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Dec. 28, 2022

How2Exit Episode 82: Hayden Miyamoto - Founder of Kingmakers Inc.and Acquira.

How2Exit Episode 82: Hayden Miyamoto - Founder of Kingmakers Inc.and Acquira.

Hayden is the founder of Kingmakers Inc, a holding company that makes investments in acquisition entrepreneurs and the companies they purchase.

He is also the founder of Acquira, an Accelerator for acquisition entrepreneurs that helps people not only...


Hayden is the founder of Kingmakers Inc, a holding company that makes investments in acquisition entrepreneurs and the companies they purchase.

He is also the founder of Acquira, an Accelerator for acquisition entrepreneurs that helps people not only find, finance and purchase a business, but also helps them become management-run and introduce best practices.
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Contact Hayden on
Linkedin: https://www.linkedin.com/in/hayden-miyamoto-8a06941/
Website: Acquira.com
Email: hayden@acquira.com
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Transcript

Ronald Skelton  0:06  
Hello and welcome to the how to exit podcast where we introduce you to a world of small to medium business acquisitions and mergers. We interview business owners, industry leaders, authors, mentors and other influencers with the sole intent to share with you what it looks like to buy or sell a business. Let's get rolling.

And now a moment for our sponsors. I want to highly recommend you get Acquisition Aficionado magazine. Every month Acquisition Aficionado magazine brings you tactics for business buying and selling you won't find anywhere else learn firsthand from industry leaders who share their success stories featuring in depth interviews and stories from leading figures in the business acquisition industry. This multi platform mobile magazine speaks to acquisition entrepreneurs wherever they are in the journey. And I want you to visit acquisition aficionado.com today. Hello, and welcome to the how to exit podcast today. I'm here with Hayden Miyamoto. He's the founder and CEO I believe or you're the CEO of acquire also, 

Hayden Miyamoto  1:15  
also yeah, yeah 

Ronald Skelton  1:16  
co-CEO, I know you have a co founder there. And you specialize in acquisition entrepreneurship buying companies. And I'm just grateful to have you on the show today. Let's just jump right in and talk about how you got into this space kind of your origin story a joke off and about you're born (inaudible) and up to date on a, on a show about acquisitions and mergers. Can you fill in the gap in between? 

Hayden Miyamoto  1:37  
For sure.

First of all, thanks so much for having me. I've been an entrepreneur all my life as a kid as well. A lot of entrepreneurs don't do well in school. And I was like that. So I dropped out of school at 17. That's sort of when I started my first business. At that time. It was a digital marketing agency. Before there was a lot of SEO before Google was even the world's biggest search engine. We optimized for Yahoo and AltaVista.

Ronald Skelton  2:00  
Did you do anything for Excite?

Hayden Miyamoto  2:02  
I know that we were post Excite. 

Ronald Skelton  2:03  
Okay. I

was, I was the director of operations for the technical side of excite.com. So we have a similar background. 

Hayden Miyamoto  2:10  
Yeah.

Yeah. So I did that. Probably, since then I've bootstrapped close to a dozen businesses, I'd say maybe 1/3 of them were successful. And the other two thirds works in some way. So not the best hit, right.

Ronald Skelton  2:24  
That's normal.

Hayden Miyamoto  2:25  
Yeah. It's normal, but it's normal. And back in 2015, is when I acquired my first business. And I realized, wow, you can like skip over all this product market fit stuff. And so since then, I've bought about 30. And we started because my background was in marketing, we started, started more digital stuff, we bought about close to 20, Digital Businesses, E-commerce, SAS businesses. And then in the last probably three or four years, we moved over to brick and mortar, but sort of brick and mortar with larger service in the markets, you could still take that customer acquisition advantage.

Ronald Skelton  2:58  
Oh, interesting. You started off in the digital space. Now you've moved into the brick and mortar home services, I'm kind of I was just telling you before the show, I'm kind of doing the other. He used to flip websites before it was even cool back before there was like buy, sell and Flippa and Empire Flippers before any of those even existed. We were hanging out on Warrior Forum, forums, I forget ones it's called the digital, digital warrior form or something like that. And we would buy websites that were generated income, pay about two to three years worth of their income to buy them. And then we would increase so back then there were a lot of these sites that were made for AdSense. And we would go through there rip through them clean up that they were viewed by him and they look like early 90s technology all text and stuff. We put graphics on it, make them nice, give a better user interface to them, switch the advertising out to people that pay more than turn around and sell them. So we were flipping them. And I got burned really hard because somebody back then it was really easy to spoof all the data. They were just showing the screen printouts of like Pay Pal and stuff what they're making. Somebody got one over on me, I spent 30 something grand for a website and turn around, which wasn't much but there's still enough back then that hurt. It burned me and I was like, I'm just not doing it anymore. Within two days, three days of me buying all the traffic dropped off. So it was all bought traffic. It was like went to zero. Found out most of the links on it were what we call now. What do they call it when they know you all know the websites

(inaudible)?

 (inaudible)yeah

Hayden Miyamoto  4:16  
Yeah. 

Ronald Skelton  4:18  
Yeah. So it's basically that I don't even know that existed then you know what I am back then I was a domainer. I had over 3000 domains. Right. I still have about 100. But yeah, I learned my lesson on that. So you've done you went from that world to brick and mortar and as funny as I went from the brick and mortar on a Real Estate Investment Group, a real estate investment firm where we bought and sold real estate, sold that to a partner and then basically bought a pest control company and moved into this space. Now I'm looking at digital assets again, and partner up with some people to buy some digital assets. So we, we've got a similar path. Why go from digital to back to Brick and mortar? What's your thought process there?

Hayden Miyamoto  4:59  
Yeah, a lot of it is is what type of asset you're buying. And so I would actually say if I was to do a startup, I would much rather start something digital than start a brick and mortar business, right? What we were focusing on was from the digital space was a bit larger than typical. So it was still like kind of million dollar STE style businesses. And just the way that we were financing them, you have this platform risk that just doesn't really exist on the brick and mortar side, right. So we've been burned probably on three different deals where the thing went to zero. I mean, three out of 20 isn't terrible. And if you take a portfolio approach, it's fine. But just the way that we were kind of developing at our business, we were more being a minority investor and other people's businesses were typically taking out loans. And I really didn't feel comfortable with recommending a path that they could go to zero, right?

Ronald Skelton  5:48  
I get that

Hayden Miyamoto  5:49  
two or three months later.

Ronald Skelton  5:50  
Yeah, I'm really leery of what I call single source income solutions. So I don't I'm not interested in when I say I'm going digital or looking at digital assets. I'm not interested in Shopify stores, Amazon stores, any of that type of stuff. I'm looking for great content that, that goes that's in alignment with this, like what I'm doing here, so

Hayden Miyamoto  6:10  
yup

Ronald Skelton  6:10  
and the monetizing the content. I'm looking for them, they already have monetized at some, so that it's generating revenue, and then I can increase that by better affiliate alignments that has associations with better advertisers. But I'm not looking for that single source. Like, it scares me when a single rule change that Amazon can destroy your entire business or Shopify, right.

Hayden Miyamoto  6:30  
Yeah, we bought one business where Amazon changed their affiliate payouts for a category and it went from 10% to 3%. 

Ronald Skelton  6:37  
Yeah,

Hayden Miyamoto  6:37  
Like two months after buying it. And then Google hit the same business, two years, a year and a half after buying it. That's the type of thing I just, again, you're taking a portfolio approach, you have a fund, that's fine, right? You can double down on the winners and ignore the losers. But if you're, you have a partner whose livelihood depends on it, you really have to,

Ronald Skelton  6:55  
Yeah, I used to hang out in the same kind of meeting like mastermind type of groups with the guy who had a audio file review site was 100%, based on Amazon. And it he was living off. I mean, that was his income. He had a couple of writers that would he would buy the products in, it wasn't doing video at the time, I think it should have it was just really writing deep reviews of I'm taking lots of photos of it and stuff like that. And then when Amazon cut it, he had to fire his writers, he couldn't even afford to keep the site up. He sold it for pennies on the dollar. But there's enough of that going on. It's like, Hey, I'm not interested in that. But I also see things like the hustle, right, it's sold to HubSpot for 25 plus million dollars. He never says his exact number from what he said it's over 25 mil, right. So content still valuable, it just needs to be good content. And that's kind of where I'm looking at in this space.

Hayden Miyamoto  7:44  
Yeah, 100%, buying a brand, buying a community 100% that makes total sense. I also am a fan of productized services and software as a service. It's just there's a certain there's like a sweet spot in terms of the size right over a certain size, and you're paying multiple in revenue, which you don't really want to do. 

Ronald Skelton  8:01  
It's crazy.

But then under a certain size, I feel like all these businesses have this incremental fixed costs of having a separate product manager and a separate kind of marketing manager or Acquisition Manager. And typically that business can't afford both of those things. So you end up being swamped and not doing either job correctly.

I noticed on your site there you talk about that you guys do provide the capital training and systems. When you see capital, or you actually have you raised money in a fund and you're using that kind of money. Are you actually helping them get loans and no, the lindian sources? Describe that for me.

Hayden Miyamoto  8:32  
 Yeah,

yeah, both well, either most of the partners we work with UCSB, It's just because it's cheapest money

Ronald Skelton  8:38  
Right

Hayden Miyamoto  8:38  
available. And so yeah, we will help facilitate that. And so we do have an equity funds. So we'll typically put 80% The equity and for a percentage a minority percentage of the deal. So that's something we can do. Obviously, it would have to align with sort of our thesis as well.

Ronald Skelton  8:55  
What is that thesis? You said? Your home service businesses and stuff? Is that like Heating Air, Pest Control? I mean, what are the kinds of categories?

Hayden Miyamoto  9:03  
You know, I would say, it's more about I would describe the business as something that provides a kind of a physical product or service with a pretty high average ticket value in a probably 50 percentage high margin to a serviceable market that's at least 100 miles or more. So that's often home service companies, right, like age backpacks, right? Who will come to your home, Right?

Ronald Skelton  9:26  
Right

Hayden Miyamoto  9:27  
But it could also be granite manufacturers or cabinetry manufacturers same concept. And obviously we liked the fact that time origin we like the fact that high value higher value means we could probably drive longer as well. But yeah, I It's kind of a weird thing to describe to someone but basically allows us to kind of take the customer acquisition strategies we've had through digital marketing and expand on

Ronald Skelton  9:49  
Somebody asked me one of the shows as Why did you buy a pest control company and the funny thing was is I resisted it for over two years. What am I I have 30 Something cousins I've got a big family and one of them I only like two or three of them. And the rest of them are listening. No, no, but most of them my, my relatives are hoodlums. But I've got one, he's just a workaholic. He's really good. He owns his own landscaping business. But on the side, he was running pest control. And his owner was going to retire. And he reached out to me said, hey, you know, help me buy this thing. Let's just run it together and muddy residents. But when I got it started researching, moving out of real estate into acquisitions and mergers, I started looking at some of the listings on biz buy, sell and seeing that these pest control companies were claiming they had margins at 35, 40. Sometimes 45% on the guy, that's BS. So I started doing the research and like, wait a second, some of them do, right? And so why am I telling this guy? No. And so I ran him, we (inaudible) up buying the equipment, and started our own because the one that he had herself after doing the due diligence, it was just too risky, I wasn't following the rules, there's too many things he wasn't doing. And that's really regulated by both state level EPA federal EPA regulations on pest control. So you don't want to buy something that's not keeping records and doing what it's supposed to. But the I got into it, not knowing what I didn't know about something way too small, we got basically a customer list and some equipment used equipment, rebranded it went out on her own. And now like I just tell you before the show, if the text can't get to the phone system, it rolls over to me. And here I am in California answering phone calls for a pest control company in Tulsa, Oklahoma. And that's not where I want to be. So what size do you recommend your people you're working with people you're in your program? How big are they? What's the target that you want people to look at?

Hayden Miyamoto  11:36  
The target is between 750 and one a half million in SC that's typically sort of that too big for most individual buyers, and too small for financial buyers a range and you hit a spot on like, it took us a couple of acquisitions to realize, actually, the business size is the single most important criteria because there is kind of this fixed cost and incremental fixed cost to becoming management run. And that's what we're all really going for. Right? So we can get out of the business a little bit. And, you know, if you're buying a business that's doing 300, 400k, in STE, and then just pay that fixed costs, you pay your debt service, and the business declines 20% Now there's no room to pay yourself. Right. And that's kind of starts a downward spiral

Ronald Skelton  12:16  
Your backdrop there has a, has we raised it a questionnaire so you guys put me pulling backdrop? Have you looked into these swimmable maintenance companies? The reason I asked because I see them constantly on sale, they're not there, but definitely owner operated. But there's a roll up play inside of that if you have the systems or process where you can train people to take something from management, from owner operated to management run those cells regularly for 1x. Right, I see him all the time listed for 1x.

Hayden Miyamoto  12:45  
Yeah, I know a bunch of people, I don't actually own any pool service or construction businesses, only because when I got into the space COVID happened shortly after, and this COVID Just really messed the entire dynamics of that

Ronald Skelton  12:57  
Right

Hayden Miyamoto  12:57  
 (inaudible). So I, I might be interested to start searching now that we have like a full year of kind of post, post ish, COVID data. But yeah, 100% I mean, all these businesses have the same kind of challenges, right? So it could be done. 

Ronald Skelton  13:11  
I would

bet money that the pool servicing actually increased, right? Because people are home all the time. They're stuck at home and three COVID I bet they got their pool service more often if people could show up and do the work. But if you think about it, if I'm stuck at my house, when I got a swimming pool in the backyard, and I'm not I'm supposed to be staying home, I'm probably not staying in the house, I'm probably going to spend more time in my pool

Hayden Miyamoto  13:32  
100% If I was buying based on like COVID affecting the business negatively, that's a great time to buy, right? Yeah, no, in this case, I really think there's like this. You imagine you have this customers list, right? And you have a list of whatever, 500 people who know about you and who will buy a pool in the next four years, right? COVID comes and suddenly you can't leave the house, suddenly all those people are buying a pool now. Right? And it was very difficult to know, how much of their sort of future demand got eaten up early. Right?

Ronald Skelton  14:02  
Yeah. Well, I was just curious because I constantly see them on all the sites and no matter if you're out there looking through and I could do a lot of sourcing people bring me deals because of the show and people know me deals because I seem to know I built a hell of a network of people who are buying stuff. So I've kind of trained people if you don't know what to do with an acquisition you find something that's not doesn't fit you bring it to me because I'm not the buyer. I probably know them and I probably know who to route you to. So I get a lot of those type of hey, I've got this thing over here. Like I'm there's a honey distribution company a little small one and guy reached out to me it's like I think I know somebody wants that. We're looking at the numbers on it. If it was closer to me, I might want it I like organic type of stuff. But that said on a seeing the poll in your background, I was like Wonder if you've ever even looked at that just because the multiples are insane. They're like what x right? So I think if you got it big enough and it's a 1x Because or 100% owner offer I mean owner managed, meaning you got to go out there. If you buy one, it's got 100 pools and it takes three days to service it. You better either have Somebody's already trained to go do it or you're going to be cleaning pools three days a week. That's what they're selling. But if you I don't have the systems and processes it sounds like you acquire it has about converting something from owner ran to management run. And then so I was just curious if you were putting much thought into that

Hayden Miyamoto  15:16  
thought about it, but never, never executed on it. 

Ronald Skelton  15:19  
Okay,

curiosity, let's jump, jump into some of the what are some of the things you guys have done, I always call this stage kind of storytime. Tell us that you guys have done a lot of acquisitions you're talking earlier is over 20. Right? So what's the

Hayden Miyamoto  15:33  
Yeah, most recently, we've been more into home service. So last year 2021, we did a roll up and are still doing a roll up. But I was kind of co-CEOing it with a, a joint venture with another company of a bunch of HVAC and Plumbing companies. So we bought four companies in that year and kind of it was my task to go and basically make the management run and kind of develop out that operating system for the roll up. So probably about 40 million in annual revenue between the four really interesting challenge various degrees of sophistication. One of the businesses was that actually the largest business had zero systems in place zero technology. So that was fun, but a great culture was so much easier to work with. Yeah, so we've been doing that. We've also kind of taken a minority interest in a bunch of similar businesses, roofing, granite, cabinetry, and a lot of several more plumbing companies. So that's what I've been working on. Most recently. 

Ronald Skelton  16:29  
It's

interesting, I've had Adam Coffee on here before who's got a couple books out on that. He, he made his money by taking the heat, he did an air company. And I think he did, let's say at least five or six times where they sold it to private equity. They kept him on as CEO. They sell like 80% of it, keep 20%. And then we grow through acquisition, acquire and others. So he's spent a quite a bit of time growing through acquisition. And now he's the CEO coach in that space. But yeah, if surprised, I think the last sell was over $2 billion with a beat.

Hayden Miyamoto  16:56  
Yeah

Ronald Skelton  16:57  
You can you can really build something in this space. Is it very competitive, because I know there's some PE firms out there playing in the same pocket, you sound like you're playing right underneath what they would look for anyway. Right? You're kind of playing 

Hayden Miyamoto  17:08  
Yeah,

Ronald Skelton  17:09  
radar. 

Hayden Miyamoto  17:09  
That's kind of our goal. HVAC has suddenly become much more competitive in the last two years ish, you're starting to see more firms who are expanding their thesis to target these sort of one and a half $2 million EBITDA companies, which means you have to kind of go smaller, I think there's still a lot of opportunity in plumbing. In fact, that like Plumbing, more than HVAC, depending on the type of plumbing business, but

Ronald Skelton  17:33  
The heat and air, you have, you can put in some recruiting revenue to like service contracts and maintenance and stuff, where the plumbing, it's kind of a one and done right? If you've got repeat business, and plumbing is kinda like my pest control company. If I got high repeat business, I'm probably not doing everything. Right? Right. Unless I do have repeat business because, because a service a lot of real estate investors, and they're buying other properties. So they come to me, I know that space, I know them, I'm friends with some type of thing. But I can see in the plumbing in the heat and airspace, like those filters have to be changed. If they don't their service, things get clogged up, things don't work. What I was saying is the heat and air business probably has a lot of recurring revenue, people come back and need filters changed, like the systems need to be maintained is the, the plumbing business is kind of a almost a one and done if you've got a lot of repeat business.

Hayden Miyamoto  18:23  
Yeah, true of residential plumbing. But I think all the strongest plumbing businesses do a lot of commercial and commercial turns into even stronger contracts, annuity style contracts. What I like about plumbing, and again, without owning the business, you might, might not expect it right? It's kind of difficult to train up HVAC people, right? It's difficult to train up a tech. And so there are different ways different companies work with that some people, some people might do HVAC construction, right. And then the construction can kind of lead into a path where you learn how to be attack and do service. 

Ronald Skelton  18:56  
Right

Hayden Miyamoto  18:56  
That's one option. But obviously construction typically is much lower margin work. With plumbing, you can actually treat Residential Plumbing as a way to kind of train people, right. And over time, you get more into a lot of the commercial service work which like I said, it's it can be a lot, a lot higher sort of recurring revenue.

Ronald Skelton  19:14  
Like our little pest control company only does residential, we've been on a couple commercial products, or projects. I don't understand how they can even make any money. We're our bid, the first time we ever bid on one. They came in and said is this for the year? And I was like, No, that's per month. And we were higher than the combined bids for everybody else for the year. And it just didn't make sense. Like how are they paying these people? Are They Spraying water because chemicals are expensive that my guys do 20 bucks, 20 bucks an hour so maybe they're paying minimum wage to their tax I don't know. But I did the math over and over again and like I unless you're spraying water and not paying their guys or they're taking this as a loss leader because when we think we know that the big commercial spaces we get other deals so if you're walking around spray in an office and they you know that the workers there could always come in and say, Hey, I'd like she'd come to my house to. Right, Probably where the bugs came from anyway, they probably brought him from home. They hit check a lot. That said, I don't know how to stand how, in the pest control basis, the commercial side even makes any money. I didn't know at least not in Tulsa, Oklahoma. We looked at a 30,000 square foot office building. And the guy that was treating it on a monthly basis was doing it for $95 a month. Right to walk the square footage with the equipment. My guys would it would take him an hour or two. I don't see how they I don't I just don't see how it works. So

Hayden Miyamoto  20:36  
Yeah, I can't advise on that. We don't have any pest control companies. They typically it's hard to find ones large enough in that sweet spot we talked about.

Ronald Skelton  20:42  
Yeah, that's easy heat and air the same? Is it hard to find large ones because I know a lot of like, I don't want a bunch of real estate in Oklahoma. And I know a lot of heat and air guys, but they're usually one in my family's in that space. My dad's brother his one of his brothers whole family. He's got to love it have the children. Michael, you had a bunch of cousins. He's got 11 children of his own. They're all in heat and air. Right. But that didn't even work on the same company together. They're all have their own little things. It's one or two men, three men shops.

Hayden Miyamoto  21:08  
Yeah, I mean, they're very competitive when you find like a business. That, that size. So we have like a whole sourcing team that tries to find these off market, right? That being said, like most a lot of people will do these tuck ins to buy sort of chucking a truck, right.

Ronald Skelton  21:21  
Right

Hayden Miyamoto  21:22  
 And it's more of a will buy your assets at fair value, give you a job and better quality of life types of

Ronald Skelton  21:28  
Right. 

Hayden Miyamoto  21:28  
deal, right?

Ronald Skelton  21:29  
I just we had some of those conversations were like for the pest control companies like, look, what your customer lists. If I gave you two years worth of what you pay yourself for the last two years, would you come work for me? Right? And give me your customer list and just a matter and work out just because someone said no, because the only reason they're on their own is they're unemployable, either. So entrepreneurial, they don't want to listen to what anybody else has to say which I get it, I'm kind of the same guy. Right? I want to work for me. But so I can toss if I'm thinking like the markets, I know in that space. I can think of, four plumbing companies in two or three, heating and air companies that are big enough, that would fit your criteria that are not already nationally owned, because it's very competitive, there's probably two or three, there's probably the equal a number of those, like I said, four of each, there's probably four of each that have already been bought out. So there's a total of big ones. There's also like there's, there equal number that already been bought out and owned by a national organization. So headed up space.

Hayden Miyamoto  22:30  
Definitely one of the roll up we did our thesis behind that roll up wasn't actually to buy sort of these brand recognized service companies. But it was actually more buying the construction companies with a thesis that you could there's if there's a Service Division, you could build a service business behind it,

Ronald Skelton  22:45  
Right,

Hayden Miyamoto  22:45  
 which we did actually prove 100% of those cases, which is nice. So there might be you might think of four service companies. But you might not be thinking of probably the six or seven different H back construction companies that also service what they construct, right, which typically are unknown to most customers.

Ronald Skelton  23:05  
One of the things I have noticed that either brought up, same thing, even if they're doing a million dollars STE or EBITDA, they still don't have the processes and stuff because they grew organically. They're what I call accidental entrepreneurs kind of jokingly call a (inaudible), they were good at it, they worked for somebody else, somebody asked them to do a side job they did one then they did two the next thing they know I've got people helping them do side jobs. And they own and operate a business. So they don't have any systems processes, and often not very good accounting systems. And you can I still, I would say even at the $1 million STE where they're doing two and $3 million dollars in revenue, most of that stuff doesn't exist for most of these guys. Could you give us kind of a high level actionable steps to convert? Like, I would bet at this stage? As far as the ways I am, I would just not acquire something that doesn't have the systems processes in place because they don't have the actionable steps. What would what it sounds like you have a you've done this multiple times, and you're, you're been trained on it? What are the actionable steps that somebody can take at a high level?

Hayden Miyamoto  24:00  
The commonalities and the types of businesses we target are exactly that what you said, right, you have this owner operator who's kind of accidentally and organically grown a company to the size, it's typically bulging at the seams, right. And typically, these companies have, I would say, between, let's say 20 and 40 employees. And that's a really weird, sort of awkward growth phase because you're still too small to have any kind of executive layer. Right? If you think about like an efficiently run organization, you will have sort of the lower level customer facing might have managers who have should ideally manage seven to 10 of those people each, 

Ronald Skelton  24:38  
Right

Hayden Miyamoto  24:39  
and which means that at about 50 people, you have enough room to say okay, efficiently, we can have an executive right. And at 250 is kind of when you have a layer of directors that report to a CEO. In this case, you have this one owner operator who's in charge with every executive function in a company, right, and I would say the most important functions I'm in any company that regardless of size is your financial strategy, capital allocation, right? Scalable customer acquisition, right? So your demand side, how do you carve out market share, not just wait for a demographic to grow. And then recruiting, training and retention. So the supply side, right. And I would say most of these owners do not do either of those three at a passable standard, right. And so there's just no best practices in place because of it, right? And they're too small to afford to hire someone to do each of those things, right, typically, HR divisions that don't exist in companies under about 60,70 people, 

Ronald Skelton  25:35  
right. 

Hayden Miyamoto  25:36  
 So what we kind of do is, there's this concept of like, the magical GM, right, and everyone's like, Oh, I'm just gonna hire a GM. But you're really just recreating the problem again, except now you're recreating the problem with a person who's not actually incentivized as an owner, right. And so what we've done is we kind of have three different roles, right. So one is what I call a people in culture role, which is the equivalent of an HR division, but with a lot of the cultural initiatives that a CEO might normally have, we have someone who's in charge of finance and revenue. And we again, we have all the systems and process for all this. And then we have basically the acquisition entrepreneur is the CEO. And we kind of have these job descriptions and deliverables around that and have this leadership team that kind of runs the business. And so the transition to get from, you've just bought a business, you're creating a succession plan with the seller, that succession plan is probably typically like a nine to 12 month plan, where all of their core responsibilities are transferring to these typically three to four people on a leadership team, as well as your delivering seeing new processes, typically takes about a year. So when we do an integration, we call it an integration is usually an eight to nine month long engagements. And kind of the deliverable behind that is the company now must have must be able to create its own goals, right, and, you know, manage through OKR's, and all these other things, right,

Ronald Skelton  27:02  
right.

Hayden Miyamoto  27:02  
 And then has to have like very strong communication protocols in place, one on ones, performance reviews, etc. Everyone has to have a job description. And then obviously, we have this people and culture person, this sort of financial and revenue person, and the CEO each doing their job. And when that happens, you know that then you can finally be sort of forgotten.

Ronald Skelton  27:21  
So, who runs the sales on that you have a different sales organization or?

Hayden Miyamoto  27:25  
Yeah, typically depends on the business. But if it's a sales driven business, then that would be part of the leadership team as well.

Ronald Skelton  27:31  
Okay. So you have a CEO, CFO and HR kind of, but you got it, you have different titles for them and stuff. 

Hayden Miyamoto  27:38  
Yeah

Ronald Skelton  27:39  
Now, that's why then that actually makes sense. Because if you're looking for something with a million plus STE, you have to have and decent margins, you have to have room to bring that team on, prior to the (inaudible) 15 person company. That's another thing is that HR rules and guidance all change when you hit the 51st employee, right? 

Hayden Miyamoto  28:00  
Yes.

Ronald Skelton  28:00  
Like there's different standards and rules and all this other stuff that like that hang special posters up and everything? Again, go ahead.

Hayden Miyamoto  28:06  
Oh, I was gonna say I would say I estimate the kind of fixed incremental fixed costs is typically around 150k. A year. So like, when I sort of help people design models and stuff, a company always loses money the first year, right? It's not just suddenly growing, typically, in almost every case that is actually hiring a new people and culture person, which is kind of like an 80k ish, a year position with benefits and stuff. And then often these companies are still two sided to small, lesser construction company. They're too small to have their own finance departments. But usually, it's like a fractional CFO. 

Ronald Skelton  28:39  
Yeah,

Hayden Miyamoto  28:40  
 yeah. And then, let's say another 30k ish, and sort of just systems right?

(inaudible)

Ronald Skelton  28:45  
And then what's the end game for most of your clients? Are they buying this to own and operate and be a holding company? And like, own this for a long time? Are they doing roll ups? Acquiring a bunch of things with the intent to sell it? Or are they flipping businesses where there's so many different strategies inside this space? 

Hayden Miyamoto  28:45  
Yeah, a little bit of

everything. I'd say most people are interested in the whole code model. And typically, I find like, your ceiling kind of changes, once you have run one business and kind of brought up to seven figures, you're like, what's the next thing for me to develop as an entrepreneur? And often it's like, get into the whole coast or the private equity side. So yeah, I mean, we're an accelerator for acquisition entrepreneurs. So that means we actually go through the entire process and not just finding and buying a business and training someone on that, but also helping them integrate and grow them. Then finally, once they kind of get out of the day to day, helping them buy more, if that's your goal, and then helping them with sort of a tax optimize exit, if that's their goal, obviously, we're not we're only three years old. So we haven't gotten to the point of a tax optimized exit, but we are sort of looking at business number two for a couple of people in this.

Ronald Skelton  29:48  
Okay. I was curious, as I seen on the thing that like the equity listed a bunch of different stuff on your website as far as the exits, exits, like access to private equity, Aesop's and IPOs. I'm interested in that just because As the you have to be pretty good size for the IPOs. Here in the United States, I know some people are doing IPO and other markets. They're doing the Frankfurt exchange and stuff. But like, I was talking to a couple people on the show, and it's between 700, it can be as much as or more than 750k. Do, do an IPO for legal expenses and all that other stuff here in the US, to whereas on other markets and other exchanges, it's 35, 40k. So that's a significant difference.

Hayden Miyamoto  30:30  
Yeah, you know, there's, I participated in a couple. So we went through a long process for one of our older companies, the one that did the digital asset roll up to go public, on the TSXV in Canada, which is sort of this reverse merger process,

Ronald Skelton  30:45  
Right.

Hayden Miyamoto  30:46  
One of the many markets where you can kind of do this faster, cheaper IPO, I that whole experience, I think we got probably 80, 90% of the way there and I decided they were too small for us. I think we were doing like 5 million EBITDA or something. 

Ronald Skelton  30:58  
Right.

Hayden Miyamoto  30:58  
 And we kind of pulled out and my opinion now is I would only do it the kosher way directly on a strong US listing.

Ronald Skelton  31:07  
Right

Hayden Miyamoto  31:08  
 And I would estimate costs probably double what you mentioned. 

Ronald Skelton  31:11  
Yeah. 1.5

Yeah, 

Hayden Miyamoto  31:13  
Yeah.

Ronald Skelton  31:14  
 I've talked to some guys required one of the guys on the show, so I won't call them up by name. But one of the guys that's been on the show, they've done 40 Plus acquisitions, or over $100 million in revenue they did in the Frankfort exchange. And the problem they're having is liquidity, right? Yeah, they listed Yeah, they can buy companies with their stock. But the owners, there's just not a lot of volume on their stock, because they're kind of still a, it's a version of pity stock. So when somebody wants to sell and get some, pick some cash off the table, take some equity off, eventhough even if they're wanting to stay if they want to sell some of their shares to, to buy that summer home. The liquidity, it really impacts the company, they

Hayden Miyamoto  31:51  
Yup.

Ronald Skelton  31:51  
even have a 12 month I like when they sell, when they become part of that company, there's a 12 or 18 month window where they're not allowed to do an exchange. So I can see that I was just curious. And then the ESOP the Employee Stock Option Plan, that's kind of what I liked the idea of is Biden like doing a roll up and then selling it to the employees and having an annuity for your retirement, like having them having the straight stock plan pay you over time, that's something I'd be really interested in.

Hayden Miyamoto  32:20  
Yeah, if you sell 30% or more, there's a lot you can do with sort of that, that deferral rate of capital gains. For me the ESOP's the most interesting, we still haven't actually set one up, though, I have a bunch of people, friends who have done it, what really got me excited in this space, and was actually the size of the opportunity, right. And that's kind of one of the reasons also we moved over to brick and mortar was I realized once I actually understood the demographic problem, right, but the US is facing, I realized, wow, this is like a $10 trillion opportunity. And there's an opportunity here as well to like, not only sort of assist with this transfer of wealth, but also to kind of redefine business as you do it. So our motto that we use internally, for our goal is to by 2035, we want to point a trillion dollars towards good. And we'd love to create a fund where there's governance in place that reduces the cost of capital for anyone within if they're hitting certain standards around employee ownership, etc. So, 

Ronald Skelton  33:21  
We talked

a little bit before the show, and you gave me a great idea to reach out to the SBA in scoring stuff. So I started that process this morning. I'm going to try to get them here on the show, we'll see what they do. But what do you see currently, like, I, I see some limitations aside of what they have right now. I, I know you can do your first acquisition takes their website, I'll tell you, they can do it fairly quick or whatever. But I know people that have been through this over and over again, I know I've interviewed probably five, maybe six experts on SBA and the closing process. A fast ones, 90 to 180 days to go through the jump through the hoops and stuff. What could the SBA do or sounds like you guys use a lot of SBA loans to what's the positive side of other low interest? What is the positive side of it? What's the like the negatives? What could they fix?

Hayden Miyamoto  34:10  
Yeah, positive side, more important than the low interest? It's not that low anymore with interest rates as they are right. Like 8%.

Ronald Skelton  34:16  
Right

Hayden Miyamoto  34:16  
 But say it's actually the incredibly high loan to value ratio, which is interesting. It's like 90, 90, 95%, technically,

Ronald Skelton  34:25  
Right, right.

Hayden Miyamoto  34:26  
 and it's the amortization, right? So if you're looking at let's say, mezzanine debt, or you're looking at these other capital partners in the space, you're typically looking at like 70%, LTV, and you're typically like 15% interest rates in like five year seven year terms. Right, 

Ronald Skelton  34:45  
right. 

Hayden Miyamoto  34:45  
And so you just don't have a lot of space. You have to be buying at 2x multiples in order to make any money there safely. I'd say that's the biggest benefit. The negatives is it's a bureaucratic nightmare. Right? Banks also are, they will often just kind of changed It turns on you over and over again. So that that's also it's just an irritating process.

Ronald Skelton  35:04  
 Yeah.

Hayden Miyamoto  35:04  
 And it is a lengthy one. So I don't think I've ever seen one close in 90 days, we closed one this year where it was about four months from sort of issuance of LOI to close the business, which is probably a record. You do it with, like certain preferred lenders and faster.

 Yeah.

Ronald Skelton  35:18  
Lot of people don't get that the lender has a lot of saying that. So SBA has a certain criteria. But they're an every single bank does two things. One, they have their own criteria they set on top of the SBA is because the SBA is only guaranteed I think, 75% of that loan. Right. So that's all it is, it's like, loa, loan guarantee the bank's loan in their own money. The only thing the SBA is doing is saying that, if they default, will insure 75% of that loan. And some of these guys that have done a lot of deals, the SBA doesn't even look at it until they're until there's a default, and then they'll review that one and others they're incentivized to get them right. But the other thing they do is if you really get into this, a lot of these banks won't tell you they specialize in certain areas, but they do, like so I always tell my guys if you're thinking about doing an SBA loan, ask you're talking to your local branch, your local bank, ask them how many of your if they see you want to buy heat and air company, like Yeah, you guys do a bunch of SBA loans. So cool. How many heat and air companies have you helped fund the acquisition of if they don't say something to the extent? Or yeah, we can do those too. You might want to look around because they whether they tell you they do or not. Most of these banks have a sweet spot that they love to loan in, that they understand. And you can go to the next one down the street. So that's the other thing. I'm sure you're aware of this, one of them tells you no, it's not a no, it's basically not them. So you probably ought to go down the street and talk to another SBA lender, because chances are, if you read the SBA guidelines, you're probably within them. It's the local banks guideline and their board that told you no, not the SBA.

Hayden Miyamoto  36:47  
Yep. Yeah, we have 100% hit rate in terms of converting partners who want an SBA loan to an SBA loan. But that might have been after going to two blank two or three banks, in some cases, 

Ronald Skelton  36:58  
right.

Hayden Miyamoto  36:59  
 Every bank has a different underwriting criteria. Like I said, sometimes they'll just change it on you all of a sudden, there's one other negative that I should probably mention, for people listening is that certain structures you just cannot do with the SBA. And this is actually one thing I think the SBA needs to improve or change. And so they do it in order to protect themselves or make sure that a lot of the companies just to protect themselves from fraud. Right. But certain things like the seller can have any potential,

Ronald Skelton  37:26  
Right. 

Hayden Miyamoto  37:26  
Right

Ronald Skelton  37:27  
Minority purchases, no mo. Yeah,

Hayden Miyamoto  37:29  
Yeah

Ronald Skelton  37:29  
 yeah,

Hayden Miyamoto  37:30  
no, no hold backs, right. Like, there are certain ways you can have like earnouts and fullbacks and like, you don't phrase them as such, and they can still get improved, approved. But you tried to do that at scale. And you like you said it when someone investigates, you might default, you really don't want that. Because of that you're kind of looking at Oh, and the seller can't be involved for more than 12 months. Right?

Ronald Skelton  37:48  
Right.

Hayden Miyamoto  37:49  
Which to me again, it's like, if you want if you really want continuity, why would you put this in place? Right?

Ronald Skelton  37:55  
Right.

Hayden Miyamoto  37:55  
I don't like yes, I understand. There's possibilities of fraud, but there's also large possibilities of default. If the business fails,

Ronald Skelton  38:02  
Right

Hayden Miyamoto  38:02  
 so yeah, so looking into what's kosher and non kosher with the SPS

Ronald Skelton  38:07  
And there's,

so that's one of the if I ever get them on the show, that's one of the things I'm going to hit pretty hard, because there are quite a few retirement aged CEOs or owners of small to medium businesses who need to or want to sell but they don't want to be not doing anything. Right, they want something to do. And I think there's a great opportunity here is to buy 80, 90% of a company, and then let that CEO hang around and do what he does best a call his best clients out to dinner, like there was when we were looking at and if you looked at how he built his business, is he plays golf with everybody in town, and almost everybody plays golf with his his client. I don't play golf, right? So if I acquire this thing that you got to take up golf or find a new source of, of lead generation, right, but I started talking to him and it's like, I think what you want to do when I retire, he doesn't wanna play more golf. I said, What if we do something along the lines of like by 80% of it, we put a percent on the table and you keep taking these guys to, to lunch trick is if the mentality has to be right you got to get over their ego a little bit. But for the right guy, there's a huge opportunity to the SBA is kind of shutting the door on in that space. 

Hayden Miyamoto  39:13  
Yep.

Ronald Skelton  39:14  
 Where and a lot of these businesses the reason they fail to close and I've interviewed close to 100 people this year, the end of the year all about interviewed over 100 people. And one of my favorite things is like when deals fell Why do you think it's fails? And the answer more often than not, is the owner change something that the last second? And then I brought a few people in here like Denise Logan and stuff who's specialized in the psychology of the seller, right? She's She got a psychology degree, a law degree and she wrote a book on this whole subject, but that's not seller. It's pre-seller's remorse, right. They didn't get to the closing line and they go, I don't know what the hell I'm going to do next. Right. I think the SBA is killing that off, because if they can hang around if they could do something if there's synergies there, and they can be managed, like they can report to somebody that not be the owner that there's a question big If they're in my mind anyway, I think they're hurting themselves. So we've got a problem come up here, you and I were talking about this before the show that trillion dollar opportunity, I think there's a number like 51% of all businesses in the United States are owned by somebody at 65 years and older, they employ almost over half the workforce. And all those businesses the next, next or two generations are going to have to change hands one way or another. And the SBA is the number one source that most people go to do it. So if they don't, if they don't step up and change their game, I don't think SBA is handled, equipped at this process to handle that volume.

Hayden Miyamoto  40:40  
Yeah, I mean, operationally, they certainly aren't. And so their solution to any problem is basically throw money at it. Right. And so that's what they've done here. (Inaudible) COVID. And I don't Yeah, I don't think that's enough. Or if you're going to do it, you can't accompany that money with all these restrictions, right?

Ronald Skelton  40:57  
Right.

Hayden Miyamoto  40:57  
And I, you we're already seeing like, they're about to pass something that like FinTech companies can start giving out SBA loans, they just change it. Now, there's no guarantee fees on like seven, eight loans, under 500k, no upfront fee, and no annual guarantee fee. So they're definitely making moves in the right direction. So if you're concerned about will the SBA still be? Will they run out of money or something like the 504 loans that they want?

Ronald Skelton  41:20  
If you could change one rule? Have you done a bunch of these deals? If you could change one rule in there that would give you the most power? Or change one thing? What would it be?

Hayden Miyamoto  41:27  
For me personally, I would just like some clarity, and truly understanding their guidelines around specifically minority rights. That for me personally, but if I'm thinking more for the utilitarian good of all people, buying businesses, I would say, yeah, it would have to do with I would say, seller retention and seller involvement, for sure.

Ronald Skelton  41:44  
Yeah.

Yeah.

And I think third to all that the brought up two great points there. The third one would probably be time to close right? That the sales cycle in normal business speak, for the day we present your paperwork. And until the day that business trend changes hands, cutting that down from 90,120 ,180 days to something more reasonable, even if it was like 60 days, a lot of times these businesses will sell at a discount. I got, I know people that will line up cash and buy businesses at a big discount, because the owner just can't hang around for another 180 days wait for the SBA.

Hayden Miyamoto  42:22  
I think it's more likely that in the next. Yeah. You mentioned a couple of decades, that there will be a sort of these BDCs that come out with the equivalent of and this is one thing that we're working on with the sort of tax (inaudible) of REITs. Right, that will start doing these tiny micro deals. And they'll start providing SBIC funds, as opposed to SBA funds. And I think we're gonna see more coming out of that than the SBA directly.

Ronald Skelton  42:50  
Interesting. It's an interesting concept like a REIT, Real Estate Investment Trusts for acquisition of small businesses.

Hayden Miyamoto  42:57  
Yep. So if you look at BDCs, they have pretty much the identical tax structure to REIT. And BDCs can be SBI C's, or you can have them sort of in parallel or the money comes from the SBIC's, which is basically coming from the SBA, but not through that

Ronald Skelton  43:10  
Explain the acronyms. Because this is a new realm. I don't think I've heard of the BBCs before.

Hayden Miyamoto  43:14  
BDC, I think stands for Business Development Corporation. 

Ronald Skelton  43:18  
Okay

Hayden Miyamoto  43:19  
Yeah. And yeah, basically, if you look it up, it's just the structure of company that kind of allows you to only be taxed once on a C Corp if your dividends over 90%. So the models basically models a REIT. And then the SBI C is you have to pass the test and become a lender, but they basically give you multiple dollars for each dollar raise. And it basically comes from the Treasury as well. So

Ronald Skelton  43:45  
Interesting.

Hayden Miyamoto  43:46  
Yeah

Ronald Skelton  43:47  
So you think that's going to be I mean, in order to solve the problem, that's before us things have to change? You think that's a couple of changes that are going to come down the pike?

Hayden Miyamoto  43:55  
Yeah, I think that's not really an SBA change so much as people being entrepreneurial and seeing the size of the opportunity.

Ronald Skelton  44:00  
Yeah,

Hayden Miyamoto  44:01  
Yeah.

Ronald Skelton  44:02  
 the SBA doesn't fix it, somebody will, right. We're all entrepreneurial money.

Hayden Miyamoto  44:05  
Yeah.

Ronald Skelton  44:05  
 And there's a lot of dry powder sitting out there a lot of money that's not deployed, just because they can't find what they're looking for whatever reason. So seeing this opportunity, and making sure that getting the word out about it's going to change the landscape. So. So before we jump into kind of how to reach you and stuff, what do you see everything going in the next four or five years? I mean, we're looks like we're kind of at the beginning of what could be another recession, and a lot of people say we're already in it, some people saying we're almost there. What do you see the impact in the acquisition entrepreneurs?

Hayden Miyamoto  44:34  
I would say, we're in a recession, and we just don't have the data to state that yet. But it's an interesting time, Right? Because unemployment is really low. I'm not a, I'm not a fortune teller here. I would say in this in these types of times. I think there's better terms that buyers can have on businesses. So I don't necessarily see I see it probably a more difficult time to raise funds. And do sort of some of these larger roll ups, it's just going to be much more expensive to do. But I don't think I don't see it impacting sort of the individual buyer, certain business types that are more recession resilient. So either recession resilient businesses, or which I sort of typically will say either, you know that they'll sell something that requires some kind of license, and you can't DIY, you can't do it yourself, but still, basically solves a really active urgent problem, right? Like you live in Phoenix and your air conditioning goes up, those businesses will be much more competitive, I think. And I think there will be opportunities for businesses that have like high asset values, as well. So you can kind of hedge against the recession risk,

Ronald Skelton  45:42  
Right. 

Hayden Miyamoto  45:42  
And then certain businesses that have zero moat and basically are not solving an active return problem will not be able to sell, right, I wouldn't buy a landscape of simple landscaping business or a simple house painting business, right? Because you lose your job. That's the first thing you're gonna do by yourself.

Ronald Skelton  45:58  
I grew up as a painter son, my father was a painter. And actually, that was my first one of my first businesses at age 16. My father decided he was going to step back and let me do it. So I actually helped run the painting company, kind of give you a scale of things on our busiest summer, we did 187 jobs. So probably, some of them are inside and outside. So probably 150 houses, like and when I say summer, it's a paint or summer, right? I always say summer, and then it always is not really summer from in Oklahoma when spring hit and we could be outside paint was warm enough to the paint would stick to the walls, right? Or at least spring when it's not freezing at night, to late fall when it's, when it's like the same scenario, it's not getting too cold. So it's not just summer, but in that window is probably six months out of the year, actually seven months out of the year, we did 187. So that was we ran a decent crew. And the funny thing was, is I decided I'd never, I've never paid in a house since I own real estate. I once I set the paintbrush down and joined the military, like I just stopped doing that ever again. So I don't know if I'll ever own a painting company. For the fear I might have to pick up a paintbrush. And I know more about it than most people and my summer job from the time I was 16. At the time I joined the military at age 20. I worked at a paint manufacturing company, we made paint, I poured the stock paint up on the shelves and watch people pour it and mix the latex and the chemicals and all that and make it that's where my dad got most of his jobs. He worked a sales counter at the paint company in town. And he mixed colors for people like, like, they would come back and go I don't know how to put this on here. But he could paint it was yeah, I'll do it, right, anyway. And I get it during the recession doesn't happen. But kind of like I like the pest control the heat and air and stuff. I don't care what the economy is like, you got bugs crawling through your house, your wife's gonna want somebody come fix it.

Hayden Miyamoto  47:38  
Yup.

Ronald Skelton  47:38  
 If your plumbing is not working, the guy might go outside, but the wife if you're married, you're fixing that. Right? I own a bunch of real estate. So I won't say it's always fixed because I got houses back and I'm like, How in the hell are they living here? This thing's been clogged for like months. It's nasty. But you know, for the general stasis of it. That was single guys. That was never there was never a married couple. Never. That's a horrible thing to say there were times. But usually that thing was taken care of if there was a family in there. So I get the recession proof (inaudible) of that. And that's plumbing and heat and air. There's the same way. Even in Oklahoma, it's (inaudible) to fall it gets 100, 810 degrees you're fixing your AC, right? Are you putting a window unit and you're doing something? Right? You're not our little tiny home didn't have heat in there because we have a private Valley in Oklahoma when we first bought it. We moved beside a lake in Texas and we thought more by the lake, it won't be bad. And we went and got something right away. Whatever it texas heat hit 110. And we've now we're by a lake and it's humid air right,  I get to ask. What else is what other industries you think would be kind of recession proof? I think of things like even like liquor stores or liquor and stuff people are going to (inaudible) because people drink when they're celebrating and they drink when they're depressed. But other than I don't involve with anything like that. I try to stay away from personal vice type of stuff. But 

Hayden Miyamoto  48:53  
Yeah, I

mean, vices obviously, always tend to do well in, in recessions. But yeah, I'm the same. I stay away from it. There are certain spaces like there's so many different spaces, you really have to look at it right appraising companies will do well, when things are booming and will do well, and things are in recession as well. So

Ronald Skelton  49:10  
Your granite countertop company, probably not so much though, right? I mean, like,

Hayden Miyamoto  49:13  
Yeah, that's why I mentioned you can hedge against it if you have high asset value. So that's one of the things you look at is okay, if this business comes with the purchase price is 4 million, but it comes with $2 million worth of equipment slash inventory. You could probably if a recession hits you could probably turn that around even at a discount and make a lot of your money back. So, 

Ronald Skelton  49:34  
Right.

Hayden Miyamoto  49:35  
Then you Okay, okay, well, if it drops to 3% a recession, but I can do this. I've hedged myself a little bit.

Ronald Skelton  49:40  
I've bought a lot of carpet and a lot of granite over the years, right, so I owned a real estate investment firm for a while and put stone countertops and a lot of houses not always granite but stone of some sort. Even concrete, but countertop businesses and stuff. I get them. 

Hayden Miyamoto  49:58  
Yeah.

Ronald Skelton  49:58  
Well, we're getting close to the top of the hour. Let's talk about acquire and like, what do you guys do there? If somebody wants to work with you, how does that work?

Hayden Miyamoto  50:05  
Yeah, so we have an accelerator. And typically, that's people who are looking to buy their first business or sometimes if they already own a business by their second business, and that's a, it's a training program slash community. And if anyone sort of wants more information on that, they can go over to our site, just acquired.com/accelerator. And they can kind of apply there, it takes a few minutes, you can have a conversation with our admissions CMC, if it's a good intro fit. And then we also have the ACE Program, which is been acquired A Certified Enterprise. So that's sort of that management run operating system. And I yeah, if anyone owns a business or wants to know more about that, they could probably just have a conversation with me, I'm always interested in talking to people about it. And my email is just Hayden@acquire.com. And in general, if yeah, people just want to kind of shoot the (inaudible) about the space, I'm happy to, to talk to people, it's always fun to meet other people in the space.

Ronald Skelton  50:56  
Awesome. And then so you already mentioned like how to reach out your email and stuff like that. It let's do the super wrap up here. If somebody could remember two to three things from the show, and about you on the show today, what would you want them to remember? What are the key takeaways?

Hayden Miyamoto  51:10  
I think, if you've never bought a business before, I think most people are focusing on kind of that first mountain in front of them, which is finding and closing a business. And they're not even aware that there's a much bigger mountain once you climb to the top, which is actually integrating it and running it. And so I would say start looking into that start looking into like various types of operating systems, so to speak, that exists simplest is something like EOS or traction, 

Ronald Skelton  51:36  
(inaudible)

Hayden Miyamoto  51:36  
a much more complex one would be scaling up. We've kind of built our own that is specific to a certain size of company. I would say that's one big takeaway if you've never bought a business, and then if, if you're interested, I guess an end. Another interesting takeaway, just from this conversation is just the size, the opportunity in this space. So if you're ambitious, this is genuinely a multi trillion dollar opportunity. And if you ever want to talk about that, I'm also willing to chat very interesting.

Ronald Skelton  52:02  
It's one of the reasons I jumped on this, I actually hired a performance coach at some point and said, Hey, I thought I was burned out in the real estate space. So I actually hired him just like help me clear my head and see if I was which because I thought I was like the stage like, am I burned out or is this because we were doing foreclosures? Is the marketing just tightening this, this is there's, there's no route to profitability with what the strategy we were using in the space. One of the things he said during that conversation is like they should play a bigger game. So I started looking for a bigger game. It's like I don't want to do apartment complexes, I was coaching a bunch of other real estate investors, I'd already talked to them. And they go into that space. And I'm thinking I'm have to compete with all my friends, right? These guys like they're out there looking for these deals. Love tooting my own horn, but I'm better at marketing than most people's, I don't want to like out market them and take deals out of every two people that were their friends. So I stepped above that into this space. But there's a hell of an opportunity here. And there's a blue ocean guy, there's enough room for all of us. There's no way one small group could acquire and fix this problem. There needs to be a shift in the marketplace to where entrepreneurial minded people are looking at things to buy as opposed to things to build. It's hard because are nationalistic, I've battled with it daily thinking of ideas, I probably should just create, right? And you have that creative. Once you're that creator, it's and you'd like to create things, it's hard. But there's just so many out there right now, so many opportunities to buy. I think it's a mistake to, to build.

Hayden Miyamoto  53:18  
Yeah.

Ronald Skelton  53:20  
Yeah.

Hayden Miyamoto  53:20  
Look at this kind of like it's an ecosystem, right? So what, what needs to exist in the ecosystem for this problem to actually be solved? Because the problem will solve itself. And there's an opportunity for anyone who wants to be kind of a leader in that ecosystem. But you look at REITs, right? And you look at where REITs were even 30 years ago, maybe you have like $2 billion in assets under management, right? 

Ronald Skelton  53:41  
Right

Hayden Miyamoto  53:42  
And what were the things in the last 30 years in the ecosystem that needed to exist to then create where we're at now? Right? And how can what are the parallels with small business ownership? When you think about it, that way, you can start thinking about, like you said, the finger problem, right? I am really one of those people who thinks if you're going to work on something, you better may as well work on something really big, 

Ronald Skelton  54:00  
Right.

Hayden Miyamoto  54:01  
Your likelihood of succeeding is probably similar. In each set, 

Ronald Skelton  54:05  
You could

go out there and spend your whole life trying to build a million dollar company. And you'll eventually get there. I think that's doable by most individuals on this planet might take you your first 12 tries to do it. But or you could go buy one, and this within a 12 month period, acquire a 12,18 month period, find one acquire it and own a, a million dollar company. But I love the idea that there's a greater play here, the whole REIT style investment mechanism for buying small businesses. I want to appreciate have you on the show today. I think we had a great topic. So we'll call that a show.

Hayden Miyamoto  54:07  
All right. Thanks so much for having me

Ronald Skelton  54:18  
 (inaudible) for a second afterwards. And we'll wrap that up. Thank you guys. 

Hayden Miyamoto  54:45  
Thank you.

Ronald Skelton  54:46  
 Hey, it's your host, Ronald Skelton. I want to thank you personally for watching the show today and invite you to call our new hotline 918-641-4150 That's 918-641-4150 Call us and tell us about our show, ask questions, suggested guests or even tell me about a business you have for sale and we'll reach back out to you. Again that number is 918-641-4150. call our hotline leave us some information. Thank you. I don't want to announce our new channel partners the ITX marketplace since 1998 ITX has created 5 billion in value by selling more than 225 it businesses in 20 countries. IDX works exclusively with it enabled businesses generating between 5 million and 30 million who are ready to be sold in m&a to decision makers who are ready to buy for over 25 years ITX has developed industry knowledge that helps determine whether a seller is a good fit for their buyers before making the match ITX mergers and acquisition marketplace we have partnered with has a proprietary database of 50,000 plus global buyers seeking it service firms managed service providers, Microsoft service providers software as a service platforms and channel partners with Microsoft Oracle ServiceNow itself and the Salesforce space. If you have an IT enabled business you're ready to sell. I want you to visit the I T exchange net.com/marketplace How to exit that link will be in the show notes visit them now. The investors and entrepreneurs professional mastermind. The investors and entrepreneurs professional mastermind combines that are traditional peer to peer mastermind introduce first in Napoleon Hill's famous book Thinking grow rich with accountability partnering, where your peers help you ensure that you set goals take action and get results. If you want to scale blow past roadblocks and achieve success faster than you might think is possible. I suggest you take a visit over to tiepm.com That's T i e. P m.com. And check out the investors and entrepreneurs professional mastermind