 Good afternoon, everyone. Hey Tom Stewart here. I'm with my partner is Trotter and Yeah Well here we are Wednesday afternoon another day more PPP Information we were just planning before we jumped on the call Derek you want to share some of the latest information we've learned on It's useful regarding how we can get a better outcome of our PPP dollars and hang out with you guys We talked disease pestilence bureaucracy. It's great fun Let's see Over the weekend on Sunday the SBA issued some new Q&As on their website. They put up three new ones All right, one of them was particularly useful Because what it said was If you offer somebody a job and they don't take it It does not count against you for needing to get back to your full employment for your PPP long Which is kind of a big deal because a lot of us have offered jobs to people to come back And they said they didn't want to they either got another job or they've decided they enjoy the stress of not working Or they're just not ready to come back yet And that makes it awful hard when we've got to get back to 100 full employment Or we've got to pay back the loan now Tom and I were talking ahead of time as liz pointed out is not That informal you have to give them a written offer. They need to have Declined it in writing and you'll probably need to attach all of that proof to the bank so I would want to have all my ducks in a row before I did that And wouldn't necessarily count on needing to make sure you know exactly how many you've got but I still try to plan on trying to get all of mine back and if I miss by a couple using that does that make sense I'm not sure I would If I had 40 employees plan on bringing 30 back and count on the other 10 declining so But if you offer someone a job and say no, I don't want to come back you want to send them a letter letting them telling them that They've got their job and Give them an x amount of time to respond and they don't respond and you document that and Keep that in the file Yeah, it did specifically say a written offer of rehire. So Uh, I can't just be quite calm. I think I'm gonna send that Yeah, I think I'm gonna send mine certified too. Yeah, there's a link in the chat That has a rather extensive article about What we know so far and like a lot of the articles It's it's couched in based on what we know now We'll just have to wait and see how what they actually, you know interpret now. They use it, but The interesting thing is it came with an attachment to a 24 page document with 40 questions and answers from the sba That I've never seen and I got a A ppp loan from the sba. So sure would have been nice to have gotten that ahead of time But so that in and of itself was useful But it's awesome information is good news for us and I I think because we don't have to go out and hire a bunch of people and we don't really want in order to You know make some overtrading number Yep I think it's going to give people Definitely a feeling of power back a lot of Business owners have been feeling really powerless, right? How can I do that? I want to come back now. I'm kind of stuck, but now Well, we have a little bit more control again, which is awesome Well, it's humorous is even that less sba loan that that little paragraph ends with and if they decline the offer they may not Be eligible for unemployment anymore. Anyway, so I thought it was interesting that the sba threw in that little kicker of Well, why are they still on unemployment then? right But you know some of the different states are saying that they are still eligible, so Oh, I agree in fact the one that was weird to me was texas as pro-business is texas is texas Is the only state in the united states where you don't have to have workers compensation insurance Yet in texas they said it if an employee says i'm uncomfortable coming back to work They can stay on unemployment. They do not need to have a specific reason medical concern, etc They just need to say i'm still not comfortable So the federal law says that that's not a valid reason, but some states are being more lenient Correct, but hey for loan forgiveness. I care about the federal law Um, I would keep that I would keep it documented and the other really interesting thing about the ppp loan Is the sba is not deciding on what's forgiven your bank is deciding on what's forgiven So you also might want to uh educate your bank officer. Yeah Of course from what I understand the banks submit all of that to the sba and the sba might Disagree with what the bank said in which case the bank doesn't get reimbursed by the sba. So There's some concern that the banks are going to be really hard-nosed about this for fear of of being caught in the middle Yeah, I was pretty cautious I purposely went for less than I could just because I wanted to be sure that I could prove every dime went to payroll. So Any uh Liz I see I got a comment on my shirt. Thank you. Lastly She liked the last one too, but she agrees this one's cuter All right, so I I do actually have a question tom. This question was posed to me today by Ruth She asked this so we know that the idle $10,000 advance rolls into our ppp in some way this these monies play together But how exactly does it work the $10,000? Does it increase the amount of our ppp monies that we need to spend? so For easy math, let's say that we got the $10,000 advance from idle and then we also got $100,000 in ppp funds And we have to spend 75 minimum of $75,000 Toward our paychecks Right with this hundred thousand now that we're rolling in this 10 Additional 10,000 do we need to pay 75 75 percent of 110,000 or does it reduce it now? We only have to do 90,000 or does it not have anything to do with anything? As I understand it The math the numbers you just just just gave us If I got $10,000 in the in the idle advance and another hundred thousand and the ppp That means that I actually qualified for 110,000 in ppp funds, but only got a hundred because They take 10,000 they take whatever you got in the idle out of the ppp funds that they give you So that makes sense So the 10,000 is already forgiven. So that's not even part of the math the way the rules are now You're not supposed to have to pay me so again I can't say a hundred percent sure but my best judgment would tell me that The 100,000 you need to spend at least 75,000 of that on on on payroll if you're No, 75 percent of the hundred thousand needs to go towards payroll You don't need to worry too much about that other 10,000 because So why are they making a big deal about it? Oh just because you can't get Um the ppp loan for 110,000 because you've already gotten the 10 If you hadn't gotten you hadn't gotten the idle funds. They would give you an extra $10,000 Yeah, okay, that makes sense Okay, so leslie wants to know so does she need to create another new account named libel idle and then one for her ppp How does her account know which money is going to which account? Do you have any ideas? What are you doing there? We're not creating any extra accounts. We're managing it all in quitbooks, but you know I gotta I have kyle a guy that's really You know it's his job to keep track of all that and you can do it all within quitbooks Just how you code your your expenditure. So we're not terribly difficult or excuse me concerned about that, but Um, depending on the level you hope that you have it and how you're doing it That would be something that I'd be consulting with with my cpa on and say look this is this is what I got What processes do I need and if uh, you know, I know banks are recommending To to people that they set up a different account for the ppp The idle funds are a little bit different. We've looked at the criteria for what that could be used for yesterday And they're a lot more generous. I mean if basically if it's a Wow, you're still there les? Uh-huh. Okay. Your picture went away and dad just disappeared all together Okay The idols there is no the math on the idle seems to be a lot simpler because there is no Calculation at the end trying to figure out how much it was going to be forgiven You're going to have to pay all of the idle back, but it's going to be over 30 years Um, and if it's a legitimate business expense be it, you know Being an operating expense or being a cost of good soul. It seems like all that's fair again You just can't take it and you know go on vacation with it as long as you're spending it on your business It seems like you're you're pretty good on the idle I'll share A link again. This was what we were looking at yesterday on the idle part and You have to share the screen real quick because this is great I'll tell you what I did leslie. I opened another account for the ppp But I didn't do anything with the idle. I just put it into my operating account You know it says here pretty much you can use these funds to cover necessary day-to-day expenses your business would have Successfully covered before coronavirus or other, you know before the coronavirus So if it was something that you were traditionally paying for out of your business, you can use these idle funds for that Um out of the list of things that they're giving here I can't think of much of anything that that wouldn't be covered by that But again, this isn't a grant. It's a loan. You're gonna have to pay it back But it's just a really You know generous loan with a with a very long amortization Hey Derek Okay So PPP funds you need to cape up with the idle funds You're just gonna I don't even know how you're gonna pay them back. You know, I guess You get a statement in the mail for the next uh, 360 months When we start paying them back, is it six months or a year before you have to start paying it back? A year is the last thing I read Okay So you don't have to do anything for a year Easy easy. Oh, I'm in the middle now Derek is really fuzzy Fuzzy fuzzy he's uh Low bandwidth Yeah having hard you know He's in colorado. That makes sense Like he's fuzzy because everybody's high over there Hey, I thought that's all Derek's we need those gummy bears That that face just lent, um Credence to what he said Derek. I'm like, oh what? How many people streaming live videos we keep losing internet, but anyway so One of the things that uh, Derek's been really busy uh doing here I mean for a while, but certainly uh recently is uh helping broker some uh, some Acquisitions or or sales. I guess depending on what side of the deal you're on There's a lot of people out there looking to sell cleaning businesses And other people out there looking to buy them or at least accounts and We want to dare to come on and share a little bit about what he's been doing and uh, you know, maybe Give us some useful information to see if we can find some opportunities out there Yeah, there's been a lot going on. Um, a lot of people have decided they basically don't want to rebuild That they've done this a couple times maybe in their life or they were close to retirement And even if they got the money, um starting over from scratch and rebuilding just doesn't sound like a good time So a fair amount of folks have started to reach out to people as it's come time to reopen and offer to sell So we've been getting a lot of emails from people saying a competitor wants to uh Sell me their business. What should I do or vice versa? We've had a couple people write us and say hey, I just don't want to do this anymore You know, I was borderline and thinking of retiring ahead of time and now I'm ready to sell So how do I get out of it? So we're seeing a lot of that happening right now Um, I've been involved in three of those deals recently One of them is recently is this week and it was a decent sized company. It was about 300,000 in revenue And the owner just decided that you know I'm over 65 I don't want to rebuild again. I just want to sell my customer list to somebody So under the best of times when you sell a home cleaning service You're normally going to sell for two to three and a half times cash flow Which is basically the revenue that your business generated in the last year The problem right now is nobody has any idea what their business is going to look like in a few weeks What your business looked like two months ago is practically irrelevant Who's coming back? Which of your customers are coming back? Which of your clients are coming back? Are we going to have another one of these outbreaks again in the fall? And as a result almost every single deal that I've seen happen and I've been involved in three in the last two weeks Where the businesses were sold based off of the revenue the clients are going to regenerate Um, basically the deals normally look like 20 of the revenue for a year Or 10 of the revenue from the clients for two years And there's some variations there of but every deal I've seen kind of happened in that range With the idea being that as long as I get the customers in I'll basically give you the person I'm buying it from the profit from those customers for a period of time But then after that time expires they're my customers and I get to keep the profit Um, and that's pretty much the only deal I'm seeing happen right now Because who wants to pay three times of last year's cash flow you have any confidence that that's going to be the cash flow this year Nobody does everyone's just guessing It's been a really unique opportunity though because some people are basically going out there and hoovering up client lists and adding In fact, I was talking to one person who's actually bought three customer lists this way now Um, and if you bring cleaners with it Could be a really interesting way to get your ppp count up if you're worried about hey I used to have 40 employees, but now I've only got 30 Well, if I bring on these two little companies and stick them on to mine now all of a sudden I can potentially have enough people out there to do it Um, so we've been seeing a lot of that. So I So these deals these deals something like if they're primarily you're just buying customer accounts rather than All of the assets. Is that right? Um, it depends most of the time people are just buying the customer accounts And normally the cleaners and the equipment and if there's some equipment a couple thousand dollars are thrown in On a couple of occasions some people have chosen to keep the company name up and running to potentially have a second brand in a market Um, a couple people I know did that even before covid and now that covid has happened. They're doing it I've always been a big fan of that model because as you guys know I used to come from proctor and gamble where we have tied cheer and gain three different laundry detergents that hit three different customer segments So if you've got a two-person team running company cars and you buy a solo company They might decide to keep the name in the brand But yeah, for the most part what you're really buying is the customer list and emailing the customers and saying Hey, you know, we decided not to reopen my close friend. So and so is going to be taking over the company and in return Uh, you know, they're going to give me part of the revenue or something like that. Um, and it varies all over the place I've literally seen just the customers transferred. Um, there was a deal we did recently where They took over the office space and everything else Which was nice because if you've got a lease with the personal guarantee on the lease and you're closing down That's worth something. So if I've decided I don't want to reopen my company And I've got a lease that I'm personally guaranteed for for a year if you're willing to take over that lease So that the landlord can't sue me for 10 grand That's that's money that's saved for me. So that's something that you can offer a value or if they've got company cars or things like that Marlow is asking a question. Um, I I think that we said if you're buying accounts just just accounts you're usually Buying accounts for like somewhere between two to three times the average monthly revenue that annual just the monthly revenue That's the top line that the customer is paying Um, if you're buying the entire business that could be two to three times annual what they call cash flow, which is You know kind of a rpx profit type thing, but So you think about two to three times revenue On the top line on a monthly revenue basis Keep the math easy two times annual revenue I'm excuse me two times monthly revenue is like 200 so divide that by 12 That's somewhere between 15 and 20 per month. So Getting it over You know 20% over one year period is about the same as getting two and a half times all up front Assuming that you didn't have leakage, but you're going to lose customers So you'd really be better off getting it up front But like Derek said nobody's going to want to do that because You don't know how many of those customers even going to come back for cleaning number one Yeah, so marlowe was asking, you know under normal conditions You normally sell multiple of profit or cash flow or how much money do you make a year? So if you're trying to sell your business normally you want to try to make your business as profitable as possible Maybe cutting off his staff run with a va to get that profit margin up Um So say you have a 20 percent margin and you sell for three times that you're actually getting about 60 percent of revenue But if you can get it up to 25 percent profit margin three times that 75 percent So but that's normal condition. That's not what we're in right now right now. We're in a fire sale um right now there's There's too much unknown So you might get lucky you never know But every deal i've seen has been where people are paying some percentage of revenue over a period of time And there's a little bit of a have and have not thing happening right now Because those of us that got some ppp funds or an idle loan have a chunk of money potentially to spend those that didn't Have no cash So once again, we've mentioned before if you were running an independent contractor model You do not qualify for ppp funding except for maybe you and your office staff um So you didn't get a hundred thousand dollar one hundred and fifty thousand dollar forgivable loan Those of us that did um have an opportunity to maybe pick up some accounts out there Now be mindful those ppp funds specifically would not You wouldn't want to use those funds to go buy another business or or a list But presumably if you're cleaning some homes you've got income coming from other areas So this is where keeping good books is useful where you can show On the books the ppp funds are covering payroll and this other money that you've got over here that customers are paying you That's how you're financing your acquisition And what exactly you wouldn't technically use your ppp funds But i don't know about you guys if i have free labor because of ppp funds I have a whole bunch of free cash flow coming out of my company that i can do something with Which gives me a pretty big competitive advantage that i can do stuff with assuming i'm cleaning houses Um, and this is also a really good example You know, we have a program that we've been offering called business staging for a while Which helps people sell their companies and one of the things that we always talk about in business staging Is you need to sell your business when you have plenty of time? Um because you don't want to sell your business when you have to you want to sell your business When it's convenient for you and when you have a good offer And selling a business is a really what we call in economic speak illiquid market meaning there's not that many people in it Um at any given time there can be two people selling a business in one buyer Which is a horrible situation to be in or one person selling their business in two buyers, which is a great situation to be in Unfortunately, we're in a situation right now Right. Well, yeah, i'm saying if you're the seller right now We're in a situation where you don't want to be selling your business It's not a good time because almost everyone's selling so it's almost the classic example of when we we've taught all this time You want to have your Business up for sale before you need to you don't want to wait until you've been relocated You don't want to wait until you're right up against retirement When I sold my business my maid service. It actually wasn't technically up for sale They literally knocked on my door and said I want to buy your business. Well, that gave me a whole bunch of negotiating leverage um The environment we're in right now is the complete opposite situation Most people don't have a lot of negotiating leverage So we had some questions coming about non-competes and things like that I would get as as long a non-compete as I could At a minimum probably a year, but I'd want two years and technically you're probably going to want a non-solicitation agreement if you can Non-solicitation agreements are normally more effective than non-competes You can't normally stop somebody from working in their chosen profession So if I buy your client list and you decide later on you want to clean It's in most states not enforceable for me to say well, wait, they sold me their clients They can't be a cleaner anymore But what is enforceable is to say they sold me their clients. They're my clients now They can't solicit them. So I would do a non-solicitation agreement for a period of time Probably I'd want at least two years Yeah There's all sorts of so I also just want to say there's all sorts of Small really really small micro businesses that are out there right now Maybe with one or two employees I just bought a client list from from one of those little tiny Companies for $50 per client Yep Yeah numbers One of the things I recommend doing is just running some ads on craigslist Just literally saying hey, you know, if you're thinking of going out of business give me a call I might be willing to buy your clients That has worked well for me in the past and yeah It's normally not bigger companies You're normally not going to buy out your biggest competitor because they've got the financial where with all to withstand it like you do It's the people who I mean if you're an independent with one assistant helping you And you just had to shut down for six weeks and you didn't have any savings Especially if you're in the state of Ohio where as of now independent contractors still can't draw unemployment You've got a real abject lesson on why maybe you want to have a job And they're willing they just want to go away What are your recommendations if you're running these ads? Would you run black box ads where you're not listing the name of your company? Or would you say hey, you know, my name's Derek Christian I own blah blah blah cleaning company. Would you would you put your name of your company in the ad? I normally don't um When I've done this I've just run an ad that said if you're interested give me a call now when they call I tell them I'm not making it a big secret but I I just normally prefer my ads to be more customer facing um now I've also Have had someone call competitors before and we'll probably have it again where we'll just call and leave a lot of messages Hey, this is Derek with you know my maid service Some companies aren't reopening if you're thinking of that let us know We'd like to maybe potentially buy your client list in that case I would but on craigslist where the whole world can see it. No, I don't think I'd want to put my name on it No You mentioned the idea of of buying a company in in the same market. You're already in but keeping that brand and running two different business Would they be a different model a different price point? How do you do that to create? In general if I had two companies I'd want them to have different business models Um, I wouldn't want to be having two companies that run too similar to each other Because then they don't really have a reason to be unique if that makes sense Um, I like the idea like when I ran solos with my maid service every now and again I'd be on the phone with the customer that I just couldn't convince that solos were the way to go Well, I work at home I want people in and out of the house quickly or I've hired independence before I don't like that idea And it sure would have been nice if I could have been like well Here's a company I recommend that runs a team model that you might like that. I also happen to own Now I wouldn't necessarily tell them that but I would recommend that one to them And once again, it goes back to the gain and tide example They're both laundry detergents, but they're very different in that, you know tides everything tide advertises is we clean the best We have the best technology Gain total advertising campaign is we smell great our products have the best sense So, you know, I would be doing the same thing with my solo versus team I would probably talk a lot about on my team efficiently were how well trained we were how professional the car looks all that kind of stuff on solos I would talk about you're going to have a close relationship with the person who cleans your house You're going to have fewer people in your house, you know better security more personalized So that's kind of how I would do it so that when your message doesn't land with company a it might land with company b Would you use the same management for both? Probably not. Um, I personally think it's difficult to do both. Um, and I definitely probably wouldn't run it out of the same office um I At various times That sounds scary That's too many mistakes waiting to happen there Too many mistakes waiting to happen And I I've run different business models out of the same company before like at my maid service for a little while We were running teams and solos and it turned into a bit of a disaster for me because The people on the teams were always mad that the solos made more money and the solos were always mad that the Teams didn't work as hard and I'm like, yes, that's why you're paid more And so it just seems like everyone wants what the other half has so just keeping them separate works better And let's be clear. I am not recommending you run two separate models Um, there is a lot of you've got to have your core company do a certain size and scale And running like a machine before you conquer that issue. Um, I'm just saying that I've seen a couple of people do it Um, you know, I I know of probably Four companies off the top of my head now all four of them They're their first company does a million and a half or more in revenue already So these aren't people run in half a million dollar companies These are people who've got a company that's already making really good money and they're now going, you know what? Maybe I want to have a different brand that generates another half a million over here We uh bought a company This is I'm going back a few years, but it was a different business model different price point different scope of work So we decided to set it up as a separate company and we ran two different brands but we're running it out of one office and The management was kind of doing both at the same time and it was not a great experience and after doing that for about a year and a half We wound up Taking the customers that were left over from the from the company that we acquired and we just converted them into castle keepers And just got out of that game Yeah, I mean I once again I'm not necessarily recommending that the ones that I know do have a different office They typically use vAs for the second company so that doesn't even touch the primary company They run a very different model etc Um, the other thing that I've seen happen in a lot right now and honestly I don't know if any of the three of us are experts to talk about it But it's been really interesting and I would be a little gun shy a lot of the companies that I've seen up for sale right now Specialized in air b&b cleaning Um, those guys are dying Absolutely dying right now. Yeah, they're laying off a bunch of staff and I understand a lot of their hosts I saw something where a bunch of their hosts are getting together standing up a platform to kind of do the same thing And cutting air b&b out of it Yeah, so the folks that are doing that vacation rental cleaning are in pretty brutal shape Um, now there's some opportunity there that air b&b is now requiring an enhanced level of cleaning And that you're supposed to have a cleaning certify a certified cleaner do the work and so I do think it's long term some opportunity over there But I'd be real careful jumping in to buying an air b&b customer list because The whole game's changing right now. Yeah, we do have a couple of questions over here. Derek So Leslie wants to know how do you and you know, how do you handle it when you are like a higher price cut company? And then you're buying the jobs from somebody who charges quite a bit less than you do How do you how do you manage that? Um, well the couple things you got to know about it. Um, first of all, are you more efficient? We've bought some companies that seem to charge less than us in the past But as we dug in they weren't very good at cleaning didn't train their people very well So while it took their people five hours to clean a house to take our people three and a half And their hourly rate didn't look as bad as it did first on paper. So that's the first thing I'd say is do a little bit of research Um, second thing is just be honest with them. The one that I was involved with this week Um, we're planning on taking them from $30 an hour to $40 an hour and told the person we're buying the company from Hey, we are going to over the next six months raise the rates by $10 an hour So don't be surprised when some of the customers go away Um, I we did feel the need to be honest with the person we're buying the customers from so they're not surprised with that later on And she completely understood and her big question was so if the revenue goes up Do I get 10 of that higher revenue or like? Yes, you do and she's like, okay Well, I get it. You know, I probably should have done a price increase all along So my first point is just do some research. Um, just because it takes them four hours to clean It might not take you four hours to clean Um, second thing is don't be afraid to do price increases. Um, you know, what while this stuff with ppp's going on I might be tempted to keep their employees their pay rates their customers Just so I can keep the staff on payroll and hit my equivalents, but soon as that was over. I'd be raising rates You know Doing research It's you know, it's important to look at the data and figure out what they're charging per labor hour But at the same time get a sample of the homes that they're cleaning on a recurring basis And you quote them yourself and you figure out what you would charge to clean those homes A lot of times the homes are price fine, but like garrick said, they just are slow So It might not be as bad as you think Right. I mean what for example one of the companies that I was working with recently They send their teams in with three separate caddies 12 different cleaners four mops. I'm like, what? You know what I'm like, this should be much simpler Um, there was so much opportunity for streamlining and efficiency in there So I think that we're going to be a lot more okay But that's the great thing about paying on a percentage of revenue If you're paying 10 of what the customer brings in for the next 12 months and you have to raise the price by a third Do you care if they quit? You know, that's a low point We have a another oh there is one more thing I wanted to say Another thing reason why I was able to buy these customers so inexpensively as well this client list is because she The lady that owned the company She and one other sometimes two other people were still cleaning on their own together And so that is not ideal going from an owner operator cleaner cleaning person cleaning to You know a cleaning company. That's a hard transition for customers to make and so I think of it as kind of like When you break up with somebody or somebody, you know, they there's a breakup that rebound person is not the best position You don't really want to be in that rebound position if you can help it It's kind of better to be like the second one out So that was a another thing to be thinking and we started getting the calls playing that I'm sorry American made you guys just aren't the same as The lady who used to clean my home We haven't but I know that we will and that's why we're only paying 50 bucks for each client that you know that and they have to They have to have at least one cleaning So because who knows how many you know, but I know that we are going to have that Yeah, it's always interesting when you buy client lists when I with my maid service We bought a little company called dove cleaning at one point and we had a ton of people calling and complaining saying that My people weren't cleaning the toilets and I'm like, I'm very confident my people clean the toilets We've been doing this a long time and as we dug into it We found out the dove had always trained their people that when they were done cleaning They were to leave the toilet seats up and my people were taught when they were done cleaning They were to put the toilet seats down And so when the customer came in and the toilet seats were all down They would call us and say we didn't clean the toilets. They could tell because the covers were down. We're like Okay, so something that's small when you're buying a company can cause issues Which is why it's a beautiful thing to buy only on a percentage of revenue because once again if they don't stick It doesn't matter Now it depends on what your goal is here If you want to try to keep as many of those customers long term What I recommend you do is you run it as close to the old model and maybe even keep the old name for A while six months to three months and only then tell people that it was even sold Hey, by the way so-and-so retired. I took over a couple months ago We've got some changes coming. Here's what it looks like because then they're like, well, wait a minute You've what do you mean? You've already cleaned my house a couple times. It wasn't a big difference When I sold my maid service To blue skies, that's actually what they did for the first three months They didn't even change the name tell the customers do anything and there was almost no customer loss rate When they bought another company they instantly changed it all to blue skies went in and changed the whole business model And they lost 50 the customers off the bat. So they kind of learned that let's Go softly at first now But this all depends on what your what your what's important to you um For those of you that haven't reopened yet. Hopefully most of you have reopening sucks. It's hard Um, you're rebuilding your schedules. Your customers are going to tell you they want to be cleaned And then the morning of they're going to change their mind it's A scheduling nightmare like nothing i've ever experienced in my life. Um So normally my concern would be let's run this other company in the way to maximize revenue Right now my personal concern is I need to make it as easy to run my company as possible because running my company is difficult And a pain in the butt right now So I probably would go with the switch it to my business model And if I lose lose half of the revenue oh well approach right now Just because my life is so difficult Now if I was in a normal world where My team was humming my schedule was pretty much set then I might do what I just recommended Which was keep the other company running the way it used to even though because it's harder on me It keeps the customers, but it's harder on me and right now. I'm not really interested in things that are harder on me We have some more questions here you guys Uh, let's see where to go sarah wants to know Is there a best or ideal size to business to buy do you guys have a Uh an opinion on that? I don't think there is I've seen all different sizes Probably the thing that makes the biggest difference is how close do they operate to you? Um, if their business model looks feels behaves a lot like yours, you're going to lose less customers The bigger that delta is between them and you the more problems you're going to have if they are a Green cleaning company that runs two person teams and you're going to switch to my model Which was solos that used the harshest chemical you could we're going to lose a whole bunch of customers Um, so that's the type of stuff that you've got to kind of be careful with so more so than type Or size I'd be concerned on business model The closer the business model is to you the more likely it is to stick Now if you're going to be buying it to run it as an independent company I wouldn't want to buy anything less than 300 thousand dollars in revenue Because we've talked before about the phrase what we call our valley of despair Which is that phase between about a hundred thousand and 350 thousand in revenue where it just sucks to run a business Yeah, somebody else do that If you're putting it into you're going to roll those accounts You're just buying your accounts and rolling it into your own business if the model fits in the What their their bill rate is is fitting what you currently do in the scope of work matches It could be a big business small business really doesn't matter special if you're you're buying it on some ref share over a period of time Be careful about buying a small business and standing up in a separate office And you're going to put a lot of extra cash in it getting it to the point where it's uh, so So we have another question here sarah wants to know Your guys thoughts on buying a cleaning business 50 50 with another local cleaning Company as a second business. So it would be like a second business for both of you It doesn't make me terribly excited life is complicated enough without partners Um, when you when you run a partnership it gets tricky Um It's true. So there's the guy who's How many partners do we have Derek? Yeah, we must have like 25 Huh No, I don't but you know, it's very difficult when you have partners. There's so much stuff that has to overlap There's so much that's involved in it. Um, it's difficult. So But the question would be why would you want to do that? Is there some synergy there do you know, like if you're really good at marketing and your partner The person who's going to be partners on the other 50 percent's really good Like an operations on the back end, you know, I mean there could be some scenarios where You know, the the the hull is worth more than the parts But you need to have a bigger strategic reason than just because it's convenient because There's big work. It's not It's not all funding games and in roses Well partnerships are just tricky at the end of the day. Um You know You know, one of the fun things about a business is you can literally wake up one day and say, you know What I'm going to do today I'm going to do this and you just do it and by the end of the day It's up and running and when you've got partners everything slower. Everything takes more time and to be clear I've got a lot of partners. I'm not necessarily complaining about my two partners on the call Um, but it's just more difficult It's a lot easier when you can just do it on your own and sometimes there's just stylistic differences Um, I Tom and I joke about this but every time we do a presentation I walk on the stage and completely wing it and he's about to have a heart attack every time I do it Because he's like, what are you presenting? I'm like, I don't know. I'm going to see what questions they ask We're going to go from there And if you can imagine trying to run a company with somebody who's approached everything as I'm just going to wing it Make it up as I go. Um, I can be a little frustrating to work with So, um, you just got That's that's what I mean, so And I mean there's so many different dimensions of that risk tolerance being personal objectives. I mean it's You need to do your homework and think long and hard. I mean it can be great and you know, there's You know give you a lot of examples where having a partner has created a lot more value than not having a partner But it doesn't always work out that way. So you you really need to do your homework I'm saying it's hard and especially right now. I'm not a big fan of telling people to make their lives more complicated Um for perspective, I think I read something that said right now our economic numbers are worse than the great depression So right now chances are your grandparents didn't live through an economy as bad as this your great grandparents did and with all that going on Do you really want to figure out a partnership right now? it's It just doesn't strike me as a great idea Yeah Now the good news I said the good news is we're probably going through the worst thing that will ever happen in your life. Hopefully So economically, so this should be the bottom Well, we haven't seen the bottom yet. We're on our way, but At the moment we're all drunk with all of this money that the government's throwing out there But there's a time coming where you know, it's going to get more complicated. Yep Let's see we got a couple more questions amber wants to know what everyone's using their idle and ppp for We'll get to that in just a little bit amber. I won't forget Um, I want to make sure that we get everybody's questions answered about buying businesses I'm selling uh dana. How did you get your sale? Um, no, so Funny story when this all happened. I reached out to all of my local competitors thinking. Hey, well except for one You know who you are anyway, I um It got together with or reached out to everybody because I wanted to you know, sort of coal us this All of the cleaning businesses and figure out how we could work together and um It didn't actually get off the ground and the way I wanted because everybody was stressed out and you know I'm not just sort of flying by the seat of their pants Uh, but this one woman she was one of the people I had reached out to uh, what I had a customer call And or a potential lead call and say she wanted to have an in-home estimate And we don't really do in-home estimates anymore. We haven't for quite a few years Somebody really presses us we will but you know once every six months, maybe So this lady said that her cleaning company was going out of business and she didn't really feel comfortable She wanted to have somebody come in So I went there and found out. Oh, it was this woman that you know, I had tried to contact So I just reached out to her and said hey Looks like you're selling your business. What the heck? Let's make a deal She said okay, monty Interesting so If you have anybody doing sales for you One of the things that you'd want them to be listening for is any clues that You know somebody's looking for a quote because they're all cleaning companies out of business and I mean That would be a really cool way to to find those acquisition leads Yeah, a lot come a lot come from just networking with others in the industry Um The one I got in Cincinnati dove cleaning with somebody I knew Building those relationships help because when it comes comes times to close A lot of times they want to sell to the person who helped them Particularly if they know they're selling uh at not the ideal situation so It gives a good opportunity for them to go. You know what at this point You know, I know I'm not going to be getting maximum dollar. I'd like to give the business to somebody I know when truck Yeah, and the woman that I bought these clients from she wasn't even going to do anything She wasn't reaching out to anybody. She was just closing up. She just wasn't going to clean anymore She was afraid. She didn't want to go into client homes She didn't want to take her employee into client homes. She just she's like, no i'm done. So 50 clients Done not doing that. So she was just gonna drop them. So ended up working out really well for me A lot of people get afraid and they just don't know how to move forward either Her thinking about how like having to restart was just more than she could even deal with The other thing which you'll want to look at we didn't get into everything when you're buying somebody's look at their customer list See how long they've had their customers. What type of relationship they have There's a lot of the newer companies that churn customers a lot that are almost more on demand Honestly, their customer list probably isn't worth as much You know a company like some of the ones i've been involved in recently Most of them had good multi-year long-term customers a strong relationship with the owner a good work process A strong brand, you know, those are more likely to stick Um, those are kind of the things you want to look at Are you going to be able to keep the employees keeping the employees is key? Um, honestly, I don't I'd almost be more interested in the employees than I would customers Because one of the things I've always said is when I've got a good cleaner Their schedule almost seems to magically fill up on their own because when they clean a house The customers are happy and get on the schedule. So I'd want to see how long those cleaners have been there You know, do they have any type of quality ratings? What type of ratings did they have? You know That's what's kind of unique about this Normally when you get that company that is about to that's willing to sell at fire sell prices Their cut employees are terrible. Um, it's normally the employees that have stressed the owner out so much That they want to throw in the towel and quit Right now the companies that I'm seeing by and large have good employees The manager is a good manager. The employees are good. Um, you know, it's a good situation It's just literally, you know, sometimes you just don't want to do it again. Uh, it's literally, you know Rebuilding a company sucks one of the things that we learned with castle keepers with opening multiple branches is Doesn't matter how many time you've done it when you open a new office. It sucks And this whole, you know This whole ppp thing is needing to restart and if you are already thinking maybe now Maybe it's within a year or two of me wanting to retire Would you really want to rebuild? So there are some really good companies with really good managers with really good employees That are up right now that you normally wouldn't be able to buy So that's why I've been interested is because you're not doing disasters You're doing good companies and good things and you know, there's some really interesting opportunities that otherwise wouldn't have been there You want to make sure that it's clearly understood that you're going to be interviewing the employees and you don't have to hire any of them if you don't want to And you want to find out if anybody has any workers comp, you know cases that are open or You know, any other issues that would make them less desirable and only hire the people that that are really going to be the best fit for you and What we've been primarily talking about is acquiring accounts So you want to make sure that in the deal you're you're you're covering the fact that you aren't buying the company You aren't even buying all the assets. You're just taking over the accounts and consideration for some rev share So if a customer comes back a month later and wants you to fix the Marvel countertop that the previous owner damaged. That's not on you. That's on them I mean those are just all kinds of crazy things will pop up that you can't anticipate until they pop up no You guys have any more questions about What uh opportunities this might bring up for you or how you can take advantage of these different opportunities Anybody on the call thinking? Yeah, I'm ready to get out. I'm I'm with them. I'm ready to sell my sell my clients I did have one more thing that I was thinking. Oh, you know, I wanted to comment about your workers comp thing Tom that was so surprising for me when we bought our first branch Like I never would have thought of that Because I know that you're buying I mean you have to rehire all of the employees But it just sort of seemed I just never would have thought of I would have been like, okay There are you on a payroll? Okay. Just you know hire them just take them on But that was a great idea and we actually found somebody that had a workers comp claim And we didn't end up hiring them and I was like, oh Well, one more thing that I wanted to point out is for those of you that are hiring right now I don't know if the situation is the same for you as it is for me But right now we've had more applicants in the last week than we've had in the last three months So there are a ton of people at least here looking for work All over the place we're getting we just got somebody applied actually starting work tomorrow that Just moved here lived here two months out of the military. So Then that's that's a job One of the guys some what was he doing? Oh, he was in construction And you know, we've opened like construction here, but there still isn't enough work. So he's starting day after tomorrow Um, I don't know. We have we have a quite a few new ones Hotels are like a 20 percent occupancy most restaurants are shut down. It would just seem like there's tons of We're getting a ton of servers a ton of servers Yeah, in Ohio we're seeing the gig economy because once again We still have not opened up unemployment for independent contractors in Ohio So if you were an uber driver or one of those guys You either work for instacart because that's about the only gig jobs still open Or you got to go get a job and they're they're lining up There are a lot of those driving jobs around here Um, you know, they deliver for casco wal-mart all of the food places here now are on Um, what was it called all the different ones that can pick what they're called Where you order the food can't even think Robin are you advertising for employees? No this facebook. Well facebook. Yeah, we're advertising on facebook free Not not a fancy ad Nothing great. Just uh, hey, do you need a job? We need some employees and people are like, yeah, I need a job I need a job. I need a job Um, uh, sara has an overflow of applications from indeed. So Yeah, you're sounds like you're running the same thing. I'm having sara and and the applicants are good That that's the thing that I'm really liking So they're really good applicants almost everybody that comes through we're like, yeah, well, how are you? Yeah, well, how are you? so I'm thinking june 30th is gonna hit. I'm gonna have more employees instead of less Derek That in ohio the independent contractors still aren't getting unemployment yet. Well in california They are but california is turning around and suing uber and lyft saying that they miss qualified Their employees as independent contractors and we told you that this was coming That you know once the dust settles on this thing It's going to be a whole lot harder for companies like cleaning companies to say that they have independent contractors When the state's had to pay out unemployment Benefits to them. So you're seeing the furf over here. This this just came out today, but you're going to see more and more of this so Moving forward, it's going to you're going to see fewer companies. I believe that are going to be doing independent contractors in this industry It's going to be scarier for sure So Laura and aja Go ahead. I said, I think you're going to see fewer people willing to be independent contractors as well Because at the end of the day They've discovered they have no safety net and what that means, you know A lot of people have only been in the economy since 2008 when everything was up up up and it doesn't matter I'll never be unemployed. I hustle, you know, they'd be like, I'll never be unemployed. I know how to hustle Well, guess what they're unemployed So we're kind of getting up the hour here I'm going to go ahead and just show you real quickly We still have a lot of people asking about The training programs that we're doing over at modern cleaning Still got a lot of people signing up and doing the uh, COVID-19 class if you haven't done that It's it's it's an awesome class and something that anybody that's cleaning homes You know residential Should should be doing right now in the COVID-19 world. It's like it takes about three hours to get through and There's a test at the end certification Of completion you get at the at the end of the class it It costs 39 dollars and there's two ways you can enroll you can enroll just by clicking on Over here, that's just a one-off if you just want to sign up one person and go right now or you can do bulk by from multiple people and get discounts if you click over here and The other class which we just launched today And you're going to see some talented people on there our first class came out today and and Liz and and mac rickets presented that first class on what professionalism is in the residential Cleaning industry there's seven classes in total and the other six are going to be rolling out over the course of may This class is designed for cleaning professionals the technicians the people that are actually cleaning homes every day So we wanted to make it accessible. So we're taking the classes. We're putting them in a learning management system. So every every candidate every every student can log in and take these classes when it's convenient for them There's a exam at the end of certificate of completion that they get at the end of that and It really is the difference between having a job and and looking at what you do as a profession and I don't know. I think it's one of the most awesome things we've ever done But you can go down here. It's got bulk pricing discount pricing and Your various options for getting it or just basically Clicking on that link right there and it takes you to to the store The other thing I want to show with you show to you is cleaning business today If you haven't subscribed over here to the right Just give us your email address and your name and you'll get on our newsletter that goes out What about every other week Derek? Yep And our secret stash of resources Is coronavirus downloads? I'll take this link. Oops. No, I won't I'll take this link and I'll paste it in here Laura and Ajay, you said you guys are not having people show up for interviews. I'm assuming that you're doing zoom interviews um We're having such good luck of having people show up for their interviews. Just um, maybe check times change time of day something like that Um, we are giving Lots of options. I don't know if that's helpful I don't know what the deal is there, but Maybe check time of day. Hey rosemary. Same as me, right great applicant pool. It's so awesome I'm just waiting for tom to pull it. You I got it tom. What do you want to pull up? Um, you were showing the uh resources. You said you were uh, modern, uh cleaning business today Yeah, you said I'm just gonna post this link. Oh, you already did it. I'm sorry. I see it. It just popped up on my screen All right, so there's where your resources are. I people ask me all the time or the where they are right there Uh, Katerina um What is the average sal salary for cleaning technicians? Oh, sorry, katerina. You're gonna have to do a little bit of Investigative work in your exact area in your market. That can be anywhere from 25 dollars to 75 dollars per made hour Huge range. You're gonna have to figure that one out Um, b. Is it too late to join the class? Nope. Absolutely not Tom just showed you where you did show modern cleaning in the first thing, right tom Go to modern and You know, we'll do it again. Okay, so Brie, what happened first? You said you were Wanted to join the class been cleaning by yourself for 30 years and then you got younger You're only been cleaning for 20 years now I see how you did that Uh, I look like you've made a mistake the first time. Yeah, so here you go And the one on the right The If you go to modern cleaning calm click right here And it'll take you to the professional house cleaning program And it tells you more about the class and click on this link and it'll take you over. Well Click on this link and it'll take you to the actual store where you can add stuff to your cart And you don't want 53 classes, but you know, if you just want one for yourself You just plug in one and Check out um, again the first class is live the other six will be uh posted over the course of may We'll be rolling out about, you know, I don't even say that they'll all all seven will be by the end of may and Liz's is helping matt ricketts. We've got we've got several people. Uh, joe wall. She's been a regular on this Jo's a big part of this my wife jan this is Kind of heading the effort up. She's the uh, the brain trust on on a lot of this science of cleaning and hygienic cleaning and Just basically a big part of putting together the original hct program So this has been a project that actually we've had in the works for for the last 10 years And we got about seven percent done And it was just like one of those things that we never really pushed it over the finish line But with uh, COVID-19 it became apparent that we really needed to pick it up and do the last 30 percent and get it out there So uh, we're getting a lot of positive response. This is exciting So tom i'm going to let you um answer missy rogers question She says for the classes at 99 dollars. Is that the discounted price or should it check out at half the price with the discount? the One if you're buying just one class it's 99 dollars We had a introductory discount program that lis we announced what for the last week or so maybe Yeah, it's been a full week and when did we and every time we announced it? We said it was going to expire When we went live, right? Yeah Yeah, we said and we said if we didn't make it expire when we went live It wouldn't be fair for all the people that were signing up before we went live. So Liz told me that I had to take it down today at noon. So so Our technical people did that um, but you can get And i'm making tom answer this question because I wanted him to Say live that he did take it down because I told him get it down at noon And i'm glad to hear you did tom. Good job and um If you buy like six or more you get a 15 discount If you buy like up to 50 if you got a larger company you still get a 50 discount. So It's really a function of of of how many classes you're buying What did you get anywhere from one to five? It's it's uh, the Published rate 99 dollars I'm glad you're enjoying the webinars messy. Uh, we're enjoying doing them as well Oh, good luck with your dream there be Seems I missed it. Yeah, you missed it by a few hours there. Sorry about that messy But if you can buy a couple more you can still get a pretty good discount. Just go to the bulk The bulk option think about you know a technician should probably generate What 1500 a week at least 1200 a week And what you're paying per hour and it's like an eight hour class with the test um 99 dollars for the difference between a job versus a profession and You know everything from the self-esteem to to gaining a deeper appreciation for how important your job is and all the different dimensions that that you're being That trust is being placed in in you as a cleaning professional and you know, we talk about surfaces we talk about chemicals we talk about uh, you know the the Science of cleaning we talk about uh, the the tools that we use there's so many different dimensions of this that we're not just talking about the What to do we're talking about the whys behind it and sharing that so You have a completely different perspective on your job after going for this class and Again, we're making this for the people that are cleaning homes every day making it accessible to them. I mean There are other I mean, I don't think there's an option out there that provides this much value for for for 99 dollars. That's really about as Good as we can So it looks like robin has already watched the first module Yay. Okay. He said we did a good job on that. Great. Thanks robin. I appreciate that Yeah Missy i'm with you missy. I do not like to miss a deal either Yeah, bane of my existence at times. So I totally understand Uh, okay. Anything else you have anything else you want to wrap up with derrick? I'm glad you're on the call today. I haven't seen you in a while Busy Yeah Okay, okay guys. Well, well, thank you and appreciate everybody being here with us this afternoon Uh Be back tomorrow same time five o'clock eastern One quick thing. So amber had asked what is everybody set spending their ppp and their idle monies on and I said I wouldn't forget and we would get to it and guess what? And here we are So if everybody could at least post one thing that you're spending your idle or your ppp monies on to help amber That would be awesome Thank you guys payroll payroll Yeah, but how are you doing that? Okay, thanks We'll see you tomorrow Yeah, bros mary. It wasn't live. So the recording is up. Yeah Thanks guys Bye y'all