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Chris Edwards is a small business owner born and residing in Colorado. After college, he jumped into a finance position but eventually decided to switch out of corporate America and into the SMB world. So, in February of 2021, he closed on a flooring store called Affordable Flooring Warehouse. They have a storefront location as well as a warehouse operation to provide installation services to customers. You’ll get to learn how this has created a competitive advantage and differentiated their business. You’ll also get to hear about why it seems more consulting guys are purchasing small companies, as well as the trajectory and direction he envisions his company going in.
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Announcer: Chris edwards is a small business owner born in and residing in colorado After college, he jumped into a finance position, but eventually decided to switch out of corporate America and into the SMB world. In February of 2021, he closed off a flooring store called Affordable Flooring Warehouse. They have both a storefront location and a warehouse operation to offer customers installation services.
Announcer: You'll get to hear about how this has created a competitive advantage and differentiated their business. You'll also get to hear about why it seems more consulting guys are purchasing small companies nowadays, as well as the trajectory and direction he envisions his company going in. Enjoy the show.
John Wilson: It's no secret that Brandon and I have cleaned up a lot of poop. Unfortunately, we don't clean up crappy bookkeeping. That's where today's sponsor comes in. Appletree Business Services handles bookkeeping, payroll, and taxes for small businesses. Appletree Business Services is the go to choice for growing service companies so they can manage cash flow, know their numbers, and save on taxes.
John Wilson: The U. S. based team has taken care of small business bookkeeping and taxes since 2005. Find them online at appletreebusiness. com or email patrick at appletreebusiness. com. Today I have Chris Edgwards with us. Welcome Chris. Thanks
Chris Edwards: Sean, appreciate you having me.
John Wilson: Yeah, this will be a lot of fun. Chris, how about you start us off with a little bit of a bio on who you are and What you're up to.
Chris Edwards: Yeah, sure thing. So I currently run a business called Affordable Flooring Warehouse. Just personally, I'm from Colorado, grew up in the front range of Colorado. Started my career in corporate finance and fp and a at a telecom company that did a lot of mergers and acquisitions. So that's how I got exposed to the m and a world.
Chris Edwards: We did about 30 deals when I was at that company. So I got. A lot of exposure to value creation through acquisitions, which is probably what prompted me to go down this career path, or at least seeded this career path in my mind. I then, before I bought this business, I was in consulting for about three years doing a salesforce.
Chris Edwards: com implementation projects. And, during the pandemic, I took a hard look at my life. Decided I didn't want him to stay in corporate America for too much longer. Stumbled upon the S and B ETA acquisition, entrepreneurship through acquisition world, and made a lot of sense for a lot of the reasons that your guests have articulated.
Chris Edwards: I'm sure. So I quit my job and. October of 2020, and I ultimately closed on affordable flooring warehouse in February of 2021, and have been operating it as the de facto general manager ever since. And yeah, so I've been drinking from the fire hose last little over a year now, and am focused heads down on making this the best flooring store we can.
John Wilson: Yeah, there's a lot to dive into there. I don't think I knew that you had the consulting and the background in M& A, obviously for a little bit of a larger corporation, but that's pretty interesting.
Chris Edwards: Yeah.
John Wilson: The 30 deals, walk us through that. Rough size of the deals. What were they looking for?
John Wilson: How did they think about value creation?
Chris Edwards: Yeah. So I worked at a company called Zayo group. It was public. It's now private. So what Zayo was a roll up of telecom assets. It started in about 2007 and at that time, telecom assets were trading at pretty depressed multiples. A lot of listeners may recall that in about 2002, there was a telecom bubble and crash.
Chris Edwards: And basically ever since that time, Telecom assets were really depressed valuation wise. And so an entrepreneur in Boulder, Colorado, he had been an executive and had ridden through that bubble and crash the prior 10, 20 years before that, and he saw an opportunity to roll these assets up at scale.
Chris Edwards: He had some heavy hitting private equity guys funding him and they, Rolled off about, like I said, they're about 30 deals from about 2007 to when I left, which was about 2017. So we were involved in a lot of deals. I wasn't a part of all of them. I was a junior employee at that point. I was just out of college.
Chris Edwards: I was like a, financial analyst, FP and a analyst climbed the ranks a little bit. And, the biggest deal that we did was a 2 billion deal to take private a company called above net. So that sort of really catapulted Zayo from this hodgepodge group of guys that were doing these deals that people were, I thought were a little bit speculative and they basically turned.
Chris Edwards: 300 million of equity into about 4 billion of equity over the course of 10 years at its peak sale was valued at about 8 billion. And then was taken private about two or three years ago. Obviously very different world than what I'm playing in now, way bigger scale, huge private equity money, funding them a lot of it was financed by debt.
Chris Edwards: So just seeing how much value could be created on a levered investment. Was really eyeopening to me. The compounded equity value of Zayo from its inception to when I left was about 45%, so you're talking about huge returns over a long course of time. So just having that sort of FP and a background, that financial modeling background, That background of really scrappy guys who are out there, like making these deals happen, rolling it all together, integrating them was awesome.
Chris Edwards: It was like probably the best place I could have ever landed out of college. It was a really incredible experience to jump into fresh out of college.
John Wilson: Yeah. That's really interesting. I don't know if we've had another guest on who has participated in an at scale roll up, which I would define this as at scale.
John Wilson: This is, billions of dollars. I think you might be the first, because I can't think of another one. There's a lot of people in the process. That is really interesting. All right. So you left there and you began consulting for Salesforce.
Chris Edwards: I worked for a consultancy that we did in Salesforce implementation projects.
Chris Edwards: So we were a Salesforce partner.
John Wilson: Gotcha. I
Chris Edwards: worked at Slalom for a couple of years and most recently Deloitte consulting.
John Wilson: Is there like a natural, it just seems there's a path. I know a bunch of people, there's a bunch of ex McKinsey, ex Deloitte, ex like all these like different consulting firms and they, all these guys end up in ETA.
John Wilson: Is it a thing inside there where people see it as a better path somehow? Like how do so many consulting guys end up buying small companies?
Chris Edwards: Yeah, it's an interesting question. There's definitely not like I wouldn't say there's like an entrepreneurial ETA ethos within Deloitte. Like I didn't learn any of this from Deloitte.
Chris Edwards: I think probably what happens when you're in consulting is you get exposure to a lot of different businesses. You peek under the hood of different businesses. You can see the common areas. Of concern areas of challenges that companies have, you get a broad perspective of different businesses and how they work.
Chris Edwards: So that probably gives consultants a little bit more of confidence that they can jump into ETA and may not necessarily know everything about the business or the industry, but get up to speed pretty quickly. That's the one thing that consultants do well is they're able to get up to speed fairly quickly.
Chris Edwards: Now I would say that it's a very surface level. Understanding of the business. A lot of times, consultants get a bad rap for a reason. A lot of the skills that I learned in consulting do not translate to the small business world at all. That's much scrappier. I'm not doing decks all day. It is a very polar opposite experience in a lot of ways, but you do have that kind of confidence to walk into a different business.
Chris Edwards: Not necessarily be overwhelmed by a day one, cause you've been exposed to a lot of different things. You get a feeling of knowing what you need to know and what you don't need to know, right? Like you're not, I think one of the skills that I learned was not succumbing to analysis paralysis. It's I don't need to know everything about flooring day one, right?
Chris Edwards: I don't need to freak out that I don't know the technical specifications of carpet. I know that I need to understand some things at a high level and you Consulting gives you that sort of understanding of where you need to pick and choose your spots of understanding and where you can leave things alone and let them matriculate over time.
John Wilson: Okay. I can follow that. And maybe like tack onto that typically male, young and ambitious. So we'll add those on there too.
Chris Edwards: That's probably true. Yeah. I think a lot of consultants get burned out in consulting because it's easy to get burned out on, it sucks. Like just doing decks all day and it's not the most sustainable lifestyle.
Chris Edwards: So I think it probably for a lot of the reasons that I was attracted to it, making a jump to a small business ownership career path can make a lot of sense for these types of people. Like me, you can buy things, just the logical aspect of it. You can buy things at a low multiple. You can, hopefully grow it and create value from there.
Chris Edwards: You've seen what value creation hopefully looks like if you've been a part of successful consulting engagements. But yeah, consulting long term is not necessarily the most. Healthy lifestyle.
John Wilson: Yeah. All right. So you're a little bit over a year in what month do you feel like you got your legs under you?
Chris Edwards: Probably I would say month nine. I feel like, okay, I can do this. I'm not like losing sleep. You get enough reps under your belt. You start to feel pretty confident about yourself. You see the PNL play out. You see that. The business is working. Hopefully the thesis is playing out. Like I hoped we're beating projections.
Chris Edwards: We're beating forecasts. So I would say probably month nine is when I was like, I could take a deep breath and take a step back and say, okay, this is going to work. The nine months prior to that were, at times hellacious, it was extremely intense. I financed this thing with 90 percent debt.
Chris Edwards: It's a lot of pressure. You really put yourself out on the line. I didn't have any equity investors with me. I did it all myself. And there's a lot of challenging moments and sleepless nights, but yeah, I'd say probably month nine was when I was able to take a deep breath and relax a little bit.
John Wilson: Yeah. What were a couple of hellacious moments?
Chris Edwards: Man, there were moments where I thought, my installation team was going to quit. I thought that I was going to be without, like my install manager. There were some Moments with the seller during the transition that I just thought that I couldn't even deal with this guy anymore.
Chris Edwards: Like he's just driving me crazy and wasn't helpful. And probably more than anything, just like thinking about what I had really done, which was pretty extreme thing. I had a good thing going. I was making good money and consulting. I had a decent lifestyle. Not that much pressure necessarily. I was working hard, but, I had a pretty cushy life.
Chris Edwards: And then I decided to throw that away and go for something that my entire net worth was on the line. If it didn't work out right. If this business goes to zero and I had this massive SBA loan on my head and I can't figure out how to pay it, like That's a lot of pressure, so it was probably more just not having a hundred percent certainty that this thesis that I built this whole acquisition around was going to work out.
Chris Edwards: And until I actually saw the results, there were just moments that I thought that I had potentially ruined my life, kind of thing. You just keep grinding, you keep going through it, you keep learning, you keep talking to customers, you keep making sales, you keep your employees happy and eventually it works out.
Chris Edwards: So far, it's been. I'd say a pretty successful transition for me.
John Wilson: Is the seller still there? How long did the transition last?
Chris Edwards: The seller stayed for three months just to, transition all of his institutional knowledge over, get me trained up his son stayed for nine months through the end of the year.
Chris Edwards: So I acquired in February of last year. He stayed through the end of December and there were some moments with him that were just extremely trying because he was just a hard person to manage and all the family dynamics that come with that it's crazy, and actually his wife still works for us.
Chris Edwards: Just coming into this family business, taking it over. All the, bullshit that comes with being in a family business, it's a crazy thing. And then also layering on top of that, it's a small town, this guy has been an institution in Steamboat Springs for 14 years. And I'm like this new guy who doesn't know anything about flooring, like what is, who is this guy?
Chris Edwards: So customers are skeptical, employees are skeptical. But yeah, so that was a lot of like interpersonal relationships you got to manage to make that work.
John Wilson: Family businesses are funny. I think just in general, I think it's a funny concept. It's Hey, we're a family. So let's go make it like a lot more difficult
Chris Edwards: together.
Chris Edwards: Yeah, no, exactly. The seller had health problems. And he was like really struggling. So it's you have that, you have the son who's taking care of his dad. Who's, anyways, there's just so many things you got to go through to navigate those choppy waters.
John Wilson: I've always been like unbelievably skeptical.
John Wilson: Of buying a business, like buying a family business in general. Cause like I'm from a family business
Chris Edwards: and
John Wilson: I get it. Like I know what's going on, but the most recent one we did back in December, it was a really funny one and I had a lot of concerns going into it, but it played out totally awesome.
John Wilson: So the owner, he was a young guy, and his mom and his aunt, so sisters, both worked as admin, in accounts payable, accounts receivable, scheduling, inside the business. They've been a total dream. To work with honestly, like they're amazing. I hope they retire from us. But before that I've been like, Oh man, I don't think this deal is going to work because you have two or three family members in there.
John Wilson: I'm like, I don't know how this is going to work, man.
Chris Edwards: Yeah.
John Wilson: Yeah. But it partially played out for you too,
Chris Edwards: for sure. Yeah. The seller's daughter in law, she's like our head of sales. She's great. Like she's been awesome. I hope. His son never listens to this, but his son was an absolute nightmare to work with, like he was just, he thought he knew the business and he was running the show, but in reality, it basically, he was just on the payroll and his dad was just paying him and he wasn't doing anything, and you want to keep. His wife, cause she's good, but he's not, and it's just you have to find a way to gracefully push him out while not like burning a bridge, hopefully, and, keep his wife happy. It's, yeah as family dynamics are extremely difficult sometimes.
John Wilson: Yeah, it's like an understatement. I think the only other understatement of the year would be, I think Heather Anderson the other day said, small business owners don't like to pay taxes. And that would be the only larger understatement.
Chris Edwards: That is very true. That is very true.
John Wilson: All right. So the first nine months, could you give us a little bit of an idea of the scale of the company?
John Wilson: That way we can work with something here.
Chris Edwards: Yeah. So when I acquired it, it was doing about three and a half million. And last year we did a little over 4 million revenue and kind of operating at a 20 percent EBITDA margin kind of run rate.
John Wilson: And team size management.
Chris Edwards: We have three managers and full time.
Chris Edwards: We have eight employees and four installers that are full time with us, 10 99s.
John Wilson: Like quick counting. That was like 16, maybe
Chris Edwards: 17 to 15. Yeah. 15 employees to make this whole thing go.
John Wilson: Yeah. Yeah. Okay. And then can you explain the model to me?
Chris Edwards: So we're a retail flooring store that provides installation services as well.
Chris Edwards: So a big part of our business is, installing to residential customers. So probably about 80, 90, I'd say probably 80 percent of our revenue comes from just residential clients, customers coming in, they want to replace their carpet. They want to replace their LBT. We sell it to them as retail. And we install it.
Chris Edwards: We also are the largest stocking dealer in Northwest Colorado. So we have the most inventory and stock out of any of our competitors around here. So we have retail storefront. We have a warehouse operation in the back with a good amount of inventory that we stock. That allows us to quickly turn jobs.
Chris Edwards: Someone comes in, they want to replace their carpet after ski season. We can get them installed in a week. So that's one of our competitive advantages. It's also one of the challenges of the business. It's just inventory management, but yeah, so it's basically retail flooring products and then installation services.
John Wilson: Can you walk me through the industry in general? I've always been, I have a guy. Like this, right? What's his name? I think custom flooring is their name. Great guy. The owner's awesome. I love the buys business one day, Bob. If you're listening, I'm a good buyer, but I've always been confused by the competitive landscape.
John Wilson: Because it would seem like Lowe's Home Depot. There are some huge players in this market. So like, how as a small company do you set yourself apart and keep stuff flowing?
Chris Edwards: Yeah. So it's a great question. So there are a lot of big competitors and it is a increasingly hostile environment to small retailers like me.
Chris Edwards: I would never own this business. Anywhere else in the country, really, we don't have a home depot here. We don't have the Lowe's here. We're like geographically isolated Northwest Colorado. So we are secluded from all that, but Lowe's and home depot by and large do not stock high quality products.
Chris Edwards: What makes this whole industry go is there are tight relationships between manufacturers and small retailers like me. I actually just had shot in here with five of their sales guys were actually about to go out to sushi after this call and they're great. They provide me with a much higher echelon quality of products than Lowe's and Home Depot can provide.
Chris Edwards: You can go to Lowe's and Home Depot and you can get 99 cents per square foot flooring for sure, but you get what you pay for. When you come to a specialty retailer like affordable flooring warehouse, you're getting higher quality products. You're getting high quality installation services. We're a local business.
Chris Edwards: You can come to our store, you know who we are and we don't really play in that lower tier clientele market. We're in that sort of middle to upper echelon clientele. So we're selling like. And we're up from 5 to 15 a square foot flooring, right? We do have some like lower end products just that we stock for those lower end clients, but it's a weird kind of legacy model that I would say that you have these manufacturers that are actually pretty loyal to smaller retailers, give them better products, give them better pricing and Home Depot and Lowe's, they take the contractor Really like lower end turn and burn flippers.
Chris Edwards: Like they're going to get that business all day. But for us, someone who wants to have quality stuff in their home, you come to a shop like ours.
John Wilson: Are the subs like shared? Like when you guys get slow subs or subs, right? So they're just going around to whoever can provide them work.
Chris Edwards: We actually do a pretty good job.
Chris Edwards: So like our subs only work for us. They do not do work for any other stores around town. We're loyal to them. They're loyal to us. That's one of the tricky parts of the business is you have to manage You know, like right now we have a huge backlog of jobs, and we're going to give that all to the same guy basically.
Chris Edwards: And. In return in like December or January, when there might be a little bit of a lull, he's not going to go next door to our competitor and do jobs for them. So it's a tricky thing. Like what we've really found is over time. And this is something I've learned from the seller is that you have to maintain that sort of loyalty to them.
Chris Edwards: They can't go Hey, I don't have a job for you today. They can't just go across the street and go to, the other carpet shop and do a job. That's not going to work. So they just work for us. We just give them work and we have struck that sort of fine balance there.
John Wilson: Why not W 2 then?
John Wilson: I don't understand that part.
Chris Edwards: We probably should. Speaking of taxes, like that's one of the reasons why that the seller did it that way. And, I think, those guys like being paid as 10 99. So they just like being subbed out. They like just getting their paycheck. They manage their taxes.
Chris Edwards: They manage all that. We pay them on a weekly basis. Like they basically just do their jobs. We pay them next week. So one of the things that they really like is the fact that we just pay them quickly. So there's an argument to be made that they should be W2s, but right now we just stuck with them as being 1099.
John Wilson: All right. So how does the sales process work?
Chris Edwards: A customer will either call us, go to our website and request a quote, or they will come into the store. We'll ask them questions. We'll interview them. What are you doing? What's the job? Where do you want, carpet, where do you want LBT, whatever. So just interview process.
Chris Edwards: And then what happens is we go out and we measure the site. So we go out, we measure each room. We, look at all the things that are necessary to do the job. Whether it's carpet removal. Baseboards, any floor prep, furniture moving, appliance moving, all that stuff. So we'll go out to the job site and then we will draft them up a quote with everything inclusive of it necessary to do the job.
Chris Edwards: And then they move forward. That's basically the sales cycle and it can take anywhere. You can have someone walk in the store. I can go out and measure today, close them tonight, or it could be a job that, They're building a new home and they, they want to start thinking about what would products they want to put in their home and it could take a year to, close the deal.
Chris Edwards: So it's a mixed bag. There's a lot of high end clientele that can take a long time to close here. And then there are some locals that just want to turn and burn their carpet and get it done in two days. So it's a little bit of both.
John Wilson: What is average ticket?
Chris Edwards: So one of the other parts of our business is we're like a supply house.
Chris Edwards: So we sell materials to contractors. We have a ton of pallets of, mortar of grout, caulk. Everything that's required to do flooring. So it's hard to say what the average ticket is. Cause you can have someone walk in and buy a tuba cock for 14 bucks. And then you could have we're about to do a 50, 000 wood job.
Chris Edwards: So I would say like for our installs, you're probably averaging. If it's carpets, a lot cheaper than LVT. So carpet, you're probably looking at an average of. 4, 000 a ticket LVT. You're probably talking 8, 000, 9, 000 a ticket. And then it just really depends with the contractors and the cash and carry business that could be anything.
Chris Edwards: So probably I would say, 20, 30 percent of our businesses that sort of cash and carry contractor materials, and then the rest of it is jobs and selling products to contractors as well.
John Wilson: Yeah. How do you look at this thing? You're coming from a background of like at scale rollup, right?
John Wilson: Jumping into consulting, like you're looking at a lot of businesses, larger businesses that are using Salesforce, and then you jump into a small flooring company. So what is next? Like, how do you look at scaling this thing? Or are you content with where it is? And this is great. Let's keep this thing going.
Chris Edwards: Yeah, it's a good question. And it's something that I'm struggling with right now, frankly, now that I'm past that one year mark, it's Hey, what do I want to do now? I don't really think that this is something that I want to roll up at scale. I don't want to go buy like a bunch of other flooring stores in Colorado.
Chris Edwards: I see myself as this is a good thing we have here. I don't really think that this is like going to be a business that's going to scale to 10 million, and I'm pretty happy with what we're doing right now. It's profitable. You could probably consider it a lifestyle business to some degree, but I think that, Over the next year, I'm going to give that question a lot more thought, probably won't be in flooring, probably will be doing a different industry.
Chris Edwards: We have a sister company next door called Granite House that does granite countertops courts, and it's a really nice symbiotic business, so I can see myself, Potentially buying that or some other businesses in the Jason industry, like what you're doing. So it's probably not going to be an at scale flooring roll up, but probably will be something a little bit more adjacent, or it could be something that.
Chris Edwards: Is completely different. Like right now I have a technology background. I've done consulting. I know Salesforce. I think that there's a lot of opportunity out there and it's nice to be technology space, something I'm exploring right now with a guy who's a CTO in Silicon Valley. So right now I don't have a great answer for you right now.
Chris Edwards: There's a lot of things up in the air, but probably is not going to be a at scale, it's boring. Roll up or anything like that probably would be something adjacent or something completely separate.
John Wilson: Yeah. Do you read Alex Bridgman's newsletter?
Chris Edwards: I used to, like when I was doing my search and kind of starting out, I was a little bit more involved in that, but I haven't read it recently.
John Wilson: He references a post. On the fatfire reddit about a guy that did an at scale, at scale, maybe 90 million in sales, which is big, but it was flooring contractor all over. I think the Southeast Southwest. So Arizona, maybe Colorado. I don't know. He throws the entire thing out. In this reddit thread.
John Wilson: I think you can find it pretty easily. I'll email to you later. Yeah, please do. But it was interesting. I didn't have much of a point other than, have you read that? Because the moment we started talking about it, I was like, Oh my God. Yeah. I just read about a guy that did this. And it was like six or seven deals over four or five years.
John Wilson: And it was crazy. Yeah. They're doing 90 to a hundred million in sales now. Totally bonkers. But each deal was like minimum 5 million in sales. And then they, now they're only looking at eight figure. Revenue deals. But I guess even at that size, you can still, it's, difficult business to run or people aren't looking at them.
John Wilson: So the multiples are still pretty attainable. So there we go. You're going to read it and then you're going to do it.
Chris Edwards: Hey, that sounds pretty good to me. I didn't go into this with any grand ambitions of having some massive rollup. I wanted to just get my feet wet in something that was, a step up for me, financially.
Chris Edwards: But was also like not biting off too much. So I feel like I struck a pretty decent balance with the deal that I did, but I have the same itch that I'm sure you have, which is I want to start to do something bigger and better and feel like now that it's a problem. Yeah, exactly. Now that I've crossed that one year mark, I'm starting to get that itch to get.
John Wilson: Yeah. I think it'll be interesting to see which way you trend. You should read the article. Cause I think if I would have followed my natural tendency. I would have done a lot of different things. I even did in the beginning. So like I started a few things that were correlated, not. We bought real estate.
John Wilson: We tried other stuff, but then we just ended up, like I didn't know what a rollup was until like late 2020. And I'd already done five deals or something by that point. So I don't think I had the grand ambitions either, but we found out five years into the journey or four years into the journey.
John Wilson: Oh, like we just created value. Like we didn't know that. Yeah, it was a total accident that whole thing happened, but I'm glad that we did find out because then, multiple expansion and all the things that come with it, but it'll be interesting to see which way you go diversified or focused.
Chris Edwards: Yeah, exactly. Yeah. You're
John Wilson: at the bottom of the steps, the red or the blue pill, right?
Chris Edwards: No, I know. And you're right. I want to be careful. I don't want to be. Someone that just chases the shiny object and tries to do whatever a tech startup, just for the sake of being a tech startup, right? Like I want to be thoughtful about this and no, I have a good thing going here.
Chris Edwards: It's working out like I hoped. So it makes a lot of sense to just double down on something like this, or do I, like I said, chase my fancies a little bit more and do something that's completely outside of what I'm doing right now. So
John Wilson: yeah, I'll keep you up to date. Yeah. But keep me up to date.
John Wilson: I'm curious to know which way you end up going.
Chris Edwards: Yeah.
John Wilson: So if you wanted to, let's go back with double down, but instead just doubling down with like your current brand infrastructure, how does this grow organically? How can you put fuel on the fire with your existing business?
Chris Edwards: I think it is probably going to be, probably a mix of really pumping sort of the contractor cash and carry business.
Chris Edwards: And just. Expanding the install team, potentially, those are probably the two levers that make the most sense right now. Right now, the thing that I have as a natural barrier to growth is I live in Seattle Springs, Colorado, there's only so many people who are looking for, LVT in their condos right now.
Chris Edwards: Like I said, it's not like I don't see like an obvious way to just grow. Fuel on the fire to double this thing in the next 12 months. I think that we're continuing to grow. Like last year we grew at 30%, which is great in my opinion, based on what I was forecasted. That was way over what I was hoping.
Chris Edwards: And, I think if we can, continue on that sort of 10, 15%, 20 percent growth trajectory, that's a healthy thing. And, I think that if I could. Talk to you two years from now, and we're sitting at five, 6 million revenue. I think that's pretty good.
John Wilson: And would you be content?
Chris Edwards: Probably not. I probably have the same itch that I have now. Like it's, as you probably know, it's a little bit insatiable at times. We'll see. Like I want to make sure that. I'd like to eventually start to have that sort of middle management layer and upper management layer that I can trust so that I can go and do a deal in the front range or something, or go and do a deal in Denver, maybe do a deal with a friend out of state, whatever.
Chris Edwards: So eventually the ability to take a step back from the business. Cause right now I'm like, I'm the engine that makes this whole thing go. And that's good. It's good that I'm like getting my hands dirty to that level, but eventually I'm going to have to. Install some management that I can really trust and allows me to go do something else.
John Wilson: As a GM, what do you think your weak points are right now? Your strong points are clear. I'll build you up first. I don't want to beat you up. You're clearly extremely intelligent, ambitious, driven, very capable, and you seem to be a good leader, right? You seem to get a good pulse on your team. I built you up.
John Wilson: But so what are the things you think you could improve on? I didn't want it to be all bad.
Chris Edwards: I think that I could first of all, hiring. I have not been good at that. I've not had that mentality of hiring and, getting that management layer in. I've just been trying to keep the team like as it is cobble together, so I think I probably so much of
John Wilson: that's time to just like literally effort who has the time when you only have 16 people on the team, like it's impossible to fully recruit the way you need to.
Chris Edwards: Yeah, exactly. So I have not been good at that. I've just been. Tracking my head above water the last year, really. So I have not been strategic in that sense. Even to this day, I'm still out doing measurements. I'm still out like talking to customers. I'm still out in the field freaking measuring for carpet jobs.
Chris Edwards: That's not what I should be spending my time on, but I have not taken the time to find the right estimator to find the right GM to find the right, Whatever to allow me to free some time up. So that's definitely my biggest weakness. I think I have a long ways to go with leadership wise.
Chris Edwards: I've engendered some pretty good will with my team, but I still think that's an area of growth for me. And, I think sales is something that I did not have a background in, but I've gotten a lot better at that for people out there who are listening to think that they're not salespeople, I wasn't either.
Chris Edwards: But you eventually. You have to be in sales when you run your own business. And so you just have to get enough reps under your belt and eventually you get pretty good at it. Surprisingly.
John Wilson: How quick do you think you got good at it?
Chris Edwards: I'd say probably again, it took nine months for me to be able to talk to any customer confidently and close them,
John Wilson: And say, I was pretty surprised when you said you were doing the measurements.
John Wilson: That's I feel like that's good. Specialized, like there's a lot going on there.
Chris Edwards: No, like it is definitely a skill. I'm like, we don't. Give out our measurements. That's a proprietary thing that we do. So here's your bid if you don't want, if you want to, take it, but yeah.
Chris Edwards: And that was not saying I was terrible at that. Literally I was like scared of a tape measure, I'm like a fricking, I'm a guy who is not handy at all, my dad never taught me anything about, construction or I just wasn't, that wasn't my world. So I was literally intimidated to use a tape measurer, but now I'm confident with it.
Chris Edwards: And I roll up to a job site with a bunch of, roughneck contractors and I feel like I can hold my own a little bit. So that just takes time and reps and confidence to build up slowly.
John Wilson: I didn't jump into the sales position, but we did a deal last year. Yeah. Where we promoted someone to like full time sales from in the field.
John Wilson: And I definitely did not appreciate how long it would take to get up to speed. Cause it is like, this is technical stuff. Yeah. It's hard. Yeah. It's hard. And yeah, especially coming from not even close to the industry. I would imagine that was a real learning
Chris Edwards: curve. Oh yeah. It still is.
Chris Edwards: Like I do not consider myself like a technical expert on flooring, I feel like I can walk into it. To someone's house and make them feel confident with purchasing with us. Yeah.
John Wilson: So I always get curious by people who had backgrounds looking at a bunch of other businesses and then why they chose the one that they chose.
John Wilson: So the last one who I put through this was Mills. So Mills, he was like selling businesses as a sell side IB and then he went and worked at Permanent Equity and I'm like, dude, you saw like thousands of deals. How did you end up with a roofing contractor in the Carolinas? Yeah. So same question.
John Wilson: You saw tons of other companies, then you embarked on a search that you said lasted about a year, was it? Ten months to a year? And you ended up with a flooring contractor. So walk us through that part.
Chris Edwards: Yeah. Yeah. My search is actually pretty short. It was only like four months, five months.
John Wilson: Oh, wow. That, okay.
John Wilson: That's crazy.
Chris Edwards: Yeah. Like the two filters that I use for my search were financial and geographic. So I was like, I kind of subscribe to the. The Harvard business review, financial barometer of 750, 000 to one and a half million of EBITDA. And then geographically, I wanted to stay in the Rocky mountain region.
Chris Edwards: So I looked at a ton of deals from Arizona, New Mexico, up through Idaho, Montana. And, I was living in Denver at the time and I'm from Colorado. So I wanted to stay in Colorado and this deal presented itself. And for a number of reasons, it made sense to me. Like I love Steamboat Springs. It's an awesome place to live.
Chris Edwards: My wife loves it. It's a great place to raise a family. So for a lot of the personal check boxes, it met those. And then, flooring to me was like, I think there's a lot of tailwinds that have played out. Like I hoped, COVID has been a huge boon to the industry. Everyone, people are staying home, they're working remotely.
Chris Edwards: This area up here in route County, Colorado is exploding. There's a huge housing shortage and there will be for a long time. So there's a ton of building going on and, just the being in an industry that I thought was. Not necessarily the most competitive, the competitive dynamics up here are pretty tolerable.
Chris Edwards: There's only a couple smaller competitors here and we have the best pricing with our suppliers. The previous owner had engendered a ton of goodwill with the community by and large. And like I said, moat where we're not competing with Lowe's and home Depot. We have the labor that people want. There's not a lot of contractors that are coming up from Denver to.
Chris Edwards: Steamboat Springs just because it's so far away. So there's just a lot of there's a lot of barriers that make this a pretty Modi business, surprisingly. And then, with flooring yeah, it's, there's a lot to it. And there's a lot of technical things, but it's not rocket science. This isn't.
Chris Edwards: You don't have to have a electrician license. You don't have to be a master, plumber or whatever. Like it is a industry that doesn't require any certifications. It is something that I've actually, I laid floor prior to doing it. So I had some experience with it and I just felt like this is a business that has some characteristics that will hopefully make it Successful for the longterm and is not going to be something that is going to be overly taxing on me to get up to speed.
Chris Edwards: So those are some of the reasons.
John Wilson: Yeah, those are all good reasons. What were the other, if any, 'cause this search was so short, did you get a good look at other businesses or was this the first one you saw and just went for it?
Chris Edwards: I looked at a lot of deals. I was perusing quite a bit before I actually searched full-time, so I had pretty good, I had decent lay of the land.
Chris Edwards: I didn't do a proprietary search or anything like that. I just did a brokerage search and this one I thought the price was fair. Live Oak bank rubber stamped it pretty quickly. So I was able to, get the ball rolling on it. And throughout the deal process, I was expecting it to fall apart just because it was my first go around really.
Chris Edwards: And it just kept going, kept making sense. I kept thinking for all the reasons why I shouldn't do it, but worked out.
John Wilson: Is there anything that we didn't cover that you want to cover?
Chris Edwards: No, I don't think so. It's a crazy world. As you're a big inspiration. So thanks for paving the way for us little guys out here.
Chris Edwards: Yeah.
John Wilson: Yeah. I don't think I'm too much of an inspiration, but I do think maybe this other guy would be. I'll forward you the email. I'm just buying up plumbing companies. Not too crazy.
Chris Edwards: No, but not to kiss your butt or anything, but it's cool to see what, like what you've done and, what. Rich Jordan and guys like that are doing like, it's cool to see like the next generation of like young entrepreneurs, come up and see the value in these types of businesses and act on it.
Chris Edwards: And so it's a cool place to play right now.
John Wilson: No, I totally agree. And I think it is just totally wild. The different types of people that have come on this show, and we're all roughly doing the same thing, right? We're all like, we're either buying one thing, we're buying, lots of things, but we're all roughly doing the same thing around the same time.
John Wilson: But the backgrounds are like, totally wild. I don't know, like I'm looking at you in a vest and a plaid and you're probably wrapping up your work day and two years ago, you were probably in a suit or something. I don't know.
Chris Edwards: Yeah, it's so true. Two years ago, I was two years ago, I guess was COVID lockdown.
Chris Edwards: Before that I was like on a plane every day or every week, I was like, I was in a suit. I was like traveling around the country live in that consulting lifestyle, living in a hotel room and, fast forward. Now I'm like fricking driving a beat up pickup truck.
Chris Edwards: And I've got like carp, carpet remnants in the back of my truck, and living the
John Wilson: dream
Chris Edwards: and living the dream. I wouldn't have any other way. Like it's cool, so yeah, no, you're right. It's an awesome. Opportunity for all sorts of different backgrounds.
John Wilson: Yeah, I agree. But that whole thing just cracks me up.
John Wilson: And I thought at the moment, the zoom call popped up and you started talking to me about your background. I'm like, this dude's just hanging out in this plaid. He's living his best life right now. And I just think that's great. But yeah, we've had people on who just, we've had people who started from the trades like me and it wasn't anything prestigious or whatever.
John Wilson: And we've had investment bankers on and people executing full scale roll ups. And it's just a totally fascinating like area, this little road that we've all found ourselves walking on, regardless of our backgrounds.
Chris Edwards: What's so cool about this background is that, it's not about credentials.
Chris Edwards: It's not about how rich your parents were. It's not about what college you went to. Everyone I work with here at the store. I think one person has a college degree, right? And, but I respect them all. They all do great work. They're all super valuable to society. We're doing good work for our customers.
Chris Edwards: No one asked me whether I went to college or, like what frat I was in or whatever, like that just doesn't, it's a world that really strips away all those things that are not necessary to actually creating value. So I really enjoy it. And I think it's really great that These small businesses provide a platform for not only just, meaningful work, but true wealth creation.
Chris Edwards: And I have an employee who came from Brazil and had nothing in his pocket and now he has a good amount of net worth. And. That's all just from flooring and granite countertops. And that's pretty amazing thing. So I think that's one of my favorite parts about doing this is that I'm not around people like I wasn't consulting who are like so hellbent on whether you have an MBA or not, like whether you can get to the next level.
Chris Edwards: Based on your credentials and things like that, that are to me superfluous. So it's a really fun place to be.
John Wilson: It's no bullshit place to be. Yeah. Credentials don't matter much. It's just can you do it? Yeah, exactly. Yeah. Are you capable? Yeah. Yeah. I love to end every episode with one simple, but probably very difficult question, which is what's your single biggest challenge right now?
Chris Edwards: My single biggest challenge is my wife's about to have a baby in about a month and I need to have kind of a little bit more of a balanced life. So thinking about how I can take a step back a little bit from the business for the next three months and have it still operate at a high level. To my earlier point about hiring, that's something that I have not done well.
Chris Edwards: So I think I have a little bit of a challenge in front of me to be able to spend time with my baby and my wife and, And have the business still run well. So that's something I haven't, I don't have a great answer for right now. I'm probably gonna have to work more than I want to, but that's something that we'll have to spend some more time thinking about over the coming weeks of how I can have a little bit more of a flexible schedule, not being the shop so much, spend more time with my baby and balance all the considerations there.
Chris Edwards: So that's by far in a way, the biggest challenge I have on my plate right now.
John Wilson: Yeah. That's a big challenge. Yeah. Our kids, I think the hard part is. Like a month, just my own feedback from two kids a month is like that baby could be tomorrow. Yeah, both of our kids were late, but I know don't tell me that yeah late in your case could be better that could help with your single biggest challenge But you know early would you know be the opposite?
John Wilson: But yeah, that's a big one I'm sure you can figure it out and hopefully get to spend all the time you want with your kid and your wife That sounds like fun
Chris Edwards: Yeah, I hope so. Hopefully it works out in my favor, but yeah, man, life's crazy right now for me.
John Wilson: Yeah. This was awesome. I appreciate you coming on today.
John Wilson: If people want to connect with you, where are they able to find you?
Chris Edwards: Find me on Twitter. My handle is at TOPH underscore Edwards, T O P H underscore Edwards. Awesome. And I'd love to connect with you there.
John Wilson: Awesome. Thanks for coming on. I really appreciate your time. And this was a good one. Thanks, Chris.
Chris Edwards: Yeah. Thanks, John. Appreciate
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