well, I'm doing that again.

[00:07:22] That's why I'm wanting out of real estate. And,the market was drying up. It was getting really hot and short sales were going away and they became so difficult to negotiate. Banks wanted like premium prices for the houses anyway, so there's no profit in them for us. So I couldn't tell in my own, I wanted somebody else to take an outside look inside of my head. But, so what led you into, so you're, are you still doing real estate? 

[00:07:44] Austin Linney: We will. Basically last year, around August, we had a bunch of deals under contract. Hotel, wedding venue, apartment complex, just all, big properties. Almost 25 million worth of deals, couple different partners, and for whatever reason, in the span of 10 days, I didn't have anything to do with it. Either the partners backed out, sewage was an issue, insurance was an issue.

[00:08:10] The seller wouldn't come down. Long story short, all the properties went away. And I had just had enough with lenders, investors, and just in general. The market was tightening up. Lenders are out of their mind. Sellers are drunk. And I just find some similar to what you said, I find the real estate market to be a little myopic from time to time.

[00:08:31] Kind of small minded thinking, they think they're rock stars and all that stuff, and it really doesn't matter. Life's about impacting people. That's what it's about. So what we realized as a group is that we no longer wanted to worry about lenders and banks. We wanted to become the bank. And so in order to do that is to buy cash flowing businesses, then use the money from that to build storage facilities, affordable housing, et cetera, rentals.

[00:08:55] And so we kind of flipped it on its head and that's what we're pursuing as we speak right now. 

[00:09:00] Ronald Skelton: That's awesome. That's awesome. And then you did acquire a heat and air company, right? That does heat, air, plumbing and electrical and stuff?

[00:09:06] Austin Linney: Yeah. Heat and air and plumbing and electrical. Basically, the guy had been in the space for, since he was 16, he's 65 now.

[00:09:14] He's had this current company for 25 years. Made it through all the recessions, made it through the different things, kind of in a rural town. So started in the last couple of years as his competition. Started falling off. Started taking the lion's share of the commercial work.

[00:09:30] He's a really good guy too. I mean, that's the most important thing. And we came in and saw that they were still on paper. No CRM. He told me flat out when I first met him, he said, if you could hire 15 people, he's like, you could triple the workload. And then when I came in my first day, there was a stack of papers in folder holders, like up on the wall. And I started walking to them and the office manager looked at me and she goes, well, you're going to get a kick out of that.

[00:09:59] And so I picked it up and I'm, I know you can't see if you're listening, but I'm saying like as big as my hand can hold, it was plumbing and HVAC jobs that we didn't get to the year prior. They were just too busy. And I said, okay, all right, got it. So I'm going to go hire. We're going to put some systems in place.

[00:10:17] And we're still currently doing that. We hired up big time. We went from, 19 people to 48 in the span of five months because, no job postings, just roared about. Landed a big job. I mean, it's still a complete shit show some days. I mean, perfect example is my number one employee just quit today for no reason.

[00:10:35] He's been gone for two weeks. He honestly said, like, I'm not even upset with you. I don't really care. He's like, I don't mind my job, but 12 years of working here and I have some beefs and it has nothing to do with you and I want to go. He's like, you're not going to yell at me?

[00:10:50] I'm like, why, what's the point? This is a small town. And if you feel like you need to do that, just know the door's always open for you and great. And so what I realized about small businesses, mainly when you take over, is it requires a calm mindset and personality, or you're never going to survive because the people will move and operate how you do.

[00:11:16] And if you're all over the place and you're stressed out and all that stuff, well, good luck. It's not going to work good for you because they're going to smell it. 

[00:11:24] Ronald Skelton: Yeah, it's a in construction heat and air. Although each one has its own culture and kind of a subculture. Like you, I was in real estate, so I was around all the heat and air. My family, one whole wing of that family does nothing but heat and air, right? 

[00:11:42] Like they, they have a big heat and air company and all their cousins and all of them do it. And, if they're listening, they'll get a kick out of this one. I've only hired him for one job in my entire life.

[00:11:51] And, it's because I know the inside of their business. They're always fighting and they're always stealing stuff from each other. They're always, it's a drama fest. And, like you, it's a dirty business to some extent. With theirs anyway, and I'm sure there's great ones out there, but there's a different subculture.

[00:12:05] There was a guy on one of our business hangouts. Young guy straight out of Harvard. And he said, I'm going to buy a construction company. And, I was like, No, you're not. He's like, why?

[00:12:16] I said, that's not gonna work. And he's like, what do you mean? I said, you're too fucking soft. And he said, that was rude. I said, see right there. 

[00:12:24] Austin Linney: Hey, dude, if you like 3 percent margins and you like to get rolled up on 24/7, yeah. It's a bloodbath. It's a bloodbath. 

[00:12:31] Ronald Skelton: It's a different culture, at least in Oklahoma where I'm from, right. 

[00:12:34] Austin Linney: Well, the commercial, the commercial, the residential, the plumbing, the electric, those are four different people, with inside a business. And you have to have enough experience to be able to talk to each one of them and it's just a different world. 

[00:12:47] Ronald Skelton: And well, the other thing he's talking like framing and concrete, slab foundation and stuff.

[00:12:52] And I was like, it's a different world. It's a different culture. You grew up Ivy, you are Ivy. I don't care if you're a Golden Globe boxer. They talk to each other different. They handle conflicts differently, you know.

[00:13:03] Austin Linney: You know what's interesting about my guys? Cause some of my dudes are 65 and 70 and been around the game for a minute.

[00:13:10] They might not have graduated college. Barely got by on high school, but let me tell you something right now. They smell bullshit, come from a mile away within 2. 5 seconds. And here's the deal. They can't get dressed in the morning, but if something came out of your mouth, they remember it. Like it's as simple as that. And like these guys don't get it and so like I grew up in that what you said, was that nice neighborhood the country club. But what you don't know, what I didn't fill you in, is the town I moved to when I was 17 was the sticks. Was camo, was cowboy boots, was fields.

[00:13:42] And that's the only reason why I understand these people, because my grandfather and my grandfather's brother are those people. And I have the best of both worlds. I can walk in a court, a nice M& A office in E.C. or in Austin, but I can also put on the boots and go out and shoot some shit on a job site.

[00:14:00] There is a rare situation that I have available to me. 

[00:14:04] Ronald Skelton: I grew up a painter's son, remodeling houses my entire life. He had a general contracting type of business where he did, but he only did the paint and sheetrock. He subcontracted everything else out. So from the time I was old enough to climb a ladder and until I was 20, I helped either run it or be part of it. 

[00:14:21] So being around that world, and then I went and got my master's degree and everything. So I've got both sides of the picture, but, I probably do better in the, in the business side of things now these days, because I don't have a tolerance.

[00:14:34] We were talking earlier about all the different things, and I honestly believe that EQ outranks IQ all the time as far as success. Your emotional intelligence, your ability to deal with stresses in life, your ability to perform under pressure, is way more important than how intelligent a human being is.

[00:14:51] And to be honest, not everybody in those spaces are, and have a balance in that space, right? I have a guy who just graduated law school. He's a buddy of mine. He invested in a construction company. I was laughing. He said what are you laughing about? You're ready for a shit show. And he's like, what are you talking about?

[00:15:06] So those guys fight to solve their problems and he calls me two days later he's like, the police were at one of our job sites. There was a fistfight on site. I was like, yeah. So this is Oklahoma,

[00:15:14] Austin Linney: This is real real. Guys, I mean, as real as I fucking can okay. When I have to lose it, and let's just be clear, I don't like it. It keeps me off center for a couple days.

[00:15:26] But my COO, who's a little more calm than me, kind of the ops guy, 20 years as a plumber, he said, I prefer that you don't, you breathe a little bit and don't do that. And I said, no, I respect that. And I'll take ownership, but I also need them to know that I'm a little bit crazy.

[00:15:41] And I need them to know that I can go there, so they kind of keep it in line. And long story short, we had an old sales guy who was bullying the other employees. And nobody was going to say anything, and I had to square up to him. We didn't fight, because I'm not a fighter. But it got nasty. And he's like, are you okay?

[00:16:00] And I'm like, yeah. I'm gonna be messed up for a couple days because I don't like losing my shit. But somebody had to stand up to the bully and I gained a lot of respect from the guys that saw that. Dude, it's crazy, right? I came here January 26th. I was here for nine days, right before Christmas, right before I moved here.

[00:16:18] I went out with the two oldest techs we had. I got in a car. I thought he was kidnapping me. That's another story for another day, but he said, let's go offroading. We went up to the mountains in 45 minutes. He told me everything I needed to know, to be wildly successful. And I didn't even have to ask. He just started telling me.

[00:16:39] So only my ego would not allow me to listen to the man that's been inside this business for 15 years, to tell you what everything's going. And guess what? He said, look, the office manager that's running the company is embezzling money and he's a piece of shit. And you know what? He was! And so like, it's not that complicated.

[00:16:58] Be quiet, ask questions, and listen. And they're gonna tell you exactly what to do. And then there's certain places you have to push them farther than they see. He's the same guy that said, screw your iPad. Now he's the guy that says, oh my god, I wouldn't live without this iPad. So, it goes back and forth.

[00:17:14] Ronald Skelton: It's interesting how much the employees at these companies really know what needs to happen, what needs to go on. They quit telling the current owner, cause years ago or weeks ago or months ago, whatever it is, they stopped feeling heard. Even during the due diligence process, if the owners allow me, I've been through a few deals, due diligence is where we're digging in and got to meet some of the employees on one on ones, they just open up to you.

[00:17:37] Austin Linney: You know what's even better? I bet you nobody does this. And I only did it because I was trying to get people back. I talked to people that had left the company. 

[00:17:44] Dude that was amazing. I got so much from doing that and that's nothing but a 30 minute call. 

[00:17:50] Ronald Skelton: Yeah. I'll call him up, I'll find him on LinkedIn or whatever and say, Hey, I see that you recently switched your job, used to work there.

[00:17:56] I won't tell him because we're under NDA. Like, I'm really curious about that company and you're like, you think about working here? I'm like, yeah, and then they'll give you the dirt, right? I'm prior military intelligence, so I've got this intrigue thing of finding things out about companies from 360 degrees. 

[00:18:10] Same way we would find out about anything else. Like you look at what you, assets you have, and then look at all the collateral information that's available and you figure out a story from both what's publicly available and what's, what's not being said.

[00:18:22] And now who do I ask to get the answers to what's not being said? And, the favorite thing I would do is sit down with anybody that works there and go, if you were to buy this tomorrow, especially if they know it's being sold, they have to already know. But if you were to buy this tomorrow, what would you fix?

[00:18:37] Austin Linney: And they do that thing where they're like, don't change too much quickly. But like my guys were asking for that stuff for seven years. I'm gonna do it right away. Like uniforms and like a couple things. It wasn't like crazy stuff and it just shows a commitment, right?

[00:18:52] They were underpaid. So I will tell you that I've learned a lot too, is that, some took advantage of me and some had to get let go. But what's interesting about somebody in that, if you're buying a company, like I hired up knowing that I would lose some. And they look at it and go, oh, you're taking my job away from you.

[00:19:13] And I said, no, no, I'm hiring up. So I have flexibility. If you don't behave right, I'm not going to be hamstrung. And that's what's happened. It's been a couple months. We've got some guys that are getting a little too comfortable. We got one that did this, that was disrespected. One of the other employees, we got this guy who lied about something like, okay. Great. 

[00:19:33] And to be honest with you, it helps. Our payroll was too high during the summer and we're all right. But if I would be scrambling, if I didn't have that, now we had the luxury of really picking the employee that we want to move forward. At first it was about bodies because we were just trying to catch up with work.

[00:19:50] Now it's about, are you a fit? And I think one of my specialties and it's been my whole life is I can see special things in people that they can't see themselves. And so like I made two hires in the office project manager role. That I told him in the interview, they weren't capable of doing the job.

[00:20:10] I said, you're not qualified enough. And he goes, why are you telling me this? I go, cause I believe that you can be. And he's young, 20 year old, took him out of a situation that he didn't love working at a sandblasting factory. And he's been my best hire. He's crazy smart, no confidence, but watching him grow and run meetings with 45, 50 year old techs, that's our favorite thing to do. 

[00:20:32] I'm looking at this kid, just blossoming. It's amazing. 

[00:20:34] Ronald Skelton: That's really cool. To be able to see that, a lot of times a lot of people think this, they think you should hire industry to industry. So if you're doing commercial electric and you needed a commercial electrician, you need to hire somebody that's had 15 years in commercial electricity, right?

[00:20:51] Where maybe because of specialized skills and stuff, but maybe that's not the case. Maybe the case is, you hire somebody that's got 10 years residential and he just really finished school on the commercial side of it or whatever, got retrained, restarted, if there's anything neat.

[00:21:06] Any codes or anything he knows, but he's really passionate about growing into that space. Who's going to put more efforts? I mean, it's been doing it for 15 years and just another job. And he's got to come in and put in his 40 and go home. Or the guy that wants to come out and make a name for himself. Cause he wants to get out of the residential side.

[00:21:21] I think the guy with the, with something to prove. I always look for somebody who's got something to prove. Because, 

[00:21:27] Austin Linney: They have kids. Are they ex military? Are they ex addict? Like those are the things that I look for. Most of my guys are ex military. Just the area. And they're organized.

[00:21:37] They're driven. I don't have to. But a lot of times it's giving them, what's crazy about life? Like a great job goes a really long way. So like I do it even when I don't really like when I need to, but because it means a lot to them. And one of the things I'm obsessed with, and I think I'll write a book on eventually, is leverage to somebody else, 10x to you, it's nothing. 

[00:22:01] Okay. And what I mean by that is, I got a new sales guy. He came and left for his current company for me. The reason I hired him, he knew nothing about HVAC and plumbing, but he was so damn good and so damn annoying to me, I had to hire him. He was super smart. And He's been crushing it, and he's been helping us with something extra.

[00:22:19] And some tech and stuff like that. Well, their car got broken into, and this, that, and the other, and blah, blah, blah, blah, blah, blah, blah. His wife can't go to work because her car doesn't work, and he's trying to figure out how to make a thousand bucks. Well, I was going to wait two months to pay him for this thing that he did, but I went ahead and wrote him a check for a thousand bucks.

[00:22:36] Don't get me wrong. Like, a thousand bucks is a thousand bucks, but to the company, it's not the end of the world, right? But to him, it feels like a hundred thousand bucks. So now I got somebody, not only do I have him bought in, I've got his wife bought in. Oh my God, your boss did that? So now we're in a different realm.

[00:22:53] Right now we're in, holy shit, let's stay committed. Those are the opportunities that business owners and CEOs don't take advantage of enough. 

[00:23:00] Ronald Skelton: They don't. And they overlook them, or they think that, they're being taken advantage of by even being asked for something like that. You're being given an opportunity, right?

[00:23:09] You've been given an opportunity to prove you're loyal to your, your employees and gain the loyalty back. It's impressive. So you've got heat, air plumbing and electrical. I like the combination because of the cyclical nature of heat leaks where I'm from originally here. It's kind of stable year round. 

[00:23:27] But I consider heat and air in Oklahoma, when it's freezing cold, you're going to get your heater. Your furniture is going to be fixed. So when it starts turning, like, and I have a bunch of friends that own heat and air businesses. And like when it turns really cold, they're out there fixing furnaces and cleaning them and make sure they kick on because nobody wants to be cold.

[00:23:43] And then when it hits, hot August nights, when the humidity is up and it's 110 during the day and 95 at night, nobody wants to sleep in the sweat bath. So they're gonna fix their AC.

[00:23:53] There's a lot of times in the year where you just slow, right? Anytime the temperatures are mild, especially in mid market areas where, where income is more important than fixing home maintenance type of stuff. I could see that the heat and air would be very cyclical. Where I'm from, plumbing would be cyclical a little bit just because during the winter stuff breaks. 

[00:24:13] So, how's electrical? I guess that goes with the building cycle. 

[00:24:18] Austin Linney: Yeah, I would say it's our weakest component. It's about a year out from having the guys, one guy's at school right now. There's an opportunity there. When I came on the lead plumber was a guy that was retiring. So really we've put mainly our focus on building plumbing.

[00:24:34] We even moved a guy in from out of state, who had worked with the CEO prior, who was looking for a change. But what we found, cause we finally got data last week actually, was that plumbing per percentage margin is making more money than HVAC, because it's been a mild summer here. It hasn't been crazy hot.

[00:24:52] Winter was mild too. We still have a ton of commercial projects, but we're trying to build up the plumbing in the residential side. And we're having to expand the market because we're in smaller counties. But yeah, I mean, it definitely is cyclical. I was reading something the other day from John Wilson, and he was talking about, because his family's owned plumbing for years, he said, I wonder if those big PE firms are starting to realize that plumbing is the real cash cow, keeps the lights on.

[00:25:17] The biggest issue that we had with the company is the current seller or the seller loved commercial work. He loved engineering design. That was his game. So he created a business that was, least amount of BS possible.

[00:25:29] But the problem is that works great, but you could be waiting weeks and months on $100, 000. You could be waiting weeks on 200 grand. And so we're really building up maintenance programs, plumbing, and residential to kind of keep the cash flow steady, to kind of build the business the right way. 

[00:25:46] Ronald Skelton: I can see that.

[00:25:47] And, so I was looking at roofing and particularly commercial roofing. And the concern I have with commercial roofing is you're always getting paid by the insurance company. So you have to have huge cash, either you have to have huge accounts with your suppliers. Like I'm talking, hundreds of thousand million dollar accounts with your suppliers, because you've got to float the material costs and labor costs until the insurance companies circle around and pay you.

[00:26:11] Austin Linney: We have a job right now, 400,000. Outlay. Ahead of time. It's real. Right? And you can't ask, you can ask, and we're gonna get most of the parts paid for.

[00:26:21] But you can't, you have to spread the payments out over 15 months. So yeah, it becomes a little bit of a game, right? Because payroll is the highest expense and then materials are the highest expense, but yeah, when you kind of balance it out, it's funny that you say roofing, we're in the process of looking into roofing as well, because there's really nobody in the area.

[00:26:37] We like the margins. One of my buddy owns a very successful roofing company in Texas. So he's going to kind of mentor us. But yeah, I mean, there is some games and there is some things that are interesting. For us, our marketing company that we hired is a friend of a friend, who started his HVAC company from his garage. Built it for 12 years and then sold it to Apex for 28 million.

[00:26:59] So he understands the space. But when he describes being in business in San Antonio, Texas and Austin, it makes me want to pull out my eyebrows because it's all about ad spin. It's all about every dollar. I'm in a small rural town where most of the competition has retired or they're about to retire or they've gone away.

[00:27:21] I don't have to fight for business. Our ad spin is nothing. We just started marketing for the first time in 22 years and I'm on the radio. So you really have to look at your company and see where money is best spent for you. I make way more ROI asking the chamber of commerce, does anybody need some work? Than I do spending $30, 000 on a ad campaign.

[00:27:43] I talked to a guy the other day in Kansas city who has a company, I think they're doing 9 million a year. The company next to them, five minutes away, is backed by a PE firm. I think they're doing 130 million a year. And he goes, I'm just going to keep spending. I go, I don't think that's the play, bro.

[00:27:59] I said, you're going to get smoked. But look, I said, look at this map down here of all these people that aren't being served. I said, go down there, go to a meetup. You're not going to have to spend any marketing, get one gig, two gigs, three gigs. And I was like, then, your private equity is never going to touch that because it doesn't make sense.

[00:28:16] And now you created a whole new market. You didn't have to spend money to get it. 

[00:28:20] Ronald Skelton: Yeah. And the roofing space, I looked at both commercial and residential. Residential is kind of a where I'm from anywhere. It's kind of a storm play. Meaning that, Oklahoma has a lot of storms. Texas has a lot of storms.

[00:28:32] You basically need a team that can mobile up pretty quick and go wherever the hail storms and wind storms are. When I got into mergers and acquisitions, I interviewed a lady, we were doing a marketing rollup by marketing agencies. I interviewed a lady and she decided she didn't want to sell.

[00:28:45] She built a lifestyle business and she also built us, in parallel with her marketing agency. She built a charity and she funded her charity from her marketing business. But the one thing that she was remarkable at, she could take a roofing company that was doing, she wouldn't touch if you weren't doing 500k or more, close to a million, but she could push you to 8, 10 million, $25 million in revenue almost overnight.

[00:29:07] If you could scale and buy the trucks and get the crews. And the way she did it is she and her team built software to track storms and could tell you ahead of time, you need to be prepared to go to Kansas, need to be there Wednesday morning at eight o'clock. This storm is going to drop hail all over the place.

[00:29:22] And, I'll tell you a second, it starts dropping hail and you start driving. And they would go canvas those neighborhoods. And the other thing is she wouldn't take you if she find out you're doing crappy work. Your reputation precedes you. Like you pull in town.

[00:29:34] People need to know that you're, there's some storm chasers in that space that are horrible, but there's some awesome people that'll come in and do the work and do a great job. that appealed to me, but the commercial side is, there are a hundred thousand, 200,000, $300,000 commercial roofing jobs, and they rely on the insurance to pay you back and they're slow pay.

[00:29:52] I know, private money lenders that lend money to roofing companies on a regular basis. Just so they can get the next job done, pay their crew and get the materials while they wait for an insurance check that is a 60, 90, 120 day pay. 

[00:30:06] Austin Linney: Yeah, it's rough. The insurance game is, it can be done.

[00:30:09] It can be done right. But yeah, I mean, it's rough where we are. We had to basically tell this company, they would call us like 10 times a week. And we'd be like, no, we're not doing any work. We've said the same thing for six months and they can't wrap their head around it. Cause I can't talk to anybody.

[00:30:23] I said, I talked to a guy the first week I was here and I said, raise up my hourly price. He said, fine. He's never done it. And I'm not going to do work for you. Good luck. Like it's as simple as that. And it creates boundaries, but more importantly, it creates an understanding. Like here's the problem with me and God bless my COO, is like, I am a go getter.

[00:30:44] Like I want to do, I want to support the community. All I care about is helping out, old people, addiction people, anybody that wants to change their life. That's what I care about. And because I do that, I see a need in the community and I want to do it. That doesn't mean that we make money doing that thing.

[00:30:59] And so there's a fine line between what gives us brand awareness and helps us out and supports the community and what takes from us. And I think one of the conversations I have with myself is I'm 40, I'll be 41 in December. I said, what would it look like if for, 10 years or five years, you just did your core thing.

[00:31:20] Make the main thing. Like, how would that look for the first time in your life? Right? And I kind of have these three buckets that I love and I'm just gonna do those things and I'm not gonna get, we're so enamored with the new thing, right? Where AI and all this stuff and I'm, look, I use AI. I got no problems with it. I got crypto, I'm in.

[00:31:40] But you're still going to need your toilet plunged. You're still going to need your heat on when you're 80 years old and it's 40 degrees outside. You're still going to need your lights to turn on. I'm good. And I think a lot of people get distracted. And, in my twenties, I wanted all the fun and the sizzle.

[00:32:00] And now I want boring as boring could ever be. And it's just, it's just a better, more balanced life for me. And I'd see more upside for it in the long run. 

[00:32:10] Ronald Skelton: When you're saying, you want to do things to help the community and stuff like that. And your, your operations guy has to reign you in occasionally.

[00:32:16] Are you talking about cases where somebody can't afford to get something fixed and they really need to? 

[00:32:20] Austin Linney: Yeah, that's a personal call. It was our lead sales guy and project manager begged me. That was the first thing he ever said to me. Look, I got no problem raising the prices, but you have to be able to make a call from time to time.

[00:32:31] I said, I'm in man. I'm in. Good. We do some construction work from time to time that's not profitable for a couple of people that can't find anybody, cause it's real hard to find anybody here. But that's gonna, 20 excess. So just things like that. We almost give to most of the charities in town. Little league, the festivals, we sponsored the fireworks, stuff like that.

[00:32:52] So we try to help as much as we can because the business is a beacon in the community. And so stuff like that is where we try to lend our, we had like national cleanup day. I brought my guys with the trailer and we cleaned up the whole street and we took the hardest part because my guys work, construction age, in fact, they don't mind.

[00:33:08] We had a big trailer. So that's the kind of stuff I try to do for the community. That's a big deal. 

[00:33:12] Ronald Skelton: That's important though. You get out there and people see that. Especially if your truck, your trucks are logoed up and you guys are wearing a shirt with something on it and they see that you're out in the community doing different, making a difference.

[00:33:22] You're engaged in it. Especially, did you just move there or did you live there when you bought it?

[00:33:26] Austin Linney: No, I just, I never been to Pennsylvania before. If I had not done that, they already didn't like out of towners. Because Pennzoil, Pennzoil Standard Air left, went to Texas, so they already didn't like Town and Outers.

[00:33:36] The cities had a rough go. So I had to really win. I tell you what I did that changed everybody's perspective and really got, and I didn't even do it for that reason. I was really blown away by what happened. And when the seller said something to me, I knew it was bigger than what I realized. So we have a Votech school here that has 26 different, that splits the high school.

[00:33:55] A lot of the people that work here are trades, ITs stuff like that, right? So there was seven seniors graduating the HVAC program. So what I did is I called my vendors and I got them to donate tool bags and tools, everything that you would need to be a worker. 

[00:34:11] On your first day. We only had one kid that was working for us that was in the program, do that thing. Hit the Facebook and hit the paper and the seller's enemies that he's had for 20 years said, Oh, damn, something's going on. This guy gets it. That's when I realized, it costs me 200 bucks or something like that.

[00:34:33] And I'm going to do it for here on now. Because it was just the right thing to do. But that's when I realized, Oh, okay. This is a different game here. They just needed that shot of confidence. 

[00:34:43] Ronald Skelton: I used to have a realtor friend and she volunteered at high schools and vote Texas stuff.

[00:34:48] And anytime she'd have somebody, cause we had a real estate entrepreneur center where we train real estate investors. And, usually you had to be 19 or older to come in there. We'd let you if you were 18, but you had to prove you were going to do something. You're straight out of high school, barely. you show up to two classes, then show up the rest of them, you're wasting our time. But, occasionally she would test somebody like this kid is 16, he's a rock star, he wants to learn this stuff, he wants to come in here, you know.

[00:35:10] We'd hold special classes and teach those guys and do things in the afternoons. When we usually would do it like Tuesday at noon, cause they're in school. We'd line up three or four of those guys and we'll put them, we'll start doing it in, Tuesday evening at 5 PM.

[00:35:22] We had young guys coming through the program and stuff. And fun thing with that is, is, we did it to a couple of those guys. If we catch you, a lot of people take the same class over and over again. If you come to the cycle the second or third time we catch you in the cycle, we put you up front of the room and have you teach it.

[00:35:37] But we help you. We walk you, they have the slides. They have the material. But, the student becomes a teacher after a little while. Cause if you haven't got it the first time, having to teach something will ingrain it in you way better than having to sit and listen to another lecture on it.

[00:35:51] Austin Linney: No, a hundred percent. I think it's interesting. So about a month ago, I started sitting with my sales guys once a week, Wednesday mornings. And we started talking about business books and mindset books, and I pulled out my favorite books and my chapters and we read it and we discuss it. It's amazing.

[00:36:07] Ronald Skelton: What is a, heat and air guy bill out at in your area?

[00:36:11] Austin Linney: So when I started, they hadn't raised the prices in seven years. It's 85 an hour.

[00:36:18] Ronald Skelton: In Tulsa, Oklahoma. In Tulsa, Oklahoma, a hundred, 110, like said. 

[00:36:22] Austin Linney: So there's a guy in town. True story. He wants me to buy his business.

[00:36:25] He's been in the space 50 years. The oldest company in town. He charges 40 bucks an hour. And complains how he doesn't have any employees. And I said, well, dude, what do you expect? But long story short, we went up to 95. Then we went up to 105, then we went up to 110 and now we're at 125, 135 an hour. And guess what?

[00:36:45] Not a single customer has said a damn thing because we're the fastest. So this area has an issue with getting people to do anything. So like this is a true story. Guy comes in pays his deposit on a new water heater or something to do with plumbing. I'm standing right next to him and he goes, this is two weeks ago.

[00:37:03] So we're talking about mid July. He goes, all right. I'll see you in September. And I go, excuse me? He goes, yeah, I'll see you in September. I said, you mean tomorrow? And he goes, I don't understand. I said, we'll be there tomorrow to fix your problem. He goes, is this a scam? And that's how they think. And so it's like, you have to be comfortable with having extra guys.

[00:37:26] So when a call comes in or emergency, you can go do that, or you can get to it the next day. A lot of people are worried about having extra guys, that's where you have to build out the training, the education, the knowledge. So when they're learning something, gaining something, even when they're not working.

[00:37:43] Ronald Skelton: I get it. In the real estate business in Tulsa, I had my favorite heat, I'm still friends with the guy, Tim cooks.

[00:37:50] He was the guy I called my heat and air. It was broken on one of my rental properties or somebody was like, I rented to a lot of people who are older and stuff and had families. Now all of our properties are owner finance. I don't have a single rental anymore, but, now it's their heat and air.

[00:38:02] They called me, my heat and air is broke. I'm like, yeah, your heat and air is broke. You call a heat and air guy about the house, I'm a bank. That's a different world. But,when we needed them, Tim knew good and well, I couldn't wait two or three days. He's, you know, it's Oklahoma. It's 110 degrees.

[00:38:15] These guys, they have a newborn baby. So I had three other guys that called him right after him. Like somebody needs to get somebody over there right now. And I knew basic stuff. 

[00:38:24] Austin Linney: I heard this on a podcast, like he said, one of this guy became wildly successful being a human router.

[00:38:30] And we had this mindset to always say no. And I'm like, guys, I don't care if we can't help them, but we can be a resource to help them. So say, yes, let me deal with it. Now we become somebody that they trust, instead of somebody that says no to them. You know what people don't like? Especially in this technology world? No.

[00:38:51] They hate that word, right? I was talking about this the other day on a podcast, like really wealthy guys, like wealthy, wealthy guys, like billionaires. They haven't heard no in like 15 years. 

[00:39:01] Ronald Skelton: So let's talk, I mean, I'm really intrigued by your mindset coaching stuff. I spent a lot of time in that space.

[00:39:06] I wouldn't say battling depression or anything like that. I'm prior military. I've got my own set of things going on in there. But I would say indifference. I think, which is worse in my mind, than depression or anything else. For a little while there, I just didn't care. I had what I had. It was good with what I got and I was just done. 

[00:39:23] And, so I went through different programs that are out there. I studied cognitive behavioral therapy, NLP. I've got certification on a bunch of stuff. I don't coach anybody in that space, but I did it for me. I did some of Tony Robbins stuff. I did everything that Landmark has.

[00:39:37] But mainly to work on, I have to say nobody ever gave us a blueprint of what it means to be a human being. And it's very, very powerful to reach out to people who've got a better grasp on that than you know you do. 

[00:39:49] Austin Linney: Yeah. Well, a hundred percent. There's a couple guys on Twitter, that I'll talk, right.

[00:39:55] I'll post. And they'll slide me a DM and they're like, did you do Landmark? I didn't. I got coached by a bunch of guys that did. and then another group. But you know what's crazy is that, this is my kind of thing. I tell everybody is like, you know what?

[00:40:07] And just so we're clear, like I'm a little under the weather. I've got a splitting headache. I was worse yesterday. I'm better today. Half the company's sick. Like it's a thing. And my fiance is like, take the day. And I'm like, it doesn't work like that. My schedule is jacked. You know, I gotta go.

[00:40:21] But what's interesting about life is a fever is there and your body trying to regulate issues within your body. And so the first thing that we reached for is a pill. Instead of letting the body do, what did the body does? Same thing I love fasting. You know what fasting does? Allows your body to heal. Who would have thought that not eating allows your body to heal? Oh my god revolutionary, right?

[00:40:44] What I found and I'd be curious to hear what you think, the podcast been going about four and a half years. I've done like 550 episodes. I got divorced my first year. I was doing 9 a day. I didn't know that people didn't do 9 a day. I was just having conversations, right? I did like 200,

[00:40:58] Ronald Skelton: I recorded 10 this week.

[00:40:59] Austin Linney: But what I'm saying is, there's a lot of months I'm not engaged. I don't really want to be there. But I know that the only thing that matters when I got sober, was consistency. Consistency. Every day, showing up, whether if it's a small percentage or the full gamut, getting it done.

[00:41:19] That one conversation, that one call, that one post, I can't tell you how many times I posted something that I didn't want to post, that led to a client that changed his life. And I'll tell you, I'll tell you the story that, that I swear to God, I'm so sick. I hope I don't cry. I was coaching for a while and I posted the story of a mentor in a group called GoBundance and I was going back and I was posting clips from when I first started my podcast.

[00:41:44] So this was years prior. I was just like tired and I was reposting episodes kind of like you didn't see it in the beginning. So I said, yeah, I don't feel like doing that, but I posted it anyway. And I got a DM at eight, eight 59 on a Monday. And the guy said, man, I'm stuck. He's like, I hate my job.

[00:42:02] I hate the people I work with. He's like, I'm never around for my family. This is just bullshit. And I was like, look, dude, if you want to go to work, we can start tomorrow. This is what it's going to cost. We're going to go. Boom, signed up, sent the money. We started the next day. He left his job 26 days later.

[00:42:17] The first month wholesaling, he made 70, 000, right? And so on and so on. Now he built this big company. That's neither here nor there. Okay. A lot of that was him. Some of it was me. About a year later, we're not coaching it anymore, I go to his house in the RV. And I walk in his house, he's got three young kids.

[00:42:33] I walk up to his youngest daughter. And he goes, hey baby. You remember a year ago, when dad was always at work and he was in the office? He goes, this is the man that allowed your father to be in your life everyday. I lost it. So let me get this straight. Cause I responded to a DM and I posted a post that this man's life will forever be chasing him and I are gonna buy businesses together.

[00:42:57] He's one of my best friends still to this day, and he almost turned back about two and a half months in he had a rough month. I was in Costa Rica and he was texting me like a banshee. I think I made the wrong mistake and I said, you know what's great? I said, why don't you go to your fucking old job?

[00:43:13] And I said, why don't you tell your boss that you never want to see your damn kids again? And he said, F you got it. I'm out. And I realized in that moment, this podcast, that coaching session, is not about me. It's about those kids. It's about that wife.

[00:43:31] It's about the people that he's going to start coaching now. That's when you realize that you can show up no matter what. 

[00:43:39] Ronald Skelton: So what do you say to the guys that are out there right now? There are search funders who just finished their master's degree. But I'm saying I've got one I interviewed here recently who's, he's 20 something months into his fund. He's not a, not a recent graduate. He's actually, his corporation's 24, or 22 months into a 24 month fund. Meaning they funded you for a 24 month search. And they're starting to look at like the wall. Like, here comes the wall.

[00:44:03] I'm going to run out of time. And, what do you say to those guys who are, they're up against the wall. They kind of thought they wanted to do this, but now they're at that spot where your buddy was. Where the question and their choices of going down the,

[00:44:15] Austin Linney: I will explain if you make me a promise that you will send this to him.

[00:44:19] Because I am the contrary coach. I'm the out of the box coach and he's not gonna, he's gonna hate what I have to say. Don't do anything. Okay, hear me out. For five days, for seven days, put it down. Jump in the car, put on tennis shoes, and run or drive till you have nothing left. You are too close to the wall.

[00:44:45] I have a rule with my clients. When there's a massive decision to be made, you're not allowed to make it for 48 hours. It drives them up the wall. And I had a client that didn't know what to do. He was shutting down a $250, 000 business that he invested in. And he was so mad at me. This was like two sessions in.

[00:45:04] He's like, I hate you. And I said, look, I'm trust me. Just take a breath. Go hang out with your wife. Two days later, signed a million dollar coaching consulting fee to start a fund with the guy. He was like, it was a sentence that you told me that changed my life. You can't see because your life is like this right now.

[00:45:26] For anybody that can't see, your phone is pressed up against your face. And you forgot why you started in the first place. Because let's be honest, does he have a degree? 

[00:45:38] Ronald Skelton: I believe he does. Yeah, absolutely. 

[00:45:39] Austin Linney: Okay, so let me get this straight. Your default is you have a college degree and you can get a job making over six figures and you're gonna beat yourself up because you couldn't find a business in the hardest market there's ever been to find a business.

[00:45:54] Oh, that sounds about right. 

[00:45:56] Ronald Skelton: And there's a thousand of him. There's guys out there where they're at the end of the fun. 

[00:46:01] Austin Linney: You know what really pisses him off? I shouldn't even say this. The first day I looked for a business, we went under contract.

[00:46:08] And because that broker had this business, we bought this business. And hear me out, you ready? I was supposed to close in January. I closed Wednesday, because we found embezzlement. And we found insurance fraud and I could be upset about all the things that I found, but what nobody knows that I haven't talked about yet because I refuse to when it's time I will that we're buying an entire business.

[00:46:36] Owner finance, no cash up front. So am I thanking this guy, this piece of shit that I'm turning into the police Wednesday, am I thanking them or am I gonna be mad at him? The road is what the road is. But you have to get distance even if it's for 24 hours. You have to get distance from the moment because you're pressing. When you're pressing you're never gonna find anything. 

[00:46:55] Ronald Skelton: So we're wrapping up time here. We're getting close to the end.

[00:46:58] I do appreciate your time. If somebody can remember one or two things from the show, what would we want them to remember of you? 

[00:47:04] Austin Linney: I would say that with every issue becomes an opportunity. That's number one. And I would say that you're probably not as far away as you think, but take 24 hours and pause. Go for a walk, take your wife or your significant other or your brother or sister to a nice meal and just remember that life is a blessing.

[00:47:25] Ronald Skelton: Cool. And then one last thing. If somebody has a heat and air business or something in your area or a better question even yet, what can the audience do for you? What are you looking for? What's your next milestone you'd like, somebody to sit right in front of you. 

[00:47:38] Austin Linney: Yeah. So we've identified the next couple targets for the next couple years, possibility acquisitions. I'm just looking to connect with anybody I can learn from. You can connect with me on twitter, Austin Linney.

[00:47:49] Shoot me a dm, austinelinney.com. You can shoot me a message there. I'm just looking to learn from anybody I can. I just love business. It's so complicated and so complex that I'll never see the end of the rabbit hole. So I just enjoy it. Just happy to connect with anybody.

[00:48:04] Ronald Skelton: Do you know who Adam Coffey is?

[00:48:06] Austin Linney: The name sounds really familiar. I read his books. I've read his books like four times each. Yes. That amazing. 

[00:48:12] Ronald Skelton: He's been on the show. I chat with him on a regular basis through LinkedIn and stuff. If you ever want to be. 

[00:48:16] Austin Linney: Amazing, I would love to. Yeah. Great books. I give them to everybody. Yeah. 

[00:48:21] Ronald Skelton: I'll definitely make that connection for you. Well, thank you for being on the show. We'll call that a show. Hang out for just a second. We'll call that it. 

[00:48:27] Austin Linney: All right. Thank you.