Acquisitions Anonymous - #1 for business buying, selling and operating - Make a $1mmyr with a Language School - Acquisitions Anonymous Episode 157

Episode Date: January 11, 2023

Michael Girdley (@Girdley) and Bill D’Alessandro (@BillDA) talk about a 38-year-old Language School located in Houston, Texas. We talk about how this business works in-depth. This business has a tailwind situation due to its location and a state-imposed Moat. We will also find out what about this company's customer service and marketing makes it stand out from the competition. Lastly, we will give our verdict.Company: 38-year-old Language SchoolLocation:TXStated Financials:$ 1M EBITDA   |   $ 3,800,000 Gross RevenueAsking Price:$ 4,000,000-----Thanks to our sponsors!CloudBookkeeping offers adaptable solutions to businesses that want to focus on growth with a “client service first” approach. They offer a full suite of accounting services, including sophisticated reporting, QuickBooks software solutions, and full-service payroll options.-----Show Notes:(00:00) - Introduction(00:30) - Our Sponsor is Cloudbookkeeping(01:57) - It's Girdley’s birthday! Friendly banter (03:20) - How do language learning classifications work? (07:25) - Deal & financials: 38-year-old Language School(09:09) - What do we think about this deal?(09:35) - Is it true that people in America are very interested in personal development?(11:49) - Why is location so important for this business?(15:18) - How hard is it to get a license in Texas?(17:45) - Are these licenses transferable?(18:49) - What makes this business so attractive from a customer and marketing perspective?(22:52) - Why should you have your accounting audited?(25:20) - What happens to industries that get regulated?(26:34) - Should we prefer virtual or in-person learning environments?(29:55) - Do we like this deal?(30:28) - What’s very inspiring about having a school like this?-----Additional episodes you might enjoy:#156 - 60% Profit Margin Amazon Online Community for Sale#155 - A $3mm profit-a-year water delivery business!#154 - A Truck Driver School for sale in Texas#153 - Will Bill buy this company for Girdley’s Christmas present?#152 - Should we buy this Ambulance company?#150 - Let’s buy a medical staffing business#148 - Growth Marketing explained: Shopify Superfood Greens Brand with 40% subscription rate w/ Baller Jesse PujjiSubscribe 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]

Welcome to Acquisitions Anonymous, the world's best podcast about small business, buying, selling, investing, and operating. I am one of your host, Michael Girdley. Today we had a banger of an episode where we looked at a million dollar a year profiting language learning school located in one of my favorite cities of the world, Houston, Texas. And it's really an interesting business. Bill and I had a great time talking about it. And I hope you enjoy it as much as we enjoyed talking about it. So here's the episode. Hey, Michael here. Want to talk to you about today's sponsor for the episode, which is cloudbookkeeping.com. So cloud bookkeeping is actually run by my neighbor, Charlie. So I've met him in person and can attest that he's a real human being and a good person. And what cloud bookkeeping does is offer a full suite of bookkeeping services all in the cloud for you around QuickBooks and other technologies that you're using as a small business owner. So if you're interested in getting the bookkeeping part of running a business off of your plate and focusing on running your business, Charlie and his team are one to call. They can put together a bunch of other stuff in terms of helping you manage and grow your business besides just bookkeeping, sophisticated reporting, definitely helping you get your quickbooks online set up in the right way, and a number of things around payroll as well. So definitely know them and recommend them. If you want to find out more about cloud bookkeeping,

you can go to their website at cloudbookkeeping.com, reach out to Charlie. I know many of you have and see if he can help you make running your business easier and more fun by letting them help with a lot of the bookkeeping solutions. And when you call, mention this podcast. It would help us and help Charlie know that we're supporting him as well.

So thanks a bunch. and cloudbookkeeping.com as the sponsor for today's episode. So now that we've clicked record, Mirko could stop scowling at us because we started to do the banter part of the podcast, Bill, before we click record. It's Michael's birthday today, and I celebrated by being 10 minutes late to this podcast recording. Bill celebrated by not even showing up.

Happy birthday to me. A fashionably late to Michael's birthday podcast. He's got to roll in, like 10 minutes in. But what I learned, which I did not know, I didn't know how bad it was that I was late because apparently when I'm late, Michael just interrogates Mirko in Spanish. Michael's learning Spanish. And Michael talks to Mirko in Spanish the whole time until I arrive.

Yes. Yeah. Well, and then I was telling Mirko what happens. You know, Mirko's in Argentina, for those we don't know, and produces all of this. And telling him what happens is I have weekly sessions with my maistra, who's my teacher. And inevitably, she asked me some questions, like, what are your goals for the year? and I will spend five minutes using like four-year-old like Spanish words trying to explain some complex abstract concept. And then she'll say like, okay, so what you're saying is this and she'll repeat it back to me in three words.

I'm like, yes. That's exactly how this works. That's how foreign languages work. Like you're not approaching fluency yet. Mirko, how does this fluency? Like five out of ten? No. There's no way, dude.

There's no way. I can do short declarative sentences. like all day long. No, my goal for the year, they have, are you familiar with the language learning like classifications, Bill? Have you followed on this? No. How does this work? So basically the way it works is there's a standards body out of the EU, I think. Anyway, and basically it lists there's three levels of language learning. And your beginner, which is the A level, and that has two sub-substages. So you're A-1, A-2. And then there's B-2, which is like intermediate. And then there's C-1-C-2, which is like fluent. And so like, like C2 is like you and me in English. Uh, and then A1 is like

CERSA and La Playa, uh, level Spanish. Like you can, you could do a few words here and there. You maybe have a hundred word vocabulary. And then there's stages in between. But the intermediate level is what I want to get to this year, like B1, which is low intermediate. And that's where you can like have a basic conversation. You can talk somewhat about abstract concepts and stuff like that. So that's, that's my goal. Or, as they say in Spanish, my objective for a year 23. So we'll see how this goes. Well, this is relevant, I swear, for our deal today, though, which is an interesting one, right?

This is not the language learning school that you have been attending, right, Michael? No, no, no. I'm using a book called Fluent Forever, which my buddy Jonathan, who, you know, so for me during COVID, I started bike riding and started three podcasts. Okay. My buddy, Jonathan, he decided he was not going to do any of that stuff, and he spent all of COVID trying to become fluent in Spanish from scratch. And he's a baller. Like, I'm just so impressed. So he turned me onto this book called Fluent Forever, and it's basically a self-paced thing that does a lot of science-oriented stuff that's very different than duolingo and all that kind of stuff that you go through and use flashcards, lots of practice, and lots of

immersion to learn how to get fluent in a book. So that's how I do it. And then I pay a tutor to talk to me once a week for 45 minutes, and it's exhausting. It frankly is the most exhausting thing I do all week. Because you do 45 minutes in pure Spanish, no English. Pure Spanish. Like, and so, you know, like, I think what's cool is, like, if you or I go on a walk and, like, how many times have you've been, like, on a walk where you do it one-on-one and you have, like, a conversation, and you tune in and tune out, and you understand everything perfectly, or a podcast like that. Like, all of my synapses are firing trying to understand, like, a very basic question. Like, How was your weekend? It's like, whew, like those explosions. So I'm exhausted. The first time I did it, literally, I couldn't make it to my next meeting because I was so tired. I had to go lay down. Like, it was so physically demanding. And I'm getting better now. But man, like the first couple of times, it was exhausting. Because I imagine you're having to process the question, essentially translated to English in your head. Then consider your response and translate it to Spanish and then say it.

that does happen. At this point, I am trying to think in Spanish, and a lot of what Fluent Forever has you do is not translate words literally, like when you go through the memorization process they have. And like, you'll see things like one of the flashcards I have, and I have them all on my phone. Like, it'll show you like a picture of a little girl. And I'm like, oh, you know, Nina, like little girl. Or daughter, Iha. Like, that's a different word there. So like, so like, it'll show you the, green and you know it's okay i'm supposed to know green so it has as minimal amount of as possible of those kind of words where you're doing the intermediate translation and i've actually seen where i've started to a dream in spanish though here's the crazy thing about it guess what the topic is

that i dream about in spanish lessons that's what i dream that's what i dream that i'm like practicing the spanish lesson the spanish words that i'm going to say when i get asked by my tutor like how to you know what are your objectives for 2023 i thought you were going to say you dream about doing this podcast in Spanish. Well, look, that's all my waking hour, so here's what's left over. All right. Tell us about this deal. Let's get today's deal, which is on the subject of language learning.

So this is pretty cool. It is a 38-year-old language school with a million dollars of EBITDA on $3.8 million of gross revenue. So pretty solid margins north of 25%. So it says for sales, a foreign language institute that has been rooted in Texas, not the one Michael's going to, for over 38 years and has grown to be one of the top leading language and cultural training centers in its metro area. With the world becoming increasingly interconnected, the global language services market has seen rapid growth, blah, blah,

it's $56 billion in 2021. Over the years, this business has demonstrated its ability to provide high quality, dynamic, innovative, and interactive language and cultural trainings to hundreds of corporations and thousands of individuals from all over the world who represent all social, ethnic and economic levels. They work across all industries, banking, finance, oil, gas, government, IT, consumer products, etc., and also offer services to individuals from international students to new immigrants in the Texas refugee community. Despite the COVID-19 crisis, this business has maintained growing revenue levels by implementing

new digital learning programs and creating strategic partnerships with foreign embassies, universities, and corporations. In this globalized market, they project that their services will expand in the current market and increase profits by over 20%. within the next year alone. It is located in Harris County, Texas. Where's that, Michael, roughly? Do you know?

Houston. That's Houston. So this is in Houston. They have 80 employees, and they say your growth and expansion would be to build on successful partnerships with government agencies domestically and internationally, among other things, and the guy is selling it to spend time with family. So, Michael, as a language learner, what do you think about this one? Dude, I think this is really interesting.

But yeah, not just for the, you know, personal. By the way, my tutor, the first thing she asked me, she lives in the EU. And so she makes me speak like proper Spanish. But we also spend a lot of time talking about the difference between the EU and America. And she's like, hey, I don't understand this. Why is everybody in America so interested in personal development? Like, why do you all have coaches and like you're reading self-help books and think and grow rich. Like, it's so weird. Like, we don't do that in France and Spain. Like, like,

like, why is that so weird? And I was just like, I don't know. Like, it's good. It's just our nature, right? Like, it's everybody wants to buy an ab wheel and figure out how to, like, lose weight and have abs, like, and make more money. Like, I don't know. Do you know why? I don't know why. No, I don't know. I mean, I'm sure it, like, goes back to, I've read some interesting thing about the selection of people that got on boats and sailed across the Atlantic, you know, to originally populate, you know, the European part of our country. And like, Yeah. Like what types of traits to those people? I mean, this was insane, right? You're going to get on a boat for like months, probably die. Like take a ton of risk, you know, to go to the new world. You know, and that I've read some things that maybe that's selected for certain types of, you know, risk taker, self-improvement type people who then, of course, bred with each other and made more. Yeah, 100%. Well, I mean, you're talking about this idea of selection bias, right? Like in anything like, so like one of the, one of the examples I hear often about selection bias. And we may be going to the most,

most niche off-topic thing possible. But, like, one of the things that people attribute charter schools, like, you know how those work here in Texas, right? Like, you can choose to go to this parallel privately run system that's funded by the government. And so basically, like, one of the reasons people think those schools actually perform better than the public's is just because it requires the parents of these kids that go to charter schools to take 30 minutes to fill out of form. And, like, that creates a huge.

Yeah, a huge selection bias of what you get on the outcome. And then you see it like crazy stuff. Like another interesting one is like the culture of Israel, like, and the business culture there. And you realize like those are people that like selected through the horrors of World War II and then selected to go join a place and then selected where they knew like it was surrounded by people who wanted to like destroy their country. Like it creates this like enormously interesting selection bias in terms of how like just

the behavior is. And our buddy Ari from Twitter, like, talks about that stuff. He's like, it's crazy here. Gertley, you got to understand this. So anyway, so like I wanted to start with this deal because there's some, there's an aspect of it that I love more than anything, which is Houston is easily a top three or four melting pot like city and globally connected city because it's so it has all these people. So I don't know if you know, but in Houston, like there are like all these, you know, kids of foreign heads of state. like all these people that are just like, you go there and like literally you can go to like a high end like private school in Arabic or like for Jordanians, right? Or like Kenyans. Like it's just crazy

because it's just the most melting pot like of almost city, almost any city in the United States except probably New York, right? Like it just has all these connections to all these different people and they're full of Vietnamese. Like I don't know if you've heard this out about Houston, but I was told that the largest population of Vietnamese people outside of Vietnam is in Houston. I did not know that at all. So that could be, don't bet your life on that one, but like there's crazy stats like that I hear about Houston all the time. And you go drive around and it's like it's like you've entered a different country.

Like it's very, very different. But that's perfect for this. Like this is a globally connected city like where this kind of stuff is super important. All these people coming in and out, it's like an immigrant destination and language connectivity. is like huge in this market. Like definite, definite the right place to have this business.

Well, what I, what is really interesting too is as you read, you know, as an American, you read this is a 38 year old language learning school. You assume that it's teaching people

non-English languages. You assume it's teaching Americans other languages. But in fact, I'm sure much of their business is teaching immigrants, English, right? So they can perform, you know, at work and all that stuff.

So, and that's a market that, you know, is sort of evergreenly renewable, right? This is a huge market. I'm sure. I'm sure. Yeah, and this is one of those ones where you're like, okay, like we have huge tailwinds of growth there. Like, like the dominance of English is incredible. Do you know what the number, so the number one most learned English, obviously, the United States is English. Do you know what number two is? It's very interesting. Surely it's Spanish. Yeah, Spanish. Yeah. That's why when I hear people, they're like, yeah, my kid's going to learn French. I'm like, are you crazy? Do you don't have that word? Do you don't have any countries in the world? Yeah, totally.

Do you know there's a whole continent just south of us? They only speak Spanish there, except for some Brazilian people, right? And then did you know there's actually a Spanish is like one of the few languages where there's a native speaking country that speaks solely their language on three different continents? Like, that's their native thing. So there's actually Latin America and North and then North America. So there's two different continents there, the EU. And then there's actually one country that was a former Spanish colony in Africa. and I'm totally blanking on what the name is,

they actually speak Spanish there as a native language as well. So, like, if you know English and Spanish, like you have a passport to basically the entire world. Like, it's pretty major. I mean, if you knew English, Spanish and Chinese, I mean, that's the trifecta, I would think, Mandarin, right? So it is interesting because when I was a kid, so I'm 48 today because it was my birthday,

when I was a kid, that was when Japan was coming in and buying up, like, that was peak Japan. They were coming in and buying up, like, all of America. So when I was a kid, there was actually a big push for us all to start learning Japanese, because we thought the Japanese were going to be our new overlords. And boy, was that a huge mistake? Because they do, you can do very well with English there. But anyhow, okay, so back to this deal. So the other thing to think about with this is I would be very curious under what sort of offerings they offer this.

So if this is considered basically the way the rules work in Texas is if you run a career school, which basically means if you charge more than $600 or you have more than a certain number of hours in your program, you have to be licensed. And that would be the first place I would go to kind of understand this. And it could potentially be a very good thing about this deal is if you have a license from the career and workforce commission here in Texas, that takes a while to get. And it's hard to get. And it can create a moat for you.

It's kind of like accreditation like for the universities, you know. So that would be something very interesting to understand how these offerings work and where they fit into that value chain. Like, are they very kind of cheapy type, type deals? Or are you putting people into $10,000 or $20,000, like, let's get you fluent in six months type programs? Which I think that that latter one is much more interesting than being in the cheapy, like, come in for a day a week and like learn stuff at the community college in terms of how to speak Spanish. So if you're in Texas, if your tuition is more than $600, period, like if each, if your customer lifetime value or customer, I guess, transaction value is more than $600, you need a license, period.

That is roughly that, yes. Yeah. And it's not like just fill out of form and you got it. Like you have to prove it over time. It is. So our coding school has been going through that. We've been licensed by the career. It's the Texas Workforce Commission.

And so most states do this. And so you have to go through like all kinds of criminal background checks. You have to submit audited financials each year. They want to know that you're not going to run off with student like, money, they go through and they look at your course handbook. You have to have a course handbook and student policies. They force you also, by the way, it's very interesting. Let's say you run a $5,000 program to teach somebody learning or to teach somebody language, which is a job skill, right? And they quit halfway through. You cannot have a policy where you don't give them back

their money. You have to give, you have to, there's state law on how that works. So like you, you, it's very difficult to run under that. And so it also makes things more expensive and costly for you because just like colleges, you have to have somebody spending all of their time making sure you stay compliant. It's like a full-time job. Yep. Yep. Interesting. So are these licenses transferable? Do you happen to know? Yep. Yeah, they are transferable, but like you have to be subjected to stuff, right? Like they will interview you potentially. They'll do criminal background checks. Like it limits the number of people that can get them. And also, it takes time to get them. So there will be time, for example, where you have to run a certain number of courses and stuff like that to get different levels

of accreditation and that sort of thing, or to allow people to be able to use some of the funding sources. So say, if somebody wanted to use the GI Bill, right, which comes from the VA to do this sort of language learning, right, which if you're accredited, you probably can do that or if you're approved by the GI folks, you can do that. That can all be part of a great revenue source if you have a business like this. Here's the trick. Like if you want to get GI Bill funding from the VA, they have a slight requirement. You have to have been in business for two years before you can even apply.

So it creates like this, there's like this regulatory mode. And people are like, why is education so expensive? I was like, I'll tell you why education is so expensive. It's because the government makes it so hard to be a good educator. Anyway, that was my rant. Well, that's what is so great about. This business has been around for 38 years. So you can be assured, not only are they, have they got all their licenses, I would think,

and are fully compliant, if that's the market they're playing in. They've probably also got the processes to stay compliant, and they've certainly passed any audits. If you're audited every five or 10 years, they've passed three of them, you know, so they know exactly how to do it. Man, you're selling me on this deal, actually. I mean, it's 38 years old. Like, it's got a million and even a dollar.

Like, it's got some longevity and some size, a little bit of size. Yeah. From a Lindy perspective, it's killer, right? Lindy, this idea, if you want to guess how long something's going to last, look at how long it's lasted so far. And that's your average of how long it's, going to last, right? Totally. Well, I also like it, too, from a marketing perspective, I mean, I think in consumer products, like with every single unit you sell, you know, that's

one more person who's experienced your product and we'll tell other people about it. Same thing here. If you're your friend, if you immigrate to America, you're going to get to know other people who have immigrated to America. And if they speak great English, what's the first question you're going to ask them? Where do you learn how to speak English so well? Right. Absolutely. And it's like referral. Every little person is a little referral soldier out there speaking English or speaking in whatever language you taught them and telling their friends about it. And then the other side is this can potentially, you know, I think they hint about it here, like I love that there's a B2B aspect of this, right?

Like there are all of these like Houston companies, right, that are sending like random people to like East Timor or like Kenya or like random parts of Africa because guess what? Like we're drilling for oil there like crazy. And sometimes you've got to have somebody that can speak the native language. And so that gives you a potential, another mode around this business is if you're the only school in town that happens to teach Cameroonian, right, or whatever language they speak in Java, then you're in a great position. Like, you can just basically write your own ticket there and you can go to these companies, Exxon, you know, pick one, BP, right? And say like, hey, you know, I've heard you got people on the ground and wherever. Like, we're your language school for that. And you can develop a great, I think, B2B aspect here that's much better than, kind of the B to C language learning where like, look, nobody's getting much money out of me for language learning. But, but a corporation, much better source of revenue. Well, I'm sure there's

also like certain markets. Like, sure, if you're sending somebody to Cameroon, like, how many people go to Cameroon versus how many people go to Mexico, you know, or how many people that come from Mexico to the States? Like, I'm sure there are different, there are, there are sub-markets here, right? And then you've got to have an instructor, you got to develop a curriculum. Like, you know, like, I'm sure there's probably like almost like some capital allocation decisions. Like what products do we want to offer? What languages do we want to offer? You know, in which and how big are the markets for them? And do we have corporate clients? And do they, if they're going to pump 20 people through our school every month, like, do we need a customized curriculum for this corporation, you know, to teach

about their jargon that's specific to that corporation? You know, and I would think if they've been doing this, it says they've got successful partnerships with government agencies domestically and internationally, you know, several, you know, industries. I bet they already have thought about a lot of this. And this to me highlights one of the reasons to buy a business rather than start one. Right. Because let's let's just say that you were willing to do the two-year slog and then go through all the certifications.

That's just one part of it. Like all these relationships, all of the processes, all the SOPs that they have for, if we want to start teaching, you know, whatever they speak in Cameroon, like here, the shell of a of a curriculum here's how you go hire an instructor like here's how you actually do it the amount of SOPs i would hope in a 38 year old business is is a real hard thing to replicate yeah well and that's one of the nice things about that career school certification stuff like at first i was like oh this such a pain like i can't believe these people are up on our business but then like as we were doing i was like oh this is really good like you know we do need an employee handbook i'm glad

they're making me do this. Like, okay, everybody's still out. We're writing an employee handbook. And I think that's so much what you find when you go look at these small businesses where it's just like, oh, hey, do you have like any like books, you know, like our processes written out? No, no, we have written it. It's in my brain.

Or you look at the small business. You're like, hey, have you, you're a $14 million your business. Have you considered auditing your financials? No, we don't do that. We just look and see how much money's in the account at the end of the year. It goes great. But that's standard, right? That's like the small business playbook.

You know, I talked to my friends and I'm like, yeah, audit. You know, spend the $40,000, get your finances audited, and it'll pay for itself. And a lot of them look at me like I'm a maniac. I'm like, look, you own a $12 million of your business. You're not going to pay somebody $40,000 to come in and run a full financial audit using gap processes against your finances. Or do you trust your controller that much? Is your accounts payable person, you know, or your accounts receivable person that

trustworthy that it's not worth it for you to risk 40 grand to have some professional accountants come in and run a process to make sure you're not getting robbed blind. And then again, they look at me like I'm crazy because I'm the guy that wrote the Chili's thread. So like as an example, though, Michael, so our business, my COO is, he's a CPA. He's a former accountant, right? He did audits before he came to work for me. And we still do audits and get stuff out of it every year.

Right. Like, he's really bright. Then there are plenty of CFOs out there of small businesses that are not formal, former Deloitte accountants, right? And they could really benefit from an audit. Or it's important to note, if you don't want to pay for audit 40 grand, you can usually get what's called a review, which is significantly cheaper and it's basically like audit light. So any firm that will do an audit will typically do reviewed financials. They'll still write you a letter and everything. It's just audit light. It's a place to start. So data point for you about this one. I texted my associate, Sam, who's been looking at businesses for us to buy, and he said, I've seen a lot of these language learning schools for sale over the past two and a half months. Not sure what that means, but it's a data point. So very interesting. Very interesting. Suddenly, the owner wants to spend more time with family.

For those of you considering rolling up HVACs and finding that they're all priced at 12 times earnings, Maybe this is a roll-up opportunity to create a national language learning school. Or maybe the regulation is about to get a whole lot more onerous or something. Definitely good. Well, and then, you know, that's the other crazy thing about like government regulation of education is by and large, more regulation of any industry typically means that the industry is going to react by getting bigger, right? So if you look, for example, at why banks have been getting so much bigger over the past couple of years or a couple of decades, it's because we keep adding more regulation. And if you want to have and be able to deal with that kind of regulatory compliance and have a

team of 50 people dealing with it, you can't be a 100-person bank, right? It's much more logical if you're a 5,000-person bank to have a 50-person compliance team. And so, you know, one of my relatives was on the board of like a small regional. And he's like, look, we just had to start buying other banks to get bigger. Otherwise, all the compliance activities were going to murder us. Like, we weren't going to be profitable because we were going to have a 50-person compliance department for a 200-person bank. And it just wasn't going to work.

But same thing here. Maybe it pays to get bigger. So I don't know. Oh, I mean, usually anything compliance related, bigger is always better. Bigger is always better. So anyway, if you want to go bigger, it's so. So anyway, I like this one. I like this one.

So one thing we haven't touched on is, Michael, do you get a lot of it? get a sense that this is delivered in person in a classroom or online, and which of those would be better? I can think of pros and cons to both, to be honest. Yeah. I would not be surprised if they offer both. And I guess I didn't do the very basic thing, which was like Google Houston language learning and see what came up. But it would not surprise me if there's a combination of classroom and Zoom-based stuff here. And it really probably depends upon what you're looking for. like if you're, you know, an oil and gas company, you know, and you're going to send three, you're going to send 50 people to your Kenyan oil and gas operation.

There's probably some of those that you're going to say, okay, well, you're going to learn like workplace, you know, Kenyon, whatever that is. And then there's another group that's going to learn how to get through, how to get by in the market, you know, servesa and playa level, you know, knowledge of the language. And that can, I think those can each be delivered very differently. But the reality is, like, if you want to be delivered, you know, be somebody that at the end of one of these programs is able to speak and have a conversation, you have to spend a lot of time listening to the language and you have to spend a lot of

time speaking it. And it's just a situation where, you know, that's typically done a lot easier face-to-face, but I do it right now like virtual over WhatsApp with video and you get by. So it wouldn't surprise me if it's a bit of both. And I don't know. Maybe that's the threat here. Maybe a lot of the online services are competing with these guys. Well, I mean, I think there's, So there's a difference in what the product is, right? On one on the spectrum, there's like the Duolingo app, right? Which is self-paced. There's not a human on the other side of it.

It's an online course, right? And it's up to you to speak it or get good or pass or fail or whatever. I don't think that's what this is. This seems to me to be classroom style instruction, either delivered over Zoom or likely, I think a fair bit in person. I mean, they got 80 employees. I got to assume, like for a million dollar EBITDA business to have 80 employees, that's a fair number of employees.

I bet a large number of them are teachers, right, of different languages. I wonder if some of them might be contractors, some of them might not be full time. Like, hey, if we're running the Kenyan class this March and, you know, we run it four times a year or whatever. And we have a contractor who they've listed to this employee count, you know, that does it. So I think this is, and I actually like that better. Like if this is kind of, you got to sell against duolingo and all that other stuff, like that's brutally competitive. That's going. Price of that is trending.

to zero, right? But if this is like, you show up, you got to be local to Houston, you sit in the room, there's real value to that, I think that's a lot more defensible. Yeah. Yeah, definitely be curious where this business is trending when you dig into it, dig into the model, you know, and go from there and see what the threats are. You know, are you getting crushed by some of this online stuff? How are you going to be, how durable is the customer referral? All those, you know, in terms of these partnerships with these corporations, all that's really important. I'm super curious. So if anybody looks into this one, definitely let us know.

Yep. Cool. Yeah, I think this is really compelling. I mean, any, I mean, we talked about the truck driver school a couple episodes ago, which if you're interested in this topic, I would encourage you go back and listen to that episode where we really got into it on truck driver CDL certification. This is sort of in the same vibe in that I actually really like it. It's a services business, you know, it can expand without a lot of capital expenditure.

It seems to be reasonably priced. It's got a million dollars of EBITDA. They want four million bucks for it. been around a long time, 38 years, probably got decent brand recognition in the market. You know, much like the truck driving school,

which was local, you had to actually show up, get behind the wheel of an 18 wheeler, right? You know, same thing here. You got to show up and sit in a classroom

and pay probably thousands of dollars. You know, high ticket, I like this one, in the same way I like the truck driver's school. Schools are, you're going to have a hard time getting super wealthy,

owning a school. But, man, the other thing that's really nice about owning a school, and I've kind of learned this through experience is it's so nice to own a business that at its core helps people in their life transformation. And a lot of times, like, if you're, you know, helping a Vietnamese immigrant,

learn how to, you know, become fluent in English, like, you're providing such opportunity for them. And it's really kind of inspiring, you know, and that's one of the things I've learned with us doing code up. Like, it's just so cool, like, to own something that really helps people, which a lot of businesses don't have that, right? Like, if you own a coffee shop, for example, yeah, you, you help make people's days, you know, a bit better. But by and large, like, it's not as being core to somebody's life transformation as a business like this. And it's, it's a lot of fun and very inspiring. I can just tell you from experience. That's awesome. I'm sure this, this business has a ton of testimonials, you know, and alumni and all that stuff. For 38 years, right, they've been

successfully teaching people languages they need to know to get by either in the States or elsewhere, you know, key skill. It is really cool. Really cool. All right. Well, I think we'll wrap it up there and see you guys next week.