Summary

Jordan Evans, an accidental M&A Roll-Up entrepreneur, shares his journey of acquiring his family's language service business and turning it into a successful roll-up strategy. He discusses the importance of earning and learning while working for someone else, the value of self-teaching and optimizing for roles that provide real-world experience. Jordan emphasizes the need to be willing to do every role in a small business and the importance of understanding cash flow and financials. He also shares his experience with buying multiple businesses, the challenges and successes of the roll-up strategy, and the importance of building relationships with brokers and sellers. In this conversation, Jon Stoddard discusses his experience with acquiring and integrating multiple businesses. He shares insights on the challenges and strategies involved in the acquisition process, including finding the right deals, managing integration and personnel changes, and dealing with difficult sellers. He also emphasizes the importance of focusing on people and building trust with the acquired companies. Jon highlights the benefits of outsourcing and hiring overseas, particularly in Latin America, to reduce labor costs and improve cash flow. He also discusses the role of off-the-shelf software in streamlining operations and maximizing efficiency. Jon concludes by sharing his plans for future acquisitions and the potential for growth in the fragmented service industry.

Takeaways

Earning and learning while working for someone else can provide valuable skills and experience for entrepreneurship.
Buying a business can be a strategic and profitable way to enter the entrepreneurial world.
Building relationships with brokers and sellers can lead to deal flow and opportunities for growth.
Raising rates can improve profitability and should be considered as a strategy for business growth.
Legacy and reputation are important currencies in business transactions. Structuring deals with seller notes and royalty agreements can help mitigate risk in acquisitions.
Retaining and repurposing employees after an acquisition can maintain goodwill and tribal knowledge.
Outsourcing to Latin America can provide cost savings and cultural alignment for remote work.
Niche service industries offer opportunities for growth and consolidation through acquisitions.

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Transcript:

Jon Stoddard (00:01.803)
Well, welcome to the show, Jordan. How are things going?

Jordan Evans (00:05.326)
I cannot complain. It's good to be alive and excited to be on the show with you.

Jon Stoddard (00:08.971)
That's all right, thanks. So let's talk about this journey that you acquired your company from your parents. You told me you pay too much, but let's kind of rewind and go, what were you doing before then? And how'd you like, ah, you know, parents want to sell it. Like, should I buy it? You know, that whole story there.

Jordan Evans (00:30.894)
Yeah, I think the narrative story is a good one to go the arc. And I think in some ways my story is typical and others atypical. I think what's typical is that I had a W -2. I worked for somebody else. I was in software startups before.

What's atypical about that is it was startups. So you're building something from scratch. And I was always on the sales and marketing side. So before jumping into entrepreneurship and buying this business, I was having a lot of fun, had a lot of misses. I had a lot of failures on my own, which I tease, I should add to my LinkedIn too, just a daily deals site for the Hispanic population when Groupon was getting started.

a SaaS project management solution. Like there were just so many misses in my journey that are not accounted for. So I just wanted to put that out there as like, when we dive into, I feel like now I got traction and success buying businesses, that there were a lot of lessons along the way and banging your head against the wall to get here. But the short of it is I always knew I wanted to work for myself and have my own thing. I always thought you had to start.

Jon Stoddard (01:27.659)
Yeah.

Jordan Evans (01:49.262)
as a startup, you know, build something from scratch. Okay, yeah, it's curable, though. It's curable. So I think what's interesting for the listeners is, you know, I was always looking at earning and learning at the same time, that if you are going to go get a W -2 and get paid, like get paid more than what's going to pay the bills, be getting the skills that you need.

Jon Stoddard (01:52.619)
I had that same disease.

Jon Stoddard (01:58.091)
Yes it is, yeah.

Jon Stoddard (02:09.931)
Right.

Jordan Evans (02:17.934)
to be an entrepreneur or business owner if that's your aspiration. So don't miss an opportunity. Self -teach yourself, but also optimize for roles or companies where you're going to get that real world MBA.

Jon Stoddard (02:31.787)
Yeah, yeah. Insert yourself into that, test your capacities, like to push yourself to limits, like what you can learn. Like if you don't know something, be curious about it. Yeah.

Jordan Evans (02:44.654)
Yeah, yeah. Or optimize for companies, which in my instance was software companies or startups where there is no career path per se. It's like, if you see a need or opportunity and you raise your hand and you come up with a plan and can execute, it's a great place to experiment and it's less permission based. It's like, hey, I see. So it's kind of a way to still have a W -2 and be entrepreneurial. So.

Jon Stoddard (03:03.307)
Yeah.

Jon Stoddard (03:12.235)
Yeah.

Jordan Evans (03:14.19)
You asked what did I do before that? I studied economics and business. What do you freaking do? Who needs a college education these days? I mean, everything's online. You could teach yourself, but whatever. I bought into it. I met my wife there. Everything's good. I have no complaints. But I'm not using any of it today. And so, you know, I respect people that get an education, but I think in today's world, owning a business is less important.

Jon Stoddard (03:34.667)
Right.

Jordan Evans (03:44.59)
I think if I could highlight anything, maybe I'm going out of track. You get me on track if I am, John.

Jon Stoddard (03:50.557)
No, no, no, no. Look, I drive my kids to high school and we pass by the University of Arizona and they've seen these kids pay 60 ,000 a year going, yeah, I'm not really sure that's a good investment. Or you could just wait for somebody like Biden to say, you know what? I'm going to get you out of your debt.

Jordan Evans (04:03.918)
Mm -hmm. Mm -hmm. Mm -hmm.

Jordan Evans (04:10.606)
Right, yeah, somebody else is gonna fix your problem. But I mean, that's not why we're here or I don't think your audience is here too. It's like, we wanna take charge of our destiny. We want to be rewarded for the risk and the opportunities that we seize. So there's definitely a place. I hire a lot of highly educated people that went through the school system. So it serves a purpose, right?

Jon Stoddard (04:15.275)
Yeah.

Jordan Evans (04:38.094)
So let's fast forward to the moment, maybe, you know, getting into M &A, and it was around 2016, thereabouts. My ass was fired. Can I curse on the show? I'll censor myself if not. Okay.

Jon Stoddard (04:43.435)
Yeah.

Jon Stoddard (04:50.781)
You can, right? I don't know if ass is a profanity. It's according to YouTube, yeah.

Jordan Evans (04:55.63)
Okay. Yeah, it's yeah, it just adds some flavor to our conversation, but I'll keep it PG 13. How about that? I was fired. I was let go by my CEO as a VP of Sales and Marketing at an early stage startup, just coming off of success of a startup before that that was acquired by booking .com as a commercial director for their entire sales force in North America. And so,

major highlight of my career, then to a really shitty, stressful time at a startup. And that was a kick in the pants of like, you've been wanting to do your own thing and be your own boss. And now here's the universe sending you the sign of like, don't be a mercenary for anybody else anymore. And so that really started the looking around and saying, well, what can I do?

At that time, I had the fortunate benefit of having family that had this translation company. And it was lifestyle business for people, $700 ,000 in revenue. And it was mom and dad, and they were burnt out after 30 years. No, no exit plan. 30 years, yes.

Jon Stoddard (06:06.251)
30 years? Yeah. And it was nice profitability. Obviously it was looked, you know, great cashflow.

Jordan Evans (06:13.678)
Great cashflow, yeah. Yeah, good margins, good repeating business, like clients reoccur. It's not contracted, but the needs keep arising. We're talking language services, which is spoken words. So think of a hospital that services a community in LA, and they've got nine different languages that people come into the ER, they need to work with them on. So it's repeating.

Jon Stoddard (06:39.019)
Yeah.

Jordan Evans (06:40.398)
Then you can think about international businesses. They don't start and stop doing business in different international markets. They need to translate marketing and support material and websites. So it's a nice niche industry that I can't take any credit for finding. It was kind of there in front of me. That's so.

Jon Stoddard (06:58.411)
No, I actually applied for a director of business development for a local language company here in Tucson. Yeah, this is a long time ago, like 1012. Yes, Seracom. Yep.

Jordan Evans (07:03.566)
Oh, really? Ah, Siracom. Do you remember? Yeah. Yeah, they're a big player in our space. That's very cool. And they do OPI, which is over the phone interpreting a lot of interpretation. And now it's a lot of video remote telehealth as well. And so we do that. Mm hmm.

Jon Stoddard (07:13.323)
Yeah.

Jon Stoddard (07:24.747)
Yeah, for definitely for hospital. They, you know, their big contracts were UMC and Banner. Yeah.

Jordan Evans (07:31.15)
Mm -hmm. So it's that moment where I was in the right place and I saw an opportunity. I could use my sales and startup skills to grow this lifestyle business and figure out how to retire them at the same time. And I didn't know you could buy a business before. I never thought of it before. And this was that revelation moment that...

I'm one of five kids. I don't want anyone coming down the road saying, hey, where's my inheritance after I scale this thing up. So the best way to do that is buy the business. So I figured that out. And at that time it was like the HBR book on how to buy a small business.

Jon Stoddard (08:11.947)
Uh, perfect. Yeah. Yeah.

Jordan Evans (08:15.502)
That was it. And talking to attorneys and Googling, it just wasn't the same level of resource and community around search and business acquisition we have today in 2024. I love it. Yeah.

Jon Stoddard (08:29.963)
It's accelerating the amount of information of the people sharing what they've learned in the last five years. Yeah.

Jordan Evans (08:37.806)
Yeah, it's so awesome to share and put that out there and help other people do it because it's it is a rising tide floats all boats situation. I believe sure we might be bidding on on deals similarly, but I don't even think it's that so fragmented SMB acquisitions.

Jon Stoddard (08:55.211)
Yeah. It's not an easy thing. Just let's just say it. Like most people that try, you know, fail. Yeah. So when did you have this conversation? Did the parents think about going, you know what, were they thinking about closing it down or were they thinking about going through a broker?

Jordan Evans (09:01.23)
Mm -hmm. Mm -hmm. Oh.

Jordan Evans (09:18.222)
No, I mean, they were just so heads down that they didn't see the exit sign. They didn't realize that that was an option even. I think they just thought they would run it till they were tired and done and shut it down, right? So that's the ideal situation. There was paper involved. There's recurring. What I'm saying the ideal situation was,

Jon Stoddard (09:31.403)
Yeah.

Jordan Evans (09:44.206)
This small business that in spite of the owners being passionate or like burnt out or not is still running and still has that repeat base. And they had a lot of hair on it, meaning like inefficient processes, things that you can modernize and, and improve the cashflow ultimately. Um, so I, I've, oh yes, a hundred percent.

Jon Stoddard (10:03.659)
with technology and software, yeah, that they weren't aware of just because they kept doing the same thing, you know, it's the way we do it. Yeah.

Jordan Evans (10:10.574)
100%. Yeah, 100%. You get later on, it's producing enough cash flow for you, you just why bother trying to learn a new system or reinvent the wheel. So there's a lot of these companies out there, maybe a little bit less than six, seven, eight years ago, but I salivate when I see a company that's got some sort of paper involved in the process and they haven't touched this pricing sheet in like two decades.

Jon Stoddard (10:21.707)
Yeah.

Jon Stoddard (10:39.115)
Yeah, yeah. I have to ask you, you know, you have other family members. Did they, as soon as you kind of came to the realization why I should buy it from them, didn't they have some kind of obligation to sit everybody down and go, well, I have the obligation to offer it to the other family members to purchase. It's kind of like in the contract of kids. Like, how'd that go?

Jordan Evans (10:42.286)
to.

Jordan Evans (11:05.838)
Yeah, good question. I guess every family is different. Fortunately, I think it worked the best that it could and then some. I was the only one showing up with willing to pony up and write him a check and sign up for working in the business. So it wasn't a formal meeting or right of first refusal. It was like I've...

Jon Stoddard (11:26.123)
Yeah.

Jordan Evans (11:33.55)
I don't have to buy this company, but I'm willing to, and here's the price that I'm willing to pay and how we'd structure it. And in fact, I wouldn't want anyone else involved. I do have my younger sister who was there for a decade before in operations who had really great foundational knowledge involved as a minority partner. So this story is interesting because it's got family involved in it too, like buying from first generation and then also.

negotiating like equity split and roll with a sibling. And I tried to do it as much arm's length, like love you all, but this is a business transaction. And that's the most fair way to do it. And we don't have to do this deal. And you know, no harm, no foul, we all want to still be family. So that was really hard. And

Jon Stoddard (12:07.755)
Yeah.

Jon Stoddard (12:23.947)
Yeah.

That seems to sound like the imperative that you not gonna underpay for it, but you need to overpay to keep those family bonds together.

Jordan Evans (12:39.694)
Yeah, it's a feel good for me. I didn't know what I didn't know, John, and I'm fine. I paid 3X too much of what I would buy now.

Jon Stoddard (12:44.747)
Yeah.

Jon Stoddard (12:49.675)
Yeah. Well, yeah, this is family. Like, it's difficult, just probably. Did they think it was worth more? Or were they happy and settled? Or?

Jordan Evans (12:51.566)
So I think there's a lesson there. Yeah.

Jordan Evans (13:01.998)
Yeah, they work static about it. And so it was way more than I think they would have put on it even. And so that's, I think, terrible negotiation on my part, you know, just. But I learned my lessons and it got me in the game. And so if you're a good operator, I don't encourage people to overpay or overbuy like you make money when you buy.

Jon Stoddard (13:12.203)
Yeah.

Jon Stoddard (13:16.939)
You

Jordan Evans (13:31.182)
or you at least had your bets. But I knew I could grow the thing and I knew because of all the hair on it that I could improve the cash flow and be able to buy the thing. So I guess part of it was ignorance and family loyalty, but also part of it was like, I do know what I'm doing here. There's some ways that I'm covering my butt.

Jon Stoddard (13:55.115)
Yeah.

Jordan Evans (13:56.174)
We doubled business organically overnight just by looking for lookalikes, meaning who's our best clients and how do we get out and get more of them? And so we were able to double, but this is a service business and they're hard to grow and hard to scale. It's a people game.

Jon Stoddard (14:11.659)
Yeah, it's, it's, it's not like a software. It's like software can scale like that. I mean, service business like this, you just got to add more translators. Right. Well, let me, let me ask you about the capital stack. Did you go to the traditional route, uh, like SBA put some money down or did you sell or finance with family or.

Jordan Evans (14:19.822)
Mm -hmm. Mm -hmm. Yeah, yes. Okay.

Jordan Evans (14:31.63)
Yeah, so I didn't even look at traditional financing. It's just, this is a non -asset heavy, it's asset light service company. So it's perfect for the SBA, but at that time I didn't know about it. So what we did was equity and seller note. And I think it's great. Not only for getting underwritten and creating whatever terms you want, but also it gave me assurances too, if something like terribly wrong, it could offset against that seller note.

Jon Stoddard (14:44.395)
Yeah.

Jordan Evans (15:00.782)
And also I got to pay them more interest and they get more money for the deal. So this was a equity plus seller note deal.

Jon Stoddard (15:11.531)
Yeah. And you jumped in, you got this. Congratulations. You jumped in and how fast were you able to double it with the first year, six months or within a year? And that's just you going business development, knocking on doors and increasing sales. Yeah.

Jordan Evans (15:20.878)
Within the year, within the year, yeah. And that's easy to do for a small business.

Jordan Evans (15:29.102)
Yes, I bought a small business, John. And when you buy a small business, you gotta be willing to do every role from ops to HR to sales. Like it's all hands on deck. And ignorantly, you know, I didn't know that, but it was all in. I think the family component propels you too. There's a lot of people downstream relying on my success. And so yeah, we doubled and.

I think out of necessity, you just go, who are we servicing well today that we can find the lookalike across town and contact them and have a good story to tell them. And it's a service business, so it's all about trust. So if we're already having success with somebody they know as their competitor or in the same space, it really lowers the hurdle to work with us.

Jon Stoddard (16:18.027)
Yeah. So you did a lot of, I mean, you're kind of look like the same path I took. I was in VP of marketing, VP of sales and business development all the way through my startup career and bigger companies. And it's easy for us to see that's where it can help. How were you on the financials? Reading the profit loss and the accounting of it? Was that...

Jordan Evans (16:29.39)
Mm -hmm.

Jordan Evans (16:40.654)
All in. You got the chart of accounts organized in a way that is gonna work for me, show us what our margins are. And I studied economics, so sure.

Jon Stoddard (16:51.691)
Yeah.

Jon Stoddard (16:55.691)
Oh, so you've gone through a number of accounting classes and yeah.

Jordan Evans (16:58.958)
Yeah, I did all of that, but honestly, the theory doesn't help. So it's really getting an understanding cash flow of simple P &L and balance sheet, like understand them, know them. How does money flow through the company from start to finish and how quick does it turn from an order to cash on the bank? Like those are so important. Some shout outs to Simple Numbers. There's two fantastic books that were my Bible.

Jon Stoddard (17:19.659)
Yeah.

Jordan Evans (17:28.526)
I think it's called Simple Numbers, A Straight Talk and Big Profits by Greg Crabtree. And then he came out with a second book, which is about scaling a business. So using those foundations, but then like growing a business, you can waste a lot of time and money. So how do we like keep track as we're growing that we're not losing sight of cashflow and all those things. So highly recommend those books. And I think that's an.

Jon Stoddard (17:54.923)
Definitely.

Jordan Evans (17:55.47)
underrated skill to is just in time learning as an entrepreneur like you know these business books I hate reading them cover to cover like why bother unless it's like got some fiction in there like use it as a reference book you know this is a bad example is a cocktail book but like today yeah

Jon Stoddard (18:14.219)
Sitting on the coffee table makes it makes the library look good

Jordan Evans (18:17.998)
It does. Yeah. It's like today I'm dealing with this issue and somebody solved it in this book. I've got, this is my reference. It's going to help me figure out like, what do I do with the issue right now? So, um, I know that your audience is like consuming this podcast and consuming books or audio books. I just want to double tap on that. Like life hack that don't feel bad. If you can't read a book cover, recover, like even better, just read the relevant part and implement the hell out of it.

Jon Stoddard (18:28.011)
Yeah.

Jon Stoddard (18:46.059)
Yeah, I had always had a trouble. I learned this, like I was consuming a lot of books written by professors and I go, well, they have no practical knowledge if they've never been in the industry, like to show me some specific example where this theory worked out or didn't work out. And I stopped buying books from professors that didn't have any real -world expenses. Yeah.

Jordan Evans (18:54.83)
Mm -hmm. Mm -hmm.

Jordan Evans (19:02.158)
No.

Jordan Evans (19:05.902)
Mm hmm. Mm hmm. Mm hmm. Yeah, let's listen to John's podcast and glean lessons. And I think that's that's the way to do it as you get real world experience and betting on yourself getting into the game. And I guess if I could like direct the conversation even more forward is now we're doing a roll up in this industry, which that was not the original guy.

Jon Stoddard (19:20.587)
Yeah.

Jordan Evans (19:34.158)
I'm an accidental roll up entrepreneur. Um, didn't know to buy a business to start. You figured that out, grew it to, you know, doubled in size and realized this is hard. I will still keep growing, but like buying a business was pretty great. Let's do this again and, uh, let's, let's buy a similar business. So use the same lookalike strategy. Like I come up with a decent playbook in the last 12 months of how to make this thing sing. Um, and.

can we expand a new geography? But it's like the same business and I just implement the same playbook. And that's what we did. I think it was like a year and a half later we closed. But I started looking, I think six months after I bought Language Network, because I knew it was going to take time. And I looked at a lot of different companies and just started getting familiar with the whole traditional search model of like talking to brokers, talking to...

building your own direct outreach pipeline and kind of seeing what's out there. And until I finally found one, it was like, let's make an offer on this bad boy. And so we bought our second company, Washington state, just north of Seattle. And I'm in California. Yeah. Santa Barbara.

Jon Stoddard (20:34.219)
Yeah.

Jon Stoddard (20:41.771)
Where was it located?

Yeah. And you're in Santa Barbara, California, right? Or where are you? Yeah.

Jon Stoddard (20:54.219)
Was this an on -market deal or an off -market deal?

Jordan Evans (20:59.31)
This one was like on BizBuySell. And it was through a non -industry, just general salt of the earth business broker, Fred the broker, fantastic guy. I've been doing it for many, many years. And he was fantastic. He helped guide and there's not a lot of good brokers out there. So I got lucky. He helped set the expectations with the seller.

Jon Stoddard (21:02.315)
Oh, okay.

Jordan Evans (21:28.206)
The seller wanted to retire and exit and those are the only deals that I do is replacing ownership. They go off. That's our roll up. We don't.

Jon Stoddard (21:38.283)
That's it, that's in the playbook. That's rule, like a hard, fast commandment. Okay.

Jordan Evans (21:42.702)
Yep, we're not mixing chefs in the kitchen. We're actually integrating and we're one company and we standardize and bring the people into the fold and build one common team. It takes time.

Jon Stoddard (21:57.963)
So these is like scale driven synergies. That's what you're doing this roll up. So what was the size of this business?

Jordan Evans (22:05.006)
It was another small deal. It was 1 .5 million gross revenue, but that allowed us to double. So remember I bought Language Network at 700, we doubled. Or threes. So we doubled again. And it's like a magic trick overnight, like boom, and you've got new customers, new team, new...

Jon Stoddard (22:16.971)
Yeah, you're at 3 .9, or yeah, you're, yeah.

Jon Stoddard (22:26.539)
Boom!

Jordan Evans (22:31.118)
service capabilities, like you got the customers and the fulfillment, like this is amazing. And so we cut our teeth on that and then we went into COVID and I was like, going, holy shit, what did we sign up for here? And I used SBA on this one. So by this time I wisen up that there's other ways to do these deals. I did try and go.

Jon Stoddard (22:46.315)
Yeah, yeah.

Jon Stoddard (22:54.443)
SBA at that time was 6 % right around, right?

Jordan Evans (22:59.246)
Yeah, I think it was six and a quarter or something. The good old days, yeah. It's a great vehicle, great lender, they loved it. We bought the deal. Yeah, I think we paid 400 something thousand. And again, two, it was like two and a quarter, 2 .25 on, on.

Jon Stoddard (23:03.339)
Not now.

Jon Stoddard (23:17.355)
And the multiple, definitely lower than the one, two.

Two and a quarter, wow.

Jordan Evans (23:26.798)
a mixture of EBITDA and the owner's salary that they were taking out a little too much. It was a good deal. This is the best deal I've done, the second one.

Jon Stoddard (23:37.195)
Anything thrown off 400 ,002 .5 is something to look at.

Jordan Evans (23:43.278)
Yeah, yeah. You make your own luck. I'm not going to be on this podcast and say I got all my shit figured out. It's just continuing to look and you kiss a lot of frogs and then you find one that's great. And the reason I think they sold and at that price was they were truly motivated to exit and they were truly motivated to see the company go to the right person. And for them that 35 years,

Jon Stoddard (24:07.467)
Yeah, how old was the company?

Oh, another duplicate of your dad's. You're in your mom's. Yeah.

Jordan Evans (24:16.11)
Yeah, it was tailor made for us to buy the business and we stuck with our criteria. It looked exactly like our business, the type of services, the type of customers, just new geo. And I flew up there. This was like the first talk to the broker. And the first thing I did, sure, I got some financials, I signed an NDA, but I flew up there and I spent the whole day with the seller. And...

Jon Stoddard (24:42.155)
How did that kind of make them feel how serious you were that you actually went and visit them? You think that helped the sale? Were there multiple offers on this or nobody else did it? So boom, yeah.

Jordan Evans (24:53.806)
John, nobody else did it. Yeah, I was late to the party. They had already gotten a few offers from other people. They had talked to other people. And so nobody else had done this. And it seems like an obvious thing. You spend a couple hundred dollars on airfare, at least back then it was, and treat them to a meal. And then you make so much more ground and rapport by breaking bread and being face to face.

Jon Stoddard (25:13.163)
Yeah.

Jon Stoddard (25:22.987)
Yeah.

Jordan Evans (25:23.086)
And the broker too did not block this. Like that's also a sign of good brokers is it encourages that buyer -seller potential get together. So.

Jon Stoddard (25:34.603)
Yeah, yeah, I, I encouraged that. I, uh, I have a student right now. She, I said, go visit them. I mean, and take your baby because the peers are selling the peers and they want to make sure that whoever they turn it over to, it's kind of a mirror of themselves, which it was.

Jordan Evans (25:37.486)
Mm -hmm.

Jordan Evans (25:42.286)
Mm -hmm.

Jordan Evans (25:50.702)
Mm -hmm. 100%. Yeah, the only currency, it's a mistake. Yeah, everyone wants to maximize the price of their exit, the seller does. But there's other forms of currency, of value in a deal.

Jon Stoddard (25:53.707)
Yeah.

Jordan Evans (26:07.598)
And it's important to find that out. What is it? And for this one, it was legacy and filling, like you said, that they're signed to appear somebody who is a many them many years ago and are going to treat their business right.

Jon Stoddard (26:22.795)
Yeah. Were there, do you recall any red flags sticking points that just took longer to navigate and negotiate?

Jordan Evans (26:32.43)
So this deal took about a year, even doing that, even doing that. The deal fell apart twice. And so they say, you know, you don't have a deal until it's died two deaths.

Jon Stoddard (26:35.531)
A year. Yeah.

Oh shit.

Jon Stoddard (26:44.971)
Your money's in the account for the seller.

Jordan Evans (26:47.758)
Yeah. So it took a year, even a small deal like this, but I was convicted that this was the right deal for us and the right next deal to do a lookalike deal. And yeah, it was had paper. It was the same playbook that we did with Language Network. So I stuck around. I think a lot of people would have said, you know, whatever.

the seller's bipolar, they're paying in my, you know what, I'm gonna go onto the next one. But I was very patient and I sure I have an ego, but that's the biggest blocker. I didn't have an ego in this deal. I was convicted and I was willing to let the seller go through the remotions of up and down and leverage the broker to kind of get them to that place a year later where we're.

Bottle of champagne, congratulations, I'm getting the keys and we're buying this thing.

Jon Stoddard (27:44.811)
Yeah. And the broker was some kind of like a intermediary that was helping like the guy wants more money or is there some kind of sticking point and yeah.

Jordan Evans (27:52.366)
Yeah, good cop, bad cop. Yeah, yeah, all of the terms, right? And then...

Jon Stoddard (27:57.707)
and he's telling the seller like, hey, he's a good buyer. He's got a business that's gonna take care of it. Yeah.

Jordan Evans (28:00.718)
Yeah, yeah, yeah, I built a good relationship with that broker. And he did a good job of actually like helping set expectations with the seller of like, knowing that this is the deal you need to take. I think a lot of brokers are too short sighted and they did, you know, they let the market, you know, beat up the seller. Yeah.

Jon Stoddard (28:23.243)
Well, it's, yeah, it's 10%, you know, if I could just turn over, you know, a couple million dollar deal and make 10%, I'm off to the next one. Yeah.

Jordan Evans (28:33.902)
Yeah, yeah. Well, we built enough of a good relationship, the broker and I, that he brought me another deal and that was the next one. And so here now we're actually a roll up. We're working, we might be small deals, but we're rolling things up and we're moving, we're improving the cash flow. The, okay. Sure.

Jon Stoddard (28:52.235)
Well, let me ask you about your dad and you're telling your dad at whatever event you're at, like, hey, we just bought another business. We double revenue, double profits. Like, what's he saying? He's just, he's proud as hell as you and what.

Jordan Evans (29:09.294)
Yeah, you know, the business is so different than what they knew, but they are proud as hell. And I just took them, we did a company All Hands in Mexico, and it's like 43 of us now, instead of just four when they bought it from them. And we're like 15x the size and revenue.

And so they could only comprehend so much John that like when I brought him to Mexico for the sales or it was the entire company kickoff, but we did a sales kickoff too. Where they just saw all the people and like their legacy, how it's just been amplified. Like they got teary -eyed. It was really special, special thing.

Jon Stoddard (29:48.811)
Oh, that's fantastic. Yeah.

Jordan Evans (29:52.75)
Yeah, yeah, it's a feel good opportunity and it's changed my life trajectory economically. Plus I feel great because I've benefited people I know and love, namely my family. And now I've got a bunch of team members, my employees in tow and this roll up strategy that I tripped and fell into but seized the moment on is a fantastic way to go.

Jon Stoddard (29:53.259)
That's nice to hear.

Jon Stoddard (30:20.523)
Yeah, I have to make a point here. Sometimes the wealth created in families is generational. Rome wasn't built in a day and it takes a while. Yeah.

Jordan Evans (30:28.91)
Mm -hmm. Mm -hmm. Mm -hmm. 100%. And I'm grateful for them to have had this industry already picked out and curated for me. Not everyone has that. So I didn't have to search forever to try and find like an industry or a niche.

Jon Stoddard (30:33.355)
Yeah.

Jon Stoddard (30:44.043)
Like, what do I do? What do I?

Jordan Evans (30:47.246)
Yeah, and I know that's a struggle and not only that, but it's like hyper fragmented. It's like the ideal industry to do a roll -up in. So that was wham -bam curated for me and I'm just seizing the opportunity.

Jon Stoddard (31:04.235)
Yeah. So this broker, you got a great relationship. Now you're a serious buyer. And does he specifically look out for other businesses that are doing this and say, you know, do you want to sell? Do you want to sell? Cause I got a great buyer, right? I got a real buyer. Yeah.

Jordan Evans (31:18.062)
Exactly. Yeah, exactly. So he said, I will start doing a search for you doing mailers. And so he introduced me to two deals. I ended up buying one of them. But that's the power of being a known buyer and a good person, easy person to work with is that you just start getting deal flow. Yeah.

Jon Stoddard (31:40.107)
Yeah. Reputation, credibility. Yeah. What you talked about earlier is the currency right there. Yeah.

Jordan Evans (31:47.214)
Mm hmm. Yeah. And so he got paid twice working with me. Hopefully he's still out there. I think we slowed on the deals or he's exhausted that geography for us. But so we did this, this, you know, about my third company and we doubled again. So it just.

Jon Stoddard (32:09.419)
So it was another 1 .5 or what was that? Three million or? Three million.

Jordan Evans (32:12.334)
It was like 3 million. So it was just, it was nice, like, you know, leveling up. So now we've doubled again. And we're growing double digits, like 15 to 20 % organically too, with sales and marketing and talking to our customers proactively, raising the rates, like, oh my gosh, I love raising the rates, especially, it goes straight to the bottom line, guys.

Jon Stoddard (32:28.939)
Yeah.

Jon Stoddard (32:39.115)
It's like, that's the first thing you do. I'll tell you, you come in and just raise the rates, yeah.

Jordan Evans (32:42.19)
Yes.

Yeah, and it doesn't have to be a huge jump or maybe it should be, but you don't want to damage the goodwill and the client. So know a little bit of what you're doing, but definitely raise the rates. And it's probably more than what you like or have an anxiety on. Just raise the rates.

Jon Stoddard (33:06.091)
Yeah, let me let me ask you about the cap stack on this one. How did you buy this SBA traditional route? Yeah.

Jordan Evans (33:12.014)
This is a fun one. Yeah, so now we're branching out, getting a little more creative. This third deal had some large customer concentration, in fact, 50%. But it's a key vertical that we want to be in. And so at first you go, hell no, that's a risk I don't need to take. But when you start getting to know the story, how long the customer's been there, let me see the contract, talk to me about the workflow.

Jon Stoddard (33:29.675)
Right.

Jordan Evans (33:38.286)
Then putting a structure in place that you have the seller has to put their money where their mouth is We'll give you 50 % consideration for the company at close. So that's our own equity And then we're gonna split the other remaining 50 % in two buckets one is going to be a seller note

and you get some interest on it, it's five years. And then the other is a royalty agreement. And so you're going to get mailbox money on that key customer, X percent for five years, I think. And, you know, as long as you.

Jon Stoddard (34:16.011)
That's going to mitigate your risk that this 50 % customer concentration, the single customer sticks around. How long were they with the company when you started this transaction?

Jordan Evans (34:28.558)
How long was the client with the company? At least a decade.

Jon Stoddard (34:30.475)
Yeah.

Jon Stoddard (34:34.987)
Okay, so that's that's some kind of, you know, belief that they're going to stick around for another five years.

Jordan Evans (34:42.542)
Yeah, yes, exactly, but also not. When I bought Language Network, I failed to share the largest customer made up 25 % of the business in the first year churned out and they had been a customer for 10 plus years. So I bought a $700 ,000 business and then what is that? Almost 200 ,000 is walking out the door and I'm going, holy shit, I gotta replace this.

Jon Stoddard (35:08.587)
Yeah.

Jordan Evans (35:08.846)
So I forgot to mention that happened in the first 12 months. So I have some scar tissue.

Jon Stoddard (35:12.971)
Oh, that's what your mom and dad's business, right? Yeah. Yeah.

Jordan Evans (35:15.95)
The first round, yeah. And that was like, I mean, that was stressful time, really stressful. But that scar tissue, that's right. Just one more deal, solve everything. 100%, if you're a business owner or you're buying a business, you gotta be willing to get out there and sell and represent. And that's why I'm still here.

Jon Stoddard (35:25.899)
Nothing a sales guy can't handle though, right?

Jon Stoddard (35:32.971)
Phone going, yeah.

Jordan Evans (35:44.942)
It's not having an aversion to that. But with this deal, that informed this deal, it's like, there's no need to take that risk. Let's structure this so we win together. I think we capped that royalty agreement so we don't pay an egregious amount. What we've done in that deal is we've grown that account. So if anything, we've accelerated their payback on that big concentrated customer.

Jon Stoddard (36:07.947)
Yeah, there you go. And they're happy with that. There are no complaints. Yeah.

Jordan Evans (36:12.526)
That's right. They're a great reference for us. And because there's a lot of deals now for bolt on that are not bankable. Like if you go to the SBA, how much customer concentration does this target have? I think some banks that are good will say, oh, how does it fit into your entire org? Like, it's not just 50 % of the target company. Now it's 5 % of your entire org. If they're underwriting the deal and you're doing a roll up.

Jon Stoddard (36:38.763)
Yeah.

Jordan Evans (36:41.87)
But on its own, this wouldn't have been an SBA bankable deal because of that risk. So we had to get creative.

Jon Stoddard (36:45.963)
Yeah, that's a, that's an interesting, you got to shop that around. I mean, if you were a subcontractor or supporter of the oil and G industry where 90 % of your customers come from, you know, revenue comes from one customer. You have to shop that around because there's like live Oak bank will do that or byline bank will do that, but there's an SBA lender in, you know, Texas that'll do it.

Jordan Evans (36:59.63)
Mm -hmm.

Jordan Evans (37:03.278)
Mm -hmm. Mm -hmm. Mm -hmm.

Jordan Evans (37:10.638)
Mm hmm. Right. Exactly. It's not every SPA lenders created equally. As you pointed out, everyone's got a different credit appetite or underwriting approach.

Jon Stoddard (37:12.907)
Yeah.

Jon Stoddard (37:20.875)
Yeah. So Rayce, let me ask you about these, this integration and this platform that you got. Did you have any difficulty in, you know, you bring these people on and there's now duplication, you have to let people go. A distasteful part of this business, right?

Jordan Evans (37:37.262)
That's never been. Yeah. Yeah. I mean, it's, you know, if you're signing up, especially for a personal guarantee, you know, you owe it to yourself and the company and the customers to make fiscally responsible decisions, which does involve letting people go at times. Um, but the truth of it is I'm in a service business and we're only as good as the people doing the service. And not only that I've bought businesses that are kind of lifestyle or.

not very standardized. And so you don't want to come in with a hatchet and start losing goodwill with the customers or tribal knowledge on how we deliver the service. So our model is not to underwrite like cutting a bunch of people. In fact, it's to try and keep as many people as possible and repurpose them first into more dollar productive roles or tasks.

And my experience so far is we've been able to retain the people that are excited and then naturally churn out people that just they can't get over that we're just a different entity now or either life is calling them elsewhere. And so this is an interesting point because success is through the people and I need to get buy -in and I, if I cut heads, like I'm going to cut all my goodwill as the new owner.

Um, and it's going to be hard to redo that first impression. So you're not touching any of the people. In fact, you're not pulling any of the benefits back. You're looking for quick wins to build trust with the team. Uh, in one instance, there were like three people in a company we bought and I raised their salaries by 20 % overnight. That hurts. Uh, but it was an equitability thing. Uh, when I looked at similar people doing their job at the other companies.

I just assumed they're gonna talk and it'd be, yeah, it wouldn't be right if I'm doing the same job, I'm getting X percent less. In fact, they had more experience. So, I mean, that's what I did. But John, here's what we do. This is a critical part of the playbook and I encourage everyone to do that is we hire overseas.

Jon Stoddard (39:32.362)
That's great. Goodwill. Yeah.

Jordan Evans (39:56.366)
for every role possible, unless you actually physically need somebody on site, specifically Latin America for time zone, for cultural alignment, for it's a great knowledge base, like they speak perfect English and we work remote. So it's just ideal. We're able to place somebody that's maybe a third of the cost of a US equivalent. And so as we've grown and we open up new roles,

Jon Stoddard (40:20.811)
Yeah, yeah.

Jordan Evans (40:24.59)
It's always higher in Latin America. And we have the best team. And it makes cash flow sing. Like truly, if you can take your labor expense and make it a third, if not a half. So.

Jon Stoddard (40:40.075)
You have to keep outsourcing to finding new locations. Yeah.

Jordan Evans (40:44.238)
Yeah, yeah, so the people.

Jon Stoddard (40:45.867)
And where are we talking about? Are we talking about the Philippines or?

Jordan Evans (40:50.574)
specifically Latin America. And so we've done four acquisitions now total, and we're trying to do one to two per year. But I spun off our internal recruiting team, a sister company called Hire Globo. And they are dedicated recruiting, hiring, staffing, all the things like build our team in Latin America. And we spun it off because friends,

Jon Stoddard (40:52.491)
Latin America.

Jordan Evans (41:18.798)
and other entrepreneurs were asking like, how do we do what you do and place amazing talent.

Jon Stoddard (41:24.939)
This is like, this was operating expense that you turned into a profit center.

Jordan Evans (41:29.358)
Yeah, we created a business around it and I'm so bullish on it because it transforms cashflow, it transforms like operations. You're going to find people that are nothing, no offense to any of my US team members. Like they're amazing people and nothing wrong with hiring the US, but I've just found like the retention to detail, the buy -in, the commitment that you're paying them in US dollars. So it gives a lot of stability in that region of the world.

And if you can work remote, like what does it matter? Like with COVID, I think it proved even to small medium -sized business that we can operate in a non -physical location. So why not another country? Tech with the technology is there and the resources are there to hire those folks.

Jon Stoddard (42:20.715)
Yeah. This is like a, I don't know if you've ever read books on Warren Buffett, Berkshire Hathaway. His first acquisition was a textile company and he goes, ah, yeah, this is a horrible thing because they started outsourcing other than United States. So yeah.

Jordan Evans (42:28.654)
Mm -hmm.

Jordan Evans (42:37.006)
Yeah.

Yeah, it's the big guys have been doing it a long time. I think what's interesting now for like entrepreneurs, especially the acquisition entrepreneurs is like we can do it too. It's just as effective, if not more for small medium sized businesses.

Jon Stoddard (42:55.083)
So what was this last one? You mentioned the third one you're working on that you completed. Where was that from? Or was it the fourth one? Yeah.

Jordan Evans (43:04.622)
So what's the fourth acquisition total? And that was in the Bay Area in California. So kind of still supplementing our geographies, but this one was a little bit different. It pushed us into some different service lines. And what's interesting now at our size and stage is we can start selling these other services to the rest of our customer base that we have with the other three companies. And so now,

The playbook has evolved and the scope has expanded a little bit too. We don't just have to do a look -alike acquisition. We could kind of buy in a different service or pick up a different vertical or industry. And so that's what this one really allowed. It allowed us to diversify our services, do more translation, localization, technical websites, things of that nature.

Jon Stoddard (43:58.699)
Yeah. And broker on market deal through a broker or off market.

Jordan Evans (44:02.606)
Okay, good question. This one is actually self -sourced. And I've gone deep in this industry. It's a fantastic one. The takeaway for people that listen to this podcast is pick an industry and go to all the conferences and attend the webinars and find the gray hairs and go make friends with them and be a known entity. And so I would give talks at all of these conferences.

and talk about what we're doing in sales or operations or talk about buying a business. And so that's where this one came from, was just being a known entity, we're part of the same association.

Jon Stoddard (44:44.587)
Yeah, how big was it?

Jordan Evans (44:47.598)
It was around 2 .5 million.

Jon Stoddard (44:51.307)
Yeah, you're doubling every couple years here. Yeah, every year so far. Yeah.

Jordan Evans (44:58.926)
Oh yeah. Oh, it's incredible. And the, we've made the Inc 5000, which is a vanity metric, you know, what do you do? But, but that's the, the power of acquisition in this business model is hyper fragmented industry. Get in, come up with your operational playbook, be able to scale your people and reduce the costs and improve the cash flow.

Jon Stoddard (45:08.139)
Yeah, yeah.

Jordan Evans (45:26.478)
and get good at buying and integrating them. There's a lot of other industries like mine that people can do this in.

Jon Stoddard (45:32.459)
Did the reason the cell meet your past requirements or the playbook, which was retiring? Yeah.

Jordan Evans (45:39.758)
It did, but this one, this one hurt out of all of them. You know, they were all smooth. What hurt is I just had the seller who I thought we had good will in the working capital. It's always a, we always include working capital in the price. And I don't know if we'll continue to do that. If we'll just say lower.

Jon Stoddard (46:04.299)
The traditional sense of working capital, right? Like total current assets minus total current liabilities. Okay, yeah.

Jordan Evans (46:08.046)
What the net normal cash position? Yes, in order to keep the lights on. I'm buying a car, I need gas and oil in it and air in the tires so we can keep driving it.

Jon Stoddard (46:20.619)
That's the blood in your body. Like if you took out any points, you're dead. Yeah.

Jordan Evans (46:22.702)
Yes. Yeah, it's not I'm not buying a car and then we're going to pull it over the side of the road. You take all the tires and I'm just going to be stuck there. So it always adds time to getting these deals done because they just don't get it. Like, that's my money. That's that's all mine.

Jon Stoddard (46:39.051)
Yeah, it's, it's, SMBs are, it's just traditionally like, hey, they think that's their business and they take it out of the business. A lot of SBA lenders like, oh, you know what? You know, you're going to borrow a little bit more to put it back in.

Jordan Evans (46:51.054)
Yeah, yeah, but I think the fallacy is to value put a multiple on the cashflow and not include the working capital in that total price. Like when you buy stock in a company, it includes its balance sheet, like the value of that company includes what's in it. And so that's, I guess, what was frustrating is their understanding of how we settle working capital. And they had a

Jon Stoddard (47:05.995)
That's correct.

Jordan Evans (47:21.358)
They had like a family consignory attorney and some other friend of a friend who was giving them bad advice on what working capital is. And so that one, we were for nine months trying to avoid this escalating to the next level and trying to explain like general GAAP accounting principles of working capital and.

purchase agreement, we thought it spelled it out pretty clear what it is. Um, and so they're just a pain in my ass. Um, it would be one thing if they're ignorant, but they just, um, they didn't want to hand over the keys. I'd asked them to consult with us for a period of time. I always do a transition. I don't know. I sought me if this isn't valuable, but it just, it's not rainbows and butterflies, I guess is the takeaway from the story here when you're buying businesses.

Uh...

Jon Stoddard (48:19.403)
I don't think there ever is. I mean, yeah.

Jordan Evans (48:21.614)
Yeah, but it's easy. Anybody could say, let's go buy a business. But like, once you operate it, you know what you bought. And I got something that was so owner dependent. I didn't realize. And so you rip them out. Like there's a lot of things that the balls are going to get dropped and like make sure it's not a crystal ball. And so that's what was messy about this one. In fact, like their ego was like so big, like they didn't care about the success of the company. They cared about.

Jon Stoddard (48:39.947)
Yeah.

Jordan Evans (48:51.694)
what they got from it, their pound of flesh. And so it was like a Dr. Jack or Dr. Hyde thing. Like we knew each other from the association, negotiated this deal. And then when it actually comes time to pay them and hand over the keys, it's like a struggle.

Jon Stoddard (49:07.659)
started walking, acting weird, ego stuff. It's worth more. I don't want to get rid of it, whatever it is, yeah.

Jordan Evans (49:09.71)
Yeah. Yeah.

Yeah, I'm not introducing you to those clients. I'm still involved in the email. And so it got to a place where it was like, I smiled and pushed her out the door and shut off email, shut off everything. Didn't give any notice. And just because I didn't trust them. They were playing games with the team, like back channeling. Like, hey, get this paid in, get that paid in the night before we're closing.

Jon Stoddard (49:33.899)
Yeah.

Jordan Evans (49:43.022)
They're still like making donations and prepayments and doing all this wonky stuff to try and lower their tax basis. Cause we're doing an entity purchase. We're going to stock purchase. We're buying the corporation.

Jon Stoddard (49:55.755)
Yeah, yeah, that, well that, that should come with working capital. Clearly. Yeah, without question.

Jordan Evans (50:00.366)
Yeah, yeah, yeah. So there's a lot of games and trust was broken. And yeah, I'm playing a long game. It sucks. I can't give a great experience to everyone. They got to own that too. But that one was just unnecessarily hard. She was getting bad advice from her advisors, the ignorance, the ego, all of those things made it a tough one.

Jon Stoddard (50:20.555)
Yeah.

Jon Stoddard (50:27.531)
Was there any tit for tat retaliation on her part? I mean, somebody that's done doing that, you would kind of imagine it's not out of the realm of her starting up another operation right in her hometown, you know, violating the non -compete.

Jordan Evans (50:41.326)
Yeah, but again, we have a seller note involved and there's offsets. So I do have a means that is financially significant to accommodate that. No, but they were done. No, no, thank God. I've been a part of mediation, not because of buying these businesses, but you want to avoid that at all costs. And like I...

Jon Stoddard (50:51.979)
Yeah.

Any any lawsuits going on? It's just no, OK.

Jon Stoddard (51:07.531)
It's a drain.

Jordan Evans (51:09.646)
Yeah, don't don't do that. Like I've got a business to run here. I've got customer support and even if I have to put my ego aside to avoid a lawsuit, I'll do it. It just nobody wins. And then you spend a lot of time and money. The attorneys win and then you don't even feel vindicated. Like you just feel exhausted. So my best advice there is set up your contract so there's.

You know, automatic provisions of how issues will be solved. I mean, there's good attorneys that will advise you. I think there's a few online that, and yeah, do your best to just keep your eyes on the most important thing.

Jon Stoddard (51:47.435)
Let me ask you about that, because you were in the software industry, I was in the software industry, and what happens is you buy these different mom and pops, they're all using different software to manage language services. Was that the case in this? And did you have a big enterprise solution?

Jordan Evans (51:57.358)
Yeah.

Jordan Evans (52:01.166)
Yeah.

Oh, this is a great topic, John, because I came from the startup world and thought software is innovative, you know, custom CRM, all of these things. I've come full cycle on that, you know, off the shelf, off the shelf, off the shelf. We're in this new world. There's no code solutions. Like don't waste your time and dollars building something custom unless it truly is IP and unique. But I'd say at this point in 2024, 90 % of the stuff that.

Jon Stoddard (52:29.835)
Yeah.

Jordan Evans (52:34.126)
used to be unique five years ago, like you can get off the shelf solution that's better supported.

Jon Stoddard (52:39.531)
especially if you're buying a 30 year old business, like the industry's been around for a long time. Yeah.

Jordan Evans (52:42.958)
Yes, yes. Oh, and I wanna drop this nugget for everyone because each of the businesses did have custom software in it and we replaced it. We replaced it off the shelf, we standardized. So when you do a purchase, you get to allocate the purchase price towards different asset buckets and custom software is the best.

Jon Stoddard (52:57.995)
Yeah.

Jordan Evans (53:09.614)
Almost one of the best buckets to allocate as much purchase price to I believe it's like a three -year or

Jon Stoddard (53:15.851)
There's a huge R &D tax credits for this.

Jordan Evans (53:18.766)
Yeah, it's you can accelerate your depreciation massively if not use bonus depreciation on that bucket. I think it's 60 % this year and it's going down like 20 % each year. But it's a huge advantage to the buyer to put purchase price in custom software. Like the IRS doesn't know how to value custom software. It's what you tell them it is. And so...

Jon Stoddard (53:46.059)
That's sad. Yeah.

Jordan Evans (53:48.494)
So you take a purchase price and you can only put some of it towards ARs and then usually a lot of it goes to Goodwill, which, you know, Goodwill is 15 year depreciation schedule. Like that's nothing to get excited about, but this custom software bucket, like, hallelujah, I can get this in three years. And so I just want to double tap on that for anyone. If there's any way you can justify it or stretch and get there, it's...

Allocate your purchase price in that custom software bucket.

Jon Stoddard (54:20.939)
Yeah, so off the shelf software, all your organizations are using this enterprise solution now. One single.

Jordan Evans (54:29.71)
Yeah, I think every industry now has some sort of niche SaaS solution. So find what that is. Buy the monthly subscription. If you're so inclined, pay for it in a year and save 20%. But focus on customers. Like that's in a service business. That's where your success is. Am I retaining them? Am I growing them? Yeah, 100%.

Jon Stoddard (54:34.635)
Yeah.

Jon Stoddard (54:49.675)
Yeah, and you can find that going to the trade shows. Yeah. Yeah. How has your role changed? I mean, you're doubling almost every year and tripling now year four. How has your role changed from just wearing a lot of hats to running a CEO, you know, 43 people plus?

Jordan Evans (55:14.318)
Mm -hmm.

It's an evolution and I don't want to ever be the bottleneck and some good there. We all have blind spots, so a good therapist. I think.

Jon Stoddard (55:19.307)
Yeah.

Jon Stoddard (55:23.787)
How do you know that? How do you know that?

Jon Stoddard (55:31.115)
Did you, I have to point this out because I've told this a couple of times. Did you ever read Michael Dell's book? His first book? Yeah. So his first book is, you know, Dell was at $50 million and the guy walked into my office and goes, Hey, I need the keys to the Coke machine. And he goes, why? It's like, you know, I lost some quarters in it. And he goes like, well, I've been told you're the only one with the keys. I was, that was my big blind spot. Like, what am I doing?

Jordan Evans (55:37.038)
No, I didn't. No.

Jordan Evans (55:58.67)
Hmm. Hmm.

Jon Stoddard (56:00.331)
the only person with the keys to the cook machine.

Jordan Evans (56:02.894)
Yep. Yep. Yep. That's a great, great anecdote. It's, there's still stuff like that, that there's a, there's a shedding of responsibilities to people that I probably overlooked as an important skill to be able to bring people in and trust that they're going to do it. And, and you give them the space to do it and then start focusing on other more productive tasks and you got to move up that stack. So.

Jon Stoddard (56:30.987)
Yeah, what's the test like? Do you say this is a $5 an hour task or this is a $1 ,000 an hour task and you put some kind of test to it?

Jordan Evans (56:43.47)
That's probably a really -

Jon Stoddard (56:43.851)
This is the challenge. Like, I'm gonna like, 93 % of businesses never get over a million dollars because it's the owner. They don't want to, or they don't have the will to, right? Or they don't know how to.

Jordan Evans (56:53.23)
Yeah, yeah, yeah. Yeah, it's the bottleneck for all these small businesses is the owner 100%. And it just, it's the owner. Small businesses stay small for a reason. And it's hard to scale. It's hard to grow because the the the leader needs to grow to and change their perspective. So

Jon Stoddard (57:01.611)
Yeah.

Jordan Evans (57:19.63)
We've been growing super fast. Fortunately for me, I felt like I got executive level experience before I started this acquisition journey. I've seen what's possible at a hyper growth organization. But gosh, John, I'm not perfect. There's still stuff my team pings me for. And I go, Holy shit. I'm the one that has the keys of the Coke machine. And I have an executive assistant now. So I think that's a high leverage point. Yes.

Jon Stoddard (57:47.179)
Erika! Yes.

Jordan Evans (57:49.838)
She's amazing. Uh, she's my right hand woman and, uh, like we're a work pair, she's in my email. Um, she, she works on my behalf. The team knows they can go to her and they're going to get an answer faster if they go to me. Um, so that's a high leverage point too, for an owner or operator is, uh, to take a lot of admin office, to hire an executive assistant. She's a Mexico city. My company hired Globo. Like we've, we found her and.

Jon Stoddard (58:14.987)
Yeah.

Jordan Evans (58:19.566)
and put her in place and it's been amazing, truly. It's like magic. Like I think I get to quantify this. I got, I think at least a full day back in my work week by hiring an executive assistant.

Jon Stoddard (58:22.635)
Yeah, fantastic.

Jon Stoddard (58:31.307)
Wow, okay. Do you speak other languages? I probably should have asked her earlier. Like, do you speak any other languages? All right.

Jordan Evans (58:38.83)
Claro que sí. I speak Spanish and English and I wish I spoke Spanish a little bit better. The team will say I'm very rusty.

Jon Stoddard (58:48.907)
Yeah. I have to ask you about what else has changed. Like there's always the management and then there's the systems. Like what about capital? It's like that our, our difference, cause it sounds like the acquisitions you made, you're kind of tapped out on SBA. They have like a five year minimum on a 10 year rule. So how's capital allocation? You can find new sources or they come into you.

Jordan Evans (59:14.19)
Good question. We've retired all of our 7A debt. So we're locked and loaded, ready to take on more. We just got to find the right deals to put it to work.

Jon Stoddard (59:17.867)
Oh, have ya. Okay.

Jon Stoddard (59:22.731)
You can go somewhere else, because that 12%, I mean, you should be able to get it at seven to eight percent.

Jordan Evans (59:28.11)
I agree with you, but also there's no loan covenants and a 10 year amortization is amazing. It means you can make a lot of mistakes and recover. So it's expensive, yes, but I wouldn't thumb at it. And we are at the size and stage where we probably could leverage alternative folks like a true cashflow loan.

or debt, making sure the coverage ratio can handle it. But I'm still a fan of SBA 7A at our size and stage, especially for the leverage. If you're doing a roll -up, maybe this is common knowledge or not, but you can do as low as 0 % down when they look at.

Jon Stoddard (01:00:11.787)
Oh, that's right. If it's an acquisition in the same exact industry. Yes. Yeah.

Jordan Evans (01:00:16.078)
That's right, same NAIC code is how they look at it. So that's amazing. There's no reason to do a dumb deal and leverage up, but it's there for you if you know how to use it. So right now we're reloaded. We're retiring some seller notes to answer your question. We're in the last years of that. And...

Jon Stoddard (01:00:22.795)
Yeah.

Jon Stoddard (01:00:33.515)
Yeah. So.

Jordan Evans (01:00:45.294)
It's time to use the equity where we've got it's like a flywheel, like you grow it to a certain size, you get enough cash flow from it, put it to work, put it to work into the next deal.

Jon Stoddard (01:00:57.387)
It's a gravity and mass. It's like physics. Yeah. Yeah. So what's next on this? Aside from your, I mean, acquisitions in the same industry because they're fragmented, you're also taking your operating expenses, tournament or profit center. Are you just going to be buying bigger things or, you know, but mentioned in Syracom, they're a big player in the market in Tucson and Phoenix market. Yeah.

Jordan Evans (01:01:00.43)
Mm -hmm. It's magic. Yeah.

Jordan Evans (01:01:15.214)
Mm -hmm.

Jordan Evans (01:01:24.366)
We've got a long ways to go. I'm having a lot of fun and I think that's important and it's given me the lifestyle and professional creative opportunity that I love. I get to work with amazing team members. And so the path for me is continue to be an operator. I think I add the most value being the operator. We'll reassess in a couple years, but.

Jon Stoddard (01:01:48.299)
Yeah.

Jordan Evans (01:01:51.918)
And then the other thing is I'm having a lot of fun with higher Globo, the business we spun off, because it's truly transformational for, it's been a secret sauce for our rollup to amplify our cashflow and get that flywheel going by lowering our labor.

Jon Stoddard (01:02:06.667)
Yeah, is that a completely different company separate from yours or is it under the same umbrella?

Jordan Evans (01:02:11.694)
It's a totally different entity, different team, but I'm the common link. It's called Hieroglobo. And, you know, it's...

Jon Stoddard (01:02:21.227)
What kind of revenue is that doing now?

Jordan Evans (01:02:23.918)
We're on pace for a million ARR. So it's, we've done every role from like controllers, operational leaders, down to, you know, VA's executive assistant. So professionally, it's higher global. It's continue on the M &A path of language network rollup.

Jon Stoddard (01:02:26.571)
Yeah. Okay.

Jordan Evans (01:02:50.062)
maybe we'll exit at some point and somebody else that has an appetite to take it even further and do even bigger deals. I think that would be a private equity buyer or there's some strategic buyers in our industry where now we're getting to the size.

Jon Stoddard (01:03:04.075)
Are you giving them the invitation to contact you through Erica?

Jordan Evans (01:03:10.03)
They contact the, but it just at this size, like why I'm having fun and like, let's grow it a little bit further.

Jon Stoddard (01:03:18.091)
Yeah.

Well, what they're going to say is, you know what, Jordan, we want you to have fun. We're just going to buy 60 % of the company and you run it for another five years, but you can put a lot more money in the pocket.

Jordan Evans (01:03:25.39)
Hehehehe.

Jordan Evans (01:03:30.478)
Yeah. Yeah, I no offense. There's just a lot of dumb money out there. Like if I partner with somebody like I want to have more fun, like you said, and they bring a skill set that truly helps us go the next level. I've seen too many guys, you know, come up with some name and put up a website and say, you know, what we're whatever capital. But it's like you guys, the money here is an operator, you guys need an operator.

Jon Stoddard (01:03:45.355)
Right.

Jordan Evans (01:03:59.182)
And I don't need your... Yeah. So I won't say never, John. And it's just too fun right now. And I would encourage people to look at fragmented service businesses as a vehicle.

Jon Stoddard (01:04:00.651)
Hard to find. Those are the hardest things to find. Yeah.

Jon Stoddard (01:04:16.523)
Yeah, that's why everybody's chasing HVAC plumbing electrical because everybody else is chasing it. It's like a yeah.

Jordan Evans (01:04:22.03)
Yeah, but go more niche, like professional, technical, scientific services. I think there's an amazing one that does like toxic testing or like there's certain regulations in some states that require your building to have this annual testing. I'm forgetting the name of it, but it's just so niche. There's so many of these like little non -home services industries that...

Jon Stoddard (01:04:25.131)
Yeah.

Jordan Evans (01:04:50.35)
The demand's never going away because it's because of compliance or regulation. And most of the time you get a guy who operates it because they were the technician originally. And yeah.

Jon Stoddard (01:04:55.019)
Yeah.

Jon Stoddard (01:05:00.651)
Same thing, it's gonna be a same duplication of the story of your parents. Like they're heads down, they're building the business, they don't put systems in place, they don't think about growing this to a hundred million dollars, right? Yeah. Jordan Evans, thank you so much. The accidental roll -up entrepreneur, which you just gave me a idea for my YouTube thumbnail.

Jordan Evans (01:05:12.782)
Yeah, 100%.

Jordan Evans (01:05:22.478)
Yeah, that sticks.

Jordan Evans (01:05:27.694)
That sticks, John. It's appropriate.

Jon Stoddard (01:05:30.123)
Thanks for being on the show.

Jordan Evans (01:05:33.486)
Yeah, thanks for putting out great content. I love listening in. It's just so fun to do this with you.

Jon Stoddard (01:05:41.067)
Stop.