0:00 Wow. How many of you have listened to the Head, Heart & Boots podcast? I can't tell you that reaction, how much that means to us. Welcome back to the Head, Heart & Boots podcast. I'm Chris. And I'm Brandon. Join us as we wrestle with what it takes to transform ourselves and the businesses we lead. This new camera angle makes my arms look smaller than yours. I'm noticing that and I really appreciate it. I thought you did that on purpose. No, I don't. I didn't. And I am not happy with it. Well, my friend, it is that time of month again, or time of year, or I'm not sure how you say it, but it's- Year and month. It's time to get some money knowledge from the man, the myth, the legend, Jim Everick over at Fractional CFO or Backbone CFO.

0:46 Dude, so I think I've not, I don't know that I'm saying your last name correctly. And I've known you for a long time now. Can you make sure I'm... Emmerick. Okay. Like a K, but a CH, but it sounds like a K. Okay. So we're in the zone. It wasn't a complete... You're in the zone. Butchering. Okay. Well, that's good. I feel better about that. Dude, how's life been, man? Life's great. Yeah. Life's really good, man. We like, today's actually the last day of summer for us. Like as a family, kids go back to school tomorrow. So it's kind of sad, but it's good. Life's really good. Nice. Nice. Yeah. So you guys all jump in about two weeks ahead of us on the West Coast. Some people are like a month ahead of us, I think. No, my kids. Yeah.

1:26 Oh, they did? Corvallis schools. Yeah. Wow. Okay. Okay. Yeah. We're actually late around here. Most of the school started earlier in the week or last week. I don't know why we're so late. I have no idea. Right on. Right on. Okay, dude, I got a question for you. See if this is going to ramp the direction of the conversation. Oh, that angle. I just changed it. I like it. Nice. What's that? Yeah, the change of, yeah. Well, it may not. It may just end up taking us right back to where we were. But I've been watching some of the content that you've been doing. And I've noticed there's a little bit of a shift in the theme. And I was wondering if some of that is based on some kind of lived through experiences that seem to be coming in groups.

2:08 Or if it's an annual thing that's shifting kind of the direction of some of the stuff that you've been talking about. And I know that there is some crossover, but a lot of our audience hasn't necessarily heard some of that content unless it's you on the show. Does my question make sense or am I making this up? So yes, there's definitely be a, and it's really been probably the last couple of months from a content standpoint. So myself and our marketing assistant, Jordan, have been working on really just looking at like making sure we're speaking to the real pain points of the folks that we work with and that listen to us and hopefully get some value from us. But there's definitely been some intentional change specifically around, I would say two things.

2:51 One. Yeah. I'll say a little bit of the size of the businesses that we're working with more frequently these days has changed some of what we always talk about, how it applies. So the implications and the application of the same principles, but that's changed a little bit. And secondly, I think we're over the last, this has probably been six months now, speaking to a really large audience from a trades perspective, whereas... year or two years ago, focused a lot more on restoration. And that's still certainly a core component of what we do and who we're talking to and working with. But I think the trades at large, you know, it's just been an audience we're diving more into.

3:33 So right now, based on what you're experiencing, and that was kind of the vibe I was getting, is what are like right now the top two things, pain points? And I'm wondering, because we're at the end of extension, tax extension season, I'm wondering if any of these things overlap. But what are the one or two top themes right now that you're seeing specifically for the trades and the blue collar industries in general? So it's interesting you start there. I see, and when we talk, I always go through, what are the last half a dozen conversations I've had personally with business owners doing this stuff? And this was actually this week and last week. A recurring theme that I'm seeing is business owners willing to pivot.

4:14 Even those, and if you're listening, in the restoration space, I had two calls in the last week where founders, owner, operators are running and one was a $7 million operation, the other was a nine, who have expressed explicit desire to not get out of restoration, but to bolt an adjacent activity on the side of it for, I think, two reasons, both of which make sense. I have differing opinions on both, but one is just a referral mechanism back into the restoration space, and the secondary is just a pivot in terms of expansion. Like an altogether different business. So this is a pivot, but not quite as dramatic with a $9 million, $9, $10 million, I'll call it a facilities management slash contractor who is kind of put in front of long-term contracts to do improvements on commercial facilities.

5:09 They're even looking at pivots. to not get out of construction, but to even go into more home remodeling because they have the crews, they have the capability, they have the market share, those kinds of things. So I'm just seeing this theme of business owners willing to pivot. When they got something right, they have some... capability, but they want to attack a little bit more market share, maybe a little more geography. And they're looking at different avenues to do that. So really interesting, presents a whole world of new fun challenges, a lot of opportunity, but a lot of buyer beware conversations I'm having as well. It's super interesting. I'm wondering, you know, one of the things that we've seen and we've seen more of on the restoration side, and I wonder if this is relevant.

5:53 Obviously, we had a budding relationship with one Tom Plummer. That started years ago. And they were kind of, I would say, at the front of some of these franchises that are pursuing partnerships specifically with restoration companies for mutual referring, right? Obviously. But then there's also this element of that, depending on how they develop these other service lines, they can be a little bit more cash friendly in terms of pay terms and things like that. because they're not pursuing payments through insurance bodies and things like that. But I think the other thing, though, is almost a... It feels a little bit like the trades and home services are starting to approach this similar to maybe what we've seen from SaaS companies and some white-collar companies where they're trying to control more of the ecosystem with that particular client.

6:42 So they're looking at it and saying, okay, we can spin up these other ways to market and find new relationships, or we can solve more problems for this gained audience that we've already spent years or whatever creating. So what are you seeing as some of the reasoning behind that? And then obviously, we need to start talking about What are some of the things surfacing from a financial perspective that maybe these teams weren't quite ready for or didn't quite have their head wrapped around it before it started to infuse that in the business? So it's really interesting from a, I'll call this more a strategy conversation that certainly can dovetail into every functional aspect of the business. But if we just look at it at the highest level.

7:25 So the way I've been taught, and I'll just, I might butcher this a little bit, but essentially when we're talking about a gained audience or a platform, there's a lot of power in that, right? As you scale your business. So, and this is true in any industry. Right. So I look at like four levels of that. So you have your direct, I'm going to just go sell to you. You and me, we're going to do a transaction. Then there's an individual where I make a relationship with one person who has maybe multiple relationships that I can sell through. So that's cool. Then there's an ecosystem. That's the next level up. That ecosystem is really what I would call a platform. So taking advantage of a brand who has hundreds, maybe thousands of members or affiliates or etc., etc., within it.

8:10 So that's going up another level. And then the fourth and final is called structural. And this is really unique. This one is, it is the winner and it is the pathway to ultimate scale. And that is, can you get your product or service to a point where it is mandated to be used by your customer? Required. So think of it this way, and I'll pick on my own kind of adjacent industry as an example. Everybody knows what the CPA is. So inherently, when you go to be a taxed accountant, you get a CPA. Why? You have to. You're bored. You don't actually have to, but most people think you do. And we'll leave those reasons to the side for a second.

8:52 But it is the standardized pathway to be an accountant. So if you're selling the CPA credential, so to speak, you're going to lobby for that to remain forever because there's an entire market structurally bound. Mm-hmm. to require that to happen for me or you or anyone else to be a tax accountant. And I think, and we know some different players, even within the restoration space, who have captured that level. It is a requirement to use their service or their product. And that to me, when you look at those four levels, any business, any company, restoration trades included, can look at their own environment of selling.

9:36 and look at it through that lens. And I didn't make that up, by the way. I completely stole that and plagiarized it from scaling.com. So that's not my idea. As far as the four levels, you mean? The four levels. Yeah. Don't credit that to backbone. Someone's going to call me and complain. But I think that's really, really unique because you were asking the question and we were kind of talking about the conversation of pivoting. And I think that pivot isn't really what all these different examples are slightly different. But I think business owners are inherently looking at those four levels and they're saying, oh my gosh, I've been doing this one-off selling for 10 years. But this one customer or this one platform?

10:18 I could sell to 10 different, I can sell the same thing or something similar 10 different ways to that one person or to that one group or to that one customer base. And that is asking me like, why the heck am I trying so hard to sell to 10 people if I can sell to one 10 times? So I think that if to answer, I don't know if that answers your question or not, but I think that's the pattern that I'm seeing in these business owners, the light bulbs going off. And I will say that it's a simplistic, in a good way, it's a simplistic way to scale. And I think when business owners start hitting a point where they think, oh man, I just got to go get more BDMs and just sell 100 times more than I'm currently selling.

10:59 And then you get to a point where you're like, what if I didn't do that? What if I sold less? quantified less for more scale. To the same group, essentially. To the same group. So in other words, I have one relationship, maybe a person in front of that relationship that yields significantly more value than to just say, I'm going to have 10 people doing the same function, trying to go find the same value in a dispersed environment. Yeah, it makes a ton of sense from my perspective. Yeah. This really relates, like, one of the things we see a lot in the restoration space is selling of master services agreements. Yeah. And using an emergency response plan as sort of a means for formalizing that relationship and going up market to executive decision makers over portfolios of properties.

11:46 It's not bulletproof. It's not quite, in reality, it's not quite structural. There's some downline relationship. I would call that ecosystem. Yeah. Yeah. Okay. Yeah. Okay. I wonder too, like, because I was kind of like wrestling with this a little bit because we've had a few new introductions with some folks that are really doing very well in their particular industry. One of them, I'm really eager because I think he's going to be a future guest on the show. I'm going to catch up with him after elk season. Yeah. But he runs a pretty good size electrical company. And he basically has identified himself and his branding as the multifamily partner. So it's in this same kind of conversation where he's...

12:30 just has decided to... And how much of this has really changed the shape of his business, we don't know yet. That's part of the opportunity I think we have to learn from him. But you can see very intentional with his language, his marketing, what he's doing from a front-facing perspective is very about establishing... this partnership specifically in the multifamily environment and identifying himself and their company as the go-to team for that specific lane or industry. And I think that there's this opportunity between all these. We're not really on money yet, but I think it's still a really interesting topic. So part of this ecosystem, part of this, like you said, whether we've gotten all the way up to structural where it's a mandatory item, it's this space where people are trying to identify a way to get some more traction or momentum in as tight of a timeframe as possible.

13:27 Because I think in general, and we assumed we would see less of this in the single trades and home services, but in general right now, the economy is not creating a sense of bullishness for the average operator. Like, I don't know much about the true finance circles and what some of them are doing behind the scenes. But in general, there's hype, there's excitement, But there's more, it just seems, I'm not going to use the term fear. I'm going to use the term concern, like generic concern. And so I think part of what's promoting this right now is people are just saying like, what can I do to stand out right now? Get some immediate traction to feel like I've got some new wind in my sail.

14:08 So I don't know. I don't know if you're running into more of that too, as you're starting to have some of these financial conversations, you know, with prospects and your client circle or what. So to maybe tie this into money, but not just like dollars and cents from a profit standpoint, but if we look at enterprise value and maybe if we connect, I would connect this more to that level of conversation than, hey, does this improve my gross profit next month? type of conversation. So, and Chris, to your point earlier, I think all of these, the four levels I mentioned, I think we could probably split hairs on like what falls where, but I think directionally you are correct in that the MSA pathway is closer to either a ecosystem or structural component.

14:53 Either way, and going back to the enterprise value piece here, what it's paving the way for is, is, and this will connect to enterprise value, is some repeatability and predictability on revenue generation. And I think that, again, is critical. And we're not a backbone CFO in our firm. We're not a transaction advisory firm, right? So we're not going out every day of the week and brokering deals or anything like that. That being said, we've had four of our clients in the past year, year and a half sell. Yeah. And of course, as a CFO, we're kind of lockstep with that process from beginning to end. And one thing that I can say without a doubt, this goes to three of those four deals being, sorry, two of the four were private equity.

15:38 One was a family office. One was a roll-up, a strategic. But every one of them, the buyer's thinking through the same filters. And that starts with revenue predictability. If I buy this thing and I get the keys tomorrow, can I rely on the past P&L for the last three years that with some degree of certainty, if it did $12 million last year, I don't wake up tomorrow and it's like a $7 million business? Because that presents a whole lot of risk to any buyer. Yeah. And again, you might be listening or your listeners might be saying, well, I'm not trying to sell my company. Don't hear it that way. Hear it in terms of building a company, building a business, that whether you decide to sell it or not, you're still pursuing enterprise value because you're going to want to scale.

16:28 I can't think of a single prospect or client that I've ever talked to who's like, yeah, I'm not trying to build enterprise value. Everybody is trying, even if they don't articulate it that way, You are. Everybody wants options. Go ahead. Yeah, that's, yeah. Yes. They want options. Jim, can we hang in this pocket a little bit? Because I think you're on, you guys have a particular visibility when you talk about four clients that have exited in the last year. Yeah. One of the terms that maybe some of our listeners aren't familiar with is quality of earnings. This is part of the new diligence. Yeah. Yes, it is. Investors, strategics across the board, if they're smart, they're going to hire their law firm, their M&A attorney, whatever, is going to engage somebody like you potentially to come in and audit the books in a very particular way and go through how clean are these financials and how clear of a story do they tell.

17:13 relative to what the business owner has been telling us about how awesome their company is, right? I'm curious when you talk about the repeatability of the revenue and these buyers are coming in, what are some of the things they're really honing in on, finding problems with? What do they like seeing? Yeah. Break some of that down for us as if we're like 12-year-olds you're talking to versus financial professionals. Or 14-year-olds. Yeah, yeah. I do this with AI periodically. It's like, whoa, whoa, whoa, whoa, whoa. But explain that to me as a 12-year-old. And then all of a sudden, it's very accessible, you know? I love that. So you set, you teed up a lot there, Chris. So let me break that down.

17:53 You threw out a term, quality of earnings. So let me define that, but then let me connect it through a 14-year-old lens and I love that. Or a simplistic way to how that matters for the business owner. So quality of earnings or QAV, you might hear that terminology if you're either approaching a transaction. When I say transaction, meaning you're looking to sell the business, buy a business, something like that. whether it's a private equity firm or some buyer might come in as strategic and say, hey, I saw your books or maybe I haven't even seen your books yet, but you've told me that you have profit of X. I need to validate that. I need to validate that. So they're going to hire an accounting firm, likely an accounting firm, third party, and they're going to just come in and they're going to look probably over the last three years of your business and they're going to validate what you said you did.

18:42 I mean, that is really at the end of the day what it comes down to. But now let's connect that to how that matters to enterprise value, the thing we were just talking about. Again, you've heard this in conversations at the bar, I'm sure. I'm going to get a certain multiple or a multiplier on my EBITDA or my profits. So they're validating the profit, and then that multiple that you're going to get against that profit, it has to be determined some way. And there's no rule, there's no rhyme or, there's a rhyme or reason, but there's no necessarily hard and fast rule. And that is essentially, there's a lot that goes into that. One of the big pieces is that revenue predictability. But Chris, what have we seen?

19:22 And this actually just came up with one of our largest clients. Any one-time anomalies or massive jobs that are just total, they make your financials look phenomenal in a given year, right? You had this huge, large loss. You had this huge project that was state-funded and it went for three years, but you know it's not renewing and it's never coming back again and you have no shot of repeating that revenue. That isn't something that somebody ultimately is going to want to buy because they can't rely on that future revenue post-transaction. And that Q of E is going to help not just justify what actual profit is to make sure it is what you said it is, but it's also going to then help the buyer discount or potentially lower the...

20:05 a multiple or something because, hey, that one project or that one quarter that you had that was amazing, that's never going to happen again. And here's why. We're a fractional CFO. So we don't do those QAVs. That's going to be a third party, completely unbiased. For us to do that for a client would be not reasonable. But it is our job to defend our clients. Yeah. And the work that you're doing up to, right? You guys are laying the bedrock and ensuring that it's protective when it comes to that point of transaction, whenever that happens. We want it to be clean. We want to know the stories ahead of time so we can not control the narrative, but so that we can help the client navigate it.

20:46 Because if I'm a buyer, of course, I'm going to want to be discounting as much as I can. I'm going to want to lower that multiple for X, Y, and Z reasons. And we're with the client, of course, we're trying to position the company to say, no, you're in a really good position, Mr. and Mrs. Buyer. And here's why. This is how we have MSAs. I came from the government contracting space. We would have these what they call IDIQ contracts, indefinite delivery, indefinite quantity, five, seven-year contracts where they can place blanket orders at any time. So it goes back to, hey, this might seem like on paper highly concentrated, but here's why this helps you. Here's why this elevates the predictability of future revenues for you. That goes back to the enterprise value conversation.

21:29 So if you're listening and you're a small business wanting to scale and you're thinking, okay, how can I pivot? Not how do I get out of restoration or how do I get out of being an HVAC company, but how do I pivot my model in such a way where I move from one-off transactions towards something that gives me, in today's world, but also in the future, some more predictability into future revenue. That could be, to Chris's point earlier, an MSA. That could be setting up a program with your, and I'm even thinking of a landscape contractor I work with, setting up one-year contracts with residential, I would say middle to upper income level type of clients where they're paying a monthly subscription for all the things, not one-off mulching in the spring and 28 cuts a year in New Jersey, but it's, I'm going to pay 10 grand or 20 grand and I'm going to have 10 services done.

22:21 I don't have to think about it. But if I have 150 customers that have that contract versus paying it one off here and there, it could be the same revenue, but the revenue predictability is entirely different. All of a sudden, enterprise value goes up. So two things I kind of want to piggyback on as we're in this topic. One is on the enterprise value. I just kind of want to unpack really quickly kind of how we think about it in relationship to a business's health. And I think this is important because we have friendships with people that are brokers, for instance, not only in this industry and others. And we always want to be very clear that floodlights specifically, we're not evaluating your company.

23:04 We're not actually telling you this is specifically what your asset is worth. What we focus on is helping that business owner understand and identify that, yes, Yes, when you were at the bar on Saturday and Jojo was telling you about the multiple he got on his profit, understand that before that transaction closes, that due diligence period is going to start. And they're going to start looking at all the systems, the processes, the key players, the roles, who owns what, whose skills are going to stay in the business. What happens when you leave when they buy you? Was this a shop that was built on the back of an overly productive owner-operator, or are there legitimate systems in place that will continue to live on after you?

23:50 And so what we like to look at is when we're looking at this enterprise value, our job in partnership with teams like yours, with a JT Cry, is we're going to help evaluate the health of the systems in the organization. And we're going to identify that these things right now are either taking away from or adding to the potential value of your business, right? And so I think just kind of coming back to that enterprise value, we're in alignment with you. That's how we think about it. Like what kind of things have to be in the business to be successful? Well, and not only that too, but one of the conversations we end up having with clients to help kind of level set their expectations is One of the ways investors and strategic buyers will sort of offset their risk when they see lumpy revenue, they see some big large loss activity, they see some heavy concentration around a single customer is, yeah, they still may pay out that 11 times multiple or that eight multiple.

24:44 But a big chunk of that payout is tied to the performance of the company over the next three years after you sell. So you might only be getting 60, 65% of that big giant number. The rest is predicated on you being able to repeat that performance over the next three years, five years, whatever. Good point. So that whole earn out thing that is like our egos as owners who have sold our company, we often just leave that part off the table. We're like, I got a nine multiple. But in reality, How much of that do you have now? They actually have a four multiple in their pocket. And the rest of that payout is predicated on them performing for another three years, which means they still have a job.

25:26 Like I just ran into one of our clients in San Diego this past week and he got a very handsome buyout here recently, but he's got a three year earnout attached to it. And I said, yeah, but you're probably still on easy street, right, bro? He's like, no, I've never worked more than I have. I never worked this hard. He's like, bro, I got a lot of money on the line to perform and grow over the next three years in order to get all the rest of the money. And I think a lot of owners don't realize that, right? It's huge. We just had a concrete restoration company. They just went to closing. This is one of Melissa's clients. And I'll tell you one of the things that I'm most proud of Melissa is that it took a while.

26:08 Multiple buyers came to the table and left and all this stuff. that she helped that company as a husband-wife owner get a one-year earn out as opposed to a two or three. Wow. Which, Chris, to your point, that's dollars, but it's also lifestyle, man. And like, again, everybody's in a different place in a season, but these guys have been at it, I think it was like 39 years. Oh my, wow. You know, kids are grown in the business and there's like, that's a whole story in and of itself. But they don't want to be on a three-year earn out, right? Like they're ready to live... in retirement, in the blessing of what they just worked the last 39 years for. So I think the conversations around exposing what that enterprise value means in terms of a sale is really critical.

26:52 But Chris, I have to go back to the thing you said like five minutes ago, because I think this is the killer in a good way. It's the thing you should be looking at if you're listening, you own a business. You said a minute ago that enterprise value gives you options. Oh, yeah. And to me, that's... That is the thing. So, because I don't know, I don't know like the actual statistic here, but I'm going to go gut reaction based on the companies I talk to. Less than 50% have a heart I need to sell in three years from now. Most of them want to eventually sell, but they're still in the pursuit and they're still growing and they might never sell at all. I was just talking with a GC in Philly Monday or Tuesday this week and he was on a pathway to sell and then his son turned 21, graduated college and all of a sudden said, dad, I want to get into the business.

27:39 And his entire trajectory changed. He's like, of course. Let's go. Let's create a 10-year pathway for you to get into a leadership capacity that you can actually run this thing. So again, everybody's got a different, but he has built an enterprise that'll do $60 million in sales this year, has significant leadership, has significant runway, has significant brand. Now he has options. He has enterprise value, but he has options. So I think if you build with that in mind, Whether or not you go to sell in three to five years from now, I think is another topic. But I think the optionality gives you a ton of peace of mind as a business owner.

28:22 And if you're building with enterprise value in mind, you'll have a healthier business. Brandon, to your point earlier, you'll have a healthier business regardless. You'll be a better business owner for it. Yeah, life will be better. Like, it's kind of like one of these things we have this conversation a lot where the level of work that it requires to create a company with a ton of enterprise value is the same work that makes that company worth owning indefinitely because you can manage it. It's not chaotic. If you don't show up for a week because you choose to take a vacation, nobody cares because you weren't part of the production cycle anyways, right? You're an actual owner versus a service provider. So I think it's critical across the board I don't want to lose a little bit of this conversation because I think that there's probably, when you get outside of restoration space, I'm not sure it's as obvious on the service-based side what we can do to make some of our service offering more consistent.

29:18 And I think this, again, this relates to cash flow. It relates to revenue consistency. And I kind of want to get your play on this. So example. Obviously, if you're talking about landscaping and it's commercial, you're already used to having some contracts of some sort where there's a monthly fixed fee. You have so many commercial clients, you know exactly or roughly what your revenue is based on number of clients. I think, though, for a lot of residential-based businesses on the service side, we tend to just be like, we're paying for so many leads. Hopefully, we get those leads in. We're going to provide so many bids. But what I'm seeing happening a lot in all the services that we've hired over the last 18 months, just personally in our own household, every single one of them has offered a monthly service of some sort.

30:09 And so like an example, and I'm sure HVAC companies are like, yeah, we've been doing this for a long time. There is a service price that I would pay fixed every month. Okay. Yep. And then what that's going to basically do is I'm going to have somebody come out two times a year, do a complete diagnostic on my HVAC system, maybe check some additional filters, things like that, maybe do some kind of very minor maintenance. And I couldn't even pretend to know exactly what it is that they would do. It's perception management, if we're honest, though. But ultimately what happens... It's keeping relationship. That's it, right? Is that the fees were small because they know the line they're walking, right? Because otherwise you got to show the value every month for this fee if it gets above a pretty small incremental amount.

30:54 But if I'm in this service contract of some sort, why on earth... what I call a different HVAC company or get multiple bids, like the likelihood of me getting competing bids at the end of the year when it's time to do XYZ or replace a roof or whatever, you name it, I'm going to have very little motivation to work with a company outside of this minimum contract. And I was thinking about this for like contractors. remodelers. Like how much of the baby boomer group is in a position now where taking care of their home is an actual problem? Like logistically, it's an issue.

31:35 How many contracting companies, for instance, I'm throwing this out there. I might get a contractor, call me and tell me I'm stupid. But what would like a honeydew list for lack of a better way to call it program look like? And maybe we do quarterly things where we hit light bulbs, we replace filters, we do some checking of certain systems, we do some diagnostic on appliances, but we have this consistent check-in and we're staying in front of that client that now it's time to sell the property. Well, we got to remodel that thing and maximize market value. That's my contract, right? Are you seeing and hearing more of this service type agreement with the effort to just maintain that sphere of influence?

32:16 Three that pop just from a client perspective that I can rattle off the top of my head. You already named one of them. HVAC is like... they're probably the staple, right? That's not new for them, but that's one of them. Pest control. I mean, this one is huge. Pest control is gigantic. And then the other one that I've seen, and I don't know, I guess it depends geography-wise. So outside of landscaping, landscaping is another one. And then duck work and up in the Northeast, we have chimneys. So like chimneys and duck work service, right? So I actually have a contract for my home on that as well. So those are three service-based contractors that could sell those exact services one-off, and they do. Or you can contract with their company, pest control, duck cleaning, chimney service, landscaping, HVAC.

33:03 My gosh, I'm a buyer of all these things personally. All right. And it's a no-brainer, right? For me, I don't want to, if I have, this just happened, if I have hornets in my barn, Like, I don't want to have to, who do I call? Like, my kids are outside, right? Like, I just got to be able to pick up the phone and be like, hey, we got a hornet's nest. Somebody get over here ASAP, right? Or once a year, you know, after, I guess, actually ours comes out in the spring, we got to clean the chimney. It's going to get cold in two months, right? It's got to happen. And then the ductwork's got to get cleaned. So these are all things where if you're listening and you're running a trade service of some sort of any sort, the likelihood of there being a component that's either repeatable or has a maintenance, servicing, check-in component or could have, that's where I would be thinking.

33:49 And the good news is in most cases, we're not talking about anything that's rocket science or brand. I don't think we're coming up with any brand new ideas on this show. But go, like, this is like, if you have eyes, play your eyes, man, right? Like, this is the exact moment to just rip off and duplicate somebody that's doing it well. Because if you're starting from nothing and it's all one-off, that, again, going back to the four levels, this is where I'm learning, you can create an asset in your business that has nothing to do with a single customer transaction. If you have a program with 1,300 members in it and they pay 50 bucks a month to just be a part of a membership, because now you come out and check on this thing once every four months, you now have a program.

34:32 And that program is an asset. That asset probably has an email list. The downstream value of that stuff is, it's wild, man. When you talk about marketing and sales, and this is why I think contractors have such an amazing advantage, especially when you're talking about trades like, or services like landscaping, where you can have hundreds and hundreds of clients over the years get 10% of them to sign up for a membership of sorts. Chris, your point, that doesn't have to be the thing that makes the money. Although there could certainly be some of that. But it's the repeatability. Now they're in my membership corner. They're not going to another landscaper when they have to have a patio built.

35:13 They're going to come to you. Yeah. That's interesting. I wonder how many teams, for instance, are beginning to do this in a way where they're creating these little mini ecosystems together. I can see a world where, let's say, a GC partners with their subs to create an environment where there's this very low fee group or whatever, like maintenance, whatever agreement. But then basically what happens is that individual now is getting access to an electrician, a plumber, the GC to do kind of the broader trades, maybe a landscaping company that they've kind of united with where maybe the fee is enough to cover the administrative work required by the GC to kind of house and corral the list.

35:58 But then ultimately, it's very low effort on the part of your business partners. You just need to be able to kind of, the people, it's like one call and one call will solve a lot of problems. And I think that we see that being mirrored across like the commercial space likes to have one neck to ring as much as possible. They'd rather have less vendors on the list and have trusted people where one call handles all of the above. And I just think that there's a way for us to mirror that in the residential space and create some of that consistency that you're talking about. It's almost more like community versus marketing. This reminds me too of the conversation we had with Rocky Hensley at One Tom Plummer. He's the founder of One Tom Plummer. Co-founder, I suppose.

36:39 But he was talking about his, in his engagement with Eversmith, which is a big private equity, you know, fund in the home services space. In his conversations with them, one of the things he's hearing at kind of a macro level is their intention to own as much of the homeowner's pocketbook as possible by sort of consolidating these different home service verticals to where Eversmith, can have a disproportionate amount of that money, whether it be weatherization, waterproofing of basements, floor covering, carpet cleaning, plumbing, electrical, et cetera, et cetera, in these residential spaces. It seems to be a trend that's starting to happen at the investor level.

37:20 And I wonder just how long it takes before we start to see here locally, we have a big painting brand called Fitzpatrick Painting. And he has started to expand into Fitzpatrick Custom Homes and Fitzpatrick Handyman Service and siding and all of this kind of stuff. I wonder just how quickly we're going to start to see that be a mainstream trend. And then I was in the gym the other day and I heard, you know, every once in a while you hear these like really charismatic, you overhear these conversations of like a sales chat that's happening around you. And of course my ears tune in. And there's this gal, she has a home service business that she sells, and she said it in her pitch to this guy.

38:01 She's like, I work with affluent homeowners and we have a suite of services where she gets her referrals from realtors and she comes in and she basically provides and or subcontracts out landscape maintenance. And that's where they started. And then they have vacation sort of home observation and home care. So when people leave for like a sabbatical, some doctor or something leaves for three months, this company will take over and collect all their mail and do like drive-bys to maintain the security, all this kind of stuff. Like if their security alarm system goes off, they have their home manager that responds to it, checks it out, works with the police, whatever, whatever, and then just sends the homeowner a report.

38:46 Hey, this thing happened. No big deal. We took care of it kind of thing. Now they pivoted. They have laundry services where they pick up laundry. They launder, fold based on the customer specifications and they deliver that laundry in 48 hours, blah, blah, blah. And so she has this whole suite of services. Yeah. That now then to that homeowner, oftentimes an affluent homeowner, has rental properties, family vacation homes that they want to Airbnb, but they also want it to be ready for them when they do family vacations. And so they have all this whole suite of services where this gal is building a company where she owns a majority of that household spent on owning a home and enjoying a home.

39:29 They also, oh, here's another thing. They set up the family home for holidays. Oh, wow. So they have a service now where it's like, hey, you pay us $2,500. We're going to come, you know, hang Christmas lights, put up decorations. We'll come with a little flip book, let you decide what style you like, and then we'll just do it for you. You show up one night, it's done. And I just thought, wow. Is this the future of this sort of contract-based business super low beta from an investor's perspective, like revenue business, where it's like month in, month out, this business is doing, you know, 40,000 a month, 50,000, like X number of profit every month, month in, month out, because they have these static relationships with homeowners or businesses, you know?

40:11 Yeah. pretty cool. The genius of that business of the woman you're speaking of that created that is that she going back to the four levels, she's creating the ecosystem for herself. Yeah. Yeah. She's just creating it. She's creating the platform, right? She owns all the relationships, all the subcontract relationships, all the trade partners, all the right. And then of course, on the client side. So I think as contractors, if you can think more, On the basis of that, it's really just taking your marketing dollars that used to be, hey, let me go Google Ads and Facebook and PPC and all the traditional methodology of creating new generation of leads, the origination cost, taking that same level of effort and maybe the same resources, but diverting it and applying it a little bit more strategically and say, how can I create a new generation?

41:00 the platform? How can I create the ecosystem? How can I either get into one or create one myself? And I think if contractors spent going back to ROI, and this comes right back to profitability too, how do we keep our overhead and cost of acquisition down? Well, it's to have access and deep relationships with recurring revenue to some extent. And that recurring revenue might not be a and again, making it up, you're a duct cleaning service or you clean gutters or something like that, might look different. But if you can stay in front somehow where you own the relationship, that is a recurring service to an extent. And if you can be the provider of choice where there is no other options, it's almost structural, but not really, but it's almost presented that way, then you're kind of creating the path forward for yourself to have enterprise value.

41:51 Yeah. You know, one kind of last thing maybe to add here for some context is I'm thinking about when we made a big push early on in restoration to do fixed contract cleaning, basically floor maintenance. And Chris really headed up that charge. And one of the things that he ended up approaching that was pretty different at the time was... was this idea of more of a fixed monthly rate that reduced... Like your overall spend on the year ended up being about the same if you did like two emergency cleanings when it was do or die last minute. But it also afforded you to have kind of a more consistent environment and you weren't necessarily paying much more at the end of the year to have this monthly service, right?

42:36 And what Chris did is he centered it around, in this particular example, around high traffic areas. So we were going in on a regular basis, hitting the high traffic areas. Red zone. Yeah, the red zone. That's right. And then by the end of the year, you would hit some of these bigger areas that are a more extensive cleaning. Maybe we did a hot water extraction two times a year. The rest of the time was encapsulation. The point was, is that Chris found a way to take something that people would do, let's say, two times a year and spend X dollars. And he basically found a way to get that client to take that same spend and break it up so that it was coming in month in and month out. But then it set the stage for them to do a la carte selling every service call.

43:19 So one of the things that they would do basically is that the team would call the client prior to their Tuesday service and be like, hey, you have your menu of additional services in front of you. Did you want us to hit a couple hallways? Did we need to hit another high traffic area? You know, whatever. And so actually, their spend, if you looked at it by the end of the year, they probably spent more with you. Most of you got on a fixed, consistent basis. And in addition to that, we would be the first call for disaster restoration because our face was in their building every month. Yeah, our hypothesis was, what if? What if we could get a one-to-one revenue bump with these carpet cleaning clients and tile cleaning clients?

44:05 What if they also, like how much could we reasonably expect across, say, the 100 or so hotels and senior living communities that we were servicing today? What if some percentage of them end up needing us for restoration? Like, could we expect a one-to-one? Like, if we do a million dollars worth of floor maintenance, could we reasonably expect a million dollars worth of restoration work across the year as well? And sure enough, within a matter of 24 months or so, we started to see that one-to-one relationship. We had a couple of years, too, that kind of popped and were even greater than that. Because, of course, as restorers know, it doesn't take a whole lot to generate a million dollars worth of restoration when you're working with commercial entities. You got a group of 100 you're selling to.

44:45 I mean, that number could be 3x in a really awesome year. But it became kind of the tip of the spear for us sales-wise was that recurring revenue to then capture the one-off large loss. We just call them angel losses. That was just, it was just piles of gravy on top of that nice static monthly revenue, you know? And Chris, like just to like seal the deal here, because I think this is so critical for, and I can almost guarantee, I've never heard you tell me that story, but I can almost guarantee this is the part of the outcome beyond the revenue, is you're able to then staff and have an operational excellence built around that delivery that now you can count on.

45:26 Yep. So there's the revenue piece. But when we talk about profit and we talk about the operational component that can deliver on the thing, that's the icing on the cake. And I talk to restorers all the time. And this, I think, is probably true in all trades, not just restoration. But we're leveling up on temporary labor. We're having a hard time staffing a particular department. But if you can have more of this recurring revenue or you can have this piece of your business that is recurring, not only is it a recurring revenue, it's also a recurring business model that you can fully staff and fund that enables your business to have an entirely different level of predictability all the way through, kind of cradle to grave.

46:07 And I think that for most business owners is another headache, right? We have to, as we scale revenue, we also have to have a way to staff it. I was talking with a roofing contractor recently going to multiple locations. Sounds awesome. Even had a, I think it has a very good pathway for creating the revenue, but... the sub-trades on delivery is now an entirely different challenge, right? Because we have to now fulfill on that revenue promise. So I think, again, the recurring nature of what we're talking about and building these platforms or this ecosystem, it actually provides a consistency across the board that elevates enterprise value. And again, think of enterprise value as optionality provides you a better lifestyle as a business owner.

46:50 Certainly helps cash flow, helps revenue consistency. And then if and when at some point in the future you decide to sell or you're entertaining those conversations, inevitably, the multiple on your EBITDA or your profit is going to, at least from that component, going to be stronger. You're going to have a great, great narrative to tell, a great story to tell if you can really lay out that you have an ecosystem creating recurring revenue in your business. Maximum leverage. Yeah, big time. It's funny because I think that the guys like the Gary Vaynerchaks and stuff have kind of been saying this ultimately, but audience is key. So I think there's an opportunity for service companies. And if I'm honest about just making some broad strokes assessment, I think our younger entrepreneurs coming into the spaces right now are living this out.

47:37 And you see it. You can see these small, newly started service brands that are... literally hitting a couple million, $3 million a year in revenue within 18 months because the approach is so audience-driven versus the service offering itself. Now, again, I'm not saying that having a tradecraft and skill and doing a great job is not important. Those are the minimum standards if you're going to charge somebody for a professional service. So that goes without saying. But you're seeing these young, yeah, the table set. You're seeing these young entrepreneurs starting right out of the gate, just recording, cleaning the freaking driveway and showing that video in 10x speed.

48:17 And all us weirdos that get chuckles out of watching a green driveway turn awesome is like watching for a minute and a half. And when I go to get my driveway clean, who am I calling? I'm going to call the guy whose video I watched on the toilet last Saturday. Dude, it is so true. Versus starting from scratch. There's this guy, real quick story on LinkedIn. This is how crazy social media is. I don't even know his name or his business's name, but he builds decks and the dude is incredible, but he shows all the little hacks and tricks of building decks. That's the entire content mix of his reels. And literally bathroom, quick break.

48:58 I'm like, oh man, he's back in my feed. Let me watch this real quick. He got this trick. How do you get that beam up there with just himself? And it took 45 seconds. But if I ever build a deck and that guy's close to me, 100%, I'm going to that guy first. There's no other... I'm not Googling deck builder near me. There's no way. Yeah. I think what you're tapping into a little bit is this idea that when we talk about people working on their business... Right. I think we all have a different interpretation or definition of what that means. But I think what we're saying here is there's an opportunity for all of us to grow very wise to the fact that having the skill to do the service, I'm not downplaying.

49:38 Obviously, we're in a deficit of blue collar skill and trade crafter. Right now. But what are you doing to think about gathering an audience or a captivated ecosystem? And it could be the most valuable time spend that you have as it relates, like you said, Jim, to the enterprise value, to the consistency in your income, your ability to recruit and have good staff because payroll's kind of taken care of.

50:22 You know, nobody's hitting home runs unless we get the big work, but payroll's taken care of. I've got people here ready to say yes to the next opportunity of substance. It's got a ton of value. So we haven't even touched on the term like, or a concept like cash flow and things like that today. And I love it because all this stuff is, it is like, this is the why behind the what, right? But I'll say like from a CFO's perspective, and this I think will put so many people at ease, but also challenge them at the same time. And I'm distinctly going to an HVAC client that we work with. And if you're in the trades, you'll relate to this immediately, especially if you're in a business where you have a lot of either new construction or a lot of one-off projects.

51:07 We do what we call a 13-week cash flow forecast. Very simple tool, but at the end of the day, we're just looking at future revenue, right? And all the expenses and stuff. But this one client, very large HVAC client, they have mastered this entire concept we're talking about. So they have effectively maintenance contracts. And dude, because you think of like a construction company, like this must be really hard to manage cash flow. And nine times out of 10, it is. And this is like a $30 million plus company. But that one line on their 13-week cash flow forecast almost never changes. And it is the most beautiful thing to look at because for a $30 million trade company, and they do new construction and that's definitely part of the bigness of their numbers.

51:51 But the fact that they can have 30% of it never go away, ever, ever. And by the way, it's huge margin business. Like, because it's service. And then, oh, by the way, when there's the emergency, who's getting the call, right? It's like, these guys are crushing it. So I will just say, if you're listening and you're thinking, how can this really benefit me? Why should I go through the effort? Why should I put the resources against this? And I can just tell you that if you can create even 20 to 30% of your business's revenue that is stabilized, and I don't want to say you don't have to think about it, but it's just there. Just what would that do for you? What would that, if you're a $10 million business and you have $2 million a year coming in that you never have to question, what would that do for you?

52:37 So question on that, because this is actually super interesting. So from your perspective, because you work with so many different companies, a lot of the nuts and bolts for Chris and I personally has been inside the P&Ls of a restoration company. When we look at restoration companies as an example, Like we're looking for the cost in your GNA, so your overhead. Let's ballpark very big, broad number around 30%, maybe 31%, okay? So when I'm hearing what you're saying, like how realistic is it in the broad range teams that you work with, for us to get the majority of our overhead to potentially be addressed by some of this fixed, more maintenance-looking revenue, so that really kind of the foundation, right?

53:23 You're paying the bill for this, whether you go out and get a new job or not. How much of that do you think realistically service companies could get covered with this kind of endeavor? I would think of it in this way. Even the example I just gave you, look at doubling your gross profit from normal. Let's simplify this. Let's say it's a $10 million HVAC company and you can get 20% of your revenue to be annualized on some recurring maintenance package. If you're typically in service business, an HVAC will already be a nice GP. It's baseline, plus 50%. But if you can get that recurring revenue, now you're looking at 80% gross profit.

54:03 So that $2 million is now producing $1.6 million of gross profit. Think about that, Matt. So to me, that is the goldmine. It's not the revenue number. It's the gross profit that it produces because that gross profit falls right to the bottom line. And it enables you to have the supers and the project managers that you need to go carry out the new construction, which is still variable and it's still going to swing, right? But now you can rely on that gross profit to manage your cash flow from this piece that's recurring and... And again, I think we keep using HVAC as an example. I believe there's a component of that reality in every trade or most trades.

54:45 Not every trade, but most trades. Like I said, I think of some examples I can personally vouch for. Pest, duct cleaning, HVAC, roof repair. Like these are things that like these can be, a component of this can be annuitized. Is that the right word? Yeah. Right? To create an annuity. Yeah. And I like the word member, right? Creating a community with your customer base, not just a one-off transaction, right? Getting away from that, but creating a community around it. And now you have loyal members. Those loyal members get special benefits. Those benefits then create future revenue opportunities when the one-off transaction.

55:26 new HVAC system has to be installed. And that's great. And those are awesome. But I want to be first in line for that or maybe exclusive when it comes to my clients needs for that new install. Well, and I think that's maybe where you just look at your service offering and saying, look, okay, the bulk of what we do is still fairly one-off. Okay, fine. But how difficult is it with your existing systems, process, toolkits, assets, tools, How difficult is it for you to identify a more mundane, quarterly, couple time a year, few time a year thing that the average homeowner or maybe it's a target, a more affluent homeowner needs? And then just decide like, we're going to provide that service.

56:07 That is our foundation offering. Like, you know, maybe a contractor decides they're going to wash windows. And they set up a four-time-a-year program with homeowners to do windows four times a year. You're not getting rich. Maybe it's actually a decent little window-washing company, but it's not the point. The point is you're in front of these people four times a year building relationship. They're getting a newsletter. They're getting the annual. Are you prepared for fall? Are you prepared for winter? What do you have planned for spring renovations? And the next thing you know, it's this consistent, captivated audience that you're doing business with on a regular basis. I mean, you can spend something up.

56:48 I think the highest and best use of a CEO or founder's time is to scale to a point where they can be spending 80% of their brainpower on solving that problem. That is where the work's at. That is where the value's at. Going back to the classic conversation of, working within the trades, talking to a business owner who he or she can swing a hammer, and that's how they got into the space. But the thing that will accelerate growth the most, and going back to enterprise value and cash flow, and we can connect the dots in all these different pieces, It's spending your time, effort, and energy on these types of activities that will ultimately get you to where you want to go.

57:30 And it's not the one-off transaction. It's not the one-off estimate. Man, this was like breaking my heart. I might have shared the story last time. Not breaking my heart, probably over-exaggerating, but I just see it so often. I'm like, no, where I'm on a sales call with a landscaping contractor doing about five, I should say, hardscaping, landscaping, both. doing about $5 million a year in sales. And literally, this is an hour conversation. I think it was the first time we ever spoke to each other. Had to take at least three calls in the middle of our call, triaging problems on a project, customers coming in for estimates, whatever the case may be. And the whole time, this guy, I could just see it in his face, right? He can't even think about what we're actually supposed to be talking about.

58:12 And for him, and we never even worked together. Like it never went anywhere. And who knows, right? But I'm not entirely surprised because he's in it, right? He's in it. And that's a real trap because you feel productive. You feel like you're doing the thing that has to be done. And the truth is that thing does have to be done. Yes, it does have to be done. Well, what's so deceptive too, or I guess distracting for most owners is that guy with that $5 million business, if he's running even halfway efficiently, the dude's probably making a lot of money. Yeah. And that can be a real detriment to shifting gears and moving into this more elevated mode. gosh, you know, I'm already making five, 600 grand a year. This is the good life.

58:53 I got the nice truck. I got a vacation home. My wife stays home. Like all these things, that can be the impediment to taking it to the next level is, yeah, but boy, we got a good thing here. I don't want to take my foot off the gas or I don't want to take my eye off the ball and potentially have this thing erode. I think that's the fear that... A lot of owners. How do you, Jim, how would you, though, like put that, like answer that in context with the enterprise value? Because in my mind, I'm like, hey, I think this is part of the importance of understanding how to create a conversation based on that, right? But what's your two cents on that? Dude, I, I, there is a distinction and it really comes down to a mindset and a decision around lifestyle businesses versus enterprise value business.

59:34 And one of my best friends growing up has a, an artificial turf installation business. He sort of went to college, but he never really went to college. Right out of high school, his dad started this, this franchise and what we're approaching 20 years graduation. So he's been running it for like 22 years. He's crushing it, man. Like incredible lifestyle. And I'm so glad for him. He's blessed. Yeah. But also, if he steps away, man, it's only a matter of time before things would break down. And he knows that. And I know that. And that's just one example that we could probably all rattle off 10 to 20 people we know that are in that spot. It's not bad, but he specifically wants a lifestyle business.

1:00:15 And that's awesome. It's just not going to create enterprise value. And that's such a, we should probably come up with a better term because it sounds so like accountant-like. But really, when I say that, meaning like he's not going to ever be in a position where he can step away for six months and let this business keep growing. You know, it's going to be compromised at some level, probably multiple levels. I think one of the things I think about on that enterprise value, Jim, is this idea, and I think we can get lost in this, of how much money, monetary value is actually tied to this. So for an example, I think $20 million, if they've got any reasonable profit, they're probably throwing off some dough. But I mean, for the average home service trade contractor...

1:01:00 If you just think about, let's say, I don't know, they're sub 10 million bucks, probably on average, most of them are maybe five, six million bucks. I don't know the stats exactly. But if they're doing even 20% profit, yeah, it's thrown off some money. It would be a substantial number, no doubt about it, right? But, and if they were to look at the value, potential value of the business, let's say over a specific time period, let's go five years, the number of commas or zeros that you're potentially adding in overall monetary value, like this will be recognized that a liquidity event as real money in your hand could be substantially greater than eking out a little bit more profit for the next five years based on you doing everything, not hiring leadership, not developing a leadership team, meaning you're not spending into your overhead, but it could be costing you a lot of money long-term because you're not...

1:01:56 looking at the multiple effect on your business's value in five years when it comes time to exit. And so sometimes I'll even get in those conversations like, hey man, I understand you made an extra 500 grand this year. But if you did that every year for the next 10 years, that's what it's going to require in order for you to outpace what you could be worth in five years if you gave your attention to the right thing. You know what I mean? It starts to change that conversation pretty substantially. Yeah. I mean, I would just love to change the entire narrative around this dichot. Because it is like, we're not making this conversation up. It's lifestyle business versus an enterprise value type of business. But one thing that I've seen to be true in, by the way, I think the example you gave of $20 million company that's shelling off some pretty, like, I don't know any business owners who are running a lifestyle business at $20 million or plus.

1:02:49 That point, I would argue you've created enterprise value. Yeah. You know, most times, again, I'm like actually trying to think of an example that's not that case. Yeah. Most of what we're talking about. Can you really? Yeah, I can. But you're right, though. It's an edge case for somebody to be able to build to that scale and not have a leadership team, a framework in place that's actually running day to day. Right. Yeah. Correct. So I would say more, but here's what I'll say. I know plenty of people that have done that and they are living a great lifestyle that never sold the business because they built a leadership team and now they're not, and I hate this even in my own company. It's one of the most frustrating parts about running a business is when you become the bottleneck or the dependency.

1:03:31 Right? It's terrible. It's a terrible feeling. So I think there's a whole slew of entrepreneurs out there right now that understand that. And I'll kind of call it the younger generation of entrepreneurs that don't want to work. There's no pride badge around 80 hours a week. Like, I got a family. I got kids. I want to be a good husband to my wife or a good wife to my husband. You know, like, these are things that, conversations that I'm actually hearing more and more often, which I'm very encouraged by. And those are the types of people I want to work with. And that's just me biased fully. Like, there's no right or wrong there. That's just... That's who I am, but it's also the types of people I want to work with. So, okay, so in order to do that, we might have to, in the short term, reduce or emit a little bit of profit that we could otherwise take home and keep in the kitty.

1:04:18 But the reality is we're building a more sustainable, enjoyable, in my opinion, lifestyle business that will actually enable me to live the life I want. I think a lot of what I saw in the past, and I still have some of these clients right now, I have this one landscaping client, man, in the sales call, It was so hard to get him to admit that working 80 hours a week wasn't good. It was just like, it was up here and it was not coming out. It was locked. And I had to, it was locked, man. I'm like, but you have two kids and a wife and you sure about that? You know, like, no, man, my dad did it. I'm doing it. You know? Whatever. So to me, that's not an aspirational place to be. So if that means lifestyle business, but because I do that, I can bring home a million bucks a year, but I forfeit so much in lieu of that.

1:05:07 I'm out on that personally. And the types of businesses we want to grow and we want our of two or three positions and working 60 to 80 hours a week on a consistent basis to make up the difference that ultimately is the profit that should be going towards building a leadership team. Yeah, I think that's huge. That's a rant. No, I love it. That's an important rant. We don't talk enough about that. You're right. It's like that whole like, pull yourself up by your bootstraps, that bravado that is just, it's a big part of what made all these trades work, you know, up until now. But we have so much technology. We have so much knowledge, right? That we can live out of to create more sustainable lives than our grandparents did, than maybe even our parents did.

1:05:54 Like we should learn from those things, right? Yeah. Okay, brother, listen, I got one more cue for you and then we'll let you go. Internally right now. Okay, we're quickly racing into September. We're at the finish stretch of the year for certain. What's the single biggest, let's just call it friction point or area of concern if you're willing to share it inside your business? You don't have to be super detailed, but just principally. And what are you anticipating that you guys are going to attempt to do to solve that problem before the end of the year? Yeah. That's an easy answer. For us, it's hiring pipeline. And the way that we're going to solve that is we need a full-time dedicated person to own that outcome.

1:06:36 And we got to stop having it be a part-time side hustle for four different people when they have time. It is the most frustrating thing that I see in my business or our business today. And the results align with that on every level. And we have a great team and they just need to, everyone needs, like we need to have twice as many people. Wow. That's awesome. It's awesome and super relevant. I don't think there's a single home service or resto company that isn't currently having that battle. So I think the only thing I heard you say there that I just want to highlight is turning that into an actual proactive investment of time and energy on a consistent basis versus trying to solve it when your back's against the wall, last minute, do or die.

1:07:23 it's got to stop. Like, if nothing else happens in my life before the end of the year, that one has to stop. That's the thing. Hey, Jim, can I... I just got to say something in closing. I'll just be really transparent here. When we first decided to do this monthly sort of financial corner, this financial thing, there was a little part of me whispering in the back of my head. I'm like, man, I don't know if we're going to be able to make this fun month after month after month. Like this financial stuff, CFO stuff. I don't know how the audience is going to take to this. And yet... Here we are with a second call and we just, I feel like this has been a really fun chat. And I think there's been a huge amount of gold that we've ventured into beyond just the profit and losses and balance sheets and cash flow statements and stuff like this.

1:08:06 There's a lot of really relevant meat here on the bone. And I just appreciate you joining, man. I'm not sure there's another fractional CFO that could have pulled that off. Yeah, yeah. There is some element there. It gives the audience an idea of what it's like to work with Backbone, that it may not be mind-numbing, you know, mundane conversations. This stuff is applicable to the overall strategy or your business, right? This isn't just the numbers. And so I'm looking forward to the next convo. Well said. For sure. Cool. Likewise, guys. Appreciate you both. All right, man. Thanks for hanging out with us. Have a good rest of your week, amigo. All right, man. All right, everybody. Heath, thanks for joining us for another episode of Head, Heart, and Boots. And if you're enjoying the show, but you love this episode, please hit follow, formerly known as subscribe, write us a review, or share this episode with a friend.

1:08:55 Share it on LinkedIn, share it via text, whatever. It all helps. Thanks for listening.