Episode 1: Building a Restoration Empire with Chris Santiago

Diners & Deals Episode 1: Journey into the Reconstruction Business with Chris Santiago

In this episode of Diners and Deals, we dive into the remarkable journey of Chris Santiago, CEO of Repairs Unlimited, as he builds a restoration empire. Chris discusses how he combines modern growth strategies—like acquisitions and de novo expansion—with the timeless values of strong company culture and operational excellence. From scaling in the lower mid-market to creating a team-driven environment, Chris offers a fresh take on business growth while staying true to the core principles that drive long-term success.

🎧 Tune in to the full episode for more on how to lead your business to success!

Episode Transcript

Seth: Thank you so much for joining us. Hey, thanks for having me. I’m glad that whoever was supposed to be in the slot called me sick. Tell us about the company. Tell us about what you do, and then let’s back way up and talk about the journey that got you here. 

Chris: Yeah. And it’s, uh, it’s weird talking to you about this because you know it, you’re there, you’ve seen it.

Chris: Uh, I’ve scared you a few times. You like to scare me a little bit, but I’ve got a really fortunate opportunity to have joined you and Great Range Capital to start a restoration and reconstruction platform. And what the heck does that mean? Well, it is, we are in the reconstruction business, restoration business.

Chris: So think of if you have a flood in your home, you have a fire. You have a tornado, you have any type of natural or unnatural disaster that happens to your home or your business, we are the single point of contact to get you back to your home the way it was before, or your business, and we are primarily insurance based.

Chris: It’s a Midwest based operation headquartered in Kansas City. With offices in Denver, Cheyenne, Wyoming, Colorado Springs, Kansas City, and then we just recently added to the platform with a really great operator out of St. Louis. 

Seth: And that came through an acquisition, correct? That’s correct. St. Louis. The others have all been DeNovo.

Seth: Expansions, right? The business started in Kansas city. The other locations have been DeNovo and now you’ve done your, your first acquisition as well, and you’re going to continue to do both, correct? 

Chris: That’s right. We think there’s a great opportunity for this to be a platform play in the Midwest and mountain West region.

Chris: We’ve got a really fragmented industry with hardworking owners that have started something, want to see that continue. But may not have the capital, the resource to grow their, their brands. They’ve done really good jobs in building solid bases in these localized markets. So think of St. Louis, as I had mentioned, Kansas city would love to see something in Omaha, Des Moines, you look at all these little, I would say a mid market town, you know, if you will, that are growing, that are seeing aging infrastructure, you have potentially a university that has turnover in student housing, all of these All those different factors.

Chris: And I think it leads to a really solid investment thesis of building this platform where you can share resources, you can share back office, you understand the industry yet you buy these businesses or partner with these businesses to where that founder or owner can stay on, have the growth capital, keep their brand.

Chris: And build something that’s really powerful across a regional area. 

Seth: Yeah. That’s exciting. Now, I don’t think you started your career in construction. Really? I don’t think, I don’t think so. Is it my 

Chris: fingernails or hair or 

Seth: neither? A little. Well, actually, again, the hair is looking very construction esque right now.

Seth: It does look like you just got off of a job site. So I’m digging it. You’re very on brand. Our, our guest from our last episode was also very on brand. So I really appreciate you all showing up. You know, in, in the full garb for, uh, for these podcasts, 

Chris: we go, we go all in. Uh, I did leave my hard hat in the car.

Chris: Okay. I want to apologize for that. And I don’t smell like smoke. Safety first. That’s exactly right. So back way up, where’d you grow up? Well, I’m still growing up. I am a very immature. 50 ish person. So I’m still working on growing up, but I spent most of my life in the Midwest. So I was born in Kansas, lived in Omaha, Nebraska, moved to Des Moines in high school, went to the Harvard of the Midwest, otherwise known as Iowa State University.

Chris: Uh, I’m sure you’ve, you’ve heard of that. Was a fantastic big eight school. I think they’re in the big 12 now, which is 16 different, I don’t know, universities in that conference, but left Iowa state, moved to Chicago, went door to door to get a job and started working at the board of trade. Just went from door to door.

Chris: And I always wanted to be a trader beyond the floor. So that brought me to Chicago. We have, uh, we consider Chicago home and we’ve lived on the east coast for a while. My wife’s from Chicago, so we came back in 2000 and then I have commuted to different jobs throughout that time period, but grew up in the Midwest, feel I have a Midwest value, spent some time on the east coast and we came back and still, still enjoy it 

Seth: from the trading floor.

Seth: Chicago board trade. Eventually you, you went to NASDAQ, correct? 

Chris: So before that, I actually went to the NASD, which is known as FINRA and that’s a self regulatory industry. For the securities industry, I felt that doing that, I could leverage my financial skills and actually help people believe it or not.

Chris: So I’m sure you get a lot of people that will bullshit and say they’re, they’re here to help people. Can I say bullshit on the podcast? Yes, absolutely. That’s great. Do you have someone that bleeps this out later? Hopefully not. Okay. Johnny, if you’re 

Seth: listening, don’t 

Chris: take out bullshit. Keep, keep bullshit.

Chris: It’s a technical term, but I was, I really wanted to help people. I like the industry. And so I went into self regulation and figured out that wasn’t for me, but it took me 10 years to figure that out. Was in a, an actual order that went door to door securities firms. We could, we put a couple of really bad people out of business, believe it or not.

Chris: And so I think we did do some, some help there and then move from that to NASDAQ, which NASDAQ at the time was part of the NASD. So it was an offshoot for the securities industry. They started a whole new market in 1970, away from your traditional market of the American stock exchange, New York stock exchange, floor based markets, NASDAQ was the first electronic market and I had a really good opportunity, not in 1970, I am old, but not that old, but I had a really good opportunity to join NASDAQ and lead.

Chris: Uh, part of their listings program, so getting companies to list on NASDAQ, keeping companies to list on NASDAQ and did that for quite a while. We were one of the first. I was part of a group that started a program to recruit companies from other exchanges. So NASDAQ’s always done an amazing job of getting IPO startups.

Chris: That’s the way people thought of NASDAQ, tech markets, startups. And we’ve shifted that and started going after New York stock exchange companies, better market, cheaper for them to trade, better access to investors, better marketing. Makes the companies look a little more savvy. I would say, you know, you look at an old company that was on New York versus what’s on NASDAQ.

Chris: So part of that was branding. And we led the first ever moves from the New York Stock Exchange to NASDAQ. So did that for a number of years and then moved into a professional. We got a really good CEO about halfway through my career that wanted to differentiate Our listings platform, but also how to create more revenue when you have listings.

Chris: There’s only so many companies that go public every year. Right. So we built a professional service business from zero all the way up to 300, 350 million, which turned out to be more than the listing revenue we got from the companies that were listed. 

Seth: How much of that did you do organically versus inorganic?

Chris: It was primarily the big chunk of this. Like most businesses you see, you’ve got an early start on. That a lot of organic growth, a lot of DeNovo growth. And then when you start to accelerate and you have some success, you get these acquisitions and the acquisitions get bigger, the better you do. And the more you do.

Chris: So it was towards the end, it was heavily weighted on acquisitions and acquisitions in, I would say, tangential spaces. So we owned a press release distribution company, web hosting company, stock surveillance company, board of directors, tool sets. So anything that can make a private or public company.

Chris: Better operate, we had a really good space to acquire from. So it wasn’t just like building out webcasts. They were able to add services that help companies be better traded or be better operated. Yep. 

Seth: Now you did that for remember in your, that, that pivot, right. When, in at NASDAQ, when you went to build that, how long did you do that for?

Seth: Did it for about seven, seven, eight years. And along the way, like you could have stayed in that industry, tremendous success. Right. But, but something inside of you wanted to do something different. Yeah. Right. What was going on with you? What were the internal drives? What is it that you were seeking that you were not finding and kind of that larger corporate Environment, what, what drove you to take, you know, this tremendous resume and say, now I want to go apply this to the lower mid, mid market.

Seth: It’s a, and it’s a big, and it’s a big transit. The other thing I want to talk about there as, as, as you unpack that is what were the big differences. That you experienced and the things that you had to adapt to from big corporate to low to low middle market. But let’s start with like the motivation and what drove you to make such a profound change.

Chris: I think the biggest driver was and what’s great about Nasdaq is like the companies that were on Nasdaq. It was very entrepreneurial, you know, and it was a large company. So you get into bureaucracy at some point you get, you get into the point of measuring to measure versus measure to act. But it was. It was powerful.

Chris: I worked firsthand with CEOs. You know, you’re, you’re getting a CEO to make the decision to list on NASDAQ, to buy your products. You’re not selling it at a lower level within an organization. So to be around that power of people who have started stuff and build things really excited me to see what else to do.

Chris: And then. As we built the professional services business, we did that by buying smaller, lower middle market companies. So whether it’s in a webcasting, again, web hosting, stock surveillance, just all of those things, believe it or not, come from middle market, small firms. And so meeting those founders, I became the, I would say basically the COO of that division running the operation.

Chris: So getting a feel for that was exciting. That’s something that I want to do versus. Hard, complex, large side sales, revenue, chief commercial officer type work. I enjoy building businesses. I enjoy operations. Don’t know why, but it’s just something that comes somewhat naturally to me, enjoy doing it and had an opportunity to, and I traveled quite a bit.

Chris: So, I mean, a big factor on this was. Wanted to start something on my own or being a smaller organization on something I could grow. And I want to spend more time at home. And so things aligned and an opportunity to join a small family office and small investor back private equity firm focused on commercial real estate and operating companies.

Chris: And so I had an opportunity to come back and not travel. I was on the road, I would say somewhere between 40 and 46 weeks a year. And so came back and did that. And unfortunately for my partners, but maybe fortunately for them, the second deal I did, I realized. I enjoy doing deals, but I’m not a deal guy.

Chris: I’m a better operator. And so I joined the second purchase, the second company that I didn’t 

Seth: take you long to figure out. You didn’t want to be investing and advising, right? You, you’re, you’re an operator. How long was that from the time you joined that family office platform to then going native again?

Seth: What was that time duration? 

Chris: It’s a little bit hard to say because I did both for quite a while. Yeah. And so I enjoyed, I do enjoy doing deals structure. I like finance around that. I like finding unique opportunities, which is exciting. So it was about a two year period where there’s an overlap. Yep. And then led that moved into that first or second acquisition we did and ran that for about four years.

Seth: So let’s talk, what was that business and what, what drew you to that? What was the challenge or the opportunity or the thing that excited you about? That platform that you want, right? Well, 

Chris: I mean, this is a natural progression, stock floor, regulation, large, complex sales for a stock exchange, building a professional service organization, of course, Seth, and then into real estate, private equity and small company investment.

Chris: Of course, I moved into beauty and wellness. That makes perfect right. And you can tell by looking at me, I understand this is a podcast and not a video, but you can see why I would migrate to 

Seth: uni. 

Chris: It was a, it was a connection that we had at the private equity firm, a family that had sold a business in 17 years ago, not today, but 17 years ago when, when we started talking to him and the private equity firm at the time did their best to ruin the company.

Seth: Yeah. 

Chris: So they merged it with an East coast brand, East coast private equity firm. And I absolutely love their story and love the family that started it. And so we, as a private equity firm, help them buy the business back, you know, outside funds, outside investors. And then unfortunately, probably for them and me, my interest in, man, I got to fix this thing.

Chris: Yeah. The first thing you do is a carve out. And so we had to set up a full infrastructure, TSA, everything. And that’s just, it’s kind of my wheelhouse. And then like every business I’ve been in, I absolutely fell in love with the people, just great people and saw the opportunity. It was a strong brand, tired brand, great teams, teams that hadn’t been motivated.

Chris: A brand that had grown tired and fit in terms of physical locations. They had a great product line that needed some help as well. And so when you see that, all I see is opportunity, excitement, long days, obviously, but just excitement. So 

Seth: was your hair better during that? Timeframe. Cause you’ve, you’ve, what are you saying about the hair?

Seth: Something’s, something’s gone on with, right. But is it better now? Or so you’re saying that it’s not as good now? It’s it’s on brand now for construction. Yes. But when you were, when you were there, did you polish this up at all? 

Chris: I mean, there was a lot of, what was nice is you get in most businesses, when you’re in the company, you get discounts.

Chris: Okay. And so I had a pretty good package in terms of maintenance on my hair, face and body, none of which worked. So, unfortunately, I stayed behind the scenes on that as well. So we had a really good looking founder that the family that started the business ran to, they were really good looking people. So I stayed behind the scenes.

Chris: That’s good. Back of house. I like it. I’m definitely kind of a back of house. But I would call 

Seth: you occasionally and you would, you would literally be working the front desk. 

Chris: Yeah, that’s right. And that’s, I guess that’s another one because I really enjoy, I don’t think I’m a micromanager, but I need to understand how a business operates all the way through.

Seth: Sure. 

Chris: And if you’re not working behind a desk, if you’re not walking a fire, if you’re not on the, you know, on the floor, I’ve also spent a little bit of time at a CPG company, if you’re not on the floor, if you don’t do that, I don’t understand how you can improve it. I really, I really don’t. And so, yes, I would work behind the desk and we’d see a drop in sales.

Chris: Unfortunately, 

Seth: so they very quickly, very quickly get you out of there and, you 

Chris: know, with a background in sales, I absolutely love sales contests. I think you’ve seen it. We’ve implemented a golden hammer. We’ve the golden sledgehammer and the, the, the organization. I mean, now we did this at NASDAQ with a lot of contests and the contest would be whoever had the highest retail retail sales.

Chris: I would go work the front desk. Yeah. And for some reason, people actually competed to have that done. And so I’ve done that a few times and enjoyed it. 

Seth: I like it. Now. Let’s then bring you forward to what you’re, you’re doing today. So after, after spending time there, of course, you got a call from, from someone that, you know, but, but what was intriguing, exciting?

Seth: What made you really get excited about then taking this next? Journey in your career when, when you, when you get a chance to visit our UI and take a look at the opportunity there. What, what got you excited about that? And, and with this, as opposed to being a family office, you’re also working now with a traditional.

Seth: You know, lower middle market, you know, private equity for 

Chris: right, right. I think, you know, I don’t run in your circles. I try to I’m kind of on the outside of your orbit, but we have a lot of similar friends that are our CEOs, both from an entrepreneur standpoint to started my business. And I think it’s the same thing is is you see opportunity.

Seth: Yeah, 

Chris: and so going there and unfortunately, my opportunity is usually I’d be the last guy that anybody should bring in. If everything’s running well. I’m just going to get in the way. And so I’ve, I’ve found this unfortunate migration into companies that can, uh, can improve. And so I saw just a tremendous amount of opportunity here.

Chris: I saw an organization that had great history, been around for 30, 36 years, but was in the middle of a transition. And I think someone that they could really benefit from someone with an outside perspective coming in. Putting in some, some business processes, building a culture around it, and then someone who wanted to grow.

Chris: And so it was, I thought really good was you had a private equity firm backing it that was excited about growth and had done this platform play in other industries into an organization that they had for about a year without really experiencing any growth and for the opportunity with. With my background with a bit of experience in M and a, uh, the ability to sell cause you’re selling founders to sell to you.

Chris: And then some kind of weird interest in operations and making things better. It was, it just seemed like a really good opportunity. 

Seth: So how did you, and you talked a little bit about it with the, with the transition into the consumer hair business in, in this business. Tell me about Let’s say your first six months in terms of, or the first year in terms of really getting your hands dirty and the various things you did to really understand this business, the restoration business inside and out.

Seth: Yeah. Can you share that kind of that journey, kind of the five or six like critical things that you did to really understand the business and then to get the buy in. Right. Not only from the existing team, any of whom had been there. Yeah, I think about Ernie, who’s how long has Ernie been there 25, 25 years.

Seth: And then, as you said, you’ve got to convince other founders within this industry right to come join you right on this journey, which which you’ve done right. And you’re going to continue to do so. Can you talk about that process of learning the business? 

Chris: You know, and I think if I break it down into three, maybe three, maybe four categories, the first one is people.

Chris: Right. And then the second one is I didn’t come out of the industry, so I’ve got, I have to get a quick deep dive and understanding the industry. Otherwise, your own, your people are not going to respect you. People outside the industry aren’t going to respect you. So there’s a whole component of learning the industry and then there is understanding the company, the processes and what drives the business and drives the people then that business.

Chris: And then the last one is, you know, what, what’s the financial. Aspects or how do you grow this business with the least amount of capital? How, how can you get quick returns? What’s the industry look like? So for me, I think the people thing, believe it or not, the, the most important thing in our business right now, and probably in most businesses is people, right, but we’re professional services, we’re general contractors.

Chris: We go out, we get a homeowner back in their home. The difference on this business is we are dealing people with Uh, probably if not the worst, the second, third or fourth worst thing that’s happened to them. Absolutely. A fire, potentially lost a pet. They’ve lost their home. They’ve lost their personal belongings.

Chris: You’ve got a small business that he’s put everything or she’s put everything into that. It’s gone. So we are dealing with people at their worst and you’ve got one person that’s driving that that can make a difference for that person. Shift that to beauty. And believe it or not, there’s a nice correlation here is the difference is we are making, we used to call it that we’re daymakers and our whole mission was to inspire confidence.

Chris: So someone comes in and they leave and it’s probably the best day, you know, not the best day of their life, but they feel really good about themselves. And so it’s the same thing with that group, making sure they understand the importance of that consumer, that customer, that guest to make them feel as good as they could and about themselves and treat them and go overboard for them to.

Chris: Now we’ve got to take someone at a low point and bring them back and feel good and make sure that we’re taking care of them. There’s a part of that in terms of getting your team to understand why that’s important. Even though they are dollar signs to every person, right? Sure. So if you’re a a stylist, you’re making money by the commission off that sale.

Chris: If you’re running a project to get someone back in, you’re making money off of how well you can run that job. You can never forget about who’s behind that. Yeah. And I think that was a big challenge when I started. I don’t think that was quite there. I think that had been forgotten. It got down to how can I get the most margin out of this?

Chris: If the private equity firm listens to this, that’s very important to me. Okay. Just for the record, but at the same time, you got to take care, take care of your people. So jumping in, getting the respect when you come from a beauty industry into construction is not the easiest thing. And so for me, it was understanding sitting back.

Chris: I’m not patient, unfortunately, but making sure I understand what’s going on. And you know, I entered a situation in terms of one of our offices that had some significant turmoil. We lost a third of our revenue within the right before I joined. We had some more turnover right after that. I would say there was a really good culture there at one point, and it clearly wasn’t there in the last few years.

Chris: And so you have people that were just focused on getting margin. There wasn’t any strong culture tying them together. They didn’t understand the vision and they didn’t feel part of the company. And so, you know, a third of my time, once I got on the ground was getting to know people. And just like everyone does, I mean, these are stupid things and not saying anything that no one knows is just, you go to happy hours, you spend time with them, find out what’s important to each of them, have silly little contests, you know, get people competitive, you know, and, and when you don’t know something, just say, you don’t know it.

Chris: And that was, I do that a lot, you know, cause I don’t know a lot. So I would say that was a big thing in terms of the first thing that I did when I got on, you know, your 30 day, 60, 90, a hundred day plan is we had to get, we had to build a culture and had to build it quick. And I’m a, I’m a pretty transparent person.

Chris: Unfortunately, I wear my emotions on my sleeve. Sometime I care about people and that’s probably something to hear all the time. But again, that’s not bullshit either. I care about every one of my team members. Yeah. And just make sure that they know that, and they don’t think it’s, it’s bullshit either. So we spent a lot of time on that.

Chris: We had a great operator in Denver, so we supported him. He took that business from, you know, his goal was, I just want to earn this amount of money every year. That’s what he told me. That’s it. And then we, you know, we set him up with equity. That’s one thing, right? And then we started listening to him, encouraging him.

Chris: You helped out quite a bit on this as well in meeting with him. We got a guy now that his first year, he grew the business 20%. This is an industry that grows at five, you know, five to six. And we just had an offsite last week and he’s got plans to double, double the business in the next two years. It’s exciting.

Seth: It’s, it’s, it’s amazing to see people. What you’ve done, you know, having the chance to come down this week and visit with you and the team. It was a, it’s an honor and a privilege, you know, for me to serve and to, to just bear witness to, to the cultural transformation, the energy in the room, the buy in, the enthusiasm, and I would say the healthy competition.

Seth: Yeah. Right. That you’ve established amongst your, your leaders, right? Most of the key leaders in the business now have equity, which is critical. It’s something we talked about in our, in our last podcast. It’s something that I harp on and I’m a big fan of, of pushing equity down as far as possible and making as many people owners in a business as possible.

Seth: But it is, it’s, it’s just night and day culturally what you’ve been able to do in a and it’s showing up in the results. So let’s then talk about, you know, What it took for you to really learn and understand the levers of the business and the industry. Can you talk about that? 

Chris: Yeah. And it, you know, great ranges.

Chris: And I’ll say one thing about private equity gets a bad reputation and sometimes it’s deserved. These guys are really good and they’re Midwestern based, but sometimes these guys came back and, and I’ve been patient and supportive. And so that’s been a big, a big part of this. And then working closely with my executive chairman, who’s got experience in HVAC and construction.

Chris: And. I think you know him. I’ve heard of him, but let’s not talk about him. No. Okay. But he’s, he’s been very helpful on that too. And then just finding a few people in the industry that are willing to help you build relationships and then trusting your team. And no matter what I’ve done is you always hire people that are smarter than you.

Chris: Right. It’s an easy, for me, it’s a really low bar, so it’s pretty easy, easy to do for me. And having people that are smarter than you and help you understand the business. And then you’ve got to, for me, you don’t have to do anything. What’s worked for me, if it’s even working is going on site, right?

Chris: Understanding how to, how to estimate that. Be on there, meet the customers. My very first day on the job, we had an irate customer come in and say, you guys are Messing up my project and, uh, you know, one of the, the individuals at the firm at the time said, that’s fine. We don’t, we don’t need to do this for you.

Chris: You can go elsewhere. And I was in that meeting and had a different opinion on that and went a different track and I didn’t have a business card. There happened to be a bar nap. There was no alcohol, but it happened to be a bar nap for some reason in this conference room, like a little napkin. I wrote my mobile number on that.

Chris: I said, you call me, we’re going to get this taken care of. Went out to his house the next day, got a new project manager on it. So it is, I think for me, I love talking to customers and the ones I talk to are not the ones that are calling to say, Hey, thanks, we appreciate you. It’s understanding what went wrong, how it can fix it, getting out there.

Chris: So I think for me, at least. That was a big way attending industry conferences, finding the leaders in the industry, leveraging the people that are smarter than you in the company, which is every single person for me right now and will continue to be so all of those things help me make a transition from an industry that really had no tangent outside of both being people centric people that made the difference in people, the product, being able to have some credibility.

Chris: In the industry. 

Seth: Yeah. So I know you’ve spent a lot of time in the field. You’ve gone through every aspect. I’ve now also seen, you know, your, your, your board and the technology, the way that you guys are tracking job, checking, checking job status, tracking whip. And I know that you’re also starting to bring some technology Into the business, can you talk about some of those technologies, some of the enhancements that you’re bringing and how that improves the life for the project manager, proves life and quality for the homeowner, improves the relationship.

Seth: With the insurance company who ultimately is, you know, paying for the majority, right? Of, of the restoration. So can you talk about some of the, the trends that you’re seeing and some of the technologies that you’re starting to bring into the business to, to modernize the company as well? 

Chris: Definitely. And I think again, for that was beneficial for me, it was the opportunity to be at NASDAQ for a number of years, right?

Chris: So you think of technology, And that’s probably the best technology in the world. That probably it is in everything they do. And there’s always been a technology culture there. And I was able to take that into every other, every other group I went to and find the best thing to do. And one of the first things that we did and the hair business is we had a brand new You know, we did a full implementation of a brand new ERP system that made a massive difference in measuring how, how often your tech should work when they shouldn’t work, how much you’re using, you know, all of those things.

Chris: And so we were able to put that in pretty quickly. And in this business, construction restoration is still very manual. There’s a lot of good technology out there for large companies. Uh, obviously project management software that we use when I was on the real estate side at my private equity company, you know, that’s there, but it is not at the small and middle market level, right?

Chris: You’ve got founders that started that still run a businesses. How profitable were you? And they opened their checkbook and they say, well, here’s what’s in the bank, you know, so there’s not that financial control and there’s not the technology to the business. So when I started just a year and a half ago, we were sketching houses with tape measures.

Chris: Now the, the big. Technology advancement was going from a manual tape measure to a laser tape. So, you know, that was it and you’re still drawing and you’ve got guys then that would come back and then do an electronic drawing, but it was manual to now we use. There’s a number of different technologies to where you go into a home or a business.

Chris: Now you put a camera in the middle of the room. And it will tell you the dimensions, it gives you bird’s eye view, you send that away and you get a full sketch of the house, you know, that it’s something that would take. Four, five, six, eight hours. You can get done now in an hour and 

Seth: we, and to your point at a e comm, we had been using these technologies years ago and they’ve been maturing every year, but, but in the world that I came from, you know, we could go do that within an industrial plant.

Seth: Right. Very quickly, we go into a large commercial space and do that. But these were very, the technologies were really only available right to, to larger firms that had the budget and larger projects. And they, I think over time, these things have really started to come down to where they’re very affordable for the, for the lower mid market.

Seth: If the leader has the foresight to do that and can convince the field Right. To, to change how they’re working. That’s exactly right. As well. 

Chris: Yeah. And so I just want to, so you were trying to, I feel really, you know, good about this technology change, but what you’re saying is it’s been around for 20 years and I shouldn’t feel so good about this.

Seth: Yes. You know, it’s, it’s, we saw this in the HVAC industry too, for a long time, there just weren’t systems that had come down to the lower mid market. It was very hard now. Like for example, in, in residential HVAC, we’ve seen service Titan, right. It’s kind of become, you know, the, The standard and it’s, it’s allowed to just a huge amount of, of transparency, visibility, very easy to implement.

Seth: And so these technologies, you know, I think that the other thing that’s happened is not just bringing them down from a cost point to the lower mid market, but making them really easy for project managers to, and estimators to adopt that, that, that has always been, been. In the hard part in the construction industry, there’s a, there’s a resistance to change, but in many cases, the technology providers did not make it easy on the field, right, to adopt new technology.

Seth: I think those things have, I think you’re experiencing some of that change. You want to talk more about some of that? 

Chris: I think we’re, we’re early on in this, uh, to not at this size of company. And I think there’s a lot of things that we did at NASDAQ and we’ve done in other, I’ve done in other industries.

Chris: That can come across here and I don’t, I am not to be cagey. I don’t want to say too much because I’m really excited about what I think we can go with this. Yeah, yeah, there, there is not outsourcing of that. And when I say outsourcing, I don’t mean send this to India. I’m talking about being able to centralize certain pieces of the work that we’re doing today, which It’s been done for years, right?

Chris: I mean, we’ve been, I’ve done this my entire career in every industry. It has not hit this industry. It’s it’s always been, no, I’ve got to be, you got to have your expert in there walking around, they’ve got to have a tape measure, got to see it. There is technology that’s going to change AI in terms of. And just to, and I know you know this Seth, but just to reiterate, this is an insurance driven industry and the insurance companies basically tell you what something costs, 

Seth: correct?

Chris: So if you’ve got a flood and you need to do a flood cut, you need to put up new drywall and flooring, the insurance company will tell you how much you can get paid for that all the way down. So a lot of this is definitely construction expertise, which our PMs have. It’s understanding how to write a scope, but at some point there’s going to be technology that can make this much more efficient and effective and we’re there.

Chris: Like we’re getting close. 

Seth: And I think, listen, at the end of the day, going back to helping people and, and, and where, where you started, you know, you remember when we had our whole house. Yeah. Thing. And, you know, we were out of the house for, for, for nine months, you know, and we didn’t get that job just for their, for your listeners.

Seth: It’s well, it’s in Chicago and that was a long time ago, but anyway, for the homeowner, the faster that you can get them certainty, right? The faster you can help the insurance company. Right, close, close this out, but at the end of the day, they’ve had this major disruption, the faster we can say to them, or you can say to them, we’ve got this, we’ve got the estimate done, we’re ready to start, you know, the job, the faster you can close it out and get them back into your home, right?

Seth: You’re these are, well, these things also free up capacity. Right for your team to be able to help more people, but you’re, you’re also making the life of the project manager easier, making it enabling PMs to take on more jobs or larger jobs. But at the end of the day, you’re really helping that homeowner to get, to get certainty sooner and to get back into their dwelling sooner, which is at the end of the day, what we are there to do.

Chris: That’s exactly correct. And that’s how we get paid. Yeah, you know, and we do want to get that homeowner back, the consumer, the business owner back. And my team hates it when I use all these little stupid analogies, but I like water. And so I’ve always lived by, we live by Lake Michigan. I’ve lived by rivers when I grew up.

Chris: I love the ocean. Mountains are fine. I like to fish. I like water. And so. And what water always does, and you’ll learn this in restoration Seth, is water takes the path of least resistance. So it’ll flow down your wall, it’ll find the easiest way to go. And I like water and I like the path of least resistance.

Chris: And I’m actually going to have a point, you’re looking at me like, why are you talking about water? My path of least resistance is, don’t try to force the guys that don’t want to use technology to use technology. So find the champions in the organization that want to use technology, get excited about it, and guess what’s going to happen to those that don’t want to use it.

Chris: You know, it may, it’s not gonna happen a week, it’s not gonna happen a month, maybe six months and all of a sudden they’re going to be like, Hey, can you, can you show me how you do that? Yeah. That’s pretty cool. Versus. Us coming out there and doing a mandate mandates don’t work mandates work enough to, you know, make someone feel like you think they’re doing what you want them to do versus making themselves better.

Chris: And I think you saw it. I was happy that you attended our meeting this last week, but we got a PM that started six months ago. Here’s another crazy thing. As I’ve mentioned to you, like some of these guys go in and they sketch on a sketch pad, right? And so now we’ve got the cameras to do that design and everything.

Chris: They’re taking in paper forms. And I know that every other industry has gotten this taken care of. We weren’t in this industry. And he came in, he’s got everything on his iPad. You know, he can now do the sketches from the camera to the iPad. He can have the customer authorization on the iPad. He’s got the scoping on the iPad.

Chris: Everything’s done. And the guy was like lit up like a Christmas tree. Yep. He was so excited to talk about it. Yep. Now, if I stand up there. You know, where my head of operations stands up there and said, here’s what we’re going to do. Here’s why it’s better for you. It’s not going to go anywhere. You’re going to have a couple of people that maybe do it, but find those champions, be the, you know, take, be like water by the path of least resistance, which is the champions in the organization, have them embrace it, have them push it.

Chris: And it makes a huge difference. 

Seth: I think the other thing about water. Just to extend the analogy for a second that I like about it is that it is unrelenting, does not stop, will, while it’s taking the path of least resistance, will always find a way. Let’s pivot and let’s talk about the role of the finance function, the role of CFOs in your, in your life.

Seth: And having come from NASDAQ. Right into the lower mid market and then, you know, public company to family owned with some institutional capital now to traditional private equity, the various different types of reporting requirements, et cetera, and then, you know, growing organically, transforming companies that were typically operating on a, as you said, on a cash basis, now having to operate on a gap basis and, and having, you know, um, Going having to do whip accruals and various things like this.

Seth: It’s a tough transformation has to be done because because when you are private back private equity back, these things have to be done. But typically, you know, the people that initially show up in these organizations haven’t had to do these things before. Right. And so typically you’re having to bring in new people outside help.

Seth: And at the end of the day, you’ve got it, you’ve got to have the reporting, you’ve got to have both the operational and the financial visibility, and it can be, it can be hard to build that, that function. I think it’s one of the hardest things to do in the lower mid market is building that function. What has your experience been?

Seth: What are the things that you’ve learned over time? This is not the first time you’ve had to build out. Office of the CFO in an organization, you’ve had to do this multiple times. What can you share with the audience about this part of the journey? 

Chris: I think there’s, there’s two paths, one of which I like, and one of which is not my favorite.

Chris: And so when you look at a CFO and you say that’s all financial functions under that CFO, right? So that’s treasury accounting, everything. I think that the biggest change to me has been FP& A. And you got a really, really big change. Big or a really good insight into that when we were at the, the health and beauty and wellness company in terms of just give you a really simple example is we changed our hours.

Chris: We got to the point of when we knew what our revenue was going to be by looking at trends in terms of bookings that were coming up, we would then change the hours based on bookings, little things like that too. We had, when I started, if you had to have a, this is a really small example, but I think it’s, it’s powerful in terms of getting the right financials and metrics, the FP and a KPIs to the, the CFO, and then to the CEO, and even you to your general managers and your leaders in the field is they used to them.

Chris: Yeah. It could not be closed. They would never be closed a day. They’re open seven days a week. Right. Well, anybody listening to this knows that, okay, do you have enough business every day of the week to do that? Well, no. Right. So we ended up closing on Monday. Didn’t lose any business, took out a ton of costs.

Chris: And a big part on this was the maintenance. So if you need a, uh, hair dryer replaced, you need HVAC systems worked on. What they were doing is they were having HVAC systems come in at night, getting double time to pay, changing a boiler out. To where it’s like, just close, man, we, you know, we didn’t lose, believe it.

Chris: We did not lose appointments, probably a couple, but we actually gained some. You have that efficiency, but if you don’t have the analysis to say that it’s going to cost you 30, 000 in overtime to put a new boiler in versus the 20, 000 in business, you’re going to get that day. And I know that’s a really simplistic example, but it’s amazing in terms of, you don’t have those financial planning metrics.

Chris: Then, then you’re lost. And it’s the same thing now in restoration is to be able to look, what’s our pipeline? Where should we put in resources? How long are the jobs taking? So I cannot speak highly enough about FPNA and the importance of it and getting a good system. And we’re nowhere near where we need to be from a system standpoint.

Chris: We’re using this brand new software called Excel. I don’t know if you’ve heard about that. It’s, uh, it’s from the notepad to excel. And I know there’s be, I’ve implemented bi systems. You know, I’ve done, we’ve done all kinds of things and continue to do so. But the, the most important thing is just to make sure you’re measuring and figuring out how to measure and looking at all aspects.

Chris: And we built a really robust KPI. system at, uh, at the hair care place. And you just got to make sure then that once you have that, you start making decisions based on that, that data. So I would say there’s an FP and a piece that I cannot imagine running a business without having, and that’s been a, it’s, it’s been a life changer and that game 

Seth: changer.

Seth: And I think, you know, I agree. I think that I learned that the first time I went to the lower middle market, right. And that. I missed that and that the oper the the fin ops analysis piece was missing. And I think what’s what’s really become cool in today’s market. I think that the outside providers just to bring in a full time F.

Seth: P. N. A. Person. You’ve got to get to a certain size and scale where you can add that. And then and then. That work in addition to the work, the day to day work and everything else that the CFO has to do, asking the CFO to put on all of these hats, it’s too much. I think it’s one of the things we ask our CFOs in the lower mid market do too much.

Seth: And so I think there are a number of really elegant solutions in the market. Where you can get managed FPNA if you can’t yet bring it in house very cost effectively, but, but I agree, I think it’s, I think it’s critical. 

Chris: Can I give you another example? Please. Do we still have tape left? We do. of those old tapes?

Chris: We’re good. We’re good. Uh, is, had an opportunity to, to join a, a smaller family owned and outside investor owned CPG company that made, I mean, trash bags, and one of the things they were, it was not in great shape when we went in and, uh, just simplistic things such as, Are you making money on everything you sell, you know, as in like, well, think so.

Chris: Well, no, when they’re, they’re really big customer, we, we have to keep doing that to getting down a level of making sure that you’re making money on every one of those and then to manage cashflow and the importance again, back to FP and a, and the office of the CFO Is to manage your inventory. And these are all obvious things, but we, we used an outside group to come in and set up a cash forecasting tool that made a huge difference in that.

Chris: And there was a really good CEO that came in obviously to that, that helped that whole process. But if there wasn’t that, that product level skew level review of profitability, it would have just been, well, we’re losing money on every sale. How are we going to make money? Just increase sales. Right. There was that connection.

Chris: I know that’s, that’s won’t work. And so that was a really important component to bring someone else outside because you can’t have that experience internally and ended up getting really good cash forecasting, product level profitability, which was, which was key. 

Seth: And so last question on this front, when you, when you look at teaming.

Seth: With a CFO, given your strengths and weaknesses, what do you look for in a business partner and a CFO? What makes the right type of person for you? It’s different for every CEO. 

Chris: What does that person look like for you? I think it looks like anybody else that’s in that company. Someone that has, is a good cultural fit.

Chris: Yep. Someone that is passionate and smarter than me. Again, that’s a low bar on the, I wouldn’t say on the passionate side, but on the intelligent side. Someone that treats it like it’s their own business and then someone that can translate the importance of the finance function to the operations function to the to the business function that’s able to do all of those things.

Chris: And someone that’s done this before. I mean, as obvious as that sounds, it’s great to train and bring people up, but having someone that’s led through this, that’s put in financial processes in place, someone that knows how to cash flow, how to sales forecast the impacts on. It. Return on investment analysis, like, as you know, we’ve added a new new business line recently and someone that can help go through that and and figure out what a return on investment looks like.

Chris: I think all of those things are important, and 

Seth: so last thing on the business and then we can we can do a little bit of a recap and some takeaways. I know you are extremely bullish. On this industry, on the restoration industry, commercially and commercial and residential, both, both sides of it, there are various aspects of the business, right?

Seth: Mitigation contents, then, then the actual construction management itself. You’ve spent now you’ve really become an insider to the industry. You’ve got a really clear crystallized vision on. How you want to build the company, how you want to operate the company, where you want to be, and there are some things going, you know, and, and the insurance industry nationally is going through some changes.

Seth: So if, if you could think about, you know, what, what do you see coming in the next few years, you know, in your industry and, You know, what excites you about the challenges and the opportunities that are in front of you over the next three to four years? 

Chris: Yeah. And I think we got to be careful on this because what we don’t want to do is bring more private equity firms into this industry, which we’re already seeing.

Chris: And one of the big, the big changes, it’s been going on, but it is accelerating is the move to investment in this sector. This industry by private equity and even institutionally managed money. So, you know, you’re looking at some of the big, big players. Now we’re starting to get into this, which doesn’t impact us yet because they’re looking for larger companies to acquire, right?

Chris: They don’t have the time to put these together. These are complex things. As you know, when you buy middle market firms, uh, there’s some challenges that come along with integrating those, building those and experience and everything else, but you look at this industry, right? So it is. Businesses and residential homes and what’s going on with residential homes got aging homestock right across the country, and you’ve got a lot of builders that are putting up shady houses.

Chris: Shady is not the right way. I don’t mean like tree shady. I mean, like quality. The quality may not be there by the rush to build new. And so you’ve got aging homestock. You’ve got probably not the best homes and and Multifamily businesses, buildings being built, commercial buildings. And then on top of that, what’s going on.

Chris: And, you know, it may be climate change. It may not be climate change, whatever it is. There’s more storms, more severe storms, and more localized. We are not. And just to expand to, we’re not a cat company, meaning we do not chase storms. We don’t send a group down to Florida versus what, you know, over what happened last week.

Chris: We focus on our local markets. And even there. The severity of storms in small markets has, is increased dramatically. And so you’re seeing, you know, a big, uh, increase in change in, in storms, in weather, in climate, everything that’s going to lead to, Unfortunately, more people needing, needing repairs, you know, and then, you know, on the other side or another plus to this is, is insurance.

Chris: Insurance is getting more and more complex. So if you can have an expert, which we are, come in and manage the process, not only do the best job in rebuilding your home or business, but be able to navigate this incredibly complex insurance, that’s only going to get worse. 

Seth: Listen, Chris, I really appreciate it.

Seth: I want to do something a little bit different here on key takeaways as we wrap up. And you have made this transition not only from public company to private, but you’ve also worked extensively now in what I consider the low mid market. You just mentioned that as well, because the area where you’re playing are typically smaller businesses that larger private equity stays away from.

Seth: And We, you’ve got the ability to, to buy, acquire, integrate, right. These, these companies and create something really, really special by doing that much less competition at that end of the market, but it comes with a heavier lift, right? Right. There are a lot of people out there that are likely listening to this that are still thinking about making the transition that you’ve made going into the lower mid market, or perhaps that first time making a transition from larger company right to private equity.

Seth: Or let’s say becoming a private equity back, they’ve been in a private equity environment, but they’ve never worn the CEO hat. So if you think about all those things and you think about, let’s say the three or four pieces of advice that you would want to give having made these transitions yourself, right?

Seth: To future CEOs, what are the things that they should really be asking themselves or preparing themselves to do to make that transition? 

Chris: Yeah, I, I, I’m not in a position, have the backing, the success to give anyone advice. And even if I do, and I try it with my kids, it doesn’t work. So, you know, some things that, that have worked in different situations for me is coming back to and as dumb as it sounds, everybody said it higher people that are passionate and smarter than you.

Chris: And smarter doesn’t mean they went to a better school or did better on their ACT, which again is a pretty low bar for me. Okay. Just means that they know what they’re doing in their space, you know, in their swim lane. And so I, and everyone talks about the importance of people, but that is so important to find that passionate, smart person to go and to bring into your business that, and then it’s your job.

Chris: To make sure that when you have this team of, of people that are passionate, smart, dedicated, and know what they want to do, make sure they understand where they’re rowing, right? You can have the best team in the world. And if they’re all rowing different directions or two of them roll in different directions, you’re not going to go very far.

Chris: So it’s your job then to figure out what motivates them, let them run their own own business, their, their own, Swim lane and support them all the way through. But I think it’s really important to find those right people and then support them. And then you’ve got to lead them, you know, where you want to go.

Chris: And that doesn’t mean in front, barking out orders, it’s get them to believe in where you’re going and it’s amazing to watch that passion and sometimes it’s hard, you know, and you’ve seen it, these small businesses, especially in a, in a blue collar industry, there is a lot of emotion. There’s emotion in any business, but this is, it’s amplified.

Chris: I’d for a number of different reasons. And so you can show what’s important for them. I think that that’s really, really important. The other thing that’s worked for me is holding myself accountable and then holding everyone else accountable. And so when we say we talk about building culture, supporting your team, that it doesn’t mean be their best friend and pat them on the back.

Chris: It’s important to give accolades. It’s important to support them, make sure they understand why they’re important. But you’ve got to hold them accountable at the same time. And that’s something I always have to try to work on. Cause it’s easy sometimes to just say, I’ll do it myself. And that is the worst thing in the world.

Chris: And I have not figured out how not to do that. And I’m working on it, on it every day. So I think that’s kind of important. And then you just get into what drives the business. You know, and then what you’re good at with me is saying, let’s focus on what’s important. And I like to think I do that, but I also like to run a thousand different directions sometimes, maybe not a thousand, maybe five or six, but making sure you’re focused on what’s important to the business and what moves it.

Chris: And then, you know, we talked a little bit about private equity, family office, publicly traded companies. It’s really, really hard, especially in this business, not to get distracted. And listen to the owners who will say, Hey, man, did I watch 60 minutes last night? And they had this great idea on a new hair product, you know, or if you thought about moving into mitigation for small homes where you advertise a lot and you, everyone’s got ideas and it’s really hard.

Chris: Just stand strong and say, let’s focus on what’s important to the business and move forward. So those are some of the things and just building that culture. Those are some of the things that have that have worked sometimes for me as we built these businesses. Well, I think 

Seth: that’s great insight, whether you want to call it advice or not.

Seth: I know it’s served you very well. I’m honored to work with you and to have you as a friend. I can’t believe that it’s been 20 years, Chris, where that’s, uh, I don’t know, man. It’s showing up in your hair more than mine. Yeah. 

Chris: But, or, or there. Lack thereof. Or lack thereof. Right, 

Seth: right. You 

Chris: look 

Seth: good. 

Chris: It looks good.

Chris: Well, you look, 

Seth: you look, you, you’re looking. I, I’m still not sure about those jorts, but Yeah. But, but I’m telling, but I like it. 

Chris: Construction. I like 

Seth: it Construction. It’s good. We’ll get you a beer. It’s good. Well, listen, I think this has been great. I think there’s a lot of insight here for our listeners. I really appreciate you making the time on a Friday afternoon to do this.

Seth: And we’re going to wrap up this episode of diners and deals. I am wearing my S and G t shirt because we were trying to do this at, at S and G, but it just Now I need to get some S and G coffee mugs to bring over here to kind of, you know, make it feel like we’re still in the diner. Do you get anything for that plug, by the way, in this podcast 

Chris: to get a 

Seth: free offer?

Seth: I mean, hopefully, hopefully we get more people coming to hang out with us at the best diner in the world. It is. In the world. Is it not? It’s fantastic. And of course, and last plug, we’re coming to you from Vocal here. And this is pretty impressive. It’s nice. It’s, and it’s, isn’t it so cool that they just like give us like their lounge to just, you know, do this.

Seth: I think it’s cool. And I got free advice 

Chris: too, from, I, we need, there’s a lot of things we can do from a digital marketing perspective. And it seems like these guys know what they’re doing. 

Seth: I think they do. That’s what I’ve really said. That that’s what I’ve heard. So, so we’re going to wrap up this episode and I’m not going to say who the next guest is, but he is a.

Seth: Incredible entrepreneur, similar to you, he’s made these really incredible leaps and transitions. I mean, it’s a guy that started as a sports agent, launched a very successful restaurant chain, and is now doing a rollup of landscaping and janitorial companies, so just an interesting track record and interesting transition.

Seth: And he’s just. You know, he’s a fantastic entrepreneur. I’m we’re very lucky to get him. So I don’t want to say who it is yet, but he’ll be here in studio with us soon. And just a fabulous guy who’s done so much in his career, but has really also transformed who he is as a person over the last probably 15.

Seth: Years. And the other thing that’s funny about him tying back to restoration, the day we had that event in our house that drove us out for nine months, we were at his birthday party when that happened. So anyway, it’s basically it’s his fault. So we’ll bring them while you’re bringing them on. That is exactly what that, this is basically his penance for that.Seth: So not going to say who it is, but really excited to have him on the show. That’ll be our next guest. And with that, we’ll get on with it. Thanks, man. Thank you. See you. That’s awesome. Bye.

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