E103: M&A Advisor Alex Nghiem: From Tech Burnout To Global Exit Expert - How2Exit.

[00:00:00] Ron Skelton: Hello and welcome to the How2Exit podcast. Today I'm here with Alex Nghiem. He's an exit specialist and M and A advisor and he specializes in the digital world, digital agency's B2B consulting software as a service. He spent a lot of time in that industry. Thank you for being on the show today, Alex. 

[00:00:17] Alex Nghiem: Hey, thanks. Its great to be here Ron. 

[00:00:19] Ron Skelton: Cool. So, I always joke around and like, it's the ongoing joke is you were born and now you ended up on a show about m and a. How did you end up here? Can you fill out the gap in between? Can you give us your origin story? 

[00:00:29] Alex Nghiem: Yeah, so, well, there's a definitely a special DNA strand. I'm just kidding. None of us are born, knowing this, right? So we kind of learned along the way. Some from mentors, some are from, as I jokingly call it, the School of Heart knocks. So I'll keep this as, as relevant and as brief as possible. So I've a technical background, went to school, got a degree in computer science, and then, the reason I start there is there's, it's actually gonna come full circle 30 years later.

[00:00:53] I was a programmer for, several years and was really burned out, right? And I used the money, I saved up, did some consulting, [00:01:00] saved up money, then start an acting consulting company. Sold that company for mid seven figures, and then one did more consulting. And about five, seven years ago, I had more and more clients wanted to, get my help in exiting. So it would help them grow the business, and I get it ready for exit, and we handed it up to somebody to actually market the business, connect it with buyers. And I noticed that part kept getting dropped. And I wondered like, well, what's going on here? Did my clients come back and say, well, it didn't work out. And I said, well, what happened?

[00:01:25] We did all the, packaging, prepping the business. They said, well, because, the party that we actually worked with after that, they couldn't understand that no ones on our business, or they didn't know how to talk to the buyers and things like that. So I said, wow, man. Like, it seems like that's when the money's made, right? Like when you exit. It's cuz there's a, that's where most of the money, you don't really realize it until it actually exits. And so then about two or three years ago, I started focusing more and more the actual market with the business to buyers, right?

[00:01:51] So meaning, connecting, different types of buyers, acquirers, family offices, private buyers, PE firms, and they'll, each one of those has different [00:02:00] nuances and we can get them to a little bit later how to pro, how they look at, acquisition a little bit differently. So that's what we're focusing now. Now, this is where my tech background came full circle. At the time I was burnout, as a programmer, and I'd been a chief technical officer, and I got so burn. I don't wanna do anything technical. I mean, I do not wanna do it. Marketing is where it's at, right? And then it's now interesting.

[00:02:19] How life kind of comes back, right? 30 some years later, I said, wait a minute, my background being a programmer and actually being a CTO it's given me huge, huge advantage, which is why I focus on those verticals, right? Digital agencies, B2B consulting companies, and there are subtle differences, between those two, SaaS companies. I've written six books. My second book published, oh my gosh, way back in early 2000, was one, the very first book about SaaS as a business model, right? So I understand, programming and tech at a much deeper level than say, most folks in my field. And then, then software companies as well.

[00:02:53] So when I talk to somebody, I assure them, say, I've been where you're at. I know what you're going through. I've ran my own companies, I've [00:03:00] sold companies, I've bought companies, I've advised companies. So I've pretty much sat, all corners of the table, for lack of a better word. And my tech background really helps a lot because when you work with digital centric businesses, they're very, very different. These are what I call predominantly high cash flow businesses, but light asset. Most people in this field, they know more, what I call, low cashflow and high asset, right? Most people that do what I do, they come from that world. The brick and mortar, the world, which is very, very valuable, but it's a very different, very, very different, set of financials and set of dynamics. That's kind of the last 30 years, it's compressing two minutes there. 

[00:03:38] Ron Skelton: It's been interesting. We both have a similar backgrounds. I came from the tech world, within the military, doing tech stuff for the military, military intelligence and then got out. Went to, in the civilian world from defense contracting to actual, the tech world, ran some of the biggest websites on the planet and got burned out, decided, I just don't like computers.

[00:03:57] Right. My problem with computers is they're hyper [00:04:00] logical. If something's broken on a computer, it's either the idiot that programmed it or the idiot sitting on the other side of the keyboard. Right? Rarely, rarely is the the computer itself the problem. There are, logic flawed chips and there's some things out there, but you as a consumer would never see it. Most of the time it's either the programmer messed something up, you're using the software totally wrong or whatever. On the other side, I got burned out. Decided I didn't want anything to do with it and went and got a master's degree in marketing. Actually I started my master's degree in technical management and about right before I get to the capstone courses in my MBA decided I just didn't wanna do it. That's when it hit the realizations, like, I don't wanna be in tech anymore.

[00:04:37] So I'd walked into the school advisor, said, look, I think I'm gonna drop out. And they're like, why? You only gotta take your capstone course. I was like, yeah, I just don't wanna do tech anymore and that's the path I'm on. She goes, well, you're, what do you like to do? I said, I'm an entrepreneur. I'm probably start something my own. Now, they didn't give me the time of day, but I found out I really enjoyed the marketing stuff. So I finished my MBA marketing and, while I was in school, I've met my wife now of [00:05:00] 15 plus years. Not at school, but the whole thing was like, we, we followed the similar path. And here I am back full circle where I'm building, buying and doing website stuff, right?

[00:05:10] Because that's just something, it meets what I'm looking for right now. It's mobile. I can take it with me. It's like you said, it's low asset based, high cash flow. Especially in the content world, I need a couple writers, a couple SEO guys, and it's not even, high employee requirement, required for most of it. You can run as pretty significant content related revenue business on a handful of people located anywhere in the world. 

[00:05:36] Alex Nghiem: It does take a while, to explain that for me. I got bit by the travel bug. I've been very fortunate. I've been in 20, 30 countries. We're actually doing this interview while I'm on the road. I've been at Airbnb, attending a conference. Love, going to conference and mastermind, meeting amazing people. So I had one deal, where, the buyer, the buyer was in the US but different part of US.

[00:05:53] I'm in the US but, different area. The sellerss in Australia. I never met the [00:06:00] buyer. I never met the seller. The seller never met the acquirer. None of us ever met, none of us actually, we didn't work within, a thousand miles of each other. And the whole deal was still closed. Right. And people are just stunned when they hear that, like, wait. They wired several million dollars. They never met the buyer. The buyer never met the seller. Nope. So that's one the attractive thing. By it completely, it opens up a tremendous amount of opportunities because now you know, it sounds kind of cliche, but we truly live in a global economy. So that's one of the reasons I like this, cuz it, it opens up tremendous, a much larger pool of buyers and sellers.

[00:06:31] And so that way there's a lot more opportunity for actually making the deal happen. If you work predominantly with, again, brick and mortar businesses, and this is a pretty broad statement, but more often than not, you are much more limited to a local, much a regional buyer, until you get to like the tens of million. At that point, you're more like a regional or national chain, right? That doesn't apply. But for a most part you have a, even a multimillion dollar, brick and mortar business, 99%, I'd say nine out of 10 more times the buyer's gonna be somebody locally or regionally. [00:07:00] It's unlikely it's gonna be international buyer cause there's just too many unknowns. They can't review the business from afar. So that's what, it's just my lifestyle cuz I still have to travel.

[00:07:08] Ron Skelton: It says something, it's a testament to your ability to get deals done too, just because there is an element that is totally lost when we're doing everything on Skype. I refer to it as the talking head. Like when we're doing talking head deals where all you see is from the, second button up. You lose a lot of that. Like there's multiple senses. There's, sight, hearing, sound, smell, visual. There's even like, you can pick up on when you're with side by side with another human being, you can actually pick up on their mood and vibration almost. There's a sense of being around somebody. You lose a lot of that online and to be able to still get a deal done when all, and a lot of people they don't get this. If you're new in this space and you think this is a numbers game, I'll dispel that myth right here and now, it's a people's game, right? You've got to build rapport. You've got to, work with other people, find out what they're trying to, what they're trying to achieve and get 'em there.

[00:07:58] Alex Nghiem: On the first call that we [00:08:00] do, we're actually, cuz I do a lot of pre-screen on behalf of my client. I represent the seller most of the time. On the first call where, you know, the buyer and the seller meet, I always break the ice saying, okay, the purposes call cuz you know, they've already seen the numbers at that point that you said they've had a chance to review. That's fairly, pretty dry, right? And there's usually some question that, well why is this that? So I usually handle all that on behalf of the seller. And on the first call we get the buyer and the seller again. I was telling him to say the purpose of this call, is to see if we get along because we don't get along, there's no way this gonna work. 

[00:08:28] I mean, you may think the numbers are great, it's a phenomenal deal, the money's all there. But like you said, they can't get along during a one hour call, there's a transition that has to happen, right? When they hand the business off, they can't get along for like 16 minutes. There's no way any semblance or smooth transition is gonna happen. So that kind of breaks the ice and, knock on wood, right? So we say in the US so far, that hasn't happened yet because I've done, I fairly thorough, and yet before we actually get, the last thing you wanna do is get on a call.

[00:08:52] Oh my God, I did not like that guy. Where'd you find out? You know where, so and so forth. Right? I mean, can't believe they said some of the stuff that they did. Right? So, you're right, it's a [00:09:00] very much a people person. It's a very, very much a, people business. And you have to reap people and find out what, what makes 'em tick and what's important to them.

[00:09:06] Ron Skelton: Yeah. My thing when, on the first call is always, a lot of times I'll even come right out and say it, hey, what I'm trying to do on this call is let's figure out where you're trying to get to. Like, what did you build? I'm fascinated by that. Like, I'm really fascinated by what did you build? Why did you build it? And more importantly than anything is where are you trying to get to? What's your end goal and, if I can help you get there, then that's awesome. And if I can't, I probably know somebody can and I'll refer you for it out. But at this point, cuz a lot of times I'm like, if you just break the ice that way, a lot of times it cuts down that the ego thing where I built this, can you really afford to buy it?

[00:09:38] Well I really don't know the value of it at this point. What do I really at doing at this point of the conversation is, do I like you? Do I like what you've built? And are your goals achievable and achievable by me? Or do I need to bring somebody in that can help you achieve your goals? Right. 

[00:09:53] Alex Nghiem: Exactly. Yep. 

[00:09:54] Ron Skelton: I have one guy, he's like, well, I'm not exactly sure you can afford what I've built. I was like, okay, [00:10:00] I didn't think we're at that point in this conversation yet, but I promise you, no matter what you build, I know people that can afford it. We're trying to figure out right now is where you're trying to get, right. I may not be your end buyer. If you're telling me you've got a, if your price tag's a hundred million and it's worth it. I can't cut that check right now, I promise you that. But I know how to, I know how to put you in contact with people that buy that type of stuff. I've interviewed over a hundred people at this point.

[00:10:21] I've got a pretty good network of, knowledgeable of people will buy anything. We can put you in, into touch with, somebody that can get this done. And he is like, all right, well, we can continue then. But anyway, let's jump in with, why should somebody sell, right? When's the right time? How do people know when, like, deploy that trigger and go, I probably should look at selling this thing. 

[00:10:41] Alex Nghiem: Yeah. So that's a, that's as much a personal, it's a, as much an emotional decision as it is a financial one, right? So that's something that you really wanna, do not underestimate the emotional impact on this, cuz some people, actually have an identity thing, which we'll get to in a second. So it's really like, one of the biggest [00:11:00] mistakes I've seen people make is they say, well, I'm still having a great time. I'm gonna sell this thing when I'm tired, when I burn out. And then I tell 'em that, ah, you already lost a million bucks. Cuz they're, dependent size of the business. I've seen, which is, for example, we just have a client sell their, digital agency.

[00:11:15] They do paid Facebook ads for a very predictive vertical. By the way, sometime I have to intentionally be vague because I'm under so many NDAs, it's not one funny. But, so we'll just say one particular vertical, but it, I can say it is a paid agency, right? They run Facebook ads for a very specific niche. Niche. And so then what happened was the business had, they came to me even six, nine months ago. We got extra million dollars. And at the time they think more things are going great and everything. And then what happened was they got distracted and then the business kind of, faltered and as the business kind of doing, kind of declining, oh I'm kind of burned.

[00:11:46] Maybe I should sell this. We managed to sell it like the business, but I said we've gotten probably, extra million dollars for it. So what I tell people is like, sell it when it's got momentum. Because a buyer, there's two words I want the listener to consider. It's [00:12:00] called about risk management, right? To a buyer, they have a certain risk, risk range, parameters what call, whatever you want, right? When it goes outside that they're a lot less likely to do a deal. Every acquirer, buyer's got a certain risk tolerance they want to deal with, right? VCs have very high risk tolerance cuz they're speculative P companies, kind of middle the road.

[00:12:21] Private equity, a private buyer, probably a little bit less than that. So what does that mean? Well, If your business is declining, you are only gonna be able to sell it to the most adventurous buyers. Probably people that wanna buy distressed businesses. And those rarely ever pay top dollars. So when you look at some of the business, you want to figure out, okay, if I'm running this, will I still be enjoying this a year from now, two years from now? If you get any sense, you're not, you probably wanna start thinking about exiting. The ideal of window six to 12 months from where you think it's gonna peak for you. Not necessarily where the business is gonna peak, right? The business should still have a lot of growth opportunities, but if you feel like in six to 12 months I may not enjoy this as much, then you may probably [00:13:00] want to do that.

[00:13:00] By the time you said, man, I'm really tired, I'm burned out. That already happened six months ago, you're just now expressing, right? It's kind of like it's been building up and you don't realize you've been slowly sabotaging it. Meaning that you probably didn't press on the gases, the foot on the gas as much. I'm sorry, put the foot on the gas pedals much and things like that. So the business, without realizing it was already performing a little bit less and optimal. So I would say that some of that is a little bit introspection. And then some of that is also, of course, life events, right? I've had situations in this one case, the one I just told you about, where we could got extra million.

[00:13:31] One of the two founders starting at a business that took off and, he found that, he was a lot more excited to do business, so therefore he wasn't contributing as much of this business. There were two partners, right? So the two partners were still very amicable, but it was clearly that this other partner who was very, a significant contributor to the business was already, spending way much more time over here. And so because of that, the business, plateaued and, actually started declining. We still found a buyer, but like I said, we end up, selling for a much, a much lower amount than would've got, could have [00:14:00] gotten just even six to 12 months earlier.

[00:14:02] Ron Skelton: I see that a little bit more than I would've originally expected to. Meaning either one of the partners or even the founder himself, they started a side gig or a sideline, sometimes even similarly related to their business. Like they're a marketing agency, and they were really seen a missing as far as a piece of software they really could use. So they built that out, and then somebody else asked to use it, and the next thing you know, they're selling that. I'm thinking of a pick one guy in particular, but it's software company that he created for marketing agencies, was making more money than his agency was, and now he's ready to sell the agency thing.

[00:14:34] Right? I was like, okay, well first of all, it's gonna be a little hard to sell because you wanna keep every, you wanted to keep all his employees and just sell the agency. Because he slowly replaced his agency employees with software coders, and he's got a couple creative guys around, but the agency's struggling on the other side. I was like, well, you've already gutted it. He just didn't see that he'd already gutted it.

[00:14:54] Alex Nghiem: Yeah. Yeah. And I mean that, these are probably like, I would say, I just wanna put a caveat on it. These are [00:15:00] more I would call cashflow buyers, like private equity private investors, they typically buy cash flow. VCs is a totally different world. Unless you ask me specifically about it, I probably can refrain from talking cuz those folks tended to make more speculative investments. And then when I tell people, say, well, I wanna sell my company to a VC fund. I'm like, well, your business doesn't have enough growth opportunity for a VC.

[00:15:18] And they rarely look at, financial performance. I mean, even now it's more conservative, it used to be. But for the most part, most of the buyers gonna be talking about family offices, private buyers, and PE companies. So, and those tend to look at, they tend to have a certain, well no parameters that they operate under.

[00:15:33] Ron Skelton: So what are some of the, like we talked a little bit before the show, there's a lot of expensive mistakes you can make. You already talked about the declining performance and the million dollar mistake is, selling it when you're tired? Are there other very expensive mistakes you can make in the exit process?

[00:15:49] Alex Nghiem: So the first one I would say, well, the other one is not having very clean financials, right? Now, when you're running a business day-to-day, your financials are product sufficient for you to make day-to-day [00:16:00] decisions. But when you look at exiting, an acquirer's gonna probably ask for certain metrics or reports or you're probably not used to compiling. And that's really eye-opening, right? I just got a business under online. It was really, very recently here, so this is very relevant. So these folks, they optimize the business more for their lifestyle, right? I don't mean just reducing, the tax basis. We can get to that.

[00:16:23] That's recasted that could be addressed. But they built the business, and again, this is another agency example. They built the business so that way they didn't wanna have as many customers. So they only wanted, like, if the customer, basically, and again, this is a business philosophy, right? There's a point to this. An agency, one of these key metrics is churn. Same thing with a SaaS, right? Meaning like, how many people can you retain. This particular, business just philosophically did not want to basically say, if somebody's gonna churn, downsell them, they said, well, look, they're gonna go just let 'em go.

[00:16:53] Well, even though they manage to extract a lot, a fair amount of money while the client is a client. [00:17:00] The way it reflects itself is the duration is fairly short. For them, they would try to have more money in a shorter window. Then a longer amount of money over a slightly longer period. Well, some buyers kind of view that as high churn. You see? So even though they're highly profitable and it fitted their philosophy to an acquirer, it looked like a red flag, right? So now we have to talk through that so that if you are buying a company and you don't, and you are okay, because the rationale with the owner was like, well, if we have to hold onto them, we have to hire more customer service manager.

[00:17:35] And for them, they wanted a very thin staff. To the acquirer, they may be okay with having more, customer service managers, right? So account management and whatnot. And so for them it was, we had to kind of get them to see eye to eye on that. They said, your approach will definitely work. If they're about to churn, then, certainly offer them a lower, a lower price option, right? And so that's another thing right there. It's kind of then not understanding what a [00:18:00] buyer, values or, or what is considered high risk for them, right? So this is not necessarily a tangent, it's related to what we're talking about here.

[00:18:09] When I talked to a lot of, the folks that I work with, I said, do you have a ideal client profile? They say, of course. Okay. Do you have an ideal acquirer profile? It's like, what the hell's that? I said, well, think about this, right? When you sell the company, that's the ultimate sale. It's the colon. The colon like 10, 20, maybe 50 times the size of your normal transaction. Does the standard make sense that you at least have some idea of what that acquirer looks like? And there's, by the way, there's not one type of acquirer. There's like, for an agency and software size company, it's usually three to five profiles. So I said, there's different types of profiles here, so we need to know, or at least have a sense of what they are.

[00:18:47] When I sold my company, I had a reasonably good idea at the time, it was by accident, I just kind of, I manage reverse engineer some of it. And in hindsight actually, figure out something that years later I figured out how to actually systematize it. [00:19:00] But the point is like if you don't understand the choir and what they value or what they consider risky, it's a lot harder to go into the conversation. This is one of the reasons why, arisa being selfer, I tell people that it helps to work with somebody who's been there before. Cuz if you only have one type of ideal buyer, right? You've limited yourself now to potentially a four or five other types of buyers. And if you don't know what these other type of buyers value or you know what they consider risky, you don't know how to talk to them, right?

[00:19:30] So in this case, we basically have this real high margin and everything. They're like, well, yeah, but your churn is high. But yeah, but it's, see that's the one thing that can really, could just make the whole thing just, if not derail the deal, add a tremendous amount of friction to the deal so that we're, having to explain, things like that, which, we're working through. So that's another one right there. And a related point to that, and this actually happened, less than six months ago. A client of mine, there's like a 3 million exit, approximately, they held back [00:20:00] about $350,000 into closing. Now, fortunately, they didn't revise the valuation. They just say that our, this company, this is an investment fund, they actually used a third party due diligence company.

[00:20:11] And the due diligence company couldn't confirm, a certain amount of EBITDA in earners before taxes. And so what happened was then said, well, because we can't substantiate this, the LOI was written with this, particular, EBITDA range in mind because we can't substantiate this amount. And they didn't, definitely didn't want to revise the deal downward cause they knew that would pretty much, unrailed to derailed the deal with the seller. They said hold back roughly about 30, $50,000 and they use a trail 12 month, moving averages. Right. The moment the traveling 12 month averages hits the number that we originally put the ally under, we're gonna release that.

[00:20:43] Ron Skelton: So I know that some of the camps out there, I would call 'em like the, build and sell and some of the other guys out there, they have their own camps on how to prepare a company for exit. They recommend changing the business model to maximize the exit. So in your case like that, what sounded like it was a creative [00:21:00] agency? So I did a marketing rollup and we've seen that exact scenario you gave us earlier about they had a high churn. They were a highly creative agency. They loved doing the highly creative work, but when there was time to do maintenance, like, run the ad for months on end and buy media and stuff, they just kind of like tapered off on that.

[00:21:16] They just wanted to focus their, them and their team, they wanted to focus on creating the really cool creatives. So once that stuff works, done, it's piecemeal, right? They do a job, they get it done, the creatives done, and then they don't get any more money from that customer. So those dollars are worth less than, okay, you get the creative done and you actually have a media buying arm over here that places that media, maintains that media and you get ongoing revenue for so long as they run your ad. Do you recommend the business model changes for some of these guys? In the event that, like, look, if you're planning on exit, I know you do X, Y, and Z, but we probably should add in A, B and C too, just because it's gonna really drive your rev, the exit value of the company.

[00:21:57] Alex Nghiem: It depends, right? I work with, I'm [00:22:00] 55. I suspect you're probably within that age range to Ron. I work with folks are a lot in their late twenties and, maybe up to their thirties. So I'm not working with the classic, baby boomer, they're like, they've been there for 25, 30 years. Cause that help people with digital agencies and SaaS. They're not that old. I mean, this is industry for crying out loud, right? So a lot of the, a lot of the folks I work with are, in their thirties, well just, more often than not. So for them, a transition like that can take a while. And so a six to 12 month window for some of these folks is an eternity. So you have to kind of balance it, right? Because then because we get into this thing, well, we have to kind of do all of this. While it's very doable, if their timeframe is such a new thing in terms of months, or some cases weeks even, more often, months or quarters, to do that, sometimes, not overnight. And so they'd rather sell it knowing that it's possible, because for many of them, I jokingly call it like, it's like a, I don't know what you call it, we're a midlife crisis.

[00:22:57] I think this is kind of like a, I don't know. I don't wanna, [00:23:00] say anything. Well, just the term I'm trying to think of here. It's almost like a, what is it? A 30 year crisis. I don't know what it is. Lot of these folks like the 30 to five year, it's considered kind of like the, I know what it is, it's a five year itch. Roughly three. It's a three year itch. Roughly people, folks at this age get restless. They say, well, I'm on the bigger things, right? And so I have to balance, I better say, man, if I ask them to do this for a year, what are the odds, or they can actually like, do this long enough to even implement these changes.

[00:23:25] Now if I feel that they, they're willing to do that, then yes, I do recommend that. In many case, I recommend them actually inject what I call, there's different scales, right? Like, at the bottom I recommend 'em injecting more, IP. What I mean by that, like really focused and doubling down on coming up with like a very highly proprietary process. That was a big reason I got acquired, okay? So this is now, so as I mentioned at the beginning of the call, I differentiate between digital agencies and B2B consulting companies. Here's what I mean. [00:24:00] If you look at this as a gradient on one left side, I would call 'em digital agencies. On the far right hand side, I would call 'em SaaS software tech companies.

[00:24:07] I would argue that a B2B consulting company is kind of like a hybrid. And here's why. I'm in conversation right now with one company that is, if you were to use this pure EBITDA number, it makes no absolute sense. I think it's like a 60x EBITDA. I mean, just complete, I mean, makes no damn sense. Right. However, they have a highly proprietary process, that basically can do, and there, I'm trying to keep this broad, a proprietary way of doing massive cost savings. They did a pilot at a multi-billion dollar company, at a very, we're talking about like the nine figure, company, like a hundred billion plus company, and it did a pilot.

[00:24:48] They showed that using the client's number they got over, they could say that company over $3 billion. That company turned right around and said, we wanna buy your processes for a hundred, over 120 million. They turn it down. [00:25:00] If you look at that thing purely as a headcount and everything, now again, we're talking about strategic buyer, right? But to me that's less of an agency and more of a B2B consultant company. Like most agencies, medical, operational work, right? They could help drive a company to growth. It's not the same as a B2B consultant company that's figure out some unique process that literally only they have.

[00:25:21] Most agencies rarely can say that. So then when I tell 'em, it's like, is there a way for you to figure out some small portion of your overall delivery? For example, I'm just making this up right, maybe LTB maximizer. For the agency's client, you see, like you have some proprietary process to drive, maybe double, double the value of a client's lifetime value, right? So then you could, trademark that or something. So that's where you, if you look at B2B consultant company, they tend to focus a lot more under processes. So that's what I tell 'em. That's kind of like the, the thing you could do relatively quickly, right?

[00:25:56] Sit down, document your process, communicate that, differentiate [00:26:00] that, trademark all that, that can be done for several, few thousand dollars. So you gotta use that, right? All your presentation. I've rarely seen any agency ever do that in their presentation. Even agency doing, Mid seventies. Right? They never really talk about the process. So lemme just rewind a little bit. Some of the things that they could do to increase the valuation would be to add IP and then trademark it and use it, right? Like actually defend it. Because then if you trademark something, which I see a lot of people do, they put like a TM and hire lawyer, but never use a communication, then it's not really trademark cuz you just do it just a checkbox, right?

[00:26:33] If you're gonna create something, trademark it and you're gonna have to use it in your communication. Cuz then people can actually say, Hey, those guys own that particular process, right? That's one. The other one I tell them is, and this is a little bit harder to pull off, is in the agency where there's a player now could go high level. They're a SaaS that exists that you could white label your stuff. They spent millions of dollars building. So now [00:27:00] the market has changed a lot in the past, if you did own the code base, massive red flag. Right. But now there are multiple companies and I spoke with Wonder Founder ago, high level, there's like five companies right now, that's valued over a billion dollars and they're, they sit on Sales Forces stack.

[00:27:18] Meaning you cannot run their stuff without having Salesforce below it. What does that mean and what has, what does that to do with anything? Well, because if you, now this works better if you're a niche agency. Okay. If you are a niche agency, let's pick something on a lot of people probably familiar are, HVAC. If you done a lot of work at HVAC, you could go to go high level, white label that, cuz at this point, if you work with enough HVAC, you have domain expertise. So you don't have to become a full-blown SaaS. Right. But you could become kind of like a hybrid SaaS. And SaaS comes, as we all know, tend to have much higher valuation.

[00:27:52] So now when they come thing, they're like, wait a minute, what is this software in here? What is this thing in here? Oh, that's our software. Well, tell [00:28:00] me about that. Oh, well it's a dashboard, right? Specifically for plumber, plumbing companies within this revenue range. And we help them basically monitor IQ metrics, right? They're like, well now you really differentiate yourself. You're not gonna get a default a vote value, which of full SaaS. But now a buyer can't say, well, you are just kinda like a random to agency. No, no, no, no. We have this IP, it's still gonna be packaged properly, mind you.

[00:28:23] But it's there you see. So now you're probably gonna have higher retention because it's a SaaS. But also because there's true IP that's defensible. You're gonna have that as well. That could probably be done in probably six to 12, maybe 18 months. So again, it depends on the buyer, right? If you know you're gonna exit in two years, that's something you can do right now. Go high level is change the rules a lot for people in the agency space. So there's definitely different things you can do, right? So the reinvention is definitely a way to significantly increase evaluation of the business.

[00:28:53] But as I was saying, like some of the folks that I work with, they're in their thirties and so because of that, sometime, what's [00:29:00] possible may not fit their timeframe, cuz many of them want us other business and move on to the next thing. I jokingly call it kind like the three year, sometime the five year itch. So for example, one analogies that I try to use with folks is, if you kinda like draw a gradient, grand or left hand side is what would call the agency world. And the middle, or closer to the software side would be what I call B2B consulting company. And on the right hand side, I would call like software SaaS tech companies.

[00:29:26] Now, why do I put the B2B consulting company in the middle? Why is that relevant? Well, what I've observed is like, and my own personal experience, what I got acquired, the biggers I got acquired was cuz we had proprietary process, in our case we're an IT consulting company, doing software development. We had a proprietary process around doing a particular type of projects online. In my hand, it was only worth so much. Like, at the time the biggest client that we landed on our own was probably $400,000, give or take. My acquirer on the other hand, they were about 10 times our size [00:30:00] and the biggest project they could land was a hundred thousand.

[00:30:03] And even though they had the client relationship, they knew that the, their clients had much more money to spend. They were blocked out of that, out of those projects cause they lacked this process that we came up with. So, I'll keep this brief and, Ron, feel free, to ask me to, you go deeper. But the idea was like in our hand, this process only worked so much cuz we didn't have the client relationship with the, some of the many comes that they did. So the most for us that we were made with this on an individual client was $150,000. The acquirer that bought us up until the point that they bought us, the biggest project was a hundred grand. After they acquired us and they adopted our process, I came on board as a Chief Technical Officer, and I infused into the company. They started winning quarter a million, half a million in six months, they land their biggest client $4 million.

[00:30:48] You see, even though that process was worth that much in their hand, I could never monetize that cuz I simply did not have a lot of the things that they were missing. Likewise, even though they had the relationship, [00:31:00] they couldn't, fully monetized, they could not land the bigger projects with their client, missing my process. So that is what I call, like, something that a lot of agencies can do that they're overlooked is really document and then demonstrate that how this is only worth so much here, but in the hands of a bigger buyer, it's worth a lot more. Right? So that's why I was saying that B2B consultant company does this really, really well.

[00:31:26] And know we, I don't know if I already mentioned this earlier, but we're working right now, for example, with a, a small client, a relatively small consultant company, right? EBITDA's, like, I think a million, million and a half, somewhere in that range. Yet, they turn on an offer for a hundred times, almost 90 times that EBITDA. And why is that? Was because the acquirer was not interested in what it can do. They did a pilot for a very big company, like over a hundred billion company, and they had data to show that this client could demonstrate that they could save billions of [00:32:00] dollars once they adopt this process, set a processes in house.

[00:32:04] So this consulting company realized that it's only worth so much in their hand, but in the hands of a much bigger consulting company, it's worth a lot more. So the more IP you can introduce, the more likely you're gonna be acquired by a strategic buyer. And at which point your multiple is gonna go up a lot more. Cuz their rationale is like in your hand, it's only worth so much. But if you can build business case that in the hands of a much bigger buyer are one that's got more resources, it's worth a lot more, then you have a lot better shot of getting acquired by a strategic buyer. I haven't been involved too many deals where the agency got bought by strategic buyer, mainly because they can't demonstrate that it's worth that much to a strategic buyer.

[00:32:40] A B2B consulting company is more often than not, even if it's not to a strategic buyer, has higher evaluation. If you caught up with a strategic buyer, it gets, even higher. Mainly cuz I kind of, to keep it simple, I tell people that a B2B consulting company is almost like a manual software company, right? Because they're proprietary process, they haven't automated.[00:33:00] So they're just basically like a, they're like a software company except it's, the process are manual. And so because of that, those things are higher. Now, if the seller is willing to, put in the resources that would be time and money and energy.

[00:33:12] The true transformation is if they're a niche agency, they take their knowledge of the niche and then they go with company that go high level or find a development partner and then develop a software product for that vertical. Because the advantages that a lot of agency have that they discount is do, especially if they're running a niche, is domain expertise, right? If you work with, like, over the history of your agency, you work with 50, a hundred, 200 plumbers, HVAC, take your pick of different verticals you work with, right? Chiropractors, whatever, construction, whatever, right? You may not realize that you picked up, you're in tune with what the pains of the business is cuz that's what you paid to solve.

[00:33:50] So now you can basically generalize that and then partner with one of these, models like again, would a go high level or with a custom software development partner. You can't create [00:34:00] a vertical specific solution and you don't have to necessarily have the development skills in house. In the past, if you didn't own the IP, that was a major red flag. Now because the world's moved so fast, a lot of acquirers are okay, provided that you could show that there's stability and that there's really strong agreements with the development partner. And the development partner, unless, you know they have some weird attorney motive, they're gonna be fine with a new acquirer.

[00:34:23] Especially a new acquirer's gonna grow even more. Right? So that, that's kind of a development. I think that's happened in the last five to seven years. I talked to actually the founder, one of the founders go high level, who's raised 50, $60 million. And I asked them about that. I would've thought it'd be very risky for an acquirer if one of the agencies actually built a solution on top of your platform and said, no, that was true. So if that were true, we would never raise the money out. Come on. Right. That's why we managed to raise 50, 60 million. Cuz this whole ecosystem is now kind of like evolving. So those are kind of like different gradients, right? If you have only like, maybe six, 12 months and you still wanna exit, [00:35:00] I would say, start documenting your processes, trademarking that, all that. It's not gonna like massive increase, I think.

[00:35:07] No, but it is, it would help you differentiate the market. If you had a little bit more time, then one thing you may want to do is, like I said, and you were put into, more energy and resource, then you may want to look at creating a vertical solution. Providing your niche agency and then partner with a company like a high level or basically, and there's, I just came back from a mastermind. There are a lot of software development companies that love that because they, what they lack is they don't have domain expertise. So those are kinda like the, I'd say like the, both end of the spectrum of that data, quote unquote reinvention and transformation.

[00:35:41] Ron Skelton: It's interesting is, it plays all the way down to the micro level. I run this podcast and, I now buy media assets and media companies, like content companies, other stuff. A podcast company reached out, like the production company, they produced other people's podcasts. They reached out cuz they heard me say on one of [00:36:00] my podcasts that I run this podcast with one full-time VA, one part-time VA, because I created an assembly line that, a process that everything goes through. And I released two shows per week. And, they're trying to sell their podcast agency.

[00:36:14] And they're like, it takes us 11 people, to manage, to produce that much content to do what you're doing. And you're saying you're doing this on, one and a half persons plus you, how many hours a week you putting on? Like, I get on the mic and get off the mic. I don't do anything else. Now, the cool news is, is they don't know, we're meeting, I think next week. What they don't know is I'm more interested in buying their agency or basically they're wanting to do something else. Taking over their agency, growing it, and selling it as part of my business or part of what I'm doing and part of my HoldCo than I am teaching them how I did the thing.

[00:36:45] But we got the meeting based off the premises, like, look, come meet with me, I'll show you a little bit about why I did what I did and how I do it. And to be honest, it's a combination of Asana and a few external tools that is an assembly line, [00:37:00] right? I create a list of people I'd like to interview. My VA reaches out and sends 'em emails and, when you drag it once they say yes or whatever, you drag it to the next thing, the tool actually automatically adds a list of task. With detailed instructions. So if she ever forgets how to do something, she can click on it, read what I want done, how I want it done, do it, and then she drags it over.

[00:37:18] When it finally gets to, like today, it remove it to record on Restream, it pops up an email to me, says, it's already in my calendar. I look on my calendar, I look up on the thing and the people I record today are on there. I have my checklist. Soon as I drag it out of that, it goes back to be assigned to her and gives her a list of stuff to do and I don't see it again. And I did that with the newsletter. I'm working on finishing that up with the newsletter. So it's an assembly line that goes through. Having a process, like you were talking about, having something that's unique to you. Not only will it help you be more valuable to sell, but might even open the doors.

[00:37:49] Like right now, it's given me an avenue to talk to somebody I might wanna buy. They want to talk to me cuz like, how are you managing as much content as you're ripping out with just a few people? I said [00:38:00] process, right? And I'm not the best at process. If you look at the skill of things, I'm not your, what do you call it? Visionary versus integrator or whatever. I'm a visionary, like 80, 90%, but I created this outta necessity, like I can't get everything I want done if I don't have a system.

[00:38:15] Alex Nghiem: Yeah, there's a lot of tools out there. And by the way, if it's not your strength, I mean, Ron, you've done a brilliant job, even though it's not your strength. There are company, I mean there, just as you specialize what you do. But I mean, you, I mean they listener or the viewer. There are teams that this is what they do. And as I said, these are, this is what we were talking about earlier, right? About like what an acquirer looks for. Like when you're doing this day to day, you're like, well, we know what we're doing or we have this. But understand when somebody's looking at acquiring the business, they're taking over stuff, and you may not be around. Right? And that may be your scenario. You don't wanna be around.

[00:38:45] And if you don't have this thing, all laid out, well, one of the contingency, maybe, well, you have to stick around. You have to kind of put this on place, and you may not want that. So these are things that you do, ahead of time that can increase the value of the business or basically track a wider, a wider [00:39:00] array of acquirers.

[00:39:02] Ron Skelton: Yeah. Cool. Let's see here. We've talked about, the different, why to sell. We talked about some of the things, well, you need to change or don't change if you're gonna sell. We, talked about, things that go into the valuation of stuff. What are other ways, like, you've been doing this for a while.

[00:39:18] What are the ways you get the word out, right? What are the ways you market a deal? Do you have a list of buyers you already know that buy these type of companies? Do you have a database? I'm gonna rephrase this cause we're running out of time. How do I pick somebody like yourself or something that has those connections guys? Cause that's a detriment of a lot of, people who sign up for a business broker or an exit advisor is, it doesn't sell. And a lot of times I think it doesn't sell cuz they pick somebody that doesn't have the knowledge of the industry and the connections in the industry to make it move. How do you know who's the right guy to help you get something to move? 

[00:39:50] Alex Nghiem: Yeah, great question. So I asked them, for example, what is their process, right? So back to that, what is their process? What's their procedure? What's their track record? What's it familiarity, right? A [00:40:00] lot of time they could have an amazing track record, but in unrelated industries. This is why we specialize in, like I said, my team and I, we specialize in helping people sell what I call high cash flowing low asset business. What does that mean? Well, because then we know how to talk to, like for example, we help our clients exit.

[00:40:16] We can put in touch with lenders, right? Understand this business. I can assure you nothing is more frustrating going to a, like a potential lender, right? Cuz some folks, use financing to buy a business. It's an investment fund. They usually have money already lined up. Go to talk to lender and said, where's your hard asset? I'm like, what do you mean? Well, where's your trucks? Where's your building? I'm like, why the hell would I wanna buy a building that's like such a poor use of my capital? And the lenders said, well, you wanna see a building? And you're like, okay. I don't feel like communicating here. When I first started, I couldn't figure out what did, said, oh my God, it dawned me.

[00:40:50] This is what I was talking about earlier about the brick and mortar, right? They're used to brick and mortar businesses. Like for them it's all about buildings, trucks, and all this stuff. Well, to me, that's a terrible use of your [00:41:00] capital if you're a fast growing agency or B2B or software company, right? You have none of that stuff. They wouldn't, they would've no idea how to look at that, right? So that's on the lender side. So when we look at it, we say, okay, these are the type of buyers are interested buying this, right? And, I'll give the list, on the viewer a chance to, to reach out to our team.

[00:41:16] And we don't take on anything unless, we feel like we have a very high chance of, closing. We intentionally do not wanna work on a ton of deals, right? Cause we wanna have very high success rate. Cause there's all these statistics out there about most deals don't sellers right? Reason because of that. And even though I'm representing the seller. I'm being paid by the seller. You should present the sale. I will be the first one to say, look, this is overpriced. I said, well, but let's go to market and find, I was like, no, this is what's gonna happen. If it's overpriced, no one's gonna reply and it's just gonna look bad.

[00:41:45] You have to revise it downward. There's a sweet spot you can keep it in, right. Now was a strategic buyer that ranges way wider. But more often than not, you're gonna, by the way, my comment earlier about the strategic buyer, I don't want to create an I expectation. Out of a hundred deals, you might [00:42:00] probably get maybe two or three the strategic buyer. So I wouldn't bet on that. But if it happens, great. But I've yet to see anybody that could engineer that consistently. It's really a lot of timing. So anyway, back to, anybody tells you that they can do that, that's a red flag. Like if you come to, and hey, I want a strategic buyer, that's all I wanted looking for.

[00:42:21] It would have to be very case by case, right? Because a lot of times they may have the funds, but the timing is off. So let's work.

[00:42:28] Ron Skelton: I've met more than one company. We're like, I'm building this to sell to x. I mean, they're actually, they have an exit. I'm building this to sell to Google. I was like, okay, well at least Google's brought enough that if Google would buy it, there's probably a few other big dogs that want it. But be careful shoehorning yourself into something like that cuz you could build something to be bought by a company that excludes you from being bought by other people. A good example is that if you build something and you're using technology that they're using, cuz you hope that they're gonna buy you and, they're the one off, company out there that's [00:43:00] using say, something expensive like SAP or something like that.

[00:43:02] Everybody else is using something else. It's gonna hurt you on the sale. Right. A lot of people don't get that. Like, it's okay to like build, have a vision. I'm building this cuz Google's gonna buy me someday. Awesome. Make sure that you include the rest of the market and understand that that you're not shoehorning because chances that Google actually buys you, I would buy a lottery tickets right along the side of your dream, right.

[00:43:27] Alex Nghiem: Yeah. So for us, like for example, now if it's a, like, one buyer, we were talking earlier, we're looking at selling to big consultant companies and there's hundreds, maybe or thousand of those. So that's okay. But to say that one buyer is kinda like, yeah. So I think we're on the same page. So for us it's like, just talk to them. Right? Find out like, do they understand you industry? Like if you came to me and even you had the best financials in the world and you had a multi-location, physical brick and mortar, I'm say, I'm gonna do your injustice.

[00:43:56] I'm not gonna have any clue what the margin of this business is. I don't know who the [00:44:00] buyers are, right? I mean, just flat out I'm not, I'm not even gonna, like you said, right or wrong, I'll help them by putting the right person. So, It's really that as well. It's been them basically admitting that, hey, like for some extent, well I, I wanna sell like 30, 60 days. I'm saying, well, I probably can't help you. I've done deals that short, but I don't wanna put myself in that. And I certainly don't wanna create that expectation for you cuz you may be waiting for this money for some very big, life event. The last thing I want to do is have you planned that life event.

[00:44:28] It could be a, summer retirement, it could be some big some big purchase. It could be to launch a new business unit money for. So our whole thing is like, I'm, understand how did they manage expectation, right? Again, I was saying earlier, we represent the seller, but I will put on the buyer's hat very quickly and said, a buyer's not gonna go for that. Like, I more often than not ask them to have a lower price. Whereas most people in my industry, or most people that do what I do, try to bid the price up cuz they say, well, we're you're being paid a percentage of sale, then hey, let's get the highest price possible. [00:45:00] Yes. Within reason, because if it was too high, nobody wins.

[00:45:05] You couldn't come across as a foolish of an acquirer if you don't have a sense like what did they, what they feel within their acceptable risk range. Even setting up a meeting is gonna be difficult. Or on the meeting they're gonna say like, okay, even if they take it, it's like, okay, so what's the deal? Why is this number and the entire meeting's gonna be defensive. Cause I remember a lot of buyers, especially investment fund, they see a lot, heck, a lot more deals than, the traditional business owner. So there's certain, certain procedures that's being done. Do they understand the process?

[00:45:32] How do they manage the process? How do they market the business? Do they just depend on, like the reason I travel fair amount and my team travel amount? Cuz some of the best buyers, acquirers tend to be met, as we talked about earlier, right? Like, you can do a lot on Zoom, but there's also a lot of time, there's something to be said for being, face-to-face. And a lot of time I may not meet the end buyer at a live event. But I, somebody introduced me to that person and that person has met that party at a live [00:46:00] function. So there's at least that, that connection, right? So those I would say are some of the, some of the things, but like I said, you know, familiar industry cannot be underestimated. That's one reason I chose to just focus on those, few industries that I'm in. 

[00:46:13] Ron Skelton: You brought up a good point in there as far as setting expectations. I reached out to a publicly listed company cuz it really intriguing to me and when you publicly list your company for sale at a certain value, like a price, cause they had a price tag on the website. They wanted, $1.5 million for this company. I'm thinking because of the price tag, I know this industry, I know what the multiple should be. You can backwards engineer what they're supposed to be doing. So I get the broker on the phone and I, it's like, hey, before he even sign, he's gonna send me an NDA.

[00:46:44] I said, just make sure I'm in the right ballpark. You've listed this thing for 1.5 and I laid out, so in this industry, that means he's probably doing X, Y, Z. He is got this many customers, and they're like, well, no, like, I said, well, how did you come up with that price? Well, that's what he really needs to [00:47:00] retire. It's not too far off. He's got this proprietary, this and that. And I was like, okay. Just understand that when I get into looking at this, when you set a number that high in this space, you're really setting some expectations of what I should see when I see your PNLs and your balance statements and stuff.

[00:47:15] I may not see 'em for a little while after build rapport, but you're causing a point of contention, if you don't put anything else out there about this, right. Because it's a weird industry. It doesn't sell like, multiples of EBITDA. Like a lot of things that actually, a lot of these high-end content sites and stuff like that, they sell on multiples of revenue because they normally operate at a 75, 80, 90% profit margin. So you're buying on multiples of revenue, and it's usually three x the year, they call it 36 x, but it's trailing 12 months on the monthly average. So you're paying 36 to 42 x of monthly average revenue. And he's like, that's why I just come out and said, that's normal in this space. Like, where do you see this?

[00:47:55] And he's like, what's about 72? And I'm like, okay, you better have some patents. And some, I'm not [00:48:00] talking just, like they got a cool process, right? Because I can engineer a process. You're asking for double what the market, nor, is there's gotta be some secret sauce. There's gotta be some, you got a patent pending or a patent on something that other people you're gonna, that they haven't licensed off yet that you're gonna license off or something. Right? And he is like, not really. We talked to two or three different people. They're doing something so fairly unique and it's a great market.

[00:48:24] So basically he was doing it on, coulda, woulda shoulda's, right? If you do X, Y, and Z, you'll be making the money to put that multiple in place in less than 12 months. And he thinks he's gonna sell. And I was like, you're doing this guy disservice they'll meet somebody. So I'll reach out, when I got the phone with broker, the conversation was like, look, I'll reach out in 12 months when you'll lower the price because it'll still be there in 12 months. 

[00:48:44] Alex Nghiem: Yeah. And unfortunately in 12 months, if you know it hits any speed bumps, then you know, it's only gonna be revised, downward. So for us, like I said, we are very, we'll talk to folks that, that have an interest in this, provide variable we can. But when we actually, take on a deal, because of my consulting background, which I mentioned at beginning of [00:49:00] this, call together. I treat, it's kinda like a consulting project, right?

[00:49:03] It's kind of a very high success rate because putting a business, under, just getting, getting a client in the agreement, we don't get paid into the business sells, right? So therefore we have to be very careful about who we work with. Like I said, it's not like something you could do overnight, right. Or even maybe a week or two. It's a fairly long, it's a, like I said, realistically, as I said, my books and when some of the content I created, plan on four to six months, have we done it sooner? Of course, but the idea is like, all along the way, you're working with the seller and of course multiple, potential buyers. And so the whole thing has gotta be something that you feel that, can actually reach completion. If it doesn't, nobody wins. And you just tied up a lot of people's, resources, time, energy, and sometime their hopes, right?

[00:49:45] That's the last thing I wanna do. So that's one reason why, I think what we do is, I think fair, fairly different. A lot of the folks in our industry in that we're fairly tightly niche, right? That's what I started to call, like a high cash flowing business, but low asset.

[00:49:58] Ron Skelton: Cool. You [00:50:00] created something specialist for us. A checklist of some sort. You wanna talk about that or?

[00:50:04] Alex Nghiem: I have a checklist yet that I've created here specifically for, listeners and viewers of this show, which by the way, it's been, it's submitted blast. It's rare, I can talk about this at the level I want. A lot of time I talk about more, I don't know what to word look for, like I have to water it down, but this is actually allow me to talk at the level, enjoy. So yeah, we created a checklist, my team and I at myexitchecklist.com/ Ron. So you go there, you're gonna have a chance to download a checklist.

[00:50:30] It's a simple one pager, just like four or five things you wanna consider, when you're looking, when you look at selling the business or in the right before you look at selling the business, right? And then also once you, go through that page, once you grab that, that checklist, you'll have an opportunity to book a time with me and we'll have a very candid conversation about, like what you should do based on what your desires are.

[00:50:52] And also, what your outcome you want to be. It could be said, your price may be a little bit too high, or no, you're in the sweet spot. Or, you may need to have a little bit more [00:51:00] track record. We work with companies predominantly between 2 million and 20 million. We have a few deals that, 50 million and and larger. But for most part that's a spot that we found as underserved and that kind of, for a lot of the folks that we work with, kind of what their outcomes are looking for. And there's certain dynamics that happen that market, that we're very familiar with cuz we specialize in that.

[00:51:19] For example, type of buyers are actively looking, buying that. Why do people buy agencies versus consulting company versus SaaS company, things like that. And then, just, once you download that, like I said that at my check, myexitchecklist.com/ron, you have an opportunity to book a time, with myself and my team and we're happy to get on a call. Usually thirty, forty five minutes, kind of walk you through, what you're looking for and how we can help and we go from there.

[00:51:41] Ron Skelton: Awesome. Awesome. One of the favorite ways I'd like to end this is if somebody could only remember two to three things from the show, what would you want 'em to remember? What are the key takeaways you want people to remember? 

[00:51:51] Alex Nghiem: Yeah. One thing I did, I cross over. I wanna really people think about is this is, you can get to where you're go and run your business more often than [00:52:00] not. You'll find if you study, people's, if you want like a significant jump in your lifestyle, more often than not, you could probably wanna look at selling your business. I could trace, I can say, very high profile folks, even people you personally know. So just kind of keep that in mind.

[00:52:13] Cause we've been taught to run, run the business, run the business, save the money, save the money, invest on that. That can be done. More likely you're gonna get there faster by exiting. So just consider that as one, one counterpoint. The second thing is also when you do look at, selling, consider that, unless you're kind of like some massive serial entrepreneur, you're probably gonna do it once. Twice if you are, I mean once, if you know it's good. Twice is extremely rare. I can count on maybe 10, 10 fingers. The peoples on it three times. Why is that important? When you sum the business, it's extremely hard to be objective.

[00:52:53] Extremely hard. And I've even worked with people that sold their own company before and still come back and use somebody like us. [00:53:00] Because when you're selling the business, there's a certain amount of emotional attachment, it makes it hard for you to remain objective, right? So when it's sellers giving, you just, some feedback about, Hey, this is why we may not feel this way, and you get defensive, that caulk does do this very quickly. It spirals under control very fast. So a lot of time, my role is to help mediate, right, for lack of a better word. Keep everybody calm so we can accomplish the same goal, because, it could be, there's a lot of money on the line, right? Let's say most of the deals we do are 70 and eight figures.

[00:53:29] So consider that. This is one of those things that it's probably worth it to bring in, somebody that's done this before. One of the things I tell people is this is, I forgot, I didn't mention this in the beginning, but under my own deal, I had a ton of people helping me and everything. But yet, because I didn't have somebody like myself advised me through a process, I had individual players, but nobody kind of quarterbacking the thing to use the football analogy. I ended up leaving $400,000 at the table. And I had a lot, some very smart people, but [00:54:00] nobody's coordinating the whole thing. So I was trying to coordinate to very smart people, but I've never been in that role, right? So you don't know what you don't know, and that's when it gets very expensive. Okay. And remember, folks like us, we only get paid in the contingency, right?

[00:54:13] So it's in our best interest to make sure that, we make this happen. And then the last one is also, understand that this is as much an emotional as is a financial decision, right? Because by the time they spent years building the business, a lot of this is they equate us who they are, right? So there's some hesitancy or nervousness about the fact that if I do something, the business, what am I gonna do next? So part of what folks like myself do is we help guide you through that. We have conversation and we may say, well, this may not be a fit for you. You may be one of this individual where it may be better, keep the business, right?

[00:54:55] I always tell people, it's not a black and white. It's gradient, right? And when [00:55:00] you don't have enough information about this process, you think there's, a lot of times it's binary like, oh, it's on or off, or black or white or yes and no. When reality, it's usually more gradients. If you want this outcome, these are some possibilities, right? These are like some of the, so that's also helps, to work with somebody myself as well, and it doesn't have to be us, but find somebody like, work with somebody like us that's been down this road before. They could see different ways of getting there. Cuz if you do this yourself, also, you probably, like you said earlier, right?

[00:55:27] You have one particular buyer in mind or you have one thing that you're kind of single, you're kind of like this, you have this tunnel vision plug, just barreling down. And a couple mistakes here, even one or two, it's a lot of money. It's a lot of money and you spent years doing this, might as well do it right to reap all the benefits that you put into the business.

[00:55:47] Ron Skelton: Awesome. Awesome. Well I wanna thank you for being here today, Alex. And we can call that a show.