E134: Daniel Sweet Teaches The Importance Of Focus When Acquiring Businesses - 2nd Interview

[00:00:00] Ronald Skelton: Hello and welcome to the How2Exit Podcast. Today I'm here with Daniel Sweet. He is the founder of Sweet View Partners. Thank you for being on the show today. 

[00:00:10] Daniel Sweet: Thank you for having me, Ronald. I appreciate it. 

[00:00:12] Ronald Skelton: All right. So you've been on the show before, but let's just give everybody that hadn't seen that one, a little bit of a recap. Who are you? Where are you from? What are you up to, kind of your origin story here? 

[00:00:23] Daniel Sweet: Sure. So, I run a, acquisitions and operations company in Houston, Texas. So we buy Texas businesses is no big thing.

[00:00:31] I spent 27 years in technology. Corporate technology before that. My first job outta college was Apple and that was interesting. Worked for HP, IBM, Compact, a lot of those folks. And eventually got to the point where I wanted to buy some of these businesses. Really small businesses that I found that, I knew people that were starting them. And then, being tech guys, they got bored. They would be successful for, a small company. They'd get bored and then close 'em down. I struggled for years with, okay, how do I get in the middle of that? So I finally started studying the acquisitions and, effectively becoming a self-funded searcher, as they call it.

[00:01:05] And going after these companies. And roughly five years ago I transitioned into doing that full-time with Sweetview Partners, going after companies in Texas. So, we've done a total of, in five years, we've done a total of four or five acquisitions, depending on how you want to count. They've all been small. I get bigger every time I started too small. I know that I, that's what I teach other people now is, listen, don't start that small. It's not gonna help. Go bigger. And so now we're just doing, acquisitions we're, we don't have our own fund. So we do a raise for each one of them.

[00:01:39] So we find good, healthy companies that the owners are looking to leave and we acquire them and grow them to that the next stage. 

[00:01:46] Ronald Skelton: Awesome. And, just companies in all of Texas. Texas is a hell of a state, is it? Or a certain region of Texas? 

[00:01:52] Daniel Sweet: It's all of Texas. We, the whole, whole thing. 

[00:01:55] Ronald Skelton: All right. So, what's the, any particular, like is it still tech, or do you do construction or?

[00:02:03] Daniel Sweet: So, myself and my partner now, we do technology, construction and energy. 'Cause that's where our background is. 

[00:02:10] Ronald Skelton: Yep. And then on your advisory side, where you're helping other people do this. They buy what they're looking for, right? 

[00:02:16] Daniel Sweet: Exactly. We'll train up other folks to do this as well, and especially for the first business, I think that's the hardest one to buy.

[00:02:22] 'Cause you've gotta go through the whole process once and you haven't been there. The way I put it now is there's no signposts on this journey. You start looking and, the feedback is the same whether you're looking at good companies or bad companies. So you could waste a lot of time. Once you've acquired, then you've learned a lot of lessons along the way, and then it becomes something different. Especially for the first companies, I advise people to pick something in your field. You've got the expertise, it makes it a natural flow. And once you're a business owner, then you're on a different plane for everybody.

[00:02:53] It makes a lot more sense if you're going after whatever at that point. 

[00:02:57] Ronald Skelton: Right. So what are some, you did this from a corporate side. You've seen your buddies shutting things down. Now you're in the middle of it. What are some of the things you know now that you wish you had known after, during that first one or two acquisitions?

[00:03:10] Daniel Sweet: Well, so here's what I've learned. Most of the, and I take my lessons from me, right? So, what I did was I spent a year and a half full time before I got my first company. And one of the lessons I learned there is the same thing most entrepreneurs say once they've acquired. Is, I had an opportunity to quit my job, 'cause they had a, they were doing a reorg and had a severance and it was nice. And I was, this close to closing this one company. And so I said, yeah, that'll all work. I'll do that. A year and a half later I closed on that company. There's so much there that will always takes longer than you think. So, one of the first things I tell people that are new at this and looking to acquire the company is, don't quit your job. It's gonna take longer than you think. It's okay. You can wait it out. But don't quit your job just yet, 'cause everything takes longer. 

[00:03:58] And then as we, go along, again, it's learning what to concentrate on. So most of the people that do this kind of thing, like me, again, I use myself an example. So don't take this as a pejorative. I say most people that start looking for businesses are act like a chihuahua on meth. Because they're all over the place, and I was too. And what I figured out later on is, bringing down that focus really makes a positive difference that you wouldn't think of it. It's counterintuitive. A lot of people start like, I'll look at everything. It'll be great.

[00:04:31] Ronald Skelton: I had, that's exactly my, I guess my frustration with a lot of guys. I do meetups on mergers and acquisitions.

[00:04:36] I just wanna meet people in the space. We do kind of hangouts, we're kind of a networking thing. Twice a month we get 25, 30 people in there and you ask 'em what their search criteria is. What they're looking for. Oh, I'm looking for any business doing a million dollars in EBITDA and on the planet.Like, no, you're not. And it's just my gut reaction is like, if you don't know what you're looking for, you're sure to find it. If you're looking for anything, well, here's something. Right? Well, that's not a business. Well, you just told me you're looking for anything. 

[00:05:00] Daniel Sweet:Oh, listen, I can show you all sorts of businesses if you're looking for anything. 

[00:05:03] Ronald Skelton: Exactly. And the problem with that is, is it's too, here's what I'm trying to say here. I'm trying to think, without being mean. You have to learn these industries pretty well.

[00:05:14] So even if you don't know, like I want to be in, coffee of all things. I just say that 'cause I was looking at it for a while. I looked at coffee for six months before I realized I don't wanna be in coffee. It matched all my, so I built a level of top criteria. That's what I tell people, and maybe you do the same thing, is what are the aspects of business that you like? Well I'm from real estate, so I want recurring revenue. I wanna do something once and get paid over. And so, so what can I add a subscription service to? Or a service agreement to? Right?

[00:05:40] So, how do I create, work once and build a relationship with that customer. Make money, provide value, and make money. Not just get paid over and over and over again, but, continue a relationship. Coffee met that. We went through, so I went through this criteria of like, here's all the stuff I'm looking for. I actually have a little, spreadsheet that says, here's all the criteria and we, I turned it into a rollup evaluation. Like, is it good for a rollup? It could be, do anything. But I have like 20 selection criteria and then I'd put industries across there and I would rate them from a scale from one to a hundred.

[00:06:07] Do they meet that criteria of mine? And then I'd look into, who has the top five things, and coffee and a few others were in that. But, I tell you what stopped me on the coffee is the, it's a dirty industry. It's really, you really have to know that industry and you really have to, I just didn't wanna deal with the politics and the, there's everything from child labor to farmers being screwed over to everything else. And, you have to, it's a lot to manage. If you want the best prices, you almost have to go through the wholesalers. But if you don't, but if you go through them, you don't know how they're treating the other people. And I know some people in the space. Like I know some people who own big roasting companies and, one of 'em got into it 'cause he married a woman whose parents and their whole family line owns the coffee farms in another country and they were never treated right. 

[00:06:53] It's like I'm in the United States. I kind of look at to create a business, why don't we bring the beans here. I'll roast 'em and sell 'em. And then we have a direct line. But, anyway, the selection criteria is like what aspects of business appeal to you? What are you good at? I play that game where I play the, use the, Japanese model Vicki guy. Have you seen that one? What are you good at? What does the world need? What will they pay you for? I forgot what the other one was, but you know, you build your selection criteria, then you figure out what industries and what businesses fit within that. So how do you get them to hone in on one?

[00:07:23] Because it's hard. People just think, they think they want money. And I mean, I was like, you really don't want money. You want the things money buys you. You want the freedom of owning a business. But for a lot of these businesses that are so far outta your bailiwick, you're not getting the freedom 'cause you're gonna have a learning curve. 

[00:07:37] Daniel Sweet: Exactly. You don't know where those little things that will change everything are. And so yeah. So everybody takes, including me. Everybody takes these business buying courses to, to learn how to do this. And they learn a lot of great stuff.

[00:07:49] There's a lot of good stuff there. But the assumption a lot of people make, and maybe me too, is I'm going to take the course. I'm gonna go from knowing nothing about this. I've done some more study, but I basically not having done it. And I'm going to become, a tycoon tomorrow. And what I tell to help people with is, it's not really popular to say of course, but I say, okay, there's probably stages to this, right? The first stage is getting your first company, right. That's one stage where you focus on just doing that one thing. The rest will be out there later, don't worry about it.

[00:08:22] Get that first one first. And within that we wanna make that box real small. Something you know about real well. And then we can go on to, stage two, which is where we expand, open our wings a little bit. We can do a little bit more than what we did on stage one. Keep moving on to where you get to where you want to be, but like all of life, it happens in stages. And of course, everybody wants, I'm gonna take a pill and I'll be there tomorrow, but.

[00:08:50] Ronald Skelton: Well, they don't get, so I did the same thing, right? I came out of the real estate world. I wanted to do something bigger. I hired a performance coach and I was, own a real estate investment company.

[00:08:59] I was in a very tight niche in the, with the hot market. It kind of shuts down. I bought foreclosures, right? Market got hot. There was none around. Not enough volume we needed to do. And so my business partner thought he could ride it out. I didn't think so. So we, I sold my shares to him and I went to do something else. But I, and in that process I like is it really, is the economy really, is it declining or am I getting burned out? So I hired a performance coach. And one of the things the performance coach did is say, in the middle of this, he says, you should be playing a bigger game. So I would flip a freaking house and, in the business would, we'd make 30, $40,000 on our best flips and stuff.

[00:09:33] That money would be wired into our account and I would still hear his voice, "but you should be playing a bigger game". So when we got out of this, the bigger game was, I get into apartments and stuff. Well, I've been mentoring and coaching real estate investors for a long time, and I've been, a bunch of my friends have moved up to that level. We had a high volume at the residential level. So we weren't needing to be in that until the market shifted. But do I want to go out, and I'm really competitive and really good at marketing. And this is a small market like Tulsa, Oklahoma. Do I really wanna go out against them and like try to outmarket all my friends that are looking for the same deals?

[00:10:03] Or do something else? So I got into this, so I know what you talked about. I hired or I paid for one of the courses. Pretty good. I still realized I didn't know stuff like I wanted to know. So I started just, I've never seen a phone number I don't like, so I started calling people like you and professionals and stuff, just asking questions. And the conversations were interesting enough when I would go back to my accountability groups and my, my hangouts, where I was hanging out with other mergers and acquisitions guys. They went more like, tell me all about that conversation. What did you learn? I was like, maybe I should just start recording this.

[00:10:30] So that's how I got this going. But to this day, I bought one before we started. But we haven't closed, like I'm two and a half years in this, we haven't actually closed. I've come really close on some. I'm glad I turned away some of them. I've had LOI signed. Lots of LOIs signed. I say that we sold, we started a rollup and we sold the, the shares of that roll up to the, two of our partners. Basically, they bought us out and moved on. But, that wasn't like, we were still in the process. Like, I didn't own the company and run it for a year or something.

[00:10:57] So I started doing the research. It takes the average search funder. Now these are guys, a lot of these guys are Harvard, like Yale. They're Ivy and they're, they've got their masters. They're getting an MBA and stuff. It takes them two to three years search. That's the average. And in that process, what you don't understand is that's built by design. The people funding this search are actually mentoring them to be CEO level quality. 

[00:11:18] Daniel Sweet: Right.

[00:11:18] Ronald Skelton: I've interviewed a lot of these, these search fund, investors, the people that invest in search funds, and that's what they say.

[00:11:23] They say, look, I don't want somebody buying a business day one. They're not ready. They need to go, they need to cut their teeth on that search. They need to look at five or six businesses. They need to go through the due diligence process. They need to understand why it's a good deal and why it's not. They need to have some successes and they need to have some failures before they actually, are in there running it. So, what's the process look like for you? I know you've got this thing you're building right now and,let's talk about the process it takes to get from, Hey, I just took a course on buying businesses.

[00:11:52] Now I want to go and,buy out McDonald's and own all their franchises. 

[00:11:57] Daniel Sweet: Sure. Why not? Yeah. So, one of the things, so I've mentored a lot of people in a lot of different places doing this. And the reason I built my thing was, I had people come to me and they'd say, this is an awesome deal. We should partner on this.

[00:12:13] And I would look at it and I go, this is horrible. Why do you like this? Well, they said they made this much money and they do this cool thing and blah, blah, blah. And I said, ah, yeah, okay. But there are financials right here. They say they lost money every year. Oh, right. But they say they, that's tax planning. Oh, okay. that's fine. If they can point out where that profit is hiding, I'm good for it. But, no. So one of the things that we're training people as we go along is we train them, so like you're talking about, you don't do the due diligence yourself and neither do I. But I train myself up during that year and a half on enough, knowledge and accounting principles and all that. So that I could look at a P and L and I could flip through there and say, okay, this doesn't make sense. It doesn't gimme answers, it gives me questions. 

[00:13:01] Ronald Skelton: Right. You need to develop that thick skin BS meters, I call it. Yeah. Something's not right here, so.

[00:13:08] Daniel Sweet: And so, the more I saw, the more I could analyze, quickly. And so that's what one of the things, that I work with these folks on is, how to read all the financials. And again, some of 'em is just an easy No. You look at the financial account, absolutely not. There is nothing redeeming here. 

[00:13:26] I don't care what you tell me, it's a no. But the other, the ones that aren't definite 'No's', the great thing about learning, just the basic skills there, is you learn what to expect. And when you see enough, you say something strange about this. And so it just leads you to new questions. It doesn't, again, not answers, but you can say, yeah, I remember you told me that each of the owners was making like 150 grand, and I've got a line here that says, officer's salaries is 60 K a year, total. Tell me about that. Uh, and they said, well, I mean, it wasn't really salaries so much as it was. They were paying themselves 160 grand a year.

[00:14:06] Okay. So they're doing distributions on most of it. Yeah, yeah. That's what it is. Well, now we need to back in some salaries and change your cash flow. And so simple things like that, that you learn to spot those anomalies and how to look for 'em that, I mean, the skill isn't terribly difficult. I mean, obviously I'm not a CPA or anything close to it, right? But I can read a P and L and I can read a balance sheet and I know to ask for a debt schedule and, those kind of things. So I can go through there and again, you've seen this all the time, right? Your profit in 21, was $3 million. Your profit in 22, was $17 million. Okay. I'm gonna call that an anomaly.

[00:14:45] And there's something really strange about that. Let's talk about that. Those kind of things that you learn to spot the areas that ask questions, but also the areas where the most common, I don't wanna say deceptions, but mistakes happen. 

[00:15:01] Ronald Skelton: Yeah. It's like guy was looking at one that had a,but first, one of the first disclosures they gave me was like, Hey, we have some trouble with the IRS.

[00:15:08] And, I'm like, okay. So I, that's easy to tell you. A lot of times you can look that up. There's court record. I mean, you can, they put liens on a lot of stuff. I started looking up their liens real quick and it had $976,000 worth of IRS liens. And then I started looking at their books and I'm like, you wonder why they're doing 15 to 20, $30 million? Between 15, one year almost hit 30, like $28 million a year in revenue. And every year they're they're claiming they only had, 15,000 to 30,000 in profit. I was like, okay, IRS audit you, you failed. But they never contested it or fixed up the books were a mess. 

[00:15:40] So I looked at this like, I better get that number down. Like, when the IRS comes after you, they come after you like grandiose, like it's way, usually way inflated. And when you really battle that down, it's usually somewhere between what you said it was and what they say it is. And, they hadn't done that expert. They were just like panicking and making a payment arrangements and, trying to pay them off slowly. And, first thing I did is like, okay, I'm gonna hire a forensic CPA. Law firm that does, tax negotiations. When that deal fell through, I was like, Hey, I already kind of, we already had contacted them, give 'em a little money to look at what we had so far.

[00:16:09] And it's like, we don't get that back in the way we had that set up. It's like, why don't you call her up and have her take a look at what you're doing? She's gonna save you a lot of money. And then if you still wanna sell it to us when you, 'cause they, the IRS and one of the bank loans, they had blocked the sale. They said they couldn't transfer assets until that was taken care of. When we got the LOI signed from them and everything. It was one of, it was a cool deal. It was like, we're a dollar down and we take over your debt and I was gonna ring a team of forensic CPAs and some tax attorneys to try to fix that.

[00:16:34] The biggest thing they did when I, $13 million a year, at the time was down to 13. $13 million a year concrete plant. We were looking at another one, another one within 30 miles, whether it was doing like 6 million, but it was like a 30% profit margin. Well, my goal was to buy 'em both. And have the guys that are running it really well, step in and help manage the 135 miles away, that wasn't doing very well. They've made complimentary products too. Like one of 'em made storm sellers and that type of stuff, and the other one in mostly culverts and, industrial stuff.

[00:17:01] It was one of those like, okay, they wouldn't even compete, but maybe one product line. But,knowing those books, I almost think there was a, there's a play for this and unfortunately, and everything I've ever collected was under NDA. But I'd like to set, I think it would be a fun game to play for,acquisition entrepreneurs to have like, deal rooms. And have like 15 of 'em line, like, one of these is not like the others. One of these is actually good. So go through there and like, you play this game where you go through the deal room, look at these deals, you do your evaluation and tell me what you find. And then we come back and go, this is what you should have found. 

[00:17:29] Daniel Sweet: Exactly. So that's a little bit of what we do with our thing. So we have this, these three stages that again, weed out the bad stuff. And so we tell them at, at every stage, we tell 'em, present your company to us.

[00:17:41] Do a little, we have a simple template. Do present it to us. Show us what you found, tell us what you're seeing. And then now we'll look at it and go, okay, but here's what you missed. Important stuff. And what they say is they learn a ton by presenting. Just because they learn the company better 'cause they know that we're going to ask a lot of questions. And they get a real good feel for if it was, and that's part of the goal. By the time they get to stage three in our little process, they've done a lot of analysis. I mean, they've done a ton of work on this. Which means they know the company inside out pretty much.

[00:18:16] So now when you go to get lending, they can answer any questions they've got. Not only do we, we teach 'em how to put together a one pager, that kind of thing. But they, whenever the lender says, I mean, I had a lender come to me once on one of my deals and they said, yeah, credit said this and that. And I said, no, that's not true. But here, here's the P and L, let me show you. And I could show 'em exactly where what they were saying was inaccurate and where it all fell out and I said, oh, okay. I mean, this is a, this was a bank. They brought it back to the credit people and said, yeah, you got it wrong.

[00:18:49] Ronald Skelton: There's a skill to that, right? When I had the real estate investment firm, we did foreclosures and short sell negotiations, and we learned so well what the banks required. Every single bank. We knew that if you were a bank of, I don't know, we didn't do Bank of America. We'll use them.

[00:19:02] We didn't like them. So if they didn't like us, then they wouldn't allow us to do deals. But, we'll say if we knew, if you were this bank, let say Bank of America, you needed exactly these 50 pages of documents to turn in to do this transaction. So we would create packages for every single one of the files. They would just go with day one. We'd faxing 50 because they were still all, all these banks are still using faxing. Very few of 'em had a secure method, like, like a secure email, but most of 'em were just faxes. So we'd fax the stupid documents to 'em and they'd call us two days later, like, or we call them and say, Hey, where are we at on this, transaction?

[00:19:29] Oh, we're still waiting for this document. No, you're not, that's on page five.Oh no, no, we're waiting on this. That's on page 17. And, but you are doing that with these loan process, like, I know enough that what the bank's gonna ask for when they call and ask for it. Like, okay, no, that's right here. So that's a brilliant thing to do, because, what happens in a lot of these deals is the reason they take so long to close is they, they need something to make, take the next step forward. And nobody's managing the process. So you don't know they're waiting for something for you.

[00:19:55] 'Cause they're waiting three days to call you and tell you they need it. They just haven't got around to call you and go, Hey, I'm looking for X, Y, and Z. 

[00:20:00] Daniel Sweet: You're on the list there, somewhere. 

[00:20:01] Ronald Skelton: Yeah. And banks are horrible about it. We had guys, their whole job was to call the bank and say, where are we at on the process and what do you need.

[00:20:07] Oh, we're doing good. Cool. We don't need anything. Cool. What's your next step? And they'd say, okay, the next step, this one, if the next step that then you need this. So it was just one of those, we had a project manage and nudge them ahead. And I think the same thing happens when these loan processes. Like, okay, where are we at and what do you need? What's your next step? Okay. When's that done by?

[00:20:23] Daniel Sweet: And I think that's, I mean, I think that's why I kind of fell into this, um, and enjoyed it is 'cause, I mean, part of what I did in my world in technology was project management.

[00:20:33] I've managed projects on a global scale. You've got offices in all different time zones with all different cultures and some different languages. And you've gotta wrangle all those cats together to do something for you that they don't really want to do in the first place. It's a much more contained scope of this project management. That's what I like about it. 

[00:20:49] Ronald Skelton: So, in, in your program, at this stage, I like to walk things through systematically. So in this stage, somebody's like, I'm one of your guys. I come in, you help me develop my investment thesis.

[00:20:58] Like, that's a fancy word for what am I looking for, right? I start bringing industries in front of you. You show me how to analyze 'em. I present to you, I try to show you what I find in my analysis. You help me learn things I missed. What's the next logical step on that? We find one that we both agree on? 

[00:21:15] Daniel Sweet: Effectively. Yeah. So, there's two focuses(?) to our program. One is the technical skills. And one is the relational skills. And so we're kind of constantly teaching both those at the same time as we move through the process.

[00:21:27] So we're doing real world stuff. And as much as I don't like, as much as I don't like using brokers on my deals, I encourage them through this training to use brokers 'cause they're gonna see a lot of deals. And so we, we teach 'em a little bit and, but every week that we teach 'em something, and then there's hands-on coaching, they have an assignment that week too. So they go out and put it into practice. They learn it and use it. Which in my technical background, that's how to make it stick best. 

[00:21:55] And so then they take what they've put together and they then they present that and say, okay, here's what I've got. And we work with 'em through that and say, okay well, you know, either here's what you missed or you're doing good. But at each stage we give 'em a go or no go. If it's a no go, you can still move forward if you want. It's our contention that you're going to be wasting your time and the questions get harder. But if it's a go, then you move on to the next stage and you collect this new information. And while you're collecting information, you're building that relationship and you're talking to people and you get the feel for them and they get a feel for you. So we're doing a teaching on the technical and the relational level at each stage.

[00:22:29] And so they're learning while they're doing and they get a good idea. The middle of the, there's an intensive structure right now to the course that we teach. The middle gets really frustrating 'cause they're getting good enough at this to be able to kind of churn through companies. So now they're churning through companies and they're going, well, I mean, I can't find a good one. I said, yes. Okay. That's the lesson to learn. 'Cause there aren't a lot of really good companies out there. Once you learn that lesson, you can start applying it well. Now we can go outside of the broker range a little bit and get to other things.

[00:23:04] Other methods of deal flow and that kind of stuff. But until you learn that lesson, you're gonna waste whatever it is, you're, whatever efforts you're doing in deal flow. Because if you can't evaluate 'em, it's no different than the bad ones. 

[00:23:19] Ronald Skelton: What makes a company not a good company? 

[00:23:22] Daniel Sweet: So there's a lot of things. One of the main things I teach from the beginning is, we build a future paced cash flow. So here's what the business is doing cash flow today. Even if from the very early stages, we'll just take the word for it, right? Here's what they say. Here's the cash flow. Now, what changes do you have to make?

[00:23:40] Just the big ones. What's that gonna cost you? Let's net that out. Let's come out with a end profit, first year. Here's what it's gonna look like. Is that profit enough for you to do this process? And usually they start with these companies going, look, it's got half a billion dollars of profit, no big deal. And so we churn through it and churn through it, churn through it, and then they come out with this number that goes, oh, that sucks. Exactly. So what it's really going to provide to you end of the day. That's one of them. 

[00:24:08] Ronald Skelton: I don't know how many business owners I've talked to who, probably dozens, who have said, I bought a company and it was doing a million and a half a year and I had to have four extra executives.

[00:24:18] I didn't make any money for the first two years. Right. Like, we had to live on my wife's salary for the first, 14, 16 months. It is not uncommon for you to buy, like if you don't go what you're going through, and you don't look at that future cash flows and expenses required and stuff, and these grandiose ideas and changes you think you're gonna make when you walk in that door, they cost money. 

[00:24:38] Daniel Sweet: Yeah. All of them. 

[00:24:40] Ronald Skelton: Right? And chances are the guy that you just replaced didn't tell you he was wearing four hats and you don't wanna wear four hats, and now you gotta have three extra employees, at 80 to 120 grand a pop. Million bucks gets eat up pretty quick when you're starting to replace, you know,the VP leaves and he was doing two jobs.

[00:24:55] Now you were, you only wanna do one or two jobs. So now you've got six jobs between two people that left. You gotta go hire four people, right? Five people. So now you got-

[00:25:05] Daniel Sweet: From an early, from an early stage, we'll do an estimate of, price of the business. Just rough estimate, right?

[00:25:09] Based on averages of the industry if they haven't given you one. And so then we do three different financial models for how we would fund that, potentially. And what they notice is, boy, all that profit disappears with that debt load. Yes. So the money in and the money out is one of the biggest ones that eliminates companies. But then you get kind of deeper into the weeds and you're kind of see how they, as you go along, how they generate their money. Is it replicable? Is it growable? Are all the relationships with the owner? How are you going to transition those? Who are, by the stage three we start to ask, who are you, the acquirer, going to have operate that?

[00:25:49] And if the answer is, I don't know, then you're not gonna buy this thing. If it's not you. Because you can argue with me all day long that you can find an operator, but you're not gonna argue with the lenders. They're gonna wanna see who's gonna run this thing. (Oh, absolutely.) If it's not the current owner and it's not you. So we'd go through those types of things to figure out if it's a good company or not. 

[00:26:07] Ronald Skelton: People don't understand that executive search can take anywhere from a few months, six months to 18 months, and it costs tens of thousands, not hundreds of thousands of dollars. (Exactly.) Right. To do it.

[00:26:16] Especially if you, like, everybody's gonna try it on their own, 'cause we're entrepreneurs. We think we can do everything on our own. And four months into it, you're like, I'm gonna have to have an executive search firm do this. They're gonna wanna retainer upfront and a piece of the, transaction on the back. It's not cheap. 

[00:26:29] Daniel Sweet: That's one reason that we buy in the state of Texas. Is because our networks in these industries are good. So we're usually not going to a search firm. We're doing a search of our network. (Right.) But we're not gonna search firm. We've got somebody in mind to run that thing by the time we get to LOI.

[00:26:43] Ronald Skelton: So, One of my favorite things to suggest, and we had this lined up for that concrete plant, is to find somebody who has done it before. They've been an operator. They've actually grown a company. Maybe not the exact same industry, but he had a, it was another manufacturing company that built, industrial stuff. And he took it from 10 million to over a hundred million dollars.

[00:27:03] And he was already searching, he was already out on his own. He had some money to put into a business. He wanted to buy it. And our goal was we were gonna sell the CEO seat. Basically make him buy in and do a, what we refer to as a, I think you and I call it a BIBO or whatever. It's buy-in, buyout. Buy in, they helps you grow it. Hits a certain point. And when we're gonna sell the company at a certain, multiple, five years down the road. He has the opportunity to buy us out at that multiple. And own the rest of it. Or he just rides with us. He runs it until then when we sell, he gets, he can cash out too. It's his call. 

[00:27:32] And he's got skin in the game. So this guy, particularly got had 300 K. We probably are gonna ask for like a 200 K for 25% or whatever the number was gonna be. Now he's got skin in the game. He owns a piece of the company, and he's the operator. He's the general manager, the CEO or what do you wanna call it. But there are people out there where, they're out there searching. They have the money down and, they just don't know how to find deals. Right? 

[00:27:54] Daniel Sweet: Right. That's the biggest challenge. 

[00:27:55] Ronald Skelton: Yeah. So, if you find something, you can pair up with one of those guys and just do a thing where, look, I'll negotiate it, I'll get it done or whatever. You go in, you run it, you're the operator, you run this thing. You grow it. You do what you do best. And at the end we'll either sell it to you or we'll sell it out, and both of us will profit. 

[00:28:10] Daniel Sweet: Yeah. We have a standard, corporate agreement that we put into any company we buy. That just lays out how we value it.

[00:28:17] So if anybody wants to buy anybody out, The argument that always happens doesn't happen. It's already been determined how you're gonna value it. So then you just determine, okay, do you have the money? Do you not have the money? Buy us out. Sure. So yeah, that's a big argument stopper that, so we try to put some stuff in our standard corporate agreement that are argument stoppers, before we get started. 'Cause we've made enough mistakes to see a lot of the arguments. 

[00:28:41] Ronald Skelton: So the other one I like to do, and I'm bouncing these off you 'cause I wanna be called out if I'm wrong. For full disclosure, I met you, you were one of the coaches at one of the programs I paid for. Like, I know you know this stuff inside and out and I'm learning from you and I do this show to learn. But one of the other things I like to tell people is, I think it was two weeks ago on one of our, networking, he goes, Hey, I've got one.

[00:28:59] We're talking. We're good. I'm ready to cut an LOI to this guy. Like, does anybody have a template for an LOI? I said, you're ready for an LOI? He says like, yeah, cool. Is the guy married? I don't know if he's married. And I was like, does he have kids? Like no, I don't know. What is he doing after the retirement? When he sells you the business, what is he doing next? And he says, I don't know. I said, you're not ready for an LOI. He said, why? Because they won't close. If you don't know what they're doing next and have them know where their mindset is and helping 'em get there, there's a good chance that you know they won't close.

[00:29:26] I caught one of my guest off guard 'cause he has a website I was interested in, I'm buying content sites. And after the, right after the call, I go, would you sell that? And he is like, yeah, I probably would for the right price. So cool, I'll schedule the call with you. And he is like, his eyes got big because he didn't realize I was serious, right. So, on that Monday, we have our call and he was like, I have to decide if this is a core part of my business or a distraction now. 'Cause once I make that call, I'll make the decision whether or not I'll sell it to you. But a lot of times, people, they built this, their ego's tied to it.

[00:29:54] They're involved with it. And if you don't understand where they're at mentally, and the other reason I wanted to know if he was married 'cause,my favorite question is, what does your wife do for the business? You'll find out a lot of times that, like they're doing bookkeeping or, one of the businesses I found out later, not only was the wife doing bookkeeping and not charging anything, because I didn't see an accountant on the book, so I had some questions.

[00:30:12] I build a little org chart like what positions are supposed to be there? And then I figure out who's doing those roles. Like who's doing your accounting? 'Cause I don't see anybody in your org chart you gave me, I don't see anybody that says accountant. Oh, my wife comes in on nights and weekends. Like, cool, how many hours does she spend? Right. Do I need a full-time person or a part-time person to replace? I gotta add that salary back. And then they don't put that in there. The better one was, is this a manufacturer, the lady that was doing the accounting, her and her husband came in and they did the deep, janitorial work every week.

[00:30:37] And I'm not doing that. Right. And the guy I was helping, like, look at it, he's not gonna do that. Like, so, okay, you gotta add a little bit of janitorial service. The shop floor did, for safety reasons, did their own sweep up and stuff on the shop floor. But they vacuum the office, they carry out the trash, they came in on every Saturday and spent half the day cleaning the place. I know that's only a few bucks a year or whatever, but it's not, still,somebody needs to do that. And there was just all little things like that. A lot of people don't realize how much, they just do out of nature. That's something they've always done.

[00:31:04] They did it when it was a two person company and then just, it was fell into habit and they never hired anybody to do, do it otherwise.

[00:31:09] Daniel Sweet: Yeah, it's, I mean, entrepreneur slash owner equals do that job plus whatever else doesn't get done. And when they get used to doing the other stuff and they don't tell anybody about that, gonna be another person.

[00:31:22] Ronald Skelton: He told me he was ready for an LOI, and the guy was like, I said, well, is it a single member? I said, what's the corporate structure? And he said it's an LLC. Oh, cool. A single person LLC or does somebody else own shares? Well, I know his wife's on it. I said, cool. What percentage? Like, probably five.

[00:31:35] At least five. 'Cause it, multi-member at least give 'em five most times. But it could be more, it could be 50 50. Now if she says, if it's anything more than two or 3%, are you gonna leave? Is she gonna continue owning hers? Or have you had a conversation with her? Are they still together? Because he didn't know. Anyway, it's just one of those, there's just certain questions before you, but I think a lot of that stuff is just simple stuff you do when you're building rapport. That needs to be done before you even do an LOI.

[00:31:58] Daniel Sweet: Well, right. I mean, you're just increasing the chance of the LOI failing. Which is already greater than 50%. Between LOI and close. 

[00:32:05] Ronald Skelton: Well, my, maybe I'm wrong here, but when in my mind, once we sign the LOI, I start spending money. I start paying for due diligence. I start, paying for maybe a little bit of, maybe with just time, 'cause I'm a marketing guy by nature. Market analysis, deeper market analysis.

[00:32:20] Like, what's the game plan? What am I gonna do with this different? What synergies are with other businesses I own or what am I gonna do with it? There's time there. A lot more time than I'd probably spent up to this point, is now we're getting serious and I gotta focus on this for a little bit. There's opportunity cost too. Now I gotta, not do some of the other stuff I do to focus in on this until we get to get it to the finish line. So, I'm pretty serious, I don't give LOI like a lot of people, everybody gets an offer. Like, I don't give LOIs unless I'm getting ready to pay for, you know, I'm willing to stroke that $25,000 check to do full due diligence. Then we'll do an LOI. 

[00:32:52] Daniel Sweet: Yes. And we've had people do our thing. Where they're ready to, I'm ready. This is a great company. I'm ready. I said, let's just put it through the stage one. The simple stage one. We've got a checklist, here's the information and look at what we, what comes out. And most of the time they would go through stage one and go, well, I don't have that information. Okay. You are absolutely not ready for an LOI. This is not ready. 

[00:33:15] Ronald Skelton: Like the other one is, what states do they operate in? Why does that matter? And because your due diligence cost shoots up big time when you start telling some attorney who has to do due diligence on, liability issues and HR issues and everything else. they went remote and now they have employee sitting in six states. 

[00:33:30] Daniel Sweet: Right. And they gotta pay employment tax in six states and rules 

[00:33:34] Ronald Skelton: And they have to comply to six states different rules, right? Two of 'em sit in California. If you see the rules here, it's crazy, right? Like as a single person, LLC, I have to have one hour a year safety training. I have to sit there and talk to myself for an hour, theoretically to be in compliance. So let's talk about the rest of the process. I really want people to get the idea if somebody works with you and they do your zero to LOI course, what are they getting out of it? What are they gonna, besides just, okay, I got an LOI done at the end of the course. What skills are they gonna pick up along the way? 

[00:33:59] Daniel Sweet: So the skills they pick up, are the skills, like I said, both behavioral and technical skills actually work with the sellers. Work with the brokers if they're existing. As well as analyze the data they get back. Whether that comes through a broker or not.

[00:34:15] So one of the big skills they get is the ability to know if a deal's good or bad early. So we're giving them back a ton of time. But the key is, like I said, just like me, most of the people that do this work are really high performing professionals, generally speaking. And so chihuahua's on meth, absolutely all day long. And so what happens is we wanna jump ahead 20 steps 'cause that's how we've gotten ahead. Well this is something you gotta kind of do step by step. 'Cause you gotta know each piece. So, a lot of what we do is we help them make it explicitly step by step. Just this step to this week is just this step and then an assignment for that step. Next week, different step, new assignment.

[00:34:57] So we make sure that they're doing it step by step so that they're able to, by the end, they're able to do a lot of that, faster, although not blow by it, 'cause they understand the value of it by that point. Additionally, what they get is a lot of handholding. So there's not a lot of signposts along this journey, as I say. And so what we do is we're work, we've got, instruction that happens every week. Usually that's me. We have coaching in a group that happens every week, where we're making sure everybody's got the lesson, is applying, it, understands what it is, the nuance, and, gets into doing the assignments.

[00:35:33] And then we have one-on-one coaching ,where we are making sure that the thing you're doing is the right thing. And you're about to get X information from certain person this way. And our coach can say one-on-one, Hey, well, how about we redirect that just like this? And you go this way. So we're working with them as they're going, so they're learning the stuff. But we're also able to give that feedback as we go to say, well, you're gonna have more success if you do this at this stage. So they get, we're kind of calling an apprenticeship because, we're walking along with you on this whole journey.

[00:36:08] And so instead of learning lessons like I did, by, full-time, a year and a half of, trial and failure, and then figuring out where I failed and then going back to that video or buying a book or whatever, we walk along with you to help you be successful. As successful as quickly as possible on that first deal. Now, we also help you be realistic. A lot of people come into what we do saying, yeah, in about three months I'm gonna have a company, I'm gonna be smoking cigars, lighting 'em with, my dollar bills. That might not be quite accurate. And then bring out your stats. For funded searchers, guys that do this for a living, that are working under companies that do this for a living. Two years is not unusual. I think we can get there 12 to 15, 12 to 18 months, of consistent effort. But it's not unusual that they're gonna take that long. And so we help them reset and again, think bigger. Just like you were talking about. If you are going to make this major career change into buying businesses, and that's what you're gonna do from here on out, you have to put a little time into it. I mean, if I were to go from technology to, what law, I would have to go to law school.

[00:37:20] I'd have to put a little time into that. This is kind of that. It's designed so that you're learning while doing, so we can both keep the knowledge and practice the motions. When you're in golf, you can practice that swing, same swing 20 times, but if it's the wrong swing, you've just built in the wrong swing. So we help you build in the right motions as we go, to get you to that first company as quickly, first good company, as quickly as is reasonable and sustainable. I mean, that's what a lot of it is we help give those signals and signposts that say, okay, yes, good. Okay, next time, avoid this.

[00:37:54] Before you do that, do this. That helps them along that path, faster. I mean, you get to learn from other people. 

[00:38:02] Ronald Skelton: So what, what elements of this do they need to do themselves and what elements of this can they actually, like I'm a big believer in the who not how. I'd outsource brushing my teeth every day if I can get somebody to show up to my house and be on time and do what they need to do.

[00:38:13] That said, some of the stuff you need to build a BS meter on. You need to do the, even if you later on have somebody, like a forensic accountant, just, looking over your stuff. Or you have an accountant friend that looks over the financials for you. My gut says you better know enough of it that you look at it first. 'Cause if they miss something, it's not on them. They're not, especially if you're doing SBA like that.They're not the ones with personal guarantees out, you are. (Right.) And a lot of people, well the SBA's gonna, SBA's not gonna write a bad loan. I was like, yeah, don't be realistic. If you're like, just say, here's a good example.

[00:38:43] SBA's more interested in it is, and the lenders more interested in is their butt covered? (Right.) If you have $5 million worth of real estate assets and you personally guarantee 'em, they're gonna be a lot lenient, more lenient on you when you buy a $2 million company. And they're not gonna, I mean be honest, they're just not gonna do the level of due diligence you think they're gonna do. They're gonna do their loan underwriting and stuff like that, but it's not what you should be doing. Because they know if you don't pay or if you fail, they're gonna come get your real estate. And people don't get that. They don't get that, there's a risk reward thing and all they're doing is covering the risk.

[00:39:13] If you got fewer assets and the personal guarantee is less valuable, yeah they're gonna spend a little more time scrutinize your business, 'cause it's all, their loan is riding on that. 

[00:39:22] Daniel Sweet: Exactly. And most of the lenders are absolutely gonna be looking at the business first.

[00:39:27] Ronald Skelton: Yeah, absolutely. But, I'm just saying you just can't count on, like, a lot of people say, well, if I do,umbrella coverage, they do their own diligence too. So if I get an SBA loan with an umbrella coverage, I'm pretty much covered on that. You gotta remember those guys are doing, it's exactly what they need to do to cover their own butt, not yours.

[00:39:43] I believe in outsourcing everything I can, but I also believe I need to do some of this stuff myself, especially in the beginning. Like right now I'm looking at tech sites and stuff. Like I don't do the evaluation of 'em. I know what SEM rush is. I know what the tools are. I know all this stuff. I could buy subscription on it. But the guys that do the evaluation on the tech stack for, from, a buying, say a, an e-commerce or website, let's just say it's under a million dollars a year in profit. They charge two or three grand to do that. And they do it within days. And they give you, like, for an extra 500 bucks, I'll say, here's the low hanging fruits to double your, revenue.

[00:40:12] They know this space. They can just, and they got tools to do it, 'cause they look at dozens a day. I'll eventually learn how to do that, but right now I'm just like handing it over because like I get a better answer from them, but I want to, like, I'm gonna pay a little extra the first time, and I already negotiated with them. It's like, Hey, the first two or three times we do this, I'm gonna have a lot of questions. I don't want just the report. I wanna understand where did you get this from the report? What does it mean? Right? So that I can glance at some of the stuff in the beginning before I actually hand it to you.

[00:40:39] Daniel Sweet: That's exactly right. And we've have, we have a lot of people at our course that come in and say, listen, I'm gonna automate the heck outta this. And I say, that's great. But you have to know what you're automating before you automate it. Otherwise, how do you know if it worked? If you don't know how to do a lot of this stuff yourself, not the in-depth stuff, obviously.

[00:40:55] But if you don't know how to do a lot of this stuff yourself, you're not gonna be able to, if you hire va, how do you know if they're doing a good job? So that's kind of what we're doing is getting the basics down. You know how to do it now. And then by the time you learn, well, okay, now I can piece this off to a va, I can piece this off to my tech analyst. You can start doing all of that because, you know what to expect back, you know what they're doing. And you know what, they're doing a good or bad job, which is kind of important. 

[00:41:20] Ronald Skelton: It's, yeah. I've never liked that, like the idea of sending something off if you don't know what you're looking at when they give it back to you, you just, if all you do is shrugged your shoulder, they said it was good.

[00:41:30] That's just dangerous. You need to be able to look at it and go, that's exactly what I wanted done. And yes, it's good. Or not. I think that'll be one of the things, the low hanging fruit, I think for what's coming around the world right now is AI. And I think the financial due diligence, I think AI will be able to crawl through that pretty quickly here. Probably in the next six months, minimum, I mean, like the, the shortest period of time. I don't think it'll be happening in the next six months. Somebody will have some betas out in the next six months or so. And I think in the next 12 to 18 months you'll be able to like load your deal room up into some tool and it'll crawl through there and go, Hey, here's some questions you need to look at. Right. 

[00:42:01] Daniel Sweet: Yeah. I talked to, I talked to fact to some startup guys at a Ivy League that, I'm just looking for advice. That are building kind of version one of that kind of tool. Yeah. 

[00:42:09] Ronald Skelton: Yeah. The technology's there. Nobody's done it. Like nobody's put the, built the data set around it and I jokingly say accounting's an artist's work.

[00:42:18] You can line five, 15 painters up by the ocean here. I live by the ocean and say, paint me this sunset and make sure they can't see each other's work. And you're gonna get, 13 of 'em look different. There's gonna be one or two that look like the others, but they're all gonna interpret it differently and accounting's that way. There's a set of rules and everybody can interpret them the way they want. Sometimes they're actually wrong. Like a lot of these, even paid accountants, CPAs will get it wrong, but sometimes there's, they're right. They just did it differently. And you gotta align that with, how do you want it done and what does it look like when you do it your way?

[00:42:48] Does it still makes sense, right? So that's where I think it'll take a little while and AI would probably be more suited for it because you can look at all those multiple cases. Like, okay, here's the law, here's how it's supposed to be done. Here's the normal business practices. These are all okay, and maybe these are gray. Here's some real red flags you probably should look at. And, you load your deal room up and three seconds later it comes up and goes, this one's pretty clean. You should take a deeper look. Or, Hey, this one's got about 15 red flags. You need to figure out what this is, why this line them's there.

[00:43:16] They say they have 15 employees, and we only see four on the payroll. It would be able to find that stuff like, I actually seen this one, one of the companies had 65 employees on payroll, and every time I talked to 'em, they said, well, we only have 50 employees here, 51 now. I just looked at your, like I looked at your payroll. I looked at your accounting, you gave me your accounting sheet. Do you know you have a bunch of people on payroll that you say, aren't there? Well, three of those left and they have two weeks front. They had some answers for from of 'em.

[00:43:41] But they had four people they've been paying for over six months that were gone. So one of 'em was kind of imp per, so it is one of those family things, right? One of 'em was a courtesy thing. Somebody had died, and like they're still paying, they're still paying them. They're like, we're gonna pay 'em for six months, and died of cancer or something horrible. But the company was being nice and like, we're gonna, continue to give the widow like, we're gonna keep doing direct deposit for about six months, and then, then we can't do that no more. But it was a small town family office type of thing. But there was just, there was a bunch of'em there that were thinking, okay, that one's there.

[00:44:12] Now we got four more left. Where are the other four? Like, who are they? They actually asked me like, who are they? Like, all right. You probably should go get that money back. I dunno if you can or not, but you know, somebody should, 

[00:44:20] Daniel Sweet: It would be tough. Employment law? It's really tough to get it back. 

[00:44:23] Ronald Skelton: Yeah. But, it reminds me of the, the office, right? Where they moved the guy to the basement and they fired him and he was still paying him long time after they fired him or whatever. And I was like,like that didn't really think that really happened, but you know.

[00:44:35] So we've walked through the process. I wanna go circle back around to your, what you're doing there. They've got their, they've got everything down. They've started presenting deals, they found something that's good. They're ready to issue an LOI. Do you guys help them, look okay, is this SBA worthy? You're gonna have to raise out signed money. Do you actually have, like, what does the deal structure look like? Do you help 'em, help 'em formulate what will go into the LOI and what the structure's gonna look like? What is the seller gonna carry back? What are you gonna do on a loan? Where the money coming from? All that stuff. 

[00:44:59] Daniel Sweet: Yeah. So that's where the, intensive instruction piece ends as we teach them about the LOI and what needs to go in there and how we're gonna structure it and what makes sense for what types of deals. Can you buy a company where the number one customer is, 63% of the,business?

[00:45:14] You can. But what I'm gonna do is I'm gonna put 63% of that on Earnout over several years. And as long as that company keeps using us, we're great. But if they fall off tomorrow, no. Things like that, yeah. That will help walk through with them, to get that LOI structured well. And then they'll transition, into due diligence. Which is, we're not teaching how to do due diligence. We help 'em. Okay, these are the areas you need to do due diligence in. And we'll know some providers, but, we don't teach how to do due diligence in the course, but we'll get 'em to that point. 

[00:45:46] Ronald Skelton: I know, I can't say of his name 'cause what I'm about to share with you, one of the guys was on the show, bought a company. They were doing really well when he bought it. Two of his biggest clients, probably 30% of his business, were only stick, it was a manufacturing company. They were building something big. The product had declined. It had some problems. You know, like the quality of, product had dropped over the last probably six months to 12 months. Two of his biggest clients were only hanging around outta loyalties to the previous owner, knowing that he eventually fix it. Right? That he was having medical issues. That his wife was kind of running things right now. That if he got well or whatever, he was gonna come in and fix this problem. So they were hanging around out of trust and respect of the previous owner. The second at train's hands, they were like really gone, right?

[00:46:29] So he had to go fly, and they were overseas too. So they had to fly out to them, fix their machine,their machines you had built for 'em. Rebuild those relationship. I think he saved them, or at least one of 'em. I remember him saying he saved one of them, but I don't know what actually happened to the other. Or I don't remember what happened to the other. But,there's a big thing about that, right? When you say like, 60% of the customers or 60% of revenue comes from one customer one, will they stay around? And two, if they do leave, is that a viable business anymore? I don't wanna touch anything.

[00:46:53] If they leave, it's not a viable business. If they leave and it hurts, that's fine. But we can still make payroll. We can still go hunt new customers down and the business will survive. It'll suck, but it'll survive. And say, okay, maybe we can still move forward with your earnout, right? And then can I talk to that client, like, before we close, can I talk to 'em? Can you help me introduce, introduce to me. Can we figure out if, you can almost, at least I can. And I'm sure you have enough, rapport building skills right now. You have an hour or 30 minutes to an hour conversation with somebody and you go, okay, I'm this guy.

[00:47:23] I can trust him. I think I can work with him. You get that gut feel to move forward. I don't think I would, touch anything that had a 60 something percent client where I haven't met that client yet. The other thing you wanna see, I get on the phone, I wanna see a Zoom call, I wanna see 'em. Right. If I'm close, I wanna go shake their hand. But if I'm, if I'm like, here in California, they're in Texas or something like that, let's get on a Zoom call. Let me see you. Or anything I want to do is like, if you look like you're 75 years old too, who's taking over your bus, like, I'm gonna buy this a year later. 

[00:47:50] Your buddy just retired. You two wanna go on your new fishing boat. He just got a big check, he bought a boat. He didn't be offering to kick you out every few weeks. There in Houston, he doesn't take you out in the coast. You don't wanna work anymore either. So now my biggest client that's getting 60% of my, in tank, is out fishing with my previous owner instead of running his business. There's some things you gotta look at inside of these things as like, okay, who is this? Are they gonna stay around? Are they gonna long-term relationship with me?

[00:48:14] Less important. It's still kind of important, but it's less important if you've got a really even keel across all the clients. You get one or two major players in there. 

[00:48:21] Daniel Sweet: You gotta know everything you can about that. 

[00:48:22] Ronald Skelton: One more quick one. One of the guys that we looked at, good business. They were overworking, meaning they were putting in way too many hours.

[00:48:28] But when I asked him finally, what's the straw that broke the camel's back. I was like, cool. How did you land all your clients? Well, I'm a pro golfer. I was like, okay. What do you mean your pro golfer? He goes, well, I'm a local, like the training pro for two of the local golf courses. People pay me for lessons there. So I take all the other, he did auto detailing and window tinting. He takes all of them out and gives them free lessons and sells 'em on his business. He's doing millions. Tinting windows and detailing cars and installing, aftermarket radios. And he was doing, six, $7 million a year. But it's because he had those relationships, right? And I didn't have what it would take to maintain those relationships.

[00:49:02] So eventually that would fade off. So you gotta look at like, how did they get their clients? Why did they come around? What is that relationship they have? And, can you maintain that? 

[00:49:12] Daniel Sweet: Again, creative deal structure, and you can make part of the payment. Listen, you'd spend on average 20 hours with each one of these guys. Part of the deal that I'm getting with this company is,I need, 10 new clients a year for the next three years. So that's gonna be, 600 hours of your time over the next three years. As part of the deal I get. 

[00:49:28] Ronald Skelton: So how do people find out about you? How do people connect to you? How do people learn about the course? Is there a website they can go look at your, what did you call it? Zero to LOI is what you call it? 

[00:49:38] Daniel Sweet: Zero to LOI. Right. So it's designed specific, I mean, everybody could benefit, but it's designed specifically for your first acquisition. And it's spelled out zero to loi.com. You'll have a link, put down the link. 

[00:49:48] Ronald Skelton: I'll put a link in the show notes. Yeah.

[00:49:50] Daniel Sweet: There will be, you can email me, if you need any questions. Dsweet@sweetviewpartners.com. Glad to talk to you. And the website is sweetviewpartners.com. Any of those. Find me on LinkedIn. I'll be glad to talk to you there. Glad to talk to everybody. 

[00:50:03] Ronald Skelton: So the other side of this is,is this in person or are you on Zoom? Can people be remote out, do they have to be in Texas or can you train anybody?

[00:50:10] Daniel Sweet: The course is delivered via Zoom. So absolutely they can be anywhere. We actually had a couple takers from outside the US. It doesn't work nearly as well. 'Cause a lot of our information is very US-centric. But within the US you can be anywhere. 

[00:50:23] Ronald Skelton: Cool. And what would be US centric? 'Cause probably the preparing for the SBA would definitely be one. 

[00:50:29] Daniel Sweet: Certainly. The lending. A lot of rules around acquisitions. 

[00:50:33] Ronald Skelton: Yeah. Man, the Europe has a really cool thing when they call that. You can crawl through their own database and see who's solvent, who's not, and all their, and then their books are actually fairly accurate 'cause they have to report them. I think it's called Company's House or something like that. That's the only thing I wish we'd, I think it would be beneficial in the US if more small corporations had to at least report their numbers, clearer or cleaner. I appreciate you. Glad to have you on the show today and I think we'll call that a show. 

[00:50:57] Daniel Sweet: Sounds good. Thank you Ronald. I really appreciate it.