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Sept. 21, 2022

How2Exit Episode 61: Callum Laing - Founder & CEO MBH Corporation PLC and Author.

How2Exit Episode 61: Callum Laing - Founder & CEO MBH Corporation PLC and Author.

MBH Corporation PLC is an agglomeration of small, profitable companies from around the world.

Callum Laing, a dual UK/NZ citizen, has more than two decades of experience in starting, building, buying, and selling businesses in a range of sectors,...


MBH Corporation PLC is an agglomeration of small, profitable companies from around the world.

Callum Laing, a dual UK/NZ citizen, has more than two decades of experience in starting, building, buying, and selling businesses in a range of sectors, including recruitment, sport and lifestyle, information technology and telecommunications. He has published three best-selling books on business and has published more than 2,000 interviews with entrepreneurs.

He has lived and worked in multiple countries, including the Netherlands, Thailand and Singapore, and across three continents. Regularly featured in the media, Callum is an accomplished speaker on entrepreneurship and small business, especially on assets, alliances and acquisitions.

Callum is a keen sportsman and lives with his wife and two daughters.
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Contact Callum on
Linkedin: https://www.linkedin.com/in/callumlaing/
Website: http://www.callumlaing.com/
Twitter: https://twitter.com/LaingCallum
Books:

Progressive Partnerships: The Future of Business
-https://read.amazon.com/kp/embed?asin=B01DYDG2UG&preview=newtab&linkCode=kpe&ref_=cm_sw_r_kb_dp_6RC9MBETK2TCGQ52ADF9

Entrepreneurial Investing: Connecting Sophisticated Capital with Talented Small Business
-https://read.amazon.com/kp/embed?asin=B084C59MD6&preview=newtab&linkCode=kpe&ref_=cm_sw_r_kb_dp_1WS7T3DQB9XYZXCM8KYF

As an Amazon Associate, I earn from qualifying purchases. Each purchase supports both the author and this podcast.

If you’d like additional ways to support this podcast, you can become a patron here: https://www.patreon.com/bePatron?u=66340956
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Reach me to sell me your business, be on my podcast or just share some love:
Linkedin: https://www.linkedin.com/in/ronskelton/
Twitter: https://twitter.com/ronaldskelton
Facebook: https://www.facebook.com/How2Exit
Instagram: https://www.instagram.com/how2exitpodcast/

Have suggestions, comments, or want to tell us about a business for sale call our hotline and leave a message: 918-641-4150
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Transcript

Ronald Skelton  0:06  
Hello and welcome to the how to exit podcast where we introduce you to a world of small to medium business acquisitions and mergers. We interview business owners, industry leaders, authors, mentors and other influencers with the sole intent to share with you what it looks like to buy or sell a business. Let's get rolling.

And now a moment for our sponsors, I want to highly recommend you get acquisition Aficionado magazine. Every month acquisition Aficionado magazine brings you tactics for business buying and selling you won't find anywhere else learn firsthand from industry leaders who share their success stories featuring in depth interviews and stories from leading figures in the business acquisition industry. This multi platform mobile magazine speaks to acquisition entrepreneurs wherever they are in the journey. And I want you to visit acquisition aficionado.com today. Hello, and welcome to the how to exit Podcast. I'm Ron Skelton, your host and today I'm here with Callum Laing, founder and CEO of MBH corporation, an agglomeration of small profitable companies from around the world. Thank you for being on the show today, man. Really appreciate having you here. 

Callum Laing  1:21  
My pleasure having me Ron. 

Ronald Skelton  1:23  
It is interesting. I've been following your, your progress and your company for probably the better part of two years now since I didn't I, I had a mentor that we have a common association with and heard about your stuff and read you know, there's a book you did I read one of your books and stuff. So it's really cool to have you on here. You you've created something really unique. And I'm looking forward to talking about that today.

Callum Laing  1:44  
Yeah, cool. Thank you. I appreciate you following us.

Ronald Skelton  1:47  
How would you like to start with the origin story kind of how did you get into this space? What got you started? And you know kind of leading up to where you're at now?

Callum Laing  1:54  
Yes, I, I mean, I've always been entrepreneur. So just as a kid hustling, and doing little side jobs and things and, and my first kind of grown up business was a recruitment company that I had at the height of the.com. Boom, I was providing IP engineers to telcos in Europe, which was incredibly lucrative, and a lot of fun. And I kind of that did very, very well. And at the age of 23, or 24, I think it was at the time, obviously, I thought that was all down to my personal talent and, and good looks, and not the fact that I was in the biggest bubble ever. And needless to say, the bubble burst. And I discovered I wasn't nearly as talented or good looking as I thought I was. But it also kind of broke me it made me unemployable to anyone else. And so, by default, I've been an entrepreneur ever since. I've been all over the place been in Asia now for 20 years, I think, when I, I was always been interested in sort of macro trends. And one of the trends obviously, technology was a huge trend. But one of the other trends that really stood out to me was the fact that there was the largest transfer of wealth in the history of mankind from west to east, west back to East originally started. And yeah, as a young entrepreneur, it just struck me that made more sense to be on the receiving end of that equation than on the giving end. So moved over to Asia, based in Singapore now, which great, absolutely great, great country, but also, I spend as you know I spend a lot of my life on a plane bounces around the world. And, and this is a great sort of kicking off point for that. And then, yeah, about, about seven years ago, the, the mentor that you're talking about friend of mine, Jeremy Harbor, I've been chatting to him, he'd come up with a concept of grouping companies together. I'd already bought one company at that point. And we are here this idea of grouping companies together and taking them public. So we started working on that together full time about seven years ago. And yeah it's been quite, quite the ride ever since.

Ronald Skelton  4:30  
You guys have done quite a number of acquisitions. Right? So the current model MBH Corporation, that's an agglomeration of I was looking at your website over 25. Is that, that accurate?

Callum Laing  4:43  
Yeah, I think it's 28 At the moment, but yeah, keeps, keeps, keeps growing.

Ronald Skelton  4:48  
Yeah. So let's talk a little bit about that. What is it agglomeration? I mean, that's a, that's a something you guys formulated or is that a? 

Callum Laing  4:58  
Yes,

I think Like all of the elements of what we do have been done before, I think, as far as we know, we're the first people that has done it in the particular kind of methodology that, that we use. And I think the main difference is that we started very much from a bottom up perspective of what's best for the small business owner. I think if you look at a lot of kind of roll ups, m&a that very often top down driven, it kind of starts with, often it's ego driven. And it, it kind of starts with this idea that the acquirer is the smartest person in the room. And so you end up with a lot of clashes. And, as I'm sure you're aware, like most, most m&a destroys more value than, than it creates. And we, we'd seen that happen, it happened to us with companies that were created, that being acquired, and then you, you it kind of get the acquiring company wants to put their mark on, on it, and fix things. And often, that destroys some of the value and you lose a lot of talent. So we basically had this idea that, how do we solve a problem for small business owners. And while the rest of the world was obsessed with startups, we had surrounded ourselves, our peers were traditional small business owners that are profitable and cash generating, but they were kind of reaching sort of plateaus that most small business owners eventually reach. And you know we, we refer to it as the scale paradox. Like, if you've built a successful small business, you reach a point where you, in order to get even bigger, you need to win bigger contracts, but you can't win those bigger contracts. Because the big companies don't like giving big contracts to small businesses, human best practice, so you kind of get, get stuck, you sort of bump up against this glass ceiling at a time when you need to recruit the, the next top level of management to take you across that, that sort of robbing. They don't want to work for small businesses, because small businesses just don't have the resources to compete on a level playing field with big company. So that's one challenge that all small businesses tend to go through. The second challenge that all small business owners will be aware of is that if you've built a successful, small business, you know, maybe doing 10 million 20 million of revenue, or above or even a little bit below, you'll, you're creating a huge amount of value in the world. Like you're clearly creating value for your clients. That's why they keep coming back. Yeah you've got 50, 100, 200 staff that you're clearly creating value for them and their families. There's a whole ecosystem of suppliers and partners and landlords that are all extracting value, because you as the owner get up and go to work every day. But typically, there's only one person that doesn't get to extract it come into value from the business and, and of course, that's the business owner them, themselves, it's very easy to put money into the business much harder to take it out. And of course, in the good years, hopefully, you're drawing a good salary and, and dividends, but compared to the economic footprint that you've created, it's negligible what you can actually extract. And so really, the only way you can monetize that value is to sell the business, but actually a lot of business owners, we might grumble about clients and stuff. But actually, we, we love what we built. And we love building and growing and scaling. And that's what excites us. So we don't actually want to scale the business, but we would like to, to monetize some of it. And so what you find happening is I think of sure other guests have touched on this, with a lot of baby boomers now sort of thinking about retirement, what happens is that sort of default option for small businesses is to be acquired by a bigger player in (inaudible) industry. And, and so you, you get to do one of these deals, and it's the biggest deal in your life and you're very excited that invariably these deals are structured as a three year or five year urn out for the, for the owner. And that's fine. Yeah, the acquiring company knows that you're the talent and it's your child and they want you to share with it. The problem is that as business owners, we, we don't make very good employees

We're very good at being told what to do, especially when it comes to our own baby. Of course, the acquiring business needs you to conform to their own systems and processes. So they very quickly tell you that yeah you need to go and renegotiate all of your client contracts, put them on our standard terms. And yeah it's great that your staff think of you as family, but we need to renegotiate all of their contracts. And it's not upsetting the rest of our existing employees. And suddenly, you're now trying to hit these targets that you've committed to, with one arm tied behind your back and, and fighting, fighting them often. And it just doesn't work for most business owners, most business owners last six to 12 months tops before either quitting in disgust, or getting fired from their own business, which is a pretty, pretty disappointing way to end, a 20 year career of creating value for, for everyone else. And often, because of that, you end up leaving a huge amount to the value on the table because you've failed to, to deliver and hit these targets. So this has happened to us, this was happening to all of our peers on a regular basis. And so our, our idea very simply was, let's create a publicly listed holding company exclusively for the use of good, well run profitable small businesses. And in fact, what happens is the business owner swaps that private equity for public equity, but they retain full control over the business. So it's their brand, is their hiring and firing. It's their culture, they don't need to run decisions past anyone, they just carry on running the business. But now when they go and pitch for business, they're a global multinational PLC. So they can, they can leverage the balance sheet to get with much bigger contracts. When it comes to recruiting and retaining good senior teams, they've got actual public stock options that they can use. If they want to grow through acquisition, they have the mechanism to do that they have the currency to do that. So that, that's really the, the concept. And then you basically end up with a holding company full of very motivated, very driven business owners, that are also the majority shareholders of the public company. So they're always in control of their own holding company. And it Yeah, just creates a very nice dynamic. And so MBH is one of the groups that we've created to, to do that. And as you mentioned, you're up to about 28 companies now, in the last three years, so we started with an empty holding company. We now 28 companies during 103 us terms, about 150 million of revenue. Nine or 10 million US of EBITDA paid dividends every year. And I think and that's, that's been achieved, even with kind of two years of, of COVID. So probably the hardest year to be running a group of small businesses. It's probably about two years behind schedule. Yeah So still doing okay.

Ronald Skelton  13:22  
I see this very diverse, right, a lot of holding companies are holding, you know, in a central area, they may be, you know, manufacturing or construction materials, but when they say they're holding, and they're broad, it's like, okay, they do construction materials, they make concrete item and they might actually own the rebar company and the sand delivery, but it's still servicing one big anchor Corp. I love that you there's some protection for the investors out there the guys buying the stock because it's diversified, like really diversified. I look it on here that everything from education engineering, at one point you had a, a taxi company, right?

Callum Laing  14:01  
Yeah, yes, it was still have, still have a taxi company is an interesting one that was a like, like many, many people, both of the taxis were dead and buried by, by Hoover. Quite quite the opposite. So we got approached by a taxi company. They had been trying to acquire other taxi companies to build a nationwide network of taxi companies in the UK. How did we manage to do so because of kind of egos and all the usual challenges. discovered our model joined us and within 18 months, they'd already acquire three companies underneath them, which is already propelled them from when they joined us. They were the 357 by fleet size in, in the UK. Today they're in the top 10 by fleet size, so dramatic growth in, in 18 months and I've still got a shopping list of another 60 Plus taxi companies to bring in. (inaudible) then realized was that it no longer matters. What's in the back of the taxi, whether it's a person, a pizza or a parcel. It's just last mile logistics. And if you own a nationwide network, you become incredibly valuable. So yeah, they joined us specifically to leverage our model to, to grow. But you're right, we, we very deliberately, we have become one of these groups, and, and we'll still do groups that are industry specific. Yeah, the advantages are that it's much easier to target investors that understand that space, if your industry (inaudible) my concern around industry specific is, is that if you go into an industry and it's a cyclical industry, as many are, if you get in at the top of the cycle, it doesn't matter how good you are, it's going to be a painful journey. And so, we decided to be diversified from day one, both geographically and industry. Of course, we, we hadn't expected a global pandemic to affect all industries. But yeah, even, even then, when that hit ups, we were predominantly we had 12 companies in the group 75% of our revenue and profit came from the construction industry which are very heavily hit by COVID. Because lockdowns today, a couple of years later, I think that the last I saw six of the top, the top contributing companies in the group are across five different industries. So really powerful demonstration of how important diversity is and diversification is and in fact, one, one of the last companies that we bought just before the COVID lockdown was a caravan company in the UK so as a 60 year old caravan company, motor homes in, in the US they're kind of less glamorous and motor homes, if that's possible. Like kind of these things, they toggle around on the back of a car. And I, I got it from my friends when we bought this because it's about the most boring company that you can imagine. It's kind of well retired couples, do they buy a caravan and, and you always get stuck behind them on small roads. It's, it's a pain so I, I got quite a lot of sick and then of course there's lockdowns and travel bans all over and this company, Robinsons caravans has just had two years of absolute bumper outperformance

Ronald Skelton  17:57  
(inaudible)

Callum Laing  17:57  
 kind of demand. So, yeah, it's, it's really, it's funny I've got it's like, at some point, I'll claim that was all my genius. But it's pure luck.

Ronald Skelton  18:09  
You know, I live in a fancy caravan. So I actually live in a tiny home right, which is nothing more than a custom built caravan. I will walk in, you know, stone shower with river stone and tile and a full but you know, a full working full size bathroom bigger than the one I had in my other house. But it is still yet on trailer and I can move it, we just like we just drove it 1800 miles and parked it in the Redwood Forest because my wife needed to be close to her family. Right. So, you know, so and we full time living is so I, I get it. I liked the model and during, during COVID a lot of them took off like because you you there was no other way to travel. And people still wanted to go on vacation. If you you know, if you were locked down and supposed to be inside of your house, I'll just drag my house with me and I'll be locked down at this campsite and you know, with a beautiful view. So

Callum Laing  18:59  
I was quite, I was quirte jealous, because looking at the numbers, because supply became a huge issue in the UK and in the US. And Singapore, all its advantages is a very small island. And so I, I was quite jealous if there are no caravans in Singapore because it's basically 45 minutes from one edge of the island to the other edge of the island. So as much exploring to be done is quite jealous of the pow ers that could get out on the island.

Ronald Skelton  18:59  
So I lived in Hawaii for three years and it's about that size. I think it's 20 I'm gonna somebody's gonna correct me on the show. It's by 27 miles across or something that the longest on Oahu. So, and a lot of people get what they call a rock fever even when they are not locked down. Meaning you're stationed there for three years in the military. You're stationed there for two or three years. And by the end of year two, you're just ready to get off the island. I never had that problem because I like to dive and go in the water at night. So I would go this is Hawaii though. waters always warm. So at night I had died during the day, I was a full time college students, I'd never had the opportunity to get bored, right full time military full time college student and had you know, had some recreational stuff to do on the water. So never took up surfing and I tried once or twice got hurt both times I decided it just wasn't for me. And here's the I mean, I was an adrenaline junkie at that age, right? I raced motorcycles and everything else. But the last time I ever went surfing, the thing I heard is no hollyball You know, which means that you're not supposed to be on top of the wave, you're supposed to be in front of it. Because when the wave breaks, it drops you like a rock on the beach, and it hurts. But, uh, I woke up to a big Samoan boy about to give me about the mouth and decided I wasn't surfing anymore. So that knocked me out. But hey, let's go into kind of, I love the diversification. I mean, you got everything from correct me wrong. I mean from these caravan and, and the taxi to you acquire to or at least you guys were talking about it. A sausage company here in United States, right? sausage manufacturer

Callum Laing  20:58  
Yeah, so we've got all the sausage in Colorado, the, the official sausage provider of the Denver Broncos. proud to announce. So yeah, that's a great little business. original German recipe. I've been making sausages in Colorado for 42 years. I think. Jim is the, is the principal there great business. And, yeah, so we bought them a couple of years ago. And they've got a bunch of other f&b businesses around that we're looking at as well. So yeah, that was second or third US company.

Ronald Skelton  21:45  
Cool. So let's talk about the diversification of location, right? You have us You got to UK, what were all you guys located?

Callum Laing  21:54  
So basically, we've tended to focus on English language, English rule of law. So New Zealand, Australia, Singapore, UK, US, Canada. I think right now, about 70% of the companies are UK based. That's not by design, it's just how it's kind of panned out. So we, we tend to have any given time, we'll probably have 40 or 50, companies going through due diligence. And it's just, you know, deals can complete very quickly or they can take years. It's just kind of which ones fall, fall out of the pipeline. If, if they fit within an existing industry vertical, we, we put them into that industry vertical. If they don't, then we will create a new industry vertical for them. When we launched the first two verticals, we have construction and education. And so investors, I always get the question about where's the synergies between construction and education. And I kind of got bored of trying to explain that we don't rely on synergies here. These are profitable, cash generating businesses. We don't need synergies for the model to be successful. And I got I got bored of that answer. So I started telling people that it was child labor was I realized that jokes funnier in some countries than another country. So

Ronald Skelton  23:27  
Yeah. I've got a dark sense of humor. So I laughed and probably somebody out there is gonna go you're going to hell for laughing.

Callum Laing  23:34  
(inaudible) I mean, a lot of m&a does have this obsession with synergies. And one of the one of the things that we've realized was synergies look fantastic. On paper, they look fantastic. And textbooks. The problem is when you've got humans, you kind of ended up with a will sorts of challenges. And you'll find the two companies in the same industry. But if they don't get on, they don't want to think of different clients. They don't want to work together. And actually, if I look at the, the most interesting jayvees and, and partnerships within the group, they're all cross industry. and yes, some really kind of interesting, unique ones. Interesting labor, construction and the education sector have worked together, they've created an apprenticeship program for disadvantaged youth to get them into, into the construction industry, which is really struggling with finding employees. The taxi company and the construction company both realized that they had challenges with the need for more effective ways to get cash to their employees, because towards the end of the month, they'd be running out of cash. So they developed designed an app that allowed them to draw down their cash and so they're working together on that and these are things that like, maybe sitting in a with an MBA we would ever think we certainly didn't think of it. But when you put smart entrepreneurs in a room together, all with a vested interest in, in the group profitability, yeah, you just get all sorts of very cool ideas and opportunities popping up.

Ronald Skelton  25:21  
I think that this is just a personal opinion from the last couple years of evaluating stuff and really study in the m&a space. I think this trying to accomplish synergies is kind of the magic carpet ride it, you know, a lot of people think it's cool. I, I honestly think it destroys more businesses and it and it helps.

Callum Laing  25:42  
I think I look, I think it, it, it works in theory. And clearly it can work in, in practice, and I, I think, you know, the private equity approach to doing it, first of all, they're doing it with much bigger companies. They can often, right, the three pain that it takes to disrupt and lose a lot of the talent. So they acknowledge that debt is going to happen, or it kind of comes out the other side. So yeah, I'm not saying it can't work. But But generally, I think, especially with small businesses, and, and this is, you know, a lot of people try and do these roll up and less and, and, you know, they're by seven dentists, and, and try and merge them all together. And these are seven business owners that have been running their own business in a particular way, for 10, 20 years, they're not going to change, you know, there's going to be so much resistance, and when you've got a relatively small business, creating that kind of wholesale change is very, very difficult to do. So, yeah, we just, we, we kind of acknowledged that, that's too hard. And, and we, because we're buying good, profitable cash generating businesses, basically, we want them to keep doing what they do. And I think one of the common misconceptions from especially investor community is that small businesses are badly run, there's, there's kind of this idea that if, if you haven't become a big business, you're doing something wrong. And actually, small businesses have this, there's always opportunities, there's always, like, when you look at a business, you can always see what they could be doing differently. But actually, small businesses tend to be pretty effective, pretty lean, tend to waste money, because it's the owners money. Whereas you can trust that with a big corporate, that's got a, they can lay off 300, middle management, to appease the shareholders, and it doesn't make a difference to, to the day to day running of the business. So you know, small businesses, they may have one or two employees that aren't fully pulling their weight. But equally those, those employees may be the ones that keep the culture of the company, and therefore our private equity would get, get rid of them. But they will destroy half the culture of the company. And the business owner knows that they might not be the most effective employee in the world, but it's worth keeping them because they, the other employees like having them around. So there's a lot of kind of, I think small businesses much more about psychology, whereas big business, you can you can play more with a balance sheet.

Ronald Skelton  28:55  
Yeah, and I think all acknowledge that what I said was a little bit erroneous in the fact that I don't believe that synergies will destroy a company. I believe that synergies trying to create synergies and a roll up a small roll up seven to 10 companies is a three to five year play. I think it's not an overnight type of thing. And if you're and I just I really, I really liked what you guys got going on. Let's talk a little bit about like kind of the process because I can imagine I don't know if you're aware of it, we created something similar started a marketing rollout. But in the collaboration model where we left them in control. It was working really well. I won't get too far into the story of why, why it stopped. But one of the things that was a challenging is to get a common model of valuation because every person that came in, bought their business is worth way more than it was what it should have been, which okay, but we had to get a standard model so because the way we, we lined ours up is everybody we were taking a minority stake in the companies as, as I think you got you guys got to do in return for, you know, minority equity stake in return for becoming part of this larger corporation. So tell me about how you do the valuation. And what's your mindset around evaluation is? 

Callum Laing  30:16  
Yeah,

I say where is you take 100% of every company say every company is 100% wholly owned. When we first started this, what we were trying to do. So basically, the game is an arbitrage between what a big publicly listed company can trade for versus what a small private company contracted for. When we first got into it, we try to give the business owners as close to that number as possible. Because this was designed to help business owners. The problem that we found with that was that it was we were to close, sometimes even above an exit valuation. And this wasn't supposed to be an exit, it's, it's not an exit. It's basically a method for a small business owner, to grow through leveraging the power of a group, but also to be able to take some liquidity off the table while keeping control. And so as long as we were giving them really good valuations, we attracted people that want to exit. And so that was a wrong model. So what we then shifted to was a fixed perpetual earning model, which is based on what your last year's EBIT contribution is saying, and it's EBIT, not EBITDA. And anyone that plays with numbers will know the dollar is where you can hide, whatever you want to hide. So we, we stick to, to EBIT, we're interested in cash flow. And every company is on the same model. So it's basically speaking, it's three times earnings plus whatever's on your balance sheet. So if you've got money in the bank that comes in, so if you've got, say, you're doing a million dollars Aviva, and you've got a half a million in the bank, you might get three and a half million in stock on day one. And then every year thereafter, any incremental EBIT, profit gets multiplied by three times. So if you came in at 1 million, if you did 1.5 million in your first year, that point 5 million, we times that by three, and you get another 1.5 million in stock. And each, each lump of stock that you get is locked up for 12 months. So when you get your bonus shares, they're locked up for 12 months, but you lost a lot of shares had just come on, you can sell down. So take some cash off the table, but still keep control of the business. And that's a very, that's what really kind of one of the foundations of the model is that you've got that equitable model, everybody in the group knows that everybody else came in on the same model. And that's important for the culture of the group. But it also saves us a huge amount of time. Because we do away with all of the negotiation stuff. So you got to do things that typically slow things down. One, as you point out, is that every business owner thinks a company is worth more than the buyer wants to pay for it. So first of all, we have to kind of switch the mindset, you're not selling the company, you take public. So automatically, that takes us away, we don't use the word valuation for a start. The second thing that happens is no lawyer is, is gonna want to do an easy deal.Yeah  they gonna want to try and complicate things, they're gonna try and want to do the best for their client. So they're going to kind try and push back and introduce clauses and, and all of these things. Well, because every other company in the group has signed up to the same terms and the same model. Basically, we can say to the lawyer, where you can mess around all you like, but you would have to convince 28 other businesses, that your business is significantly better than theirs, which are things to say it enables us to move much quicker, because it's yeah, it's just as a standardized cookie cutter approach.

Ronald Skelton  34:41  
I like that. Now, you said it's publicly traded, what's what what Stock Exchange Are you guys traded on?

Callum Laing  34:48  
So we've traded on the UK PLC we listed on the Frankfurt Stock Exchange because it's one of the most liquid Frankfurt in Germany, one of the most liquid The stock exchanges is also quite flexible to our model. So a lot of the we wanted to be in the main market Frankfurt as a main markets, one of the top ones in the world. A lot of main markets have restrictions around decentralized control. So they want to see centralized control and where the ultimate have decentralized control. And a lot of main markets also have controls around how much new stock you can issue. So for example, on the London Stock Exchange, where we would have listed if you create more than 20% of your market cap and new issued stock, you have to delist reassured prospectus, and then uplisting which obviously wouldn't, wouldn't work. And then we did a cross listing to the OTC QX mainly so that American business owners could see our ticker and narrow, that hasn't really worked. So well, there seems to be a lot of the brokers don't seem to cover the smallest stocks on the OTC Qx. And we're kind of we're sort of exploring other, other markets as well. So, yeah, it's an interesting,

Ronald Skelton  36:20  
we evaluated that because the roll up we were doing was international. And, you know, one of the extra strategies was, you know, you did it, you took it public, then, you know, kind of a SPAC, right, you kind of took a public and bought into it. But we were, we were looking at that as one of the exit strategies, like either buy it in acquiring something that is public, and then, you know, consuming all these into it, or the other way around taking that something public. The difference between the Frankfort exchange in the US process was to the tunes of hundreds of 1000s of dollars, as far as the legal process to take a company through that and the regulatory nightmare to do so. You know, I, I could see why you wouldn't go straight to try to, like, try this on NASDAQ or something, right.

Callum Laing  37:08  
I mean, interestingly, we did one listing with NASDAQ in Europe a few years ago got a very good relationship with NASDAQ as one of their IR guys at a barbecue the other day. They, they were pushing quite hard. When we started talking about doing a cross listing to the US, they were pushing quite hard, because it's an international company, it's fast growth. We obviously we bring in investors from all around the world, because the business owners from around the world. So they really like the model. The challenge for us is on Frankfurt, we have to submit two sets of numbers a year, almost in numbers in the management account six months later, Frankfurt is quarterly. And even twice a year, it's a fairly significant burden for a small company to have 28 companies trying to submit numbers every quarter, they just wouldn't be a cool business. Say, Yeah, we decided that for now, it didn't make much sense.

Ronald Skelton  38:16  
I like that. So let's you said earlier that you guys typically can have as many as 50 businesses and tomtop, some form of evaluation, due diligence and stuff, what's the main criteria, the selection criteria, what you're looking for.

Callum Laing  38:33  
So for us, it's really about finding good, well run businesses that we're not gonna have to worry about. You know, we're not staffed up with a team of MBAs to go in and fix problems. That's, it's an incredibly lean model. And MBH only has two full time employees, which is myself and Victor tan, our CFO, everything else we outsource. So we're not in a position to fix companies. We're not interested in distressed companies or anything like that. So we're really looking for good well run profitable companies, and preferably, where they're still owned or operated. And I give you kind of an example of why that, hat makes a difference. And I didn't even know this has happened until after it happens. But during COVID When, When times were really tough. The some of the business owners were shoveling their own money into their companies to cover salaries and all the stuff that you do as a private business owner anyway. But they're not part of a PLC. You know, if you, if you take a purely cynical financial, look at it, their employees Why on earth are they taking their own Money to tide over cashflow problems in the business. It doesn't make any sense to the finance community. But that's, that's why we love business owners because, you know, this is something that they've poured their life and soul into for 20 years. It means more, this is not just a financial transaction for them you know. They this is their legacy. Part of why they've joined us is because they, they don't want to have somebody else come in and destroy the brand and fire half their family and stuff. So yeah, where, where possible, we, we like it, where the business owner is still has some level of, of involvement and caring business.

Ronald Skelton  40:48  
There's no way as a business owner, that you cannot tie part of your identity to it, I think we do it a little bit too much, actually. But as part of, you know, owning a business, you go in there day in and day out, you work with the same people, you've hired them. But you've been around the same people for a year, five years, 20 years, sometimes, you know, lives. If you're a second or third generation, you know, company. I've seen companies where like, you know, this guy's worked here, his dad worked hard, his granddad helped start the company kind of thing. No, there's no central loyalty to those employees. That is really.

Callum Laing  41:21  
This is the bit that a lot of people don't understand. And it's why a small business is all about psychology. So somebody will look at us from the outside through the lens of the balance sheet. So typical investor and private equity. And they'll see 28 companies and 25 CFOs. And they'll say it makes no sense like, by 20 of the CFOs, consolidate the finance function, and you just made an extra 3 million in, in profit. The problem is like you say that those CFOs are often, their often the most trusted person in the business, they've often half the companies I've seen, it's like the brother in law, is the CFO firing that CFO to make a 5% incremental gain? It's just not worth it, or the headaches and the pain it causes. So yeah, I think, yeah, a lot of people miss the intangible benefits. And for us, every time we add a company, we're adding typically 20 to 30 years of entrepreneurial experience from that founder, we're adding their network, those employees now have a larger base to connect with and chat to as to all the other employees. So we have kind of forums where the marketing guys get together and the finance guys get together and the ops and ESG guys get together. So yeah, there's a lot of, again, comes, comes back to the psychology and the personalities is very key.

Ronald Skelton  42:52  
So there's something I keep wanting to think of, to keep thinking about what to talk about, because I don't want to miss this because there's a huge potential there. Do you guys do the 28 companies, the CEOs and the leaders of those companies, you guys meet regularly in some form of mastermind? And like, how do you guys help move each other forward? Cool. The reason I'm asking is, that's a huge potential like that many, and the fact that they're in different industries, like one of the best things I've ever seen is I used to go to entrepreneur meeting, meetings every single week, and everybody's like, Well, you're in real estate. Why would you go to this thing with a startup? We're like, what startups pitch? I said, because those guys are facing challenges and doing things on a daily basis, that if I think clearly enough, I can probably apply some of the stuff they're doing to what I'm working on. Right.

Callum Laing  43:37  
Yeah... So yeah, I mean, we we do everything on Slack. So there's people bouncing ideas around on Slack all the time, we have monthly zoom meetings we are struggling to do now because of time zones. And then twice a year, once a year, we get together just the principles. So next month, we're two months time we're meeting him, phuket, just the right rules. And then six months after that we'll meet in London, that's principles and sort of senior team members so that they can kind of interact as well. But yeah, it's, it's very valuable kind of having, having that connection.

Ronald Skelton  44:13  
I do a lot of masterminds. I host one for the for m&a guys out there. Every two every two weeks we get together and just kind of help each other move the game forward. But I honestly think that what you've got built in there is extremely powerful because you have a whole network. It's like, hey, you know, I've got this business friend of mine trying to get you know, into Europe. He's got this product who you know, I mean, you, you just have a network of people who have a common interest to see each other succeed. That's, that's extremely powerful.

Callum Laing  44:42  
Yeah, so (inaudible) the kind of a lot of my thinking around MBH is not as a company but more of it as an ecosystem. That attracts small businesses and some of them will go bust over time, some of them the entire industry was successful and when multigenerational want us to be, entire industries will disappear. But I kind of look at a look at something like YPO Young Presidents Organization or EO organization, these incredible powerful networks, they happen mastermind groups. And they have grown very successfully. And if you take that model, if you think of as more of as a network, that business owners say, Okay, I want to belong to this network. Well, imagine those mastermind groups where everyone in the group owns a slice of the future, everyone else that actually have that stake in your future. And I've noticed that it changes the dynamic. You know, one of the things that used to frustrate me as an entrepreneur was the amount of people that would give you good advice. But it was yeah, they had no skin in the game. So yeah, they would tell you kind of goes through different phases like a while ago, everyone had to have an app, it didn't matter what you do, are (inaudible) go into China, if you just get $1, after everyone in China using and these kind of theories, but they've got no skin in the game. And that doesn't happen in our group. If somebody asks for advice, they get very measured very well thought out advice, because nobody wants them to go and waste money on a frivolous project. So yes, it's a very powerful,

Ronald Skelton  46:30  
I can see that that's, that's incredibly powerful. Even in like, in the masterminds, I run a lot of times somebody I'll throw in a vise something and I have this thing where I, have you done that? Or did you read it in a book or seen it on a YouTube, right? I, I want to know the difference. And it's okay to share an idea that you've pulled from a book or you've seen something on YouTube or you know, a guy that did it. But when you're telling somebody, they should try this, they need to know whether or not you've been there or not, because he needs to know whether or not they're going to call you when it doesn't work. And I this is what's going on. And, you know, what did you do when this happened? Or they need to go find the guy that watch and made the video or, you know, wrote the book that, that you read that you got the idea from? So I get? I mean, I just think there's a huge I think it's more powerful than the possible synergies you could have as a possible, like having 20 year business entrepreneurs on a common vision. So let's talk about that. What is the I don't mean when I say long term, I think five years or whatever, but when you say long term vision, what do you what is your timespan on a long term vision? 

Callum Laing  47:36  
Yes, I put out an

article last year talking about MBAs. 2121. So 100 years from now. And I that's really, you know, we've got companies in the group that are second generation companies 40, 50, 60 years old. My view is that we owe it to them to have a platform that if they survived for the next 5060 years, we're still going to be there. So I, I did a lot of research into companies that survived hundreds of years, the very few that survived over 1000 years, like what, what was the commonality? What mistakes do they make. And what I realized was that actually, there's very little commonality among companies that have survived over 1000 years, they have all had one thing in common, which is they haven't messed up. They haven't done something stupid that has killed them. And the one that sort of sticks out the most is debt, a lot of companies take on too much debt, and that kills them. So putting together like a lot of where I spend my time thinking about for MVH is the governance structure, I'm not always going to be on the borders, that model is designed to have a constantly rotating or constantly rotating CEO, it shouldn't be determined by anyone driven leader, that the model has to be sustainable. But that depends very much on having very strong governance and culture around that. So that, that's a lot of what I focus on. And yeah, that's basically the idea is that we build a community of small businesses, hopefully, multigenerational, that can support each other and the more companies you bring into it, the stronger the proposition becomes, the more value that you, you add. But you've also got a lot of headstrong, opinionated business owners in there. So making sure that there is that equitable model that is based on meritocracy is a fair model. And sustainable is a huge part of thinking.

Ronald Skelton  50:11  
Maybe this is I maybe I should have done my research a little bit better. But I probably shouldn't know the answer this just by reading to your website and stuff. And have you guys acquired like what I would consider, like corporate components, like a marketing company and accounting company, I could you build an ecosystem to support this, or you outsource a lot of that.

Callum Laing  50:29  
So, basically, we don't go out targeting businesses, we get over 1000 applications a year from companies that, that target us. And, and if there's m&a guys out there that want to work with us, please, please reach out. Yeah, our, our view is much more about finding good, good companies. Over time, we will attract great marketing companies and great accounting companies, and they'll join us and that's good and, and the companies in the group may or may not choose to use it's entirely their discretion. So yeah, it's kind of it's not something that was particularly focus on.

(Inaudible)

Ronald Skelton  51:16  
One of the challenges we had was that internal accounting process when you do have synergies across and people want to work together. Is there? Is it just straight billing? Is there a discount? Is there you know, like this cross selling upselling commissions going on? Did you guys talk a lot, he just let them figure it out?

Callum Laing  51:33  
Just let them figure it out. I mean, it doesn't, you know, trading within the group doesn't really help us because it's, it's just an internal transaction. Yeah, companies cross selling for each other is great. And leveraging off each other is great. But yeah, we don't you know, it's pretty much up to them to figure it out as, as what makes sense for them, there's, there's no pressure on them to work with each other if they don't want to.

Ronald Skelton  52:07  
So for a while there, you guys were having like people like myself, Acquisition Entrepreneurs if we see an SOP, that would be a better fit for your model than it would be for something we want to do. We could make an introduction. Are you still taking those introductions? 

Callum Laing  52:19  
Yeah, absolutely.

Absolutely. We gotta introduce, introduce a program that (inaudible)

Ronald Skelton  52:25  
Yeah. So we're getting close to the top of the hour, let's make sure everyone knows how to reach out to you. What's the best way for somebody to either wants to work with you want to take a deeper look at what you got maybe invest in or maybe bring it deals with? You know, how would you want people to reach out to you

Callum Laing  52:39  
(inaudible)kind of have a look at MBH corp.com. It's, it's credibly comprehensive. There's a business owner section there. And the team is very responsive. If you leave a message, you'll get a response within 24 hours. Reach out to me on LinkedIn, my team all kind of, especially if you mentioned if you connect to me mentioned this podcast. And my team will let that through. And yeah, look, if you've got good, good companies, we'd love to talk to you. Or investors are always open to that.

Ronald Skelton  53:16  
I always like to ask if, if somebody wants to show and they can only remember one thing from the show, what would you want them to remember?

Callum Laing  53:24  
 I think just

when it comes to small businesses, m&a, it's more about being creative. And I think if you can start with what the business owner wants, rather than what you want, it will go a long way to make the estimator process.

Ronald Skelton  53:40  
You guys certainly put a lot of thought into that, like, what does the business owner want? What do they need, and you know what will make a difference in, in, in the world of you know, of small business owners and the longevity of their companies. So that that's really cool. I appreciate your time here. And want to make sure everybody knows that they can reach out to you. And again, thank you guys for listening to the show today. As always, I always tell everybody, we do hold a mergers and acquisitions, meetup twice a month, I do one in the morning, and one in the evening, my time so that people like column here can join if you want. Because if I did it the same time, it wouldn't work for everybody. So I have people from Singapore, I've got people from Australia, a lot of people from the US, everybody joins that. So that'll be in the show notes, columns, contact information, including his LinkedIn, everything will be in the show notes. So if you're trying to reach out to him, you'll be able to get to it by looking at the show notes here. I appreciate your time. And thank you for being on the show, man. 

Callum Laing  54:45  
Thanks Ron

Ronald Skelton  54:46  
cool. And that's the show. Hang on for just a second. Hey, it's your host Ronald Skelton. I want to thank you personally for watching the show today and invite you to call our new hotline 918-641-4150 That's 918-641-4150 Call us and tell us about our show, ask questions, suggested guests or even tell me about a business you have for sale and we'll reach back out to you. Again that number is 918-641-4150. call our hotline leave us some information. Thank you. I don't want to announce our new channel partners the ITX marketplace since 1998 ITX has created 5 billion in value by selling more than 225 it businesses in 20 countries. IDX works exclusively with it enabled businesses generating between 5 million and 30 million who are ready to be sold in m&a to decision makers who are ready to buy for over 25 years ITX has developed industry knowledge that helps determine whether a seller is a good fit for their buyers before making the match ITX mergers and acquisition marketplace we have partnered with has a proprietary database of 50,000 plus global buyers seeking it service firms managed service providers, Microsoft service providers software as a service platforms and channel partners with Microsoft Oracle ServiceNow itself and the Salesforce space. If you have an IP enabled business you're ready to sell. I want you to visit the I T exchange net.com/marketplace How to exit that link will be in the show notes visit them now. The investors and entrepreneurs professional mastermind. The investors and entrepreneurs professional mastermind combines that additional peer to peer mastermind introduced first in Napoleon Hills famous book Thinking grow rich with accountability partnering where your peers help you ensure that you set goals take action and get results. If you want to scale blow past roadblocks and achieve success faster than you might think is possible. I suggest you take a visit over to tiepm.com That's T i e. P m.com. And check out the investors and entrepreneurs professional mastermind