How to 4x a Small Manufacturer

Today's is an update episode with a popular guest from 2024, Tato Corcoran. We reran Tato's first episode during Christmas week, which sparked interest in learning what has happened in the two years since that first interview. Tato bought a very small manufacturer of sinks for bathroom vanities, with just $400,000 in revenue and three employees. As Tato put it in her first interview, looking back on it, the seller didn't have a business. He had a job that paid him. If you haven't heard that first interview, check it out to hear what the first year and a half transitioning such a small business is really like. You'll find the link to that in the show notes. Well, things are better as of January 2026. Revenue in 2025 reached 1.6 million, which is a quadrupling of the baseline, and blew away Tato's own goals. Excitement about the business's future is a key theme in our conversation today. Of course, plenty of challenges remain. They're just different challenges now. Tato just had her first baby in October, and she invokes a parenting truism to describe business ownership. It doesn't get easier, the challenges just change. Welcome back to Tato Corcoran, owner of Brandt's Molded Marble. Come out flags when evaluating businesses to buy. Green flags are good size. Yellow flags mean be cautious here, tread carefully. Red flags mean stop. Well, today, Thursday, February 19th, Max Lums and his team at LCS return for due diligence office hours on the topic of red flags that kill or fundamentally reshape acquisition deals. Max and team will discuss revenue quality issues, unsupported EBITDA adjustments, expense timing issues, and other major due diligence discoveries that you should treat as critical risks should you find them in your own deal. LCS is a forensic accounting firm that does the quality of earnings for dozens of search acquisitions every year, so come learn about red flags from a team trained to find them. That is today, Thursday, February 19th, noon, Eastern. Register at the link right at the top of this episode, show notes, or on the acquiring mines homepage, acquiring mines.co. Welcome to acquiring mines, a podcast about buying businesses. My name is Will Smith. Acquiring an existing business is an awesome opportunity for many entrepreneurs, and on this podcast, I talk to the people who do it. You know Inzo Technologies, as one of the leading IT managed service providers serving the search community, led by Nick Acres, an acquiring mines guest who bought the 35-year-old business, the team at Inzo regularly works with searchers and their acquisitions, and one feature of acquired businesses that Inzo is seeing over and over is the need to implement cybersecurity promptly during the transition. So many acquired small businesses either have glaring vulnerabilities, lack security best practices, or both, that step one to de-risk the deal you just closed should be addressing these issues. Inzo is your full service IT MSP for post-close stability. They assess your target, surface the biggest risks in plain English, and give you a day one through 30 plan to cut exposure, prevent downtime, and even find cost takeouts like bloated telecom bills. Check out Inzo Technologies dot com, I-N-Z-O, or email Nick directly at nick@inzotechnologies dot com. Tato Corkrin, welcome back to acquiring mines. Thank you so much. I'm so so excited to move back. I really appreciate it. You were a guest in early 2024, Tato. It was a very popular episode. So much so that we actually re-ran it Christmas week a few weeks ago during our break. So a lot of people re-listen to it. A lot of new people listen to it. And there was interest in learning what has happened to Tato since in the in the about two years since. So that's what we're here to learn. Let's begin Tato by quickly catching people up on the business you bought. Tell us about it please. Yeah, awesome. So in a nutshell, we actually manufacture stone countertops and showers. So unlike a granite or a real marble that naturally occurs from the earth, you pull it out of the earth and cut it down. We actually make stone in a manufacturing facility. We do that mostly for new construction. Lots of remodel also. But it's a very like construction adjacent business if you will. But manufacturing. Correct. Yes. So the market is construction ebbs and flows with construction. But your day to day is owning and running a manufacturing business. Yeah. Great. And so you bought it in what June of 22 June of 22. Okay. Yep. And give us some numbers as you recall them around the business when you first bought it. Yes. So little tricky because the owner had owner operated classic Boomer situation, right? 30 plus years. And he had spent about the last decade winding it down. But then COVID hit. And as everybody knows, I mean, COVID did wonders for the construction industry. And so he was winding down to like three to 500 top line and then kind of spiked back up to maybe better part of like 700 again, not wanting to at all. And you know, for for no reasons other than COVID. So I would say I bought around like the 700,000 top line mark. But again, I think that that, you know, consider the context. Yeah. But that was about the size of the business. There were three employees. Yeah. Lots of weird book cooking, etc. So hard to say about about bottom line. But well, I recall our kind of the normalized annual revenue being more like 400. So that 700 was totally. It was it was it was totally a COVID spike. Exactly. Okay. So so let's call it a 400,000 revenue revenue business. So and then three employees. So this was a very, very small business. Very. You come from tech 10 years or something ish at sales forced. Bay area born and raised. You moved to Milwaukee where your sister has settled down and decided to buy a business. And but you don't know anything about manufacturing. Yes. So the the famous quote, which I won't repeat here. You don't know s about no, you don't know f about s. I think that's what it is. Yes. Correct. No, no, you don't know s about f. Anyway, as much or matters the order of the words there. So it was a very small business in manufacturing, which you didn't know. And it was extremely difficult. And so part of the popularity of your first appearance here was hearing the unvarnished recounting of all of that and just how hard it was. Many fetal position moments. Many fetal position moments daily crying in on the in the kitchen when you got home. These were these were all markers of your episode. Okay. But the good news was you closed 2023. So a year and a half into the business at right around a million just just at a million dollars in sales. So you felt like you'd kind of gotten your feet under you and even were starting to see actually not starting. I mean, that's real growth. Yeah. So pick us up from there. What's give us the bullet points of what the business looks like now two years later. Yeah, definitely. Like I had told you, I wanted to come prepared with some actual numbers because I'm sure that that will interest people. So to your point 2023 we were definitely still writing all the greatness of COVID. Especially new construction, right? It's a long cycle. You know, we get a purchase order prior to them even digging a hole into the ground. And so because of how long that cycle was and how low interest rates were for so long, we actually rode that for quite some time. So that was definitely part of the 2023 numbers, right? But I also was really focused on obviously being able to get our name out there and kind of see who else we could sell to. So we ended 2023 top line of 985. So not quite a million. But still, I was super proud of that. And what I was more proud of was we actually dropped $80,000 to the bottom line. So if viewers recall how badly I was bleeding for that sustained period of time initially, the fact that I was able to close that year having made not just a little money, but enough for me to feel like, okay, wow, I did that. And I can keep doing this was huge. And then with that money, I was a able to make my first in that like real investment into growth, right? There was actually a shop that closed down in St. Louis. So we purchased all the assets of that shop, drove them up to Milwaukee and we're able to physically reconfigure our shop, introduce that new equipment to drill down into, okay, how much can we actually produce under our roof? So that was kind of key point of 23 in addition to getting some who are now long-term employees, which was a huge, huge kind of turning point. 24 we closed top line at 1.16 million. So that was like, I think about 20% growth, which is like exactly what I was hoping for. So I was pretty excited about that. We netted to 25 that year. So again, you know, very excited about that, right? Feeling like, okay, I made, you know, a good chunk of money and I, I, I closed that year knowing, wow, look what we did. And I don't believe we've even scratched the surface of what we can actually achieve with good people and kind of this ability to produce more out of our facility. And then 2025 was like record-shattering in all kinds of ways. My goals, I actually haven't refreshed my goals. I always have them taped here to my laptop. My goal was 1.3 in sales for end of 25 top line. We actually did 1.6. So I'm super proud of that. Yeah. Congratulations. Thanks. Netted about 300 grand. So super excited about that. And 2025 was amazing in lots of ways outside of, you know, new miracle values. But regardless, those are kind of the, the quick hits in terms of numbers and growth. And, and so coming off the heels of 2025, I just, you crushed your own goal. You must be feeling good. What is your kind of the emotional state of Tato these days? Yeah. So let's see. Sincidentally, super, super proud of 25. It was, I knew that we could be and would be really busy for a lot of different reasons that we can definitely talk about had no idea we would be that busy. I also figured out how to have a baby in October. So that was. Wow. Amidst like all the chaos, like I've never endured such a chaotic couple of months. It's been wild. But so I would say emotions are obviously really positive. You know, I, I know this mom who had twins last year as well. And she said something that totally resonated with me. She was like, as you get through the months, like it doesn't get easier, the challenges just change. And so I would say that that's really similar. Like we are light years ahead of where we started. And that's amazing. But the challenge is just change, right? Like by no means do I want people walking away from listening to this podcast, thinking like, oh, she just turned it around and now she gets many patties every day. And you know, spends a month in Bermuda. That's so great. Not at all, right? I'm very optimistic, excited to have things I want to, you know, really drill into and get, get better with, but also super proud of, you know, where we've come. Well, congratulations on the baby as well. And wow, having doing doing two of those things at once, where I think we will also talk about that in the middle. Because one of one of the themes of the episode, the first interview was being a woman in manufacturing. So yeah, yeah, sure. The challenges never cease. They come. They evolve. You, you know, you get through some and then you just have new and different challenges tomorrow. But I still do think that you can characterize kind of like, you know, feeling good or feeling bad. Yeah. And you were feeling terrible at for a long spell of your transition, right? Yeah. Are you, I mean, with what frequency are you crying in the kitchen? Yes. Well, it depends on if you ask me or my husband. I would tell you somewhat, infrequently, I'm sure you would tell you more. No, I think there are definitely some key themes that I don't believe ever dissipate as a small business owner. For example, staffing is just like perpetually challenged, right? If I had to choose one thing that's really never become less challenging, it would be that at this current moment, I really need to more super solid people. Now on the flip side, I need to super solid people because our first day back of the year, because we take Christmas years off was January 5th by January 6th. I had outsold our capacity. So like, that's amazing, right? I'm really excited about that. It doesn't change the fact that I need to really solid net new heads. So like, that's stressful. But I need them because we're selling so well. So that's what I mean by like the challenges change, right? Like that's that's an exciting reason why I mean new people versus, you know, when everybody heard me last, I just like literally didn't have people at all. Yeah. So that's cool. So that's that's a key thing that that persists. But what I'm I would honestly, if you're trying to force a primary adjective out of me, it would be I'm really excited and proud, but really excited. I am so excited about what it last year and I even still even despite the chaos, I was like, okay, I know that we can do more and better with the people that we have in the space that we have, even though we did more and better last year from the year before, right? And so that that totally changes, you know, kind of like the funness of everything. And even on bad terrible days, I reflect and I think, wow, I went from something that is worth nothing, right? Cause I acquired it for nothing to something that is definitely worth something. And that is the, that's the whole gig, right? Yeah. And one other kind of part of your background is that you were a, you are a real estate person. So you're actually your first entrepreneurial love is building a real estate portfolio. Correct. And one of the things you liked about this deal, which we didn't mention is that it, it real estate came with it. And so you saw a huge hedge in this tiny fragile business that even if the business totally collapsed under your ownership, you had this, this real estate that you thought could be income generating. Yeah. Um, when we, when we caught up offline last week, you said that real estate remains your first love that's still, so it's not like SMB ownership has superseded real estate as your kind of what you're, you're, you're, you're clearest path to wealth, right? Right. To wealth and financial independence. So how do you think about those two now? Yeah. So a couple of things at play. First and foremost, I actually met my now husband who was my boyfriend in the previous podcast. So it's always funny listening to that. I met my now husband, tried to hustle an off market real estate deal to him. And we ended up out on a date, rest of history. So we both came together like I had my own portfolio. He had his own portfolio. We've met, we merged and now we've grown considerably since then. So in part, that's kind of like the uniqueness of the relationship that I'm in. It's hers love my love. And it's the thing that we're both really good at. And he's a builder by trade. And you know, I run a manufacturing business of builders. So everything that we're involved in is very symbiotic and very much lends to this hypergrowth of a real estate portfolio. So I would say that's maybe a little bit unique kind of to me. I also think that at least for me, and it kind of goes back to being a woman of manufacturing, right? I don't know if I can see myself owning and running this business forever for several different reasons. But what I know is forever is the purchase of buildings that will continue to live on. I think the time I believe inevitably the time will come when I will have multiple children need to be a little bit more focused on raising them as they get older. And so this is kind of that like alternative path of that makes sense. Okay. And so those are the reasons why you could see stepping out or selling this business. No doubt the overwhelming like larger reason is just that, you know, that is his skill set that's his business and the thing, you know, that we kind of mutually do together. But yes, I could see that potentially being reason why I would sell it in the future. That and, you know, I'm a business person, right? If somebody made me an offer that made sense, you know, I'm obviously going to seriously consider it. That's kind of the whole point of growing something that's worth something. Although the real estate types generally have a long term whole perspective. They're accumulating in portfolio that they that they kind of intend to hold. Are we listening? We hold. Yes, definitely. But and there's a philosophy there around business ownership as well that you don't that you don't sell. I guess what I'm trying to tease out is that there's something about the quality of your life or the way you spend your time. Something that you dislike, frankly, about being a business owner too that is steering you to to envisioning a life beyond owning this business. Definitely. I think in part, possibly it's a personality thing, right? Like I'm a really hands-on leader. I believe in being there for my people. And so it's a hands-on business for me. Could I, you know, navigate away for it to be a little less hands-on possibly? Yep. And so maybe that's something that's in my future too. I'm not sure. But I also, you know, we've thrown around the thought of you know, if an offer made sense, could we take that and go by a 30 unit apartment building? That can cash flow potentially just as much as the business. I don't know, right? The landscape is always changing. So, you know, I think that a lot of small, but I have come to find, I don't know if others would disagree with me, that a lot of small business owners very actively do not own other real estate because they feel like landlording is like a whole other job. Which is an interesting point of view to me, but nevertheless. And so, I don't know if maybe, I'm just kind of the opposite, right? You know, I'm using this business for cash right now, and we're doing a good job of doing that. And so in the future, could I cash it out to go buy a couple really big buildings? Maybe build a couple really big buildings, perhaps? Maybe. Okay. Well, and so I think one thing that I heard there was that as your style of leadership and ownership is kind of means that this is pretty all-consuming for you. So, it definitely can be on a lot of days, for sure. And so maybe there's a future where there's a general manager who runs it for you, maybe, maybe. But it feels more likely that, you know, you're kind of all or nothing in this project, and if you're going to divert your attention away from this, it's kind of going to be all the way away from it sort of thing. Okay. What do the following acquiring mine's guests all have in common? Doug Johns, Morley Decy, Tim Erickson, Sharag Shah, Shane Ursem. They all went through the acquisition lab, the accelerator and community for people serious about buying a business. But they represent just a sliver of the lab's success stories. The number of deals across the lab's cohorts now stands at over 120, with over $300 million in aggregate transaction value. The acquisition lab was founded by WalkerDibble, author of By Then Build, the book that introduced so many of you to the very idea of buying a business. The lab offers a month-long intensive, almost daily Q&A sessions with advisors, live deal reviews with Walker, deal team introductions, and an active community of serious searchers. Check out acquisitionlab.com, link in the notes, or email the lab's co-founder, Chelsea Wood, Chelsea at By Then Build.com. Okay. Well, let's talk more about your leadership style, Tato. For background, so for more background people who didn't hear the episode, you just mentioned the staffing. That was this real unlock you discovered you were having a very hard time getting people to show up, people were ghosting you. You just couldn't get anybody interested, and you have this insight, one late one night of reaching out to the Latino community, and hiring directly for us. So you went to Facebook groups, and started putting ads in there, was a total unlock, and you got all of this inbound. And when we left you, pretty much your whole team were Spanish speakers, right? Still are. Still are. Okay. So that remains, I guess. Say more about your kind of evolution as a leader, because that has been one of your challenges, actually. Definitely. Yes. So the day that I, well, the night, I guess that I posted that job at, at the viewers will remember, the next day at a gentleman at my door who wanted to work. I got him on payroll. He started the following Monday. And truly, since that point, the rest has been history. We now have four gentlemen who have been with me pretty much since that time. So the term long term employee is all being relative, right? They've been with me two to three years, because that's really as long as I've been around. But that has been probably the single best, most fun aspect of what I do every day. The fact that these four gentlemen, and they all came in different ways at different times, but have found such positivity in a job that otherwise sucks so bad for so many reasons. And have really stuck by me and genuinely enjoying showing up to work every day has been great. If you recall, I had no leadership experience whatsoever, had never managed anybody in the corporate world. What was your job prior to this? I wasn't assistant to a couple of folks who reported them to mark many off. So an executive assistant to very high level people at Salesforce to the top level executives just below the CEO? Yeah, so I mean, that demands certain leadership qualities, for sure, right? In order to get and keep that job. But I had no skills around, you know, if an employee shows up, complaints about something says, well, that's not fair. You know, how do you handle that situation? Especially if they're right, you know, like that's not fair. Just little daily interactions like that. I was just totally ill equipped, introduce also the aspect of general labor, right? You need absolutely no skill whatsoever to work at our company. You don't even need to speak English. So meeting people on that level was such a learning curve to say the very least. But what give us more, Tatto? What's sorry? What was hard? What give us the feel for the nature of these interactions and why it was hard? So it's funny. I've like come so far now. I have to take myself back to that time. The things that are important to general unskilled laborers. Well, let me back up further. Every employee who works for me with the exception of my one white employee who I see kind of as a business partner, no, a fewer call from the past from the past episode. Every person who works for me walked here, like they actually walked on their feet. Because they don't have a car. They walked, they walked to America. They walked through South America to America. So when you saw on Fox, like throngs and throngs of thousands of people walking from places like Columbia, that's what my employees did. So they show up at this job with this, you know, life perspective that you will never, ever be able to understand. And so that's already something that that puts such a moat right between me and them in addition to a language barrier. They have no skills, no education. I actually just lost a kid who I loved. So I'm really bummed he left. He had like a second grade education, like he was borderline illiterate. They're all living paycheck to paycheck, right? Zero money savings. And any money they do make, they figure out how little they can live on so that the rescues set home. And so these people can only see what's in front of them, right? They're literally just making it day by day paycheck by paycheck. And it's really easy to view workplace challenges or anything about the workplace with the sort of privileged American corporate point of view that just innately I have and the rest of us would have. For example, you know, I got a lot of advice. We'll have weekly one-on-ones with people. Okay, yes. I think what you mean is sit down with each of my employees occasionally, get to know them personally and have them understand me as a person and vice versa, right? You can't be like, oh, you know, hey, Zeus, it's your one-on-one today. You'd be like, what the fuck are you talking about? You know what I mean? So you just have to kind of, and I feel like maybe I'm sounding like I'm marginalizing them or diminishing them or making them sound stupid, not at all. It's just we couldn't come from more different universes, right? Yep. Yep. So it's almost like you have to boil everything down and sort of like start from the beginning like, okay, this employee just freaked out about something. I don't think it's important at all. Oh, you mean example. We have overcome this now, but we had a ton of discrepancy about if somebody went and installed countertops and it took 50, they ended up getting 15 minutes of overtime and the person who was not out installing, right? They were just at the shop, manufacturing, left on time, right? They would literally compare their paychecks and because this employee made $7 more, right? For the 15 minutes of overtime. There was like, they were in my office the next day. Like, this is completely unfair. We need to figure out how we're, you know, how like I can go install next time. So I got over time and I'm like, it's $7. Like, here, I'll give you the $7. You know, but that's really important to them, right? And so little challenges like that. I'm like, okay, this kid is telling me it's not fair. Technically, he's right. You know, it's not fair. I don't know what to say. Like, I actually have no idea what to say, you know? Yeah. That sounds like such a small thing, but it can be, it can be really hard. You're constantly wanting to make sure that things are fair that employees don't feel favoritism, etc. Yeah. You also sometimes have to meet people where they're at. For example, I have a kid who's literally never even been a minute late since the day he started working for me three years ago. If anything is five to ten minutes early, not too long ago, he got pissed off about something. I don't know what he decided to leave in the middle of the shift. Okay. Well, that's super challenging. Right? What do I do about that? This kid is perfect. He obviously had a bad day. The policy is that if you walk out of your shift, you don't get your job back. So I'm just going to wipe away three amazing years with this kid who you know decided. So just things like that, I constantly felt like I was being watched by employees to see what kind of decisions I was going to make and then be judged for it. And that I just found that to be a really challenging thing. How would you grade yourself? You know, I've gotten a lot of help. So if this is ultimately where you want to steer that conversation, I'm happy to. Well, we're getting there. But no, but I'm really, I want to set it up because this is this is something that so many listeners will likely experience. And yeah, and we take for granted, we don't understand that, you know, it's kind of the water you swim in thing like we don't understand the professional environment that we think everybody else has in fact not universal. And so when we bring those assumptions in, it can be disorienting to everybody. I think in hindsight, looking back, there's a reason that my longer term employees have stayed. I believe it's because I earn their respect in a lot of different ways, namely by showing up, physically working hard alongside them and also doing everything that I could to instill fairness. I think that when it obviously has gone a really long way with them, the source of the challenge was not that I was doing a bad job. It was that I was perceiving that I was doing a horrible job because I was so insecure. Like I am a really secure and confident person, but specifically when it comes to managing my people or people in general, I just have this extreme insecurity. You know, I don't know if it's a lack of experience or just because I really want people to agree with my decisions, you know, unfortunately. Yeah, yeah, really, I guess for a lack of a better term, which is kind of a tough characteristic when, you know, my goal should be to be to be light, right? My goal should be to be fair and successful, I think. But easier said than done. So again, I think my grade would be better than I would give myself just because, you know, that's the reason people have stayed. But man, every day I was just like, my employees think I'm a doormat. Seriously, like, that's, I ultimately, do you think you are? A way less so now, way, way, way less so now. Back then, 100%. I definitely came home crying meltdowns because I was like, I'm a doormat. Like, I see it, you know, I'm at least aware of it. And I don't know how to unravel how far, you know, we've gone in this incorrect direction. And doormat, because you could tell that they were taking advantage or pushing too hard and didn't respect a pure authority, essentially. Yep, absolutely. And largely, those people have been weeded out. I mean, it's certainly not like, you know, I haven't kept around anybody who was, who was really guilty of doing that. But yeah, I mean, it was embarrassing. I'm like, oh my gosh, like I see this happening, you know, it's so hard though, right? Because you feel like, you really need these people to show up the next day and do XYZ thing for you. Otherwise, like you can't get that order out or, you know, there's constantly like some rational reason in your head why you're accepting this behavior that is not okay. You know, small business lane you're only as good as your employees who show up. That's just a fact. But it took a lot of painful days for me to realize, even if I had to rid my shop of half the people who were working here, I will be better off in the long run. I have got to figure out how to turn myself around or, you know, it just wasn't sustainable. And so you have started to turn that around with some really creative approaches to doing that. Tell us about the Starbucks manager first. Yeah. Yeah. Starbucks guy. So I had had one too many mornings of employees walking into my office saying, hey, by the way, I have to leave it three today, shift down to 330. Like no notice, no reason, right? And I'm just like, I just can't do this anymore. You know, or people being like, I need tomorrow enough tomorrow off, but I'll be here the next day. I came home and I was just like so frustrated with myself. Like I definitely started crying to my husband. God bless him. And I'm like, I need some help. You know, and I don't want to call any of my friends who are in tech, managing, you know, their little white color jeans because they have no idea what I'm going through. You know, maybe I'll reach out to some other business owner who, you know, I can think of and I'm just kind of like talking it through. And I just realize in that moment for absolutely no reason whatsoever that the guy who manages my local Starbucks is there every morning. As a sidebar, I'm a super millennial in that I go to Starbucks every single morning. I'm that asshole on Christmas morning, seriously, like pulls through the drive through and it's like, thanks so much for working, you know, so I can get my triple espresso. And just like his face flashed in my head. And I'm like, oh my God, the guy is there every day. Imagine the copious amount of bullshit that guy deals with it a day. Between his breezes, but then also like Starbucks customers, right? Like I can't think of a worse customer. I'm like, I'm going to go talk to that guy. And who I husband who I'm sure just wanted the conversation and was like, that's such a good idea. You should definitely do that. Yeah, it's a grony. Pawning the problem off to some other male who was not him. So I did exactly that. I was there at 6am the next morning. And I don't see him. And I'm like, so I go up to the front and I say to the ladies, I'm like, Hey, you know, the guy who's like kind of short, he's there every day. I'm pretty sure he's a manager is here by chance. They're like, do you mean Alex? I'm like, yes, Alex. They're like, yeah, he's in the back. Do you want us to tell you to tell him that you're here? I'm like, oh, that would be so awesome if you could do that. They're like, is he expecting you? I'm like, definitely not. So they go get at me, comes out and he's like, uh, can I help you? And I'm like, you definitely can help me. I'm like, do you recognize me? And he goes, yeah, actually, do recognize you. You're here most mornings. I'm like, yes, I am. I'm like, this is so random. But I own a judge. I own a general general labor business about 15 minutes from here up in the falls. And I have absolutely no leadership experience whatsoever. And I'm really struggling. And I don't know why because I don't know anything about you. Didn't know your name until 47 seconds ago, but you seem like you know what you're doing. And I think that you can help me. And he's like, he laughed and he's like, wow, that is that is so random. But I mean, I'm happy to help. What can I do? And I'm like, well, like, can I come at some time and day that's convenient for you and just sit down and like, I talk to you, you know, I like, I actually have like specific specific circumstances I can bring to you that that I need help with. He goes, yeah, Thursday at noon, you want to do that? I'm like, done. Like, I will be here. Thursday at noon, I show up notebook and pen and hand. I had a little thank you card with $50 bill in it, slid it across the table. And I'm like, Alex, I am not here for Adam boys. I need some serious help here. Okay. And I was there for like an hour and a half. It was so fantastic. And so now he is a mentor of mine. And we've had a number of these sit downs. They're, you know, informal and they're occasional. They're just kind of like on demand. But I come with my problems and my quandaries and he has like fundamentally changed my ability to organize the way I go about leadership at work if that makes sense. And so can you distill two or three of what things you've learned from him? So in that first moment, I gave him specific examples like employees essentially making their own schedules and a couple of other things. I brought to him the whole like, well, this isn't fair thing. And so he was like, okay, basically it sounds like you don't actually have any rules. And I'm like, well, you know, that's not a poor assessment. He's like, you need no matter how formal or informal, not informal, but distilled down. It needs to be he's like, we need some written, you know, rules and regulations. He had a perfect, he's perfect because A, he's completely objective, right? He doesn't know anything about my business or my people. And so he's just giving me the unfiltered version of what he thinks. And two, he comes from an ultra-corporate, ultra-organized structure, right? So he's a leader of many different Starbucks locations. And he is given the rulebook, given the playbook. He can't change the rules. He didn't make up the rules. He's funneled, you know, direction and people, etc. So not to say his job is easy, right? He still needs to gain the trust of the baristas who work under him. But things like that are very obvious to him because that's just the structure of his job. And so he was able to be like, you know, you don't need a Starbucks handbook. That's 17,000 pages, but you need something. And so he was, we were able to to write out, it's super basic. It's like a two-page employee handbook, if you will. It's a little bit longer now because I've iterated on it and done some OSHA stuff and what have you. But it started as just a couple pages. He even helped me come up with some, I call them like team values. Not, I hate the whole company value thing. I don't know why. But I have some team values. They're basically like four characteristics of our team that I think are are important to judge ourselves against as we show up to work every day and then some actual rules around like you know being late, missing work, giving you know notice if you need a day off, etc. Like these things are so basic. I'm listing them out and I'm sure people like I said this on the last time I was on. I'm sure people are like wow like the chick does not know what she's doing because it's so basic but it's so lost a lot of the time right. So he helped me come up with the material implementing it was a whole source of other like insecurity and challenge that he also helped me through over many discussions because you have to figure out how to show up one day and be like okay guys you know I'm acknowledging that in a big way it's been the wild wild west here. We need some structure and I got that you're not used to me saying no or pushing back on you but like that's that's what we have to start doing. That was like basically the the conversation at the team meeting but what I ultimately found was that your best employees, crave rules like that and when I realized that distinction I felt so much less insecure and so much more confident moving forward with what I was doing. That could employ that could employees actually like the structure in want and also see the toxicity of people of the people who break the rules being. 100% correct. Yes they practically like snatch the paper out of my hand to sign in and and it back. And so that made me that made me feel good so that that was a key turning moment for me feeling like I was grabbing my authority back. And there was a moment you kind of had a team meeting where you had prepared something to say. Yes that first team moment and Alex helped prepare me for it in a couple of meetings leading up to it some mentorship sessions. I literally said the words like we need structure around here. I you know I guys did a little bit as like we're growing we have more people right. We need we need some some written down rules and regulations for the benefit of everybody. This should help you and should help me. So there's ways that you can message. But yeah I was like you know here's the new employee handbook take a look see we went through it since by sentence. You all are going to have to sign this and you're going to have to hand it back. If you have questions about it you know come talk to me. But otherwise this is how we're rolling now. And you thought that the message that you were trying to communicate was received that there was kind of a new Tato in town. Yes 100% and yeah I have a kid who works for me from Cuba and he made some joke in Spanish which I completely understood as you know like me taking my dictatorship back. And so there was like a chuckle that eased the you know eased the room. But yes that was 100% that was a fundamental moment for sure. Because I think I because again too like half the employees in that room are still with me like I know that they're all like they were all rooting for me right I know that they I know that they welcomed that so sincerely. Because they've just seen the evolution of of me running the place kind of like before their eyes if they will and they definitely understood how that was going to benefit them. There's probably something not just not just their selfish interest although I don't doubt that but also just some sort of human interest in seeing you recapture your mojo. And I think I think we root for that healthy people root for that and they don't like to see it being chipped away at and other people. And in a broader sense as much as I've sort of set my people up in this conversation to sound wildly unprofessional which is a largely accurate description. My long term and please I think they have a ton of pride in seeing a dirty nothing place become professionalized over the years. Yeah to a certain extent if that makes sense there's a lot of pride in that and that was sort of a key moment of professionalization. Looking to secure an SBA loan to buy a business, meet Pioneer Capital Advisory your go to partner for sophisticated buyers who want deals closed quickly and on the best possible terms. The Pioneer team has closed more than 100 SBA loans, averaging timelines well below industry standards, founder and owner Matthias Smith in COO Valerie Stash bring over two decades of SBA lending experience. Matthias and Valerie have built a team that meticulously works your deal from underwriting to close. You'll have a full bench working on your behalf, sales associates who streamline onboarding, MNA financial analysts who craft investor grade lender decks and an operations team that manages every step of the closing process with institutional level rigor. Pioneer is not a single person but your true deal team. Visit pioneercaps.com or click the link in the notes. And you know what's really interesting is my that employee who I mentioned who was the first to answer the job ad in the Compreh evento Facebook group. My professionalization of the rules regulations and more importantly the things that I value in our team ultimately we did him out of the organization which is something I could never have predicted if you had told me that when I first recorded I would have been like your full of crap like there's no way but for lots of different reasons is his attitude soured and I was able to recognize I did exactly what you know my Starbucks mentor has instilled in me so strongly have something to fall back on right so you're not the bad guy an employee does something that's against rules and regulations and you say well here's here's where it says that you can't do that and that's what you just did right and yeah so to be able to have that to make what was one of the hardest decisions that I've had to make in the last almost four years was like I couldn't imagine anything more exciting. In our first conversation you were very excited about him. You you you he was you know you kind of talked about loving your current employees and he was kind of top of the top of the heap there. So it didn't work out he eventually soured. Yeah yeah that and you know what um have you read um what's the jaco willing book. Yeah extreme ownership. Thank you thank you. Have you read that? have you read that? No. I am I oh okay so extreme ownership is like that is my motto like I am all about extreme ownership in every single thing that I do um that was an extreme ownership moment for me. I totally put him on a pedestal. There's way too much than I should have and also he there is a difference between an employee who is an amazing excellent employee borderline perfect and employee who's a leader. I made him a leader he was not a leader he was just a really good employee and I understand now what a fundamental difference there is and so he was put on a pedestal in a leadership position he never should have been in and that unfortunately um it took a turn so far left that we just we couldn't come back and you know again right like swimming in the gray as a small business owner you can't react to employees coming to your office and saying I hate this guy if you don't get rid of him I'm gone right can't do that but you can pay attention to a common theme of employees ex having the vulnerability to express to you we have a really big problem with with this particular employee and it's not just me it's my colleagues right um so that was that was the case with him unfortunately he if I he was he became a bad apple I he had to leave the barrel or the rest we're gonna sour okay Tato just a little bit more on the leadership stuff before we turn to our last segment and close it out but um really what is there anything other than what you've just told us you learned that you would kind of tell a first time small business owner who doesn't have leadership experience tell your younger two three year younger self um is it basically just you know have an employee handbook written or or is there something maybe subtle or deeper about leadership that you've learned yeah you know I think that um I've given this advice as recently as last week actually to a searcher right um my whole journey and evolution of getting to the place that I am now can be distilled down to all these many moments where I've just sought out someone else who's doing the thing that I either want to do or don't understand how to do um and so I think that to me the kind of broader answer to leadership questions or any questions is find the person who's doing it right you know you say oh what would your advice be to another small business owner well like I said I just gave this advice literally last week to somebody who asked for my time on the phone find the person who's doing the thing right that can be anything um and there's never a moment in my opinion, where you know so much that you don't need to seek that out from somebody else. Just recently, super short story, you know, long story made short. I found this guy who I needed to replace carpet at one of our rental properties turns out we have a bunch of the same customers on the new construction side. Got you talking. He's classic boomer, long time owner, blah, blah, blah. Had an honest, an awesome conversation. And, you know, I always tell these guys, I'm like, oh my god, I have so much I can learn from you. Like, I just love talking to you. This is awesome. He's like, what are you doing next Monday, right in the van with me for a day, you know, like you're never too evolved that you can't get in the van with Jim and learn something that you didn't know before, you know, go against anything your parents ever told you. Get in the white van with the ball boomer. It's amazing what you'll learn, you know, and I just think that you could extrapolate that example to anything and everything that somebody listening to this podcast is asking themselves or feeling like I have no idea how I'm going to figure this this thing out. Right. There's there's always somebody who will help you figure it out because they're doing it. You know, Starbucks guy was like, I can't believe we're having this conversation. Like, I know this like the back of my hand. Like, I can't believe this is a problem for you. You know, there's people like that who are like, this is a problem for you because it's so easy for that. Excellent, excellent advice, Tato. Profit first is a book that many listeners will recognize if not have read. Tell us about it and why it was so instrumental in your journey. Yeah. So when I finally proved to myself that I bought a business that made a thing that I could go out and sell, right? It's not all top line is is good, you know, or just because you're bringing in money doesn't mean that you're keeping it, I guess, because it's a better way to say that. So I proved to myself that I could make the money and then I needed to go through the hard exercise of figuring out how to really keep it. And that was really just an exercise in figuring out how much does it actually cost me to run this place? How much can I actually sell on the backs of the people that I have? And how much can we actually do with the physical space that we have, you know, the actual manufacturing capacity. And that was a multi month or a year plus long figuring outing. And I really needed to learn how to take money out of my business, because that's the whole point, right? And the whole point is to make money and take it out and do something with it, right? Without feeling insecure, it goes back to that insecurity, right? Of, well, what if I need that money next month, right? And that's just like a really unhealthy place to be financially and mentally. This very much speaks to my complete nutter lack of any type of financial background. Didn't go to business school, never took an accounting class. Basically was as ill prepared as possible. And I had to, I really had to unravel that or I was never going to use my business to grow or real estate portfolio was really like what I was trying to solve for. And so the whole finds somebody who knows, right? From being on this podcast, I have met tons of amazing individuals and for that I'm forever indebted to you. And one of them had bought an accounting practice actually. And we just got connected kind of loosely at first. And then I found out he was a profit first professional. And I'm like, this is so perfect. Like I have the book. I've read it multiple times. Listen to it on audiobook multiple times. But actually like implementing it. I'm like, I'd rather just like pay somebody to do it. So long story not so short, I guess. I ended up paying him to implement profit first for me. And that's meant to be a year plus long exercise because you're supposed to have four quarters under your belt with advisory. And I did that. I like gave it, you know, the length of time that it required. And it has been a complete game changer, complete game changer. It's the single thing that I point to when people tell me like, oh, I'm having XYZ financial trouble. I'm like, you know, have you read this book? So like what has changed about your operations or your financial picture? It's different. So essentially it forces you to start with the end in mind, right? And it's funny. Actually, having done this, now I use that term start with the end in mind for a lot of other things that I do day to day or other goals that I have. But it essentially forces you to figure out what your margin is more or less. And it says if you bring in for round numbers $100,000 a month, you need to immediately take out a certain percentage of that and pay it to yourself before you do anything else, which is completely the opposite what traditional counting would tell you you start with like super training wheels like I started with one percent owner's pay one percent of my top line went into a tax account to pay my tax bill. And then that's another thing that can easily creep up on you if you're not, you know, kind of prepare yourself for it. And then 1% toward just like profit that can kind of sit there and then be distributed out at a later point in time. And then 97% right that's the remaining percentages besides the 3% 97% of that goes into an operating account out of which you operate your business. That you you're starting to pay yourself a little bit right above and beyond your normal salary, but you're starting to pull a little bit of money out you're like, OK, this feels good. I can do this. And then ideally that operating expense account is building month over month because you actually can pull more money out of your business. So that's where it becomes relevant to do this exercise every quarter of figuring out OK, net of anything else what are how much did I actually drop to the bottom line and then how can I segment them into things like a distribution to myself preparing for tax time, etc. And ideally that amount grows like ideally you get to like I'm at 5 5 and 5 so 5% owners pay 5% profit 5% tax and then is that's and then 85% off X. Yeah, so per my profit first numbers 85% of anything I bring in is required to run my business I actually think that I do a little bit better than that but I like to still be conservative but the fact that I've now moved to a place where 15% of my top line is automatically coming to me is just a place of much more financial empowerment that I was in before. Now I will at the end of each year do a bigger separate distribution to myself when my op X account like I had mentioned has inevitably built up even above and beyond the for the 15% that i'm taking out. But it just makes me feel good to have we do some like bigger longer term projects and stuff that I like to be well capitalized for so i'm still a little bit conservative. And I just it helps you put training wheels on pulling money out of your business and it's amazing how many people don't pull money out of their businesses even though they show up and work their ass up every day at these businesses so it's a great tool. So it's sort of like instead of I run my business as well as I can and then I pay all my expenses and then I look what's left over and I decide whether or not I can take some out this year as a distribution or this quarter. You say no I am going to take out X percentage before anything else and then and then pay the expenses and that shift has downstream effects that that changes how you think about money coming out of the business distributions coming out of this is it's a little hard to understand the concept which is why I wanted you to talk about it I've been exposed to it and I still don't fully grasp I think it's a subtle one. And I don't fully grasp it to be honest but starting with the end in mind is is helpful yeah that's kind of like the broader theme right and you know everybody thinks well that's kind of dumb like obviously I operate as efficiently as I can you know like if you don't actually have any structure around how you're doing that then you just think that you do you know what I mean. And so it just really it forces you to get really naked with yourself and understand if you actually have the business like as healthy of a business as you think that you do so good luck taking that to your CPA by the way everybody who's like that's absolutely genius I'm going to do that my CPA was like you realize this is stupid right and I'm like I don't care. But you know it's like it's I mean it's just like completely opposite of traditional accounting you know and also the if you truly do it correctly you need a variety of different bank accounts because I physically move the money every two weeks that is what you do as per the prescription of the book. And so that's the other thing to us then they have to reconcile reconcile a bunch of different accounts which is not difficult because the only thing in those accounts is that those couple transactions moving so it's not big of a deal but literally my account was like I love you but this is dumb and I'm like well I love you but this is what we're doing so and I'm so glad there's some leadership there we go. Hey there we go exactly. All right Tato some let's do some quick questions to wrap so you're in manufacturing you didn't have any experiences was covered in depth and episode number one and we've heard a little bit more about today. Would you suggest manufacturing to searchers who don't have other experience or was it just like yes you've survived and you're starting to argue are thriving. now, but really it's not a good idea. No, 100% yes. I say this about myself in the first episode and it's true. Like, I don't have any relevant skills or background to anything I was going to take to any business that I was going to go by, right? And I would like to think that there's a lot of people who could probably resonate with that. And so if you don't have like a specific skill, you're going to go by a business based on, then you kind of, I don't want to say have to pick. That's what I did. I'm not saying you need to be as lack a days ago. But I think that you have to face the fact that you are going to go learn something new to put it lightly. Yeah. Yeah. Well, but actually for one of the reasons, one of the reasons manufacturing isn't popular researchers is precisely this that oftentimes in manufacturing, there is it's just the learning curve is too steep. There's too much knowledge you need. But there's a very wide variety of manufacturing businesses from the simple to the complex in yours is pretty simple. So yours it was learnable. Yeah, I don't know if simple is the right word because it's pretty niche, but like learnable for sure. I think that very few things in life actually aren't learnable personally. And then on the point of manufacturing again, Tato, so this is a business that's in tied to residential construction notoriously cyclical. We're seeing we heard that your employee base are Spanish-speaking immigrants. Obviously that's in the news these days. So hearing a lot about that from small business owners who who employ such people, although manufacturing is trying to be brought back to the US. So kind of prospects for the market position of your business. We've heard so much about how you as leader have evolved, how you're an operator have evolved and you got your hands around the kind of micro world of your business. But macro, what do you think the prospects are factoring all these things in for your business is future. My personal opinion, I'm super bullish on anything construction related, traits related. So my husband is a skilled tradesperson. He installs tile as well as builds our rental portfolio. It's insatiable. The amount of work that he could go out as a skilled tradesperson. The remodel kind of prospects insatiable might be a little bit unique to our market for sure. Right? We're in the Midwest where everything is relatively affordable. New construction, they can't dig holes fast enough. I hear people saying, oh, new construction is slowing down. Perhaps as a macro trend that that's true. But at least in our area, I now very aggressively go after bigger multi-family projects. That's what I've learned is really where we're making our money. I don't have any concern about, oh, am I going to sell enough? Because if I sold them all, I'd never even be able to service them all. There's so much demand. So I feel very positive about the prospects of what our business, like who our business sells to. The question about my employees is, that is like a whole other podcast episode for sure. But here's what I would say. I have put myself, whether I meant to or not, in a very unique position with my employee base. And I've found that one of the greatest joys of showing up to work every day outside of having turned a business around or the pride that I have that, you know, I have made this thing into something that makes me good money. Is that I have the chance every single day to change the lives of the people who work for me. And I do believe if you talk to business owners and have been at it long enough that this is something that is important to them, whether they acknowledge it or not or talk about it or not. That's like arguably my number one mission. One of my best employees came to me and was like, okay, I'm serious this time. Like I really like no joking around. I want to learn English. Will you help me? He now has a private tutor. I pay for everything every Monday, Friday. Is that expensive for me? Yes. Am I insane that I'm not asking him to pay me back for it maybe. But is it going to fundamentally change his life as from here on out? Absolutely. And like if I have the power to do that, I think it would be ignorant not to. And I have a lot of stories. I could point toward that. I'm not at all trying to put myself on a pedestal. But just I'm just like faced with, you know, that option more days than not. And while that can be stressful times sometimes and expensive, I have started to really see it as a privilege. And so yeah, I don't know if that necessarily answers the question of like, you know, what's going on with, you know, like you see everything on the news, right? Like deportation. Are you still going to have employees? I don't know, but what I can tell you is that my employees show up to a super shitty workplace every single day because, you know, when they came in a year ago with a raging infected tooth, I paid to pull it out. I paid for the new one, you know, and they recognize that I have the opportunity to shape shape their lives for the better. And I think that ultimately, that is something that is going to lead to at least part of my success and their successes individuals in the long run. So Tato, we had touched on the you're having a baby just a few months ago. So babies now three months old, three and four months old. Just shy. Just shy of three. Yeah, October, just three months. And it's January 18th. Oh, tomorrow. Tomorrow. Good thing you asked. I probably wanted to glaze right over that. God. So you went through that last year. In episode one, we talked a lot about being a woman in this world. So how now that you're that many more years into it and you're now a mom doing this, what do you have to say to the the would be women manufacturing buyers out there? The common person, common searcher, starts off not knowing what it is that they want to get into, right? But then that's like even more layered when it comes to women searching. There's this extra level of complexity around the fact that in my opinion, it pretty much doesn't matter which doors you go beat down. They're not going to be full of women behind them. I guess unless you go like acquired dance studio or something that's like very like female niche, you know, but any pretty much anything that's discussed on this podcast is going to be male dominated. And I actually said this on the first episode and I really like I couldn't mean it more like I'm not a feminist. I am absolutely not. I look at my husband every single day and I'm like, I need you. Don't ever leave me or I will die. And so I try really hard not to beat the band of like, well, listen, what this guy said to me, because I have an countless stories of the ways that I have been spoken to in the last nearly four years. But there's just such a complexity around in a vulnerability around choosing to go into a space where you're always going to be the only woman. Now, especially if you don't know anything about that space, no wonder female searchers aren't showing up being like, I'm in a body manufacturing company. You know, like, you're just you're so lacking of credibility. And then you show up and it got forbid you're younger too, you know, you're like a younger woman. And they're like, oh, you have the wrong address. You know, so we we do new construction, right? And every time I go out for a field measure, any tradesperson who's there is like, ooh, miss. I have a question about the faucet color that you picked because they think I'm the homeowner, right? Why else would I be there? I was out of field measure not too long ago for a shower for a gentleman and and he goes, you mentioned somebody named Noah in our conversation. And I said, oh, yeah, Noah's like my right hand guy. Yeah, what about him? And he goes, it would make me feel a lot more comfortable if you could have him come back and field measure the shower. Just if you don't mind, you know, I mean, that it just happens every day. Whether I actually think he was a really nice guy like I I don't think people mean to be so discrediting of you right off the bat. But it does happen. And it happens every day all the time. And you know, it's hard to be like, well, you got to be prepared for that. You know, it's just an extra learning curve. And so I think it's in part a reason why you just don't see women in search or not in big numbers. Anyways, because so many of the businesses are going to be like manufacturing in the way you describe. You have to yeah, I mean, you have to show up with such a thick skin. And you basically have to like regenerate your soul every day, you know, to a certain extent. People are just always always going to look at you, you know, with a side eye, no matter what. Now, have I made that a really advantageous thing in the long run, unquestionably so yes, I stand out good and bad is really like the only way to put it. I truly believe that so much of the business that I have succeeded in winning is at least in part due to the fact that that I make an immediate impression if I show up and I'm at least relatively well-spoken and kind of sound like I know what I'm talking about, because my voice is not lost amongst all the other, 50-ish aged men, putting it a bit for the same project, right? - Yeah. - So that's just one of a lot of different ways. There's also like accreditation and stuff you can get by your local municipalities or states where a lot of projects have to give dollars to diversity businesses of which I am one. So if you can figure out how to muster that strength to keep going and really try to make a name for yourself in whatever industry that you're in, no matter how small or local or not, you can definitely use it to your management and have great success, but it's not a barrier that you would immediately recognize because you're a man, nobody's questioning you walking onto a job site or into a meeting. I actually won an anecdote and then that's it, 'cause like I said, I really could go on all day, but I was signing a quarter million dollar contract and the guy literally like hands me the papers and he goes, shoot, I meant to ask, did you want your husband here? - Mm. - I'm like, well, how useful would your wife be here? You know, because that's the same thing and he was kinda like, I said that to him, you know, and he's like, oh, like I don't get it. And I'm like, my husband has nothing to do with my business. But you know, I guess we could call him like he's a cool guy. (laughing) You know, you just have to accept that it's like sort of a way of life and if you figure out how to wear it with a badge monitor, then you know, a mess, so everything I've just told you, imagine that showing up 40 weeks pregnant to a job site, you know, people are like, what are you doing? - Did I know anything that we didn't get to you wanted to hit? - Oh gosh. I mean, I think that, you know, the journey for all of us is so long and, you know, there's so many speed bumps throughout the way. But it's easy to listen to all of these episodes and only hear people's success and think that you're like so alone because you're struggling or, you know, business ownership is not what you thought it was gonna be or what have you. But it's so not true. Like every person listening to this podcast is listening for a reason, right? And there's so many people who are like you and you know, I just hope that people leverage the community the way that I have because it's been really impactful in my journey up to this point. - I'd love to hear it. Tato Corcoran, thank you so much for both episodes, both interviews, great ones, inspiring to people. And you're just sharing everything with us. The good bad and ugly is so appreciated and takes courage. So thank you. - Yeah, by the way, I'm gonna get back to every single person who has reached out to me. I'm very grateful, but just give me time. I do it like during newborn feeding. So that's like the time that I do it. So David, a few people, a few people. - In response to the rerun that we rerain your episode a few weeks ago, you've gotten a ton of inbound and you're feeling guilty about not responding to all those people. - Yes, yes, exactly. She's gonna get back to everybody. That's where I'm generous of you. Thank you, Tato. - Hope you enjoyed that interview. 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