Jan. 20, 2023

E90: Christine McDannell of Magnolia Firm Helps Business Owners Achieve Seamless Exits - How2Exit

E90: Christine McDannell of Magnolia Firm Helps Business Owners Achieve Seamless Exits - How2Exit

Chrisine McDannell is a serial entrepreneur, author, and speaker. She is the Principal and Lead Business Intermediary of The Magnolia Firm, a boutique M&A brokerage firm helping business owners achieve the perfect exit.

Since its recent...

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Chrisine McDannell is a serial entrepreneur, author, and speaker. She is the Principal and Lead Business Intermediary of The Magnolia Firm, a boutique M&A brokerage firm helping business owners achieve the perfect exit.

Since its recent inception, Christine’s firm has already helped countless women cross the chasm from business ownership to their first successful exit, all without compromising their values or dream outcome. The Magnolia Firm proudly upholds a 100% success rate for its clients, with most closings coming in at either full-asking or over-asking price.

After founding, growing, acquiring & selling 20+ of her own businesses across several verticals including cleaning, wellness, beauty, technology, exotic cars, and real estate, she realized that there was a formula behind the perfect business sale and now dedicates her full-time attention on helping others do the same.
Contact Christine on
Linkedin: https://www.linkedin.com/in/christinemcdannell/
Website: themagnoliafirm.co.
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Ron Skelton: [00:00:00] Hello and welcome to the How to Exit Podcast. Today I'm here with Christine McDannell. Principal and lead business intermediary for the Magnolia Firm, where they help business owners achieve a seamless exit. Thank you for being on the show today. 

Christine McDannell: Thanks, Ron for having me. 

Ron Skelton: So I'm curious, that's a mouthful. Principal and lead business intermediary. Like why not CEO or broker or like, what's good with the title? 

Christine McDannell: I've never liked being in the CEO title ever. With my last, with my software company, I just had to use that word. Right. And, but before that it was always founder. That's what I just usually say.

But yeah, principal sounds a little bit different with the firm. So I don't use CEOs. I always get around it. Business intermediary that's like, I love, brokers have such a bad reputation. I'm sure you already know. I'm sure. I don't like, 

Ron Skelton: I big jokes about brokers all the time. Like to the reason they're labeled appropriately most of the time.

If you work with one, you might end up broker. 

Christine McDannell: Oh. Oh, that's a good one. I'm gonna steal that, Ron. I got broker Bob on all their social [00:01:00] media. People can check out and they'll die. Cause I like dress up as an old man broker, but , poke fun. Oh my God. Like on, eventually I'm like, well those old brokers are not on TikTok or Instagram, so I think I'm good.

Nobody's complained yet. Some fun little skits there. But yeah, bad, bad, bad reputation. I love innovating and I'm just like, oh, business. Intermediary is just somebody that's mediating right between two parties. And I love that. I love helping first time buyers. A lot of them are first time buyers.

Every single transaction we've done, they've been unrepresented completely. So I just hold their hand through the process and it makes things, there's less cooks in the kitchen, the transaction goes quicker. So yeah, that's, I if I'm talking about other brokers, I use the word broker, but if I'm talking about myself or my team business intermediaries.

Ron Skelton: Yeah. We do have one of our sponsors that's a major broker. But man, I spent a lot of time doing due diligence and picked somebody that's been doing it since the late eighties. And like, the biggest thing I'm always looking for is like, what is your heart in it and how much skill and expertise you have. We were talking about this earlier.

You have bought, [00:02:00] sold, or worked with over 20 plus companies with your own before you got into brokerage. Right. And I was just, I was really kind of, it was cool cause I was looking through 'em was like, wait a second. I read about that. I read about that. Let's just kind of start there. Let's go into your origin story.

How did you go from, I guess you can go back as far as you want, always joke around and say, Hey, you were born and now today you ended up on a show on him about M&A. How did you, can you fill in the gap in between? How did you get here? 

Christine McDannell: Definitely the girl with the lemonade stand and the snow cone stand and the selling candy bars outta my backpack.

My dad was self-employed in HVAC. So by age 11 he made me the little secretary. And at age of 11, it's fun, right? By age 14 I was doing all the accounts, payables, receivables, I was, dispatching teams. By then cell phones came out on the next till walkie-talkies, , really back in the day I'm dating myself.

So I loved it. I loved it. Worked all summer, did answering phones and, for him, and I just, yeah, I just made my voice, sound older than an 11 [00:03:00] year old. So that was fun. What else? And then by 23, I started, I went into real estate first from age 17 to 23. Doing property management.

Got my real estate license right when I turned 18 and that will come full circle in a second. And then I started my cleaning company with $300. I was 23 years old. I had a ton of debt and I had to like bartend at night to pay that clean houses all day. It was wild. And I exited that business after like five or six years, for six low six figures.

But when you're 29 you're like, this is amazing. And so real estate license, I kept active all that time. So 20 years and to become a business broker, that's all you need in the state of California. And I'm just like, yes, thank God I already have it. So that's kind of my story. But yeah. Nine last 19 years.

Built, sold, acquired, rolled up 20 companies totaled 10 were startups cuz I just loved the crazy chaos. And then once it gets boring and systematized, which is usually the five year mark, it's usually when I exit. I never have an exit [00:04:00] plan. I don't think that's a good idea. Just concentrate on customer service and culture and your team and like providing an incredible experience.

And then that exit will naturally come. That's kind of the wild story of my life. But my, the thing I'm most proud about, of those companies, 20 of 'em, is every single one is still in business to this day except for one. And I even went just last week, Eco Chateau, which was my biggest exit, five years ago.

The same owner bought it, five years ago. I saw they opened a massive third location. I had two, they just opened their third. It's in, it's beautiful. And it's, 

Ron Skelton: is that the, uh, luxury medical spa? 

Christine McDannell: Yeah. Not medical though, but yeah. Luxury wellness, wellness. It was a good one. It was fun.

Ron Skelton: Cool. 

Christine McDannell: Yeah. 

Ron Skelton: That sounds like something to be fun to own. I like to meditate and get a massage here and there, like, but I want a really nice place. I don't go anywhere creepy. I've been married for 15, 15 years. I'd like to keep it that way. And I've like I was talking about you before the show, about this before the show.

I've actually read through some of the businesses and I recognize some of 'em. So a lot of your startups are really creative and unique [00:05:00] in their space. The tree rental service and the, like we rent a Christmas tree and you guys get it back and you plant it and it's really green.

Really. I think I would take off now too, cuz the world's starting to focus a lot more on that green space. I'm sorry that the lady who bought it shut that one down. You said that. That's the one that

Christine McDannell: I know. That's the one. And I would've taken it back. I was like, once they, it's like the website's down for two years.

I just noticed. She's like, yeah, I shut down two years ago. I mean, 32 million Christmas trees get cut every single year and just in the US right? We had the pot in singling dancing elves would deliver it. It's definitely hard because I'm, it's like I'm running it parallel with whatever company I have.

And it's like, hey, it's very difficult. It's very difficult. holidays, I just was like, I can't do this anymore. 

Ron Skelton: That's interesting. Like I was looking through some of the, listings you have, you got some pretty cool interesting things on there, some subscription based stuff.

I was looking, do you specialize in a particular type of business or particular space? Like some firms do? 

Christine McDannell: Oh, definitely. We're all digital now. So [00:06:00] we work with businesses around the world now. Digital recurring revenue is amazing. That's huge. Subscription box is recurring revenue.

Those are super hot. So we can get those in, in sell 'em really quickly. Yeah. Anything remote with recurring revenues like amazing. But yeah, digital marketing agencies, digital PR firms, that's kind of our wheelhouse now. So Yeah. 

Ron Skelton: That's an interesting space. I did, I participated in a marketing roll up last year.

And I was their chief marketing sales office, so that's what my master's degree is in. But it, it bought me a ticket in to participate into a big marketing roll up where we were acquiring marketing agencies.

And we sold our interest in that to some, two of the partners on it wanted to take it a different direction, so they bought us out. 

Christine McDannell: So in 2023, we're probably, Magnolia friends gonna launch like a venture arm, right? I would love to do a digital marketing, like a marketing agency, rollup.

Because that's like my biggest passion is marketing, especially digitally. So, yeah. That's great.

Ron Skelton: We could talk after the show and stuff. If I could give you some insight. [00:07:00] I like, cuz we managed to get in less than 200 days, we had two hundred and sixteen, two hundred eighteen agencies, do screening calls. 

We can chat about more of that if you ever want to, when you get ready to do that. Cuz I, I know people are still doing this space.

So anyway, let's talk about kind of what's your favorite thing inside of this space? You've been doing this quite a while. Why go from, the entrepreneur that creates things to the, advisory who helps other, entrepreneurs achieve successful exits?

Christine McDannell: Woo. I know I said I love the chaos, but after so many years, you're like, I'm doing this again. After like the 10 startup, I'm like, oh yeah, I don't wanna do this as much anymore. And honestly, it's really, I listened to an interview with you, Ron, and it's that same ethos, like you love genuinely helping people.

Like you're literally, pretty much working on the biggest transaction of somebody's, life. And then you're helping some, again, a lot of first time buyers, you're helping people get freedom. Covid gave people so much freedom in their corporate life with the [00:08:00] golden handcuffs and that they, I got a lot of people coming outta corporate, right?

They're getting a second mortgage on their home that appreciated like crazy in the last few years. They're taking Rob's IRA out, which is where you could pull from your IRA and when you quit your job. So you're your own bank, which I think that's rad. So I love it. I love how creative deals are because again, a startup is creative, right?

I love doing those little, innovative little businesses from scratch. But this is super creative. I mean, deals you, you can do a deal a million different ways, and I love, love, love that part is just finding those, that's like those answers and what works for both parties. 

Ron Skelton: I noticed throughout your, I'm not calling you out here, but I'm just curious, I noticed throughout your success stories that the majority of them are women, or is that because you're marketing to the women or is that just how it's fall fallen out?

Christine McDannell: It's so funny. So we just had our one year anniversary, so we haven't even been around too long and we just hit the ground running and we've had tons of success, success stories, which is cool. We did target women specifically because the first three people coming to me [00:09:00] were all women.

Ron Skelton: Yeah. 

Christine McDannell: They were female friends of mine, and they're like, You've done your deals, can you do mine? Because I've done every single one of my deals except the first. I had a broker. Cause I didn't know any different. And so yeah, I go, okay, I'll help you girls. And then they've referred other women, et cetera.

So I'm like, oh, like let's do, our tagline was like helping female business owners achieve seamless exits. Then guys started coming and they're like, well, why can't you help us? My dad raised me. I'm around guys all the time. I get along like amazingly with men. So that's why I was like, well no, I'll help you too.

It was just that that's what we were attracting. It was a great niche, because women wanna deal with a female broker, I've noticed. Then we started taking on guys. It's just a, it's just a truth, men are scaling, even though more women are starting companies than men in the last few years, men are still have scaled them bigger, right?

Cause they've been doing it longer. So we're, we moved up market real quick. So all the ones we're taking on now, I mean, we took on the last six are all men. And then one female we're [00:10:00] launching this week. I totally switched, but we took off, we changed our marketing, we took it off and opened it up to everybody. I'm not discriminating. 

Ron Skelton: No, that's okay. I mean, it's okay if you did, but I was just curious. I have friends in spaces, like, especially in the real estate space, where they primarily focus on helping women become investors and helping 'em become financial independence. I'm all for it. I'll promote their stuff above anybody.

I love the, the underdog, I guess you could call that, right? I happen to be an old white guy, right? Cuz if you look at me, you can tell I've got the gray beard. I'm the old white guy. But, hands down, if I can promote, a female entrepreneur or a minority entrepreneur, I'll do that hands down.

What you can't tell by looking at me is I'm a card carry Native American. I'm the whitest guy in my family. Like I would show up to family reunions, be like, who brought the right guy? My sister, got most of her college paid through for the Indian thing, but, Anyway, I look more like my mom than I do my dad.

So yeah, I was just curious about that cuz I see that, I see in the profile there and I could get it right. I've talked to a fair share of my own [00:11:00] and especially the older guys that still got that old. School business. Where am I looking for? I'm gonna be really nice here. Ego, there's a old business ego and, that happens to be with some of the older brokers.

So that's what I was curious if you, were attracting that cuz they didn't have to deal with the male ego. 

Christine McDannell: Yeah. And let me add to this too. So we brought on from USC, an intern. It was like a favor to a friend of mine. College student last year, this summer. It was this last year in college right now.

And I was very hesitant and I was like, oh, all our scholars are women. I just don't know how they're gonna feel about dealing with the male for whatever reason. I don't, I asked some of my sellers and they were like, yeah, it's fine. And it was the smartest thing we did. And now I brought, I'm bringing on a partner actually.

Who's a guy. And I'm excited. So we could scale even quicker because I can only do it so fast. Yeah, because I realize because 95% of our inquiries are men. 95% of our, the guys that buy the business are men. So they really enjoyed, when I would answer the phone, [00:12:00] I'm not kidding.

They'd be like, oh, lemme talk to Hunter. And I'm like, oh, well, like, like they thought it was the secretary and they're like, no, I kid you not. They're like, can you just take a message for Hunter? I'm like, actually I'm the lead business intermediary on this, on that listing. Like, oh, okay. It happened when we were teasing.

I'm like, I'll be Hunter's secretary. I'll take a message cuz it, I'd be so busy. I'm like, okay, lemme take a message for Hunter. Yeah, it's kind of funny. 

Ron Skelton: Right now we have this, um, What they call it, the silver tsunami and stuff. But there is such a huge, portion of the United States, economy that's tied to small business ownerships.

It's gonna have to change hands on the next 10 or 20 years. It's actually a problem, right? If nothing happens, if we go down the path now and the number of average businesses that sell happen, continue down what we're doing now, and people don't make that shift, we're gonna lose close to, a half of our GDP.

If you look at what truly is going on, I think 51% of [00:13:00] all, employers are above the age, of small businesses. They employ 51% of all people here in the United States currently. So I'm a number, like, I'm gonna butcher the numbers, but, they're all in the 65, 70 year age range, right?

There's two things going on here. A lot of people need to make the shift of like, you don't have to start it, you can buy it. Right. And make that shift. And then the business owners have to make that shift of, Hey, this, I, I'm not gonna be in this seat forever. At some point I need to sell it, and there's some things that need to happen before I can.

How do you see like that shaping up over the next 10 to 15 years? Do you see,

Christine McDannell: That's a great, great question and I wish there was more statistics in this industry, right? This whole weekend we were just trying to like pull stats and it's like you can't, unlike real estate sales, you can't pull, like when did it sell, how much did it sell for, et cetera.

Why did it sell? So you got 10,000 sell over tsunami. I've heard that. I like that term. 10,000, you know, business [00:14:00] owners per day that are gonna be retiring out of their business. Maybe they're leaving it to their kids, but we don't have record of that cuz you, you can't see it change hands.

Maybe they're just shutting it down, which is super unfortunate. I hate seeing that because they can at least sell it for something. But then at the same time, what's crazy is, like our demographic specifically is no joke right now. It's like early twenties to like maybe close to 40

It's twenties and 30 year olds because they build these digital, company because we're handling just digital, they're building these digital companies. However, the people purchasing them are typically in their forties is what we notice. Uh oh. Thirties and forties . So we're kind of in this like different age group, and we're more cheeky on the website and we're on TikTok, we're on inta, Insta, so we're just attracting this other demo.

I mean I really hope these 10,000 business, I didn't know those numbers, the GDP lowering, just based on these small businesses retiring out or closing their doors, that's unfortunate. 

Ron Skelton: Yeah, I was looking at the, the US [00:15:00] in 2021. The US GDP was $23 trillion. Just over one quarter of that mount could be gone in the inactions of a single generation, so at least a quarter of it would be gone if nothing happened, if we continued on the path and don't solve this problem.

Christine McDannell: Yeah. And so let me promote this to every listener, right? Is that what about these companies, manufacturing, all these companies that have been around like 20, 30, 40 years plus, older, those guys never digitalized their businesses. I just took over two spas during Covid. This is in San Diego. No joke to like flip 'em because I knew like, I like chaos. I like bad times, to be honest. Like, believe it or not, because you could just get steals and you can like grow them. And the biggest companies, grew during recessions. So pick 'em up. And I kid you not, they were both on written appointment books still. Both owners are in their sixties written appointment books. Like I am like, oh my God, no. Accepting cash, not a merchant account. I was like, oh gosh. [00:16:00] Anyways, we put in these amazing software systems. There was online scheduling and the sales went up, like everything was. . Amazing. And, imagine, everybody listening, picking up, these old school businesses and trying to move, make them more digital and like jumping into that if you're able to, like, I think there's massive potential in that world.

Ron Skelton: Absolutely. Absolutely. That's a lot of people. That's what they search for. They look for something that. Like for me, until I moved and realized I like moving , I like living in a new place. We'll probably be here a while. We moved to the Redwood Forest in Northern California, but our in-laws are nearby and some of the families here. It's like we moved to where they retired to. Before that I was actually like looking for my qualifications I was looking for is Business well run, seven figures or above, so it can support management staff and stuff. Not because of anything else. 

I've noticed anything under about 2 to $5 million, there's just not, the infrastructure isn't there to bring in a general manager, make sure the system and processes are right. It's just you're still [00:17:00] fighting that, that startup phase. And then the other thing is, can I bring it current to technology? Like is there technology outdated, they're not online, that type of stuff. And then is there a way to turn it into a recurring revenue? Is there some type of subscription model you can add to it? So I was looking at weird things like coffee roasting companies and other stuff where like, look, get 'em online, get 'em set up with, digital invoicing, digital, actual paper, I mean actual, electronic accounting.

And then, put a subscription based into it and do it. But leaning towards now is, content based, website based. Things I don't have to basically touch anything and put it in a box and ship it. We'll see where that goes. There's just a huge number of businesses out there. Everything from, your mom and pop shops to, service industry businesses are hot. A lot of people, if you watch what the p and e firms are doing right now, they're doing rollups in heat and air, pest control, plumbing, all these different things. It's because they see what's coming and those [00:18:00] industries are, I wouldn't say they're recession proof, but the recession resistant.

Right. I have a pest control company in Oklahoma. That said, we're not gonna have a problem. Right. The economy goes down. People are, a cockroach runs across the kitchen counter. Your wife's still calling the pest control company. It's gonna get dealt with. Right. I don't think we, we don't, at least, I don't know anybody that does, but we don't have any luxury services that we offer inside of the pest control. Right. Thought about doing some cool stuff where we do deep cleans before and after, like buy a cleaning company as an add-on and then we go in.

Cuz a lot of times that's the problem. You gotta really scour and clean things and remove the, the old ovens and clean behind 'em and pull out the refrigerator, wipe the size down anywhere that food can get, you gotta clean everything so that there's no food source and them that come back to once you, you handle it.

Otherwise, once the chemicals wear off, then there's food still there to attract them back. So 

Christine McDannell: I love that because that's, you're just cross-selling. 

Ron Skelton: Yep. 

Christine McDannell: So [00:19:00] you're, the cost to acquire customers stays the same but the profit, yeah, the service and the profit goes up.

Ron Skelton: But going back to the whole space of, what opportunities is available about out there? It's just massive. Anything you can think of, any industry you want to get into from Imagine manufacturing, widgets to doing stuff in a box, shipping subscription based companies to digital marketing.

A lot of the, a lot of these marketing agencies, they're coming for sale because they've hit that glass ceiling. The owners built these things. They build them to a certain size and they just don't know how to make 'em any bigger and the other side of the other dual-edged sword of a marketing agency is typically the owner that creates a marketing agency, is extremely creative. And after four or five years, he's got other ideas. 

Christine McDannell: Oh yeah, you nailed it. The three we've, have now and recently did, again, young, right? Spent six year, they're in their early thirties. They spent the last six years building these amazing firms and every single one of them, well two reasons. First, they're excited to [00:20:00] get into web three and blockchain, which is so funny. It was like three in a row that said that. I'm like, okay, I get it. And second was like, look, Christine, we have the skillset set to go from, zero to 2 million. But like above that, like we just don't have the skillset to scale it up, just like you said, that glass ceiling for them, right?

And it does take a different skillset to, to take it to next level and scale it, right? So that's a legitimate reason, right? And that's the number one question buyers ask is if this company's so great and profitable, why are they selling it? These are the reasons and then they get it. Right? 

Ron Skelton: Right. And if you look at it, if you look at private equity, venture capital and stuff like that, it's not uncommon. It's actually highly common that the person that does the startup that takes it from the bootstraps at the, zero to the first, few hundred grand is a different guy that, often they switch to leadership that goes from, okay, we've got a proof of market, we have minimal viable product, we're out there and now we've gotta do, raising money and take this thing to scale. [00:21:00] Sometimes the same guy pulls it off, but very often after they raise the first little bit of money that the investors come back and go, look, I've got somebody over here. Why don't you become a VP? Let this guy run this thing and we can do this. It just happens. And there's coaching programs out there.

I won't name any of 'em off the top of my head, but there's coaching programs that'll show you that it's a different skillset from zero to a million then they, there's one of the ones we were looking at that, that coaches at way above a hundred million, but the curriculum changes from 1 million to 5 million and they have a whole new curriculum from 5 million to 10 and from 15 or what the, I forgot what the watermarks are. But if this is a skillset that you need to go to the next level and you that you can learn it or we need to help you find somebody to bring in for it. 

Christine McDannell: Yeah. And no, and that's, I'm the zero to a million girl. Yeah. By then it's like multiple managers in place and everything. I love the marketing hat so I hold that till the very end. But everything's like, I don't need to be there. I'm getting bored. But I hired a professional cuz every like coach and mentor mine was like, Christine, you could go so big, like you have the skillset. But I'm like, [00:22:00] so I hired this super expensive coach and he would've been able to do it, but I just didn't and I'm glad I hired him because it proved to me like I didn't want to do that I was like, I don't wanna do this. And that's fine. It's okay. 

Ron Skelton: Right. It's interesting that, I think you and I are a, probably, if you look like there's a few tests out there, I've done all the Myers Briggs and all that stuff. I bet we're pretty close on a lot of the stuff cuz like the EOS has one that whether or not you're an integrator or a visionary and I am so far on the visionary side of it, it's insane. Right. I'm not an integrator. I like, I got like, Zero integrators. So I have to find integrators and operational specialists to put around me or not, or nothing. Nothing. I can do anything once, I can solve problems brilliantly and come up with the first solution. But if you asked me to do it two or three times after the second time, I'm like, yeah. 

Christine McDannell: No. The partner we're bringing in, and I'm so excited, is that we did these reference checks this morning. I'm like, you've had partners. I've had partners. Let's give references. So three mine, three years. My last partner in the software company, he's like, she's great. She's a, he's had really [00:23:00] great things and he accidentally CC'd me because this was be confidential. And he goes, look oh, sorry everybody, he's like, I meant every word of it. And he said, Christine needs to have, she's the visionary and she has to have the implementer. If you're the implementer, great, you guys are gonna rock and roll. And he is. So I was like, I'm so glad my partner said that.

Ron Skelton: That's awesome. It's been interesting that, it's a common thread. I currently am on the search for another one here for this project I'm working on, and I rewrote the job description the other day and it's pretty much, I'm looking for somebody that has that, that integrator, the implementer like mindset to take this project we're working on.

And as we acquire things, implement. Matter of fact, tomorrow I'm interviewing the CEO of EOS. So as part of the show. So that's one of the things I do a lot of times is if I'm trying to learn something like, Hey, I really gotta get this done. I'll just invite them. If it applies to buying, growing, or selling a business, I'll buy 'em on here.

We'll ask the questions here, kinda how this show started. Actually, I got into mergers and [00:24:00] acquisitions and thought I've got a lot of questions I'm gonna just ask people. And then those conversations become, good enough, or interesting enough, I thought, well, other people might like this. So we recorded them and then I was like, I just, I have all this equipment anyway.

I should probably turn this into a podcast. It's kinda, 

Christine McDannell: I love that. I've heard it multiple times, is some people only wanna acquire companies that have EOS in, in place. None of our listings that hasn't come up with mine, but just other people doing acquisitions, they, that's a massive benefit if that's kind of in place.

Ron Skelton: I'm interviewing them. I've got a guy coming on for the, who teaches the Great Game of Business, which is another business operating system. Jack Stack, I think's the author of the book by it, but it's about open books and making the business itself, the product. I've got a connection that's gonna reach out and see if I can't get the author of scaling up.

Christine McDannell: Oh, nice. Oh my God, that's a great book. That's another one that everybody talks about. 

Ron Skelton: So the whole goal is like, it will be a little miniseries like you bought it now what? EOS particularly has a, a whole thing where it's like [00:25:00] six weeks to get your business under control. It's like a crash course.

I thought it, I'm interviewing him cuz I want to figure out if that's a great way. Like once you buy one, bring that process in to get everybody on the same page. And there's two things, when you acquire something, and you've been around this for a while, and you start making a lot of changes, you know that the employees kind of get that, who the hell is this guy and what is he doing? But if you're making changes, their nationally accepted and it's very common, like EOS or scaling up and they can go read the book and they can go see it, it's, I think it's an easier sell. It's an easier to get people enrolled in the process and on, on board because you're doing something that's known.

Christine McDannell: No, that's huge. And I do coach people, try not to like, get in there and start changing everything day one. You're just gonna scare everybody off. We've been lucky. All our acquisitions, they keep the whole team, they don't change much. And if they're gonna, they do it slowly. They kinda wait six months. Same with mine that I've sold. They keep the team, they don't change things, which is amazing. Right? [00:26:00] I've got some same team members, this far, I started 10 years ago, I sold it five years ago. And they've got some of the same team members that are still there. 

Ron Skelton: Yeah, I'm not recommending anybody to make any major changes. But as far as like what, when you're ready to start systemizing things, especially in environments like Rollups and stuff. How do you put something in place that gets a little less resistance? So the miniseries on that's gonna be about, you bought it now what the hell are you gonna do with it? Right. 

Christine McDannell: I love that. I love that. 

Ron Skelton: And most likely, the answer is for most of these guys, there are a lot of new people that have never run a business buying businesses. For those people, I would say the first thing you do is sit back and watch. Let it run the way it's always run, observe, learn, talk to everybody, don't make any changes. But for you and people like me who have done this a bunch of times and you can see what's working and what's not working, if I need to implement something fast, what are the tools that people are more likely to accept without having so much pushback? So I'm kind of looking at these. The EOS, Going Up, Great Game of Business of as ways to, hey, we don't do something with this.

It's gonna hurt [00:27:00] us. It might open the doors cuz there's some businesses out there that. They kind of need to sell, good bones, good practicality, but, they're just, they're on the wrong path. And right now I just walk away from those. It's like, look, you're on a declining market. You're almost at the point where you need somebody that's a turnaround specialist. But, looking at these other tools as to, what's out there that would help with that. 

Christine McDannell: No, definitely. One thing I like to do, and again, I ease into it, is the price increase because people don't even notice. Like if you don't do it dramatically, they don't even notice inflation's happening right now, honestly. They expect it. And the people you're gonna lose if you do the math versus, what you're gaining on the increase is not like you're gonna end up with more and it goes straight to the bond line. There's multitude of reasons. Again, I don't do that day one, but I'll do that as quick as I can. That's one change.

Or like I'll leave the product. Like at the spa there's like five different product lines. It drove me bananas. But I left it because God forbids someone comes in and the product is now gone because the new [00:28:00] owner took it away. So I just leave things. Don't fix what's not broken. 

Ron Skelton: Right. You know that's funny is if you build a business, it's yours to build, create, and make work. And if you buy it, it's yours to mess it up. Right. That's my kind of rule of thumb is you start turning the gears a different direction, you're more likely to break something than you are to fix it at the beginning. Yeah. 

Christine McDannell: And that's on a takeover. So takeovers, when I do the price increase, when I'm rolling up a company under mine, I actually grandfather their pricing and it's always lower than mine. Of course. I just can't, like, I just gotta keep 'em excited and engaged and we gotta prove our worth and maybe we raise it down the road, but we grandfather 'em in typically.

Ron Skelton: Cool. So I see you both, you cover both, buying and or for buyers and sellers. A lot of brokers only deal with selling. So what represents, 

Christine McDannell: oh, sorry to, um, interrupt. We're on the sell side only. I just happen to like, they always come unrepresented, so I do. But buyers coming straight to us. We're gonna open up a [00:29:00] division of the company next year, on the buy side cuz people are, it's just a little bit of a different type of billing. It's different type of outreach. Like my head is always in, how do I sell my sellers companies as fast as we can? That's all I care about. I have to shift gears and I know how to do it. And to go source a business for the buyer, it's just like shifting gears. 

Ron Skelton: I was just looking to the website and you had the four buyers and four sellers. And when I click on the four buyers, I guess there's a, the Magnolia Rapid, Firm Rapid Acquisition Club. What is that? 

Christine McDannell: Oh yeah, yeah, yeah. So again, because we have an amazing database of buyers, right? So buyer comes to us, they might, they look at our company and then they pass on it or whatever. And then we pass, we have a wait list for sellers. Like we pass on so many amazing ones cuz we're too busy or maybe it's too small. And then sometimes if it's like SaaS, I got a couple buddies that are like, Christine, we got a million in cash.

If you find like a killer SaaS, can you just throw it to us? Which I do. And I've done a couple times, but then I'm like, so we threw one on like a Shark Tank style, cuz I had like four friends and I'm like, [00:30:00] Hey guys, you guys can fight over this one. Let's get you all on Zoom. You grill the founder. I can't take this on right now, but you go for it.

And we just did it. It was fun. We did it over the summer and this founder had like a little pitch deck. I was on there moderating, they're like firing questions at 'em. And I was like, wow, like we could totally do this and charge and build some recurring revenue in our firm.

Um, right. And so like, hey, you're gonna have access to these off market listings before anybody sees them. We're gonna vet 'em, you're gonna come on Shark Tank style in the founder. And so yeah, we're trying, we're launching it, we're collecting, we got people getting into the program, but we're just gonna beta test it, not charge anything yet.

So the seller will get, a percentage they'll do on the transaction we'll do with them. And then, We'll just charge PI 200 a month is what we're looking at for the buyers because they're in the market. We're doing all the work and vetting these sellers. Yeah. So we're, yeah, rapid acquisition actually, our great intern this summer. He came up with a name. We were so excited. 

Ron Skelton: I like it. I like Rapid, rapid Acquisition [00:31:00] Club. I like that. I'll put my name on your list there. If you come across and I'll buy some small stuff too. So if you come across B2B content sites or even like software review sites, something that one or two writers can maintain, like the, where the content journal, which is, cause I, I've got, I'm hiring writers as we speak now. If you've got something like that comes across here and like, Hey, it's just too small for us to represent, I'd pay you a fee whenever you're a broker. 

Christine McDannell: Yeah. So we have, we have a 200,000, we want the EBITDA, the net down to the cash flow. Like our requirement is at least 200,000. Cuz we're moving up markets, but then with the rack I was like, oh, maybe like, so let me ask you this in real time and anybody else can like, ask in the comments. Yeah. Like, is this like a, if it's netting out 50k, is that still appealing to you? 

Ron Skelton: Well, on average I pay, so it has to pay for the writers and I can grow the content and switch that. I've got some people on that can help me switch, to increase the profit. And I'm creating a holding co around B2B content to drive people to the podcast, to drive people to, show [00:32:00] listings.

That type of stuff to, show me deals. So anything in the b2b growing small, I would say smb, small to medium business, growing the business, maintaining the business, everything from software review sites to, like comparing HubSpot to a different CRM tool and those type of sites. If they're generating more than, say, $2,000 a month, I'd be interested in it.

Cuz they're really high profit margin companies. Like it's 80, 90% of a profit margin on a content website. It's not uncommon cuz you're just hiring one or two writers. 

Christine McDannell: Yeah, I love that. 

Ron Skelton: I would dip down pretty low if it's good content. The trick is a lot of these sites, they're made for SEO and the articles are horrible to read and I'm wanting, I want sites that are great to read, that's good content that I can actually tell my guests on the show to go to. I can tell the audience to go check this out. Here's a great article on how to do X, Y, z if you're in a business. That's the kind of stuff I want to produce and have, and then, go back and clean up the SEO and make the SEO right.

I know there's a balance there, but yeah, I would [00:33:00] dip down into the smaller ones. I'm talking to people in the space that do it. I've interviewed a bunch of 'em. 

Christine McDannell: Yeah. Yeah. And you could pick 'em up real cheap. You can do seller financing. These guys went out. So again, like our listings, we take premium. I mean, these are like perfect reputation, at least like five years in business, amazing team, et cetera, et cetera. And we price it high. We're more on the higher end. We could get better multiples because of that. But then these guys, it's like, okay, this is how much you want in your walk.

Okay, let's put it out there. So yeah, I think it'll be fun. I'm excited to launch that. Again we're, we just had our one year. I mean, we've been like, it's crazy, insanely busy. The amount of listings and closes we've had. So yeah, I keep trying to get over to work on that project. 

Ron Skelton: I get it. I get busy with stuff too. One of the things you say on the website there is help helping the business owners achieve seamless exits. What is that? 

Christine McDannell: Oh, people can read our testimonials. You'll see Seamless. Um, 

Ron Skelton: I read 'em, that's why I'm asking. I'm intrigued because I've been through quite a few, the process of getting LOIs and [00:34:00] it's not seamless for me. Most of these guys are not prepared. So I'm really intrigued in what you do to make this. What do you do to make this seller prepared to actually answer an investor's questions? 

Christine McDannell: Oh my gosh, our data room is so incredible. So where're and we've got do, like, things are super automated. We use an amazing CRM system. It ties into DocSend.

I can see every time they open data room, what they look at, how long they looked at it, all this amazing data on like a data junkie. So it is a lot and we charge a set up a marketing fee. So I know a lot of brokers that don't charge anything and to cross their fingers, it's gonna sell. Right.

Ron Skelton: Right. 

Christine McDannell: And they get paid at the end. And I'm like, we do so much upfront that they've gotta pay this setup fee. We're doing a full-blown pitch deck. Just like if you raise capital. I don't know why people don't do a full-blown pretty pitch deck when they sell their company. I have no idea. But we do it for them.

We do a memorandum, we do a sim, an FAQ inside the data room, a video. We've been doing videos with the founder, again, we're working internationally, we've got a big listing, Romania. And I was like, Hey guys, let's just, let me interview you for 30 minutes on [00:35:00] Zoom and we'll put it in the data room because it's all the questions that people are gonna ask anyways.

Why are you selling the business? It comes better from them in real time and they're great founders. We're so, okay. We're doing a lot of that upfront. I don't wanna bother my sellers. I tell them, okay, we're gonna do, get me your financials. Even just before this interview, I shot screenshots over because one person, five years of books, we contracted out a bookkeeper five years of putting every single transaction into QuickBooks Online, and I shot her screenshots.

I was like, Hey, here's how you add me is, read only on your reports. I love QuickBooks. I'm gonna pull every report. Don't even worry about that. I'm gonna pull the reports we need. I'm gonna do as much as we humanly possible. We've got the LOI template. Hey, buyer, you're about to write an offer.

Hey, I've got a template you can use. Hey, I've got a buyer profile. Buyer profiles isn't any, I mean, I came up, I made that up. I just, you write love letters. When you want a house in a tough, tough market, why not write a love letter? So it's like why they wanna buy their business. Screenshots of the [00:36:00] credit score.

Screenshots of proof of funds. Again, this is like, right, it's coming in with the LOI. And why they're qualified and it kinda like, it's fun reading those cause and then the owner loves it. The seller, they're like, well, they really care about my company. Yeah, we, the only time I'm bothering, I said seller.

Okay. We're at mile 23 of a marathon. I'm making you sprint these last three miles. Okay? You need to put the pedal, I, all I care about is you have to grow this company. And they do, you've got to grow it because it looks really good. You're scaling up month over month, over month. Please just do that.

The only time I'm gonna bother you, we're gonna pre-call every single person. We're gonna make sure they have proof of funds, access to capital, that they're serious. And then I'm gonna ask you, Hey, what's your schedule? We're jumping on a 30 minute zoom for a pitch. And then that person just asks the seller questions and it's only 30 minutes.

It shouldn't take longer than that. And then we're pushing to the, uh, LOI. I try to keep 'em out of it as much as possible. 

Ron Skelton: It's interesting is that, I probably in just in that [00:37:00] marketing roll up, we talked over to a hundred marketing agencies and I've been on calls helping other people.

I'm a negotiator for real estate deals before I got into this. So people will bring me on and say, Hey, would you help me work with this guy? And I was like, okay, first of all, not if you've already had two or three calls with him, cuz you missed a key component. You didn't build rapport. Right? 

Christine McDannell: Yeah.

Ron Skelton: And that's what most good negotiations are based off is rapport, understanding what they want and how do you, how do we get 'em there? It's not like what most of these new guys think it is. I want the best price that doesn't work. And like, not in my space anyway. My space is, what is the owner trying to accomplish and can we get them there in a way that makes financial sense to us and nothing else matters, right?

If we can help them get where they need to be, that makes financial sense to us and get some where they want to be, then we do it. Sometimes sellers need to be somewhere where we can't take them. So that said, there's a lot of conversations that happened over 2, 2, 300 conversations I've had. I've seen one, maybe two with the deal room [00:38:00] set up and one I can remember that's memorable.

Cause they had everything you mentioned. Right? It was a marketing agency. They had the video when we said, Hey, we're, we're thinking about, we're serious here. Are you serious? Like, yeah. It was like, within probably, I don't remember. I think it might even, he might even sent it over before our first call because the emails were really good and kind of explained a little bit of the email.

He sent us a Dropbox folder that said, okay, well here's the room. You need to find everything you need. And it had the video, it had the PowerPoint slides and stuff, and he says, I'll unlock the deeper folder, the financials weren't there, but it had a couple, like high level stuff. He said, I'll unlock the, I'll give you the link to the deeper folders as soon as we, we get to the LOI state.

It was put together. That was, a year, and a half ago and I still remember it. I can still remember the name of the, I won't say it cuz they, I don't, they where they're at in that process. And it's a very, good size marketing agency, but it's not common. 

Christine McDannell: No. And buyers have complimented us so many times on that. My logic for that is, and we don't put the tax, the only thing, it's, we put PNL as a balance sheet. It's gonna not have tax returns, bank [00:39:00] statements, Stripe reports. That's after. Right? After LOI. Like immediately.

So my theory is let's give them as much up, again, they have to be qualified, they have to have a meeting, blah, blah, blah. Let's give them so much upfront that the due diligence, they're so confident writing an LOI. Because they just saw pretty much everything already I want, and then it shortens the DD period, right?

Cause they got so much up front and you're super transparent and it looks good, it's organized and they trust the seller. It's worked out really, really well. 

Ron Skelton: Like I said, I've, I'm probably pushing 300, reviews where I've reviewed over 300 businesses and I've seen it twice.

I still get about one or two a week where somebody goes, Hey, I've been interested in selling. It's like, okay, well send me, whatever you got on your business. It kind of a teaser. Send me a teaser. Most people don't even have anything to send me. They just wanna jump on a call.

Christine McDannell: Oh God. 

Ron Skelton: Right? 

Christine McDannell: Yeah. 

Ron Skelton: And, if you're really seriously reaching out to somebody like myself, who knows everybody, like I always joke around, it's like, I may not be your buyer, but I probably know 'em. I've interviewed almost a hundred people in this space and I'm, and I hold net networking meetings for fun, [00:40:00] where we meet other mergers and acquisitions guys, twice a month.

I meet a, at least a dozen people, two different times a month in this space. I know who's buying what. If you wanna reach out to me and say, Hey, I'd like I, I'm thinking about selling my business and you don't have anything put together. 

Christine McDannell: Oh my gosh. And then, oh, the other thing, we go in, in the data room, I forgot about, it's called owner's duties.

I have my seller fill out in the beginning, Hey, you work 10 hours a week, what do you do? Exact. And they outline everything they do each week. Because again, that's another question. So we just hit as much as we can right up front that whatever elephant is in the room, and I've had some elephants from these sellers.

I'm telling the person right up front on the phone, right up front. 

Ron Skelton: I laughed when you said 10 hours because like, here's a good one. So small company, a million a half, almost 2 million in revenue. They do car modifications, so tinted windows, radio install, deep clean, like detail work and stuff like that.

Anyway. Sounded interesting. I have a business [00:41:00] partner who's in the automotive space. He owns a towing company where they tow an impound. And a lot of times they end up owning the vehicles because they don't get picked up or whatever. So if somebody could deep clean it and get it ready to take the auction, it would be cool.

So it'd be a good add-on for him. Got to talking to him and not one, but two of those people in that company carried on three or four jobs. Like one of his lead guys, the guy doing window tending, pulled 16 hours a day is six days a week. And he liked doing it. He didn't wanna let anybody else, like, they like no.

Why is he working double shifts every day? Well, he's paid off commission off job. He does. He wants to do 'em all himself and he wants to make the money and he's the hard work. He's been doing it for years and I was like, yeah but what if he leaves, I gotta hire two people, right? 

So the owner in this particular case, I said, why are you thinking about selling? He goes, well, I kind of want to, I'm a pro golfer and I want more time for golf.

He goes, I didn't even be willing to stay on part-time. And I was like, and here's a famous, I was like, okay, what would part-time mean to you? He said, oh, 40 hours a week would be great. I'm like, dear Lord, how many hours a week are you working? He goes, [00:42:00] 75, 80. And I'm like, how many? Like what exactly do you do?

And like this guy is not only the lead sales guy, he does his own accounting. And I got one guy who's commission only, who is technically, I mean he is currently a contract laborer cuz he's working on contract only like in 10 99, who technically isn't.

Cuz he doesn't have any of his own tools and stuff. And my business partner is an attorney. And he is like, yeah, I say that he's about to pass the bar. He's taking the bar in February, but he's finishing up law school. He guy, I can't get in the middle of this. That one employee is gonna, at some point it's gonna be a problem cuz he's not truly, a 10 99.

He's not got his own tools. He's not, he's commissioned only, but it's, he's one accident or one thing away from, wait, why don't I have workers' comp. I love that the owner's responsibility. I laugh when you said 10 hours cause I've yet to meet an owner of the company.

Christine McDannell: I swear to you. Cause one was actually a good friend of mine and then I was like, Jill, she's not even doing 10 hours away. She's like, oh, put 15 to be safe. I'm like, you're not even doing 10. Like I know your lifestyle. No, they [00:43:00] legit, are not doing that many hours. So we outline it and it's super reasonable what they're doing.

Ron Skelton: That owner's responsibility to that deal room is absolutely, I would love to see that. As a matter of fact, I might actually, peek my head in there and see what you got as far, I'd looked at one of your listings earlier. 

Christine McDannell: Yeah, there's a couple listings, the ones you, we were talking about. So I'll send, you'll see it yourself. 

Ron Skelton: I'll be straight up. I'm not really big on doing the whole credit report and all that stuff cause I'll, if whatever, whatever I'm after, I'll either raise the funds for it, pay cash for it, so I'll be able to show you that. I don't mess with any of that. 

Christine McDannell: I would only require, it's crazy. Again, brokers are requiring, like, we want proof of funds, bank statements, credit score, at the first phone call. They haven't even talked to the owner. No. It's crazy to me. I'm like, whoa, whoa, whoa.

Like that's so far down the line. The day you bring the offer in. No. If it's all cash, I don't care about the, they don't have to put, they still do, but they don't have to put the credit score because they're paying all cash. And most our deals are all cash. Some over asking, which is always nice. And so yeah. 

Ron Skelton: What I, I'm [00:44:00] down to the point where it's like, I'll figure out kind of where the range is and I'll move cash into those accounts. I'll show you accounts where it has just enough or just above what you're because you just don't need to know. And it's, or there are lot of times if I've got other partners on, I make them show cash too. Just because like, look, not just my cash. We have, I've got somebody else that's gonna come in with me, he's got cash too.

I was just curious cuz a lot of people in this space, they're really put off by that whole broker. So I want your opinion, what about to wrap up here, but what's your opinion on this? I've got a lot of these acquisition entrepreneurs that won't touch brokers who ask for proof of funds before getting to see any of the details.

For two reasons. One is a little intrusive and second of all, the questionnaire on these things, they're asking, how much money do you have available? I was like, okay, well, I'm gonna have to negotiate a purchasing this at one point. That's kinda under your damn business, right? 

Christine McDannell: No. Cause that takes the joy outta my negotiations. I don't wanna know how much money they got to spend. I love negotiating. It's fun. It's like a game of chess and, yeah. No, no, no. I would never ask how much money do you have to spend? We have a buyer criteria, like if they [00:45:00] do pass on one, and they're like, or people just reach out, Hey Christine, I'm looking for this, this, this, this.

We have a really great buyer criteria. Okay. Well, we don't even ask how much capital you have on hand. I don't even, we don't even ask that. We just ask like, purchase price. How much do you want it cash flowing, da dah, dah. No, I don't need to know how much cash they could come up. And this is the other thing is my, the seller carry situation, I'm super strict on, in an earnout.

I'm literally max 20% my seller will carry. And that's okay. That's only if it's like been listed for a little bit. And while, when I say a while, I mean more than three months cuz we sell quick. So if it's say over three, maybe we'll start considering a seller finance portion of 20%. But like, there's so many ways that you guys can go get capital.

So me telling you how much cash you have in the bank doesn't really matter. Again, you can pull out a stocks in crypto, in IRA. 

Ron Skelton: And I hate using my own money anyway. Like that's a bad use of my capital. If I've got investors or people that want in on the deal, keep my powder dry. And like I say, that I'm selling some real estate right now just because I [00:46:00] wanna have more available, right?

Christine McDannell: Yeah, yeah, yeah. No cash. Just key and hold it like I'm all about opm. We just had one that tried to do a hundred percent seller financing last week. Back and forth, and he's like, well, I wanna put my money in real estate. So I knew we had it. And I'm like, Hey. I'm like, hey, I agree.

I'm all about OPM. I'd be doing the exact same thing. Like you're not using your own money, you're using other people's money. We're just, again, it's such a hot seller's market, like why we don't really need to do that right now. Maybe later. 

Ron Skelton: Does most of your sellers want to totally leave or some of 'em interested in? So a lot of times the buyers that I know of, they're looking to buy 75, 80% of the company but keep the owner around to deal, especially in these brick and mortar companies where they've been around for 20 or 30 years. I mean, this may not be true with some of your clients cuz they're newer businesses, but a lot of times there's some old relationships around that are great to, just keep.

Keep the old dogs around in case they need to answer questions, put out fires and stuff. About a year and a half, two years ago, we were looking at Byron. Here's one good example. We were looking at [00:47:00] buying a concrete plant that produced concrete products for construction. And it been around for three generation, 60 something years, three generations now.

And most of the people they do business with, they've known for a long time. Family goes out to dinner with them, everything else. So our offer on the table was, look, we're gonna acquire this, we're gonna run it for about five to seven years. We're gonna buy a bunch of 'em, and we're probably gonna sell it to a PE firm.

I've already talked to other concrete, manufacturing companies. What our offer was is like, we'll buy, I think it was the first one was at 75 or 80% of it. And then you get to participate in the backside of what we do four or five years from now, which will probably be bigger than, we showed 'em the model, it'll probably be bigger than, or as big as your initial purchase.

And they're like, well, why would you wanna do that? I said, there's three generations of knowledge there.

Christine McDannell: Wow. 

Ron Skelton: And I don't have anybody on my, and there's 52 employees that we're responsible for. My team we're mergers and acquisition guys. Right. We're attorneys. We have a team member [00:48:00] marketing guys.

We're not concrete guys. So if something comes up, I want the expertise to lean back on. Or if there's a relationship, they had three of their clients that were too big, meaning that they were too much of their overall revenue. And I was like, if something goes wrong with one of three, I want you to go whatever you've done to keep that relationship going for the last 60 something years, I want you to go do it.

Well go to dinner with them, do whatever, but you don't have an my a financial incentive if you don't own a piece of this. So we were looking at doing that. Do you have anybody doing that type of deal where you're want or wanting to keep the original founder involved in any sense? 

Christine McDannell: No. Again, sellers market and, I don't, I just do deals differently than I think anybody else does. I rewrite it in the purchase agreement. They're gonna get two weeks of training, 80 hours, which is like, wow. Again, so all of ours we've done so far, we can get away with that. There's managers in place, there's automations, like they can spread those 80 hours and I always advise it's too much to do that in two weeks.

So they can use it however they wanna use it, however they wanna spread it out. [00:49:00] Above and beyond that, they're gonna pay my seller consulting fee. Right.

Ron Skelton: Yeah. 

Christine McDannell: A hundred hour, 200. That's been fine. Okay. And I see, cuz I learned my lesson real hard. 

Ron Skelton: That was a consulting fee arrangement too. Yeah.

Christine McDannell: Yeah. I had my first deal. My broker wrote in 90 days of training. Oh, Christine, he's never gonna take that. He's gonna have you there for a week. You got managers, you're never there. And he took all nine, I think we had to renegotiate. He wanted all 90 full-time. I was on my next venture. I just lost it. No. So I'm like, I don't wanna make that mistake. We have bigger, the bigger transactions. Obviously it's case by case. So they might need to stand for a month or two. But what we've done with that one is the CEO, they each only work genuinely 10 hours a week.

But that CEO has these relationships with the big multimillion dollar agencies. But he's already hired a BizDev person as the company's listed, hired them. They took over the relationships, it's going really well. They've landed a big client cuz it, because everybody's like, oh, well CEO lands the big clients.

Well now we prove that wrong. And so it's an easier handoff. But again, they're, they'll be willing to [00:50:00] stay part-time for a few months. But there's none of this two year earnout. There's not a single owner. One of my friends finished his earn out his two year. I would've put money down. He wasn't, he was gonna walk.

It's very hard to do an earnout. 

Ron Skelton: It is.

Christine McDannell: You have a boss and you're watching them change your company and da da da da. So I'd say nine outta 10 walk. Never finish it. They leave money on the table. So I don't like those. But long story short, we just had one, our first listing that the owner wanted to stand, and it's software based.

And he's like, I wanna stay on full-time. And I'm like, oh my gosh, this is so, so easy to sell. Sold two weeks over asking all cash. Me and my, partner that's coming on, we were this close to taking it because I'm like, oh my God. Like if we had our venture arm set up, if we weren't so busy, we would've grabbed it in a heartbeat.

I'm like, dude's staying is amazing. So that is the case where they're staying and the choir is a bigger company. Said he's gonna make, he's getting a big fat salary. He's getting cash off the table to buy real estate right now. He's getting fat [00:51:00] salary, he's gaining commissions and then he will have, I don't think he's doing equity though.

I always like that in the bigger parent company. Cause then you have the potential rate ma making a more, but that, that was cool. That's rare . 

Ron Skelton: I interviewed, Adam Coffey. He sold the, he had a heat and air business. He sold like, I wanna say five or six times to the last sell was over two point something billion dollars. Right. 

Christine McDannell: Oh. 

Ron Skelton: So like they, they basically a P&E firm bought it. Bought 80% of it, left 20% on the table for them. And they grew it through acquisition and then another PE firm bought it. So they sold to five different PE firms. I'm sorry, he decided he was done being CEO of it and became an advisor. Got two books out on it, but, been intriguing model. 

Christine McDannell: It is. I know. And I regret that. So again, HVAC as a kid, my dad had his company in 20 years, but I went into other stuff and I don't know enough HVAC anymore and I'm like, dang, I could have been doing those Rollups and selling PE. That is like one of the hottest right now. That's what's going on in that world. They're like, darn it. 

Ron Skelton: Cool. We're running out of time here, so let's do a couple cool [00:52:00] things. Give me three things. If they don't remember anything else that they heard on the show, they'll remember these. What would you want people to remember you by? 

Christine McDannell: Ah, you caught me. We will do anything it takes to get that deal all the way to that finish line. Number one. Number two, make it as easy as possible. Of course, it becomes a little bit of a roll, rollercoaster towards the end. Number two, just making it fun process, right?

Number three, oh, how did I not talk about this? Our biggest thing, of course get you the most money I can. Easy transaction, quick transaction is the buyer. Every single transaction we've done, we find the most amazing buyers. I have a no, a-hole rule. Like across the board. Sellers have come to me where I'm like, oh, I can't work with this person, so we have to turn down the listing cuz I know out the gate.

So we just, the sellers are so, friends with the buyers, they hit it off. The baby is moving to an amazing person. Switch off. So yeah, those would be the three.

Ron Skelton: How do people reach out to you? And let's make sure we get that. Before we close this off, if somebody wants to reach out [00:53:00] to you, do business with you, just ask you some questions, what's the best way to reach you? 

Christine McDannell: LinkedIn for sure. So my name's not super common, so it's easy to find me. Message me there. It cuts through the clutter. Emails too hard. themagnoliafirm.co is our website.

Sit in the Magnolia Firm on on all the social channels that we finally launched. And then YouTube also. 

Ron Skelton: Cool. I'll make sure all that's in the show notes for you guys are out there and I appreciate you having you on your show today. So thank you very much for being here. 

Christine McDannell: No, thanks Ron. I appreciate it.

Ron Skelton: Cool. Hang on a second. That's the show guys.