How I Bought a $3.4M Business For $200K

If you've ever thought about buying a business, then this episode's gonna be for you. Because on the internet, there are a lot of people telling you about how amazing it could be to just go buy a business that's already working. You just take out a loan, you put very little money down, and boom, you're cash flowing and you're working passively. But those are also people that are kind of selling you the dream. Now, my buddy Dan is one of my best friends from college. Just actually did this a couple years ago. He bought a business, a very random, unsexy business that he had no experience in. He didn't have a lot of money coming in. He had never bought a business before, but he did it. And it's actually worked out pretty well. And I asked him to come on and tell the real story. So tell us, like, what was it like? What'd you do the first 100 days? How did you actually find— buying the business? How much money did you have to put down? How much money did it make? What are the downsides? What are the traps? All the real stuff. And, uh, I love it because Dan was very honest. He was very, uh, open about all those things. And then at the end, he actually brainstormed a couple of business ideas that he saw. Because when you buy a business, you look at hundreds of businesses. Um, he actually saw, has a couple of his favorite spaces that he thinks people could go into, and we brainstormed that at the end. So this episode I think is gonna be a lot of value for anyone who's ever thought about buying a business. And then we have a fun brainstorm also at the end for other businesses that people could check out. All right. Enjoy this episode with my buddy Dan.

I feel like I could rule the world. I know I could be what I want to. Uh, I put my all in it like no days off on the road. Let's travel.

Never look back. All right. This is a special one. My buddy Dan from college is here, and me and Dan, we've started a sushi restaurant together. We've owned a pet cat mouse together. We've tried to bring down the house at a casino together. We have gone through many schemes and dreams. And then Dan called me a couple of years ago and I convinced him to try to buy a business. And then he, he has done it now. He bought the business and he's here to tell the story of that whole journey of going from a guy who never thought that he would ever buy a business to now owning one of the most random businesses that you'll ever hear about. And then I got Sam here who doesn't know Dan. So it's me and my college buddy, and then Sam, you're sort of the third wheel on this date. Are you ready for this?

Yeah, sign me up. This isn't the first time it's happened, but I'm gonna ask questions that usually what I think is what the audience thinks. So I'll ask some questions.

Yeah, exactly. All right, so Sam, where do you wanna start? Just maybe first question is like, who the hell is this guy? Who are you?

Yeah, who are you?

Sertner, Dan Sertner. So I wasn't his roommate in college, I was like the next door neighbor. So for the Seinfeld references, I was like the Kramer. I'd show up from time to time unannounced. Lived with this guy for 4 years. So, uh, I go way back with Sean.

And by the way, Sam, the funniest part of meeting Dan, uh, the first day of college, I walk in and Dan, the way he looks now, he looked exactly the same at age 18. And so Dan is standing there and he used to wear a visor cuz he's like, I don't know, cool guy from New Jersey. So I thought he was someone's dad. I was like, this guy with a visor, I saw him from the back and he knew everything. He was like, laundry's down there. Yeah, you have to do this. You know, your meal plan's not gonna work until you activate it. You have to go to— he knew everything about the campus and I was totally clueless. I didn't know anything about going to college. And so he was— and he had a, he had a single. He was like one of the smart guys. He like requested having a single room, didn't have to have a random roommate. So Dan's been ahead of the game for a long time.

And okay. And what business did you end up buying, by the way?

So I bought a company called Fleet Packaging. So it's a packaging distributor. So effectively we work with large retailers in the US., who need, uh, any sort of packaging. So if, you know, you go to a mall, you know, you leave with one of those to-go bags, uh, we help companies buy those. Um, and then we help with warehousing, distribu— distribution. We make it easy to buy bags overseas.

So he is Dan the Bag Man now, which is all you really need to remember, Dan the Bag Man. But to get there, I think it's a fun kind of journey, right? So we're gonna skip the part about me and Dan in college and then the company we tried to start together. We're gonna skip that for now. We'll go, we can go back there later. The, I think the buying a business story starts where, um, in actually kind of a funny way. So after we, after we kind of try and fail at our first business, we go off and do different things. Um, I go move to Australia. Dan moves to San Francisco and he goes and gets a job at Facebook. A few months later, Dan calls me and, um, he's like, oh yeah, uh, sorry. Like, he's, I don't know what he said, but he was like, Yeah, I was just, uh, quickly just fixing a bug. And I was like, fixing a bug? What are you talking about? And he's like, yeah, I'm coding now. It's like, you're coding? You're a— he was like an economics, finance— he was like our finance guy. Why is the— why is our finance guy— what are you doing in code? And basically what he did was, I don't know if you know this, Dan, but I guess at Facebook they have just like a coding academy internally at Facebook. Dan, is that how you describe it? Like a bootcamp? Basically any non-engineer could go like become an engineer just while on the job. Is that, is that how it works?

It's not explicitly, so it's actually for the engineers when they show up. So when you show up, and I actually think they just got rid of this like a few weeks ago, so this might be old news, but you know, for the first 20 years of Facebook's existence, uh, you know, when you get a job as an engineer at Facebook, you go to this 8-week crash course on how to be an awesome Facebook engineer. And it's not typically open to non-engineers, but you know, why, uh, why accept the status quo? So I was actually one of the few people who early on was able to take classes there. So I started in fraud.

Do you have a good FarmVille fraud story? What does an average person like us not know about like fraud on a farm? Like FarmVille sounds like the stupidest thing in the world. The fact that there's even fraud going on, it's like, you know, am I stealing crops from Sam's farm?

You are stealing crops. Well, what you're doing is you're probably— you're wanting to make a better farm than Sam, but you don't have time.

Is this for pride or money?

It's, well, the fraudsters are doing it for money. So the, the buyer is doing it for pride. They're like, I want a bigger farm than Sean, but I don't have time to actually spend my time playing the game. So I'm gonna go online to the black market, wherever that is, and someone's gonna sell me whatever, 200 mushroom seeds to plant in my farm. And they've procured those illegally 'cause they've stolen someone's credit card. And there's this whole world of Facebook Games fraud that existed.

So, so FarmVille was basically like I don't know, is this called— is that the laundering part? Basically, the guy steals the credit card, uses it in FarmVille, sells the FarmVille stuff to me, which looks harmless, and he gets cash out the other side.

Precisely.

This is like a much less cooler version of The Wire.

It's pretty much— well, there was also like real money laundering too, where like people would make their own app and then launder money through that. That one was, was a little more intense.

Dude, Sam, one time, uh, I was like, Dad, what are you even doing at Facebook, dude? What do you mean fraud? What is the Facebook fraud? And he goes, have you ever opened up your timeline on Facebook and just seen a dick? And I go, no. He goes, you're welcome.

No, that was, so no, that, that, that was the later iteration. I moved on to community, uh, community tooling.

Yeah. Yeah.

But effectively preventing, uh, porn on Facebook. So that, that was my go-to line.

And, uh, what'd you do after Facebook?

So after Facebook,, I all of a sudden, you know, had transitioned into engineering. I went to a startup, uh, called Namely. Uh, it was a payroll company and I joined as an engineering manager, eventually worked my way up to be CTO of that company.

You gotta tell Sam the, uh, the brilliant, uh, so Dan's, Dan's actually a marketer at heart. He just never worked in marketing for some reason, but the way he, uh, framed himself in the job market was amazing. So he's, he's at Facebook, he becomes an engineer there, right? So it's not like he's like MIT computer scientist, right? Like when you think about like who would be—

I'm a Duke Spanish major.

He's a Duke Spanish major. When he was at Duke, he kept, he kept taking this class called lemurs where he was going to the zoo and looking at lemurs all day. Like Dan was, that's what Dan was doing at Duke. But then he trains himself to be an engineer. And then when he goes into the job market, he has this brilliant way of framing himself so that he ended up becoming a CTO of this like fast-growing startup.

All right, so I leave Facebook. Um, as you will see, most of these things are schemes that Sean and I have done in our lives that slowly elevated to good ideas. But I left Facebook, um, you know, basically the best of the best at the time. Like it was, you know, still is, you know, one of the best technology companies. Um, but I'd say, you know, I was, I was, I joined Facebook, there were 3,000 people. I left when there were 60,000 people. So I saw a lot of things and I'm not like old school Facebook rich. I missed that and I wasn't an engineer in the beginning. So just want to clarify that too. but I left and I had, you know, kind of this weird amount of experience. Like I had whatever, 4 or 5 years of coding experience, which is cool, maybe enough to make me like an eng1 or eng2 at a normal company. Um, but you know, I had moved into management while I was at Facebook and, and the way that I positioned it was, you know, I am a Facebook manager. I know how things work at Facebook. Let me come into your startup. And let me whip your team in shape. Let me help your team run like a Facebook engineering team.

All right. So I've built a few companies that have made a few million dollars a year, and I've built two companies that have made tens of millions of dollars a year. And so I have a little bit of experience launching, building, creating new things. And I actually don't come up with a lot of original ideas. Instead, what I'm really, really good at, what my skill set is, is researching different ideas, different gaps in the market, and reverse engineering companies. And I didn't invent this, by the way. We had this guy, Brad Jacobs. We talked about him on the podcast. He started like 4 or 5 different publicly traded companies worth tens of billions of dollars each. He actually is the one who I learned how to do this from. And so with the team at HubSpot, we put together all of my research tactics, frameworks, techniques on spotting different opportunities in the market, reverse engineering companies, and figuring out exactly where opportunities are versus just coming up with a random silly idea and throwing it against the wall and hoping that it sticks. And so if you wanna see my framework, you can check it out. The link is below in the YouTube description.

But Sam, isn't that great to just be like, how to re— how to rebrand yourself to be like, I'll make your engineering team run like a Facebook engineering team. And as if you're a startup founder who's, you know, sitting like Nameless in New York, right? That's kind of aspirational to have somebody say that versus just, I have 5 years of experience, right?

Yeah, man, that's great.

Yeah, it was all about storytelling.

So the story is so far is like, you know, whatever, pretty good. You're stumbling into things.

Just a smart guy. A smart guy with a smart guy with a dream and a little bit of scheme.

And now you're in a position where you're like, I'm at this startup. We just raised a bunch of money at a good valuation. I'm the CTO. I got these shares. I'm going to be rich.

Trying to be rich. What happens? Didn't get rich. Second time, Facebook. Cool. Really didn't get rich. This time didn't get rich. Uh, you know, the, so, you know, long story short, we found ourselves in a place where in order to do what we needed to do, uh, we needed to sell the company or in order for the company to do what it needed to do next, we needed to sell the company. And it became very clear that this wasn't going to be kind of this massive windfall that I had been expecting. Long story short, the company sells, I find myself out of a job because as part of the transition, the acquiring company was like, we have a CTO, so we don't need you. So it's like 5 years of hard work and kind of that dream of like, hey, we're going to take something and turn it into something else kind of goes away pretty quickly. And that's kind of where things start to get interesting because, you know, I have Sean on speed dial. So had a, had a fortuitous conversation with him that day.

Was he the one who inspired you to do this, or did you listen to the MFM, or how did that insight come to be? Because like, it's not normal for a a Duke Facebook unicorn startup guy to buy a business.

Correct. So no, it was, and it wasn't even like a, hey Sean, I need advice. It was just like a random, like, you were doing a college catch-up call. Yeah. Yeah. Let's just catch up. It's been a while.

Wait, so Sean, did you say like, I use this bad company?

No, no, no. We're on this college catch-up call. What's going on with you? What's going on with you? Dan tells us this story. We got acquired. You know, there can only be one CTO. They already have one. So great. I'm going to be.

And so he was just saying like, if you know any cool companies, buddies, let me know.

I'm going to be looking. And then I kind of just mentioned to him, I was like, dude, Dan, you're so like, like, ever since I known you, you've been entrepreneurial. And I think like Naval said this once, he goes, you know, other people sometimes see your gifts easier than you can see them. So he was saying for Naval, he also used to think, I'm going to be a scientist. And his mom was like, no, no, you're going to be a business person. He's like, what? No, science, right? And she's like, oh, like every time we walk by a pizza shop, you're telling me all the 3 different things that they should be doing to run their business better. Like, you're always doing that. You're naturally, you're a natural fit for a business person. Like, that's what you're good at. And so Dan, same thing. Dan was always somebody who was like shooting his shot. Like when our freshman year at Duke, all of a sudden there's like this huge package and Dan has like a lifetime supply of Stride gum. And I'm like, Dan, why did you buy this much gum? He's like, I didn't buy it, I won it. And he would always be entering contests. I went, you know, one day with Dan, I go to, um, I go to work and Dan goes, 'Hey, I got to get off early. I got an audition.' I'm like, 'What? What are you doing?' He's like, 'I'm going to try to get on Wheel of Fortune right now.' And so I went with him and we both got casted on the Wheel of Fortune.

Well, yeah, you leave out the point. We like, we came, we were doing the sushi restaurant at the time, so we like, we're both like been working all day. We have these bright green headbands. Like we have not, like we came in with knives. Like we had our sushi knives on our belt. We come into this interview like, no wonder we got cast. It was like, this is good TV, man.

Yeah, these clowns. But he was always doing this. He was always like he early on he started, uh, recording like product review videos for like, I don't know, 2 cents a pop or something like that. Like he was just doing random shit all the time. So it just seems strange to me that he was like going to get a corporate job. Like it just didn't, it's not like the vision I had. So I was like, Dan, you ever started, thought about starting a business? He's like, ah, I don't really have like a killer idea. I feel like I need like a killer idea if I'm going to like put my whole life on the line for something. I go, oh, that's fair. I said, you know, I've been doing this podcast and it's not something I was doing a lot of, but like, we've met a few people who go and buy businesses and it honestly seems like a little bit of a cheat code. Like, as in the business, if you find a business that's already working, you don't have to come up with a genius idea. It's already validated, it's already working. It's got years of profitable history. You can buy it at a fair price. And then if you're good at executing, like, you can grow it over time. And, you know, there's retiring business owners, like there's reasons these are up for sale. And so I just kind of like planted that seed. I was like, would you, I don't know, like consider that? And Dan, I don't know what your first reaction was, but I bet it was probably just like lukewarm. I don't know.

It was lukewarm. I mean, it was two-part. One, you know, I, in the beginning I said Sean, you know, always knows what he's talking about. Seems to, seems to have his life figured out. My first response is like, Sean has no idea what he's talking about. He's never bought a business before. Uh, to this day, that is still my first, you know, my, my main thing is like, you don't know, man. Um, but the second one was like, But Sean is a pretty smart dude, like, and he, you know, if he's saying this is a good idea, it's a good idea. But, you know, my real, my second reaction after that was, with what money am I buying this business? 'Cause let's recall, missed the boat on the Facebook riches, missed the boat on the Namely riches. But it actually turned out, and you know, we'll, I'll get into this more later, like, you don't need that much money to buy the business. That's the crazy part. And I think it, it took a little bit of digging initially to figure that out. And I'll, I'll talk more about that in a minute.

So let's, let's do a quick Tarantino. So let's give the ending first. So let's say you buy it, you ended up buying a bag business as in like literally if you go to a shopping store and you buy something and they have a custom branded bag when they check out, like there's a decent chance I made that bag.

So it's, it's, it's, it's that big.

It's that big. I unfortunately can't, I like, I'm under confidentiality agreements with most of my clients, but if you go to a mall, there's a pretty decent shot that you're going to touch one of my bags.

We're going to get it out of you somehow. We're going to, we're going to get out of you.

I mean, I'll tell you after.

I'm not bound by any confidentiality. Maybe I can say some things. All right. So, but, but Dan, let's give the headline. So you buy a business. Let's, we're going to, we're going to work backwards for like, because it's going to sound cool and then we're gonna be like, here's the crazy journey of how I got there.

All right.

So how much did you buy that business for?

I bought the business for $3.4 million.

So he buys a bag business for $3.4 million. That business had been around for how long and about how much money was it making when you bought it?

Yep. So it was about 15 years old. The business had been making anywhere from— and it was right after COVID, so it was a weird few years, but it had been making anywhere from $8 to $11 million a year in revenue. In revenue. And it was doing on average about $800,000 in profit.

And what's the URL?

What's the— fleetpackaging.com.

Best bags in the business.

Best bags.

Do you have like a— do you have like a slogan yet? So jingle where we're working?

Oh, maybe we could come up with it later. I'll brainstorm later. It's like, no, we're working on Rethink Your Packaging Partner or Rethink Packaging Partnership, because what we're trying to do is, you know, there's a lot of people that sell packaging, but what we're trying to do is just do it better than everybody. Just kind of go that extra level of like, let's make your life easy as a packaging buyer.

So, Dan, explain. So you said you bought this business about 18 months ago. It was doing $11 million in revenue, about $800,000 in profit that the seller, that the guy who owned it was able to— that was his living. He's making $800 grand a year. And now last year, how much revenue did it do?

You grew the business. Last year we had a record year. I think we did. We did about $13.8 million in revenue.

That was pretty easy to get the information out of him. Didn't he just say he can't tell you?

No, I just thought I can't share client names. I'll share everything else.

He can share his own information. Yeah. How much money did you put down to buy this business? Because again, you talked about like, most people assume if I'm going to buy a business for $3.5 million, cool, where am I going to get $3.5 million from? Yep.

And really quick, how much profit does it do now on the 13?

So you, you, you creamed it.

I mean, you crushed it. You've— Yeah, last year was—

Last year was amazing.

Suck on that, Zuckerberg. I don't need you anymore. There you go.

Got it. So you bought a business that made $800K in profit to— you've more than doubled it.

Yeah. And there were lots of, and you know, was it every, you know, things that I did that doubled it? Certainly that was part of it. A lot of it was getting out of COVID and figuring out how we position it. And it turned out, you know, the business had not kind of reached its potential yet.

And back to what Sean said, you bought it for $3 million or so. Where'd the money come from?

Was she just down from day one to do this or what did you— did it take a lot of persuasion? How did you position this with the wife to make that happen?

She was down. I mean, she has a similar kind of philosophy on, you know, we should do something that's gonna be kind of a step change in where we're at. You know, if we're gonna bet on someone, we should bet on us. And, you know, she knows Sean, she knows what we've been up to for the past, you know, however long.

She knows she married a stallion who just needed to run.

So this wasn't like a, oh my goodness, where did this idea come from? This guy's crazy. It's like, no, that, that sounds about right that this is what you're doing.

How much of the loan have you paid back now?

But the same. So he put, he put down $200K, he got an SBA loan, and then he had a seller note also, which I think is a key part of this. So you want to explain where the rest of the money came from? So $200,000 from you, where'd the other $3.2 come from?

Why'd they want to sell the company? That seems like a—

he was retiring.

He just wanted out.

He was done. He wanted out. And that's kind of the— what I loved about kind of this world once Sean kind of turned me on to it is like the baby boomers are retiring, like the past few years to the next 10 years. I forget what the window is, but like a lot of them don't have kids or they have kids that don't want it. This guy had 3 kids. None of the kids wanted the business.

Dan had told me, he goes, anytime I ran into a business that looked really cool and the guy who owned it was 26, He's like, I don't want to buy this off a 26-year-old. Why are you selling this business? Like, I want to buy from a boomer. That is my goal.

And he would probably still answer your phone calls when you had questions.

Exactly. Like, and, you know, spoiler alert, I found like the nicest buyer in the history of the world. Like, I got incredibly lucky.

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So to me, there's two kind of good things out of this episode. One, I get to hang out with my best bud. All right. The second would be for other people who are listening to this, that they hear what I'll call like the real life take of this, because Dan's not selling courses. He's not telling you you should do this. He's not like a business buying guru who's got a book and a mastermind. None of that. I think he's got good opinions and like a real story of like, all right, where do you start? So to me, this episode would be interesting because if I'm interested in buying a business, I kind of want to know What is it like from a person who's smart but came in with no experience, no money and no like kind of clue where to start? Because even though I was like, hey, you should do this, it's not like I was there helping you every day or, you know, you were wandering around figuring this out, you know, by yourself. So he told me this. I called Dan like last week to be like, all right, what do you want to talk about? He had said something great. He goes, he goes, all right, I started and I was high excitement and low knowledge.

So I bought the book. You ever, you ever heard this framework like, like D1 through D4? It's like you start high excitement, low knowledge, and then you become, you know, you kind of go up in knowledge and down in excitement. You kind of enter into the pit of despair, which is low knowledge, low excitement. And then you learn more and you slowly kind of get out of this pit.

His quote was, this is great, it's going to be great, it's going to be easy, I'm going to be rich. And he goes, then I started and I realized this is not easy, this is not going great, and I might not be rich. And so Do you want to talk about like how you actually like what'd you do? Your first maybe 100 days, what'd you do?

Well, first, how did you find the company?

So I ended up finding the company through a broker. Got it. So a lot of what I started to do, and I'll go back to the beginning in a second, but, you know, there's a ton of business marketplaces out there. Acquire.com, probably the most known for tech. BizBuySell for kind of more of those main street businesses, but there are these brokers that effectively represent buyers and kind of put together these packets of like, hey, I have this bag business, here's what it does. And most brokers, I was telling this to Sean, hate searchers because they just assume like, you know, people are, you know, they just saw Cody Sanchez video, they're about to buy a business, like they're pumped, you know, this morning they saw the video and now they're ready to buy the business. So they reach out to the broker. This one broker actually like understood. He was like, I get it. I understand this jump from tech to this. And then like several months later he calls me back, which is rare. Like most people didn't. He's like, I got this business, you know, check this guy out. So it ended up happening through a broker.

But and to go back to Sean's thing, the first 100 days.

So the first thing, you know, hit Google, started reading books, started watching videos, started to just learn like what is a search fund? That was something that like Sean didn't use that word, but eventually I found it where effectively there's kind of a few models to do this. One of them is, is kind of a search fund where someone will actually, you know, you get someone to finance you looking for a business and then you take a small piece of it and they effectively own most of it. Like there's lots of courses now in business schools, you know, teaching entrepreneurship through acquisition is kind of the fancy way of talking about it. And then there's kind of like this other model of, you know, you just do it yourself. You know, you effectively bootstrap it, find the money yourself, do it through an SBA loan. So first it was kind of like educating myself on the different models. You know, I thought a little bit about getting the funding, uh, but at the end of the day, it's like, nah, if I'm going to do this, like, it's got to be me. I don't want to answer to anybody. And then it was really like finding this community. And there's a really cool community in search. It's been growing pretty steadily over the past, you know, call it 5-ish years, I think. Um, but there's a, there's a, there's a website called searchfunder.com. Um, like those were my people during the time because, uh, search is like, it's a very lonely process.

When you guys say look at 100, what does that mean? Does that mean browse a website with 100 or does that mean actually due diligence on 100?

So it's something in the middle. So you, you basically see kind of like the headline on the website. It's like laundromat for sale, you know, $4 million. Like usually you'll get like the flashy headline and, and not much more information. Then you kind of got to double-click in and request information. And so you usually sign kind of a, an NDA and you'll get something called a CIM or a Confidential Information Memorandum. So it's kind of look at like 100 of those because that's really going to show you like, here's the finances of the business. Like, here's kind of the story that they're putting together.

It's overwhelming. But you got, you kind of got to go through those reps and figure it out before you even have any idea of what you're looking at. I kind of liken it to looking for a house because I think that's that's a pro, you know, or an apartment even, because that's something that most everyone goes through, even if they're renting, you know, usually the first time you see it, you have nothing to compare it to. So you end up kind of getting to a place where you can spot the winners from the losers faster. But like Shawn said, when I first started, it was like super exciting because it's like the ultimate career fair. It's like, oh cool, I'm going to be a landscaper. I'm going to be, you know, I'm going to own, you know, a scrap metal recycling center. It's like you just get so excited. And again, the business brokers especially, like, they make these things sound amazing. It's like, of course I want to buy this business.

So what were some of the cool businesses you saw? Like, what's one? Give us an example of one that you kind of liked, but you didn't end up pulling the trigger.

So my favorite example is I got pretty close to buying a sausage company. It did about like $10 million a year in sausage. You know, my favorite anecdote on this—

Sam is also a fellow sausage man, actually.

Yeah, I know.

I know that. Kindred spirits. If we held an event together, It might also be a sausage fest.

We don't know.

You're, you're almost a purveyor of fine wieners.

That could have been. I could have been and still maybe.

So you went, but you, you didn't just like look at, you didn't just read the sim. You're like touring.

No, I went there. I went to the sausage. I went to the sausage. I'm like walking through like pretending to know what I'm talking about. Like, you know, how hot does this oven get? Like, it's like, that's the biggest thing. You gotta like figure out what questions to ask.

This is a really common, have you guys heard of, uh, the secretary problem?

Yeah. Somebody explained it. Somebody told us that on the pod.

So you can't go back and buy that first one.

You can't go back.

You cannot go back.

But you need to like, you need to spend time like exploring the first third to see what all is out there.

That's fair. I bought the house that I found on the first day of touring, so I just wanna make sure I didn't like violate the secretary problem. But I did.

Yeah, you did. But you didn't with the business. And so you wouldn't with the business. And so what of the 100 or so that you saw, were there any that looking back you're like, that was a winner?

Um, no, it wasn't until we saw, and you know, there were a few close ones where like, I think I was under LOI maybe 3 or 4 times.

For example, that sausage company had like one huge client. They had one huge client and no contract.

No contract.

But you thought they were amazing. That's kind of my point is you thought of some were so good that you were under LOI.

Uh, yeah, but then you get, you know, you're under LOI and then you get, you know, the full amount of information and then you very quickly see like, LOIs are also in this business is like a very, it's kind of like agreeing to a first date more than it is an engagement.

Yeah, because, you know, you're not giving the— a lot of the information you're not even getting until that point anyway. So, you know, you're checking all the boxes up until there. Like, this seems good. I think this is going to be good. And then, you know, you get their financials or you go tour it and you find kind of that, oh, this is why, you know, you're selling it or this is why it hasn't been bought yet. That's another thing.

One thing you did that was great, I think, I think I kind of was like the one piece of advice I think I was pushing on you was like, hey, write a memo for every one of these deals that you like. Basically, he would write me like a one-page Notion memo that was basically like, what is the business? Why does it, you know, like how it like what is the current state of it? Just speak in numbers only, right? Why is the seller selling? You know, what's the one reason that you would buy this business? What's the one reason you would not buy this business?, you know, what are the kind of— and you would just go there and you would write these memos. And I feel like that was key because I remember you would call, you were like excited about, let's say, uh, like, I don't know, what was an example of one you were excited about that then after the memo and we talked it, we beat it up and then we were like, no, this is not worth doing.

It was a Clover app. I remember the conversation. Uh, so basically like, so the Clover point of sale system, like when you're like checking out of a restaurant, it's like, you know, they flip it and you're like, what's your tip?, this guy made different apps for it. So like, you know, like when you round up for charity, for instance, I think that was one of his apps. Um, so it was actually pretty interesting. It was like, hey, Clovers are growing.

Super niche.

Yeah, it's very niche. Uh, but he owned 20 of these things. It was, you know, more up my alley in terms of tech. But, you know, when I actually hashed it out with Sean, you know, it was kind of like at the end of the day, it was very niche, very small, and there wasn't necessarily a good path. To grow that business. It was just something that like was interesting now, but probably didn't have the longevity of, hey, you're about to swing, you know, this is gonna, that's another thing you said to me, Sean. You were like, this is gonna be, you know, don't listen to all those like blogs out there of like, yeah, you're gonna buy this, flip it, and then next year you're gonna buy 2 more businesses. Like, no, you're probably gonna be working in this business for a little bit of time. Make sure it's good, make sure it's lasting. And I think that first one was an example of like, sure, if I was going to buy 10 businesses, maybe that was one of them. But like, that's not the game we're playing right now.

Real dollars.

Yeah. That's not a job anymore. Now that's like an asset. That's like a real business. And yes, it took more risk and it took more time to find a good one of those, but it was like well worth it. So I feel like that was another kind of like key learning I think we both had during this process, like became blatantly obvious.

Yeah, not rushing the search and you want to trust me, like call it like 5 months in, you know, when you really hit this pit of despair of like, I am never going to find anything. Everything under $5 million is trash. You know, private equity scooping up, scooping up all the good stuff and anything that's left, you know, under this point, like there's a reason it's there. You kind of just get to this place like you're never going to find it. It's easy to want to just grab one and say like, those things are fine. Like, we'll kind of ignore those. Yeah, those holes in the business.

I've made so many bad decisions, like almost all bad decisions that I've made. It was— I could like— it's like I had principles leading into this and I got fatigued and I didn't stick to my principles.

Fatigue. Yeah, exactly. Exactly. There was one that was like an SEO business. It was actually like a good business. But what was the— the situation with that one?

Yeah, so that one was, it was like a competitor for like, uh, SEMrush. Um, you know, it was a solid business. It made, I think it did like a million, uh, it was like half a million to a million a year in profit. Like it was a, it was a nice business. Um, but this was right as, um, you know, AI was really starting to becoming kind of the center point of the conversation, especially as it relates to search.

I helped a friend buy a company that was in the SEO space and anytime an SEO company wants to sell, it's sort of like at a time— do you guys remember Bitcoin miners? Like the— it's like, so if these are so good, why are you selling a money printer?

Yeah.

And SEO is sort of the same way where it's like, wait, so if you're just getting like a fountain of traffic and customers, why would you want to get rid of this?

Well, that's the same thing. It's like when you meet a 30-year-old selling a business, it's like, you know, why? And that was exactly that. And I think going into, you know, let's call it the AI headwinds. It was like, there's a lot of reasons this business might be completely different. And I think Sean said like, unless you feel like you're the best suited to take this SEO company into the, you know, the next 5 years, there's more risk than upside. And it's like, that is not my background. So, you know, that's not the game I wanna play. And funny enough, I was actually in LOI with this SEO company when I found Fleet. Um, and I, I was, I almost wrote off Fleet. Like it seemed really interesting and I like, there was some part of me that, you know, didn't have me rejected even though I was kind of in very late stages with this other company. Thank goodness I, you know, I made that pivot.

So let's tell the story. So you, you, the broker calls you, says, check out this business. What happens from there?

So from there, I think this was before I was under LOI, but, you know, effectively Fleet looked very different than a lot of these other companies. Like the finances at first glance, like were super clean. You know, the story made a lot of sense. Like a lot of these Sims and a lot of these brokers, like, you know, yes, they're padding things and trying to make things sellable, but there was always like a blatant gotcha in a lot of these. Like, let's take the sausage example. They're like, oh yeah, this makes half a million a year. Oh, and by the way, he also makes another $400,000 in cash, but we don't pay tax on that. So like, you can't see that anywhere. And it's like, a part of me is like, that's kind of cool. Also sounds a little dangerous, like selling $400,000 worth of sausage on the side of the road. Um, but like there's always something like that, uh, with a lot of these businesses. But, but Fleet was like very clean, like everything was kind of buttoned up. The story was really tight and it kind of checked all the boxes of like, this is a recurring business. Like people are rebuying the bags several times a year. They have these amazing clients, they have these amazing factories that like, it looked very different than, than these other, than these other companies.

Sort of sounds like Dunder Mifflin of bags.

Exactly. Yeah, exactly. I am Michael Scott. You know, it's, it's, it's a, it's a necessity that these companies need.

So what'd you do? You go, you meet the guy?

I was actually going to say no to the broker because again, this SEO thing was heating up. I hadn't had my, you know, come to terms talk with Sean yet. He's like, hey, the seller wants to meet you. You know, let's all go out for lunch. I was like, all right, I'm like, free lunch. That's cool. So we meet for lunch and like my goal was like, you know, entertain this business. But at the end of the day, like I'm under LOI, so I really shouldn't.

Free lunch.

Yeah, free lunch. I should, I should break up with him after this lunch. But we start talking and like, you know, just had this instant connection with this guy. Like he was the most stand-up guy. I had met in the past few months, especially when it comes to like the business ownership. You know, he wasn't trying to, you know, pull something over my eyes. Like he wasn't trying to spin the story. He was like, this is the story. Like a lot of people like, you know, put lipstick on a pig. This guy was like selling a rabbit or selling a different animal. Like it wasn't like, he kind of said it as it is. And it was very refreshing. And like, And in that moment it was like, I kind of abandoned the, like, I'm gonna break up with you. And like, we kind of went the other way. We started talking about like, okay, well how are we gonna work together during the transition? How are we gonna grow this? And then my favorite part is they, you know, they asked if we wanted any dessert and he's like, oh, do you wanna share a tartufo? And I was like, yes. And we shared a tartufo. I don't think I've shared dessert with my wife ever, but I shared a tartufo with this guy. And like, I remember calling,, my wife after, and I was like, you know, I didn't do what I was supposed to do. Like I was supposed to break up with this company, but like we shared a tartufo and like, I think we're gonna buy a bag business now. Um, and it was just like this like complete 180.

Um, but in hindsight, literal Michael Scott, right? Doesn't he have a scene at Chili's that's like exactly this?

Yeah, exactly. It would be like a lava cake or something like that.

A tartufo.

A tartufo. It's very, I don't, I, I don't think that was my first tartufo I've ever had too.

Who knows what a tartufo is? I had to Google it. You're my type of people, Dan, I'll tell you that.

There you go. And then, you know, from there, I, you know, I broke it off with the SEO guy. You know, we ended up like diligence took a while. That's like the second part was like, okay, like now you're committed to buying a business. How are we going to do this now? And like, it actually took 4 months because again, like I'm signing my house away, signing my life savings away. Um, like I needed to be damn sure that this thing was going to be solid before I did that. Um, and then like the world of search like took on kind of like that next chapter of like, all right, well, how do you actually like figure out, you know, are the assumptions you've made in this quick few week period of dating, like, are they correct? And we kind of transitioned to that, uh, that phase of the process.

What, uh, what, what was wrong and what was right for your assumptions and what was the difference in his asking versus the paying?

What was surprising to you or what was different than the dream that gets sold on social media? So if you watch the videos and you see Cody Sanchez telling you to just buy a laundromat, it's going to— you'll be rich, whatever, that type of shit. Like Was it in line with that? Was it different than that? What was the difference if there was one?

So every week, because he happened to live in New York City too.

Oh, the whole thing was serendipitous. Like he lived 20 minutes from my house. Wow. And I, the, the, you know, before I signed the sim, it was like packaging distributor in, in the Northeast. So like, you know, it could have been in Boston, could have been wherever. This guy lived 20 minutes from me. That's how the tartufo was so accessible. But I literally went to, I went to the office every week, sat with the guy for several hours, and just he walked me through packaging. He walked me through his day to day. And it just gave me, you know, it started my training of like, okay, well, how am I going to run this business? But it allowed me to really kind of take what was on that paper and figure out, you know, okay, this is, these are the skills that I will need to run this business. This is how I might be able to grow it. This is where I might need more help. Um, it made it more real. And I think I was lucky in that I was able to do that because I've talked to other searchers. I was like, you know, let's go back to the laundromat. You know, you buy a laundromat. I would imagine day one, you kind of walk in and the machine breaks and you're like, oh crap, like, what do I do? I know nothing about these machines. Now I need to find a mechanic. Like everything is a little more complicated and nuanced, uh, with regards to even like how laundromats are, you know, I went down the laundromat path, like I spent a while thinking that was going to be my destiny. And it's like, well, no, like valuing a laundromat like actually has a number of facets and you need to kind of really get into the weeds there. So, you know, I'd say like the biggest takeaway is like, it is hard and it takes time. It's not something that you can just do, you know, for a few minutes a day. Um, like you really got to invest in making this happen if that's what you want to do, or you're going to end up, you know, with some surprise down the road. I think that's probably my biggest relief is like, I've been waiting for, you know, the shoe to drop somewhere and like, this is what I missed. And like, you know, knock on wood, haven't had that yet.

How many hours a week are you working on it now? And how many hours a week was he working on it?

He was probably working, let's call it 25 to 40. I think he definitely was working less. He kind of had it on autopilot. I think he had started to, you know, kind of tune out a little bit, but not in a way that like he neglected the business. It was just like he'd been in packaging all his life, like he could run it in his sleep. He wasn't as focused on kind of doing the growing or renegotiating things with suppliers, building the supplier base. You know, I'm probably working on, you know, 50 to 60 hours. Like I spend like a bunch of time on this.

How much were you able to take home?

So that's the, uh, the million-dollar question, uh, is like, okay, cool, your, your business is making all this money. You know, at the end of the day, 2 years in, I'm still only making, you know, $150,000 a year. Like I take the minimum amount that I need to for, you know, IRS compliance because I'm saving the rest in Able to Finance growth. Like I, like I've made enough to pay back the loan, but I'm not paying back the loan 'cause I need that cash to fuel the growth. It's a very cash-intensive business and I'm not in a place quite yet where I can, take as much off the table. Although Sean has been giving me some other frameworks saying like, hey, you actually should be doing this.

What's that framework? Which is like, if you want to replace yourself, you have to pay yourself the replacement cost.

It forces you to make a profit as well.

Let's do that again.

What do we need? One extra episode too? Should we go get a guest? What's Mohnish doing today? Let me see what's going on over there. Right? Like you start to think about what you could do to go to go drive it back up. And I think there's an unhealthy version of that, but there's some healthy components to that.

Yeah.

So I think I— that's a lesson learned for me. I think I'm still in the very conservative, you know, what if I need this money? And I do have high working capital costs, especially around now, kind of pre-holiday. I'm about to have to write a bunch of checks, but very soon I should get to a place where I can take more out and/or start paying back some of the debt a little faster.

All right, listen up. Turn the volume up because it's your boy Sean, and I got a little message for you. I talk to hundreds of founders a week, and when I talk to founders, everyone says the same thing, that the one thing they need the most is not funding, it's not more resources, it's just having more time. The goal here is to win, and the way you win is you get yourself free time to do stuff that's high impact. How do you do that? Well, I'll tell you my solution. The answer is Gabby. Well, you might be wondering, who is Gabby? Gabby is my assistant. She is my wonderful assistant. Gabby lives in Latin America and she helps me save about 20 hours a week. So what she's doing for me is every morning my inbox is sorted and triaged and the most important stuff is right at the top with draft replies ready for me. So I'm never behind on email. And then as I'm on the go, I'll just send her voice notes saying, hey, could you find my kids a soccer class? Hey, could you take care of this car registration thing for me? All these little tedious. BS things that would take up time in my day, she takes care of for me. And so that's free time I'm getting back. So if you are a CEO who's serious about growing your company, you need to get yourself an assistant. The best place to go is somewhere.com. Somewhere sources the best assistants from low-cost areas for you. So you can get an amazing executive assistant who's got, you know, business experience and has supported other CEOs for $7, $8, $9, $10 an hour. And so go ahead, go to somewhere.com. Tell them I sent you. They'll hook you up with a good deal and get yourself an assistant. And you can thank me later. All right, back to this episode. So, Sam, I'm curious, what's your reaction to this whole thing?

So I think that for people who have your personality type, which is you, you're a very serious person, I think like, like you're a person. Like if I was a broker and I met you, I would not think you were kicking tires. I'd be like, oh, this guy's for real. Like, it's— you have that very obvious for real energy. And if you have that very obvious for real energy where like, no, I'm going to do this, this makes sense. I think that the path that you're taking is so wonderful. And I, my assumption is that you're gonna be wildly successful. Um, and so I think it's very wise to do. I think that if you, if you are an unserious person where you are not willing to put your house up or something like that, like that's kind of like the one of the tells, like, If so, if you're like not serious like that and you are not willing to do the diligence and say, I'm willing to look at 100 things, I would say do not do this.

Yeah, I think there's also one— I think you said it perfectly. There is one more thing to it, which is what situations do you shine the most? And so like for Dan, I think he always had an entrepreneurial streak that was used as like random side quests in life. Like we would go try to win the McDonald's Monopoly game every year. Like we tried to like actually win it, not just like hope.

We know we had— we thought we were going to win it.

We were like dumpster diving, trying to, trying to win this stupid thing, right? Like, or, you know, we started a blackjack club on campus and we're running simulations to see how much money we could make if we started a blackjack club. Like we were always trying to come up with ideas. It was more fun to come up with our own idea versus just like go get a job and do the thing. And so I feel like if you know that you actually turn up the most you're the most version of you when you're doing this type of shit, when you're like in control of your own fate and you have your own project. As arbitrary as like, you know, bags are, doesn't matter. It's like, I'll take bags super seriously. I took— he took gum seriously, blackjack seriously, sushi seriously. Like all those things. I think that that's the other part, which is not only the part you said, but then also if you really are like at your core more entrepreneurial and you're more switched on doing that, then you're going to have a better result doing this than you are if you, you know, stay in a more traditional job.

That's my— and I think, I think people, you know, when I tell them about, you know, first it's always like the unbelievable, wait, you do what? But then the second, like their mind goes like, oh, I should do that because, you know, it sounds great in hindsight, right? Like when everything works out, it's like, cool, of course this is easy. Of course anyone can do it. But, um, I think people miss the point that there's a lot of ways that this doesn't go like that. And it's not necessarily the most glamorous.

I also think most people shouldn't do this. So for example, this is not something I like this does not fall within my skill set. So my— like, if I had to guess, you— when you were buying the company, like you guys were negotiating over $10,000, $20,000, $30,000, $40,000 things. Like, if I had to guess, you were incredibly anal about the paperwork. You were asking, you're like, what's this $300— what's this $3,000 charge? What's this? That is not what I do.

I do not do that.

That kills me. That does not fit my personality type. So I have bought and invested and done a bunch of real estate stuff in my time and I lose on all of it because you make your money when you're buying it and when you sweat the details upfront, which is not— that is not what I do. I don't think necessarily that is what Shawn likes to do. And I think that if you are the type of person who plays a board game and you memorize all the rules and you like sweat the details and you have that attribute, then this buying a company is— it could potentially work well for you.

I'm the guy that takes the rulebook out of the box and reads it to explain to everybody.

Exactly. If you have that trait, this could be awesome. Life-changing.

Yeah. So, Dana, one of the other cool things about doing a search for a business is you realize how big the universe of businesses is. And I asked you, I said, you know, usually we try to brainstorm business ideas with people like, what opportunities do you see? You said you would come up with a couple of ideas. Give us a couple of your ideas of what you think other people could go do. This is just like the sort of random section.

Yeah, I think the, I mean, the biggest takeaway, like, from buying a business, before I get into, into the ideas, like, everything's a business, right? Like, you walk, you know, go look at any store, you know, every little piece of that business is something that someone sells. Like, that display that says for sale, like, someone sells that. Like, the, the holder for the gum on the store, like, that's a business. Like, I don't think I really appreciated how random and how basic some of these businesses can be, and, and people make really good money doing it. Even packaging. It's like you don't really think about that.

By the way, I'm pretty sure Robert Kraft, the owner of the Patriots, the— he owns the Kraft Group. I think that's a packaging company.

It could be. There are so many packaging companies.

They make corrugated cardboard, I believe.

Yeah, cardboard.

Okay.

One of our best episodes ever, if you want to go listen to a great episode, is the Sarah Moore episode on this podcast. And she's the— I think it's called the Egg Carton Queen. And her thing was she did the same thing you did, basically. She went and found a retiring guy who owned a business that sold egg cartons, like not the eggs, the carton they come in. And you don't even think that's a business. Like when you go look at, you're like, eggs.

Okay. There's a farm that sells eggs. You don't even realize that the farm has to then buy egg cartons and there's somebody whose job is to make egg cartons and they sell it at the best price and the best value, blah, blah, blah. And so her episode, I think, is amazing. And you see that the other example, Sam, that I always give when I explain what this podcast is to people, is I talk about like everything you see is there because someone sold it. Like nothing gets there by accident. And so I was like, you know, even in the workplace, if you go to your break room and there's a poster on the wall that's like the labor code, there's a guy in Minnesota that sells that. He makes $1 million a year selling you the poster every year. Once I heard that, I was like, oh shit. It's like a physicist when he learns about string theory or some shit, you know, it's like, oh, it's everywhere. I get it.

Oh, the waves are particles. You see the world of the components.

Yeah, all the components themselves are businesses too. And then you realize like if you're not making it in business, it's mostly because of a lack of creativity and effort. It's not because of a lack of opportunity because literally every item everywhere is itself, you know, a business that somebody is running to get it there. And so, you know, there's no lack of opportunities in that sense. Yeah.

So now I'm like hardcore on the other end of the spectrum of like as unsexy as possible. I want to do that. Like I want to, I want to be the guy that has like the most random thing. Like packaging is pretty random. Like like, you know, in a future world, once I, you know, if and when I'm done with this, like, I want to go even further.

Yeah. By the way, do you have— when you lay out— when you're laying in bed at night, what do you think? Like, in 10, 20 years, we're gonna— we could be this. Like, do you have— do you think this could be a $100 million company? Do you think you could sell it for a certain amount? What's your sort of North Star that excites you?

So, you know, at this point, I don't have any plans to sell it. I do think it could be $100 million in sales company easily. Like there's so like some of these big packaging players are huge. And we're able to compete with them. That's kind of the, you know, we're small in the scheme of things. Like it's a nice size business, but we're small in the scheme of things. But what I'm finding is as we work with these brands, like we actually do have a pretty differentiated offering because we are small, we're scrappy. And people love that. And, you know, as we've been able to kind of add clients, I'm like, oh, this thing can really take, like we can really scale this up and, and, you know, start to gain more traction with these large brands. And, you know, the crazy thing is people spend tens, you know, these big companies spend tens of millions of dollars on their packaging. Um, so you could easily get like 5 clients to get you to $100 million, like, like that, if, if it's the right 5. So my goal is to grow it. I, I do think in a few years I'll, I'll hire an operator to run it. One of my biggest pieces of advice to people searching is like, don't assume you're gonna hire the operator day one, especially if you're putting your house on the line. 'Cause there is not a single person that I trust to run this business when I'm gonna get kicked out on the street if it fails. When I get to the place that I feel better about that, like only then will I then decide, okay, well maybe I'll hire someone and just do more strategic work. But yeah, the, like, I'm loving doing what I'm doing now. So I think it's eventually scaling my time. So it's not like, I'm very involved in all the processes right now and I designed it that way because that's how I learned. You know, I'd love to be able to go away and not have to take a call because the blue isn't blue enough. Like, you know, I got a lot, I do a lot of color matching.

When we were doing the sushi restaurant, um, Dan was not only sweating the details on the finance side, but we were like, dude, we don't really know how a restaurant works. None of us have ever worked in a restaurant. So Dan went and got a job at Noodles and Company. Oh yeah. And he studied them from the inside and we treated it like it was like Ocean's Eleven. Like every day he'd come home and we were like, what did you do?

Write a report.

Yeah. Yeah.

He was like, draw the workflows or he'd like, what did What did you learn and what did you bring me? Give me the pesto cavatappi.

Yeah, then he'd bring the pesto cavatappi and he'd be like, trust me, do not eat the tomato basil soup. We're like, why? It seems just tomato soup. He's like, don't eat the tomato basil soup, guys.

And so he was like, went undercover and he was like willing to go like the big reveal, like the big Undercover Boss reveal at the end when I quit.

Yeah. By the way, were they blown away by the fact that you're like, I am creating a sushi chain?

I think I tried to hire the GM and she's like, I was like, all right, like, that sounds better than what I'm doing here at Noodles and Company. Like, she was like, like, I thought you'd like, you betrayed me. It's like, cool. You're like, oh, you're trying to move next door? Great. Like, we can trade food at lunch.

So Dan, you, um, let's do, uh, let's do, actually, do you have that, the business plan that we made? Do you still have that binder?

Yeah, one sec. Let's find it.

So the story here is that Uh, not only did Dan work undercover at Noodles and Company, at some point—

also, this was not a— I didn't just put that there. Like, that's lived there behind.

You just keep that there? I don't have one. I need to get a copy of this.

All right, so this— I also, like, our Sabi Sushi hat is right there.

Oh, nice. Yeah, so basically the first business we, me and Dan, uh, and our buddy Trevor had out of college was to create this brand called Sabi Sushi. The idea was to create the Chipotle for sushi. So go get sushi the way you eat Chipotle, where you just walk down the line, you pick your ingredients, and you get the thing. This is our big idea.

And, um, which was not only— how do you maintain a good idea, uh, all the time?

It's been proven.

It's been proven it's a bad idea, but like, I still want it.

Okay, so, so we— not only did Dan work undercover at Noodles and Company, we then go and I don't know how we get a meeting with the founder of Noodles and Company and we show up to this meeting with this binder. This binder is our business plan. We had been working on this for months while we were searching for a location. And can you just hold up the thickness of this binder so people see?

Oh, it's thick. Uh, let's see.

And he, uh, I forgot that guy's name.

He's like, all right, so like, what's the plan? And we think, We're about to wow this guy. And we're like, plan? Oh, funny you should ask. Whip out that binder, slam it on the table, and it's basically like, here's our plan, look how great this is. And I remember he looks at it and first of all, it looks like a kid's project. Like even, even the COVID is like, we inserted this colorful thing in the front plastic thing. And then he flips through and he's like, realizes pretty quickly, oh, these idiots wrote a 250-page business plan for their sushi restaurant and they don't even have a location. They don't have any customers. They're starting on, you know, from scratch. And I remember the look on his face. And then I remember like the moment that was rock bottom for me in the whole sushi journey, which was that he should have just ripped us and been like, guys, what the hell are you doing? This is so ass backwards. Like, why don't you get out there, start testing your concept, see if people actually want this, and then like, you know, you'll learn by doing. And instead he kind of took pity on us and didn't say that. I could tell he wanted to say something and then he was like, uh, and then he just tried to be nice about it. And I was like, oh my God, we're so bad that he feels like he needs to be polite about this. That means we're even worse than just being bad. Um, and I just remember realizing like, well, I don't know what the right answer is, but whatever we're doing is dead wrong. I could tell you that right now after that meeting.

I just remember years later, years later, someone did tell us that though. In Boston there, you know, we were talking about, we were about to sign a 10-year lease and we literally just met this guy like 10 minutes ago and he, oh, he was, it was a guy, he like owned a bunch of Boston Markets.

I don't know if you remember this. Yeah, John Prendergast.

Prendergast.

Oh my goodness. Nice call. That's his name. He was doing a tech company now, but he was like, you know, early in my career, I owned 20 or 30 Boston Markets. And, um, he's like, so I know a little bit about the quick service industry. Let me, you know, be your mentor.

Yeah. But he basically just tore the whole thing to shreds, like within 5 minutes. It was like, this is wrong. Don't sign that lease. And like Trevor, like, wasn't in Massachusetts with us when we, when we were doing this. We like, he was like about to sign the lease. We like called him. We're like, wait, no.

Yeah, I remember he introduced us to like Lean Startup and, you know, actually figuring out, you know, we used to poll people. We're like, you know, would you eat sushi once a week? Like how many times a week would you eat sushi? Which is a badly phrased question anyway. In hindsight, they're like, oh, I'd come 2 to 3 times a week. And it's like, we, we did this proof of concept, um, on the cheap, um, as, as quickly as we could. And like, the answer was like, not even once a month. Um, like night and day.

Right. Outside of, outside of like LA, SF, New York, the answer is like, if I eat sushi at all, like, right, to make a concept like this work, it needs to work in Texas, Colorado, you know, it needs to work everywhere. And the answer was, if I eat sushi at all, I eat it about once a month and I'm happy with that. I'm not trying to eat it 3 times a week.

And I'm gonna go to the nice restaurant to do it. Right.

And we were looking for like the 3 people who validated us rather than ignoring the 97 people who were saying no. We were like, yeah, see those 3. He also did one other amazing thing that as an entrepreneur, I now see like this pattern over and over again. So he suggested to us, he's like, do it delivery only.. And we were like, ah, but he like saw the look on our face. He's like, what? And we were like, delivery just sucks. And we, we started, you know, he's like, why? So we're like, delivery, I mean, you order food, you don't even know when it's gonna come. This is before DoorDash, by the way. This is before DoorDash.

I think the biggest thing is we, we probably invented DoorDash, uh, and didn't know it. And we were fixated, didn't know it. We were fixated on the sushi, but we really, you know, came up with a better model.

Yeah. Rethinking, rethinking what, you know, everyone kind of assumed we would make with a restaurant and kind of flipping it on its head. And it allowed us to fail faster.

So back to the business ideas. You had a few here. Are there any that you think are cool or interesting that you think somebody could go do?

and they have you hostage.

Have you hostage? All the arcade games, you got to buy their food. Kind of these very easy to run, like almost a single person, but, you know, let's call it like a teenage business. So you hire teenagers to work there, like anything that they're not going to mess up.

Yeah, like a bowling alley.

And then how do you find things that like have multiple purposes? Like there's a bowling alley in my town and I, you know, it's, you know, during the day it's for kids, like they have the kids activities and like after-school activities. And then at night it's the bowling league for the adults and they have a bar. So it's the local dive bar. It's like, You know, then there's like 5, you know, 5 vending machines in there. Again, teenager working like the no-frills. But I have to imagine if you can find the right business like this, kind of great to be able to just go bowling at your bowling alley. I can't do much with my paper bags. Like I go and I check them out and maybe walk around with them, but like not much.

Like why family entertainment? Why this out-of-home entertainment? Why now? Like, is there anything that's changed in the market? Why? Because, you know, these have been around forever, laser tag, like a public bowling alley, whatever.

My hunch is they've been profitable for a while. Like, I think a lot of these are like sneaky businesses that you don't think of. Um, you know, I think there's also kind of more of a trend. I was reading about this, like, you know, millennials like don't drink as much. They want more like sober events. Um, I think this idea of doing more like games is starting to take on, again, you know, small sample size of things in my town. But like, you know, you go to these like unlimited, you know, there's an arcade in my town. It's like you pay like $8 for an hour and you can play unlimited arcade games. This place is packed. Um, you know, that sort of thing never really existed, but I think there's like this desire to like leave the house and do things. Maybe it's a post-COVID thing. I'm not sure. Um, the thing that I think is really interesting about this is like, and this is probably true across the country, like if I think about, like I always drive by like these large commercial real estate, um, you know, old malls, you know, these big buildings that no one wants to buy anymore. Uh, and then when I see one, when I see what people put in them, like it tends to be kind of like these newer things, you know, more interesting things like, um, pickleball courts. Like, I think I read something, it's like, oh, they're taking all the old bed baths and turning them into pickleball courts. Um, so it's actually like, take something that maybe you can get that's not being used and, you know, make a climbing gym, make it a ninja course. Um, but I think is like the most incredible marketing, uh, where they like just marketed gymnastics to boys and now all of a sudden they've doubled, they've doubled the amount of like demand for this. And then there's like the climbing team and like, this place is packed. All the time.

Yeah.

And it's, you don't need to, and it's AI-proof, right?

Like, so like if you're looking for where do I do business if I know the whole world is changing with AI, well, AI's probably not gonna like do a trampoline park or, you know, do a, a kids' soccer center. You know, like those are, those are pretty safe businesses. Yeah.

And they're predictable. I mean, like there are kids are always gonna wanna jump. It's not like you're buying a product that, you know, all of a sudden you don't know if it's gonna last.

Uh, right.

You put a bullet point on here, the least sexy businesses possible, touch the taboo.

Right. Because it might mean that, you know, let's say there's a really sexy business on one side, right? There's a business that's like, maybe it's like software only, you don't have to run it. Um, you know, it's low operations, blah, blah, blah. And it's, it's about whatever, party planning or something fun. The hair on that deal might be, it may be just that the valuation is extremely high. So it's going to take you a long time to get your cash back. Or it might be some other, something else like, you know, users are very fickle, the competition is very intense, whatever. There's going to be hair in every deal. The good thing about what you're saying is that if you choose the hair that it's not the most fun thing to run. Well, yeah.

Where the hair's gonna be like, you gotta cremate someone. It's like, I actually, like, I don't actually know if I wanna do that. Like, now that I'm saying it out loud, like, right. That's, I mean, I'll hire a teenager to do it then. Uh, but like, that's a better hair. That's about a better amount of hair. Like, you kind of know what it is. It's like the hair is the thing almost. Right.

Versus like the P&L has hair or the, there's a lot of debt on the business already. There's other problems in other areas.

Exactly. So if there's something that like, like, yeah, like if 20 people are gonna flock to the software-only party planning one, but only like 2 crazy enough people are like, well, let me roll up these funeral homes, try to like aggregate. And I'm sure people do this, like the, you know, I'm not the first one to think about this. Um, but I like that. The other thing I really like right now, Party City just went out of business. Who's buying? Where are you buying balloons? Um, there's a guy like 20 minutes from me. He had a fireworks store. His fireworks store happened to sell balloons. The day Party City went out of business, he rebranded, man. Now his store is called Balloons. It used to just be called Fireworks. Now it's called Balloons. He's taking out all the ads on the street. And we went there, you know, for my, for my son's birthday and he's doing awesome. So it's like, how do you like kind of— and don't copy Party City. That clearly didn't work, right?

But the demand for balloons still exists and will continue to exist.

Exactly. The supply just shrank like a whole lot. Right. And I imagine as things change, like the landscape for better or worse is changing very rapidly these days. You know, maybe something goes out of business because they can't compete because of tariffs or whatever. Like, how do you think about being, you know, opportunistic in that sense and doing it? And you can do it like you don't even need— like you could start selling balloons, like get a permit and start doing delivery-only balloons like that. I actually saw a truck doing that when I went to Mohnish Pabrai's house.

Uh, I love that. Yep. That's awesome.

Cool. Well, Dan, dude, awesome hanging out with you as always. I'm glad you got to tell your story and congrats, man. I'm blown away by what you did with the, with the business that you bought. You are officially Dan the Bag Man.

Thanks for telling the story. Yeah. Thanks for having me on. It's, uh, exciting to, uh, to be here. Cool.

All right, my friends, I have a new podcast for you guys to check out. It's called Content is Profit and it's hosted by Luis and Fonzie Cameo. After years of building content teams and frameworks for companies like Red Bull and Orange Theory Fitness, Louise and Fonzie are on a mission to bridge the gap between content and revenue. In each episode, you're gonna hear from top entrepreneurs and creators, and you're gonna hear 'em share their secrets and strategies to turn their content into profit. So you can check out Content is Profit wherever you get your podcasts.