23. Building and Empowering Small Teams with Rich Jordan

Brock Briggs  0:01  

Hello and welcome to the Scuttlebutt podcast. Today, you're hearing my conversation with Rich Jordan. Rich is a former infantry officer in the Marine Corps and now runs a holding company, Strongpoint, which is centered around real estate and small business ownership. We talked through how his early financial habits set him up to make a large commercial real estate purchase and his last few years of his military career. He goes on to talk about his acquisition of a plumbing company and a recent acquisition of an HVAC company. 

Rich has great insights into building a ground up team bolstered by one of the strongest units around Marine infantry specifically. We hear how he approaches new acquisitions and integrating teams on an increasingly larger scale. Please enjoy this conversation with Rich Jordan.

Brock Briggs 

Rich, I wanna start out by saying thank you for coming on the show. I spent several weeks and I think a little over a month trying to wrangle you into coming on for an interview. Usually, that is indicative of a good interview in the works, though. So that means you're busy working on stuff. Looking forward to our conversation and talking about your experience and what we can learn from that. You spent seven years as a Marine infantry officer. Was that on your bingo card of things that you wanted to do in life?

Rich Jordan  1:52  

Yeah, first, thanks. Thanks for your patience in wrangling me, Brock and I'm happy to be on here with you, man. Marine infantry officer was definitely on the bingo card. You know, I like a joke with my friends and my family that I just wanted to do cool shit with my friends, you know. And becoming a Marine infantry officer like definitely allowed me to do that and panned out that way, too.

Brock Briggs  2:23  

Yeah, I think that wanting to do interesting things is like probably a better indicator of the type of life people live than a lot of other things. I think that some of the more cool, fun people that have a lot of interesting experiences start out like that saying, “Oh, I just, you know, wanna experience some cool things.” So I think that that's the right mindset going in. I want to kind of talk about here, first off you buying an apartment building while you're in the Marines. What was the motivation for that? Were you really considering staying in the Marines long term? I know that you've said in prior interviews and don't wanna rehash a bunch, but your long distance with your wife, was long term Marines an option for you? And what was making you think about getting out?

Rich Jordan  3:19  

Yeah, it's funny, I came back from my second deployment. I've been gone for a year. And I've been at that point, stuff like geographically separated from my wife for two years. And actually, at that time, this is summer of 2018. I came back, like pretty jazzed up on the Marine Corps. And I had like every intention of staying in and becoming a company commander, and you know, my wife and I had talked about her trying to match. She's, at the time, she was a medical student. She's now a surgical resident. 

We're talking about her trying to match you know, in San Diego or something so that I could go to Pendleton and be like a company commander or fifth Marines or something like that. So the dream was still alive in 2018. It's just kind of like logistically it became clear logistically after coming back, and like, you know, seeing the distance, seeing how tough it is to mash into a residency in California. I was just like, hey, like, you know, like this is a pipe dream. It's not gonna happen. We need to figure out what we're gonna do. 

So at that time, I was an instructor in Quantico at the basic school, which is like where new lieutenants learn to be platoon provisional rifle platoon commanders. And I had to step back a little bit. When I entered the Marine Corps, I had this like, save every penny, invest, live below your means mindset because I'd had this horrible, horrible corporate job in for like six months before I joined the Marine Corps, before I went active duty.

Brock Briggs  5:05  

What was the job, if you don't mind me asking? You don't have to share names if you don't want but

Rich Jordan  5:10  

It was just like global logistics company just outside of New York City and think like, cubicle farm. Very like disengaged, very inept management, not enough work to do like, I was literally like that guy. The main character and office space where like, you know, hey, if I just like stare at my desk all day, like they'll think I'm working. And that's like, I'm not the type of person to be able to, like live a life like that. 

So I had a really tough time there. I left that job six months before I came into the Marine Corps, and I spent the rest of the time it's like a plumber's apprentice and a bouncer at a local pub. Just because I could not do that job anymore. So but anyway, I had like, at that time, I had stumbled across like, Mister Money Mustache and like some of these like personal finance guys, really, with the intention of like, hey, I wanna make sure I'm shored up enough that I never have to work a job I hate, you know, ever again. I never wanna find myself in a position like that. It's like traumatizing, right? 

And so I came into the Marine Corps and spent my entire Marine Corps career like sharing housing with my buddies, driving like a piece of crap car. You know, having a good time and going out, and all that but, but just you know, instead of buying the cocktails, buying the PBRs, you know.

Brock Briggs  6:37  

You weren't driving the Camaro, brand new Camaro at 30% interest.

Rich Jordan  6:44  

Right, right. Exactly, I avoided some of those pitfalls that a lot of guys make.

Brock Briggs  6:47  

It's almost a rite of passage. So I'm sure you probably had a couple of Marines under you at one point that showed up to work and a car they couldn't afford. 

Rich Jordan  6:58  

Big time. I had a really great Corporal who was a squad leader for me. He showed up in like a gorgeous F-350 lifted, beautiful truck, paid 65 grand for it. Oh man, I fell over. Yeah, so I was able to sidestep all that, you know, all those mistakes. And basically, I came back from that deployment in 18. Now an instructor in Quantico and had a bunch of money in my pocket, right? 

Combat Zone tax exclusions, hazardous duty pay, overseas housing allowance, all that stuff and kind of added up and I banked it all. So yeah, so but at the same time, I had all of my money in index funds at the time because that's basically how these personal finance guys will kind of tell you to go and the market had just been like up and down that whole year. And it was like you know, it's like affecting my mood you know. Like this sucks.

Brock Briggs  8:06  

Were you like regularly checking it and like kind of monitoring your balance on going and?

Rich Jordan  8:12  

Yeah, yeah just like terrible like behaviors, you know. Yeah, absolutely checking the app on my phone like, “Oh shit, I lost eight grand today or like, hell yeah, I made six grand today.” Just like it's just like I didn't enjoy it. So as I had like, accumulated some cash over time, like now those swings like legitimate now you know. So yeah, you know, I'm thinking about what I wanna do with my money particularly if now I'm like, come to this realization that I probably need to leave the Marine Corps in the next three years. 

So what I wanted to do and two things kind of dawned on me is if I wanna like rapidly increase my net worth, my assets, I need leverage to do it, right? And I need like control. I need to be like, I need my hands on the steering wheel, my hands on the levers and be able to control the stuff. So for me like as somebody who had you know, no business background, no business education. Leverage to me was just you know, real estate, right? Like a real estate mortgage. So I started looking into real estate and as I kind of fell down that rabbit hole, I realized that commercial real estate is valued significantly differently than what folks like you and I like might be used to. 

As far as you know, like how a house is valued, right? The house is gonna be valued based on comps on the street, other three bed, two bath, two door garage, 1200 square feet, whatever, right? Like other houses like that, that have sold recently. That's how it's gonna be valued. You don't necessarily have control over that, right? You could put a gold plated toilet in your bathroom, it's not gonna increase like the value of your house. So, but commercial real estate very much is like that where you can drive revenue up, gonna increase rents or fees, increase occupancy, faster turnover, and you drive down your expenses. 

And now you've increased your net and your property's value based on a multiple net, right? So, and a lot of times, these are gonna be anywhere between, you hear real estate guys talking cap rates. I prefer multiples, let's say a 5% cap rate would be like a 20x multiple on NOI. So like for every dollar, you drop the net, you get $20 in value on your property, right? So that gets like really, really juicy when you put 20% down on a property. And then you start increasing the NOI. And for every dollar you drive, you get $20 back. So yeah, it's like not far fetched to double the value of a commercial real estate property if you're doing things correctly, which is how it worked out for me on my first deal.

Brock Briggs  11:20  

Well, and you make it sound like really simple, you know. Just as simple as, you know, just charge more rent or, you know, just increase occupancy. In your experience, was it really that simple? And like is that maybe the case across the board? I think a lot of you know, there's probably half the people in the military are like really financially not savvy. 

And then there's like a portion of people that are and the people that are the ones that are like, “Oh, get a house hack, you know. You know, buy a house, every duty station that you go to,” and whatever, but not a lot of those folks are talking about like buying 18 unit apartment buildings and talking cap rates. I know people in real estate that can't even say what the cap rate equation is. So it sounds like you really had some thought about the numbers that were going into that.

Rich Jordan  12:15  

Yeah, well, to answer your first question, it definitely is not that easy. You know, I tried to make it really simple for people because, you know, I often have these conversations where I'm talking to folks who are not in real estate, and I'm explaining what I do. And the reality is like the numbers and the way to generate the wealth and equity is simple, right? 

But everything tied to okay, how do you increase rents? Well, there's like, you know, 12 different, like operational things that have to occur to be able to increase rent. How do you increase occupancy? How do you reduce terms, you know, like, the length of turning a unit and all that stuff is like now we're talking about comp ops, right? Marketing, ops, aesthetics, all that stuff. So, yeah, no, it's not that easy, right? But as like a general macro level, it is like, it's a simple endeavor. Your next question was like, how do I kind of get the knowledge, so actually it's all out there, right? Like I kinda decided, like I said, like, I decided I wanted to get into real estate to have that leverage sound like control. 

And when I decided to do that, I had no idea of any of the things I was just talking about, right? The things I just explained to you. When I got it all through podcasts, YouTube videos, those leading to like book recommendations, you know, working on Twitter conversations, like everything, just like you just kind of like, get into this rabbit hole and you spiral further further down, and you start to learn more and more and more. You come across a term or an idea that you don't understand, you look into that. That leads to something else, right? And that is like legitimately how I learned everything I know about real estate, and largely about small business too.

Brock Briggs  14:25  

Was there ever a point where you maybe were kind of like trapped in the rabbit hole of information? Because I think I certainly have like caught myself in a lot of different circumstances where I will just sit there and overanalyze and want to read and read and read and just think that like maybe one more podcast or something that I will like, kind of have this breakthrough and then that will be what I need. Did you ever struggle with anything like that?

Rich Jordan  14:54  

Yeah, I generally don't suffer from that affliction.

Brock Briggs  15:02  

It's terrible, man. It's a sickness.

Rich Jordan  15:05  

Yeah, yeah, seriously, for better or worse, it's worked out okay for me so far, but certainly there are downsides to it. Like, I'm very, like much action oriented. I can't just sit there and read about stuff and read and read. I have to, like, put it to action. So I was on that last deployment, I decided I wanted to get into real estate like maybe three or four months before I came home. So that was actually kind of nice. Like, it's like, “Alright, hey, I'm over in CENTCOM. I can't be buying real estate right now.” 

So basically, I was like, forced into like, hey, like, you know, in your free time, you're just gonna read, you're gonna listen, you're gonna watch. And then I came home, like, the first week of July. And I was under contract for my 18 unit apartment building, the last week of August. And that was like, with moving to Virginia, with starting at a new command, all that stuff. Yeah, about seven weeks later, I was under contract for that 18 unit apartment building. 

Brock Briggs  16:19  

Did you kind of have an idea already? Or were you maybe already looking at deals, and maybe you'd like to share some of the reasons why you thought this apartment building was a good buy. But I feel like and maybe it's just the market now versus the market a couple of years ago. But the way that you've described this apartment building, it's like, you wonder if those types of things are like laying around. And that's a really quick turnaround for that type.

Rich Jordan  16:52  

Yeah, and this one has some hair on it too, right? And that's why I had so much upside. Yeah, I've been looking at deals like anybody else, like just kind of, particularly like a new guy, browsing. LoopNet is like the, you know, the big commercial real estate, sort of equivalent of like BizBuySell, or like, you know, Zillow. And so I was just like cruising LoopNet, seeing what was out there, you know, requesting information on stuff, just kind of digging in deeper, getting my hands on like financials for a bunch of different buildings, just so I could like, immerse myself, get those repetitions, start to see like patterns or trends. 

And think about, you know, either make an offer on a property or at least like think about what my offer would be. And so, I came across this building. It's a gorgeous building. It's like built of like, granite block. This area of North Carolina has like a lot of granite quarries. And they literally like carted in a horse and buggy like, one foot by one foot by two foot granite blocks and built this building out of it. It's like a gorgeous building. And originally been a hospital, like, like the, it was like a World War l era hospital, like 1915. And it had a fire in the 50s. And then when they kind of they retrofitted to apartments in the late 50s. So it's a really cool building. 

Obviously, it's got some age on it, got some vintage to it. But it's really cool. It's like a nice piece of property, like rolling like, green grassy hills and stuff. I'm a proud owner of this building. But basically, like, you know, I was looking at, like I said, like, I'm a new guy, but I'm looking at the financials. And I'm seeing like, okay, they sold 18 units in this property. And, you know, I had heard and read that you generally don't want an onsite property manager unless you're like forced to by state regulation. You don't want an onsite property manager, if you don't have more than like 50 units, right? You just can't afford it. 

So this 18 unit was owned by like an out of state owner and had an onsite property manager, utilizing one of the units to live in and utilizing another unit at an office. And he was also receiving two units worth of rent as a stipend to pay him.

Brock Briggs

Wow!

Rich Jordan

Now it's like god damn! Like that's, you know, essentially like it's like, effectively, like, just that alone is effectively like the property is only 80% occupied, right? 

Brock Briggs

Yeah 

Rich Jordan

So like, okay, that's interesting. Don't think I need that guy. And, you know, I can recoup the rents on those two units. I can rent those out and I can get rid of him, you know, recoup his cost. 

And that was the major play, like, literally, I saw that. I kind of saw that hiding in the financials, and I was like, “Wow!” The building was priced at 500,000. And, you know, I kind of just did like the quick NOI calculation on that, based on the cap rate, at the time. I was like, making this change, we make this building worth $675,000. Like, that's more money than I've ever seen in my life, you know, holy shit, like, I gotta do this. So I didn't even model in, like rent growth or anything like that. After I took over the property, it became clear that rents were like 25% below market in some cases, 50% below market for some units. 

And that's what like, really drove the value once I started bringing rents to market. But really, like, what sold me on this building was that kind of property management setup, just realizing like, hey, I can drive like 10, I can drive $12,000 a year more to the net operating income of this building. And that's going to, you know, that's gonna net me equity value of like 140, 150, $160,000. Which, like, obviously, was very enticing to me and because I saw that, and maybe because I was naive or overly eager. You know, I was willing to pay, asking price for that building, when there were like four or five other, like professional like syndicator investors going after that building. 

And all of them were like, very disciplined, focused strictly on like, the historicals, the historical rents, the historical expenses. And they were only willing to pay, you know, like 375, 425. I didn't give a shit about any of that, you know. I saw what the building could be worth and was willing to pay for it. So that's obviously like a slippery slope, I wouldn't necessarily recommend that to anybody. But at the same time, there's like a balance. You gotta understand like, what things are worth to you versus what they've been worth historically. So that was why I went for that building. And why I wanted to do.

Brock Briggs  22:24  

Well, I'm talking about a margin of safety. I mean, you've got you maybe not even knowing anything about the market rents, or whatever. But like that is, that's an ace in the hole, like literally right off the top. And then everything else is just kind of all these extra things that can kind of like stack on top of each other. I think it's very easy for, like, maybe newer investors to talk about, like, “Oh, we'll just buy this and like, raise the rents or whatever.” Like, as you kind of alluded to before, this is like, it's not always that easy. 

But like having that as like maybe a potential option on some of the units, or if you're not at market, or maybe kind of being mismanaged. But you know, it's just an extra option for you to go down. You had again, I'm kind of alluding to several other podcasts that you've kind of spoken on just to not rehash a bunch, but you had mentioned that you had came up with 25% down. Is that all just from that deployment money and stockpiling that? And let's say I will kind of go back to if you were doing this, again, as a new person to the market, is that smart to save up that kind of money? 

Before jumping into buying an apartment building, commercial real estate, or maybe even a small, medium sized business, how much money should you be planning to bring to the table? And like, when it comes to like, hey, we've got LPs you can bring on. And I think that that's a big question that I have. And like I had mentioned before we started recording a big barrier, I think, for people looking to get into this space is the money.

Rich Jordan  24:08  

Yeah, and it's like, it's a real barrier, I would say. You know, I do see a lot of guys on Twitter or on forums or whatever. And they're like hustlers. But they're young, or they're just like kind of getting their shit together. So they don't have a lot of cash. And, you know, you see, like, how do I get into commercial real estate with $5,000? And  like, well, you don't. You don't. And that's just like, that's just the facts. So and you start to take, trying to figure like a good way to say this. Like you can start to take stabs when you're like, at that level, just starting out. But the reality is like it's gonna be really hard. 

And you're gonna put in a lot of effort for like not a lot of game. It's like, so my advice is just like, save up your money, right? And or, like I said, like, get LPs. I don't know, like, for me, I didn't feel as particularly on that first year, like, I definitely didn't feel super comfortable. Like bringing LPs in like, particularly if they weren't like people that I knew really well. It's something that I wrestle with still, you know, particularly like, with my plumbing, age back stuff. Like there are, you know, like, could we take that on a much larger deal if we brought in some savvy LPs with some money behind them? We could set the figure like what that you know, is that what I even want, you know. 

But yeah, so to answer your question, I mean, we, originally, I kind of got the loan commitment letter for that apartment building, and they wanted 20% down. And I felt comfortable with that. As we went through and had like, property inspections and appraisals, and whatnot, the bank sort of like rescinded back 25%. So now we're talking, you know, 125,000 down, right? And then another, you know, like 20,000 closing costs to like 150 grand all in, that I did not feel as comfortable about. So at that point, I was trying to figure out, like, where, you know, kind of where to get that extra 50. 

And I called up brother, my younger brother. So this time, I'm like, I'm 27 at that time, my brother was 23. And he was a Naval Academy grad. He was like a ensign in the Navy, right? Like brand new ensign in the Navy, maybe six months in the fleet. And, but he had that career starter loan. And he had been saving up his money and then at the Naval Academy, too. So he basically sent me every dollar he had. Yeah, and, yeah, so for that he got, you know, he got a third of the building, he owns 33% of it. And I handled it all, I mean, he's essentially an LP. That has worked out really well for him. 

But yeah, you know, I'm still thankful to him to this day for taking the flyer on me. But yeah, it worked out really well. And that's, yeah, basically, I mean, you need the cash, you either need the cash yourself, or you need it from people around you, or from LPs. But they said that you're willing to, like be patient, be somewhat patient, wait a couple of years. And put, like, some real cash to work instead of like trying to put 5000 to work. You know, the upside correlates, as well, you know, when you put more money to work on larger deals.

Brock Briggs  28:24  

I've never heard of this career starter loan. I just like pulled this up with like Navy Federal is this like, strictly? Can you give us like, maybe I don't know if you use this, but like maybe a 60-second pitch on it for anybody that like, maybe wants to take advantage of this because this looks like too good to be true.

Rich Jordan  28:41  

Yeah. So the really short summary on this is that this is why you see second lieutenants and NCOs showing up in Camaros and Corvettes, and brand new Jeep Wranglers. This is why, right? Because they can get I think it's like 25 or 30 grand at like, I think for like for me, it was like maybe like 2.9% interest or something. But for like a Naval Academy grad, it's like something crazy. 

It used to be like .75% interest. It's like, it's literally like free money. So I didn't take all of it. I used, I took 10 grand of it when I graduated college and I bought my car. I bought like a used car. My brother took all of it. Because you know I've been talking to him for four years at that point about, you know, prudent financial decision making and stuff. So he took it off and he put it in index funds. 

So that's why he had like 50 grand sitting around you know, a year after graduating the Naval Academy. But yeah, so it's literally like because the Navy federal and USA, they know that you have a steady job for at least the next 4 years, right? As like a newly minted officer, they know what your salary is gonna be. They know what your benefits are, you know. They know what your kind of like credit risk is. They're willing to give you like 25 grand.

Brock Briggs  30:14  

Yeah, I see here on the Navy Federal website, it’s 2.99% right now, which is still stupid low. I can't even imagine, under 1%. That's crazy. We'll have to keep that. That's probably one of those things that's not talked about very much. Because we don't need anything like furthering the divide between enlisted and officers, because that would definitely continue to drive that wedge.

Rich Jordan

Yep, yep.

Brock Briggs 

That's super funny. I wanna kind of start talking about your entrance into the small and medium sized business space. You've got an apartment building under your belt at this point. What and as you're starting to kind of approach getting out, you know, you're saying you came back from deployment, excited about the Marine Corps, which is, I think, kind of counterintuitive in itself. Not many people come back from deployment ready to re-up or stick around, but what was the thought around wanting to purchase a business?

Rich Jordan  31:16  

Yeah, yeah, I mean, so I had, you know, that apartment deal, while it was real estate, you know, still like a, it was an acquisition, right? And, you know, kind of, like I alluded to before all the, like, operational things that go into like really successfully operating a large piece of real estate. I'd kind of gotten this, like, small taste of small business. You know, I often refer to it as, like me, like dipping my toes and like, the shallow end of a small business like, that was an apartment building. 

So, I tried to figure out like, you know, for a little bit, I was like, you know, like maybe I should start you know, I've had this success because that apartment building for 500 grand it appraised 14 months later for 1.2 million, right? 

Brock Briggs

Wow!

Rich Jordan

So like, just an incredible outcome. And we cash out, refinance it and put that cash and bought another 32 unit apartment building. After I got out, a couple of months after I got out, we acquired that 32 unit. 

Brock Briggs  32:27  

Is the money that you took away from that is that kind of like, floating you from like getting out to getting into this next kind of phase?

Rich Jordan  32:38  

Sort of, you know, the cash flows from that apartment building in the two years that I was still in and owned, it kind of allowed me to aggressively bank my salary, you know what I mean? So I was basically like, my living expenses were covered by the apartment building. So again, I kind of built up my stack again, in those two years. And then the annoying, actually like extremely, extremely frustrating thing about that cash out refinance of that apartment building. This is like two or three months before I got out, was the lender put a covenant in the loan documents that said I had to use the proceeds. 

Basically, the proceeds had to sit in escrow. And I had to use them for future real estate purchases. I couldn't use them for any other purpose. Which was like, super frustrating for me, particularly at that time. I like, I'm about to get out of the Marine Corps. I'm trying to buy a business. I've got like, you know, several $100,000 sitting in escrow account that I can't touch. You know, I'm still pissed off about that, because I wouldn't be able to buy a much larger business, you know. 

But it ended up working out but yeah, so I mean, you know, thinking like, do I you know, we've had the success with the apartment building. Do I start like one of these, like, boutique, syndicate, investment firms, you know, that a lot of guys do? It seems like ones popping up, you know, every five minutes. That wasn't as interesting to me, because I don't think I'm really wired to be just a real estate investor. 

You know, I enjoy doing the deals. I enjoy, like, you know, the urgency behind getting the deal done in like the first 90 days of getting a building, you know, stabilized. But just like sitting around for like, 18 months, you know, waiting for the property to season so you can refinance and stuff like I don't have the temperament for that, right? So, you know, I really love like leading people. And that's like, where I've been successful, right? It's why I went to the Marine Corps. It’s why I joined the infantry. So, like some of the experiences I had in the Marine Corps were like, on both sides of the spectrum, like both showed me that I didn't wanna be part of a large organization, right? 

So I probably wouldn't do well, or I wouldn't enjoy like working for an Amazon or a Johnson and Johnson or Boeing or something. So that's out. And where I like the moments where I was just absolutely, like, euphoric in the Marine Corps, this is why I came back from that deployment. So high on the Marine Corps was like, when I was on a small team with a lot of autonomy, you know, figuring it out, just responsible for like, the morale and the training and like, the survivability, the lethality of my guys, right? 

So when I had that like full autonomy and responsibility, that's where I was like, this is awesome. This is what I wanna do. So to me, small business like fit that bill, you know. So and that was like, alright, you know, and I really did think about my first kind of my first thoughts around that were, alright, so I gotta find a small business to like, go work in and be like a, you know, try to be like a GM or something like that. And I just didn't see like a clear way. And I definitely could have done this, and it would just take some work.

But I didn't see a clear way for me to sell myself to a small business owner who's like, probably strapped for cash, you know, to like bring in some guy who's basically untested, you know. And you know, obviously, like I think I'm tested, but not in their realm, you know. I've never run their business before in their industry. So, to me, it seemed like, hey, if I wanna do this, the fastest way to get there is to buy a business and just do it myself, you know, not have to convince anybody.

Brock Briggs  37:09  

Well, I think you've touched on there, one of like, the big problems that transitioning military members faces were very equipped to do things and to lead people and in very uncertain situations, and that's kind of what small business really is. 

But I think that there's probably a large group of the small business owners that think that, you know, they've been in the industry or been in plumbing for 30 years and think that just you have to have that experience to. Like, you won't be able to cut it unless you have that when in the reality is I don't think that that's really the case. It's more responsiveness, being able to act quickly and make a decision quickly, that's well thought through with a strong tear for your people, which is really everything the military leadership summed up is. 

Rich Jordan  38:09  

Yeah, you're 100% spot on. I mean, it's a problem across small businesses everywhere. It's something that I like beat the drum on a lot. And this kind of speaks to like one, like small businesses generally suck at training people. They suck at boiling their business down to brass tacks, and being able to train somebody on that, which makes it extremely hard to recruit, right? Because they're looking for these unicorns that not only are stellar operators and great with people and great managers.

But also having to be stellar operators, and great people and great managers in their very specific niche industry, right? Like, that's what the small business owners are looking for. And that person doesn't fucking exist, you know, it doesn't exist. And if they did exist, they'd be too expensive, right? So yeah, you're absolutely correct. I mean, like, the reality is, like, you need someone with the, like, soft skills, right? And like the strength of character, right? And the energy, and you know, the outlet and the mindset to get the stuff done. 

And then you can learn the specifics of the trade, right? I get that question all the time. Like, what did you know about plumbing before you bought your plumbing business? I really didn't know shit about plumbing when I bought my plumbing business, you know. It really hasn't mattered, either, you know. So

Brock Briggs  39:37  

Do you think that that's a barrier? And I'm not sure how your acquisition process kind of went with and you kind of recently closed on another one, so maybe in between both of them. But I think that there are probably a lot of these 30 year veterans in the industry that, you know, it's their baby. Like they've spent their entire life cultivating this. 

And you're kind of just like a shithead kid that's just coming in to try and like take over and have these big aspirations. Do you think that that's a barrier for the seller that you need to convince them of that you are the right person? Because at the end of the day, sometimes if you're dealing with like, maybe a business that's not on the market, you're like, trying to tell them I'm the right person for this. Did you have to overcome that in either of your acquisitions?

Rich Jordan  40:31  

Definitely the first one. Yeah, there's gonna be like these gatekeepers in your path on this kind of stuff, right? Particularly when you're like a 28 year old, 29 year old, 30 year old, 31 year old, whatever. And so, like, off the top, I had a couple of gatekeepers, right? They're gonna be the broker and the seller, right? You gotta convince them that like, you're actually serious. You're credible. You've got the cash. You've got the skills. The blender, right? That's a big gatekeeper. You gotta convince them that you've got the skills, you know, you're not gonna like, go bankrupt. Those are like, those are real barriers. 

But you know, what I'll say too, is that like, particularly for some of these, like small businesses that they know better than anybody, how hairy their small businesses, you know, all the skeletons like in the closet, all their desks under the rug. And you being like a young energetic guy, like you just come in, and figure it out. Like, sometimes you just have to convince them that, like, you're crazy enough to do it. You know, you're crazy enough to do it, and you've got a big fat SBA loan, like coming their way of closing. Sometimes that's enough, you know. Because if someone was savvy or like, they probably wouldn't do it. You know, like, if I knew what I knew now, I wouldn't have bought guarantee. 

I would not buy guarantee today. Where it was when I took it over, right? Because it was like, it was a mess. You know? But, you know, crazy ass Rich Jordan circa 2020, you know, “Hey, fuck it, let's go.” So, a part of me thinks like that, that seller probably knew that. He's like, hey, like, I gotta take this guy on it while he's still hot on it. So yeah, now that dynamic has changed significantly from now, right? Like, now I can point back to, like, my track record in the plumbing and HVAC space. The story plays pretty well, right? 

You know, like, the guy I bought this recent HVAC company from, you know. He was like, super impressive. Like, hey, like, we bought, basically, like a crap plumbing business that only had three employees, and a bunch of like, hoopty trucks and grew it to like, you know, three extra in size, added 14 jobs, you know. Now, we're like 11 trucks. He's like, “Holy shit, that's awesome.” We did it in less than 18 months. So he's like, ‘Wow!” So that guy didn't need a whole lot of convincing, you know, after he heard the story. 

But that's a story you can only tell after you're in the game, right? So yeah, definitely, you got to, as you're transitioning, if you're trying to do stuff like this, or if you're trying to do anything, you have to get good at pitching your experience, pitching your military experience. And I'm somewhat of a contrarian on this. You go to like trs condition, right? In a seminar. You talk to people who, particularly people who have like, gone into a corporate or gone into their MBA or something, and they're giving you advice on how to transition. 

And everyone tells you stuff like, hey, on your resume, don't put Platoon Commander on your resume, put Operations Manager, you know, don't, you know, and stuff like that, right? Like basically like civilian eyes your resume. I chafe at that. I think that's bullshit. I think that like, yeah, sure. So maybe, like, you know, Sharon, and like, you know, Johnson and Johnson's HR department, like not gonna know what a Platoon Commander is, and maybe you should put Operations Manager on there. 

But otherwise, though, like, when you're talking about your experience, own your experience. Like people largely respect what you've done, when you talk about it with confidence. You know, like, the way it actually was, instead of like, you know, trying to like circle around what you did and talk about the budgets you were responsible for whatever you know, the amount of ammo that you're responsible for and like nobody gives a shit about that. 

Tell me about how you like commanded troops in uncertain in like austere and uncertain situations, and how you took like a ragtag crew of 18 year olds and turn them into like, war fighters, you know what I mean? Like, that's what people are like, “Damn, I should hire this guy.” Or, “Damn, I should give this guy this SBA loan,” you know, not like watering down your stuff. So like, that's what's worked for me. Because just like you like, speak your truth, you know, I mean, like, that's what you did. That's what you're passionate about. And just allow yourself to be passionate about it in front of these people, in front of these gatekeepers. It goes a long way in my experience.

Brock Briggs  45:52  

I like that. That is definitely contrarian to a lot of the transition stuff that we're fed, and I think that that confidence means a lot. I was recently going through the process. I was looking at a laundromat that's near me and very mismanaged one, started talking to the SBA lender, was kind of going down the path. And they could tell that I was animated. And I was really kind of going along the lines of like, oh, this is what I've done. And you know, saying all this stuff. 

And the SBA person was like, “Well, you know, that's all great, but what experience do you have as like in the laundry field?” And I was like, “Are you fucking kidding me?” Like, I literally manage like, 10 people in a combat zone overseas. I'm pretty sure that people coming in to like, wash their clothes is like not something like it's gonna be fine, basically. So I wonder where the line is, sometimes of like, when you really need to kind of like dumb it down for people and maybe change it to the, “Oh, I was an operations manager.” I think that there's some people that probably can only understand that.

Rich Jordan  47:10  

Yeah. I think you do have to, I mean, you do have to put some thought into like, how does my experience apply, right? So thinking back to what I was having this first conversation by SBA lender, like I very much talked about how I had led and managed, you know, like 54 blue collar, like skilled tradesmen, right? Like my skilled tradesmen were, you know, gunslingers. But 

Brock Briggs 

The rifle field

Rich Jordan 

Yeah, yeah. But literally, like, you know, like, guys, just like the guys that I ended up inheriting that plumbing company, you know. And obviously, that's true, like plumbers and HVAC techs are very much like Marines. 

But, yeah, like, I remember having that discussion with them, you know, like, “Hey, I've, you know, maybe have not run a plumbing shop before.” But I have, because that seems to be, at least the conversations I've had with different lenders. They seem to really care, like, have you even had management experience before? Like, maybe whatever studies they've done, have shown that people with management experience like have better outcomes with these SBA loans. That seems to be all they care about. So I was able to, you know, fairly easily sell that. While still like remaining, you know, true to my stuff, but, you know, kind of like putting a little flavor on it, hitting the keywords a little bit. But, yeah.

Brock Briggs  48:55  

I want to kind of dive into business operations as a whole and kind of incorporating this new acquisition and talk about some stuff there. Before we get into that, and just looking at your career trajectory. Is this a lifestyle business for you now, and something that you're looking to do like long term? And maybe is there a job that could lure you out of SMB ownership?

Rich Jordan  49:28  

A job that can blow me out of SMB ownership? That's a big ask, I'd say. Okay, so my first inclination is like, no, there is not a job out there that could wear me out, but I guess that's not true. So what would that look like? It would look like I'd have to be solving like a big, challenging problem, right? I would have to be the head of my own team with a lot of autonomy. I would have to have my compensation tied directly to my performance or like the results of my team's performance. And I'd have to have a flexible schedule. 

Basically, like you have to be results oriented, right? Like, don't give me shit about coming in at 8:05. Like, I'm here to do work, and often I'm gonna work way more than you might, you know, than like the 40 hour guy. I'm gonna do it on my own time. So basically, it has to look like the SMB ownership, right? 

Brock Briggs

Right

Rich Jordan 

Just a lot bigger. I guess, the only way I could get lure away is if it was basically as SMB ownership working for someone else. And it was just like on a much larger scale. Like, we're talking like, orders of magnitude larger. Maybe, you know, Elon Musk is like, hey, you know, come run some fucking company for me, which obviously would never happen. And I'm not even qualified to do but that's what Apple look like. So essentially, no. Essentially, there's nothing that would lure me away.

Brock Briggs  51:14  

I'll come at that with a follow up and say, and I'm gonna make an assumption here that the problem that you would be solving would probably need to be something that you care about immensely. Like something that you're maybe personally passionate about. Is there anything like that, that you and maybe not gonna dog you if plumbing is your lifelong dream. But I'm guessing that it might not be. Is there anything out there that you care a lot about that isn't in this field?

Rich Jordan  51:47  

Yeah, you're right. I mean, I don't necessarily have a passion for plumbing. I do legitimately, though, have a passion for like providing really great leadership and development opportunities for like blue collar Americans. You know what I mean? Whether that's like, Marine Corps, Lance Corporals, or plumbing apprentices, or like high school kids, like, looking for direction. That's like, what really gets me going. 

So we're talking like, you know, how, like, something I think a lot about is like, how do we provide, like best in class training pipelines, and like career paths for guys in the blue collar trades, so that they can go from being like a punk 17 year old kid who like has no idea what he's gonna do. He just knows he's not fit for college. And turn them into, like, someone who's providing for their family, you know, in an honorable trade, that you know, like providing services that other Americans need and that they can't do themselves. Like, that's a pretty good life, you know what I mean? So I guess I'm passionate about giving guys opportunities to like really build, like an awesome life for themselves.

Brock Briggs  53:10  

I like that. I think that's a good calling. As I kind of in the process of searching for a business as well, I can't help but feel like that there's an opportunity, maybe in the form of like a skill Bridge Program, or something that really focuses on this field. And why, I personally believe from talking to people, like you and Nate Lenahan. And like a few other guys from Twitter. 

I'm like, why is it like 50% of the military population doing this, like, this seems like such a great, we're given all of the skills and stuff that we need to, like live a very good life. You know, like you said, maybe not a passion, but it's something that there are other byproducts that you can really kind of, whether it's training or whatever, that you can kind of live out and make a great living at the same time. Want to dive into kind of the business operations and I'm gonna start out by kind of calling you out here a little bit. So on your website, you 

Rich Jordan  54:25  

That's an old website. It’s an old website. 

Brock Briggs  54:26  

Okay, well it's representing you. So I'm gonna hold you to it. Your name is on the masthead here.

Rich Jordan

That’s true.

Brock Briggs

So let's see. We seek to acquire high quality, low growth and profitable SMBs with sustainable characteristics. Something about you tripling your headcount in 18 months, and like what did you say doubling profitability or revenue? That doesn't really sound quite like low growth to me, so let's talk about that.

Rich Jordan  55:03  

Yeah. I'm glad you called me out on this. I've been meaning to the need to pay somebody to redo a whole site for that. So I'll eat crow on this one. But basically what that is, man is that, that is a byte that blurb is a byproduct of. If you go look at like, if you go find 12 searchers and go look at their like little one pager websites that they probably have. They all say the same shit, right? They all say the same shit, because we all read how to buy a small business, the HBR Guide to Buying a Small Business, right? We all read The Messy Marketplace, or we all read, you know, Buy Then Build, right?

Brock Briggs  55:49  

Don't call me out here because I'm reading Buy Then Build right now. I'm getting close to finish, so

Rich Jordan  55:54  

Yeah, so yeah, so maybe you recognize some of that wording there.

Brock Briggs  56:02  

Exactly, straight page out of chapter two, your one sentence statement on, I'm looking for this type of company, this industry.

Rich Jordan  56:10  

Yeah, so there's a lesson there, right? I mean, you know, obviously, like, I was able to close all my business, but at the same time, like, you're gonna look at that website you look at, like, where that, you know, that's, I guess that's where my mind was, you know, in 2020. It's like, not differentiated at all, you know. It's not differentiated from any other searchers out there. So, I think like now, like we've got our legs under us. 

And now like, I think it probably even says, like Strong Point management group on there. Where now we're Strong Point services are actually like an operating parent company that supports these different operating companies that we have. And we've got, you know, what I think is like a pretty good vision for that. And like that should all be on the website instead, you know. So we got a full rewrap, full rebrand coming. But yeah, like so anyway, yeah, I guess the call out take and I certainly do, like, you know. 

I love going into like, fairly stable companies that kind of have a turnaround element to them, you know, not like a not only a turnaround and like, the true sense, like where they're like facing bankruptcy or something. But like, where there's just like, a lot of upside in pulling on operational levers. And that can lead to like revenue growth very, very quickly at the small size, you know. So yeah, I mean, that's kind of like the flavor that I like. And that's what we've pursued.

Brock Briggs  57:59  

So is that the case with the plumbing business? Is that, did you kind of come in and say, oh, we're not doing all of these things. And it was just as simple as starting to do those, you know. Was it sales and marketing? Was it hiring, just a matter of hiring more people? What were those operational levers that you were pulling first and foremost at the plumbing business?

Rich Jordan  58:27  

Yeah, originally, it was like, and this is only I'll make a point. And we'll come back to this. But originally, it was all capacity expansion and efficiency, right? So like hiring guys, making them more efficient, making sure their trucks are stocked, like we just had, like a lot of wasted time. So literally, like, we took over September of 2020. 

And this company had historically, fairly, like stable, had done between 90 and $100,000 a month in revenue, right? Like, never really any big jumps above 100,000. In October of 2021, one month later, we did 160,000, right? Like that's not any additional marketing. That's not any like sales, no advertising, that is literally just increased capacity and increased efficiency. That's it.

Brock Briggs  59:34  

What does that look like for maybe people not in the home service space? And I'm certainly not. What is increasing capacity and efficiency of like a skilled trade? What does that mean? Not gonna let you get by on the jargon here.

Rich Jordan  59:51  

Yeah, sure. I mean, so increasing capacities were like more technicians, right? And then like efficiency is, you know, talking about making sure that they can do like they could do more jobs in a given period of time, right? So like, for instance, like my guys were, they have these like, trucks, the boxcars that were filled to the gills with shit, disorganized. And so they'd be on a job and they need a part. It's probably, it's actually probably in their truck, right? 

But then they would jump in their truck and they go drive 15 minutes to Home Depot, or to Ferguson plumbing supply, and then go pick it up, right? The warehouse that we had 1200 square foot warehouse was like, filled with junk vehicles. And like, literally, like the entire floor was covered with Home Depot buckets, filled with old iron pipe fittings, like rusty iron pipe fittings. Like you couldn't even get to the shop, there are shelves on the wall, you couldn't get to them. Because there's 100 buckets full of steel, there's still iron in your way. 

So like organizing that so we could actually get to the stuff we have. Organizing the trucks that the guys actually knew what they had on their truck and could get to the things on their truck, make sure they had the right tools for the job, right? Like, all of these things that like actually really was just me as like an infantry officer coming out of the Marine Corps with like a bunch of experience like running ranges where I got to put you know, 200 guys in the company through like a infantry squad attack range. I gotta do it in the most efficient way possible. So I can get it done before like, the sun goes down. Like all the stuff I had done in that capacity, or like get guys through armory draw, you know.

Before we had to get on the trucks is literally like the same exact thing, just like looking at the problem and saying like, okay, there's wasted time here. There's wasted time here. There's wasted time here. Let's fix that. And then that I mean, just that efficiency, expanded our capacity to do jobs with the same team that we had, you know. I don't think I hired my, we had three guys. I don't think I hired my fourth plumber until like halfway through October. So we did, we basically did that 160k like with the same three plumbers that we're doing 100 before.

Brock Briggs  1:02:31  

That's really incredible. And I think that that serves to highlight how big of an opportunity there is in the SMB space generally, like if you can, you know, increase your revenue 50% month over month, just by cleaning up the shop like that. Do you think that that's the state of a lot of the SMBs? A lot of people are talking about this. The next trillion dollar wealth transfer or whatever, like all these SMBs that are gonna be sold in the next 10 years or whatever, are a lot of them falling into categories like that, do you think?

Rich Jordan  1:03:05  

Definitely, particularly at that size, that small end of the size. Like obviously, like a 60% revenue increase in one month, like sounds wild. But at the same time, it's only 60 grand, right? Like, for me to increase my revenue 60% now, you know, would be like several millions of dollars, you know. So it'd be like a lot harder to do at the, like, slightly larger size. 

But definitely that small end, like we get in, you know, get into a small company like yeah, you can absolutely drive 50% revenue growth in six months. It's like completely feasible, you know. Because a lot of yeah, like a lot of these small businesses are held together with like bubble, like bubble gum and fucking paperclips, you know. So you start to actually like put some meat on that thing, put some gas in the tank and like you will see immediate results, very awesome.

Brock Briggs  1:04:06  

Was that 60 grand that you made in addition, is that all coming straight down to the bottom line? Because you know you said that you hired an additional person midway through October but a lot of those improvements that sounds like weren't even really like you said just kind of an efficiency thing but not buying the parts that you might need because you already have them. That should have fallen straight to the bottom line now.

Rich Jordan  1:04:34  

It did in that month. But those first like two three months, like I was working like 100, 120 hours a week like doing a lot. So while I did make like a shitload of money in that first few months, we had to like rapidly start hiring for positions so that like you know, I wouldn't like die of or have an aneurysm or something. So then like, you know, that started going towards overhead instead. So I'd say like, most of that fell to the bottom line in that second month. 

And then over the course of the next like, three, four or five months, it got eroded away, as we build out the team. Which obviously, like, it's that sounds like a sox vote. But it's all you know, it's great, because you basically like, you increase revenue. Yeah. Okay, you got a nice top and the bottom line for a little while, but then you basically built the back of this company, on that revenue, you know. And that's what we were able to do. So, you know, by the time, so we started with three guys plus me. By the time we were six months in, we probably had 12 people, you know. 

Brock Briggs  1:05:57  

Wow! Well, like you said that build out is so important, because with three people plus you, there's literally only so many hours in a week, you know. You're working 100 hours in a week, and that even with your efficiency gain, maybe 160 is the most that you can make in a month. But you've gotta add that kind of top of funnel with more workers. So what just this was a little bit of a rewind really quick, but just to kind of catch me up. What were like the baseline numbers of the plumbing business? What you buy it for? Did you have the seller's discretionary at the time?

Rich Jordan  1:06:37  

Yeah, sure. So it was a very lean operation. It was the seller out in the truck with the guys as a technician. His wife was in the office, and not even in the like, she was working from her kitchen table, you know what I mean? His son was doing like some, you know, not super useful stuff for them. And then they had two technicians outside of Tom, the owner. They hired that third technician about two or three weeks before I showed up. So with that, they were doing about 100,000 a month in revenue, 1.2 million a year. 

And that was like fairly steady over like the last three years is like between 1.1 and 1.2 over the last three years. Or 1,000,00 or 1.2 over the last two years. And then, they were doing about 370,000 in SDE so you know, basically like a 30% margin, net margin. And they're asking 820,000 for it. And that's what they got. 

Brock Briggs

Okay

Rich Jordan

So it's like a 2.2x multiple on SDE. Honestly, like a very high net margin. And that's the thing with these companies like running super lean, and well, it's like, where it's like where I was the month after takeover, right? I'm making a shitload of money, right? I'm making a ton of money. My net margins are through the roof. 

But I couldn't pass that out, that business off to anyone else, right? I was the only one that could do that. And I wasn't even doing it well, right. And I'm running myself ragged. So that's, I mean, that's basically what these people were doing. But they were doing it for 20 years, you know. 

Brock Briggs

Right

Rich Jordan

So yeah, that's when you start to come in and actually build a real business, you're not gonna hit that 30% margin on that plumbing company. You're not. And we don't right now. But we do a lot more revenue than them, you know. So yeah, that was like the baseline numbers.

Brock Briggs  1:08:55  

One of the things that has steered me away from home services business in my search is the people element, which you've talked about a lot, not just in the SMB space. But in terms of like your leadership and like, what you care about, what you think is important. You need trained, licensed people. And you're also working. You know, if you're in the northeast, that's an area with like, really heavy union activity. I don't know if that's something that you encounter. 

But I wanna talk a little bit about the importance of people in your business. What kinds of things are you doing to break down the training into something simple. You've talked about people not being able to boil down what people are doing for work into really simple things. What is your training pipeline look like? Just kind of people problems, in general.

Rich Jordan  1:09:51  

Yeah, sure. So I mean, your assessment is correct. Like people are the biggest problem in these businesses. And it really holds companies back, because a company that we just acquired is a good company. But it has absolutely been held back by its inability to recruit, its inability to retain. And that's largely because like, they were looking for those unicorns, like I talked about, right? They're looking for the fully licensed, fully trained 15 year experience guy who also has sales skills, you know. It's just that guy, like those guys actually do exist, but they're really hard to find. 

And they command a really high rate, and a higher rate than this company was willing to pay. That's like, really held them back, you know. There's so much that goes into this, you know. I mean, for one, like you have to, it's as simple as running your business, you know, in such a way that people actually wanna work there, you know. Like, being somebody that people want to work for, being a business that people wanna work for, like, deliberately building your culture, and protecting that culture. And so that's like the table stakes stuff, right? 

And then obviously, like you gotta be willing to pay a decent wage. You gotta be willing to charge the customer a decent rate to be able to command or to be able to support the wages that you pay your guys, right? And then as far as training, it's mostly, you know, we're still actually building out like a robust training program. You know, like a multi month, multi year kind of training pipeline that, you know, a young kid or a guy could come in. And you can basically, like, show him pointing to the poster on the wall and say, this is like, the route you're gonna take over the next 24 months. We're still building that out. 

But a lot of it is, it's also like, just like clarity around what's needed, you know. Like, you know, things like checklists and rituals and meeting cadences and guidance. So, you know, we do one on ones with, like, the service manager does one on ones with his technicians every single week, right? So that, like, there's a constant, like, focus on development and improvement, and feedback. We, you know, for instance, like, there was some frustration for a little while around like, “Ah, man! Like, you know, the guys, they always forget to do this.” 

So they always forget this at the shop, when they go out on a dig job. Or, you know, like, they're just not, they're not taking initiative. And there's like, alright, like, let's spell out exactly what we want that to look like, you know. Before they go out on a big job, like, what are they doing back in the shop? What list of shit are they reviewing, and making sure they have on their truck? Or they understand about the job. When they get to the job site, what are they doing to protect the homeowner’s property? Or to get things set up or to get, you know, ahead of the problem or talk to the customer through the job or whatever. When they're cleaning up, what are they doing? When they get back to the shop, what are they doing? 

So we like really built that out. And then lo and behold, like, we don't have those frustrations anymore, right? Because, like, hey, like, follow the process. And it's not, I think some guys are hesitant to do stuff like that. And I was too because you feel like you're like you're kneecapping the people that work for you, you know. Like you're taking out their autonomy or you're treating them like a robot. The reality is like, the more guidance that you give people, the more comfortable they feel actually like exercising their own autonomy within their box. 

You know, like, I like to use the analogy of, if you have like a, if you're like in an urban setting, and you have like a park, right? Like a small park, there's like, it's like, there's like streets going around the park, right? And cars zipping by, like, all the kids are gonna, like stay like glued to the jungle gym, and all the parents can be helicopter parenting the whole time because they don't want their kid to run into traffic, right? But if you put a fence up around that park, like now, like the parents are gonna relax. The kids are gonna be like, run around playing freeze tag having a great time. 

And then they know they can run all the way up to the fence. They can even like run into the fence and they're not gonna run into traffic, right? So that's like what we've you know, we've tried to build Guarantee and now at Stanford, the new company and, you know, seemingly working pretty well.

Brock Briggs  1:15:02  

You posted a couple funny Twitter threads that I think speak to your work in building culture within your company. You talked about like carrying a water heater under the house with one of your guys and then at your new place like painting a wall. So simply as just trying to do something that makes the lives better for people that are working for you. I like the idea of the processes and the checklist. 

I think that former military people are kind of, we gravitate towards that way, because we're so used to that. I worked in aviation, and there was like, we have a freakin’ manual for everything. And it's like, this is the exact step that you need to do this in. At what point do those checklists become just bureaucratic? Like, when is the right time to implement those? And when is it just adding more red tape?

Rich Jordan  1:16:09  

Yeah, I think a lot of times, so I know for me like, yeah, sure. Like, there are a lot of like processes and checklists in the military. I think it kind of pushes guys like us away from it actually, right? Like, initially, like, when I got when I left the Marine Corps, like, you know, I don't want to build that, right? And I never, I didn't necessarily have to build in the military. It was given to me, you know, in some cases. So yeah, it's like I had to like, ultimately do a reset, and say, like, hey, you know, that's stuff that I did in the Marine Corps with the processes. And say, hey, that's a good idea. Maybe I should go ahead and do that. 

But, you know, a lot of times this stuff is welcomed, because it's the people on the ground that are feeling the pain and frustration and friction of not having that stuff in place every single day, right? I only feel the frustration of it when the problems bubble up to me, right? But that technician who's going out four or five calls a day, like he feels the friction of whatever it is on that specific call five times a day, five days a week, right? 

I mean, like, it's just like, so when you give that guy, a system or a tool or process or checklists, that makes his life easier, like, a lot of times I found it's actually quite welcome. How do you keep it from being bureaucratic? I mean, you have to, to me, like a bureaucratic checklist is one that's like sitting in a binder collecting dust, like on the shelf in the corner, you know? And then when someone screws something up, like, then someone points to the binders is like, “Well, why don't you follow the checklist?” So I think people generally appreciate when these processes are put in place. 

And then they're actually like, lived every day. Like they're like ritualized, you know, the install crew, before they go on a big job. Like the checklist is hanging on the wall. They grab it off the wall. They review the checklist, and then they get in their trucks and go. Like, it's part of their daily bowel rhythm. So in that sense, like it has utility, and I think a lot of the guys after a few months, after a year, they don't see like how they could. Like, they can't even like fathom how the company could run without it, you know. 

So in that sense, it's just a tool. And it's not necessarily like some bureaucratic process. And it's like, totally like in there. Like, to me like bureaucracy is having to go mother may I, somebody else for permission to do something, right? Or to go ask to go to do something. So to the extent that I can provide guidance, clarity, checklist processes, so that people don't have to come to me, or they don't have to go to their manager. They just make the call. Like, because they know, they know how Rich would do it. 

They know, they know like, what decision he would make here because it's written right here. Or it's been given to me in guidance in a one on one or it's pressed into me and the training each week. So they like they have essentially like in a sense, it's like putting that fence up on playground, right? Now they can run around and have a good time and make the calls themselves without having to worry about getting hit by a car.

Brock Briggs  1:19:44  

I like that idea. It's pushing the authority down and empowering your people to kind of make the decisions that they don't have to kind of wonder about or come and bug you about and allows you to focus on bigger and better problems. 

And I think that the analogy of the binder, like sitting collecting dust, that resonated with me big time, because there are so many of those and maybe more military related, but so many just rules that are written somewhere and nobody wants to. It's kind of you go day by day until something bad happens. And then it's like, oh, well, you know, this official document says, “This is how we handle this.” And, you know, if, why weren't we abiding by that all the time, then?

Rich Jordan  1:20:31  

Yeah. Yeah, I come back to autonomy a lot, because that's something that's like, very important to me. It's just like, kind of my personality. But you know, I see, when it comes to, like, team engagement, and like having people that enjoy working for you, or enjoy working for your company, on your team. It's basically, my take is like, it's three things. It's like optimizing for their autonomy, their confidence and their impact. You know, and here's what I mean by that. So that let them like feeling like they have a level of autonomy in their box, right? 

Like, we're not talking like Lord of the Flies like running around, you know, shirtless on the jobsite, but we're talking like they've been given the box that they get the plan, and they get to plan in that box, right? And confidence being like, hey, like, do you have the training? Do you have the guidance? Do you have the expectations? Like, are you receiving feedback? Do you feel like you know how to do your job? Are you being employed in accordance, like with, like, the knowledge that you have, right? So you're like, stressed out that you don't know what you're doing. And then impact is like, do I have the ability to like, impact this team, right? Do I have the ability to like, push feedback up to my manager to Rich? And is it gonna be actioned on, you know? 

So that's something we take really seriously, particularly taking over a new company is like, how do we optimize for that level of impact? Felt like perceived level of impact on the employees. And that was like, one of the reasons we painted that wall this week, is, you know. I sat down with one of the, were the serious hours in the office on day one, you know, just to get to know her. And one of the first things that she mentioned was how I like her and the girl that she shares the office with, hate the color on that wall. Like they've always hated it. It was like a brown like a chocolate brown.

Brock Briggs  1:22:44  

That was a really hideous color. Like, I'll defender on that one. 

Rich Jordan  1:22:48  

Yeah. Yeah. So it was just like, okay, boom, like, scribble some notes. And, you know, ask her, like, hey, you know, while you swing by the hardware store and pick up some paint swatches, let's talk about it. So like, little things like that, I mean, that's obviously like an easy win. 

Just because it's easy win, doesn't mean it's not an impactful win, either, you know. Because not like, literally every day, she's gonna walk into that office, you're gonna see that nice blue color that she picked out. And it's indicative of the other things that are happening. It seems like a visual reminder of all the other things that are happening in the company that she also was able to provide impact on, you know.

Brock Briggs  1:23:31  

This kind of sorts of deed into integration with the new acquisition, which I wanna talk briefly about. What kinds of questions are you asking the employees of this new company or maybe even with the plumbing company as well originally? What kinds of questions are you asking that the CSR brings up the fact that she doesn't like the color of the paint on the wall? Like that is such a basic thing. 

And I think if I were in the shoes of her being interviewed by my new boss, I'm not gonna bring that up naturally. And so that tells me that you asked something that led to that being brought up, or maybe she's just really outspoken. I don’t know. But what types of questions are you looking to ask generally with this one specifically, but all over the place when integrating?

Rich Jordan  1:24:25  

Yeah, I mean, they're all kind of variations of the same question. So in the first few weeks, it's a lot of you know, what if anything, like would you change about your job or how this company operates? You know, like, what is your job look like if it was easy? Was this process look like if it was easy? I think we got the paint question, the paint answer out of her was, you know, yeah, it's just like, well, what would you change about this company if you could? 

And, you know, what's something that was something that like frustrates you day to day? So like, those are all questions that we're doing on ride along with the techs, you know. We're putting in a water heater with a technician and we're cleaning the AC condenser. And we're talking like, hey, like what, you know, what's a real pain in the ass for you? You know. And as such, just kind of like bubbles up. You know, a lot of times, you know, it depends on who you're talking to. Some guys are open. Some guys are a little more closed mouth. 

But when you like, when you spend time with somebody, you spent six hours in a truck with somebody doing these different jobs, and, you know, busting your back and a sweat on, like you're ultimately gonna get some good stuff out of them. And then when you particularly that guy, that was like, kind of hard to crack, when you then take his, you know, the thing that he finally offered up to you, and you action that, you know, nearly immediately whether it's like a tool purchase, or you know, like we got the guys respirators, right? Because they were breathing in all this like nasty dust and stuff. 

So when you like take quick action on stuff like that, like the easy wins, like now you've got that guy, right? Because it's often like those guys that are toughest to crack. Like they're tough to crack because they're like me. They're like, tribal, you know what I mean. They're like, you know, like born in another century, they'd be like a Scottish Klansmen or something, you know what I mean? And like, so they're kind of like tough to crack. So when you get that guy's buy him, like you've got him, you know. Like, he's on the team. So it's like, it's those guys who are like the toughest to get the information out of the toughest to win over. Like ultimately, when you can win them over. Like they're almost always gonna be your largest advocates.

Brock Briggs  1:27:08  

I think that those problems are amplified by the fact that or maybe just maybe more difficult by the fact that this acquisition comes actually in a different state than your original company. You've got Pennsylvania, right? And then this is New Hampshire?

Rich Jordan  1:27:28  

New Jersey and New Hampshire. I live in Pennsylvania. Yeah. 

Brock Briggs  1:27:31  

Okay so you're all over the place. What's the geographic spread here in terms of like distance? I wanna hear a little bit of your rationale about distance if this was like some big master plan on like, a northeast plumbing takeover? Or what do you think about going into this?

Rich Jordan  1:27:50  

Yeah. So originally, I was just like a victim of my own circumstances, right? So like my wife match to, you don't really have a say in where you go. As a med student, like matching to residency, you kind of get told where to go. So we matched to this large hospital in central Pennsylvania quite literally, like in the middle of nowhere. Not a whole lot of like, you know, pulling businesses for sale in Central PA. 

So I found that opportunity in New Jersey, and I'm from New Jersey. I went to college in New Jersey. My best friend from college and now my partner is from Jersey and lives right down the street from Guarantee. So that's how we kind of originally got started with, maybe that's a three and a half hour drive from me is the plumbing company in New Jersey. 

Now, my partner who lives down the street from Guarantee, he was an engineer. He stayed at his full time W2 for about 10 months post acquisition before we felt like we were like large enough and stable enough to have him take the leap and come over full time. So basically, I had to run that company, remote. You know, basically the first three months I spent on site. And then as I kind of built out the team and built out the processes and didn't have to be there 100 hours a week anymore, started dial it back and I was only there three days a week and then one day a week and then three days a month, you know. And now they're like, you know, I guess once a quarter. 

So, we, you know, we basically built out with that constraint. You know, we built everything out with that constraint. So like our call centers, fully remote. Our bookkeeping is remote, you know. Everything is built to be remote compatible on the management side. Like, honestly, just because of my like, situation. And then we realized, like, hey, like, we've got this like pretty badass, like remote capability now. 

So we could feasibly open up our aperture outside of New Jersey, you know. We don't need to buy if we're gonna roll up somebody or bolt somebody on or do a platform acquisition, like doesn't need to be in our backyard. We could do this, you know, really, we could do this anywhere, right? And the only like constraint is like basically my own tolerance for travel.

Brock Briggs  1:30:44  

Which is obviously very, very low.

Rich Jordan  1:30:51  

So the New Hampshire deal fell in our lap. I mean, TJ is my partner. TJ and I went to an event in Minneapolis, like a plumbing and HVAC event for business owners. Just like business planning and stuff, like this organization, were part of a training thing. And we had, we ended up like spending a couple days at the same table as this guy who was, you know, in his 60s, and had owned this HVAC company for 44 years. And, you know, we got to talk with him, and he was pretty impressed with our story and everything, and we start talking about acquisition. 

So that's how this fell on our lap, so it's like, oh, shit, like, this is New Hampshire. That's a six and a half hour drive from me from Pennsylvania. Lucky for me, you know, lucky, fortunate. In around Labor Day weekend, last year, so 2021, I decided that I really hated driving to New Jersey. The three and a half hour drive, I just like hated doing it. So I started working towards my pilot's license. And I purchased the plane in December. So like five months ago, four months ago. 

And today, I have the capability to fly to New Hampshire instead. So instead of six and a half hour drive, like an hour and 40 minute flight, from like door to door. There's an airstrip, like 10 minutes from my house. There's an airstrip, 10 minutes from HVAC company. I get to guarantee for me like 40 minutes. So that makes life a lot easier. 

So now instead of having to like devote a week, you know, because if you're gonna drive six and a half hours, you kind of wanna spend a few days somewhere, being away from my wife and in my house everything. Now I can like now I can, you know, fly in the morning, fly back in the evening. So I am driving in New Hampshire right now. I'm actually in New Hampshire, my Airbnb. Because Airbnb booked for like the next five weeks for transition. But yeah, post like transition stabilization, it'll be you know, flying up to New Hampshire. 

Brock Briggs 

Yeah

Rich Jordan

Tolerable

Brock Briggs  1:33:11  

Very cool. That sounds so exciting. Was the pilot's training and certification, was that fun? It's kind of been something that's on my mind recently for unrelated reasons. But it sounds like a lot of fun.

Rich Jordan  1:33:26  

Yeah, it's awesome. Honestly, it's really challenging. It's like very rewarding, very challenging, particularly when you start soloing and you're like flying this plane on your own and you're like a young junior pilot. You know, there are plenty of opportunities like scare the shit out of yourself, which I think is like healthy to be like a grown ass man and still having things that like scare the hell out of you. So I've really enjoyed the pilot training.

Brock Briggs  1:33:56  

Want to kind of close out with some larger maybe kind of tactical questions about the acquisition? When was, you said it fell into your lap. Was there or is there ever a right time for the next acquisition? And how did you know that you guys were ready to take that on?

Rich Jordan  1:34:20  

I think it comes down to like your own bandwidth, really, like I had. So TJ had come on full time in July. I had basically passed off, you know, call it like General Manager responsibilities to him. He was running the day to day and he's like, fully immersed in that and takes a lot of his attention. And we're working to alleviate that for him so that we can kind of pull him up to the strong point level soon. But for me, like to an extent like I felt like I was out of a job, you know? So that might sound really sweet to some people. 

And, you know, maybe it was for like a month. But you know, you're like a young ambitious guy, it's like, I gotta do something with my time, right? So it was like, “Hey, I've got the bandwidth, what's, let's go do this, again. Let's do it bigger.” So like the company, Stanford is three times the size that the Guarantee was when we bought Guarantee. So it's like a little more than double. It's a little more than a doubling of what we're doing right now. So, you know, totally worth the effort. And I've got the bandwidth. So like, let's go for it. Yeah, I think you have these, you know, hopefully, you have these kind of ebbs and flows, where you're like sprinting, and resting and sprinting and resting, so you can kind of like. 

It definitely would not have made sense for me last year, to do what I'm doing right now with this acquisition. And I tried to warn guys about that, too, because, you know, there's a lot of guys on Twitter, they're like, you know, very much like sharing their thought processes. And as they're going through their first acquisition, you know, they're one week post acquisition, one month, six weeks. And you know, the kick around the idea of buying a second company, like, right then. 

And it's like, don't do that. Like, seriously, do not do that, unless you're much larger. Like your first company was like a $10 million company has like a bunch of management, like a whole robust team, and you've got the bandwidth already. Sure, but if you're buying, like a $1 million company, and you're like, hooking in Javon every day, and you think you're gonna be able to go through like a deal process and transition another company, and, like, forget it. You're gonna get your teeth kicked in. It's just, it's like a really bad idea. 

So, for me, it was like, get to a point where we've like grown. We've built up a team. We have people like responsible for the different functional areas of the company. Now, I basically, you know, feel myself like my role is changing. I've got a lot more bandwidth. And where I can add value is in doubling the size of the company, you know.

Brock Briggs  1:37:22  

I got a really good question on Twitter from Tim Ludwig, have to give him a shout out and you have the cheat sheet beforehand. So you had time to prepare for this. But if somebody came in and bought your business today, as just wrote you the check and took over your whole operation, what's the first thing that they would do? 

And I like this question because I think it highlights rather than just asking, “Hey, what's your biggest weakness?” Or I usually like to ask, like, if you're bankrupt in five years, what happened? But I think that this really highlights what you maybe know you need to be working on.

Rich Jordan  1:38:06  

Yeah. All of the things that come to mind for this question I can, like proudly say we're actively working on right now, you know. So I think if someone's savvy came in and bought my businesses, you know, like home service, B to C businesses that I have, they would immediately you know, come to the conclusion that like a dedicated marketing effort by someone who owns that and is responsible for that, is probably immediately needed, right? 

And we didn't have that guarantee, I was basically like me, and my call center manager, you know, we didn't have other responsibilities, we'd be doing that. You know, if we would even do that. And we didn't necessarily need to work, right? But if you're trying to grow you certainly do need to work. So like essentially like a director of marketing on the team, and that's something we've actually just bought on last week. 

So maybe that's me cheating a little bit. That's me, like patting myself on the back. Processes around purchasing and inventory tracking, like you have this like decentralized model, where, you know, you essentially have, you know, like, I've got like 25 trucks. You know, those are like 25 little mini warehouses rolling around your different service areas, right? And they've got, you know, like our plumbing trucks have like $9,000 worth of material and tools on them are just material on them. 

So, your ability like track that is super important one just like for your financials, for your accrual accounting. And then also like we mentioned earlier, like for your efficiency and make sure you guys have what they need. We are working on that, like we are like so far from being done with that. But I think like someone who came in bought my company that was like real savvy, you know. Maybe had like a built out team of experts on their staff, they would probably immediately turn to like tackling my purchasing and inventory management, both in the warehouse and on the trucks and all that stuff.

Brock Briggs  1:40:37  

Is that an opportunity that you see widespread in this industry? 

Rich Jordan 

Yeah, definitely. I mean, most of these companies suck at it. 

Brock Briggs 

Is that just because there's no software that does it? Or is it because I don't know it's there, and just people don't wanna do it?

Rich Jordan 

There's plenty of software to do it. And we're looking at some of them as a solution right now. But even like, you know, even with the software solutions, you can't just like install it on your computer. And it's done, right? Like, you still need somebody to manage it. You need somebody to set it up. And like setting it up means going and counting all your shit. And a lot of business owners like aren't willing to do that. 

Brock Briggs  1:41:27  

Or they think there's a lot of fittings that need to be counted. And I'm sure it's really lined enough to do that. 

Rich Jordan  1:41:33  

Definitely. And it's changing everyday, right? It's changing every hour, because you guys are consuming stuff every hour. So that's like the excuse you'll get from his business owner, saying, well, we haven't done it. Throughout is like you just gotta rip the band aid off and do it, organize the warehouse, organize the trucks, that makes it a lot easier to count. The problem is a lot of these spaces are disorganized. 

And then you just do like a recurring count on them, right? And like true up throughout the software, you know, maybe you've got like a scan in, scan out thing going on, so that it's auto updating the quantities. But that's like we're removing, I think once we have that like playbook set, we'll be in a much better spot when it comes to that stuff, which will allow us to, you know, make sure we're only keeping the things on hand that we like, actually consume. 

And replenishing the stuff that we consume as well. Like right now I've got I like, in this warehouse I just took over, we like don't have enough of the stuff we need to do the jobs we do, we often do. And we have a shitload of stuff that we don't need. That literally is like just caked in dust because it hasn't moved in a year. You know, I'm really just walking around the warehouse looking for stuff with dust on it. I'm like, “Okay, I know, we don't need those fittings anymore. Because we haven't used them in two years, you know.”

Brock Briggs  1:42:56  

Yeah, like I said, I imagine in that line of work, there are so many little tiny pieces of everything and constantly changing. it's probably difficult to keep track of everything. All I need to follow up with you in six months and see where you're at on that. See if anybody didn't find it in line account. Do you have any heroes that you look up to? A mentor or some other people to check out or if you're reading anything inspiring or interesting?

Rich Jordan  1:43:35  

I'm reading a really good book right now. The culture index, not on the culture index, that's something else I use. Culture by Design is what I'm reading. Good book, I recommend it.

Brock Briggs

Who is that by?

Rich Jordan

I forget the guy's name. I got it on the table here behind me. But it's a good book about 

Brock Briggs

David Friedman? 

Rich Jordan

David Friedman, yeah. It's a book about basically like how to communicate and execute on a culture in like a deliberate and systematic way. Instead of you know, basically just like kind of being, you know, just like getting the culture the sanity or getting the, you know. Every company has a culture, whether it's like deliberately focuses on it or not, you know, this is like how to, like deliberately drive the culture that you desire. It's actually like quite actionable. It's not just like pie in the sky bullshit.

Brock Briggs  1:44:29  

I’ll check that out. I think you're the second person that's actually recommended that on this show, I think. So now I might really need to read it.

Rich Jordan  1:44:35  

Yeah, it's good. It's good.

Brock Briggs  1:44:39  

My last and final question for you, is for you to explain why the Navy is the best branch of all of them. And we'll get it recorded here. So there's evidence and proof and then we can take our separate paths.

Rich Jordan  1:44:56  

I'll tell you. I've actually got a lot of love for the Navy. My dad was a Naval officer. My brother is a Naval officer for the next couple months here. And I grew up going to like Navy football games and Navy wrestling matches and stuff. The Navy is like a big machine man. It's pretty amazing. I didn't do like a float. I didn't do MU, as a Marine. But when I did, I got out on an aircraft carrier in the Persian Gulf, the Teddy Roosevelt. 

And I was just like, awestruck by the sheer power that a branch of the Navy has, right? I say the same thing for like, the Air Force too, honestly. I went to the Combined Air Operations Center in Qatar. That things like the fucking Deathstar, you know, it's like a bunker in the middle of the desert. And it's like an anthill, just full of like, majors and captains and you know, E-8 and stuff and they're all just like, tracking and targeting targets all over CENTCOM, Iraq, Syria, Yemen, Afghanistan. It was just incredible to watch. 

And that was like, when I really I felt like, “Wow, like, this is American. This is American military power right here.” You know.

Brock Briggs

Yeah

Rich Jordan 

So I got love for those services, man, you know. But you know, I'm, of course, like a big fan of like the Nimble you know, rifle infantry platoon, you know, out in the desert, out in the woods on their own, like figuring it out and sustaining and sustaining themselves and meeting the mission and figuring it out. But yeah, I'll fully admit that there's like some big power behind those other branches. It's pretty cool to see.

Brock Briggs  1:47:03  

Yeah. Well, now you're continuing your love for being out in the trenches and surviving on your own and doing it out in the real world. I think that that's super cool. And I think that you set a great example for people in the military and wanting to kind of pursue this path. Rich, thank you so much for coming on. This has been great. I really enjoyed this.

Rich Jordan  1:47:26  

Yeah, Brock, thanks. This is a fun conversation, man. I’ll talk to you again.