Buyers and Builders
00:38:53 · Sam Allsopp
[00:38:53] S1: Huge. I mean, that's like... It's kind of our... That's a that's a big part of our business and not something that we've always done, but it... It's really hard to get someone to care as much as you want, that you care when you own the business. Like, it's just... You hear it all the time. It's kinda cliche to say. Right? But no one's gonna care as much as you care, but how do you get it pretty close? You align incentives. And as much as I like to think that people wouldn't work at Neal Roofing for free, I know that that's not true. Right? Money money is a big part of why they do what they do. Sure. Secondary, they like coming to the office, like the people they work with. They like being with a company that's growing this fast. Great. You know, culture is super, super important, but first and foremost, how do we align our goal with our leadership team, with our employees, and create a performance pay comp comp package, right, for for everyone? That's the goal. I mean, I would love... This is kind of a Tommy Mello thing, but I think he joked. He said it's cleaner. The the lady that cleans the office is on performance bay. So, you know, with with... Maybe not that extreme, but with that kind of mindset is how we've we've really gotten to where we are is just... I said it. Right? Here's our goal. We're gonna divide our way back into what needs to get done every single day to hit that goal. How many appointments do we just need to set? How many how much does it need to cost? How many opportunities? What's our close rate? Look at all that. How many permits need to get approved? How How much money do we need to collect in accounts receivable? Break every single thing out. Give it to the people that are in charge of it. Have a scorecard. Track it every single day, every single week, every single month. And then if they hit their goals and, you know, the company is hitting its goals, then reward them and incentivize them for for doing that.
00:40:30 · Mikk
[00:40:30] S0: What have been your your thoughts, you and Andrew and your team, when it comes to acquiring a competitor and not just relying on organic growth? Because this you have, I guess, you have mastered, so there is always some some next levels. But what what are your thoughts and what have been the the conversations when it comes to acquisitions?
00:40:53 · Sam Allsopp
[00:40:53] S1: So it is the shiny object. We have highly considered. We've actually gotten, you know, under LOI with a pretty sizable roofing company up north in a market that we weren't in. We we have been, you know, spoiler alert, it didn't go through, and we just greenfielded into that area. You know, it's something that we've looked at, we've gotten pretty close to doing it, but the one that we got, you know, kinda down to the one yard line with, we just didn't like a couple thing. We we put a really good team together. A lot of people I've met on X, right, just connected me with good attorneys, M and A, people that have done this before that could kind of advise us. We all just sort of agreed that there was... It just wasn't it wasn't gonna work out. And ICE continue to have conversations with roofing companies that are interested in partnering, interested in doing something. It's not something I put a huge emphasis on just because when I look at our core business and what we've done since inception and how fast we've been able to grow and drive enterprise value, it almost feels silly to not just keep doubling down on what we've been doing. Right? Like if we hit some sort of inflection point or some sort of cap on, like, where we thought we could go and m and a was kind of the next piece of the puzzle to keep growing, then I think we'd be putting a lot more emphasis on it. We're happy with our growth and we're actually... I mean, hey, perfect if acquisition, like, rolled up and knocked on our door, and it made sense. We would we would do it. But I'm super interested in greenfielding. It's something that we've done three, four, three? Yeah. Three now. The most recent being over in Tampa. So we cover the East Coast and cover the West Coast. I mean, the economics. Like, it just... You can put it on a spreadsheet and say, hey. If we can go do this, why would we acquire a company at this stage? Right? I'm not saying that m and a is not gonna eventually be part of the playbook, but right now, I'd much rather go open up offices from scratch and get them to a million dollar EBITDA run rate and, you know, a little bit over a year and do that over and over and over.
00:42:56 · Mikk, Sam Allsopp
[00:42:56] S0: But I would I would interrupt you here. What makes a roofing company attractive to acquire or what would make a company attractive to acquire? If if if something comes to table, is it just a valuation multiple or what would you look at? [00:43:09] S1: Yeah. I mean, obviously, like, the the... There's the arbitrage, you know, argument. Right? Can you tuck it in and integrate it with your company and create create enterprise value? Like, sure. But operationally, I guess it's more so... At least what I'm finding is it would have to either be to get into... To kind of speed up getting into a new market, and and it has to be like worth it. Like, are are we gonna go buy a $304,100,000 dollar EBITDA company? No. Because we can spin that up in a new market pretty fast. So we're still kind of creating like what our thesis is there and what and what that would look like, but I mean, the obvious answer is the arbitrage. In doing that, obviously, you have to integrate the business and you have to really... You go through that process so that you have a playbook there, so assuming that was done and that's an obvious benefit, yeah, it would be getting into a new market and speeding up the growth in that market with an established brand that has a chunky enough kind of even a number where it's where it's worth it and not something that we could just spin up ourselves.
00:43:09 · Sam Allsopp, Mikk
[00:43:09] S1: Yeah. I mean, obviously, like, the the... There's the arbitrage, you know, argument. Right? Can you tuck it in and integrate it with your company and create create enterprise value? Like, sure. But operationally, I guess it's more so... At least what I'm finding is it would have to either be to get into... To kind of speed up getting into a new market, and and it has to be like worth it. Like, are are we gonna go buy a $304,100,000 dollar EBITDA company? No. Because we can spin that up in a new market pretty fast. So we're still kind of creating like what our thesis is there and what and what that would look like, but I mean, the obvious answer is the arbitrage. In doing that, obviously, you have to integrate the business and you have to really... You go through that process so that you have a playbook there, so assuming that was done and that's an obvious benefit, yeah, it would be getting into a new market and speeding up the growth in that market with an established brand that has a chunky enough kind of even a number where it's where it's worth it and not something that we could just spin up ourselves. [00:44:11] S0: Have you ever considered selling a business or you're just enjoying the the the process and you really know that you can not maybe double it that fast, but even if it happens over the next three, four years, it's still a massive outcome because you're young. Yeah.
00:44:27 · Sam Allsopp, Mikk
[00:44:27] S1: No. I mean, we're... We are open to to partnering right with with the right partner. It's not something that we're, like, really aggressively going after. Everything is good right now. Like, we're making money. We're happy. We're having fun. We're growing. We're enjoying the ride. I am very competitive. You know, if I... Could I be convinced that, you know, this partner has ran a greenfield? You know, they can grow at this rate, they've done this before. They're very confident they can do this. They can put in an m and a playbook. They can beef up the balance sheet. Like, yeah. I mean, I... I'm open to it. I think the biggest thing for me, is that... And you touched on it. I'm young. I have no intention of stopping. Right? And that's something that I think a lot of people, you know, employees or, you know, there's kind of like a stereotype where there there... People have like this preconceived notion of like what selling is, and there's just so many different flavors of of it. And, you know, one extreme being, Sam, are you gonna just sell the company, roll off into the sunset, sell a 100%, and chill for a couple years and then go do the next thing? Like, no. Absolutely not. I I love what we've created here. We have a ton of momentum, and I wanna be around for that. So we're more so looking for someone who could come in potentially and and amplify everything that we're doing that sees the value in in what we've built and the people that that we have at the company. [00:45:49] S0: Okay. How old are you, Sam? [00:45:53] S1: 31.