Maximize Your Business Sale: Sell Smarter with No BS

eb Curtis and Richard Parker (: 00:00

We're going to touch on that. So let's bring on John to the stage, ladies and gentlemen. Hey, how are you? Great. Good to see you both. Oh, good to see you. Glad you're here. Yeah. So, yeah. Love that segue you made in the, to the 1%. Yeah. Pretty, she was very slick, right? I didn't plan that. I know I'm planned. Well, that's why you're, you know, you're, you're a star here, Deb. I don't like agendas. I just give me the mic and let's go.

That's the way I roll. That's the way I roll. So, so John, tell us about that headline. What, what made you see the value in that headline for business owners? Yeah. You know, um, so the headline is really my tagline on LinkedIn is freeing executives to work on their business instead of in their business. And.

You know, because I had seen too many times where business owners started to, their business started to take them over, right? As they started to grow, they got busier and busier with routine tasks, the things that keep the business moving every day, or reactively solving problems working in their business. And they just weren't getting time to work on the things that really were going to have an impact.

and allow them to achieve sustainable growth. So I thought about, you know, what should they be doing if they're not working in their business? And I thought, well, maybe they should be working on their business. So I think it's a good tagline because I get that question a lot. Mike, what do you mean by that? So it leads to a great discussion about what kinds of things are working in your business versus on your business. That's great. I have a, you know,

I've always told people like you want to be in business, not busy -ness. You know, and you've seen, and I guess it's similar to that. And you're talking about, you know, putting out fires and how often you talk to clients or individuals that they become firefighters, not business people. And it's a very hard road to go down for me. Anyways, I found that oftentimes it's, it's, it's because the owners don't spend the money to put in the right people below them to do an everything themselves.

eb Curtis and Richard Parker (: 02:22

and they get used to the money that's being thrown off from the business and they adjust their lifestyle accordingly. But that's my take and you're the expert in the field. So what are a couple of high level points that you find where people, you know, they, they go off the reservation, they start making this mistake and then they get themselves into becoming firefighters or working in it, not on it, you know, or in busyness, as I like to say, like some of the things that you see them make mistakes repeatedly. Yeah. Yeah. No, you know, I mean, you, you pointed out one of them. One, one could just be,

right, this creating a constraint for themselves financially, right? That really boils down to short term thinking, right? If you can't afford the help, then you're probably operating on too short of a timeframe. You're not thinking about where you want to be down the road. So that's one thing, one place that I struggle. The other thing I think just comes down to,

you know, kind of mindsets about what it takes to operate as a team, right? So on a day -to -day basis, right, you're faced all the time with decisions about whether I should react to this urgent thing right here or whether I should let somebody else handle that and go work on something more important. And a lot of times it's easy for owners to slide back and make the same decision every day.

to take care of that urgent thing. And that's a little bit like the busyness that you mentioned, Richard. It feels good. It feels good to go ahead and check that box and take care of that urgent item. But that's not going to help drive value in your business over time. What's going to drive value in your business over time is building the capabilities of your team.

It's getting more out of the people that work for you. You mentioned earlier, sometimes people feel constrained. They think the answer is I need to hire more people. I would say the answer is actually you need to figure out how to get more out of the people that you have. Most businesses already have a lot of potential and unused capacity laying on the table. Yeah. Right. Interesting. Yeah.

eb Curtis and Richard Parker (: 04:45

Don't they say, and I've heard this the best way to figure out what kind of team you have is to take a vacation and let it go and see who steps up. That's right. That's right. Yeah. Yeah. What happens? Can you take a vacation? Can you, you know, I think, um, you know, most business owners don't get into business because they want to be a slave to their business. They want to be successful and they want to improve their situation.

If they want more freedom, they want more freedom in either in terms of resources and money, or they want more freedom in terms of time. And unfortunately, sometimes once you create a business, the business can just start to take you over and start to consume you. And I love what you guys are doing, right? When things get real, when you come to a point where you might want to sell your business, that's when things really get real. Yeah.

And you're confronted with what's the value of this enterprise that I've been building, you know, and, and what happens if I'm out of the equation, right? A prospective buyer might look at a business where the owner is doing everything and say, this isn't worth anything to me. Cause I don't want that job. Right. At any price. Yeah. Yeah. Would we, um, you know, one of the things that I teach are my buyer clients. We have this course that walks me through one of the key questions. Cause there's a 36 key questions to ask a seller when you're.

going through the processes to your point is how much vacation do you take? And it's a multi prong question because one is if they don't take any vacation, it's an indication of a couple of things. Either they micromanage the business or they haven't put the people in place. That's a possibility as well. There's a number of possible answers, but they certainly have not trained themselves or their staff to be able to manage the business or they don't trust their staff, which could be their problem or the staff's problem.

And the other question I always ask them is, you know, what happens if you get hit by a Pepsi truck tomorrow? Like what happens to the business? You know, can it run and sustain itself? I have one client on the sell side that I worked with. Well, I used to take a hundred, he took 120 days vacation a year. Wow. And everything and things ran well. So if you don't, sometimes you don't have the luxury because of the money in the business, but other times you look at it and say, well, if you want to give yourself the luxury of having that, you got to take a step back for a while and have some short term pain.

eb Curtis and Richard Parker (: 07:13

So you could put these things into place and empower people to be able to make these decisions. You know, sometimes they just micromanage the hell out of it. And that's why it always stays a small business. Well, and I mean, so have either of you ever worked for a micromanager? Yeah, of course. I have. Yeah. It sucks. Insanity. Insanity. You know, so I don't know, you guys might not know this, but it did.

Would it surprise you to know that less than 25 % of people are actually engaged at work? Like they actually really care and they're actually, Oh yeah. There's no surprise to me. I remember there was a survey that we'd refer to all the time and I don't know if it was Gallup or whoever. It was Gallup. Yeah. And it was one of them was they talk about people that really, um, they asked them to rate their jobs from I tolerate it to I love it to whatever. It was like 74 % were either hate it, despise it, or, or, um, significantly unhappy.

was 74%. So which fits perfectly with the 25, right? Yeah. And you know, I'll bet money that most of those people are working for, you know, a boss that's not empowering them. Yeah. Right. You know, and so that's, that's one of the things I really love to do with, with business owners is to work on like, how do you create an environment? Right. So working on your business is, is actually focusing on how do I move that number up?

How do I get more and more people really engaged, empowered to bring more of themselves into the business? And for me to start, it's not about dumping stuff. It's not about dumping stuff to your employees. It's about engaging them to solve more and more of the problems. If you've got an organization where you have 50 people, but 50 people out there finding problems,

but only one person solving them, the head cheese, the boss, you're in trouble, man. But if you've got 50 people and you've got 50 problem solvers, then you've got a really valuable business that's going to run well. And you're going to be able to take that vacation. You're going to be able to step away and be confident that the business is going to run. It's not only going to drive value in your business. If you have a business like that, you might not want to sell it.

eb Curtis and Richard Parker (: 09:38

That's because it's actually fun to fun to run it. I like to add for our listeners, if we have buyers in the audience, these days we see a lot of business listings on the market. John and Richard absentee owned. It seems to be a big trend. Everything is absentee owned. And I tell my buyers due diligence wise to confirm, is it absentee owned?

Richard, you were talking about building up a relationship with the seller. You're a buyer. You're building up the relationship. John, you're coaching people, you know, to be absentee owned. You got to work on the business versus working in it. So I coach them in that relationship as the proposed buyer with the seller. Like you said, when's the last time you went on vacation? And if they tell you I haven't been on one in the last three years, well, guess what?

We're really not an absentee owned, are we? I had a business owner once tell me with pride, he hasn't been on a vacation for 14 years. And I said to him, like, and you're proud of that? Wow. He said it would pride like, you know, and he was a guy from Eastern Europe. So I understand it was an old school mentality is quite a bit older than me at the time. Now there's much fewer people that are older than me, but he was, you know, it was a number of years ago. And he said that would, would great pride. And you know, the world has changed quite a bit.

And where there's probably going to be some conflict is you get the baby boomers or just below that age that are still going to be in business for another five to 15 years or what have you. And there's a real disconnect between their work ethic and the pay your dues mentality and this next generation that, you know, thinks you get rich real quickly or, you know, the entitled mentality. There's a lot, it's all different discussion, but there's going to be, there's got to be some significant conflict.

Oh, definitely. Definitely. Thanks for bringing that up. And I see that already because every, a lot of the buyers today, they want it to be absentee owned. And I'm like, you better be doing your due diligence to make sure it is, or you're going to have a rude awakening. So, so John, tell us your ideal client size for our audience to know if they are small business owners and they do want to match up with you to help advise them to work.

eb Curtis and Richard Parker (: 12:02

on their business versus working in it. What kind of business owners are you looking for? Approximately what size? Okay, yeah. You know, I find a kind of a sweet spot is on the small side, I would say folks starting at around 12 to 15 million in revenue. You know, they need a certain scale to have big enough problems and opportunities to afford external help.

You know, and then all the way up to, I would say about 200 million. A sweet spot for me is kind of privately held companies that have manufacturing operations. I have a, I have a pretty deep pedigree in manufacturing. And so it gives me another avenue to kind of add value in the relationship. Currently I'm working with a diverse set. I work with both manufacturing and non manufacturing.

And, uh, and also clients up to a billion, but I would say that 15 million to 200 million is a good sweet spot for me. You mentioned manufacturing. Um, and what would you say are some of what, what in like 30 seconds, what is the number one challenge today of manufacturing companies?

Wow, you know, manufacturing companies, you know, they're as diverse as as there are products. So that's a that's a challenging one to to answer. But, you know, usually it's right now, I think a lot of a lot of it lately has been around people. It's around getting talent, keeping talent. That's been changing over the last few months. I would say it's getting better, but.

That's consistently a challenge is finding good people and keeping good people. Now, like I mentioned earlier, you know, one key one big way that you can influence whether people stay or not, right, is through the engagement, right? What kind of environment do you have? Like, do people show up to work and they feel valued and they feel like part of a team and they're working toward a purpose that's meaningful?

eb Curtis and Richard Parker (: 14:18

You know those are the times of places that people love to get up and go to work, right? If it's a place that you're going to go and you're just going to take orders, you're going to be, you know, punching the clock and doing your time, you know, then then people are going to turn over more and I see that consistently. You know the you're going to get you're going to get back from your employees. What you put into your employees. So.

Yeah, people is a consistent topic because manufacturing tends to you know operations tend to be people heavy. Yeah, right It's pretty amazing that you know, I'm doing this the being in the universe of buying and selling businesses for 34 years things some to some old Books that I read, you know, like thriving on chaos or mark McCormick, but I don't teach you at Harvard business Well, they don't teach at Harvard Business School some real old classic books or whatever. That's pretty amazing to me that

at time, I started working in: 1981

dealt with, treated, the opportunities that they are or are not given the recognition of how important people are to the equation. It's like we haven't learned anything. It's still a problem. Well, I think it's something you can never stop learning about, Richard. It's an easy thing to say. It's a really hard thing to do because what we're talking about is trust. Right. Right. And.

And I've seen a lot of people start to make improvements. And then something happens in the external environment. Maybe it's a recession. Maybe it's kind of something happens in their business sector. And management has to take, they start to get under tremendous pressure. And then they revert. They start to act like they did before.

eb Curtis and Richard Parker (: 16:40

Right. They start to do things that undermine employee trust. And so I think it's I think I think we do learn. It's just that we unlearn. Yeah, we learn slowly. So it's a really hard these cultures that I think do this well and that can can maintain it over a long period of time. There's a that's one of the reasons I prefer to work with.

privately held companies instead of publicly owned or yeah, publicly created because when you're in the quarterly earnings environment, yeah, you make a lot of short term stupid decisions. You make short term stupid decisions when you own the company, when you are, you know, captain of your own destiny, then you have a chance, right? To be able to make different decisions. Do you have a chance to learn those lessons?

and to maintain that kind of culture over the long run. Yeah, I mean, it's a great point with the public companies. I worked for one at one point. It was, I hated it. I mean, I had an executive position and it was, it seemed like my whole life was, was guided by the quarter, like just things. And it's like, there was, you couldn't really make a lot of long -term decisions. Granted, we weren't a billion dollar company, but the stock was so vulnerable that it was like, you lived quarter to quarter and you know, filing to filing, which was.

unfortunately ridiculous, but yeah, I mean, it makes sense. And what you do sounds, I mean, it's fascinating. And I like you, certainly I like your approach. There's a lot of coaches out there, but it's, it's from you, you see, you look at it from a very interesting perspective of, you know, improvement gradually and being able to evaluate the company. So hopefully you'll be able to generate some interest with some of the listeners, because it obviously, it, from my standpoint, it behooves people to find as many.

intelligent, believable parties like to refer to them or I stole that term from when I worked for the Dalio family office because they were very, they were great calling believable parties. I used to call it the number one draft pit, but that's the concept is find someone who's really, you know, knows their stuff and bring them in to help you. I do know by the way, Deb, that we have a couple of questions. I want to let Patrick know we're going to get to it in a second. That's some great questions. And, and John, how do people get hold of you?

eb Curtis and Richard Parker (: 19:00

Yeah, I think the best way to get ahold of me is connect with me on LinkedIn and you can DM me there or there's a link on my profile if you want to chat. There's just a free easy option. You can click link on my profile and jump on my calendar for a chat. Perfect. And we have the QR code up there right now. Make that available if and make the information available in case anybody asks us post show. This is great. We appreciate you. You're joining us. This is terrific. Yeah.

Very helpful. Shall we? We have a question here we can put up on the board, Richard and John, let's open it up for discussion. Thank you, Patrick. Your question. Oh yeah, this is a perfect question. Yes, it's a good one. Utah friend. Good to see you, Patrick. So great question. How would you treat a business that's for sale where the owner is the business and if they leave, so do the clients.

Okay, so I'll tell you that for me, this is like a slow hanging curve ball right over the middle of the plate, because they deal with this all the time. So the first part, Patrick, is to really understand if they are the business, meaning there are cases where you simply cannot acquire the business because of this. It's not going to transition to a new owner. That happens frequently. Unfortunately,

but it happens frequently. So making that determination of can this really transition to another individual altogether is the first question that you have to answer. The drop down to that or the double click to that is if a new owner comes in and transitions to a new individual, how do you protect yourself in a deal to make sure it doesn't come back to bite you in the rear end or the dupe as Deb would say, meaning.

you're almost certainly going to have to have a performance -based agreement with the seller. If it's a case of that the entire business is really reliant on the owner, well then by and large the whole deal is gonna be performance -based or an earn out to make sure those clients continue. Now, if the owner is comfortable and it's certainly something that I recommend my buyer clients do is irrespective of what the deal terms are, you have to get in front of the customers.

eb Curtis and Richard Parker (: 21:24

because before you close the deal, even if it's the last contingency, because you want to validate, is this even possible? Like it doesn't matter if it's not possible, it doesn't matter how good the deal terms are, it's still going to cost you money if this business can transition to you. So there's, you know, those three different approaches to it is first understanding again, are they really, really the business? Can it transition to you? And so have a performance based agreement with them for the acquisition.

And the third part, which comes before you purchase the business is making sure as part of your due diligence, you have to get in front of some of the customers because it doesn't, doesn't make sense. There's no deal good enough if the business won't sustain itself. And I'd like to add on the bank lending side that the underwriters more than likely will pass on this deal, uh, case by case, obviously, but if it is a business owner who has the relationships with the clients that are

bringing in the revenue, we're not moving forward. We're going to have to call on John, a business advisor to turn business around. So tell us how you would do that, John, what this is your assignment now. What are you going to do? I mean, honestly, I would challenge this person, this owner and say, you don't have a business, you have a personal brand. Right. Like, you know, they, they, they've got to get to work on, you know, transitioning whatever this.

secret sauces that they have, whether it's relationships or knowledge or whatever it is, they've got to start to move that away from them and into into something else, right? And whether that's other people, whether that's into, you know, solid contracts, right? Longer term contracts. You've got to do something to turn this relationship into real assets, right? Otherwise you don't have a business at all.

There's no value there. Yeah, that's right. Great question. And I love the panel of answers. Um, wonderful. Well, it's at the half hour mark before we wrap up the show. We can't end this episode without who's the Dupa.

eb Curtis and Richard Parker (: 23:38

It's coming. I know it's coming.

eb Curtis and Richard Parker (: 23:49

There we go. All the time. We love it. Here is our story. We're going to make it short. A gentleman proposed. I've been on a roll building a successful business over the past three years. My fiance who left her job gets paid by the company for minimal help at the business. I pay her for keeping our home clean. I now have bought a new business.

to expand and grow my empire. And she is now making me choose between our relationship, we're engaged, and the expansion. She worries about the time and risks involved, and I see it as a step forward to further our future income. Who's the do -pa? Because she wants me to make a decision, to sell the business or to stay with her.

stay with her and sell the business or keep the business and lose her? Oh, good question. Do you want me to take a stab at this? I want to hear both of you. So I look at this, there's, I think there's a, there's a couple of ways of looking at this. I certainly get the point of where she says, you know, doesn't want the additional acquisition because it's going to infringe upon their time, family time or whatever. I mean, it's, it's mostly.

speculation at this point as to how much that's infringing. So I think at that, you know, from a human relationship standpoint, probably has a very valid comment. So that's on the relationship side. On the other side of things, on the reality side of things, and I don't think this is a male female thing, on the reality side of things, if this individual owns the business and has entrepreneurial blood running through his veins, then this subject or issue,

is gonna surface again. It's only a matter of time. Like if you're an entrepreneur and you wanna build something, well, he may take a step back now and say, okay, you know what, I hear what you're saying. I won't buy this business all good. But in two or three years from now, it's gonna happen again. Because you can't, you know, like when you're an entrepreneur, you can't help yourself. And then the third part, looking at it just from a guy's perspective is, you know, if you haven't even got married yet and she's making the man. Okay? So, that's a little - Great.

eb Curtis and Richard Parker (: 26:11

Boom. So I think she's the Dupa. All right. Now, before we get to John, I'm going to give my side of the story. This is just me. If that's my fiance and all I have to do is cook and clean the house, go for it. Buy that fricking business and expand it. It's a good deal, right? Bring it home, baby. Bring on the bacon. I'll take care of you on the home front. That's what I have to say. So, um, John, that's what I say. So what do you have to say, John?

Yeah, I mean when I was listening to this I was thinking that this is like a smoke signal. There's a different problem here. I think there's a relationship problem behind this that like Richard said, if you don't get to the bottom of this, it's going to come up or it's going to get bigger somewhere else, right? So I heard kind of a cry for attention, you know, that we need communication here and kind of partnership.

Um, you know, so I think, I think probably he needs to look a little bit in the mirror. Um, but on the other hand, you know, on, on the surface, so there's a danger signal here that he needs to be listening to. On the other hand, um, on the surface, right. I'm with Deb, like, you know, Hey, it sounds like a pretty good, pretty good deal. If that's what, if that's what she needs, I'll do it tomorrow. I'm in like, you know, Hey, I'll, I'll put on my apron and do the cooking and cleaning. You look good.

Um, but I suspect there's probably more to the story behind it. So I think, I think actually he's probably the Dupa. I remember days being a commercial loan portfolio. One particular customer of mine went through, um, a bad divorce because he grew the business so huge and took on other companies and was working 80 hours a week.

And, uh, he was devastated and the numbers he was in my portfolio started to go down because the marriage was failing. I'm sure you see that both of you. Yeah, of course. Happy, happy, uh, happy wife, happy life, happy home life, happy life. And it's, and you do get a lot of, uh, business owners. It doesn't, it's, it crosses the gym. Doesn't matter. Male, female running a business. They spend way too time with it and they get their gratific. That's how they get their buzzes. And it just impacts life at home.

eb Curtis and Richard Parker (: 28:33

And, uh, and you miss a lot. I need to be working on the business instead of in the business. So that's the dupe of good, uh, good tape by the three. That's a great way to end the show. I would say, I think we're all good. We want to thank everyone for joining us. Business buying banter, John, it was a pleasure to have you as a guest. Richard always making me smile and laugh every day. Uh, we'll be back next Thursday, 2pm Eastern business buying banter.

We thank you and until next time, we're out of here. All right. Ciao, Deb. See you later. Thanks again, John. Thank you.