Alex Bridgeman: Thanks for coming on the podcast, Jordan, it’s good to talk to you. I’ve been excited to have this episode since we had our chat about Santa Barbara and running a family business and all this other stuff. I’d love to hear a little about the business your parents started and life growing up with a family business and then how you eventually decided to buy the business and run it.
Jordan Evans: Yeah, it’s an honor to be here. I’m a huge fan and avid listener. So hopefully we can discuss something of interest and fun for the rest of your listeners. My story is a little unique in that I accidentally stumbled into the world of buying a business. It wasn’t something very apparent growing up and even having a career in software before. The other element I think is quite unique is that I get to carry on a family business and legacy, and that’s been an amazing, evolving story from buying the family business to developing a playbook to go out and acquire similar companies and bolt them on. My journey is a long and winding road, but I’m really loving what I’m doing and the fact that I get to involve this family legacy as well as create my own chapter of entrepreneurship on top of what my parents built.
Alex Bridgeman: So, you worked in software before. What did that work look like?
Jordan Evans: So, when I graduated college, the world was in a very different place. The economy was in the tanks. The best thing going in the States was venture funded software startups. That was the eye-catching thing to do coming out of college. So, I jumped into the software startup world doing sales and marketing, and that was a great way to go and start your career, learn the skills of having to pound the phones and email and find clients, learn to negotiate, do solution selling. And software was fun. There were great perks. I was young, being here on the West Coast, we had the Bay Area, I mean, Seattle. So, I had a good run in software; I ended up being VP of sales and marketing at an early stage company. I was a part of a company that also was acquired by booking.com. So, I got to be a part of five startups. Three of them went bust. One of them want acquired. And the last one I was actually fired from, and that was a wakeup call to not be a hired gun working for somebody else. So, the pull of software and the fact that you could get equity and potentially build wealth, that all sounded great. While you’re working for maybe peanuts in the early days, until you get up to a position that I was in, you’re making very good money at a VP level. But the merry-go-round stopped when I was let go from an early-stage startup. The CEO and I didn’t get along very well. Some lessons learned, I needed to manage up a little bit better. But that was the point where I decided working for myself sounds pretty good right now, not having to have to report to somebody else where they can say we’re done and let you go.
Alex Bridgeman: So, what kind of options were you weighing when you got let go?
Jordan Evans: Well, I had seen my parents as entrepreneurs growing up. They had started this translation company from my mom’s bedroom and had always done this lifestyle entrepreneurship. They worked out of the house. They were always there for us as kids, getting to go to our basketball or sporting events. So, I had seen the freedom that that path had provided for them. And so that sounded pretty good at this moment in time, that I want to go work for myself, even if I have to grind it out and start small. The timing was actually fortuitous because my parents, after 30 something years, were exhausted, they’re burnt out, didn’t have a succession plan, didn’t have any leadership or management crust to take over their business. So, it was actually an amazing time and a great pivot professionally for me to take the skills that I learned in the software world and be able to take a lifestyle business that they had started and scale it up and grow the thing while providing them an exit. So, it was I think the stars aligning for them and for me.
Alex Bridgeman: At what point in your childhood did they start the business, or had they started it before you were born?
Jordan Evans: I think I was two or three years old when my mom became a full-time interpreter, which is somebody who goes between languages, so Spanish and English, and legal settings, healthcare settings, social services. She would get called out to go onsite and interpret for somebody that speaks limited English. So, it was around maybe two or three. So, my whole life, essentially, I got to see them have this business.
Alex Bridgeman: Was there a moment in your childhood where it clicked that your parents are entrepreneurs and running their own business and they are their own bosses?
Jordan Evans: As a kid, I thought it was more normal than I do now to see mom and dad working together and have their own business. And as a kid, I would replicate that with my younger sibling. We would play office. We would go door to door selling cinnamon rolls or on Saturdays, sell donuts on the street corner. So, I think what’s interesting is it was so normal to see it as a kid that I would play business with my sister. And the irony of that story is now as an adult, I play business with my sister still. She is actually a part of the business and my partner. So, we’ve always been practicing. That’s always been a normal part, I guess, of growing up.
Alex Bridgeman: Did your parents give you jobs within the business? Or did you work for it on some level?
Jordan Evans: Actually, I never did work in the business until I joined as an adult. But my sister actually had worked there for 10 years prior to me joining. So, she actually did join the family business and learn the operation. So that was a great match.
Alex Bridgeman: So at the point of time when you acquired the business, can you give us an overview of what the business did, what kind of customers they had, various services, how their team was built up, all that sort of stuff?
Jordan Evans: Sure. So, we are a language services company, and that means that we provide written, spoken and signed language services in about 200 languages. So, whether it’s a written document, online text, sending somebody to the ER or the courtroom to be the mouthpiece between the different parties that don’t speak the same language, or if it’s via Zoom or video or FaceTime or phone. So, any medium, any time two people need to communicate, we have a service to bridge the gap. What’s interesting is we cover 200 languages, the reality is there’s 4,000 languages. So, we’re quite busy. The company started in California, so greater Los Angeles, which as you can imagine is a very diverse part of the country. And we work with almost every cusp of society, but we are kind of an invisible industry. I think the numbers are larger than the music streaming industry as a whole. So, we’re the biggest little industry that nobody’s heard of, which is language services. So, to give you an example, we work with healthcare, social services, government, let’s see, we work with nonprofits, international businesses. So, at every single industry, we have some sort of crossover.
Alex Bridgeman: So, what does a customer relationship look like? Is it with individual people? Is it with a school district or a company? Can you give us an overview of what the kind of the low end and high end of customer relationships look like?
Jordan Evans: Sure. In such a fragmented and broad industry, such as language services, the client relationship really varies by industry. So, we have the least sophisticated type of client which might be an individual who needs documents for immigration that needs certified translation. And so that’s more of a B2C or business to consumer type business model. Somewhere in between, we have business to business where we might be working with a local healthcare clinic, and they need services for patients coming in and out that don’t speak English. And so, you’re working with an office manager and maybe the owner of the clinic. And so that’s like a traditional sales cycle and you need customer support. And then we have enterprise sales. So, if we’re selling to a fortune 500 company and they need services to translate all of their internal e-learning and training, their manufacturing documents, their marketing materials, typically they go through some sort of procurement, RFP. So, the sophistication of our sales and our client services really is across the entire spectrum from the consumer to this traditional enterprise sales cycle. What we’ve tried to do in order to grow organically is focus more on that center, the B2B sale cycle. You have a lot more control and sales cycles are shorter to be able to find more clients in that health care clinic situation that I mentioned versus selling to a lot of individuals versus the long procurement processes of working with fortune 500. So that’s what you get in the highly fragmented services industry.
Alex Bridgeman: So how do you organize your team to handle all those different types of customer relationships?
Jordan Evans: Well, it’s an ongoing process. When I jumped into the family business, we were servicing every single customer across that spectrum. And since then, we’ve specialized more on that middle. They call it rabbits, deer, and elephants. If you eat meat, you’re going to go out, and I’m going to try and catch a bunch of rabbits to feed my family, or I’m going to go focus on bringing down a deer, which it takes a little bit of skill and effort, or I’m going to go elephant hunting, and I need a big gun and I need a big team and a lot of time. So, we we’ve focused on the deer, if I could use that analogy, in sales to grow organically. But as far as our processes go, we utilize cloud-based software. We all work remote as a team. So, it was a matter of making the decision to say no to the long tail consumer requests coming in or referring them out and focusing our sales and marketing effort on the B2B, the deer. And then, occasionally, if there’s an RFP or bid, in that elephant category, if I can keep the analogy going, we evaluate is it winnable, is it serviceable, then we might pursue it. But it’s taken an evolution to get here from buying a business that had been around for 30 years and really run as a mom-and-pop lifestyle business. They were scared to say no, and they would say yes to everything that came across their desk. The challenge of scaling an organization, making sure that we’re profitable, that doesn’t work for us anymore. We really need to focus. So that’s kind of where we are now.
Alex Bridgeman: So, what sorts of things did your parents do running the business as a mom and pop, optimizing for their life, and what they prioritize in the business? What sorts of things did you change from that to more of a growth model where you’re trying to grow the company actively and add on any other bolt-ons? So, what sorts of changes did you make from the way they ran the business to how you want to run the business?
Jordan Evans: The advantage of buying an existing business is you get many years of successes and mistakes to evaluate and then intentionally build on and make tweaks. The challenge is you don’t want to change too much that’s working or move too many things too quickly. As a service business, our biggest expense is our team, is our people, and if you make changes too drastically, too quickly, that stresses everybody out and you may have turnover. I think some of the immediate changes was looking at who our core clients are really, we had never done that before, looking at what verticals and industries we service and are the most profitable and creating a plan to go out and find more of these best fit customers. We had never had any intentional sales. As a lifestyle business, it was always word of mouth. You do a good job, and the company will grow. So that was, I think, one of the first changes. Shortly after, it was looking at the operations. So, the company had paper in it still. So, we were tied to an actual physical location. People were using a database plus paper and post-it notes. So, when work orders come in or client requests, you would have to be in the office and know where that post it is and on whose desk with the critical details. So, we looked at how can we make this cloud based? How can we remove paper altogether? And that was one of the best decisions that we made. We were able to take- One client request, took about 30 minutes of labor hours from intake to billing. And by switching to a cloud-based system, we were able to condense that time down to five minutes. So, it freed up so much capacity for us to continue to grow and give the team the freedom to focus on other high value tasks. So those were the two quick changes that we had made – develop a sales plan that fits our key competencies today. We don’t have to introduce any new service lines or dabble in any uncharted territory, and then create operational efficiencies. And finally, I think to round out my answer to your question, we reevaluated our pricing and our margins, and we were able to bump up some of our rates. So, all of that was like magic. And to be honest, going into it, newly as a business operator, I didn’t realize the power of selling more, improving efficiency, and raising our margins, what that does to the bottom line. So, it’s kind of a surprise to see, wow, this business really is kicking off more cash, and I had no idea that that was a possibility.
Alex Bridgeman: Yeah, that was really exciting. I love going paperless and I hate paper within businesses, even though I run a print publishing business. But as a process, it’s always fun removing paper. Me and Jackson, on our episode, we chatted about this a little bit, but she has removed a lot of paper in her business. And at my full-time job at a college, I helped this wealth management firm move off paper a little bit too. So, I love chatting about moving off paper. What part of that process was the most difficult? Like I imagine there’s a lot of records that existed on paper that weren’t digital or some processes that used paper in some specific way that maybe were harder to replicate in software or not. What were some difficulties or challenges in going from paper-based or at least partially paper-based to a cloud solution?
Jordan Evans: Well, one challenge is getting people on board, the people that are in the trenches doing the work, that there might be another way to do this that’s more efficient. Everyone’s so busy doing the work that they don’t have time or desire to reimagine the process or explore what else is out there. So, I think number one, it was getting by that this process could be improved and it would benefit everybody’s life to improve it. The next thing I think that we did was we timed the whole process and mapped it out. We didn’t have any checklists in the company, true mom-and-pop. There weren’t any standard operating procedures or checklists for people to follow. So, we did step by step, went through all the details, where they’re written out, where that piece of paper goes. And so, by doing that exercise, we’re able to get an idea of that total time it takes, which was shocking and eye-opening for the entire team to see, wow, it takes us 30-35 minutes for one client request. That really identified the time constraint. We only have so many hours in a day and so many people on the team. And then looking at the software system options, we identified three and mapped out a similar process in the software. And we did our demos with the software providers, and we even did trials with some dummy data. And I think that was really eye-opening to go through and see that we can record all the appropriate information in the system, everyone’s got access to it, it takes five minutes instead of 30 minutes. So going through that process, the initial mapping it out, looking at the details, making sure that nothing would get lost in the software, that we would cover all of our steps that requires paperwork. And then the other piece, moving from paper to digital – which I can’t believe we’re having this conversation, it’s 2021 – but there’s a lot of great businesses out there that still use paper. I get so excited when I see a company that their process has paper, because I know that we can drive a lot of efficiency on the other side. But what I wanted to say is there’s amazing scanners that you can upload a bunch of files and have access to them and store them in Google Drive or Dropbox. So, we were able to, I think in a day’s work, scan an entire office full of file cabinets of tons of contracts, tons of old jobs, and get those all digitized. If I think of the name of the scanner, I think it’s called Scan Snap, but it’s just such a fast scanner, posts directly online to a cloud-based file storage. So, we ripped the Band-Aid off and we haven’t looked back.
Alex Bridgeman: That’s awesome. And then adding salespeople is another one I’d be curious to hear a little bit more about too. So, there was no internal sales process, it was word of mouth based. When you hired your first salesperson, what sorts of processes did you create for them or step-by-steps did you create so that they could start selling? And what did that initial process look like from having no sales team to starting to build a sales team?
Jordan Evans: Great question. I was the salesperson starting out, and I was the salesperson maybe a little too long. But my background being in software sales and ultimately managing a team of 25 sales reps, I felt confident I had to spend time learning this industry, learning how we sell, and who we should be presenting to first. So, a true small business, jumping in sales and operations, but it wasn’t until the second acquisition that it was time to hire our first sales hire. So, I had done sales up until that second acquisition. Looking back, I would have hired a lot sooner. We got away with doing a junior sales model, so some interns as well as hiring a VA overseas, to help with lead generation and get everything set up in outbound email sequences. And when there was somebody that would agree to a discovery meeting, then I would jump on and take over the sales process. So, I was able to get leverage by using some low-cost labor, and then handle the sales process from that initial meeting. On hiring, it’s hard to hire somebody in sales. It takes a lot of investment and energy. And it’s really an experiment when you’re doing the first hire. The company hadn’t had one other than me before. Fortunately, this has been an amazing hire, a force multiplier to the business. I was able to pick somebody up that was already in the industry that had a desire to leave a bigger organization where they were just a number and jump in and was attracted to the entrepreneurial journey that we were on of buying and building translation companies and was able to attract that great talent by offering something that could be molded and impacted. So, I can’t say that I have the secret sauce to hiring the right sales person. I’ve hired and fired a lot of salespeople. I think the advice that I have is higher sooner and hire people that have high curiosity that have general interest in other people, that are self-starting, and you can teach them all the tactical skills. But if somebody is not generally interested, especially in a service business where our differentiator is how we talk and how we present ourselves. So that would be my advice is hire sooner and look for those soft skills.
Alex Bridgeman: Yeah, certainly. Your team is fully remote. And I think based on our phone call, you had some insane number of freelancers. I want to say it was 1500 or some huge number. How on Earth do you manage a team like that? And I assume based on our call as well that you don’t interact with all 1500 every day or every week or month, but use them every now and then when you need to. But just how do you manage a team that’s that big and so scattered across the world too?
Jordan Evans: Sure. I think our database or our network of interpreters and translators is probably closer to 3,000. And the reality is we don’t manage everyone per se. In our industry, there are actually standard certifications and accredited programs that an interpreter or translator will go through to become a professional and an independent contractor. So, by using our software, we’re able to manage the relationships at scale, make sure we have people that are in our system with the right certifications and specialties. And it’s almost like a high volume niche staffing model where, I’ll give you an example, we work with a hospital and not only do we need to send somebody who’s a qualified linguist in the languages they’re requesting, let’s say they need Mandarin, English and Mandarin for a patient interaction, but that person needs to be medically certified. In that state, there’s an actual state level certification that that interpreter needs. And then on top of that, we need to have background checks, vaccination records. With COVID-19, we need proof of COVID vaccinations. So, there’s a whole slew of requirements that we manage in our system to ensure we’re compliant with the client’s requests. So, software allows us to do this at scale. And then part of it is art, which I do enjoy. I still learn a new language, about a new language, every day since there are 4,000 of them. So, every now and then a client will come back with an odd language request, and we’ll need to scour our database to see if we’ve ever done that language before. If not, we go out and recruit and qualify somebody. But it’s an ongoing process, really. So even though we’ve got 3000 linguists in the system, some of them may not be active for a long time because of their language pair is rarely requested.
Alex Bridgeman: And the business was run out of an office in Los Angeles when your parents ran it. So now that you said you’re fully remote now, how did you switch from office to remote? It sounds like going paperless was part of that. I’d love to hear more about that transition.
Jordan Evans: Sure. We pulled the band-aid off to go digital and paperless. And part of that was I wanted to live in Santa Barbara, and our main office was in Orange County and Riverside, and I was making the commute in the early days every other week. And that was a grind to go through Los Angeles traffic every other week. So, part of it was just out of selfish, personal need that we need to go digital and I need to stop commuting. So, we had our office for a little while after and allowed team members to go in and work together from the office. It wasn’t until 2019, before COVID, that we decided the office expense was unnecessary. Everyone had grown comfortable with the new process online. We implemented Slack as an internal tool for collaboration, and we weren’t missing anything since everything was cloud-based. So, it was 2019 that Language Network was online. We also acquired our second business in Washington State at the end of 2019, right before COVID. And this business was, again, all on paper, everybody in the office. So, we had to take the same playbook that we implemented for Language Network and really quickly apply it to this acquisition we made right as we’re rolling into COVID.
Alex Bridgeman: Yeah. And acquisitions have been a big part of your growth over the last two years. I’d love to hear how you eventually decided to start acquiring these companies. And can you tell us why you started to acquire them and why they fit and why that acquisition model of bolting on similar companies made sense for you?
Jordan Evans: Well, as I mentioned before, the idea of buying a company was such a foreign concept when I decided I wanted to take over the family business, and it was a mentor and friend of mine actually, David Barnett, I was consulting with him on how do we do this buy out of my parents that he had mentioned, and this planted the seed of once you do this, I’m sure there’s more companies that don’t have somebody to take over. What if you create a buy-in program and are able to acquire them? So that was the seed that started this business model that we’re on. Once we figured out the playbook for going digital and optimizing operations, adding some sales, we kind of hit a plateau of how fast and far we can grow organically versus acquisition where you can double in size overnight and get the team to continue to provide the services. So, you get this lever up effect of acquisition. So early on, when I bought Language Network, I had committed to continue to look in and having an active pipeline talking to other companies in our industry that were selling, get an idea of what was out there, what we could acquire. And I’m glad I did because this whole process takes a long time. So acquired Language Network through organic sales, we doubled in size and kind of hit a plateau. And we were able to do a second acquisition, and we were able to double in size overnight again, and then institute the playbook of improving operations, going digital, proving margins. And I don’t know if the original question was how did we stumble into this model, but it was really I want to grow faster where I am in our career, as well as this sweet timing in the market. There’s a lot of Baby Boomers, people that have been doing this work for 30 years, and there’s nobody to continue on the legacy and carry on what they’ve built. So, part of it is just being in the right place at the right time.
Alex Bridgeman: And how many companies have you acquired to date?
Jordan Evans: So we’ve done three acquisitions, and we hope to do two more in the next 12 to 18 months. And it’s getting a little bit easier, but it’s a lot of work to be an operator and be scaling up our current business and not losing sight of what’s in front of us, as well as evaluating what it looks like to add a net new business into the mix. And I will say on a caveat, we’re a smaller acquisition. I think a lot of search funders are looking for that business that’s 1 million to 5 million in EBITDA. And we went smaller. The business Language Network was around $700,000 in revenue, so a really small lifestyle business when I acquired it and we really had to jump in and get our hands dirty. But that allowed me to understand the business and improve the business, and in that same period of time, do two more acquisitions. So, we’re around 5 million top line revenue. So that’s the power I think of going smaller in these acquisitions – you can get more done, you’re going to learn the business a lot faster rather than searching for several years for that one sweet platform business. What we’re doing right now is building up our own platform, essentially. So, every incremental acquisition we do now is that much less disruptive since we’ve gotten to this critical mass size of 5 million top line revenue.
Alex Bridgeman: Yeah. So, what’s gotten easier and then what’s gotten harder with each acquisition? You mentioned some things had gotten easier, but I’d love to hear both sides of that coin.
Jordan Evans: Yeah. As we’ve done each acquisition, my role, I’ve needed to evolve fast. And I’m glad to have been in the software world where 100, 200% growth and job titles and descriptions change so fast. So, joining a nascent service industry, I’m able to take those same lessons in startup land and realize my role has got to evolve and change, and I need to develop processes and people in order for this organization to scale because in the early days, I’m the biggest bottleneck. So, what’s gotten easier, well, number one, I know that I’m mediocre at a lot of things. So, handing those off to really good people and hiring good people as we’ve gone and promoting people internally that have more capacity for higher value tasks has made things easier. You had asked me earlier what fires I wake up to in the morning, and it’s a lot less to do with operations. I get to focus more on the vision and strategy and culture, making sure we’ve got the right people, meeting with key accounts, keeping an eye on our PNL and finances. So that’s what’s changed a lot as is my role. What hasn’t changed is it still takes a lot of time to find the client and to onboard them and to support them. And it still takes a lot of time to find great interpreters and translators, but that’s just part of the business, and it hasn’t gotten harder, it’s just the same. I think what’s getting harder now as an organization is culture and making sure we’ve got people in the right seats because we’re in hyper-growth mode and we’re acquiring these businesses and we’re bolting them together. So, our model is we buy the business as an entity, as its own. We do a stock purchase if you will. We want to preserve the contracts that they have. And that’s why we do that model. So, all these team members are still employed under that entity, but we tell them you’re part of the Language Network family, which is a series of translation companies. So, you may be employed under XYZ Inc, but your job responsibility will cover multiple brands. And that’s been an entrepreneurial experience. That’s really a trying to experience to make sure we have people in the right seats. And some people have turned out because that’s not their cup of tea, but others have really shined. So, I guess my final answer is people, making sure that we’re cultivating people, that we have a culture of trial and error and being entrepreneurial, making sure we don’t have any deep-seated old way of doing things, thinking that prevents our forward progress. So as a leader, those have been my challenges.
Alex Bridgeman: So, where do these deals come from? I assume there’s some element of you chat with brokers who get these types of deals every now and then, or banks. I would assume ,though, there’s a lot of companies you just know of and have built relationships with or reach out to directly that also lead to deals. So where do deals generally come from?
Jordan Evans: The benefit I think we have is that we’re so focused on doing a roll up in our space with translation and interpreting services. And that’s allowed us to talk to all of the industry brokers, which is actually quite common. There’s a handful of intermediaries where they’ll focus on a type of industry or business. So, every single broker in our space we’ve developed a relationship with. I check in regularly. If we go to an industry conference, before COVID, I’d make sure to have a cocktail with them. When they do send me an opportunity, I make sure to give them feedback, whether it’s inbound, looks like a good fit for us, or I give them a couple of points of what would make an opportunity a good fit for us. So that’s the benefit of being a buyer and focused really on one industry. Then there’s the other element, which is referrals. So, we’ve had a couple of deals that came from the seller of the company we just acquired. So that’s also great. It’s making sure you’ve got a good reputation with the seller, and deals can come that way. And then of course, the mailers and the email outreach, I’d say that’s kind of a top of the funnel activity when you’re just getting started but doesn’t hurt because those letters have a long shelf life, especially if it’s really personable, especially if you’re putting in there I already own a similar company in the space. It gives you a lot more credibility to the seller. And so, we’ve gotten calls maybe 14 months later where they were saving it for when they were really burnt out and thinking about selling. And then the other deal flow piece is industry conferences. So, I go to all of them in our space, and I make sure to speak at all of them and share about our experience operating and buying these companies. And that’s been fantastic for general thought leadership and branding, but so many conversations after doing a talk that turn into opportunities is amazing. What I’ll do at the industry events when I speak is I’ll ask, by show of hands, who’s looking to sell their company at some point? So a couple of brave souls will raise their hands and I make a mental note, those are all the folks I need to talk to and follow up with. But some people aren’t as brave to raise their hands, so I’ll ask a follow-up question of how many of you would like to know you could sell your business at your time of choosing at some point in the future? So, then we’ll get a broader group raising their hands. They may not be ready, but let’s nurture those opportunities. So, I really think doing acquisitions and focusing on a niche where you can bolt-on is such a force multiplier. As I go, this business model has evolved while we got to this point. So, I can’t say I’m a genius and thought of this from the start. But those would be my main areas for deal flow.
Alex Bridgeman: And then you talked about building a good relationship or a good reputation with sellers. I assume part of that is also just deal structuring. How do you tend to structure or think through the deals you do with sellers?
Jordan Evans: This is a great question and one that I would like to preface by saying that in the United States, the SBA is a fantastic program, but it’s made all of us lazy at doing deals. It sets the expectation for buyer and seller that we can just go to the bank, borrow a ton of money, pay all cash at close, have some decent financing over a 10-year period. So fantastic program, but the downside is it’s made brokers, buyers, and sellers all lazy. And there’s a lot of businesses that actually don’t fit the lendable model for SBA 7A. With that being said, there’s a lot of ways to do a deal, and we’ve done them all, at least the ones that are relevant for our industry, which is some sort of seller note that you can do royalty agreements, where if there’s customer concentration, which inevitably in a service business, there is, where consideration or purchase price is paid out on performance. So, it’s kind of like an earn-out. We have done more of an earn-out piece. We’ve also done working capital note. So, the seller wanted certain terms and price, and we said we can’t give you price and put in the capital to fund the working capital, so something’s got to give, and we’re able to get really great working capital terms. So, the seller left cash in the business for a lot less than we could have borrowed. So that way the business can stand on its own and start generating its own cashflow. So, there’s a lot of ways to do a deal, especially if you’re an industry buyer. And now you’ve got that credibility, people have heard or seen you do a talk, that they’re buying a proven operator and by them holding paper or allowing you to improve their operation is going to be a solid bet for them. You’re very bankable. So, in the service business, especially in these deals that are sub 1 million, sub 2 million, sometimes they’re messy and you’ve got to do some creative deal structures to make it happen.
Alex Bridgeman: So have you used SBA at all or have you only used conventional so far?
Jordan Evans: We did do 7A for one of the deals. And that was a great experience. I would gladly use SBA 7A again. It just takes such a long time and a tons of paperwork, tons of extra scrutiny, the cost of doing the deal with all the fees, there’s that component. I tell our sellers I’d rather pay you interest. It goes into your pocket, and I’d rather work in a way where we can move faster than involve a third-party lender. But we did use it for one deal. The option was she would carry for three years. And we would do, I believe it was 15% down. So, at close, she would carry the whole note for three years, so that goes to show you how much trust and rapport we had built up, but we were able to pay 20% less by giving her all cash at close and doing the SBA 7A program. So, we opted for that because it was a 10 year term at 5.5%. So, I had nothing against it. It’s just there’s a lot of other options out there.
Alex Bridgeman: What are you most excited for over the next year?
Jordan Evans: Gosh, I love what I’m doing, and I love the space that other people are finding legacy businesses and buying them and infusing them with fresh ideas and growing them, preserving the goodwill. I think it’s such an amazing opportunity for people to be entrepreneurial and buy a business. So, I feel really blessed to, number one, carry on family legacy, but number two, have the freedom and flexibility to be an entrepreneur and build on top of that platform. So, I’m excited to do more of what I’m doing, as boring of an answer as that is. I am excited to do one or two more of these bolt-on acquisitions. I am looking forward to the management team that we’re developing. So, we’re at that stage as a company where middle management is being solidified, and I’ve got some great people, so investing in the team. And somebody had said that you’re not a leader until you have developed leaders who develop leaders. And so personally, I feel like I’m at that cusp of I’m developing the next group of leaders in the company. And then hopefully in two years’ time, they’ll have developed the next set of leaders behind them. So just on a personal fulfillment level, I’m really excited to be doing that with my team.
Alex Bridgeman: Yeah, that’s fantastic. That’s very cool to hear. Moving into closing questions, what college class would you teach if it could be about any subject you wanted?
Jordan Evans: Okay, I knew you were going to ask this one, and I wouldn’t say I’m an expert on anything to teach a college class. And oftentimes, I question the validity of a college degree or how relevant it is nowadays. But with that being said, I’m glad that I got to go to Westmont, which is a liberal arts school here in Santa Barbara. I would love to give back by maybe teaching how to buy a business and help undergrad business econ majors or anyone in general think about leaving college and buying a boring business or a Main Street business and how to operate it into the future. So that would be one thought. The other is I wish somebody taught me strategic decision-making sooner in life, of how to weigh risk and reward, look at all the moving variables, and look at worst case or best case or base case outcomes and learning that if the reward is high enough and you can live with worst case, then go for it. So, I’m not an expert on strategic decision-making, but I would have loved to have gone through a class like that. And if I can just be one chapter ahead, maybe I could teach the class. So those would be my answers.
Alex Bridgeman: Yeah, I wish I could take both those in college. Those would have been really, really fun. What strongly held belief have you changed your mind on?
Jordan Evans: This one is interesting because the hard work and more hours equals success has been deep-seated seeing my parents own their own business, working late nights. And this is generally accepted, I think, in the business world that you have to grind and put in your time. And some of that may be true, but there’s definitely a pivotal moment where if you really want to scale up and have your business be successful or you as an individual go to the next level, is that I need to look at the hundred tasks that I have and bucket them accordingly, that there’s a lot of tasks that I shouldn’t do and that I should work less and I should work on the higher dollar productive tasks. So, I think not earth shattering, but a mentor had told me that you need to bucket your tasks into $10 an hour tasks, $100 an hour tasks, $1000, $10,000, so on and so forth, $100,000 tasks, and get to a place where you can focus on those high dollar amount tasks and the rest of them delegate to your team. So that’s where I’m at right now is that I actually need to work a lot less number of hours in my week and work a couple more hours on those high dollar value tasks.
Alex Bridgeman: What’s the best business you’ve ever seen?
Jordan Evans: So, since I’ve looked specifically in the language services space, my example is tied to that. So, there’s two interesting ones. In the professional services industry, which I encourage people to look at more businesses in this technical scientific professional services bucket, one of them was a niche immigration document translation company. And it was a team of two people, and they had developed an online website, they had a ton of great online marketing for that business to consumer to get immigration documents quickly and reliably translated. They had great margins. They were hyper-focused. I think what was really neat about it is just how focused they were on immigration needs. The other example I’ll give is a translation company that does help desk ticket translation. So again, super niche. And they had built an API that connected with a help desk, like Zendesk, there’s a whole bunch of them. And what they would do is they would pull in any texts, so support tickets and customer inquiries and how to work flow to quickly translate that text, ship it back via API to the help desk so that way the client could overnight provide customer care in many, many languages. So, I love the niche focus of these two companies and just proving that there’s so much room for creativity and a lot of ways to make a dollar in a particular industry.
Alex Bridgeman: Yeah, there’s definitely tons and tons of ways. That’s been one of the fun parts of running the podcast is constantly finding niche industries like language services. So that’s been a really fun part for me. Thanks, Jordan, for sharing a little of time about language services and the business that you run and taking over from your family and building a sales team and remote work and all this other stuff. It’s been really fun to chat with you about it all.
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