Acquisitions Anonymous - #1 for business buying, selling and operating - $2mm Landscaping Services Business / $650k Charleston Custom Homebuilder - e33

Episode Date: June 22, 2021

Two deals discussed this week on the pod!- a $2mm Landscaping Services Business- a $650k Charleston Custom HomebuilderThese are both listener submitted. Let us know if you have something we should discuss on the pod!Bill, Michael, & Mills-----* Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel.* Do you enjoy our content? Rate our show!* Follow us on twitter @acquanon Learnings about small business acquisitions and operations.-----Past guests on Acquanon include Nick Huber, Brent Beshore, Aaron Rubin, Mike Botkin, Ari Ozick, Mitchell Baldridge, Xavier Helgelsen, Mike Loftus, Steve Divitkos, Dzmitry Miranovich, Morgan Tate and more.-----Additional episodes you might enjoy:#62 Two Landscaping Businesses for Sale - Mike Loftus CEO of Connor's Landscaping#66 Analyzing Software Businesses for Sale with Steve Divitkos, experienced industry CEO#42 $900k Moving and Storage Company / $500k Rural Mini-Storage#61 Two Manufacturing Businesses for Sale - Brent Beshore - Founder and CEO at Permanent Equity#24 $5mm pool services and lifeguard staffing co / $2mm septic services business -  featuring baller @WilsonCompanies as a special guest!#45 $800k/yr cleaning business in Midland, TX / a $565k/yr window cleaning business in San Antonio, TX #48 Two Landscaping Businesses for Sale - Mike Botkin of Benchmark Group--- Support this podcast: https://anchor.fm/dealtalk/supportSubscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

All right, welcome to Acquisitions Anonymous. I am one of your host, Michael Gridley. This is our weekly podcast where me, Mills Snell and Bill DeLessandro, and sometimes with guests, talk about two companies that are small businesses that are currently for sale. And so we look at them, analyze them. And this is a great podcast for people that are potential acquirers or small businesses or just learning more about how small business works. we end up talking a lot and learning a lot from each other as we do that.

So no guest today, but back from his triumphant return of installing new roofs on people's buildings is Mills Snell. Good morning, Mills. I think I only missed one week. It was just a double header in terms of recording. And I couldn't be here last Friday. Well, I know your business is going well because you trimmed your beard. So that's what's going.

That's my wife. I had this like more kind of rugged. beard that was kind of good out of hand. She was like, yeah, I think you should probably get that trim. And then I got it trimmed. And now she's like, actually, I like it better the other way. And my six-year-old son, I walked in after I got in the haircut and he cried. He really didn't like it. So I learned my lesson about getting my beard trim. I'm just going to let it keep growing from now. That's awesome. All right. Well, we don't know where Bill is, but hopefully he'll be here soon. And he's a pretty reliable guy. So hopefully everything's okay. But we started recording,

and it'll be the Girdley and Mills show here for the two deals that we have. And maybe Bill will jump in mid-stream, which would be awesome. But if not, we'll trudge on. So first deal that we have, I have it is, and I'll talk about it here, it is listener submitted, which is pretty exciting. And the title for it is Custom Home Builder and Remodeling Company located in South Carolina. So your neck of the woods, Mills. And here's the note from our listener.

We'd love to see you guys talk about a smaller regional builder, something that profits $2 million in EBITs or earnings before interest, taxes, depreciation, amortization, or less. I work in the commercial general contractor business and just about every general or subcontractor I've dealt with of this size is owned by a late 50s or mid-60s man or woman and most have no succession plan. Seems like a ton of these businesses will come up for sale in the next decade and could be a great purchase for some folks.

It would be great to get your thoughts on something like the link below. I thought this one was interesting based on the competition notes and one times asking price. So we'll see what that one times is, whether it's one times profit or one times revenue. Want to look for, stay away from and is buying something like this, a good idea, etc. I think Mills's insights from the roofing contractor acquisition could be very helpful. Also curious to be seeing the same thing as far as older owners getting ready to retire with no plan. Discovered your show a month or so ago and really enjoy it. and the diversity of deal offerings, offerings discussed.

Keep it up. So yay us. That was really nice note. All right. So here's the listing that the listener sent in. And it's from buy-biz sell, which is an online listing service for small businesses for sale. And this is a custom home builder and remodeling company in Charleston, South Carolina. They are asking $650,000 for it.

They claim that their profits or cash flow is $671,000 a year. Gross revenue last year was $4.5 million. And EBAA is the same as cash flow. So earnings before interest, taxes, depreciation, emmerization was $671,000. They own $30,000 in FF&E, so furniture, fixtures, and equipment. They have no inventory. They pay rent of $2,500 per month. And the business has been around since 2000.

business description. This is one of the top home builders and remodeling companies in the Charleston region, with highly consistent annual sales over 4 million. A custom home builder and remodeling company can be a hard company to sell unless the company's position properly for continued success for the new owner. In this instance, that has occurred and the new owner will enjoy the following. One, an operating structure that is actually a company operating structure, meaning the company has a skilled team in place that will ensure the quality of work continues in the future. the owner will offer long-term transition assistance, yada, yada, yada. They have a backlog of work, but it is anticipated they will have a backlog of work

at the time of sale around a million and a half. Return on investment is key with this offering as a business is priced fairly at one-time's adjusted EBITA. They have sales north of $4 million, and that is the norm for this company. And as a bonus, the company offices reflect the high-end quality of work this company does and allows for the owners to walk to one of the most appealing areas in the Charleston region for lunch, dinner, or drinks. Let's see.

Anything else here that's interesting? They have a lease that they've signed up for through 2031, 11 employees. They will include the furniture, fixtures, and stuff in the asking price. They have a tiny office, 840 square feet in Class A office building. Lots of competition in the Charleston region, but currently quality home builders or a modelist have a backlog of business. In addition, the company operates at the higher end of the market, enjoying word-of-mouthed referrals as its primary source of business.

there is opportunities they think to grow into the digital age with its sales and marketing program to increase sales and the current owners will stick around for a while and help you get up to speed and it is listed by a guy in Charleston of the Charleston business brokers. So what do we think about this, Mel's? Oh, man. I guess with what the listener is kind of asked about from a meta perspective, I mean, he's totally right. There are a bunch of businesses like this that are too big to wind down or walk away from. I mean, $650,000 in free cash flow, or that's at least what you're calling it.

I mean, that's significant, right? But these are very, very difficult businesses to transition. And the broker tries to get out in front of that a little bit. It just depends on the composition of the team here. The fact that they have 11 employees, but they have an 800 square foot office, tells me that it's probably mostly like field foreman or kind of like a superintendent or a project manager. I mean, for most of these, most of these residential GCs, they're very lightly staffed. You got to think, though, I mean, in Charleston, $4 million in revenue is not that many projects. Well, it's $8,500,000 project. So we think that the $4 million annual sales is gross, not their net fees. That is probably gross.

that's the way most residential guys display it is, hey, look, we built $20 million worth of houses. Now, their cost, you know, was like $19 million on that. And then they had overhead to come out. And then they have a little bit of profit left over. I mean, in Charleston, though, there's single homes that are $4 million. So I just don't, I would have a lot of questions, right? And they talk about their office being in a really high-end area, paying $30 a square foot in downtown, Charleston on the peninsula. That sounds about right. It's crazy, though, they give you this little option, which I think they think that everyone wants, right? But in this case, it's a little bit odd to offer it. They say long-term lease available, or the owner will consider selling the entire complex at appraised value, which they estimate to be $3.5 million. This is a business that's going to change hands for $650,000. But they're like,

hey, if you want the real estate, too, it's $3.5 million. It's kind of a weird offering. And it's not clear whether or not a business owner owns the real estate or if the business owner is just leasing from a third party and that third party is like, sure, if you wanted to try and buy it, here's our price. Regardless, right, they're saying they target a high-end market and that's pretty much what most of Charleston is. Charleston, Mount Pleasant, Daniel Island, North Charleston, like all of those areas are booming right now. But I'm just thinking there are not that many $500,000 houses going up in Charleston. Their niche is what I would really want to dig down into, there's some fascinating builders and renovators in Charleston who they have found out

how to navigate the complexity of historic renovations, permitting, licensure, jumping through a ton of the hoops that the city provides for good reason, right? These are cool, interesting old properties and they want to make sure that they don't all just get pancake. But this doesn't seem like it's that. I mean, I know of a group down there who's doing 25 to 30 million in historic renovation of these amazing kind of, you know, anti-bellum Charleston homes. So I'm just wondering about they're saying their niches high-in,

but if it really is, then they may only be doing two houses a year. You know, I just am struggling with the differentiation on this one a little bit. Yeah. Well, and so correct me if I'm wrong here, but this sounds like one where you're definitely buying yourself a job, right?

These little things are referral-based. It's tough to make these work without an owner-operator being in there because your relationships and your customer service you develop with the clients are how you win. Yeah, yeah.

And I mean, you know, you've got to be the qualifier on their general contractors license. So that is not really addressed at this level and this teaser, but at some point, somebody's going to have to go take the general contractors exam.

I would think if he already had guys who were licensed, then he'd probably be selling it with them. I mean, it's not like his asking price. is crazy high, you know, one-time's cash flow. He could have seller financed it to one of his key employees if they already had the licensure and the wherewithal. So that's just another hurdle to a business like this. It's not a deal breaker by any means, but you're basically saying, hey, to the seller, you've got to stick around longer than you thought because I've got to get

the required experience and then I can sit for the test. But the owner's going to carry a significant amount of risk in the meantime, because if a project goes south and somebody's getting sued, it's going to come back on him. He's the qualifier. Yeah. Well, what am I really buying with this? You know, is there a brand? I mean, I guess maybe I'm buying a backlog of work. Yeah, I mean, they're, you know, they're saying that it's brand, right? So, I mean, if you think about their backlog at one and a half million, based on their margins,

you're talking about, you know, roughly $215,000 worth of profit on the existing backlog. and then you're talking about maybe another $400,000 in change that you've got to figure out in your head purchase price allocation. So maybe the brand is worth a third of the purchase price, the backlog is worth a third, and the employees are worth a third in terms of just having all those things kind of with a bow on them. The fact that the broker's starting at one-time's EBITDA, I know that that looks good on the surface, but that gives me a ton of cost for concern. like then they're starting there and say hey this is a fair price it's like man i i mean

they've got to think that it can probably get negotiated beyond this and so what's what's so bad about this thing that they started at one times even though most of these people even if it's a terrible business they'll start at three times even though knowing that they you know probably have some concessions to make interesting well i mean this and there's an element of an optimal place to be in terms of scale for this type of business right you you you you You don't want to be too small and then also at a certain size you start to have, you know, dis-economies of scale. We're getting bigger, makes it harder to do your business.

Where does this sit on that spectrum? This feels pretty small in terms of, you know, losing or winning one job a year away from losing all their, you know, breaking even or losing money, right? Yeah. I mean, the one thing on a business like this is that their overhead may be so thin, Michael, that it could be that the owner is probably the only burden in terms of. of overhead and everybody else might be job-costed. So, you know, if overhead's that thin, then all of a sudden you go, hey, look, if we do two houses, we're fine. If we do four houses or

five houses, we're fine because at the end of the day, you just are so lean at the overhead level, at the kind of fixed, you know, fixed monthly expense level. They're rent, you know, $2,500 a month. They may have like a person who sits in the office and helps process payments and AR and payables and things like that. But chances are these 11 employees are not all cramming into this 840,000, 840 square foot office. They're all field. Very interesting. So I think we've determined this is not the right business for someone to buy who wants to be an absentee owner,

who doesn't want to go join the country club in Charleston and make this their life. Who would be the right buyer for something like this? Well, I mean, let me take one step back. I mean, when you think about this on the spectrum, right, there are smaller residential builders and renovators. There's just owner operators who they perform most of the work. So he's at least a step above that and he's got some full-time staff. But he's not yet at a point where, you know, as an owner, he's going to be able to be removed from the day-to-day operations. I mean, this guy on this size business, you live or die based on every job. So you are really. really, you're staying very close, right, to the job and to the underlying economics and to managing change orders. And people who are moving to Charleston have some money, they're going to spend some money on a house, but they are expecting a lot, right? It's not a lot of bang for their bug, but they're expecting very high quality and probably, you know, an optimum kind of delivery at the end of the day. So I think it would have to be somebody who is an owner-operator

just given where it is on the spectrum. It's not self-perform everything, and it's definitely not absentee. And I've rarely met somebody who can be an absentee owner of a construction-related business. Yeah, not at this size. I mean, I think you can start to see them

when they get niche or super large, right? It's still even for construction. I mean, I've looked at a very large number of, you know, five to $10 million, even without construction businesses, and it's wrong you have an absentee. Maybe if it's like an aging first generation and the second generation has become fully enveloped. And it's just that that person's kind of phasing out.

You know, the senior generation is phasing out. But I would just say it's rare. It's very rare. Yeah. What's interesting. One of my buddies, he's in construction as a GC. And part of his long-term vision is actually to go do that, right? To take what he's learned in his first.

decade of buying into one of those general contracting businesses and then go do go take those same like playbook and go run it by acquiring other kind of struggling ones and create value that way so I don't know maybe it'll work out for him. I was some really interesting some interesting examples of that. You know, like for example, I'm thinking of this deal where this company was a very specialty metal manufacturer and so they didn't actually like take the raw iron ore and and make stuff but they took like stainless steel for things that were corrosion resistant and made them into certain applications like things for healthcare or things for manufacturing.

And what they did is they just started tucking in other manufacturing processes. Like they might have been really good at stainless steel. And then they needed somebody who was really good at copper, right? Or like a less conductive metal or something, you know, like that. So they just kept folding in like, hey, we were really good at, you know, stainless steel welding. and we got this group who's really good at stainless steel finishing. And we've folded them in-house. And it becomes this kind of arbitrage play because you're buying these smaller,

more inefficient mom and pops. And all of a sudden you get a lot of purchasing power. But I will say, I mean, the CEO of this business, and they were quite large. They were over $10 million. And even though, he just had gotten really, really good at assimilation, you know, deal-making. He was not actively running the businesses.

He was actively deal-making. and he had kind of an operator who was overseeing this portfolio of companies. But, you know, it's a little bit of an eye role to me when I see folks who are like, they haven't bought a business at all. And they're like, hey, I'm going to, you know, I'm trying to scale and, you know, I'm an holding company. And I feel like people put fun at that on Twitter plenty. And I don't need to add to it.

But it's just owning one business is hard enough, right? All this. You know, not everybody can be Michael Gerdley and run multiple different disparate businesses that all function distinctly and make it look easy. But I just think when it comes down to it, the rubber meets the road, that's a very, very difficult thing. All right.

Thank you for the compliment, I think. Yeah, I mean, totally. You make it. But I think people look at that and they're like, oh, wow, I mean, this would be really cool. I can own a coffee shop. I can own a software business. I could own a specialty retail business.

But they don't see the 20 years that it took for you to, you know, extricate yourself from day-to-day operations of a heavily heavily cashed in something, you know, inventory managed business. Like that, you're on the tail end of that right now. And you've learned through bumps and bruises and hitting your face on paper. Yeah. As Molson says, says easy does hard. I think that's pretty much what it is.

But, I mean, that is kind of one of the funny things for me about Twitter. Like sometimes people are like, you, why are you giving away this secret? Why are you telling people how to do this? I'm like, nobody's going to listen. They don't do it. They don't listen to me. Like, nobody. And if one percent do, like, it's a kindness to the universe.

But, you know, like, I don't have to worry about somebody stealing my, like, secret sauce because they don't do it. Like, the number of times I'm like, okay, guys, like, here's how you do hiring, right? And, like, I've been studying hiring for like 15 years. I've learned this stuff. And then somebody will be like, no, you're wrong. You just got to hire a city college graduates. Like, it's okay. It's just like, no.

Okay. Anyway, let's move on to deal number two before I get on another rant. You got this one. Yeah, all right. So this is an established and profitable landscaping services business in Austin, Texas. The asking price is $19.7, or no, sorry, $1.97 million. The cash flow is $490,000 a year. And on gross revenue of $1.18. So pretty decent margins here. No FF&E, no inventory. It's been around since 1990. decades old and very profitable landscaping and lawn services business. The company has hundreds of affluent clients, residential and commercial.

The formatting of mine is kind of messed up, Michael. So is it 65% residential? Yeah, and 35% commercial. Mostly residential. They have four full-time crews and one office staff, trucks, trailers, and equipment, transfer in the sales. So they said no FF&E, but there actually is. some stuff on the balance sheet.

The owner's been running it for 30 years and wants to retire. Operates out of the owner's home. The office manager works remote, quote, essential service in a booming market. Austin is booming and people have grass there. Support and training as needed to ensure a smooth transition. This is a listener submitted one as well. So we have a little bit more information.

Let me dig into this a little bit more. So it looks like their cogs are typically, what does that look like, maybe 30%. Yeah, so it's roughly 30% cogs, kind of 60-ish percent gross mark. So cost of good sold. Yeah, I'm sorry, cost of gold. So this is, you know, in landscaping, this is, hey, we want to come do your yard and you need some new bushes and not really sure exactly what all they're putting into cost of good sold versus overhead.

but chances are, you know, they're billing their guys' time and, you know, fuel and stuff like that to each stop costing it. The overhead looks like it's typically between $370,000 and $430,000 a year, but they seem to somehow manage it in conjunction with the top line. So I'm not sure how they're able to flex their overhead. It may be that maybe that it's payroll related for some hourly guys. I'm not really sure. But the SDE has been on kind of a steady decline. In 2017, it was just over $800,000. Then 2018, it was $750,000. And then in 2019 and 2020, has fallen to kind of the mid-500s. So it looks like that is SDE, but the teaser was saying more like $490,000. So you just take kind of a little bit of reconciliation to figure out what's the difference that they're, the difference between SDE and cash flow in these two different documents. There could be a good reason for that.

But I think key thing you're talking about here is this business is shrinking and has been for the past four years, every year. Yeah. Which to me is not a deal killer, right? I mean, it's an older owner. I'm reading here that, you know, the equipment is all stored at this guy's house. And the crews come there, you know, drop off their personal vehicles and pick up the trucks and trailers.

and go out to the jobs and bring it back there at the end of the day. This makes sense, right? The narrative plays out my head. This guy's been kind of maybe getting a little bit older, getting a little bit less, you know, inclined to push business. And if you know that you're buying that and it's priced accordingly, that's not a bad thing. You just don't pay up, right, for secular decline.

The owner works eight to five Monday through Friday. It looks like they, you know, had a pretty decent pickup because of the February storm. It went through Texas. The owner's primarily generating quotes and interfacing with customers, which is, this is how most, right, most landscaping businesses this size are. The guy has graduated out of the field. He probably started it just out of his own pickup truck with his own equipment. Eventually, he's able to hire some guys. They do a good enough job. They're competent enough. He gets out of the field and starts spending time in the office. And he's, you know, he's doing quoting, estimating, you know, interfacing with customers, collecting money, those kind of things. things. Anything else jump out at you, Michael, this more detailed information that we have?

No, I mean, I did gravitate back to, I'm thinking about, okay, if I wanted to build a million dollar a year landscaping business, you know, it doesn't seem like, it doesn't seem like this is the way I would go about it. Like, I would just, like, everybody I know can't find good landscaping people. And they even talk about it a bit here. Like, look, these guys, you know, the finite resources is actually the crews. And like, I asked myself, like, what am I really buying when I buy this business? Yeah, you buy those relationships.

But like, it's so easy to switch from one landscaping company to the other. Like, so would I really want to pay five times revenue, five times cash flow for, what is essentially some crews. Yeah. No, no, sorry. So it's four times cash flow and a little. Yeah, they're asking two million and it's cash flow is 500,000. I think that's going to be a really tough sell. But for all the reasons that you're saying, right, how difficult is it to get to a million dollars in residential and commercial landscaping revenue? You could probably go build it almost, you know, definitely less for less cost, right? If you just say,

about, okay, if I had a lot, a certain amount of dollars to customer acquisition costs to get me to 1.18 million, it's going to be way less, right? There's more risk involved. You're not buying an established book of business. You're not buying the crews, all those things. But in this case, it may be more of a build versus buy kind of situation. Unless you get into it and you realize there's some really nice differentiation. But in landscaping, that's hard to find, right? I mean, the contracts, are very loose. The switching costs are very low. There's not any exclusive vendor relationships, for the most part. It's not like, oh, I have to go use Michael Gurdley's landscaping business because he's the only one who can get me this type of grass or this type of pesticide or this type of pavers

to redo my walkway. Like, all of those things are commoditized. Wow, it's surprising to me that we liked the custom home builder more than this one. But also, I think it also just highlights how So many times when you look at something for sale, it all comes down to price, right? I mean, if they were asking a billion dollars for this business, that's very different than asking four times sellers cash flow versus asking one times. I mean, you also have to think about in this case, it's worked really well for this owner, running it out of his home, the office manager's remote. You know, you're going to have some hard costs that this owner doesn't have.

You know, chances are like how difficult is it going to be? maybe he's not, his house isn't, you know, in kind of Austin proper. But either way, right, it's going to be expensive to find a piece of dirt that you can transplant his current operations to yours. He doesn't, there's really no, nothing on the income statement about, you know, rent, you know, or anything to account for the fact that he doesn't have a cost and you're going to have it. There's no ad back for that. That, to me, starts to give me, you know, some, okay, now we're wiggling it down,

even further. This is probably one where this owner needs to go get disappointed, you know? Yeah. He needs to go find out that somebody's probably not going to pay him four times. Ibadah and his expectations need to kind of come back into sync with reality, which is, which is sad, right? I mean, it's a very kind of troubling thing when you interact with somebody and they maybe have their heart set or their, you know, their retirement set on a certain number. but sometimes it has to kind of marinate for a little while, come back to reality, and maybe you're the bad guy, right? Or maybe you're the guy who catches it after a lot of people told him bad news

and you can pick it up at a more realistic price. Yeah. When I see kind of this unrealistic stuff and then I look at the broker's picture and I'm just like, man, what are you doing? Like, I admire the business brokers who are ones who will just straight up tell the client. Like, I don't think I can get that for you. I don't want to, I don't want to play games with you and take the listing at that kind of price. It's just not going to work.

I know this is a tough business for these business brokers, but I mean, look at the SIM, right? So, I mean, we're looking at something that is 10 pages long and that includes a tax return. Yeah. So in this case, the broker is out hours, right? Just a few hours worth of putting this SIM together. And he knows he's going to get zero if he doesn't have the listing. If he has the listing, then he at least has a probability of collecting some fees off of this. So you look at what happens upmarket for investment bankers, and they're setting expectations

much more effort because they've got a ton of sunk cost, hundreds of thousands of dollars typically. And they may or may not get a retainer to offset some of that. But if they get you to the finish line on a $50 million deal and they've got $500,000 worth of sunk cost and you walk away because if the whole thing, time you wanted 70 and you're only getting 50 million, right? Like it's it they're eating that. So there's a lot more upmarket, you know, there's a lot more expectation setting. But down here, like this broker's not losing out on anything. He's got no time in it. He's going to receive the

phone calls, kind of maybe weed out the tire kickers and see what comes. And chances are he's still going to be hanging around when, you know, when this business does transact and it might be for a million bucks instead of two million and he still gets he still gets paid but if he doesn't get the listing he's not getting a dollar yeah well i appreciate all that and i think that it's just i dislike that it the way the game gets played like that just waste everybody's time included the seller i'm not okay with it i'm just saying that's like the world that we live in right and it and what you see is that sellers don't know what they don't know and so they go through this process it's their learning curve and it's also, you know, it's a lot of money, right? It's a lot of things from one direction to the other

terms of what they thought, what they actually get. Yeah. Well, I can't tell you in terms of also buyer business fit, this is one that if I did not speak Spanish and I did not like, like, keeping my crews happy, I would not consider even talking about this with somebody. I mean, these folks, the folks that are working on these crews, you know, they're not, They're not Oxford graduates, right? They're oftentimes new immigrants to the U.S. And you need to speak Spanish if you're going to run these crews. That's just the nature of it.

Yeah, I mean, it would be interesting. We talked about should we save this one for Mike Buck. And it may be an interesting guess to have on because the aggregation of these businesses, you can see how it makes sense in your head, but in practice, it's very, very difficult because you could go keep buying up this revenue. do and it may not be that sticky. Yeah. I don't know if from a technology standpoint,

I don't know if you've seen that the autonomous mowers and stuff are getting closer and closer. Yeah. So there is there is and will become a reduced need to where eventually just a truck drives up, three robots hop out, drop your grass back and then hop back in the car and drives someplace. Now that's jets and stuff that's a while away.

but it's going to start quickly, right, in terms of, okay, your four-person crew is going to turn into a three-person crew because you're going to bring out an automated mower. And the mowing will happen while the edging happens. And then eventually we'll have an edging robot and all that stuff will be part of the deal. So is the installation side, which when most people look at these, they love the maintenance, right? Because they're like, look at... Recurrent revenue. $10 a month to go out and do this guy's yard and whatever. But, you know, the installation side, it is a bumpier.

but that's going to be the thing that's much harder to, you know, to actually eat into, I think, from an automation standpoint. Yeah, for sure, for sure. But, I mean, I think on the maintenance side, it will be interesting to see if this type of market gets, with robotics and stuff like that, you get more economies of scale, right? And you'll start to see that there will be an Uber for lawn cutting, which won't involve a bunch of people. Yeah. Anyway, sorry, that was my, I'll take up my venture capitalist hat.

But yeah, it's super interesting. All right. Well, yeah, I'm definitely interested if we get Mike Botkin on because I'd love to learn more about the dynamics of this type business. But this guy's got a great life. Crazy, just like, you know, I think the interesting pattern here, if you look at this guy and you look at the home builder, so the home builder was selling their business for like, let's say, 500 grand. But how much of their real wealth is in the building that they bought in 1992 in Charleston and is now worth three and a half million. And like, I just see that story over and over again. The same thing with

this landscaping guy. I bet you he has a business property on three acres somewhere in the West Austin Hills that he bought for nothing 30 years ago. And now that's worth $5 million. And he's got this crappy lawn care business and he's like, why am I doing this? And this is like, you know, it goes back to kind of that idea that if you can pick up real estate as as part of your business and have it paid for by your business. It's a great place to build wealth over time, especially with the government, you know, printing a bunch of money. So super cool. All right. So you're going to put in an offer on the landscaping and maybe on the house one? The house one's in South Carolina. So that is intriguing to me just because I know other home builders here. So I may

send it to a couple guys. That's very interesting. All right. Well, great job today. Quick commercial. We lose money doing this podcast. If anybody would like to become a patron of ours and donate each month to pay for the editing. So we get rid of all the ums and ahs and sneezes. Please consider doing that on our anchor page and join the 25 or so other people that give us a few bucks a month to pay for stuff. So if you're learning from this and it's helpful, consider doing that. We have a link on our Twitter page.

Other than that, awesome job today. 10 out of 10 would have been 11 if Bill had been here. But I hope everything's okay with him. And good job by you, Mills. Fun times. See you. All right. Bye, everybody.

Catch you next week.