Getting Organized – Managing the Piles of Information

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welcome where business buying banter meets no BS reality get ready to dive

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into the world of buying and selling businesses without the fluff and fancy jargon whether you're a seasoned

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business buying Pro or a curious aspiring entrepreneur this is where the

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real talk happens because in business there's no room for sugar coating let's

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get down to the Brass tax

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well welcome how are you Deb in the house how

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you doing you know I'm doing great it is Thursday almost there baby and it's my

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favorite time of the week where I get to spend a good 45 minutes with my co-host

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Richard Parker um business buy banter baby love seeing you and I'm looking

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forward to the show hope you're having a good week anything exciting to report oh

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no well I guess up north here in Wisconsin we have been experiencing weather in the mid 50s in February

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unheard of we have that that's what we've been having here in Florida how's that overnight I mean it's been really cold however I have a feeling it's uh

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it's not going to last up there are people walking around with shorts guaranteed right listen we're in Walmart

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wearing shorts when it's 30 below so yeah that's given

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um the here's the we have uh perennials that pop up for spring you know the

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crocuses well on the news they're all popping up they're popping up and I'm telling you we're gonna get buried in

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snow come March it's coming oh yeah because usually March I mean I grew up a mreal march to me March was like the

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teaser month you thought you were home and then you got absolutely slammed with a snowstorm in March like you're

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shoveling over your head right that in Wisconsin yeah heavy heavy heavy sh

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heavy CH well you you know what I you got to be Hardy to live up there and I'm I I

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admit I'm just not Hardy I've just I love the Four Seasons and um we love

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coming down to Florida you mean the hotel me too you're right that's a good hotel as well but welcome everybody we

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are so glad you are here and we're gonna get right down to the show today's topic

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is piles of information Richard do you have piles of information yeah there's piles of

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information I was doing a uh a a seminar for a group and one of the sections was

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called getting organized for the process and yeah it excuse me there are piles

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there there is piles of information and if you don't manage it well it'll get out of control in in in no time at all

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and so today we'll we'll talk about how people can manage this in a good way to keep it um again to keep it under

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control because if not it gets out of control one of the things that I was thinking about is maybe you know for for

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your standpoint like the lending piece When Buyers have a particular business

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of interest and I know you get this from business brokers as well but a buyer finds a business of particular interest

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you know from this time that they start looking at financing until they close an

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SBA deal there's tons of there's tons of paper I was in a deal I walked in it was

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the SBA um attorney was there a number of years ago and I looked onto the table and it was like 18 inches P of paper

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right that they were signing and I said to them like they didn't enjoy this they they didn't appreciate it I thought it was funny but I said to them you know

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the country has run for over 200 years magnificently on the Constitution which

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is like two pages long I said how is it that this loan for this shitty little business has 18 inches of paper but

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that's just the reality of it so what does a buyer bring you as far as the the paperwork if you will at the beginning

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very early on um that they need to get things going with you and that's a

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brilliant question my friend um and I would like to answer it

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twofold a buyer when they come to me there there will be the physical items

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that they need to bring for me to take a look at but let's talk

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about piles of information that may be in the closet okay you know what I'm

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talking about Richard pil I need to know the piles of

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information that are in the closet otherwise known as skeletons in the closet I'm not the underwriter I'm not

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the seller I am the consultant that needs to know what are these skeletons

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in the closet if they're they're there and you know if they're going to be there uh and No Holds Barred back man

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because that underwriter is gonna find those skeletons so I want to just clear the air for our listeners out there if

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you are a Searcher if you are a business buyer I need to know all the piles of

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information that you have hidden in the closet and I'll tell you if we can get around it or if it's old enough or if

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there is a process to clean it up before we present a package to a bank

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underwriter so let's just start there no skeletons in the closet would you agree

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on the seller side too Richard oh 100% and the one thing that one point you

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made which is critically important is you got to bring those skeletons to the Forefront because the reality is they're

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going to be uncovered like there's without question bet on it it's just a matter of when and so if you get too far

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into the process and some of these skeletons or issues start to surface whether from the seller or whether they

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be from the buyer it's the quickest way to lose all credibility with the other side derail a deal and as it relates to

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the lender side if there's this bring them up at the you bring them up early and find out about them early because

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you may as well know early whether or not this is even financeable and so you know thinking that you're going to get

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away with something whether you're a seller a buyer or not disclosing something is is complete Insanity from

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this happens more from a you know a seller standpoint who may not disclose something so it's really incumbent upon

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the buyer to really dig dig dig and you know get some of these issues out and make sure that they they know what

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they're dealing with because chances are you know you could typically deal with most scenarios it's only the scenario if

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you don't know what you're dealing with right impossible to deal with but you know and that lends itself for other

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stage of the process when we hopefully we can help people get a little organized with some of the paperwork involved throughout throughout the

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process yeah Sage um I love the I love the the ads there um and I'm thinking

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about business brokers as well because they're probably a few listeners out

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there that are business brokers and as a lender one of the um challenges that I

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always faced with many business brokers not all is as soon as I start to sniff

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something in what is presented to me which we'll get into that I have questions but they don't have the

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answers and sometimes the answers need to be proof and and it might just be

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it's a skeleton in the closet what is your take on what business brokers should do should they

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be knowing this out of the gates before it's listed because it seems like

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to me there's a lot of listings out there that have piles of skeletons P

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piles of information in the closet that aren't even discovered yet or

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proven how to put closure on it I'm gonna answer this like one of my kids always answers yes but right so it's yes

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right yeah but so they yeah but they yeah they should know it but the reality

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is they don't there's a combination of a a couple things number one the seller doesn't always provide them with the

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information and then you have some Brokers don't dig for the information so between the two of them you you have

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scenarios where it falls short so from a broker standpoint if they don't yeah I

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mean I fundamentally believe I know in my engagements I want to know that business next to the seller I want to know it better than anybody else on the

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planet but it doesn't always happen that way and so but it's incumbent upon the

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business broker to make sure that they dig in with the seller to make sure they get the answers the information because

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you want to move the financing piece along as fast as possible because it does take an awful long uh a lot of time

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and SBA Loans you know take time to get them underwritten reviewed approved um

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there's paperwork and documentation right up right seems to be right up to the final Bell but if if the broker

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doesn't have that information readily available it doesn't really matter whether they should or they shouldn't they have to get it they have to get it

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expeditiously yep y boom and uh for all the business buyers or business sellers

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out there or those that are thinking of preparing to sell tracking all of the

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skeletons or or documents that you need track it and then provide it and

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talk about it with your business broker so in all fairness we're not here to bash the business brokers because there

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are a lot of sellers soon to be sellers that don't want to share that information right yeah or they right or

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they don't understand why it has to be shared and and so explaining it to them you know business brokers want to get

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want to get deals done and sometimes they have hard ass Sellers and they don't want to disclose certain information but they need to understand

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you know there Sellers and I'm sure they convey it to them and sometimes they have to just be more forceful say look we you're not getting the money unless

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we provide the information so they have to really put their you know put put the screws to them to let them know the information has to be provided if not

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you're not getting you're not going to the next step if there's you know if there's a cog in the wheel it the deal's not moving and so you know really

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conveying it to them and you know they as as often as a seller as a as a broker

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may not have the information just from for for whatever reason there's an equal

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amount of time that sellers haven't provided so they they really have to push for it you know and and um you know

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that also lends itself on on the buy side where buyers are going to get inundated um with information from the

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get-go I was mentioning I had this uh seminar that I was running on behalf of someone um uh out of town a couple weeks

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ago and we were talking about this getting organized piece and buyers need to really I I find most buyers are

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terribly organized or they think that this is something they're just going to log you know log on their phones or what have you and there's so much paperwork

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and this is besides just the financing part I mean there's so much paperwork there's you know business listings there's ndas there's the financials that

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come there's other information about the about the business then you start doing investigation related to the competition

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the employees the industry Etc you start Gathering all this information and paperwork piles of information so if you

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don't keep it under control quickly it gets out of hand um fast and you know we should we we'll talk about that in a

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second and then you have the whole other piece where there's when there's an Loi in place and you start to formalize due

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diligence there's a whole other series of documentation that need to be kept under control and it's very easy to um

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to lose control and once you do that it's just hard to keep the deal together you know so buyers really need to do um

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and I've gone through this a bunch of times and and talk about extensively we should um we should jump into that as

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far as how they keep themselves organized because the information the piles of information don't stop it

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doesn't and thankfully today Richard we we are living in a world of more um

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electronic tools online instead of the old days where we had email everything

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and the email server couldn't handle the boatloads of information so um there are

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even SBA lenders out there today that have certain programs that uh um our

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platforms that make it easy for uh uh the underwriters the the closing team

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the processors everybody on the bank side can see when the seller side

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uploads information into this platform and the buyer size so it's all in one

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portal right not not all banks have access to some of these platforms but there are plenty out there that are

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starting to step up their game uh it's more secure and it's more organized

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versus emailing everything which is no doubt yeah yeah I mean the even the smallest deals now typically have a data

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room and you're able to upload the information give people access um to certain parts of it but you know often

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times before they even get to that point the buyers have um a ton of information

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they start out looking at businesses and they may look at 25 or 50 businesses and have the business you know the business

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listing from the broker or from bis Buell or businesses for sale.om one of the online databases of businesses for

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sale and some down I preferably I I like the deal in paper because I make my notes on it but you know I'm a little

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old I'm an old fart so you know I like to print out the information WR write my notes but it has to be a way to scan and

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and keep it on the wraps because you want to be able to look to look for it after then you get an NDA and then you get the initial financials then you get

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another set of financials then you get a here's a report oh here's a copy of the you know of a report they did for a certain client or here's this and or

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here's that and all this information you start building this portfolio on a particular business and you've got a ton

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of information and then you're doing it you're looking at five different companies so that's multiplied by five

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and it's not just a matter of just saving it to your you know saving it as an email because you you don't even have

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the data room at this point but you have to figure out a way and one thing that I I've told buyers is as soon as you find

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a business that's of interest to you once you go past the first step meaning your first step is you're sending in an inquiry you might get back in NDA and

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you might get the business listing if you look at that and there's of interest to you and you're going to go to the next step maybe a conversation with a

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seller or there may be some additional documentation you immediately have to set up a folder whether it be a paper folder or a digital folder and name it

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that business okay and drop everything in there now if that the conversation

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abruptly ends for whatever reason that's that's okay that's fine if if your conversation continues you may have to

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um get a little more granular in that folder well you ultimately will um have to get more granular of naming the files

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but you know you've got to keep folders on every business often times you're going to look at that as a reference to

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another but if you just keep dropping them into a folder of you know in your outlook called you know businesses I

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mean you're never going to be able to find it's GNA be like all over the place right it's it's all over the place

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all the time and kind of like finding our backstage link for this show today where's you you and I both right like

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it's it's like you think we the first time we did it okay and and you know like I I send and I live for CIA okay

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and I said they're like where's the link excuse me I was like I can't find this link all of a sudden I'm

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sorry we you know like right it's like yes so that's us and we're allegedly we

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allegedly know what what we're doing so organization is is number one and I like

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where you went with the data room where if you're a buyer and I share um data

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rooms with my buyers share file Dropbox there's all of them but I love your idea

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of creating a a folder for each business that you're searching and even if it's a business that in the moment we gathered

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as much as we could and for whatever reason maybe there's another offer on it and it's on hold let it sit because I

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have seen deals where buyers Revisited and all of a sudden went back to that

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business went back to that business absolutely or you find a business you know similar industry and you use that

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as a point of reference to look at it and by the way I know C is sitting in the background the brains of the operation I have I was thinking have a

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slide that I used at this recent um sem seminar that lists the all the folders

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that a buyer needs to set up related to a business um and um that they're looking at and so if anybody wants to

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email me at Richard parker.com through the contact page I'm happy to share that um that actual slide with people or send

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them a copy of the PDF um because you know for business buyers they'll find they'll find it very helpful because you

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want to keep yourself organized because if not it gets out of control in a hurry and people can also set up their own data room like you use a platform like

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box or something and that's very good way to do it the the you know the underlying theme Here is you've got to

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get organized because there's a ton of paper there's a ton of information and also for example I've seen buyers sign

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two ndas for the same business with two different Brokers and they said oh it sounds familiar so when you're signing

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ndas for businesses at the beginning at least have a folder that's called ndas and put all your signed ndas in there

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and then if something sounds familiar well if you have to go find it or if there something comes up you need to question it your ndas are all in the

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same place subsequent to that when a you follow you know follow up with a particular business then that business

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gets a folder and you can have a bunch of subfolders related to financials and competition and resources and employees

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and assets and what whatever the case may be but get yourself set up don't you know because if not You' be drowning in

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paper you're laughing because it's true they it's out of control fast that's right and back to the buyer side I

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believe business well Searchers because they're all they all start out as Searchers and business brokers are

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inundated with Searcher calls on the daily when you mean Searcher is the fancy name for buyers right correct

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because they're call themselves Searchers now well it seems to be Searchers and I think Searchers is fair

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in the beginning and then eventually they become the business buyer Searchers can be a pain in the ass for business

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brokers because they're not prepared and they're not fully vetted they're not ready that's my world I live with that

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yeah of course and they and and very often they think they they think they're ready or they think they know what they're doing it's it's just absolutely

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ridiculous but yes they're not they're not prepared they are not prepared I want to reel that back in and tell the

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Searchers Slow Down slow down I know it's exciting kind of like firsttime home buying you want to go look at all

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the homes that you think you might want to buy move into on a Sunday open house

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I'm G I'm gonna tell you right now probably more than half the homes that you're walking into without any kind of pre-qualification letter knowing what

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the heck you qualify for to buy a house you're in the wrong open house I'm telling you you're in the wrong and it's

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worse with a business because you know even if you're in the wrong open house even if you managed to buy that home for

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example and you're not thrilled with it well you're going to be able to sell it buy the wrong business and it's going out of business so you know just yeah so

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don't you're right slow down get smart get educated and attack this process in a good meaningful way and then the

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output at the end is going to be positive that's right and and what I do because I'm organized you've seen my

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emails I try to be very very specific with what I have to say oh no kidding you're talking to me like we just met

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yes yeah well the re there's there's a me Madness because because yes I want to

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talk to Searchers business buyers I want to understand more about their goals

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what they qualify for and then there's going to be the piles of information that I need to collect to see if they're

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qualified a lot of what I speak I also follow up in writing in email why as

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point of reference not just for me because I can't remember everybody's backstory about their skeletons in the

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closet or their goals or what they want to do I need a trail and I'm teaching

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you the business buyer what needs to be done at certain stages and the why

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behind it so I'll tell you verbally but I'm going to follow it up with an email

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and a list and a checklist to help keep you organized along with that Dropbox

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link to pop everything in there um so method to the madness is listen to your

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advisors whether it's Richard whether it's Deb whether it's the business broker the CPA the attorney we all

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listen well where we lack is taking action yeah and one of the things you

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know when you mentioned there there's a lot of stakeholders this so you may have someone like yourself you may have someone like myself or might have a

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broker you might have an account well you have an accountant you'll have an attorney and who knows what else financial planner whatever case may be

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when you start getting and you have an offer in place and then you have to start doing formalized due diligence all

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these stakeholders have tasks including yourself as the buyer things the buyer has a list of things that they have to do is longer than everybody else is

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combined and so one of the things that I tell people to regardless of the format that you do it whether it could be in a

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data room whether you use your phone whether you use your PC or whether you do it you know in a Word document you've

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got to create a master to-do list after you have an Loi or purchase order into

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place that lists out everything that has to be done related to due diligence and who has to do it and as importantly when

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it has to be done by because I've seen cases where buyers have gone past the end of their

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due diligence and then try to back out of a deal and they said oh oh I didn't realize my due diligence period

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expired two days ago tough too late at that point unless you have you know you may have a relationship with a seller

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they say okay we're good to go but you need to com you need to put together a master to-do list and you put Deb and

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Richard and C Mr CPA and Mrs attorney and Mr accountant or whatever the case may be everything that has to be done

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and the other thing is during this process of buying a business looking at a business investigating a business talking to the seller there's a billion

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things that you're going to be thinking of that are running through your mind of things that you have to do always keep a

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notepad with you with again be digital or in your car or what have you and write it down immediately because you're

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going to forget it and you don't you don't want to forget something because

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if you for get something important it could come back to bite you in the ass and so you have to you have to think

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about this you know this is a project it's project management so finding a way to keep everything together in in a in

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in a good organized way and keeping everybody else organized yeah because you're the buyer you're the chief here

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that's right and for those items that you said would bite you in the dupa again in the D I forgot yeah in the dupa

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in the dupa I know what some of those items are as the business buyer from the GetGo

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and I will stay on your dupa as the business buyer to make sure you are

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following through with the action needed to not delay your loan closing now if

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you decide to just listen and not take action that's on you and guess yeah

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guess what I told you verbally and as I said earlier Richard I put it in writing an email so I have I have the chain of

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telling you what to do in an email format because we forget I need to hear things sometimes two three times before

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I my kids yeah we're all human and there's a lot of movement in these transactions a lot of movement we

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haven't even gotten to the point when the loan is approved and there's a commitment letter and then there's the

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conditions that have to be met before closing that's another piles of information that be another show yeah

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there's piles of information you know one and one of the key things here is understand you're if you're a business

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buyer it happens on the seller side as well but you know you you may have all these stakeholders or people that are

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going to help you and Deb is you know she you know she runs things like a Rolex watch and that's wonderful but it

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this is the buyer's responsibility it's not the lender's responsibility it's not the broker's responsibility it's not the

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accountant's responsibility it's not the attorney's responsibility it's the buyer's responsibility and yes you bring

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all these people onto your team to help you along the way but it's incumbent upon you the buyer to make sure that

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everybody is organized because you know why you may be dealing with someone like you Deb who's very organized and then you'll deal with an attorney who can't

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find their pencil I mean you walk into most Attorneys Office and certainly accountants right at certain times of year you got piles you think they're in

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the paper manufacturing business they got everywhere and so they very often they're not organized so you can't

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rely on them it's the buyer this is UN this is incumbent on the buyer this is so good Richard you are so spoton not

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all attorneys but I have seen some that screwed up the process toward the tail

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end trying to move the file to a closing because they're lost in their own

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information yeah of course you're right drive your bus that's it you're the buyer you're the buyer you've got to

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keep everything under control and if you you know if you if you rely on other people which you have to you've got to

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make sure everybody is pulling in the same direction and if the accountant has to get um certain uh you know uh

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information to you by a certain period of time well it's not a case of just saying you know you know hey Bob I need

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this by next Thursday and then expect it to happen that they automatically sent

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this to the other party that need you got to make sure on Wednesday you call them and say hey this is due tomorrow

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make are we good and if it's not because if not you're going to miss deadlines and you're gonna have a problem because

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you're going to miss deadlines that are going to wreck train wreck your deal and you're the one paying for the services

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that are supporting you so speak up speak up speak up speak up baby Hey

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listen I think it's time for questions we got a bunch of them so yeah yeah I'll

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let you read this first one here and let cck last property I purchas I walked in

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the lawyer's office have to find them in a mountain the paper yeah 100% um James

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is always um let's see going down here I saw a question earlier sorry to be looking off to the side I'm not checking

25:47

emails has one up here right on the main slide here how will AI help business

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buyers get through these processes faster um well we're seeing some of it

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first of all you know we're talking about artificial intelligence and we just had this conversation recently and he said sadly most of the people that I

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deal with have artificial intelligence you know but I know one area that seems

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to be to me is really really exciting is and I had um dinner with this Law Firm

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down in um Miami two and the two principles and they're really integrating Ai and taking documentation

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that in a in a typical m&a transaction used to be a $25,000 cost to a buyer they do larger

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deals but not not monsters but large larger than typically Main Street USA deals and the the documentation assembly

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that used to cost about $25,000 from the various documents assets purchase and sale agreement UCC filing all these

26:46

various documents they've now reduced that to a um to a $500 cost as a result

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of AI because AI is isn't that unbelievable and the nice thing about it they're actually passing the savings on

26:57

to their clients that's what's even nicer there we go so so in AI in certain things that are wrote that are template

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um uh certain agreements now you never want to have ai writing your agreement because every deal is different and

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there's different contingencies but certain um processes or documentation will definitely benefit from AI I think

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AI may also potentially be able to um scour the internet in an effective way

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to to um produce some targeted Acquisitions it's being done already in

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in in some way I I I I don't think it's being done that great from what I've seen and I've spoken to probably a dozen

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lead generation companies that are using a version of AI to generate deal flow it's okay it's not great but it'll keep

27:45

getting better so I think that is going to be really um really really helpful

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but it's gonna take some time I I agree it's gonna take time because AI is still

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humans putting in the information and humans are not necessarily always accurate um I have

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seen AI spit out some feedback in regards to SBA sop that was not accurate

28:13

or too old or the policy had changed um as they always say AI is a

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tool you just can't count on it 100% for if it gives you a checklist it might be

28:25

close but there might be some things off but boy if you're if you're asking AI for answers to legal questions in

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regards to your transaction I would tell you no contact no tell you no right

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because right now ai is not the believable party right it's an aggregation of information that's out there to the best of my understanding

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how this works and so you know there's there's a lot of horrific information out there misleading or inaccurate or

28:50

incomplete information so I think AI will play a role but until it's able to

28:56

discern you know who is the believable party as far as the origins of the

29:01

information that they're assembling it it it's there's going to be a lot left to be desired where I do see where I do

29:08

see AI speeding up the process Richard uh for business buyers we're not there yet or maybe it's in practice um

29:15

spreading deals you know you can enter all the business tax returns and it will

29:21

I haven't done that yet but I hear you it will spread the deals and Underwriters may have an easier job

29:29

getting the underwriting done faster because of AI but we still need a second

29:36

set of a credit manager a supervisor eyes underwriter eyes double-checking AI

29:42

right absolutely we have a question from uh is it Chason yeah Chason Chason for he said is

29:50

there a research tool that you to suggest for finding businesses it's a great question because we part of it we

29:55

just talked about related to AI there are some lead generation tools as far as finding business is concerned typically

30:01

the programs are pretty expensive at this point and they're done for more institutional buyers like private Equity

30:06

firms family offices Etc um however there's um you know as far as the search

30:13

is concerned what you ultimately want to get to is start off at the beginning using some of the databases of

30:19

businesses for sale because you could weed out ones that are not don't make sense for you types of businesses and

30:25

then still the the the best um tool of finding

30:33

businesses is really you know these direct searches for businesses but

30:38

you've got to look at it this as as as a funnel because at the beginning you can't if you you can't be interested in

30:45

20 types of businesses when I say 20 types you know Commercial Landscaping uh

30:50

Business Services um durable medical equipment have this laundry list of potential business types that you'd be

30:56

interested and then try to send the direct direct solicitation because your list will be a million companies and so you want to be able to whittle it down

31:01

um you know by and large the business for sale websites are used at the initial stage it's a good laboratory to

31:08

whittle out and and figure out what type of business is right for you um but there's not there's nothing Chason

31:13

that's really sophisticated yet um that's getting the job done what's getting the job done is good

31:19

oldfashioned roll up your sleeves Network like an animal get the word out to everybody at every opportunity um and

31:25

every situation to tell them you're looking for a business because it does that's the um that's the blue collar

31:31

pack your lunge pail part of the process I I I like to think the oldfashioned way

31:36

like you said networking um especially with LinkedIn we have business advisors

31:41

that are working with small businesses to help them be more profitable more efficient they have an idea in their

31:48

head who is thinking short-term long-term wise when they might want to

31:53

exit it doesn't hurt to network with those folks not you need to know names of who what when or where but as long as

32:01

you have an idea that you can give to them that I'm looking for this kind of business they'll add you to their

32:06

portfolio um or their CRM to contact if they know one of their clients is looking to sell privately and not be

32:13

public at the markets oh absolutely unless you're you're in a confidentiality situation where you have

32:19

a job and for some reason you know you're worried that word gets out or what have you I get that outside of that

32:24

if that's not a um you know an impediment to your search the goal is which you said earlier you've got to

32:31

tell everybody and you've got to network with everybody all of these venues whether they be networking groups

32:37

whether it be online businesses for sale business brokers lawyers accountants Chambers of Commerce Commerce businesses

32:43

that you frequent on a regular basis people that you meet in the street you got to tell everybody because you never

32:49

know when the lead is coming from I you know we don't have enough time in the show to talk about some of the crazy

32:54

ways that I've come across businesses that I ended up AC wiring and it's just you got to tell everybody it's like walk

33:00

walk around with a sandwich board I'd love to see that on you one day yeah no problem no problem I can

33:07

have it ready for next week oh yeah please love to see that seea mentioned

33:12

something about question number three um here we go Jordan James Rogers here

33:18

let's see what do we have a question up here thank you for these great questions to our loyal listeners are we seeing AI

33:25

help Searchers to analyze Financial statements and provide feedback

33:30

um I don't I I hear AI can spread

33:36

financials I haven't practiced it yet myself because I I tend to trust my own

33:42

spreading versus AI at this point just because AI is not perfect yet I've

33:48

noticed that um I'll use it as a tool if I'm trying to search for something specific to the industry uh but to

33:56

actually anal financial statements I don't think we're ready yet Richard with that do you here's my take on it I'm all

34:03

for technology I'm all for advancement and I'm all for improving the way we do things these type of

34:11

scenarios is you've got to learn this yourself you've got to be able to look

34:17

at a spreadsheet from a business and be able to put two three periods together

34:22

and look at them in a on a spreadsheet and have the Acumen to be able to extract or identify what are the

34:30

problems or what needs to be questioned further AI yeah if it exists great I

34:36

don't know that I would ever want to get away from the way I look at a business to scrub a financial statement myself

34:44

okay I because you know what one thing's for sure I trust me when it reles now I'm not you know but I'm not the

34:50

smartest guy in the room but I've been doing this long enough so I trust me to be able to look at that and look for problems would I bring in something like

34:57

AI as an additional tool to augment what I do of course the same way you'd bring

35:03

in an accountant to augment what you do to look at the financial statements afterwards but you need to have an

35:09

understanding of a financial statement to look at your look at it yourself when you get a business to make that

35:14

comparison okay and so you know I think Patrick mentioned here that they're good for finding inconsistencies but but yes

35:22

the it's what what's the reasoning behind the inconsistency for example you look at a spreadsheet and marketing

35:29

costs have either gone up or down and there's an inconsistency on that line well if you have if you know if if you

35:35

can see you can see the right on the spreadsheet that it was 200,000 one year 150 to next year 175 what is the

35:41

reasoning for that is it and the only person that can answer that is you and the seller and so it may be able to I

35:48

spot and say your marketing was is down 3.2 marketing spend is down 3.2% this

35:54

year over last well you know I don't need AI to tell me that I understand it it points it out but the more important thing as a buyer is you want to

36:00

understand why yeah an AI is not answering why because it's particular to that business that's right and and for

36:07

the business buyers out there I will show you how to do the spreads I have a

36:14

template where I put the financials in and I kind of walk through it some of you know how to do it already some of

36:20

you don't yet that's okay I didn't know how to do it years ago uh and I and like you said I'm still learning there's

36:26

still things that I'm learning that's why Show and Tell like like we did in

36:31

the kindergarten days right Show and Tell Show and Tell absolutely that's my

36:37

job and and sometimes we have to show and tell the business broker or show and

36:42

tell the seller like hey did you see this and that and that's okay I'm not trying to challenge them there might be

36:50

an addback that I think should be added back that maybe they missed yeah it's

36:55

okay to challenge them it's 's nothing wrong with challenging them right absolutely absolutely you know it's nice to be good and respectful but let's be

37:01

honest here I mean there's nothing wrong with challenging them either side of the equation because if they miss something they want to add it back it helps the

37:07

financials and if something's in there that shouldn't be in there they need to understand why because it's going to be you know a potential detriment to to to

37:14

getting the amount of money that they anticipated getting so challenging is good it is good and and Lord have mercy

37:20

they challenge me all the time so I guess I should challenge more often right Richard challenge more often absolutely right I think we're at our

37:27

wrapup time according to ca okay well listen um you have your special report

37:33

up here it's good timing so maybe share with our loyal listeners what that's all about so these this is a report that I

37:39

wrote and add some there's modifications related to the um financing part of the deal that Deb has been a great

37:45

contributor to to the information well it's 10 things the sellers won't tell you and I urge anybody who's thinking

37:51

about buying a business to go through this report because it's going to point out things that specifically seller is

37:57

not going to necessarily be upfront about and that could be related to terms

38:02

to pricing to customer issues to employee issues to uh competitive issues

38:08

and things that they are not required to disclose because they're not necessarily material um and if you don't look for

38:15

them you're not going to find them and so these are things that are they're common to the equation it's it's a great

38:20

I think it's about 40 page report it's going to be really it's really really helpful it's a lot of great information in there and so I um I strongly suggest

38:27

anyone who's thinking about acquiring a business um just Link at the uh download the report and it's uh it's a really

38:33

it's a really good read really helpful awesome if I do say so myself yes it is

38:38

and in closing I would like to thank our show sponsor and producer brilliant beam

38:45

media seea and team they are the behind the scenes uh producer of our business

38:51

buying banter show and if you go to uh Richard's Prof profile on LinkedIn or

38:58

mine or follow our YouTube channel business buying banter you will see

39:04

several shorts clips of all of our previous shows and some of them are

39:10

quite funny I I enjoy laughing at them myself um and and the production behind

39:16

those clips would be brilliant beam media so thank you for all you do uh to raise our game in this uh technology

39:23

industry Richard and I are better at helping people buy and sell businesses than we are creating video clips oh yeah

39:30

if you rely on me for that you're in deep I mean yeah I'm not find the link for today folks yeah we yeah we

39:36

couldn't even find the link so right I mean I have enough challenge in the morning open you know getting my emails so yes see CA is like she what did you

39:44

say she's the bomb she's the best she's absolutely fantastic thank you CA so

39:50

until next time ladies and gentlemen we want to tell you all that have a great day uh consider entrepreneurship through

39:58

acquisition skip the startup baby buy something that's working right amen Amen

40:04

to that skip the startup I like it skip the startup be here yeah we will be here

40:09

same time same channel next week Thursday 2 pm Eastern any closing

40:16

thoughts for you Richard um you know hopefully people understand the the amount of uh

40:22

documentation involved so get themselves really really organized I'll repeat that if someone wants to get that list of the

40:28

the initial files to be created send through an email happy to provide that and as usual Deb you're a wealth of

40:33

information I hope the listeners found helpful information I know I always gain a ton of it from you when we spend this

40:39

time together can't wait till next week I'm sure I'll speak to you about a hundred times in between now and then and looking forward to it so have a

40:47

terrific rest of your afternoon everybody out of

40:55

here

41:03

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