E187: Clint Fiore Discusses the Challenges and Strategies of Buying Businesses

[00:00:00] Ronald Skelton: Hello and welcome to the How2Exit Podcast. Today I'm here with Clint Fiore, and I'm glad to have you here, man. You and I have been connected on, uh, Twitter for quite some time. You always put out good content there. I poke fun at everybody. That's, kind of popular on there. So I probably, poked a joke or two at you occasionally or something like that.

But to have you on the show's gonna be a good time. You always seem to contribute to the,the social media marketplace for small medium business. So, thank you for being here today. 

[00:00:26] Clint Fiore: Thanks so much for having me, Ronald. I feel like I've already known you for a while, but, it's long overdue that I jump on the pod with you and, just excited to be here, man.

Thanks. 

[00:00:35] Ronald Skelton: I must be getting old because in my youth I had a near photographic memory. Like I didn't take hardly any notes in college or anything. But as I get older, maybe it's all the rock stars I've drank into my life, but it's not working. So I kept looking at your photo. I was like man, I know i've interviewed for this.

This is a repeat interview. I had to go through everything. So, uh, yeah, I get that. And it's just because we interact with and I share your stuff online and you just put out a lot of good stuff. So, thank you for being here. Where are you located? I think you're down in Texas, right? 

[00:01:01] Clint Fiore: Yeah, I'm headquartered near San Antonio.

[00:01:03] Ronald Skelton: Let's talk about kind of how you got into the space. Give us your origin story. How did you get around, you created, uh Bison Business. You do all kinds of advisory, buy side, sell side, deal hunting. I was looking through your website. You're pretty a, pretty much full service in the world of, Uh, buying and acquiring businesses. So kind of, how did that come about?

[00:01:23] Clint Fiore: I kind of grew up, the long story short of it is I grew up in a small business family. We're in the nursery business in North Texas plants. And, uh, we grow and retail, plants. And, I never wanted to be in the small business world cause I just associated it with hard manual labor.

And I wanted to go to college and my mom was big on education. And it reminds me of like rich dad, poor dad, a little bit of just the parent that says, Hey, go get a good, get an education, get a good job. I listened to that advice. I went to college. Originally planning to be a professional pilot and I was putting myself through school, doing like sales and marketing jobs. Which I found out I was pretty good at while I was learning to fly airplanes and getting all my advanced ratings. And then by the time I was getting out of college, I kind of realized, I didn't really want to be an airline pilot. 

I just liked airplanes and flying, but that, just everything about being a cog in a big machine and climbing a ladder for decades didn't really sit well with me. Like I wanted to be more creative. And so I ended up kind of working a series of non flying jobs.

It mostly in sales and marketing. And, sure enough, got the entrepreneurial itch around, I guess it was 2011 is when I left the corporate world. I was grateful for, you know, I had a really good couple of jobs out of college that kind of helped me get married and have, have my first kid or two get established.

But, the last JLB I had was in the insurance world and I just kind of, again, realize like I wasn't cut out for this normal path in life of just kind of working for somebody else and repeating the same year over and over and slowly getting fatter and more bored and, and things like that. And so I ended up having entrepreneurial spasm and left my job and started a business with some friends.

We did the, the stupidest startup we could have chosen for our first entrepreneurial adventure. And it was a manufacturing startup with Angel Investment. And everything was on hard mode. I mean, everything about that was, was super difficult. But thankfully we, we made it to market and had some success. Uh, within two years, the investors of that company bought me out.

And it was like this rocket ship ride where I went from working for an insurance company to working on an angel backed manufacturing startup with the national launch. Which was a great, it was like in, in two years, I learned so much about business that it made my head spin, but I was, it was exciting. It was engrossing.

I was addicted to the thrill of the startup and the business world. And I, and so I sold my shares in that. And then ended up helping another startup launch, raise money, angel investors again. And then just kind of decided, it was like, I would always have a lot of fun in the early stages of putting a deal together, but then once it got to the execution slog of just like walking out that plan, I was always just miserable in the trenches all day long building the businesses out. But I was very good at the fundraising.

I was very good at selling the dream and communicating the dream and, and I was becoming like the serial startup entrepreneur. And, after about the second time I, I started up an angel investment and sold an, uh, a stake in it, I realized like, Hey, I've got a wife and kids. This is a little too much drama to just kind of keep repeating this launch mode process over and over.

And I was thinking, you know, I need something, like I need a way to pay my bills that's sustainable. And I don't want to go back to insurance. I don't want to go back to sales and marketing jobs. And it kind of dawned on me, like I should just get like a boring business. Instead of one of these rocket ship tech enabled, like, what if I just got a franchise. Or something like easy that I could own and operate that's already established.

And so I started searching. And before I knew any of the vocabulary of the space, I was like a self funded searcher and didn't know it. I had my own capital and I was looking to buy something. And that's when I started running into business brokers. That's when I was immediately unimpressed by business brokers.

I was, you know, I'd already bought a couple houses along the way. I was used to using the internet to find what I wanted to buy. And it's pretty easy to do that in housing and lots of other things. But in business, um, small business acquisitions, it was really hard. It's really hard to find people to take me seriously.

It's hard to find the good opportunities. And I just discovered a very broken system with kind of like, very behind the curve, operators in the brokerage world. And after about six months of just striking out over and over again as a searcher, I kind of got so frustrated that I was like, man, someone needs to make this process better.

And, that's when it kind of dawned on me is like, maybe I'll do one more startup, but this time do one that, that fixes this business buying struggle for lots of people. Because I knew if it was such a hard thing for me, it's got to be hard for a lot of other people to find and buy good businesses. So I started educating.

I read every book in this space. I got every credential I could get in the space, from these different organizations. And then about, after about a year of educating, I launched my brokerage and that was, in the summer of 2015. So now I'm,eight years into the journey, eight and a half years in or so. And it's like the thing I discovered that, it's almost like, felt like what I was created to do. Is I've always been like this creative person that likes putting the deals together.

Every business deal is basically just a combination of, a cast of characters. The buyer and the seller and their advisors, uh, and a business and its team and assets in the middle and banks. And it's just like a big puzzle and you can get in there and kind of build the puzzle to make sure everybody gets everything that they want figured out.

And I just liked kind of putting myself above that playing field and moving the pieces around and then figuring out how can we make this work for everyone. And, once I discovered this career path, I was kind of off to the races. And so ever, ever since then, that's all we've been doing is, we started as a Texas based sell side firm.

So we are mainly representing Texas based companies that didn't have a successor lined up that needed to be marketed to the general public or strategic buyers. And we did that for about seven years. And then in the last two years, since kind of we've had a relationship, I started storytelling about a lot of these adventures I've been on in the last seven years and everything I've learned. And, I started writing.

And that, that writing turned into like a bunch of mega threads on Twitter and things like that. And that kind of blew up my visibility. And from there we, we rebranded and now we do not just Texas sell side work, but now we're starting to do new national buy and sell side advisory. So we do work on both sides of the table now. And are taking advantage of that bigger audience that mainly started on Twitter, but now has expanded onto these other platforms as well.

[00:09:15] Ronald Skelton: Yeah. I've seen that you take off on there. You've done a really well on Twitter. And like I said, we were talking earlier, really provide a, a lot of great information. You were talking about, having an underwhelming experience with brokers. I used to teach real estate investing and, uh, I have a real estate background, marketing background, sales background.

So we have a lot of similarities in there, but the joke was in the real estate world was always like, yeah, there's a reason, the brokers are the most appropriate named service ever in the world. Because if you, if you listen to them too much, you might be broker than you were when you started listening to them.

It's just, there's such a low and there's some really good ones. I don't want to pick on anybody, but there's such a low barrier to entry, in both real estate and, in even worse in business brokerages, that you just, you get a big mix, right? You get a full variety of just about anybody in, a lot of the States there's no requirements whatsoever. 

[00:10:07] Clint Fiore: So yeah, I've discovered there are good brokers out there. It's frustrating as a buyer because you don't know how to find them right off the bat. And so, it's kind of the 80, 20 rule in effect of, you know, 80 percent I think are just kind of bad. Like they're, they might even be hurting the process.

They're not even helping their clients really. But there's 20 percent that are really good. That, that are adding a lot of value, that know what they're doing, that make your life as a buyer 10 times easier and make your life as a seller a hundred times easier. And just our true professionals that are masters of their craft.

And so, if you're a seller, you definitely need to find someone in that 20%, to represent you. But if you're a buyer. It's good to kind of know what attributes to look for to, if you're dealing with one of the 80 or the 20, but sometimes if you only run into one or two ever as a buyer, you don't hit one of the good ones and you get a very bad taste in your mouth and a bad impression on all business brokers.

Which I think, is ultimately, feeds a stereotype and is a bit unfairif you've never met one of the good ones. So that's something I've been doing along the way is, I make a lot of fun of the bad ones and they're the way they do business. But I'm also trying to, support and teach the general public about the value of the good ones and what they, the good ones can bring to the table.

[00:11:33] Ronald Skelton: Do you think, I think a lot of it has to do with the same thing as chiropractic and even dentists and doctors and stuff. Even if they're licensed and taught, like say they're a part of one of the bigger brokerages and they're licensed and there are certain training requirements, nobody's ever taught, taken the time to teach them exactly how to be a good business owner.

Communications, responsiveness, all the different things you need to do to build and run a great business. So a lot of times they might have the skill to negotiate a good deal, but if they don't reply to your email for 7 to 10 days, when they have a listing out, how, they get kind of grouped into that, you know, must be a bad broker, right?

[00:12:13] Clint Fiore: Yeah. And there's even some very competent ones that can still have trouble with the responsiveness part. And part of that's just because like the, the overwhelm of the imbalance between buyers and sellers. So, let's say you get a good listing. A company that's making, a million dollars in EBITDA or earnings.

And, um, you put it out across all the major websites, Axial and BizBuySell and buy and sell a business and all these different marketplaces. You're going to get hundreds of inquiries. And a lot of these guys, but even the good experience ones, like they, they don't have much of a team behind them. And so, you know, they'll have 300 people go to their website and sign their NDA.

But as soon as they've got two or three really serious ones that they like, they focus all their attention on those two or three, and there's two or 300 getting ignored. And making it sound like, man, this person sucks. And, 

[00:13:10] Ronald Skelton: That's what I was getting at. Yeah. Like you don't know if they're any good or not cause you never got responded to.

And, it might've been something, there was one here recently. I kind of have like a, about a five day rule. If I email you on Monday and I don't have something back from you on Friday, I just move on. I don't try to hunt you down and track you down just because, if it's going to be that hard to get on your radar, I don't want to, the process, once it starts rolling, needs the role, right? 

I don't want to have to, if you're going to take five days to respond to an email I send you, maybe if I get into your top three or four, you like, then you get real active with me, but you get a bad taste for this.

Like I, I'm bad about it I guess. If I call a business owner and I get their voice, their voicemail and I need something done that day, I don't wait 20 minutes and call back. I look in, you know, back on Google and look at the next one on the list and I go visit them.

Right. Uh, we're a nation of instant gratification. So maybe I'm not giving enough leeway in the fact that I know that I, I know they're overwhelmed. I didn't realize it was, they're going to get two or 300 inquiries for, for,good listing. But I get that. Cause a lot of the listings, even on Biz Buy Sell and stuff just by first glance or just not, they're not that attractive. And the good ones must get a lot of attention. 

[00:14:16] Clint Fiore: Yeah. And, and so I, I think, it's really on us as a group of brokers to really, like the only way to really combat that is with a team and technology. You've got to use tech to streamline the process, automate the process as much as you can, but you can never fully automate it because this is a relational business.

And so the rest of it has to be done by a team. And so I, from the beginning with buying like my first or second year in the business, I realized that and, I started hiring staff and team that works with me way sooner than a lot of other brokers do. And now, I mean, I spend most of my days on deals where I'm quarterbacking the deal.

I don't really work the initial aspects of the deal. So I'll have a team that filters those two or 300 inquiries. And sets meetings with the ones that have filled out the NDAs and jumped through the hoops and had a preliminary interview with our team. And they'll kind of filter out folks to make sure they're a right fit before we get to me and the seller.

And then I'll spend more of my time in the later part of the deal, negotiating directly with the best candidates and not, not playing filter, um, before that. And so I think that's something that I definitely, promote to the brokerage industry is just hire, hire, hire, hire quick. There's really no excuse, especially in the, world we have today, where you can have a distributed workforce, to not have good folks answering your phones.

Cause yeah, we don't always have the bandwidth to do it, but someone can do it and you can hire someone to help you with that. 

[00:15:56] Ronald Skelton: I haven't tried them yet, but one of the ones, I won't name, I'm not naming other brokerages and stuff here, but there's one of the brokerages out there I just learned that, they've automated the front end quite a bit.

And you say you want to look at a listing, they send you an NDA, you fill out the NDA and send it in back and they send you the, like the, you know, CIM or the just a very brief, PDF, but they also send you a quick interview. They did a video link to a video where they recorded the seller talking about what they, to think the key questions that are usually asked during the first call, what did you build?

Why did you build it? That type of stuff. And then if you're interested, you, you indicate you're interested and then they get an interview and you don't really talk to a human being until you're like, Hey, I'm really interested in this. Reason I told the story is I've had the opposite where I said, I'm interested.

They send me the basic, you know, some basic information. Then they send me, 15 documents. I have to verify my income, verify my ability to pay and all this other stuff. Like, I don't even know if I'm interested in this listing yet. Give me at least a teaser. Show me something that before I just start disclosing to you my personal finances in the world, show me that this thing's even interested in looking at. There's gotta be something that's not super sensitive that says, Hey, you want to continue with this one and you want to spend the time it's going to take to fill out all this stuff.

Just, like I said, so many listings out there are mediocre. Show me that this isn't a mediocre one. So it's something worth listening to. There's definitely some room to improve the early on process. I think more brokerages and more services should automate the majority of it. But I'm going to try, I'm going to look through some of that.

I know which agency I was talking about. I'm going to try their process a little bit and try one or two and look at it. Because if, I'm usually able to say no. After the first call with that seller. I may be able to filter through quite a few if I just see their video, but 

[00:17:50] Clint Fiore: I love the video, I love the video aspect.

I think there's a fine line to walk. If you over automate or you make it too buyer friendly, you can actually ruin it for confidentiality with sellers, right? Because once you get the SIM or the CBR or whatever you want to call it, that's the confidential business review or the, uh, information memorandum, then the name of the business is on there, you know.

And all of the the details about the company are in the hands of that person. And, like I said, if you've got 300 people kicking the tires on it, I want to filter them a little bit before they all get, I don't want to send the SIM out 300 times. That's too many people that are aware of that, the name of that business. Where they're, you know, the owner and the broker are working really hard to keep the fact that it's for sale.

Confidential from the employees and from their vendors and from their customers. And so, I think you got to find the balance of, and so I'm trying to actually do two videos. Like one where it's just me, saying non confidential stuff and sharing enough information that you need to be able to know it's in your industry that you like the size range that you like.

The geography that you want, and any of like the big issues that would let you make, you say no to it right away. I'm just going to say all that like upfront in the listing and in my like sizzle reel video, that's non confidential that I'll send out to like our email list, but you haven't even signed an NDA yet.

Cause I want you to be able to say no before you even sign the NDA. 

But once you sign the NDA, then I want to, I just want to make sure that you're a real person, and maybe not full financial diligence on you yet, but I need to like screen you a little bit before we send out the SIM.

[00:19:47] Ronald Skelton: I think what I would need to know, like right off the, because like I said, I can say no pretty quickly after I, usually right after the first call with the owner. What I'm wanting, what I'm looking for and what most business buyers are probably looking for is a basic stuff. Is it a steady business or growing business or declining business?

We all specialize in different things. I'm only looking for, I'm not a turnaround guy. I'm 51. I don't want to spend two, three years trying to turn something around. All right. I want something that's steady and slightly growing or growing like, hell, and I have to go raise some money because you want more for it than I've got laying in my coffers.

I'm willing to go raise the money. If you've got something that's growing, you know, worth the raise. A lot of times, people are selling something it's in a decline and they, they did better last year and they did better the year before the owners, whatever reason is not as engaged, uh, illness or whatever. Unless it's like I've got somebody else on already there.

They can turn it around. I'm just, I'll pull the plug right then and there. I'm not a turnaround guy. Right? You've taken the plane, you're in the nose dive, and you're like trying to hand me the yoke. I'm not even that good at fly. Yeah. Yeah. My mindset is you run this thing for 30 years and you got it into a nosedive and I'm going to come in on a day want to turn around? That's really me inflating my own ego a little bit. And there's a lot of buyers that do this. They'll say they think they can fix anything. I'm just not, I'm not that guy. I don't want, I probably could. I don't want it. That's not what I'm looking for though. I'm not looking to fix somebody else's problem.

So that's sizzle wheel. If you just basically said this company is in San Antonio, it's been around for 15 years, it's got, 50 plus employees. It's in, I'll pick a random industry, in the concrete industry. It's growing year over year, slower than it has in the past, but it is still growing.

Employment stable. Customers are stable with no concentration of customers across, you know, revenue split pretty evenly across them. You got to see this thing that I'm in. But a lot of the CIMs and the other stuff I said, they're just missing those pieces. 

[00:21:37] Clint Fiore: I hear what you're saying. I think there's a, a frustration on the other side of the table by brokers with everybody, and their dog says, well, I'm not sharing that with you.

Or, well, I don't have that liquid, but I can get it. I can get money. And like, we don't know who's real and who's not real. Because everyone says they, they've either got it, but I'm not gonna fill out your thing. Or I don't got it, but I can easily get it. And like we're, we've been around the block so many times. We roll our eyes a little bit at that.

And so, I think there's a balance of, if you want to stand out from the pack as a buyer and be the top, top favored buyer on a good deal represented by a broker, I think you should at least make an effort to show that you've got down payment strength. And so maybe it's not opening the whole kimono and showing your whole, real estate trust world and all that.

But most brokers will tell you kind of how much cash down it's probably going to take to get into that business. And if you can just show that you've got it in cash or, or a brokerage account or something that's easy, quickly able to turn into cash, then you're going to go top of the pile, as a buyer. Versus ones that we've got to trust that your uncle or buddy or whoever can do it.

[00:23:00] Ronald Skelton: Yeah. I owned it on a few where like, I just they had enough information out. I knew I was already interested. But a lot of times you're, you're filling out these things because something's slightly intrigued you on a Biz Buy Sell or something. There's not enough information there to really know anything.

And then when the NDA comes with that, with right off the bat, wanting, verification, it's like, I'm not even sure I'm interested yet. Like you got to, there's a balance in that. 

[00:23:26] Clint Fiore: Yeah, I think what's different than real estate, I think when you're a real estate buyer, your net worth and your portfolio strength plays a huge factor in your favorite status as a buyer and, in the real estate world. 

But in the business buying world, it's more about the liquid, the liquid down payment and the skills and resume that you bring to the table. Because we're thinking about, all right, if I'm going to take you to the seller, I don't want you to embarrass me. I want you to have a good background that says to me, you're capable of running this business. You've, you know, got some entrepreneurial experience and you've got the liquid down payment, but I would rather have a light net worth buyer that has a good down payment and a good resume. Then the super rich buyer that doesn't have, that's just thinking that I can buy this as a, as another asset in my portfolio, but I don't really know the first thing about it.

and they're thinking more in terms of an investment. Like, I think that those folks are a little bit, even though banks like them, not SBA lenders, you know. Like it's different. The SBA lending world, like they're looking for the right person, not just the right balance sheet. They're looking for the right person who can fill the shoes of the outgoing seller.

And so it's not all about balance sheet and net worth, and it is about the right skills and match, to the company itself. So show us down payment, show us the right resume and,the right mindset that you're going to be willing to, to jump in and run this thing. And at least for a period of time until you raise up the management you need and are capable of running a business.

That's going to make you, most endearing to the seller and to the broker. 

[00:25:20] Ronald Skelton: Yeah, I always, uh, I tell everybody, we teach some classes and stuff like that on these private networks and stuff. Sourcing off market deals and stuff. One of the first things I always tell them sourcing, sourcing off market deals is you are who Google says you are.

So if all your background experiences, your job, and you don't look like a business owner, it's going to hurt you. For most of these guys, there's operators, they come right out of a job and they're like, okay, I got laid off.

I want to buy a company. I can see where that, that's hard because, when people look and see who they are, yeah, you worked at, a manufacturing plant as a GM for the last 15 years. But if you ever had a P and L responsibility to your name? And I tell them, it's like, we talk to people all the time.

We actually, I host a, twice a month we host a networking for buyers and acquisition entrepreneurs. And, uh, they say, what's important. I was like, well, where are you coming from? Like, Oh, a job. Have you ever had P and L responsibility? Profit and lost responsibility? Yeah. Make sure that's in your job description.

Make sure that's on LinkedIn. Make sure that's everywhere because that's, the one thing you've got of everybody else that thinks they're going to come in and be an operator is you've actually had some experience managing profit and loss. You've had some experience understanding the financials of business. Most of these guys don't.

Will they make it or not? It all, tenacity can overrule everything. Like, a guy can, I honestly believe that. And I think a guy can come straight from college, buy a company and if they stick with it and they do anything else, they can make it. I do believe that. They got a better chance if they've got some prior knowledge, prior experience and a team around them.

[00:26:52] Clint Fiore: I agree. Yeah. And I think there's levels to this game. I've always thought, and I think I'm biased because I came from a sales background. Like in my early career, I did every kind of sales, starting with retail to Cutco cutlery to telemarketing. 

[00:27:08] Ronald Skelton: I'd hire you in a heartbeat. I'd hire a Cutco guy any day of the week.

[00:27:11] Clint Fiore: Yeah. So I was a good kind of classically trained salesman and all the hardest sales jobs you could have as a young man. And I've always, in my experience as a main street business broker, anyone with a sales background like mine that bought a business, I 100 percent knew they would succeed. Because it was like, if you could sell, you can go win.

Like, but the more I've, yeah, the more I've been exposed to like the lower middle market to the larger size deals, the more I've realized like those sales skills only get you so far. So I think there's a level where I would say it's like zero to maybe 2 million in revenue, where sales is pretty much king for your background.

Like you can learn to manage the P and L. You can learn to hire people to do some of the frontline work. And do, you know, like you can learn the business basics stuff, but if you're a really good salesman, you'll never starve. Like you'll always be able to feed the machine and it'll make up for a multitude of errors.

It reminds me of like someone that can run a four to 40 in football. Like they're going to, they're going to be successful because speed is the great, you know, like it makes up for a lot of things. But when you, when you get to that, like 2 million and up revenue level, I think you start, the people that really win are the people that have, like management and people hiring and delegation skills.

And those are more of a soft skills in the organizational skill set. And so, it kind of depends, as I've learned the levels of this game, when now, when someone's looking at, you know, a 5 million revenue business that's doing a million and a half of EBITDA. That has a, a management team, then it's not necessarily the crack salesman that might be the best leader.

It might be someone that's got more of the CEO, maturity and people leadership skillset, that's going to crush it the best in that role. So, so yeah, I think, that could be a good piece of advice for your listeners. Just evaluate your skillset. Look at yourself in the mirror and be honest about what am I bringing to the table and find a business that's size wise and industry wise.

And, case by case, business wise that, that can benefit the most from what you bring to the table. And that's going to help you stack the odds of success heavily in your favor. 

[00:29:48] Ronald Skelton: You know, if you look across the different industries, like we're talking about buying and selling small to medium businesses.

If you take a step back and you go starting businesses, look at the VC route, even they have those same tiers. The guy that goes out and scraps and raises money and, you and I were talking about, I've raised money for real estate. I've raised money for businesses and angel investors. It's a different set.

Not everybody can do it. Like I said, I smile when you said, yeah, everybody tells me they can raise money. It's like, yeah, you and I both know that that's not true. And that not everybody can, you have to be a pretty decent salesman and you got to understand what the investor wants. So, but if you look at the VC world, a lot of times they actually swap out the CEOs through different phases. 

The guy that can shoestring it, raise the angel investors, get the first round of funding is very often not the same. Very, very rarely is the same CEO. They can take it from, I'm funded to I'm profitable. And then there's a opinion on the industry there's a spot between five and $10 million in revenue where, they end up having to switch it out again. Where now you need an operator in there that knows the day to day operations and knows how to manage a CFO and a controller and other executives, so those positions change.

You have a few rare unicorns out there, Facebook and Oracle knows where the CEO found it. It ran it all the way to the top. Even Larry Page and the other guy that helped him to do work, they stepped out of the way for a while because they knew they weren't the right ones. They came back in with them.

They've been mentored and coached and trained if you really look what they did. But um,that's a very, keen observant, observation you've made. 

How does a buyer, what's, what kind of self assessment do you think these buyers should go through? Like, I'm a big fan of like Ikigai, but that's kind of soft touchy filly. 

[00:31:34] Clint Fiore: I think it's not like, I think the mistake is, um. filtering by like, Ikigai or passion. You know like, the intersection of your, your skills and passion and what you can get paid for and what brings you joy.

Like I wouldn't be Marie Kondo, with your, your business search and I would really start with the, the dollars and cents of it and your skills of it. And it's my belief that if, if you're a true entrepreneur, the game itself excites you. if you're destined to be in the business buying and selling, ETA space, SMB space.

Like the true people that I think are going to do the best here is like, they're pretty open minded about industry because to them, the game is the game. Like leading people, growing a company, business for the sake of business and, and changing lives and the human element of it gets you out of bed and gets you excited. And you can be just as excited if you're, pumping septic tanks as then if you're like selling jet skis or something that is, your, whatever your passion or hobby is.

And so I would be very careful. In fact, if you get too in love with a passion play, you're almost more vulnerable as a buyer to overpaying, to missing red flags, to getting the wool pulled over your eyes or being manipulated by your heart strings on a deal. Versus kind of sticking to your guns on the buy box that's, the more logical, um, levers that you need to, to pull here. 

[00:33:16] Ronald Skelton: I think with what we're, what we're looking for is the word cognitive bias. Basically, you, you know, you liked an industry, you have a passion for it, so you're trying to make it work. So you already have a preconceived mental bias towards, well, this should work.

I love this. Like, I love coffee. This should work. I'm going to buy a coffee shop. Yeah. You may or not be, may or may not be the right business for you. I get that. I liked it, the game of the game, the game of the business, mentality. Too many people, like I, I get too many people that come in.

It's like, well, I've been in construction all my life. I'm going to buy a construction company. It's like, cool. Tell me about your history in construction. Well, I've been swinging a hammer for 15 years. I like, okay. Have you managed construction workers? No, I hate them. They're hard to work with. 

I'll give you a better, even a better example. Uh, on one of our networking calls, a guy that had just graduated Harvard, told me he was in my construction company. I was like, no, you're not. And he's like, what? I was like, no, you're not. You're too soft. And he's like, Hey, that's rude. You're like, he got snapped at me.

I said, see? That's one of the nicest, year I grew up around construction companies. My dad was a painting remodeler. It's a different world, right? 

[00:34:18] Clint Fiore: Yeah, I think you make a great point, like, there's transferable skills, and I think that's what you gotta be honest with, is what are my transferable skills?

And so, let me give an example like that, like, that construction worker, they might not be the best buyer for a construction company. They might be, they might not be, but just being around the rough and tumble construction crews, and knowing how to, push back and earn the respect and kind of get in the trenches with those guys is going to be valuable in a plethora of blue collar trades. 

So you're going to be able to earn the respect of any tradesmen if you've been a tradesman. And if you've had that blue collar experience in your life. And so that can be very handy. There's a, the nerdier buyers that maybe have a technical higher education background.

Like a lot of my friends are aerospace engineers. Cause I went to a college that has half the col-, half of my university was aerospace engineers, and some of them reach out. They're bored at Boeing or Lockheed and whatever. And they want to go like buy a small business. They're super smart. Super nerdy and they know they've been kind of niched into aerospace. And so they're like, hey, do you have anything Clint, that's like aerospace? 

That's small and I'm like, there's not like this. That's pretty rare like 

[00:35:42] Ronald Skelton: Aerospace and small Yeah. Yeah. 

[00:35:45] Clint Fiore: Yeah, and so it's not that helpful to, to be, the aerospace part isn't that helpful because there's not very many targets that are like the exact size that you can bite off and buy that you can use your Boeing experience at. But, there's a whole lot of companies that have technical engineering staff. 

So you might find like, a white label manufacturing company that does machine work. Or,like, uh, one of my aerospace engineering friends was looking at a, a company that builds knives for a lot of the big brands. I won't say the names of the brands, but the household names that you buy a pocket knife at Walmart from. They don't actually run their own manufacturing companies.

A lot of times they're essentially like marketing businesses. And they, they outsource their manufacturing. And then they've got folks that have you, that are using CNC machines and that have mechanical engineers and that, and an aerospace engineer can come in to that, to that environment making pocket knives.

And instantly be kind of overqualified. They can speak the language of the people on the floor. And then all the way up to, to the, to the executives. Their customers, that are buying the brands, buying the knives, because they've been the interface between the machinists at Boeing and the Boeing brass and stuff like that.

And so all of a sudden it's not an aerospace company, but you can find something that has very transferable skill sets and you're the perfect owner for it, but it's in a totally different industry. And so that's what I mean when I said, look in the mirror and like what skills do you bring to the table and find something where you can, even if it's an unrelated industry to the one that you know the best,what are you great at?

Is it the sales? Is it the marketing? Is it the technical proficiency? Managing people, et cetera. And find a company that needs those skills. And that's going to give you just a huge leg up. 

[00:37:47] Ronald Skelton: I like that. I like that. When it goes back to the,the guy swinging the hammer and the Harvard grad, if I was told I had to fund one of the two to buy a construction company, I'd only have one question.

How big of a construction company? If it was under $5 million, I'd say I'll back the guy swinging the hammer. He knows how to handle the blue collar guys. If it's a big one, you know, like say under over 10, 15, $20 million, that's what I told the Harvard guy. Like, if you truly wanna buy a construction company, his uncles and stuff are in construction, go buy something big that has management around.

They've hammered out a lot of the rough and tumble, you know, mentality and you're not gonna be on the front line, talking to the guys, swinging hammers and moving equipment. They're going to eat you alive. Cause this guy's a, bow tie wearing, you know, suit showing up to the meeting, um, kind of Harvard grad. 

[00:38:35] Clint Fiore: I make fun of the MBA guys from the big business schools, on Twitter all the time, but the, the truth is they're fricking good. Like they're smart, 

[00:38:43] Ronald Skelton: Brilliant guy. Yeah. I just said, buy bigger, right? 

[00:38:46] Clint Fiore: Yeah, they're smart and they're capable and they usually do win when they buy a business, but that's great advice is like, if you're going to have a smaller acquisition, like, and you've got a Harvard MBA or you're coming out of Stanford or Chicago booth or any of these schools. 

I love the guys that they did do their own landscape company to put themselves through college and they have, some of that, that work ethic background of like doing the front lines stuff. And the first thing they tell me is, yeah, when I buy this, I'm going to work every job for the first year. You know, and like, I'm going to go and pull water heaters and I'm going to go, mow lawns or whatever the service is.

And if I see that mentality and I see some track record prior to their MBA of them, serving in such, such a way that I'm like, okay, you could probably handle the smaller one. But when I see someone that was kind of like that thoroughbred, like went from, an accounting or financial background into, big companies and, and MBA schooling, and they've been in the white collar space, they're brilliant, um, people, and they can actually be very capable leaders of companies. 

But I tend to agree, like a larger target that has a deeper bench, might be the best way for them to go. 

[00:40:04] Ronald Skelton: My rule of thumb is the smaller it is, the more hands on you have to be, right? (100%, yeah.) Yeah, the smaller a company is, the more likely you're going to be on the front line. And, uh, the other thing I tell people when we have these meetings and we chat, a lot of people, I'm going to buy a company, put an operator in. And it's like, no, you're not, right?

You're going to buy a company, and if you just understand, yeah, you could, it's very possible. But it takes 12 to 18 months to do an executive search. Who's running a company while you get a good executive in? And my biggest thing is I don't want to buy anything that if I had to run it for 18 months, I would screw it up.

So, and you got to know your own abilities and own, own, things. So I wouldn't go get an engineering firm that only had five, a small one that maybe they're doing a million dollars a year, but they only had five employees. And, I would be managing five engineers.

I've never run an engineering firm. I've been a software engineer before, like,senior software, software engineer, but I wouldn't know how to lead those five people until I found somebody that could. But, 

[00:41:02] Clint Fiore: Yeah, you're very vulnerable if you buy in a space where you're not capable of running the company yourself in a pinch and you're, and you're just fully dependent on the existing manager staying with you.

Or, your friend that you're bringing in to run it, staying with you and doing a great job. That's a risky proposition because you just don't know. You know, the biggest mistake I made at the very first startup I did, the manufacturing company I told you about earlier, was I like, I recruited my dream team at the time, because I had a big check from an angel investor and we wanted to go hard out of the gate. And so I was recruiting people that I knew from my circle and I was like, Hey, you're going to be CFO, you're going to be COO. And, uh,I'm like handing out titles and I was handing out equity.

And, I thought I could feel it. You know, like I thought, like, these are good people that I like, and they've got the right kind of background. And I just kind of was moving in faith that they're the right person. But I was doling out huge expectations along with chunks of equity. And half of them were absolutely the wrong people.

And I didn't know that until we got in the trenches and started this very difficult execution process. And then what do you do when you've, you've got a friend in there that's now an owner, that it dawns on you two in the morning when you can't sleep. Like I shouldn't have hired him. Like, like that was the wrong person.

And so, yeah, like all these acquisition entrepreneurs, I would say like, make sure that you're stingy with equity. That you're able to run the company and hire folks for fair market wages to, to do their specialist roles and that you can get rid of them if they're not working out and get the right people in there.

And then when it's time to like get skin in the game with key leaders, like think about profit share. Think about phantom equity. Think about anything else prior to voting rights, like true equity. Or if you do that, make them earn it, you know, not don't assume because, it's like, you just don't know until the bullets are flying proverbially. Like, uh, metaphorically in the business, like how people are going to really respond to that pressure.

[00:43:34] Ronald Skelton: I've done it recently in the last three years. We created a rollup where we just, we were in a big networking meeting of all acquisition entrepreneurs. A lot of us were old CEOs, run companies, had million dollar companies. Sold companies, you know, we had a, a good array of people in the room.

And we came up with an idea and we said, who's in? About 10 or 11 rose their hand, eight of them stuck together. We worked for two years and it was like, we had eight CEOs in the room. It was a bad idea. So I, and I learned a lot of stuff from there. We picked up a couple of cool things. We learned, uh, Mike Moyer has a book out called Slicing Pie.

I absolutely love that model. Now everybody earns their equity based off their worth and how many hours they put in and what they contribute. So, and there's, it's already written in and worked out so that they leave early what happened. So it's fairly well kind of a, earn as you go equity model for a startup or for an acquisition.

He's he came out of the tech startup world. And realized he did what you did. And what I've done. Where you bring all your buddies and you give them equity. And like, now you got to try to get it out, figure out how to get, you just, you three of you created something. You need to get 33 percent of equities because Joe's not working out.

Joe's not showing up. And now you own 33 percent of your company and he didn't earn it. You got to convince him to sign those shares back over somehow, some way, buy him out something. Yeah. So, this is a mechanism to avoid that from the start. 

[00:44:52] Clint Fiore: Yeah, I've made every mistake in the book,and I feel like I'm probably pretty good at that stuff just from trial and error.

And now I know how to structure, it's really like the operating agreement, the buy-sell agreement. And making sure that those are dialed in. And so I've kind of got my preferences all dialed in on that, but having some sort of playbook for folks that haven't learned all those lessons the hard way where you can just from day one, um, set it up right. That would have been invaluable to me several businesses ago. 

[00:45:26] Ronald Skelton: I don't want to go too far without giving you a compliment. I've seen some of the photos you took of your family growing business, the poinsettias? Man, that was beautiful. You guys like it was, greenhouse upon greenhouse. I think just rows upon rows.

I've had a small farm myself a little bit. I think the biggest thing we ever did is we wholesale off some of our stuff to like people that go to farmer's markets. Like, so we didn't have to set up the farmer's market, but, uh, no, I have a lot of respect cause it's a lot of work. I grew up on a Pecan Grove. 

It's a lot of work to, uh, to do anything in the farming realm. One of the things I evaluated was buying a tree farm and the wife's like, you're too injured and too old. Don't do that. It's more work than you're, you're like, I'll get a forklift or which trees I'll move them around on pallets.

I'm really good at driving, you know, equipment. And she's like, yeah, but it just doesn't work all the time. You know as well as I do, there's more work to it than that. Right. It's a very manual labor. You gotta love it, but you know, they can be profitable. They can be really cool.

[00:46:17] Clint Fiore: You never really know until you get under behind the scenes and see the financials. And that's just another lesson here is all the work we did the last eight years sell side. 

Some of the business you'd never expect to make much money or actually making a lot of money. And then some of the ones that look like, Oh my gosh, this person's raking it in. It's going to be fantastic. Then they extremely disappoint you with how little they make.

There, I mean, people are people like, like people think that business owners, I think they're naturally assuming that they're kind of like good business people because they've owned a business for a certain amount of time. They must be a good business person. But like, most business owners that are bootstrapped or that started, like they never had anybody really teach them how. They're learning by trial and error, or legend myth passed down from their parents or something like that.

And there's a lot of basket cases out there that just, they just do things cause that's how they learned how to do it. That's how they figured it out, but it's not really optimized. And,it's quite shocking how little logic there is sometimes. And some of the decisions people make. When you get under the hood, like, my, my family business was not immune to this, you know, where my brother and I are taking over the business this year and we're,fourth generation.

And my great grandfather started it. My grandfather was the kind of like the true entrepreneur that made it what it is. He had three kids that became equal owners. That was my mom and her two brothers. And they were, they did a good job in their generation, kind of managing what he built, but they weren't like the true entrepreneurs that my grandfather was.

And, they would tell you that. And, if you're listening, I love you. I respect you. But, you know, granddad was at another level. Like he just was. And so, you know, a lot of things that they do, it's, it was just like, it made no sense to me as someone who left the business. Learned a lot about business from all these other business owners and being exposed to all these other industries and CEO groups that I'm in. And then I could go back in and look at our family business. And I'm like, what are y'all doing? This is insanity. Like we would,my uncle would price our plants, like our flowers based on whatever Lowe's was pricing them out and wanted to be like lower than them.

Like he was deathly afraid of anyone, of not having the lowest price in town. And meanwhile, our family business, like its reputation was where the highest quality, like highest quality plants with the most knowledgeable people in it. And people went there for quality and for customer service. And because you could look at a plant and say, is this shade or sun?

How does this work? And we all know how to give you good advice on that. When no one at Lowe's don't know how to give you any advice on plants. And so I'm like, you don't have to be the cheapest. Like just have the best and you can charge a little more than, than Lowe's or Home Depot or either the big box stores.

And like, that's what they were afraid of. And I think they were just giving away the farm metaphorically in terms of like pricing, because it was just like, at one point in time, it was my grandfather, my great grandfather. They were like, Hey, the way you're always do this is you want to be the cheapest. And that legend gets passed down, but a new buyer can come in there and say, you know what really makes us special, it's quality and service and let's price accordingly so that we can make the margin we need to make to still continue to provide the level of quality and service that our clientele expects.

And we can, we can have one or the other guys, what do we want to have? So yeah, that's, that's like every business out there. They just have their quirks. And especially ones that have been around a long time. And I think that, as a broker, that's one of the blessings I've experienced is like a sense of almost x ray vision of you've seen so many sets of financials, thousands of sets of financials.

Done thousands of valuations over the years. Hundreds per year. And met hundreds of business owners. And you start to become really good at pattern recognition and kind of finding where's the BS here, where are they leaving money on the table? And there's no perfect business out there.

They all have their issues. They all have their hair on them. And I think you just got to like, learn to see through, find those issues and get comfortable with them and go in with a new set of energy, and kind of solve those things over time and not be afraid to make some changes that make sense on the things that, that don't make sense.

And the employees are usually happy for, they're not dumb. Like they know we didn't need to be selling this that cheap and, or whatever. They usually are on board with that stuff. If it makes sense. 

[00:51:18] Ronald Skelton: It's the old story of the three quarter ham. You know that story, right? 

[00:51:22] Clint Fiore: Yes. 

[00:51:22] Ronald Skelton: So that's like, well, it's the way it's always been done.

And it happens. Like one of the things that, when I first got into this space, I had a real estate investment firm. Kind of sold it or transferred it over to my business partner. We split up real estate, so it was kind of a sale. And meaning that, we divvied up the real estate unevenly.

That's how we sold it. Right.So he kept the business. I took some real estate and I went on to do something else. I started off like looking for perfect financials, right? I'm your MBA. Like I have my master's degree, it's in marketing I know what financials are supposed to look like. And I would discount company after company, like other financials of trash or financials of trash. I ring one of the guys on the show and he's like why?

Why are you expecting these business owners who have never, they don't have their MBA. They've never been taught what financials are look like. They've only done, the only reason they've ever even put anything in this spread sheet or financials is they have to do it for the IRS. They wake up every day, they go to work and they're hoping they can pay their employees and make enough money to be comfortable in their lives.

The only reason they do any of this stuff you're looking at is you've either asked for it or they needed to give something there to the CPA so they can get out of trouble or not be in trouble with the tax man. 

[00:52:25] Clint Fiore: And some of them are really skilled financially, but their only skill is proving to the IRS. They don't make any money. 

[00:52:32] Ronald Skelton: Exactly. Right. And that's what, when you do get financials, they spent a lot of, their entire life trying to like, I looked at a concrete plant who,they owe the IRS $976, 000 now because they got that math wrong. But, uh, you know,

[00:52:44] Clint Fiore: Yeah. And so if you're that financial whiz, that's a buyer, sometimes you'll, you'll be more successful if you don't try to like correct the business owner, teach an old dog, new tricks that they're not going to learn. And sometimes it's a garbage in, garbage out thing where, like you, you get a whole batch of ugly historicals where they're writing off everything and running through their, all their personal life's expenses and everything but the kitchen sinks a deduction.

The foolish way of the really smart people that are, the finance backgrounds is to kind of, they try to put on their green visors and be the forensic. Try to figure out the true story of what really happened with every little thing here and make sense of not, of the nonsense, but it still becomes a garbage in garbage out problem.

Where if you have that finance background, if you can just go to a first principles thinking and say, just zoom out, okay. And think, what am I trying to buy here? What's, what am I trying to buy? And if you realize a business is basically just most of these deals are asset sales, you know, and so you're like, I'm buying a good name.

I can verify we've got all these good people working here. I can verify that there's, revenue. And so like if, sometimes if you can just throw the P& Ls in the trash or the tax returns in the trash and go straight to the bank records, the credit card statements, the point of sale system. Verify revenue, go to the payroll system, verify payroll, go to the vendors, verify the cost of goods, and now you're almost there, right?

Now you can just go and think of what are all the expenses that I'm going to have to have electricity, right? I'm going to have to have insurance, right? And you start thinking through those things and you can almost reconstruct. Once you trust the top line numbers, which is pretty easy to verify. You can see the money coming in, then you can reconstruct your own P and L and be like, if this person had just ran this thing super clean and had only the people, the cost of goods and the necessary business expenses, what is the true earnings power?

What should this company be making? And you can build your own set of financials and then build a forecast forward looking from there. If you can apply your financial knowledge to do that, then you're going to get into deals where nine out of 10 other MBA buyers passed because they couldn't make sense of the garbage, but you can create something from nothing and get a really good price, a really good value buy on a great company that had bad financials. And so use that skill to get yourself a great deal that way. 

[00:55:32] Ronald Skelton: I like it. I like it. So, we're getting late in the time here. Let's talk about,what do you need? What can the audience do for you? Is there anything that, uh, you've got going on? Anything we could, support you in, in, in your business?

[00:55:45] Clint Fiore: Yeah, I mean, um, I'm easy to find. So my name is Clint Fiore, C L I N T F I O R E. Most places, including Twitter and Facebook, all the social networks, I'm at Clint Fiore. And, my company is called Bison business. It's bisonbusiness. com. And we do, full service, sell side advisory. The most valuable thing you can do is bring me someone that's ready to sell their business.

And needs a broker they can trust to value it right, package it right and market it. And then we have thousands and thousands of buyers that have great relationships with us that trust our analysis, that trust our opinion on these companies. And so we'll do a great job. Sell side's always been our bread and butter.

Um, so bring us sellers, we'll work anywhere in the nation. We're typically like two to 20 million revenue range companies is kind of our sweet spot. Bigger than that it's probably a little too big for us and smaller might be too small, but if they're in that revenue range, that's really where we'll do a great, great job and that's where most of our buyers are looking.

If you want to join our buyer network and get aware of our deals, just make sure you go to our website and sign up for our, early notice email list, or you can go straight to probably a good deal. com, which is the name of our newsletter, which is kind of a fun name,and sign up to get notice of our deals.

If you're a buyer, that's just, you can't find anything on our website or Biz Buy Sell or anywhere else that, that, that fits your profile and you're frustrated with striking out. We have a search program to kind of help people build an off market list of targets and work that for you. It's called the search for you program.

And so if you go to bisonbusiness. com, you can learn about our search services. And then we also do buy side advisory. So if you find a deal off market. Or with another broker and you just want someone on your side of the table that can help you evaluate, negotiate, project manage, help you get the deal closed, like we do that as well. 

It's called buyer Sherpa. So those are the three main things we do. We help people sell businesses. We help people find businesses and then we help buyers, walk through their first deals as well. So any of those that you need, feel free to help us out. But in general, just for, for education and, social hanging out and let's get together and shoot the breeze and talk business deals. Just make sure you find me on social media at Clint Fiore, but absolute pleasure, to have me on Ronald really appreciate you, man. 

[00:58:13] Ronald Skelton: I appreciate it. It was really good. We'll call that a show.