In this episode of JackQuisitions, Jack sits down with Nathan Lindley of Done Right to dig into what it really looks like to roll up small HVAC companies—and why acquisition can be the smartest growth channel in the trades. Nathan shares his jump from Christian book publishing to home services, the “HVAC is non-optional” thesis that pulled him from Oregon to Dallas in early 2020, and why he knew his first deal would be his worst.
They get into the gritty middle: buying tiny mom-and-pops out of “cowardice,” learning fast under SBA debt pressure, and discovering the multiple-expansion play that turns a handful of 2.5x shops into a 4x+ platform. Nathan breaks down his current machine—nine deals closed, two under LOI—plus what he actually buys when he acquires sub-$2M businesses: phone rings, not EBITDA. You’ll hear how he values active vs dormant customers, the outbound power-dialer strategy most sellers never use, and how acquisitions can outperform Google PPC CAC by 50% or more.
They also talk integration across Dallas and Austin, hiring remote CSRs (shoutout stay-at-home moms), transitioning customers after close, and the emotional reality of early-stage ownership—panic blankets, family capital on the line, and the hard truth that buying businesses isn’t passive income until you’ve survived the knife fight of years 0–5.
If you’re doing ETA in home services—or thinking about your first HVAC tuck-in—this one is a masterclass in how real operators build value through acquisition.
🔍 What You’ll Learn
- Why HVAC roll-ups are a customer acquisition strategy more than a profit-multiple game.
- Nathan’s path from book publishing to buying his first HVAC company right before COVID.
- Why your first acquisition will probably be your worst—and how to grow out of it fast.
- The multiple-expansion thesis: aggregating small shops into a higher-multiple platforms
💼 Shoutout to Quick Staffers LLC
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💼 Special Thanks to First Internet Bank!
Looking to buy or expand a business? First Internet Bank is a National Preferred SBA lender specializing in acquisitions for the skilled trades. Their SBA loan program offers up to 90% financing for business acquisitions, partner buyouts, and commercial real estate—plus optional lines of credit to fuel future growth. Unlike traditional lenders, they take a “how can we” approach, making deals happen for both first-time buyers and experienced operators.
👉 Special Offer: Mention Owned and Operated for a reduced good faith deposit and a complimentary deal review + buyside prequalification.
Connect with Alan Peterson from First Internet Bank here
🔗 Connect
Jack Carr — https://www.x.com/thehvacjack
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Welcome back to Jack Acquisitions. Today we have Nathan Linley with Dun, right? Nathan is all over social media, so you might've seen him on X or LinkedIn, but he's doing a great job putting himself out there. Nathan, how are you doing today? Doing awesome, man. How are you doing? Again, we've talked about this offline, but doing as well as you can be as an HVAC owner in the middle of shoulder season when it's 75 and sunny out.I know, man. But hey, you know, it, it's part of the, part of the, the gig. So, uh, that's it. Gotten used to it. Yep, yep. Totally man. Totally. So, Nathan, start us off with a little bit for those who don't know about your background Yeah. How did you, um, start buying? So for everyone who doesn't know, Nathan is doing something similar to myself.He's rolling up very small HVAC companies in the Dallas-Fort Worth area. Yep. How did you get into that, Nathan? Yeah. So, uh, to make a very long story short mm-hmm. Uh, I had a, I had a previous business in Christian Book publishing, which was cool and purposeful, but a very difficult way to make a living.And one of the things I learned in that was that no matter how great our books were, nobody needed to have them. And I was always very acutely aware of that. So when we decided to shut down that business, I was trying to find an industry that my, my, my mental test was if I just lost my job. And I, I, and I had this bill come, I would call my dad and I would borrow the money to pay that bill because I noticed that no matter how broke I was, I found the money for certain things, right?Mm-hmm. Like we never went without food, you know, things like that, right? So I wanted to be in my next, in my next attempt at entrepreneurship, I wanted to be that guy. And so I kind of wrote a, a list of all the. The businesses I could think of that kind of fit, that, that mental framework, HVAC was on the list.Um, my dad had traveled extensively growing up, and so he had a really wide network of friends. One of his friends was an HVAC professional, um, in a town called Palestine, which is down like central Texas. And so I reached out to that guy and said, Hey, uh, if I gave you 10% of whatever I buy. Um, would you consult with me and basically teach me how to run this thing?Okay. And so, uh, he agreed, uh, we did end up landing on an HVAC business in Dallas. I was living in Portland, Oregon at the time with my family. And so we sold a rental property that we had up there, uh, and, and moved my wife and three kids down to Dallas and we closed on our first deal in February of 2020.So excellent time beginning into a new industry, like right at the beginning of, uh, COVID. So yeah. Right before it dropped out. Yes. It's, it is wild house. Similar. Your story actually is to mine, is we, we left the west coast about 2020. Okay. And moved across the country, into the south. Okay. Right. And bought an HVAC company because of the same thesis, though.The thesis that I had was if you lived in Nashville, Tennessee when it's 95 out and a hundred percent humidity. Yeah. If you had to choose between. Getting your lawn mowed, fixing your pool or your AC unit, it's going to be AC unit or flooding toilets every single time. I don't care. A hundred percent. Yeah, hundred percent.You, you'll figure out a way as, as someone in your family to get that working. Yes. And uh, it, it still holds true. I do find that to be, um, a, an amazing thesis that continues to prove to today, so, yeah. Okay, so, so you buy this first company, you move from Oregon. Into Dallas. And how did you go about finding, uh, this first acquisition biz buy sell, bro.Yeah. Okay. Yeah, I did not overthink it. Well, so lemme ask you the question a different way. Do you feel like it was a good deal now that you've done a few deals? Uh, no, definitely not. It was, it's absolutely the worst deal of all the ones that we've done and my, so we were, we, we knew that that would be the case too.In fact, I said to my wife, I'm like, I'm going to make this statement out loud right now just so that we can look back on it and remember, our first deal will our worst deal because we don't know what we don't know. I just wanted to like make that statement, you know, very clearly. So that we would not kind of like, you know, take the pressure off of ourselves that this had to be, you know, the home run, you know, and, and just know that this is gonna be a process.We're gonna be learning as we go and the deals will get better. And they absolutely did. A hundred percent they did. Yeah. Yeah. And so as you're going through that, um, so you bought, found one on biz buy sell. At some point you came up with an, an additional thesis that, hey, I'm not just gonna buy one, I'm gonna buy.Multiple HVAC businesses. Right. Where and why did that come about? Yeah, so, um, it, it was interesting. I'd be on biz buy sell and I would, I'm trying to kind of get the, the, the pattern or the rhythm to, you know, the valuations. Mm-hmm. And what I would notice that there'd be these small mom and pops that we're trading for, you know, two and a half x.Back in the day. Um, and then I'd see these, you know, big, you know, bigger companies, you know, trading for Forex. I'm like, well, you know, what's the, what's the difference there? And I started to realize that, you know, there's this multiple, uh, expansion as the companies get bigger. And I was like, man, I wonder like, what if you could buy like two or three of these smaller ones and put 'em together to one bigger one, and you could sell that for a higher multiple.I had absolutely no idea. You know, I, I had no private equity background or. You know, like nothing. So I'm sorry, you know, Googling all this stuff and I realize, oh yeah, that that's a thing. You know what I mean? Yeah. It's like you're kind of discovering all the principles on your own and then you go and research it to figure out if you were crazy or not, and you realize that no, there's a whole industry built around this exact idea, you know?And so, because initially I was gonna just try and buy something and run. Um, and just get passive income. You know, the, the whole idea was, you know, let's buy a company that's been profitable for a hundred years and don't change anything and it'll continue to be profitable. Right. And of course, you know, you and I both know that it doesn't work that way, but that was the original thesis.And then as I started kind of like, you know, doing more research and educate. Myself, I, I realized that, you know, you could buy all these companies and in increase their collective value and then at some point you could sell it down the road. And so my, my strategy kinda shifted around that point, point to trying to scale this thing.Also, the company that we bought to start with was too small to really make a living on while you're also servicing the debt. You know, the, the free cash flow after that debt payment wasn't really enough, so we kind of needed to scale anyway. Yeah. So I. There's so much to unpack there that I just wanna No dude.Seriously is like there, there's the concept of Yeah, the, you have to understanding that your first deal is going to be bad. You had to grow out of it as quickly as possible. Yes. We found out the same thing through the hard way as well is keeping expenses low while pushing hypergrowth to, uh, exceed your debt limitation on the business and actually survive.A hundred percent. Um, you also, also to unpack is like. Again, very similar strain as we've bought four businesses in the past three years, and we found the same thesis. Did you find that buying those small mom and pop shops, um, did you find that they were easier to purchase because there wasn't as much competition versus the large companies?Or why did you choose on those? It wasn't just like multiple compression. It was, it was probably a mix of. You know, competition for the actual listing itself, maybe longer time on market, like where, what, where was your focus on those kind of ones? So early on it was out of cowardice. Uh, it was, it was just not having the guts to go, you know, spend $2 million on, on a, on a business.But I didn't know anything, so I thought I was playing it safe. By buying this little tiny thing and I'm gonna learn the industry, you know, on the cheap and then I'll in, in retrospect, if, if there's anyone out there who's thinking about doing this for the first time, I would personally, you can disagree with me if you want My personal recommendation, very strong recommendation is to go buy the biggest one Yeah.That you can afford, because there, there will be layers of management and institutional knowledge that you're gonna inherit that will take you years and could potentially be fatal just to learn. Um, you might not survive the learning process, but if, like, and I would say, I mean, maybe not, maybe the biggest is an extreme, uh, example, but I would say three to 5 million, somewhere in that range, you will have managers in place and institutional knowledge that will greatly benefit you.Yeah, yeah. Three to 5 million. There's a service manager somewhere in that mix who understands at least the, the majority of the tech technical knowledge behind what you need to do and so that you can focus on the business. So. Um, and with that all being said, um. Where was I gonna go with that? Oh goodness.Um, I mean, there's again, so much to unpack and, and our sim our stores are so linearly similar, which is actually really eerie. 'cause we bought the small ones outta cowardice. 'cause like, I couldn't afford anything else because it just took out a massive, uh, line of debt, uh, to own this one. But it helped me grow out of that, so, oh, that's where I was going.So when you're buying these other small mom and pops, were these tuck-ins or were these. Separate entities that you're running? Like how did you manage the, the, uh, merging or not merging of the companies? Yeah, so I mean, so obviously early on there was nothing to tuck into, so every, it was, you know, my, my little one tech operation was the platform.And so the deal number two, so for deal number one was in Dallas, deal number two was in Austin. So it couldn. Really bolt those together. We, we kind of did in the, the back office operations, so like my, my admin was handling payroll and my CSRs, you know, we're using, you know, a, a, you know, a soft phone and so we could, we could centralize the call center and all that kind of stuff.But, um, you know, it was pretty tough for a while to, to fully integrate. As we've gone on. Yeah. It's, it's fully integrated. Even being in the two different locations is, it is extremely well integrated, uh, to where if I go buy a location in Austin tomorrow, or one in Dallas, it's about a 72 hour onboarding process and then it's, it's indistinguishable from the rest of the, of the platform.Um, and that's, you know, really, um, getting a good team built up was. Buy a long shot. The most important thing that we did, you know, getting mm-hmm. Competent managers in place who are strong, technically, uh, strong, uh, salesmen, um, and could take the inherited technicians, um, and, and bring them into our process, uh, effectively was, was paramount.And so how many deals have you done now to, to date? We've done nine so far. We're under contract with two right now. Awesome. Congrats. That, that's amazing. Yeah. Thanks man. And so I didn't realize though, I thought you were DFW and Dallas only. You're also in Austin? No, we're Dallas and Austin. How, how has that presented a challenge having an additional, I guess, hub or location?That's what, two hours away? Yep. Yep. It's, it's, it's closer to four depending on what, what part of Dallas learn the hard way. It was just me hour just to get through. Dallas Briscoe to the airport is an hour, and yes, I'm sure the airport to like the bottom of Dallas is another hour. So, no, it's literally an hour to get from the north side of Dallas to the south side, and I'm on the north side, so, yeah.Um, but, uh, yeah, so I, I think, I mean. The way we did it was stupid, and we probably should, definitely should not have done it the way we did it. But early on I would have, I had like, you know, two or three techs in each, uh, city, and I had one service manager who at the time lived in Austin. And so he would drive up to Dallas like once a week, have a little team meeting, and then he would drive back, uh, to Austin.Mm-hmm. O operationally it's actually not too bad because if you are running a house called Pro or ServiceTitan or job or whatever. You have full visibility, like from your couch, right? Yeah. So you know what's going on in the field no matter where you, you can sitting on a toilet and seeing if a guy's, you know, taking good notes or whatever.So, um. So that wasn't too bad, but the boots on the ground aspect and like just kind of the, the tech manager relationship, that was definitely suffering and we improved that when we were able to kind of build up each location to the point that it could justify, uh, independent managers. And that's kind of what we've got going on now.I have a Dallas guy and I have an Austin Guy. They're both fantastic. They're kinda working on getting on the same page. In ter Managerially so that they're, they're, you know, teaching the same scripts and things like that to the guys. Uh, we're trying to kind of get more in sync that way right now. That's kind of our, our growth challenge at the moment.That's very cool. And then with economic economics of scale, I'm assuming that almost everything back of house is singular location. Do you, do you guys generally house that out of, uh, the Dallas or the Austin area? What does that look like for you? Our CSRs all work remotely. We let 'em work from home, which, by the way, there's a, a great workforce out there and stay at home moms who are highly competent individuals, but they prioritize their family.And if you can give them that ability to work from home, they will. Absolutely hit it outta the park for you. And they'll frequently do it for less compensation because they value that work from home component so much. Mm-hmm. I'm not say suggesting that you shortchange them if you can possibly help it, but, um, I think there's this, this massive untapped resource in stay at home moms.Yeah. I mean, I don't disagree on remote labor in general from, from that aspect. So our, yeah, our dispatcher's a stay at home mom and we found the same thing. She is an amazing, she definitely ba values her work-life balance. Yeah. Um-huh. That being said, the work ethic, uh, when she's on the clock is absolutely incredible.So yeah, shout out. Shout out to stay at home. Moms rocking it. Um, track in home service companies. So that's, that's a super interesting, um, I mean, very similar, uh, stories, thesises and movement. Um, what's next for you? You talked about, hey, rolling this up into a platform. Uh, getting some of that multiple expansion at some point.Yeah. Uh, what's, what's the long-term goal? I know a lot of people are like, buy and hold, buy and get to private equity. Where, where do you sit in somewhere in that? Yeah. We, we were for a while contemplating, uh, an exit mostly out of duress. Mostly out of just, um, having, having, I mean, you know, you know, the stress.Of those early years and just the, you know, the sleepless nights. I mean, there was literally a day I, this is not an exaggeration. I pulled a blanket over my head. I hid under a blanket because I was absolutely so terrified about the situation I'd gotten myself into. And on top of that, I had gotten, I'd taken my dad's retirement.Uh, to buy our second location. So his entire retirement was tied up in my business. And when I had run out of cash early on, I brought in my, my, one of my best friends, uh, from Oregon as a co-investor. He put his wife's inheritance from her grandfather into my company. So I was taking everybody down with me in those early days when we were struggling.So when we finally had something worth selling where we maybe could get, you know, a million dollars of equity out of it, I was like, man, this is a great time to just. Call it a day, lick our wounds, and at least I can make my, my friends and family whole, right? Um, but after a while I started to realize that we were not in that place anymore.And, you know, it was definitely like A-P-T-S-D kind of thing, right? And, and so, um, but now that we've got a, a really good team and we have a really dialed playbook, I'm starting to think that it'd be pretty stupid of me to sell because we've gone through, we've paid the, the tuition to learn this lesson.You know, and so now at, at this point my attitude is hold it forever. And you know, but never say never. Yeah. No, it's interesting because, I mean, uh, it aligns too with, so we, John and I run the Breaking five workshop and we always say, you know, the zero to five is such a hard range just because it's such a knife fight every single day.Yes. Over every single thing. Because you don't have the individuals, the managers Yes. Helping that business along. Yes. All of the responsibilities end up on. You're back as well as marketing. Yep. And yeah. Oh yeah, yeah. Absolutely. Just like everything, um, everything. So, but I, I love the fact that you grew out of a lot of that through I'm sure quite a bit of organically, but also quite a bit from the acquisition side.Yeah. So going back to acquisitions mm-hmm. How Biz by self or number one, but I'm sure it wasn't biz by self or. One through nine. Where, where are you locating and how are, like, what's, I don't wanna ask the secret sauce, um, but I'm curious like where it was been myself for 1, 2, 3, 4, 6. Seven. Okay. It was, it was over half biz buy, so, believe it or not.And then, and then kind of through those, um, through those deals you're exploring, you connect with brokers and then they kind of know that you're looking around and, and know what you like. And, and so anything that I directly pick. I'm sorry. I said Yeah, they'll give you first. Looks like I have one after this meeting is a broker reached out to Jack.I know you're buying in in Tennessee. Here's a first look. It's not on the market yet, but it's on market deal. We will put it on Biz Buy at some point. Yes. Yeah, totally. Exactly. Yeah. And so it, so even if I didn't buy a company through Biz Buy Sell, I would develop a relationship with a guy. Mm-hmm. And then that would later on lead to other deals I did.So with all those businesses that you're buying through Biz Buy Sell, though, I mean, notoriously. Biz buy sell happens to be some of the worst deals. Right. Um, did you find that you're, for people listening are going, oh my gosh, like that's a lot. The, the, the amount of money, everything on there. Yeah. When you're looking at those deals, are you, when you see those prices, I guess is what I'm saying, and you see those multiples, are you taking those at face value or are you looking at that and going, Hey, this is my strategy, I'm gonna bring that down 200 k and then that's in my range, and then go into this off.I guess go into the relationship, A, building the relationship, and then b, knowing that you are going to offer a little bit less than they're presenting. Yeah. So I'll say I'm a terrible negotiator. I, I just suck. Like I'm, I'm not good at, you know, bringing people down. Um, I should try sometimes. I always just, I always am too embarrassed.Like, if you want 1.2 and I think you're really worth eight 50, I'm just too embarrassed to say I'll give you eight 50. Um, you know, I usually just don't even offer if I don't think that we're gonna mm-hmm. You know. Come, come to a meeting there. Um, but I, I will say, and maybe this is a good point, uh, to, to pivot on, um, my, my value drivers are very defined and they have nothing to do with your SDE or your ebitda.Um, so while everyone else is out there paying, you know, multiples of profit, for me that's a borderline irrelevant, uh, data point because your, your SDE or your EBITDA is, is the end result of a whole bunch of decisions that you made. Um, you know, that, that post-close I will have control of over all of them.And so, you know, the, your, your pricing, your sales training. Your, and you know how you spend your money once it's, once it's come in, all of those things are your decisions right now that are ending up with a, with a given number. And every single one of those things I have control over post-close. And so what I'm looking for when I'm buying a company is I'm looking for the, the number of times that that phone rings in a year.How many people are calling you for service? Because for me, that's what I'm buying. Everything that happens after that phone call, I have direct control over. I can. Train your, your, my, my, my technicians, how to sell better. I can adjust my pricing to get better margins. I can bring in my suppliers to get better margins.Um, and then I can control, you know, how big of a shop leasing or you know, all, all of those things to, so I, I know how much money I'm gonna make off of your business before I buy it based off of. Uh, some key data like that. I think that's a good point for small businesses, right? When you're buying companies without systems, which are like the one to two under $2 million range.So that, that's actually the same as our strategies, as I always say, uh, you can. You can mitigate risk by looking at price and due diligence. But when you're buying in that low category, yeah, you're buying the book, you're buying the phone number. Yeah. Uh, you're really not even buying technicians or systems to keep the technicians running.Well, a hundred percent. This is, and I want to be really clear that this is, for me, this is different. Once you get like to five or $10 million, it's a different world, right? Yes. If someone were to buy your business now, they would look at those things, but for people buying very small. What he's saying is like, we're looking at a business right now that has two brothers, and the two brothers, one of 'em is not gonna come onto with to our team.The other one's retiring, right? So it, we will pick up one of the brothers. But the point is, is that you're right, it's like all the decisions you made. And so what we do is we take that and we juxtapose it against how much is it gonna cost for us. To acquire a customer, like what's our customer acquisition cost?Our cac? Yep. And then whichever one is like, does it make sense from a CAC to, um, volume standpoint? Because once you bring the customers into your wheelhouse, you start answering the phones with your scripts, your people, your gross margin, your prices, it ends up becoming a, uh, revenue top line revenue source.But really it's a. Um, lead generation, source like a marketing channel. That is interesting. That is exactly what it's, this is a replacement for marketing. Yeah. Yeah, yeah. You're able to add a huge amount of, of inbound phone calls and then how you handle it. So speaking of that, so we have our way where we handle those transitional phone calls and those transitional customers.Mm-hmm. Um, we found interestingly enough that people are very cult-ish about their HVAC guy, but that being said, ironically enough, they're extremely cultish about their H Jack Guy. But when their HVAC guy leaves, they're very ready when they. Um, to like, go anywhere. It, it's very strange, right? Um, they just want, I guess, service and they clinging on to whoever gives them good service.Yeah. How do you transition, like what's your method of transitioning customers once that that happens? Yeah, so we, you know, we have voice greetings for, you know, number one, we've got like 30 phone numbers and so depending on which phone number you're calling, you know, we know where, where you're from. And so, you know, if we, you know, we bought a company called Nix a while ago.And so we have a voice screen and says, thank you for calling Nix now part of done right. And then the lady answers the phone says, thank you for calling Nick. That part of done right. So we're kind of reiterating number one, you called the right number. You did call Nick. Yep. But there's been a change of ownership.And, uh, we're also working on, uh, doing, we haven't deployed this yet, but we're gonna start doing targeted Facebook ads to everyone in that database. Um, that's smart. You know, announcing, Hey, Nixon's done right, are now, you know, uh, one thing. And, and doing that on Facebook. Um, and probably doing some email as well.I think we have done it a little bit of email, but not as much as we probably should be doing. So basically just trying to make that announcement. And then, um, one thing that we're really, really heavy on is giving away. Uh, free tuneups and or free maintenance plans to those customers to, 'cause I, I, we do occasionally get some guys like, well, I used Steve for 30 years.He was the best man in my world. You know, all that kind of stuff. And, well, guess what? My name's not Steve, so I'm just kind of, I'm kind of screwed, you know? And so, so trying to get them to give us a shot is really, really important. Um, 'cause we provide a great service, usually, in fact, always better than the company that we acquired.And so we, I know that you will love us if you give us a chance. And so we're, you know, we, we push that pretty hard, like free tuneups, free year of maintenance, um, just to get them in the habit of using us. Do. So again, very linear. 'cause we do the exact same thing. We have the old owner say, Hey, this is John from Room Mechanical.I've partnered and just like have the old owner's voice as well. Yes, yes. Transition to our company, we, yeah, we started doing that as well. Yeah. And then what we do after is we send them an email campaign that's just like, Hey, we've partnered. We partnered. But uh, yeah. We still get those people. So we, what what's your, um, now this is, this is turning into like Jack Jack's episode where I'm, I'm just focusing on how I'm gonna do better on my acquisitions.Like how, how are you, how are you looking at, at, at attrition and attribution for like the customers? So if it has 10,000 customers, do you have an expected amount that you are going to convert over from? X, y, z company to done right? Like where, where do you place that at? Yeah, so we're, we're in a continual discovery process on that, and there has been a fairly wide range of outcomes there.Um, but one of the things that we do, and this is actually a pretty important point, is we outbound call. To all of the customers in that database and we use a power dialer. But if you're gonna do this, look up the laws around it because they matter. Um, but you can out use a power dialer to call everyone in the database and leave a voicemail if they don't pick up.And, and, and, you know, basically what we're trying to do is we're trying to get our foot in the door with as many people as possible and, and that, that dormant portion of your customer, so when I'm looking at a company. They have 5,000 customers in their database and they ran 1500 calls last year. Okay?So I'm gonna ascribe, when I'm buying the company, I'm gonna ascribe a certain value to the customers that did call. I'm gonna ascribe a, a lesser value to the customers who didn't call. And then I'm going to put my outbound girls on the people who did not call in the last 12 months. And what we tend to see is about a 2% conversion rate per attempt.And we, what we do is we do four attempts in a row, like four weeks in a row we call, um, and then we give it about a 90 day rest, and then we call again. So that should work out over the course of a year to about a 25% conversion rate. Uh, on, on, you know, dormant cold customers. And so that's, that's an additional layer of value that we can extract outta that company, which, by the way, no one else does.You know, the, the, you know, the whole, you know, mythical, you know, boomer HVAC guy, um, he's not calling his customers and that's part of the value unlock in these acquisitions. Is there? Mm-hmm. The, the attitude, the attitude that I was trained on, the guy that I told you I brought in as a, as a partner, you know, when think when the phone was ringing.I said, well, what do I do? He is like, I don't know. You wait for the phone to ring. Well, that's a, it's a terrible strategy, by the way, if you're getting into hvac, it's a terrible strategy. Like, pick up the phone and call your customer, and whatever you have to do to get your foot in the door, you do it. You know, if it's giving away, you know, a free tune up or you know, a free whatever, you know, figure out a way to get your foot in that.Door. Very interesting. Yeah, yeah, yeah. That all makes sense. All really, really, really good advice for people doing add-ons or tuck-ins. I mean, this is all extremely applicable. We, we present, or we, we usually buy on a 50% of active customer base, which is people who've called in the last two years. We get 50% of that for the, Steves the Steve buddy from church.We, yeah. Figure hey, there's a good chance that Steve has another HVAC friend. Yeah. So we discount the Steves and then we assign our, our CAC to that Nice. Plus a few dollars. And then that's generally where we fall. But we don't, we don't generally assign a value to the non. Um, active customers. Okay.Although that being said, there definitely is value there. Like we get a lot of, we, we got one yesterday from our first acquisition or tuck in, Hey Jeff, like my buddy gave me your number. Are you still working on HVAC units? And like, so we still get those every now and then, which is is wild that, you know, three years later somebody still is, uh, driving through on Oh yeah.The old name on the old number that wasn't in his list. And totally, um. It's kind of nice. Well, today, like literally today, we sold $30,000 on two different jobs to customer, to dormant customers from one of our portfolio companies where one of our girls outbound called to them and said, Hey, it's been a while.Would you like a free tuneup? We went out there and two different calls. We sold systems for a combined 30 grand. It literally happened today. Yeah, that that makes a payment on that company for two months. The profit on that, and so. Uh, this, my next question is, do, do you, do you feel that there's a point where you will stop acquiring as a growth metric?Because from what you know, uh, we've talked to quite a few people who have the large, you know, 30 40 John Wilson for example, you know, buying a $600,000 book becomes a lot less effective from a growth metric percentage wise as you get bigger, right? Mm-hmm. As 1 million, like, you're almost doubling. Or 50% increase in your business, right.But at 20 million or not, where does the value or where do you see the value stopping for you as you get bigger? Yeah. So, uh, I'll be honest, I suck at marketing. So right now I have no choice, but if I want to grow, I'm gonna have to do it through acquisition. So, um, but, but honestly, I mean, today my plan is to scale an m and a team who goes out there and buys 30 $600,000 companies a year.Um, and then we will just develop a good onboarding process. That's my strategy today. Uh, part of the reason for that, and I don't want to give away the secret sauce too much, okay, but my, the, the, the published CAC numbers in the industry. I, I just saw this week, like $600. I think, you know, the, the data driven driven trades.I think John Tory, I think is the guy's name. Um, data Driven Trades is his newsletter. If you don't subscribe to it, I strongly recommend that you do. Publishes great marketing statistics that he's pulling from ServiceTitan accounts of people who have. Giving him access to the service side. So this is real, real data.Anyway, he was publishing $600 per customer CAC costs. Um, I think through like Google PPC or something like that, it's, it's astronomical. But if you can go out and can buy John's AC in, you know, small town, Tennessee for $300 per active customer, you're getting that company for half of what it would cost for you to build that company through Google.PPC. Unless you're better than the average statistic, which obviously some people are going to be, I'm not that guy today, so maybe someday I'll, I'll meet the marketing wizard who can help me unlock another, uh, growth channel. But today, that's my, my strategy. The other part that I think is extremely interesting about the strategy, uh, of, you know, hey, 30 $600,000 companies is what you do is you pick up naturally companies that are kind of in less.Um, like congested areas, and maybe this is not what you see, but this is what I've seen around us, is there's a lot more of those small guys who have kind of owned a small submarket, like a tertiary, or I don't even know. It's after tertiary. Yeah, totally. A four tier market. Yeah. And they've been the only ones in this town of, you know, 10,000, 15,000 people.Right. And they've just completely owned it at, you know, 1,000,005 in revenue. Right. And, uh, being able to, you know, buy them Yeah. At a fair price and, you know, you get a lot more out of that because they haven't a, they're not, they're not going to anybody else. So you actually, you're buying an entire territory, given it's a tertiary market, but you're buying the entire thing.And B um, they generally haven't had that service, like you mentioned, of, of like a really top tier service. Right. So you're able to step in, give a top tier service, and actually raise that valuation on that singular area. A hundred percent a portion of the company by time. A hundred percent. Absolutely. In fact, one of the, the best deal we've ever done was exactly what you're describing.Yeah. And I think we paid that whole company back in six months. I mean, I think we, so I think that's my last question to finish you out. I know we're rounding up on time here. Yeah. Um, how are you funding all these, is there, like what, what does that look like and what do you recommend from a funding standpoint?So we use the SBA seven A plus internal. Um. Cash flow, like cap access? Yep. So we've, we've done SBA seven A on I think three deals now. Um, some of them. We're just, the whole deal was SBA, some of them it was like 50% SBA 50% seller's note. Uh, I, my, the favorite deal that I've ever done from structure was a complete, uh, revenue share.Uh, be, and the, the, I love it. The seller had, they built their company in a very weird way. Everything was subcontracted, but there was still a database there that had some value. And I said, I'll, I'll give you 10%. Of whatever revenue comes in. Mm-hmm. And we assigned it a phone number and we tagged all the calls so we could pull a report to, to show the revenue.And that was my favorite deal structure. Um, then we've done, I, you know, I did like, you know, 150 cash, uh, plus a seller's note for 200. I mean, just basically everything that you can imagine. What, um. Graduating to right now. The two deals that we've got under LOI are, are kind of bigger deals, so I'm going to see if I can do a deal with an SBIC, um, and, and get like, like a $10 million.Uh, package put together with them, but I have not done it yet, so. We'll, that's, that's the, the next layer of this thing that I'm exploring. Yeah, I mean that, so that's all. You just named off all of your We have one SBA, uh, we're open to, you know, an expansion loan on that with the 0% down, but, uh, which those are awesome, by the way.I have actually done that and it's amazing. It's, it's, I actually got a $20,000 check out of that deal. It was cool. They gave you money to, to loan on it. They gave me money back on a deal. Yeah. Yeah. And then the rest have been cash plus, uh, rev share. And we did the exact same thing that you're doing here is we tied it to, um, the phone number, tied it to the account, and then took a piece of that on every single job that came in, which I think we paid off the rest of that, that specific loan in like seven months.So like, awesome. It was amazing. It was a great. Great. Um, it was a big win for the, the company. Yeah. Um, and by the way, guys, I would love to, to draw a note, is if you can hear Nathan's phone in the background and you're curious about what it's like to be a business owner, just go back and listen to how many times it rings in 30 minutes.I apologize for that, man. I don't know. Don't, don't. No, no. Please don't. We're buying a couple trucks right now. I think it might be. Banker trying to get ahold of me for something, so, I'm sorry. Yeah, mine's doing the exact same thing. I having notifications, like, it's like the phone's ringing right now. So, yeah.You know, that's, that's the joy. Um, I'm sorry man. No, seriously. Don't worry about it. Um, any, any last minute thoughts or questions, concerns? Uh, you know, uh, soap, I give it as a soapbox moment if you have. Uh, a big like, Hey, this kind of beat me up during my initial acquisition that I want to yell and choke new searchers on and say, Hey, don't do this or do this.Like, what? Yes. What is that? Yes. Uh, we all have one. Yes. Give it to us. Buying, buying small businesses is a tremendous opportunity, but it is not like buying duplexes. Do not think that this is gonna be a passive income. You just sign the contract and just wait for the checks to roll in. You need to go into this.With the, with the mentality that I am going to own this, this is going to be my career for the next three years plus. Um, I, I've talked to multiple people who grossly underestimated the challenge. Several of them have lost everything, uh, through SBA loans that they were not able to pay back. Um, so yeah, it is absolutely a tremendous opportunity, but it is not a passive income opportunity until.You're at year six and seven and you've built a great team, and then you can kind of unplug a little bit Actually, that, that phone ringing is, is deceptive because I, I don't have, I homeschool three kids right now and, and I can actually really unplug for a lot of the day. It's going crazy right now for some reason.I don't know why. Um, but you can get there, but it is, that is your reward for half decade of hard work. Yeah. Well, awesome. Nathan, thank you for coming on today. I really appreciate. Where can people find you, reach out to you, hear more about you? Yeah, so yeah, I'm on x uh, uh, at a acore lasting legacy, which is a carryover handle from my publishing days.Um, and then, uh, you can find me on LinkedIn. I'm, I'm super active on there as well, so. Awesome. Well, thank you for coming on today. If you guys like what you heard. Leave us five stars. Just do it. Take the five seconds. I'm over here hustling away. You the least you can do is drop a five star view for me. I appreciate it.It helps, uh, us all out and us us grow to be able to get, you know, more people on. So, uh, thank you all and I'll see you next time.
