Interview with Jason Paris of Paris Painting & Aleph Holdings - Round 2

Welcome to the Painter Marketing Mastermind podcast, a show created to help painting company owners build a thriving painting business that does well over 1 million in annual revenue. I'm your host, Brandon Pearpot, founder of Painter Marketing Pros and creator of the popular PCI educational series Learn, Do, Grow, Marketing for Painters. In each episode, I'll be sharing proven tips, strategies and processes from leading experts in the industry on how they found success in their painting business. We will be interviewing owners of the most successful painting companies in North America and learning from their experiences. On this episode of the Painter Marketing Mastermind podcast, we host repeat guest Jason Paris, the founder and co-owner of Paris Painting and Olive Holdings. Jason discusses his journey from solo-prenuer to building a highly successful team that runs multiple businesses doing well north of $20 million in annual revenue. Jason takes a deep dive into Olive Holdings and an exciting new partnership opportunity that Olive is now offering to qualify painting company owners who are looking to aggressively grow their businesses. He shares why the painting industry is so ripe for business-minded painting company owners to succeed in some ways that other company owners can take advantage of current opportunities. If you want to learn more about the topics we discussed in this podcast and how you can use them to grow your painting business, visit Painter Marketing Pros.com/podcast for free training as well as the ability to schedule a personalized strategy session for your painting company. Again, that URL is Painter Marketing Pros.com/podcast. Jason, thank you for coming on again to the Painter Marketing Ask Why podcast. Here we are. Glad to be back. Here we are. So, Jason, remind all of our listeners that they probably don't know who you are. Jason, Paris, Paris Painting. Who are you? What's your company? Alright. What? So, I have a Paris Painting out of Minneapolis area of Minnesota. We are a large residential repaint contractor. That's my company. I am also a person outside of my company. Okay. So, Jason, Paris is separate in some ways from Paris Painting. And please separate. Yeah. My identity is not Paris Painting. It is. Here's my last name. I started the company. Just kind of thought I found it. So, start that off. But I am a father. I'm a husband. I have four kids been married for 10 plus years. I chair the PCA in my free time to volunteer. I like ultra endurance events. So, I did an Iron Man last year and in one week, I'll be doing a 50 mile trail run carrying up for a hundred this fall. And what else about me? When I was in middle school, when I was a sophomore, we moved high schools and I would take my lunch tray and I would sit in the bathroom until the bell rang because I had so much social anxiety. I don't want to sit with anybody. Actually, I was mostly scared about sitting by myself at lunch so I just sit in the bathroom. So, that last one was going to cut me down at size. I felt like I was breaking a little bit in some of those things. Yeah. No, the last one did cut you down pretty effectively, I would say. It's a sad story. I don't think it's an unusual story. And you got me kind of thinking, oh, you should talk about childhood bullying or something but I'm going to pull it back. All the childhood traumas, yeah. The childhood traumas, we all have, you know, terrible parents and childhoods if we allow ourselves to find all the right issues on that. Bring it back. Bring it back in, Brad. Yeah. Yeah, all right. So, Chair of the PCA, you have a large painting company. How large is your painting company? Eight figures. So, 10 million top line. We did separate out the handyman division about three, four years ago. So we actually acquired a company that was doing about $600,000 for revenue of handyman light remodeling, kind of married the logos together. So a pairs of paying logos in Orange House, there's two gray houses and then we started a sister company, Haven Builders, Blue House, two gray houses. That's about $10 million separate as well. It's about $20 million top line between those two business units. And then, yeah, that's pairs of painting in a nutshell what we do. So let's talk about all of holdings and kind of how that whole thing set up. Yeah. So all of holdings is a holding company that's actually the hat I'm wearing today. So that was well timed. All of it is just the first letter of the Hebrew alphabet. So I started this with a bunch of guys about three, four years ago and it was never meant to be the public face, but we just rolled with it because it kind of seems like a cool brand at this point. But the idea was that there's so much opportunity in the trades that we would start a holdings company that was strictly focused on trades businesses, small trades businesses and whether they were starting them or acquiring them, bringing them through to professionalization because overall contracting has not gone through this Renaissance in the US as opposed to many other industries that have like farming, coffee shops, breweries, etc., have all kind of gone through that professionalization Renaissance contracting has not. So we did that and we formed it in 2019, January 1st, about midway through that year is when we purchased Haven Builders with about $600,000 company at that time, top line revenue. And I've since scaled it to looking and do eight figures this year. 2020, we purchased a company called Pivot World Marketing, which was a flyer delivery company in the Twin Cities, does a lot of work with trade services. So that was a great purchase one for the hire. So we kind of in a sense bought the founder of that company and he's now our director of marketing at all holdings. And then it was derisking a primary vendor for Paris painting and now Haven Builders to make sure that maintained stability. And then it's just a nice business unit to hold. It's our lowest top line revenue, it's about a million bucks give or take, but it has really nice margins and it's really data intensive sort of like those types of businesses. And then January, so it was 2019, 2020, the big excitement for 2021 was all purchased a majority equity in Paris painting. In the way we did that, the way we structured it as I had started an LLC called Paris Services LLC. And I first started with a paintbrush and a dream. And we ended up starting a new company called Paris Painting LLC and all holdings got equity in Paris painting LLC and Paris Services has equity in Paris painting LLC, but all holdings is the operating partner. So there are the ones that drive the business and are ultimately responsible for delivering shareholder profits. So at that point, I stepped completely out of the company. I know long had a job at Paris painting, but I did go to all holdings and say maybe I could have a job here. And so that's what I do now. I'm one of five primary shareholders for all holdings. So there are four other guys that we started with and that's the holdings and not quite. That's the start of the nutshell. So then we have partner companies that we're taking minority stake in initially to help stabilize their asset and scale their revenue. And these are focused to painting companies at the moment. And so Paris Painting is kind of the operating partner model. We have two painting companies that were minority partnerships in. And right now we have three yellow eyes that were in the process of due diligence to see if there's others, there'll be good fits. But that's what we're doing through all of ventures, which is owned by all of holdings and all of capital. All of ventures could start as a minority equity holder and then tear, tear step into a majority owner at which point it would take over as the operating partner. So that's we're going to put out a cap table for anyone who's been listening to the to all of it. So all of capital, all of holdings, owns all of ventures, all of capital is a capital arm of what we do. That's investing in small businesses and then doing real estate investment as well. So we have three big apartment bills that we're doing right now. And that's the way that we kind of put our cash to use from the distributions of the holdings. Nice. So yeah, I see that I'm actually holding your business card here. Jason, well, there it is. In my eye. I'm virtual. You are, well, doesn't actually say your official title says Jason Paris, synergy and memes. That's what I do. Yeah. Yeah. So you're about the synergy and me. Do you really was synergy? Yeah. I don't know about synergy. I know a little bit about me. I think I think my sister sent me a meme one time. So I kind of know something about those. Yeah. You taught me how to how to short code them on the phone, which I didn't know how you could do that. So that was kind of neat. Yes, you're good at the synergy and the me. So I want to, I want to kind of in that whole segment that you just gave there, which was impressive. One thing really stood out to me. So you bought Haven Builders in January of 2019. That was like June, July. So we started off holdings in January, 1st, 2019, when all of holding started, and you bought it in the middle of 2019. And then the middle of 2019, we bought off holdings, bought Haven Builders. So under three years, you've taken it from 600 K to 10 million. Yep. That's pretty good. And what you're saying is we also did the same thing with Paris painting, just as maybe another point. Yeah. Yeah. So what's the time, is that timeline there? I used to have it on my whiteboard. So I had to go back to go backwards. So 10, 8, 5, 4, 3, 2, 1. Uh. probably like 2017 2018 so basically in four to five years you took Paris painting from one to over five to six five to six from one to over 10 and Haven Bellers and I did not take it there just to be clear this was presentation Paris did it and some other guys kind of watched no just kidding I know you're one of your superhuman skills is is being able to get out of the way and hire people who are better than you I think that might be my skill I am trying to figure out my superpower getting all the way seems to be something pretty good at not that good at it though but I do run a lot committed to you know I do run a lot but I think getting all the way there's certainly a skill set in having the ability to initiate something and start it and then acknowledge that you're not going to be the sustainer and having the humility to step away and let someone else take those reins and that's a hard thing to do I think that's a hard thing to do I've been doing it pretty consistently for a while and it's spread a lot of success for both myself and others but yeah it's not super common in the trades yeah well yeah there's so much I think entrepreneurs in general but maybe even more so a little bit in the trades kind of be the pride you know this is mine the bravo that's kind of an odd thing you take someone that was like wow you have a really novel skill set you you founded a company and over five years got it to like good sustainability like that is not many humans on the planet and do that entrepreneurs are very well rewarded because it's a very unique skill set in the society it would be even more bizarre and more unique if you were good at that and you were also the right person to scale it into maturity sometimes those are like opposite skill sets right yeah you founder you have to be good at pretty much everything you can't have many weak spots for blind spots because you're going to just get destroyed by those as you're going to going through founding and then you have to have a high tolerance for pain but if you want to scale something to maturity you have to be hyper good at your specific role whatever that is in the organization at that time and in a lot of ways you want someone who has a low tolerance for pain right because they're going to want to professionalize it and scale it and start pack it together and I was not that person in my company and I find that odd that people automatically assume that they're the right person at each scale the company yeah yeah the the personality traits are definitely very different and the requirements for skill and I think you know this is idea of there's a lot of times it comes down to control you know you are willing to give up equity and control in certain ways to grow your business and ultimately too much more success and do you want to maintain all of a small pie or a small-ish pie are you willing to maybe embrace these skill sets and know how people who maybe are better in certain ways or have more experience than you do in certain ways to ultimately magnify the size of your pie and still maintain a good percent it was like a funny I've gone through the year by your examples I talked to people of like being at three million then four million then five million and after the five million dollar mark is when sold 50 percent of Paris services LLCs stake in Paris painting LLC to all holdings and what do you know that's the year we go from five to eight point three and it's not a shock it's I have very aligned and incentivized partners and shareholders that want to drive the value of this asset independent of my energy and efforts and there's something novel and unique to that where you kind of lock down there's really no flight risk in the organization and there are a lot of people that are really really good at carrying the burden so I don't have to and those are those are novel things yeah so let me ask you this you you mentioned that you guys you have three letter letters of intent out there with potential painting partners you have two already that you've invested into and I that you're providing the systems for what do you look for in a partner yeah so I mean you kind of boil down from its most fundamental concept all holdings is looking to make good investments right and so what makes good investment it's something that there's an existing business and a base where we can step in and provide a lot of value and we are really really excuse my language we're really freaking good at scaling companies and professionalizing them there's a lot of value and acknowledgement to someone that's got it through the startup base and what all holdings is not looking to do is to go into city why and start a company from scratch there's a lot of brain trauma that happens and being the domain expert for that geography and and building a brand and getting the the building blocks of good people started we want to take those building blocks and scaled professionalization and that's what we're really good at so fundamentally looking to make good investments where we see the foundations of a business so we can know we know we can lean in and provide the value because we're going to come in and purchase 40% equity of this business and we only it's only a good deal for us if the value increases but does not is what we call a bad deal or a bad investment so fundamentally that's kind of what you look for we are domain experts experts in residential repaint so we love that that business and kind of the last thing is this is a partnership model so it's not coaching it's not franchising it's partnering which is pretty intimate you get yoked up with someone pretty intensely for for at least three to five years and we're looking to work with people that we want to work with just to call a space paid there's a lot of good businesses out there there's a lot of interesting financials out there but it's kind of like what do you want to invite into your life and who do you want to take on as a partner so that's certainly there's an element of that too because it was kind of a cultural and fit personality fit a value alignment yeah there's kind of like there's actually so there's a guy it's going to be visiting us next week and hopefully he listens to this because it'll be funny but we are not the same people at all we don't have the same belief structures but we both have the same values and it's kind of like there are values aligned and we don't have to be the same people we don't have to like doing the same things but ultimately is it going to work out as a partnership if we have to have our same values yeah yeah values is key is there a specific size company that that you look for you know we're definitely filling that out Brandon so we're like a few quarters into this right now and you know I'd say it's you kind of like need a million dollars to have that concept of being ready to play and take on partnership but I don't know where the sweet spot is that three million is kind of nice because then it's like at that point the owner has gotten the concept of I have to let go of some things in my business sure as it starts to scale you can go and even theory you could still be at three million the hands-on micromanaging everything but they're starting to let go of some stuff a little bit but I don't know I don't know what the magic numbers there's not like a hard profile or what do you call it in marketing we call it like an avatar not like a strong avatar we've built out we're kind of seeing like somewhere between like million dollars plus there's different there's actually different profiles there's the person who's hungry up and running and they want to take on a partner because they've gone through the pain to get to a million bucks I recognize that there's you know five different pain points so they're gonna have to go through to get to sustainability and they want a partner to do that with them that's one of our partners we've taken on there's the hey I want to be I don't want to work that hard I've got a pretty comfortable lifestyle but I want more for my people all right that's another model that's a different profile that seems to work well there's I'm ready to disengage in the company it's probably going to die in the next five years also on my client list and ladders or I could take on a partner potentially we get this thing to stabilize and scale and I can have passive equity for the rest of my life with a minority interest might already interest level so those seem to be three that we've found so far come back to me in a year and I'll give you a much more polished answer but that's been going off the cuff yeah okay great and then for anyone who's listening who maybe does fit one of these profiles and is in that revenue range where it might make senses are a way that they can reach out to you or your team or someone yeah just reach out to me I mean this is probably the first actually call the action thing I've ever done because it's been pretty like if you know you know if you don't you don't because we're not looking to blow it up crazy it's partnership not those other models I mentioned so we do have to be a little careful and how fast we go because each require a lot of a lot of work so I'm always happy to talk to painters and about what's going on their business and help them out as much as I can but certainly reach out to me if you think that's an interesting concept and I'll be brutally honest of ace is probably not a good fit right now but here's where it would be good fit if you get to this mark yeah it's they just reach out to me what would be the best social media would be the best way to contact you social media is great yep so Jason Paris like the city you could also email me Jason at olive al e ph hyphen mgmt.com either one works awesome so you being the chair of the PCA I don't want to a lot of our listeners are already in the PCI or at least they subscribed over drive but I guess maybe let's let's touch base briefly on on the expo and what we can expect in albuquerque next year kind of some of the the benefit maybe maybe what you see going well with the PCA and maybe even for members who are who are already in the PCA what what could they be capitalizing on more of that that you think they're kind of leaving on the table in terms of value yeah well I'd say for expo if you did not come to Orlando this year you missed out and I think people have picked up that that's kind of been put out there pretty heavily you fomo you missed out yeah for sure I mean it was it was off the hook as the kids say. Yeah, New Mexico, we're certainly looking to any of that up, level that up. So build off a momentum. We actually had a phenomenal expo in 2020. It was right right before COVID ended up hitting in 2020. And we're pretty bummed to lose that momentum in 2021. We're really picked it up this year in 2022. So 2023, 2023, I'll work with New Mexico. It's going to be a real banger. It's going to be a fun time. And it's the one event you don't want to miss throughout the year, if you're a painting contractor. Some things that the PCA is doing really well right now. I think we want to go hard on events. I know we want to go hard on events this year. That's been something that we've missed over the last 18 months, call it two years, seemingly. And it's something we do really, really well. So while lean in heavy on events, the education is a big part of what the PCA provides. So part of that's through just content that we pump out, law that's for the industry. But there's members specific training that I hope people are aware of that they have access to both on the technical side of painting. So training up painters, but also soon to be released, the business side, both accessible to what's called the learning management software or learning management system. Those are cool things also. So yes, like those are things are going well at the PCA. I'll do a couple more, but it wouldn't be probably unfair for me to not say what's going poorly with the PCA. We need to a better job promoting and also asking our partners to help us promote all the the value that we're starting to do in the association. The PCA has gotten a pretty, pretty fun injection of of energy or the last couple of years, and we want to ride that momentum and ride that wave. But what we're going to say, the health insurance thing is a great example of that. I don't know if PCA members realize or know that their membership gives them access to a group bartered a plan for health insurance. And that is like very not easy to do. I was very skeptical that we could do it, I'll be honest, and that we got across the finish line was pretty surprising. I've only so far, and I'm open to feedback, I've only heard good data points from people who have tried it out, both in the ease. So health insurance is typically a very difficult thing to do for your business. But the ease of what you can do it, and then the affordability and the like the ease or the common understanding of the options are available. It's not super complicated. They provide a lot of options, but they're easy to understand. Yeah. Yeah, there's the health insurance marketplace. I would spend days on that thing, you know, comparing you pick the three plans and then once the website got open working back in the day. Yeah, once it actually got up and working, then you have 75 different rows to compare. I mean, that was overwhelming. And they got like 200 plans to pick from and that was really something. But the PCA is super cool. It's a people who don't know it's a nonprofit. So it's it's underwritten by every every major paint manufacturer under rights, the programs that we put out as well as a lot of other industry partners that are involved with painting as well. And that combined with being a nonprofit, we're able to offer a lot to the membership and the industry at large for not much cost. And it's a pretty cool thing to be a part of it's a way to give back way to volunteer. Most of the people, the whole ethos is really what I call co-op partition, helping one another, as opposed to painting can be kind of a weird industry where historically it's been a little regressive, where it's more combative and had on it, don't want to help my competitor down the street, you're taking food off my family's plate. If he does better, I do poor. And that's that's just not reality in this industry. It's so fragmented. It's more of a we all do better when we all do better mentality. Yeah, and that's one of the themes that I've noticed with the PCA is people joining recognize that when your competitor professionalizes his or her business and goes in and starts to get the homeowner or the commercial business owner, whoever comfortable and accustomed to interact with painters like that, the whole industry gets raised and profit margins get raised and employment becomes a lot of an issue because you can pay people more and it benefits it doesn't hurt you. Yeah, it's a standard. What is the standard for hiring a painting contractor? Right now we're joking before we started this like, if you show up, if actually if anybody shows up to a homeowner or just anybody and says, I paint, there's a good chance they'll make that sale, right? That's kind of what the standard is right now. They don't even have to turn together full sentences. Just say, just say, I paint that they'll probably sell the job and then they may or may not show up on time and may or may not do the right things and and that's certainly a challenge for what the expectation of a homeowner is when you're trying to run a professional business, you you mentioned the part about being able to pay labor well. Another part of that is just treating labor well, right? Why it's no surprise that we are having a labor shortage in this industry. Why on God's green earth would anybody want to get into being a painting contractor for mostly these painting companies just to call a spade a spade? The industry is highly fragmented and unprofessionalized. And most people that go to work for somebody do not have an A plus experience. And they quickly get out and they kind of message or propagate that tarnish on the industry that they experienced. So part of that is how the how the clients are treated. But big part of that is how the labor is treated. Yeah, yeah, happy, happy employees are even if they're subcontractors, happy workers make for happy customers. Yeah, absolutely. And then how is the business treated to? I would say that's another big part of it, right? It's it's all kind of cyclical and it's all tied together of the industry has had a tough time because it hasn't been professional, right? And you have a lot of painting owners who get to the end of their their business cycle. And they are grumpy burnt out and don't have much to show for it. And that's kind of a stereotype of the industry, but the stereotypes exist for a reason. And it's like, shoot, how do you attract good, you know, top level business talent into this industry when that's the expectation? I'll just tell you, you're not you're not going to. So you have to change that Paris that perspective and that paradigm to say, this is an industry that has a lot of opportunity, you can build not just a good job for yourself, but a good business. And at the end of your business cycle, you can have something real to show for it. That's going to attract great people who are around their business in extremely professional ways. They're going to treat their labor well, treat the clients well. And under those conditions, the industry goes through its renaissance. I think that's going to happen. I don't know if it's in the next five years, I don't know if it's the next 20 years. Obviously, with all holdings, we believe strong enough that that's where I'm stacking my personal chips, what's going to happen? And I want to be a part of that wave. But the industry is about to go through its renaissance. It feels like it's almost like if you go to why did the PCA presentation down Orlando, I talked about, if you go to investtopia.com, you talk about what are the, you know, textbook conditions that you look for when industry is about to go through its wave of professionalization, highly fragmented industry, success in challenges. And I forgot what the other ones were, so excited. Cash flow, right, doesn't require much capital. So it's low barrier to entry, highly fragmented, succession challenges. And I'll throw out a fourth one, which is it has like societal downward pressure. Alright, so some industries that have upward societal upward pressure, like working at a tech startup, or most blue for a while, it's arguing like the 20s and 2010s, it was working at you know, the blue chip companies. Like you go to the, it's kind of the concept, as you go to Thanksgiving family dinner, and it's like, Johnny, what are you doing these days? Like, well, I'm I'm a, I'm trying to think of something funny. And I'm obviously not good on the phone. So I'm a, I'm a, I'm an account manager at XYZ firm. And what does that really mean that he does? He's making minimum wage doing paperwork, right? Let's say, give him this nice title, or you go to Thanksgiving dinner, you say, oh, I started a painting company, right? One of those has upwards societal pressure, another has downwards societal pressure. And those would be like the four factors you'd say, wow, this, this is about to tip over. And you do want to press on every single one of those levers, if you can, to get to go through his professionalization shift, maybe not every single one, maybe take one of them out there. But if you can touch on every other lover that we get. So when you say, what do you mean press on each of those levers? Yeah, so you talk about the industry being a success in challenges, right? Great minds are not entering into the painting industry. So the painting industry is typically, you are found, you're not finding. So people are not seeking out the painting industry and saying, I've found this and I went to go find something. And this is where I'm going to land on doing because I see great opportunity. It's typically, you hear two stories of how people got into it. I did this in college, or my dad was a painter. Yeah, it's kind of like two things and how you get started. It's typically the fallback option, not where people kind of jump into it. One of the big reasons for that is there's nothing to show really at the end of your business. It's a very, there's very, there's a lot of difficulty in realizing the value of your equity. There's not much liquidity in a painting company. You can sell your client list, you can maybe sell your lures and tools, but the typical model, the typical profile is you build a job, not a business that has value that has inherent value and inherent equity. So I think that's an important thing to change and important thing to shift if you want to see the industry go through its Renaissance. And obviously, that's a big part of what I'm trying to do and push on just to be transparent. So what other part of it would be go ahead? No, please, I'll follow up. I mean, part of that too is just the highly fragmentation of the industry, right? And you have a lot of, it's a low barrier entry. I actually don't think that's a good thing to change that beat that's the [BLANK_AUDIO] lever that I want to not step on, because there's a beauty to that and that it's really an entrepreneur's dream. It's a double-sided dream or double-sided sword where that low barrier to entry anyone can jump in, but the same time anyone can jump in, right? So you get a lot of success stories of like I started with nothing. I had nothing. Painting gave me the opportunity and I built a big business and I built this for my life, right? So you don't want to lose that. And with that, I think parve comes like, people can just step in and do whatever they want. There's no barrier, right? But you want to societal barrier where there's a higher standard and higher expectations. So if you show up to a bid and you don't have your SH-blank T together, right? You should not get hired and that's what all opinion contractors complain about is this kind of underdog or this kind of undercutting of pricing where contractors come in and they do out of business pricing because the average paying company doesn't last three years. That's when they find out what taxes are. And so they're pricing themselves to go out of business, but setting a standard for the industry and that's what a lot of people complain about. Do you think that that is, I mean, do you think that makes it harder to succeed as a painting company owner? No. So right now, you could, it's certainly not a, in some ways, it's not positive, right? Because you have to overcome that as a tough thing. It'd be much better if the industry was had a higher standard for everybody, for the clients, for the labor, for the business owner and how they're kind of running their business and the expectations they have. But this is not a hard industry to be successful in. I'll just be honest with you. It is, we do, I had way more success than I probably deserved in life because I was in the right place at the right time. And painting is, if you show up and you don't, if you do not go into rehab, your first five years running a painting company, there's a really good chance that you're going to make a lot of money, right? And you don't even have to be able to string a full sentence together. If you don't, you don't have to be a phenomenal leader. There's so much demand for professional painting services. And there is such a lack of supply. This started arguably in 2008 when the recession hit and a bunch of supply left the market and never came back, never came back. And it was already an issue. Then it got boom, big issue. And since that, both curves have been getting larger and larger apart because you have more boomers retiring. Millennials are the worst. They don't want to do anything hard. So they're not starting, they're not getting into painting, right? They're not getting into the trades. So you have that demographic issue. And then the Millennials that do get good jobs that are not in the trades, they buy houses and they want stuff done for them, right? They don't want to do it. They don't want to paint their own house, right? They want to hire that service or more demand, less and less supply. And it's kind of like, it's just like, that's another thing you talk about the industry. It's like, when you have those two market conditions, that is a recipe for profit. And at some point, outside business minds and outside capital gets really excited about that. And they come in and the industry goes through Renaissance. And it hasn't had that happen yet. And that's where it's like, you definitely look at this industry and you see it's on the precipice of having a crest. Yeah. So what is your goal with olive holdings when you're making these investments? Are you are you planning to keep the investments long term and until the Renaissance occurs? Or what is your kind of end game here with this? Yeah. So the goal when you make an investment is you want to increase the value and have stability. Those two things are not super common in painting companies. And we feel like we're really, really good at that. And as a, you know, even as a minority partner, we can step in and have that mutual incentive with a founder. So ultimately, we want to increase the value, more profitability, but also a big thing is stability. If we're going to make that investment, we don't want it to be like, oh, shoot, founder got hit by a turkey truck or founder decided he doesn't want to do this anymore. And now the asset has no value. That's like, that's a bad day. Yeah. You want to do that. But then also, you know, kind of give that concept of of liquidity in people's equity, right? That's not like a huge concept that people have where they think, well, I can build something and be a multi-millionaire because they built a company. Most people are thinking, oh, I can build something and have an okay job the rest of my life. And hopefully my kids want to take it up. Hopefully one of my employees want to buy this company and they end up being the operator. I think that that is one of the triggers. If you talk about what kind of has that big shift of professionalization is when people can start to realize liquidity and their equity, that just is going to change how they approach their companies. Yeah. Yeah. So I went on your site and I was kind of looking and it looks like you guys have and I know it's still early, you know, it's probably still a little bit fluid, but you guys have had a pretty kind of some sort of push. Well, no, I always talk about the type of, I'm talking about the system that you guys have. You're going to have these meetings. You're going to input your operating system. I'm wondering if anyone listening who who thinks this might be a fit, what does it look like if they partner with you? What do you give them, you know, in exchange for 40% of the company? What can they expect? Yeah. Well, I'd say we buy 40% of the company. We don't want to, it's not, we're not just getting it. No one give, no one just gets equity in a company. It would have to be invested in, it would have to be bought. Now, when we make that investment, we're pretty incentivized to make sure that that's a good investment and the way we have to do that, it keeps going back to us like we have to increase the profitability and we have to make the company stable. So we have some rhythms of how we can do that. Now, if we're going to be the minority operator where a company is, you know, mostly an advisory role, but most people, so coaching is fantastic. I love coaches. I have a lot of great friends who are coaches. Sometimes people don't want to coach. They want someone to do it with them, right? They want a partner. And so it's like we build that, we'll, we need to build out the plan idea where the, the big gaps are, the big issues are, and one of the things that the founders going to address, one of the things where they really need all to come in and step in and say, hey, I would rather that you guys tackle this big rock of development, right? Maybe somebody's never, you know, truly hired and trained a sales rep who doesn't come with domain expertise. It's like, cool, I, I could really use you guys as helps in doing that. Obviously, you have the playbook and you're learning, and you're learning management software and you're custom software that you've built out, but this I need you to do with me. And so it's, I'd just to be frank, it's a little bit more custom fit to each role, the teach business, depending on what their needs are. So you go in and you basically work with them to come up with some sort of valuation of what their company is worth. You, you pay them essentially around 40% of that valuation. And then you are now on board with them, them still being the primary owner, operator, decision maker, and you're on board to basically plug in any holes that they have any experience. A lot of it sometimes is a minority partner. It's even like, hey, this is not my fault that the company's here, but it is my problem. Right? It's like, everything becomes your problem. Now it's not, now you have, and it's kind of like a good partner to have share your problems. Right? Here's a, here's a partnership that has scaled the company from low single digits to eight figures, or sorry, low six figures to eight figures in just a handful of years. And so I said that wrong. Slow seven figures to eight figures. Anyways, it's a company that still exists. Even it did that. It went from, yeah. And haven is another one. I just, I do want a caution because I think we're domain experts in painting. And I'm not like, we're not buying spray foam companies or garage door companies or anything like that. We're just focused on painting. So I think that's our domain expertise for at least a while for a long time. And I'm one of, one of five seats on the board that connects those decisions. But for I was going to say, oh, we're talking about it's not your problem. It's not your fault, but it's your problem. You got to figure it out. Now at some point, it may make sense for everybody to say, hey, if we're going to scale this, you know, from five to 10, it might make sense for all to become not just an advisory partner that plugs in holes, but to become the true operator and become the operating partner and allow the founder to get completely passive where they could take either a niche role in their company, head, you know, coach or advocate or whatever and get kind of a salary that they see fit. Or maybe they want to take the Jason Paris route and get completely passive in their company and only take distributions. And that's the route that I took and, and I've certainly I can I can give you more stories about about middle school and high school to cut myself down, but I think we are going to create themselves Jason. You have a very important role. Make way more impassive distributions. Now that I've let go, then I would ever be making if I were a full time actor role in Paris painting, right? And that's not to brag or to be the opposite of humble. Yeah. But just to paint the picture and tell a story that there is a lot of value and a lot of leverage that comes when we start to utilize partnerships. It's that if that's the path that someone wants to go down. Now, a lot of people, they want a lifestyle business and they want to say, I'm the boss. I'm the man. This is Paris painting and I'm Mr. Paris and and I'm going to run this company until I die. And I might have been able to get to three four million dollars on my own without any help. I am certainly not the person to get to be a 10 million dollar company. That's what I don't know if I could do that. Even if I could, I don't want to. I don't want that weight. I don't want that pressure. So yeah, those are some thoughts on kind of what you get out of it. So some of the things that kind of the big takeaways I just took from that is the huge benefit someone could expect is basically they're going to essentially be able to get some cash for all the work that they put in the day so far because you're going to value their company and write them a fairly sizable check, you know, to the partner. They're going to now have a seasoned huge team that is domain experts to solve problems for them, which I can tell you. a lot of those problems, they don't even know what they are yet, because you can do that advisory or maybe we need to step in and do it and you can actually see around the corner. It's nice to have a partner who can see around the corner and see through the fog when you're about to enter into something you've never done before. It's also valuable to say have a partner that can step in and do it with me if you have to. Yeah. And then they are also going to potentially have the option for a full buy out later on for or to get into basically a distribution over they don't have to do anything. Yeah, you could certainly and that's kind of to the founders decision and choices they could do a full buy out where they sell 100% of their company. I would probably recommend not selling 100% because these are pretty good cash cows and keep on keeping my own already interest and just take those distributions for life. That's another option. Yeah. And typically you talked about like the purchase initially, what's been interesting in the handful that we've done and most of the ones we've looked at for the first time that the founder ends up getting a competitive salary for their role, which is so funny. Even though they, yeah, they get competitive because that's how we like to run businesses. We like taxability. We don't like flight risks. So founder may not sit in that spot always, but we don't want to build a business model that's architected around martyrdom. That's not a good asset. Yeah. And so they get a a welcome state role. And then on top of that, they get their distributions when there's profitability. So typically, there's kind of this headtrash thing of like, well, you know, I had 100% of the pie and now I'm losing, I'm losing 40% of the pie and losing it's scarcity. It's gone. That's one way to think about it. That's certainly one way to think about it. Another way to think about it is you're getting a compensation package for the first time of your life that actually equaled the profitability of your company in the years past. And so everything above and beyond that is upside. And you know, if partners are going to help you drive that pretty quickly, especially if you want to look at this over the long haul about how stable it is. And you've greatly de-risked. And I'm not trying to talk people into this. This is like, you're actually asking a lot of progenarians to talk people into it. I'm just trying to be honest with you on it. But this is not for everybody. We're certainly not interested in every business. I hope that more companies do what we're doing just for the industry's sake. There's not many holdings companies that are coming in as an advisory partner in purchasing equity with the opportunity to lean in and help scale their business. I hope that's not the case five years from now. I hope there's a lot more people that do that because I think that's going to have a positive impact on the industry being viewed as a business, not just owning a job, which can kind of go into those unintended consequences that we talked about for both the client and the labor. Yeah. So you mentioned the value in having a partner that kind of see around the corner because they've been there. They've seen those problems. I would love to get your thoughts because a lot of people don't know what those problems are. If you've never played up that level, you can't know it. So when you went, you know, let's say from one million to now do a north of 10 million, what are a couple of the themes that you've noticed, like how the company at all? Yeah. I would say, man, a lot of that is structure, some of that is structure, some of that's personnel, some of that's operating system, and that can be tech, that can be rhythms. There's so many. When you talk about seeing around the corner, so we like the value of small businesses. They're focused on the trades, but we also really like real estate. So we're building these apartment buildings and in Southern Minnesota, we've partnered with a construction company that has done this many times before because we don't know what we don't know. And just to be frank with you, we don't want to find out the hard way. And that's the risk of doing it on your own. You can certainly have a larger piece of the buy. It just might be a lot more painful to get there and take you a lot longer. So like there's nothing in business that I do, whether it's real estate or running the actual operations of the company that's not without partners, because I like to do things fast and with less risk. I'm fine not having every single piece of the buy. If I wanted everything, I would do it over a long period of time and it would be pretty risky, right? And that's not my personal profile. But yeah, that thought of it just kind of reminded me when you said like having someone who can see around the corner and see through the fog is like, that's actually what we do in real estate right now is we want to learn, we want to learn that stuff. I'm willing to give up sizable profits and equity to learn those things, because that's not something that I'm really excited to deal with the mistakes of my own. It's kind of drinking, drinking your own cool out here, just in a different industry that you don't have that expertise in. You love this opportunity. Right. And whether it's a different industry or a different stage of business, there's kind of a couple of ways to look at it. And a lot of ways, you know, an eight million dollar painting company is like a different industry than a two million dollar painting company. Yeah. Right. That is not the same company at all. And you may be a domain expert and have a really comfortable two three million dollar company that's a lifestyle business. That's like, hey, it's off some nice cash, I'm pretty passive in it. But I want to see more from my people. I want the company to grow so that they have more opportunity as kind of like, hey, all of paint me a picture where I can make more cash than I am now and be more passive. Business gets larger and that creates opportunity for my key people. What does that look like? Yeah. Yeah. Yeah. Makes sense, man. So you meant, well, you're a bit of an anomaly. I just want to point this out, Jason. I mean, in many ways, I think you know that. But you say, like, oh, I wanted to quick, the quick route, you know, not the long painful route. But then you do 100 miles runs that seem to be all about the long painful route. So I haven't really figured out how to rectify that in mind. Well, there's the reality of like, so I'm talking about collapsing time. I'm in this for the long haul. Right. I don't want to, so what, how could I translate that over to running? I would not want to like, try and figure out what a good training plan is for running. I'm like, willing to hire a coach to help me train. I see. There's some metaphors that will break apart pretty quick there. But the idea of like, I don't want to, yeah, I don't want to do a lot of risky things. I'd rather have a lot more stability in life. And I'm willing to share. And there's also this concept of some of the, someone that, one of the biggest drivers to be successful in life is to share that success with others. And like for me, it's what other way, is there any other better way to share that than through partnerships? Right. And it's like, I've got four of my best friends in this office and all of our lives are going pretty awesome. It's pretty fun. Deal. Right. Now, I would not be doing anywhere nearly as well without those guys, but it's kind of like, well, I could have my own little business. And then like, maybe I did crush it on my own and I did want to go through all that pain. And it took me three decades. And now it's like, how do I share that with others? Like, wow, Frick, I wish I could go back 20 years and we could do this together. That's what I would do. I'd try and buy a time machine and go back in time and be like, Hey, man, I want you to experience what it's like to build equity. I want you to experience what it's like to have an asset in your life that outweighs your liabilities. And that's kind of, that's one of the drivers is one of the most motivating parts of success is that ability to share success with others. Yeah. Yeah. Once you get past a certain level and kind of like, was it Mazzlop's hierarchy of needs? What's his? Mazzlop's? Mazzlop's hierarchy. Pavlov. Pavlov's dog. So. I was combining them, I guess. Yeah. Dog. The bell. Yeah. Once you get, once you get past that sort of hierarchy, you know, at some point, it's kind of what's the point. If you have your needs met, your children's needs met. What's driving you? Anyhow, when you get to that level of success, it, it oftentimes about helping others. Yeah. And I like, now, the thing with partnerships is I certainly benefit from them too. Right. You can look at all of holdings too, like all of holdings when they come into these painting companies, all of holdings is designed to have incentives to benefit, but the founded proportion, but disproportionately will benefit as well. And so it's not like pure altruism, part of it is just aligning the incentives of life. It's. Yeah, I only win when you win more. That's a great partnership. Right. And that's how I try and approach all my partnerships, where it's like, I will only win when my partner was win more. Yeah. If every partner has that attitude, you can get a lot of good synergy, bring it all the way back. There, there. Now we get it. All right. Now that's why you have it on your business card. Have you heard of the book, Slipstream? I've been to party. I'm going to send it to you. I sent it to Nick. He didn't respond. So I'm not sure he's in. I don't know what to read. So. Yeah. I didn't send him the audio book. So. But yeah, it's, it's all about collapsing time. I'm not even sure it's a real book. It was written on kickstart. I read it the first time, I think like 10 years ago, one of the most interesting and best books I've ever read. So that's any slipstream by Benjamin Hardy. If you, if anyone listening, yeah, it's not my, there's like, there's nothing that I say that I typically. Your favorite. It's all been said under the sun before that concept of collapsing time. I stole that from people who have set up before 100%. Well, we can try to say something unique. And I'm pretty sure we could spend our whole life trying to think of that and we will never get there. Yeah. Yeah. Efficiency. Okay. So you, you had said that if you were working at yourself at this point, you would maybe be at three million or four million, you, you would be unhappy probably. But I'm really interested. It might be a sweet business that I'm passive in, but it would be a lifestyle business. It'd be different than owning an asset. I want to figure out exactly where you think, and then this might be a tough question. But what were the holes that kind of got plugged are the people that I've went in and did stuff that you know you wouldn't have been able to do as well, and that's that really propels your growth. That's super easy. That's not a hard thing to see. I don't think I'm, there's a lot of things I'm not amazing at. I hope that. hate to first people's bubbles that think I'm like I got or something but I'm not I'm not no definitely not I mean you could take every single key role in our company. I am not a great VP of sales. I don't like sales people They drive me nuts. They're so needy and they're not compliant and it just drives me crazy, but our VP of sales Micah This is like his gifting The way he corrals these cats and gets them to produce at amazing metrics. That is I mean, I could never do that I'll be I never do that. Yeah, I also like I like Excel spreadsheets. I'm pretty good I have a pretty okay. Everyone likes my quirky keyboard. It's got all these weird things to it on it and But Eric or CFO he is on a world-class different level than I am I mean the things that he does and the way he's on top of everything and ties all together and I'm not that I'm not that I'll just be honest I'm not that you can even go all the way to our president Alex I'm a pretty good leader of people at times at times. I think I'm a pretty good leader of people But Alex is a savant at just that and you take each one of those people to like Micah not great with finances like Eric Not great at like being a president like Alex Alex not great at what Micah does like all these guys They're they're just so specialized in their roles and that's where I look at myself. I'm like I'm a good founder I'm pretty good at everything, but I'm not hyper specialized. It's hard to be good Everything and also hyper specialized and being a VP of sales a CFO president of a company Even you say like even it being a CEO the visionary is a hyper specialized skill set and For me, it's been super easy Also because that's not what I want to do. I don't like carrying the weight of all those things each one of those roles has a lot of weight to it and If I have a choice to not carry that weight just my personal preferences I'd rather not I rather dedicate more time to my family to my hobbies to giving back right now I choose the PCA as a vehicle to do that Those are things that I would rather do if I don't have to sure and for me It's been fortunate and I think that is the beauty of partnerships where I actually do better and I get more the more that I give up Yeah, yeah, love that to win win everybody's winning so one of the I guess what what I'm hearing you say is One of the biggest changes from let's say two three four million dollar company to a ten plus million dollar company is you have to Get more people who are hyper specialized as that company grows Yes, that's a great way of like framing and all that all that gibber job right throughout there. It's exactly Yeah, I just you know so many very few of our listeners are gonna be at that eight figure mark, right? So I want to Yeah, I want to kind of try to break it down for people like hey Here's what you know and you and you say there's also were eight figures at residential repaint. I've seen companies scale pretty large with pretty simplistic Infrastructure models in the commercial and industrial So you think residential it requires more in terms of the org chart You need a more sophisticated org chart to org chart to scale residential for sure And why would you say just because the sheer volume of jobs because they're lower ticket jobs? Yes, that's the fundamental principle is you just have more you have you need more I mean average job size would be the key metric right so you need more sales reps more project managers more coordination more moving puzzle pieces Then if your average job size is 60 grand right just a different someone would say it's different by a factor of 10 So if someone were running a strictly commercial business you think you think they might be able to get to 10 plus and not really have all this You could actually probably scale a commercial company quite large as a lifestyle business. It's more about what is the maturity of the asset and is it stable as their true flight risk is there's like a founders risk in that You also want to separate the hassle you wear in your company because you're probably the founder and the president and the shareholder But if you're a put your investor head on and look at the company objectively and say is this a good investment You know what if myself decided that I don't want to show up in two years and get you know we have a we have a flight risk right now We have a president who the minute that he goes out This company is not worth anything That's one that's like an investor's mindset of how to analyze a company And it's healthy to do that as yourself even if you're the sole sole owner Now it's difficult when you're the sole owner to feel the true weight of fiduciary responsibility That's just not a natural thing that's not inherent thing for any human to do if they don't have to So in part of that plays out we talked about the martyrdom that people live with and that martyrdom can be more than just financial right can be The martyrdom that you put on with some of the inefficiencies in your business some of the unhealthy cultures that can creep in the passivity or the kind of Familiarity with comfort that inhibits growth and development all those things can be a sense of martyrdom that you carry because You are the only one you don't have any accountability Okay outside of yourself And so you kind of don't really feel the weight of that responsibility whether it's fiduciary or all those other elements I listed when you take on a partner that paradigm shifts a little bit It's no longer what will I tolerate it's what's what's best for the company what's best for the business Yeah, look like I'm and you and I was joking, you know, all Jason pairs is not pairs painting but I think So many people do the largest shareholder. So I'm pretty I'm in yeah, I have an influence there But I do not run the day-to-day operations Yeah, but but there's so much ego oftentimes wrapped up you know within a within a painting business and One of the things I mean you say is yeah, you have more of a fiduciary duty But you're also almost able to to differentiate you know kind of put the business as its own thing that you focus on Outside of yourself because now there are multiple vested interests in this thing Yeah, it's and that's I think that's ultimately what build stable assets, right? It's kind of easy to close one eye and squint out the other when it's just you But when you have those responsibilities you just Everything becomes very transparent and there's a lot more accountability that comes into place and that can be for everyone's benefit So you've mentioned a flight risk. So basically a key player at the company leaving deciding that they're done and the company tanking Usually that being founded founder owner You've mentioned founders risk what what is founders risk? I just made that word up also maybe that's the unique one because it doesn't make any sense But all founders risk would be it's kind of the same thing, right? So a company is its success is Limited because it's it's inherent in the founders sitting in their seat Okay, I admit that founder leaves that that vehicle that business no longer generates value failing this Turkey that's not that's not just a bad thing for the shareholder right who is typically is the founder in that case You know, suddenly they're equity in the company no longer produces a return All right, that's a bad deal for the stocks It's also a bad deal for all those involved in the company right all the key players and typically that's like And there's probably a word for it. But a lot of founders they feel guilt around They can kind that's probably the one thing that pushes them the hardest is like they see that they are the cap or the ball neck To their company developing to ride more opportunities for their people to develop Yeah, these keep people have this tremendous potential and potentials opportunity But your company is it's got a lot of great things which is why they stick around But it's not quite allowing them to realize their full potential And as a leader as a founder Sometimes that can be the biggest like pain point of gosh. How do I get beyond this comfort zone? Sure Do you do you see any other um, well, do you see any other risks? I guess That that you think maybe are oftentimes overlooked by painting company owners I mean, I think those are Pretty well encapsulated but figured out throw it out there. Yeah, I mean, there's the classic Yeah, it's kind of who I think growth has a lot of risk to it and are you planning smartly for growth in terms of operations Yep, in terms of well operations. So key roles operations How deep is your bench right how stable is the company put a lot of times is how deep is the bench How well poised is it for growth Um, do you have good financial stability? Do you have the mechanisms in place to fund and finance the growth and Do you have your A B and C continuously plans locked in to kind of pivot as you need to to make sure you still hit the target But in a different way There's a lot of different risks that can happen when you're growing and sometimes Sometimes growth and success or what puts companies out of business And we've certainly seen that before where yeah, completely so successful that They suddenly enter into a new paradigm of how business needs to be run and they're not used to that yet And so what that what got them to that point suddenly is not just a hindrance, but ends up you know destroying their company sure Yeah, and I think so one of my one of what I view my roles in as running this podcast is kind of trying to to summarize things um at times and you use Uh, you speak very differently from every other person that I've had on the podcast So I just want to want to note that That I mean you really coming out this from an investor standpoint, you know, you're approaching at all these bit all these risks you talking about stakeholders you talking about um the the different Risks to equity right and viewing it as I mean who views a painting company Ownership as equity. It is equity though, right? If you think about as an investor and you think about it in business If you own your company and you run it you own equity in it so I just there's an important paradigm shift Sort of here in terms of how most people think about their businesses and how you're talking about them that that I think Is important to recognize because you're talking from a different level now. You're talking from a 10 20 plus million dollar level and and And uh, that's important and that's what's possible when you start to enter that this mindset and these partnerships and this kind of opportunity Revenue certainly allows the infrastructure for stability. There's no there's no panel lie to that um There's also There's kind of a difference between assets stability and professionalization that I want to make sure I voice because you can be a small company and beyond professional. You can also be a small company and be professional and that way of professionalization should hit all stratas of business sizes. And I think that's going to be really important. I think where it's going to be derived from and really originate and really propagate from arguing with those larger companies that are driven by the equity value of their business. And that's what drives world class net promoter scores. That's what drives, you know, having successful businesses that company that people want to enter into that industry. That's going to help drive ensuring that, you know, labor is treated well because you need something to fund you need someone to do the work to fund the growth. I think all those three elements are low points in this industry. You look at the options available in the economy to different people, right? They're probably probably bad at all three of those things. And all three of those can be improved not just in large companies, but also in smaller businesses as well. So, Jason, I'm not positive when this podcast episode is going to be released, but you do have an event that I want to touch on as well. Okay, so the gump is just a gathering of Minnesota painters. We do that once a quarter and kind of around the Twin Cities area. So today is the 31st of March. We're doing our queue to kick off gump. And so that's happening today. So definitely for you to do that. But if you live in Minnesota, you're a painting contractor, just search for gathering of Minnesota painters. I think it's MN painters is how it's felt on Facebook. We have a little group where we do logistics. That's a cool thing. And then stay posted on the PCA website. The website is actually PCA paint ed for events coming up this year. There's a little bit of a teaser that we may be hosting an event Minneapolis this summer, maybe not going to release anything. I've heard some whispers and I've heard some whispers that's going to be a real banger as the kids call it. Yeah, I love it. Jason, you want to have anything else like you want to share before we wrap up? No, man, you did a great job. This is a fun podcast. Any other time you want to have me on this is a blast. So that's it. Yeah, well, appreciate you, appreciate you having me on, man. It was amazing. And I hope that that some ambitious penny company owners who really want to grow and how other people grow. We'll think about reaching out to you. Awesome. Thanks, man. Thanks. If you want to learn more about the topics we discussed in this podcast and how you can use them to grow your painting business, visit painter marketing pros.com forward slash podcast for free training as well as the ability to schedule a personalized strategy session for your painting company. Again, that URL is painter marketing pros.com forward slash podcast. Hey there, painting company owners. If you enjoyed today's episode, make sure you go ahead and hit that subscribe button. Give us your feedback. Let us know how we did. And also, if you're interested in taking your painting business to the next level, make sure you visit the painter marketing pros website at painter marketing pros.com to learn more about our services. You can also reach out to me directly by emailing me at branded at painter marketing pros.com and I can give you personalized advice on growing your painting business. Until next time, keep growing.