Rob Parker

to add companies onto. So go do acquisitions inside of that platform. So maybe it's a roofing platform or an HVAC platform or garage door services platform. There's the initial core company with a management team and ERP system, processes, technology, all of those foundational things that you need.

And then you go out and do acquisitions of smaller companies, maybe a little less sophisticated, but that's okay because you don't need them to do that. You've already got that. But they've got great relationships. They're strong in their market. They've got a good name. You then add them onto your business as the platform, and you've created something that's larger and more valuable.

And then you go out and do acquisitions of smaller companies, maybe a little less sophisticated, but that's okay because you don't need them to do that. You've already got that. But they've got great relationships. They're strong in their market. They've got a good name. You then add them onto your business as the platform, and you've created something that's larger and more valuable.

right it used to be enough there was a time where you didn't need to affect a business that you acquired literally just adding those earnings onto the platform and making the platform that much bigger made the whole thing more valuable.

right it used to be enough there was a time where you didn't need to affect a business that you acquired literally just adding those earnings onto the platform and making the platform that much bigger made the whole thing more valuable.

And that arbitrage in valuation, so you paid one price for this add-on acquisition, but when you plug those same earnings into the platform, the whole thing is worth a much higher price, a much higher valuation. And that was enough. And there was a long time where that was simply enough. They didn't really need to be very integrated.

And that arbitrage in valuation, so you paid one price for this add-on acquisition, but when you plug those same earnings into the platform, the whole thing is worth a much higher price, a much higher valuation. And that was enough. And there was a long time where that was simply enough. They didn't really need to be very integrated.

They didn't necessarily have to report their financials on the same system in a timely manner. We've had clients not too long ago, clients who were bringing in financials every month from different divisions on totally different systems and aggregating everything in Excel. Literally that sort of basic system. Today, it's more difficult to get away with that.

They didn't necessarily have to report their financials on the same system in a timely manner. We've had clients not too long ago, clients who were bringing in financials every month from different divisions on totally different systems and aggregating everything in Excel. Literally that sort of basic system. Today, it's more difficult to get away with that.

As more and more capital has come into home services, the expectation of sophistication has gotten higher. So it would be tougher today to go do an acquisition and just not do anything to it, leave it alone, not at least improve the processes, improve the systems, get it integrated onto one ERP, one financial reporting system. It'd be difficult to do that today.

As more and more capital has come into home services, the expectation of sophistication has gotten higher. So it would be tougher today to go do an acquisition and just not do anything to it, leave it alone, not at least improve the processes, improve the systems, get it integrated onto one ERP, one financial reporting system. It'd be difficult to do that today.

and go sell the whole thing later for a premium valuation.

and go sell the whole thing later for a premium valuation.

Yeah, we did lose groups in the A1 process because they were concerned that there was some COVID pricing in there and the lift in average ticket was driven a lot by inflation and things that might come down eventually and normalize and revert back to the mean. And Eric's exactly right. And that's a good example of if you look at the headline numbers only, you can draw one conclusion.

Yeah, we did lose groups in the A1 process because they were concerned that there was some COVID pricing in there and the lift in average ticket was driven a lot by inflation and things that might come down eventually and normalize and revert back to the mean. And Eric's exactly right. And that's a good example of if you look at the headline numbers only, you can draw one conclusion.

And that can be dangerous. When you unpacked it further and really dug in and asked questions, you saw that really there was a mixed shift going on. your people were learning how to convert service leads, maintenance leads into system replacements because it was the right thing for the customer. And they learned how to do that.

And that can be dangerous. When you unpacked it further and really dug in and asked questions, you saw that really there was a mixed shift going on. your people were learning how to convert service leads, maintenance leads into system replacements because it was the right thing for the customer. And they learned how to do that.

And they were able to identify that and let the customer know that's in their best interest. And they were doing more and more of that. And that really what was going on behind the numbers. And for the groups that dug in, they saw that conversion happening at A1 and it made them appreciate the business even more.

And they were able to identify that and let the customer know that's in their best interest. And they were doing more and more of that. And that really what was going on behind the numbers. And for the groups that dug in, they saw that conversion happening at A1 and it made them appreciate the business even more.

yeah sure i mean there's each has its pros and cons i mean there's a lot of value to be had in all three but if we just take a look at each one starting with let's say new construction new construction what's good about it is those jobs can be big i mean if you have if you get the chance to let's say the contract to install new garage doors in a brand new neighborhood