HOSU 26 | Growth Through Acquisition

How Growth Through Acquisition Expands Your Business Fast With Kylon Gienger

Do you want to grow your existing company fast? Then you need to learn growth through acquisition. Matthew Sullivan’s guest today is Kylon Gienger, the President at Acquira and Owner of Black Sheep Holdings. In this episode, Kylon talks with Matt about how you can grow exponentially when you buy multiple related businesses. Acquirers are a must to guide you through the process. You need to know the numbers, integrate yourself into an existing culture, and create positive change. If you want to know more about growth through acquisition, this episode’s for you. Tune in!

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How Growth Through Acquisition Expands Your Business Fast With Kylon Gienger

Kylon has founded and led multiple businesses in the construction, food service, fitness, real estate, online education and digital marketing industries since 2012 with 3 successful exits. He is also the founder and host of a popular business and education podcast which was featured in BuzzFeed (as the #15 most recommended podcast) and the Huffington Post

There’s a British comedian. I can’t remember his name but he would do this thing where there’s wrong with the phone. He would go on this and pretend that there’s a loose wire which is so apt for Zoom calls and broadband. I don’t know why it’s called broadband. It’s broad as a thing that’s not broad.

That’s how I get rid of telemarketers too.

That’s because I don’t want to be dealing with telemarketers. There are all these stuffs on YouTube about how people have tracked down. Scammers and telemarketers are very different people but there are all these scammers that call you up, claiming that your computer’s blown up and that they’re going to fix it for you.

I’ve had my number out on enough websites, podcasts and stuff to where I am inundated with those types of calls. I would highly recommend an app called RoboKiller. I pay $20 a year or something like that. It has a database of millions of phone numbers that are reportedly scams or even telemarketers. It’ll pick up the phone for you and play recordings to them.

It also wastes their time. It’s mostly built for a scam. It records that hilarious conversation for you so you can go back and enjoy it later. For the longest time, I had a recording that all it was some random guy on my end. They’d pick up the phone and all they hear is like, “Hello?” You’d get some guy on the end like, “Hello, Mr. Gienger.” They’re trying to sell me something.

You can tell because when you pick up the phone, there’s that pause. It’s like the systems on their end are busy connecting you through. We need these people. Kylon, I need to say one thing to everyone and that is you play the drums in a rock band, and so therefore, everything else is irrelevant. Everything else is pausing the time and paying for the ability to travel and play great music.

That is the number one priority all the time. Every business I buy and build is to buy bigger and better drum sets.

It is an affliction, frankly. As the owner of a Roland electronic drum kit, which I am still completely unable to play, I gave it to my children and demanded that they learn to play the drums because that is the only thing that counts. Everything else is secondary. Guitars and vocals are there, I suppose, to fill space more than anything else.

I’m the most important instrument in the band. I was telling my wife that I needed to get one of those electric sets. I’m standing in a home we just bought and we’re remodeling. You can see the amazing popcorn ceiling there that we’re in the process of scraping off. We semi-moved here to Missoula, Montana from Washington state. I left my drum kit back at home and I’m here with nothing to hit. I got to get one of those electric ones. Our neighbor is right across from us. He’s got a band. I can almost reach out and touch his shed from here that they go and practice. They need a drummer. It was a good setup. We found that a lot out.

To call up businesses, you need high emotional intelligence.

It’s some of the things wherein business you can hide behind various personas, emails and things but when it comes to stuffs, it’s a bit like sports. You cannot hide. I suppose you probably could plug in some sample tune and pretend that you’re hitting. When I was watching this thing about Led Zeppelin, this documentary about John Bonham, I was thinking, “If I had my time again, I would become the Bill Bruford from a group.” They are fantastic drummers. We’re not digressing. This is the main subject of the conversation here. Business stuff can wait but we probably should get into the business and you seem to have a habit of buying businesses. Is that a fair assertion?

It’s very fair.

You’ve recognized this illness and called the company Acquira. Just to acknowledge the fact that this is something that you appreciate that you do, what’s the strategy? I can see from the website that there is clearly a plan like a roll-up strategy. Tell us a bit about that. Is that the most relevant thing to talk about, do you think, in terms of the business side?

I’d probably say so. What Acquira does is help people buy businesses. We are buying businesses ourselves. I’m even building a personal portfolio. That’s the nutshell. The reason for starting the company and why there’s an opportunity out there is because I’m sure a lot of your audience knows. We have this massive wave of the Baby Boomer generation retiring.

They own the majority of small businesses in America. They’re the backbone of America. They employ millions of people and its trillions of dollars’ worth of small business assets that need to switch hands over the decades as these folks retire. There is a decent amount of small business supply and people looking to get out. A lot of entrepreneurs are starting to be turned on to this idea of acquisition entrepreneurship.

It’s amazing years ago when we started doing this. Very few people had heard about acquisition entrepreneurship. Everybody is familiar with startup entrepreneurship or buying and flipping a house, buying and fixing a house and holding it for future cashflow. This is the same idea for existing businesses but it is a long and complex process. Also, anybody can buy a business, even though you’ve got your hurdles to get through but once you have the business, how do you optimize and grow it? Acquira comes and helps people A to Z through that whole process over a multi-year relationship.

The challenge for you is you’ve got two sides to the equation. You’re the buyer and the seller. Your role changes because, first of all, to find the correct acquisition target, you put your investor hat on, presumably and say, “Is this something that I would invest in?” From the entrepreneur’s perspective, you have to put on your company hat and say, “Is this someone that is going to fit with this business?”

HOSU 26 | Growth Through Acquisition

Growth Through Acquisition: Acquirers help people buy businesses.

In other words, if you mismatch and you don’t have that right correlation of skills, desire and knowledge, I suppose, the transaction doesn’t matter how successful the business is. It is very easy to become unsuccessful very quickly. How did this start? What was the genesis of this concept? Clearly, you start with one idea, I would imagine and then you build a business out of that. Is that how it started for you? It’s this concept of looking at entrepreneurship through a different lens.

It started out of that need. These businesses are coming online and they need to sell regardless. What we saw was lack of general knowledge. Business acquisition was even a thing for the average person that has some business experience, capital and wants to own their own business. Everybody’s thinking of starting a business. Also, lack of capital and the specific know-how. Acquira rose from that gap in the market we saw. In 2020, we’ve helped close to 400 folks on their business buying journey. That’s been a lot of fun.

It’s a bit like when you’re trying to buy off-market properties in real estate. Do you find that you’re looking to target specific businesses almost as if you’re a VC or an investor where you’re saying, “We like your business. Do you want partners? Do you want a new blood?” Are you expanding that way?

If you want to break a deal flow down into a couple of buckets, there are only two, which is on-market and off-market deal flow. I’d say the majority of businesses that at least folks who work with, look at and buy, come through business brokers, their broker. That in itself is a very fragmented industry. Not all brokers are created equal. There is a lot of consolidation to be done there, honestly.

The other bucket is off-market deals. There are pros and cons to both. A major pro to off-market is you can be the only buyer at the table. You don’t have that buyer competition. You cannot have a middleman and connect directly with the seller. Cons are it can be difficult to find off-market deals. You’re calling up businesses. You got to have high EQ, Emotional Intelligence. You’ve got to like cold calling.

Once you get ahold of somebody who is interested in selling, these folks have never been through this process when the finances are messy. There’s even a whole education process around what their business is worth. That’s not worth twenty times revenue. It’s worth more like 3 or 4 times EBITDA. There are pros and cons to both. We do a lot of off-market deal flow and can help folks with that.

Acquisition is an excellent way to grow your existing company or startup.

Have you found as you’ve developed the business that there are these additional possibilities for you to not do a complete sell but do partnership where you’re bringing in new capital and partners where the existing owner takes a step back? You’re bringing in a new lease of life as it were.

There’s a growth for equity model. There are few different ways to think about that we’ve done. I moved here to Missoula, Montana. It’s because I did exactly that. I personally bought 80% of a plumbing company. The previous owners are still on the org chart. They still work in the business and retained 20%. I’ve been working in tandem with them. There are pros and cons to that. Fortunately, in this case, there had been a lot more pros that we have a great working relationship. Together we’re building this business but that’s not a super typical situation simply because most owners were either burnt out or looking to retire. They typically want out.

In this case, these owners still got a couple of decades left where they want to be entrepreneurial and build something. Frankly, they were a bit burnt out. They had started this thing many years ago. It got it to a certain point and simply didn’t know how to grow it. They’ve created a full-time job for them. Me coming on board, we are scaling this thing. I was telling my wife that I’m so stoked because I’ve been able to get them out of a bunch of tasks and things that were eating up all their time that they hated doing. They’re having fun again. It’s super fun for me to experience.

It’s almost like a business recovery process as well. Are you looking for businesses where it’s a straightforward handover, so you’re looking at cashflow or are you looking for undervalued businesses where the owners have become too embroiled in the business where they run the business rather than manage it? They end up spending all their time as effectively an owner-manager rather than working on the business.

To be quite honest, that describes 98% of these small businesses. In small businesses meeting, we’re talking revenues between $1 million and $10 million, EBITDA between $250,000 to $1 million and employees anywhere from 4 to 50 employees. In those types of businesses, almost always, the owner is still very significantly involved. They’re a key man in a lot of areas. That’s the typical situation.

That presumably is the burnout. One of the biggest issues running the business as a small business owner or as an entrepreneur is losing perspective. In other words, figuring out that being busy each day and doing stuff is not necessarily the best use of your time. In terms of your success rate, you’re not going to get every deal that you want. Following on from that, do you see yourself growing the business and providing consultancy services effectively where you come across these businesses and see these issues over and over again? Is that another potential revenue stream for you?

That’s essentially Acquira’s business model in a lot of ways. We look for folks that are interested in business buying. It’s a long and complex process. There’s a lot of mystery involved. We essentially partner with them. They go through a couple of programs first and have a lot of training and everything.

At the end of the day, our model is to invest in the deal alongside them so that post-acquisition, we can be that board of directors, mentor and consultancy to help them grow and optimize the business. The more businesses we work with, the more experience we’re getting in and the more we’re taking that and putting that into better package training and systems. If somebody buys a business, we can hand over a thumb drive. Here are a bunch of systems they can pick and choose afterwards.

You talked about systemization. This is a common thread where companies grow from an idea or a concept. One of the guests that I had was a specialist in outsourced personnel but with that, they also brought systems and processes. Those personnel that could not be dropped into a random environment could bring structure. From your helicopter view dealing with all these businesses, what are the problems that leap out of the page time and time again?

We could talk for quite a long time on that. It might be best to give some specific examples for the business that I’m directly involved in that I added to the portfolio. This also describes 90% of other businesses. It’s things like severely under-optimized in terms of new technology. With many of these businesses, things are still pen and paper.

Bringing in software ERP can help streamline things quite a bit. No clear roles or organizations in the organization, whatsoever. People are doing things in the organization because they want to or they’re good at it. Even if they don’t want to, you have multiple people in one role, which is a big no-no. The lack of documented systems, which causes an inability to grow or scale fast. You hire one new guy and it takes five times as long to train them. I could go on and on.

HOSU 26 | Growth Through Acquisition

Growth Through Acquisition: The more businesses we work with, the more experience we get, and the better we develop training packages and systems.

With businesses to a certain extent, you invest in people but you got to have a real leap of faith to be able to see the opportunity beyond that. If you’ve got a business that’s still running analog systems where you’ve got the owner as the head chef and chief bottle-washer at the same time, isn’t that a business that you want to run away from very quickly? How do you spot the diamonds in the rough?

That’s not necessarily a business that you need to run away from. You need to understand those risks and understand how you’re going to mitigate against them. With the business owner you described, we would call that in our diligence process a key man risk right there. I have another deal that I’m post-LOI on. It’s a much larger HVAC company. They do a lot of large construction work.

The owner is the estimator. He holds some very key relationships with large general contractors that provide 50% of the revenue that comes into the company. That’s not a deal killer but in Acquira’s book, we would call that a yellow flag. We’ve got red flags. Too many red flags, that’s a deal killer. We’ve got black flags. One of those is a deal killer.

A black flag, a good example, would be a business that has more than 30% of its revenue coming from a single source. You got too big of a potential failure there if that goes away. This, to me, is more of a yellow flag. There are some very easy ways for those relationships to be passed off to me. I feel quite confident in my people’s skills and ability to fill up those relationships. Then there’s a transition period that we have put into the asset purchase agreement that will help mitigate that as well if the owner will stay fairly involved. These are the things you have to think about and there are different ways to mitigate them.

I’d say something that often people overlook because you’re talking about people. Business is all about people and relationships at the end of the day. Culture is a very important thing to be doing your diligence on as well. That’s tough because a lot of these sellers don’t want you to come in as a new buyer prior to the sale. They don’t want their team to know they’re selling.

I have visions of the episode after episode of the office. From an entrepreneur’s perspective, the wheels are turning here. Let’s say as an entrepreneur, there’s a business that one’s built. You still have passion for your business. One of the ways to grow it is through organic growth but the other way is through acquisition. What areas do you specialize in terms of geography? Are there specific business types that you tend to hone in on?

Growth through acquisition is something not a lot of folks think about but it’s a very good way to grow your existing company or startup. In terms of industry location, we’re pretty much US-focused. A lot of that is because one of our primary funding sources for getting these deals done is our SBA loans. These businesses need to be US-based and you need to be a US citizen or resident.

In terms of industry, we’ve looked at hundreds of deals. We have experience in a lot of different industries but there are businesses in all sorts of industries that are great. Where we’re particularly focused and the industries we like are home services. Things like plumbing companies, that’s why I have here HVAC, roofing, moving companies, landscaping and pest control. Particularly, we do like HVAC, plumbing and roofing.

It’s interesting because I was talking to someone about solar companies because that falls somewhere between the cracks of service and general contracting as it were. Do you see yourself with the knowledge that you have moving in and being able to take over, not an industry but make some significant changes? If you take solar as an example where people talk about Solar CowboyZ, it’s not terribly regulated and not homogenous as it were where you’ve got different deals in different states. Do you see yourself with your investors moving into a particular area and colonizing that?

Yes. It is in some of those specific industries like plumbing, roofing and HVAC. It’s funny you mentioned solar too, because I talked to one of our acquisition entrepreneurs in our program. He owns a solar company and he specifically joined two clawback companies through the acquisition of roofing companies and then cross-sell to customers. We’re seeing HVAC. We’re not the only ones who are attracted to HVAC. Private equity discovered that years ago. We’re seeing the multiples for those businesses start to expand a bit. They’re getting more expensive. That industry is certainly changing in terms of it being consolidated.

Even people reading at home, if you’ve had somebody come look at your HVAC system, you’ll notice these companies are getting more tech-savvy. The technicians are showing up with iPads. Probably pricing is changing. People are moving to flat-rate. Price is going up because actual business-minded people are focusing on these and optimizing pricing. These industries are changing. They’re being updated from when they were started decades ago.

You’re working typically on a one-to-one basis, if I were to put it simply. What I mean by that is you’ve got an entrepreneur who comes to you and says, “I want to buy a business in this space.” You will find something that suits him in terms of his potential investment, geographic location and other criteria. Is that a fair description of the model?

Bring something new to people who do things the same old way.

The one correction I would make is we help them do it. We don’t like to call ourselves a done-for-you service. It’s a do-it-yourself service. What you’re entering into Acquira is it’s an ecosystem where you have the vendors and tools, when I say vendors, for legal diligence that you have the tools, the training, our team and a community of other folks on the same journey to do it yourself.

We had that model where people paid us a lot more and we did everything for them. What you quickly discover is you don’t know if you have the right people. It is an interesting task to try to find the right people to partner with to buy businesses and then find the right business. Not everybody is cut out for buying a business. We switched things around to where, “Here’s a giant data and resource dump on everything you need. Here’s accountability, a structure and our phone number.”

You have to go out and do the work. It is a lot of work. At the end of the day, when we’re reaching the finish line on a deal and this is a multi-month process, the acquisition you’ve worked with has shown a lot of grit, determination, problem-solving, critical thinking and conscientiousness. That’s when we know, “We like to invest in this person, own the deal together and work to optimize the growth of this business.”

HOSU 26 | Growth Through Acquisition

Growth Through Acquisition: We have wholly owned and operated deals we’re rolling up.

That’s the important thing because you continue on as an equity owner after the transaction. You get the benefit of the upside of your ongoing support and knowledge. My next question is, have you considered the experience and knowledge that you’ve gained in these various different sectors? Some strategy which goes beyond this one-to-one relationship is where you create an entity that is effectively a roll-up of all of these businesses. Rather than you finding businesses for someone else, are you looking at saying, “Let’s find something for ourselves. Let’s collect all of these businesses, put it into an entity and then get the economies of the scale of that?”

That is a strategy that we’re doing like as a company Acquira is. We’re specifically in-home services. We have our own wholly owned and operated deals that we’re rolling up. I’m doing it personally. A lot of our acquisition entrepreneurs are doing that as well. Some people want to do one deal, hold that thing and grow it over twenty years or grow it for 3 or 4 years and then sell it more than they paid for it.

A lot of folks are going for a roll-up in a bit of a consolidation strategy, which is smart because you get those multiple arbitrages. You’re buying all these businesses at 3 or 4 times earnings. Once you get a certain amount several million, at least EBITDA under control, those multiples expand. The market will pay more 6, 8, 9 or 10 times with those earnings. You’re creating that wealth out of thin air. That’s a great strategy to go with and we have experience in that.

Do you see the impact of COVID has shaken out a lot of these businesses? This is a two-part question. First of all, is there more inventory available because of COVID? Secondly, hedge funds are looking at HVAC companies. Is there a move do you see from investors generally to the more traditional boring businesses?

Yes, less inventory. When COVID started, everybody was freaking out. A lot of sellers pulled the deals off the market. A lot of numbers tanked. We’re still not trying to buy any restaurants, concert venues, cruise ships or anything like that. To be honest, the market came back pretty quickly. If anything, it was one of the reasons we’re interested in-home services.

I’ve looked at dozens of P&Ls from home services companies. They’re all very strong through COVID. Some have taken a little bit of a dip here and there but for the most part compared to many other industries, they’re incredibly strong. Yelp and BizBuySell.com put out a report that showed data on this. BizBuySell is the Zillow for businesses for sale out there. Home services did very strong. It’s because people were at home.

I own a plumbing company. People don’t appreciate the plumbing in their homes but it’s probably the utility they use the most. If you have a broken toilet or something, you’re going to spend that discretionary income. You’re not going to go on vacation. You’re going to get that thing fixed. It’s an urgent and active problem. That’s why we like these businesses and they did fairly strongly and why I think a lot of large strategic firms are starting to look at these more traditional boring and unsexy businesses.

How did you get into this? What was the pathway that took you to create Acquira and finding the investment partners that you’re working with? I like to hear a bit more about how that came about.

The short story is, personally, I’ve been starting businesses all of my life. I started a painting company. I started a couple of other businesses after I got out of the Navy in 2012. I eventually sold those. I’ve been through the startup game and got hooked up with the Founders of Acquira, Hayden and Deven. You can go to Acquira.com, look at our team and stuff and then see the bios.

At the time that I started talking with them, they were buying online companies. They were buying blogs, eCommerce, SaaS companies and stuff like that. I got hooked up with them. I was running one of the companies in their portfolio. We started talking about it more and realized, “This acquisition thing is a good idea and also, let’s look into doing this with brick-and-mortar businesses.”

More of those are coming online as people are retiring and stuff. Then we noticed that gap in the market where we threw out. We did the Jim Collins bullets before Cannonball. Threw out a couple of MVPs and realized, “There are a lot of folks out there that want to buy these businesses but they don’t have the know-how. They want somebody to hold their hand with big capital.” That’s the way we started Acquira. It’s going to be going pretty well.

In many deals that you do, you come in as a partner or co-investor. What’s the appetite from investors? How do you think that’s changed over the last couple of years?

The appetite for investors in the minority held positions in businesses. We are a true minority partner. If we do come in as an equity partner, we’re never more than 30%. In many cases, we do 20%. The appetite is fairly strong. It’s optional for us to invest in the deal with you. You can take our resources and buy a business and then run with it by yourself but if you do want that experienced partner, we are open to putting our own capital in the deal and that aligns incentives.

A lot of people are very open to that but it ends up being a pretty individualized conversation. Every business and partnership is different but at the end of the day, we are true minority partners. We serve as more like a board of directors. We’re not involved in the operations. We give you what you need to make the thing successful and give you a bit of a roadmap.

I probably can guess what your answer’s going to be but have you stumbled across a particular sector or industry where you’ve gone, “This is massively undervalued. Let’s fill our boots with this as much as we can?” Why would you want to disclose that? Have you come across these pleasant surprises?

Yeah. First, it was HVAC and that was back in 2019 but every other private equity firm is pursuing that. Then it was plumbing. I’d say they’re still largely undiscovered but that’s becoming more discovered. Roofing is something that we’re into. I was on a podcast and that host mentioned some friends he has that have done well-acquiring home foundation, remediation specialist or restoration specialist, which is brilliant.

You can successfully integrate into an existing culture and create change.

That’s a high-ticket business. It’s something that people can’t do themselves. It’s an urgent, active problem. You’re buying a house. You get an inspection and there’s a giant crack in your foundation. You’ve got to get it fixed. The bank won’t fund it. That’s something that I’m going to dig into a little bit more as well. I’m finding if those secrets are out because I can tell you where there’s an opportunity but it’s a whole another thing to pursue it and close the deal.

It’s like everyone has ideas but the trick is execution. If you were to fast forward, will Acquira itself become an operating company?

We already are in some respects, at least, subsidiaries and parent companies of us are because we have our wholly owned and operated portfolio. I’m speaking more to our team. Our team has a lot of operations experiences. Acquira we’d prefer to stay and stick to being a training company. We’re good at that. We’re good at marketing, so we’re good at attracting the right audience to us and then train them very well. We’re going to invest it. That’s why our little slogan is, “We’re Acquira and we are an investment fund and an accelerator/training ground for acquisition entrepreneurs.” That’s what we would prefer to be as time goes on.

Do you see yourself going further upstream having an accelerator as it were? Do you see yourself investing more at earlier stage businesses depending on the entrepreneurs are, who they are and how good you think they are?

We’ve talked about it a lot, frankly. I don’t see it.

Have you been vaccinated against startup businesses?

HOSU 26 | Growth Through Acquisition

Growth Through Acquisition: Every business and partnership is different. But at the end of the day, we are true minority partners.

Yeah. That’s not where I’m going with it. I know personally after buying a business, I’ll never go back to starting a business again when you can just buy it. It’s a hack. That almost feels illegal sometimes to cut in line in that entrepreneurial process to skip the years of blood, sweat and tears, building something from scratch and proving the market. That’s fun. Some people enjoy it. I do but I’m at a stage in life where I love the business of business. It’s a weird thing buying a business and stepping in. I don’t have to worry about customers.

You have different challenges. You have customer retention issues and presumably, you’ve got personality issues. When the owner leaves, there’s a certain amount of something with the company that leaves with him. There are different challenges.

There are and that’s what I mean. Having started a lot of business, it’s a different muscle I have to flex run-up to that. That’s interesting.

This is where scale comes in for entrepreneurs or business owners that are looking to grow and buying a business. It gives you a different perspective because that business if it’s in your industry, has been run by someone else in a very different way. You can learn from that. It doesn’t just bring you extra customers or revenues. It probably brings you different ideas and ways of doing things.

It does and on the flip side too, I felt very advantaged coming into a plumbing company with no experience running plumbing companies. They’ve been doing things the same way for years. I’m able to immediately see things in a completely different light and think outside of the box. It made us successful in a lot of areas.

It’s always a challenge to bring something completely new and unheard of to people that have been doing some of the same ways. We finished overhauling the entire business, all of our systems and implemented end-to-end software. The entire business runs on the software. The main benefit there is it gives me data points to understand how we’re doing and where to diagnose problems.

That almost feels like cheating where you can step in and you can see the problems these owners are having. You know that you can fix those almost overnight and double or quadruple the revenue as a result.

People who are certain to understand this acquisition game do think they can come in and overhaul things overnight. They see all of these areas of the business that are severely under-optimized but I can’t stress enough, especially in-home services. It takes time. You move at a sale. It’s not like the startup where you’re just pivoting here and pivoting there. Everybody’s technically savvy. It’s taken us good months to implement this software. There was a hell week or two in that where people were not happy. They were having a tough time with it and things move a bit slower.

It’s different dynamics. Stepping into another company, particularly if there’s a large staff, then you’ve got all of the dynamics around, the new broom and the politics. Some guys don’t like the fact that there’s a new owner and some guys embrace the new owner. It’s a different set of mechanics, I would have imagined.

That’s why it’s good to come into an acquisition with certain hard skills. It helps if you’ve managed people and the P&L or business and are financially savvy. There are a lot of soft skills as well. For instance, you got to be high EQ. That emotional intelligence has to be through the roof. It’s all about people and relationships.

You can’t be a jerk. The first several weeks in this business, I didn’t touch a thing. I made that very clear to people. All I did was I sat and I watched people work and I asked them questions. I typed on my computer this is how things are being done. I wanted to understand the business and its people. I also had to develop trust.

I got in the vans with the guys. I got in the trenches. I’m remodeling this house. They see I can work. They see I know the trays. They see I’m not afraid to take out the garbage or get into a crawlspace with spiders and cobwebs. That respect builds up. We’re at the stage where they’re excited for our weekly meetings when I bring up and do things we’re implementing.

Do you have to reinvent yourself for every new deal?

Every deal and culture is different. You have to build relationships to all these different types of people. Everybody’s different and has different values. Every company has different values too. I’d love to be able to say, “Here’s a blanket. Values, mission and vision statement.” I can put it on every company we buy but no. With this company, through the process of building the relationships here and observing the company, I’ve started to identify the values that already existed here.

You have to be able to step out when the new owner steps in. You effectively create that environment that the new owner becomes accepted because effectively, he’s being chaperoned by you. You become the trusted entity, so therefore your reflected trust shines down on the new owner. Is that what has to happen? Otherwise, you end up with failure. What I’m saying is that the importance that you bring in this experience that you have dealing with multiple companies effectively creates a pathway so that the new owner can come in without having to suddenly learn all these skills, which spent decades polished finessing.

The thing I like to say here is this whole process. It’s part of science. The part of science to this is there is a systematic way to come in and successfully integrate into an existing culture and create change. It’s things like you always have that first speech when you buy a business to the team. “I’m the new owner and here’s where I want to take things.”

Set up a support system of good relationships and best practices.

People don’t care about a lot of what you probably think they do. At the end of the day, they want to know, “Is my job safe? Am I going to get paid what I was getting paid? Who’s my new boss?” These are the questions that are asked. The only thing you need to make clear and this is the science part of it is, “Everybody here, we’re all taking steps forward. Nobody’s going to take a step back. I’m not going to completely overhaul certain things. I’m going to look for little incremental changes that improve people’s quality of life.” Many of these companies don’t have people benefits. They don’t have retirement savings. They don’t have a lot of things that more established companies and larger businesses do. When you come in and implement that, people love it.

If you’re co-investing, you can fit and forget. To use a plumbing term, what you’re doing is you’re overseeing. You’ve got a vested interest, so you’re continually calibrating the owners and helping to leverage your experience in other businesses. The chance of success working with you is going to be a lot higher than if I were to go and try and find a business myself.

It’s not just Acquira that people have access to. It’s all the other deals that we’re involved in as well. If you buy an HVAC company with us, we own several. You can travel across the US and visit other HVAC companies. Talk to their owners and find out how they’re doing things. You have that support system of relationships and best practices.

I have a network of folks that I’ve found mainly through Twitter and Acquira, who owned plumbing companies. My greatest fear is spending time doing the wrong thing. Fortunately, I haven’t done much of that. One of the things I did in this company is we revisited our pricing and we did the math backward to find out here’s where we want to go. Here’s what that’s going to cost. Here’s what the overhead looks like. Let’s build that and do our pricing. That whole system, I didn’t have to figure out. I had other people who had already been there, done that, who gave me the system behind that. It seems like a lot of time and energy and that’s why we exist.

The lesson is growth comes from working on businesses rather than working in businesses and the fact that you have all these inventories because people have got that wrong. They’ve got burnt out. They haven’t grown. Is that one of the headlines that you would agree with?

Yeah. This is a unique situation I’m in because I still work day-to-day with the current owners. We try to have a weekly meeting altogether. It’s almost impossible to get them to focus on the business within that meeting with me for 45 minutes. They’re constantly on calls. They’re being called here and there and that’s the situation with these businesses.

It’s time for the show’s questionnaire. You’ll realize that the questions are quite simple. The less preparation, the better. I can assure you. Let me apply my evil laugh. Question one, what is your favorite word?


Question two, what is your least favorite word?


Question three, what are you most excited about?

This deal. I’m working on another personal acquisition. It’s ten times larger than the one I did and it scares me to death. That’s going to be a big, hairy and audacious goal. I’m simultaneously scared to death and stoked for it.

Question four, what turns you off?

Honestly, this is getting granular. One of the things with these types of businesses is you have a price book that lists all your different services and stuff for customers. It is incredibly handy when you’ve got that fully built out because you can scale fast. Your techs can be out there selling. It’s decentralized. It’s building that thing out with all the proper costs. There are thousands of materials in the plumbing world that are used on jobs. No job is the same. Digging into that detail, I’m good at it, fortunately but it’s like pulling teeth. I’ve only told that to you and my wife. The team never hears about it.

Question number five, if I can survive, what sound or noise do you love?

I’m a cliche but my daughter is starting to find her voice with singing. She started to hit different pitches and stuff. She’s two. It’s the cutest most angelic sound. It’s amazing to watch that little personality form. That’s my favorite sound.

It goes quickly, then they end up going to fifth grade and they come back in a play and you can’t stand the sound of it.

I’m sure that’s coming.

My next question. Number six, what sound or noise do you hate?

That’s an easy one. Speaking of Cocomelon, it’s again, my daughter. One of our family members was almost a joke. They knew exactly what they were doing. They got her one of these Cocomelon dolls like babies and there’s a button on there you press. It’s super loud and it’s the same three things over and over again. She’s even figured out how to open up the Velcro in the back and take that noise box out because she likes to press that button. It’s even louder because it’s not muffled out.

This is the sound that has to be surgically removed from your brain.

It went off a couple of times during this interview and I was like, “That’s creepy.”

Question number seven, what is your favorite curse word?

It’s fuck.

That’s the best one. It’s all about the intonation. It’s brilliant.

It’s true. My wife doesn’t ever cuss because I can’t take her seriously.

Fuck is the primordial molecule. Question number eight, what profession other than your own would you like to attempt?

HOSU 26 | Growth Through Acquisition

Growth Through Acquisition: You have to be decent with numbers when handling businesses.

You mentioned in a previous life, you would love to be a professional drummer. I have often thought if I had a second life to live, I would love to try to be a professional snowboarder. I love snowboarding. I would be one of those couch bums. The exact opposite of what I’m doing here. I have no goals or ambitions except to be on the slopes every day and sleep on somebody’s couch at night. That’s what I do or a professional musician. I’ve tried that. I’m still trying that. I’m still in that world a bit but I would have been a snowboarding bum.

I suppose the equivalent is surfing. People in California, it’s what all you want to do. Every day is different. Every day has its own set of challenges. They’re never the same. I can certainly understand that. The follow-on question, what profession would you not like to attempt?

I don’t know if I could ever be an accountant. I’m decent with numbers. You have to be that in these businesses but an accountant, CPA or somebody that has to do that all day. God bless him.

My next guest is going to be a CPA. It has to be. I’m sure that his answer to what profession would you hate is, “I would hate to be a snowboarder.” It’s going to be something like that.

Something like a public speaker.

My final question, if heaven exists, what would you like to hear God say when you arrive at the pearly gates?

People are still talking about you. I’d love to see that. I’d love it ten years after I’ve walked through those gates to hear the same thing. When it comes down to it, I want to leave some great things and great people behind that remember what I did. That’s the same for a lot of folks.

It is the legacy. Kylon, it’s been such a pleasure speaking to you. How do people get in touch and how do they find out more about you and what you’re doing with Acquira?

Please do get in touch. You can always go to Acquira.com or reach out to me personally at KylonGienger@Gmail.com. I have a personal website at KylonGienger.com that you can go to and find my LinkedIn and find your way to Acquira. We have some awesome people at Acquira. They’d love to talk to you. Get on a call. We can share more of what we do and see if we’re the right fit.

There is also a link to a very good YouTube video with you in a band playing the drums.

That’s right. If you go to KylonGienger.com, you can hear the band a bit.

Thank you once again. I look forward to staying in touch and following your progress. Kylon, it’s been such a pleasure.

Thanks, Matthew. I appreciate it.

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About Kylon Gienger

HOSU 26 | Growth Through AcquisitionKylon has founded and led multiple businesses in the construction, food service, fitness, real estate, online education and digital marketing industries since 2012 with 3 successful exits. He is also the founder and host of a popular business and education podcast which was featured in BuzzFeed (as the #15 most recommended podcast) and the Huffington Post