Ep 130 - "Building The Empire, With Mark Davis"

0:00 dude, man, this show, you know, I hesitate to like be so effusive about this because we have, we just like all of our guests are really great. Oh yeah. They're all great in their own way, but man, I was so inspired by this episode. With Mr. Mark Davis. I know. I was too. And honestly, I kind of had a buzz from RIA. It was fun hanging out with, obviously, these three titans, you know, of the industry. Yeah, did we record those same day? It was just within a day or so at most. Yeah. Yeah. And just a rad, I mean, it's just honestly a pretty rad guy. Like, you know, I think we made some similar comments about Mark Springer when we interviewed him.

0:45 And it was just kind of this, when, when people who are doing really phenomenal things in an industry, you know, but have really driven this hard line of integrity and consistency. It's really powerful. And I think on top of that, some different versions of humility. So Mark Davis and Mark Springer, not even the same person, but they both have their own version of expressing humility with the way they carry themselves. And you see it, you hear it. I mean, I don't... Mark doesn't talk numbers, but I think people will put two and two together as they're listening to his story that this guy is not dealing with small numbers. A few large numbers do come out over the course of the conversation.

1:26 And we should just give people, I don't know, a warning. I mean, a lot of our audience, I think, listens to Joe Rogan, as does like a trillion people in the universe. Yeah, exactly. Yeah. And obviously, I don't think Rogan's ever had a podcast in the last five years for less than 90 minutes. This is a longer episode. But I don't think anybody's going to complain about it or get tired. Mark is such a phenomenal storyteller. I want to share something, too. This is slightly unrelated, but I think it's something for people to watch for. I'm always, and I know you do this too. And I think many people listening, like when I see a leader that is projecting in a lot of ways, they're the kind of person that I want to emulate.

2:13 Yeah. Like I'm watching everything and I'm listening to everything they say, right? I'm watching how they talk. I'm watching how they don't talk. And, you know, I stepped into your office, I think later this morning, that morning after we recorded and I was like, you know, man, I've just, we've had a few conversations with some really epic leaders that I really admire. And one of the things I've noticed is they're really careful with their language. And I don't even know necessarily at this point in their lives, in their careers, how careful they have to be. But I've noticed they don't curse as much as I do. And it's funny. I didn't use to curse.

2:53 I've talked to this before. I didn't use to curse as much as I do now being in the restoration industry and being in construction and the trades. Yeah. And again, I'm not making a values judgment here. Like, I'm not saying, none of you should cuss. We shouldn't cuss. Like, oh, yeah, because fuck, man, we do all the time. That's not where I'm coming from. But I think as a leader, I think maybe there is a leadership behavior there that I could grow in. Yeah. Which is... really being considerate of the audience that I'm in front of. And I think as a leader, we don't ever want to burn a bridge with somebody in our audience. Sure. And I just get that vibe from... Now, behind the scenes, they may cuss like a sailor when they're with their buddies and they're sitting in the sauna with their friends and lighting up a stogie or whatever.

3:42 Or in Mark's case, on the boat. On the boat, yeah. With his evening... his evening time out on the water. But I just, I don't know. Anyway, so that was just something that struck me is I've just been watching some leaders I really admire and generally speaking, even Rogan, Yeah. I've just noticed, I mean, is he more cavalier with like his comedian guests? Of course. But I've just, I've noticed some of the leaders and figures that I really admire are pretty judicious with their cursing and pretty considerate of the audience and the subject matter and just like the setting that they're in. And I really, I just found myself kind of admiring that and it made me want to clean up my act a little bit.

4:26 You know, I hold you to that. Kinda. I'm a bad battle buddy for that. If I'm honest, if I recall correctly, that conversation, um, like, like I ended up cursing three or four times over the course of that minute conversation. That is so funny. But anyhow, so this thing with Mark Davis, I mean, there's just so much to absorb and it's fun and it's inspiring. Yeah. Those of you who are like growth-oriented achievers, I think there's just so much to align with and relate to. And at the same time, there's something to chase here in the sense of like making your vision bigger and bigger and bigger. All of us continuing to learn to take...

5:08 bigger risks to aim higher. And you and I have been talking this both from a personal growth perspective. It's like asking that question, what am I capable of? You know? Clearly he's done that. Oh my gosh. Over and over in his career. And yet, and there is also just a real humility that I think comes through of He's not. Anyway, that's probably enough stage setting. I think so. Yeah. Let's jump in, guys. It's a longer show. Buckle up. The storytelling's great. The journey's awesome. And Mark Davis is an absolute stand-up man. Tons of respect for him. So let's get into it. Wow. How many of you have listened to the Head, Heart & Boots podcast?

5:50 I can't tell you that reaction, how much that means to us. Welcome back to the Head, Heart & Boots podcast. I'm Chris. And I'm Brennan. Join us as we wrestle with what it takes to transform ourselves and the businesses we lead. This new camera angle makes my arms look smaller than yours. I'm noticing that and I really appreciate it. I thought you did that on purpose. No, I don't. I didn't. And I am not happy with it. Hey, y'all. Thanks so much for listening to the show. Hey, if you're not already following, please do so. And ultimately share, right? The coolest currency that we have in terms of supporting this is share it with a friend, share it with somebody, a colleague, a peer, one of your downline team members. Let them be able to take advantage of the information you're already leveraging in your favor.

6:33 And finally, guys, if you hear a show that really moves you, that really moves the needle, will you please leave us a review? Those five-star reviews help Right on. And listen, if you're trying to grow your business, you might consider checking out Floodlight's Business Opportunity Audit. It's free. We provide it at no charge. It's actually what we use to assess new clients as they come in. It's 110 point assessment for your business. And we've now decided to give access to the general public for it. So go and take our business opportunity audit at floodlightgrp.com. It's going to help you identify the biggest gaps and opportunities in your business right now. And at the end, it'll assign you a health score to let you know exactly where your business stands right now.

7:16 So go check it out, floodlightgrp.com forward slash audit and take the BOA. It's a great way to get a pulse on your business. Well, my friend, thank you so much for taking time out of your schedule to hang out with us. We've been really looking forward to getting some time with you, Mark. So thanks again, man. My pleasure. Okay. So we're going to go right to the top tier in terms of, okay, we got to hear a little bit more about your story. For those of us that are listening that came to RIA, they have a sense of your background and what it is that you've been building and have built. But give us the 30-second Where did you come from and what is it that you currently have your arms wrapped around?

7:57 Because it is no small deal for sure. Well, I'm happy to do that. I wish I could do it in 30 seconds. I won't be able to do that in 30 seconds. So I entered the restoration industry in 1996 and I was 27 and I did not know of the industry before then. My parents, I grew up in Nebraska. We never had a water damage at our house. So, you know, a lot of people find out about the industry from different ways. Oh, yeah. Well, the way I found out about the industry, my best friend at the time, he and I wanted to own our own company. We didn't have a lot of money. We wanted it to be in Denver. And so we were literally searching for small companies. kind of a mom and pop company in a service business.

8:39 And we wanted that because it would be relatively low capital expenditure. And that's all we really knew. We wanted to be our own boss and we wanted to be in Denver and we wanted to be in the service business. So as we started looking very serendipitously, we went to a business broker who had the listing for a company called Rocky Mountain Catastrophe. It was a private listing. I didn't even know until that point that there were actual brokers for businesses that I thought brokers were either stock brokers or real estate brokers. Well, it's a big business of, you know, business brokers selling all size different businesses. We found a guy who was selling small family, you know, mom and pop businesses. And he had a company called Rocky Mount Catastrophe. That's, how it happened.

9:19 We looked at this company and it was for sale for much more than we could afford. The business was 13 years old. It was doing top line revenue of 3.6 million. It was making 350,000 of net income to the bottom line. And the purchase price that they were asking for, the asking price was $1.2 million. And we each had about $100,000. So we came up with this plan after we did a little research that we wanted to try to buy this company. So my business partner at that time, his name is Jeff Johnson. He is today the CEO of First On Site. So go back, though, 28 years ago, Jeff and I are just Mark and Jeff, and we'd like to own our own business. And so we put together a plan.

9:59 We borrowed most of the money. We came up with a million, too. And a few weeks before the closing, the business broker who liked us called us and said he had bad news, and that is that a full cash offer just came in. We had negotiated to have the sellers carry 400,000 of the million too, and we would pay them over a five-year period. This cash offer had just come in, and the broker said, I'm so sorry, but I have to recommend to them the cash offer. And Jeff and I said, please give us a meeting with them at 10 o'clock tomorrow morning. We'd like to adjust our offer. We put a PowerPoint together. We meet with him at 10 o'clock in the morning. We change our offer from 1.2, which was their asking price, and we change it to 1.7. And the way we were kind of come up with that extra 500 grand is they had already agreed to seller carry 400,000 of the million too.

10:44 So we increased the seller carry number to 900,000. And we really said, if you believe in us, then you'll make an extra 500,000. And if you don't, you'll get your business back because we will have defaulted and you will have gotten 800,000 and you get your business back. But if you bet on us, you can get a million seven, which is 500 more than you were asking for. And they just needed five minutes. They left the room for less than five minutes. And they came back in and said, you guys have a deal. So Jeff and I then bought this company doing 3.6 million in Denver called Rocky Mount catastrophe. And it didn't take us long to figure out that we didn't want to just do local residential mitigation and rebuild, even though that's what the company did and did well, because in 1996 in the fall, hurricane Fran hit Wilmington, North Carolina in this business as we all use, identify periods of time or milestones in restoration based on storms.

11:38 whether it be, you know, Andrew 92, Northridge earthquake 94, Katrina 2005, you know, everyone kind of thinks about the industry in those terms is after we did go out to Wilmington, North Carolina in 1996, and we had some success there, we were like, okay, so we are no longer just going to be Rocky Mount catastrophe. We're going to be a national company. And that was the plan. And so literally this is, and again, we were undercapitalized. So remember we had to borrow most of the money to even buy the company for a million seven. And now we tripled revenue in the first year. We did 11.1. And you know, what happens when you grow, okay, is it takes working capital, which means it eats cash.

12:19 Yeah. And even though I have a business degree, you do not think about those things relating to that until you're in it. And then when you're in it, you're like, okay, why are we growing? And it shows we're making money on the P&L and we have no cash. And so running out of cash is a very serious issue for any growing small company, right? You just can't run out of cash. You heard me say it in the podcast at the RA.com. conference, you can never miss a payroll. Now you can skip your payroll. Like, you know, Jeff and I, we cut our salaries down during this growth phase down to $50,000 and we had to be extremely frugal, but we were investing back in the business. So in the second year we did 25 million, you know, up from 11.

12:59 And then the third year we did 35 million. Now there were a number of things that happened obviously to get there because we did a couple acquisitions, but they were bootstrap acquisitions, which means we took over the balance sheet. We didn't pay a lot. The second company we bought was the Rose Brooks company, Spectrum Systems, out in Oregon. Then we bought a company in New York City called TRC, which was the remnants of the restoration company that MF Bank used to own. So all of a sudden we're coast to coast. But then at that time, the number one commercial company drying company was Munters worldwide. They were headquartered, I think, in Sweden, and they were the biggest in the U.S. as well. And Jeff and I were able to somehow convince the top eight people from Munters, including the managing director, their national sales manager, the national operations director, three salespeople, to, and a project manager to all come to leave Munters on one day and all come to work for us in May of 1998.

13:51 Okay, how did that happen? Wow. What in the world transpired to create that kind of movement at one time? So in 97, when the Red River flooded in North Dakota, we loaded up the trucks again, We were bidding on commercial jobs and we were getting them. And the people from Munchers came to our job trailer and wanted to meet with us because we weren't using Munchers equipment. We were using Agreco equipment. So we were signing the big Central High School and some of these other big jobs and then you know, we would put Rocky Mountain catastrophe banners on top of these big desiccants or these, you know, generators. And so Muntres being the market leader wanted to know who is this company.

14:32 So they knocked on the job trailer, they came in and they introduced themselves. And this amazing dynamic woman named Teresa Williams wanted to meet who's this Rocky Malcatastrophe. So we met with her and we liked her. So where she's thinking she wanted our business, we were immediately thinking, oh, no, we want her on our team. So we started recruiting her. And that process was really very interesting because she showed interest, but she's a very loyal person. And She said, I can't leave my people. And, but I think she wanted to come with us. So then she sent us an email and said, okay, I will actually accept your offer with the following conditions. And the conditions said, you will hire my boss. You will hire these other six people.

15:13 And in essence, you'll get all eight of us and here's their salaries and that are needed. And so we're undercapitalized. We're levered, okay, but we're growing and we're technically making money. So our bank was amazing. It was called Citywide Financial out of Aurora, Colorado. We went to the bank. We showed them the spreadsheet of these eight people and how much they were going to cost. But we explained to them that we had this relationship with Agreco where we could rent the Agreco equipment so we wouldn't need anything for capital expenditure. And Agreco agreed to rent it to us exclusively and no one else in the industry for at least one year to see how this experiment would work if we hired the Munters people. So the Munters people knew we would have equipment because we'd have access to the entire Agrico fleet on an exclusive basis in the entire industry.

15:58 That was, I couldn't believe we pulled that off, but it was only for one year. So it was to see how it worked. Well, how did it work? So we hired all those people in May of 98 and September 30th of 1998, Hurricane Georges hit Puerto Rico first and then hit Biloxi, Mississippi. Yeah. we end up with eight to $10 million of drying, okay, commercial drying business from the hurricane. You guys know what that means. And although it did tie up cash, our bank increased our line based on the receivables. So we were able to receivable finance that growth. And then the collections came in, And again, one of those things where we were rolling the dice, but it was moving and we were making money along the way.

16:39 And yet, even though we were strapped for cash, and I can't emphasize that enough, is that although the thrill and the adrenaline of victory is great, we're growing people, we're making a difference, we're building a brand and we're doing great work. But every other Thursday, Jeff and I would look at their bank balance and we're like, for another three or four days afloat on the payroll, where we would write a check on a Wednesday for Friday's payroll, knowing full well that we didn't have enough money in that account and hoping that by Monday or Tuesday, when it actually cleared the bank with the PEO, that we actually had. And we never missed a payroll. You could have heard me say that before, but those were very challenging times.

17:22 And so Everybody always thinks, well, growth is good. And yes, I'm a big believer of growth because if you're not growing, you're shrinking. People don't stay static. You don't stay the same. It doesn't happen. So you're either growing or you're shrinking. So you got to pick which one. And I've always been a high growth individual. I just, it's what motivates me. But being properly capitalized. And I remember our bank asking us to slow down. And I remember Jeff and I thinking, can you imagine slowing down? What does that mean? Slow down. That means don't go after that next I can't, you can't turn it off. You either are going or you're not. And so we loved our bank. Al Crezet was the guy's, the name of the president of the bank, I remember from 20 years ago.

18:03 He gave us our shot. They kept increasing our line of credit. And yet here we were in the third year doing 36 million. Unbelievable. And our profit was what our revenue was three years before. And during that three year time, we made enough of a splash that our name got shortlisted to this group of Germans and Europeans that owned the Belfort brand in Europe. Because Belfort started in Switzerland, in Gisey, in 1989. And a German company called Franz Hanyl, the company, renamed it Belfort. And they came up with this name Belfort, the Germans did, because they... researched. They wanted a global name because they were going to start buying up companies in Europe.

18:46 They started in 1989. They started in Switzerland. They went to Austria, Germany, the UK, France, Belgium. And every time they bought a company, they changed its name to Belfort. And they wanted to pick a name that didn't offend, like didn't mean like something rude in another language. So that's where the Belfort name came from. It was created by an ad agency that the family business, Frantaniel, had hired to come up with that name. And the logo, if you look at that Belfort logo, it's the symbol of all the fire alarms in Western Germany. So it's kind of got two things in a circle in the middle. So a lot of people look at that, don't know what it is. It's because that's what the fire alarms look like. Oh, that's wild. Yeah, I had no idea. In Western Europe. Yep. Okay.

19:27 So anyway, our name got shortlisted along with some titans of the industry at that time, like BMSCAT, ATI. They were emerging, but they were on the list. And a company called Inrecon, which we ended up buying later out of Michigan. Anyway, somehow, after they met with the five companies and interviewed them for who they were going to try to propose some sort of merger acquisition with to be the platform for growth in North America... They selected us. So our first meeting was Easter weekend of 1999. So kind of right around April 1st, I guess. And we closed on September 9th. So on 9-9 of 99, that's because they picked that date.

20:10 But on 9-9 of 99 at 9 a.m. is when Mark Davis and Jeff Johnson started Belfort in North America. Unbelievable. So just to recap this, because not very many people understand it, you literally were the anchor point for Belfort becoming an American brand, basically. This is true. Unbelievable. Unbelievable. Wow. And we were young. At that point, I was 30 and Jeff was 31. Wow. And we didn't even know about the industry three and a half years before that. So I pause you there, Mark, because this is unbelievable. Like if we don't give this enough airtime, everybody's going to just hear all this ridiculousness and not know what to do with it. So, okay. There was some really profound things you guys were doing as very young men as you're spinning this operation up.

20:55 So you have a business degree, but where was the rest of this instinct coming from? Was this just naturally in you guys? What'd you do from 21 to 27? What was the origin story before? Okay. Okay. Yes, a lot of credit goes there. And also the trust that Jeff and I had together and also understanding each other's skills, our strengths, and maybe our challenges. So Jeff is originally from Grand Junction, Colorado. He went to University of Colorado and he joined in Boulder and he joined a fraternity called Sigma Phi Epsilon. I didn't know Jeff. He was a state champion tennis player. He won doubles in the state of Colorado. Well, I grew up in a small farm town in Nebraska called Nebraska City, population 7,000, 16 kids in my high school graduating class, 14 boys and two girls.

21:41 Yeah. We had to play eight man football because the school only had 60 people in the high school. It was an amazing experience. And I go to University of Nebraska and I joined the same fraternity that Jeff had joined. And I didn't know Jeff at the time, but these are parallel paths where we did not intersect. So I'm a year younger than Jeff. So Jeff graduated from Colorado in 1989 from University of Colorado, and he accepted a job working for Sigma Phi Epsilon's headquarters as a leadership consultant in Richmond, Virginia. Well, I was hired to do that same job one year later when I graduated from University of Nebraska. So when I moved to Virginia at age 22, right after I graduated to start my job, Jeff Johnson was my boss. He was 23.

22:22 I was 22. And he had just graduated the year before. So we worked together for a year. And then I got promoted to be his peer. And then he was in charge of chapter administration. We had 280 chapters. So think of it like a franchise system, pretty much. 280 locations, yet we were the headquarters. So Jeff was in charge of chapter administration. I was in charge of expansion. So over the next two years, those next two years, I started 22 SIGF chapters, would add them to Jeff's administration, and where Jeff would then be managing 300 instead of 208. Okay. So in essence, what we were doing, we were working, but you may think, okay, well, fraternity, look, a fraternity is a small not-for-profit business. It is. It has members.

23:03 It has dues. It has alumni. It has a budget. It has risk management. It has to pay insurance. I mean, it is a small business. And so a lot of people will give fraternities a hard time. Oh, people pay for their friends. I never looked at it that way. I looked at it as a social organization that if you get into leadership, you learn how to run a small business at age 19, at age 20, at age 21. So Jeff and I had been officers in our individual chapters at both Colorado and Nebraska, but then we went to go work for the fraternity. We went through an extensive training program to learn how to help a small business survive, first of all, survive, and then secondly, grow, and then third, thrive.

23:44 Little did we know that that incubation period of working for the fraternity, which was really about belief in young men and developing young men and, and helping an organization would, would transfer into understanding how to run an organization because neither one of us had owned a company. So when we bought Rocky Mount Catastrophe, there were 33 employees of Rocky Mount Catastrophe and we closed on April 15th of 1996. And in the warehouse in Arvada, Colorado, 5762 Lamar street, I'll never forget it. Jeff and Angela Stimak that owned Rocky Mount Catastrophe, they introduced us to the 33 team members. Here's Mark and here's Jeff, your new owners. You know, I'm 27, Jeff's 28, we're smiling.

24:24 You know, we're not the youngest people in the room, but there was only a couple of people in the room younger than us. You know, these are all people. They're like, oh, okay, you guys are running the business. And the very first thing we did We got on a plane a week later and went to San Juan, Puerto Rico because Rocky Mount Catastrophe was a member of DKI. And DKI was having its annual convention at the El San Juan in San Juan, Puerto Rico. So Jeff and I are green. We're just getting, we just bought the business. We just borrowed all this money. Now we fly to Puerto Rico. And then our eyes were opened up. We're like, oh. we met some amazing people. Okay, that's where I first met Phil Rosebrook, senior and junior. Yeah. Okay, that's where I met Denny Jensen from Utah Disaster Cleanup, Frank Heaton from North Carolina.

25:09 Jeff and Angela had been members for a long time. Rusty Amarante. And so our eyes were opened up saying, okay, we didn't just buy a small company in a suburb of Denver. Yes, we did. Look at this industry and look at it. Wow. And so it was such a beautiful thing That happened in our first week that it opened up our eyes to what this possibility could be. Now, of course, because we're undercapitalized, you think we didn't think we're going to start buying up other DKI members, but that did happen. One year later, we bought the Rose Brooks business. OK, and we ended up buying Simon Katz out of Indianapolis and Rusty Amaranti had already sold to Inricon before we bought Inricon.

25:49 So we ended up buying like six DKI members over the course of that period. But again, to answer your question, that's kind of how Jeff and I got the training. And it was through working for the fraternity. You know, it's interesting how there are these kind of common stories. We have some relationships that are associated with the college propainer system and then the Certa propainer system. And in some of these franchise models or groups, you know, where they're bringing young people in and really giving them full-blown responsibilities to build and grow and, you know, educate teams and do all these things. It's absolutely profound what many of them are capable of moving on and doing because they just start putting in reps when they're so young.

26:36 You know, like one of our counterparts that we have a relationship with. Same thing. He's in his 20s and this guy's building a 50s. million dollar franchise, you know, cutting his teeth on every scar, every hard thing that you go through. And the guy's done all of this before he even hits 30 years old. It's just so profound. And your guys, the story clearly is this kind of similar pattern of exposure putting in the reps when you're young. You don't know what you don't know. So there's not a lot of fear because you, you're not smart enough to know that you should be afraid of that. Yeah, that's great. I can tell you, we were not smart enough to know that if we sold a bunch of jobs, we'd run out of cash.

27:16 We were not smart enough to know that. Okay. Now we figured that out relatively quickly. Yeah. Sometimes what you don't know is the fuel you need to do some scary crap, right? So the old saying, ignorance is bliss. Yeah. There's so much truth to that. Okay. And that's why they say, you just want to, I mean, you know, look, I'm always with my children. I'm like, you got to get good grades. You got to get good grades. You know, but, you know, one of the things that I've known, and I heard this when I was younger is, and this is just a generalization, but, but, and I'd certainly not say this to my kids when I'm talking about their academic performance. But, you know, one of the analogies I've heard is, is that will be nice to the C students because the C students are going to own the companies.

27:56 They're going to hire the B students to run them. And then the B students are going to hire the A students to be the accountants and the lawyers. And part of why those A students become the accountants and the lawyers is because they're so smart. They know not to take risks. But the C student is like, oh, risk, no problem. Let me dive into that because, you know, they're not thinking about what could happen negatively. You know, so anyway. I love it. They're always true, but I can tell you right now, I definitely was not the A student. And I hire those A students to work with me. Yeah, a lot of the C students aren't getting analysis paralysis in most cases, are they? Right. They're just moving. That's funny.

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30:43 It is the water cooler of our industry. So if you're not subscribed, go to cnrmagazine.com. Follow them on LinkedIn. Follow Michelle on LinkedIn. Trust us. If you're trying to stay on top of everything happening in the industry, your best destination is cnrmagazine.com. You guys, many of you have already heard about actionable insights and the training and the technical expertise that they bring to the industry. But how many of you are already leveraging the actionable insights profile for Xactimate? That's the game changer. It's essentially an AI tool that's walking alongside of you as you write your estimate, bringing things to your attention that should be added, that could be considered.

31:24 All of them items that increase our profitability, increase the effectiveness and the consistency of that scope. And it can do anything from helping a new team member assimilate some estimating best practices. And it also helps the grizzled vets add back that few percent that we've just forgot over time. So actionable insights, get insights.org forward slash floodlight and take a look at what the actionable insights exactimate profile could be doing for you and your team. This story so far, I mean, I'm just like sitting here with my mouth wide open, just listening to you recount this origin story.

32:04 And while you've described a lot of challenging factors, you spent a fair bit of time talking about your relationship with your bank and how you were able to problem solve through a lot of these growth modes with a great relationship with your banker. And you guys were performing to the vision that you were giving the banker. And so it all came together. Like, holy cow, this is just a beautiful, a dream, a dream that unfolded for you. But what did the hardship look like? I mean, you talked about payroll, you know, Wednesday to Friday, like we don't know. But how did you, what were some of the skills that, that you guys had to learn as you went in order to keep the dream alive.

32:46 I was talking with Jerry at ATI. He's the head of their national disaster team. And we were just talking about how these cat situations, you can sell yourself into bankruptcy. And you see this all the time in our industry is people go out, do a couple million dollars worth of work on a storm, and they have trouble collecting on it. They overspend, you know, and they don't know how to manage the operation. And what could have been Ferraris and Lambos, you know, that ends up, they go back to work for somebody else because they can't put it all together. So what did that learning process look like internally? And what did you have to begin understanding to keep that operation growing and solvent? I'm going to go back to the fraternity because even though the bank was accommodating, and I mean, every six months, this was not like once a year, we'd go back to the bank.

33:32 We were having to go back every six months because of the trajectory of, that we were growing. And the fact that they would give us receivables financing, and I can remember it like it was yesterday, is that we had a 70%, we went 70, 50, 30. But the minute we signed a signed contract, let's say it was for a hundred thousand, then we'd get 70% of that signed contract in AR eligibility. And then after 30 days, it would go to 50. And then after 60, from between 60 and 90, it would go to like 30. And so literally we kept continuing to sell our way into liquidity because the minute we'd signed a hundred thousand, we'd get 70. Okay. Access to 70. And now that works only till you stop selling.

34:13 Cause it can happen to say you have slow month or you have a slow quarter. And then all of a sudden you're like, Whoa, we don't have any new cash and that's fully levered. And so at one stage, and this is at about, I'd say about a year and a half, maybe two years. So we're talking 1990. Yeah, it was probably early 98, late 97. The bank said, yes, we will do this if you guys put some more money in, okay, during one of these requests. because we didn't have any more money left, we had to go back to the friends and family program that we had done to even help raise the money in the first place, where we had borrowed money. I remember Jeff's parents loaned us money. My parents loaned us some money.

34:53 And then we went to our fraternity brothers. And even though Jeff and I were not the ones that were from wealthy families, we had fraternity brothers from wealthy families. And we asked... some of our friends for loans and some other people that we'd met when we worked for the fraternity. And we literally did a second round of private financing to be able to, to keep the machine going, which then the bank was happy to see because once they saw that we were able to put some more money in and it was technically off balance sheet debt. So Jeff and I took that debt on personally and then we put it into the business knowing that on a waterfall, we're not getting that money back till the end because debt always gets their money back first, obviously. Yeah. So we did, we had to go back to the, and what kind of skills did that take? First of all, humility, right?

35:35 But you, at the same time that you've got to have the humility, you have to have the confidence because no one is going to want to loan you money out of just because they like you. Okay. And especially if you're going to personal relationships, yeah, people may want to help you, but okay. What is the business case? And what is the timeline? What is the interest rate? What is your trajectory? And all those things. And so Jeff and I got good at forecasting, at planning what we thought we could do, when we thought we could pay people back, you know, that sort of thing. And so, yeah, those skill sets took, first of all, yes, humility, but confidence in their plan, and then the ability to articulate and sell that vision and to friends and family so that they would believe in us to be able to help us with our capital position.

36:17 So I don't think that's uncommon for a lot of small businesses where they'll run out of cash and they'll go to, you know, and a lot of them don't end, like you were mentioning, don't necessarily end favorably. You know, the good news is ours did work out, but you don't know that when you're in that position, you believe it, you have to believe it, otherwise you can't go ask for it. But, you know, one of my other favorite sayings is, isn't it ironic that the harder you work, the luckier you get? And we were definitely working hard. But in this business, as you know, tailwinds can be helpful. And we certainly had the benefit of tailwinds with some timely storms. Like I mentioned, Hurricane George's really was this huge boost for us at that time in 98.

36:58 And then again in 99. And then in 99 is when the phone rang and we ended up selling to Belfort and that's Had we not sold to Franz Hanyl technically and started Belfort in North America, I can honestly say I'm not sure what would have happened to us eventually because we were so undercapitalized at that time. The good news is we don't have to wonder because that happened. But, you know, we could have never dreamed, oh, some German multinational is going to call us literally on our phone and ask if they can come to Denver immediately. And then six months later, we sell 80% of our company to them. We start the Belfort brand. And then they give us $400 million of capital to go roll up and consolidate the industry over a five-year period.

37:39 Unbelievable. I mean, so you were really riding the lightning right up until that moment. So to a certain extent, I don't want to underplay this, but to a certain extent, the shit could have still blown up in your face had that moment not come. Oh, for sure. That's why... When I say that humility is that people say, oh, do you get nervous? Look, Jeff and I are both competitive and we both like to win. And we both just believe that you can get, I mean, Jeff is such an inspiration. We both had that. Neither one of us had any doubt. However, other people would look around and be like, well, if that hadn't happened, what about, or if that hadn't happened? And yet we both believe in resilience. Resilience is one of my favorite words.

38:20 Yeah. is that although the whole journey, believe me, had lots of ups and downs in it, we never stopped believing in ourselves. And that, when you think about cultures are driven top down, when any organization and the team members are always looking at the leadership. And if the leadership is genuine, is believable, and when they really are all in, believing that you're going in the right direction, people want to follow people that they believe in. And even if it seems like it's a doubt, if those leaders don't show any doubt at all that they are charging forward, that just gives confidence to the rest of the organization. And it really does help elevate the performance of everybody. And I believe that's what happened. I don't want to think what would have happened with that because, you know, the good news is we don't have to.

39:02 But I'm telling you, Jeff Johnson, I would have found a way to make it work. You know, it's interesting. I think one of the things that you're highlighting, and I feel like we've heard this a lot, is there's this very distinct difference between those that are winning, right? They're building nice, small to medium-sized businesses, and they're having success, and it's a great lifestyle that's coming out of it. versus the men and women that do things on the scale that you have. And we haven't even moved into what you're currently focused on. That's a whole nother huge adventure in front of you. But one of the things I hear you talking about is very early on, you were getting keyed in on this vision casting, on your ability to sell what you're doing, the vision of what you have in front of you.

39:46 And it's interesting. We see a lot of successful business owners, but they never really... they never really fine tune a focus on developing that skill set, that core competency. It just constantly is this returning back to how we do service, how we deliver the product, right? And so if that makes sense at all to you, what was it for you that you guys learned early on was like, our ability to communicate and cast vision is going to be a difference maker between just building a business and building an empire. Like, was that even relevant? Was it part of your thinking process? When did that come up? I'm going to go back to the fraternity training that we received. We talked earlier about mentorship, but that's where we also, Jeff and I both had some great experiences with early life mentors.

40:32 But one of the things we learned in working for the fraternity is what's counted counts. Yeah. And this goes back to, again, a culture and part of how we did it. When we were members of DKI, as you know, we bought our way into DKI. In that second year, so in 1997, the actual convention was because the 96 was in Puerto Rico, like I mentioned. And in 97, it was actually in Denver. It was scheduled to be in Denver before we bought Rocky Mountain Catastrophe. So we were the host members. of the 1997 DKI International Conference. And they asked us to then present. You guys have had this success in a year. You've already bought your second DKI member, you know. And so Jeff and I gave a very controversial presentation to the DKI annual convention in 1997.

41:16 And we got a lot of criticism for it. And it was about how Jeff Johnson and Mark Davis were building a sales organization in the restoration industry, as opposed to a restoration company that was performing sales. So you think about that. We basically said that we gave a presentation that we bought Rocky Mount Catastrophe that was a restoration company in Denver, Colorado, and we transitioned it into a sales organization. that was selling restoration services all across the U.S. And we talked about what that means in changing the mindset and certainly not discounting operations, but what the theme was highly criticized again by the leaders of DKI and a lot of the more seasoned members is those young whippersnappers don't know what they're doing.

41:59 This is all about production. It's all about operations. They're going to, those guys will be bankrupt, you know, in a year. We heard it all. Wow. But Jeff and I just believed so much in this what's counted counts and we're going to build a sales organization. And how do you do that? We then built a training room in our little warehouse in Arvada and put whiteboards along all four walls. And we listed every one of our estimators and every one of our business development people in every Thursday at 8 a.m. mountain time. we had a sales meeting and everyone was in the room and everyone's numbers of were posted on the whiteboard. So this is before spreadsheets and before PowerPoint on the thing. This is like a true whiteboard with, you know, the dry race marker, but it would say Dan Dansby weekly sales.

42:43 Cause this was every Thursday. And then, month to date, okay, year to date, and last year. So we are tracking activity, sales, and in a manner where it was nobody wanted to show up to that Thursday morning meeting at 8am and have a goose egg and then have to talk. And so that culture would be one where if someone was not performing, they didn't want to be in that culture because you don't want to show. And we didn't, it wasn't a high pressure situation. This wasn't like boiler room or or, you know, something like that. It was obviously very friendly and positive, but it was definitely friendly competition and one that that drove revenue. And so that was a big part. And in fact, when we hosted that DKI meeting, I'll never forget it.

43:24 I'm giving Denny Jensen, who's like the godfather of restoration at the time, I'm giving him a tour. And in the training room, we did not put those numbers up there just for this tour, you know? And he goes, did you put those numbers? Is that just for this tour? Because, you know, the numbers that we were doing, I said, Denny, that is last Thursday's sales effort through October, you know, blah, blah, blah. And so anyway, I think from the standpoint of what did we do differently, Jeff and I did not come from this industry. We didn't know anything about it. We knew how to build a small not-for-profit and help them thrive. And we had some great mentors. And we just believed that nothing happens until you sell something. Hmm. Okay.

44:05 So you have to sell something now. Don't, you can't think that, oh, well, you can just be sales. That implies you still deliver excellent service. So you don't ever discount that, but if you don't sell it, you don't have the opportunity to deliver relentless customer service or great service because someone else gets that opportunity. You have to get it sold. You have to get the ink on paper. Okay. nothing happens till you sell something. And a big part of our success was the fact that our national sales manager that was already an employee of Rocky Mountain Catastrophe when we bought the company in April of 96, his name was Stacy Mazur. So when Jeff and I bought the company, we meet this young guy who's only like two years younger than we are named Stacy.

44:50 And he's the, I mean, his title was national sales manager, but yet the company was only in Arvada, Colorado. And he had come from, Gerloff, which is a restoration company in San Antonio. And Jeff and Angela Stimak had recruited him from a headhunter. And he'd want to live in Denver. So Stacy Mazur, as you guys may know, is that when Jeff and I hired Teresa Williams in 1998 from Munters, he decided to leave and form his own company called Interstate. And that company today is first on site. Unbelievable. Unbelievable. So anyway, Stacy knew how to sell. And so Jeff and I, even though we knew how to sell, we learned how to sell in restoration from Stacy. And Stacy was a big part of our sales growth in those first couple of years.

45:33 That's so wild. What an absolutely wild. interesting trajectory. Like some of the names that, you know, it's similar. We hang out sometimes with Thomas McGuire, Large Loss Mastery. And it's like, you know, he's one of the guys that came up as a PM and kind of the heart of a lot of these things. Yeah, that Munter space. Was he one of the guys you pulled over in the Rocky days? No. No, I know Thomas Mavara, but nope. I know most of the guys, Randy Lambert's at Cotton. Robert Peets is still at Belfort. Eddie Placuda is, I think, now at Electrolux. Teresa Williams is still at Belfort. Richard Freund was the managing director. He retired... Yeah. And so, no, I mean, I, I have a very clear, like photographic memory visual of the eight people and, and how much it was going to cost us to hire them in 1998 and thinking to myself, this is really a great idea, or this is going to bury us.

46:26 And that seriously, we did, Or not necessarily various, but we're like, you don't want to ever hire someone and then not be able to afford them a year later. Yeah, yeah. I would assume that payroll load from that group of eight probably wasn't the smallest salaries that you had been put. No, they were not. They were the biggest. They were by far the biggest of anybody in our entire company. But again, had we not made that move and then had that move with Agreco for the equipment, then we don't get selected by Franz Hanyl to start Belfort in North America. That was the move that sold the Germans on us being the platform. So unbelievable. Okay. All right. So I think we keep stopping your storyline, but there's so much awesome stuff happening here.

47:08 Okay. So you sold to Belfort. What now? What leapt into where you're currently grinding gears? Like what kind of walk us into this more modern scenario that you're currently leading? So as many of us in every industry have seen, and what will be a big impact to our industry going forward is this FTC ruling on the removal of non-competes. And I bring that up because it had a significant, profound impact on me because when I sold Belfort, Okay, to the Germans. And again, the Germans were called Franz Heinrich. That was the family office that then owned, when I sold my remaining 10%, the Germans owned 100% of the business of Belfort worldwide. And I signed a non-compete.

47:50 And I will tell you, I made the decision to sell and I wanted to sell. And I just had never imagined coming from small town Nebraska that I would be in this position. And yet what happened the year after I sold? Hurricane Katrina hit. So I'm on the sideline and I miss Earth King Katrina. Now, I had made the decision as a husband and as a father with a now growing young family. And in order to grow that business, as you guys know, takes a lot of sacrifice and a lot of nights on the road. And that's when I made the decision. You know what? I want to focus on family. Well, I'm on the sideline. Okay, you can do that and be an entrepreneur at the same time working. And a year after I was just, oh, I wanted to get back in so badly.

48:31 So I asked Belfort if I could buy my way out of my non-compete. And the answer was no, you're too young. We're not going to do that. So I had to wait. And as I waited, Okay. I'm like, okay, I'm going to reenter now at the completion of my non-compete. And instead of thinking, let me do exactly what I did before and find a small platform like a Rocky Mountain cat. I was thinking, no, I'd rather do something bigger because once I got to the scale of Belfort. So I was approached by a private equity firm that was buying a subsidiary of ServiceMaster called Instar, Instar Services Group. So it was PE owned. They wanted a CEO. I came in to partner with them.

49:11 I had a minority stake and I'm now reentering the industry with a newly acquired subsidiary that came out of ServiceMaster that was doing just commercial loss. And the reason ServiceMaster sold it is the ServiceMaster franchisees did not respond well to an independent commercial company being brought in saying, refer your big jobs to them. So yeah, That was a very interesting experience because that company was losing money. So I was not a turnaround guy. I had never run a company that was losing money. We were always making money before. So I take over this company that was losing money. And what happens? Not because of me. I can tell you this was not because of me. But Hurricane Ike happens and we signed $70 million with one client.

49:54 Wow. Okay. In Houston, 70 million with one healthcare client. And so obviously we have a huge financial turnaround. So that all went well. And again, I have nothing negative about private equity. I just think there are some people that can work for private equity and some people that can't. And I think I would put myself into the category of challenged. I would be challenged with that. Maybe a little better now, but you know, now that I'm in my later fifties, but you know, At this point in time, when I'm, you know, early 40s, it's like, wow, I'm not so sure because I have that heavy growth, let's go, let's go. And so anyway, we didn't see eye to eye. So I decided to sell my shares in Instar and fulfill a one-year non-compete.

50:38 And this is where I had the pivot in my mind. Where before, remember, I said I started with a small mom and pop platform. That turned into Belfort. That was great. Then I went with Instar, which was a PE owned firm doing a hundred million to start with right when I took over. After reflection on those experiences, I was like, you know what? I'm going to come back in and I'm going to go right back to what I did before. I'm going to find a Rocky Mount catastrophe. I'm going to find a husband and wife owned business. great business with a great foundation. And again, whether it's serendipitous or not, I literally had a vision of what I was looking for. And that's exactly what I found with Signal Restoration. But I needed a Jeff Johnson. So Jeff, when he had sold Belfort, then he ended up fulfilling his non-compete.

51:21 Then he ended up partnering with Stacy and buying in with Interstate. So I needed to find, you know, because again, back to strengths and weaknesses, I always kind of defined myself as outside the curb and Jeff was inside the curb. So I wanted to find someone with, because operations is not my expertise. So I found the most amazing business partner you could imagine. Jeff was great. And then I, for the next chapter, I find Frank Torrey and Frank Torrey is an operational master. He's just, he's incredible. And he had built from scratch a landscaping company to turn into one of the largest regional ones in the country. He was in 16 States and he started with one wheelbarrow. So he had just sold his landscaping company and he and I knew each other because I used him as a subcontractor.

52:06 before. And we were talking, I'm like, this guy is incredible. He would be the perfect partner. So I said, Frank, what do you think about this? You've sold your business. You know a little bit about restoration. What do you think we go in 50-50 and we do this together? And here's how Jeff and I did it before. And I think you and I'd be great. So He's all in. We go in 50-50. We decide to search for that platform and we find a husband and wife owned business that was 40 years old in Metro Detroit, in Troy, a suburb of Detroit, that was doing just under 10 million a year and making about a million bucks a year. And they had no lawsuits, no debt, They were part of the State Farm PSP program. That's how they built the business. And they had the best reputation. But they really ranged between eight and 10 million for like 10 years.

52:48 And they had never done a job outside of Michigan and mostly just in Metro Detroit. They also only did reconstruction. No mitigation, no content. There were other companies that they had partnerships with where they did lead sharing. And so literally a company called Modernistic did the water damage. A company called Coaches that Belfort ended up buying later, it did the contents. And so they had this partnership. So when Frank and I bought it and we bought it March 1st of 2012, the company was 40 years in business, Michigan only, reconstruction only, 95% residential, never a job outside of the state of Michigan. And the first thing we did was hire eight operational people. So we even go back to the DKI presentation in 1997, when we were like very much, we are building a sales organization.

53:34 And we did when we bought Signal. It was like, okay, Signal already has, cash flow of a million bucks a year. Okay. And Frank and I are like, we're not going to touch that cash flow. So we're going to use that cash flow. And we know how to sell. So what we're going to go do, we're going to go hire the best large loss commercial operators, because we know we're going to go sell those jobs and we have to be able to perform them. So I think those critics in 1997 would be proud of my evolution of that because I always appreciated operations. But They were the first eight people I hired. Seven of those eight are still with us today, 12 years later, in our operational team. And so that $10 million company that had never done a job outside of the state of Michigan ended up doing $140 million of commercial work outside of the state of Michigan in the next 14 months.

54:24 Holy cow. Wow. That is a ridiculous number. Let's talk about tailwinds. How did that happen? I always say, and you guys have heard me say this before, is that you've got to have a vision. Okay. And then you've got to articulate that vision. You set the goals. But if this is the definition of success right here, planning and opportunity, that is the intersection of success. Because the opportunity will go by, but if you're not planning, then you will miss that opportunity. So you have to be planning. So we were planning to be a nationwide large loss commercial contractor, but we had to hire the operations people first. Superstorm Sandy hits. That's what we did. We got hired by the city of New York. Our one T&M contract was 133 million, and we rebuilt all the hospitals in the city of New York for the city of New York in 10 months.

55:11 under signal restoration, which then put us on the map in year one of our ownership, which was year 41 of signals existence. And now all of a sudden people like, well, who's signal? What? Where's signal? And then we bought a company in California in 2013 called USA specialized. So now we have an office in orange County. And we now have a satellite office in New York because we've now done all this work. And so we're officially coast to coast, you know, one year later. And since then, it's been absolutely incredible. Now, two times in signals, 12 years, we've done, ironically, $230 million jobs. When Hurricane Maria hit Puerto Rico, we got hired by Hilton and Blackstone.

55:53 And just the Caribe Hilton job was $130 million. And then we did the embassy suites for Blackstone for 22 million. And we did the Intercontinental and a number of other hotels. So we ended up doing 200 million in Puerto Rico in 2017 and 18 after Hurricane Maria. And so, but what Frank and I did after Superstorm Sandy, instead of paying ourselves big bonuses and instead of buying Ferraris, we didn't do any of that. We kept the money in the balance sheet. So we've now got a strong company. It was a strong company before, but now we have a strong balance sheet. And then we use that strength of that and our personal balance sheets because we were considering, we didn't want to bring in outside investment because we had done that before.

56:33 And the thought was we don't need it unless we want to grow through acquisition. But growing through acquisition would mean that you have to bring in a financial partner if you really want to do it to compete with, you know, those like ATI and, you know, First On Site and Belfort that are growing that way in Blue Sky. Yeah. We wanted to stay private. So we were going to franchise Signal. And we met with Wayne Wadaika, who's the founder of CRDN. We met with another gentleman named Lee Capitina, who founded ERS and Electronic Registration Services and ART, and he franchised those. And so we were talking to our different colleagues that had franchised. And it wasn't long that basically the consensus was, Mark and Frank, you guys move too fast.

57:14 Franchising will take too long. It's also a crowded space. And so we were going to franchise Signal. maybe you should consider buying a franchise system. Well, we're not a private equity fund, you know? And so we have to go down the list. Like how far down the list can you go to get to affordability? And by the way, you just can't buy a franchise system because they're not for sale. And most of them are owned by private equity. So anyway, we would go down the list. And so Pure Clean was near the bottom of the list of restoration franchise systems. And the company was in a difficult time in that they didn't really have any national accounts and they were losing some, I would say, instead of growing, they were shrinking in that the number of units was going down and then the royalties were going down.

57:57 And so Again, I'm not a turnaround person. And Frank had not been a turnaround person before, but we certainly know how to sell and we know how to work hard. So Frank and I decided to make a run at Pure Clean unsolicited. So we did the diligence. We met with the owners. We liked the owners very much. I think they liked us. We presented a plan to them that we would buy the 80% of their business so that they could still own the 20% to ride our coattails and ride with us. And that we overpaid for the business based on the trailing 12 month. We paid a 21 times multiple, which when people hear, they're like, you paid 21 times.

58:37 And I'll say this to people all the time, is that evaluation is simply a point in time. And what you're paying for is the value of what the former owners could reach. That's what the price is. But once you own the platform, it's then up to you. What kind of value can you turn that company into? So I've had the opportunity to buy and sell several companies now over my 28 career in the industry, most of the time on the buy side, a couple of times on the sell side, right? So I understand it. But when you really believe in yourself and your plan and your people, don't be afraid to overpay a little bit for a company because what's the alternative? You either own the company and now you have the platform to grow or you don't.

59:19 I always use the analogy of an aquarium. If you're not in the industry yet, you're thinking of buying a company to get in, then you're looking at those fish through the outside of the aquarium. You're not in. You've got to get into, in order to get into that aquarium, you've got to buy your way in or if you can start a franchise or whatever. I mean, this is just amazing, but I want to go back and I want to hit on something that you've referenced a bunch of times. First of all, this experience with Sigma Phi Epsilon, right? Early days, how formative that was for you and Jeff. And really, it sounds like set the tone for how you guys saw business building, how you learned to lead, all of those things. But I want to go back to this mentor piece because I'm curious...

59:59 Who did you have in your circle at some of these different intervals? And what were they speaking into your life? Because undoubtedly, and Sigma Phi, when you first talked about the fraternity, first of all, I actually did construction one summer. And we spent a lot of time in a Sigma Phi Epsilon fraternity at Oregon State University. In Corvallis. In Corvallis. Connection to that. But I think the value I immediately went to with a fraternity is it connected you with a lot of iconic leaders that also came potentially through that fraternity system, right? And supported the fraternity and so forth. But I'm curious, talk us through some of the mentorship that you received along the way. the way and what they were speaking into your life. So it's interesting you mentioned the SIGEP chapter at Oregon State and Corvallis because my first mentor was my, Jeff and my, both our bosses, the executive director of SIGEP at SIGEP headquarters, who was a SIGEP from Oregon State and Corvallis.

1:00:55 And Corvallis was even his hometown. His name is Ken Maddox. And Ken to this day is still a mentor of mine. So Ken has retired, but he still performs the annual leadership retreat for Signal's leadership team. So he comes in from Oregon. He is just, so he has continued to be, so I'm going to answer the question about, that early stage when he was a mentor, but he still is. Wow. And I met him in 1990. So, you know, we're talking 34 years. And part of it was the training was excellent. At that time, we went through a three-month summer training before you ever went to a university campus. So you graduated, you moved to Richmond, and there was a six-day-a-week summer training program.

1:01:37 That training program included things like how to give a presentation. And the dynamic woman that came from New York City that the fraternity hired to teach us on how to give a presentation was, for example, one of her clients was the former CEO of General Electric, Jack Welch. So here she was at that time teaching Jack Welch how to give a presentation. And yet she's coming to the fraternity. And at age 22, I'm learning how to give a PowerPoint presentation, what to do with your eyes, what to do with your hands. Yeah. how to work a crap. That's just one example of the professional training that we received. We also received sales training. We received conflict resolution training. You know, we had these extemporaneous cards and we would be in the conference room, right?

1:02:20 And we also, in the first week, they would take us to Joseph A. Bank. And again, those suits are $180. So it's not like they're expensive. We each got to buy two suits, you know, the white shirts, the striped tie, And, you know, that was our uniform. So it was, this was not, oh, you're a fraternity, you're wearing a t-shirt. It was jacket and tie. Okay. And that's what you wore. That's what you wore to training. And that was that whole theory of work. You're creating a culture. And so that's everything, everything from what you wear to how you speak. And so that was the fraternity experience was, wow, I'm 22 years old. Yes, I'm working my fraternity, but I have to wear a suit and a tie to work every day. And I go through this training and we're learning about sales training and conflict resolution.

1:03:01 Then we had this exercise every week called extemporaneous where we'd be in the conference room and they would toss each person a three by five card and a three by five card. And they would have a scenario on it. So give me an example. You walk into the fraternity house at Old Miss and, you know, there is a brother laying unconscious, you know, on the couch or something like that. Or you walk into a fraternity and you see a keg of beer or whatever, whatever those scenarios are that, you know, Or you walk in, you're there on a Friday night and you smell marijuana or something. And so they literally was like, how would you address conflict resolution?

1:03:42 And what's interesting is that's when we learned things like, Bad news does not get better with time. Little things like that. What does that mean? When you have an issue, you don't wait to confront it. You confront it right away because it's like, the issue isn't gonna get any better. If you're aware of the issue, why would you wait to address the issue? Because all it can do is simmer and get worse, okay? Those kinds of things that you learn, again, that were invaluable of how they transferred into ownership of a small independent restoration company when we were just there working for Ken Maddox at the fraternity and the mentorship that the whole culture provided. That is so powerful. With that, and maybe you can't reference this specifically, but in that kind of more one-on-one mentorship, the Ken Maddox relationship, like what did that look like?

1:04:30 So as you look back on that experience, and I know mentorship is important to you now, what did that skill set look like? What was it that he was doing? What did that relationship look like that... carried you in to ultimately being so honoring of it now. I would say instead of him talking and giving wisdom, he was the thought provoker. He would ask questions. He would answer a question with a question because instead of him having the answers, he was the best at facilitating us to come up with the answers ourselves. And that, I just remember continuing to be amazed by that. Because we all believed he knew the answer, but he was not going to give us the answer.

1:05:11 It was, he wanted us, you know, collectively thinking of what would be the right answer for that. And then, of course, it would come around full circle. That is so powerful. I mean, that is. And I learned that in your early 20s. Observe that, that leadership attribute. I mean, that is what an incredible opportunity and experience. Any other key figures besides Ken that showed up along your path that asked great questions, right? What, who was that? Well, his name is AJ Scorbante. He is also a SIGEP. He graduated from Kansas State University in 1955. So he's in his nineties now. And so my father had done the same job in 1954.

1:05:52 When my dad graduated from university Nebraska, Omaha, he went to go work for SIGEP headquarters. And that's why I wanted to do it because when I grew up in a small town in Nebraska and on a Saturday, my dad would be like, Oh, Auburn university is a beautiful campus. And I'm in the middle of Nebraska. Dan, where's Auburn? How do you know? And Oh, in 1954, I worked for my fraternity for two years. Well, While he was traveling around the country, he met AJ Scurvante in Manhattan, Kansas, and AJ was the chapter president of the SIGEP chapter. Well, I don't even hear AJ's name until 1992, okay? So fast forward to 1992 and 1993, I'm leaving my three-year tour duty with a fraternity. And my dad says, well, I would like you to meet AJ Scravante in Omaha.

1:06:34 He owns a company called Vital Learning that he had bought from McGraw-Hill Training Systems, and they sell off-the-shelf training, sales training, supervisory training. And it's a private company. He bought it from McGraw-Hill, and he's hiring young salespeople. And I told him about you. And I said, well, dad, Bill Schreier, who's a SIGEP alum, he is the CEO of Merrill Lynch, and that Merrill Lynch has a training program in Plainsboro, New Jersey. And I have an opportunity to go work for Merrill Lynch. And I'd really want to do that. He said, would you just please meet with him? So I fly to Nebraska, you know, where I'm from. And I have lunch with Mr. Scribanti. And I was just fascinated because he came from a small town, small area in Nebraska.

1:07:16 He had started a company from scratch. It was called Majors Corporation. And we're... He was literally early on one of the first people to collect all the prices from the different grocery stores and then combine them into a price book and then sell them back to them so they could know what their competitor's pricing was. Anyway, very, very innovative for his time. But just listening to him, how he had done it, this entrepreneurship. And then once he sold to Dun & Bradstreet for $80 million back in the 80s, then he was doing all this other entrepreneurship. And so the opportunity was to go work for him and work directly for him and learn how an entrepreneur actually runs a business. Oh, unbelievable.

1:07:57 The salary offer was 50% less than the Merrill Lynch salary offer. Right. Okay. 50% less. I can remember the numbers like it was yesterday. The Merrill Lynch offer. Now this was in 1993 was 80,000. And the vital learning offer was 40,000. And one was in New Jersey and one was in Nebraska. And I'd already grown up in Nebraska and gone to school there. And I was interested in staying on the East coast, but something was telling me, wow, working for this man would be unbelievable. I'm going to go. Otherwise I'll be in a great corporate training, but, but I can work for this amazing entrepreneur. So the reason I made that ultimate decision was based on Ken Maddox telling me, okay, so going back to my first mentor and what he had said to me years before, which was about the decision-making of You know, the whole, those three components of what criteria should you rank as you're making those early decisions?

1:08:53 Number one should be learning. Okay. Two should be earning. Three should be giving. And then those three rotate as you evolve in your career. But he said the first 10, 15 years after you graduate, every decision you make about where you want to work should be based on where you're going to learn the most. Because as you learn the most, you're building up the tools in your toolbox and your heavy earning years are usually in your 40s. So if you're building that toolbox those early years, And so I reflected back on that and I thought to myself, okay, I think I'm going to learn the most from Mr. Scribante. And that's where I made the decision to go work for Vital Learning. And that's exactly what happened. And then Jeff Johnson, then I hired him to come work for Vital Learning. So now Jeff and I are back together again. So we worked at SIGF headquarters for three years together.

1:09:35 Then we worked at Vital Learning for three years together. And that's why we had the confidence of knowing that the two of us could be great partners. We trusted each other. We knew each other's skill sets. So vital learning was an amazing part of the journey because I got to have a mentor that I worked directly for again. So now my first two jobs, I worked for people that I'm still in touch with today. Okay. AJ lives on Sanibel Island and his house got hit by Hurricane Ian. Checked in on him to make sure he was okay. Okay. And as I said, Ken is still involved in our company providing, you know, leadership training. So, but that experience at Vital Learning, small entrepreneurial company, very sales driven.

1:10:16 And we had to learn how to sell sales training. So if you think about who do you sell sales training to, you sell it to the VP of sales. So the VP of sales, and I mean, big companies like Home Depot, we sold sales training to Home Depot where we were training all of the clerks. on how to sell. It was called customer oriented selling. Well, what does a VP of sales look at when they're looking at the salesperson that's selling them sales training? Are you modeling what you're selling? So Jeff and I had to learn customer oriented selling and had learned how to model it. And so what did that mean? I already knew how to sell, but once you learn a system on how to actually sell and how to handle obstacles and how to give presentations again, that really enhanced the, I guess, my sales technique.

1:10:58 Yeah. which I think I was partially born with, but I've certainly enhanced it with a lot of training over the years. So that helped us tremendously. What an up-and-hour hole afterburner that kicked on. Well, hey, I want to be really conscientious of your time, so I want to bring this to a close, but I got one last question for you to kind of sum this thing up. So amazing experiences. You've built amazing companies. You're still absolutely engaged and have the pedal down and are continuing to scale. You referenced these amazing relationships that helped really grow and support this trajectory. You're now clearly in a position where you have a lot to offer. And I know that you have prioritized some mentorship yourself now being in that more giving back space.

1:11:44 Just kind of give us a quick perspective on what that looks like to you. And then let's bring this to a wrap. We really appreciate all the time you've already given us. So, yeah. Well, thank you guys for that. And I have to tell you that that's how I believe that it worked out that Frank and I ended up buying PureClean and that's where the story was going is, is eight years ago, we bought that PureClean franchise unsolicited and little did I know that it was going to be the most fulfilling business venture you could even imagine. And I'm talking about the personal, yes, have we had business success? Yes, we have. But I'm talking about how it feels to help mentor new and even existing franchise owners that come from all walks of life and all ethnicities and all countries where they've, most of them have not been in our business before, whether they took a corporate buyout or whatever it might be, is that, believe it or not, I would say we have 500 locations now.

1:12:37 We just hit 500. Wow. We bought the company eight years ago. We had 200. So we've been on a heavy growth trajectory. Wow. But I would guess there's at least 25 of our owners in the last five years that were introduced to the industry by having a water damage in their home. And they had an experience and they're like, wait a minute. Wow, that's it. They start talking to the technician. That's incredible. That's interesting. And so, but with people from all walks of life, the thing that today is by far the most fulfilling is I have the opportunity to mentor literally dozens of new Pure Clean franchise owners every year. And that number just compounds. And I think the thing that I'm, although I'm very, very honored and proud to be able to provide some leadership at any level, is our longest tenured franchise owner, Rob and Caroline Hunter out of Louisville, Kentucky.

1:13:27 They've been in the system since day one. And they are the largest in terms of revenue. And I'm very, very proud of this. And I'm good friends with them. So I hope I can say this. I don't think they'd mind this, is that they have been the top dog since we bought the company and their revenues were about 8 million when we bought. And a lot of people have said, well, how can you help the bigger ones? I know you can help the small ones, but how do you help the bigger ones? The good news is, and I'm not saying I have anything to do with it other than, you know, I love providing that guidance and mentorship for them. They have tripled their business. And, you know, they just did almost 23 million, you know, last year and continue to grow. And the fact that they're fully engaged because they're then mentoring, they're providing mentorship to that next level of owners.

1:14:12 And so we have a culture at Pure Clean of mentorship. It's a big part of our culture. It's a big part of our success. Yeah. is that even in certain areas like Columbus, Ohio, we have an immigrant from Nigeria. Okay, Sadiq moves here. He's a genius with, absolute genius with internet marketing, but he decides to buy a PuraClean because he had had a water damage in his house. He's one of those examples. And, And he's now off. I mean, it's unbelievable the success he has had in his five years, only five years, where now he started a back office company in Nigeria that provides back office to over 70 pure cleans now, not only the entrepreneurial there. And I just had a mentorship call with him on Sunday morning, Mother's Day, because he got accepted into some Harvard Business School executive leadership thing.

1:15:02 Now he's only five years into his career ownership. And he's asked me to be his mentor and to have a call, you know, 30 minutes once a month. And those are just the kind of things that are just so rewarding. It's incredible. And so, yes, we like the growth and Frank and I support our franchise owners and we have so much fun and we, and Signal and Pure Clean do not compete because Pure Clean does, you know, primarily smaller jobs, mostly residential. Signal does commercial jobs. And there's a cross-reference there where the companies are referring projects to each other every single week and providing a lot of cross-training. And at Signal, we're helping train the PureCleaners that want to learn about commercial loss because we believe the rising tide raises all ships.

1:15:44 So without the PureClean franchise system, I would still be wanting to mentor, but I just wouldn't have as much exposure. I would do it through RIA and other things like that, which I still do. But the blessing that I have to be able to be in that position to help serve others that are helping build their Pure Clean is really incredibly rewarding. That's awesome, man. What a freaking journey. Man, you spent a lot of time with us. Thanks so much for being so gracious with that. We'll bring this to a close, but... I'm really blown away by the entire story. I mean, there's just so much history that really has affected the industry as a whole that you've been a part of in a real key way.

1:16:26 And it's just really amazing. And on top of that, you continue to be super humble and really sharing with the people that you serve and work around. So it's pretty easy to respect you, man. So thanks so much for hanging out with us and giving us your time. We really appreciate it. It's been my pleasure, my honor, and thank you very much. If there's ever anything I can do for any of you, please let me know. Love it, man. Thanks so much. All right, everybody. Hey, thanks for joining us for another episode of Head, Heart, and Boots. And if you're enjoying the show, but you love this episode, please hit follow, formerly known as subscribe, write us a review, or share this episode with a friend. Share it on LinkedIn, share it via text, whatever. It all helps.

1:17:06 Thanks for listening.